LOCK-UP AGREEMENT
Exhibit
10.4
THIS
LOCK-UP AGREEMENT (this “Lock-Up Agreement”), dated as of March 14, 2008, by and
among Intelli-Check - Mobilisa, Inc., a Delaware corporation (the
“Company”) and the shareholder signatory hereto (the
“Shareholder”).
WITNESSETH:
WHEREAS,
this Lock-Up Agreement is made pursuant to the Merger Agreement, dated November
20, 2007, by and among the Company, Intelli-Check Merger Sub, Inc., a Washington
corporation, Mobilisa, Inc., a Washington corporation, and certain common
shareholders of Mobilisa, Inc. (the “Merger Agreement”).
WHEREAS,
the Company has entered into the Merger Agreement pursuant to which it will,
among other things, issue that number of shares of its common stock (the “Common
Stock”) and/or issue that number of options to purchase shares of the Company’s
common stock (the “Options”) set forth opposite the name of such Shareholder on
Exhibit
A;
and
WHEREAS, it
is a
condition of the Merger Agreement that the Shareholder enter into a lock-up
agreement with the Company in the form of this Lock-Up Agreement relating to
such Common Stock and the shares of the Company’s common stock underlying any
such Options (such Common Stock and the shares of the Company’s common stock
underlying any such Options, the “Shares”).
NOW,
THEREFORE, in
consideration of the foregoing and the terms, conditions and mutual covenants
appearing in this Lock-Up Agreement, the parties hereto hereby agree as
follows:
1. Terms.
Capitalized terms used and not otherwise defined herein that are defined in
the
Merger Agreement shall have the meanings given to such terms in the Merger
Agreement.
2. Lock-Up.
(a) The
Company agreed to file a registration statement with the SEC relating to the
resale of the Shares on Form S-1, or such other form as may be applicable,
within 120 days of the Closing Date and to use commercially reasonable efforts
to have such registration statement declared effective by the staff of the
SEC
and to keep such registration effective during the Effectiveness Period (as
defined in the Merger Agreement). Regardless of the effective date of such
registration statement, the Shareholder may not offer, sell, contract to sell,
pledge or grant any option to purchase (collectively, a “Disposition”) any of
the Shares for a period commencing on the date hereof and ending on the six
(6)
month anniversary of the date of this Lock-Up Agreement (the “First Lock-Up
Period”); provided,
however, that the Shareholder may transfer any Shares during such First Lock-Up
Period: (1) to family members and/or estate planning vehicles; (2) to any
partner, shareholder or member of the Shareholder if, prior to such transfer,
such partner, shareholder or member agrees in writing to be bound by the
restrictions set forth herein; or (3) to any controlled affiliate of the
Shareholder if, prior to such transfer, such person agrees in writing to be
bound by the restrictions set forth herein.
(b)For
a
period of six (6) months after the expiration of the First Lock-Up Period,
the
Shareholder will be permitted to undertake a Disposition of up to three percent
(3%) of his, her or its respective shareholdings for any given consecutive
three
(3) month period.
(c) For
the
purpose of effectuating this Lock-Up Agreement, the Shareholder hereby consents
to the Company issuing a stop transfer instruction to the transfer agent in
accordance with the terms of this Lock-Up Agreement. Any sale of Shares in
violation of this Lock-Up Agreement by the Shareholder shall constitute a
material breach of this Lock-Up Agreement.
(d) Notwithstanding
anything contrary in this Lock-Up Agreement, the Shareholder may settle any
options, calls or similar obligations with respect to the Shareholder’s Company
Common Stock or Parent Common Stock that exist as of the date of the Merger
Agreement.
(e)The
Shareholder acknowledges that its breach or impending violation of any of the
provisions of this Lock-Up Agreement may cause irreparable damage to the Company
for which remedies at law would be inadequate. The Shareholder further
acknowledges and agrees that the provisions set forth herein are essential
terms
and conditions of the Lock-Up Agreement that the Company may seek to enforce
in
addition to any of its rights or remedies provided under any other agreement
or
decree or order by any court of competent jurisdiction enjoining such impending
or actual violation of any of such provisions. Such decree or order, to the
extent appropriate, shall specifically enforce the full performance of any
such
provision by the Shareholder, and the Shareholder and the Company hereby consent
to the jurisdiction of any such court of competent jurisdiction, state or
federal, sitting in the City of Wilmington, State of Delaware, and authorizes
the entry on its behalf of any required appearance for such purpose. This remedy
shall be in addition to all other remedies available to the Company at law
or
equity.
3. Successors
in Interest.
Subject
to Section 7 hereunder,
this Lock-Up Agreement shall inure to the benefit of, and be binding upon,
the
Company and its successors and assigns, and upon the Shareholder and his or
her
heirs, executors, administrators, legatees and legal
representatives.
4. Severability.
Should
any part of this Lock-Up Agreement, for any reason whatsoever, be declared
invalid, illegal, or incapable of being enforced in whole or in part, such
decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in full force and effect as if this Lock-Up Agreement
had
been executed with the invalid portion thereof eliminated, and it is hereby
declared the intention of the parties hereto that they would have executed
the
remaining portion of this Lock-Up Agreement without including therein any
portion which may for any reason be declared invalid.
5. Effect
of Termination of Merger Agreement.
If the
Merger Agreement (other than the provisions thereof that survive termination)
is
terminated or is to be terminated prior to the payment for and delivery of
the
Shares, the Company will release the Shareholder from its obligations under
this
Lock-Up Agreement.
6. Governing
Law.
This
Lock-Up Agreement shall be construed and enforced in accordance with the laws
of
the State of Delaware applicable to agreements made and to be performed in
such
state without application of the principles of conflicts of laws of such
state.
7. No
Assignment.
This
Lock-Up Agreement and all rights hereunder are personal to the parties and
shall
not be assignable, and any purported assignment in violation thereof shall
be
null and void.
8. Notices.
All
notices, requests, demands and other communications to any party hereunder
shall
be in writing and shall be given to such party at its address or telecopier
number set forth below, or such other address or telecopier number as such
party
may hereinafter specify by notice to each other party hereto:
if
to the
Company, to:
000
Xxxxxxxxx Xxxx Xxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxx, Interim Chairman & CEO
Telecopy:
(000) 000-0000
with
a
copy
to
(which shall not constitute notice):
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxxx X. Xxxxxxxx
Telecopy:
(000) 000-0000
if
to the
Shareholder:
As
set
forth on Exhibit
A
with
a
copy
to
(which shall not constitute notice):
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxxxxxx
Telecopy:
(000) 000-0000
Each
such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the appropriate answer back is received or, (ii) if given by
certified mail, 72 hours after such communication is deposited in the mails
with
first class and certified postage prepaid, properly addressed or, (iii) if
given
by any other means, when delivered at the address specified herein.
9. Waiver.
The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Lock-Up Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and
said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or any condition of this Lock-Up Agreement on the part of
either party shall be effective for any purpose whatsoever, unless such waiver
is in writing and signed by such party.
IN
WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement as
of
the day and year first written above.
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INTELLI-CHECK
–
MOBILISA, INC.
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By:
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/s/
Xxxxxx Xxxxxx
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Name: Xxxxxx
Xxxxxx
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Title:
Chief Executive Officer
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SHAREHOLDER:
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By:
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/s/
Xxxxxx Xxxxxx
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Name:
Xxxxxx
Xxxxxx
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