FORM OF LOCK-UP AND SHARE RELEASE AGREEMENT
Exhibit 10.3
FORM
OF LOCK-UP AND SHARE RELEASE AGREEMENT
This Lock-Up and Share
Release Agreement (“Agreement”)
is entered into on this 12th,
day of August, 2008 (the “Effective
Date”), by and between AdEx Media Inc., a Delaware corporation (the
“Company”)
and ____________, an individual (“Shareholder”).
RECITALS
WHEREAS, the Company
entered into that certain Membership Interest Purchase Agreement dated August
12, 2008 ( “Purchase
Agreement”) by and between the Company, and the members (“Members’) of
Digital Instructor, LLC, a Colorado limited liability company (“Digital
Instructor”) in which the Company purchased all of the issued and
outstanding membership interests of the Members of Digital Instructor (“Membership
Interests”) in consideration for the payment to each of the Members of
their pro rata portion of the Purchase Price (as defined in the Purchase
Agreement);
WHEREAS, upon the Closing
(as defined in the Purchase Agreement) and subject to the terms of the Purchase
Agreement, the Company issued, as part of the Purchase Price, an aggregate of
One Million Two Hundred Thousand (1,200,000) restricted shares of common stock
of the Company to all the Members (“Shares”);
WHEREAS, Shareholder’s pro
rata portion of the Shares is ________ shares of restricted common stock of the
Company (“Shareholder
Shares”);
WHEREAS, as an inducement
for the Company to issue the Shareholder Shares and the Shareholder to accept
the Shareholder Shares, the Shareholder and Company desire to enter into this
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in
consideration of the representations and warranties herein contained, the
Company and Shareholder agree as follows:
1. Shareholder
Shares. The Shareholder is the owner of the Shareholder
Shares.
2. Lock-Up. The
Shareholder agrees that, except as provided below, without the prior written
consent of the Company, the Shareholder will not, directly or indirectly, offer,
sell, pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of (each, a “Disposition”)
any of the Shareholder Shares for a period of one (1) year from the date of
issuance and thereafter according to the Schedule below (the “Lock-Up
Period”). The foregoing restriction, which is expressly intended to
preclude the Shareholder from engaging in any transaction which is designed to
or reasonably expected to lead to or result in a Disposition during the Lock-Up
Period, shall terminate on the earlier of a Change in Control event or the
expiration of the Lock-Up Period. Notwithstanding the foregoing, the
Shareholder may (i) transfer some or all of the Shareholder Shares during the
Lock-Up Period by bona fide gift upon death by will or intestacy, provided that
any transferee agrees to be bound by the terms of this agreement, (ii) transfer
other shares acquired on the open market, (iii) transfer some or all of the
Shareholder Shares with the advance written consent of the Company, and (iv)
transfer the Shareholder Shares to any trust for the direct or indirect benefit
of the Shareholder or the immediate family of the Shareholder, 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 Agreement, “immediate family”
shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin. For purposes of this Agreement, “Change in Control” means (a)
a sale or other disposition of all or substantially all of the assets of the
Company; (b) a merger or consolidation in which the Company is not the
surviving entity and in which the shareholders of the Company immediately prior
to such consolidation or merger own less than fifty percent (50%) of the
surviving entity’s voting power immediately after the transaction; (c) a reverse
merger in which the Company is the surviving entity but the shares of the
Company’s Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, and in which the shareholders of the Company
immediately prior to such merger own less than fifty percent (50%) of the
Company’s voting power immediately after the transaction; (d) any other
capital reorganization in which more than fifty percent (50%) of the shares of
the Company entitled to vote are exchanged.
3. Share
Release. The Shareholder and Company agree that Shareholder Shares will
be subject to the following lock-up and release schedule (the “Schedule”):
|
DATE
|
PERCENT
OF SHARES RELEASED
|
|
12
month anniversary of Shareholder Share issuance date
|
20%
|
|
13
month anniversary of Shareholder Share issuance date
|
15%
|
|
14
month anniversary of Shareholder Share issuance date
|
15%
|
|
15
month anniversary of Shareholder Share issuance date
|
15%
|
|
16
month anniversary of Shareholder Share issuance date
|
15%
|
|
17
month anniversary of Shareholder Share issuance date
|
10%
|
|
18
month anniversary of Shareholder Share issuance date
|
10%
|
4. Representations
and Warranties.
4.1 Shareholder
represents and warrants to the Company that:
4.1.1 Purchase
for Own Account for Investment. Shareholder is investing in the
Shareholder Shares for Shareholder's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shareholder Shares within the meaning of the Securities Act of 1933, as amended
(the “1933
Act”). Shareholder has no present intention of selling or otherwise
disposing of all or any portion of the Shareholder Shares and no one other than
Shareholder has any beneficial ownership of any of the Shareholder
Shares.
4.1.2 Accredited
Investor/Net Worth. The Shareholder represents that
Shareholder is either (1) an “accredited investor” as that term is defined in
SEC Rule 501(a) of Regulation D, 17 C.F.R. 230.501(a) or (2) the Shareholder (a)
has adequate net worth and means of providing for his current financial needs
and possible contingencies, (b) has no need for liquidity in this investment,
(c) is able to bear the economic risks of an investment in the Shareholder
Shares for an indefinite period of time, and (d) is able to bear the risk of
losing his/its entire investment in the Shareholder Shares.
4.1.3 Not
An Underwriter. The Shareholder is not an underwriter or
dealer in the Shareholder Shares, and the Shareholder is not participating,
pursuant to a contractual agreement, arrangement or understanding, in a
distribution of the Shareholder Shares.
4.1.4 Compliance
with Securities Laws. Shareholder understands and acknowledges
that, in reliance upon the representations and warranties made by Shareholder
herein, the Shareholder Shares are not being registered with the Securities and
Exchange Commission (“SEC”)
under the 1933 Act or applicable United States state securities laws, but
instead are being issued under an exemption or exemptions from the registration
and qualification requirements of the 1933 Act or other applicable state
securities laws which impose certain restrictions on Shareholder’s ability to
transfer the Shareholder Shares.
4.1.5 Restrictions
on Transfer. Shareholder understands that Shareholder may not
transfer any Shareholder Shares unless such Shareholder Shares are registered
under the 1933 Act and qualified under applicable state securities laws or
unless exemptions from such registration and qualification requirements are
available. Shareholder understands that only the Company may file a
registration statement with the SEC or applicable state securities commissioners
and that the Company is under no obligation to do so with respect to the
Shareholder Shares. Shareholder has also been advised that exemptions from
registration and qualification may not be available or may not permit
Shareholder to transfer all or any of the Shareholder Shares in the amounts or
at the times proposed by Shareholder. Shareholder is aware that the
Shareholder Shares may not be resold pursuant to Rule 144, as promulgated by the
SEC under the 1933 Act, unless all of the conditions of that rule are
met.
4.1.6 Legends. Shareholder
understands and agrees that the Company will place the legends set forth below
or similar legends on any stock certificate(s) evidencing the Shareholder
Shares, together with any other legends that may be required by state or federal
securities laws, the Company's Articles of Incorporation or Bylaws, any other
agreement between Shareholder and the Company or any agreement between
Shareholder and any third party:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO REGISTRATION OR AVAILABLE
EXEMPTIONS FROM SUCH REGISTRATION. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON RESALE AND TRANSFER,
INCLUDING A LOCK-UP AND SHARE RELEASE SCHEDULE AS SET FORTH IN A LOCK-UP
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH SALE AND
TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE
SECURITIES.
4.1.7 Stop-Transfer
Instructions. Shareholder agrees that, to ensure compliance
with the restrictions imposed by this Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
4.1.8 Refusal
to Transfer. The Company will not be required (i) to transfer
on its books any Shareholder Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shareholder Shares, or to accord the right to vote or pay
dividends, to any Shareholder or other transferee to whom such Shareholder
Shares have been so transferred.
4.1.9 Authority,
Power, Enforceability. The Shareholder has all the requisite
power, authority and capacity to acquire and hold the Shareholder Shares and to
execute, deliver and comply with the terms of each of the instruments required
to be executed and delivered by the Shareholder in connection with the
investment in the Shareholder Shares as contemplated by this Agreement and such
execution, delivery and compliance does not conflict with, or constitute a
default under, any instruments governing the Shareholder, any law, regulation or
order, or any agreement to which the Shareholder is a party or by which the
Shareholder may be bound. The Shareholder hereby adopts, accepts and
agrees to be bound by all the terms and provisions of this Agreement and to
perform any obligations therein imposed.
4.2 Company
represents and warrants to the Shareholder that none of its existing
shareholders, as of the date hereof, have been granted any registration rights,
either demand, piggyback or otherwise.
5. Miscellaneous.
5.1 Assignments;
Successors and Assigns. The Company may assign any of its
rights under this Agreement. This Agreement will be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein, this Agreement will be binding upon Shareholder
and Shareholder’s heirs, executors, administrators, successors and
assigns.
5.2 Governing
Law. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed, and interpreted in accordance with
the laws of the State of Delaware, without giving effect to principles of
conflicts of law.
5.3 Notices. Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient upon delivery, when delivered personally or by overnight
courier or sent by telegram or fax, or forty-eight (48) hours after being
deposited in the U.S. Mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified, and if to the Company, at the
Company’s principal executive office, with a copy to Xxxx X. Xxxxxxx, Xxxxxxxxx
Xxxxxx Xxxxxx PC, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000,
facsimile to (000) 000-0000.
5.4 Further
Assurances. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this
Agreement.
5.5 Titles
and Headings. The titles, captions and headings of this
Agreement are included for ease of reference only and will be disregarded in
interpreting or construing this Agreement.
5.6 Counterparts;
Facsimiles. This Agreement may be executed and delivered by
facsimile signature and in two (2) or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one
instrument.
5.7 Severability. If
any provision of this Agreement is determined by any court or arbitrator of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such provision will be enforced to the maximum extent possible given the intent
of the parties hereto. If such clause or provision cannot be so enforced, such
provision shall be stricken from this Agreement and the remainder of this
Agreement shall be enforced as if such invalid, illegal or unenforceable clause
or provision had (to the extent not enforceable) never been contained in this
Agreement.
5.8 Amendment
and Waivers. This Agreement may be amended only by a written
agreement executed by each of the parties hereto. No amendment of or
waiver of, or modification of any obligation under this Agreement will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought. Any amendment effected in accordance with this
section will be binding upon all parties hereto and each of their respective
successors and assigns. Any waiver, permit, consent or approval of
any kind or character regarding the conditions of this Agreement or the breach
thereof must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded, shall be cumulative and not
alternative.
5.9 Entire
Agreement. This Agreement, the documents referred to herein,
and any other agreements executed as of the date hereof together constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements existing between the
parties hereto are expressly canceled. Shareholder hereby agrees
that, to the extent that the terms of this Agreement conflict with or are in any
way inconsistent with any agreement to which the Shareholder and the Company may
be a party, this Agreement supersedes such agreement.
5.10 WAIVER
OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT HEREBY WAIVE ANY
RIGHT THAT THEY MAY OTHERWISE HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR
PROCEEDING THAT ARISES OUT OF OR RELATES TO THIS AGREEMENT, ANY AMENDMENTS TO OR
ANY REPLACEMENTS OF THIS AGREEMENT, AND ANY TRANSACTIONS OR AGREEMENTS RELATING
TO THIS AGREEMENT. THE PARTIES UNDERSTAND THAT, AS A RESULT OF THIS
WAIVER, THE FACTS RELATING TO ANY DISPUTE THAT IS COVERED BY THIS WAIVER WILL BE
TRIED, IF NECESSARY, TO A JUDGE RATHER THAN TO A JURY.
[Signatures
on following page]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed on their
respective behalf, by their respective officers thereunto duly authorized, all
as of the day and year first above written.
“COMPANY”
a
Delaware corporation
By: _____________________
Name: _____________________
Title: _____________________
“SHAREHOLDER”
By: _____________________
Name: _____________________
Address:
_____________________
_____________________
_____________________
