REVOLVING LINE OF CREDIT
AGREEMENT
This Amended and
Restated Revolving Line of Credit Agreement (this “
Agreement ”) is made as of November 15, 2005 by
and between General Finance Corporation, a Delaware corporation
(“ Borrower ”), and Ronald Valenta (“
Lender ”), with reference to the following
facts.
(a) Borrower
has been organized for the purpose of effecting a merger, capital
stock exchange, asset acquisition or other similar business
combination with an operating business (a “ Business
Combination ”).
(b) Borrower
proposes to: (a) make a public offering (the “ Public
Offering ”) of its securities pursuant to a registration
statement (the “ Registration Statement ”) filed
with and declared effective by the Securities and Exchange
Commission (the “ SEC ”); (b) deposit the
proceeds from the Public Offering into a trust account (the “
Trust Account ”) for the benefit of the purchasers of
securities in the Public Offering, net of offering costs,
underwriting discounts and a financial advisory fee, to be held and
disbursed in accordance with the terms of the Investment Management
Trust Agreement to be entered into between Borrower and Continental
Stock Transfer & Trust Company as trustee (the “ Trust
Agreement ”); and (c) utilize the funds in the Trust
Account in connection with a Business Combination.
(c) Borrower
may need funds to pay costs and expenses prior to consummation of a
Business Combination.
(d) On the
terms and subject to the conditions set forth in this Agreement,
Lender is willing to make available to Borrower a revolving line of
credit to pay certain costs and expenses that may arise prior to a
Business Combination (the “ Loan ”).
1.1 Lender agrees
to make advances to Borrower, and Borrower agrees to repay such
advances, from time to time in accordance with the terms and
conditions of this Agreement and the form of revolving promissory
note attached hereto as Exhibit A (the “ Note
”); provided, however, that notwithstanding anything to the
contrary in this Agreement, at no time shall the aggregate of all
advances and readvances outstanding under the Loan at any time
exceed $1,750,000. This Agreement and the Note are each sometimes
referred to in this Agreement individually as a “ Loan
Document ,” and are sometimes collectively referred to as
the “ Loan Documents .”
1.2 Lender’s
obligation to make advances shall expire upon the first to occur of
the following:
1.2.1
Upon a material breach or default of any representation, warranty
or agreement of Borrower that is not cured or corrected within
20 days of notice of such breach from Lender;
1.2.2
Upon consummation of a Business Combination;
1.2.3
Upon notice from Lender at any time prior to the effectiveness of
the Registration Statement;
1.2.4
Two years after the effective date of the Registration Statement;
and
1.2.5
Upon the adoption of a resolution by the Board of Directors of
Borrower authorizing or approving the dissolution and/or
liquidation Borrower.
2.
Conditions of Advances . Upon reasonable advance request
from Borrower, Lender shall make advances to or as directed by
Borrower, provided that each and all of the following conditions is
satisfied:
2.1 Borrower shall
have executed and delivered the Note to Lender;
2.2 The aggregate
amount of outstanding advances following such advance shall not
exceed $1,750,000;
2.3 The
representations and warranties of Borrower in the Loan Documents
shall be true and correct in all material respects;
2.4 Borrower shall
have complied in all material respects with each of its agreements
in the Loan Documents;
2.5 Borrower shall
not have terminated Lender’s employment as the Chief
Executive Officer of Borrower other than for cause;
2.6 The advances
shall be used only for such purposes as are set forth in
Section 4.1 of this Agreement; and
2.7 Prior to the
effectiveness of the Registration Statement, Lender consents to the
advance.
3. Borrower
Representations
3.1 Borrower
represents and warrants as follows:
3.1.1
Borrower has full power and authority to execute and deliver this
Agreement and the other Loan Documents to be executed and delivered
by it pursuant hereto and to perform its obligations hereunder and
thereunder. This Agreement and such Loan Documents constitute the
valid and legally binding obligations of the Borrower and are
enforceable against Borrower in accordance with their
terms.
2
3.1.2
Neither the execution and the delivery of the Loan Documents by
Borrower, nor the consummation of the transactions contemplated by
the Loan Documents, nor the borrowing by Borrower, will
(a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which Borrower is subject or any provision of the Certificate of
Incorporation or Bylaws of Borrower, or (b) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any entity or natural person (each, a
“ Person ”) the right to accelerate, terminate,
modify, or cancel, any agreement, contract, lease, license,
instrument, or other arrangement to which Borrower is a party or by
which it is bound or to which any of its assets are subject (or
result in the imposition of any security interest upon any of its
assets), in each case other than where such violation, conflict,
breach, default, acceleration or creation of right would not
reasonably be expected to have a material adverse effect on the
ability of Borrower to repay amounts due under the Note in
accordance with the terms of the Loan Documents. (a “
Material Adverse Effect ”).
3.1.3
Borrower does not need to give any notice to, make any filing with,
or obtain any authorization, permit, certificate, registration,
consent, approval or order of any government or governmental agency
in order for the parties to consummate the transactions
contemplated by this Agreement, except whether the failure would
not reasonably be expected to have a Material Adverse
Effect.
3.1.4
The conditions to the obligation of Lender to make the advance, as
set forth in Section 2, shall be satisfied.
3.2 Each and every
representation and warranty made by Borrower in this Agreement
shall be deemed renewed and remade upon the making of each and
every advance or readvance under the Note that Lender may
make.
4. Borrower
Covenants . For as long as Lender shall have a commitment to
make advances or there shall be any outstanding balance on the
Loan, without the prior consent of Lender, Borrower
shall:
4.1 use the
proceeds only for: (a) prior to the closing of the Public
Offering, costs and expenses of the Offering, including legal,
accounting, printing and “road show” expenses; and (b)
after the Closing of the Offering, ordinary and reasonable
operating costs and expenses during the period Borrower seeks to
identify, investigate, negotiate and consummate a Business
Combination, including Borrower’s reporting obligations with
the SEC, the audit and review of Borrower’s financial
statements, identifying and investigating potential targets for a
Business Combination, negotiating and closing the Business
Combination, legal and other professional fees and expenses, fees,
salaries and compensation for directors, officers, employees,
consultants and advisors, and insurance premiums;
4.2 within three
business days following the closing of the Public Offering, pay all
outstanding principal and interest on the Loan and the Note
outstanding as of the closing of the Public Offering to the extent
such amounts were borrowed in respect of offering costs for which
Borrower may utilize the funds held by it which were not deposited
into the Trust Account;
3
4.3 not declare or
pay any dividend or distribution with respect to, or repurchase or
redeem any shares of, the capital stock of Borrower, provided that
this shall not prohibit payments from the Trust Account to
stockholders of Borrower in accordance with the Trust
Agreement;
4.4 not engage in
any business other than identifying, investigating, negotiating and
closing a Business Combination;
4.5 make any
material capital expenditure or purchase any material property or
asset (other than office supplies and equipment); and
4.6 upon request
of Lender, provide to Lender copies of all fil
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