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EXHIBIT 10.8
PROMOTIONAL SHARES LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement (this "Agreement") is entered into
on ____ day of _____________, 2001, by and among PETSVETSANDYOU, INC., a Florida
corporation (the "Issuer"), whose principal place of business is located at
00000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxxxx 00000 and XXXXX X. XXXXXXXXX,
XXXXXXX XXXXXX, D.V.M. and XXXX X. XXXXX AND XXXXXXXX ("XXXX") X. XXXXX, AS
TENANTS BY THE ENTIRETIES, (collectively, the "Security Holders").
WITNESSETH THAT,
A. The Issuer has filed an application with the Securities
Administrators of the States listed in Schedule A attached
hereto ("Administrators") to register certain of its Equity
Securities (as defined in the North American Securities
Administrators Association (the "NASAA") Statement of Policy
on Corporate Securities Definitions Policy (the "NASAA
Policy")) for sale to public investors who are residents of
those states ("Registration");
B. The Security Holders listed on Schedule B attached hereto are
the owners of the shares of common stock or similar securities
and/or possess convertible securities, warrants, options or
rights which may be converted into, or exercised to purchase
shares of common stock or similar securities of the Issuer,
which constitute Promotional Shares (as defined in the NASAA
Policy and which are deemed and defined for purposes of this
Agreement as Promotional Shares.
C. As a condition to Registration, the Issuer and the Security
Holders (collectively, the "Signatories") agree to be bound by
the terms of this Agreement.
II. THEREFORE, the Security Holders agree not to sell, pledge, hypothecate,
assign, grant any option for the sale of, or otherwise transfer or dispose of,
whether or not for consideration, directly or indirectly, the Promotional Shares
and all certificates representing stock dividends, stock splits,
recapitalizations, and the like, that are granted to, or received by, the
Security Holders while the Promotional Shares are subject to this Agreement (the
"Restricted Securities").
A. Beginning two years from the completion date of the public
offering, two and one-half percent (2 1/2%) of the Restricted
Securities may be released from the restrictions of this
Agreement each quarter pro rata among the Security Holders.
All remaining Restricted Securities shall be released from
escrow on the anniversary of the fourth year from the
completion date of the public offering; OR
B. If the Issuer's Aggregate Revenues (as defined in the NASAA
Policy) are:
$500,000 or more, provided that neither the auditor's report
nor any footnote to the Issuer's latest audited financial
statements contain an opinion or statement regarding the
ability of the Issuer to continue as a going concern, then
beginning one year
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from the date of completion of the public offering, two and
one-half percent (2 1/2%) of the Restricted Securities held
in escrow may be released each quarter pro rata among the
Security Holders. All remaining Restricted Securities shall be
released from escrow on the second anniversary from the date
of completion of the public offering.
III. THEREFORE, the Signatories agree and will cause the following:
A. In the event of a dissolution, liquidation, merger,
consolidation, reorganization, sale or exchange of the
Issuer's assets or securities (including by way of tender
offer), or any other transaction or proceeding with a person
who is not a Promoter, which results in the distribution of
the Issuer's assets or securities ("Distribution"), while this
Agreement remains in effect that:
1. All holders of the Issuer's Equity Securities will
initially share on a pro rata, per share basis in the
Distribution, in proportion to the amount of cash or
other consideration that they paid per share for
their Equity Securities (provided that the
Administrators have accepted the value of the other
consideration), until the shareholders who purchased
the Issuer's Equity Securities pursuant to the public
offering ("Public Shareholders") have received, or
have had irrevocably set aside for them, an amount
that is equal to one hundred percent (100%) of the
public offering's price per share times the number of
shares of Equity Securities that they purchased
pursuant to the public offering and which they still
hold at the time of the Distribution, adjusted for
stock splits, stock dividends recapitalizations and
the like; and
2. All holders of the Issuer's Equity Securities shall
thereafter participate on an equal, per share basis
times the number of shares of Equity Securities they
hold at the time of the Distribution, adjusted for
stock splits, stock dividends, recapitalizations and
the like.
3. The Distribution may proceed on lesser terms and
conditions that the terms and conditions stated in
paragraphs 1 and 2 above if a majority of the Equity
Securities that are not held by Security Holders,
officers, directors, or Promoters (as defined in the
NASAA Policy) of the Issuer, or their associates or
affiliates vote, or consent by consent procedure, to
approve the lesser terms and conditions.
B. In the event of a dissolution, liquidation, merger,
consolidation, reorganization, sale or exchange of the
Issuer's assets or securities (including by way of tender
offer), or any other transaction or proceeding with a person
who is a Promoter, which results in a Distribution while this
Agreement remains in effect, the Restricted Securities shall
remain subject to the terms of this Agreement.
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C. Restricted Securities may be transferred by will, the laws of
descent and distribution, the operation of law, or by order of
any court of competent jurisdiction and proper venue.
D. Restricted Securities of a deceased Security Holder may be
hypothecated to pay the expenses of the deceased Security
Holder's estate. The hypothecated Restricted Securities shall
remain subject to the terms of this Agreement. Restricted
Securities may not be pledged to secure any other debt.
E. Restricted Securities may be transferred by gift to the
Security Holder's family members, provided that the Restricted
Securities shall remain subject to the terms of the Agreement.
F. With the exception of paragraph A.3 above, the Restricted
Securities shall have the same voting rights as similar Equity
Securities not subject to the Agreement.
G. A notice shall be placed on the face of each stock certificate
of the Restricted Securities covered by the terms of the
Agreement stating that the transfer of the stock evidenced by
the certificate is restricted in accordance with the
conditions set forth on the reverse side of the certificate;
and
H. A typed legend shall be placed on the reverse side of each
stock certificate of the Restricted Securities representing
stock covered by this Agreement which states that the sale or
transfer of the shares evidenced by the certificate may be
subject to certain restrictions until the date that is 4 years
from completion of the offering pursuant to this Agreement
between the Security Holders (whether beneficial or of record)
and the Issuer, which agreement is on file with the Issuer and
the stock transfer agent from which a copy is available upon
request and without charge.
I. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrators
("Effective Date") and shall terminate:
1. On the anniversary of the fourth year from the
completion date of the public offering; or
2. On the date the Registration has been terminated if
no securities were sold pursuant thereto; or
3. If the Registration has been terminated, the date
that checks representing all of the gross proceeds
that were derived therefrom and addressed to the
public investors have been placed in the U. S. Postal
Service with first class postage affixed; or
4. On the date the securities subject to this Agreement
become "Covered Securities," as defined under the
National Securities Markets Improvement Act of 1996.
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J. This Agreement to be modified only with the written approval
of the Administrators.
IV. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of the Agreement signed by the
Signatories to be filed with the Administrators prior to the
Effective Date;
B. Copies of the Agreement and a statement of the per share
initial public offering price to be provided to the Issuer's
stock transfer agent.
C. Appropriate stock transfer orders to be placed with the
Issuer's stock transfer agent against the sale or transfer of
the shares covered by the Agreement prior to its expiration,
except as may otherwise be provided in the Agreement;
D. The above stock restriction legends to be placed on the
periodic statement sent to the registered owner if the
securities subject to this Agreement are uncertificated
securities.
Pursuant to the requirements of this Agreement, the Signatories have entered
into this Agreement, which may be written in multiple counterparts and each of
which shall be considered an original. The Signatories have signed the Agreement
in the capacities, and on the dates, indicated.
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
PETSVETSANDYOU, INC.
By:
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Date Xxxxx X. Xxxxxxxxx, President
(the "Issuer")
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Date XXXXX X. XXXXXXXXX
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XXXX X. XXXXX AND XXXXXXXX "XXXX" X.
XXXXX, AS TENANTS BY THE ENTIRETIES
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Date Xxxx X. Xxxxx
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Xxxxxxxx "Xxxx" X. Xxxxx
AND
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Date XXXXXXX XXXXXX, D.V.M.
(the "Security Holders")
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SCHEDULE A
LIST OF STATES
Alabama, Arizona, Arkansas, California, Connecticut, Delaware, Idaho, Indiana,
Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi,
Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota,
Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota,
Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Colorado,
Florida, Georgia, Illinois, Louisiana, Minnesota, New York, Ohio, Tennessee and
Wyoming.
This Schedule may be modified by the parties based on the number of states in
which the offering becomes effective.
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SCHEDULE B
LIST OF SECURITY HOLDERS AND SHARES SUBJECT TO LOCK-IN
NAME NUMBER OF SHARES SUBJECT TO LOCK-IN
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Xxxxx X. Xxxxxxxxx 20,443.2 shares of Class B common stock
0000 Xxxxxx Xxxxx 20 shares of Class A common stock
Xxxxx, Xxxxxxx 00000
Xxxx X. Xxxxx and Xxxxxxxx "Xxxx" X. Xxxxx, 20,4436.2 shares of Class B common stock
as tenants by the entireties 20 shares of Class A common stock
0000 Xxx Xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxxx, D.V.M. 20,443.2 shares of Class B common stock
0000 Xxxxxxxxx Xxxxxxxxx 2,180 shares of Class A common stock
Xxxxx, Xxxxxxx 00000 600 shares of preferred stock
*The number of shares reflects 1-for-5 reverse stock split of the
Company completed January 23, 2001. The number of shares subject to this
Agreement shall also include any and all additional shares of any class of the
Company acquired by any of the above parties pursuant to the anti-dilution
provisions contained in the Company's articles of incorporation.
