LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT (the "Lock-up Agreement") is entered into effective as of
January 31, 2007, by and between Xxxx
Xxxxxxxx
(the
"Shareholder"), a shareholder of Smart Kids Group, Inc., a Florida corporation
(the ("Company"), and the Company;
WHEREAS,
Shareholder beneficially owns 4,400,000
shares
of common stock, $.0001 par value per share of the Company (the "Common
Stock");
WHEREAS,
Shareholder understands that the Company needs additional financing, is in
the
process of applying for a listing with the National Association of Securities
Dealers (“NASD”), and believes that a lock-up on transfer of the Shareholder's
shares will improve the Company's prospects for obtaining additional financing
as well as for a listing;
WHEREAS,
for valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Shareholder has agreed to enter into this Lock-up
Agreement.
NOW,
THEREFORE, in consideration of the foregoing, the parties hereto agree as
follows:
1.
Lock-up on Transfer of Shares
(a)
The
Shareholder agrees not, directly or indirectly, to sell, offer to sell, contract
to sell, assign, pledge, hypothecate, encumber or otherwise transfer, or enter
into any contract, option or other arrangement or understanding with respect
to
the sale, assignment, pledge or other disposition of (collectively, "Transfer")
any rights with respect to (i)
4,400,000
shares
of the Common Stock currently owned by Shareholder for a period commencing
on
the date hereof and continuing through January 31, 2009 (the "Lock-up Period")
except as expressly provided herein. The foregoing restriction has been
expressly agreed to preclude Shareholder from engaging in any hedging or other
transaction during the Lock-up Period that
is
designed to or reasonably expected to lead to or result in a Transfer
of the Common Stock. Such prohibited hedging or other transaction would include,
without limitation, any short sale (whether or not against the box) or any
purchase, sale, or grant of any right (including, without limitation, any put
or
call option) with respect to the Common Stock or with respect to any security
(other than a broad-based market basket or index) that includes, relates to
or
derives any significant part of its value from the Common Stock.
(b)
The
Shareholder also agrees and consents to the entry of stop transfer instructions
with the Company's Transfer Agent against the Transfer of Common Stock held
by
Shareholder except in compliance with the terms and conditions of this Lock-up
Agreement.
(c)
The
restrictions contained in this Lock-up Agreement shall apply to Shareholder
with
respect to any and all Transfers of any of the Company's Common Stock with
the
exception of that Common Stock acquired by the Shareholder on the open market.
Any and all other transfers are prohibited by this Agreement.
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2.
Early Termination of Lock-Up Period.
(a)
In
the event any Common Stock of Shareholder is subject to any involuntary
transfer, whether by reason of death, bankruptcy or divorce proceedings or
otherwise, the transferee of such Common Stock shall take such Common Stock
subject to this Lock-up Agreement. Any purported transfer of any Common Stock
of
Shareholder that is not in accordance with this Lock-Up Agreement shall be
null
and void, and shall not operate to transfer any right, title or interest in
such
Common Stock to the purported transferee. The Shareholder agrees that the
Company shall not cause or permit the transfer of any Common Stock of
Shareholder to be made on its books unless the transfer is permitted by this
Lock-up Agreement and has been made in accordance with its terms.
(b)
The
restrictions contained in this Lock-up Agreement shall not apply to any Transfer
by Shareholder with respect to transfers of any Common Stock acquired on the
open market.
3.
Representations, Warranties and Covenants of the Shareholder.
Shareholder
represents and warrants to, and agrees with, the Company that:
(a)
this
Lock-up Agreement has been duly executed and delivered by Shareholder and
constitutes a valid and binding obligation of Shareholder enforceable in
accordance with its terms;
(b)
neither the execution and delivery of this Lock-up Agreement nor the
consummation of the transactions contemplated hereby will result in any breach
or violation of, be in conflict with or constitute a default under any agreement
or instrument to which Shareholder is a party or by which Shareholder may be
affected or is bound;
(c)
Shareholder is not subject to or obligated under any provisions of any law,
regulation, order, judgment or decree which would be breached or violated by
the
execution, delivery and performance of this Lock-up Agreement by Shareholder
and
the consummation of the transactions contemplated hereby; and
(d)
Shareholder is now, and will be at all times up to the termination of this
Lock-up Agreement, the record and beneficial owner of the Common Stock which
at
such time is subject to Transfer restrictions pursuant to the terms hereof,
free
and clear of any pledge, lien, security interest, mortgage, charge, claim,
equity, option, proxy, voting restriction, right of first refusal, limitation
on
disposition, adverse claim of ownership or use or encumbrance of any kind,
other
than pursuant to this Lock-up Agreement.
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4.
Miscellaneous.
(a)
Specific Performance. Shareholder acknowledges that damages would be an
inadequate remedy for any breach of the provisions of this Lock-up Agreement
and
agrees that the obligations of Shareholder hereunder shall be specifically
enforceable and Shareholder shall not take any action to impede the Company
from
seeking to enforce such right of specific performance. Shareholder agrees that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of their obligations in this Lock-up Agreement and hereby
agrees to waive in any action for specific performance of any such obligation,
the defense that a remedy at law would be adequate.
(b)
Notices. All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Lock-up Agreement shall be in
writing and shall be given and shall be deemed to have been given when
personally delivered or three days after being mailed, if mailed by first class
mail, return receipt requested, or one day after being sent by reputable
overnight delivery service, or when receipt is acknowledged, if sent by
facsimile, telecopy or other electronic transmission device. Notices, demand
and
communications to Shareholder and the Company will, unless another address
is
specified in writing, be sent to the address indicated below, except that
notices of change of address shall only be effective upon receipt:
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If
to Shareholder:
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0000
- 000 Xxxxxx
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Xxxxxxxx,
Xxxxxxx
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X0X
0X0 Xxxxxx
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If
to the Company:
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United
States:
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Canada
(Head Office):
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Smart
Kids Group, Inc.
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Smart
Kids Group, Inc.
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00
Xxxxxx Xxxxxxxx Xxxx
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Xxxxx
000, 9768 - 170 Street
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Santa
Fe, New Mexico 87505
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Xxxxxxxx,
Xxxxxxx X0X 0X0
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(c)
Assignment. This Lock-up Agreement and all the provisions hereof will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that neither this Lock-up Agreement
nor
any of the rights, interests or obligations hereunder may be assigned by the
Shareholder hereto without the prior written consent of the
Company.
(d)
Governing Law. The internal law, without regard for conflicts of law principals,
of the State of Florida will govern all questions concerning the construction,
validity and interpretation of this Lock-up Agreement and the performance of
the
obligations imposed by this Lock-up Agreement.
(e)
Counterparts. This Lock-up Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than
one
party, but all such counterparts taken together shall constitute one and the
same instrument.
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(f)
Severability. Whenever possible, each provision of this Lock-up Agreement will
be interpreted in such manner as to be effective and valid under applicable
law,
but if any provision of this Lock-up Agreement is held to be prohibited by
or
invalid under applicable law, such provision will be ineffective only to the
extent of such provision or invalidity, without invalidating the remainder
of
such provision or the remaining provisions of this Lock-up
Agreement.
(g)
Amendment Waiver. This Lock-up Agreement may not be amended or waived except,
(i) in a writing executed by the party against which such amendment or waiver
is
sought to be enforced, and (ii) without the expressed written consent of the
Company. No course of dealing between or among any persons having any interest
in this Lock-up Agreement will be deemed effective to modify or amend any part
of this Lock-up Agreement or any rights or obligations of any person under
or by
reason of this Lock-up Agreement.
(h)
Review by Shareholder. The Shareholder has had the opportunity to review this
Lock-up Agreement with legal counsel and other advisors as the Shareholder
deemed advisable, prior to the Shareholder's execution of this Agreement, and
the Shareholder has not relied on any advice other than from his own legal
counsel.
(i)
Complete Agreement. This Lock-up Agreement contains the complete agreement
between the parties hereto and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way.
IN
WITNESS WHEREOF, the parties hereby have executed this Lock-up Agreement as
of
the date first written above.
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Xxxxxxx
Xxxxxxxx
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Chief
Executive Officer
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(Shareholder)
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