LOCK-UP AND SHARE RELEASE AGREEMENT
EXHIBIT
10.1
This Lock-Up and Share Release
Agreement (“Agreement”) is
entered into on this 29th day of
August, 2008 (the “Effective Date”), by
and between AdEx Media Inc., a Delaware corporation (the “Company”) and Bay
Harbor Marketing, LLC, a California limited liability company (“Bay
Harbor”).
RECITALS
WHEREAS, the Company and Bay Harbor
have entered into that certain Asset Purchase Agreement dated August 29, 2008
(the “Purchase
Agreement”) by and between the Company, Bay Harbor and Xxxxx Xxxxxxx as
representative member of Bay Harbor (“Xxxxxxx”) pursuant to
which the Company has purchased substantially all of the assets of Bay Harbor in
consideration of the payment of certain sums in cash to Bay Harbor and in
consideration of the issuance of certain restricted shares of the Company’s
common stock (the “Shares”) to Bay Harbor as set forth in the Purchase
Agreement; and
WHEREAS, as an inducement for the
Company to issue the Shares and Bay Harbor to accept the Shares, Bay Harbor and
the Company desire to enter into this Agreement on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the
representations and warranties herein contained, the Company and Bay Harbor
agree as follows:
Shares. For
purposes of this Agreement, the Shares shall include: (a) fifty
thousand (50,000) restricted shares of the Company’s common stock to be issued
to Bay Harbor at the Closing of the asset purchase transaction contemplated by
the Purchase Agreement (the “Closing Shares”) as more fully set forth in Section
2.3.1(b) of the Purchase Agreement; and (b) one hundred fifty
thousand (150,000) restricted shares of the Company’s common stock to
be issued to the Escrow Agent identified in the Purchase Agreement and held in
the name of Bay Harbor at the Closing and subject to the Earn Out provisions of
the Purchase Agreement, (the “Earn Out Shares”) as more fully set forth in
Section 2.3.1(e) of the Purchase Agreement.
Lock-Up.
Bay
Harbor agrees that, except as provided below, without the prior written consent
of the Company, Bay Harbor will not, directly or indirectly, offer, sell,
pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of (each, a “Disposition”) any of the Shares for a
period of one (1) year from the date of issuance and thereafter according to the
Schedule below (the “Lock-Up Period”). The foregoing restriction,
which is expressly intended to preclude Bay Harbor from engaging in any
transaction which is designed to or reasonably expected to lead to or result in
a Disposition during the Lock-Up Period, shall terminate on the earlier of a
Change in Control event or the expiration of the Lock-Up Period.
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For
purposes of this Agreement, “Change in Control” means (a) a sale or other
disposition of all or substantially all of the assets of the Company; (b) a
merger or consolidation in which the Company is not the surviving entity and in
which the shareholders of the Company immediately prior to such consolidation or
merger own less than fifty percent (50%) of the surviving entity’s voting power
immediately after the transaction; (c) a reverse merger in which the Company is
the surviving entity but the shares of the Company’s Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, and in
which the shareholders of the Company immediately prior to such merger own less
than fifty percent (50%) of the Company’s voting power immediately after the
transaction; (d) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are
exchanged.
Share
Release. Bay Harbor and the Company agree that the Shares will
be subject to the following lock-up and release schedule (the
“Schedule”):
|
DATE
|
PERCENT
OF SHARES
RELEASED
|
|
12
month anniversary of Share issuance date
|
20%
|
|
13
month anniversary of Share issuance date
|
15%
|
|
14
month anniversary of Share issuance date
|
15%
|
|
15
month anniversary of Share issuance date
|
15%
|
|
16
month anniversary of Share issuance date
|
15%
|
|
17
month anniversary of Share issuance date
|
10%
|
|
18
month anniversary of Share issuance date
|
10%
|
Representations and
Warranties. Bay Harbor represents and warrants to the Company
that:
Purchase for Own Account for
Investment. Bay Harbor is investing in the Shares for its own
account for investment purposes only and not with a view to, or for sale in
connection with, a distribution of the Shares within the meaning of the
Securities Act of 1933, as amended (the “1933 Act”). Bay Harbor has
no present intention of selling or otherwise disposing of all or any portion of
the Shares and no one other than Bay Harbor has any beneficial ownership of any
of the Shares.
Accredited Investor/Net
Worth. Bay Harbor represents that Bay Harbor is an “accredited
investor” as that term is defined in SEC Rule 501(a) of Regulation D, 17 C.F.R.
230.501(a) and that Bay Harbor (a) has adequate net worth and means
of providing for its current financial needs and possible contingencies, (b) has
no need for liquidity in this investment, (c) is able to bear the economic risks
of an investment in the Shares for an indefinite period of time, and (d) is able
to bear the risk of losing its entire investment in the Shares.
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Not An
Underwriter. Bay Harbor is not an underwriter or dealer in the
Shares, and Bay Harbor is not participating, pursuant to a contractual
agreement, arrangement or understanding, in a distribution of the
Shares.
Compliance with Securities
Laws. Bay Harbor understands and acknowledges that, in
reliance upon the representations and warranties made by Bay Harbor herein, the
Shares are not being registered with the Securities and Exchange Commission
(“SEC”) under the 1933 Act or applicable United States state securities laws,
but instead are being issued under an exemption or exemptions from the
registration and qualification requirements of the 1933 Act or other applicable
state securities laws which impose certain restrictions on Bay Harbor’s ability
to transfer the Shares.
Restrictions on
Transfer. Bay Harbor understands that Bay Harbor may not
transfer any Shares unless such Shares are registered under the 1933 Act and
qualified under applicable state securities laws or unless exemptions from such
registration and qualification requirements are available. Bay Harbor
understands that only the Company may file a registration statement with the SEC
or applicable state securities commissioners and that the Company is under no
obligation to do so with respect to the Shares. Bay Harbor has also
been advised that exemptions from registration and qualification may not be
available or may not permit Bay Harbor to transfer all or any of the Shares in
the amounts or at the times proposed by Bay Harbor. Bay Harbor is
aware that the Shares may not be resold pursuant to Rule 144, as promulgated by
the SEC under the 1933 Act, unless all of the conditions of that rule are
met.
Legends. Bay
Harbor understands and agrees that the Company will place the legends set forth
below or similar legends on any stock certificate(s) evidencing the Shares,
together with any other legends that may be required by state or federal
securities laws, the Company's Articles of Incorporation or Bylaws, any other
agreement between Bay Harbor and the Company or any agreement between Bay Harbor
and any third party:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO REGISTRATION OR AVAILABLE
EXEMPTIONS FROM SUCH REGISTRATION. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON RESALE AND TRANSFER,
INCLUDING A LOCK-UP AND SHARE RELEASE SCHEDULE AS SET FORTH IN A LOCK-UP
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH SALE AND
TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE
SECURITIES.
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Stop-Transfer
Instructions. Bay Harbor agrees that, to ensure compliance
with the restrictions imposed by this Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
Refusal to
Transfer. The Company will not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Agreement or (ii) to treat as owner of such
Shares, or to accord the right to vote or pay dividends, to transferee to whom
such Shares have been so transferred.
Authority, Power,
Enforceability. Bay Harbor has all the requisite power,
authority and capacity to acquire and hold the Shares and to execute, deliver
and comply with the terms of each of the instruments required to be executed and
delivered by Bay Harbor in connection with the investment in the Shares as
contemplated by this Agreement and such execution, delivery and compliance does
not conflict with, or constitute a default under, any instruments governing Bay
Harbor, any law, regulation or order, or any agreement to which Bay Harbor is a
party or by which Bay Harbor may be bound. Bay Harbor hereby adopts,
accepts and agrees to be bound by all the terms and provisions of this Agreement
and to perform any obligations therein imposed.
Miscellaneous.
Assignments; Successors and
Assigns. The Company may assign any of its rights under this
Agreement. This Agreement will be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
herein, this Agreement will be binding upon Bay Harbor and its successors and
assigns.
Governing
Law. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed, and interpreted in accordance with
the laws of the State of California, without giving effect to principles of
conflicts of law.
Notices. Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient upon delivery, when delivered personally or by overnight
courier or sent by telegram or fax, or forty-eight (48) hours after being
deposited in the U.S. Mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified, and if to the Company, at the
Company’s principal executive office, with a copy to Xxxx X. Xxxxxxx, Xxxxxxxxx
Xxxxxx Xxxxxx PC, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000,
facsimile to (000) 000-0000.
Further
Assurances. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Agreement.
Titles and
Headings. The titles, captions and headings of this Agreement
are included for ease of reference only and will be disregarded in interpreting
or construing this Agreement.
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Counterparts;
Facsimiles. This Agreement may be executed and delivered by
facsimile signature and in two (2) or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one
instrument.
Severability. If
any provision of this Agreement is determined by any court or arbitrator of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such provision will be enforced to the maximum extent possible given the intent
of the parties hereto. If such clause or provision cannot be so enforced, such
provision shall be stricken from this Agreement and the remainder of this
Agreement shall be enforced as if such invalid, illegal or unenforceable clause
or provision had (to the extent not enforceable) never been contained in this
Agreement.
Amendment and
Waivers. This Agreement may be amended only by a written
agreement executed by each of the parties hereto. No amendment of or
waiver of, or modification of any obligation under this Agreement will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought. Any amendment effected in accordance with this
section will be binding upon all parties hereto and each of their respective
successors and assigns. Any waiver, permit, consent or approval of
any kind or character regarding the conditions of this Agreement or the breach
thereof must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded, shall be cumulative and not
alternative.
Entire
Agreement. This Agreement, the documents referred to herein,
and any other agreements executed as of the date hereof together constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements existing between the
parties hereto are expressly canceled. Bay Harbor hereby agrees that,
to the extent that the terms of this Agreement conflict with or are in any way
inconsistent with any agreement to which Bay Harbor and the Company may be a
party, this Agreement supersedes such agreement.
WAIVER OF JURY
TRIAL. THE PARTIES TO THIS AGREEMENT HEREBY WAIVE ANY RIGHT
THAT THEY MAY OTHERWISE HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR
PROCEEDING THAT ARISES OUT OF OR RELATES TO THIS AGREEMENT, ANY AMENDMENTS TO OR
ANY REPLACEMENTS OF THIS AGREEMENT, AND ANY TRANSACTIONS OR AGREEMENTS RELATING
TO THIS AGREEMENT. THE PARTIES UNDERSTAND THAT, AS A RESULT OF THIS
WAIVER, THE FACTS RELATING TO ANY DISPUTE THAT IS COVERED BY THIS WAIVER WILL BE
TRIED, IF NECESSARY, TO A JUDGE RATHER THAN TO A JURY.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed on their respective behalf, by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
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By: _____________________
Name: _____________________
Title: _____________________
Bay
Harbor Marketing, LLC
By: _____________________
Name: _____________________
Title: _____________________
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