LOCK-UP AGREEMENT
EXHIBIT
10.3
June 30,
2009
DORCHESTER
MINERALS, L.P.
0000 Xxx
Xxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Re:
Dorchester Minerals,
L.P.—Restriction on Common Unit Sales
Ladies
and Gentlemen:
This
letter is delivered to you pursuant to the contribution and exchange agreement
(the “Contribution and Exchange
Agreement”) to be entered into by
and among Dorchester Minerals, L.P., a Delaware limited partnership (the “Partnership”), Tiggator, Inc.,
a Texas corporation (“Tiggator”), TRB Minerals, LP,
a Texas limited partnership (“TRB Minerals”), and West Fork
Partners, L.P., a Texas limited partnership (collectively with Tiggator and TRB
Minerals, the “Contributors”). Upon
the terms and subject to the conditions of the Contribution and Exchange
Agreement, the Contributors desire to contribute all of their interests in
certain oil and gas properties and other assets to the Partnership (the “Contribution”), in exchange
for 1,600,000 common units of the Partnership (the “Subject Units”).
The
undersigned recognizes that the Subject Units are, or may be, subject to certain
restrictions on transferability, including those imposed by United States
federal securities laws. Notwithstanding the applicability of these
restrictions, the undersigned has agreed to enter into this letter agreement to
further assure the Partnership that the Subject Units will not enter the public
market until the day after the termination of the Lock-Up Period described
below.
Therefore,
as an inducement to the Partnership to execute the Contribution and Exchange
Agreement, the undersigned hereby acknowledges and agrees that the undersigned
will not offer, sell, contract to sell, pledge, grant any option to purchase or
otherwise dispose of (collectively, a “Disposition”) any Subject
Units for a period commencing on the date hereof and ending on the later to
occur of (i) the first anniversary of the closing date of the Contribution and
Exchange Agreement and (ii) the date of termination of all indemnification
obligations arising from or as a result of a Contributor’s breach or alleged
breach (as determined in the sole discretion of the Partnership) of a
representation, warranty or covenant contained in the Contribution and Exchange
Agreement (inclusive of such later date, the “Lock-Up Period”), without the
prior written consent of the Partnership (which consent may be withheld or
delayed in the Partnership’s sole discretion); provided that if (i) during the
period that begins on the date that is fifteen calendar days plus three business
days before the last day of the Lock-Up Period and ends on the last day of the
Lock-Up Period, the Partnership issues an earnings release or material news or a
material event relating to the Partnership occurs; or (ii) prior to the
expiration of the Lock-Up Period, the Partnership announces that it will release
earnings results during the sixteen day period beginning on the last day of the
Lock-Up Period, then the restrictions imposed hereby shall continue to apply
until the expiration of the date that is fifteen calendar days plus three
business days after the date on which the issuance of the earnings release or
the material news or material event occurs.
The
foregoing restrictions are expressly agreed to preclude the undersigned from
engaging in any hedging, collar (whether or not for any consideration) or other
transaction that is designed to or reasonably expected to lead or result in a
Disposition of Subject Units during the Lock-Up Period, even if such Subject
Units would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include any short sale or any
purchase, sale or grant of any right (including any put or call option or
reversal or cancellation thereof) with respect to any Subject Units or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the
Subject Units.
In
furtherance of the foregoing, the Partnership and its transfer agent and
registrar are hereby authorized (i) to decline to make any transfer of Subject
Units if such transfer would constitute a violation or breach of this letter and
(ii) to note stop transfer restrictions on the stock register and other records
relating to the Subject Units. This letter shall be binding on the
undersigned and the respective successors, heirs, personal representatives and
assigns of the undersigned.
Very
truly yours,
TRB
MINERALS, LP
By:
Lizardhead Corp.,
its
general partner
By: /s/ Xxxxxxx X. Xxxx,
Xx.
Xxxxxxx X. Xxxx, Xx.,
President
