LOCKUP AGREEMENT
This AGREEMENT (the “Agreement”) is
made as of the 9th day of
July, 2010, by and between Xxxxxxx Xxx (“Holder”), maintaining
an address at Xxxxxxxx 0, Xxxxx Xxxxxxxx, Xxxxxx Xxxx Xxxx, Xx’an City, Anhui
Province, PRC 237000, in connection with his ownership of shares of Buyonate,
Inc., a Nevada corporation (the “Company”) and 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. The
Company is offering to certain subscribers (the “Subscribers”) on a
“best efforts” basis, investment units (each a “Unit” and collectively the
“Units”), each consisting of four (4) shares of the Company’s common stock,
$0.0001 par value per share (the “Common Stock”); a Series C warrant (the
“Series C Warrants”) to purchase one share of common stock
at an exercise price of $3.70 per share (the “C Warrant Shares”); and a Series D
warrant (the “Series D Warrants”) to purchase one share of common
stock at an exercise price of $4.75 per share (the “D Warrant Shares”)
(collectively, the C Warrant Shares and the D Warrant Shares are the “Warrant
Shares”) at a price of $10.56 (the “Issue Price”) for aggregate
gross proceeds of $3,000,000 (the “Minimum Offering”) to $5,000,000 (the
“Maximum Offering”) in gross aggregate proceeds. The Common Stock, Warrants and
Warrant Shares are hereinafter referred to as the “Purchased
Securities”.
x. Xxxxxx
is the beneficial owner of the amount of shares of the Common Stock of the
Company designated on the signature page hereto.
c. As
a condition to the Offering and as an inducement to the Subscribers to enter
into a subscription agreement pertaining to the purchase of Units by the
Subscribers (the “Subscription Agreement”), Holder understands that the
Subscribers have required, and the Company has agreed to obtain on behalf of the
Subscriber an agreement from the Holder to refrain from selling any of the
Lockup Shares, as defined below, for a period of eighteen (18) months from the
final closing date (the “Closing Date”) of the sale of Units (the “Restricted
Period”). Notwithstanding the foregoing or anything else to the contrary
contained herein, the Holder may transfer to American Capital Partners, LLC
(“ACP”), in a private transaction, pursuant to the Stock Option Agreement, dated
July 9, 2010, by and between the Holder and ACP (the “Option Agreement”) up to
the maximum number of shares of Common Stock which ACP may purchase upon
exercise of the option granted to ACP under the Option Agreement.
2. Sale
Restriction.
a. Holder
hereby agrees that during the Restriction Period, except as set forth in Section
1(c) herein, the Holder will not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, lend, 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, the “Lockup
Shares”), 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 the Lockup Shares held by Holder in violation of this
Agreement. The Company agrees not to facilitate 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 Holder 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 Holder. 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 any Subscriber 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. The
Holder irrevocably appoints the Company the Holder’s 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 the Holder with the same force and
validity as if served upon the 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 and the Holder’s legal representatives,
successors and assigns.
e. This
Agreement may be signed and delivered by facsimile signature and delivered
electronically.
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 July
9, 2010 among the Company and the Subscribers, may be enforced by the
Subscribers and may not be amended without the consent of the Subscribers who
constitute Majority Holders, as such term is defined in the Subscription
Agreement, which consent may be withheld for any reason.
[Signature
Page Follows]
IN
WITNESS WHEREOF, and intending to be legally bound hereby, Holder has executed
this Agreement as of the day and year first above written.
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HOLDER:
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(Signature
of Holder)
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Xxxxxxx Xxx
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(Print
Name of Holder)
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11,566,288
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Number
of Shares of Common Stock
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Beneficially
Owned
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COMPANY:
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BUYONATE,
INC.
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By:
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Name:
Xxxxxxx Xxx
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Title:
CEO
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