EXHIBIT 2
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement ("Agreement") is entered into as of July 22,
2004, by and among TRIDENT ROWAN GROUP, INC., a Maryland corporation (the
"Company"), and each of the stockholders set forth on SCHEDULE A attached hereto
(the "Stockholders").
Recitals
A. The execution and delivery of this Agreement is a condition to the
closing of the transactions contemplated by that certain Share Exchange
Agreement, dated as of May 25, 2004, by and among the Company, each of the
persons listed under the caption "Company Stockholders" on SCHEDULE A attached
hereto, and Comtech Group, Inc. (the "Share Exchange Agreement").
B. The Company and the Stockholders are entering into this Agreement to
provide for (i) the designation and voting by the Stockholders, and the
nomination by the Company, of certain Persons to serve on the Company's Board
(as hereinafter defined); and (ii) restrictions on transfer, sale or other
disposition of shares of the Company's Common Stock (as hereinafter defined) by
the Stockholders.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
Section 1
DEFINITIONS; EFFECT
1.1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"Acquiror Nominees" has the meaning set forth in the Share Exchange
Agreement.
"Acquiror Stockholders" means those persons listed on SCHEDULE A to this
Agreement under the caption "Acquiror Stockholders".
"Act" means the Securities Act of 1933, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $0.01 par value per share, of the
Company.
"Company Board" means the board of directors of the Company.
"Company Nominees" has the meaning set forth in the Share Exchange
Agreement.
"Company Securities" means the Common Stock, Options and any other equity
securities of the Company issued and outstanding at any time.
"Company Stockholders" means those persons listed on SCHEDULE A to this
Agreement under the caption "Company Stockholders".
"Escrow Shares" means 16,058,085 shares held in escrow with Loeb & Loeb
LLP, pursuant to the terms of that certain Escrow Agreement dated as of even
date herewith.
"Options" means any rights, options or warrants to purchase shares of any
Common Stock or Preferred Stock or securities or obligations convertible or
exercisable into any Common Stock or Preferred Stock.
"Share Exchange Agreement" has the meaning set forth in Recital A above.
"Stockholders" has the meaning set forth in the first paragraph of this
Agreement.
"Transfer" means, with respect to the Company Securities, any transfer,
sale, gift, exchange, assignment, pledge or other encumbrance or disposition of
Company Securities by a Holder and in the case of a Stockholder that is not an
individual, a Transfer of any Company Securities held by such Stockholder shall
be deemed to have been made if any equity interest in such Stockholder is
directly or indirectly transferred, sold, given, exchanged, assigned, pledged or
disposed of to any other Person.
Section 2
AFFIRMATIVE COVENANTS OF THE COMPANY
AND THE STOCKHOLDERS
2.1. Voting Agreement.
(a) Designation and Nomination of Directors. During the two-year
period commencing on the date hereof, the Company shall nominate at each annual
meeting of stockholders of the Company, the Company Nominees and the Acquiror
Nominees to serve on the Company's Board of Directors. Each year during such
period, the Company Stockholders and the Acquiror Stockholders shall submit to
the Company their director designees for Company Nominees and Acquiror Nominees,
respectively, not less than twenty (20) calendar days before the date of the
Company's proxy statement released to stockholders in connection with the
previous year's annual meeting.
(b) Voting for Directors. Each of the Stockholders severally
covenants and agrees that such Stockholder shall vote all shares of the Company
Securities owned or controlled by such Stockholder and over which such
Stockholder has voting control, as of the record date of any action of the
stockholders of the Company, and shall take all other necessary actions and
actions reasonably requested by any other Stockholder within such Stockholder's
control (including, without limitation, attendance at meetings in person or by
proxy for purposes of obtaining a quorum and execution of written consents or
resolutions in lieu of meetings), so that the Company Nominees and the Aquiror
Nominees shall be elected to the Company Board.
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(c) Filling Vacancies. If at any time in the interim between annual
meetings of stockholders or special meetings of stockholders called for the
election of directors, vacancies exist on the Board of Directors, such vacancies
shall be filled by the appointment of directors, either by (i) the remaining
Company Nominees, if such vacancy was created by a Company Nominee, or (ii) the
remaining Acquiror Nominees, if such vacancy was created by an Acquiror Nominee.
(d) Payment of Expenses. The Company shall pay the reasonable
out-of-pocket travel, lodging and other related expenses of all directors
elected pursuant to this Section 2.1 incurred in connection with attendance at
meetings of the Company Board or any committee thereof.
(e) Number of Directors. Pursuant to the Company's By-laws, the
Company Board consists of seven directors.
Section 3
RESTRICTIONS ON TRANSFER
3.1. Transfer Restrictions. Without limiting the restrictions on Transfer
of securities of the Company as provided in the lock up letters executed as of
even date herewith by each of the Stockholders, any Transfer by the Stockholder
shall remain at all times subject to applicable securities laws, including
without limitation, the resale restrictions imposed by Rule 144 promulgated
under the Act.
Section 4
CONFIDENTIALITY
4.1. Confidentiality. Each Stockholder covenants and agrees to maintain
the confidentiality of all non-public information related to the business of the
Company made available to the Stockholder and/or any of their representatives by
the Company ("Confidential Business Information"). Without the prior written
consent of the Company, each Stockholder further covenants and agrees not to
disclose any Confidential Business Information to any person or entity, other
than their respective Affiliates, partners and prospective partners, officers,
directors, employees, attorneys, accountants and other agents ("Related
Parties") and except as required by law or by government regulators; provided
that to the extent a Stockholder discloses Confidential Business Information to
Related Parties the Stockholder will advise the Related Party that the
information is confidential and subject to this Agreement and that by accepting
the information the Related Party acknowledges the information's
confidentiality. Each Stockholder agrees that violation of this Section 4.1
would cause immediate and irreparable damage to the business of the Company, and
consents to the entry of immediate and permanent injunctive relief for any
violation thereof. Confidential Business Information excludes (a) information
that is or becomes available to the public, other than by reason of the
recipient's disclosure thereof to the public, (b) information that the recipient
can demonstrate was known to the recipient prior to the recipient's receipt of
the information from the Company or (c) information that becomes available to
the recipient from a third person or source not known by the recipient to owe a
duty of confidentiality to the Company.
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Section 5
MISCELLANEOUS
5.1. Legends. The Company and the Stockholders agree that, so long as this
Agreement is in effect, all Company Securities now or hereafter held by any
Stockholder will be stamped or otherwise imprinted with a legend in
substantially the following form, in addition to any other legends required by
any and all applicable federal or state securities laws:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AGREEMENTS,
COVENANTS AND RESTRICTIONS, INCLUDING WITH RESPECT TO VOTING FOR DIRECTORS
CONTAINED IN THE STOCKHOLDERS' AGREEMENT DATED JULY 22 2004, AS AMENDED
FROM TIME TO TIME, BY AND AMONG TRIDENT ROWAN GROUP, INC. AND THE PERSONS
NAMED THEREIN, and the lock up letter executed by the stockholders, dated
JULY 22, 2004. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY ANY STOCKHOLDER
OF THE COMPANY UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL OFFICE OF THE COMPANY.
5.2. Waivers and Amendments. The rights and obligations of the Company and
the Stockholders hereunder may only be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely) or amended with the written consent of
a majority of the shares of Company Securities held by each of the Company
Stockholders and the Acquiror Stockholders, respectively, voting separately.
Upon the effectuation of each such waiver or amendment, the Company shall
promptly give written notice thereof to the holders of the shares who have not
previously consented thereto in writing.
5.3. Governing Law. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.
5.4. Successors and Assigns. This Agreement shall be binding on each party
hereto with respect to all Company Securities now or hereafter held by each
Stockholder. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
5.5. Entire Agreement. Section 2.4 of the Share Exchange Agreement is
hereby incorporated by reference. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. This Agreement supersedes all prior and inconsistent
agreements and understandings between and among any of the parties hereto.
5.6. Notices. All demands, notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be personally delivered or sent by facsimile machine (with a
confirmation copy sent by one of the other methods authorized in this Section),
commercial (including Federal Express) or U.S. Postal Service overnight delivery
service, or deposited in the U.S. Postal Service mailed first class, registered
or certified mail, postage prepaid, as set forth below:
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If to the Company, addressed to:
Trident Rowan Group, Inc.
x/x Xxxxxxx Xxxxx
Xxxx 0000, Xxxxx X, Xxxxxxxx Building
High-Tech Industrial Park
Nanshan, Shenzhen PRC
Attention: Xx. Xxxxxxx Xxxx
Telephone No.: 000-000-000-0000
Facsimile No.: 011-755-267-43508
with a copy to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to any Company Stockholder, at the address
set forth on
SCHEDULE A
----------
with a copy to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to any Acquiror Stockholder, at the address
set forth on
SCHEDULE A
----------
with a copy to:
Kramer, Levin, Naftalis & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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Notices shall be deemed given upon the earlier to occur of (i) receipt by
the party to whom such notice is directed; (ii) if sent by facsimile machine, on
the date (other than a Saturday, Sunday or legal holiday in the jurisdiction to
which such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after
5:00 p.m. Eastern Time, on the day (other than a Saturday, Sunday or legal
holiday in the jurisdiction to which such notice is directed) after which such
notice is sent; (iii) on the first business day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
the day the same is deposited with the commercial carrier if sent by commercial
overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice
duly given in accordance therewith may specify a different address for the
giving of any notice hereunder.
5.7. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in force and effect. Any provision of this Agreement
held invalid or unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
5.8. Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when taken together, will be deemed to constitute
on and the same agreement.
5.10. Consent to Jurisdiction. The Company and each Holder hereby agree to
submit to the exclusive jurisdiction of the courts of the State of New York and
to the courts to which an appeal of the decisions of such courts may be taken,
and consents that service of process with respect to all courts in and of the
State of New York may be made by registered mail to it at the address set forth
on SCHEDULE A hereto.
5.11. Remedies.
(a) The parties hereto agree that irreparable harm would occur in
the event that any of the agreements and provisions of this Agreement were not
performed fully by the parties hereto in accordance with their specific terms or
were otherwise breached, and that money damages are an inadequate remedy for
breach of the Agreement because of the difficulty of ascertaining and
quantifying the amount of damage that will be suffered by the parties hereto in
the event that this Agreement is not performed in accordance with its terms or
is otherwise breached. It is accordingly hereby agreed that the parties hereto
shall be entitled to an injunction or injunctions to restrain, enjoin and
prevent breaches of this Agreement by the other parties and to enforce
specifically such terms and provisions of this Agreement, such remedy being in
addition to and not in lieu of, any other rights and remedies to which the other
parties are entitled to at law or in equity.
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(b) Except where a time period is otherwise specified, no delay on
the part of any party in the exercise of any right, power, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any exercise or partial
exercise of any such right, power, privilege or remedy preclude any further
exercise thereof or the exercise of any right, power, privilege or remedy.
5.12. Waiver of Jury Trial. Each of the parties hereto hereby voluntarily
and irrevocably waive all rights to a trial by jury in any action or other
proceeding brought in connection with or any matter arising under, out of or
relating to, this Agreement (as this Agreement may hereafter be amended) or any
of the transactions contemplated hereby or thereby.
5.13. No Third Party Rights. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors or assigns.
5.14. Duration. This Agreement shall terminate and be of no further force
or effect upon the written agreement of all of the parties hereto to terminate
this Agreement, except that the provisions of Section 4.1 shall survive any
termination of this Agreement.
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IN WITNESS WHEREOF, the Company and the Holders have executed this
Agreement as of the date first set forth above.
"Company"
TRIDENT ROWAN GROUP, INC.
By: /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Co-Chief Executive Officer
----------------------------------
"Stockholders"
XXXX XXXXXX
----------------------------------
(Print Name of Holder)
/s/Xxxx Xxxxxx
----------------------------------
(Signatory)
Xxxx Xxxxxx
----------------------------------
(Print Name of Signatory)
XXXXXXX XXXXX
----------------------------------
(Print Name of Holder)
/s/ Xxxxxxx Xxxxx
----------------------------------
(Signatory)
Xxxxxxx Xxxxx
----------------------------------
(Print Name of Signatory)
XXXX XXXXXX
----------------------------------
(Print Name of Holder)
/s/ Xxxx Xxxxxx
----------------------------------
(Signatory)
Xxxx Xxxxxx
----------------------------------
(Print Name of Signatory)
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----------------------------------
COMTECH GLOBAL INVESTMENT LTD.
----------------------------------
(Print Name of Holder)
/s/X. Xxxx
----------------------------------
(Signatory)
Jingwei (Xxxxxxx)Xxxx
----------------------------------
(Print Name of Signatory)
Sole Director
(Title of Signatory)
----------------------------------
PURPLE MOUNTAIN HOLDING LTD..
----------------------------------
(Print Name of Holder)
/s/Xxxxxx Xxxx
----------------------------------
(Signatory)
Yue (Xxxxxx) Xxxx
----------------------------------
(Print Name of Signatory)
President/ Director
(Title of Signatory)
REN INVESTMENT INTERNATIONAL LTD.
----------------------------------
(Print Name of Holder)
/s/X. Xxxx
----------------------------------
(Signatory)
Jingwei (Xxxxxxx)Xxxx
----------------------------------
(Print Name of Signatory)
Sole Director
(Title of Signatory)
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SCHEDULE A
NAME AND ADDRESS OF STOCKHOLDERS
COMPANY STOCKHOLDERS
Comtech Global Investment Ltd.
Romasco Place
P.O. Box 3140
Road Town, Tortola
British Virgin Islands
Purple Mountain Holding Ltd.
3rd Floor, Qwomar Complex
P.O. Box 765
Road Town, Tortola
British Virgin Islands
Ren Investment International Ltd.
c/o Comtech Technology (Shenzhen) Ltd.
Room 1001, Tower C, Skyworth Building
High-Tech Industrial Park
Nanshan, Shenzhen PRC
ACQUIROR STOCKHOLDERS
Xxxx Xxxxxx
c/o FdG Associates
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxx
0 Xxxx Xxxxxx
Xxxxxx XXXXXX
Xxxxxx Xxxxxxx
Xxxx Xxxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 0X
Xxx Xxxx. XX 00000
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