LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (the "Agreement") is made and entered into on February
4, 2008 between the E X. Xxxxx Trust, X. X. Xxxxx, XX, Xxxxxxx X. Xxxxx and
Xxxxx Case (each, a "Holder" and collectively the "Shareholders") and North
American Gaming Corporation, a Nevada corporation (the "Company").
RECITALS
A. The Company has determined that it is advisable and in its best interest to
enter into that certain Plan of Exchange Agreement, dated February 4, 2008(the
"Exchange Agreement") with Hongkong Wah Bon Limited, a Hong Kong corporation,
("Wah Bon") and its subsidiaries. Pursuant to the Exchange Agreement, a lock up
agreement is required of certain of the Company's officers, directors and
shareholders named therein (the "Shareholders") and certain other parties named
therein. Capitalized terms used and not otherwise defined herein that are
defined in the Exchange Agreement will have the meanings given such terms in
the Exchange Agreement.
B. It is a condition to the Shareholders' respective obligations to close
under the Exchange Agreement and provide the close the intended transaction
contemplated by the Exchange that the Holder execute and deliver to the Company
this Agreement.
C. In contemplation of, and as a material inducement for Wah Bon to enter
into, the Exchange Agreement, the Holder and the Company have each agreed to
execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. Effectiveness of Agreement. This Agreement shall become null and void
if the Exchange Agreement is terminated prior to closing.
The Holder has independently evaluated the merits of its decision to enter into
and deliver this Agreement, and such Holder confirms that it has not relied on
the advice of the Company or any other person.
2. Representations and Warranties. Each of the parties hereto, by their
respective execution and delivery of this Agreement, hereby represents and
warrants to the others and to all third party beneficiaries of this Agreement
that (a) such party has the full right, capacity and authority to enter into,
deliver and perform its respective obligations under this Agreement, (b) this
Agreement has been duly executed and delivered by such party and is the binding
and enforceable obligation of such party, enforceable against such party in
accordance with the terms of this Agreement and (c) the execution, delivery and
performance of such party's obligations under this Agreement will not conflict
with or breach the terms of any other agreement, contract, commitment or
understanding to which such party is a party or to which the assets or
securities of such party are bound.
3. Beneficial Ownership. Holder hereby represents and warrants that it
does not beneficially own (as determined in accordance with Section 13(d) of
the Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder) any shares of Common Stock, or any economic interest therein or
derivative therefrom, other than those shares of Common Stock specified on its
signature page to this Agreement. For purposes of the Agreement the shares of
Common Stock beneficially owned by such Holder as specified on its signature
page to this Agreement are collectively referred to as the "Holder's Shares."
4. Lockup. The E X. Xxxxx Trust, X. X. Xxxxx, XX, Xxxxxxx X. Xxxxx and Xxxxx
Case and the Company hereby agree to a "lockup" under which the Shareholders
agree that the Company shall not remove the restrictive legend regarding this
lock-up agreement or otherwise permit sales of the Holder's Shares or other
restricted securities except in accordance herewith. The shareholders may, on a
pro-rata basis, remove restrictive legends and sell certain of the locked up
shares on the following schedule provided that the selling party complies with
Rule 144 in effecting such sales. The collective total of shares that may be
sold during the term of this Lockup Agreement and the schedule for release and
sale is as follows:
(a) 5,000,000 pre-reverse split shares collectively shall be
released and permitted for resale after the expiration of 90 days
following the end day of closing until the expiration of 180 days
following the Closing Date;
(b) 5,000,000 pre-reverse split shares collectively shall be
released and permitted for resale after the expiration of 180 days
following the end day of closing until the expiration of 270 days
following the Closing Date;
(c) 5,000,000 pre-reverse split shares collectively shall be
released and permitted for resale after the expiration of 271 days
following the end day of closing until the expiration of 360 days
following the Closing Date.
(d) On the one year anniversary date of the Closing Date, the
lockup shall expire and all remaining shares shall be eligible for the
removal of the restrictive legend and resale in accordance with law.
Except as set forth herein, none of the Shareholders shall sell, pledge,
hypothecate, cover a short position, encumber or otherwise transfer any or all
of the Shareholder's rights to the Holder's shares in any manner whatsoever.
5. Third-Party Beneficiaries. The Holder and the Company acknowledge and
agree that this Agreement is entered into for the benefit of and is enforceable
by the Shareholders and their successors and assigns.
6. No Additional Fees/Payment. Other than the consideration specifically
referenced herein, the parties hereto agree that no fee, payment or additional
consideration in any form has been or will be paid to the Holder in connection
with this Agreement.
7. Enumeration and Headings. The enumeration and headings contained in
this Agreement are for convenience of reference only and shall not control or
affect the meaning or construction of any of the provisions of this Agreement.
8. Counterparts. This Agreement may be executed in facsimile and in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which shall together constitute one and the same
agreement.
9. Successors and Assigns; Third Party Beneficiaries. This Agreement and
the terms, covenants, provisions and conditions hereof shall be binding upon,
and shall inure to the benefit of, the respective heirs, successors and assigns
of the parties hereto, provided that the Shareholders shall be intended third
party beneficiaries of this Agreement.
10. Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, such provision will be conformed to
prevailing law rather than voided, if possible, in order to achieve the intent
of the parties and, in any event, the remaining provisions of this Agreement
shall remain in full force and effect and shall be binding upon the parties
hereto.
11. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by each of the parties hereto if
and only if such modification or amendment is consented to in writing by the
Shareholders holding a majority in interest of the Common Stock issued or
issuable under the Exchange Agreement.
12. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
13. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
14. Remedies. The Company and the Shareholders shall have the right to
specifically enforce all of the obligations of the Holder under this Agreement
(without posting a bond or other security), in addition to recovering damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. Furthermore, the Holder recognizes that if it
fails to perform, observe, or discharge any of its obligations under this
Agreement, any remedy at law may prove to be inadequate relief to the Company
or the Shareholders. Therefore, the Holder agrees that each of the Company and
the Shareholders shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
15. Governing Law. The terms and provisions of this Agreement shall be
construed in accordance with the laws of the State of Delaware and the federal
laws of the United States of America applicable therein.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as of the day and year first above written.
The E X. Xxxxx Trust:
By:
Number of shares of Common Stock beneficially owned:
_______
X. X. Xxxxx, XX
Number of shares of Common Stock beneficially owned:
_______
______________________________________________
Xxxxxxx X. Xxxxx
Number of Shares of Common Stock beneficially owned:
________
_____________________________________________
Xxxxx Case
Number of Shares of Common Stock beneficially owned
________
NORTH AMERICAN GAMING CORPORATION
By:
Name: X. X. Xxxxx
Title: CEO, President and Chairman of the Board
