exv10w3



 






EXHIBIT 10.3




STOCK ESCROW AGREEMENT




     This Stock Escrow Agreement (this “Agreement”) is made and entered into as of
___, 2006, by and among Continental Stock Transfer and Trust Company, a New York corporation
(“Escrow Agent”), General Finance Corporation, a Delaware corporation (the
“Company”), and the undersigned stockholders (each, a “Stockholder” and
collectively, the “Stockholders”) of the Company, with reference to the following facts:



     A. The
Company has entered into an Underwriting Agreement dated
              ,
2006 (“Underwriting
Agreement”), with Morgan Joseph & Co. Inc. and Wedbush Morgan Securities, acting as
representatives (“Representatives”) of the underwriters (collectively, the
“Underwriters”), pursuant to which, among other matters, the Underwriters have agreed to
purchase 10,000,000 units (“Units”) of the Company. Each Unit consists of one share of the
Company’s common stock, par value $.0001 per share (“Common Stock”), and two Warrants, each
Warrant to purchase one share of Common Stock, all as more fully
described in the Company’s final prospectus, dated
                  ,
2006 (“Prospectus”) comprising part of the
Company’s
Registration Statement on Form S-1 (File No. 333 ___) under the Securities Act of 1933, as
amended (“Registration Statement”).



     B. In order to facilitate the public offering of the Units, each Stockholder has agreed to
deposit all shares of Common Stock that he owns as of the date hereof, as set forth opposite his
name in Exhibit A attached hereto (collectively “Escrow Shares”), in escrow as hereinafter
provided.



     C. The Company and the Stockholders desire that the Escrow Agent accept the Escrow Shares, in
escrow, to be held and disbursed as hereinafter provided.



     NOW, THEREFORE, with reference to the foregoing facts, the parties agree as follows:



     1.      Appointment of Escrow Agent. The Company and the Stockholders hereby appoint the
Escrow Agent to act in accordance with and subject to the terms of this Agreement, and the Escrow
Agent hereby accepts such appointment and agrees to act in accordance with and subject to such
terms.



     2.      Deposit of Escrow Shares. On or before the effective date of the Registration
Statement, each Stockholder shall deliver to the Escrow Agent a certificate representing his Escrow
Shares, to be held and disbursed subject to the terms and conditions of this Agreement. Each
Stockholder acknowledges that the certificate representing his Escrow Shares is legended to reflect
the deposit of such Escrow Shares under this Agreement.



     3.      Disbursement of the Escrow Shares.



          3.1      The Escrow Agent shall hold the Escrow Shares from the date of delivery until the Release
Date (the “Escrow Period”).




          3.2      For purposes of this Agreement:




 









 








               3.2.1      “Business Combination” shall have the meaning set forth in the Certificate of
Incorporation of the Company.



               3.2.2
     “Release Date” shall
mean the earliest to occur of: (a) one year from the closing of
the Business Combination; (b) the Sale Date; and (c) the Trust Account
Liquidation Date.



               3.2.3      “Sale Date” shall mean the date following a Business Combination that a
Stockholder Liquidation Event occurs.



               3.2.4      “Stockholder Liquidation Event” shall mean: (a) the merger, consolidation,
reorganization or similar transaction involving the Company (or a successor to the Company) in
which the common stockholders of the Company (or such successor) have the right to exchange their
shares of Common Stock (or successor securities) for cash, securities or other property, but
excluding a reorganization in which the common stockholders exchange their shares for shares of a
newly formed holding company and have substantially the same proportionate interests in the holding
company that they had in the Company (or successor); (b) the
liquidation of the Company; or (c) the
sale of all or substantially all of the assets of the Company.



               3.2.5      “Trust Account” shall have the meaning set forth in the Certificate of
Incorporation of the Company.



               3.2.6      “Trust Account Liquidation Date” shall mean the date prior to the completion of
a Business Combination that the Trust Account is liquidated and the funds in the Trust Account are
distributed to the beneficial owners of the Trust Account.



          3.3      Upon the Release Date, the Escrow Agent shall disburse to each Stockholder his respective
Escrow Shares to the address on record of the Stockholder or as may otherwise be directed by the
Stockholder in writing.




          3.4      The Company agrees to notify the Escrow Agent in advance of any anticipated Stockholder
Liquidation Event or Trust Account Liquidation Date and upon the occurrence thereof. The Escrow
Agent shall rely upon a certificate (the “Officer’s Certificate”), executed by the Chief
Executive Officer or Chief Financial Officer of the Company, in form reasonably acceptable to the
Escrow Agent, that certifies that the Release Date has occurred, and shall not be required to disburse the Escrow Shares unless and until it receives the
Officer’s Certificate.




     4.      Rights of Stockholders in Escrow Shares.



          4.1      Rights as a Stockholder. Except as provided in this Section 4 and the Insider
Letter (as defined below), each Stockholder shall retain all of his rights as a stockholder of the Company with
respect to his Escrow Shares during the Escrow Period, including, without limitation:




               4.1.1      the right to vote; and



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               4.1.2      the right to receive dividends and distributions, with cash dividends paid to the
Stockholder and dividends paid in stock or other non-cash property (“Non-Cash Dividends”)
delivered to the Escrow Agent to hold in accordance with the terms hereof (and the term “Escrow
Shares” shall be deemed to include the Non-Cash Dividends distributed with respect to any
Escrow Shares held by the Escrow Agent prior to the distribution).



          4.2      Restrictions on Transfer. During the Escrow Period, each Stockholder agrees not
to sell, transfer or assign any or all of his Escrow Shares except (a) by gift to an immediate
family member of the Stockholder or to a trust, the beneficiary of which is the Stockholder or a
member of the immediate family of the Stockholder; (b) by virtue of the laws of descent and
distribution upon death of any Stockholder, or (c) pursuant to a qualified domestic relations
order; provided, however, that such permissive transfers may be implemented only
upon the respective transferee’s written agreement to be bound by the terms and conditions of this
Agreement as a Stockholder and of the Insider Letter signed by the transferring Stockholder
transferring the Escrow Shares. During the Escrow Period, each Stockholder agrees that it may not
pledge or grant a security interest in the Escrow Shares or grant a security interest in his rights
under this Agreement. For purposes of this Agreement, “Insider Letter” means a letter
agreement between the Stockholder, the Representatives and the Company substantially in the form of
Exhibit ___to the Registration Statement setting forth certain rights and obligations of the
Stockholder in certain events, including but not limited to the liquidation of the Company.




     5.      Concerning the Escrow Agent.



          5.1 Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith and in the exercise of its own best judgment, and 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 Escrow Agent), 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 Escrow Agent to be genuine and to be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification,
termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow
Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall have given its prior written consent thereto.




          5.2 Indemnification. The Company agrees to indemnify and hold the Escrow Agent
harmless from and against any expenses, including counsel fees and disbursements, or losses
suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any
claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the
services of the Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than
expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent.
Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement
of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in
writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to determine ownership or
disposition of the Escrow Shares or it may deposit the Escrow Shares


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 with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of
a final, non appealable order of a court having jurisdiction over all of the parties hereto
directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered.
The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is
discharged pursuant to Sections 5.5 or 5.6 below.




          5.3      Compensation. The Escrow Agent shall be entitled to reasonable compensation from
the Company for all services rendered by it hereunder. The Escrow Agent shall also be entitled to
reimbursement from the Company for all expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and
disbursements and all taxes or other governmental charges.




          5.4      Further Assurances. From time to time on and after the date hereof, the Company
and the Stockholder shall deliver or cause to be delivered to the Escrow Agent such further
documents and instruments and shall do or cause to be done such further acts as the Escrow Agent
shall reasonably request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is protected in acting
hereunder.




          5.5      Resignation. The Escrow Agent may resign at any time and be discharged from its
duties as escrow agent hereunder by giving the other parties hereto written notice, and such
resignation shall become effective as hereinafter provided. Such resignation shall become
effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed
by the Company the Escrow Shares held hereunder. If no new escrow agent is so appointed within the
60-day period following the giving of such notice of resignation, the Escrow Agent may deposit the
Escrow Shares with any court it reasonably deems appropriate.




          5.6      Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged from
its duties as escrow agent hereunder if so requested in writing at any time by the Company and the
holders of a majority of the Escrow Shares, provided, however, that such
resignation shall become effective only upon acceptance of appointment by a successor escrow agent
as provided in Section 5.5.




          5.7      Liability. Notwithstanding anything herein to the contrary, the Escrow Agent
shall not be relieved from liability hereunder for its own gross negligence or its own willful
misconduct.




     6.      Miscellaneous.



          6.1      Governing Law. This Agreement shall for all purposes be deemed to be made under
and shall be construed in accordance with the laws of the State of New York, without giving effect
to conflicts of law principles that would result in the application of the substantive laws of
another jurisdiction.




          6.2      Third-Party Beneficiaries. The Stockholders hereby acknowledge that the
Underwriters are third-party beneficiaries of this Agreement and this Agreement may not be modified
or changed without the prior written consent of the Representatives.




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          6.3      Entire Agreement. This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as expressly provided herein, may not
be changed or modified except by an instrument in writing signed by the party to the charged.




          6.4      Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation thereof.




          6.5      Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their legal representatives, successors and assigns.




          6.6      Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be mailed, certified or
registered mail, or by private courier service, return receipt requested, postage prepaid, and
shall be deemed given when so delivered personally or, if mailed, two days after the date of
mailing, as follows:




          If to the Company, to:



General Finance Corporation

206 S. Los Robles, Suite 217

Pasadena, California 91101

Attn: Chief Executive Officer



          If to a Stockholder, to his address set forth in Exhibit A.




          and if to the Escrow Agent, to:



Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman



          A copy of any notice sent hereunder shall be sent to:



Morgan Joseph & Co. Inc.

600 Fifth Avenue, 19th Floor

New York, New York 10020

Attn: Mike Powell



          and:



Wedbush Morgan Securities

1000 Wilshire Boulevard

Los Angeles, CA 90067

Attn: _____________



          and:




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Troy & Gould PC

1801 Century Park East, Suite 1600

Los Angeles, CA 90067-2367

Attn: Alan B Spatz, Esq.



          and:



McDermott Will & Emery LLP

50 Rockefeller Plaza

New York, NY 10020

Attn: Joel Rubinstein, Esq.


Any party may change the person and address to which the notices or other communications are to be
sent by giving written notice to any such change in the manner provided herein for giving notice.




          6.7      Liquidation of the Company. The Company shall give the Escrow Agent written
notification of the liquidation and dissolution of the Company in the event that the Company fails
to consummate a Business Combination within the time period(s) specified in the Prospectus.




     WITNESS the execution of this Agreement as of the date first above written.



	 	 	 	 	 
	 	 	GENERAL FINANCE CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Ronald Valenta
	 

	 	 	 	Title: Chief Executive Officer
	 
	 	 	 	 
	 	 	CONTINENTAL STOCK TRANSFER &
	 

	 	 	 	TRUST COMPANY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	STOCKHOLDERS:
	 
	 	 	 	 
	 	 	 
	 	 	Ronald Valenta
	 
	 	 	 	 
	 	 	 
	 	 	John O. Johnson






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	 	James B. Roszak
	 
	 	 
	 

	 	 
	 

	 	Lawrence Glascott
	 
	 	 
	 

	 	 
	 

	 	Manuel Marrer
	 
	 	 
	 

	 	 
	 

	 	Marc Perez
	 
	 	 
	 

	 	 
	 

	 	David M. Connell






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EXHIBIT A




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name of	 	Number	 	Stock	 	Date of
	Stockholder	 	of Shares	 	Certificate Number	 	Insider Letter
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Ronald Valenta
	 	 	1,880,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	John O. Johnson
	 	 	475,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	James B. Roszak
	 	 	30,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	David M.
Connell
	 	 	30,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Lawrence Glascott
	 	 	30,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Manuel Marrero
	 	 	30,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Marc Perez
	 	 	25,000