PLEDGE AGREEMENT
THIS
PLEDGE AGREEMENT (this “Pledge
Agreement”)
is
made and entered into as of October 1, 2008 by and among each of the undersigned
pledgors (each, individually a “Pledgor”
and,
collectively, the “Pledgors”),
GENERAL FINANCE CORPORATION, a Delaware corporation (“Parent”),
and
GFN NORTH AMERICA CORP., a Delaware corporation (“Sub”
and
collectively with Parent, the “Buyers”).
W I T N E S S E T&am
p
;#1 60;H:
WHEREAS,
pursuant to that certain Agreement and Plan of Merger (the “Merger
Agreement”)
dated
July 22, 2008 by and among Buyers, PAC-VAN, INC., an Indiana corporation
(“Pac-Van”),
MOBILE OFFICE ACQUISITION CORP., a Delaware corporation (“MOAC”)
and
the Pledgors, MOAC has been merged with and into Sub (the “Merger”),
and
each Pledgor will receive the shares of common stock of Parent set forth on
Schedule
I
hereto
(as to each Pledgor, the “Pledged
Shares”),
other
shares of common stock of Parent not subject to this Agreement and other
consideration in exchange for their stock in MOAC;
WHEREAS,
the Merger Agreement requires that each Pledgor pledge the Pledged Shares in
favor of Buyers to secure the payment of the indemnification obligations of
such
Pledgor under Article 7 of the Merger Agreement; and
WHEREAS,
Buyers have required, as a condition to entering into the Merger Agreement,
that
Pledgors (i) pledge to Buyers, and grant to Buyers a security interest in,
the Pledged Collateral (as defined herein) and (ii) execute and deliver
this Pledge Agreement in order to secure the payment by each Pledgor of its
Secured Obligations.
AGREEMENT
NOW
THEREFORE, in consideration of the premises and in order to induce Buyers to
enter into the Merger Agreement, each Pledgor hereby agrees with Buyers as
follows:
SECTION
1 Defined
Terms. The
following terms shall have the following respective meanings:
“Additional
Shares”
has
the
meaning specified in Section 8(b) hereof.
“Pledged
Collateral”
has
the
meaning specified in Section 2 hereof.
“Pledged
Shares”
has
the
meaning specified in the recitals hereof.
“Secured
Obligations”
has
the
meaning specified in Section 2 hereof.
“Securities
Act”
has
the
meaning specified in Section 12 hereof.
“UCC”
has
the
meaning specified in Section 3 hereof.
All
other
capitalized terms used herein and not otherwise defined herein shall have the
meanings given in the Merger Agreement, or, if not defined therein, the meanings
set forth in the UCC, except where the context otherwise requires.
SECTION
2 Pledge.
Each
Pledgor hereby pledges to Buyers, for their benefit, and grants to each Buyer,
for their benefit, a continuing first priority and perfected security interest
in, its right, title and interest in and to the following (collectively, the
“Pledged
Collateral”):
(a)
the
Pledged Shares of such Pledgor, the Additional Shares applicable to such
Pledgor's Pledged Shares and any certificates representing the Pledged Shares
of
such Pledgor and/or the Additional Shares applicable to such Pledgor's Pledged
Shares; and
(b)
the
proceeds (equal to $7.50 per share) of any sale of the Pledged Shares of such
Pledgor and/or the Additional Shares applicable to such Pledgor's Pledged
Shares.
SECTION
3 Security
For Obligations.
As to
each Pledgor, this Pledge Agreement secures, and the Pledged Collateral of
such
Pledgor is collateral security for, the prompt payment in full when due of
all
Losses (as defined in the Merger Agreement) payable to Buyers from such Pledgor
now or hereafter existing under Article 7 of the Merger Agreement and all
amendments, extensions or renewals thereof (all such obligations under Article
7
of the Merger Agreement being collectively referred to herein as the
“Secured
Obligations”).
Cancellation of shares included in the Pledged Collateral shall be done solely
in accordance with Section 7.3 of the Merger Agreement. If a Pledgor pays a
Secured Obligation in cash in lieu of permitting Buyers to retain Pledged Shares
as payment of such Secured Obligation, the number of shares included in the
Pledged Collateral (assuming a $7.50 value per share) equal to the cash payment
made by such Pledgor shall no longer be pledged to Buyers and Buyers shall
promptly deliver to such Pledgor the certificates for such shares with the
legend relating to this Pledge Agreement removed therefrom.
SECTION
4 Delivery
Of Pledged Collateral.
All
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to and held by or on behalf of the Buyers pursuant hereto.
Such certificates or instruments shall be in suitable form for transfer by
delivery, or shall be accompanied by instruments of transfer or assignment
in
blank (or such other documents or agreements necessary to give Buyers “control”
within the meaning of the UCC (as defined below)), all in form and substance
reasonably satisfactory to Buyers. “UCC”
means
the Uniform Commercial Code, as in effect from time to time, of the State of
Delaware or of any other state the laws of which are required as a result
thereof to be applied in connection with the issue of perfection of security
interests in the Pledged Collateral; provided,
that
to the
extent that the UCC is used to define any term herein or in any other documents
and such term is defined differently in different Articles or Divisions of
the
UCC, the definition of such term contained in Article or Division 9 shall
govern.
SECTION
5 Representations
And Warranties.
Each
Pledgor represents and warrants as to the Pledged Collateral pledged by it
as
follows:
(a) Such
Pledgor is the legal and beneficial owner of the Pledged Collateral pledged
by
it, free and clear of any Lien on the Pledged Collateral.
2
(b) Upon
the
delivery to Buyers of the Pledged Collateral pledged by such Pledgor and the
filing of a UCC-1 financing statement, the pledge of such Pledged Collateral
pursuant to this Pledge Agreement will create a valid and perfected first
priority Lien in such Pledged Collateral securing the payment of such Pledgor’s
Secured Obligations for the benefit of Buyers.
(c) No
authorization, approval, or other action by, and no notice to or filing with,
any Governmental Authority is required either for the pledge by such Pledgor
of
Pledged Collateral pursuant to this Pledge Agreement or for the execution,
delivery or performance of this Pledge Agreement by such Pledgor.
(d) Such
Pledgor has full power and authority to enter into this Pledge Agreement and
has
the right to pledge and grant a security interest in the Pledged Shares pledged
by it and the other Pledged Collateral pledged by it, in each case as provided
by this Pledge Agreement.
(e) This
Pledge Agreement has been duly authorized, executed and delivered by such
Pledgor and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
laws affecting the rights and remedies of creditors generally and by general
equitable principles.
SECTION
6 Further
Assurances.
Each
Pledgor agrees that at any time and from time to time, at its expense, it will
promptly execute and deliver, or cause to be executed and delivered, all stock
powers, assignments, acknowledgments, financing statements, instruments and
documents and take all further action, at the Buyers’ request, that Buyers
reasonably deem necessary or advisable in order to perfect any security interest
granted or purported to be granted hereby or to enable Buyers to exercise and
enforce their rights and remedies hereunder with respect to any Pledged
Collateral pledged by such Pledgor and to carry out the provisions and purposes
hereof. Each Pledgor will, promptly upon request, provide to Buyers all
information and evidence it may reasonably request concerning the Pledged
Collateral pledged by such Pledgor to enable Buyers to enforce the provisions
of
this Pledge Agreement.
SECTION
7 Voting
Rights; Sale Proceeds.
(a) Each
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Shares pledged by such Pledgor or any part
thereof for any purpose not inconsistent with the terms of this Pledge
Agreement; provided,
however,
that no
Pledgor shall exercise or shall refrain from exercising any such right if such
action or inaction could reasonably be expected to adversely affect the
validity, priority or perfection of the security interests granted hereunder
or
would otherwise be inconsistent with or violate any provisions of this Pledge
Agreement.
(b) Any
and
all cash or other proceeds (equal to $7.50 per share) paid, payable or otherwise
distributed in redemption of, or in exchange for, any Pledged Shares, shall
in
each case be delivered forthwith to an escrow agent pursuant to an escrow
agreement, both of which shall be mutually satisfactory to the selling Pledgor
and Buyers to hold as Pledged Collateral and shall, if received by a Pledgor,
be
received in trust for the benefit of the Buyers, be segregated from the other
property or funds of such Pledgor, and be forthwith delivered to such escrow
as
Pledged Collateral in the same form as so received (with any necessary or
requested endorsement). The selling Pledgors shall bear all fees and costs
of
such escrow. Any amounts received paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Shares in excess of $7.50 per
share shall be retained by the selling Pledgor and shall not be subject to
this
Agreement in any manner.
3
SECTION
8 Transfers
And Other Liens; Additional Shares.
(a) Each
Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant
any
option with respect to, any of the Pledged Collateral unless the proceeds of
such sale up to $7.50 per share are delivered to escrow pursuant to Section
6(b)
and such sale is made in accordance with the Stockholders Agreement of even
date
herewith among Pledgors, Parent and other persons named therein; (ii) create
or
permit to exist any Lien upon or with respect to any of the Pledged Collateral,
except for the security interest granted under this Pledge Agreement; or (iii)
enter into any agreement or understanding that purports to or may restrict
or
inhibit Buyers’ rights or remedies hereunder, including, without limitation,
Buyers’ right to retain the Pledged Collateral. In connection with any sale of
the Pledged Collateral in accordance with clause (i) of this subsection, Buyers
shall deliver to the selling Pledgor the certificates for the Pledged Collateral
being sold.
(b) Each
Pledgor agrees that it will deliver to Buyers hereunder, promptly upon its
acquisition thereof, any and all additional shares of stock received as a result
of a split or subdivision of such Pledgor’s Pledged Shares (“Additional
Shares”).
SECTION
9 Buyers
May Perform.
If any
Pledgor fails to perform any agreement contained herein, either Buyer may itself
perform, or cause performance of, such agreement, and the reasonable expenses
of
Buyers incurred in connection therewith shall be payable by such Pledgor.
SECTION
10 No
Assumption Of Duties; Reasonable Care.
The
rights and powers granted to Buyers hereunder are being granted in order to
preserve and protect Buyers’ security interest in and to the Pledged Collateral
granted hereby and shall not be interpreted to, and shall not, impose any duties
on Buyers in connection therewith except the duty to exercise reasonable care
in
the custody and preservation of the Pledged Collateral in its possession. Buyers
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which Buyers
accords its own property, it being understood that Buyers shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Buyers have or are deemed to have knowledge
of such matters or (ii) taking any necessary steps to preserve rights against
any parties with respect to any Pledged Collateral.
SECTION
11 Subsequent
Changes Affecting Pledged Collateral.
Each
Pledgor represents to Buyers that it has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, payments of interest and/or principal, reorganization or other
exchanges, tender offers and voting rights), and each Pledgor agrees that Buyers
shall have no responsibility or liability for informing such Pledgor hereunder
of any such changes or potential changes or for taking any action or omitting
to
take any action with respect thereto.
4
SECTION
12 Remedies
Upon Default.
If a
Pledgor shall have failed to pay a Secured Obligation of such Pledgor under
Article 7 of the Merger Agreement and such failure shall be continuing, the
Pledged Shares of such Pledgor in the amount of such Secured Obligation
(assuming a per share price of $7.50) shall be cancelled in accordance with
the
Merger Agreement.
SECTION
13 Attorney’s
Fees.
The
prevailing party(ies) in any litigation, arbitration, bankruptcy, insolvency
or
other proceeding (the "Proceeding") relating to the enforcement or
interpretation of this Agreement may recover from the unsuccessful party(ies)
all costs, and actual attorney's fees (including expert witness and other
consultants' fees and costs) relating to or arising out of (a) the Proceeding
(whether or not the Proceeding proceeds to judgment), and (b) any post-judgment
or post-award proceeding including one to enforce or collect any judgment or
award resulting from the Proceeding. All such judgments and awards will contain
a specific provision for the recovery of all such subsequently incurred costs,
expenses, and actual attorney's fees.
SECTION
14 Security
Interest Absolute.
All
rights of Buyers and the security interests hereunder, and all obligations
of
the Pledgors hereunder, shall be absolute and unconditional irrespective of,
and
unaffected by any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Secured Obligations.
SECTION
15 Miscellaneous
Provisions.
Section
15.1 Notices.
All notices, approvals, consents or other communications required or desired
to
be given hereunder shall be in the form and manner, and delivered to the
Pledgors (or any of them) and to the Buyers and to any other courtesy copy
addressees, at their respective addresses set forth in Section 9.3
of the
Merger Agreement.
Section
15.2 Headings.
The headings in this Pledge Agreement are for purposes of reference only and
shall not affect the meaning or construction of any provision of this Pledge
Agreement.
Section
15.3 Severability.
The
provisions of this Pledge Agreement are severable, and if any clause or
provision shall be held invalid, illegal or unenforceable in whole or in part
in
any jurisdiction, then such invalidity or unenforceability shall affect in
that
jurisdiction only such clause or provision, or part thereof, and shall not
in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Pledge Agreement in any
jurisdiction.
Section
15.4 Amendments,
Waivers and Consents.
Any amendment of this Pledge Agreement shall not be effective unless the same
shall be in writing and signed by Buyers and the Pledgors affected by such
amendment. Any waiver of any provision of this Pledge Agreement and any consent
to any departure by the Pledgors from any provision of this Pledge Agreement
shall not be effective unless the same shall be in writing and signed by the
waiving party and then such amendment or waiver shall be effective only in
the
specific instance and for the specific purposes for which given.
5
Section
15.5 Interpretation
of Agreement.
Time is of the essence in each provision of this Pledge Agreement of which
time
is an element. To the extent a term or provision of this Pledge Agreement
conflicts with the Merger Agreement and is not dealt with herein with more
specificity, the Merger Agreement shall control with respect to the subject
matter of such term or provision. Acceptance of or acquiescence in a course
of
performance rendered under this Pledge Agreement shall not be relevant in
determining the meaning of this Pledge Agreement even though the accepting
or
acquiescing party had knowledge of the nature of the performance and opportunity
for objection.
Section
15.6 Continuing
Security Interest; Transfer of Notes and Secured
Obligations.
This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until full and final
payment (including after twenty (20) months after the Closing Date) of the
Secured Obligations, (ii) be binding upon each Pledgor, its successors,
transferees and assigns and (iii) inure, together with the rights and
remedies of Buyers hereunder, to the benefit of the successors, transferees
and
assigns of Buyers.
Section
15.7 Reinstatement.
To the
maximum extent permitted by law, this Pledge Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by Buyers in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by Buyers upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Pledgor or any other Person
or
upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for any Pledgor or any other Person or any substantial part
of
its assets, or otherwise, all as though such payments had not been
made.
Section
15.8 Survival
of Provisions.
All representations, warranties and covenants of the Pledgors contained herein
shall survive the execution and delivery of this Pledge Agreement, and shall
terminate upon the termination hereof.
Section
15.9 Authority
of Buyers.
Buyers
shall have and be entitled to exercise all powers hereunder which are
specifically granted to Buyers by the terms hereof, together with such powers
as
are reasonably incident thereto. Buyers may perform any of their duties
hereunder or in connection with the Pledged Collateral by or through agents
or
employees and shall be entitled to retain counsel and to act in reliance upon
the advice of counsel concerning all such matters. Buyers and their directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document reasonably believed by it or them to
be
genuine and correct and to have been signed or sent by the proper person or
persons.
Section
15.10 Release;
Termination of Agreement.
This Pledge Agreement shall terminate on the third anniversary of the date
hereof (the "Termination
Date");
provided, however, if indemnification claims are pending on the Termination
Date
under Section 7.2(a) of the Merger Agreement, then this Pledge Agreement shall
terminate on the date on which such pending indemnification claims are paid
in
accordance with Article 7 of the Merger Agreement. At such termination date,
Buyers shall, at the request and expense of Buyers, reassign and redeliver
to
each Pledgor all of the Pledged Collateral pledged by such Pledgor hereunder
without any legend referencing this Pledge Agreement which has not been retained
or applied by Buyers in accordance with the terms hereof. Such reassignment
and
redelivery shall be without warranty by or recourse to Buyers, except as to
the
absence of any prior assignments by Buyers of their interest in the Pledged
Collateral, and shall be at the expense of Buyers.
6
Section
15.11 Counterparts.
This Pledge Agreement may be executed in any number of counterparts and by
the
different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be deemed an original but all of which shall
together constitute one and the same agreement.
Section
15.12 Governing
Law; Arbitration; Jury Trial Waiver.
(a) THIS
AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE
(AS OPPOSED TO THE CONFLICT-OF-LAWS PROVISIONS); PROVIDED THAT ISSUES WITH
RESPECT TO CREATION, PERFECTION OR ENFORCEMENT OF LIENS UNDER ARTICLE 9 OF
THE
UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH
IN
ARTICLE 9 OF THE UCC OF THE STATE OF DELAWARE; PROVIDED
THAT
BUYERS AND THE PLEDGORS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
(b) NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, ANY CONTROVERSY OR CLAIM
BETWEEN OR AMONG THE PARTIES, ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT, SHALL BE DETERMINED BY BINDING ARBITRATION PURSUANT TO THE TERMS
AND
CONDITIONS OF SECTION 9.16 OF THE MERGER AGREEMENT, SUBJECT TO THE EXCEPTIONS
SET FORTH IN SECTION 9.16 OF THE MERGER AGREEMENT.
(c) No
provision of Section 10.12(b) shall limit the right of Buyers to exercise
self-help remedies such as setoff, foreclosure against or sale of any personal
property collateral or security, or obtaining provisional or ancillary remedies
from a court of competent jurisdiction before, after, or during the pendency
of
any arbitration or other proceeding. The exercise of a remedy does not waive
the
right of either party to resort to arbitration.
Section
15.13 Waiver
Of Jury Trial.
SUBJECT
TO THE PROVISIONS OF SECTION 16.13(d), EACH PLEDGOR AND BUYER EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS PLEDGE
AGREEMENT, THE MERGER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT
BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY
OR
ASSIGNEE. EACH PLEDGOR AND BUYER AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS PLEDGE AGREEMENT OR THE MERGER AGREEMENT OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS PLEDGE AGREEMENT AND THE MERGER
AGREEMENT.
7
Section
15.14 Limitation
Of Liability.
No
Pledgor shall have any liability or obligation for any covenant of, or breach
hereof by, any other Pledgor. Without limiting the generality of the foregoing,
no Pledged Collateral pledged by a Pledgor shall be security for any obligations
of any other Pledgor. No claim may be made by any party hereto against any
other
party hereto, or the affiliates, directors, officers, officers, employees,
or
agents of such parties, for punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Pledge Agreement or the Merger Agreement,
or
any act, omission or event occurring in connection therewith, and each party
hereto hereby waives, releases and agrees not to xxx upon any claim for such
punitive damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
[SIGNATURE
PAGES FOLLOW]
8
IN
WITNESS WHEREOF, Pledgors and Buyers have each caused this Pledge Agreement
to
be duly executed and delivered as of the date first above
written.
|
BUYERS:
|
||
|
GENERAL
FINANCE CORPORATION
|
||
|
By:
|
/s/ Xxxx X. Xxxxxxx | |
|
Name:
Xxxx X. Xxxxxxx
|
||
|
Title:
Chief Operating Officer
|
||
|
GFN
NORTH AMERICA CORP.
|
||
|
By:
|
/s/ Xxxxxxxxxxx X. Xxxxxx | |
|
Name:
Xxxxxxxxxxx X. Xxxxxx
|
||
|
Title:
General Counsel
|
||
9
|
PLEDGORS:
|
||
|
/s/
Xxxxxx X. Xxxxxxx
|
||
|
Xxxxxx
X. Xxxxxxx
|
10
| /s/ Xxxxxx X. Xxxxxx, Xx. | |
|
Xxxxxx
X. Xxxxxx, Xx., as Trustee of the Xxxxxx
Family
Trust dated July 24, 1995
|
11
|
X.
X. XXXX LAMINAR PORTFOLIOS, L.L.C.
|
||
|
By:
|
/s/ Xxxxxx X. Xxxx | |
|
Name:
Xxxxxx X. Xxxx
|
||
|
Title:
Authorized Secretary
|
||
12
13
SCHEDULE
I
14
EXHIBIT
A
PLEDGE
AMENDMENT
This
Pledge Amendment dated __________________ is delivered pursuant to Section 8(c)
of the
Pledge Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge Agreement (the “Pledge
Agreement”)
dated
as of July 22, 2008 among the undersigned and General Finance Corporation,
a
Delaware corporation (“Parent”),
and
GFN North America Corp., a Delaware corporation (“Sub”
and
collectively with Parent, “Buyers”);
capitalized terms defined therein being used herein as therein defined and
that
the shares and other instruments listed on this Pledge Amendment shall be deemed
to be part of the Pledged Collateral and shall secure all Secured Obligations
of
the undersigned.
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[PLEDGOR]_____________________________,
|
|||||
|
a
______________________________________________
|
|||||
|
Date:
|
By:
|
||||
|
Name:
|
|||||
|
Title:
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15
