August 29, 1997
RT Industries, Inc.
Attn: President
0000 X. Xxxx Xxxx Xxxxxxxxx
Xxxxxxx, XX
Re: Lock-Up Agreement
Gentlemen:
In connection with the acquisition, by merger of Quality Automotive Company
("Quality") by QUAC Acquisition Corp. ("Subsidiary"), a Delaware corporation and
wholly-owned subsidiary of RT Industries, Inc. (the "Company"), pursuant to the
Agreement and Plan of Merger dated June 6, 1997, among the Company, Subsidiary,
Quality and all of the stockholders of Quality (the "Merger") and as a condition
of such Merger, each of the undersigned holders of securities in the Company who
have executed this Agreement at the end hereof, jointly and severally (the
"Undersigned"), hereby covenants and agrees:
1. Except as otherwise permitted in paragraphs 2 and 3 hereof, from the
date hereof (the "Effective Date") until the fifth (5th) anniversary of the
Effective Date, the Undersigned will not directly or indirectly, sell, offer for
sale, transfer or otherwise dispose of any securities of the Company acquired
and beneficially owned by the Undersigned in connection with the Merger (the
"Merger Shares"), in any manner whatsoever, pursuant to Rule 144 ("Rule 144") of
the rules and regulations promulgated under the Securities Act of 1933, as
amended, or otherwise.
2. Commencing as of the First Anniversary of the Effective Date and
continuing until the third (3rd) anniversary of the Effective Date, the
Undersigned may collectively sell, offer for sale, transfer or otherwise dispose
of, the Merger Shares (to the extent possible) up to an aggregate proceeds of
$2,500,000 in transactions pursuant to (i) Rule 144 and/or (ii) the registration
of such Merger Shares under registration rights granted to the Undersigned in
the Registration Rights Agreement entered into simultaneously herewith with the
Company (the "Rights Agreement"); provided, however, that in order to insure an
orderly market, the Undersigned agree and covenant that, except upon the prior
consent of the Company, they shall limit their sales, during any monthly period
notwithstanding the existence of an effective registration statement, of Merger
Shares (exclusive of any Merger Shares sold under Rule 144) to the approximate
aggregate value of $200,000 or less, based upon the proceeds of such
transaction. Notwithstanding anything to
the contrary contained hereinabove, the monthly $200,000 aggregate value
limitation on transfers shall be cumulative in effect; provided that the
Undersigned were precluded from transferring the Merger Shares during such given
monthly period notwithstanding the prior consent of the Company.
3. Commencing as of the third (3rd) year anniversary of the Effective Date
and continuing until the fifth (5th) anniversary thereof, the Undersigned may
only sell, offer for sale, transfer or otherwise dispose of the Merger Shares
(whether pursuant to Rule 144 or the Rights Agreement) only in quantities and at
times which are pari passu with Elm Grove Associates II, L.P., which stockholder
simultaneously herewith has entered into a lock-up agreement with the Company on
terms identical to the terms of this Agreement.
4. Each of the Undersigned hereby consents to the Company giving the
Company's Stock Transfer Agent written stop-transfer instructions consistent
with the provisions of paragraphs 1, 2 and 3 hereof.
5. It is intended by the parties that this Agreement, upon execution by the
Undersigned, shall be and become a valid and binding restriction on transfer of
securities within the meaning of Section 202 of the Delaware General Corporation
Law ("DGCL") (or any successor provisions). Accordingly, the Undersigned
consents to the placement of an appropriate legend upon any certificates
evidencing his/her/its stock or right to acquire stock in the Company, as
contemplated by Section 202(a) of the DGCL (or any related or successor
provisions) and, upon request by the Company, the Undersigned will submit his or
her securities of the Company for legending in accordance with this agreement.
6. This Agreement shall be governed by, and construed in accordance with,
the law of the State of Delaware without regard to its choice of law principles.
7. This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
8. This Agreement and the agreements referred to herein constitute the
entire agreement, and supersede all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
9. A copy of this Agreement shall be maintained by the Company at its
principal place of business or registered office, and shall be made available
for examination by
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shareholders of the Company, in person or by agent or attorney, on the same
basis as the books and records of the Company are made available.
Very truly yours,
SECURITYHOLDERS:
Dated: August 29, 1997 /s/ Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
Dated: August 29, 1997 /s/ Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX
Dated: August 29, 1997 /s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
Dated: August 29, 1997 /s/ Xxxxx X. Ram
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XXXXX X. RAM
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