SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS
SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of October 1, 2008 (this
“Agreement”)
is
entered into among PAC-VAN,
INC.
(the
“Borrower”), GFN
NORTH AMERICA CORP. (the
“Company”),
LAMINAR
DIRECT CAPITAL, L.L.C.,
as
Senior Agent (as hereinafter defined) for the Senior Lenders (as hereinafter
defined) under the Investment Agreement (as hereinafter defined), and
D.
E. SHAW LAMINAR PORTFOLIOS, L.L.C. (the
“Subordinated
Lender”).
RECITALS
A. The
Senior Agent, certain financial institutions (together with the successors
and
assigns thereof, “Senior
Lenders”),
the
Borrower and Mobile Office Acquisition Corp. ("MOAC")
have
entered into an Investment Agreement, dated as of August 2, 2006 (as from time
to time amended, modified, extended, renewed, refinanced or restated prior
to
the date hereof, the “Original
Investment Agreement”),
together with the other Loan Documents (as defined in the Original Investment
Agreement, such documents, the "Original
Loan Documents"),
whereby the Subordinated Lenders have made available to the Borrower certain
loans and other financial accommodations therein set forth. The Original Loan
Documents include a Continuing Unconditional Guaranty dated as of August 2,
2006
(as from time to time amended, modified, extended, renewed or restated (the
“Original
Parent Guaranty”)
by
MOAC in favor of the Senior Agent. All of the Borrower’s and the Company’s
obligations under the Senior Loan Documents (as hereinafter defined) are secured
by assignments of and security interests in substantially all of the now or
hereafter acquired assets of the Borrower and the Company, all as more fully
set
forth in the Senior Loan Documents.
B. Borrower,
the Company and the Subordinated Lender (in its capacity as a stockholder of
MOAC) are parties to that certain Agreement and Plan of Merger, dated as of
July
28, 2008 (the “Merger
Agreement”),
pursuant to which MOAC is merging with and into the Company effective as of
the
date of this Agreement. Pursuant to Section 2.1 of the Merger Agreement, the
Company has issued a promissory note dated as of the date hereof in the
aggregate principal amount of $1,500,000 (the “Subordinated
Note”,
together with all guarantees and other debt documents or debt instruments
executed in connection therewith (as from time to time modified, extended,
renewed, refinanced or restated to the extent permitted by the terms of this
Agreement), collectively the “Subordinated
Documents”)
in
favor of the Subordinated Lender, which Subordinated Note, together with cash
and shares of restricted common stock of General Finance Corporation, a Delaware
corporation, in the amounts determined in accordance with Section 2.1 of the
Merger Agreement, constitute the merger consideration to be received by the
Subordinated Lender under the Merger Agreement in exchange for the cancellation
of the Subordinated Lender’s shares of stock in MOAC.
C. In
connection with the transactions contemplated by the Merger Agreement, the
parties to the Original Investment Agreement have agreed to amend and restate
(i) the Original Investment Agreement in the form of that certain Amended and
Restated Investment Agreement dated as of the date hereof by and among the
Borrower, the Company, the Senior Lenders party thereto and the Senior Agent
(as
from time to time amended, modified, extended, renewed, refinanced, or restated,
the "Investment
Agreement"),
(ii)
the Original Parent Guaranty in the form of that certain Amended and Restated
Continuing Unconditional Guaranty dated as of the date hereof by the Company
in
favor of the Senior Agent (the "Parent
Guaranty")
and
(iii) certain of the other Original Loan Documents. In addition, the Company
has
agreed to enter into that certain Security Agreement dated as of the date hereof
by and among the Company and the Senior Agent (the "Parent
Security Agreement").
D. As
a
condition of the financing accommodations under the Senior Loan Documents,
the
parties hereto are required to enter into this Agreement to establish the
relative rights and priorities of the Senior Agent, the Senior Lenders and
the
Subordinated Lender under the Senior Loan Documents and the Subordinated
Documents.
E. The
Subordinated Lender will benefit from the financing accommodations made by
the
Senior Lenders under the Investment Agreement and the other Senior Loan
Documents. The Subordinated Lender and the Company desire to enter into this
Agreement in order to induce the Senior Lenders to amend and restate the
Original Investment Agreement in the form of the Investment Agreement and to
enter into the amendments of the other Loan Documents contemplated thereby.
The
Subordinated Lender acknowledges that the Senior Lenders would not amend the
Senior Loan Documents but for the execution of this Agreement.
In
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
1. Definitions.
Except
as otherwise provided herein, all capitalized terms used in this Agreement
shall
have the meanings ascribed to such terms in the Investment Agreement, provided
that the following terms shall have the meanings set forth below:
“Bankruptcy
Code”
means
Title 11 of the United States Code (11 U.S.C. § 101 et. seq.) or
any replacement or supplemental federal statute dealing with the bankruptcy
of
debtors.
“Borrower”
shall
have the meaning set forth in the recitals hereof.
“Borrower
Property”
means
all assets, property and property rights, of any kind or nature, tangible or
intangible, now or hereafter existing, in which the Borrower or any Obligor
owns, asserts or maintains an interest.
“Company”
shall
have the meaning set forth in the recitals hereof.
“Company
Property”
means
all assets, property and property rights, of any kind or nature, tangible or
intangible, now or hereafter existing, in which the Company or any Obligor
owns,
asserts or maintains an interest.
“Investment
Agreement”
shall
have the meaning set forth in the recitals hereof.
“Finally
Paid”
or
“Final
Payment,”
when
used in connection with the Senior Indebtedness, means the full and indefeasible
payment in cash of all of the Senior Indebtedness.
“Liens”
means
any mortgage, deed of trust, pledge, lien, security interest, charge, set-off
right or other encumbrance, whether now existing or hereafter created, acquired
or arising.
“Obligor”
means
any guarantor or obligor of any Senior Indebtedness.
“Proceeding”
means
any voluntary or involuntary proceeding commenced by or against the Borrower,
the Company or any Obligor under any provision of the Bankruptcy Code, or under
any other bankruptcy or insolvency law, including assignments for the benefit
of
creditors, formal or informal moratoria, compositions, extensions generally
with
its creditors, or proceedings seeking dissolution, receivership, reorganization,
arrangement, or other similar relief.
“Senior
Agent”
means
Laminar Direct Capital, L.L.C., as Collateral Agent for Senior Lenders, or
any
other Person appointed by the holders of the Senior Indebtedness as collateral
agent for purposes of the Senior Loan Documents and this Agreement, together
with the successors and assigns of all of the foregoing.
“Senior
Indebtedness”
means
all obligations, liabilities and indebtedness of every nature of the Borrower
and the Company from time to time owed to the Senior Agent or any Senior Lender
under the Senior Loan Documents, including the principal amount of all debts,
claims and indebtedness, accrued and unpaid interest and all premium, fees,
costs and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and from time to time hereafter owing, due or
payable, whether before or after the filing of a Proceeding, together with
(a)
any indebtedness which refinances such principal, interest or other obligations
and any amendments, modifications, renewals, restatements, refinancings or
extensions thereof to the extent not prohibited by the terms of this Agreement
and (b) any interest accruing thereon after the commencement of a Proceeding,
without regard to whether or not such interest is allowed in any Proceeding.
Senior Indebtedness shall be deemed to be outstanding until it is Finally
Paid.
“Senior
Loan Documents”
means
the Investment Agreement, the Parent Guaranty, the Parent Security Agreement,
the Subdebt Parent Pledge Agreement (as defined in the Investment Agreement)
and
the other Loan Documents (as defined in the Investment Agreement) and all other
agreements, documents and instruments executed from time to time in connection
therewith, in each case as from time to time renewed, extended, amended,
restated or modified and all agreements and instruments evidencing full or
partial refundings or refinancings of the indebtedness thereunder.
“Subordinated
Documents”
shall
have the meaning set forth in recitals hereof.
“Subordinated
Indebtedness”
means
all obligations, liabilities and indebtedness of every nature of the Borrower
and the Company from time to time owed to any Subordinated Lender under the
Subordinated Documents, including the principal amount of all debts, claims
and
indebtedness, accrued and unpaid interest and all premium, fees, costs and
expenses, whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and from time to time hereafter owing, due or payable, whether
before or after the filing of a Proceeding, together with (a) any amendments,
modifications, renewals, restatements, refinancings or extensions thereof and
(b) any interest accruing thereon after the commencement of a Proceeding,
without regard to whether or not such interest is allowed in any Proceeding.
“Subordinated
Lender Remedies”
means
any action (a) to take from or for the account of the Borrower, the Company,
any
Obligor, any other guarantor of the Subordinated Indebtedness or any other
Person, by set-off or in any other manner, the whole or any part of any moneys
which may now or hereafter be owing by the Borrower, the Company (other than
receipt of payments of Subordinated Indebtedness to the extent permitted by
this
Agreement), any Obligor, any such guarantor or any other Person with respect
to
the Subordinated Indebtedness, (b) to xxx for payment of, or to initiate or
participate with others in any suit, action or proceeding (including any
Proceeding) against the Borrower, the Company, any Obligor, any such guarantor
or any other Person to (i) enforce payment of or to collect the whole or any
part of the Subordinated Indebtedness or (ii) commence judicial enforcement
of
any of the rights and remedies under the Subordinated Documents or applicable
law with respect to the Subordinated Indebtedness, (c) to accelerate the
Subordinated Indebtedness, (d) to exercise any put, repurchase or similar option
or to cause the Borrower, the Company, any Obligor, any such guarantor or any
other Person to honor any redemption or mandatory prepayment obligation under
any Subordinated Document or (e) to take any action under the provisions of
any
state or federal law, including the UCC, or under any contract or agreement,
to
enforce, foreclose upon, take possession of or sell any Borrower Property,
Company Property or any property or assets of any such guarantor or any other
Person. Notwithstanding the foregoing, “Subordinated
Lenders Remedies”
does
not include any action to seek and obtain specific performance or injunctive
relief to compel the Company or any Obligor to comply with (or not violate
or
breach) an obligation under the Subordinated Documents, so long as it is not
accompanied by a claim for monetary damages.
“Subordinated
Lender”
shall
have the meaning set forth in the recitals hereof.
“Subordinated
Note(s)”
shall
have the meaning set forth in the recitals hereof.
“UCC”
means
Article 9 of the Uniform Commercial Code, as in effect in any relevant
jurisdiction.
2. Subordination
of Subordinated Indebtedness to Senior Indebtedness.
The
Borrower and the Company covenant and agree, and Subordinated Lender by its
acceptance of the Subordinated Documents (whether upon original issue or upon
transfer or assignment) likewise covenants and agrees, notwithstanding anything
to the contrary contained in any of the Subordinated Documents, that the payment
of any and all of the Subordinated Indebtedness shall be subordinate and subject
in right and time of payment, to the extent and in the manner hereinafter set
forth, to the Final Payment of all Senior Indebtedness. Each holder of Senior
Indebtedness, whether now outstanding or hereafter created, incurred, assumed
or
guaranteed, shall be deemed to have acquired Senior Indebtedness in reliance
upon the provisions contained in this Agreement.
3. Subordination
of Liens.
(a) Subordinated
Lender hereby covenants and agrees that any Liens and rights of any kind such
Subordinated Lender may now have and hereafter acquire (or be deemed to now
have
or hereafter acquire) against the Borrower, the Company or any Obligor and/or
any Borrower Property or Company Property, if any, shall be subordinate and
subject to the Liens and rights against the Borrower, the Company, Obligors
and/or Borrower Property or Company Property of the Senior Lenders arising
from
or out of the Senior Indebtedness, regardless of the order, time or manner
in
which any Liens attach to or are perfected in any Borrower Property or Company
Property.
(b) If
(x)
the Borrower, the Company or any Obligor, as the case may be, desires to make
any distribution or payment or to sell any Borrower Property or Company Property
as to which the Senior Lenders have provided their written consent or which
is
otherwise permitted under the Senior Loan Documents or (y) the Senior Lenders
release their Lien in connection with any sale or disposition of any Borrower
Property or Company Property, the Subordinated Lender shall be deemed to have
consented to such disposition and shall execute such releases with respect
to
such Borrower Property or Company Property to be sold as the Senior Agent or
the
Senior Lenders request to evidence the release of any Lien against such property
the Subordinated Lender may have or be deemed to have. Each Subordinated Lender
hereby irrevocably appoints the holders of the Senior Indebtedness, or the
Senior Agent on their behalf, as the true and lawful attorneys of the
Subordinated Lender for the purpose of executing and filing any such releases.
Each Subordinated Lender hereby waives any rights such Subordinated Lender
has
or may have in the future to object to the appointment of a receiver for all
or
any portion of the equity or the assets of the Borrower, the Company or any
Obligor or to require any Senior Lender to marshal the collateral and agrees
that each Senior Lender may proceed against the collateral in any order that
it
deems appropriate in the exercise of its absolute discretion.
4. Warranties
and Representations of Company and Subordinated Lender.
(a) The
Borrower, the Company and the Subordinated Lender hereby severally represent
and
warrant to the Senior Lenders that each Senior Lender has been furnished with
a
true and correct copy of all instruments and securities evidencing or pertaining
to the Subordinated Indebtedness.
(b) The
Borrower and the Company hereby represent and warrant to the Senior Lenders
that
this Agreement has been duly executed and delivered by the Borrower and the
Company and constitutes a legal, valid and binding obligation of the Borrower
and the Company enforceable in accordance with its terms except to the extent
that the enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect affecting generally the enforcement of creditors’ rights and remedies and
general principles of equity.
(c) Subordinated
Lender represents and warrants to the Senior Lenders: (i) that this Agreement
has been duly executed and delivered by Subordinated Lender and constitutes
a
legal, valid and binding obligation of Subordinated Lender enforceable against
Subordinated Lender in accordance with its terms, except to the extent that
the
enforceability thereof may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect affecting
generally the enforcement of creditors’ rights and remedies and general
principles of equity; (ii) that Subordinated Lender has not relied and shall
not
rely on any representation or information of any nature made by or received
from
any Senior Lender relative to the Borrower, the Company or any Obligor in
deciding to execute this Agreement or to permit it to continue in effect; and
(iii) that Subordinated Lender is the current holder of the Subordinated
Indebtedness.
(d) The
Senior Agent and each Senior Lender represents and warrants to the Subordinated
Lenders: (i) that this Agreement has been duly executed and delivered by the
Senior Agent, on its own behalf and on behalf of the Senior Lenders, and
constitutes a legal, valid and binding obligation of the Senior Agent or such
Senior Lender, as applicable, enforceable against the Senior Agent or such
Senior Lender, as applicable, in accordance with its terms, except to the extent
that the enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect affecting generally the enforcement of creditors’ rights and remedies and
general principles of equity; (ii) that the Senior Agent or such Senior Lender,
as applicable, has not relied and shall not rely on any representation or
information of any nature made by or received from any Senior Lender relative
to
the Company or any Obligor in deciding to execute this Agreement or to permit
it
to continue in effect; and (iii) that such Senior Lender is a current holder
of
the Senior Indebtedness.
(e) Notwithstanding
anything contained in this Agreement to the contrary, Subordinated Lender hereby
represents and warrants to the Senior Agent, the Borrower and the Company that,
except for security interests and Liens subordinated to the Senior Indebtedness
pursuant to a written subordination agreement, Subordinated Lender has no
security interest in or Lien on any assets of the Borrower, the Company or
any
Obligor or any Borrower Property or any Company Property.
5. Negative
Covenants.
Until
all of the Senior Indebtedness has been Finally Paid: (A), except for security
interests and Liens subordinated to the Senior Indebtedness pursuant to a
written subordination agreement, the Subordinated Lender shall not demand,
accept or acquire from the Borrower, the Company or any Obligor any security
interest in or Lien on any assets of the Borrower, the Company or any Obligor
or
any Borrower Property or any Company Property, nor any collateral from the
Borrower, the Company or any Obligor; (B) neither the Borrower nor the Company
shall discharge the Subordinated Indebtedness other than in accordance with
the
terms of the Subordinated Documents; (C) the Subordinated Lender shall not
demand or accept from the Borrower, the Company, any Obligor or other Person
any
consideration which would result in a discharge of the Subordinated Indebtedness
other than in accordance with the terms of the Subordinated Documents; (D)
the
Subordinated Lender shall not hereafter give any subordination in respect of
the
Subordinated Indebtedness; and (E) neither the Borrower nor the Company shall
hereafter issue any instrument, security or other writing evidencing any part
of
the Subordinated Indebtedness, and the Subordinated Lender shall not receive
any
such writing, except upon the condition that such security shall bear the legend
referred to in Section
25
below
and a true copy thereof shall be thereupon promptly furnished to the Senior
Agent.
6. Permitted
Payments.
(a) Notwithstanding
the terms of the Subordinated Documents, the Company hereby agrees that it
shall
not make (and will not permit any other Obligor to make), and Subordinated
Lender hereby agrees that it will not accept, any payment or distribution with
respect to the Subordinated Indebtedness including any payment or distribution
received through the exercise of any right of setoff, counterclaim or
crossclaim, until the Senior Indebtedness is Finally Paid; provided
that the
Company may make to the Subordinated Lender and the Subordinated Lender may
accept any payments in respect of principal and interest on the Subordinated
Indebtedness in an aggregate amount not to exceed $2,000,000.00, all in
accordance with the terms of the Subordinated Documents, so long as no Default
or Event of Default has occurred under the Investment Agreement and is
continuing or would result from the making of such payment.
(b) The
failure of the Company to make any payment with respect to the Subordinated
Indebtedness by reason of the operation of this Section
6
shall
not be construed as preventing the occurrence of a default under the
Subordinated Documents.
7. Forbearance
of Legal Remedies.
(a) Until
the
Senior Indebtedness is Finally Paid, the Subordinated Lender shall not, without
the prior written consent of the Senior Agent, exercise any Subordinated Lender
Remedies.
(b) Notwithstanding
anything contained herein to the contrary or any rights or remedies available
to
the Subordinated Lender under any of the Subordinated Documents, applicable
law
or otherwise, prior to the time that the Senior Indebtedness has been Finally
Paid, any payments, distributions or other proceeds obtained by Subordinated
Lender from the exercise of any Subordinated Lender Remedies shall in any event
be held in trust by it for the benefit of the Senior Agent and the Senior
Lenders and promptly paid or delivered to the Senior Agent for the benefit
of
the Senior Lenders in the form received.
8. Dissolution,
Liquidation, Reorganization or Bankruptcy.
(a) In
the event of any Proceeding involving the Borrower, the Company or any
Obligor:
(i) all
Senior Indebtedness shall be Finally Paid before the Subordinated Lender shall
be entitled to receive any payment on account of any Subordinated Indebtedness;
and
(ii) any
payment or distribution of assets of such Person of any kind or character,
whether in cash, property or securities, to which the Subordinated Lender would
be entitled except for these provisions, shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution directly
to
the Senior Agent, to the extent necessary to make Final Payment of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment
or
distribution or provision therefor to the holders of such Senior Indebtedness.
Subordinated Lender irrevocably authorizes, empowers and directs any debtor,
debtor-in-possession, receiver, trustee or agent or other Person having
authority, to pay or otherwise deliver all such payments or distributions to
Senior Agent.
(b) Until
the
Senior Indebtedness has been Finally Paid, if a Proceeding shall occur and
be
continuing, the Subordinated Lender shall file all claims they may have against
the Borrower, the Company or any Obligor, and shall direct the debtor in
possession or trustee in bankruptcy, as appropriate, to pay over to the Senior
Agent all amounts due to the Subordinated Lender on account of the Subordinated
Indebtedness until the Senior Indebtedness has been Finally Paid. If the
Subordinated Lender fails to file such claims prior to 30 days before the
expiration of time to do so, the Senior Agent may (but shall have no obligation
to) file such claims in the Subordinated Lender’s name on behalf of the Senior
Lenders; provided,
that
neither the Senior Agent nor any Senior Lender shall have any right whatsoever
to vote any claim that the Subordinated Lender has in any such Proceeding to
accept or reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or existence.
(c) Subordinated
Lender agrees, in connection with any such Proceeding, that while it shall
retain the right to vote and otherwise act in any such proceeding (including
the
right to vote to accept or reject any plan of partial or complete liquidation,
reorganization, arrangement, composition or extension), it will not take any
action or vote in any way so as to (i) contest the validity of the Liens
securing the Senior Indebtedness, (ii) contest the enforceability of any of
the
Senior Loan Documents, (iii) contest the Senior Lenders’ priority position over
the Subordinated Lender created by this Agreement or (iv) take any position
or
action which would have directly or indirectly any of the following effects:
(A)
extension of the final maturity of and/or forgiveness, reduction or cram-down
of
the Senior Indebtedness or deferral of any required payment in respect of Senior
Indebtedness, (B) opposing or objecting to initiatives or claims by the Senior
Lenders for adequate protection or relief from the automatic stay, use of cash
collateral or super-priority expense of administration for failure of adequate
protection, (C) challenging in any respect treatment of the Senior Indebtedness
as a first priority perfected fully secured claim, (D) blocking current payment
of any obligation in respect of Senior Indebtedness, (E) assenting to or
supporting any requested extension of the exclusivity period for the submission
by Borrower or Company of any plan of reorganization or liquidation under the
Bankruptcy Code unless such extension is assented to or supported by the Senior
Lenders; and (F) opposing or objecting to any sale or lease of any Borrower
Property or Company Property that has been consented to by the holders of Senior
Indebtedness. Except as expressly set forth in this Section 8(c) or otherwise
in
this Agreement, the Subordinated Agent and Subordinated Lender shall, in any
Proceeding, be entitled to (x) file any pleadings, objections, motions or
agreements which assert rights or interests available to unsecured creditors
of
the Company arising under either bankruptcy law or applicable non-bankruptcy
law, (y) may file claims or statements of interest with respect to all or any
portion of the Subordinated Indebtedness, (z) file any necessary responsive
or
defensive pleadings in opposition to any motion, claim, adversary proceeding
or
other pleading made by any person objecting to or otherwise seeking the
disallowance of the claims of the Subordinated Agent or Subordinated Lender.
(d) Until
the
Senior Indebtedness has been Finally Paid, if a Proceeding shall occur and
be
continuing, the Subordinated Lender hereby (i) expressly consents to any Senior
Lender’s providing post-petition financing to the Borrower, the Company or any
Obligor or the granting by the Borrower, the Company or any Obligor to any
Senior Lender of senior liens and priorities in connection therewith and/or
the
use of cash collateral and (ii) agrees that adequate notice of such financing
or
cash collateral usage to the Subordinated Lender shall have been provided if
the
Subordinated Lender received notice in accordance with Section
16
hereof
two (2) Business Days prior to the entry of any order approving such financing
or cash collateral usage.
(e) If
Subordinated Lender has or at any time acquires any Lien securing any
Subordinated Indebtedness, such Subordinated Lender agrees not to (i) initiate
any proceeding involving the marshalling of any of the Borrower Property or
the
Company Property (whether in a Proceeding or otherwise) or (ii) assert any
right
it may have to “adequate protection” of its interest, if any, in such security
in any Proceeding and agrees that it will not seek to have the automatic stay
lifted with respect to such security, in each case without the prior written
consent of the Senior Agent. Subordinated Lender waives any claim or defense
Subordinated Lender may now or hereafter have arising out of the election by
any
Senior Lender in any Proceeding instituted under Chapter 11 of the Bankruptcy
Code of any use of cash collateral, any borrowing or any grant of a security
interest under Sections 363 and/or 364 of the Bankruptcy Code by the Borrower,
the Company or any Obligor, as debtor-in-possession. Subordinated Lender agrees
that it will not object to or oppose a sale or other disposition of any property
securing all or any part of the Senior Indebtedness free and clear of any Liens
or other claims of Subordinated Lender under Section 363 of the Bankruptcy
Code
if the Senior Agent has consented to such sale or disposition. Subordinated
Lender further agrees that it will not seek to participate on any creditors
committee in respect of the Subordinated Indebtedness without the Senior Agent’s
prior written consent. To the extent that any Senior Lender receives payments
on, or proceeds of collateral for, the Senior Indebtedness which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any
bankruptcy law, state or federal law, common law, or equitable cause, then
as
between such Senior Lender and Subordinated Lender hereunder, to the extent
of
such payment or proceeds received, the Senior Indebtedness, or part thereof,
intended to be satisfied shall be revived and continue in full force and effect
as if such payments or proceeds had not been received by such Senior
Lender.
9. Obligation
of Company Unconditional.
Nothing
contained herein or in the Senior Loan Documents is intended to or shall impair,
as between the Company and the Subordinated Lender only, the obligation of
the
Company, which is absolute and unconditional, to pay to the Subordinated Lender
the Subordinated Indebtedness as and when the same shall become due and payable
in accordance with their terms, or to affect the relative rights of the
Subordinated Lender and creditors of the Company other than the Senior
Lenders.
10. Subordination
Rights Not Impaired by Acts or Omissions of the Borrower, the Company or Holders
of Senior Indebtedness.
(a) No
right
of any present or future holders of any Senior Indebtedness to enforce the
subordination provisions as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Borrower
or the Company; by any act or failure to act by any such holder; by any act
or
failure to act by any other holder of the Senior Indebtedness; or by any
noncompliance by the Borrower or the Company with the terms hereof, regardless
of any knowledge thereof which any such holder may have or be otherwise charged
with. The Subordinated Lender shall not be released, nor shall the Subordinated
Lender’s obligation hereunder be in anyway diminished, by any of the following:
(i) the exercise or the failure to exercise by any Senior Lender of any rights
or remedies conferred on it or them under the Senior Loan Documents hereunder
or
existing at law or otherwise, or against any Borrower Property or Company
Property; (ii) the commencement of an action at law or the recovery of a
judgment at law against the Borrower, the Company or any Obligor for the
performance of the Senior Indebtedness and the enforcement thereof through
levy
or execution or otherwise; (iii) the taking or institution or any other action
or proceeding against the Borrower, the Company or any Obligor; (iv) any delay
in taking, pursuing, or exercising any of the foregoing actions, rights, powers,
or remedies (even though requested by Subordinated Lender) by any Senior Lender
or anyone acting for any Senior Lender; (v) any lack of validity or
enforceability of any Senior Loan Document; (vi) the release or non-perfection
of any collateral securing the Senior Indebtedness; or (vii) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Borrower, the Company or any Obligor in respect of the Senior
Indebtedness or Subordinated Lender in respect of this
Agreement.
(b) Without
limiting the generality of the foregoing, and anything else contained herein
to
the contrary notwithstanding, any Senior Lender, from time to time, without
prior notice to or the consent of the Subordinated Lender, may take all or
any
of the following actions without in any manner affecting or impairing the
obligation or liability of the Subordinated Lender hereunder: (i) obtain a
Lien
in any property to secure any of the Senior Indebtedness; (ii) obtain the
primary and secondary liability of any party or parties with respect to any
of
the Senior Indebtedness; (iii) renew, extend, or otherwise change the time
for
payment of the Senior Indebtedness or any installment thereof for any period,
or
change the interest rates and fees with respect to the Senior Indebtedness;
(iv)
renew, reaffirm, extend, release or otherwise change any liability of any nature
of any Person, including any Obligor, with respect to the Senior Indebtedness;
(v) exchange, enforce, waive, release, and apply any Borrower Property or
Company Property and direct the order or manner of sale thereof as such Senior
Lender may in its discretion determine; (vi) enforce its rights hereunder,
whether or not such Senior Lender shall proceed against any other Person; (vii)
exercise its rights to consent to any action or non-action of the Borrower,
the
Company or any Obligor which may violate the covenants and agreements contained
in the Senior Loan Documents, with or without consideration, on such terms
and
conditions as may be acceptable to it; or (viii) exercise any of its rights
conferred by the Senior Loan Documents or by law.
11. Waivers.
The
Borrower, the Company and Subordinated Lender each hereby waive, to the fullest
extent permitted by law, any defense based on the adequacy of a remedy at law
which might be asserted as a bar to the remedy of specific performance of this
Agreement in any action brought therefor by the Senior Lenders. To the fullest
extent permitted by law and except as to any notices specified in this
Agreement, notices regarding the intended sale or disposition of any portion
of
the collateral held by the Senior Lenders, or any notice which may not be waived
in accordance with the UCC, the Borrower, the Company and Subordinated Lender
each hereby further waive: presentment, demand, protest, notice of protest,
notice of default or dishonor, notice of payment or nonpayment and any and
all
other notices and demands of any kind in connection with all negotiable
instruments evidencing all or any portion of the Senior Indebtedness or the
Subordinated Indebtedness to which the Borrower, the Company or the Subordinated
Lender may be a party; prior notice of and consent to any loans made, extensions
granted or other action taken in reliance thereon; and all other demands and
notices of every kind in connection with this Agreement, the Senior Indebtedness
or the Subordinated Indebtedness. Subordinated Lender consents to any release,
renewal, extension, compromise or postponement of the time of payment of the
Senior Indebtedness, to any substitution, exchange or release of collateral
therefor, and to the addition or release of any Person primarily or secondarily
liable thereon.
12. No
Estoppel.
Neither
the failure nor any delay on the part of any Senior Lender to exercise any
right, remedy, power or privilege hereunder shall operate as a waiver thereof
or
give rise to an estoppel, nor be construed as an agreement to modify the terms
of this Agreement, nor shall any single or partial exercise of any right,
remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver by a party hereunder shall be effective unless it is
in
writing and signed by the party making such waiver, and then only to the extent
specifically stated in such writing.
13. Incorrect
Payments; Specific Performance.
If the
Borrower, the Company or any Obligor shall make or the Subordinated Lender
shall
collect any payment on account of the principal of, premium or interest on
or
any other amounts due under the Subordinated Indebtedness in contravention
of
this Agreement, such payments shall be held in trust by the Subordinated Lender
and not commingled with any assets of Subordinated Lender and shall be paid
over
and delivered to the Senior Agent, for the benefit of the Senior Lenders,
promptly upon receipt thereof. At any time Subordinated Lender fails to comply
with any provision of this Agreement, the Senior Lenders may demand specific
performance of this Agreement, whether or not the Borrower or the Company has
complied with this Agreement, and may exercise any other remedy available at
law
or equity.
14. Amendment
of the Subordinated Documents and Senior Loan Documents.
Subordinated Lender agrees that it will not, without the prior written consent
of the Senior Agent, agree to any amendment, modification or supplement to
the
Subordinated Documents. The Senior Indebtedness may at any time be amended,
modified, restated, refinanced or waived without limitation without notice
to,
or the consent of, the Subordinated Lender.
15. Inconsistent
or Conflicting Provisions; Construction.
If a
provision of the Senior Loan Documents or the Subordinated Documents is
inconsistent or conflicts with the provisions of this Agreement, the provisions
of this Agreement shall govern and prevail. The term "including" is not limiting
and means "including without limitation." In the computation of periods of
time
from a specified date to a later specified date, the word "from" means "from
and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including."
16. Notices.
Any
notice, consent or other communication provided for in this Agreement shall
be
in writing and shall be delivered personally (effective upon delivery), via
facsimile (effective upon confirmation of transmission), via overnight courier
(effective the next Business Day after dispatch if instructed to deliver on
next
business day) or via U.S. Mail (effective 3 days after mailing, postage prepaid,
first class) to each party at its address(es) and/or facsimile number(s) set
forth on Annex
I
hereto,
or to such other address as either party shall specify to the other in writing
from time to time. The Subordinated Lender shall provide the Senior Agent with
written notice promptly upon the occurrence of an event of default under the
Subordinated Documents.
17. Entire
Agreement.
This
Agreement constitutes and expresses the entire understanding between the parties
hereto with respect to the subject matter hereof, and supersedes all prior
and
contemporaneous agreements and understandings, inducements or conditions,
whether express or implied, oral or written. Neither this Agreement nor any
portion or provision hereof may be changed, waived or amended orally or in
any
manner other than by an agreement in writing signed by the Senior Agent and
the
Subordinated Lender; provided
that any
such change, waiver or amendment shall be binding upon the Borrower and the
Company by their written consent thereto. This Agreement shall constitute a
Loan
Document and the recitals hereto shall constitute part of this
Agreement.
18. Additional
Documentation.
The
Borrower, the Company and the Subordinated Lender shall execute and deliver
to
the Senior Agent such further instruments and shall take such further action
as
the Senior Agent may at any time or times reasonably request in order to carry
out the provisions and intent of this Agreement.
19. Expenses.
The
Borrower and the Company agrees to pay the Senior Agent and the Senior Lenders
on demand all expenses of every kind, including Attorney Costs, that the Senior
Agent or the Senior Lender incur in enforcing any of their rights against the
Borrower, the Company and/or the Subordinated Lender under this
Agreement.
20. Successors
and Assigns.
(a) This
Agreement shall inure to the benefit of each Senior Lender, Subordinated Lender,
and their respective successors and assigns, and shall be binding upon the
Borrower, the Company and their respective successors and assigns, and each
Senior Lender, Subordinated Lender and their respective transferees, successors
and assigns, including any subsequent holders of the Subordinated Note. Any
Senior Lender, without prior notice or consent of any kind, may sell, assign
or
transfer any Senior Indebtedness, and in such event each and every immediate
and
successive assignee or transferee thereof may be given the right by such Person
to enforce this Agreement in full against the Borrower, the Company and the
Subordinated Lender, by suit or otherwise, for its own benefit.
(b) Subordinated
Lender shall not sell, assign, pledge, dispose of or otherwise transfer all
or
any portion of the Subordinated Indebtedness or any Subordinated Document:
(i)
unless, prior to the consummation of any such action, the transferee thereof
shall execute and deliver to the Senior Agent a joinder to this Agreement,
providing for the continued subordination of the Subordinated Indebtedness
to
the Senior Indebtedness as provided herein and for the continued effectiveness
of all of the rights of the Senior Agent and the Senior Lenders arising under
this Agreement, and (ii) unless the related Subordinated Documents evidencing
such Subordinated Indebtedness contain the legend referred to in Section 25
below.
(c) Notwithstanding
the failure of any transferee to execute or deliver an agreement substantially
identical to this Agreement, the subordination effected hereby shall survive
any
sale, assignment, pledge, disposition or other transfer of all or any portion
of
the Subordinated Indebtedness, and the terms of this Agreement shall be binding
upon the successors and assigns of each Subordinated Indebtedness, as provided
in this Section
20.
(d) Subordinated
Lender hereby agrees that any party that refinances the Senior Indebtedness
of
the Senior Lenders may rely on and enforce this Agreement as if it were such
Senior Lender. Subordinated Lender further hereby agrees that it will, at the
request of such Senior Lender, enter into an agreement, in the form of this
Agreement, mutatis
mutandis,
to
subordinate the Subordinated Indebtedness, to the same extent as provided
herein, to the party refinancing all or a portion of such Senior Indebtedness;
provided
that the
failure of the Subordinated Lender to execute such an agreement shall not affect
such party’s right to rely on and enforce the terms of this
Agreement.
21. Covenant
Not to Challenge.
This
Agreement has been negotiated by the parties with the expectation and in
reliance upon the assumption that the instruments and documents evidencing
the
Senior Indebtedness are valid and enforceable. In determining whether to enter
into this Agreement, the Subordinated Lender has assumed such validity and
enforceability, and has agreed to the provisions contained herein, without
relying upon any reservation of a right to challenge or call into question
such
validity or enforceability. As between any Senior Lender and Subordinated
Lender, Subordinated Lender hereby covenants and agrees, to the fullest extent
permitted by law, that it shall not initiate in any proceeding a challenge
to
the validity or enforceability of the documents and instruments evidencing
the
Senior Indebtedness or the validity, perfection or priority of any Lien of
the
Senior Agent or the Senior Lenders securing the Senior Indebtedness, nor shall
the Subordinated Lender instigate other parties to raise any such challenges,
nor shall the Subordinated Lender participate in or otherwise assert any such
challenges which are raised by other parties. As between any Senior Lender
and
any Subordinated Lender, each Senior Lender hereby covenants and agrees, to
the
fullest extent permitted by law, that it shall not initiate in any proceeding
a
challenge to the validity or enforceability of the documents and instruments
evidencing the Subordinated Indebtedness, nor shall the Senior Lenders instigate
other parties to raise any such challenges, nor shall the Senior Lenders
participate in or otherwise assert any such challenges which are raised by
other
parties.
22. Subrogation.
Subject
to the Final Payment of all Senior Indebtedness and the provisions of
Section
24
hereof,
the Subordinated Lender shall be subrogated to the rights of the Senior Lenders
to receive payments and distributions of cash, property and securities
applicable to the Senior Indebtedness to the extent that distributions otherwise
payable to the Subordinated Lender have been applied to the Senior Indebtedness,
until all amounts payable under the Subordinated Indebtedness shall have been
paid in full. For purposes of such subrogation, no payments or distributions
to
the Senior Lenders of any cash, property or securities to which the Subordinated
Lender would be entitled except for the provisions of this Agreement, and no
payment pursuant to the provisions of this Agreement to the Senior Lenders
by
the Subordinated Lender shall, as among the Borrower, the Company and their
respective creditors other than the Senior Lenders, be deemed to be a payment
or
distribution by the Borrower or the Company to or on account of the Senior
Indebtedness. If the Borrower or the Company fails to make any payment on
account of the Subordinated Indebtedness by reason of any provision contained
herein, such failure shall, notwithstanding such provision contained herein,
constitute a default with respect to the Subordinated Indebtedness if and to
the
extent such failure would otherwise constitute such a default in accordance
with
the terms of the Subordinated Indebtedness.
23. Termination
of Agreement.
This
Agreement shall continue and shall be irrevocable until the date all of the
Senior Indebtedness has been Finally Paid or otherwise discharged and released
in an express writing to such effect by the Senior Lenders.
24. Reinstatement.
The
obligations of the Subordinated Lender under the Agreement shall continue to
be
effective, or be reinstated, as the case may be, if at any time any payment
in
respect of any Senior Indebtedness is rescinded or must otherwise be restored
or
returned by any Senior Lender by reason of any bankruptcy, reorganization,
arrangement, composition or similar proceeding or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer
for,
the Borrower, the Company, any Obligor or any substantial part of its property,
or otherwise, all as though such payment had not been made.
25. Legends.
Until
the termination of this Agreement, Subordinated Lender will cause to be clearly,
conspicuously and prominently inserted on the face of Subordinated Note and
any
other Subordinated Document, as well as any renewals or replacements thereof,
the following legend:
“THIS
INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE “SUBORDINATION
AGREEMENT”)
DATED
AS OF OCTOBER 1, 2008 AMONG D. E. SHAW LAMINAR PORTFOLIOS, L.L.C., PAC-VAN,
INC.
(THE “BORROWER”),
GFN
NORTH AMERICA CORP. (THE
“COMPANY”)
AND
LAMINAR DIRECT CAPITAL, L.L.C. (TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, THE
“SENIOR
AGENT”),
TO
THE INDEBTEDNESS (INCLUDING INTEREST) OWED BY THE COMPANY PURSUANT TO THAT
CERTAIN AMENDED AND RESTATED INVESTMENT AGREEMENT DATED AS OF OCTOBER 1, 2008
AMONG THE COMPANY, THE SENIOR AGENT AND BORROWER, AND THE OTHER LOAN DOCUMENTS
(AS DEFINED IN THE INVESTMENT AGREEMENT) AS SUCH INVESTMENT AGREEMENT AND OTHER
LOAN DOCUMENTS MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM
TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE INDEBTEDNESS THEREUNDER AS
CONTEMPLATED BY THE SUBORDINATION AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT,
BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS
OF
THE SUBORDINATION AGREEMENT.”
The
Borrower’s and the Company’s books shall be marked to evidence the subordination
of all of the Subordinated Indebtedness to the holders of Senior Indebtedness,
in accordance with the terms of this Agreement. Each Senior Lender is authorized
to examine such books from time to time in accordance with the terms of the
Investment Agreement and to make any notations required by this
Agreement.
26. Governing
Law.
THIS
AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
THE
BORROWER, THE COMPANY AND THE SUBORDINATED LENDER HEREBY AGREE THAT ALL ACTIONS
OR PROCEEDINGS INITIATED BY THE BORROWER, THE COMPANY OR THE SUBORDINATED LENDER
AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT SHALL BE LITIGATED
IN A
NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK OR, IF ANY SENIOR LENDER INITIATES SUCH ACTION, IN ADDITION
TO THE FOREGOING COURTS, ANY COURT IN WHICH SUCH SENIOR LENDER SHALL INITIATE
SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. THE BORROWER, THE
COMPANY AND THE SUBORDINATED LENDER EACH HEREBY EXPRESSLY SUBMIT AND CONSENT
IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY ANY SENIOR
LENDER AND HEREBY WAIVE ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM
OR
AN IMPROPER FORUM BASED UPON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM AS
SET
FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY ANY
SENIOR LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING, BY
ANY
SENIOR LENDER, OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION, AND THE BORROWER, THE COMPANY AND THE SUBORDINATED LENDER EACH
HEREBY WAIVE THE RIGHT TO COLLATERALLY ATTACK SUCH JUDGMENT OR ACTION.
27. Jury
Trial.
THE
SENIOR AGENT, THE SUBORDINATED LENDER, THE BORROWER AND THE COMPANY WAIVE TRIAL
BY JURY IN ANY DISPUTE ARISING FROM, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
28. Severability.
The
provisions of this Agreement are independent of and separable from each other.
If any provision hereof shall for any reason be held invalid or unenforceable,
it is the intent of the parties that such invalidity or unenforceability shall
not affect the validity or enforceability of any other provision hereof, and
that this Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein.
29. Counterparts.
This
Agreement may be executed in any number of separate counterparts, all of which,
when taken together, shall constitute one and the same instrument,
notwithstanding the fact that all parties did not sign the same counterpart.
Receipt of an executed signature page to this Agreement by facsimile or other
electronic transmission shall constitute effective delivery
thereof.
30. Sections.
The
section headings used in this Agreement are for convenience only and shall
not
affect the interpretation of any of the provisions hereof.
31. Defines
Rights of Creditors.
The
provisions of this Agreement are solely for the purpose of defining the relative
rights of the Senior Lenders and the Subordinated Lender and shall not be deemed
to create any rights or priorities in favor of any other Person, including
the
Borrower and the Company.
[signature
pages follow]
The
parties hereto have executed this Agreement as of the date first above
written.
|
PAC-VAN,
INC.
|
||
|
By:
|
/s/
Xxxxxxxx X. Xxxxxxxxx
|
|
|
Xxxxxxxx X. Xxxxxxxxx, President
|
||
|
COMPANY:
|
GFN
NORTH AMERICA CORP.
|
|
|
By:
|
/s/
Xxxx X. Xxxxxxx
|
|
|
Xxxx X. Xxxxxxx, Chief Operating Officer
|
||
|
SENIOR
AGENT:
|
LAMINAR
DIRECT CAPITAL, L.L.C.
|
|
|
By:
|
/s/
Xxxxxx X. Xxxx
|
|
|
Xxxxxx X. Xxxx, Authorized Signatory
|
||
|
SUBORDINATED
LENDER:
|
D.
E. SHAW LAMINAR PORTFOLIOS, L.L.C.
|
|
|
By:
|
/s/
Xxxxxx X. Xxxx
|
|
|
Xxxxxx X. Xxxx, Authorized
Signatory
|
||
ANNEX
I
NOTICE
ADDRESSES
BORROWER:
Pac-Van,
Inc.
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxxxx X. Xxxxxxxxx
Facsimile:
(000) 000-0000
COMPANY:
GFN
North
America Corp.
00
Xxxx
Xxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000
SENIOR
AGENT:
Laminar
Direct Capital, L.L.C, as Collateral Agent
00000
Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
Attention:
Xxxxxx
Xxxxx
D.
E.
Shaw Laminar Portfolios, L.L.C.
00000
Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
Attention:
Xxxxxx
Xxxxx
