LOCK-UP LETTER AGREEMENT
Xxxx Capital Partners, LLC
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Dear Sirs:
The undersigned understands that Xxxx Capital Partners, LLC (the "Placement
Agent") has been retained by DigitalFX International, Inc., a Florida
corporation (the "Company"), in connection with a Securities Purchase Agreement
(the "Agreement") providing for the Company's offering of shares of its common
stock (the "Placement") by the Placement Agent on a "best efforts" basis. The
undersigned recognizes that the Placement will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations.
As required under the Agreement, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of Kingdon Capital Management, LLC ("Kingdon") (which consent may be
withheld in its sole discretion), the undersigned will not, directly or
indirectly, (1) offer for sale, sell, pledge (including without limitation
margin stock), establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or
otherwise dispose of (or enter into any transaction or device that is designed
to, or could be expected to, result in the disposition by any person at any time
in the future of) any shares of Common Stock, par value $0.0001 per share, of
the Company (the "Common Stock") (including, without limitation, shares of
Common Stock that may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock that may be issued upon exercise of any
option or warrant) or securities convertible into or exchangeable for Common
Stock or any substantially similar securities now owned or hereafter acquired by
the undersigned, or sell or grant options, rights or warrants with respect to
any shares of Common Stock or substantially similar securities, (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, or (3) publicly announce an intention to affect any of the foregoing
transactions, in each case for a period beginning on the date hereof and ending
180 days after the closing of the Placement.
In furtherance of the foregoing, the Company and its Transfer Agent are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Lock-Up Letter Agreement. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
It is understood that, if the Company notifies the undersigned that the
Agreement (other than the provisions thereof which survive termination) has been
terminated prior to the closing of the Placement, then the undersigned will,
upon written notice to the Company and Kingdon delivered after receipt of such
notice, be released from the undersigned's obligations under this Lock-Up Letter
Agreement.
Xxxx Capital Partners, LLC
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The undersigned understands that the Company and the Placement Agent will
proceed with the Placement in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. This agreement is irrevocable and any
obligations of the undersigned shall be binding upon the heirs, personal
representatives, successors, affiliates (within the meaning of the Securities
Act of 1933, as amended), and assigns of the undersigned.
This Lock-Up Letter Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. The undersigned hereby irrevocably
submits to the jurisdiction of the federal and state courts located in New York
County, New York. The undersigned agrees that this Lock-Up Letter Agreement
may be enforced by specific performance.
Very truly yours,
By:
-----------------------------------
Name:
Title:
Dated:
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