LOCK-UP AGREEMENT
EXHIBIT 10.4
THIS LOCK-UP AGREEMENT (this "Agreement") is made
and entered into on April ____, 2008 between the stockholder set forth on the
signature page to this Agreement (the "Holder") and
American Business Holdings, Inc., a Delaware corporation (the "Company").
RECITALS
A. The
Company has determined that it is advisable and in its best interest to enter
into that certain Securities Purchase Agreement dated the date hereof (the
"Securities Purchase
Agreement") with the Purchasers named therein (the "Purchasers"),
pursuant to which the Company will issue and sell in a private offering
securities of the Company (the "Offering"). Capitalized
terms used and not otherwise defined herein that are defined in the Securities
Purchase Agreement will have the meanings given such terms in the Securities
Purchase Agreement.
B. It
is a condition to the Purchasers' respective obligations to close under the
Securities Purchase Agreement and provide the financing contemplating by the
Offering that each Holder execute and deliver to the Company this
Agreement.
C. In
contemplation of, and as a material inducement for the Purchasers to enter into,
the Securities Purchase Agreement, the Holder and the Company have each agreed
to execute and deliver this Agreement.
NOW, THEREFORE, for and in
consideration of the mutual covenants and agreements set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, agree as
follows:
1. Effectiveness of
Agreement. This Agreement shall become null and void if the
Securities Purchase Agreement is terminated prior to closing.
The
Holder has independently evaluated the merits of its decision to enter into and
deliver this Agreement, and Holder confirms that it has not relied on the advice
of the Company or any other person.
2. Representations and
Warranties. Each of the parties hereto, by their respective
execution and delivery of this Agreement, hereby represents and warrants to the
others and to all third party beneficiaries of this Agreement that (a) such
party has the full right, capacity and authority to enter into, deliver and
perform its respective obligations under this Agreement, (b) this Agreement has
been duly executed and delivered by such party and is the binding and
enforceable obligation of such party, enforceable against such party in
accordance with the terms of this Agreement and (c) the execution, delivery and
performance of such party’s obligations under this Agreement will not conflict
with or breach the terms of any other agreement, contract, commitment or
understanding to which such party is a party or to which the assets or
securities of such party are bound.
Holder
hereby represents and warrants that all shares of Common Stock, or any economic
interest therein or derivative therefrom, that it beneficially owns (as
determined in accordance with Section 13(d) of the Exchange Act) (collectively
referred to as the “Holder’s Shares”)
shall be subject to the restrictions set forth in this
Agreement.
3. Tax
Liability. Holder hereby represents and warrants for the
benefit of the Purchasers that in the event the Company is required to pay
additional income taxes for fiscal years ending on or before May 31, 2007,
Holder shall immediately reimburse the Company for Holder’s pro rata share of
such payments.
4. Lockup. From and after the
date of this Agreement and through and including the twelve month
anniversary of the Closing Date under the Securities Purchase Agreement (the
"Lockup Period"),
Holder irrevocably agrees it will not offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, or announce the offering of, any of its
Holder’s Shares (including any securities convertible into, or exchangeable for,
or representing the rights to receive, Holder’s Shares). In
furtherance thereof, the Company will (x) place a stop order on all Holder’s
Shares, (y) notify its transfer agent in writing of the stop order and the
restrictions on such Holder’s Shares under this Agreement and direct the
transfer agent not to process any attempts by the Holder to resell or transfer
any Holder’s Shares in violation of this Agreement.
5. Reliance. Holder
acknowledges that the Company is relying upon the agreements of Holder contained
herein, and that the failure of Holder to perform the agreements contained
herein could have a detrimental effect upon the Company. Accordingly,
Holder understands and agrees that Holder’s agreements herein are
irrevocable.
6. Third-Party
Beneficiaries. The Holder and the Company acknowledge and
agree that this Agreement is entered into for the benefit of and is enforceable
by the Purchasers and their successors and assigns.
7. No Additional
Fees/Payment. Other than the consideration specifically
referenced herein, the parties hereto agree that no fee, payment or additional
consideration in any form has been or will be paid to the Holder in connection
with this Agreement.
8. Enumeration and
Headings. The enumeration and headings contained in this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction of any of the provisions of this
Agreement.
9. Counterparts. This
Agreement may be executed in facsimile and in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which shall together constitute one and the same
agreement.
10. Successors and
Assigns. This Agreement and the terms, covenants, provisions
and conditions hereof shall be binding upon, and shall inure to the benefit of,
the respective heirs, successors and assigns of the parties
hereto.
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11. Severability. If
any provision of this Agreement is held to be invalid or unenforceable for any
reason, such provision will be conformed to prevailing law rather than voided,
if possible, in order to achieve the intent of the parties and, in any event,
the remaining provisions of this Agreement shall remain in full force and effect
and shall be binding upon the parties hereto.
12. Amendment. This
Agreement may not be amended or modified in any manner except by a written
agreement executed by each of the parties hereto if and only if such
modification or amendment is consented to in writing by the Purchasers holding a
majority in interest of the Securities issued or issuable under the Securities
Purchase Agreement.
13. Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
14. No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
15. Remedies. The
Company and the Purchasers shall have the right to specifically enforce all of
the obligations of the Holder under this Agreement (without posting a bond or
other security), in addition to recovering damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by
law. Furthermore, the Holder recognizes that if it fails to perform,
observe, or discharge any of its obligations under this Agreement, any remedy at
law may prove to be inadequate relief to the Company or the
Purchasers. Therefore, the Holder agrees that each of the Company and
the Purchasers shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
16. Future Cooperation.
At any time, and from time to time, after the signing of this Agreement, Holder
will execute such additional instruments and take such action as may be
reasonably requested by the Company to carry out the intent and purposes of this
Agreement.
17. Governing
Law. This Agreement shall be governed by the internal laws of
the State of New York, without reference to principles of conflict of laws or
choice of laws.
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IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement as of the
day and year first above written.
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Name:
Number
of shares of Common Stock beneficially owned:
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By________________________________________
Name:
Title:
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