MODEL PROMOTIONAL SHARES LOCK-IN AGREEMENT
1. This Promotional Shares Lock-In Agreement ("Agreement"), which is entered
into on this 11th day of December, 2000, by and between Kinship Systems, Inc.,
a Utah Corporation ("Issuer"), whose principal place of business is located at
22 East 000 Xxxxx, 0xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, and Xxxxxx Xxxxxxx of
0000 Xxxxx Xxxx Xxxxx Xxxxxx, Xxxxx, Xxxx 00000, ("Security Holder") witnesses
that:
A. The Issuer has filed an application with the Securities Administrator
of the State of Utah ("Administrators") to register certain of its
Equity Securities for sale to public investors who are residents of
that state "(Registration");
B. The Security Holder is the owner of 49% of the shares of common stock
of Issuer, which are deemed and defined as "promotional shares" for
the purposes of the Agreement.
C. As a condition to Registration, the Issuer and Security Holder
("Signatories") agree to be bound by the terms of this Agreement.
II. THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate,
assign, grant any option for the sale of, or otherwise transfer or dispose of,
whether or not for consideration, directly or indirectly, PROMOTIONAL SHARES as
defined in the North American Securities Administrators Association ("NASAA")
Statement of Policy on Corporate Securities Definitions and all certificates
representing stock dividends, stock splits, recapitalizations, and the like,
that are granted to, or received by, the Security Holder while the PROMOTIONAL
SHARES are subject to this Agreement ("Restricted Securities").
A. Beginning two years from the completion date of the public offering,
two and one-half percent (2 %%) of the Restricted Securities may be
released each quarter pro rata among the Security Holders. All
remaining Restricted Securities shall be released from escrow on the
anniversary of the fourth year from the completion date of the public
offering; OR:
B. If the Issuer's AGGREGATE REVENUES are:
1. $500,000 or more; provided that neither the auditor's report nor
any footnote to the issuer's latest audited financial statements
contain an opinion or statement regarding the ability of the
issuer to continue as a going concern: Beginning one year from
the date of completion of the offering, two and one-half percent
(2 % %) of PROMOTIONAL SHARES held ire escrow may be released
each quarter pro rata among the Depositors. All remaining
PROMOTIONAL SHARES shall be released from escrow on the second
anniversary from the date of completion of the offering.
III. THEREFORE, the Signatories agree and will cause the following:
A. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is not a Promoter, which results in the
distribution of the Issuer's assets or securities ("Distribution"),
while this Agreement remains in effect that:
1. All holders of the Issuer's EQUITY SECURITIES will initially
share on a pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other consideration that they
paid per share for their EQUITY SECURITIES (provided that the
Administrator has accepted the value of the other consideration),
until the shareholders who purchased the Issuer's EQUITY
SECURITIES pursuant to the public offering ("Public
Shareholders") have received, or have had irrevocably set aside
for them, an amount that is equal to one hundred percent (100%)
of the public offering's price per share times the number of
shares of EQUITY SECURITIES that they purchased pursuant to the
public offering and which they still hold at the time of the
Distribution, adjusted for stock splits, stock dividends
recapitalizations and the like; and
2. All holders of the Issuer's EQUITY SECURITIES shall thereafter
participate on an equal, per share basis times the number of
shares of EQUITY SECURITIES they hold at the time of the
Distribution, adjusted for stock splits, stock dividends,
recapitalizations and the like.
3. The Distribution may proceed on lesser terms and conditions that
the terms and conditions stated in paragraphs 1 and 2 above if a
majority of the EQUITY SECURITIES that are not held by Security
Holders, officers, directors, or Promoters of the Issuer, or
their associates or affiliates vote, or consent by consent
procedure, to approve the lesser terms and conditions.
B. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is a Promoter, which results in a
Distribution while this Agreement remains in effect, the Restricted
Securities shall remain subject to the terms of this Agreement.
C. Restricted Securities may be transferred by will, the laws of descent
and distribution, the operation of law, or by order of any court of
competent jurisdiction and proper venue.
D. Restricted Securities of a deceased Security Holder may be
hypothecated to pay the expenses of the deceased Security Holder's
estate. The hypothecated Restricted Securities shall remain subject to
the terms of this Agreement. Restricted Securities may not be pledged
to secure any other debt.
E. Restricted Securities may be transferred by gift to the Security
Holder's family members, provided that the Restricted Securities shall
remain subject to the terms of the Agreement.
F. With the exception of paragraph A.3 above, the Restricted Securities
shall have the same voting rights as similar EQUITY SECURITIES not
subject to the Agreement.
G. A notice shall be placed on the lace o each stock certificate of the
Restricted Securities covered by the terms of the 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
H. A typed legend shall be placed on the reverse side of each stock
certificate of the Restricted Securities representing stock covered by
this Agreement which states that the sale or transfer of the shares
evidenced by the certificate may be subject to certain restrictions
until December 15, 2004 pursuant to this Agreement between the
Security Holder (whether beneficial or of record) and the Issuer,
which agreement is on file with the Issuer and the stock transfer
agent from which a copy is available upon request and without charge.
I. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrators ("Effective
Date") and shall terminate:
1. On the anniversary of the fourth year from the completion date of
the public offering; or
2. On the date the Registration has been terminated if no securities
were sold pursuant thereto; or
3. If the Registration has been terminated, the date that checks
representing all of the gross proceeds that were derived
therefrom and addressed to the public investors have been placed
in the U. S. Postal Service with first class postage affixed; or
4. On the date the securities subject to this Agreement become
"Covered Securities," as defined under the National Securities
Markets Improvement Act of 1996.
J. This Agreement to be modified only with the written approval of the
Administrators.
IV. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of the Agreement signed by the Signatories to
be filed with the Administrators prior to the Effective Date;
B. Copies of the Agreement arid a statement of the per share initial
public offering price to be provided to the Issuer's stock transfer
agent.
C. Appropriate stock transfer orders to be placed with the Issuer's stock
transfer agent against the sale or transfer of the shares covered by
the Agreement prior to its expiration, except as may otherwise be
provided in the Agreement;
D. The above stock restriction legends to be placed on the periodic
statement sent to the registered owner if the securities subject to
this Agreement are uncertificated securities.
Pursuant to the requirements of this Agreement, the Signatories have entered
into this Agreement, which may be written in multiple counterparts and each of
which shall be considered an original. The Signatories have signed the Agreement
in the capacities, and on the dates, indicated.
3
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
KINSHIP SYSTEMS, 1NC.
By: /s/ Xx. Xxxxx Xxxx
----------------------
Xx. Xxxxx Xxxx
Its President
Xx. Xxxxxx Xxxxxxx
------------------
Printed Name of Security Holder
Its N/A
/s/
------------------
Signature
MODEL PROMOTIONAL SHARES LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement ("Agreement"), which is entered
into on this 11th day of December, 2000, by and between Kinship Systems, Inc., a
Utah Corporation ("Issuer"), whose principal place of business is located at 22
East 000 Xxxxx, 0xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, and Xxxxx Xxxx of 0000
Xxxx 000 Xxxxx, Xxxxx Xxxxxxx, Xxxx 00000, ("Security Holder") witnesses that:
A. The Issuer has filed an application with the Securities Administrator
of the State of Utah ("Administrators") to register certain of its
Equity Securities for sale to public investors who arc residents of
that state "(Registration");
B. The Security Holder is the owner of 49 of the shares of common stock
of Issuer, which are deemed and defined as "promotional shares" for
the purposes of the Agreement.
C. As a condition to Registration, the Issuer and Security Holder
("Signatories") agree to be bound by the terms of this Agreement.
II. THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate,
assign, grant any option for the sale of, or otherwise transfer or dispose of,
whether or not for consideration, directly or indirectly, PROMOTIONAL SHARES as
defined in the North American Securities Administrators Association ("NASAA")
Statement of Policy on Corporate Securities Definitions and all certificates
representing stock dividends, stock splits, recapitalizations, and the like,
that are granted to, or received by, the Security Holder while the PROMOTIONAL
SHARES are subject to this Agreement ("Restricted Securities").
A. Beginning two years from the completion date of the public offering,
two and one-half percent (2'/z%) of the Restricted Securities may be
released each quarter pro rata among the Security Holders. All
remaining Restricted Securities shall be released from escrow on the
anniversary of the fourth year from the completion date of the public
offering; OR:
B. If the Issuer's AGGREGATE REVENUES are:
1. $500,000 or more; provided that neither the auditor's report nor
any footnote to the issuer's latest audited financial statements
contain an opinion or statement regarding the ability of the
issuer to continue as a going concern: Beginning one year from
the date of completion of the offering, two and one-half percent
(2-1/2 %) of PROMOTIONAL SHARES held in escrow may be released
each quarter pro rata among the Depositors. All remaining
PROMOTIONAL SHARES shall be released from escrow on the second
anniversary from the date of completion of the offering.
III. THEREFORE, the Signatories agree and will cause the following:
A. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is not a Promoter, which results in the
distribution of the Issuer's assets or securities ("Distribution"),
while this Agreement remains in effect that:
1
1. All holders of the Issuer's EQUITY SECURITIES will initially
share on a, pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other consideration that they
paid per share for their EQUITY SECURITIES (provided that the
Administrator has accepted the value of the other consideration),
until the shareholders who purchased the Issuer's EQUITY
SECURITIES pursuant to the public offering ("Public
Shareholders") have received, or have had irrevocably set aside
for them, an amount that is equal to one hundred percent (100%)
of the public offering's price per share times the number of
shares of EQUITY SECURITlES that they purchased pursuant to the
public offering and which they still hold at the time of the
Distribution, adjusted for stock splits, stock dividends
recapitalizations and the like; and
2. All holders of the Issuer's EQUITY SECURITIES shall thereafter
participate on an equal, per share basis times the number of
shares of EQUITY SECURITIES they hold at the time of the
Distribution, adjusted for stock splits, stock dividends,
recapitalizations and the like.
3. The Distribution may proceed on lesser terms and conditions that
the terms and conditions stated in paragraphs 1 and 2 above if a
majority of the EQUITY SECURITIES that are not held by Security
Holders, officers, directors, or Promoters of the Issuer, or
their associates or affiliates vote, or consent by consent
procedure, to approve the lesser terns and conditions.
B. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is a Promoter, which results in a
Distribution while this Agreement remains in effect, the Restricted
Securities shall remain subject to the terms of this Agreement.
C. Restricted Securities may be transferred by will, the laws of descent
and distribution, the operation of law, or by order of any court of
competent jurisdiction and proper venue.
D. Restricted Securities of a deceased Security Holder may be
hypothecated to pay the expenses of the deceased Security Holder's
estate. The hypothecated Restricted Securities shall remain subject to
the terms of this Agreement. Restricted Securities may not be pledged
to secure any other debt.
E. Restricted Securities may be transferred by gift to the Security
Holder's family members, provided that the Restricted Securities shall
remain subject to the terms of the Agreement.
F. With the exception of paragraph A.3 above, the Restricted Securities
shall have the same voting rights as similar EQUITY SECURITIES not
subject to the Agreement.
G. A notice shall be placed on the face o each stock certificate of the
Restricted Securities covered by the terms of the 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
H. A typed legend shall be placed on the reverse side of each stock
certificate of the Restricted Securities representing stock covered by
this Agreement which states that the sale or transfer of the shares
evidenced by the certificate may be subject to certain restrictions
until December 15, 2004 pursuant to this Agreement between the
Security Holder (whether beneficial or of record) and the Issuer,
which agreement is on file with the Issuer and the stock transfer
agent from which a copy is available upon request and without charge.
I. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrators ("Effective
Date") and shall terminate:
1. On the anniversary of the fourth year from the completion date of
the public offering; or
2. On the date the Registration has been terminated if no securities
were sold pursuant thereto; or
3. If the Registration has been terminated, the date that checks
representing all of the gross proceeds that were derived
therefrom and addressed to the public investors have been placed
in the U. S. Postal Service with first class postage affixed; or
4. On the date the securities subject to this Agreement become
"Covered Securities," as defined under the National Securities
Markets Improvement Act of 1996.
J. This Agreement to be modified only with the written approval of the
Administrators.
IV. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of the Agreement signed by the Signatories to
be filed with the Administrators prior to the Effective Date;
B. Copies of the Agreement and a statement of the per share initial
public offering price to be provided to the Issuer's stock transfer
agent.
C. Appropriate stock transfer orders to be placed with the Issuer's stock
transfer agent against the sale or transfer of the shares covered by
the Agreement prior to its expiration, except as may otherwise be
provided in the Agreement;
D. The above stock restriction legends to be placed on the periodic
statement sent to the registered owner if the securities subject to
this Agreement are uncertificated securities.
Pursuant to the requirements of this Agreement, the Signatories have entered
into this Agreement, which may be written in multiple counterparts and each of
which shall be considered an original. The Signatories have signed the Agreement
in the capacities, and on the dates, indicated.
IN WITNESS W.HIRIOF, the Signatories have executed this Agreement.
KINSHIP SYSTEMS, INC.
By /s/ Xx. Xxxxxx Xxxxxxx
-------------------------
Xx. Xxxxxx Xxxxxxx
Its Vice President
Xx. Xxxxx Xxxx
--------------
Printed Name of Security Holder
Its N/A
/s/
---------------
Signature
