UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 22, 2020
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General Finance Corporation
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or Other Jurisdiction of Incorporation)
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001-32845
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32-0163571
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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39 East Union Street
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Pasadena, California
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91103
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(Address of Principal Executive Offices)
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(Zip Code)
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(626) 584-9722
(Registrant’s Telephone Number, Including Area Code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (See General Instruction A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol
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Name of Each Exchange
on Which Registered
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Common Stock, $0.0001 par value
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GFN
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NASDAQ Global Market
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9.00% Series C Cumulative Redeemable Perpetual Preferred Stock (Liquidation Preference $100 per share)
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GFNCP
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NASDAQ Global Market
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8.125% Senior Notes due 2021
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GFNSL
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NASDAQ Global Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTES
Certain References
References to “we,” “us,” “our” or the “Company” refer to General Finance Corporation, a Delaware corporation (“GFN”), and its consolidated subsidiaries. These subsidiaries include GFN U.S. Australasia Holdings, Inc., a Delaware corporation (“GFN U.S.”); GFN Insurance Corporation, an Arizona corporation (“GFNI”); GFN North America Leasing Corporation, a Delaware corporation (“GFNNA Leasing”); GFN North America Corp., a Delaware corporation (“GFNNA”); GFN Realty Company, LLC, a Delaware limited liability company (“GFNRC”); GFN Manufacturing Corporation, a Delaware corporation (“GFNMC”), and its subsidiary, Southern Frac, LLC, a Texas limited liability company (collectively “Southern Frac”); Pac-Van, Inc., an Indiana corporation, and its Canadian subsidiary, PV Acquisition Corp., an Alberta corporation (collectively “Pac-Van”); and Lone Star Tank Rental Inc., a Delaware corporation (“Lone Star”); GFN Asia Pacific Holdings Pty Ltd, an Australian corporation (“GFNAPH”), and its subsidiary, Royal Wolf Holdings Pty Limited, an Australian corporation (“RWH”), and its Australian and New Zealand subsidiaries (collectively, “Royal Wolf”).
TABLE OF CONTENTS
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Page
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Item 1.01
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Entry Into a Material Definitive Agreement
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1
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Item 8.01
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Other Events
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1
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Item 9.01
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Financial Statements and Exhibits
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1
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Exhibit 10.1
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Stock Purchase Agreement dated June 22, 2020 between GEPT and GFN
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Exhibit 10.2
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Promissory Note dated June 24, 2020 by GFN in favor of GEPT
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Exhibit 99.1
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Press Release of GFN dated June 23, 2020
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Item 1.01 Entry Into A Material Definitive Agreement
On June 22, 2020 General Electric Pension Trust (“GEPT”) and GFN entered into that certain Stock Purchase Agreement (the “Stock Purchase Agreement”) under which GFN purchased 911,765 shares of GFN common stock held by GEPT (the “Shares”) at a price of $6.40 per share, the closing price of GFN’s common stock on June 22, 2020, for an aggregate price of $5,835,296 payable on June 24, 2020 and agreed to deliver to GEPT a promissory note of GFN (the “Note”) in the original principal amount of $6,843,381.
The Note provides that GFN will pay GEPT $3,421,690 on each of October 1, 2020 and January 1, 2021 and will bear interest of eight percent per annum if GFN fails to pay GEPT $3,421,690 on either October 1, 2020 or January 1, 2021.
GFN purchased the Shares pursuant to the Stock Purchase Agreement and agreed to deliver the Note to GEPT to satisfy in part and amend GFN’s obligations under the Amended and Restated Securities Purchase Agreement dated September 19, 2017 (the “Securities Purchase Agreement”) among Bison Capital Partners V, L.P. (“Bison”), GFN, GFN U.S. Australasia Holdings, Inc., GFN Asia Pacific Holdings Pty Ltd. and GFN Asia Pacific Finance Pty Ltd. and the $7,750,000 secured senior convertible promissory note issued to GEPT in connection with the Securities Purchase Agreement (the “GEPT Note”). The Stock Purchase Agreement and the Note extend until January 1, 2021 the time by which GFN must pay GEPT the amounts required to meet GFN’s obligation that GEPT receive a minimum return on investment of 1.75 times the amount originally invested by GEPT in the GEPT Note, as required under Section 9.20 of the Securities Purchase Agreement.
The foregoing descriptions of the Stock Purchase Agreement and the Note are summaries and are qualified in their entirety by reference to the Stock Purchase Agreement and Note, which is attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
Item 8.01 Other Events
On June 23, 2020 GFN announced that it repurchased 911,765 shares of its common stock in a private transaction completed as a block trade. The shares were originally issued upon the conversion of the GEPT Note purchased under an assignment agreement with Bison as a portion of the $26 million senior secured convertible note Bison acquired on September 19, 2017.
A copy of the press release of GFN dated June 23, 2020 is attached as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits
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Exhibit
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Exhibit Description
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10.1
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10.2
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99.1
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENERAL FINANCE CORPORATION
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Dated: June 24, 2020
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By:
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/s/ CHRISTOPHER A. WILSON
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Christopher A. Wilson
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General Counsel, Vice President and Secretary
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Exhibit
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Number
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Exhibit Description
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10.1
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10.2
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99.1
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this “Purchase Agreement”) is entered into as of June 22, 2020 (the “Effective Date”) between General Electric Pension Trust, a New York common law trust (“Seller”), and General Finance Corporation, a Delaware corporation (“Company” and collectively with Seller, the “Parties”).
RECITALS
WHEREAS, Bison Capital Partners V, L.P., a Delaware limited partnership (“Bison”), the Company, GFN U.S. Australasia Holdings, Inc., a Delaware corporation, GFN Asia Pacific Holdings Pty Ltd., an Australian corporation (“GFNAPH”) and GFN Asia Pacific Finance Pty Ltd., an Australian corporation (“GFNAPF”), entered into that certain Amended and Restated Securities Purchase Agreement dated September 19, 2017 (the “Securities Purchase Agreement”) under which GFNAPH and GFNAPF issued a $54 million secured senior promissory note and a $26 million secured senior convertible promissory note (the “Convertible Note” or “Convertible Notes”);
WHEREAS, Bison and Seller entered into an Assignment Agreement dated September 25, 2017 under which Bison sold, assigned and transferred to Seller a 29.8076922308% interest in the original principal balance of the Convertible Note equal to $7,750,000, GFNAPH and GFNAPF issued to Seller a 11.9% million secured senior convertible promissory note in the original principal amount of $7,750,000 (the “GEPT Convertible Note”) and GFNAPH and GFNAPF paid Seller $883,823 of interest under the GEPT Convertible Note (the “Convertible Note Interest”);
WHEREAS, on September 10, 2018 the Company delivered a notice of forced conversion to Seller pursuant to the GEPT Convertible Note that converted the entire principal amount of the GEPT Convertible Note to 911,765 shares of Company common stock (the “Shares”);
WHEREAS, under Section 9.20 of the Securities Purchase Agreement the Company agreed that if a holder of the Convertible Notes did not realize a minimum return of 1.75x on the amount invested in the Convertible Note (the “Minimum Return”) through all payments received under the Convertible Note and the value realized upon the sale of Company Common Stock issued upon conversion of the Convertible Note, the Company would deliver additional cash so that the holder receives the Minimum Return;
WHEREAS, Seller desires to sell, and the Company desires to purchase, the Shares at the price and upon the terms and conditions hereinafter set forth herein, the amounts to be received by Seller for the Shares will count toward the satisfaction of the Minimum Return obligation, and the Parties have agreed that Seller shall accept the other payments described herein in full satisfaction of all obligations of the Company under the GEPT Convertible Note, including, without limitation, the obligation of the Company to pay Seller the Minimum Return; and
WHEREAS, under the Minimum Return provision, the Company owes Seller $13,562,500 (the “Minimum Return Total Amount”) less the $883,823 previously paid as Convertible Note Interest, leaving a difference owed of $12,678,677 (the “Minimum Return Remainder”), which Seller and Company agree will be paid in full satisfaction of the Minimum Return obligation as (i) the purchase price payable for the Shares pursuant to Section 1.1 hereof (the “Purchase Price”) plus (ii) the payments described in Section 1.2 hereof (the “Minimum Return Payments”);
WHEREAS, the Company’s subsidiary Pac-Van, Inc. will borrow and remit the funds used to pay the Minimum Return Payments under the senior secured credit facility governed by the Amended and Restated Credit Agreement dated as of February 14, 2020 (the “Credit Agreement”) with Wells Fargo Bank, NA and other lenders, and payment of the Minimum Return Payments is subject to certain covenants in the Credit Agreement and the First Supplemental Indenture dated June 18, 2014 (“First Supplemental Indenture”) between the Company and Wells Fargo Bank, NA governing the Company’s 8.125% Senior Notes due 2021; and
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1.
SALE AND PURCHASE OF SHARES AND MINIMUM RETURN PAYMENTS
1.1
Sale of Shares. On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions set forth hereof, Seller is hereby selling to the Company, and the Company is hereby purchasing from Seller, the Shares at the purchase price of $6.40 per share of Common Stock for an aggregate price of $5,835,296.00 (the “Purchase Price”). At the closing that shall occur two business days after the Effective Date (the “Closing”), (i) Seller shall transfer the Shares free and clear of any Encumbrances (as defined below) to the Company through Seller’s brokerage account, (ii) the Company shall deliver the Purchase Price to Seller by wire transfer to the account designated by Seller and (iii) the Company shall deliver to Seller a promissory note, which provides for the payment of the Minimum Return Payments to the Seller in equal installments on October 1, 2020 and January 1, 2021, in the form attached here to as Exhibit A (the “Promissory Note”). The recitals set forth above are incorporated by reference herein and made an express part of this Purchase Agreement.
1.2
Payment of the Minimum Return Payments. The Company shall pay Seller the Minimum Return Payments via wire transfer to the account designated by Seller all in accordance with the terms of the Promissory Note; provided, however, that if the payments contemplated by this Section 1.2 and the Promissory Note violate the covenants of the Amended and Restated Credit Agreement dated April 7, 2014, as amended to date, among Wells Fargo Bank, NA, certain other lenders and certain GFN subsidiaries and the First Supplemental Indenture dated June 18, 2014, as amended to date between Wells Fargo Bank, NA and GFN (the foregoing collectively, the “GFN Debt Agreements”), then the Company shall not make such payments on the dates set forth in the Promissory Note, but such amounts shall accrue interest in accordance with the terms of the Promissory Note until such payments are paid in full (together with all accrued and unpaid interest).
2.
Representations and Warranties of Seller
2.1
Title to Shares. Seller is the sole beneficial owner of the Shares. Seller has good and valid title to the Shares, free and clear of any mortgage, lien, pledge, encumbrance, security interest, deed of trust, option, encroachment, reservation, order, decree, judgment, condition, restriction, charge, agreement, claim or equity of any kind (“Encumbrances”) with full right and lawful authority to sell and transfer the Shares to the Company pursuant to this Purchase Agreement. There are no proxies, voting rights, stockholders’ agreements or other agreements or understandings, to which Seller is a party or by which Seller is bound, with respect to the voting or transfer of the Shares. Upon the consummation of the transactions contemplated by this Purchase Agreement, Seller shall not own, of record or beneficially, any interest in the Shares or have, by conversion, warrant, option or otherwise, any right or interest in the Shares. Except under this Purchase Agreement, Seller has not sold, pledged, hypothecated or otherwise transferred any of the Shares or any interest therein to any other individual or legal entity. Upon payment for the Shares to be purchased from Seller pursuant to the terms of this Purchase Agreement, the Company will acquire good, valid and marketable title thereto, free and clear of all Encumbrances.
2.2
Authorization. Seller has full legal right, power, capacity, and authority to enter into and perform its obligations under this Purchase Agreement and to consummate the transactions contemplated hereby. This Purchase Agreement constitutes a valid and binding obligation of Seller, enforceable in accordance with its terms. There are no agreements, all foreign, federal, state and local statutes, laws, ordinances, regulations, rules, resolutions, orders, determinations, writs, injunctions, awards, judgments and decrees applicable to the specified any person, limited liability company, partnership, trust, unincorporated organization, corporation, association, joint stock company, business, group, governmental authority or other entity (each of the foregoing, a “Person”) and to the businesses and assets thereto (“Laws”) or other restrictions of any kind to which Seller is party or subject that would prevent or restrict the execution, delivery or performance of this Purchase Agreement. No consent or approval of any Person, court or governmental authority is necessary by Seller to transfer the Shares to the Company. There are no agreements, Laws (defined below) or other restrictions of any kind to which the Seller is party or subject that would prevent or restrict the execution, delivery or performance by the Seller of this Purchase Agreement. No consent or approval of any Person (defined below), court or governmental authority is necessary by the Seller to sell the Shares or perform its obligations under this Purchase Agreement. “Law” means any foreign, federal, state and local statute, law, ordinance, regulation, rule, resolution, order, determination, writ, injunction, award, judgment or decree of any governmental authority . “Person” means a natural person, limited liability company, partnership, trust, unincorporated organization, corporation, association, joint stock company, business, group, governmental authority or other entity.
2.3
No Conflicts. The execution, delivery and performance of this Purchase Agreement by Seller, the fulfillment of and the compliance with the respective terms and provisions of this Purchase Agreement, and the consummation of the transactions of this Purchase Agreement, do not and will not (i) conflict with, or violate any provision of, any Law applicable to Seller or (ii) conflict with, or result in any breach of, or constitute a default under, any agreement, arrangement, policy or other requirement that is binding upon Seller or to which Seller is a party or Seller is otherwise subject to.
2.4
Accredited Investor. Seller is an “accredited investor” within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect.
2.5
Capable of Evaluating Merits and Risk of Sale. Seller acknowledges and agrees that:
(a)
Seller has reviewed this Purchase Agreement;
(b)
Seller is represented in the preparation, negotiation and execution of this Purchase Agreement by legal counsel of its own choice;
(c)
Seller is fully capable of evaluating the merits and risks of the sale of the Shares pursuant to this Purchase Agreement;
(d)
Seller understands the terms and consequences of this Purchase Agreement and is fully aware of the legal and binding effect of this Purchase Agreement;
(e)
Seller is not in a disparate bargaining position with the Company;
(f)
Seller has been represented or advised, or has had the opportunity to be represented and advised, by advisors of its own choice, including financial advisors and tax advisors, that can assist it in understanding and evaluating the risks and merits associated with its sale of the Shares pursuant to this Purchase Agreement and its participation in the transactions contemplated by this Purchase Agreement;
(g)
after the Closing, the value of the Shares may increase as a result of a number of factors, including, without limitation (a) changes in the business, financial condition, business relationships or prospects of the Company, or (b) general industry, market or economic conditions;
(h)
(a) the Company and its management may at present be, and may in the future be, exploring potential financing, merger, acquisition, combination or other restructuring, business or strategic alternatives involving the Company that may have an impact on the value of the Shares and (b) Seller shall have no rights (and the Company shall have no obligations to Seller) with respect to the Shares relating to any such transaction that may be consummated by the Company at any time after the date hereof;
(i)
from time to time, the Company may possess material non-public information not known to Seller, including (without limitation) information regarding the business, assets, liabilities, results of operations, financial condition or competitors of the Company (the “Confidential Information”), and that such Confidential Information, if it had been disclosed to Seller, might affect Seller’s decision to sell or the price at which Seller would be willing to sell the Shares;
(j)
Seller has not requested and will not request that the Company or any of the Company’s affiliates disclose to Seller, its representatives or any other party any such Confidential Information, and that none of the Company or any of the Company’s affiliates will have any liability to Seller as a result of such non-disclosure; and
(k)
the Company is relying upon all of the representations and warranties of Seller herein, including the foregoing clauses of this Section 2.5, and would not have executed this Purchase Agreement or otherwise agreed to purchase the Shares in the absence thereof.
3.
REPRESENTATIONS AND WARRANTIES OF BUYER
3.1
Authority. The Company has full legal right, power, capacity, and authority to enter into and perform its obligations under this Purchase Agreement and to consummate the transactions contemplated hereby. This Purchase Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms. There are no agreements, Laws or other restrictions of any kind to which the Company is party or subject that would prevent or restrict the execution, delivery or performance by the Company of this Purchase Agreement. No consent or approval of any Person, court or governmental authority is necessary by the Company to purchase the Shares or perform its obligations under this Purchase Agreement.
3.2
No Conflicts. The execution, delivery and performance of this Purchase Agreement by the Company, the fulfillment of and the compliance with the respective terms and provisions of this Purchase Agreement, and the consummation of the transactions of this Purchase Agreement, do not and will not (i) conflict with, or violate any provision of, any Law applicable to the Company or (ii) conflict with, or result in any breach of, or constitute a default under, any agreement (including the Credit Agreement and First Supplemental Indenture), arrangement, policy or other requirement that is binding upon the Company or to which the Company is a party or the Company is otherwise subject to.
3.3
Capable of Evaluating Merits and Risk of Purchase. The Company acknowledges all of the matters acknowledged by Seller in Section 2.5 as if such Section was directed towards the Company.
4.1
Survival of Representations, Warranties and Covenants. The warranties, representations and covenants of the Company and Seller contained in or made pursuant to this Purchase Agreement shall not survive the execution and delivery of this Purchase Agreement (and only the covenants that by their terms survive the Closing shall so survive the Closing in accordance with their respective terms) and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Company or Seller.
4.2
Release. Upon receipt of the Purchase Price and both Minimum Return Payments, Seller for itself and its affiliates, successors and assigns hereby irrevocably and expressly forever releases, discharges and waives any claims, rights, causes of action, suits, obligations, debts, demands, liabilities, controversies, costs, expenses, fees, or damages of any kind that may be legally waived (including, but not limited to, any and all claims alleging violations of federal or state securities laws, breach of fiduciary duty, negligence or otherwise), whether known or unknown, directly, indirectly, representatively or in any other capacity, now or hereafter arising, against the Company and the Company’s directors and officers based upon, arising out of, relating to or resulting from any facts, circumstances, acts or omissions from the beginning of time up to the execution and performance of this Purchase Agreement; provided that in no event shall any obligation on the part of the Company to pay the Purchase Price and/or the Minimum Return Payments be released pursuant to the foregoing. Seller expressly acknowledges its understanding and knowledge of the provisions of Section 1542 of the California Civil Code, or under the statutes or common law of any other jurisdiction which has the same or similar effect as the provisions of Section 1542, and, to the extent such section is applicable, hereby expressly waives all rights, benefits and remedies under said section or similar sections. Section 1542 of the California Civil Code provides: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
4.3
No Third Party Beneficiaries; Successors and Assigns; Amendments and Waivers; Entire Agreement. The rights and obligations of the parties under this Purchase Agreement may not be assigned or delegated to any third Person without the written consent of the other party, provided that the rights and obligations of the Company under this Purchase Agreement with respect to some or all of the Shares may be assigned to one or more parties in its sole discretion, in which case such assignee shall be deemed to be the Company of such Shares for all purposes under this Purchase Agreement. Except as aforesaid, nothing in this Purchase Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Purchase Agreement, except notwithstanding any assignment by the Company, the Company may rely on the representations and warranties made by the parties in Sections 2 and 3 as though such representations were made directly to the Company. Any term of this Purchase Agreement may be amended and the observance of any term of this Purchase Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of both Parties. This Purchase Agreement and the documents referred to herein, including the Promissory Note constitute the entire agreement among the Parties with respect to the subject matter hereof and no Party shall be liable or bound to the other Party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.
Governing Law; Consent to Jurisdiction and Venue. This Purchase Agreement shall be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the Parties.
(a)
Each of the Parties hereby consents and agrees that all actions, suits or other proceedings arising under or in connection with this Purchase Agreement shall be tried and litigated in state or federal courts located in the County of Los Angeles, State of California, which courts shall have exclusive jurisdiction to hear and determine any and all claims, controversies and disputes arising out of or related to this Purchase Agreement. Notwithstanding the foregoing, nothing contained in this Section 4.4(a) shall preclude either Party from bringing any action, suit or other proceeding in the courts of any other location where the assets of such Party may be found or located or to enforce any judgment or other court order in favor of such Party.
Each of the Parties hereby (i) irrevocably submits to the jurisdiction of any such court and consents in advance to such jurisdiction in any action, suit or other proceeding commenced in any such court, (ii) waives any right it may have to assert the doctrine of forum non conveniens or any objection that such Person may have based upon lack of personal jurisdiction or improper venue and (iii) consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each of the Parties hereby waives personal service of the summons, complaint or other process issued in any such action, suit or other proceeding and agrees that service of such summons, complaint and other process may be made by registered or certified mail addressed to such party at the address set forth below their signature to this Purchase Agreement and that service so made shall be deemed completed upon the earlier of such Person's actual receipt thereof or five days after deposit in the United States mail, proper postage prepaid.
To the extent permitted under applicable Laws of any such jurisdiction, Company and each of its subsidiaries hereby waives, in respect of any such action, suit or other proceeding, the jurisdiction of any other court or courts that now or hereafter, by reason of such Person's present or future domicile, or otherwise, may be available to it.
(d)
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
Counterparts. This Purchase Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
4.6
Notices. All notices, requests, waivers and other communications made pursuant to this Purchase Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) three business days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other party at the address set forth on the signature page hereof; or (c) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the other Party at the address set forth on the signature page hereof, with next business day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. A party may change or supplement the addresses set forth on the signature page hereof, or designate additional addresses, for purposes of this Section 4.6 by giving the other Party written notice of the new address in the manner set forth above.
4.8
Severability. If one or more provisions of this Purchase Agreement are held to be unenforceable under applicable Law, such provision shall be excluded from this Purchase Agreement and the balance of the Purchase Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
4.9
Further Assurances. Each Party hereto shall from time to time and at all times hereafter make, do, execute, or cause or procure to be made, done and executed such further acts, deeds, conveyances, consents and assurances without further consideration, which may reasonably be required to effect the transactions contemplated by this Purchase Agreement.
4.10
Acknowledgment. Each party acknowledges that: (a) it has read this Purchase Agreement; (b) it has been represented in the preparation, negotiation and execution of this Purchase Agreement by legal counsel of its own choice; and (c) it understands the terms and consequences of this Purchase Agreement and is fully aware of the legal and binding effect of this Purchase Agreement.
IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the date first above written.
SELLER:
General Electric Pension Trust,
a New York common law trust
By: SSGA Funds Management, Inc., its Investment Adviser
Name: David B. Stewart
Title: Managing Director and Authorized Signatory
c/o State Street Global Advisors
1600 Summer Street
Stamford, Connecticut 06905
GENERAL FINANCE CORPORATION,
a Delaware corporation
By: /s/ Christopher A. Wilson
Name: Christopher A. Wilson
Title: General Counsel, Vice President & Secretary
39 East Union Street
Pasadena, California 91103
PROMISSORY NOTE
THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY TO THE EXTENT THAT SUCH ACT APPLIES TO A TRANSFER OR DISPOSAL, NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
GENERAL FINANCE CORPORATION
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US$ 6,843,381.00
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Los Angeles, California
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June 24, 2020
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FOR VALUE RECEIVED, GENERAL FINANCE CORPORATION, a Delaware corporation ("GFN”), subject to compliance with the covenants of the GFN Debt Agreements, hereby promises to pay to the order of GENERAL ELECTRIC PENSION TRUST, a New York common law trust (“GEPT”), or its registered assigns (along with GEPT, each a "Holder" and collectively with GFN, the “Parties”), the Minimum Return Payments ($6,843,381.00 in the aggregate) (the sum of both Minimum Return Payments, the “Principal”) to GEPT in equal installments on October 1, 2020 and January 1, 2021, or in the case of a prepayment, such portion thereof being prepaid.
This Note is the promissory note referred to in the Stock Purchase Agreement (the "Purchase Agreement") dated June 22, 2020 between GFN and GEPT. Holder is entitled to the benefits of this Note and the Purchase Agreement, as it relates to this Note, and may enforce the agreements of GFN contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto and thereto. Capitalized terms used herein without definition are used herein with the meanings ascribed to such terms in the Purchase Agreement.
(a)
Interest shall accrue on the Principal if GFN fails to pay in full either equal installment of the Minimum Return Payment on October 1, 2020 or January 1, 2021 (each a “Minimum Return Payment Deadline”) at a rate per annum (the "Default Rate") equal to 8.0% from the Minimum Return Payment Deadline until such time as such installment of the Minimum Return Payment plus accrued Default Rate interest is paid to Holder. Default Rate interest shall be payable on each month’s last Business Day (as such term is defined below). "Business Day" shall mean any day except Saturday, Sunday and any day which either is a legal holiday under the laws of the State of California or is a day on which banking institutions located in such state are authorized or obligated to close.
(b)
All Default Rate interest payable under this Note shall accrue on a daily basis and be computed on the basis of a 360-day year of twelve 30-day months.
2.
Maturity Date. The outstanding Principal balance of this Note, together with if any, accrued and unpaid interest on, and all other amounts owing under this Note, shall be due and payable on January 1, 2021 (the “Maturity Date”); provided that 50% of the Principal is due and payable on October 1, 2020.
(a)
GFN may prepay the unpaid Principal balance of this Note at any time. Any prepayment of this Note under this Section 3 shall also include any accrued and unpaid interest on the outstanding Principal balance of this Note through and including the date of prepayment.
(b)
GFN shall give the Holder written notice of each voluntary prepayment not less than one day prior to the date of prepayment. Such notice shall specify the Principal amount of this Note to be prepaid on such date.
4.
Change in Control Prepayment. The Holder may require GFN to prepay the outstanding Principal balance of this Note, in whole or in part, plus any accrued and unpaid interest as a result of an acceleration of the amounts owing under this Note, as requested by the Holder, at any time following the consummation of any transaction which constitutes a Change in Control (as such term is defined below). For the purposes of this Note, a "Change in Control" shall mean:
(a)
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the 1934 Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than 50% of the equity securities of GFN entitled to vote for members of the board of directors or equivalent governing body of GFN on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);
(b)
during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of GFN ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or
(c)
the passage of 30 days from the date upon which any individual, trustee, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, limited liability partnership, other business entity or governmental authority (any of the foregoing, a “Person”) or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of GFN, or control over the equity securities of GFN entitled to vote for members of the board of directors or equivalent governing body of GFN on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right) representing more than 50% of the combined voting power of such securities.
GFN shall notify the Holder of the date on which a Change in Control has occurred within three Business Days after such date and shall, in such notification, inform the Holder of the Holder's right to require GFN to prepay this Note as provided in this Section 4. If the Holder elects to require GFN to prepay this Note pursuant to this Section 4, it shall furnish written notice to GFN advising GFN of such election and the amount of Principal of this Note to be prepaid. GFN shall prepay this Note in accordance with this Section 4 and such written notice within three Business Days after its receipt of such written notice.
5.
Manner of Payment. Payments of Principal and other amounts due under this Note (except for interest) shall be made no later than 2:00 p.m. (Eastern Time) on the date when due and in United States Dollars (by wire transfer in funds immediately available at the place of payment) to such account as the Holder may designate in writing to GFN. Payments of interest in U.S. Dollars under this Note shall be made no later than 2:00 p.m. (Eastern Time) on the date when due (by wire transfer in funds immediately available at the place of payment) to such account as the Holder may designate in writing to GFN. Any payments due hereunder which are due on a day which is not a Business Day shall be payable on the first succeeding Business Day and such extension of time shall be included in the computation.
6.
Maximum Lawful Rate of Interest. The rate of interest payable under this Note shall in no event exceed the maximum rate permissible under applicable law. If the rate of interest payable on this Note is ever reduced as a result of this Section 6 and at any time thereafter the maximum rate permitted under applicable law exceeds the rate of interest provided for in this Note, then the rate provided for in this Note shall be increased to the maximum rate provided for under applicable law for such period as is required so that the total amount of interest received by the Holder is that which would have been received by the Holder but for the operation of the first sentence of this Section 6.
7.
GFN’s Waivers. Except as otherwise provided herein, GFN hereby waives presentment for payment, demand, protest, notice of protest and notice of dishonor hereof, and all other notices of any kind to which it may be entitled under applicable law or otherwise.
(a)
The term "Holder" as used herein shall also include any transferee of this Note whose name has been recorded by GFN in the Register (as hereinafter defined). Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may be transferred only pursuant to an effective registration statement under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act.
(b)
GFN shall maintain at its principal executive office a register for the registration of transfers of this Note (the "Register"). The name and address of the Holder, each transfer thereof and the name and address of each transferee shall be registered in the Register. Prior to due presentment for registration of transfer, absent demonstrable error, the Person in whose name the Note is registered shall be deemed and treated as the owner and holder thereof for all purposes hereof. Any transfer of this Note shall be effective only upon appropriate entries with respect thereto being made in the Register.
9.
Persons Deemed Owners; Participations.
(a)
Prior to due presentment for registration of any assignment, GFN may treat the Person in whose name any Note is registered pursuant to the Register as the owner and Holder of such Note for all purposes whatsoever, and GFN shall not be affected by notice to the contrary. Subject to the preceding sentence, the Holder may grant to any other Person participations from time to time in all or any part of this Note on such terms and conditions as may be determined by the Holder in its sole and absolute discretion, subject to applicable federal and state securities laws; provided, however, that unless the Holder has assigned or transferred all or any portion of this Note in accordance with Section 10 hereof by surrendering this Note at GFN’s principal executive office for registration of any such assignment or transfer, GFN shall continue to treat the Person in whose name the Note is registered as the owner of purposes, including payments. Except as set forth in clause (b) below, notwithstanding anything to the contrary contained herein or otherwise, nothing in the Purchase Agreement or this Note or otherwise shall confer upon the participant any rights in the Purchase Agreement, and the Holder shall retain all rights with respect to the administration, waiver, amendment, collection and enforcement of, compliance with and consent to the terms and provisions of the Purchase Agreement or this Note.
(b)
Notwithstanding anything to contrary contained in this Note or the Purchase Agreement, in the event the Holder has granted a participation in this Note, the Holder may give or withhold its consent or agreement to any amendments to or modifications of the Purchase Agreement or this Note, waive any of the provisions hereof or thereof or exercise or refrain from exercising any other rights or remedies which the Holder may have under the Purchase Agreement, this Note or otherwise.
10.
Assignment and Transfer. Subject to compliance with applicable law and except as otherwise provided in the Purchase Agreement, the Holder may, at any time and from time to time and without the consent of GFN, assign or transfer to one or more Persons all or any portion of this Note or any portion thereof (but not less than US$500,000 in principal amount in any single assignment (unless such lesser amount represents the entire outstanding Principal balance hereof)) or any rights hereunder. Upon surrender of this Note at GFN's principal executive office for registration of any such assignment or transfer, accompanied by a duly executed instrument of transfer, GFN shall, at their expense and within three Business Days of such surrender, execute and deliver one or more new notes of like tenor in the requested principal denominations and in the name of the assignee or assignees and bearing the legend set forth on the face of this Note, and this Note shall promptly be canceled. If the entire outstanding Principal balance of this Note is not being assigned, GFN shall issue to the Holder hereof, within three Business Days of the date of surrender hereof, a new note which evidences the portion of such outstanding Principal balance not being assigned. If this Note is divided into one or more notes and is held at any time by more than one Holder, any payments of Principal of, premium, if any, and interest or other amounts on this Note which are not sufficient to pay all Principal, premium, interest or other amounts due thereunder, shall be made pro rata with respect to all such notes in accordance with the outstanding Principal amounts thereof, respectively.
11.
Loss, Theft, Destruction or Mutilation. Upon receipt of evidence reasonably satisfactory to GFN of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of an indemnity agreement or other indemnity reasonably satisfactory to GFN or, in the case of any such mutilation, upon surrender and cancellation of such mutilated Note, GFN shall make and deliver within three Business Days a new note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
(a)
An "Event of Default" occurs if, upon notice from Holder, if GFN (i) fails to pay as and when due (whether at stated maturity, upon acceleration or required prepayment or otherwise) any Principal on either of the Notes, or (ii) fail to pay any interest, premium, if any, fees, costs, expenses or other amounts payable under this Note within two Business Days after the date due thereunder.
(b)
GFN agrees to pay all costs and expenses, including the reasonable fees and expenses of any attorneys, accountants and other experts retained by the Holder, which are expended or incurred by the Holder following an Event of Default in connection with (a) the enforcement of this Note or the collection of any sums due hereunder, whether or not suit is commenced; (b) any actions for declaratory relief in any way related to this Note; (c) the protection or preservation of any rights of the Holder under this Note; (d) any actions taken by the Holder in negotiating any amendment, waiver, consent or release of or under this Note; (e) the Holder's participation in any refinancing, restructuring, bankruptcy or insolvency proceeding involving GFN, any of its subsidiaries; (f) any effort by the Holder to protect, assemble, complete, collect, sell, liquidate or otherwise dispose of any collateral, including in connection with any case under any bankruptcy law; or (g) any refinancing or restructuring of this Note at the request or instigation of GFN, including, without limitation, any restructuring in the nature of a "work out" or in any insolvency or bankruptcy proceeding of GFN.
13.
Extension of Time. The Holder, at its option, may extend the time for payment of this Note, postpone the enforcement hereof, or grant any other indulgences without affecting or diminishing the Holder's right to recourse against GFN, which right is expressly reserved.
14.
Notations. Before disposing of this Note or any portion thereof, the Holder may make a notation thereon (or on a schedule attached thereto) of the amount of all Principal payments previously made by GFN with respect thereto.
15.
Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. TO THE EXTENT NECESSARY, THE PROVISIONS OF ALL OTHER DOCUMENTS REFERRED TO HEREIN (INCLUDING WITHOUT LIMITATION THE PROVISIONS OF THE PURCHASE AGREEMENT AND SPECIFICALLY THE REPRESENTATIONS, WARRANTIES, COVENANTS AND EVENTS OF DEFAULT PROVIDED IN FAVOR OF OR FOR THE BENEFIT OF THE HOLDER) SHALL BE DEEMED TO BE INCLUDED HEREIN AS IF SET OUT IN FULL HEREIN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA EVEN IF EXPRESSED IN THE OTHER DOCUMENTS TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION. THE ENFORCEMENT BY THE HOLDER OF THE PURCHASE AGREEMENT OR ANY OTHER DOCUMENT UNDER THE LAWS OF ANOTHER JURISDICTION DOES NOT RESTRAIN OR IN ANY WAY IMPACT UPON THE ABILITY OF THE HOLDER TO ENFORCE THIS NOTE OR OTHERWISE UNDER THE LAWS OF THE STATE OF CALIFORNIA.
16.
Jurisdiction and Venue.
(a)
Each of the Parties hereby consents and agrees that all actions, suits or other proceedings arising under or in connection with this Note shall be tried and litigated in state or federal courts located in the County of Los Angeles, State of California, which courts shall have exclusive jurisdiction to hear and determine any and all claims, controversies and disputes arising out of or related to the Purchase Agreement and/or Note. Notwithstanding the foregoing, nothing contained in this Section 16 shall preclude either Party from bringing any action, suit or other proceeding in the courts of any other location where the assets of such Party may be found or located or to enforce any judgment or other court order in favor of such Party.
Each of the Parties hereby (i) irrevocably submits to the jurisdiction of any such court and consents in advance to such jurisdiction in any action, suit or other proceeding commenced in any such court, (ii) waives any right it may have to assert the doctrine of forum non conveniens or any objection that such Person may have based upon lack of personal jurisdiction or improper venue and (iii) consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each of the Parties hereby waives personal service of the summons, complaint or other process issued in any such action, suit or other proceeding and agrees that service of such summons, complaint and other process may be made by registered or certified mail addressed to such party at the address set forth below their signature to this Note and that service so made shall be deemed completed upon the earlier of such Person's actual receipt thereof or five days after deposit in the United States mail, proper postage prepaid.
(c)
To the extent permitted under applicable Laws of any such jurisdiction, GFN and each of its subsidiaries hereby waives, in respect of any such action, suit or other proceeding, the jurisdiction of any other court or courts that now or hereafter, by reason of such Person's present or future domicile, or otherwise, may be available to it.
(d)
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
17.
Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable substantially impair the benefits of the remaining provisions hereof.
18.
Headings. The headings in this Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Note is executed as of the date first above written.
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GENERAL FINANCE CORPORATION,
a Delaware corporation
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By:
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/s/ Christopher A. Wilson
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Name:
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Christopher A. Wilson
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Title:
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General Counsel, Vice President & Secretary
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