LOCK-IN AGREEMENT BETWEEN XXXXXXXXXXXXXX.XXX, INC.
AND PROMOTERS
I. This Promotional Shares Lock-In Agreement ("Agreement"), which was
entered into on the 29th day of September, 2000 by and between
XxxXxxxxXxXxxx.xxx, Inc. ("Issuer"), whose principal place of business is
located at 000 Xxxxxxx Xxxxx, Xx. Xxxxx, Xxxxx 00000, and Xxxxx X. Xxxxxx,
Xxxxxxx Xxxxxxx, Xxxx Xxxx and Xxxx Xxxxx ("Security Holders") witnesses that:
A. The Issuer has filed an application with the Securi-
ties Administrators of the states listed in Schedule A ("Administrators") to
register certain of its Equity Securities for sale to public investors who are
residents of those states ("Registration");
B. The Security Holders listed on Schedule B are the owners of
the shares of common stock or similar securities and/or possess convertible
securities, warrants, options or rights which may be converted into, or
exercised to purchase shares of common stock or similar securities of Issuer.
C. As a condition to Registration, the Issuer and Secu-
rity Holders ("Signatories") agree to be bound by the terms of this Agreement.
II. THEREFORE, the Security Holders agree 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 Holders while the PROMOTIONAL SHARES are subject to this Agreement
("Restricted Securities").
Beginning one year 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
second 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
33
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,
recapitalization and the like.
3. The Distribution may proceed on lesser terms and con-
ditions 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, reorgani- zation, 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 this 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 this Agreement which states that the sale or
transfer of the shares evidenced by the certificate is subject
to certain restrictions until _____________(insert date of
termination of the Agreement) 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 Administrators
("Effective Date") and shall terminate:
1. on the anniversary of the second year from the
completion 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. 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, recapitalization and
the like.
J. This Agreement to be modified only with the written approval
of the Administrators.
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 Administrators 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.
XXXXXXXXXXXXXX.XXX, INC. DATE SIGNED
By /s/ Xxxxx X. Xxxxxx September 29, 2000
------------------------- -------------------
Xxxxx X. Xxxxxx, President
/s/ Xxxxx X. Xxxxxx September 29, 2000
--------------------------- ------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxx October 2, 2000
------------------------- -----------------
Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxx October 5, 2000
--------------------------- ---------------
Xxxx Xxxxx
/s/ Xxxx Xxxxx October 3, 2000
-------------------------- ---------------
Xxxx Xxxxx
SCHEDULE A
List of States
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware,
D.C., Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, North Dakota, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wisconsin, Wyoming, New York
SCHEDULE B
List of Security Holders
Name Number of shares subject to lock-in
Xxxxx X. Xxxxxx 2,858,128
Xxxxxxx Xxxxxxx 3,321,106
Xxxx Xxxxx 1,644,388
Xxxx Xxxxx 1,225,500
