RANCHER ENERGY CORP. December 21, 2006
December
21, 2006
999-18th
Street,
Suite 1740
Xxxxxx,
Xxxxxxxx 00000
| Re: |
Rancher
Energy Corp. - Lock-Up
Agreement
|
Dear
Sirs:
This
Lock-Up Agreement is being delivered to you in connection with the Securities
Purchase Agreement (the "Purchase
Agreement"),
dated
as of December 21, 2006 by and among Rancher Energy Corp. (the
"Company")
and
the investors party thereto (the "Buyers"),
with
respect to the issuance of (i) convertible notes of the Company (the
"Notes")
which
Notes shall be convertible into the common stock, par value $0.00001 per share,
of the Company (the "Common
Stock")
(ii)
shares of Common Stock and (iii) warrants to acquire additional shares of Common
Stock.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.
In
order
to induce you to enter into the Purchase Agreement, the undersigned agrees
that
commencing
on the date hereof and ending on the later of (i) the date 180 days from the
Closing Date (as defined in the Purchase Agreement) and (ii) the
date
the
Initial Registration Statement (as defined in the Registration Rights Agreement)
filed by the Company pursuant to the Registration Rights Agreement is declared
effective by the United States Securities and Exchange Commission,
but in
no event later than the one year anniversary of the Closing Date (the
"Lock-Up
Period"),
the
undersigned will not, without the written consent of the Required Holders (as
defined in the Registration Rights Agreement), (i)
sell,
offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant
any
option to purchase,
make any
short sale
or
otherwise dispose of or agree to dispose of, directly or indirectly,
any
shares
of Common Stock, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange
Commission,
or (ii)
enter into any swap or other arrangement that transfers to another, in whole
or
in part, any of the economic consequences of ownership of any
shares of Common Stock, owned directly by the undersigned (including holding
as
a custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange
Commission,
whether
any such transaction is to be settled by delivery of such securities, in cash
or
otherwise, (collectively, the "Undersigned’s
Shares").
This
Lock-Up Agreement shall not apply to any shares of Common Stock acquired by
the
undersigned on the open market or otherwise after the Closing Date.
The
foregoing restriction is expressly agreed to preclude the undersigned or any
affiliate of the undersigned from engaging in, without the written consent
of
the Required Holders, 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 the Undersigned’s Shares even if the Undersigned’s Shares would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transactions would include, without limitation, any short sale or any purchase,
sale or grant of any right (including, without limitation, any put or call
option) with respect to any of the Undersigned’s Shares or with respect to any
security that includes, relates to, or derives any significant part of its
value
from the Undersigned’s Shares.
Notwithstanding
the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a
bona
fide
gift or
gifts, provided that the donee or donees thereof agree to be bound in writing
by
the restrictions set forth herein or (ii) to any trust for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such transfer
shall
not involve a disposition for value. For purposes of this Lock-Up Agreement,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. The undersigned now has, and, except as
contemplated by clauses (i) and (ii) above, for the duration of this Lock-Up
Agreement will have, good and marketable title to the Undersigned’s Shares, free
and clear of all liens, encumbrances, and claims whatsoever. The undersigned
also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Undersigned’s
Shares except in compliance with the foregoing restrictions.
The
undersigned understands and agrees that this Lock-Up Agreement is irrevocable
and shall be binding upon the undersigned’s heirs, legal representatives,
successors, and assigns.
This
Lock-Up Agreement may be executed in two counterparts, each of which shall
be
deemed an original but both of which shall be considered one and the same
instrument.
This
Lock-Up Agreement will be governed by and construed in accordance with the
laws
of the State of New York, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of New York, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the
State
of New York to be applied. In furtherance of the foregoing, the internal laws
of
the State of New York will control the interpretation and construction of this
Lock-Up Agreement, even if under such jurisdiction's choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
apply.
The
Buyers shall be intended third party beneficiaries of this Agreement to the
same
extent as if they were parties hereto, and shall be entitled to enforce the
provisions hereof. No provision of this Agreement may be amended or waived
without the written consent of the Required Holders.
[Signature
Page Follows]
|
Very
truly yours,
________________________________________
Exact
Name of Stockholder
________________________________________
Authorized
Signature
________________________________________
Title
|
Agreed
to
and Acknowledged:
By:
_______________________
Name:
Xxxx Works
Title:
President and Chief Executive Officer
