Document:

FIRST SUPPLEMENT TO INDENTURE

 

Exhibit 4.2.1

FIRST SUPPLEMENT,

Dated as of July 27, 2004

to

INDENTURE,

Dated as of October 23, 2003,

AMONG

NATIONSRENT COMPANIES, INC.,

as Issuer,

WILMINGTON TRUST COMPANY,

as Trustee and as Collateral Agent,

AND

THE GUARANTORS NAMED HEREIN,

as Guarantors,

9 1/2% Senior Secured Notes due 2010

 

 

     FIRST
SUPPLEMENT (“Supplement”), dated as of July 27, 2004, to Indenture
(the “Indenture”), dated as of October 23, 2003, among NationsRent Companies,
Inc., a Delaware corporation (the “Company”), the Guarantors (as defined in the
Indenture) and Wilmington Trust Company, as Trustee (in such capacity, the
“Trustee”) and Collateral Agent (in such capacity, the “Collateral Agent”).

WITNESSETH:

     WHEREAS, the Company and the Guarantors have requested an order from the
Commission under section 304(d) of the TIA exempting the Company and the
Guarantors from the requirement under section 314(d) of the TIA to furnish
certificates of fair value in connection with certain sales of assets which
would constitute Collateral or Additional Collateral and providing that such
sales are not to be included in determining whether releases of collateral
require that the certificate of fair value must be provided by independent
expert.

     NOW, THEREFORE, each party hereto agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the Holders:

ARTICLE ONE

INTERPRETATION

     SECTION 1.01. Definitions. The definitions and rules of construction in
the Indenture apply to this Supplement.

     SECTION 1.02. UCC Terms. The terms inventory and equipment are used with
their meanings under article 9 of the New York Uniform Commercial Code.

     SECTION 1.03. Continuing Agreement. Except as expressly set forth in this
Supplement, all the provisions of the Indenture continue in full force and
effect.

     SECTION 1.04. Effectiveness. This Supplement shall become effective
immediately upon (i) the Commission granting an order under section 304(d) of
the TIA exempting the Company and the Guarantors from the requirements of
section 314(d)(1) of the TIA to the extent provided in this Supplement, and
(ii) the satisfaction of any conditions in the Indenture to the effectiveness
of a supplement to the Indenture, including, if required by the terms of the
Indenture, the delivery of any Officer’s Certificates and/or opinions.

ARTICLE TWO

SUPPLEMENT

     SECTION 2.01. Amendment to Section 12.03. Section 12.03 of the Indenture
is amended to read as follows:

     SECTION 12.03. Release of Collateral.

          (a) The Collateral Agent shall not at any time release Collateral from the
security interests created by the Security Agreement unless such release is in
accordance with the provisions of this Indenture and the Security Agreement.

 

 

          (b) At any time when a Default or an Event of Default shall have occurred
and be continuing, no release of Collateral pursuant to the provisions of this
Indenture and the Security Agreement shall be effective as against the Holders.

          (c) The release of any Collateral from the terms of the Security Agreement
shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Security Agreement. To the extent
applicable, the Company shall cause TIA Section 314(d) relating to the release
of property from the security interests created by this Indenture and the
Security Agreement to be complied with. Any certificate or opinion required by
TIA Section 314(d) may be made by an Officer of the Company, except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by
an independent Person, which Person shall be an independent engineer, appraiser
or other expert selected or approved by the Trustee in the exercise of
reasonable care. A Person is “independent” if such Person (a) is in fact
independent, (b) does not have any direct financial interest or any material
indirect financial interest in the Company or in any Affiliate of the Company
and (c) is not an officer, employee, promoter, underwriter, trustee, partner or
director or person performing similar functions to any of the foregoing for the
Company. The Trustee and the Collateral Agent shall be entitled to receive and
rely upon a certificate provided by any such Person confirming that such Person
is independent within the foregoing definition.

          (d) So long as no Event of Default shall have occurred and be then
continuing, the Collateral Agent’s security interests in, and Liens on, (i)
Collateral of the type described in clauses (a) and (b) of Section 2.1 of the
Security Agreement shall automatically be released upon the sale thereof by the
Company or the applicable Guarantor, as the case may be, in the ordinary course
of business and (ii) the proceeds resulting from any such sale shall be
automatically released upon receipt thereof by the Company of such Guarantor,
as the case may be.

          (e) If requested in writing by the Company, the Trustee shall instruct the
Collateral Agent to execute and deliver such documents, instruments or
statements prepared and delivered to it at the expense of the Company and
acceptable to the Trustee and the Collateral Agent and to take such other
action as the Company may reasonably request to evidence or confirm that (i)
the Collateral falling under this Section 12.03 has been released from the
Liens of the Security Agreement or (ii) the property described in such
documents, instruments or statements does not constitute Collateral, and in
each such case, the Company shall have provided the Collateral Agent with such
information relating thereto as the Collateral Agent may reasonably request.
The Collateral Agent shall execute and deliver such documents, instruments and
statements and shall take all such actions promptly upon receipt of such
instructions from the Trustee.

          (f) Notwithstanding anything to the contrary in this Indenture, neither
the Company nor any Guarantor need furnish an Officer’s Certificate or the
certificate or opinion of an engineer, appraiser, or other expert that would
otherwise be required by section 314(d)(1) of the TIA on the release of the
following collateral and its proceeds (the “Exempt Collateral”), upon the sale
or disposition thereof by the Company or a Guarantor in the ordinary course of
business:

          (1) Rental Equipment;

          (2) Additional Collateral, to the extent such Additional Collateral
would constitute Rental Equipment if such assets were to be added to
Collateral by way of a Supplement to the Security Agreement;

-2-

 

          (3) any Additional Collateral consisting of machinery, equipment,
furniture, apparatus, tools, implements, materials or supplies or other
similar property (“Subject Property”)
which, in the Company’s reasonable opinion, may have become obsolete
or unfit for use in the conduct of its businesses or the operation of the
Collateral upon replacing the same with, or substituting for the same,
new Subject Property constituting Collateral not necessarily of the same
character but being of at least equal value and utility as the Subject
Property so disposed of, as long as such new Subject Property becomes
subject to the security interest created by the Security Agreement; and

          (4) any Additional Collateral consisting of personal property the
use of which is no longer necessary or desirable in the proper conduct of
the business or maintenance of the earnings of the Company or the
Guarantors and is not material to the conduct of the business of the
Company and the Guarantors, taken as a whole.

          (g) The fair value of Exempt Collateral released from the Lien and
security interest of the Security Agreement pursuant to Indenture shall not be
considered in determining whether the aggregate fair value of Collateral
released from the Lien and security interest of the Security Agreement in any
calendar year exceeds the 10% threshold specified in TIA Section 314(d)(1).
The Company’s and each Guarantor’s right to rely on the immediately preceding
sentence at any time is conditioned upon the Company having furnished to the
Trustee all certificates described in Section 12.03(i) that were required to be
furnished to the Trustee at or prior to such time.

          (h) The Company may from time to time file with the Commission a request
for exemption from the requirements of TIA Section 314(d). The Company shall
provide the Trustee with a copy of any such exemption and promptly inform the
Trustee of any rescission or termination of, or amendment to, such exemption.

          (i) In addition to the annual certificate required by Section 4.06, the
Company shall deliver to the Trustee, within 15 days after the end of each of
the six month periods ended on May 31st and November 30th of each year, a
certificate signed on behalf of the Company by an Officer of the Company to the
effect that all dispositions of Exempt Collateral during the immediately
preceding six month period were made by the Company and the Guarantors in the
ordinary course of business and that all proceeds therefrom were used by the
Company and the Guarantors in connection with their respective businesses or to
make payments on the Notes or as otherwise permitted under this Indenture and
the Security Agreement.

ARTICLE THREE

MISCELLANEOUS

     SECTION 3.01. Trust Indenture Act Controls.

     Subject to any exemption under the TIA, if any provision of this
Supplement limits, qualifies, or conflicts with another provision which is
required to be included in the Indenture by the TIA, the required provision
shall control. Any provision of the TIA which is required to be included in a
qualified Indenture, but not expressly included herein, shall be deemed to be
included by this reference.

     SECTION 3.02. Governing Law.

     THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.

-3-

 

     SECTION 3.03. No Recourse Against Others.

     A past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or Guarantor or of the Trustee shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Guarantees, the Security Agreement, the Indenture or this
Supplement or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder, by accepting a Note, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.

     SECTION 3.04. Successors.

     All agreements of the Company and the Guarantors in this Supplement shall
bind their successors and assigns. All agreements of the Trustee and the
Collateral Agent in this Supplement shall bind their respective successors and
assigns. In the event of any transfer or assignment of rights by any Holder or
the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.

     SECTION 3.05. Duplicate Originals.

     All parties may sign any number of copies of this Supplement. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.

     SECTION 3.06. Severability.

     In case any one or more of the provisions in this Supplement shall be held
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.

-4-

 

SIGNATURES

     IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed, all as of the date first written above.

	 	 	 	 	 
	 	NATIONSRENT COMPANIES, INC., as Issuer

 	 
	 	By:  	 	 
	 	 	Name: Thomas J. Hoyer	 	 
	 	 	Title: Executive Vice President
and

Chief Financial Officer	 	 
	 

NATIONSRENT, INC.

LAS OLAS TWELVE CORPORATION

LAS OLAS FOURTEEN CORPORATION

NRGP, INC.

NATIONSRENT USA, INC.

NATIONSRENT WEST, INC.

LOGAN EQUIPMENT CORP.

NATIONSRENT TRANSPORTATION

SERVICES, INC.

BDK EQUIPMENT COMPANY

NR DELAWARE, INC., as Guarantors

	 	 	 	 	 
	 	By:  	 	 
	 	 	Name: Thomas J. Hoyer	 	 
	 	 	Title: Executive Vice President
and
Chief Financial Officer	 	 
	 

NATIONSRENT OF TEXAS, LP, as Guarantor

By: NRGP, Inc., as General Partner

	 	 	 	 	 
	 	By:  	 	 
	 	 	Name: Thomas J. Hoyer	 	 
	 	 	Title: Executive Vice President
and
Chief Financial Officer	 	 

-5-

 

	 	 	 	 	 

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as Trustee

 	 
	 	By:  	 	 
	 	 	Name: Christopher J. Slaybaugh	 	 
	 	 	Title: Financial Services Officer	 	 
	 

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name: Christopher J. Slaybaugh	 	 
	 	 	Title: Financial Services Officer	 	 
	 

-6-Letter Agreement w/ Metcare and Humana

 

Exhibit 10.2

February 21, 2003

Debra A. Finnel

Chief Operating Officer

Metcare of Florida, Inc.

500 Australian Avenue, Suite 1000

West Palm Beach, Florida 33401

	 	 	 
	Re:

	 	Letter of Agreement Pertaining to Amendment of 
Physician Practice Management Participation Agreement

Dear Debra:

     This letter is to set forth the terms in principle of an amendment to the
Physician Practice Management Participation Agreement between Metcare of
Florida, Inc. (hereinafter, “Metcare”), and Humana Medical Plan, Humana Health
Insurance Company of Florida, Inc. and Humana Insurance Company (hereinafter
collectively, “Humana”) effective on January 1, 2000 and subsequently amended
(hereinafter the “Agreement”).

     The Amendment to the Agreement shall be consistent with the terms and
conditions set forth in general terms in this Letter of Agreement (hereinafter,
“Letter of Agreement”).

     The Amendment in principle shall be as follows:

     1. The Amendment to the Agreement shall be effective on January 1, 2003.

     2. For Medicare+Choice members, Humana will pay Metcare under a global
risk arrangement which will be funded at * of total combined CMS and collected
member premium (equating to * of CMS premium and * of collected member premiums
or * per member).

     3. For commercial members, the risk deal in the current Agreement will
convert to a “no-risk” deal. However, primary care physicians will continue to
be paid commercial HMO member capitation rates as outlined in current contract.

     4. While it is the intent of Humana to continue participating in M&C in
the Daytona Market on an ongoing basis, in the event that Humana ever decides
to exit the Daytona Market the following modification of the Medicare+Choice
global risk arrangement will occur: (1) Two months prior to the market
withdrawal by Humana, the two parties will share risk as follows- *
Metcare and * Humana; (2) One month prior to the market withdrawal by
Humana, the two parties will share risk on the basis of * Metcare and * Humana.
If Humana should decide to exit the Daytona market, Metcare shall be permitted
to contract with any other HMO or form its own HMO to offer M&C services on any
financial basis whatsoever effective after Humana’s exit of the market.
Further, Metcare shall be permitted to notify Humana members of any new
arrangement 60 days prior to the termination of Humana’s Medicare+Choice
contract with CMS.

* The Confidential Portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.

 

 

Debra A. Finnel

Page 2

     5. During the term of the Agreement, Humana will review cash payments due
to Metcare on a monthly basis. If in any month the total amount due to Metcare
is less than $ * Humana will make a cash advance to Metcare
to increase the total cash payment to Metcare to $ * . (For example: If the
monthly surplus is $ * due to Metcare, Humana will make an additional $ * cash
advance payment to Metcare in order to result in a $ * payment. Alternatively,
if the monthly surplus due to Metcare is $ * , Humana will make no cash advance
to Metcare that month since the $ * minimum cash payment has already been
achieved. Finally, if a month results in a deficit for Metcare, Humana will
make a $ * cash advance payment in order to achieve the $ * cash payment
level). All cash advance payments will be expensed against Metcare’s Service
Fund totals and shall be repaid by Metcare to Humana. However, if during the
term of this deal, Metcare receives monthly payments that average more than $ *
        , and they are subsequently followed by a month in which a deficit is
generated, Humana will not make the $ * guaranteed payment. If less than $ *
is necessary to reach the monthly average of $ * , then the lower payment will
be made instead of the guaranteed $ * monthly payment.

     6. The deficit is defined as the negative balance in the January 2003
Service Fund Total (approximately $ * ) will be converted into a note payable
to Humana and will be treated separately from the ongoing Service Fund balance
from that point onward. Repayment of the note will be based on 12 equal
monthly installments charged to Metcare’s Service Fund balance beginning
January 2003.

     7. Humana will pay directly to the appropriate providers certain debts
incurred by Metcare relating to PCP incentives, PCP hospitalist services,
oncology supplies and office space rental. Such payments are expected to be
approximately $ * in total and will be mutually agreed to be Humana and
Metcare prior to the execution of the Amendment. Up to $ * of the payments set
forth in this paragraph will be added to Metcare’s note payable to Humana under
Paragraph 6. Humana will charge the remainder of the payments, if any, to
Metcare’s Service Fund balance.

     8. During the term of the Amended Agreement Humana will agree not to enter
into any new MSO M+C global risk deals for Medicare+Choice HMO products in the
Daytona Market. In addition, unless agreed to by Humana, Metcare and its
affiliated companies will agree not to enter into or participate in a risk
contract (including global, full, and limited risk and capitated contracts) for
M+C members with any other Medicare+Choice HMO or PSO in Florida counties in
which Metcare and Humana have a Medicare+Choice contract; specifically Palm
Beach, Broward, Miami-Dade, Volusia, and Flagler Counties. Failure to comply
with the provisions of this paragraph will constitute cause for termination of
the Agreement. Humana will make reasonable efforts to ensure that all
contracted risk providers are treated similarly with respect to enforcement of
contractual obligations.

* The Confidential Portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.

 

 

Debra A. Finnel

Page 3

     9. The term of the Amended Agreement in the Daytona Market between Metcare
and Humana will be 12 months from the effective date, and will automatically
renew unless the terminating party gives the other party notice of termination
180 days prior to the end of the term.

     10. If, during the term of the Amended Agreement, Metcare notifies Humana
of its intent to terminate the Agreement, any restrictions on Humana related to
MSO exclusivity in the Daytona Market, as described in paragraph 8 above, will
be immediately void as of the date of the termination notice.

     11. If Metcare obtains external stop loss insurance in the Daytona Market,
acceptable to Humana, the monthly premium for said stop loss insurance will be
paid directly from Humana to the stop loss carrier. The stop loss premium
expenses will be charged to Metcare on a monthly basis. If at any time Metcare
does not carry external stop loss insurance acceptable to Humana, Metcare
agrees to use Humana’s stop loss insurance. In addition, if Metcare carries
external stop loss insurance, any requirements for claims data imposed by the
external stop loss carrier are understood to be the sole responsibility of
Metcare.

     At the time a revised Agreement is executed between Metcare and Humana,
both parties agree to issue a mutually agreed-upon written statement to the
participating PCP’s in the Daytona Market notifying them of Metcare’s
continuing relationship with Humana.

     Also, both Metcare and Humana agree to work in partnership to resolve
problems and grow membership in all areas in which they mutually do business.

     This Letter of Agreement is subject to the execution of the Amendment of
the Agreement. It is intended that the Amendment shall be executed by the
parties within 10 business days from the date of this Letter of Agreement.

     Please execute this Letter of Agreement where indicated below and return a
fully executed copy to me for my records.

Sincerely,

Michael Seltzer

* The Confidential Portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.

 

 

Debra A. Finnel

Page 4

	 	 	 	 	 	 	 
	Agreed to and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	Metcare of Florida, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	

	 	Date:
	 	

	

	 	Debra A. Finnel	 	 	 	 
	

	 	Chief Operating Officer	 	 	 	 
	 
	 	 	 	 	 	 
	Agreed to and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	Humana Medical Plan, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	

	 	Date:
	 	

	

	 	Michael A. Seltzer	 	 	 	 
	

	 	Chief Executive Officer of South Florida	 	 	 	 
	 
	 	 	 	 	 	 
	Agreed to and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	Humana Health Insurance Company of Florida, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	

	 	Date:
	 	

	

	 	Michael A. Seltzer	 	 	 	 
	

	 	Chief Executive Officer of South Florida	 	 	 	 
	 
	 	 	 	 	 	 
	Agreed to and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	Humana Insurance Company.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	

	 	Date:
	 	

	

	 	Michael A. Seltzer	 	 	 	 
	

	 	Chief Executive Officer of South Florida	 	 	 	 

* The Confidential Portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.

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