EXHIBIT 1.3
LOCK UP AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of September,
1999, by and between the undersigned, as an officer, director and/or shareholder
of HAT WORLD CORPORATION ("Company"), a Minnesota corporation, and NEIDIGER,
TUCKER, BRUNER, INC. ("NTBI"), as lead manager of the Representatives of the
Underwriters. The undersigned owns a total of _______________ shares ("Shares")
of the Company's $.01 par value common stock ("Common Stock"), of which
_________ shares shall be subject to the terms of this Agreement.
1. PURPOSE. The Company has filed a registration statement on Form SB-2
(Commission File No. 333-80761) and all amendments thereto ("Registration
Statement") with the United States Securities and Exchange Commission relating
to the public offering of the Company's securities, consisting of 920,000 shares
of its Common Stock plus an overallotment option of 138,000 shares of its Common
Stock. NTBI has required the Company to agree that, prior to the execution of
the Underwriting Agreement to be entered into between the Company and the
Representatives of the Underwriters ("Underwriting Agreement"), the undersigned
will sign and deliver to NTBI this Agreement accompanied by the Stock
Certificates representing the Shares owned by the undersigned as set forth
above. The Shares will be held by NTBI for a period of twelve (12) months after
the date that the Company's Registration Statement is declared effective
("Effective Date") by the United States Securities and Exchange Commission.
During such twelve (12) month period ("Lock Up Period") the undersigned will not
directly or indirectly offer, sell or grant any option to purchase or otherwise
dispose of or transfer, publicly or privately, any portion of the Shares owned
by the undersigned, whether beneficially or of record, as of the Effective Date
of the Company's Registration Statement, or any portion of the shares of Common
Stock acquired by such persons directly from the Company after such Effective
Date without NTBI's prior written consent. The purpose of this Agreement is to
set forth the agreement of the undersigned relating to such stock transfer
restriction.
2. AGREEMENT OF SHAREHOLDERS. The undersigned hereby acknowledges that
the undersigned will benefit greatly from the Company's proposed public offering
of the shares of Common Stock; and, as further inducement to the Representatives
of the Underwriters to agree to act as the Representatives of the Underwriters
in connection with the proposed public offering of the Company's shares of
Common Stock, the terms and conditions of which underwriting will be more
particularly described in the Underwriting Agreement to be entered into by the
Company and the Representatives of the Underwriters, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees and represents that during the Lock
Up Period, except to the extent permitted under Section 4 hereof, the
undersigned shall not directly or indirectly offer, sell, pledge, margin,
hypothecate, or grant any option to purchase or otherwise dispose of or
transfer, publicly or privately, any portion of the Shares held, whether
beneficially or of record, by the undersigned as of the Effective Date of the
Company's Registration Statement, or any portion of the shares of Common Stock
acquired by the undersigned directly from the Company, including shares of
Common Stock acquired as the result of the exercise of any options, warrants or
other rights (including a right of conversion), after such Effective Date and
prior to the expiration of the Lock Up Period, without NTBI's prior written
consent. While the granting of written consent shall be made in NTBI's sole
discretion, NTBI will
be reasonable in granting its consent for a limited amount of sales after the
Effective Date by taking into account such factors as the Company's earnings
history, market conditions for the Company's shares of Common Stock, and other
factors deemed relevant by NTBI. The undersigned shall not enter into any swap
or other arrangement that transfers all or any portion of the economic
consequences associated with the ownership of the shares or any shares of Common
Stock owned or which may be acquired by the undersigned during the Lock Up
Period.
3. AFTER ACQUIRED SHARES OF COMMON STOCK. If the undersigned, who is
either an officer or director of the Company does not own any shares of Common
Stock as of the Effective Date but subsequent to the Effective Date and prior to
the expiration of the Lock Up Period acquires shares of Common Stock as a result
of exercising any options, warrants or other rights (including the right of
conversion), the undersigned agrees that the shares of Common Stock so acquired
will be subject to the terms of this Agreement for the remaining portion of the
Lock Up Period and as otherwise provided in this Agreement. In addition, the
undersigned agrees not to sell, pledge, margin or hypothecate or otherwise
dispose of any shares of Common Stock acquired by exercise of any option,
warrants or other rights pursuant to the exemption afforded by Rule 701 under
the Securities Act of 1933, as amended, during the Lock Up Period without NTBI's
prior written amount.
4. PERMISSIBLE TRANSFERS. Notwithstanding the provisions of Section 2
to the contrary, following the Effective Date, the undersigned may transfer
Shares, including shares of Common Stock acquired by the undersigned after the
Effective Date, held by the undersigned to members of the undersigned's
immediate family. However, such Shares so transferred shall continue to be held
by such transferee subject to the terms and restrictions set forth in this
Agreement. Members of an undersigned's "immediate family" shall consist only of
such undersigned's spouse and lineal descendants or a trust or other entity
created for such persons in order to facilitate estate planning for the
undersigned.
5. AGREEMENTS AND COVENANTS OF THE UNDERSIGNED. The undersigned hereby
agree(s) and consent(s) and authorize(s) the Company and the Company's stock
transfer agent as follows:
a. To maintain a copy of this Agreement in the Company's
principal place of business and to provide a copy to the Company's
stock transfer agent, and to make a copy available (or cause the
Company's stock transfer agent to make a copy available) to any person
upon request and without charge;
b. To file a manually signed copy of this Agreement with each
state where such filing is requested or required in order to maintain
registration of the Company's shares of Common Stock;
c. To permit and authorize the Company and the Company's stock
transfer agent to place a notice on the front of each stock certificate
covered by the terms of this 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
2
d. To place the following legend placed on the reverse side of
each certificate covered by the terms of this Agreement:
The sale or transfer of the shares evidenced by this
certificate is subject to certain restrictions until
September ______, 2000 (12 months following the
effective date of the registration statement
relating to the Shares) pursuant to an agreement
between the holder hereof, the Company and Neidiger,
Tucker, Bruner, Inc., which agreement is on file
with the Company and the Company's stock transfer
agent, from which a copy is available upon request
and without charge.
e. To file a manually signed copy of this Agreement as part of
the registration documents with the Securities and Exchange Commission
and with the securities commission or division of those states, if any,
where the filing of this Agreement is required as a condition of the
registration of the Company's shares of Common Stock in such state; and
f. To enter stop transfer instructions with the Company's
stock transfer agent and registrar against transfer of the Shares or
any shares of Common Stock acquired by the undersigned during the Lock
Up Period except in compliance with the restrictions set forth in this
Agreement.
6. REPRESENTATIVE'S RIGHT TO TRANSFER The undersigned further agrees
that all of the rights, authority and preemptive provisions granted to NTBI
pursuant to this Lock Up Agreement may be transferred to any other NASD member
firm that participates in the proposed public offering of the shares of the
Company's Common Stock.
7. FAILURE TO COMPLETE OFFERING. If the Company's registration
Statement does not become effective, if the Underwriting Agreement is not
executed or if the Company's shares of Common Stock are not purchased by the
Representatives of the Underwriters pursuant to the Underwriting Agreement, this
Agreement shall be come null and void.
8. BENEFIT. This Agreement is made solely for the benefit of the
Representatives of the Underwriters and their respective successors and assigns.
9. AMENDMENTS. This Agreement may not be modified or amended in any
manner (including premature termination hereof) except in writing signed by all
of the parties hereto, and then only with the approval of the securities
commissions or divisions of those states, if any, where such approval is
required as a condition of the registration of the Company's shares of Common
Stock.
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10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
NEIDIGER, TUCKER, BRUNER, INC. UNDERSIGNED
If Individual(s):
By:
------------------------------------ --------------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Corporate Finance, as lead manager on --------------------------------------
behalf of the Underwriters as set (Print Name)
forth in the Underwriting Agreement
--------------------------------------
--------------------------------------
(Print Name)
If Entity:
--------------------------------------
By:
-----------------------------------
Name
----------------------------------
Title
---------------------------------
4
LOCK UP AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of September,
1999, by and between the undersigned, as an officer, director and/or shareholder
of HAT WORLD CORPORATION ("Company"), a Minnesota corporation, and NEIDIGER,
TUCKER, BRUNER, INC. ("NTBI"), as lead manager of the Representatives of the
Underwriters. The undersigned owns a total of __________ shares ("Shares") of
the Company's $.01 par value common stock ("Common Stock"), of which _________
shares shall be subject to the terms of this Agreement.
1. PURPOSE. The Company has filed a registration statement on Form SB-2
(Commission File No. 333-80761) and all amendments thereto ("Registration
Statement") with the United States Securities and Exchange Commission relating
to the public offering of the Company's securities, consisting of 920,000 shares
of its Common Stock plus an overallotment option of 138,000 shares of its Common
Stock. NTBI has required the Company to agree that, prior to the execution of
the Underwriting Agreement to be entered into between the Company and the
Representatives of the Underwriters ("Underwriting Agreement"), the undersigned
will sign and deliver to NTBI this Agreement accompanied by the Stock
Certificates representing the Shares owned by the undersigned as set forth
above. The Shares will be held by NTBI for a period of six (6) months after the
date that the Company's Registration Statement is declared effective ("Effective
Date") by the United States Securities and Exchange Commission. During such six
(6) month period ("Lock Up Period") except as provided in this Agreement, the
undersigned will not directly or indirectly offer, sell or grant any option to
purchase or otherwise dispose of or transfer, publicly or privately, any portion
of the Shares owned by the undersigned, whether beneficially or of record, as of
the Effective Date of the Company's Registration Statement, or any portion of
the shares of Common Stock acquired by such persons directly from the Company
after such Effective Date without NTBI's prior written consent. The purpose of
this Agreement is to set forth the agreement of the undersigned relating to such
stock transfer restriction.
2. AGREEMENT OF SHAREHOLDER. The undersigned hereby acknowledges that
the undersigned will benefit greatly from the Company's proposed public offering
of the shares of Common Stock; and, as further inducement to the Representatives
of the Underwriters to agree to act as the Representatives of the Underwriters
in connection with the proposed public offering of the Company's shares of
Common Stock, the terms and conditions of which underwriting will be more
particularly described in the Underwriting Agreement to be entered into by the
Company and the Representatives of the Underwriters, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees and represents that during the Lock
Up Period, except to the extent permitted under Section 4 of this Agreement, the
undersigned shall not directly or indirectly offer, sell, pledge, margin,
hypothecate, or grant any option to purchase or otherwise dispose of or
transfer, publicly or privately, any portion of the Shares held, whether
beneficially or of record, by the undersigned as of the Effective Date of the
Company's Registration Statement, or any portion of the shares of Common Stock
acquired by the undersigned directly from the Company, including shares of
Common Stock acquired as the result of the exercise of any options, warrants or
other rights (including a right of conversion), after such Effective Date and
prior to the expiration of the Lock Up Period, without NTBI's prior written
consent or except as otherwise specifically provided in this Section 2. While
the granting of written
consent shall be made in NTBI's sole discretion, NTBI will be reasonable in
granting its consent for a limited amount of sales after the Effective Date by
taking into account such factors as the Company's earnings history, market
conditions for the Company's shares of Common Stock, and other factors deemed
relevant by NTBI.
Notwithstanding anything contained in this Section 2 to the contrary,
the stock certificate(s) representing the Shares held by NTBI in the
undersigned's names(s) shall be released, prior to the expiration of the Lock Up
Period, by NTBI if the shares of Common Stock have traded on the National Market
System at a closing price equal to one hundred and fifty percent (150%) of the
initial offering price of the shares of Common Stock (as priced in the
definitive Prospectus included as part of the Registration Statement as of the
Effective Date thereof) for a period of fifteen (15) consecutive trading days.
The undersigned shall not enter into any swap or other arrangement that
transfers all or any portion of the economic consequences associated with the
ownership of the shares or any shares of Common Stock owned or which may be
acquired by the undersigned during the Lock Up Period.
3. AFTER ACQUIRED SHARES OF COMMON STOCK. If the undersigned, who is
either an officer or director of the Company does not own any shares of Common
Stock as of the Effective Date but subsequent to the Effective Date and prior to
the expiration of the Lock Up Period acquires shares of Common Stock as a result
of exercising any options, warrants or other rights (including the right of
conversion), the undersigned agrees that the shares of Common Stock so acquired
will be subject to the terms of this Agreement for the remaining portion of the
Lock Up Period and as otherwise provided in this Agreement. In addition, the
undersigned agrees not to sell, pledge, margin or hypothecate or otherwise
dispose of any shares of Common Stock acquired by exercise of any option,
warrants or other rights pursuant to the exemption afforded by Rule 701 under
the Securities Act of 1933, as amended, during the Lock Up Period without NTBI's
prior written amount.
4. PERMISSIBLE TRANSFERS. Notwithstanding the provisions of Section 2
to the contrary, following the Effective Date, the undersigned may transfer
Shares, including shares of Common Stock acquired by the undersigned after the
Effective Date, held by the undersigned to members of the undersigned's
immediate family. However, such Shares so transferred shall continue to be held
by such transferee subject to the terms and restrictions set forth in this
Agreement. Members of an undersigned's "immediate family" shall consist only of
such undersigned's spouse and lineal descendants or a trust or other entity
created for such persons in order to facilitate estate planning for the
undersigned.
5. AGREEMENTS AND COVENANTS OF THE UNDERSIGNED. The undersigned hereby
agree(s) and consent(s) and authorize(s) the Company and the Company's stock
transfer agent as follows:
2
a. To maintain a copy of this Agreement in the Company's
principal place of business and to provide a copy to the Company's
stock transfer agent, and to make a copy available (or cause the
Company's stock transfer agent to make a copy available) to any person
upon request and without charge;
b. To file a manually signed copy of this Agreement with each
state where such filing is requested or required in order to maintain
registration of the Company's shares of Common Stock;
c. To permit and authorize the Company and the Company's stock
transfer agent to place a notice on the front of each stock certificate
covered by the terms of this 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
d. To place the following legend placed on the reverse side of
each certificate covered by the terms of this Agreement:
The sale or transfer of the shares evidenced by this
certificate is subject to certain restrictions until
September ______, 2000 (6 months following the
effective date of the registration statement
relating to the shares) pursuant to an agreement
between the holder hereof, the Company and Neidiger,
Tucker, Bruner, Inc., which agreement is on file
with the Company and the Company's stock transfer
agent, from which a copy is available upon request
and without charge.
e. To file a manually signed copy of this Agreement as part of
the registration documents with the Securities and Exchange Commission
and with the securities commission or division of those states, if any,
where the filing of this Agreement is required as a condition of the
registration of the Company's shares of Common Stock in such state; and
f. To enter stop transfer instructions with the Company's
stock transfer agent and registrar against transfer of the Shares or
any shares of Common Stock acquired by the undersigned during the Lock
Up Period except in compliance with the restrictions set forth in this
Agreement.
6. REPRESENTATIVE'S RIGHT TO TRANSFER The undersigned further agrees
that all of the rights, authority and preemptive provisions granted to NTBI
pursuant to this Lock Up Agreement may be transferred to any other NASD member
firm that participates in the proposed public offering of the shares of the
Company's Common Stock.
3
7. FAILURE TO COMPLETE OFFERING. If the Company's registration
Statement does not become effective, if the Underwriting Agreement is not
executed or if the Company's shares of Common Stock are not purchased by the
Representatives of the Underwriters pursuant to the Underwriting Agreement, this
Agreement shall be come null and void.
8. BENEFIT. This Agreement is made solely for the benefit of the
Representatives of the Underwriters and their respective successors and assigns.
9. AMENDMENTS. This Agreement may not be modified or amended in any
manner (including premature termination hereof) except in writing signed by all
of the parties hereto, and then only with the approval of the securities
commissions or divisions of those states, if any, where such approval is
required as a condition of the registration of the Company's shares of Common
Stock.
10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
NEIDIGER, TUCKER, BRUNER, INC. UNDERSIGNED
If Individual(s):
By:
------------------------------------ --------------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Corporate Finance, as lead manager on --------------------------------------
behalf of the Underwriters as set (Print Name)
forth in the Underwriting Agreement
--------------------------------------
--------------------------------------
(Print Name)
If Entity:
--------------------------------------
By:
-----------------------------------
Name
----------------------------------
Title
---------------------------------
4
