Nationsrent Liquidating Trust Agreement

Exhibit 10.1

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE ____________________________________
In re:

NATIONSRENT, INC., et al.,

Debtors.
____________________________________
Chapter 11

Case No. 01-11628 (PJW)

Jointly Administered


NATIONSRENT LIQUIDATING TRUST AGREEMENT

This NationsRent Liquidating Trust Agreement (the "Agreement") dated as of June 13, 2003 by and among NationsRent, Inc. ("NationsRent"), and 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 and NationsRent of Indiana, LP (collectively with NationsRent, along with any successors in interest, the "Debtors"), as settlors, and Perry Mandarino as trustee (the "Initial Trustee"), for the benefit of the holders of Allowed Class C-4 Claims under the terms of the First Amended Joint Plan of Reorganization of NationsRent and the other Debtors filed in the above-captioned matter (as modified by certain modifications filed with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on April 16, 2003, May 6, 2003 and May 13, 2003 (the "Plan") and confirmed by the Bankruptcy Court in the Chapter 11 Cases No. 01-11628 through 01-11639 (Jointly Administered) by Order dated May 14, 2003 (the "Confirmation Order").

WITNESSETH:

WHEREAS, the Trust (as defined in Article I) is created on behalf, and for the sole benefit, of the Beneficiaries (as defined in Article I);

WHEREAS, pursuant to the Plan and the Confirmation Order, NationsRent was merged with and into Las Olas Thirteen Corporation ("Las Olas Thirteen"), a Delaware corporation and an indirect subsidiary of NR Holdings, Inc., a Delaware corporation ("Holdco");

WHEREAS, in accordance with the terms of the Plan, on the Effective Date, (i) Holdco shall issue five percent (5%) of each of the New Common Stock and the New Preferred Stock, and Las Olas Thirteen shall transfer the New Subordinated Notes (the New Common Stock, New Preferred Stock and New Subordinated Notes, collectively, the "New Securities") not otherwise distributed to the New Capital Providers, to the Trust, and Holdco shall distribute $300,000 in cash (the "Cash Amount") to the Trust and (ii) the Debtors shall assign to the Trust all of their rights to pursue, and receive all recoveries on account of, all Unresolved Avoidance Actions (against parties not released under the Plan) and all Retained Actions;

WHEREAS, the primary purpose of the Trust is the liquidation of the Trust Assets and the Trust' s purposes are limited to (i) the collection of the Trust Assets (as defined in Article I), (ii) the sale of New Securities in one or a series of related transactions for cash and/or other property, (iii) the investigation and pursuit of Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions, to the extent deemed reasonable by the Trustee (as defined in Article I), (iv), the prosecution and/or settlement of objection to Class C-4 Claims, (v) the distribution of Trust Assets from time to time in accordance with the terms of this Agreement (vi) becoming a party to, and being bound by the terms and conditions of, that certain Stockholders' Agreement, dated the Effective Date, by and among Holdco and the stockholders named therein or which may become a party thereto (the "Stockholders' Agreement"), (vii) becoming a party to, and being bound by the terms and conditions of, that certain Call Agreement, dated the Effective Date, by and between Holdco and the Trustee (the "Call Agreement"), and (viii) following the sale of the New Securities and the Trust' s investigation and pursuit of the Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions, the liquidation of any remaining Trust Assets in accordance with the terms of this Agreement, the Stockholders' Agreement, the Call Agreement and the Plan; and

WHEREAS, pursuant to the Plan, the Debtors, the Trustee, and the Beneficiaries are required to treat, for federal income tax purposes, the transfer of the Trust Assets to the Trust as a transfer of the Trust Assets by the Debtors to the Beneficiaries in satisfaction of their Allowed Class C-4 Claims, followed by a transfer of the Trust Assets by the Beneficiaries to the Trust in exchange for their beneficial interests in the Trust, and to treat the Beneficiaries as the grantors and owners of the Trust; and

WHEREAS, the Trust is intended to be treated as a grantor trust for federal income tax purposes;

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and in the Plan, the Debtors and the Initial Trustee agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATIONS

1.1 Definitions

1.1.1 "Beneficiaries" shall collectively mean the holders of Allowed Class C-4 Claims under the Plan, or any successors to such holders' Allowed Class C-4 Claims pursuant to Section 12.1 herein.

1.1.2 "Permitted Investments" shall mean investments in (i) direct obligations of the United States of America or obligations of any agency or instrumentality thereof which mature not later than one year from the date of acquisition thereof, or (ii) money market deposit accounts, checking accounts, savings accounts, or certificates of deposit, or other time deposit accounts which mature not later than one year from the date of acquisition thereof which are issued by a commercial bank or savings institution organized under the laws of the United States of America or any state thereof.

1.1.3 "Proportionate Share" shall mean, with respect to a particular Beneficiary, a fraction, the numerator of which is the amount of such Beneficiary' s Allowed Class C-4 Claims and the denominator of which is the amount of the Allowed Class C-4 Claims for all of the Beneficiaries.

1.1.4 "Trust" shall mean the liquidating trust established pursuant to the terms of this Agreement and the Plan.

1.1.5 "Trust Assets" shall mean the following assets held from time to time pursuant to this Agreement by the Trustee for the benefit of the Beneficiaries: (i) the New Securities, the Cash Amount, the Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions and the proceeds and/or income related to the New Securities, the Cash Amount, the Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions (including any dividends, payments or other distributions received on account of the New Securities, any consideration received in connection with the sale of the New Securities, and any cash proceeds or other consideration recovered on account of such Unresolved Avoidance Actions and Retained Actions) and (ii) any assets acquired in exchange, or in substitution, for the assets referenced in clause (i) of this definition.

1.1.6 "Trustee" shall mean (x) initially, the Initial Trustee, and (y) any successors or replacements duly appointed under the terms of this Agreement.

1.2 Use of Plan Definitions . All terms which are used in this Agreement and not defined herein shall have the same meaning set forth in the Plan. In the case of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Agreement shall govern and control.

1.3 Interpretation . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the provisions of this Agreement. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender.

ARTICLE II

DECLARATION OF TRUST

2.1 Creation of Liquidating Trust . The Debtors and the Trustee, pursuant to the Plan and in accordance with title 11 of the Bankruptcy Code, hereby constitute and create the Trust, which shall bear the name "NationsRent Unsecured Creditor' s Liquidating Trust." In connection with the exercise of the Trustee' s power hereunder, the Trustee may use this name or such variation thereon as the Trustee sees fit.

2.2 Purpose of Trust . The Trust is organized for the primary purpose of liquidating the Trust Assets, and the Trust' s purposes are limited to the following: (i) to collect the Trust Assets; (ii) to hold, vote and sell or exchange the New Securities; (iii) to pursue the Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions, to the extent deemed reasonable by the Trustee; (iv) to make distributions of the Trust Assets from time to time in accordance with the terms of this Agreement; (v) to investigate, prosecute and/or settle objections to Class C-4 Claims (vi) becoming a party to, and being bound by the terms and conditions of, the Stockholders' Agreement; (vii) becoming a party to, and being bound by the terms and conditions of, the Call Agreement; and (viii) following the sale of the New Securities and the investigation and pursuit of the Unresolved Avoidance Actions (against parties not released under the Plan) and Retained Actions, to liquidate the Trust, in the case of each of the above clauses, for the benefit of the Beneficiaries in accordance with the terms of this Agreement, the Stockholders' Agreement, the Call Agreement and the Plan. The activities of the Trust shall be limited to those activities set forth in Article III hereof and those reasonably related or ancillary thereto. The Trust shall not engage in the conduct of any trade or business, except to the extent reasonably necessary to, and consistent with, the purposes of the Trust.

2.3 Appointment and Acceptance of Initial Trustee . The Initial Trustee is hereby named, constituted and appointed as the Trustee, to act and serve as trustee of the Trust upon and subject to the terms and conditions set forth herein. The Initial Trustee is willing, and does hereby accept the appointment, to act and serve as trustee of the Trust, and to hold and administer the Trust Assets pursuant to the terms and conditions of this Agreement, the Stockholders' Agreement, the Call Agreement and the Plan.

2.4 Transfer of Trust Assets .

A. In consideration for the satisfaction of all Allowed Class C-4 Claims, the Debtors hereby grant, release, assign, transfer and deliver, on behalf of the Beneficiaries, the Trust Assets to the Trustee as of the Effective Date, free and clear of all liens, claims, encumbrances and interests, in trust for the benefit of the Beneficiaries to be applied as specified in this Agreement and the Plan. In addition, the Debtors hereby assign to the Trust as of the Effective Date all of their rights to object to all Class C-4 Claims. The Debtors shall from time to time as and when reasonably requested by the Trustee execute and deliver or cause to be executed and delivered all such documents (in recordable form where necessary or appropriate) and the Debtors shall take or cause to be taken such further action as the Trustee may reasonably deem necessary or appropriate, to vest or perfect in or confirm to the Trustee title to and possession of the Trust Assets.

B. For all federal, state and local income tax purposes, the Debtors, the Beneficiaries, and the Trustee shall treat the transfer of the Trust Assets to the Trust as a transfer of the Trust Assets by the Debtors to the Beneficiaries in satisfaction of their Allowed Class C-4 Claims, followed by a transfer of the Trust Assets by the Beneficiaries to the Trust in exchange for their beneficial interests in the Trust. Thus, the Beneficiaries shall be treated as the grantors and owners of the Trust.

C. For all federal income tax purposes, the Trustee and the Beneficiaries shall apply consistent valuations of the Trust Assets.

2.5 No Reversion to the Debtors . Except as may be required or permitted under the Stockholders' Agreement or the Call Agreement, in no event shall any part of the Trust Assets revert to or be distributed to any of the Debtors.

ARTICLE III

ADMINISTRATION OF THE NATIONSRENT TRUST

3.1 Rights, Powers and Privileges . The Trustee shall have only the rights, powers and privileges expressly provided in this Agreement. The Trustee shall have the power to take the actions granted in the subsections below and any powers reasonably incidental thereto, which the Trustee, in his reasonable discretion, deems necessary or appropriate to fulfill the purposes of the Trust, unless otherwise specifically limited or restricted by the Plan or this Agreement, the Stockholders' Agreement or the Call Agreement:

A. Hold legal title to any and all rights of the Debtors and the Beneficiaries in or arising from the Trust Assets, including, but not limited to, the New Securities and the right to vote the New Securities and any other Trust Assets consisting of securities as provided for in Article IV hereof;

B. In reliance upon the official claims register maintained in the Debtors' Chapter 11 cases, maintain on the Trustee's books and records (or on the books and records of any agent appointed by the Trustee to maintain a record of the Beneficiaries and their respective beneficial interests in the Trust) a register evidencing the beneficial interest in the Trust held by each Beneficiary;

C. Protect and enforce the rights to the Trust Assets vested in the Trustee by this Agreement by any method deemed appropriate including, without limitation, by judicial proceedings or otherwise;

D. Subject to the provisions of the Stockholders' Agreement and the Call Agreement, sell or exchange the New Securities for cash and/or other property at such times and for such consideration that the Trustee deems appropriate;

E. Make all distributions provided for in, or contemplated by, the Plan and/or this Agreement;

F. Open and maintain bank accounts on behalf, or in the name, of the Trust;

G. Make all tax withholdings, file tax information returns, make tax elections by and on behalf of the Trust and file returns for the Trust pursuant to Section 8.9 hereof;

H. Send annually to each Beneficiary a separate statement stating the Beneficiary's Proportionate Share of income, gain, loss, deduction or credit and instruct all such Beneficiaries to report such items on their federal tax returns;

I. Establish such reserves for taxes, assessments and other expenses of administration of the Trust as may be necessary and appropriate for the proper operation of matters incident to the Trust;

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