PROMOTIONAL SHARES LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement ("Agreement"), which was entered
into on the ___ day of December, 2002, by and between Lone Moose Adventures,
Inc. a Nevada corporation ("Issuer"), whose principal place of business is
located in Salt Lake City, Utah, and Xxxxxxxxxxx X. Xxxxxx ("Security Holder")
witness that:
A. The issuer has filed an application with the Securities
Administrator of the State of Utah ("Administrator") to register
certain of its Equity Securities for sale to public investors who
are residents of that state ("Registration");
B. The Security Holder is the owner of 500,000 shares of the Issuer's
common stock;
C. As a condition to Registration, the Issuer and Security Holder
("Signatories") agree to be bound by the terms of this Agreement.
II. THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate,
assign, grant any option for the sale of, or otherwise transfer or dispose of,
whether or not for consideration, directly or indirectly, PROMOTIONAL SHARES
as defined in the North American Securities Administrators Association
("NASAA") Statement of Policy on Corporate Securities Definitions and all
certificates representing stock dividends, stock splits, recapitalizations,
and the like, that are granted to, or received by, the Security Holder while
the PROMOTIONAL SHARES are subject to this Agreement ("Restricted
Securities").
Beginning two years from the completion date of the public offering, two
and one-half percent (2-1/2 %) of the Restricted Securities may be released
each quarter pro rata among the Security Holders. All remaining Restricted
Securities shall be released from escrow on the anniversary of the fourth year
from the completion date of the public offering.
III. THEREFORE, the Signatories agree and will cause the following:
A. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or
securities (including by way of tender offer), or any other
transaction or proceeding with a person who is not a Promoter,
which results in the distribution of the Issuer's assets or
securities ("Distribution"), while this Agreement remains in
effect that:
1. All holders of the Issuer's EQUITY SECURITIES will initially
share on a pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other consideration that
they paid per share for their EQUITY SECURITIES (provided that
the Administrator has accepted the value of the other
consideration), until the shareholders who purchased the
Issuer's EQUITY SECURITIES pursuant to the public offering
("Public Shareholders") have received, or have had irrevocably
set aside for them, an amount that is equal to one hundred
percent (100%) of the public offering's price per share times
the number of shares of EQUITY SECURITIES that they purchased
pursuant to the public offering and which they still hold at
the time of the Distribution, adjusted for stock splits, stock
dividends, recapitalizations and the like; and
2. All holders of the Issuer's EQUITY SECURITIES shall thereafter
participate on an equal, per share basis times the number of
shares of EQUITY SECURITIES they hold at the time of the
Distribution, adjusted for stock splits, stock dividends,
recapitalizations and the like.
3. The Distribution may proceed on lesser terms and conditions
than the terms and conditions stated in paragraphs 1 and 2
above if a majority of the EQUITY SECURITIES that are not held
by Security Holders, officers, directors, or Promoters of the
Issuer, or their associates or affiliates vote, or consent by
consent procedure, to approve the lesser terms and conditions.
B. In the event of a dissolution liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or
securities (including by way of tender offer), or any other
transaction or proceeding with a person who is a Promoter, which
results in a Distribution while this Agreement remains in effect,
the Restricted Securities shall remain subject to the terms of
this Agreement.
C. Restricted Securities may be transferred by will, the laws of
descent and distribution, the operation of law, or by order of any
court of competent jurisdiction and proper venue.
D. Restricted Securities of a deceased Security Holder may be
hypothecated to pay the expenses of the deceased Security Holder's
estate. The hypothecated Restricted Securities shall remain
subject to the terms of this Agreement. Restricted Securities may
not be pledged to secure any other debt.
E. Restricted Securities may be transferred by gift to the Security
Holder's family members, provided that the Restricted Securities
shall remain subject to the terms of this Agreement.
F. With the exception of paragraph A.3 above, the Restricted
Securities shall have the same voting rights as similar EQUITY
SECURITIES not subject to the Agreement.
G. A notice shall be placed on the face of each stock certificate of
the Restricted Securities covered by the terms of the Agreement
stating that the transfer of the stock evidenced by the
certificate is restricted in accordance with the conditions set
forth on the reverse side of the certificate; and
H. A typed legend shall be placed on the reverse side of each stock
certificate of the Restricted Securities representing stock
covered by the Agreement which states that the sale or transfer of
the shares evidenced by the certificate is subject to certain
restrictions until _____ pursuant to an agreement between the
Security Holder (whether beneficial or of record) and the Issuer,
which agreement is on file with the Issuer and the stock transfer
agent from which a copy is available upon request and without
charge.
I. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrator
("Effective Date") and shall terminate:
1. On the anniversary of the fourth year from the completion date
of the public offering; or
2. On the date the Registration has been terminated if no
securities were sold pursuant thereto; or
3. If the Registration has been terminated, the date that checks
representing all of the gross proceeds that were derived
therefrom and addressed to the public investors have been placed
in the U.S. Postal Service with first class postage affixed; or
4. On the date the securities subject to this Agreement become
"Covered Securities" as defined under the National Securities
Markets Improvement Act of 1996.
J. This Agreement to be modified only with the written approval of
the Administrator.
K. Nothing in this Agreement shall be construed to limit the Issuer's
ability to acquire and cancel PROMOTIONAL SHARES in connection
with any financing that the Issuer may arrange during the term
hereof.
IV. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of the Agreement signed by the Signatories to
be filed with the Administrator prior to the Effective Date;
B. Copies of the Agreement and a statement of the per share initial
public offering price to be provided to the Issuer's stock transfer
agent;
C. Appropriate stock transfer orders to be placed with the Issuer's
stock transfer agent against the sale or transfer of the shares
covered by the Agreement prior to its expiration, except as may
otherwise be provided in this Agreement;
D. The above stock restriction legends to be placed on the periodic
statement sent to the registered owner if the securities subject to
this Agreement are uncertificated securities.
Pursuant to the requirements of this Agreement, the Signatories have entered
into this Agreement, which may be written in multiple counterparts and each of
which shall be considered an original. The Signatories have signed the
Agreement in the capacities, and on the dates, indicated.
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
LONE MOOSE ADVENTURES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
/s/ Xxxxxxxxxxx X. Xxxxxx
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Signature
Xxxxx Xxxxxx
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Printed Name of Security Holder
