DEBENTURE REDEMPTION AGREEMENT
This DEBENTURE REDEMPTION AGREEMENT, dated as of May 1,
2003 (this "Agreement"), is by and among AJW Partners, LLC, a Delaware
limited liability company ("AJW Partners"), New Millennium Capital
Partners II, LLC, a New York limited liability company ("New
Millennium") AJW Offshore, Ltd. ("AJW Offshore"), a Cayman Islands
entity and AJW Qualified Partners, LLC ("AJW Qualified"), a New York
limited liability company (AJW Partners, New Millennium, AJW Offshore
and AJW Qualified being collectively referred to herein as the
"Sellers" and individually as a "Seller") and Phoenix International
Industries, Inc., a Florida corporation (the "Company").
WHEREAS, as of the date hereof, the Sellers hold 12%
Secured Convertible Debentures (the "Debentures") of the Company in
the aggregate principal amount of $2,271,990.00, which were issued or
reissued, as the case may be, pursuant to that certain Securities
Purchase Agreement, dated September 21, 2001, by and among the Sellers
and the Company, as amended on October 3, 2001 (the "Purchase
Agreement"), and are owed an aggregate amount of $403,908.90 by the
Company for accrued interest on the Debentures;
WHEREAS, in connection with the execution of the Purchase
Agreement and the consummation of the transactions contemplated
therein, the Sellers and the Company entered into a Registration
Rights Agreement, dated September 21, 2001, as amended on October 3,
2001 (the "Registration Rights Agreement"), and a Security Agreement,
dated September 21, 2001 (the "Security Agreement");
WHEREAS, the Company desires to redeem the Debentures
listed opposite each Seller's name on Schedule I attached hereto (as
to each Seller, its "Owned Debentures"), and the Sellers desire for
the Company to effect such redemption, in accordance with terms and
subject to the conditions set forth herein; and
WHEREAS, each of the parties hereto desire to set forth in
this Agreement certain agreements and understandings among themselves
with respect to, among other things, the redemption by the Company of
the Owned Debentures.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto
agree as follows:
1. Redemption of the Owned Debentures. The Sellers and the
Company hereby agree that the Company shall redeem the Owned
Debentures in the manner set forth in Section 2 hereof. The Owned
Debentures shall be redeemed by the Company at an amount equal to the
Aggregate Redemption Price set forth opposite each Seller's name on
the attached Schedule I less any conversions of the Owned Debentures
by the Sellers in accordance with Section 4 hereof (the "Net
Redemption Amount"). Upon full payment of the Net Redemption Price
due each Seller, such Seller shall return the Owned Debentures to the
Company for cancellation.
2. Redemption Schedule; Payment of Net Redemption Amount. The
Company shall pay the Net Redemption Price to the Sellers in monthly
installments in the amount of $40,000 (the "Monthly Redemption
Payment"), with the first installment thereof due on July 1, 2003 and
subsequent installments thereof due on the first business day of each
succeeding month (each, a "Payment Date") until the Net Redemption
Amount has been paid in full. Each Monthly Redemption Payment shall
be allocated to each of the Sellers according to the respective Seller
Allocation Percentage set forth opposite such Seller's name on the
attached Schedule I (the "Allocated Amounts") until all of such
Seller's Owned Debentures have been redeemed or converted in
accordance with the terms of hereof. The Company shall pay the
Allocated Amounts to the applicable Seller by wire transfer of
immediately available funds pursuant to each Seller's written
instructions set forth on the attached Schedule II on each Payment
Date. The Allocated Amount shall be applied with respect to each
Seller in the following order: (i) Accrued Interest (as set forth on
the attached Schedule I), (ii) Redemption Premium (as set forth on the
attached Schedule I), and (iii) outstanding principal balance of the
Owned Debentures.
3. Prohibited Conversions. The Sellers shall not convert the
Owned Debentures into shares of the Company's common stock, par value
$.001 per share (the "Shares") during the period commencing on the
date hereof and ending on June 30, 2003 (the "Prohibited Period")
4. Permitted Conversions. Notwithstanding redemption of the
Owned Debentures pursuant to Sections 1 and 2 hereof, following the
Prohibited Period, each Seller shall be permitted to convert its Owned
Debentures, to the extent such Owned Debentures have not been
previously redeemed hereunder, into Shares in accordance with the
terms and subject to the conditions of the Owned Debentures, subject
to the following restrictions:
(a) If the last reported sale price of the Shares on the
Over-the-Counter Bulletin Board as reported by Bloomberg (the "Price")
is less than $.10 per Share, then the Sellers shall have the right to
convert their Owned Debentures into not more than an aggregate of
300,000 Shares every thirty (30) days during the period in which the
Price remains less than $.10 per Share,
(b) If the Price is equal to or exceeds $.10 per Share but
is less than $.20 per Share, then the Sellers shall have the right to
convert their Owned Debentures into not more than an aggregate of
500,000 Shares every thirty (30) days during the period that the Price
is equal to or exceeds $.10 per Share but is less than $.20 per Share,
(c) If the Price is equal to or exceeds $.20 per Share but
is less than $.30 per Share, then the Sellers shall have the right to
convert their Owned Debentures into not more than an aggregate of
750,000 Shares every thirty (30) days during the period that the Price
is equal to or exceeds $.20 per Share but is less than $.30 per Share,
and
(d) If the Price is equal to or exceeds $.30 per Share,
then the Sellers shall not be restricted by the Company hereunder with
respect to the number of Shares into which the Debentures may be
converted during the period that the Price is equal to or exceeds $.30
per Share,
provided, however, that if the Company fails to (i) make the Monthly
Redemption Payment pursuant to Section 2 hereof within five (5)
business days following the Payment Date or (ii) pay any delinquent
amounts that are due and owing under this Agreement, then the
foregoing restrictions on the Sellers' right to convert their Owned
Debentures into Shares shall be
2
suspended until the first day of the next month following the date that
the Monthly Redemption Payment is received in full by the Sellers.
5. Issuance of Additional Shares. The Company shall issue and
deliver to AJW Partners, New Millennium, AJW Offshore and AJW
Qualified, based upon the Seller Allocation Percentage set forth on
the attached Schedule I, shares of common stock representing, in the
aggregate, one percent (1%) of the outstanding shares of the Company
on the earlier to occur of: (i) the date of full conversion by the
Sellers of all of the Owned Debentures and (ii) the date of payment by
the Company of the total Aggregate Redemption Price (collectively, the
"Additional Shares").
6. Interest. Interest on the outstanding balance of the Owned
Debentures shall continue to accrue following the date hereof as
specified in the respective Owned Debenture and shall be payable in
cash or Shares in accordance with the terms thereof.
7. Effectiveness of the Registration Statement. The Company
shall take all necessary actions, including the preparing and filing
of one or more registration statements of the Company and any
amendments or supplements thereto (the "Registration Statement")
required under the Securities Act of 1933, as amended, and the rules
and regulation thereunder, to cause the Shares issuable upon
conversion of the Owned Debentures to be registered for resale
pursuant to an effective Registration Statement. If (i) the Company
fails to respond to all comments made by the Securities and Exchange
Commission (the "SEC") in connection with the Registration Statement
within ten (10) business days of receipt from the SEC or (ii) the SEC
has not declared the Registration Statement effective on or before
July 10, 2003, then the Company shall immediately pay to each Seller
an amount equal to five percent (5%) of the sum of (a) the outstanding
balance of the Seller's Owned Debentures, (b) accrued interest on the
Seller's Owned Debentures and (c) a premium equal to thirty percent
(30%) of the sum of (a) and (b) (the "Registration Penalty"). The
Registration Penalty shall be payable either in cash or Shares, the
number of which shall be based on the conversion price set forth in
the Owned Debentures, at each Seller's option. If a Seller elects to
receive the Registration Penalty in cash, then the full amount of the
Registration Penalty shall be paid to such Seller by wire transfer of
immediately available funds in accordance with the instructions set
forth on attached Schedule II.
8. Effect of Breach. In the event of a breach by the Company
of any of the provisions of this Agreement, either by a failure to
timely make any payment or failure to effect any conversion by the
Sellers or otherwise, in addition to any other remedies available to
the Sellers in law or equity with respect to such breach, the
applicable discount to the market price of the Owned Debentures shall
permanently be amended from fifty percent (50%) to seventy-five
percent (75%).
9. Other Agreements. All other agreements between the parties
hereto, including without limitation, the Registration Rights
Agreement and the Security Agreement, shall remain in full force and
effect and shall not be modified or superceded hereby unless
specifically stated herein. To the extent the terms of this Agreement
conflict with the terms of such other agreements between the parties
hereto, the terms of this Agreement shall govern.
10. Conditions Precedent to Performance by the Company. The
performance by the Company on each Payment Date of its obligations
hereunder is subject to the fulfillment, to the
3
reasonable satisfaction of the Company (unless waived in writing), of
each of the following conditions:
(a) All representations and warranties of each Seller
contained in this Agreement shall be true and correct; and
(b) Each Seller shall have complied with all of its
covenants and obligations, as set forth herein.
11. Conditions Precedent to Performance by the Sellers. The
performance by each Seller on each Payment Date of its obligations
hereunder is subject to the fulfillment, to the reasonable
satisfaction of such Seller (unless waived in writing), of each of the
following conditions:
(a) All representations and warranties of the Company
contained in this Agreement shall be true and correct;
(b) the Company shall have complied with all its covenants
and obligations set forth herein, including, but not limited to, the
payment of all amounts due hereunder;
(c) each individual listed on Schedule III attached hereto
shall have executed and delivered to the Sellers a Lock-Up Agreement
substantially in the form of Exhibit A attached hereto;
(d) the Company shall have duly executed and delivered to
each Seller this Agreement; and
(e) the Company shall have issued and delivered to the
Sellers the Additional Shares.
12. Representations and Warranties of the Sellers. As
applicable, each Seller, severally and not jointly, hereby represents
and warrants to the Company as follows:
(a) Such Seller is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated above, has the requisite power and authority to own its
assets and to transact the business in which it is now engaged or
proposed to be engaged and is duly qualified as a foreign corporation
and in good standing under the laws of each other jurisdiction in
which such qualification is required, except where the failure to so
qualify would not have a material adverse effect on the business or
operations of such Seller or on its ability to perform its obligations
under this Agreement.
(b) This Agreement has been duly executed and delivered
and constitutes the legal, valid and binding obligations of each
Seller, enforceable against it in accordance with its terms, except to
the extent the enforcement thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject to general equitable principles.
(c) As of the Closing Date, (i) each Seller (1) is the
beneficial owner (as such term is defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as
4
amended) of and (2) has all right, title and interest in, and has not
previously transferred, sold, assigned or conveyed, its Owned Debentures,
and (ii) each Seller's Owned Debentures are free and clear of all
encumbrances created, incurred, permitted to exist or suffered,
voluntarily or involuntarily.
(d) Each Seller is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D and is acquiring the
Additional Shares for its own account and not with a present view
towards the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under federal and state
securities laws.
13. Representations and Warranties of the Company. The Company
represents and warrants on and as of the date hereof as follows:
(a) It is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, has the
corporate power and authority to own its own assets and to transact
the business in which it is now engaged or proposed to be engaged and
is duly qualified as a foreign corporation and in good standing under
the laws of each other jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a
material adverse effect on the Company's business or operations or on
its ability to perform its obligations under this Agreement.
(b) The execution, delivery and performance by the Company
of this Agreement and any the issuance of the Additional Shares have
been duly authorized by all necessary corporate action.
(c) Neither the execution, delivery or performance by the
Company of this Agreement, nor compliance by it with the terms and
provisions hereof or thereof, conflicts or will conflict with or will
result in a breach or violation of any (i) of the terms, conditions or
provisions of any law, governmental rule or regulation now binding on
the Company or the Company's articles of incorporation or bylaws, each
as in effect on the date hereof, (ii) order, writ, injunction or
decree of any court or governmental authority now in existence against
the Company or by which it or any of its properties is now bound, or
(iii) indenture, mortgage or contract or other agreement or instrument
to which the Company is now a party or by which it or any of its
properties is now bound.
(d) This Agreement has been duly executed and delivered
and constitutes the legal, valid and binding obligations of the
Company enforceable against it in accordance with its respective
terms, except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and subject to general equitable
principles.
(e) No consent, approval, or authorization of, or filing,
registration or qualification with, any governmental body or any third
party is required for the execution, delivery and performance by the
Company of this Agreement.
(f) There are no actions, suits or proceedings, whether or
not purportedly on behalf of the Company, pending or threatened
against or affecting the Company or any property rights of the Company
at law or in equity, or before any commission or other administrative
agency, arbitrator or governmental body, which would preclude or
otherwise prohibit it from
5
entering into this Agreement or which, if determined adversely to the
Company, would affect its ability to perform its obligations hereunder or
thereunder.
(g) When issued in accordance with the terms hereof, the
Additional Shares, will be validly issued, fully paid and non-
assessable, and free from all taxes, liens, claims and encumbrances.
14. Third Party Beneficiaries. No person other than the
Sellers and the Company and their respective successors, transferees
and permitted assigns shall acquire any rights whatsoever by reason of
this Agreement, whether as third party beneficiary or otherwise.
15. Further Assurances. Each Seller and the Company shall, at
any time and from time to time, upon the request of the other party,
promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as such
requesting party may reasonably request to obtain the full intended
benefits of this Agreement.
16. Survival of Obligations. The representations, warranties,
covenants, and agreements shall survive the consummation of the
transaction contemplated by this Agreement, and shall remain in full
force and effect until the expiration of the statute of limitations
with respect to any action arising under this Agreement.
17. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or
delivered when delivered personally or when sent by registered or
certified mail or by private courier addressed as follows:
(a) If to the Sellers. to the address listed below each Seller's name
on Schedule I attached hereto, in each case, with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Company: Phoenix International Industries, Inc.
0000 Xxxxxxx Xxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxx@xxxxxx.xxx
6
with a copy to:
X. Xxx Xxxxxxxx, Esq.
Law Office of X. Xxx Xxxxxxxx P.A.
0000 Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Email: xxx@xxxxxxxx.xxx
or to such other address as such party may indicate by a notice
delivered to the other party hereto.
18. Amendments and Waivers. This Agreement shall not be
amended, modified or supplemented except by a written instrument
signed by an authorized representative of each of the parties hereto.
Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to
the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to
any party, it is authorized in writing by an authorized representative
of such party. The failure of any party hereto to enforce at any time
any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any party thereafter to
enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
19. Expenses. The Company shall reimburse the Sellers' legal
expenses incurred in connection with the negotiation and preparation
of this Agreement, up to a maximum of $5,000. The Sellers shall
provide the Company with an invoice detailing such expenses incurred
prior to receiving reimbursement therefor. All other costs and
expenses incurred incident to the negotiation, preparation and
performance of this Agreement shall be the responsibility of the party
incurring such costs and expenses.
20. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, heirs and legal representatives.
21. Severability. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such provision shall be ineffective
to the extent, but only to the extent, of such invalidity, illegality
or unenforceability without invalidating the remainder of such
invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
22. Interpretation. Titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of
7
this Agreement. The Schedules and the Exhibit referred to herein shall
be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.
23. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the
internal laws of the State of New York without regard to the
principles of comity or the conflicts of laws principles of any
jurisdiction which would cause this Agreement to be governed by the
laws of any jurisdiction other than that of the State of New York.
24. Submission to Jurisdiction. The parties hereto hereby
irrevocably submit in any suit, action or proceeding arising out of or
related to this Agreement or any of the transactions contemplated
hereby to the jurisdiction of any federal or state court in the State
of New York and waive any and all objections to jurisdiction that they
may have under the laws of the State of New York or the United States.
25. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same
agreement.
[Remainder of this page intentionally left blank]
8
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PHOENIX INTERNATIONAL INDUSTRIES, INC.
--------------------------------------
Xxxxxx Xxxxxxx
President and Chief Executive Officer
SELLERS:
AJW PARTNERS, LLC
By: SMS Group, LLC
--------------------------------------
Xxxxx X. Xxxxxxxx
Manager
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: First Street Manager II, LLC
--------------------------------------
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
--------------------------------------
Xxxxx X. Xxxxxxxx
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
--------------------------------------
Xxxxx X. Xxxxxxxx
Manager
9
SCHEDULE I
Outstanding
Principal Redemption Aggregate Seller
of Owned Accrued Premium Redemption Allocation
Seller Debentures Interest (30%) Price Precentage
-------------------------------------------------------------------------------------------------------
AJW Partners, LLC
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 $ 741,483.00 $135,096.49 $ 262,973.85 $1,139,553.34 32.76%
New Millennium Capital
Partners II, LLC
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 $1,305,507.00 $253,130.17 $ 467,591.15 $2,026,228.32 58.24%
AJW Offshore, Ltd.
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 $ 112,500.00 $ 7,841.12 $ 36,102.34 $ 156,443.46 4.50%
AJW Qualified Partners, LLC
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 $ 112,500.00 $ 7,841.12 $ 36,102.34 $ 156,443.46 4.50%
Totals: $2,271,990.00 $403,908.90 $ 802,769.68 $3,478,668.58 100.00%
SCHEDULE II
Wire Transfer Instructions
Seller Wire Transfer Instructions
------ --------------------------
AJW Partners, LLC Bank: North Fork Bank
Branch Address: 00 Xxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Account Name: AJW Partners, LLC
Account Number: 6224023355
Swift: 0000-0000-0
Officer: Xx. Xxxxxx Xxxxxxx,
Branch Manager
New Millennium Capital
Partners II, LLC Bank: North Fork Bank
Branch Address: 00 Xxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Account Name: New Millennium Capital
Partners II, LLC
Account Number: 6224023389
Swift: 0000-0000-0
Officer: Xx. Xxxxxx Xxxxxxx,
Branch Manager
AJW Offshore, Ltd. Bank: North Fork Bank
Branch Address: 00 Xxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Account Name: AJW Offshore, Ltd.
Account Number: 6224023413
Swift: 0000-0000-0
Officer: Xx. Xxxxxx Xxxxxxx,
Branch Manager
AJW Qualified
Partners, LLC Bank: North Fork Bank
Branch Address: 00 Xxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Account Name: AJW Qualified Partners, LLC
Account Number: 6224022415
Swift: 0000-0000-0
Officer: Xx. Xxxxxx Xxxxxxx,
Branch Manager
SCHEDULE III
XXXXXX XXXXXXX
XXX XXXXXXXXX
PHOENIX MANAGEMENT
PHOENIX DIRECTORS
EXHIBIT A
LOCK-UP AGREEMENT
-----------------
May 1, 2003
Phoenix International Industries, Inc.
0000 Xxxxxxx Xxxxx
Xxxx Xxxx Xxxxx, XX 00000
AJW Partners, LLC
New Millennium Capital Partners II, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
c/o The N.I.R. Group, LLC
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned is the beneficial owner of shares of common
stock, par value $.001 per share ("Common Stock"), of Phoenix
International Industries, Inc., a Florida corporation (the "Company").
I understand that AJW Partners, LLC, New Millennium Capital Partners
II, LLC, AJW Offshore, Ltd. and AJW Qualified Partners, LLC
(collectively, the "Investors") and the Company are contemplating
entering to a certain Debenture Redemption Agreement (the "Redemption
Agreement").
In order to induce the Company and the Investors to proceed
with the Redemption Agreement, the undersigned agrees, for the benefit
of the Company and the Investors, that the undersigned will not, and
will cause its affiliates to not, for a period beginning on the date
hereof and ending on the earlier of (i) sixty (60) days from the date
hereof and (ii) the date that the Sellers receive the first Monthly
Redemption Payment (as defined in the Redemption Agreement) (the
"Lock-Up Period"), offer to sell, contract to sell or otherwise sell,
dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, "Securities"), now owned or hereafter acquired directly
by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition, otherwise than (i) as a
bona fide gift or gifts, provided the donee or donees thereof agree to
be bound by this Lock-Up Agreement, or (ii) with the prior written
consent of the Investors. The foregoing restriction is expressly
agreed to preclude the holder of the Securities from engaging in any
hedging or other transaction which is designed to or reasonably
expected to lead to or result in a Disposition of
Securities during the Lock-Up Period even if such Securities would be
disposed of by someone other than the undersigned. Such prohibited
hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any
Securities or with respect to any security that includes, relates to
or derives any significant part of its value from Securities.
The undersigned confirms that he, she or it understands
that the Investors and the Company will rely upon the representations
set forth in this agreement in proceeding with the transactions
contemplated by the Redemption Agreement. This agreement shall be
binding on the undersigned and his, her or its respective successors,
heirs, personal representatives and assigns. The undersigned agrees
and consents to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of Common Stock or other
securities of the Company held by the undersigned except in compliance
with this agreement.
Very truly yours,
______________________________
Name:
