Exhibit 10.3
 
INVESTMENT MANAGEMENT TRUST AGREEMENT
 
This Agreement (this “Agreement”) is made as of April 5, 2006 by and between
General Finance Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”).
 
WHEREAS, the Company has entered into an Underwriting Agreement (“Underwriting
Agreement”) with Morgan Joseph & Co. Inc. (“Morgan Joseph”) acting as the
representative (the “Representative”) of the underwriters (collectively, the
“Underwriters”), pursuant to which, among other matters, the Underwriters have
agreed to purchase from the Company, and effect a public offering (the “IPO”)
of, 7,500,000 Units (“Units”), each Unit consisting of one share of the
Company’s common stock, par value $.0001 per share (“Common Stock”), and one
Warrant, to purchase one share of Common Stock, all as more fully described in
the Company’s final Prospectus comprising part of the Company’s Registration
Statement on Form S-1 (File No. 333-129830) under the Securities Act of 1933, as
amended (“Registration Statement”);
 
WHEREAS, prior to the closing of the IPO, the Company will sell 583,333 Warrants
to two officers of the Company (the “Private Placement”);
 
WHEREAS, the Registration Statement has been declared effective as of the date
hereof by the Securities and Exchange Commission (“Effective Date”);
 
WHEREAS, as described in the Registration Statement, funds (the “Property”)
constituting a portion of the proceeds of the Private Placement and the IPO will
be delivered to the Trustee to be deposited and held in a trust account for the
benefit of the Company and the holders of the Common Stock (the “Public
Stockholders,” and collectively with the Company, the “Beneficiaries”) issued in
the IPO as part of the Units (such shares, excluding shares of Common Stock
issued upon exercise of Warrants issued in the IPO, the “IPO Shares”); and
 
WHEREAS, the Company and the Trustee desire to enter into this Agreement to set
forth the terms and conditions pursuant to which the Trustee shall hold the
Property.
 
IT IS AGREED:
 
1.  Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants
to:
 
(a)  Hold the Property in trust for the Beneficiaries in accordance with the
terms of this Agreement (“Trust Account”) established by the Trustee at a branch
of JP Morgan Chase NY Bank in conjunction with an account established at a
broker dealer selected by the Trustee;
 
(b)  Manage, supervise and administer the Trust Account subject to the terms and
conditions set forth herein;
 
(c)  In a timely manner, upon the instruction of the Company, invest and
reinvest the Property in any Government Security. As used herein, “Government
Security” means any Treasury Bill issued by the United States, having a maturity
of one hundred and eighty days or less or in money market funds selected by the
Company meeting the conditions specified in Rule 2a-7 promulgated under the
Investment Company Act of 1940, as amended, as determined by the Company;
 
(d)  Collect and receive, when due, all principal and income arising from the
Property, which shall become part of the “Property”;
 

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(e)  Notify the Company and the Representative of all communications received by
it with respect to any Property requiring action by the Company;
 
(f)  Supply any necessary information or documents as may be requested by the
Company in connection with the Company’s preparation of the tax returns for the
Trust Account;
 
(g)  Participate in any plan or proceeding for protecting or enforcing any right
or interest arising from the Property if, as and when instructed by the Company
and Morgan Joseph;
 
(h)  Render to the Company and to the Representative, and to such other persons
as the Company may from time to time instruct, monthly written statements of the
activities of and amounts in the Trust Account reflecting all receipts and
disbursements of the Trust Account;
 
(i)  Upon written instructions from the Company, the Trustee shall disburse
funds by bank wire transfer out of the Property in the Trust Account to the
Company’s bank account in an amount specified by the Company, as required to pay
its income tax liability, if any, relating to interest earned on the Property;
 
(j)  Upon receipt of a letter (a “Termination Letter”), in a form substantially
similar to that attached hereto as either Exhibit A or Exhibit B, signed on
behalf of the Company by its Chief Executive Officer or Chairman of the Board
and affirmed by a majority of its Board of Directors, comply with the
instructions set forth in the letter regarding the liquidation of the Trust
Account, including distribution of the Property in the Trust Account only as
directed in the Termination Letter and the other documents referred to therein;
and
 
(k)  If the Trustee shall not have received a Termination Letter on or prior to
the Distribution Date, promptly following the Distribution Date the Trustee
shall liquidate the Trust Account in accordance with the procedures set forth in
the Termination Letter attached as Exhibit B to the Public Stockholders of
record as of a record date fixed by the Trustee, which record date shall be
within ten days of the liquidation date, or as soon thereafter as is
practicable. For purposes of this Agreement, the “Distribution Date” shall mean
October 5, 2007 [18 months from the Effective Date] or, if on or prior to such
date the Trustee has received a certification from the Company substantially in
the form of Exhibit C, the date that is two years from the Effective Date.
 
2.  Agreements and Covenants of the Company. The Company hereby agrees and
covenants to:
 
(a)  Give all instructions to the Trustee hereunder in writing, signed by an
Authorized Individual. The “Authorized Individuals” shall be those individuals
from time to time designated in writing to the Trustee by the Company as
“Authorized Officers,” provided that each such individual must be an executive
officer or Chairman of the Board of the Company. The initial Authorized
Individuals are identified in Exhibit D to this Agreement. In addition, except
with respect to its duties under Section 1(j) above, the Trustee shall be
entitled to rely on, and shall be protected in relying on, any verbal or
telephonic advice or instruction which it in good faith believes to be given by
any one of the persons authorized above to give written instructions, provided
that the Company shall promptly confirm such instructions in writing;
 
(b)  Hold the Trustee harmless and indemnify the Trustee from and against any
and all expenses, including reasonable counsel fees and disbursements, or loss
suffered by the Trustee in connection with any action, suit or other proceeding
brought against the Trustee involving any claim, or in connection with any claim
or demand which in any way arises out of or relates to this Agreement, the
services of the Trustee hereunder, or the Property or any income earned from
investment of the Property, except for expenses and losses resulting from the
Trustee’s gross negligence or willful misconduct. Promptly after the receipt by
the Trustee of notice of demand or claim or the commencement of any action, suit
or proceeding, pursuant to which the Trustee intends to seek indemnification
under this paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the
right to conduct and manage the defense against such Indemnified Claim,
provided, however, that the Trustee shall obtain the consent of the Company with
respect to the selection of counsel, which consent shall not be unreasonably
withheld. The Company may participate in such action with its own counsel;
 

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(c)  Pay the Trustee an initial acceptance fee of $1,000 and an annual fee of
$3,000 (it being expressly understood that the Property shall not be used to pay
such fee). The Company shall pay the Trustee the initial acceptance fee and
first year’s fee on the Effective Date and thereafter on the anniversary of the
Effective Date. The Trustee shall refund to the Company the fee (on a pro rata
basis) with respect to any period after the liquidation of the Trust Account.
The Company shall not be responsible for any other fees or charges of the
Trustee except as may be provided in Section 2(b) of this Agreement (it being
expressly understood that the Property shall not be used to make any payments to
the Trustee under such paragraph);
 
(d)  In connection with any vote of the Company’s stockholders regarding a
Business Combination (as defined in the Certificate of Incorporation of the
Company), provide to the Trustee an affidavit or certificate of a firm regularly
engaged in the business of soliciting proxies and tabulating stockholder votes
(which firm may be the Trustee) verifying the number of votes of the Company’s
stockholders for and against such Business Combination.
 
3.  Limitations of Liability. The Trustee shall have no responsibility or
liability to:
 
(a)  Take any action with respect to the Property, other than as directed in
Section 1 of this Agreement and the Trustee shall have no liability to any party
except for liability arising out of its own gross negligence or willful
misconduct;
 
(b)  Institute any proceeding for the collection of any principal and income
arising from, or institute, appear in or defend any proceeding of any kind with
respect to, any of the Property unless and until it shall have received
instructions from the Company given as provided herein to do so and the Company
shall have advanced or guaranteed to it funds sufficient to pay any expenses
incident thereto;
 
(c)  Change the investment of any Property, other than in compliance with
Section 1(c) of this Agreement;
 
(d)  Refund any depreciation in principal of any Property;
 
(e)  Assume that the authority of any Authorized Officer designated by the
Company to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company shall have delivered a
written revocation of such authority to the Trustee;
 
(f)  The other parties hereto or to anyone else for any action taken or omitted
by it, or any action suffered by it to be taken or omitted, in good faith and in
the exercise of its own best judgment, except for its gross negligence or
willful misconduct. The Trustee may rely conclusively and shall be protected in
acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee), statement, instrument, report or
other paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Trustee, in good
faith, to be genuine and to be signed or presented by the proper person or
persons. The Trustee shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this agreement or any of the terms
hereof, unless evidenced by a written instrument delivered to the Trustee signed
by the proper party or parties and, if the duties or rights of the Trustee are
affected, unless it shall give its prior written consent thereto;
 

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(g)  Verify the correctness of the information set forth in the Registration
Statement or to confirm or assure that any Business Combination consummated by
the Company or any other action taken by the Company is as contemplated by the
Registration Statement;
 
(h)  Subject to the requirements of Section 1(i) of this Agreement, pay any
taxes on behalf of the Trust Account to any governmental entity or taxing
authority;
 
(i)  File income tax or information returns with the United States Internal
Revenue Service and payee statements with the Company, documenting the taxes
payable by the Company, if any, relating to interest earned on the Property; or
 
(j)  Compute, confirm or otherwise verify amounts requested by the Company
pursuant to Section 1(i), above.
 
4.  Termination. This Agreement shall terminate as follows:
 
(a)  If the Trustee gives written notice to the Company that it desires to
resign under this Agreement, the Company shall use its reasonable efforts to
locate a successor trustee. At such time that the Company notifies the Trustee
that a successor trustee has been appointed by the Company and has agreed to
become subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not
limited to the transfer of copies of the reports and statements relating to the
Trust Account, whereupon this Agreement shall terminate; provided, however, that
if the Company does not locate a successor trustee within 90 days of receipt of
the resignation notice from the Trustee, the Trustee may submit an application
to have the Property deposited with the United States District Court for the
Southern District of New York and upon such deposit, the Trustee shall be immune
from any liability whatsoever that arises due to any actions or omissions to act
by any party after such deposit; or
 
(b)  At such time that the Trustee has completed the liquidation of the Trust
Account in accordance with the provisions of Section 1(j) or Section 1(k) of
this Agreement, and distributed the Property in accordance with the provisions
of the Termination Letter, this Agreement shall terminate except with respect to
Section 2(b) of this Agreement.
 
5.  Miscellaneous.
 
(a)  The Company and the Trustee each acknowledge that the Trustee will follow
the security procedures set forth in the Section 5 with respect to funds
transferred from the Trust Account. Upon receipt of written instructions, the
Trustee will confirm such instructions with an Authorized Individual at an
Authorized Telephone Number listed on the attached Exhibit D. The Company and
the Trustee will each restrict access to confidential information relating to
such security procedures to authorized persons. Each party must notify the other
party immediately if it has reason to believe unauthorized persons may have
obtained access to such information, or of any change in its authorized
personnel. In executing funds transfers, the Trustee will rely upon account
numbers or other identifying numbers of a beneficiary, beneficiary’s bank or
intermediary bank, rather than names. The Trustee shall not be liable for any
loss, liability or expense resulting from any error in an account number or
other identifying number, provided it has accurately transmitted the numbers
provided.
 
(b)  This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws. It may be executed in several counterparts, each one of which
shall constitute an original, and together shall constitute but one instrument.
 
(c)  This Agreement contains the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof. This Agreement or any
provision hereof may only be changed, amended or modified by a writing signed by
each of the parties hereto; provided, however, that no such change, amendment or
modification may be made without the prior written consent of Morgan Joseph. As
to any claim, cross-claim or counterclaim in any way relating to this Agreement,
each party waives the right to trial by jury.
 

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(d)  The parties hereto consent to the jurisdiction and venue of any state or
federal court located in the City of New York for purposes of resolving any
disputes hereunder.
 
(e)  Any notice, consent or request to be given in connection with any of the
terms or provisions of this Agreement shall be in writing and shall be sent by
Express Mail or similar private courier service, by certified mail (return
receipt requested), by hand delivery or by facsimile transmission:
 

 
if to the Trustee, to:
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven G. Nelson, Chairman
Fax No.: (212) 509-5150
       
if to the Company, to
General Finance Corporation
260 South Los Robles, Suite 217
Pasadena, CA 91101
Attn: Ronald F. Valenta
Fax No.: ____________
       
in either case with a copy to:
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19th Floor
New York, New York 10020
Attn: Michael Powell
Fax No.: (212) 218-3719
       
and
Troy & Gould PC
1801 Century Park East, Suite 1600
Los Angeles, CA 90067-2367
Attn: Alan B. Spatz, Esq.
Fax No.: (310) 789-1431
         
McDermott Will & Emery LLP
340 Madison Avenue
New York, NY 10017
Attn: Joel L. Rubinstein, Esq.
Fax No.: (212) 547-5444

(f)  This Agreement may not be assigned by the Trustee without the prior written
consent of the Company and the Representative.
 
(g)  Each of the Trustee and the Company hereby represents that it has the full
right and power and has been duly authorized to enter into this Agreement and to
perform its respective obligations as contemplated hereunder. The Trustee
acknowledges and agrees that it shall not make any claims or proceed against the
Trust Account, including by way of set-off, and shall not be entitled to any
funds in the Trust Account under any circumstance.
 
REMAINDER OF PAGE LEFT BLANK
 

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IN WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust Agreement as of the date first written above.
 

       
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
 
   
   
    By:   /s/ Steven Nelson    Name:  
Title:

             
GENERAL FINANCE CORPORATION
 
   
   
    By:   /s/ Ronald F. Valenta    Name:  
Title:

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EXHIBIT A
 
[Letterhead of Company]
 
[Insert date]
 
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven G. Nelson
 
Re: Trust Account No. [ ] Termination Letter 
 
Gentlemen:
 
Reference is made to that certain Investment Management Trust Agreement between
General Finance Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”) dated as of __________, 2006 (the “Trust
Agreement”). Capitalized terms used in this letter shall have the meanings
ascribed to them in the Trust Agreement unless otherwise defined in this letter.
 
Pursuant to Section 1(j) of the Trust Agreement, the Company hereby advises you
that it has entered into a definitive agreement to consummate a Business
Combination with _____. The Company anticipates that the Business Combination
will be consummated on or about [insert date]. The Company shall notify you at
least 48 hours in advance of the actual date of the consummation of the Business
Combination (the “Consummation Date”).
 
In accordance with paragraph B of Article Sixth of the Certificate of
Incorporation of the Company, the Business Combination has been approved by the
stockholders of the Company and by the Public Stockholders holding a majority of
the IPO Shares, and Public Stockholders holding less than 20% of the IPO Shares
have voted against the Business Combination and given notice of exercise of
their conversion rights described in paragraph C of Article Sixth of the
Certificate of Incorporation of the Company. Pursuant to Section 2(d) of the
Trust Agreement, we are providing you with [an affidavit] [a certificate] of
_____, which verifies the number of votes of the Company’s stockholders for and
against the Business Combination.
 
On the Consummation Date (a) counsel for the Company shall deliver to you
written notification that the Business Combination has been consummated and (b)
the Company shall deliver to you written instructions with respect to the
transfer of the funds held in the Trust Account (the “Instruction Letter”). You
are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the counsel’s letter and the
Instruction Letter, in accordance with the terms of the Instruction Letter. If
certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company of the same and
the Company shall direct you as to whether such funds should remain in the Trust
Account and distributed after the Consummation Date to the Company. Upon the
distribution of all the funds in the Trust Account pursuant to the terms hereof,
the Trust Agreement shall be terminated.
 
If the proposed Business Combination is not consummated on the Consummation Date
described in the notice thereof and we have not notified you on or before the
original Consummation Date of a new Consummation Date, then you shall reinvest
the funds held in the Trust Account as provided in the Trust Agreement on the
business day immediately following the Consummation Date as set forth in the
notice.
 

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The undersigned directors constitute a majority of the Board of Directors of the
Company as of the date of this letter.
 

       
Very truly yours,
     
GENERAL FINANCIAL CORPORATION
 
   
   
    By:      

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Name:  
Title:

       
AFFIRMED
 
   
   
    By:      

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Name:   Title: Director

 

       
 
 
   
   
             

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Name:   Title: Director              

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Name:   Title: Director        

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Name:   Title: Director

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EXHIBIT B
 
[Letterhead of Company]
 
[Insert date]
 
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven G. Nelson
 
Re: Trust Account No. [ ] Termination Letter 
 
Gentlemen:
 
Reference is made to that certain Investment Management Trust Agreement between
General Finance Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”) dated as of ____________, 2006 (the “Trust
Agreement”). Capitalized terms used in this letter shall have the meanings
ascribed to them in the Trust Agreement unless otherwise defined in this letter.
 
Pursuant to Section 1(j) of the Trust Agreement, the Company hereby advises you
that the Board of Directors of the Company has voted to dissolve and liquidate
the Company. Attached hereto is a copy of the minutes of the meeting of the
Board of Directors of the Company relating thereto, certified by the Secretary
of the Company as true and correct and in full force and effect.
 
In accordance with the terms of the Trust Agreement, we hereby authorize you to
liquidate the Trust Account to the Public Stockholders. In connection with this
liquidation, you are hereby authorized to establish a record date for the
purposes of determining the Public Stockholders of record entitled to receive
their pro rata share of the Trust Account. The record date shall be within ten
days of the liquidation date, or as soon thereafter as is practicable.
 
You shall notify the Company in writing as to when all of the funds in the Trust
Account will be available for immediate transfer (“Transfer Date”) in accordance
with the terms of the Trust Agreement. You shall commence distribution of such
funds in accordance with the terms of the Trust Agreement and you shall oversee
the distribution of the funds. Upon the payment of all the funds in the Trust
Account, the Trust Agreement shall be terminated.
 
The undersigned directors constitute a majority of the Board of Directors of the
Company as of the date of this letter.
 

       
Very truly yours,
 
GENERAL FINANCIAL CORPORATION
 
   
   
    By:      

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Name:  
Title:

      By:      

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Name:  
Title:

       
AFFIRMED
 
   
   
    By:      

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Name:   Title: Director

 

       
 
 
   
   
             

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Name:   Title: Director              

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Name:   Title: Director        

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Name:   Title: Director

 

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EXHIBIT C
 
[Letterhead of Company]
 
[Insert date]
 
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven G. Nelson
 
Re: Trust Account No. [ ] Termination Letter 
 
Gentlemen:
 
Reference is made to that certain Investment Management Trust Agreement between
General Finance Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”) dated as of ____________, 2006 (the “Trust
Agreement”). Capitalized terms used in this letter shall have the meanings
ascribed to them in the Trust Agreement unless otherwise defined in this letter.
 
The Company hereby advises you that it has entered into a letter of intent, an
agreement in principle or a definitive agreement to complete a Business
Combination, a copy of which is enclosed. As a result, the Distribution Date has
been extended to , 2008, the second anniversary of the Effective Date.
 

       
Very truly yours,
     
GENERAL FINANCIAL CORPORATION
 
   
   
    By:      

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Name:
Title:

 

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EXHIBIT D
 
 
AUTHORIZED INDIVIDUAL(S)
FOR TELEPHONE CALL BACK 
 
 
AUTHORIZED
TELEPHONE NUMBER(S) 
Company:
   
Ronald Valenta
 
(626) 795-0040
John O. Johnson
   
Trustee:
   
Continental Stock Transfer & Trust Company
   
17 Battery Place
   
New York, New York 10004
   
Attn: Steven G. Nelson
 
(212) 845-3200

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