LOCK-UP AND TRADING RESTRICTION AGREEMENT
Exhibit
10.3
LOCK-UP
AND TRADING RESTRICTION AGREEMENT, dated as of _______, 2008 (the “Agreement”),
by
and among [___________] (the “Stockholder”),
Fortissimo Acquisition Corp., a Delaware corporation (“Parent”)
and
[_________] (the “Trading
Restriction Administrator”).
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Merger Agreement referred to
below.
WHEREAS,
the execution of this Agreement is a condition to closing of the Agreement
and
Plan of Merger and Interests Purchase Agreement, dated as of January 15,
2008,
by and among Parent, FAC Acquisition Sub Corp., a New York corporation
and
a
wholly-owned subsidiary
of Parent (“Merger
Sub”),
Psyop, Inc., a New York corporation (the “Company”),
Psyop
Services, LLC, a New York limited liability company, Xxxxxx Xxxxx-Xxxxxxxx,
Hejung Xxxxx Xxxx, Xxxxxx Xxxx, Kylie Matulick, Xxxx Xxxxx, Xxxxxx Xxxx
Xxxxxxx,
Xxxxxx Xxxxxxxx, Xxxxx Xxxxx and Xxxxxxxxxxx Xxxxxx (collectively, the
“Stockholders”)
and
the Stockholders’ Representative (the “Merger
Agreement”).
WHEREAS,
as a condition to the willingness of Parent to enter into the Merger Agreement,
Parent has requested that the Stockholder agree to be bound by the terms
of this
Agreement.
WHEREAS,
Parent,
the Stockholders and the Trading Restriction Administrator (the “Parties”)
desire
to establish the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby,
the
parties hereby agree as follows:
Section
1. Lock-up.
The
Stockholder hereby agrees as follows:
(a) As
of the
Closing Date, the Stockholder shall be entitled to receive a certain number
of
shares of Parent Common Stock (the “Stockholder
Shares”)
as set
out in the Merger Agreement.
(b) Except
as
provided pursuant to subsection (c) below, the Stockholder will not, without
the
prior written consent of Parent, which consent may be withheld for any
reason,
directly or indirectly, (i) offer, pledge, hypothecate, sell, contract to
sell, enter any agreement to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
for
the sale of, or otherwise dispose of or transfer any Stockholder Shares,
or file
any registration statement under the United States Securities Act of 1933,
as
amended, with respect to any of the foregoing, or (ii) enter into any swap
or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of any Stockholder Shares,
whether any such transaction is to be settled by delivery of Parent Common
Stock
or other securities, in cash or otherwise.
(c) Notwithstanding
the foregoing, the Stockholder is permitted to offer, pledge, hypothecate,
sell,
contract to sell, enter into any agreement to sell, sell any option or
contract
to purchase, purchase any option or contract to sell, grant any option,
right or
warrant for the sale of, or otherwise dispose of or transfer Stockholder
Shares
according to the schedule set forth below:
|
12
months after the Closing Date (the “Initial
Release Date”)
|
33.33%
of the Stockholder Shares
|
|
12
months after the Initial Release Date (the “Final
Release Date”)
|
100.00%
of the Stockholder Shares
|
In
the
event the Stockholder attempts to transfer or otherwise dispose of the
Stockholder Shares in violation of Section 1(b) prior to the Final Release
Date,
such transfer shall have no force and effect.
Furthermore,
any certificate representing Stockholder Shares shall have a legend
substantially as follows:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP AND TRADING
RESTRICTION AGREEMENT BETWEEN THE HOLDER AND THE
CORPORATION.”
(d) The
Stockholder agrees and consents to the entry of stock transfer instructions
with
Parent’s transfer agent against the transfer of any Stockholder Shares held by
the Stockholder and subject to this Agreement except in compliance with
the
foregoing restrictions.
Section
2. Trading
Restrictions.
(a) Subject
to Section 2(b) below, for a period of two (2) years following the Initial
Release Date, each Stockholder agrees that the Stockholders may not, as
a group,
directly or indirectly, sell, offer to sell, grant any option for the sale
of,
assign, transfer, pledge, hypothecate, or otherwise encumber or dispose
of
(“Transfer”)
to any
Third Party any legal or beneficial interest in shares of Parent Common
Stock
(the “Shares”)
(whether pursuant to a registration statement or otherwise), on any given
day,
constituting more than 10% of the average daily trading volume of Parent
Common
Stock over the 20 trading days before such day, nor can the Stockholders,
as a
group, Transfer, in any given week, more than 30% of the average daily
trading
volume of Parent Common Stock over the 20 trading days before such week.
If the
Stockholders, as a group, request to Transfer more than the foregoing amounts,
then all such requesting Stockholders shall be restricted from the Transfer
of
Shares, on a pro rata basis, so as not to exceed the foregoing amounts,
in
accordance with the provisions of Section 3. “Third
Party”,
for
purposes of this Agreement, means any Person other than: (i) a Stockholder;
(ii)
the spouse, parent, sibling or descendants of a Stockholder; (iii) any
trusts
for the benefit of a Stockholder, or (iv) all Persons Affiliated with,
principally owned by and/or organized or operating for the benefit of any
of the
foregoing, in each case, so long as such Person agrees to be bound by this
Agreement, including the restrictions set forth in this Section 2, by the
execution and delivery of an Addendum in the form of Schedule
B.
For
purposes of this Agreement, “Affiliate”
means,
with respect to any Person, any other Person that controls, is controlled
by or
is under common control with the first Person.
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(b) Notwithstanding
Section 2(a) above or any other provision of this Agreement to the contrary,
any
Stockholder may Transfer any or all of its Shares to any Third Party if
such
Transfer (i) is executed as a private sale not executed upon any exchange
or
through any public securities market and (ii) such Third Party agrees to
be
bound by this Agreement, including the restrictions set forth in this Section
2,
by the execution and delivery of an Addendum in the form of Schedule
B.
(c) Whenever
a Stockholder desires to Transfer any Shares, the Stockholder shall make
a
request in writing to the Trading Restriction Administrator, in accordance
with
the instructions contained in Schedule
A
attached
hereto, not later than Noon, Eastern time, on the Business Day before the
proposed date for such Transfer, specifying the number of the Shares requested
to be Transferred and the proposed date for such Transfer.
(d) Upon
any
request by a Stockholder pursuant to Section 2(c), the Trading Restriction
Administrator, in its sole discretion exercised in good faith, shall determine
whether such Transfer is permissible pursuant to Section 2(a), taking into
account the request for such Transfer and all other requests by the other
Stockholders for such proposed date.
(e) If
the
proposed Transfer would not exceed the limits imposed by Section 2(a),
as
determined by the Trading Restriction Administrator in accordance with
Section
2(d), the Trading Restriction Administrator shall promptly notify Parent
and the
Stockholder, not later than 4:00 P.M., Eastern time, on the Business Day
before
the proposed date for such Transfer, that such Transfer is permissible
under
Section 2, and Parent shall take such appropriate steps as are necessary
to
facilitate such Transfer on the stock records of Parent.
(f) If
the
proposed Transfer would exceed the limits imposed by Section 2(a), as determined
by the Trading Restriction Administrator in accordance with Section 2(d),
the
Trading Restriction Administrator shall calculate the number of Shares
that may
be Transferred by each requesting Stockholder in accordance with the
restrictions set forth in Section 2(a) (the “Adjusted
Amount”),
which, in each case, shall be equal to the maximum number of Shares that
could
be Transferred on such date by all Stockholders, multiplied by a fraction,
the
numerator of which is the number of Shares requested to be Transferred
by such
requesting Stockholder on such date and the denominator of which is the
number
of Shares requested to be Transferred by all Stockholders who have requested
a
Transfer on such date. The Trading Restriction Administrator shall promptly
notify Parent and the Stockholder, not later than 4:00 P.M., Eastern time,
on
the Business Day before the proposed date for such Transfer, that such
Transfer
is only permissible if adjusted pursuant to this Section 2(f), specifying
the
Adjusted Amount. Unless the Stockholder delivers a notice to Parent and
the
Trading Restriction Administrator (which must be received by Parent and
the
Trading Restriction Administrator by 5:00 P.M., Eastern time, on the Business
Day before the proposed date for such Transfer (the “Final
Rejection Time”)),
that
such Stockholder no longer desires to sell the Adjusted Amount of Shares,
Parent
shall take such appropriate steps as are necessary to facilitate such Transfer
of the Adjusted Amount on the stock records of Parent.
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(g) Any
Transfer permitted to be made pursuant to this Agreement shall be brokered
by
the Trading Restriction Administrator or any of its affiliates, except
for the
exempt transactions described in Section 3.
(h) The
Parties understand that the Shares covered by this Agreement are not subject
to
an effective registration statement at the time of this Agreement, and
neither
Parent nor the Trading Restriction Administrator are responsible for
fluctuations in the market in connection with any Transfer of the
Shares.
(i) Each
Stockholder agrees in connection with any registered underwritten public
offering of the Parent Common Stock occurring during the 3-year period
following
the Initial Release Date that, upon request of the Parent or the underwriters
managing an underwritten public offering, for a period of 90 days (or such
shorter period of time as may be requested by the Parent or the underwriters),
not to sell, make any short sale of, loan, grant any option for the purchase
of
or otherwise dispose of any Parent Common Stock (other than those, if any,
that
are included in the public offering) without the prior written consent
of the
Parent or such underwriters, as the case may be, provided
that all
of the officers and directors of the Parent shall also enter into an agreement
imposing substantially equivalent restrictions on such persons for the
same
period of time as such restrictions are imposed on the Stockholders, and,
provided, further, that the Parent may not invoke this right more than
twice in
any twelve (12) month period.
Section
3. Exempt
Transactions.
Notwithstanding the restrictions set forth in Sections 1 and 2 above, the
Stockholder may sell, assign or transfer all or any portion of the Stockholder
Shares: (i) to his or her spouse (or former spouse in connection with any
marital separation, asset allocation agreement or qualified domestic relations
order) or parents, siblings or children (by blood, marriage or adoption)
(“Qualified
Relatives”),
to a
trust established for the benefit of the Stockholder or his or her Qualified
Relatives, to an entity owned, directly or indirectly, by such a trust
or to a
beneficiary of his or her will through a disposition under such will; (ii)
if
the Stockholder is a partnership, to its partners; (iii) to an Affiliate
of the
Stockholder or his or her Qualified Relatives; or (iv) to the beneficiaries
of
any trust to which the Stockholder has transferred Stockholder Shares in
compliance with subsection (i); provided that,
in each
case, the transferee agrees in writing to be subject to the terms of this
Agreement to the same extent as if such transferee were a holder of Stockholder
Shares hereunder.
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Section
4. Representations
and Warranties of the Stockholder.
The
Stockholder on his, her or its own behalf hereby represents and warrants
Parent
as follows:
(a) Power,
Binding Agreement.
The
Stockholder has the legal capacity, power and authority to enter into and
perform all of his, her or its obligations under this Agreement. The execution,
delivery and performance of this Agreement by the Stockholder will not
violate
any material agreement to which the Stockholder is a party, including,
without
limitation, any lock-up agreement, shareholders’ agreement, partnership
agreement or voting trust. This Agreement has been duly and validly executed
and
delivered by the Stockholder and constitutes a valid and binding obligation
of
the Stockholder, enforceable against the Stockholder in accordance with
its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles
of
equity (regardless of whether enforcement is sought in a proceeding at
law or in
equity).
(b) No
Conflicts.
The
execution and delivery of this Agreement does not, and the consummation
of the
transactions contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration
of
any obligation or loss of a material benefit under, any provision of any
loan or
credit agreement, note, bond, mortgage, hypothecation, indenture, lease
or other
agreement, instrument, permit, concession, franchise, license, judgment,
order,
decree, statute, law, ordinance, rule or regulation applicable to the
Stockholder of any of his, her or its properties or assets, other than
such
conflicts, violations or defaults or terminations, cancellations or
accelerations which individually or in the aggregate do not materially
impair
the ability of the Stockholder to perform its obligations
hereunder.
Section
5. Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event that
any
provision of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of
the
terms hereof, in addition to any other remedy at law or in equity.
Section
6. Miscellaneous.
(a) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements
and
understandings, both written and oral, between the parties with respect
thereto.
This Agreement may not be amended, modified or rescinded except by an instrument
in writing signed by each of the parties hereto.
(b) If
any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law, or public policy, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and
effect.
Upon such determination that any term or other provision is invalid, illegal
or
incapable of being enforced, the parties hereto shall negotiate in good
faith or
modify this Agreement so as to effect the original intent of the parties
as
closely as possible to the fullest extent permitted by applicable law in
a
mutually acceptable manner in order that the terms of this Agreement remain
as
originally contemplated to the fullest extent possible.
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(c) This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York without giving effect to any conflicts of laws principles
thereof directing the application of any law other than that of the State
of New
York. Courts within the State of New York, County of New York or the United
States District Court for the Southern District of New York will have
jurisdiction over all disputes between the parties hereto arising out of
or
relating to this agreement and the agreements, instruments and documents
contemplated hereby. The parties hereby consent to and agree to submit
to the
jurisdiction of such courts. Each of the parties hereto waives, and agrees
not
to assert in any such dispute, to the fullest extent permitted by applicable
law, any claim that (i) such party is not personally subject to the
jurisdiction of such courts, (ii) such party and such party’s property is
immune from any legal process issued by such courts or (iii) any litigation
commenced in such courts is brought in an inconvenient forum. Each party
hereto
hereby irrevocably waives all right to trial by jury in any proceeding
(whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or any transaction or agreement contemplated hereby or the actions
of
any party hereto in the negotiation, administration, performance or enforcement
hereof.
(d) No
delay
or omission by either party hereto in exercising any right under this Agreement
will operate as a waiver of that or any other right. A waiver or consent
given
by either party on any one occasion is effective only in that instance
and will
not be construed as a bar to or waiver of any right of any other
occasion.
(e) This
Agreement may be executed in counterparts, each of which shall be deemed
an
original and all of which together shall constitute one and the same instrument.
The delivery of a signature page of this Agreement by one party to each
of the
other parties via facsimile transmission shall constitute the execution
and
delivery of this Agreement by the transmitting party.
[Remainder
of Page Intentionally Left Blank.]
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IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be
signed individually or by its respective duly authorized officer as of
the date
first written above.
By:
______________________________________
Name:
____________________________________
Title:
_____________________________________
STOCKHOLDER
Signature
block for individuals:
_________________________________________
Signature
_________________________________________
Print
Name
_________________________________________
[TRADING
RESTRICTION ADMINISTRATOR]
By:
______________________________________
Name:
____________________________________
Title:
_____________________________________
Signature
Page to Lock-Up Agreement
