FORM OF LOCKUP AGREEMENT
This
AGREEMENT (the "Agreement") is made as of the ____ day of September, 2007,
by
______ ("Holder"), maintaining an address at c/o Pay88,
Inc., 0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, telecopier:
(000) 000-0000,
in
connection with his ownership of shares of Pay88, Inc.,
a
Nevada corporation
(the "Company").
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt
of
which consideration are hereby acknowledged, Holder agrees as
follows:
1. Background.
a.
Holder
is
the beneficial owner of the amount of shares of the Common Stock, $.001 par
value, of the Company (“Common Stock”) designated on the signature page
hereto.
x. Xxxxxx
acknowledges that the Company has entered into or will enter into at or about
the date hereof agreements with subscribers to the Company’s Notes, convertible
into Common Stock and Warrants (the “Subscribers”). Holder understands that, as
a condition to proceeding with the Offering, the Subscribers have required,
and
the Company has agreed to obtain on behalf of the Subscribers an agreement
from
the Holder to refrain from selling any securities of the Company from the date
of the Subscription Agreement until the sooner of (i) the Registration Statement
in connection with all of the Registrable Securities shall have been effective
for 365 days, or (ii) the Notes are no longer outstanding.
2. Sale
Restriction.
a. Holder
hereby agrees that during the Restriction Period, the Holder will not sell,
transfer or otherwise dispose of any shares of Common Stock or any options,
warrants or other rights to purchase shares of Common Stock or any other
security of the Company which Holder owns or has a right to acquire as of the
date hereof (collectively, “Locked Up Securities”), other than in connection
with an offer made to all shareholders of the Company in connection with merger,
consolidation or similar transaction involving the Company. Holder further
agrees that the Company is authorized to and the Company agrees to place "stop
orders" on its books to prevent any transfer of shares of Common Stock or other
securities of the Company held by Holder in violation of this Agreement. The
Company agrees not to allow to occur any transaction inconsistent with this
Agreement.
b. Any
subsequent issuance to and/or acquisition by Holder of Common Stock or options
or instruments convertible into Common Stock will be subject to the provisions
of this Agreement.
c. Notwithstanding
the foregoing restrictions on transfer, the Holder may, at any time and from
time to time during the Restriction Period, transfer the Common Stock (i) as
bona fide gifts or transfers by will or intestacy, (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
Holder, provided that any such transfer shall not involve a disposition for
value, (iii) to a partnership which is the general partner of a partnership
of
which the Holder is a general partner, provided, that, in the case of any gift
or transfer described in clauses (i), (ii) or (iii), each donee or transferee
agrees in writing to be bound by the terms and conditions contained herein
in
the same manner as such terms and conditions apply to the undersigned, and
(iv)
up to five percent (5%) per year of the Holder’s Common Stock component of the
Locked Up Securities as of the Initial Closing Date, in free market sales not
subject to further restrictions on sale but not more than one such percent
during any thirty day period. For purposes hereof, "immediate family" means
any
relationship by blood, marriage or adoption, not more remote than first
cousin.
3. Miscellaneous.
a. At
any
time, and from time to time, after the signing of this Agreement Holder will
execute such additional instruments and take such action as may be reasonably
requested by the Subscribers to carry out the intent and purposes of this
Agreement.
b. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of
New
York or in the federal courts located in the state of New York. The parties
to
this Agreement hereby irrevocably waive any objection to jurisdiction and venue
of any action instituted hereunder and shall not assert any defense based on
lack of jurisdiction or venue or based upon forum
non conveniens.
The
parties executing this Agreement and other agreements referred to herein or
delivered in connection herewith agree to submit to the in personam jurisdiction
of such courts and hereby irrevocably waive trial by jury.
The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid
or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.
Notices hereunder shall be given in the same manner as set forth in the
Subscription Agreement. Each party hereby irrevocably waives personal service
of
process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing
a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to
it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law. Holder irrevocably appoints each of the officers and directors
of and agents for service of process for the Company, its true and lawful agent
for service of process upon whom all processes of law and notices may be served
and given in the manner described above; and such service and notice shall
be
deemed valid personal service and notice upon Holder with the same force and
validity as if served upon Holder.
c. The
restrictions on transfer described in this Agreement are in addition to and
cumulative with any other restrictions on transfer otherwise agreed to by the
Holder or to which the Holder is subject to by applicable law.
d. This
Agreement shall be binding upon Holder, its legal representatives, successors
and assigns.
e. This
Agreement may be signed and delivered by facsimile and such facsimile signed
and
delivered shall be enforceable.
f. The
Company agrees not to take any action or allow any act to be taken which would
be inconsistent with this Agreement.
g. The
Holder acknowledges that this Lockup Agreement is being entered into for the
benefit of the Subscribers identified in the Subscription Agreement dated
September ____, 2007 among the Company and the Subscribers, may be enforced
by
the Subscribers and may not be amended without the consent of the Subscriber,
which may be withheld for any reason.
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h. Upper
case terms employed herein and not otherwise defined shall have the meanings
given such terms in the Subscription Agreement.
IN
WITNESS WHEREOF, and intending to be legally bound hereby, Holder has executed
this Agreement as of the day and year first above written.
| HOLDER: | |||
|
(Signature of Holder) |
|
(Print Name of Holder) |
|
Number of Shares of Common Stock
Beneficially Owned
|
| COMPANY: | ||
| PAY88, INC. | ||
| |
|
|
| By: | ||
|
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||
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