EXHIBIT 10.5
LOCKUP AGREEMENT
This Lockup Agreement (this "Agreement") is made and entered into as of
August 20, 2002, by and between Mobility Electronics, Inc., a Delaware
corporation ("Parent"), and Xxxx Xxxx ("Shareholder"). Terms used herein but not
otherwise defined shall have the meanings ascribed thereto in the Merger
Agreement (as defined below).
WHEREAS, CES Acquisition, Inc., a Texas corporation and wholly-owned
subsidiary of Parent ("Merger Sub"), Parent, Cutting Edge Software, Inc., a
Texas corporation (the "Company"), and Xxxx Xxxx, as the sole shareholder of the
Company, have entered into that certain Agreement and Plan of Merger, of even
date herewith (the "Merger Agreement"), pursuant to which, among other things,
Merger Sub will be merged with and into the Company (the "Merger"); and
WHEREAS, as a condition to and an inducement to Parent's agreement to
consummate the Merger, Shareholder has agreed to enter into this Agreement; and
WHEREAS, the agreements of Shareholder contained herein are an
important aspect of the Merger, and Parent would not have entered into the
Merger Agreement absent the covenant contained therein providing for the
execution by Shareholder of this Agreement.
NOW, THEREFORE, for and in consideration of the agreements and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Lockup. Without the prior written consent of Parent, Shareholder
agrees not to, directly or indirectly, offer, sell, contract to sell, grant any
option to purchase, hypothecate, pledge, grant any rights with respect to or
otherwise dispose of (each, a "Transfer") the following shares of Parent Common
Stock acquired by Shareholder pursuant to the Agreement and Plan of Merger (the
"Locked Up Shares"):
(a) 597,295, which shares represent seventy-five percent (75%)
of the Shares, during the first ninety (90) day period from and after from the
Effective Date;
(b) 398,197, which shares represent fifty percent (50%) of the
Shares, during the second ninety (90) day period from and after from the
Effective Date; and
(c) 199,098, which shares represent twenty-five percent (25%)
of the Shares, during the third ninety (90) day period from and after from the
Effective Date.
Notwithstanding the foregoing, Shareholder may Transfer all or any
portion of the Locked Up Shares in a private transaction or a series of private
transactions if the transferee or transferees execute an agreement with Parent
(which agreement shall be reasonably satisfactory to Parent) to the effect that
the Locked Up Shares shall be subject to the restrictions set forth in this
Agreement. Shareholder agrees and consents to the entry of stop transfer
instructions with the transfer agent for the Parent Common Stock against the
transfer of the Locked Up Shares
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held by Shareholder except in compliance with the foregoing restrictions.
Shareholder is aware that Parent is relying upon this Agreement in entering into
the Agreement and Plan of Merger.
2. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to its choice
of law principles.
3. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
MOBILITY ELECTRONICS, INC.
By: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx,
Chief Executive Officer
/S/ Xxxx Xxxx
Xxxx Xxxx
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