STOCKHOLDERS AGREEMENT
Exhibit
10.5
THIS STOCKHOLDERS AGREEMENT
(this “Agreement”) is made and entered into as of December 13, 2010, by
and among Wuhan General Group (China), Inc., a Nevada corporation (the
“Company”), Fame Good International Limited, a British Virgin Islands company
(“Fame Good”), Xx. Xx Jie, Fame Good’s controlling stockholder (“Xu”), and the
undersigned holders of the Company’s Series A Convertible Preferred Stock
(collectively, the “Undersigned Stockholders”).
WITNESSETH
WHEREAS,
as of even date herewith, the holders of at least seventy-five percent (75%) of
the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share
(the “Preferred Stock”) have executed a Waiver (the “Waiver”) of the Lock-Up
Agreement, dated February 7, 2007, as amended, between the Company and Fame
Good; and
WHEREAS,
the Undersigned Stockholders have conditioned execution of the Waiver upon Fame
Good entering into this Agreement.
NOW,
THEREFORE, in consideration of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the undersigned hereby
agrees as follows:
1. Tag-Along
Rights.
(a) So
long as an Undersigned Stockholder beneficially owns any of the shares of the
Company’s Preferred Stock or shares of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), if Fame Good proposes to
transfer an aggregate of 10% or more of the shares of Common Stock owned by Fame
Good or its affiliates as of February 1, 2010 to any purchaser or affiliated
group of purchasers, in one or more transactions, other than an affiliate of
Fame Good (the “Proposed Purchaser”), Fame Good shall deliver to the Undersigned
Stockholders a notice (the “Tag Notice”) of such proposed transfer, which Tag
Notice shall include (i) a copy of the Proposed Purchaser’s offer in writing
stating its terms and conditions, including the number and price per share of
the Common Stock to be purchased, the method of payment and the proposed closing
date (which shall not be sooner than 30 days after the Tag Notice has been
delivered) and (ii) evidence that the Proposed Purchaser has the legal and
economic capacity to perform under such offer.
(b) Upon
delivery of the Tag Notice, each Undersigned Stockholder may, by written notice
to Fame Good at any time during a period of 30 days (the “Tag Exercise Period”)
from the date of delivery of the Tag Notice, require the Proposed Purchaser (or
Fame Good) to purchase from it a number of shares of Common Stock up to the
amount calculated by multiplying (a) the number of shares of Common Stock
proposed to be acquired by the Proposed Purchaser by (b) the quotient derived by
dividing (i) the number of shares of Common Stock or securities convertible into
Common Stock (excluding options and warrants) (“Convertible Securities”) owned
by such Undersigned Stockholder by (ii) the aggregate number of shares of Common
Stock or Convertible Securities owned by Fame Good and its affiliates and all
Undersigned Stockholders participating in such transaction (the “Tag-Along
Shares”);
(c) If
none of the Undersigned Stockholders has provided Fame Good with notice of their
election to exercise the right set forth in Section 1(b) within
the Tag Exercise Period, the Undersigned Stockholders shall be deemed to have
elected not to exercise such right, and Fame Good may transfer the applicable
shares to the Proposed Purchaser free of the Undersigned Stockholders’ tag-along
right; provided, however, that, (i)
such transfer must be on the terms and conditions described in the Tag Notice,
and (ii) such transfer must be consummated within 60 days after the end of the
Tag Exercise Period, and (iii) as a condition precedent to such transfer, such
Proposed Purchaser must become a party to, and agree in writing to be bound by,
all terms and conditions of this Agreement;
(d) If
one or more of the Undersigned Stockholders does provide Fame Good with notice
of its election to exercise the right set forth in Section 1(b) within
the Tag Exercise Period, Fame Good (or the Proposed Purchaser) shall purchase
the Tag-Along Shares at the same price per share of Common Stock and upon
substantially the same terms and conditions as such transfer described in the
Tag Notice; provided, however, in the event
a transfer is not consummated with the Proposed Purchaser, Fame Good shall have
no obligation to purchase the Tag-Along Shares from the Undersigned
Stockholders. Each of the Undersigned Stockholders agrees to pay its
pro-rata share (based on the shares included by each Undersigned Stockholder in
such transaction) of the reasonable and documented transaction costs to be paid
by sellers if such Undersigned Stockholder successfully exercises its right set
forth in Section
1(b); and
(e) During
the term of this Agreement, Xu agrees not to transfer, sell or otherwise dispose
of 50% or more of Fame Good’s share capital to a Proposed
Purchaser.
2. Termination. Unless earlier terminated by
the written agreement of the Company, Fame Good, Xu and each of the Undersigned
Stockholders, this Agreement shall terminate on February 5, 2011.
3. Entire
Agreement; Amendment. This Agreement and the
Waiver contain the entire understanding and agreement of the parties with
respect to the matters covered hereby and, except as specifically set forth
herein, none of the parties hereto makes any representations, warranties,
covenants or undertakings with respect to such matters; all prior understandings
and agreements with respect to said subject matter are merged herein. No
provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company, Fame Good, Xu and each of the Undersigned
Stockholders, and no provision hereof may be waived other than by a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought.
4. Notices. Any notice, demand, request,
waiver or other communication required or permitted to be given hereunder shall
be in writing and shall be effective on the third business day following the
date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
2
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If
to the Company, Fame Good or Xu:
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Canglongdao
Science Park of Wuhan
East
Lake Hi-Tech Development Zone
Wuhan,
Hubei 430200
People’s
Republic of China
Attention:
Xx Xxx
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with
a copy to (which shall not constitute notice):
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Xxxxxxxx
Xxxxxxx LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxx, Esq.
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If
to any Undersigned Stockholder:
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At
the address of such Undersigned Stockholder set forth on such Undersigned
Stockholder’s signature page
hereto.
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Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other parties
hereto.
5. Headings. The headings and
other captions in this Agreement are for convenience and reference only and
shall not be used in interpreting, construing or enforcing any provision of this
Agreement.
6. Governing
Law. This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York, without giving effect to any of the conflicts of law
principles which would result in the application of the substantive law of
another jurisdiction. This Agreement shall not be interpreted or
construed with any presumption against the party causing this Agreement to be
drafted.
7. Counterparts. This Agreement
may be executed in any number of counterparts (including by facsimile) and by
different parties hereto in separate counterparts, with the same effect as if
all parties had signed the same document. All such counterparts shall
be deemed an original, shall be construed together and shall constitute one and
the same instrument.
[Signature
Pages Follow]
3
IN WITNESS WHEREOF, the
undersigned have caused this Stockholders Agreement to be executed, all as of
the day and year first written above.
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By:
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/s/ Xxxxxx
Xx
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Name:
Xxxxxx Xx
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Title:
Chief Financial Officer
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[Signature
Page to Stockholders Agreement]
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FAME
GOOD INTERNATIONAL LIMITED
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By:
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/s/ Xx
Xxx
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Name: Xx
Xxx
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Title: Director
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[Signature
Page to Stockholders Agreement]
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/s/ Xu
Xxx
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Xx
Jie
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[Signature
Page to Stockholders Agreement]
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VISION
OPPORTUNITY MASTER FUND, LTD.
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By:
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/s/ Xxxx
Xxxxxxxx
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Name: Xxxx
Xxxxxxxx
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Title: Director
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Address:
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00
X. 00xx
Xxxxxx, 0xx
Xxxxx
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Xxx
Xxxx, XX 00000
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VISION
CAPITAL ADVANTAGE FUND LP
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By:
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/s/ Xxxx
Xxxxxxxx
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Name: Xxxx
Xxxxxxxx
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Title: Authorized
Signatory
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Address:
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00
X. 00xx
Xxxxxx, 0xx
Xxxxx
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Xxx
Xxxx, XX 00000
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[Signature
Page to Stockholders Agreement]
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QVT
FUND LP, by its general partner,
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QVT
Associates GP LLC
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By:
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/s/ Xxxxx
Xx
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Name: Xxxxx
Xx
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Title: Managing
Member
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By:
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/s/ Yi
Cen
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Name: Yi
Cen
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Title: Authorized
Signatory
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Address: c/o QVT Financial
LP
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1177 Avenue of the Xxxxxxxx, 0xx
Xxxxx
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Xxx Xxxx, XX 00000
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QUINTESSENCE
FUND L.P., by its general partner,
QVT
Associates GP LLC
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By:
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/s/ Xxxxx
Xx
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Name: Xxxxx
Xx
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Title: Managing
Member
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By:
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/s/ Yi
Cen
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Name: Yi
Cen
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Title: Authorized
Signatory
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Address: c/o QVT Financial
LP
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1177 Avenue of the Xxxxxxxx, 0xx
Xxxxx
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Xxx Xxxx, XX 00000
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[Signature
Page to Stockholders Agreement]
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TCW
AMERICAS DEVELOPMENT ASSOCIATION, L.P.
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By:
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/s/ Xxxxxxxx X.
Xxxxx
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Name: Xxxxxxxx
X. Xxxxx
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Title: Managing
Director
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Address: 0000
Xxxxxx xx xxx Xxxxxxxx, Xxxxx 0000
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Xxx Xxxx, XX 00000
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[Signature
Page to Stockholders Agreement]
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LIGHTHOUSE
CONSULTING LIMITED
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By:
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/s/ Bai Ye
Feng
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Name: Bai
Ye Feng
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Title: Director
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Address: Xxxx
0000, Xxxx Xxxx Xxxx.
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00 Xxxxxxxxxx Xxxxxx
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Xxxxxxx, Xxxx Xxxx
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[Signature
Page to Stockholders Agreement]
