Document:

exhibit_10-3.htm

Exhibit 10.3

 

LIMITED GUARANTY

 

IN CONSIDERATION of credit granted or to be granted by PNC Bank, National Association ("PNC"), and various other financial institutions from time to time (PNC and such other financial institutions are each, a "Lender" and collectively, the "Lenders"), pursuant to that certain Revolving Credit and Security Agreement, dated of even date herewith, by and among Pac-Van, Inc., an Indiana corporation and each other Borrower party thereto (each a "Debtor" and collectively, the "Debtors"), the Guarantors (as defined therein) party thereto, the Lenders, Pac-Van Asset Trust, a Delaware statutory trust and PNC, as administrative and collateral agent for the Lenders (in such capacity, the "Agent") (as amended, restated, modified or supplemented from time to time, the "Credit Agreement"), intending to be legally bound hereby, and to induce the Lenders to maintain or extend credit to the Debtors, Ronald F. Valenta ("RFV") and Lydia D. Valenta ("LDV"), husband and wife (RFV and LDV are each, an "Individual Guarantor" and collectively, the "Individual Guarantors"), this 16th day of July, 2010, jointly and severally hereby:

 

1. Become absolute and unconditional guarantors to the Agent and the Lenders, their respective successors, endorsees and assigns, for the prompt payment and performance when due (whether at maturity, by declaration, acceleration or otherwise) of all Obligations (as defined in the Credit Agreement) including, without limitation, all extensions, modifications, renewals thereof and substitutions therefor, whether absolute or contingent, direct or indirect, matured or unmatured, sole, joint or several, of any nature whatsoever, without regard to the validity, enforceability or regularity thereof including, without limitation, continuing interest thereon in accordance with the terms thereof and all expenses (including any reasonable costs of legal expenses) incurred by the Agent or any Lender in enforcing any rights with regard to or collecting against either Individual Guarantor under this Limited Guaranty (this "Agreement") (hereinafter collectively referred to as the "Debtor Liabilities"), whether or not such Debtor Liabilities or any portion thereof shall hereafter be released or discharged or is for any reason invalid or unenforceable (capitalized terms used in this Agreement that are defined in the Credit Agreement shall have the meanings assigned to them therein unless otherwise defined in this Agreement);

 

2. Assent to all agreements made or to be made between the Agent or any Lender and any other Person(s) liable, either absolutely or contingently, on any of the Debtor Liabilities, including any and all such agreements made by any Debtor and any co-maker, endorser, pledgor, surety or guarantor (any such Person being hereinafter referred to as an "Obligor"), and further agrees that the Individual Guarantors' liability hereunder shall not be reduced or diminished by such agreements in any way;

 

3. Consent and agree that their obligations and liabilities hereunder shall in no way be reduced, limited, waived or released if any other Person or Persons is presently or in the future becomes a surety or guarantor in regard to the Debtor Liabilities or any other liabilities among any Debtor, the Agent and the Lenders;

 

  

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4. Consent that the Agent and the Lenders may, at their option, without in any way affecting the Individual Guarantor's liability hereunder:  (i) exchange, surrender or release any or all collateral security of any endorsement, guaranty or surety held by the Agent or any Lender for any of the Debtor Liabilities; (ii) renew, extend, modify, supplement, amend, release, alter or compromise the terms of any or all of the Debtor Liabilities; and (iii) waive or fail to perfect the Agent's and the Lenders' rights or remedies against any Debtor or the collateral security for any of the Debtor Liabilities;

 

5. Warrant that the execution, delivery and performance by each Individual Guarantor of this Agreement do not contravene any law or contractual restriction binding on or affecting such Individual Guarantor;

 

6. Warrant that all financial information provided to the Agent by the Individual Guarantors in connection herewith is accurate and complete and has been prepared in accordance with sound accounting principles, and that the Individual Guarantors have made full and true disclosure of all pertinent financial and other information in connection with the transactions contemplated hereby; and

 

7. Warrant that the addresses specified on the signature page hereof, immediately below each Individual Guarantor's name, is such Individual Guarantor's true and correct address, and agrees to notify the Agent, in the manner hereinafter specified, within fifteen (15) days after any change in either Individual Guarantor's address.

 

CONTINUING GUARANTY.  This Agreement shall be a continuing one and shall continue in full force and effect until (subject to the terms and conditions of the Section of this Agreement entitled Bankruptcy of the Debtors) all Debtor Liabilities and all other amounts payable under the Credit Agreement and the Other Documents have been paid and performed in full, and all commitments to extend credit thereunder have terminated.  Without limiting the generality of the foregoing, each Individual Guarantor hereby irrevocably waives any right to terminate or revoke this Agreement.

 

EXTENT OF INDIVIDUAL GUARANTORS' LIABILITY.  Notwithstanding anything to the contrary contained in this Agreement, the Individual Guarantors' aggregate monetary obligations or liabilities under this Agreement shall be limited to the sum of Ten Million and 00/100 Dollars ($10,000,000.00) (the "Maximum Amount") plus any liabilities of the Individual Guarantors arising under the Section of this Agreement entitled Payment of Costs (together with the Maximum Amount, the "Maximum Aggregate Liability"); provided that (i) on or after July 1, 2011 the Maximum Amount shall be reduced to Eight Million and 00/100 Dollars ($8,000,000.00) so long as (a) no Event of Default or Default shall have occurred and be continuing and (b) the Agent has received from the Borrowing Agent the Compliance Certificate required to be delivered pursuant to Section 9.8 of the Credit Agreement for the fiscal quarter of

 

  

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Pac-Van ended June 30, 2011 containing calculations in sufficient detail to demonstrate compliance with all financial covenants contained in the Credit Agreement, and (ii) on or after July 1, 2012, the Maximum Amount shall be reduced to Six Million and 00/100 Dollars ($6,000,000.00) so long as (a) no Event of Default or Default shall have occurred and be continuing and (b) the Agent has received from the Borrowing Agent the Compliance Certificate required to be delivered pursuant to Section 9.8 of the Credit Agreement for the fiscal quarter of Pac-Van ended June 30, 2012 containing calculations in sufficient detail to demonstrate compliance with all financial covenants contained in the Credit Agreement.

 

EXERCISE OF RIGHTS AND REMEDIES.  Subject to the succeeding paragraph, the Agent and the Lenders agree that they will not exercise their rights and remedies under this Agreement until the earlier to occur of (i) (a) ninety (90) days have lapsed from the date upon which the Agent has delivered written notice to the Individual Guarantors that the Agent has commenced the exercise of its rights under Article XI of the Credit Agreement to liquidate, sell, collect, foreclose upon, or otherwise realize on any part of the Collateral (in any instance, a "Foreclosure Proceeding"), and (b) the conclusion of such Foreclosure Proceeding (if applicable, the date of the satisfaction of the conditions in this clause (i) being referred to herein as the "Conclusion Date"), or (ii) one hundred eighty (180) days have lapsed from the date upon which the Agent has delivered written notice to the Individual Guarantors that the Agent has commenced a Foreclosure Proceeding ( if applicable, the date of the satisfaction of the condition in this clause (ii) being referred to herein as the "Collection Date").  Upon the Conclusion Date, if applicable, the Individual Guarantors shall deposit into the Individual Guarantor Collateral Account an amount equal to the lesser of (A) the Maximum Aggregate Liability, and (B) the outstanding amount of the Debtor Liabilities as of the Conclusion Date, which amount shall be immediately applied to the outstanding amount of the Debtor Liabilities.  Upon the Collection Date, if applicable, the Individual Guarantors shall deposit into the Individual Guarantor Collateral Account an amount equal to the Maximum Aggregate Liability.  Upon the earlier to occur of (y) one hundred eighty (180) days after the Collection Date, and (z) the conclusion of the applicable Foreclosure Proceeding, amounts deposited into the Individual Guarantor Collateral Account along with the interest accrued on such amounts shall be applied to the outstanding amount of the Debtor Liabilities.  Any amounts remaining in the Individual Guarantor Collateral Account after the Debtor Liabilities are paid in full will be released by the Agent to the Individual Guarantors.

 

Notwithstanding the foregoing, in the event (i) either Individual Guarantor fails to perform any covenant or obligation hereunder, (ii) any Loan Party does not cooperate with Agent (which cooperation shall be determined by Agent in its reasonable discretion) in its efforts to collect the Obligations from such Loan Party or to liquidate, sell, collect, foreclose upon or otherwise realize on the Collateral, (iii) there is filed by or against any Loan Party or either Individual Guarantor any case, petition, proceeding or other action under any existing or future state or federal bankruptcy, insolvency, reorganization, liquidation or arrangement or readjustment of debt law or any similar existing or future law of any applicable jurisdiction, (iv)

 

  

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a custodian, receiver, trustee, sequestrator, or agent is appointed or authorized to take charge of any assets of any Loan Party or either Individual Guarantor, (v) either Individual Guarantor shall die, be incarcerated for more than three (3) days or declared incompetent or otherwise incapacitated or unable to perform under this Agreement, or (vi) in Agent's reasonable opinion, a material adverse change in the condition (financial or otherwise), assets or properties of the Individual Guarantors taken as a whole has occurred (the occurrence of item (i), (ii), (iii), (iv), (v) or (vi) of this paragraph being referred to herein as a "Collection Event"), then Agent shall have the right immediately, and without any further notice, demand, or condition (which the Individual Guarantors hereby waive), to collect payment of all of the Debtor Liabilities from the Individual Guarantors up to the Maximum Aggregate Liability and otherwise to enforce all of the Agent's and the Lenders' rights and remedies under or arising out of this Agreement.  Upon the occurrence of a Collection Event, the Individual Guarantors shall immediately deposit into the Individual Guarantor Collateral Account an amount equal to the Maximum Aggregate Liability.  Amounts deposited into the Individual Guarantor Collateral Account pursuant to this paragraph shall be immediately applied to the outstanding amount of the Debtor Liabilities, and any amounts remaining after such application shall remain in the Individual Guarantor Collateral Account until the indefeasible payment in full to the Agent and the Lenders of all Debtor Liabilities.

 

Amounts deposited into the Individual Guarantor Collateral Account pursuant to this Section will not be subject to withdrawal by the Individual Guarantors and the Agent, or a designated representative of the Agent, shall have the sole right to withdraw such amounts.  Neither the amounts deposited into the Individual Guarantor Collateral Account nor the Individual Guarantor Collateral Account itself shall constitute a trust fund.

 

UNCONDITIONAL LIABILITY.  The Individual Guarantors' liability hereunder is absolute and unconditional and shall not be reduced, limited, waived, or released in any way by reason of:  (i) any failure of the Agent or any Lender to obtain, retain, preserve, perfect or enforce any rights against any Person (including without limitation, any Obligor) or in any property securing any or all of the Debtor Liabilities; (ii) the invalidity or irregularity of any such rights that the Agent and the Lenders may attempt to obtain; (iii) any delay in enforcing or any failure to enforce such rights, even if such rights are thereby lost; (iv) any delay in making demand on any Obligor for payment or performance of any or all of the Debtor Liabilities; or (v) from time to time, the payment in full and subsequent incurring of any Debtor Liabilities.

 

WAIVER.  Each Individual Guarantor hereby waives all notice with respect to the present existence or future incurrence of any Debtor Liabilities including, but not limited to, the amount, terms and conditions thereof.  Each Individual Guarantor hereby consents to the taking of, or failure to take, from time to time, any action of any nature whatsoever permitted by law with respect to the Debtor Liabilities and with respect to any rights against any Person or Persons (including, without limitation, any Obligor), or in any property including, without limitation, any

 

  

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renewals, extensions, modifications, postponements, compromises, indulgences, waivers, surrenders, exchanges and releases, and the Individual Guarantors will remain fully liable hereunder notwithstanding any or all of the foregoing.  The granting of an express written release of either Individual Guarantor's liability hereunder or any other Obligor's liability shall be effective only with respect to the liability hereunder of such Individual Guarantor or Obligor who is specifically so expressly released but shall in no way affect the liability hereunder of either Individual Guarantor or any Obligor not so expressly released.  The death or incapacitation of either Individual Guarantor, or dissolution of any other Obligor, shall in no way affect the liability hereunder or that of any other Obligor.  Each Individual Guarantor hereby expressly waives:  (i) notices of acceptance hereof; (ii) any presentment, demand, protest, notice of default in connection with the Debtor Liabilities, dishonor or notice of dishonor; (iii) any right of indemnification; and (iv) any defense arising by reason of any disability or other defense whatsoever to the liability of any Debtor, or any other circumstance which might otherwise constitute a defense available to, or in discharge of, either Individual Guarantor with respect to his/her obligations hereunder.

 

Neither Individual Guarantor shall have the right of subrogation, contribution, indemnification or other rights to be reimbursed, made whole or otherwise compensated by any other Obligor with respect to any payments made hereunder, until all of the Debtors' obligations to the Agent and the Lenders under the Credit Agreement and the Other Documents are satisfied in full and are not subject to any right of disgorgement.  Each Individual Guarantor hereby waives any benefit of and any right to participate in any collateral security now or hereafter held by the Agent and the Lenders or any failure or refusal by the Agent and the Lenders to perfect an interest in any collateral security.

 

BANKRUPTCY OF THE DEBTORS.  Neither each Individual Guarantor's obligations to make payment in accordance with the terms of this Agreement nor any remedy for the enforcement hereof shall be impaired, modified, changed, released or limited in any manner whatsoever by any Debtor's bankruptcy or by any impairment, modification, change, release or limitation of (i) the liability of any Debtor, any Person assuming the obligations of any Debtor under the Credit Agreement or any of the Other Documents or any Debtor's estate in bankruptcy or (ii) any remedy for the enforcement of the Debtor Liabilities, either of which result from the operation of any present or further provision of any bankruptcy act, law or equitable cause or from the decision of any court.  Each Individual Guarantor agrees that to the extent that any Debtor or any other Obligor makes a payment or payments to the Agent or any Lender, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be paid to a trustee, receiver or any other Person under any bankruptcy act, law or equitable cause, then to the extent of such payment, the Debtor Liabilities or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

 

PAYMENT OF COSTS.  In addition to all other liabilities of the Individual Guarantors hereunder, each Individual Guarantor also agrees to pay to the Agent on demand all costs and expenses (including reasonable attorneys' fees and legal expenses) which may be incurred in the enforcement or collection of the liabilities of the Individual Guarantors hereunder.

 

  

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LIABILITY OF THE INDIVIDUAL GUARANTORS.  Each Individual Guarantor agrees that nothing contained herein shall prevent the Agent and the Lenders from suing on the Credit Agreement and the Other Documents, or any of them, or foreclosing their Lien, if any, on any collateral hereafter securing the Debtor Liabilities or from exercising any other rights available under the Credit Agreement and the Other Documents, or any other instrument of security if neither the Debtors nor the Individual Guarantors timely perform their obligations thereunder, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not constitute a discharge of any of the obligations of the Individual Guarantors thereunder or hereunder; it being the purpose and intent of the Individual Guarantors that the obligations of the Individual Guarantors hereunder shall be absolute, independent and unconditional.  Neither the obligations of the Individual Guarantors under this Agreement nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release or limitation of the liability of any Debtor or by reason of the bankruptcy or insolvency of any Debtor. If acceleration of the time for payment of any amount payable by the Debtors is stayed upon the insolvency or bankruptcy of any Debtor, amounts otherwise subject to acceleration under the terms of the Credit Agreement and the Other Documents including, without limitation, interest at the rates set forth in the Credit Agreement occurring after the date of such bankruptcy or insolvency, shall nonetheless be payable by the Individual Guarantors hereunder forthwith on demand by the Agent.  Each Individual Guarantor acknowledges that the term "Debtor Liabilities" as used herein includes any payments made by any Debtor to the Agent or any Lender and subsequently recovered by such Debtor or a trustee for such Debtor pursuant to bankruptcy or insolvency proceedings.

 

RIGHTS OF THE INDIVIDUAL GUARANTORS.  All rights and remedies of the Individual Guarantors against each Debtor or any property of any Debtor or any collateral security for any of the Debtor Liabilities, whether arising by promissory note, subrogation, security agreement, mortgage or otherwise, shall in all respects be and remain subordinate and junior in right of payment and priority to the prior and indefeasible payment in full to the Agent and the Lenders of all Debtor Liabilities and to the priority of the Agent and the Lenders in any property of any Debtor and any collateral security for any of the Debtor Liabilities.  Any amount which may have been paid to either Individual Guarantor on account of any indebtedness of any Debtor to either Individual Guarantor, or on account of any subrogation or other rights of either Individual Guarantor against any Debtor, when all of the Debtor Liabilities shall not have been indefeasibly paid in full, shall be held by the undersigned in trust for the benefit of the Agent and the Lenders and shall forthwith be paid to the Agent to be credited and applied upon the Debtor Liabilities, whether matured or unmatured.

 

NOTICE TO THE AGENT BY THE INDIVIDUAL GUARANTORS.  Any notice to the Agent by the Individual Guarantors pursuant to the provisions hereof shall be sent by first-class or first-class express mail, private overnight or next business day courier or by telex or telecopy with confirmation in writing mailed first class, in all cases with charges prepaid, and any such properly given notice will be effective when received, to:

 

  

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PNC Bank, National Association

1900 East Ninth Street, 9th Floor

Mail Stop B7-YB13-09-5

Cleveland, OH 44114

Attention:                      Todd Milenius, Vice President

Telephone:                      (216) 222-9761

Facsimile:                      (216) 222-8155

with a copy to:

PNC Bank, National Association

PNC Agency Services

PNC Firstside Center

500 First Avenue, 4th Floor

Pittsburgh, Pennsylvania 15219

Attention:                      Andrea Gibb

Telephone:                      (412) 762-7196

Facsimile:                      (412) 762-8672

with an additional copy to:

Thorp Reed & Armstrong LLP

One Oxford Centre

301 Grant Street, 14th Floor

Pittsburgh, Pennsylvania  15219-1425

Attention:                      Sean M. Girdwood

Telephone:                      (412) 394-2567

Facsimile:                      (412) 394-2555

Notice by either Individual Guarantor shall not, in any way, reduce, diminish or release the liability of any other Obligor.  In the event that this Agreement is preceded or followed by any other guaranty or surety agreement(s) regarding any Debtor or any other Person, all rights granted to the Agent and the Lenders in such agreement(s) shall be deemed to be cumulative and this Agreement shall not, in such event, be deemed to be cancelled, superseded, terminated or in any way limited.

 

FINANCIAL STATEMENTS AND TAX RETURNS OF THE INDIVIDUAL GUARANTORS.  As soon as practicable, and in any event within one hundred twenty (120) days after the close of each calendar year, the Individual Guarantors shall furnish to the Agent copies of their personal financial statements as of the calendar year then ended, in the form previously provided by the Guarantors to the Agent and in substance satisfactory to the Agent.

 

  

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As soon as practicable, and in any event, within thirty (30) days after the date the annual federal tax return of the Individual Guarantors is due to be filed, as such due date may be properly extended, the Individual Guarantors shall furnish to the Agent copies of the annual federal tax return of the Individual Guarantors, including all schedules and attachments filed with such returns.  The delivery of such annual federal tax return to the Agent shall be accompanied by an update from the Individual Guarantors with respect to the status of the State of California income tax lien existing as of the Closing Date against RFV in the amount of Two Million Three Hundred Thousand and 00/100 Dollars ($2,300,000.00), in form and substance satisfactory to Agent.

 

MISCELLANEOUS.  This Agreement shall be binding upon each Individual Guarantor and such Individual Guarantor's heirs, executors, administrators, successors, assigns and other legal representatives, and shall inure to the benefit of the Agent and the Lenders, their respective endorsers, successors and assigns.  If any provision of this Agreement shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein.  All matters arising hereunder shall be governed by the laws of the State of New York without regard to the conflicts of laws thereof, and the parties hereto agree to the jurisdiction and venue of the federal and state courts located in the County of New York, State of New York with respect to any suit arising in connection herewith.

 

WAIVER OF TRIAL BY JURY.  EACH OF THE UNDERSIGNED HEREBY EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY, AND IT WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION ARISING IN CONNECTION WITH THIS AGREEMENT, THE CREDIT AGREEMENT OR ANY OF THE OTHER OTHER DOCUMENTS.

 

[INTENTIONALLY LEFT BLANK]

 

  

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IN WITNESS WHEREOF, the undersigned Individual Guarantors, intending to be legally bound, have executed and delivered this Agreement on the day and year first above written.

 

WITNESS: 

 

/s/ Ronald F. Valenta

Ronald F. Valenta

 

Address:

 

39 East Union Street

 

Pasadena, California 91103

 

Telephone:  (626) 584-9722

 

Facsimile:  (626) 795-8090

 

 

WITNESS: 

 

/s/ Lydia D. Valenta

Lydia D. Valenta

 

Address:

 

39 East Union Street

 

Pasadena, California 91103

 

Telephone:  (626) 584-9722

 

Facsimile:  (626) 795-8090

 

  

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ACKNOWLEDGMENT

STATE/COMMONWEALTH OF _______________                                                                                                )

 

)           SS:

 

COUNTY OF _______________                                                                                                )

 

On this, the _____ day of July, 2010, before me, a Notary Public, the undersigned officer, personally appeared Ronald F. Valenta, an individual, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same for the purposes therein contained.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

______________________________

Notary Public

 

My Commission Expires:

 

  

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ACKNOWLEDGMENT

STATE/COMMONWEALTH OF _______________                                                                                                )

 

)           SS:

 

COUNTY OF _______________                                                                                                )

 

On this, the _____ day of July, 2010, before me, a Notary Public, the undersigned officer, personally appeared Lydia D. Valenta, an individual, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that she executed the same for the purposes therein contained.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

______________________________

Notary Public

 

My Commission Expires:

 

  

11exhibit_10-4.htm

Exhibit 10.4

 

PLEDGE AGREEMENT

 

Pledge Agreement (the "Pledge Agreement"), dated the 16th day of July, 2010, is made by GFN North America Corp., a Delaware corporation (the "Pledgor"), in favor of PNC Bank, National Association ("PNC"), as administrative and collateral agent for the Lenders (as hereinafter defined) (in such capacity, the "Agent").

 

W I T N E S S E T H:

 

WHEREAS, Pac-Van, Inc., an Indiana corporation ("Pac-Van") and the other Borrowers party thereto, the Pledgor and the other Guarantors party thereto, PNC, and various other financial institutions from time to time (PNC and such other financial institutions are each, a "Lender" and collectively, the "Lenders"), Pac-Van Asset Trust, a Delaware statutory trust and Agent have entered into that certain Revolving Credit and Security Agreement, dated of even date herewith (as may be amended, restated, modified or supplemented from time to time, the "Credit Agreement"), which is incorporated by reference thereto, pursuant to which the Borrowers, the Guarantors, Lenders and Agent agreed, among other things, that Lenders shall extend credit to the Borrowers as set forth in the Credit Agreement; and

 

WHEREAS, Lenders have required, as a condition to their making the Advances (as defined in the Credit Agreement) pursuant to the Credit Agreement, that Pledgor create a security interest in and pledge all of its issued and outstanding capital stock in Pac-Van to Agent (for its benefit and for the benefit of Lenders) under the terms and conditions set forth herein; and

 

WHEREAS, in consideration of the Obligations (as defined in the Credit Agreement), Pledgor has agreed to create such a security interest and pledge all of its capital stock in Pac-Van to Agent (for its benefit and for the benefit of Lenders) under the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and in order to induce Lenders to make the Advances pursuant to the Credit Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Agent as follows:

 

1. Defined Terms.  Unless otherwise defined herein, terms defined in the Credit Agreement shall have such defined meanings when used herein.

 

  

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2. Pledge.  As collateral security for the prompt and complete payment of all Obligations, Pledgor hereby pledges to Agent (for its benefit and for the benefit of Lenders) its right, title and interest in and to all of the issued and outstanding capital stock of Pac-Van owned by it, as described on Exhibit A attached hereto and made a part hereof (which Exhibit shall be and shall be deemed to be updated upon the issuance of any additional capital stock), now or hereinafter acquired (the "Pledged Interests"), and hereby grants to Agent a first Lien on its right, title and interest in and to the Pledged Interests, the interest thereon and all products, proceeds, substitutions, additions, dividends and other distributions in respect thereof, and all books, records, and papers relating to the foregoing (all of which are referred to herein as the "Collateral").  The share certificates collectively representing all of the Pledged Interests in Pac-Van now or hereinafter acquired, together with a transfer power with respect to each share certificate duly signed in blank by Pledgor, as transferor, shall be delivered by Pledgor to Agent (for its benefit and for the benefit of Lenders) contemporaneously with the execution of this Pledge Agreement and with any acquisition of additional capital stock of Pac-Van by Pledgor that is represented by a new share certificate.

 

3. Rights of Pledgor.  Prior to the occurrence and continuance of an Event of Default under the Credit Agreement, Pledgor shall have all voting and other rights, powers, privileges and preferences pertaining to the Collateral (including, without limitation, the right to receive all proceeds, dividends and distributions in respect thereof), subject to the terms of this Pledge Agreement, and Agent (for its benefit and for the benefit of Lenders) shall not be entitled to any of such rights by reason of its possession of the Pledged Interests.

 

4. Covenants of Pledgor.  Pledgor agrees that it will not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral, (ii) create or permit to exist any Lien, option or other charge or encumbrance upon or with respect to any of the Collateral, except for the Lien under this Pledge Agreement and Permitted Encumbrances, (iii) file any affidavit for replacement of lost stock certificates, or (iv) vote the Collateral in favor of or consent to any resolution which might result in any restrictions upon the sale, transfer or disposition of the Collateral.  Pledgor further agrees that it will take all actions necessary to cause Pac-Van not to issue any capital stock or other securities in addition to or in substitution for the Collateral or exercise any right with respect to the Collateral which would adversely affect Agent's rights in the Collateral.  Pledgor further agrees to execute all such instruments, documents, and papers, and will do all such acts as Agent may request from time to time to carry into effect the provisions and intent of this Pledge Agreement, including, without limitation, the execution of stop transfer orders, transfer powers and other instruments of assignment executed in blank, and will do all such other acts as Agent may request with respect to the perfection and protection of the Lien granted herein and the assignment effected hereby.

 

5. Release of Collateral.  Subject to any sale or other disposition by Agent of the Collateral in accordance with the terms hereof, promptly after payment in full and the satisfaction of all of the Obligations and the termination of the Credit Agreement, this Pledge Agreement shall terminate, Agent shall file, if applicable, UCC-3 financing statements to release the Liens granted hereunder and the Collateral shall be returned to Pledgor.

 

  

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6. Rights of Agent.  If an Event of Default has occurred and is continuing, Agent may, without notice, exercise all rights, privileges or options pertaining to any Collateral as if it were the absolute owner thereof, upon such terms and conditions as it may determine, all without liability except to account for property actually received by it, but Agent shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing.

 

7. Remedies.  If an Event of Default has occurred and is continuing and in the event that any portion of the Obligations becomes due and payable, Agent (for its benefit and for the benefit of Lenders), without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Pledgor or any other Person (all and each of which demands, advertisements and/or notices are hereby expressly waived), may forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give an option or options to purchase, contract to sell or otherwise dispose of and deliver said Collateral, or any part thereof, in one or more transactions at public or private sale or sales, at any exchange, broker's board or at any of Agent's offices or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk, with the right of Agent upon any such sale or sales, public or private, to purchase the whole or any part of said Collateral so sold, free of any right of equity of redemption in Pledgor, which right or equity is hereby expressly waived or released.  Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all costs and expenses of every kind incurred therein or incidental to the care, safekeeping or otherwise of any and all of the Collateral or in any way relating to the rights of Agent hereunder, including attorneys' fees and legal expenses, to the payment in whole or in part of the Obligations in such order as Agent may elect, Pledgor remaining liable for any deficiency remaining unpaid after such application, and only after the application of such net proceeds and after the payment by Agent of any other amount required by any provision of law, need Agent account for the surplus, if any, to Pledgor.  Pledgor agrees that Agent shall give at least ten (10) Business Days' notice of the time and place of any public sale or of the time after which a private sale or other intended disposition is to take place and that such notification is reasonable notification of such matters.  No notification need be given to Pledgor if it has signed after the occurrence and during the continuance of such Event of Default a statement renouncing or modifying any right to notification of sale or other intended disposition.  In addition to the rights and remedies granted to it in this Pledge Agreement and in any other instrument or agreement securing, evidencing or relating to any of the Obligations, Agent shall have all the rights and remedies of a secured party under the Uniform Commercial Code or other applicable laws.  Pledgor shall be liable for the deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay all amounts to which Agent and Lenders are entitled, and the reasonable fees of any attorneys employed by Agent to collect such deficiency.

 

  

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8. Representations, Warranties and Covenants of Pledgor.  Pledgor represents and warrants that:  (a) it has, and on the date of delivery to Agent of any Collateral will have, good and marketable title to the Collateral and full power, authority and legal right to pledge all of its right, title and interest in and to the Collateral pursuant to this Pledge Agreement; (b) this Pledge Agreement has been duly executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable in accordance with its terms; (c) no consent of any other party (including, without limitation, creditors of Pledgor) and no consent, license, permit, approval or authorization of, exemption by, notice or report to or registration, filing or declaration with, any governmental authority, domestic or foreign, is required to be obtained by Pledgor in connection with the execution, delivery or performance of this Pledge Agreement; (d) the execution, delivery and performance of this Pledge Agreement will not violate any provision of any applicable law, or of the certificate/articles of incorporation, bylaws, any shareholders' agreement or any securityholders' agreement of Pledgor or Pac-Van or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Pledgor or Pac-Van is a party or which purports to be binding upon Pledgor or Pac-Van or upon any of their respective assets and will not result in the creation or imposition of any Lien on any of the assets of Pledgor except as contemplated by this Pledge Agreement; (e) except as provided by the Securities Act, the rules and regulations promulgated thereunder and state securities laws, there are no restrictions on the transferability of the Collateral to Agent or with respect to the foreclosure and transfer thereof by Agent or, if there are any such restrictions, any and all restrictions on such transferability have been duly waived with respect to this assignment, transfer, pledge, and grant of a security interest to Agent and with respect to the foreclosure and transfer thereof by Agent; and (f) the pledge, assignment and delivery of such Collateral pursuant to this Pledge Agreement will create a valid first Lien on all right, title and interest of Pledgor in or to such Collateral subject only to Permitted Encumbrances, and the proceeds thereof, subject to no prior Lien or to any agreement purporting to grant to any third party a Lien in the property or assets of Pledgor which would include the Collateral.  The Collateral is fully paid and nonassessable.  Pledgor covenants and agrees that it will defend Agent's right, title and Lien on the Collateral and the proceeds thereof against the claims and demands of all Persons whomsoever; and covenants and agrees that it will have like title to and the right to pledge any other property at any time hereafter pledged to Agent as Collateral hereunder and will defend Agent's right thereto and Lien thereon.

 

9. No Disposition, Etc.  Pledgor agrees that it will not sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Collateral, nor will it create, incur or permit to exist any Lien with respect to any of the Collateral, or any interest therein, or any proceeds thereof, except for the Lien provided for by this Pledge Agreement or otherwise permitted by the Credit Agreement.

 

  

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10. Sale of Collateral.  (a) Pledgor recognizes that Agent may be unable to effect a public sale of any or all of the Collateral by reason of certain prohibitions contained in the Securities Act, and applicable state securities laws, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that such private sale shall be deemed to have been made in a commercially reasonable manner.  Agent shall be under no obligation to delay a sale of any of the Collateral for the period of time necessary to permit Pledgor to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if Pledgor would agree to do so.

 

(b)           Pledgor further agrees to do or cause to be done all such other acts and things as may be necessary to make such sale or sale of any portion or all of the Collateral valid and binding and in compliance with any and all applicable laws of any Governmental Body having jurisdiction over any such sale or sales, all at Pledgor's expense.  Pledgor further agrees that a breach of any of the covenants contained in this paragraph 10 will cause irreparable injury to Agent and Lenders, that Agent and Lenders have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this paragraph shall be specifically enforceable against Pledgor and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants.

 

11. Waivers by Pledgor; Subrogation.

 

(a) Pledgor (i) waives presentment, demand, notice and protest with respect to the Collateral; (ii) waives any delay on the part of Agent without notice to or consent from Pledgor; (iii) waives the right to notice and/or hearing prior to Agent's exercising of Agent's rights and remedies hereunder upon the occurrence and during the continuance of an event which would constitute a default hereunder or an Event of Default under the Credit Agreement; (iv) waives any right to require Agent to marshal the Collateral with other collateral which secures Pledgor's obligations and any similar right to which Pledgor is or may become entitled; (v) shall, when the Obligations are paid and satisfied in full and the Credit Agreement has been terminated, be subrogated to the rights of Agent and Lenders with respect to the value of any payments or distributions in cash, property or other assets that Pledgor pays over to Agent or Lenders hereunder; and (vi) waives any right of subrogation, reimbursement, contribution and any similar rights against Pac-Van until the Obligations are paid and satisfied in full and the Credit Agreement has been terminated.

 

(b) Agent shall have no duty as to the collection or protection of the Collateral or any income or distribution thereon, beyond the safe custody of such of the Collateral as may come into the possession of Agent and shall have no duty as to the preservation of rights against prior parties or any other rights pertaining thereto.  Agent's rights and remedies may be exercised without resort or regard to any other source of satisfaction of the Obligations.  In no event shall Agent have any liability to Pledgor or otherwise hereunder except for liability arising out of the gross negligence, bad faith or willful misconduct of Agent.

 

  

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12. Further Assurances.  Pledgor agrees that at any time and from time to time upon the written request of Agent, Pledgor will execute and deliver such further documents and do such further acts and things as Agent may request in order to effect the purposes of this Pledge Agreement.

 

13. Severability.  Any provision of this Pledge Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

14. No Waiver; Cumulative Remedies.  Agent shall not, by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder and no waiver shall be valid unless in writing, signed by Agent, and then only to the extent therein set forth.  A waiver by Agent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Agent would otherwise have on any future occasion.  No failure to exercise or any delay in exercising on the part of Agent, any right, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law.

 

15. Binding Effect.  This Pledge Agreement and all obligations of Pledgor hereunder shall be binding upon the successors and assigns of Pledgor, and shall, together with the rights and remedies of Agent hereunder, inure to the benefit of Agent (for its benefit and for the benefit of Lenders) and its respective successors and permitted assigns.  This Pledge Agreement shall be governed by, and construed and interpreted 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 undersigned hereby agrees that any judicial proceeding by Pledgor against Agent or any Lender involving, directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Pledge Agreement or any related agreement, shall be brought only in a federal or state court located in the County of New York, State of New York.

 

16. PLEDGOR AND AGENT, RESPECTIVELY, TO THE EXTENT ENTITLED THERETO, WAIVE ANY PRESENT OR FUTURE RIGHT TO A TRIAL BY JURY OF ANY CASE OR CONTROVERSY IN WHICH THEY ARE OR BECOME A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THEM OR IN WHICH THEY ARE JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT TO, ANY RELATIONSHIP AMONGST OR BETWEEN PAC-VAN, PLEDGOR AND/OR AGENT.

 

[INTENTIONALLY LEFT BLANK]

 

  

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IN WITNESS WHEREOF, and intending to be legally bound, Pledgor has caused this Pledge Agreement to be duly executed and delivered on the day and year first written above.

 

	
WITNESS:

 

 

 

 

	
GFN North America Corp.

 

 

By:                  /s/ Christopher A. Wilson                                              

Name:             Christopher A. Wilson                                                   

Title:               Secretary                                                

 

  

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ACKNOWLEDGMENT

STATE/COMMONWEALTH OF _________________                                                                                                )

 

)           SS:

 

COUNTY OF _________________                                                                                     )

 

On this, the _____ day of July, 2010, before me, a Notary Public, the undersigned officer, personally appeared _____________________, who acknowledged himself/herself to be the ___________________ of GFN North America Corp., a Delaware corporation (the "Company"), and that he/she as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the Company as such officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

______________________________

Notary Public

 

My Commission Expires:

  

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EXHIBIT A

PLEDGOR'S STOCK

	
Pledgor

	
Issuer

	
Pledged Equity Description

	
Percentage of Interests in Issuer

	
Certificate Number

	
GFN North

America Corp., a Delaware corporation

 

	
Pac-Van, Inc., an Indiana corporation

	
Class A Common Stock

	
100%

	
107

  

9

  

TRANSFER POWER

 

FOR VALUE RECEIVED, GFN North America Corp., a Delaware corporation ("Company"), hereby sells, assigns and transfers unto ________________________________, ___ shares of stock of Pac-Van, Inc., an Indiana corporation, standing in the name of Company on the books of said corporation and represented by Share Certificate No. __ and does hereby irrevocably constitute and appoint _________________________________ as its attorney-in-fact, to transfer said shares on the books of said corporation with full power of substitution in the premises.

 

	
Dated:  _______________ ___, ______

	
GFN North America Corp.

 

 

By:                                                      

Name:                                                                

Title:                                                      

 

 

  

10

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