TAG IT PACIFIC, INC.
LOCK-UP LETTER
November 7, 1997
CRUTTENDEN XXXX INCORPORATED
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, $0.001 par value per share (the "Common Stock"), of
Tag It Pacific, Inc., a Delaware corporation (the "Company") and that the
Underwriters propose to reoffer the Shares to the public (the "Public
Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that without the prior written consent of Cruttenden
Xxxx Incorporated (which consent may be withheld in its sole discretion) the
undersigned will not sell, offer to sell, solicit an offer to buy, contract to
sell, loan, pledge, grant any option to purchase, or otherwise transfer or
dispose of (collectively, a "Disposition"), any shares of Common Stock, or any
securities convertible into or exercisable or exchangeable for Common Stock
(collectively, "Securities"), now owned or hereafter acquired by the undersigned
or with respect to which the undersigned has or hereafter acquires the power of
disposition, for a period of 365 days after the date of the final Prospectus
relating to the offering of the Shares to the public by the Underwriters (the
"Lock-Up Period"). The foregoing restriction is expressly agreed to preclude
the holder of the Securities from engaging in any hedging, pledge or other
transaction which is designed to, or which may reasonably be expected to lead to
or result in a Disposition of Securities during the Lock-Up Period even if such
Securities would be disposed of by someone other than the undersigned. Such
prohibited hedging, pledge or other transactions would include without
limitation any short sale (whether or not against the box), any pledge of shares
covering an obligation that matures, or could reasonably mature during the
Lock-Up Period, or any purchase, sale or grant of any right (including without
limitation any put or call option ) with respect to any Securities 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
Securities.
Notwithstanding the foregoing, the undersigned may (i) exercise (on a cash or
cashless basis, whether in a traditional cashless exercise or in a "brokers"
cashless exercise), Common Stock options or warrants outstanding on the date
hereof, it being understood, however, that the shares of Common Stock received
(net of shares sold by or on behalf of the undersigned in a "brokers" cashless
exercise or shares delivered to the Company in a traditional cashless exercise
thereof) by the undersigned upon exercise thereof shall be subject to the terms
of this agreement, and (ii) transfer shares of Common Stock or Securities during
the undersigned's lifetime by BONA FIDE gift, to the undersigned's equity owners
or members of the undersigned's immediate family, or to a trust for such
members' benefit, or upon death by will or intestacy, provided that any
transferee agrees to be bound by the terms of this agreement.
The undersigned understands that the Underwriters will rely upon the
representations set forth in this agreement in proceeding with the Public
Offering. The undersigned agrees that the provisions of this agreement shall be
binding upon the successors, assigns, heirs, personal and legal representatives
of the undersigned. Furthermore, the undersigned hereby agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the Securities held by the undersigned except in
compliance with this agreement.
CRUTTENDEN XXXX INCORPORATED
November 7, 1997
Page 2
It is understood that, if the Underwriting Agreement does not become
effective prior to February 27, 1998, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Shares, the obligations
under this agreement shall automatically terminate and be of no further force
and effect.
Very truly yours,
By:
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Name:
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Title:
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Additional signature(s) if stock jointly held
By:
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Name:
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Title:
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