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EXHIBIT 1.4
August ___, 1997
X. X. Xxxxxx & Company, L.L.C.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
RE: KARTS INTERNATIONAL INCORPORATED - LOCK-UP AGREEMENT
CONVERTIBLE PREFERRED STOCKHOLDERS
Gentlemen:
The undersigned understands that Karts International Incorporated (the
"Company") has filed a Registration Statement on Form SB-2 (the "Registration
Statement") with the Securities and Exchange Commission in connection with a
proposed public offering (the "Offering") underwritten by Argent Securities,
Inc. (the "Underwriter") of 1,550,000 shares of common stock, par value $.001
per share (the "Common Stock") and 1,550,000 warrants (the "Warrants") to
purchase shares of Common Stock. In addition, the Underwriter has been granted
an option to purchase from the Company up to an additional aggregate of 232,500
shares of Common Stock and 232,500 Warrants for the sole purpose of covering
over-allotments, if any.
In connection with the Offering, the undersigned agrees that, except
as hereinafter provided, such undersigned will not, without the Underwriter's
prior written consent, sell, contract to sell or otherwise dispose of any
shares of Common Stock issued upon conversion of the Preferred Shares, 1996
Warrants, common stock issued upon exercise of the 1996 Warrants, options,
convertible securities, or other equity securities of the Company (including
any other securities of the Company issuable upon exercise or conversion of any
warrants, options or convertible securities), now owned or hereinafter
acquired, whether directly or indirectly or beneficially (as defined in Section
13 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder) by such undersigned (all such securities
referred to collectively herein as the "Securities") for a period of eighteen
months from the effective date ("Effective Date") of the Registration
Statement.
Notwithstanding the foregoing, the undersigned reserves the right to
sell or otherwise dispose of the Securities owned by such undersigned in a
privately negotiated transaction, provided that (i) the purchaser agrees in
advance in writing with the Underwriters to the restrictions on transfer of the
Securities set forth herein and (ii) the disposition is otherwise in accordance
with the federal securities and other laws.
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Argent Securities, Inc.
August ___, 1997
Page 2
Further, during the four year period following the Effective Date of
the Registration Statement, the undersigned grants to the Underwriters the
right of first refusal to sell any and all securities owned by the undersigned
which the undersigned may desire to sell, provided that the price and terms of
execution offered by the Underwriters are at least favorable as may be obtained
by the undersigned from other brokerage firms.
The undersigned will permit an appropriate restrictive legend to be
applied to all certificates evidencing the Securities and will cause the
transfer agent for the Company to note such restriction on the transfer books
and records of the Company.
This agreement shall be binding upon any pledgee or any transferee of
the undersigned and shall be binding on the heirs, legal representatives,
transferees and assigns of the undersigned. Any attempted sale, transfer or
other disposition in violation of the agreement shall be null and void. The
undersigned acknowledges that this agreement was a material inducement to the
Underwriters to act as the Company's underwriters and agrees that the
Underwriter's remedies at law may be inadequate in the event of a violation of
this agreement and, in such event, agrees to pay the Underwriter's costs and
expenses, including attorney's fees, of enforcing this agreement, which may
include costs of an action seeking to enjoin such violation.
The undersigned hereby represents and warrants that, as of the
Effective Date, the undersigned owns (or will own) the amount and type of
securities set forth below:
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Signature
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