EXHIBIT 10.4
LOCK-UP AGREEMENT
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This LOCK-UP AGREEMENT (the "Lock-Up Agreement") dated as of June 22nd
2001, is made by and among Spacial Corporation, a Delaware Corporation (the
"Company") and each of Xxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), Xxxxx X. Xxxxxx, Xx.
("Xxxxxx"), Xxxxxx X. Xxxxxx ("Xxxxxx"), the Trust Under Agreement Dated June
30, 1989 (the "Trust"; and collectively with Prestiano, Solano and Xxxxxx, the
"Restricted Shareholders"), with respect to shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), beneficially owned by
such Restricted Shareholders.
W I T N E S S E T H:
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1. The Company has entered into a Share Exchange Agreement (the "Share
Exchange Agreement") with Waste Recovery Technology Corporation
("WRT") and all of its shareholders (the "WRT Shareholders"), wherein
the Company issued an aggregate of 13,160,000 shares of Common Stock
to the WRT Shareholders, in exchange for all of the issued and
outstanding WRT Stock (the "Share Exchange"). All capitalized terms in
this Lock-Up Agreement shall have the meanings ascribed to them in the
Share Exchange Agreement, unless otherwise specifically defined
herein.
2. Xxxxxx, Xxxxxx and the Trust (the "WRT Principals") own an aggregate
of 1,785,000, 1,000,000, and 10,000,000 shares of Common Stock,
respectively (collectively, the "WRT Principal Shares"), which shares
were issued pursuant to the Share Exchange.
3. Xxxxxxxxx owns an aggregate of 800,000 shares of Common Stock and
warrants (the "Xxxxxxxxx Warrants") to purchase 150,000 shares of
Common Stock (the "Warrant Shares"; and collectively with said shares
of Common Stock, and the Xxxxxxxxx Warrants, the "Xxxxxxxxx
Securities").
4. In order to facilitate possible future financings of the Company, and
in consideration for the Company's reduction of the length and scope
of certain other Company's shareholders' lock-up obligations, the
Restricted Shareholders have agreed with the Company to restrict their
ability to transfer the Xxxxxxxxx Securities and the WRT Principal
Shares (collectively, the "Restricted Securities").
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:
Section 1. The Lock-Up Term. The "Lock-Up Term" shall be the one-year
period immediately following the Closing Date of the Share
Exchange, unless otherwise extended in accordance with Section
2(b), hereof.
Section 2. (a) during the first six months of the Lock-Up Term, a
Restricted Shareholder shall not offer, pledge, sell, transfer,
assign, hypothecate, contract to sell, grant an option for the
sale of or otherwise dispose of (collectively, "transfer") any
Restricted
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Securities beneficially owned by such Restricted Shareholder on
the date hereof or hereafter acquired, without the Company's
prior written consent.
(b) Subject to the provisions of Section 2(i) below, during the
second six month period of the Lock-Up Term, such Restricted
Shareholder will not sell more than fifty percent (50%) of any
Restricted Securities owned by such Restricted Shareholder.
(c) Subject to the provisions of Section 2(i) below, all
Restricted Securities shall be free and clear from the
restrictions of this Lock-Up Agreement on the day after the first
year anniversary of the Closing Date.
(d) During the Lock-Up Term, a Restricted Shareholder shall not
sell short any Common Stock or otherwise sell any securities
exchangeable for or convertible into the Common Stock, that such
Restricted Shareholder does not own, or engage in any sale that
is consummated by the delivery of any Common Stock borrowed by or
from the Restricted Shareholders.
(e) Notwithstanding the foregoing, a Restricted Shareholder may
sell or otherwise transfer Restricted Securities provided that
such sale is a privately negotiated transaction to a
non-affiliated institutional investor upon prior notice to the
Company and the other Restricted Shareholders and the transfer is
otherwise effected in accordance with the federal and state
securities and other laws, and such assignee executes an
agreement to be bound by the terms of this Lock-Up Agreement. No
transfer of the Restricted Securities will be valid without due
compliance with the terms of this Lock-Up Agreement.
(f) Any sales of Restricted Securities or of the other Common
Stock or securities in violation of this Lock-Up Agreement by a
Restricted Shareholder shall constitute an event of default under
this Lock-Up Agreement as to such Restricted Shareholder. In the
event of such default, in addition to any other remedy the
Company may have at law, in equity or under this Agreement, such
Restricted Shareholder shall pay all proceeds from the sale of
such securities by such Restricted Shareholder, regardless of
whether such proceeds derive from sales made prior to, concurrent
with or subsequent to such event of default, to the Company.
(g) Each of the Restricted Shareholders acknowledges that his
breach or impending violation of any of the provisions of this
Lock-Up Agreement may cause irreparable damage to the Company and
to the Company's shareholders for which remedies at law would be
inadequate. Each Restricted Shareholder further acknowledges that
the provisions set forth herein are essential terms and
conditions of this Lock-Up Agreement. Each Restricted Shareholder
therefore agrees that the Company shall be entitled to a 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
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any such provision by the Restricted Shareholders, and each of
the Restricted Shareholders and the Company hereby consents to
the jurisdiction of any court of competent jurisdiction, state or
federal, sitting in the State of New York, 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. If any portion of this Section
2(g) is adjudicated to be invalid or unenforceable, this Section
2(g) shall be deemed amended to delete therefrom the portion so
adjudicated, such deletion to apply only with respect to the
operation of this Section 2(g) in the jurisdiction in which such
adjudication is made.
(h) The Restricted Shareholders will permit an appropriate
restrictive legend to be applied to all certificates evidencing
the Restricted Securities giving notice of the restrictions
imposed under this Agreement and will cause the transfer agent
for the Company to note such restriction on the transfer books
and records of the Company.
(i) If, during the Lock-Up Term, the Company enters into a letter
of intent with an underwriter (the "Underwriter"), for a firm
commitment underwritten Public Offering of the Company's
securities registered under the Securities Act (the "Public
Offering"), then (i) the Lock-Up Term shall be extended with
respect to all Restricted Securities owned by such Restricted
Shareholder at such time, until the closing or earlier
abandonment of the Public Offering, (ii) notwithstanding the date
of such letter of intent, the provisions of Section 2(a) shall
apply to all Restricted Securities and (iii) the Restricted
Shareholders shall agree to all further restrictions, extensions
and modifications of the terms of this Lock-Up Agreement, and any
additional lock-up restrictions as are requested by the
Underwriter as condition to Public Offering. The Restricted
Shareholders agree and consent to the execution of such
modifications, amendments or revisions to this Lock-Up Agreement,
or a new lock up agreement, as necessary in order to effectuate
the foregoing.
Section 3. Subject to Section 6 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 Restricted Shareholders and their heirs, executors, trustees,
administrators, legatees and legal representatives.
Section 4. 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.
Section 5. This Lock-Up Agreement shall be construed and enforced in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in such State without application of the principles of conflicts of
laws of such State.
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Section 6. This Lock-Up Agreement and all rights hereunder are personal to the
Restricted Shareholders and shall not be assignable by the Restricted
Shareholders, and any purported assignment in violation hereof shall be null and
void.
Section 7. (a) All notices, requests, consents, and demands by the parties
hereunder shall be delivered by hand, recognized national
overnight courier or by deposit in the United States Mail,
postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to be notified at
the address set forth below:
(i) If to the Restricted Shareholders, to the last known
address of record on the books and records of the
Corporation.
(ii) If to the Company, to:
00 Xxxxx Xxxxx
Xxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Snow Xxxxxx Xxxxxx, PC.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(212) 687-3860
(212)-949-7052
Attn: Xxxx Xxxxxx, Esq.
(b) Notices given by mail shall be deemed effective on the
earlier of the date shown on the proof of receipt of such mail
or, unless the recipient proves that the notice was received
later or not received, three (3) days after the date of mailing
thereof. Other notices shall be deemed given on the date of
receipt. Any party hereto may change the address specified herein
by written notice to the other parties hereto.
Section 8. The failure of any 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 any
party shall be effective for any purpose whatsoever unless such waiver is in
writing and signed by such party.
Section 9. In the event a lawsuit is instituted by any party concerning a
dispute under this Agreement, the prevailing party in such lawsuit shall be
entitled to recover from the losing party all reasonable attorneys' fees, costs
of suit and expenses (including fees, costs and expenses of appeals
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and of expert witnesses), in addition to whatever damages or other relief the
injured party is otherwise entitled to under law and in connection with such
dispute.
Section 10. This Lock-Up Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
Section 11. This Lock-Up Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement
as of the day and year first written above.
SPACIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: President
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Trust Under Agreement Dated
June 30, 1989
By: /s/ Xxxxx Xxxxxx, Trustee
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Xxxxx Xxxxxx, Trustee
/s/ Xxxxx X. Xxxxxx, Xx.
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Xxxxx X. Xxxxxx, Xx.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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