LOCK-UP AND NO SHORTING AGREEMENT
Exhibit 10.1
This
LOCK-UP AND NO SHORTING AGREEMENT (this “Agreement”) is made as of
_______ __, 2017, by and between the undersigned person or entity
(the “Restricted
Holder”) and Sincerity Applied Materials Holdings
Corp. (formerly known as Symbid Corp.), a Nevada corporation (the
“Parent”). Capitalized
terms used and not otherwise defined herein shall have the meanings
given to such terms in the Acquisition Agreement (as defined
below).
WHEREAS, pursuant
to the transactions contemplated under that certain Acquisition
Agreement, dated as of June 5, 2017, as amended on each of July
7,2107,July 21,2017, August 15, 2017, August 23,2107, September
1,2017 and September 15,2017 (the “Acquisition Agreement”),
by and among the Parent, Sincerity Australia Pty Ltd., an
Australian corporation (“SAPL”) and the sole
shareholder/member of SAPL, SAPL will become a wholly owned
subsidiary of Parent, and all of the outstanding capital stock of
SAPL will be exchanged for shares of common stock of the Parent,
par value $0.001 per share (the “Parent Common Stock”) on
the terms set forth in the Acquisition Agreement (the
“Acquisition”);
WHEREAS, in
consideration with the closing of the Acquisition, Parent will
complete the initial closing under a private placement offering
(the “Private
Placement Offering”) of a minimum of $150,000 and a
maximum of $500,000in units of Parent securities (the
“Units”), each Unit
consisting of (i) one 12% Senior Secured Convertible Note (the
“Note”)
with a term of 13 months in the face (principal) amount of $10,000
convertible in the manner and on the terms set forth in the Note,
and (ii) one warrant (the “Warrant”) to purchase shares
of Common Stock exercisable in the manner and on the terms set
forth in the Warrant; and
WHEREAS, the
closing of the Acquisition and the Private Placement Offering are
each conditioned on, among other things, the Restricted
Holder’s entering into this Agreement with the
Parent;
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions.
(a) “Affiliate” shall have the
meaning set forth in Rule 405 under the Securities Act of 1933, as
amended (the “Securities
Act”).
(b) “Business Day” means any
day other than a Saturday, a Sunday or a day on which banks in the
state of New York are required or authorized by applicable law to
close.
(c) “Change of Control” means
the transfer (whether by tender offer, Acquisition, consolidation
or other similar transaction), in one transaction or a series of
related transactions, to a person or group of Affiliated persons,
of the Parent’s voting securities if, after such transfer,
such person or group of Affiliated persons would hold more than 50%
of the outstanding voting securities of the Parent (or the
surviving entity).
(d) “Immediate Family” means
any relationship by blood, domestic partnership, marriage or
adoption, not more remote than first cousin.“Restricted Period” means
the period of twenty-four (24) months commencing on the Closing
Date of the Acquisition.
(e) “Restricted Securities”
means all shares of Parent Common Stock held by the Restricted
Holder and all securities held by the Restricted Holder that are
convertible into or exercisable or exchangeable for shares of
Parent Common Stock, in each case held immediately following the
closing of the Private Placement Offering or thereafter acquired by
any means (including, for the avoidance of doubt, any shares of
Parent Common Stock or other securities of Parent received by the
Restricted Holder pursuant to the Acquisition Agreement), and
whether held beneficially or of record, but excluding any shares of Parent
Common Stock purchased by the Restricted Holder in the Private
Placement Offering or in the open market following the Private
Placement Offering.
(a) During the
Restricted Period, the Restricted Holder will not, directly or
indirectly: (i) offer, sell, assign, transfer, pledge, hypothecate,
contract to sell, grant an option to purchase or otherwise dispose
of, or announce the intention to so dispose of, any Restricted
Securities or (ii) enter into any swap, hedge or similar agreement
or arrangement that transfers, in whole or in part, the economic
consequence of ownership of any Restricted Securities (the actions
described in clause (i) or (ii) above being hereinafter referred to
as a “Disposition”). The
foregoing restrictions are expressly agreed to preclude the
Restricted Holder from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead
to or result in a sale or disposition of any of the Restricted
Securities of the Restricted Holder during the Restricted Period,
even if such securities would be disposed of by someone other than
the Restricted Holder.
(b) In addition, during
the period of twelve (12) months commencing on the Closing Date of
the Acquisition, the Restricted Holder will not, and the Restricted
Holder will cause its Affiliates not to, directly or indirectly,
effect or agree to effect any short sale (as defined in Rule 200
under Regulation SHO of the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”)) with
respect to any shares of Parent Common Stock, whether or not
against the box, establish any “put equivalent
position” (as defined in Rule 16a-1(h) under the Exchange
Act) with respect to any shares of Parent Common Stock, borrow or
pre-borrow any shares of Parent Common Stock, or grant any other
right (including, without limitation, any put or call option) with
respect to shares of the Parent Common Stock or with respect to any
security that includes, is convertible into or exercisable for or
derives any significant part of its value from shares of the Parent
Common Stock or otherwise seek to hedge the Restricted
Holder’s position in the Parent Common Stock.
(c) Notwithstanding
anything contained herein to the contrary, the restrictions set
forth in Section
2(a) shall not
apply:
(i) if the
Restricted Holder is a natural person, any transfers made by the
Restricted Holder (A) to any member of the Immediate Family of the
Restricted Holder or to a trust the direct or indirect
beneficiaries of which are exclusively the Restricted Holder or
members of the Restricted Holder’s Immediate Family, or (B)
by bona fide gift, will or intestacy;
(ii) if the Restricted Holder is a
corporation, partnership, limited liability company or other
business entity, any transfers to a charitable organization, or to
any stockholder, partner, manager, director, officer, Affiliate,
employee or member of, or owner of a similar equity interest in,
the Restricted Holder or its Affiliates, as the case may
be;
(iii) if the Restricted Holder is a
corporation, partnership, limited liability company or other
business entity, any transfer made by the Restricted
Holder:
(A)
in connection with the sale or other bona fide transfer in a single
transaction of all or substantially all of the Restricted
Holder’s capital stock, partnership interests, membership
interests or other similar equity interests, as the case may be, or
all or substantially all of the Restricted Holder’s assets,
in any such case not undertaken for the purpose of avoiding the
restrictions imposed by this Agreement,
(B)
to another corporation, partnership, limited liability company or
other business entity so long as the transferee is an Affiliate of
the Restricted Holder, or
(C)
to any investment fund or other entity that controls or manages the
Restricted Holder (including, for the avoidance of doubt, a fund
managed by the same manager or managing member or general partner
or management company or by an entity controlling, controlled by,
or under common control with such manager or managing member or
general partner or management company as the Restricted Holder) if
such transfer is not for value;
(iv) if the Restricted Holder is a
trust, to a trustor or beneficiary of the trust if such transfer is
not for value;
(v) any transfers
of Restricted Securities to the Parent upon a vesting event or upon
the exercise of options or warrants to purchase the Parent’s
securities, in each case on a “cashless” or “net
exercise” basis, including to cover tax withholding
obligations of the Restricted Holder in connection with such
vesting or exercise (and for the avoidance of doubt, any securities
issued to the Restricted Holder upon such exercise shall be
Restricted Securities subject to the restrictions set forth
herein);
(vi) any transfers of the Restricted
Securities pursuant to a court order or by operation of law,
including pursuant to a domestic order or a negotiated divorce
settlement;
(vii) any
transfers of the Restricted Securities to the Parent pursuant to
agreements under which the Parent has the option to repurchase such
Restricted Securities or the Parent has a right of first refusal
with respect to transfers of such Restricted
Securities;
(viii) any transfers of the Restricted
Securities pursuant to a bona fide third-party tender offer,
acquisition, consolidation or other similar transaction made to all
holders of Restricted Securities involving a Change of Control of
the Parent (it being further understood that this Agreement shall
not restrict the undersigned from entering into any agreement or
arrangement in connection therewith, including an agreement to vote
in favor of, or tender Restricted Securities or other securities of
the Parent in, any such transaction or taking any other action in
connection with any such transaction), provided that the
restrictions set forth herein shall continue to apply should the
completion of such transaction not occur, and provided, further,
that such transaction has been approved by the Board of Directors
of Parent.
(ix) The exercise of any right with
respect to, or the taking of any other action in preparation for, a
registration by the Parent of Restricted Securities;
or
(x) Any Disposition
by a Restricted Holder where the other party to such Disposition is
another Restricted Holder.
provided, however, that
(A) in
the case of any transfer described in clause (i), (ii), (iii), (iv)
or (vi) above, it shall be a condition to the transfer that the
transferee execute and deliver to the Parent, not later than one
Business Day prior to such transfer, a written agreement in
substantially the form of this Agreement covering the transferred
Restricted Securities for the balance of the Restricted Period (it
being understood that any references to “Immediate Family” in the
agreement executed by such transferee shall expressly refer only to
the Immediate Family of the Restricted Holder and not to the
Immediate Family of the transferee) and otherwise reasonably
satisfactory in form and substance to the Parent;
(B) in
the case of any transfer described in clause (i), (ii), (iii),
(iv), (vi) or (x) above, such transfers are not required to be
reported under Section 16 of the Exchange Act, and the Restricted
Holder does not otherwise voluntarily effect any public filing or
report regarding such transfers during the Restricted Period (other
than a filing on Form 5);
(C) in
the case of any transfer to the Parent described in clause (v)
above, if the transfer is required to be reported under Section 16
of the Exchange Act, any filing under Section 16 of the Exchange
Act related to such transfer shall clearly indicate in the
footnotes thereto that (a) the filing relates to the circumstances
described in clause (v) above, (b) no shares were sold by the
reporting person and (c) any remaining shares received upon
exercise of an option or a warrant (net of any shares transferred
in connection with such “cashless” or “net
exercise” to cover tax withholding obligations) or the
remaining vested shares are subject to a written agreement with the
Parent in substantially the form of this Agreement for the balance
of the Restricted Period; and
(D) in
the case of any transfer described in clause (viii) above, in the
event that the tender offer, acquisition, consolidation or other
such transaction is not completed, the Restricted Securities owned
by the Restricted Holder shall remain subject to the restrictions
contained in this Agreement; and
(E) in
the case of clause (ix) above, no actual transfer or other
Disposition of the Restricted Holder’s Restricted Securities
registered pursuant to the exercise of such rights under clause
(ix) shall occur during the Restricted Period.
(d) Furthermore, during
the Restricted Period, the Restricted Holder may exercise any
rights to purchase, exchange or convert any stock options granted
to the Restricted Holder pursuant to the Parent’s equity
incentive plans or awards existing after the closing of the
Acquisition or warrants or any other securities held by the
Restricted Holder after the closing of the Acquisition, which
securities are convertible into or exchangeable or exercisable for
Parent Common Stock, and the Restricted Holder agrees that the
shares of Parent Common Stock received upon such exercise,
purchase, exchange or conversion shall be and remain Restricted
Securities subject to the terms of this Agreement.
(e) In addition, the
restrictions set forth in Section 2(a) shall not apply to the
repurchase of Restricted Securities by the Parent in connection
with the termination of the Restricted Holder’s employment or
other service with the Parent or any of its
subsidiaries.
(f) Notwithstanding
anything herein to the contrary, nothing herein shall prevent the
Restricted Holder from establishing a 10b5-1 trading plan that
complies with Rule 10b5-1 under the Exchange Act
(“10b5-1 Trading
Plan”) or from amending an existing 10b5-1 Trading
Plan so long as there are no sales or other Dispositions of
Restricted Securities under such plans during the Restricted
Period; and provided that
no public announcement or filing under the Exchange Act, if any, is
required or voluntarily made by or on behalf of the Restricted
Holder or the Parent during the Restricted Period regarding the
establishment of a 10b5-1 Trading Plan or the amendment of a 10b5-1
Trading Plan.
3. Legends; Stop Transfer
Instructions.
(a) In addition to any
legends to reflect applicable transfer restrictions under federal
or state securities laws, each certificate representing Restricted
Securities shall be stamped or otherwise imprinted with the
following legend:
“THE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A LOCK-UP AND NO SHORTING AGREEMENT, DATED AS OF
SEPTEMBER 19, 2017, BETWEEN THE HOLDER HEREOF AND THE ISSUER, AND
MAY ONLY BE SOLD OR TRANSFERRED IN ACCORDANCE WITH THE TERMS
THEREOF.”
(b) The Restricted
Holder hereby agrees and consents to the entry of stop transfer
instructions with the Parent’s transfer agent and registrar
against the transfer of the Restricted Securities except in
compliance with this Agreement.
4. Miscellaneous.
(a) Material Inducement and
Consideration. The Restricted Holder acknowledges
and agrees that its entering into this Agreement with Parent and
its covenants and agreements herein are a material inducement to
the Parent’s entering into the Acquisition Agreement and
proceeding with the Acquisition and the Private Placement Offering,
and Parent’s so doing constitute valuable consideration to
the Restricted Holder.
(b) Specific
Performance. The Restricted Holder agrees that in
the event of any breach or threatened breach by the Restricted
Holder of any covenant, obligation or other provision contained in
this Agreement, then the Parent shall be entitled (in addition to
any other remedy that may be available to the Parent) to: (i) a
decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other
provision; and (ii) an injunction restraining such breach or
threatened breach. The Restricted Holder further agrees that
neither the Parent nor any other person or entity shall be required
to obtain, furnish or post any bond or similar instrument in
connection with or as a condition to obtaining any remedy referred
to in this Section, and the Restricted Holder irrevocably waives
any right that he, she, or it may have to require the obtaining,
furnishing or posting of any such bond or similar
instrument.
(c) Other
Agreements. Nothing in this Agreement shall limit
any of the rights or remedies of the Parent under the Acquisition
Agreement, or any of the rights or remedies of the Parent or any of
the obligations of the Restricted Holder under any other agreement
between the Restricted Holder and the Parent or any certificate or
instrument executed by the Restricted Holder in favor of the
Parent; and nothing in the Acquisition Agreement or in any other
agreement, certificate or instrument shall limit any of the rights
or remedies of the Parent or any of the obligations of the
Restricted Holder under this Agreement.
(d) Notices. All
notices, consents, waivers, and other communications which are
required or permitted under this Agreement shall be in writing and
will be deemed given to a party (i) on the date of delivery, if
delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (ii) the date
of transmission if sent by facsimile or e-mail with confirmation of
transmission by the transmitting equipment if such notice or
communication is delivered prior to 5:00 P.M., Eastern Time, on a
Business Day, or the next Business Day after the date of
transmission, if such notice or communication is delivered on a day
that is not a Business Day or later than 5:00 P.M., Eastern Time,
on a Business Day; (iii) the date received or rejected by the
addressee, if sent by certified mail, return receipt requested; or
(iv) seven days after the placement of the notice into the mails
(first class postage prepaid), to the party at the address,
facsimile number, or e-mail address furnished by the such
party,
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If to
the Parent:
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With a
copy (which copy shall not constitute notice hereunder)
to:
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X.X.
Xxx 000
100
Toorak Road
South
Yarra, V1C 3141
Attn: Mr.
Xxxxx Xxxxx, CEO
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CKR Law
LLP
1330
Avenue of the Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attn: Xxxxx
Xxxxxxxx
Facsimile: 212.259.8200
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If to
the Restricted Holder:
To the
address set forth on the signature page hereto.
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Any
party may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been
duly given unless and until it actually is received by the party
for whom it is intended. Any party may change the address to which
notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in
the manner herein set forth.
(e) Severability. Any
term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid
or unenforceable, the parties hereto agree that the court making
such determination shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified. In the
event such court does not exercise the power granted to it in the
prior sentence, the parties hereto agree to replace such invalid or
unenforceable term or provision with a valid and enforceable term
or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or
unenforceable term.
(f) Applicable Law;
Jurisdiction. THIS AGREEMENT IS MADE UNDER, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW. In any action between or among any of the parties arising out
of this Agreement, (i) each of the parties irrevocably and
unconditionally consents and submits to the exclusive jurisdiction
and venue of the courts of the State of Ohio sitting in Cincinnati,
and the United States District Court for the Southern District of
Ohio sitting in Cincinnati; (ii) if any such action is
properly commenced in a state court, then, subject to applicable
law, no party shall object to the removal of such action to such
United States District Court; (iii) EACH OF THE PARTIES
IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY; and (iv) each
of the parties irrevocably consents to service of process (in
addition to any other means of service authorized by law) by first
class certified mail, return receipt requested, postage prepared,
to the address at which such party is to receive notice in
accordance with this Agreement.
(g) Waiver;
Termination. No failure on the part of the Parent
to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of the Parent in exercising any
power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and
no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or
of any other power, right, privilege or remedy. The Parent shall
not be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly
executed and delivered on behalf of the Parent; and any such waiver
shall not be applicable or have any effect except in the specific
instance in which it is given. If the Acquisition Agreement is
terminated, this Agreement shall thereupon terminate.
(h) Captions. The
captions contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement
and shall not be referred to in connection with the construction or
interpretation of this Agreement.
(i) Further
Assurances. The Restricted Holder hereby
represents and warrants that the Restricted Holder has full power
and authority to enter into this Agreement and that this Agreement
has been duly authorized (if the Restricted Holder is not a natural
person), executed and delivered by the Restricted Holder and is a
valid and binding agreement of the Restricted Holder.
(j) Entire
Agreement. This Agreement sets forth the entire
understanding of the Parent and the Restricted Holder relating to
the subject matter hereof and supersedes all other prior agreements
and understandings between the Parent and the Restricted Holder
relating to the subject matter hereof.
(k) Non-Exclusivity. The
rights and remedies of the Parent hereunder are not exclusive of or
limited by any other rights or remedies which the Parent may have,
whether at law, in equity, by contract or otherwise, all of which
shall be cumulative (and not alternative).
(l) Amendments. This
Agreement may not be amended, modified, altered or supplemented
other than by means of a written instrument duly executed and
delivered on behalf of the Parent and the Restricted
Holder.
(m) Binding Nature. This
Agreement and all authority herein conferred are irrevocable and
shall survive the death or incapacity of the Restricted Holder (if
a natural person) and shall be binding upon the heirs, personal
representatives, successors and assigns of the Restricted
Holder.
(n) Survival. Each of
the representations, warranties, covenants and obligations
contained in this Agreement shall survive the consummation of the
Acquisition.
(o) Counterparts. This
Agreement may be executed in separate counterparts, each of which
shall be deemed an original and both of which shall constitute one
and the same instrument.
[Signature Page Follows]
IN
WITNESS WHEREOF, the undersigned has executed and delivered this
Agreement as of the date first set forth above.
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SINCERITY APPLIED MATERIALS HOLDINGS
CORP.
Title:CEO
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RESTRICTED HOLDER:
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If an individual:
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If an entity:
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Print
Name of Entity:
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Sign:
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Print
Name:
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By
(sign):
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Print
Name:
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Signature (if Joint Tenants or Tenants
in Common)
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Print
Title:
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Address:
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Address:
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