================================================================= NATIONSRENT BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2001 (ISSN XXXX-XXXX) December 19, 2001 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- NATIONSRENT BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtor's case. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Any re-mailing of NATIONSRENT BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO NATIONSRENT BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF NATIONSRENT [00002] NATIONSRENT'S SEPT. 30, 2001 CONSOLIDATED BALANCE SHEET [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] NATIONSRENT DEBTORS' CHAPTER 11 DATABASE [00005] 20 LARGEST HOLDERS OF SENIOR SUBORDINATED UNSECURED NOTES [00006] 20 LARGEST HOLDERS OF SUBORDINATED ACQUISITION NOTES [00007] 20 LARGEST HOLDERS OF UNSECURED TRADE CLAIMS [00008] DEBTORS' MOTION TO SECURE $55 MILLION OF DIP FINANCING KEY DATE CALENDAR ----------------- 12/17/01 Voluntary Petition Date 01/06/02 Deadline to provide Utilities with adequate assurance 01/16/02 Deadline for filing Schedules of Assets and Liabilities 01/16/02 Deadline for filing Statement of Financial Affairs 01/16/02 Deadline for filing Lists of Leases and Contracts 02/15/02 Deadline to make decisions about lease dispositions 03/17/02 Deadline to remove actions pursuant to F.R.B.P. 9027 04/16/02 Expiration of Debtor's Exclusive Plan Proposal Period 06/15/02 Expiration of Debtor's Exclusive Solicitation Period 06/30/02 Deadline under DIP Facility to Hire Permanent CEO 06/13/03 Outside Maturity of $55MM Fleet-Arranged DIP Facility 12/17/03 Deadline for Debtor's Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO NATIONSRENT BANKRUPTCY NEWS ----------------------------------------------------------------- NATIONSRENT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of NATIONSRENT BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving NATIONSRENT BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- NATIONSRENT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of NATIONSRENT BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF NATIONSRENT ----------------------------------------------------------------- NationsRent, Inc. 450 East Las Olas Blvd. Fort Lauderdale, Florida 33301 Telephone (954) 760-6550 http://www.nationsrent.com NationsRent, Inc. (OTCBB: NRNT; formerly, NYSE: NRI) advertises that it will get you what you need, on site and on time, with no excuses and no hassles. With 230 rental centers located in 27 states, NationsRent is a leading provider of rental equipment in the United States. The Company is headquartered in Fort Lauderdale, Florida and maintains regional offices in Fort Worth, Texas; Columbus, Ohio and San Diego, California. Beginning immediately after its formation in 1997, and continuing through April 2000, NationsRent acquired 58 equipment rental businesses, many of which have been operating in their respective markets for more than 35 years. In addition to rental centers acquired in these transactions, NationsRent has opened approximately 80 new rental centers, including 40 new rental centers within select home improvement stores. As part of building a nationally branded network of rental centers, NationsRent conforms the physical appearance and product offerings at NationsRent locations to a uniform format. Distinguishing characteristics of this format include a full line of rental equipment, prominent use of the NationsRent logo and colors and attractive, well organized and clean rental facilities. In addition, NationsRent rental centers seek to offer a high level of customer service that is supported through employee training and information systems. In 2000, the Company generated $669 million of revenue. In the nine months ending September 30, 2001, the Debtors, pulled-in $464 million of revenue. The Company's workforce currently includes approximately 3,300 full-time and part-time employees Approximately 149 of these employees are represented by unions. The Company offers a comprehensive line of equipment for rent to a broad range of construction and industrial customers, including general contractors, subcontractors, highway contractors, manufacturing plants and distribution centers. NationsRent sells new and used equipment, spare parts and supplies and provide maintenance and repair services. The Debtors generate revenue from four primary related business activities: (A) Equipment Rental. The Company rents a wide variety of light, medium and heavy equipment serving contractors and other commercial and industrial customers, as well as homeowners. The Company offers this equipment for rent on a daily, weekly and monthly basis. The Company's rental inventory includes such equipment as aerial lifts and work platforms, backhoes, boom lifts, bulldozers, ditch equipment, fork lifts, generators, excavators and lawn and garden tools. The Company routinely makes capital investments in new equipment, sells used or obsolete equipment and conducts preventive maintenance on their rental fleet. (B) Used Equipment Sales. Periodically, the Company sells used or obsolete equipment to adjust the size and composition of its rental equipment inventory in response to changing market conditions and to maintain the quality and average age of its rental equipment. (C) New Equipment Sales. NationsRent acts as a distributor of new equipment for nationally-known equipment. (D) Parts, Supplies and Service. NationsRent sells parts, supplies and merchandise to customers in conjunction with their equipment rental and sales businesses. The Company also provides repair services to rental and sales customers. The Overleveraged Capital Structure NationsRent raised capital by entering into secured and unsecured financing arrangements and selling equity: Senior Secured Revolver & Term Loan NationsRent and certain of its direct and indirect subsidiaries are party to, and borrowers under, a senior secured revolving credit and term loan facility with certain lenders, Fleet National Bank, as administrative agent for the Lenders, Bankers Trust Company, as syndication agent, and ScotiaBanc Inc., as documentation agent. The Credit Facility consists of a $400,000,000 term loan due July 2006 and a $450,000,000 revolving line of credit due July 2004. Borrowings under the Credit Facility are secured by first priority liens on substantially all assets, including inventory and accounts receivable. As of September 30, 2001, approximately $395,000,000 and $364,000,000 were outstanding under the term loan and the revolving line of credit, respectively. Senior Subordinated Unsecured Notes Pursuant to an Indenture dated as of December 11, 1998, NationsRent, certain of its direct and indirect subsidiaries, as guarantors, and the Bank of New York, as trustee, NationsRent issued senior subordinated unsecured notes, in the aggregate principal amount of $175,000,000. The Notes accrue interest at an annual rate of 10-3/8 percent that is payable in cash semiannually on June 15 and December 15. Substantially all of the direct and indirect subsidiaries of NationsRent guarantee NationsRent's obligations under the Notes. The Notes are unsecured and are subordinated and junior in right of payment to the senior debt, but are senior to all other subordinated debt. Subordinated Unsecured Promissory Notes As part of the consideration delivered to certain parties from which NationsRent acquired equipment rental businesses, NationsRent issued subordinated unsecured promissory notes in varying amounts with varying terms. These Subordinated Unsecured Promissory Notes are unsecured and are subordinated and junior in right of payment to the Senior Subordinated Notes and the Companies' obligations under the Credit Facility. Purchase Money Security Interests NationsRent entered into financing arrangements with certain equipment manufacturers and third-party financial institutions to finance the purchase of equipment for use in their rental businesses. These financings are secured by purchase money security interests in the purchased equipment. In addition, NationsRent assumed certain other purchase money obligations in connection with equipment acquired as part of various business acquisitions. At December 17, 2001, the Company is party to purchase money security transactions totaling approximately $72,600,000. Preferred Stock NationsRent is authorized to issue 5,000,000 shares of $0.01 par value preferred stock. As of December 14, 2001, 100,000 Series A convertible preferred shares, with a liquidation preference of $100,000,000 had been issued and were held by two holders. As of December 14, 2001, 100,000 Series B convertible preferred shares, with a liquidation preference of $100,000,000 had been issued and were held by four holders. Common Stock NationsRent is authorized to issue 250,000,000 shares of $0.01 par value common stock. As of September 30, 2001, approximately 58,429,637 shares were issued and outstanding. Additionally, as of September 30, 2001, 1,065,200 of there shares of common stock were held as treasury shares. NationsRent's common stock is listed on the New York Stock Exchange. On November 26, 2001, the NYSE suspended trading of NationsRent's common stock and is currently seeking to delist it. Events Leading to the Chapter 11 Filing Joseph H. Izhakoff, NationsRent's Vice President, General Counsel and Secretary, explains that, beginning in late 2000, the Company faced increasing financial stress and liquidity issues. "In particular," Mr. Izhakoff says, the Company was "affected adversely by the overfleeting of the equipment industry over the past few years, which resulted primarily from industry consolidation, coupled with an overall slowdown in construction spending beginning in the second half of 2000. This mismatch between supply and demand greatly increased market pressures in an already competitive industry. These industry-wide problems, coupled with the financial pressure placed on the Debtors by a generally softening national economy, substantially diminished the Debtors' liquidity, adversely impacted operations and undermined their ability to complete their strategic business initiatives in the short term." Beginning in the last quarter of 2000, NationsRent implemented a plan to restructure operations to address significant imbalances between revenue and costs. As part of this restructuring effort, the Company undertook four key strategic activities: (a) selling excess rental equipment, primarily consisting of heavy earthmoving equipment that has the highest unit cost, requires the most expensive support infrastructure and has the lowest return on investment; (b) abandoning certain information systems projects that were under development; (c) eliminating jobs company-wide and consolidating various departments within the organization; and (d) closing certain unprofitable rental and office locations. Notwithstanding these efforts, as a result of continuing economic weakness and heightened competition in the construction and rental equipment industries, the Company continued to experience significant strain and constraints on liquidity, compounding substantial earnings and cash flow pressures. As a result of these pressures, NationsRent failed to make a principal payment on the term loan portion of the Credit Facility of approximately $53,700,000 that was due December 1, 2001. As a result of this missed payment and other factors, ratings agencies such as Standard & Poor's further lowered the Debtors' corporate credit and senior secured debt ratings. In addition, the Company failed to make an interest payment due under the Notes on December 15, 2001 of approximately $9,100,000, as well as certain scheduled payments under other funded debt instruments. Under the circumstances, to give the Company an opportunity to focus on its operations, develop and implement their new business model and complete the prepetition restructuring efforts, NationsRent determined that the filing of these chapter 11 cases would be the best alternative for the Company to preserve value for its stakeholders. ----------------------------------------------------------------- [00002] NATIONSRENT'S SEPT. 30, 2001 CONSOLIDATED BALANCE SHEET ----------------------------------------------------------------- NATIONSRENT, INC. CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2001 (UNAUDITED) ASSETS Cash and cash equivalents..................... $ 43,038,000 Accounts receivable, net...................... 122,328,000 Inventories................................... 36,125,000 Prepaid expenses and other assets............. 19,396,000 Deferred financing costs, net................. 16,381,000 Rental equipment, net......................... 475,507,000 Assets held for sale.......................... 1,150,000 Property and equipment, net................... 101,211,000 Intangible assets related to acquired businesses, net................... 770,824,000 -------------- Total Assets........................ $1,585,960,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable............................ $ 21,099,000 Accrued compensation and related taxes...... 5,531,000 Accrued expenses and other liabilities...... 52,376,000 Debt........................................ 1,118,413,000 Income taxes payable........................ 17,000 -------------- Total liabilities................... 1,197,436,000 -------------- Commitments and Contingencies Stockholders' Equity: Preferred stock -- $0.01 par value, 5,000,000 shares authorized: Series A convertible, $100,000,000 liquidation preference, 100,000 shares issued and outstanding............ 1,000 Series B convertible, $100,000,000 liquidation preference, 100,000 shares issued and outstanding............ 1,000 Common stock-- $0.01 par value, 250,000,000 shares authorized, 57,364,437 shares issued and outstanding................... 584,000 Additional paid-in capital.................. 471,172,000 Accumulated deficit......................... (80,354,000) Treasury stock, at cost, 1,065,200 shares... (2,880,000) -------------- Total stockholders' equity.......... 388,524,000 -------------- Total Liabilities and Stockholders' Equity............. $1,585,960,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- NationsRent Commences Chapter 11 Proceedings to Restructure Debt -- Company Continues to Conduct Business as Usual; -- Superior Customer Service Will Continue to Be Top Priority -- Lenders Providing up to $55 Million in New Financing To Fund Normal Operations -- NationsRent Is Restructuring Debt to Build Financially Stronger, More Competitive Business FORT LAUDERDALE, Florida -- December 17, 2001 -- NationsRent, Inc. (NRNT), announced today that the Company filed a voluntary petition under chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware to restructure the Company's debt. NationsRent will continue to pay all employees in the ordinary course of business and continue to provide their health and other benefits as usual. As in all chapter 11 cases, obligations to suppliers/vendors, employees and others incurred after the filing will be honored in the ordinary course of business without need to obtain court approval and will receive priority status going forward. NationsRent intends to restructure its balance sheet, so the Company can emerge from the chapter 11 process as a financially stronger, more competitive business. Operations to Continue as Usual NationsRent stores, field operations and field support services will continue with business as usual. Customers will continue to have access to NationsRent's broad range of quality equipment and the Company intends to fulfill its commitments to customers in the markets it serves. The court mandates priority status be given to prompt payment of all obligations incurred after the filing. Vendors will be paid for goods and services supplied to the Company after the filing according to terms in the ordinary course of business, so there will be no interruption in the service and equipment the Company provides to customers. Lenders Providing Additional Financing to Fund Operations NationsRent also announced that the Company has obtained up to $55 million of debtor-in-possession (DIP) financing led by Fleet Bank, subject to court approval. This financing will enable the Company to continue normal operations while moving through the reorganization process. The Company is seeking interim approval for a portion of the financing today and will ask the court to set a date for final approval. Restructuring Debt a Strategic Step Toward Renewed Financial Health Ezra Shashoua, Executive Vice President and Chief Financial Officer of NationsRent, said, "This financial restructuring of the Company's debt is a prudent, strategic step NationsRent is taking to preserve and strengthen our business. This allows us to run the business in a normal manner, while we address our balance sheet issues to ensure that NationsRent has a sound financial foundation to build on for the future. NationsRent has a solid business model with good potential in a growth industry." Gerry Weber, Executive Vice President, Operations, added, "Over the past year, we have been diligent in streamlining operations and integrating systems company-wide to cut costs. We have improved our product mix and added and trained sales personnel to attract a broader base of customers, as well as right-sizing our fleet for greater utilization." Weber continued, "I am confident that our motivated employees will remain focused on providing superior service to all our customers, and that the Company's experienced management team will guide NationsRent through the reorganization process to renewed financial health." The core senior management team is committed to leading the Company through the reorganization process and beyond and will continue with recent, decisive actions that are moving the business in the right direction. NationsRent has many strengths to build on for the future, including its expanding customer base, a nationally recognized brand name, its quality fleet of equipment and multiple convenient locations in large and growing markets. The Company also announced that Chairman and Chief Executive Officer James L. Kirk and the Board of Directors have mutually agreed that it would be in the best interest of the Company to allow new leadership to guide NationsRent through the reorganization process. Mr. Kirk will be relinquishing his leadership role. The Company is commencing the search for an interim President and Chief Restructuring Officer and, concurrently, will engage an executive search firm to help in hiring a new, permanent Chief Executive Officer. To insure a smooth transition, Mr. Kirk has agreed to remain with the company until the interim President and CRO is chosen. Background on Chapter 11 Chapter 11 of the U.S. Bankruptcy Code allows an over- leveraged company with a solid business model, such as NationsRent, to continue operating its business and managing its assets in the ordinary course of business. Congress enacted chapter 11 to enable a debtor business to continue as a going concern, so as to maintain jobs for its employees and maximize the recovery of creditors. NationsRent is not filing under chapter 7, which involves liquidation. NationsRent will continue with business as usual. The Company employs approximately 3,300 individuals and executes over 25,000 rental transactions per week from 230 locations all across the country. Company Profile Headquartered in Fort Lauderdale, Florida, NationsRent is one of the country's leading construction equipment rental companies and operates 230 locations in 27 states. NationsRent offers a broad range of high-quality construction equipment at its locations that are conveniently located in highly visible areas with a consistent retail look and feel, offering superior customer service at affordable prices. More information on NationsRent is available on its home page at http://www.nationsrent.com ----------------------------------------------------------------- [00004] NATIONSRENT DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: NationsRent, Inc. Debtor Affiliates Filing Separate Chapter 11 Petitions: NationsRent USA, Inc. NationsRent Transportation Services, Inc. NR Delaware, Inc. NRGP, Inc. NationsRent West, Inc. Logan Equipment Corp. NR Dealer, Inc. NR Franchise Company BDK Equipment Company, Inc. NationsRent of Texas, LP NationsRent of Indiana, LP Walsh Bankruptcy Case Nos.: 01-11628 through 01-11639, inclusive, to be Jointly Administered under Bankruptcy Case No. 01-11628 Petition Date: December 17, 2001 U.S. Bankruptcy Court: United States Bankruptcy Court District of Delaware 824 Market Street, 5th Floor Wilmington, DE 19801 Telephone (302) 252-2900 Bankruptcy Judge: The Honorable Peter J. Walsh Debtors' Lead Bankruptcy Counsel: Paul E. Harner, Esq. Jones, Day, Reavis & Pogue 77 West Wacker Chicago, Illinois 60601 Telephone (312) 782-3939 Debtors' Local Bankruptcy Counsel: Daniel J. DeFranceschi, Esq. Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, Delaware 19899 Telephone (302) 658-6541 U.S. Trustee: Donald F. Walton Acting United States Trustee for Region 3 844 King Street, Suite 2313 Lockbox 35 Wilmington, Delaware 19801-3519 Telephone (302) 573-6491 Fax (302) 573-6497 ----------------------------------------------------------------- [00005] 20 LARGEST HOLDERS OF SENIOR SUBORDINATED UNSECURED NOTES ----------------------------------------------------------------- Entity Claim Amount ------ ------------ The Bank of New York $175,000,000 Corporate Trust Administration 101 Barclay Street Floor 21 West New York, New York 10286 Tel: 212 815 5758 Fax: 212 815 5195 Investcorp $58,800,000 Sean Madden 280 Park Avenue New York, New York 10017 Tel: 212 599 4700 Provident Investment $12,000,000 Management LLC David Fussell 1 Fountain Square Chattanooga Tennessee 37402 Tel: 423 755 1916 Seneca Capital Management $12,000,000 Charles Dicke 909 Montgomery St. Suite 500 San Francisco California 94133 Tel: 415 486 6500 Bank of America Securities $9,735,000 Scott Reifer 300 Hamon Meadows Blvd. Secaucus, New Jersey 07094 Tel: 212 583 8351 David L. Babson & Co., Inc. $9,000,000 Mary Wilson-Kibbe 1295 State Street Springfield, Massachusetts 01111 Tel: 413 744 6070 Apollo Advisors $8,800,000 Anthony Tortorelli 2 Manhattan Road, 1st Floor Purchase, New york 10577 Tel: 914 694 8000 Muzinich & Co., Inc. $6,300,000 George Muzinich 450 Park Avenue 18th Fl. New York, New York 10022 Tel: 212 888 3413 Bank of Montreal $6,000,000 Neil Hanson c/o Chase Bank Texas J.P. Morgan Chase Tower 600 Travis Street 5oth Floor Houston, Texas 77002 Tel: 713 216 1358 Commonwealth Advisors $5,300,000 Walter Morales 247 Florida Street Baton Rouge, Louisiana 70801 Tel: 225 343 93424 Teachers Advisors, Inc. $5,000,000 Michael O'Kane 730 Third Avenue New York, NY 10017 Tel: 212 916 4345 ING Pilgrim $5,000,000 Steve Vyner 7737 E. Double Tree Ranch Road Scottsdale, Arizona 852 58 Tel: 480 477 3000 Delaware Management Company $5,000,000 Matt Naneen 7800 E. Union Ave. Ste. 300 Denver, Colorado 80237 Tel: 215 255 8891 PPM America, Inc. $5,000,000 Brian Schinderle 225 W. Wacker Drive Suite 1200 Chicago, Illinois 60606 Tel: 312 364 2572 Stein Roe & Franham $3,000,000 Stephen Loskman 1 South Wacker Drive 33rd Floor Chicago, Illinois 60606 Tel: 312 368 7788 Penn Capital Management $2,115,000 Richard Hocker 457 Haddonfield Road Suite 210 Cherry Hill, New Jersey 80002 Tel: 856 910 8181 Cadogen Management LLC $2,000,000 Chris Strausser 414 East 75th Street, 3rd Floor New York, New York 10021 Tel: 212 288 6999 Hawkeye Capital LP $2,000,000 Rich Rubin 200 West 57th Street, Suite 1004 New York, New York 10019 Tel: 212 265 0565 BlackRock Financial Management $2,000,000 Keith Andersen 345 Park Avenue-29th Floor New York, New York 10154 Tel: 212 754 5330 Diaco Investments $2,000,000 John Bernstein 1271 Avenue of the Americas New York, New York 10020 Tel: 212 259 0300 MBIA Inc. $2,000,000 Robert Claiborne 113 King Street Armonk, New York 10504 Tel: 914 765 3347 Credit Suisse Asset Management $2,000,000 Richard Linquist 466 Lexington Ave. 13th Floor New York, New York 10017 Tel: 212 326 5420 ----------------------------------------------------------------- [00006] 20 LARGEST HOLDERS OF SUBORDINATED ACQUISITION NOTES ----------------------------------------------------------------- Entity Claim Amount ------ ------------ TJWSR/SKW Investments $10,000,000 Thomas Watts 1001 E. Southmore, Suite 402 Pasadena, TX 77502 Bode-Finn LP $8,080,000 c/o Columbus Truck & Equipment Chief Financial Officer 1688 East Fifth Avenue Columbus, OH 43202 Bryan Rich $6,754,220 217 Whitney Street Northboro, MA 01532 River City Rentals $5,500,000 John Green 3340 Cothrin Ranch Road Shingle Springs, CA 95682 Team Runyon, Inc. $4,000,000 c/o Jack's Tool Rental 5283 E. 146th Street Noblesville, IN 46060 Contractors Equipment Company $3,500,000 c/o Lloyd Wells Gift Trust 17075 Old Coach Gift Trust Poway, CA 92064 Sylvan Equipment Corp. $3,100,000 Mr. Elliot Prigozen 740 Bryant Avenue Roslyn Harbor, NY 11576 Tennessee Tool $3,100,000 Kenneth & Ted Petty 411 North Maney Avenue Murfreesboro, TN 37130 Francis P. Rich $2,969,000 62 sandy Pond Parkway Bedford, NH 03110 Linda A. Raymond $2,749,520 4012 Deer Creek Drive Louisville, KY 40241 Gary L. Gabriel $2,600,000 3327 Vacation Lane St. James, FL 33956 James and Virginia Kelly $2,500,000 20646 Windham Macomb Twp, MI 48044 Reliable Rental & Supply Co., Inc. $2,500,000 c/o Crane Works, Inc. Chief Financial Officer PO Box 336 Birmingham, AL 35202 George W. Gartner III $2,375,000 2433 Max Road Pearland, TX 77581 C & E Rental and Service Inc. $2,000,000 EC Holdings Chief Financial Officer 20288 Cumberland Road Noblesville, IN 46060 Gary L. Gabriel Grantor Retained $2,000,000 Troy L. Gabriel, Trustee Annuity Trust Alpha PO Box 446 Grove City, OH 43123 Gary L. Gabriel Grantor Retained $2,000,000 Thomas C. Richardson, Trustee Annuity Trust Beta PO Box 446 Grove City, OH 43123 Dimco Construction Company $2,000,000 Chief Financial Officer 75 Chapman Street Providence, RI 02905 Raymond E. Mason Foundation $1,920,000 c/o Columbus Truck & Equipment Chief Financial Officer 1688 East Fifth Avenue Columbus, OH 43203 ----------------------------------------------------------------- [00007] 20 LARGEST HOLDERS OF UNSECURED TRADE CLAIMS ----------------------------------------------------------------- Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Motor Credit Company Equipment Lease $4,140,913 Commercial Lending Services PO Box 910 Dearborn, Michigan 48127 Transmerica Business Credit Equipment Lease $1,043,033 Corporation 144 Merchant Street Suite 150 Cincinnati, OH 45246 Debris Financial Services Equipment Lease $806,920 Inc. 201 Merritt 7, Suite 700 Norwalk, CT 06856 Key Corporate Capital Inc. Equipment Lease $776,424 54 State Street, 9th Floor Albany, New York 12207 Citizens Leasing Corporation Equipment Lease $632,596 One Citizen Plaza, 4th Floor Providence, RI 02903 Textron Financial Equipment Lease $608,246 Corporation Commercial Finance Division Suite 400 4550 North Point Parkway Alpharetta, Georgia 30022 OmniQuip Parts Worldwide Trade Debt $593,548 2760 Collections Center Drive Chicago, Illinois 60693 The CIT Group/Equipment Equipment Lease $557,251 Financing, Inc. 1540 W. Fountainhead Parkway Tempe, AZ 85282 Fleet Capital Corporation Equipment Lease $548,520 c/o Fleet Capital Leasing 300 Galelria Parkway N.W. Suite 800 Atlanta, Georgia 30339 Bank of America Equipment Lease $537,827 PO Box 31682 Tampa, FL 33631-3682 LaSalle National Leasing Equipment Lease $489,084 Corporation 502 Washington Avenue Suite 500 Towson, Maryland 21204 CitiCorp Del-Lease, Inc. Equipment Lease $421,705 dba Citicorp Dealer Finance 450 Mamaroneck Avenue Harrison, New York 10528 AMSOUTH Leasing, Ltd. Equipment Lease $421,430 1900 Fifth Avenue north Birmingham, Alabama 35203 South Trust Bank, NA Equipment Lease $414,412 420 North 20th Street Birmingham, AL 35203 Associates Leasing, Inc. Equipment Lease $407,251 PO Box 868 Addison, Texas 75001 IBJ Whitehall Business Equipment Lease $390,097 Credit Corporation One State Street New York, NY 1004 Attn: Equipment Finance Division American finance Group, Inc. Equipment Lease $350,488 dba Guaranty Capital Corporation 24 School Street, 7th Floor Boston, Massachusetts 02108 ICX Corporation Equipment Lease $347,387 3 Summit Park Drive Suite 200 Cleveland, OH 44131 Heller Financial Leasing, Equipment Lease $295,737 Inc. 500 West Monroe Street Chicago, IL 60661 PO Box 96881 Chicago, IL 60693 General Electric Equipment Lease $283,980 Capital Corporation 1000 Windward Concourse Suite 403 Alpharetta, Georgia 30005 ----------------------------------------------------------------- [00008] DEBTORS' MOTION TO SECURE $55 MILLION OF DIP FINANCING ----------------------------------------------------------------- "It is essential that the Debtors obtain postpetition financing to continue their ordinary course, day-to-day operations, service their customers, accomplish their long-term operational restructuring goals and effectuate their reorganization," Joseph H. Izhakoff, NationsRent's Vice President, General Counsel and Secretary, tells Judge Walsh. Although the Debtors have considerable assets, Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue adds, immediate access to credit under a new post-petition debtor-in-possession financing facility is necessary to enhance the Company's liquidity and provide customers, employees, vendors, suppliers and other key constituencies with confidence that the Debtors have more than sufficient resources available to maintain their operations in the ordinary course. "Absent this key source of liquidity or the full cooperation of these parties at this critical early stage," Mr. Harner says, "the Debtors' could suffer the loss of customer patronage and vendor support, which would, in turn, impair their ability to maximize the value of their estates and reorganize successfully." Prior to filing for chapter 11 protection, NationsRent turned to its existing Bank Lender to arrange for DIP Financing. Those talks culminated in the documentation of a DIP Facility that, subject to Bankruptcy Court approval, provides the Debtors with up to $55,000,000 of super-priority senior secured post-petition credit on these terms: Borrowers: NationsRent, Inc., and each of its Debtor affiliates Lender: Fleet National Bank, and any assignee Administrative Agent: Fleet National Bank Syndication Agent: Fleet National Bank Swing Lender: Fleet National Bank Issuing Bank: Fleet National Bank Lead Arranger: Fleet Securities, Inc. Book Manager: Fleet Securities, Inc. Commitment: In the form of a revolving credit facility, the Lender will provide the Borrowers with access to: $20,000,000 on entry of an Interim DIP Financing Order by the Bankruptcy Court and $55,000,000 after: (A) satisfaction of certain Cash Management Obligations, (B) appointment by the Debtors of an interim president and chief restructuring officer (C) assignment by Fleet to an eligible assignee acceptable to Fleet and the Debtors, respectively, of at least $27,000,000 of the Total Commitment, (D) satisfaction of any condition to interim funding that has been deferred in the discretion of the Administrative Agent and (E) entry of the Final Order. The DIP Facility includes a $20,000,000 sublimit for standby and (if agreed by the Administrative Agent) documentary letters of credit Mandatory Reduction: The Loan Agreement provides that the Maximum Commitment will be reduced by $5,000,000 on November 30, 2002 Borrowing Base: Borrowings are limited to the sum of: (a) 80% of eligible accounts, eligible instruments and eligible chattel paper arising from the Debtors' sale or lease of inventory in the ordinary course; minus (b) amounts specified as reserves determined by the Agents in their reasonable discretion (including a $3,500,000 Reserves for the Carve- Out) Availability: The sum of the aggregate outstanding amount of direct borrowings plus undrawn letters of credit and drawn but unreimbursed letters of credit under the DIP Facility shall not exceed an amount equal to the lesser of: (a) the Maximum Commitment and (b) the Borrowing Base. Swing Line Lending: The Administrative Agent will establish a loan commitment amount of $10,000,000 for swing line loans. The swing line loans shall be available upon the same terms that revolving credit loans would be available under the DIP Facility but for the requirement of a minimum amount. Superprioritv Claims and Collateral Security: Subject to the Carve-Out, all Loans. unreimbursed obligations under Letters of Credit, including those relating to Specified Existing Letters of Credit, and all other obligations under the DIP Facility are: (1) entitled to superpriority claim status, pursuant to section 364(c)(1) of the Bankruptcy Code, senior to any superpriority claim granted as adequate protection in respect of the Prepetition Lenders and any other claims of any entity, including any claims under sections 503, 507, 1113 and 1114 of the Bankruptcy Code; and (2) secured by a first priority perfected security interest in and lien on all of the assets, whether now owned or hereafter acquired, of the Debtors and their estates, including avoidance power claims arising under Chapter 5 of the Bankruptcy Code, other than avoidance power claims against the Prepetition Lenders. Carve-Out: The Lenders agree to a $3,500,000 carve-out for payment of unpaid professional fees and disbursements incurred following any Event of Default by professionals retained by the Debtors and any statutory committees appointed in the chapter 11 cases and for payment of U.S. Trustee fees pursuant to 28 U.S.C. Sec. 1930 and to the Clerk of the Bankruptcy Court. Maturity Date: June 13, 2003 Interest Rates: Base Rate plus 2.5% Fees: The Debtors agree to pay a variety of Fees: * an $825,000 Facility Fee; * a $550,000 Arranger Fee * a monthly $50,000 Agent's Fee if the Debtors don't draw on the Facility and a retroactive $100,000 monthly Agent's Fee if the Debtors do draw on the Facility; * 3.25% per annum letter of credit fees; * 0.5% per year on every dollar not borrowed Financial Covenants: The Debtors covenant with the Lenders that their Adjusted Consolidated EBITDA will not fall below: ($2,828,000) for the month of January 2002; ($2,874,000) for the two-month period ending February 2002; and for each successive three-month period, Minimum Adjusted Consolidated EBITDA will be no less than: Three-Month Minimum Adjusted Period Ending Consolidated EBITDA ------------- ------------------- March 2002 $1,720,000 April 2002 7,327,000 May 2002 17,318,000 June 2002 23,533,000 July 2002 28,984,000 August 2002 32,458,000 September 2002 33,594,000 October 2002 32,976,000 November 2002 27,135,000 The Debtors covenant with the Lenders that their Cumulative Cash Flow will not fall below: For the Minimum Month Ending Consolidated Cash Flow ------------- ---------------------- January 2002 ($5,834,000) February 2002 (3,966,000) March 2002 (7,786,000) April 2002 (19,796,000) May 2002 (21,366,000) June 2002 (8,889,000) July 2002 (10,906,000) August 2002 4,736,000 September 2002 20,823,000 October 2002 16,795,000 November 2002 35,957,000 The Debtors covenant with the Lenders that they will limit their aggregate capital expenditures to: For the Period From the Petition Date Through the Month Ending Maximum CapEx ----------------- ------------- January 2002 $4,197,000 February 2002 9,252,000 March 2002 18,325,000 April 2002 26,559,000 May 2002 31,085,000 June 2002 32,243,000 July 2002 33,291,000 August 2002 34,765,000 September 2002 35,814,000 October 2002 36,695,000 November 2002 37,576,000 Management Search Covenant: The Debtors promise to: (A) commence and diligently maintain a search for the selection of an industry-experienced interim president and chief restructuring officer who is also experienced in restructuring operations of financially distressed companies; and (B) commence and diligently maintain an expeditious search, using a nationally-recognized executive search firm, for a permanent president and chief executive officer with industry experience who is also experienced in restructuring operations of financially distressed companies, and hire that person by June 30, 2002. By this Motion, the Debtors ask Judge Walsh for permission to enter into the DIP Facility, perform their obligations under the Credit Agreement, and borrow up to $20,000,000 from Fleet on an interim basis pending a Final DIP Financing Hearing. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------