LOCK-UP AGREEMENT
Exhibit
4.3
THIS
AGREEMENT (this "Agreement")
is
dated as of October ___, 2007 by and among International Imaging Systems, Inc.,
a Delaware corporation, (the "Company"),
and
the Stockholders of the Company listed on Schedule
A
attached
hereto (collectively, the "Stockholders").
WHEREAS,
to induce the Purchasers (the “Purchasers”)
to
enter into the Series A Convertible Preferred Stock Purchase Agreement dated
as
of October __, 2007 (the “Purchase
Agreement”)
by and
among the Company and the Purchasers, the Stockholders have agreed not to sell
any shares of the Company’s common stock, $0.001 par value per share (the
"Common
Stock"),
that
such Stockholders presently own or may acquire after the date hereof, except
in
accordance with the terms and conditions set forth herein. Capitalized terms
used herein without definition shall have the meanings assigned to such terms
in
the Purchase Agreement.
NOW,
THEREFORE, in consideration of the covenants and conditions hereinafter
contained, the parties hereto agree as follows:
1. Restriction
on Transfer; Term.
Each
Stockholder hereby agrees with the Company that such Stockholder will not offer,
sell, contract to sell, assign, transfer, hypothecate, pledge or grant a
security interest in, or otherwise dispose of, or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition of (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of the
Company), directly or indirectly (all such foregoing methods being collectively
referred to herein as “Sell”), any of the shares of Common Stock during the
period commencing on the Closing Date and expiring on the date that is twelve
months following the effective date of the registration statement (the
“Effective
Date”)
filed
by the Company with the Securities and Exchange Commission providing for the
resale of the shares of Common Stock issuable upon conversion of the Preferred
Shares issued pursuant to the Purchase Agreement (the “Period”);
provided
that,
each
Stockholder also agrees that it shall not Sell more than one-tenth (1/10) of
the
shares of Common Stock he/she owns for a period of twenty four (24) months
following the Period.
2. Permitted
Dispositions.
The
following dispositions of Common Stock shall not be subject to the restriction
on transfer set forth in Section 1:
(a) Each
Stockholder may transfer Common Stock to his or her spouse, siblings, parents
or
any natural or adopted children or other descendants or to any personal trust
for the sole benefit of such family members and/or Stockholder;
(b) Each
Stockholder may transfer Common Stock on his or her death to such Stockholder’s
estate, executor, administrator or personal representative or to such
Stockholder’s beneficiaries pursuant to a devise or bequest or by laws of
descent and distribution;
(c) Each
Stockholder may transfer Common Stock as a gift or other transfer without
consideration;
(d) Each
Stockholder may make a bona fide pledge of Common Stock to a lender; and,
(e) Each
Stockholder may participate
in any
transaction in which all holders of the Common Stock of the Company participate
or have the opportunity to participate pro rata, including, without limitation,
a merger, consolidation or binding share exchange involving the Company, a
disposition of the Common Stock in connection with the exercise of any rights,
warrants or other securities distributed to the Company’s stockholders, or a
tender or exchange offer for the Common Stock,
provided,
however,
that in
the case of any transfer of Common Stock pursuant to clauses (a), (c), and
(d),
the transferor shall, at the request of the Company, provide evidence (which
may
include, without limitation, an opinion of counsel satisfactory in form, scope
and substance to the Company in its sole discretion as the issuer thereof)
satisfactory to the Company that the transfer is exempt from the registration
requirements of the Securities Act, and such Common Stock shall remain subject
to this Agreement and, as a condition of the validity of such disposition,
the
transferee shall be required to execute and deliver a counterpart of this
Agreement. Thereafter, such transferee shall be deemed to be the Stockholder
for
purposes of this Agreement.
3. Ownership. During
the Period, the Stockholders shall retain all rights of ownership in the Common
Stock, including, without limitation, voting rights and the right to receive
any
dividends, if any, that may be declared in respect thereof.
5. Notices.
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall
be
deemed to be delivered and received by the intended recipient as follows: (i)
if
personally
delivered, on the business day of such delivery (as evidenced by the receipt
of
the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, four (4) business days after being mailed, (iii)
if
delivered by overnight courier (with all charges having been prepaid), on the
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (iv) if delivered by facsimile
transmission, on the business day of such delivery if sent by 6:00 p.m. in
the
time zone of the recipient, or if sent after that time, on the next succeeding
business day (as evidenced by the printed confirmation of delivery generated
by
the sending party's telecopier machine). If any notice, demand, consent,
request, instruction or other communication cannot be delivered because of
a
changed address of which no notice was given (in accordance with this Section
5), or the refusal to accept same, the notice, demand, consent, request,
instruction or other communication shall be deemed received on the second
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers
as
applicable.
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If
to the
Company:
International
Imaging Systems, Inc.
c/oXi'an
Baorun Industrial Development Co. Ltd.
Dongxin
Century Square, 7th Floor
Xi'an
East Xxxx Xxxx-tech Industrial Development Park
Shannxi
Province, P.R. China
Attn:
Xx.
Xxx Xincheng
Tel:
00 00 00000000
Fax:
00
00 00000000
With
copies to (which shall not constitute notice):
Loeb
& Loeb
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX00000
Attn:
Xxxxxxxx X. Xxxxxxxx
Tel:
000.000.0000
Fax:
212.407-4990
or
to
such other address as any party may specify by notice given to the other party
in accordance with this Section 5.
6. Amendment.
This
Agreement may not be modified, amended, altered or supplemented, except by
a
written agreement executed by each of the parties hereto.
7. Entire
Agreement.
This
Agreement
contain
the entire understanding and agreement of the parties relating to the subject
matter hereof and supersedes all prior and/or contemporaneous understandings
and
agreements of any kind and nature (whether written or oral) among the parties
with respect to such subject matter, all of which are merged
herein.
8. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to agreements made and to be performed in that
state, without regard to any of its principles of conflicts
of laws or other laws which would result in the application of the laws of
another jurisdiction. This Agreement shall be construed and interpreted without
regard to any presumption against the party causing this Agreement to be
drafted.
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9. Waiver
of Jury Trial.
EACH OF
THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES
UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE
FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
OBJECTION TO VENUE IN NEW YORK COUNTY OR SUCH DISTRICT, AND AGREES THAT SERVICE
OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER PROCESS RELATING TO SUCH SUIT, ACTION
OR OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION 5.
10. Severability.
The
parties agree that if any provision of this Agreement be held to be invalid,
illegal or unenforceable in any jurisdiction, that holding shall be effective
only to the extent of such invalidity, illegally or unenforceability without
invalidating or rendering illegal or unenforceable the
remaining provisions hereof, and any such invalidity, illegally or
unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. It is the intent of the parties that this Agreement be fully
enforced to the fullest extent permitted by applicable law.
11. Binding
Effect; Assignment.
This
Agreement and the rights and obligations hereunder may not be assigned by any
party hereto without the prior written consent of the other parties hereby.
This
Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and
their respective successors and permitted assigns.
13. Counterparts.
This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original, and all of which, when taken together,
shall constitute
one and the same document. This Agreement shall become effective when one or
more counterparts, taken together, shall have been executed and delivered by
all
of the parties.
In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect
as if
such facsimile signature were the original thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above herein.
INTERNATIONAL
IMAGING SYSTEMS, INC.
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By: | ||
Name:
Xx. Xxx Xincheng
Title:
CEO
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STOCKHOLDER
Redsky
Group Limited
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By: | ||
Name:
Title:
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[Signature
Page to Lock-Up Agreement]
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Schedule
A
Redsky
Group Limited
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