China Yongxin Pharmaceuticals, Inc. Lock-Up Agreement
Exhibit
10.40
China
Yongxin Pharmaceuticals, Inc.
[date]
Xxxxxx
& Xxxxxxx, LLC
1251
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
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Re: Agreement to Lock Up
Shares
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Ladies
and Gentlemen:
The undersigned understands that you
propose to enter into an Underwriting Agreement between China Yongxin
Pharmaceuticals Inc., a corporation existing under the laws of Delaware (the
“Company”), and you as representative (the “Representative”) of the underwriters
named therein (the “Underwriters”), providing for a public offering (the
“Offering”) of shares of common stock of the Company (the “Common Stock”),
pursuant to a Form S-1 Registration Statement (File No. 333-167416) (the
“Registration Statement”) filed with the Securities and Exchange Commission (the
“SEC”).
In consideration of the agreement by
the Underwriters to offer and sell the Common Stock, and of other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the undersigned agrees that, during the period specified in the
following paragraph (the “Lock-Up Period”), the undersigned will not offer,
sell, contract to sell, pledge (except a pledge for the benefit of the Company
pursuant to an agreement entered or to be entered into between the Company and
the undersigned), grant any option to purchase, make any short sale or otherwise
dispose of any Common Stock of the Company, or any options or warrants to
purchase any Common Stock of the Company, or any securities convertible into,
exchangeable for or that represent the right to receive Common Stock of the
Company (“Company Securities”), whether now owned or hereafter acquired, owned
directly by the undersigned (including holding as a custodian) or with respect
to which the undersigned has beneficial ownership within Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the SEC (collectively the “Undersigned’s Securities”) by the undersigned as of
the Public Offering Date (as defined below), without the prior written consent
of the Representative; provided that nothing herein shall prohibit the
undersigned from (a) acquiring Company Securities directly from the Company or
exercising or converting any Company Securities; provided, however, that any
Company Securities received upon the exercise of any derivative security of the
Company shall be subject to the restriction set forth herein, (b) surrendering
any Company Securities pursuant to the terms of an amalgamation, merger or
consolidation of the Company approved by the Board of Directors of the Company
and a majority of the shareholders of the Company, or (c) tendering any Company
Securities pursuant to a tender offer made in compliance with applicable
securities laws and approved by the Board of Directors of the Company. The
foregoing restriction is expressly agreed to preclude the undersigned from
engaging in any hedging or other transaction with respect to such Undersigned’s
Securities during the Lock-Up Period which is designed to or which reasonably
could be expected to lead to or result in a sale or disposition of the
Undersigned’s Securities even if such Undersigned’s 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 of the Undersigned’s Securities or with respect to any
security that includes, relates to, or derives any significant part of its value
from such Undersigned’s Securities.
The Lock-Up Period will commence on the
date of this Lock-Up Agreement and continue for one hundred eighty (180) days
after the initial effective date of the Registration Statement (the “Public
Offering Date”) pursuant to the Underwriting Agreement.
Notwithstanding the foregoing, the
undersigned (i) if an individual, may transfer any or all of the Undersigned’s
Securities either during his or her lifetime or upon death, by bona fide gift, will or
intestacy, to his or her immediate family or to a trust or limited partnership
the beneficiaries or members of which are exclusively the undersigned and/or a
member or members of his or her immediate family, (ii) if a trust, may
distribute any or all of the Undersigned’s Securities to its beneficiaries, or
(iii) if a corporation, partnership or a limited liability company, may
distribute any or all of the Undersigned’s Securities to its shareholders,
partners or members; provided, however, that in the case of transfer under each
of clauses (i), (ii) and (iii) it shall be a condition to such transfer or
distribution that: (a) such transfer or distribution shall result in no
dispensation of value; (b) such transfer or distribution shall not be required
to be, or voluntarily, reported at such time in a U.S. public filing or report
or any other forum in the U.S.; the transferee shall execute an agreement
reasonably satisfactory to the Representative agreeing to take and hold the
Undersigned’s Securities subject to the terms of this Lock-up Agreement; and (c)
there shall be no further transfer of such Undersigned’s Securities except in
accordance with this Lock-up Agreement. For purposes of this Lock-up
Agreement, “immediate family” means relationships by blood, marriage or
adoption, not more remote than first cousin.
The undersigned represents that the
undersigned has as of the date of execution of this Lock-Up Agreement good and
marketable title to the Undersigned’s Securities, free and clear of all liens,
encumbrances, and claims whatsoever, except as set forth in the Registration
Statement. The undersigned agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the Undersigned’s Securities except in compliance with this
Lock-Up Agreement.
The undersigned understands that the
Company and the Underwriters are relying upon this Lock-Up Agreement in
proceeding toward consummation of the Offering. The undersigned
further understands that this Lock-Up Agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representatives, successors, and
assigns. This Lock-Up Agreement shall lapse and become null and void
upon written notice from the Company to the Representative that the Company does
not intend to proceed with the Offering or wishes to terminate the engagement of
the Representative as an Underwriter of the Offering.
[Signature
Page Follows]
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Very
truly yours,
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________________________________________
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Exact
Name of Shareholder
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________________________________________
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Authorized
Signature
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________________________________________
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Title
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[Signature
Page to Lock-Up Agreement]
