Exhibit 10.5
LOCK-UP AGREEMENT
LOCK-UP AGREEMENT (the "Agreement") dated as of April 13, 2006, by and
among INCENTRA SOLUTIONS, INC., a Nevada corporation (the "Company"), and XXXXXX
X. XXXXXXXX ("Xxxxxxxx").
W I T N E S S E T H
WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as of
April 13, 2006 (the "Purchase Agreement") between the Company, Xxxxxxxx and
Network System Technologies, Inc., an Illinois corporation, on the date hereof,
the Company has agreed to issue to Xxxxxxxx such number of shares of Common
Stock, $.001 par value, of the Company (the "Common Stock") as determined
pursuant to the Purchase Agreement; and
WHEREAS, following the consummation of the transactions contemplated in
the Purchase Agreement, Xxxxxxxx will beneficially own approximately 1,034,483
shares of Common Stock; and
WHEREAS, as a condition precedent to the consummation of the transactions
contemplated by the Purchase Agreement the Company, Xxxxxxxx and Network System
Technologies, Inc. desire to provide for certain restrictions on the transfer of
such shares by Xxxxxxxx;
NOW THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, it is hereby agreed as follows:
ARTICLE I
CERTAIN DEFINITIONS
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1.1 DEFINITIONS. Whenever used in this Agreement, unless otherwise
defined or the subject matter or context dictates, the following terms shall
have these respective meanings:
(a) "Affiliate" shall have the meaning ascribed to it in Rule
12(b)(2) promulgated under the Securities Exchange Act of 1934, as amended.
(b) "Agreement" means this Lock-up Agreement, any agreement
which is supplementary to or in amendment or confirmation of this Agreement, and
any schedules hereto or thereto.
(c) "Disposition" shall have the meaning assigned in
Section 2.1.
(d) "Lock Up Expiration Date" means April 13, 2008.
(e) "Person" means any individual, estate, trust, partnership,
joint venture, limited liability company, association, firm, corporation,
company or other entity.
(f) "Shares" mean the shares of Common Stock beneficially owned
by Xxxxxxxx, as well as: (i) any shares into which such shares may be converted,
reclassified, redesignated, subdivided, consolidated or otherwise changed; (ii)
any shares of the Company or any successor or other body corporate which may be
received by the holders of such shares on a Purchase, amalgamation or other
reorganization of or including the Company; and (iii) any securities which may
now or hereinafter be convertible or exercisable into such shares.
(g) "Transfer" shall have the meaning assigned in Section 2.1.
1.2 EXTENDED MEANINGS. Words importing the singular number include the
plural and vice versa and words importing gender include all genders.
ARTICLE II
DISPOSITION OF SHARES
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2.1 RESTRICTION ON TRANSFER OF SHARES.
(a) Except as provided in Section 2.1(b) and 2.1(c), prior to the Lock
Up Expiration Date, Xxxxxxxx may not sell, assign, transfer, mortgage, alienate,
pledge, hypothecate, create or permit to exist a security interest in or lien
on, place in trust or in any other way encumber or otherwise dispose of (any of
the foregoing shall constitute a "Transfer," and the consummation of such being
a "Disposition") any Shares now owned or any interest therein except as
expressly permitted by the terms and provisions of this Agreement. The Company
shall have no obligation to recognize or accede to any Disposition or to
register any Transfer of Shares on its books unless such Disposition is effected
in accordance with the terms and provisions of this Agreement. No Person who
purports to be a holder of Shares acquired in violation of the terms and
provisions of this Agreement shall be entitled to any rights with respect to
such Shares, including any rights to vote such Shares, to receive any dividends
declared thereon, or to receive any notice with respect thereto under this
Agreement or otherwise.
(b) Xxxxxxxx may Transfer all or a portion of his Shares for estate
planning purposes to a trust or other entity solely owned and controlled by
Xxxxxxxx. If Xxxxxxxx intends to make a Disposition of all or a portion of his
Shares pursuant to this paragraph, he shall give at least 30 days prior written
notice of such proposed Disposition to the Company. Any such notice shall
specify the number of Shares subject to such proposed disposition, identify the
proposed transferee and state the relationship between Xxxxxxxx and the proposed
transferee.
(c) Notwithstanding any provision to the contrary contained herein, on
or after the Lock Up Expiration Date, Xxxxxxxx (or any transferee
allowed under Section 2.1(b) above to which Shares have been
transferred) shall be permitted to Transfer or Dispose of the
Shares in any lawful manner without notice to the Company unless,
and to the extent, required by applicable law.
ARTICLE III
MISCELLANEOUS
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3.1 LEGEND. The Company may cause each certificate representing Shares
that are subject to this Agreement to have stamped, printed or typed thereon the
following legend:
The securities represented by this certificate are subject to a
Lock-Up Agreement, dated as of April 13, 2006, among Incentra
Solutions, Inc. (the "Company") and certain of its stockholders, a
copy of which may be examined at the principal office of the
Company.
3.2 NOTICE. Any notice or document required or permitted by this
Agreement to be given to a party hereto shall be in writing and is sufficiently
given if delivered personally, or if sent by prepaid certified mail, return
receipt requested, to the Company or to Xxxxxxxx addressed as follows:
the Company: Incentra Solutions, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: Xxxx Guest, Esq.
00 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxxx: Xxxxxx X. Xxxxxxxx
0000-00 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy to: Xxxxxxx X. Xxxxx, Esq.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Notice so mailed shall be deemed to have been given upon receipt if delivered
personally or on the fifth business day next following the date of the returned
receipt. Any notice delivered to the party to whom it is addressed shall be
deemed to have been given and received on the day it is delivered. Any party may
from time to time notify the others in the manner provided herein of
any change of address which thereafter, until changed by like notice, shall be
the address of such party for all purposes hereof.
3.3 TERM OF AGREEMENT.
(a) The provisions of this Agreement shall terminate as
provided in Article II or on such earlier date as is mutually agreed in writing
by the Company and Xxxxxxxx.
(b) Nothing contained in this Section 3.3 shall affect or
impair any rights or obligations arising prior to the time of the termination of
this Agreement, or which may arise by an event causing the termination of this
Agreement.
3.4 SEVERABILITY. If in any jurisdiction, any provision of this
Agreement or its application to any party or circumstance is restricted,
prohibited or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of such provision in any other
jurisdiction or its application to other parties or circumstances.
3.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document.
3.6 ENTIRE AGREEMENT; ETC. This Agreement sets forth the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, among the parties hereto and there are no warranties,
representations and other agreements between the parties hereto in connection
with the subject matter hereof except as specifically set forth herein or
therein. No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the Company and Xxxxxxxx. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
3.7 TRANSFEREES BOUND. Each Disposition otherwise permitted by Article
II hereof shall not become effective unless and until the transferee executes
and delivers to the Company a counterpart to this Agreement, agreeing to be
treated in the same manner as Xxxxxxxx. Upon such Disposition and such execution
and delivery, the transferee shall be bound by, and entitled to the benefits of,
this Agreement with respect to the transferred Shares in the same manner as
Xxxxxxxx.
4.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed in Delaware.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto as of the date first above written.
INCENTRA SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx III
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Name: Xxxxxx X. Xxxxxxx III
Title: Chief Executive Officer
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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