EXHIBIT 10.7
GLOBALOPTIONS, INC.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
May __, 2005
To the Holders of GlobalOptions Common Stock and other Securities:
RE: REVERSE MERGER LOCK-UP AGREEMENT
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Ladies and Gentlemen:
GlobalOptions, Inc. (the "COMPANY") plans to enter into a reverse
merger transaction (the "REVERSE MERGER") with a publicly-traded company,
concurrently with a private placement by the publicly-traded company of a
minimum of $7,500,000 of Units, each Unit consisting of one share of series A
convertible preferred stock and a warrant to purchase 125 shares of common stock
(the "FUNDING TRANSACTIONS"). The publicly-traded company, which is called
"PUBCO" for purposes of this lock-up agreement, will then succeed to and operate
the business of the Company under the current management of the Company. We
currently expect to close these Funding Transactions on or around May 18, 2005.
Pubco is not identified at this time due to securities regulations regarding
"insider" knowledge of upcoming transactions involving publicly-traded
securities.
You are a holder (a "HOLDER") of (i) outstanding shares of common
stock of GlobalOptions, (ii) outstanding shares of Series A, Series A-1 or
Series A-2 preferred stock of GlobalOptions which are convertible into shares of
common stock, (iii) convertible notes of GlobalOptions which are convertible
into shares of common stock, (iv) warrants to purchase shares of Series A-1
preferred stock or common stock of GlobalOptions or (v) stock options to
purchase shares of common stock of GlobalOptions, which, if we are successful in
closing the Funding Transactions, will be exchanged for common stock ("COMMON
STOCK") of Pubco (or, in the case of stock options, options to purchase Pubco
Common Stock) (the "PUBCO SHARES") following the Funding Transactions.
IT IS ESSENTIAL TO THE SUCCESS OF THE FUNDING TRANSACTIONS THAT THE
COMPANY AND ITS FINANCIAL ADVISORS CAN GIVE COMFORT TO POTENTIAL INVESTORS THAT
THE "AFTER MARKET" FOR THE PUBCO SHARES WILL NOT BE DISRUPTED BY A VERY
SUBSTANTIAL BLOCK OF SHARES BEING SOLD IN AN INAPPROPRIATE FASHION. WE ARE
OBTAINING SUCH COMFORT, SUBSTANTIALLY IN THE FORM PROVIDED FOR BELOW, FROM ALL
GLOBALOPTIONS HOLDERS, INCLUDING EACH OF OUR OFFICERS, DIRECTORS AND PRINCIPAL
SHAREHOLDERS.
By signing and returning this agreement in the manner indicated
below, the undersigned, ____________________________________ [Insert Name Here]
hereby agrees NOT to, directly or indirectly, publicly sell, contract to sell or
otherwise transfer any of the Pubco Shares beneficially owned by you immediately
after the closing of the Funding Transactions (your "INITIAL HOLDINGS") except
as follows:
o if you are an employee or director, or an affiliate thereof,
of GlobalOptions (an "INSIDER"), (i) during the first 12
months following the closing date of the Funding Transactions,
you may NOT sell your Pubco Shares; (ii) from 12 months, and
at each subsequent three-month interval thereafter, you may
sell your Pubco Shares at a rate of 12.5% of your Initial
Holdings, subject to Pubco's Common Stock having an average
"asked" price of at least $4.00 per share for the 30-day
period preceding such sale; and (iii) from 24 months, and at
each subsequent three-month interval thereafter, you will be
permitted to sell up to 12.5% of your Initial Holdings during
each three-month interval regardless of the trading price of
Pubco's Common Stock; and
o if you are not an Insider, (i) beginning 90 days after the
effective date of a registration statement filed with respect
to the Pubco Shares, you may sell your Pubco Shares at a rate
of 12.5% of your Initial Holdings per 90-day period, at a
market price of not less than $2.00 per share; and (ii)
beginning immediately after the closing of a private
investment in public equity (PIPE) transaction or secondary
public offering that raises a minimum of $30.0 million in
gross proceeds for Pubco at a minimum price of $2.50 per
share, you may sell your Pubco Shares at a rate of 25% of your
Initial Holdings per 90-day period, at a market price not less
than the price per share of Common Stock (or Common Stock
equivalent) in the PIPE or secondary public offering.
To the extent that you do not sell Pubco Shares during a three-month
or 90-day interval during which sales are permitted as described in this
paragraph, the Pubco Shares that could have been sold during such three-month
interval may be sold in a subsequent three-month interval, in addition to any
other Pubco Shares that may be sold in such subsequent three-month or 90-day
interval.
This agreement and all restrictions on your ability to sell Pubco
Shares set forth herein shall terminate on the date that is 36 months following
the closing date of the Funding Transactions.
Pubco, acting with the consent of its financial advisors, may waive
in writing any provision of the lock-up agreements executed by Holders if and
only if (i) any such waiver is simultaneously applicable to all other Pubco
Shares issued to Holders, and (ii) at least five business days' advance written
notice of such waiver is provided to all Holders. In the event that a particular
waiver applies to only a percentage of the Pubco Shares held by each Holder,
then the percentage shall be identical for each such Holder.
BECAUSE OF THE IMPORTANCE OF THE LOCK-UP TO THE FUNDING
TRANSACTIONS, IF YOU FAIL TO EXECUTE AND RETURN THIS LOCK-UP AGREEMENT TO THE
COMPANY, YOU MAY NOT BE ENTITLED TO INCLUDE ANY OF YOUR PUBCO SHARES IN THE
REGISTRATION STATEMENT THAT THE COMPANY INTENDS TO FILE WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION FOLLOWING THE CLOSING OF THE FUNDING TRANSACTIONS.
PLEASE NOTE THAT THERE CAN BE NO ASSURANCE THAT SUCH REGISTRATION STATEMENT WILL
BE FILED OR WILL BECOME EFFECTIVE OR THAT ANY OR ALL OF YOUR PUBCO SHARES WILL
BE INCLUDED THEREIN.
By signing and returning this agreement, you further (i) represent
and consent that you have full power and authority to enter into this lock-up
agreement and that, upon request, you will execute any additional documents
necessary or desirable in connection with this lock-up agreement and its
enforcement; and (ii) understand that this lock-up agreement is irrevocable by
you, all authority herein conferred by you or agreed to be conferred by you
shall survive your death or incapacity, and any of your obligations hereunder
shall be binding on you and your heirs, personal representatives, successors and
assigns.
In order to enable the aforesaid covenant to be enforced, you hereby
consent to the placing of a legend and/or stop-transfer order with the transfer
agent of the Common Stock with respect to any of the Pubco Shares registered in
your name or beneficially owned by you.
Whether the Funding Transactions actually occur depends on a number
of factors. Notwithstanding the foregoing, this lock-up agreement will terminate
on July 18, 2005, in the event that the Funding Transactions are not completed
on or before such date.
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Accordingly, to evidence your agreement to the terms hereof, please
date, sign and return this lock-up agreement to the Company by courier, Federal
Express or fax NO LATER THAN THE CLOSE OF BUSINESS ON MAY 18, 2005. If you
return your signed lock-up agreement to the Company by fax, please promptly mail
the executed copy of the lock-up agreement to the Company.
Acknowledged and Agreed
this ___ day of May, 2005:
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By:
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Name:
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Entity (if any):
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Title (if Shares held by Entity):
RETURN TO THE COMPANY BY FAX: AT (000) 000-0000
-AND-
BY FEDERAL EXPRESS OR OVERNIGHT COURIER TO:
GlobalOptions, Inc.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx, Chairman
Tel: (000) 000-0000
Accepted:
GLOBALOPTIONS, INC.
By:
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Xxxxxx X. Xxxxxxxx
Chairman
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