October 4, 2013 Firsthand Technology Value Fund, Inc.
October 4, 2013
000 Xxxxxxx Xxxx., Xxxxx 0000
San Jose, California 95113
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Exchange Agreement (the “Exchange Agreement”), among Firsthand Technology Value Fund, Inc., a Maryland corporation (the “Company”), and the purchasers listed on Schedule 1.01 thereto (the “Purchasers”), pursuant to which (a) each of the Noteholder Purchasers (as defined in the Exchange Agreement) shall exchange a portion of the Intraop Debentures held by them for newly issued shares of Common Stock of the Company, par value $0.001 per share (the “Common Stock”), and (b) each of the Factoring Lender Purchasers (as defined in the Exchange Agreement) shall exchange a portion of the Intraop Factoring Credit Interests (as defined in the Exchange Agreement) held by them for newly issued shares of Common Stock.
In order to induce you to enter into the Exchange Agreement, the undersigned will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of Common Stock or securities convertible into or exchangeable or exercisable for any shares of Common Stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of Common Stock, whether any of these transactions are to be settled by delivery of Common Stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the Company for a period of five (5) years after the date of the Exchange Agreement (such period, the “Lock-Up Period”). The securities subject to lock-up agreements shall be released from the obligations herein on the following schedule: (a) 40% on the second anniversary of the date of the Exchange Agreement; (b) 20% on the third anniversary of the date of the Exchange Agreement; (c) 20% on the fourth anniversary of the date of the Exchange Agreement; and (d) 20% on the fifth anniversary of the date of the Exchange Agreement.
Notwithstanding the foregoing, the undersigned may transfer any shares of Common Stock owned by him or her or any interest therein (i) for estate-planning purposes to (x) a trust under which the distribution of the shares of Common Stock transferred thereto may be made only to beneficiaries who are the undersigned, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants (collectively, “Permitted Family Members”), (y) a corporation the shareholders of which are only the undersigned or Permitted Family Members or (z) a partnership the partners of which are only the undersigned or Permitted Family Members or (ii) in case of the death of the undersigned, by will or by the laws of intestate succession, to his or her executors, administrators, testamentary trustees, legatees or beneficiaries (each such person to which a transfer is permitted pursuant to clauses (i) and (ii) immediately above is hereinafter referred to as a “Permitted Transferee”); provided, however, that in each such case, the shares of Common Stock transferred shall be subject to all provisions of this agreement as though the undersigned were still the holder of such shares of Common Stock; and provided further, that the Permitted Transferee must execute and deliver to the Company an agreement stating that the Permitted Transferee is receiving and holding such shares of Common Stock in the same manner as the person making the transfer.
Subject to regulations promulgated by the Securities and Exchange Commission and the internal compliance procedures of the Company, the undersigned may place shares of Common Stock that have been registered pursuant to a valid registration statement in marginable broker accounts and may allow the broker of such marginable broker account to sell shares of Common Stock only to the extent necessary to satisfy a margin call, provided, however, that the undersigned shall (i) take all reasonable efforts to ensure that such margin call is satisfied, to the extent possible, by securities other than the Common Stock and (ii) promptly notify the Company in writing if a margin call involving shares of Common Stock occurs.
If for any reason the Exchange Agreement shall be terminated prior to the Closing Date (as defined in the Exchange Agreement), the agreement set forth above shall likewise automatically be terminated.
Yours very truly,
LACUNA VENTURE FUND LLLP
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By:
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Lacuna Ventures GP LLLP, its general partner
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By:
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Lacuna, LLC, its general partner
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By:
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/s/ Xxxxxxxx Xxxxx
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Name:
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Xxxxxxxx Xxxxx
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Title:
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Partner
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Address:
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0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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Facsimile:
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000-000-0000
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LACUNA HEDGE FUND LLLP
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By:
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Lacuna Hedge GP LLLP, its general partner
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By:
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Lacuna, LLC, its general partner
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By:
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/s/ Xxxxxxxx Xxxxx
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Name:
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Xxxxxxxx Xxxxx
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Title:
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Partner
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Address:
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0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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Facsimile:
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000-000-0000
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/s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, an individual
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Address:
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000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
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Facsimile:
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000-000-0000
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