LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT (this “Agreement”)
is
made and entered into as of the 15th
day of
June, 2007, between West Coast Opportunity Fund, LLC, a California limited
liability company (“WCOF”),
and
the individuals and entities that execute and deliver a Counterpart Signature
Page hereof, each a shareholder of Tribeworks, Inc., a Delaware corporation
(the
“Company”),
and
sometimes collectively referred to herein as the “Stockholders”
and
each, a “Stockholder.”
WHEREAS,
the Company intends to enter into a Securities Purchase Agreement between
the
Company and WCOF, dated on the date hereof (the “Securities
Purchase Agreement”)
pursuant to which the execution and delivery of this Agreement is a condition
precedent to the closing of the Securities
Purchase Agreement;
and
WHEREAS,
in order to facilitate the consummation of the transactions contemplated
by the
Securities Purchase Agreement and to provide for an orderly market for the
Company’s common stock, par value $0.0004 per share (the “Common
Stock”),
subsequent to the closing of the Securities Purchase Agreement, the Stockholders
have agreed to enter into this Agreement and to restrict the sale, assignment,
transfer, conveyance, hypothecation or alienation of the Common Stock, all
on
the terms set forth below.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Notwithstanding
anything contained in this Agreement, a Stockholder may transfer his/her/its
shares of Common Stock to his/her/its affiliates, partners in a partnership,
subsidiaries and trusts, or spouses and lineal descendants for estate planning
purposes provided that the transferee (or the legal representative of the
transferee) executes an agreement to be bound by all of the terms and conditions
of this Agreement.
2. Each
Stockholder agrees that it will not make or cause any sale, except as described
in Section
1,
above,
of any Securities listed on Exhibit
A
hereto
(which, as of the date of this Agreement, the Stockholder owns of record),
without WCOF’s prior written consent earlier than the ninetieth day following
the date on which that certain Initial Promissory Note, dated as of the date
hereof and executed by the Company in favor of WCOF and that certain Secondary
Promissory Note, dated as of July 10, 2007, have been fully repaid or otherwise
satisfied.
3. a.
In
the
event
of a firmly-underwritten public offering of Common Stock or other equity
interest of the Company for the account of the Company registered under the
Securities Act of 1933 (the “1933
Act”)
by a
nationally recognized investment bank resulting in at least US $35,000,000
in gross proceeds (before underwriters’ discounts and selling commissions) to
the Company (the “Public
Offering”),
Stockholder agrees that for a period of six (6) months commencing on the
effective date of the registration statement filed under the 1933 Act relating
to the Public Offering (the “Lock-up
Period”),
Stockholder will not offer, sell, contract to sell, grant any option for
the
sale of, or otherwise dispose of, directly or indirectly, any of the Common
Stock, or any other securities of the Company which are exercisable for any
other securities of the Company. In order to enable the Company to enforce
the
aforesaid restrictions on transfer, Stockholder hereby agrees that the Company
may impose stop-transfer instructions with respect to the securities of the
Company owned beneficially or of record by Stockholder until the end of such
six-month period.
b. In
the
event that the National Association of Securities Dealers, any other state
or
federal regulatory authority requires that the Lock-Up Period be extended
in
connection with the Public Offering, Stockholder agrees that it will use
commercially reasonable efforts to execute any agreements and other documents
to
extend the Lock-Up Period to the extent required by the National Association
of
Securities Dealers or such regulatory authority.
c. Any
one
or more of the restrictions set forth in this Section
3:
(i) may
be waived by the board of directors of the Company if it determines in good
faith and in the exercise of its fiduciary duties that such waiver would
be in
the best interests of the Company and its stockholders for any valid business
purpose, including, without limitation, to increase the liquidity of the
Common
Stock; and (ii) will be null and void upon the consummation of any tender
offer
to purchase all or substantially all of the Company’s issued and outstanding
securities or any merger, consolidation or other reorganization of the Company
with or into an unaffiliated Person if such transaction is approved by the
affirmative vote of the requisite number of record and beneficial owners
of the
Company’s then outstanding and entitled to vote on such
transaction.
4. To
the
extent not inconsistent with applicable law, if Stockholder’s Common Stock are
included in a registration statement, Stockholder agrees not to effect any
public sale or distribution of the issue being registered or a similar security
of the Company, or any securities exercisable for such securities, including
a
sale pursuant to Rule 144 under the 1933 Act, during the fourteen (14) days
prior to, and during the one hundred eighty (180) day period beginning on,
the
effective date of such registration statement (except as part of the
registration), if and to the extent requested by the managing underwriter
or
underwriters in the case of an underwritten public offering.
5. By
executing this Agreement, each Stockholder represents that the Common Stock
set
forth in Exhibit
A
is all
of the shares of Company Common Stock that such Stockholder beneficially
owns as
of the date hereof.
6. In
the
event of a tender offer to purchase all or substantially all of Company’s issued
and outstanding securities including all of the securities owned by WCOF,
or a
merger, consolidation or other reorganization with or into an unaffiliated
entity, and if the requisite number of the record and beneficial owners of
Company securities then outstanding are voted in favor of such tender offer,
merger, consolidation or reorganization, and such tender offer, merger,
consolidation or reorganization is completed, this Agreement shall terminate
as
of the closing of such event provided that the Promissory Note has been fully
repaid or otherwise satisfied, and the Common Stock restricted pursuant hereto
shall be immediately released from the restrictions contained
herein.
2
7. Except
as
otherwise provided in this Agreement or any other agreements between the
parties, the Stockholders shall be entitled to their respective beneficial
rights of ownership of the Common Stock, including the right to vote the
Common
Stock for any and all purposes.
8. The
Common Stock restrictions covered by this Agreement shall be appropriately
adjusted should the Company make a dividend or distribution, undergo a forward
split or a reverse split or otherwise reclassify its shares of Common
Stock.
9. This
Agreement may be executed in any number of counterparts with the same force
and
effect as if all parties had executed the same document.
10. All
notices, instructions or other communications required or permitted to be
given
pursuant to this Agreement shall be given in writing and delivered by certified
mail, return receipt requested, overnight delivery or hand-delivered to all
parties to this Agreement, to WCOF, at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, XX 00000, Attn: Atticus Xxxx, CFA, and to the Stockholders, at the
addresses in their Counterpart Signature Pages. All notices shall be deemed
to
be given on the same day if delivered by hand or on the following business
day
if sent by overnight delivery or the second business day following the date
of
mailing.
11. The
sale
and transfer restrictions on the Common Stock set forth in this Agreement
shall
be in addition to all other restrictions on transfer imposed by applicable
United States and state securities laws, rules and regulations.
12. This
Agreement sets forth the entire understanding of the parties hereto with
respect
to the subject matter hereof, and may not be amended except by a written
instrument executed by the parties hereto.
13. This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware applicable to contracts entered into and to be performed
wholly within said State; and Company and the Stockholders agree that any
action
based upon this Agreement may be brought in the United States and state courts
of Texas only, and each submits himself/herself/itself to the jurisdiction
of
such courts for all purposes hereunder.
14. In
the
event of default hereunder, the non-defaulting parties shall be entitled
to
recover reasonable attorney’s fees incurred in the enforcement of this
Agreement.
3
IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement
as of the day and year first above written.
| WEST COAST OPPORTUNITY FUND, LLC | ||
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| By: | ||
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Name: Atticus Xxxx |
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| Title: Chief Investment Officer | ||
Counterpart
Signature Page to the Lock-Up Agreement
IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this Lock-Up
Agreement as of the day and year first above written.
| STOCKHOLDER: | ||
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| By: | ||
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| Name: | ||
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| Address: | ||
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EXHIBIT
A
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Stockholder
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Number
of Shares of Common Stock Owned
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