PUT AND CALL AGREEMENT
EXECUTION
DRAFT
THIS PUT
AND CALL AGREEMENT dated as of April 7, 2009 (this “Agreement”) and entered into
by and between Spring Creek Acquisition Corp., a Cayman Islands company (“Spring
Creek” or the “Company”), AutoChina Group, Inc. (“AutoChina”), and the
signatories on the execution page hereof (each, a “Seller” and collectively, the
“Sellers”).
WHEREAS,
the Company was organized for the purpose of acquiring, through a stock
exchange, asset acquisition or other similar business combination, or
controlling, through contractual arrangements, an operating business, that has
its principal operations in the Greater China region, which includes Hong Kong,
Macau and Taiwan;
WHEREAS,
Spring Creek has agreed to acquire (the “Acquisition”) AutoChina pursuant to
certain agreements.
WHEREAS,
the approval of the Acquisition is contingent upon, among other things, the
affirmative vote of holders of a majority of the outstanding ordinary shares of
Spring Creek voting at the meeting to approve the Acquisition.
WHEREAS,
pursuant to certain provisions in Spring Creek’s amended and restated memorandum
and articles of association, a holder of ordinary shares of Spring Creek issued
in the IPO may, if such holder votes against the Acquisition, demand that Spring
Creek convert such ordinary shares into cash (“Conversion Rights”).
WHEREAS,
the Acquisition is subject to the exercise of Conversion Rights by holders of
less than 40% of the Spring Creek ordinary shares issued in the
IPO.
WHEREAS,
the Sellers are the holders of an aggregate of 106,990 ordinary shares of the
Company (the “Shares”) and is interested in acquiring the right to require the
Company to purchase the Shares, and the Company is interested in acquiring the
right to require the Sellers to sell the Shares, in each case during the time
periods and upon the terms and conditions described herein.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
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1.
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Defined
Terms.
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1.1.
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“Escrow
Account” means the escrow account established by the parties hereto to
hold ordinary shares of the Company and funds to secure the payment of the
Option Price as set forth herein.
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1.2.
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“Escrow
Agent” means the firm of Loeb & Loeb LLP, acting as escrow agent under
for the Escrow Account.
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1.3.
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“Market
Price” means the closing price of the Company’s ordinary shares as of the
immediately preceding trading day as quoted on the OTC Bulleting Board (or
any successor market, or the New York Stock Exchange, the NYSE Alternext,
the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ
Capital Market on which the Company’s ordinary shares are listed or quoted
for trading on the date in
question).
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1.4.
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“Option
Price” means $9.05 per Share, less the per Share portion of any cash
dividend or other cash distribution paid to the Company’s shareholders
prior to the exercise of the Put Option of Call
Option.
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2.
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Put
Option. The Company hereby grants each Seller the option
to require the Company to buy from Seller any or all of the Shares owned
by such Seller at the Option Price during the two week period commencing
on the six month anniversary of the closing of the Acquisition (the “Put
Option”). In order to exercise the Put Option, Seller shall
deliver to the Company a put option notice in the form of Schedule I
hereto.
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3.
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Call
Option. Each Seller hereby grants the Company, or its
assigns, the option to require the Seller to sell to the Company, or its
assignees, any or all of the Shares owned by such Seller at the Option
Price from the date of this Agreement until the last date on which the Put
Option may be exercised in accordance with Section 2 (the “Call Option”);
provided,
however,
that the Company may not exercise the Call Option if the Market Price of
the Company’s ordinary shares on the applicable date exceeds the Option
Price. The Company may assign, in whole or in part, the Call
Option at any time prior to its expiration, and the assignment or exercise
of the Call Option with respect to any Shares shall not limit the
Company’s rights under the Call Option with respect to any remaining
Shares. In order to exercise the Call Option, the Company, or
its assigns, shall deliver to Seller a call option notice in the form of
Schedule
II hereto.
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4.
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Completion. If
either the Put Option or Call Option is exercised, a closing shall be held
on the Closing Date specified in the relevant notice (provided that with
respect to the Put Option the Closing Date shall be no earlier than a date
that is two weeks after the date that the Company receives such notice) at
the offices of the Company’s counsel, Loeb & Loeb LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 at which Seller or Sellers, as applicable, will
deliver certificates representing such Shares as shall have been specified
in the relevant notice (or shall have delivered such Shares through the
book-entry facilities of DTC at the election of the Seller) and the
Company, or its assigns, will deliver immediately available funds equal to
the Option Price per Share to an account of Seller furnished to the
Company and its assigns, as applicable, at least five business days prior
to such closing. In the event the Put Option is exercised with
respect to any of the Shares, the Company, or its assigns, may exercise
the Call Option and in lieu of Closing on the Put Option may close on the
Call Option with respect to such Shares; provided, however, that
the Closing Date of such exercise of the Call Option shall be no later
than the Closing Date specified in the relevant put option
notice. The exercise, in whole or in part, of the Call Option
shall reduce the number of Shares subject to the Put Option on a
one-for-one basis, and (subject to the immediately preceding sentence) the
exercise, in whole or in part, of the Put Option shall reduce the number
of Shares subject to the Call Option on a one-for-one
basis.
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5.
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Representations and
Warranties of the Company and the
Sellers.
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5.1.
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The
Company hereby represents and warrants to the Sellers as of the date
hereof and as of the Closing Date, as follows: (i) it is free to enter
into this Agreement; (ii) in so doing, it will not violate any other
agreement to which it is a party; and (iii) it has taken all corporate
action necessary to authorize the execution and delivery of this Agreement
and the performance of its obligations under this Agreement. The Company
hereby represents and warrants to the Sellers that as of the Closing Date
all necessary filings with the Securities and Exchange Commission related
to this Agreement shall have been made and that such filings will comply
in all material respects with the securities laws of the United
States.
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5.2.
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Each
Seller hereby represents and warrants to the Company as of the date hereof
and as of the Closing Date, as follows: (a) immediately prior to the
closing of each sale pursuant to this Agreement, Seller or its applicable
designees will have all rights, title and interest in and to the Shares
being sold, (b) any Shares sold by Seller and its designees under this
Agreement will be owned by Seller or its applicable designee free and
clear of all liens and encumbrances, and upon receipt of such Shares the
purchaser of such Shares will have all rights, title and interest in and
to such shares, (c) it is free to enter into this Agreement; (d) in so
doing, it will not violate any other agreement to which it is a party; and
(e) it has taken all corporate action necessary to authorize the execution
and delivery of this Agreement and the performance of its obligations
under this Agreement
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6.
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Voting of Shares; Sale
of Shares.
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6.1.
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In
further consideration of entering into this Agreement, each Seller hereby
agrees the Seller will not exercise the Seller’s Conversion
Rights. Each Seller hereby irrevocably appoints Xxxxx Sha and
Xxxxx Xxx and each of them, each with full power of substitution, to the
full extent of such stockholder’s rights with respect to the Shares (and
any and all other Shares or securities or rights issued or issuable in
respect thereof) to vote in such manner as each such attorney and proxy or
his substitute shall in his sole discretion deem proper, and otherwise act
(including without limitation pursuant to written consent) with respect to
all the Shares to be sold hereunder which the Seller is entitled to vote
at any meeting of stockholders (whether annual or special and whether or
not an adjourned meeting) of the Company held prior to April 15,
2009. This proxy is coupled with an interest in the Company and
in the Shares and is irrevocable.
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6.2.
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Until
the closing of the Acquisition, each Seller agrees not to take any action
(including any purchase or sale of any security or the establishment of
any arbitrage or similar derivative position relating to any security)
that is reasonably expected to materially adversely affect the adoption of
the Acquisition by the shareholders of the
Company.
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6.3.
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Each
Seller may sell any or all the Shares prior to the expiration of the Put
Option and Call Option only if the Market Price of the Company’s ordinary
shares on the applicable date exceeds the Option Price, in which case the
number of Shares subject to both the Put Option and Call Option shall be
reduced by the number of Shares so sold on a one-for-one
basis.
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7.
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Escrow
Account. Honest Best Int’l Ltd, the sole shareholder of
AutoChina (the “Shareholder”), hereby agrees to place 7,745,625 ordinary
shares of the Company to be received at the closing of the Acquisition
(the “ Escrowed Shares”), and Spring Creek hereby agrees to place $2.40
per Share (an aggregate of $256,776.00) (the “Escrowed Funds”) in the
Escrow Account maintained by the Escrow Agent pursuant to the terms of an
escrow agreement to be executed by the parties and the Escrow
Agent. The escrow agreement provides that a pro rata (with
respect to all holders of put options) portion of the Escrowed Shares and
$2.40 of the Escrowed Funds will be released to the Seller by the Escrow
Agent for each Share subject to the Put Option upon notice to the Escrow
Agent that the Company has not fulfilled its obligations under this
Agreement to buy such Shares upon the appropriate exercise by the Seller
of its rights under this Agreement. In the event a dividend is
declared on the Escrowed Shares, such dividend shall be deposited with the
Escrow Agent to be held pursuant to the terms of the escrow
agreement. The parties hereto acknowledge and agree that, in
the event that the obligations of the Company pursuant to this Agreement
are not satisfied, the full amount of the Sellers’ pro rata share of the
Escrowed Shares and the Escrowed Funds will be distributed to the Sellers,
regardless of the value of such pro rata
share.
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8.
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Registration of
Escrowed Shares. The Company shall use its commercially
reasonable efforts to cause a registration statement covering the resale
of the Escrowed Shares (the “Registrable Securities”) to become effective
by September 30, 2009, and to remain effective until the earlier of the
date when (i) each Seller has sold all of the Seller’s Registrable
Securities, (ii) all the Registrable Securities covered by the
registration statement have been sold pursuant thereto or otherwise or
(ii) the Registrable Securities may be publicly sold without volume
restrictions under Rule 144 (or any similar provisions then in force) of
the Securities Act. The Company acknowledges and agrees that it
will use commercially reasonable efforts to file any supplements or
amendments to the registration statement required to permit each Seller to
sell the Registrable Securities pursuant to the registration statement
after any of the Escrowed Shares have been released to the
Sellers. The release of Escrowed Shares and Escrowed Funds
shall not relieve Spring Creek of its obligations under this Agreement,
including without limitation its obligation to deliver any remaining
portion of the Option Price not covered by the release of Escrowed Shares
and Escrowed Funds.
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9.
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Indemnification.
The Company and AutoChina hereby agrees to indemnify and hold harmless
each Seller and each of their respective partners, principals, members,
officers, directors, employees, agents, representatives and affiliated or
managed funds (the “Indemnified Parties”) from and against any and all
losses, claims, damages, liabilities and expenses, joint or several, of
any kind or nature whatsoever, and any and all actions, inquiries,
proceedings and investigations in respect thereof, whether pending or
threatened, to which any such party may become subject, arising in any
manner out of or in connection with this Agreement or the transactions
contemplated herein to the fullest extent permitted under applicable law,
regardless of whether any of such parties is a party hereto, and
immediately upon request reimburse such party for such party’s legal and
other expenses as they are incurred in connection with investigating,
preparing, defending, paying, settling or compromising any such action,
inquiry, proceeding or investigation (including, without limitation, usual
and customary per diem compensation for any such party’s involvement in
discovery proceedings or testimony); provided that
the Company and AutoChina shall not be liable for any such loss,
liability, claim, damage or expense resulting from actions taken by the
Indemnified Parties in bad faith or as a result of their respective gross
negligence or willful misconduct; and provided further that
such foregoing indemnity pursuant to this Section 9 shall not be available
for any losses, claims, damages, liabilities or expenses or with respect
to any lawsuits, inquiries, proceedings and investigations in respect
thereof to the extent such arise out of any actions taken after the
Closing.
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10.
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Notice. Any
notice required or permitted to be given or delivered hereunder or by
reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been properly served if: (a) delivered personally, (b)
delivered by a recognized overnight courier service instructed to provide
next-day delivery, (c) sent by certified or registered mail, return
receipt requested and first class postage prepaid, or (d) sent by
facsimile transmission followed by confirmation copy delivered by a
recognized overnight courier service the next day. Such
notices, demands and other communications shall be sent to the addresses
set forth below, or to such other addresses or to the attention of such
other Person as the recipient has specified by prior written notice to the
sender. Date of service of such notice shall be: (i) the date
such notice is personally delivered or sent by facsimile transmission
(with issuance by the transmitting machine of confirmation of successful
transmission), (ii) three days after the date of mailing if sent by
certified or registered mail, or (iii) one day after date of delivery to
the overnight courier if sent by overnight courier. Unless
otherwise specified in writing, the mailing addresses of the parties
hereto shall be as follows:
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If to the
Company, AutoChina or the Shareholder, addressed to:
c/o Loeb
& Loeb LLP
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxxx
X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
If to a
Seller, addressed to:
c/x
Xxxxxxxxx Capital Management, LLC
0000 Xxxx
Xxxx
Xxxxxxxxx
XX 00000
Attention: Xxxxx
Xxxxxxxxx
Facsimile: ______________
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11.
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Counterparts;
Facsimile Execution. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other
party. Facsimile or other electronic execution and delivery of
this Agreement is legal, valid and binding for all
purposes.
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12.
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Entire Agreement;
Third Party Beneficiaries. This Agreement, taken
together with all Exhibits, Schedules and Annexes hereto (a) constitutes
the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the matters contemplated hereby and (b) is not intended to confer upon any
person other than the parties any rights or
remedies.
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13.
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Governing
Law. In accordance with Section 5-1401 of the General
Obligations Law of the State of New York, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
without regard to principles of conflicts of laws that would result in the
application of the substantive law of another jurisdiction. The
parties hereto agree that any action, proceeding or claim arising out of
or relating in any way to this Agreement shall be resolved through final
and biding arbitration conducted in the City of New York, State of New
York in accordance with the rules and regulations of the American
Arbitration Association (AAA), by a panel of three arbitrators selected
from the AAA Commercial Disputes Panel instead of any jury trial and that
the arbitrator panel’s decision shall be final and binding to the fullest
extent permitted by law and enforceable by any court having jurisdiction
thereof. The cost of such arbitrator and arbitration services,
together with the prevailing party’s legal fees and expenses, shall be
borne by the non-prevailing party or as otherwise directed by the
arbitrators. The Company, AutoChina and the Shareholder each
hereby appoints, without power of revocation, Loeb & Loeb, LLP, New
York, New York, Attn: Xxxxxxxx Xxxxxxxx, as their respective agent to
accept and acknowledge on its behalf service of any and all process which
may be served in any action, proceeding or counterclaim in any way
relating to or arising out of this
Agreement.
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14.
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Assignment. Except
as set forth in Section 3 hereof, neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned,
in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other
party. Any purported assignment without such consent shall be
void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and
assigns.
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[remainder
of page left intentionally blank; signature pages follow]
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
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SPRING
CREEK ACQUISITION CORP.
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By:
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/s/ Xxxxx Sha
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Name:
Xxxxx Sha
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Title:
Chief Executive Officer
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AUTOCHINA
GROUP, INC.
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By:
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/s/ Li Xxxx Xxx
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Name:
Li Xxxx Xxx
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Title:
President
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[sellers
and shareholder signature pages follow]
[sellers
signature page]
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XXXXXXXXX
CAPITAL PARTNERS, LP
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By:
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/s/ Xxxxx Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Managing Member
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Address:
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c/x
Xxxxxxxxx Capital Management, LLC
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0000
Xxxx Xxxx
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Xxxxxxxxx
XX 00000
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HCP
OPPORTUNITY FUND, LP
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By:
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/s/ Xxxxx Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Managing Member
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Address:
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c/x
Xxxxxxxxx Capital Management, LLC
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0000
Xxxx Xxxx
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Xxxxxxxxx
XX
00000
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[shareholder
signature page follows]
[shareholder
signature page]
ACKNOWLEDGED
AND AGREED only with respect to Sections 7 and 13:
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HONEST
BEST INT’L LTD
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By:
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/s/ Xxxx Xxx
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Name:
Xxxx Xxx
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Title: Director
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SCHEDULE
I
PUT
OPTION NOTICE
To:
[COMPANY]
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Attention:
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[•]
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[Date]
Ladies
and Gentlemen,
Put
Option Notice
We refer
to the Put and Call Agreement (the “Put and Call Agreement”) dated
April ___, 2009 and made between you and the undersigned. Terms defined in the
Put and Call Agreement shall bear the same meaning when used
herein.
We hereby
confirm that we wish to exercise the option granted under Section 2 of the Put
and Call Agreement and accordingly the Put Option is hereby exercised with
respect to ________ Shares.
The
Closing Date shall be [•][date must be at least two weeks after the date the
Company receives the Put Option Notice].
This put
option notice is irrevocable and is governed by, and shall be construed in
accordance with the laws of the State of New York.
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Yours
faithfully
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By:
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Name:
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Title:
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SCHEDULE
II
CALL
OPTION NOTICE
To:
[SELLER]
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Attention:
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[•]
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[Date]
Ladies
and Gentlemen,
Call
Option Notice
We refer
to the Put and Call Agreement (the “Put and Call Agreement”) dated
April ___, 2009 and made between you and the undersigned. Terms defined in the
Put and Call Agreement shall bear the same meaning when used
herein.
We hereby
confirm that we wish to exercise the option granted under Section 3 of the Put
and Call Agreement and accordingly the Call Option is hereby exercised with
respect to ________ Shares.
The
Closing Date shall be [•].
This call
option notice is irrevocable and is governed by, and shall be construed in
accordance with the laws of the State of New York.
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Yours
faithfully
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By:
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Name:
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Title:
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