LOCK-UP AGREEMENT
EXHIBIT
1
THIS LOCK-UP AGREEMENT (this “Agreement”)
is made and entered into as of December 15, 2009 by and between
Xxxxxxxxxxxxxxx.xxx, Inc., a Delaware corporation (“Borrower”),
HWH Lending, LLC, a Delaware limited liability company (“Lender”),
and the Stockholder signatory hereto (“Stockholder”).
Capitalized terms used but not defined herein shall have the meanings set forth
in the Loan and Security Agreement by and between Borrower and Lender dated as
of the date hereof (“Loan
Agreement”).
RECITALS
WHEREAS, Borrower and Lender
are parties to the Loan Agreement, pursuant to which Lender will make Advances
to Borrower, such Advances to be evidenced by Notes;
WHEREAS, Stockholder will
guarantee Borrower’s obligations to repay the Notes; and
WHEREAS, in connection with,
and as a condition to closing of, the transactions contemplated by the Loan
Agreement, the parties hereto desire to enter into this Agreement to restrict
the trading of the Company Shares (as defined below) held by the Stockholder
during the period in which the Notes are outstanding.
NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Transfer
Restrictions.
(a) The
Stockholder will not, without the prior written consent of Lender, offer, sell,
contract to sell, pledge or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned), directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Securities and Exchange
Commission (the “Commission”)
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder with respect to 12,500,00 shares of the
Company’s Common Stock (the “Company
Shares”) or any securities convertible into or exercisable or
exchangeable for Company Shares, or publicly announce an intention to effect any
such transaction, for a period ending on the date upon which all of Borrower’s
obligations under the Notes have been satisfied and paid in full and are no
longer outstanding (the “Lock-up
Period”), other than (i) Company Shares disposed of as bona fide gifts,
(ii) transfers to any trust for the direct or indirect benefit of Stockholder or
Stockholder’s immediate family; provided that it shall be a condition to any
such gift or transfer that the transferee/donee agrees to be bound by the terms
of this Agreement to the same extent as if the transferee/donee were a party
hereto, (iii) the filing or participation in the filing of a registration
statement with the Commission in respect of Company Shares or securities
convertible into or exercisable or exchangeable for Company Shares under any
employee option plan or other employee benefit plan or distribution reinvestment
plan, and (iv) the exercise of the option to purchase shares of the Company’s
Common Stock granted to Stockholder in that certain Incentive Stock Option
Agreement dated May 20, 2009 (the “Option
Grant”) pursuant to the cashless exercise provisions set forth in Section
5 of the Option Grant, only to the extent that shares of Common Stock are “sold”
in order to pay the exercise price thereunder.
(b) The
certificates representing Company Shares subject to this Agreement shall, unless
and until the Transfer Restrictions have been released as to the
Company Shares such certificates represent, bear the following
legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER
DISPOSED OF EXCEPT IN ACCORDANCE WITH THAT CERTAIN LOCK-UP AGREEMENT DATED
DECEMBER 15, 2009.”
(c) The
Company may impose stop-transfer orders to effectuate the Transfer
Restrictions.
2. Termination. This
Agreement shall terminate and be of no further force or effect on the date upon
which all of Borrower’s obligations under the Notes have been satisfied and paid
in full and are no longer outstanding.
3. Notices.
. All
notices or other communications required or permitted hereunder shall be in
writing and shall be delivered personally, by commercial overnight delivery
service, by facsimile or sent by certified, registered or express air mail,
postage prepaid, and shall be deemed given when so delivered personally, by
overnight delivery service or by facsimile, or if mailed, five days after the
date of mailing, addressed to the parties at the addresses set forth herein, or
such other address which either party has in writing designated.
|
If
to Borrower:
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Xxxxxxxxxxxxxxx.xxx,
Inc.
000
Xxxxxxxx Xxxx.
Xxxxxxxxxx,
XX 00000
Attention: Xxxxx
Xxxxxxxxx
Facsimile: 000-000-0000
|
|
If
to Lender:
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HWH
Lending, LLC
c/o
Romulus Holdings
0000
Xxxxxxxx Xxx., 0xx Xxxxx
Xxxx
Xxx, XX 00000
|
|
Attention: Xxxx
Xxxxxx
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|
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Facsimile:
000-000-0000
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If
to Stockholder:
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Xxxxx
Xxxxxxxxx
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c/o
Xxxxxxxxxxxxxxx.xxx, Inc.
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4. Miscellaneous.
(a) Successors and
Assigns. Except as otherwise provided in this Agreement, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this
Agreement.
(b) Amendments and
Waivers. Any term of this Agreement may be amended or waived
only with the written consent of the Lender and the Stockholder.
(c) Severability. In
the event that any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement shall continue in full force
and effect and shall be interpreted so as reasonably to effect the intent of the
parties hereto. The parties shall use their reasonable best efforts
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that shall achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable
provision.
(d) Entire
Agreement. This Agreement constitutes the entire agreement
among the parties relating to the transactions contemplated hereby and no party
shall be liable or bound to any other party in any manner by any warranties,
representations, or covenants relating to the transactions contemplated hereby
except as specifically set forth herein or therein.
(e) Governing
Law. This Agreement shall be governed by, construed in
accordance with, and enforced under the internal laws of the State of New York
applicable to contracts executed and to be performed solely within such
State.
(g) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(h) Facsimile
Signatures. This Agreement may be executed and delivered by
facsimile and upon such delivery, the facsimile signature will be deemed to have
the same effect as if the original signature had been delivered to the other
party.
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left blank]
IN
WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement as of
the date first written above.
| HWH LENDING, LLC | |||
|
|
By:
|
/s/ Xxxx Xxxxxx | |
| Name: | Xxxx Xxxxxx | ||
| Title: | President | ||
| XXXXXXXXXXXXXXX.XXX, INC. | |||
|
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By:
|
/s/ Xxxxx Xxxxxxxxx | |
| Name: | Xxxxx Xxxxxxxxx | ||
| Title: | President & CEO | ||
