December 29, 2005
Exhibit
4.4
December
29, 2005
To
the
Investors (as defined below)
Ladies
and
Gentlemen:
This
Lock-Up Letter Agreement is being delivered to you in connection with the
Securities Purchase Agreement (the “Purchase Agreement”), dated as of December
22, 2005 by and among Cape Coastal Trading Company (the “Company”), uBid, Inc.
and the investors party thereto (the “Investors”), with respect to the issuance
of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”)
and warrants to acquire additional shares of Common Stock. Terms not defined
herein have the meaning given them in the Purchase Agreement.
In
order
to induce you to enter into the Purchase Agreement, the undersigned agrees
that
for a period (the “Base Period”) of 365 days beginning on the First Closing Date
(as defined in the Purchase Agreement), the undersigned will not, without your
prior written consent, (i) other than with respect to redemptions by the Company
required by the Merger Agreement, sell, offer to sell, contract or agree to
sell, transfer, hypothecate, hedge, pledge, grant any option to purchase or
otherwise dispose of or agree to dispose of, directly or indirectly, any shares
of Common Stock or warrants or other rights to purchase shares of Common Stock,
or cause the Company to file or cause to be declared effective a registration
statement with the Securities and Exchange Commission (the “Commission”)
relating to the offer and sale of any shares of Common Stock (other than the
Registration Statement contemplated under Article VI of the Purchase Agreement
or the Merger Agreement), 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, or warrants or other rights to purchase
shares of Common Stock, whether any such transaction is to be settled by
delivery of such securities, in cash or otherwise, 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
Commission (collectively, the "Undersigned Shares"); provided that if the
Registration Statement is not
declared effective
by the
SEC on or prior to the Required Effectiveness Date, the number of days between
the actual Effective Date and the Required Effectiveness Date will be added
to
the Base Period (the Base Period, subject to such extension shall be referred
to
as the “Lock-up Period”).
The
foregoing shall not, with respect to Undersigned Shares, apply to (a) bona
fide
gifts, whether to charitable organizations or otherwise, provided the recipient
thereof agrees in writing with each of you to be bound by the terms of this
Lock-Up Letter Agreement, (b) dispositions to any foundation, trust, partnership
or the limited liability company, as the case may be, exclusively for the direct
or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such person (or trustee of such trust) agrees in
writing with each of you to be bound by the terms of this Lock-Up Letter
Agreement, (c) transfers as required by law and (d) to dispositions by a
partnership to a partner of such partnership, provided such partner agrees
in
writing with each of you to be bound by the terms of this Lock-Up Letter
Agreement.
Notwithstanding
anything herein to the contrary, with respect to any Securities purchased by
the
undersigned pursuant to the Purchase Agreement, the undersigned may sell, offer
to sell, contract or agree to sell, transfer, hypothecate, hedge, pledge, grant
any option to purchase or otherwise dispose of or agree to dispose of, directly
or indirectly of such Securities (a) in an underwritten secondary offering
of
the Company’s shares, (b) if the price at which shares of Common Stock are so
sold or otherwise disposed is at least $5.00 per share, as equitably adjusted
for stock splits and the like from and after the date hereof, or (c) pursuant
to
a redemption in accordance with the terms of the Merger Agreement.
Notwithstanding
the foregoing, the undersigned’s obligations under this Lock-Up Letter Agreement
shall be released at any time prior to the expiration of the Lock-up Period
if
(1) the sale price of the Common Stock for any 20 out of the last 30 trading
days is greater than $6.75 per share, as equitably adjusted for stock splits
and
the like from and after the date hereof, and (2) the Common Stock is listed
on
NYSE, AMEX or Nasdaq National Market.
The
undersigned confirms that he, she or it understands that the Investors will
rely
upon the representations set forth in this Lock-Up Letter Agreement in
proceeding with the transactions contemplated by the Purchase Agreement. The
undersigned further confirms that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns. The undersigned agrees and consents
to
the entry of stop transfer instructions with the Company’s transfer agent
against the transfer of securities held by the undersigned except in compliance
with this Lock-Up Letter Agreement.
This
Lock-Up Letter 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 Letter 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.
[Signature
Page Attached hereto]
| Yours very truly, | ||
| [Investor] | ||
| By: | ||
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| Its: | ||
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