LOCK-UP AGREEMENT
This agreement (the "Agreement") sets out the terms and conditions upon
which Online International Corporation shall cause the common stock controlled
by the shareholders of Condor West, to be locked-up, untradeable and restricted
in accordance with the terms and conditions of this agreement. The subject of
this agreement shall be the common stock held by certain officers and directors
after the merger between Online International Corporation and Condor West
Corporation.
This Agreement also sets out the terms and conditions of the agreement
for each of the persons listed on Schedule "A" attached hereto (each a
"Shareholder" and collectively, the "Shareholders") to deposit irrevocably and
unconditionally under the terms of this Agreement 286,000 common shares
presently owned beneficially and of record by such shareholders.
THE OFFER
Online offers the subject shareholders an opportunity to remain
shareholders of the surviving corporation following the subject merger. Online
shall tender to the shareholders or shareholders duly authorized representative
$275,000.00 (Two Hundred and Seventy Five-Thousand Dollars) for the opportunity
to merge the two corporations. The shareholders will be permitted to retain
85,000 shares of the surviving corporation.
TIMING
The merger partner, Online, agrees to offer cash to certain shareholders of
Condor West AS an incentive to effect the merger between the two companies. In
exchange, Online will be permitted to merge and control 90% of the issued and
outstanding shares of Condor. The closing of the subject transaction is on or
before September 9, 1999.
CONDITIONS PRECEDENT
4. Condor West must be current with all required filing with the U.S.
Securities and Exchange Commission; and all state and federal tax returns must
be filed and taxes, if any, due must be paid in full to any and all taxing
authorities. The officers and directors have represented that Condor West has no
assets or liabilities. However, if there is a change in financial condition
prior to the close of the contemplated merger, the officers and directors of
Condor West shall inform Online. The foregoing conditions are for the sole
benefit of Online and may be waived by Online in whole or in part.
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each shareholder hereby severally, and not on a joint or a joint and
several basis, represents and warrants to Online that: it is a corporation duly
incorporated and validly existing under the laws of Nevada, its jurisdiction of
incorporation. The sellers represent, the Condor has all the necessary corporate
power, authority, capacity and right, and has received all requisite approvals,
including the majority of its respective shareholders, to enter into this
Agreement and to complete the
contemplated transactions. Upon the due execution and delivery of this Agreement
by the parties hereto, this Agreement shall be a legally valid and binding
agreement enforceable by Online against the shareholders in accordance with its
terms, subject, however, to the usual limitations with respect to enforcement
imposed by law in connection with similar proceedings and the availability of
equitable remedies. The shareholders are, at the time of deposit of the
securities under this agreement, the sole beneficial owner of the shareholder
securities listed opposite their names in Schedule "A" attached hereto and have
the unfettered ability, authorization, capacity and the exclusive right to
dispose of all such securities under the contemplated merger. The shareholders
are not a party to, bound or affected by or subject to, any agreement, charter
or by-law provision, statute, regulation, judgment, order, decree or law which
would be violated, contravened, breached by, or under which default would occur
as a result of, the execution and delivery or performance of this Agreement.
The common shares listed in Schedule "A" hereto opposite such
shareholder's name constitute 90% of the shares or other securities in the
capital of Condor owned beneficially by such shareholders on the date hereof.
Condor represents that no stock option plan exists now or heretofore, and to the
extent any prior stock option plan have existed in the past, such plan or plans
are hereby canceled. There are no stock options unexercised on the date hereof.
The shareholders own the securities with good and marketable title, free and
clear of any and all mortgages, liens, charges, pledges, encumbrances, claims,
security interests, restrictions or rights of others of any nature whatsoever.
The shareholders have not previously granted or agreed to grant any
proxy or other right to vote in respect of the shareholder's securities or
entered into any voting trust, vote pooling or other agreement with respect to
the right to vote, call meetings of shareholders or give consents or approvals
of any kind as to the shareholders' securities except those which are no longer
of any force or effect; there is no claim, action, lawsuit, arbitration,
mediation or other proceeding pending or, to the best of the actual knowledge
information and belief of the shareholders, threatened against the shareholders
or Condor, which relates to this Agreement or otherwise materially or impairs
the ability of the shareholders to consummate the transactions contemplated
hereby.
REPRESENTATIONS AND WARRANTIES OF MERGER CANDIDATE
The merger partner hereby represents and warrants that: the Online is
a corporation duly incorporated and validly existing under the laws of its
jurisdiction of incorporation; the merger partner has all necessary power,
authority, capacity and right, and received all requisite approvals from a
majority of its shareholders to complete the contemplated merger in accord with
this and other Agreements between the companies.
Upon the due execution and delivery of this Agreement by each of the
respective parties, this Agreement shall be a valid and binding agreement
enforceable by the shareholders against Online in accordance with its terms
subject however, to the usual limitations with respect to enforcement
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imposed by law in connection with bankruptcy or similar proceedings and the
availability of equitable remedies.
1. Online is not a party to, bound or affected by or subject to,
any agreement, charter or by-law provision, statute,
regulation, judgment, order, decree or law which would be
violated, contravened, breached by, or under which default
would occur as a result of, the execution, delivery and
performance of the terms and conditions of this Agreement and
which default, violation, contravention or breach would
materially impair or would prevent the Online from
consummating the transactions contemplated hereby. Online has
sufficient funds or financing arrangements in place to fulfill
its fiscal responsibilities in connection with the
contemplated merger.
COVENANTS OF THE SHAREHOLDERS
2. GENERAL. Each of the shareholders covered by the instant
agreement hereby covenants that once the common shares of the
surviving corporation commence to trade on any U.S. Exchange
operated by NASDAQ, the individual shareholders will:
(i) not sell, transfer, pledge, encumber, grant a security
interest in, hypothecate or otherwise convey, directly or
indirectly, the shareholder's securities to any person, or
agree to any of the foregoing; and,
(ii) not grant or agree to grant any proxy or other right to
vote in respect of the shareholders' securities, or enter into
any voting trust, vote pooling or other agreement with respect
to the right to vote the shareholders' securities, other than
pursuant to the terms of this Agreement; and
(iii) not initiate, solicit or encourage any inquiries,
submissions or offers as to or in connection with the making
of, or provide information to, or respond to any person
making, any offer or proposal with respect to:
(a) any other reverse takeover, tender offer or exchange
offer, merger, amalgamation, plan of arrangement,
reorganization, consolidation, business combination, sale of
assets, sale of securities, recapitalization, liquidation,
dissolution, winding-up, or similar transaction involving
Condor West.
The instant lockup agreement expressly covers a period not to exceed
twelve (12) consecutive months commencing on the initial date the stock of
Online trades. For the duration of the initial six (6) months following the
commencement of trading, the individual shareholders who beneficially own 85,000
shares of the common stock of the surviving corporation are expressly prohibited
from selling or disposing of said the common stock in the manner set forth
above; and
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Beginning on the seventh (7th) month following the commencement of
trading the common stock covered by the instant lockup agreement, the individual
shareholders shall be permitted to sell or dispose of their common stock in
increments equal to twenty percent (20%) on a monthly basis of the aggregate
shares of each individual shareholder until all of the original common stock has
been disposed of or until the expiration of the subsequent six (6) month period
or the earlier of the two preceding events. At the end of the lockup period, the
lock-up becomes null and void. Any and all securities pursuant to this lock-up
agreement shall be held in trust by the Law Firm of Xxxxxx-Xxxxxxx, PC. and
shall be released upon request of the owner in the applicable above referenced
increments without delay. The Law Firm of Xxxxxx-Xxxxxxx, P.C. shall absorb the
expense associated with sending the certificates to the owners via Federal
Express or other overnight delivery service.(See Schedule "A" Attached Hereto)
ADDITIONAL COVENANTS
3. Each of the shareholders hereby covenants with Online that
until the merger occurs, which is scheduled on or before the
end of September 9, 1999, the shareholders will: promptly
notify the Online orally and in writing of any material
adverse effect known to the shareholders; and request the
corporation or the transfer agent(s) of the Condor to prepare
a list of its shareholders.
COVENANTS OF THE PURCHASER
GENERAL. Online hereby covenants to its reasonable best efforts to
successfully complete the transactions contemplated by this Agreement, including
the merger, and shall in all material respects comply with the requirements of
applicable law, including the federal securities laws. The terms of the merger
agreement are consistent with the terms of this Agreement.
ACCEPTANCE OF OFFER
DEPOSIT. Each of the shareholders, who owns all or part of the share
certificates representing the 85,000 shares, hereby irrevocably and
unconditionally agrees to deposit with legal counsel for Online, the securities,
together with duly completed and executed letters of transmittal, immediately
following the consummation of the merger, on or before the third business day
after the date of the merger.
NO-WITHDRAWAL
Each of the shareholders hereby irrevocably and unconditionally agrees not to
withdraw or take any action to withdraw any of his or her securities deposited
with legal counsel notwithstanding any statutory rights or other rights under
the terms of the merger agreement or otherwise which he or she
4
might have unless this Agreement is terminated by the shareholder due to Online
inability or unwillingness to perform in accordance with the terms and
conditions of the aforementioned merger agreement.
TERMINATION BY SHAREHOLDERS
Any of the Shareholders, when not in default in performance of its
obligations under this Agreement, may, without prejudice to any other rights,
terminate this Agreement by notice to the Online if: the Merger Agreement has
been terminated or common shares deposited under the terms of this Agreement
have not, for any reason whatsoever been executed and paid for on or before the
September 9, 1999.
TERMINATION BY PURCHASER
The Purchaser, when not in default in performance of its obligations
under this Agreement, may, without prejudice to any other rights, terminate this
Agreement by notice to the shareholders if: the Merger Agreement has been
terminated for any reason whatsoever, or otherwise expires in accordance with
its terms.
EFFECT OF TERMINATION
In the event of the termination of this Agreement, it shall become
void forthwith. There shall be no liability on the part of the Online, or the
shareholders hereunder except that nothing contained in this Agreement will
relieve any party from liability for any breach of any provision of this
Agreement which occurred on or before the date of such termination.
GENERAL SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the shareholders and the Online
contained herein shall survive the consummation of the Merger for a period of
time not to exceed two years. In the event one party has made material
misrepresentations to the other, the recourse shall be that provided by the
applicable law. No investigations made by or on behalf of the Online or any of
their authorized agents at any time shall have the effect of waiving,
diminishing the scope of or otherwise affecting any representation or warranty
or covenant made by the shareholders in or pursuant to this Agreement.
DISCLOSURE
Except as required by the federal securities laws or judicial
authority, none of the shareholders shall make any public disclosure of, or any
announcement of or statement with respect
5
to, this Agreement without the prior written approval of the Online; provided,
however, that this section will not restrict any shareholder who is a director
or officer of the Condor West from authorizing or participating in any
disclosure by the Condor which is in accordance with the mandatory statutory
provisions of the State of Nevada.
ASSIGNMENT
This Agreement shall not otherwise be assignable by any party hereto.
TIME
All parties understand and agree time is of the essence in connection
with this Agreement.
CURRENCY
All sums of money referred to in this Agreement shall mean U.S.
currency.
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada and the federal securities laws.
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding
between the parties hereto with respect to the lock-up of the securities and
supersedes any prior agreement, understanding and representation.
AMENDMENTS
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by all of
the parties to this Agreement.
NOTICES
Any notice or other communication which may or is required to be given
pursuant to this Agreement shall be in writing and shall be sufficiently given
or made if delivered personally
6
or sent by facsimile, in the case of Online, the communication must be addressed
as follows:
Attention: President
Xxxxxxx Xxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone No.: 0-000-000-0000
Telecopier No.: 0-000-000-0000
with a copy of each to:
Xxxxx Xxxxxx-Xxxxxxx
LAW FIRM OF XXXXXX-XXXXXXX, PC
0000 X Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
and Condor West Corporation must be addressed as follows:
Attention: President
Xxxx X. Nation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxx, Xxxxx 00000
Telecopier No.: 0-000-000-0000
Telephone No.: 0-000-000-0000
with a copy of each to:
Xx. Xxxxxxx X. Xxxx, Esquire
0000 X. Xxxxxxx Xxxx. Xxxxx 0
Xxxx Xxxxx, Xxxxx 00000-0000
Telecopier No.: 0-000-000-0000
7
Telephone No.: 0-000-000-0000
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. Any notice that is delivered
will be deemed to be delivered on the date of delivery to such address if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or on the next business day if delivered after 5:00 p.m. or on a
non-business day. Any notice via facsimile will be deemed to be delivered on the
date of transmission (for which confirmed receipt is provided to the sender) if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or the next business day if delivered after 5:00 p.m. or on a
non-business day.
SEVERAL LIABILITY
It is understood and agreed that the rights and obligations of each of
the shareholders under this Agreement shall be several and not joint or joint
and several and in no circumstances shall the action or omission of one of the
shareholders arising in connection with this Agreement constitute the action or
omission of the other shareholders or create any liability whatsoever on the
part of the other shareholders or affect in any respect the right of the other
shareholders to rely upon and enforce against Online the provisions of this
Agreement.
EXPENSES.
Each of the parties shall pay its legal, and accounting costs and
expenses incurred in connection with the preparation, execution and delivery of
this Agreement and all documents and instruments executed or prepared pursuant
hereto and any other costs and expenses whatsoever and howsoever incurred.
COUNTERPARTS
This Agreement may be executed in one or more counterparts which
together shall be deemed to constitute one valid and binding agreement and
delivery of the counterparts may be effected by means of a faxed transmission.
This Agreement may be executed by facsimile signature, and execution thereby
will constitute an original hereof.
If the terms and conditions of this Agreement are acceptable, please
so indicate by signing in the below space.
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CONDOR WEST CORPORATION
By: /s/ Xxxx X. Nation
-------------------------------------
Xxxx X. Nation
Title: Chief Executive Officer, President
Secretary
ONLINE INTERNATIONAL CORPORATION
By: /s/ Xxxxxxx Xxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx Xxxxx
Title: President & Secretary
SCHEDULE "A"
Disbursement of 85,000 Condor Wst Shares retained by the Shareholder
Following the 48-1 reverse split and post merger.
Pre-Reverse Split Shares Post Reverse Split
------------------------ ------------------
Xxxx X. Nation 5,325,000 26,335
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxx, XX 00000
Xx. Xxxxxxx Xxxxxx 5,325,000 26,335
000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx 1,000,000 4,945
0000 X. Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxx, XX 00000
Xxxx X. Xxxxxx 1,000,000 4,945
0000 Xx Xxxx
Xxxxx Xxxxxx Xxxx, XX 00000
Xxxxxxxx X. Xxxxxxxxx 300,000 1,484
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Xxxxx Xxxxxxxxx 200,000 000
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 200,000 989
848 Decatur
Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 200,000 989
0000 Xxxxxxxxxx Xx.
Xxxxx Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx, Xx. 200,000 989
000 Xxxxxxxxx Xxxxx 000
Xxxxxxx, XX 00000
Twentieth Century LLC 0 17,000
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
---------- ------
Totals 13,750,000 85,000
