Document:

f8k112911ex10ii_datastorage.htm

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement ("Agreement"), dated November 29, 2011, is made by and between DATA STORAGE CORPORATION a Nevada corporation ("Company"), and SOUTHRIDGE PARTNERS II, LP, a Delaware limited partnership (the "Investor").

RECITALS

 

WHEREAS, upon the terms and subject to the conditions of the Equity Purchase Agreement ("Purchase Agreement"), between the Investor and the Company, the Company has agreed to issue and sell to the Investor shares (the "Put Shares") of its common stock, par value $0.001 per share (the "Common Stock") from time to time for an aggregate investment price of up to Twenty Million Dollars ($20,000,000) (the "Registrable Securities"); and

WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, "Securities Act"), and applicable state securities laws with respect to the Registrable Securities;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1.           Definitions.

(a)           As used in this Agreement, the following terms shall have the following meaning:

(i)           "Subscription Date" means the date of this Agreement.

(ii)           "Investor" has the meaning set forth in the preamble to this Agreement.

(iii)           "Register," "registered" and "registration" refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the "SEC").

(iv)           "Registrable Securities" will have the same meaning as set forth in the Purchase Agreement. In addition, Registrable Securities shall include additional securities designated by the Company to be included in the Registration Statement provided that such additional securities shall not result in an amount of securities that may be deemed excessive by the SEC in accordance with Rule 415.  If this is the case, the Registrable Securities defined in the Purchase Agreement shall take priority over any additional securities designated by the Company to be included in the Registration Statement.

 

  

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(v)           "Registration Statement" means the Company’s registration statement on Form S-1, or any similar registration statement of the Company filed with SEC under the Securities Act with respect to the Registrable Securities.

(vi)           "EDGAR" means the SEC's Electronic Data Gathering, Analysis and Retrieval System.

(b)           Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

2.           [RESERVED]

3.           Obligation of the Company.  In connection with the registration of the Registrable Securities, the Company shall do each of the following:

 

(a)           Prepare promptly and file with the SEC within sixty (60)  days after the date hereof, a Registration Statement with respect to not less than the allowable amount of Registrable Securities shares that the Company can register in accordance with Rule 415 of the 1933 Securities Act, and thereafter use all commercially reasonable efforts to cause such Registration Statement relating to the Registrable Securities to become effective within five (5) business days after notice from the Securities and Exchange Commission that such Registration Statement may be declared effective, and keep the Registration Statement effective at all times until the earliest of (i) the date that is three months after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registrable Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registrable Securities (collectively, the "Registration Period"), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(b)           Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.

 

(c)           With respect to the Registrable Securities, permit counsel designated by Investor to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than two (2) business days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects.

 

  

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(d)            As promptly as practicable after becoming aware of the following facts, the Company shall notify Investor and Investor’s legal counsel identified to the Company and (if requested by any such person) confirm such notice in writing no later than one (1) business day thereafter (i): (A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose; and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

 

(e)           Unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, furnish to Investor,  promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto;

 

(f)           Use all commercially reasonable  efforts to (i) register and/or qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Investor may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions: provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;

 

  

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(g)           As promptly as practicable after becoming aware of such event, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading ("Registration Default"), and promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and take any other commercially reasonable steps to cure the Registration Default, and, unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.

 

(h)           [INTENTIONALLY OMITTED];

 

(i)           Use its commercially reasonable efforts, if eligible, either to (i) cause all the Registrable Securities covered by the Registration Statement to be listed on a national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation of all the Registrable Securities covered by the Registration Statement as a National Association of Securities Dealers Automated Quotations System ("Nasdaq”) security within the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the quotation of the Registrable Securities on the Nasdaq Capital Market; or if, despite the Company’s commercially reasonable efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in doing so, to use its commercially reasonable efforts to secure authorization of the Financial Industry Regulatory Authority (“FINRA”) and quotation for such Registrable Securities on the over-the-counter bulletin board and, without limiting the generality of the foregoing;

(j)           Provide a transfer agent for the Registrable Securities not later than the Subscription Date under the Purchase Agreement;

 

(k)           Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request and registration in such names as the Investor may request; and, within five (5) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Investor) an appropriate instruction and opinion of such counsel, if so required by the Company’s transfer agent; and

 

(l)           Take all other commercially reasonable actions necessary to expedite and facilitate distribution to the Investor of the Registrable Securities pursuant to the Registration Statement.

 

  

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4.           Obligations of the Investor.  In connection with the registration of the Registrable Securities, the Investor shall have the following obligations:

 

(a)           It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Investor that the Investor shall timely furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.

 

(b)           The Investor by such Investor’s acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and

(c)           The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d)(ii) or (iii) or 3(g) above, the Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Investor receives the copies of the supplemented or amended prospectus contemplated by Section 3(d)(ii) or (iii) or 3(g) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

5.           Expenses of Registration.  All reasonable expenses incurred in connection with registrations, filings or qualifications pursuant to Section 3, including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.

 

  

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6.           Indemnification.  After Registrable Securities are included in a Registration Statement under this Agreement:

 

(a)           To the extent permitted by law, the Company will indemnify and hold harmless, the Investor, the directors, if any, of such Investor, the officers, if any, of such Investor, each person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person"), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, "Claims") to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as  "Violations").  Subject to Section 6(b) hereof, the Company shall reimburse the Investor, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.   Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the  Company, which consent shall not be unreasonably withheld.  The Investor will indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence.

 

  

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(b)           Promptly after receipt by an Indemnified Person under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding.  In such event, the Company shall pay for only one separate legal counsel for the Investor selected by the Investor.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.  The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

 

7.           Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation; and (c) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

8.           Reports under Exchange Act.  With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to use its commercially reasonable efforts to:

(a)           make and keep public information available, as those terms are understood and defined in Rule 144;

 

(b)           file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act for so long as the Company remains subject to such requirements, and the filing of such reports is required for sales under Rule 144;

 

(c)           furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration; and

 

  

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(d)           at the request of any Investor of Registrable Securities, give its Transfer Agent instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Investor of:

(i) a certificate (a “Rule 144 Certificate”) certifying (A) that such Investor has held the shares of Registrable Securities which the Investor proposes to sell (the “Securities Being Sold”) for a period of not less than (1) year and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

(ii) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Investor’s counsel shall be deemed acceptable if such opinion is not given by Company counsel provided Company counsel reviews and approves such legal opinion and does not unreasonably withheld its approval) that, based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s  books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor).   If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.

9.           Miscellaneous.

(a)           Registered Owners.  A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

 

  

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(b)           Rights Cumulative; Waivers.  The rights of each of the parties under this Agreement are cumulative.  The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing.  Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right.  Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right.  No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

(c)           Benefit; Successors Bound.  This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their successors.

(d)           Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof.  There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement.  Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.

(e)           Amendment.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor.  Any amendment or waiver affected in accordance with this Section 9 shall be binding upon the Company.

(f)           Severability.  Each part of this Agreement is intended to be severable.  In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.

(g)           Notices.  Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered (by hand, by courier, by telephone line facsimile transmission, receipt confirmed, email or other means) or sent by certified mail, return receipt requested, properly addressed and with proper postage pre-paid (i) if to the Company, at its executive office and (ii) if to the Investor, at the address set forth under its name in the Purchase Agreement, with a copy to its designated attorney, or at such other address as each such party furnishes by notice given in accordance with this Section 9(g), and shall be effective, when personally delivered, upon receipt and, when so sent by certified mail, five (5) business days after deposit with the United States Postal Service.

 

  

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(h)           Governing Law.   This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York with respect to any dispute arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.

(i)           Consents.  The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.

(j)           Further Assurances.  In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.

(k)           Section Headings.  The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(l)           Construction.  Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.

(m)           Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by email of a .pdf or telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.  A facsimile transmission or email of a .pdf of this signed Agreement shall be legal and binding on all parties hereto.

[SIGNATURES ON FOLLOWING PAGE]

 

  

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[SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

COMPANY:

                                                      DATA STORAGE CORPORATION

By:_________________________________

Name:_______________________________

Title:________________________________

INVESTOR:

SOUTHRIDGE PARTNERS II, LP

By:_________________________________

Name:_______________________________

Title:________________________________

 

 

11exhibit_10-1.htm

EXHIBIT 10.1

SECOND AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT

 

Second Amendment to Revolving Credit and Security Agreement, dated November 30, 2011, by and among Pac-Van, Inc., an Indiana corporation ("Pac-Van"), GFN North America Corp., a Delaware corporation ("GFN"), the financial institutions party hereto (collectively, the "Lenders" and individually a Lender"), and PNC Bank, National Association ("PNC"), as administrative and collateral agent for the
Lenders (PNC, in such capacity, the "Agent") (the "Second Amendment").

 

W I T N E S S E T H:

 

WHEREAS, Pac-Van and the other Borrowers party thereto, GFN and the other Guarantors party thereto, the Lenders party thereto, Pac-Van Asset Trust, a Delaware statutory trust formed under the Delaware Statutory Trust Act and the Agent entered into that certain Revolving Credit and Security Agreement, dated July 16, 2010, as amended by that certain First Amendment to Revolving Credit and Security Agreement, effective as of March 31, 2011 (as further amended, modified, supplemented or restated from time to time, the "Credit Agreement"), pursuant to which, among other things, the Lenders agreed to extend credit to the Borrowers; and

 

WHEREAS, the Loan Parties desire to amend certain provisions of the Credit Agreement and the Agent and the Lenders desire to permit such amendments pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1. All capitalized terms used herein which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement unless the context clearly indicates otherwise.

 

2. Section 1.2 of the Credit Agreement is hereby amended by adding the following definitions thereto in their appropriate alphabetical order:

 

"Adjustment Date" shall have the meaning specified in the definition of Availability Block.

 

"Availability Block" shall mean, (i) Zero and 00/100 Dollars ($0.00), if the Leverage Ratio is less than 5.50 to 1.00, (ii) Five Million and 00/100 Dollars ($5,000,000.00), if the Leverage Ratio is greater than or equal to 5.50 to 1.00, but less than 6.00 to 1.00, or (iii) Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00), if the Leverage Ratio is greater than or equal to 6.00 to 1.00.  The Availability Block for the period commencing on the Second Amendment Closing Date through the day immediately preceding the first (1st) Adjustment Date, shall be Zero and 00/100 Dollars ($0.00).  The Availability Block
shall be recomputed as of the end of each fiscal quarter ending after the Second Amendment Closing Date based on the Leverage Ratio as of such quarter end.  Any increase or decrease in the Availability Block computed as of a quarter end shall be effective on the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 9.8 (each, an "Adjustment Date").  If a Compliance Certificate is not delivered when due in accordance with such Section 9.8, then the Availability Block shall equal Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00) as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is
delivered.

 

  

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"Leverage Ratio" shall mean, as of the end of any date of determination, the ratio of (i) Senior Funded Debt on such date to (ii) EBITDA, in each case for the period equal to the four (4) consecutive fiscal quarters then ending.

 

Mobile Storage shall mean GFN Mobile Storage Inc., a Delaware corporation.

 

Mobile Storage Merger shall mean the merger of Mobile Storage with and into Pac-Van pursuant to and substantially consistent with the Mobile Storage Merger Agreement, the surviving Person of which is Pac-Van.

 

Mobile Storage Merger Agreement shall mean the Agreement and Plan of Merger, dated November 30, 2011, by and between Pac-Van and Mobile Storage.

 

Mobile Storage Merger Documents shall mean the Mobile Storage Merger Agreement and all other documents, agreements and instruments executed in connection with the Mobile Storage Merger Agreement.

 

"Second Amendment Closing Date" shall mean November 30, 2011.

 

3. Section 2.1(a) of the Credit Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

(a)           Amount of Revolving Advances.  Subject to the terms and conditions set forth in this Agreement including Section 2.1(b), each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender's Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the sum of (i) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit, plus (ii) the aggregate amount of outstanding
Swing Loans and (y) an amount equal to the sum of:

 

  

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(i)           subject to the provisions of Section 2.1(b) hereof, up to eighty-five percent (85%) ("Receivables Advance Rate") of Eligible Receivables, plus

 

(ii)           subject to the provisions of Section 2.1(b) hereof, up to the lesser of (A) the sum of (y) up to eighty percent (80%) ("Rental Fleet Advance Rate (NBV)") of the net book value of the Eligible Rental Fleet Inventory, and (z) up to eighty percent (80%) ("Other Inventory Advance Rate (NBV)") of the net book value of the Eligible Other Inventory, and (B) the sum of (y) (I) from the Closing Date through and including June 30, 2011, up to ninety percent (90%), (II) from July 1, 2011 through and including June 30, 2012,
up to eighty-five percent (85%), and (III) from July 1, 2012 and thereafter, up to eighty percent (80%) (collectively, the "Rental Fleet Advance Rate (NOLV)") of the Net Orderly Liquidation Value of the Eligible Rental Fleet Inventory, and (z) (I) from the Closing Date through and including June 30, 2011, up to ninety percent (90%), (II) from July 1, 2011 through and including June 30, 2012, up to eighty-five percent (85%), and (III) from July 1, 2012 and thereafter, up to eighty percent (80%) (collectively, the "Other Inventory Advance Rate (NOLV)") of the Net Orderly Liquidation Value of the Eligible Other Inventory , plus

 

(iii)           subject to the provisions of Section 2.1(b) hereof, up to the least of (A) the sum of (w) up to fifty percent (50%) ("Tractor Advance Rate (NBV)") of the net book value of Eligible Tractor Equipment, (x) up to fifty percent (50%) ("Rolling Stock Equipment Advance Rate (NBV)") of the net book value of Eligible Rolling Stock Equipment, (y) up to fifty percent (50%) ("Branch-Use Advance Rate (NBV)") of the net book value of
Eligible Branch-Use Equipment, and (z) up to fifty percent (50%) ("Step Inventory Advance Rate (NBV)") of the net book value of Eligible Step Inventory, (B) the sum of (x) up to eighty-five percent (85%) ("Tractor Advance Rate (NOLV)") of the Net Orderly Liquidation Value of Eligible Tractor Equipment, (y) up to eighty-five (85%) ("Rolling Stock Equipment Advance Rate (NOLV)") of the Net Orderly Liquidation Value of Eligible Rolling Stock Equipment and (z) up to eighty-five (85%) ("Branch-Use Advance Rate (NOLV)") of the Net Orderly Liquidation Value of Branch-Use Equipment, and (C) Two Million and 00/100
Dollars ($2,000,000.00), minus

 

  

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(iv)           the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus

 

(v)           the aggregate amount of outstanding Swing Loans, minus

 

(vi)           the Availability Block, minus

 

(vii)           such reserves as Agent may reasonably deem proper and necessary from time to time.

 

The amount derived from (x) the sum of Sections 2.1(a)(y)(i), (ii) and (iii), minus (y) Section 2.1(a)(y)(iv), (v), (vi) and (vii), at any time and from time to time shall be referred to as the "Formula Amount".  The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the "Revolving Credit Note") substantially in the form attached hereto as Exhibit 2.1(a).

 

4. Section 4.21(b) of the Credit Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

(b)           In respect of any Titled Asset purchased or otherwise acquired (including, without limitation, pursuant to any transaction permitted by Section 7.1(a)) by any Loan Party after the Closing Date, (i) each Loan Party shall, within thirty (30) days after such purchase or other acquisition, note the name and other necessary details in respect of the Trust on the Certificate of Title for such Titled Asset in such manner as shall indicate that a first priority security interest has been perfected in favor of the Trust in accordance with the Motor Vehicle Statutes adopted in the state where such Titled Assets are titled, and (ii) each Loan Party
shall, within thirty (30) days after such purchase or other acquisition, take or cause to be taken all other actions necessary to perfect, maintain, protect, and enforce the Trust's first priority Liens.

 

5. Section 6.5(b) of the Credit Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

(b)           Leverage Ratio.  Maintain a ratio of Senior Funded Debt to EBITDA of not greater than 6.50 to 1.00 calculated as of the last day of the fiscal quarter ending December 31, 2011 and as of the last day of each fiscal quarter thereafter, in each case for the period equal to the four (4) consecutive fiscal quarters then ending.

 

  

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6. Article VI (Affirmative Covenants) of the Credit Agreement is hereby amended to add the following new Section 6.13 immediately after Section 6.12:

 

	
  

	
6.13

	
Tax Lien Certificates.

 

Within sixty (60) days after the Second Amendment Closing Date, provide to Agent tax lien certificates for Mobile Storage dated not more than thirty (30) days prior to the Second Amendment Closing Date, issued by the Secretary of State or other appropriate official of Mobile Storage's jurisdiction of incorporation and each jurisdiction where the conduct of Mobile Storage's business activities or the ownership of its properties necessitates qualification.

 

7. Section 7.1(a) of the Credit Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

(a)           Enter into any merger, consolidation or other reorganization with or into any other Person or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit any other Person to consolidate with or merge with it, provided, however, that (i) Pac-Van may consummate the Mobile Storage Merger pursuant to the Mobile Storage Merger Documents, so long as (x) Pac-Van survives such merger, (y) Pac-Van provides to the Agent, within one (1) Business Day after the Second Amendment Closing Date, a
filed copy of the certificate of merger (or equivalent document) merging Mobile Storage with and into Pac-Van and all other filings with respect to such merger filed with the Secretary of State of the State of Delaware and the Secretary of State of the State of Indiana and (z) no assets of Mobile Storage shall be included in the Formula Amount in accordance with the terms of this Agreement until such time as the Agent makes such a determination in its sole discretion, and (ii) with the prior written consent of Agent and on terms and conditions (including, without limitation, in the case of Pac-Van acquiring the ownership interests of any Person, execution of a Joinder and/or any additional documentation required by Agent) satisfactory to Agent, (y) Pac-Van may purchase or acquire all or a substantial portion of the assets or Equity Interests of any Domestic Person or a business or
division of another Domestic Person (a "Permitted Acquisition"), or (z) Pac-Van may merge or consolidate with or into any Domestic Person so long as Pac-Van is the continuing and surviving entity.

 

  

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8. Section 7.15 of the Credit Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

7.15           Amendment of Organizational Documents.

 

Amend, modify or waive any term or provision of its Certificate or Articles of Incorporation or By-Laws in any material respect (other than (i) amendments in form and substance satisfactory to Agent in its reasonable discretion to authorize the issuance of preferred stock that will pay dividends permitted by this Agreement and (ii) amendments or modifications solely to effectuate any transaction permitted by Section 7.1(a)) or in any way adverse to Agent or any Lender, unless required by law.

 

9. Schedules 4.5, 4.19, 5.6, 5.8(b) and 5.9 to the Credit Agreement are hereby deleted in their entirety and in their stead are inserted the Schedules attached hereto as Exhibit A.

 

10. The provisions of Sections 2 through 9 of this Second Amendment shall not become effective until the Agent has received the following, each in form and substance acceptable to the Agent:

 

	
  

	
(a)

	
this Second Amendment, duly executed by the Loan Parties, the Required Lenders and the Agent;

 

	
  

	
(b)

	
the documents and conditions listed in the Preliminary Closing Agenda set forth on Exhibit B, attached hereto and made a part hereof;

 

	
  

	
(c)

	
payment of the all fees and expenses owed to the Agent and its counsel in connection with this Second Amendment and the Credit Agreement; and

 

	
  

	
(d)

	
such other documents as may be reasonably requested by the Agent or its counsel.

 

11. The Loan Parties hereby reconfirm and reaffirm all representations and warranties, agreements and covenants made by and pursuant to the terms and conditions of the Credit Agreement, except as such representations and warranties, agreements and covenants may have heretofore been amended, modified or waived in writing in accordance with the Credit Agreement or as set forth in this Second Amendment and except any such representations or warranties made as of a specific date or time, which shall have been true and correct in all material respects as of such date or time.

 

12. The Loan Parties acknowledge and agree that each and every document, instrument or agreement which at any time has secured payment of the Obligations including, but not limited to, the Credit Agreement, each Pledge Agreement, the IP Security Agreement, each Deposit Account Control Agreement, the Individual Guarantor Pledge and Security Agreement and the Individual Guarantor Account Control Agreement continue to secure prompt payment when due of the Obligations.

 

  

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13. The Loan Parties hereby represent and warrant to the Lenders and the Agent that (i) the Loan Parties have the legal power and authority to execute and deliver this Second Amendment; (ii) the officers of the Loan Parties executing this Second Amendment have been duly authorized to execute and deliver the same and bind the Loan Parties with respect to the provisions hereof; (iii) the execution and delivery hereof by the Loan Parties and the performance and observance by the Loan Parties of the provisions hereof and of the Credit Agreement and all documents executed or to be executed therewith, do not violate
or conflict with the organizational documents of the Loan Parties or any law applicable to the Loan Parties or result in a breach of any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against the Loan Parties and (iv) this Second Amendment, the Credit Agreement and the documents executed or to be executed by the Loan Parties in connection herewith or therewith constitute valid and binding obligations of the Loan Parties in every respect, enforceable in accordance with their respective terms.

 

14. The Loan Parties represent and warrant that (i) no Event of Default exists under the Credit Agreement, nor will any occur as a result of the execution and delivery of this Second Amendment or the performance or observance of any provision hereof; and (ii) they presently have no claims or actions of any kind at law or in equity against the Lenders or the Agent arising out of or in any way relating to the Credit Agreement or the Other Documents.

 

15. Each reference to the Credit Agreement that is made in the Credit Agreement or any other document executed or to be executed in connection therewith shall hereafter be construed as a reference to the Credit Agreement as amended hereby.

 

16. The agreements contained in this Second Amendment are limited to the specific agreements contained herein.  Except as amended hereby, all of the terms and conditions of the Credit Agreement and the Other Documents shall remain in full force and effect.  This Second Amendment amends the Credit Agreement and is not a novation thereof.

 

17. This Second Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original, but all such counterparts shall constitute but one and the same instrument.

 

18. This Second Amendment shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York applied to contracts to be performed wholly within the State of New York.  The Loan Parties hereby consent to the jurisdiction and venue of any federal or state court located in the County of New York, State of New York with respect to any suit arising out of or mentioning this Second Amendment.

 

[INTENTIONALLY LEFT BLANK]

  

7

  

IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto, have caused this Second Amendment to be duly executed by their duly authorized officers on the day and year first above written.

 

	  	
BORROWER:

 

	  	
PAC-VAN, INC.

 

 

By:           /s/ CHRISTOPHER A. WILSON

Name:         Christopher A. Wilson

Title:           Secretary

 

	  	
GUARANTOR:

 

	  	
GFN NORTH AMERICA CORP.

 

 

By:           /s/ CHRISTOPHER A. WILSON

Name:         Christopher A. Wilson                                           

Title:           Secretary                                           

 

  

  

  

Acknowledged and consented to on November 30, 2011:

/s/ RONALD F. VALENTA                                                      

Ronald F. Valenta

/s/ LYDIA D. VALENTA                                           

Lydia D. Valenta

  

  

  

	  	
AGENT AND LENDERS:

 

	  	
PNC BANK, NATIONAL ASSOCIATION, as Agent and as a Lender

 

 

By:        /s/ TODD MILENIUS                                                      

Name:   Todd Milenius

Title:     Vice President

 

  

  

  

	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

 

 

By:        /s/ JAMES M. STEHLIK                                           

Name:   James M. Stehlik

Title:    Vice President

 

  

  

  

EXHIBIT A

UPDATED SCHEDULES

[see attached]

  

  

  

EXHIBIT B

PRELIMINARY CLOSING AGENDA

[see attached]

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