EXHIBIT 10.15
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LOCK-UP AGREEMENT
THIS AGREEMENT, dated as of May 21, 2004 (the "Agreement"), is by and
among XXXxxx.Xxx, Inc., a Delaware corporation (the "Company"), and the
Stockholder of the Company that have executed this agreement. The parties hereto
other than the Company are sometimes collectively referred to herein as the
"Stockholders."
RECITALS
WHEREAS, the Stockholders own 3,357,827 shares of the Company's common
stock issued upon the conversion of the Company's Series A Preferred Stock (the
"Shares").
WHEREAS, the Company, certain subsidiaries of the Company, Miletos,
Inc., Delaware corporation ("Miletos") and Xxxxxxx Xxxxxxxx ("Typaldos") entered
into an Agreement and Plan of Merger dated of even date herewith (the "Merger
Agreement");
WHEREAS, pursuant to the Merger Agreement, the Company, among other
things, will issue _____ shares of its Common Stock, $.001 par value, to Miletos
stockholders (the "Miletos Shares");
WHEREAS, 11,595,167 of the Miletos Shares will be issued to Typaldos
and his affiliates (the "Typaldos Group") of which 1,155,000 shares (the
"Escrowed Shares") are the subject of various provisions of an escrow agreement
between the Company, the Typaldos Group and Xxxxxx & Xxxxxxxxx LLP (the "Miletos
Escrow Agreement");
WHEREAS, pursuant to the Merger Agreement, at the Closing the Company,
the Stockholders and other holders of Common Stock will enter into a
registration rights agreement (the "Registration Rights Agreement") pursuant to
which the Stockholders, the Typaldos Group and such other holders will have
certain registration rights with respect to the shares of the Company's Common
Stock; and
WHEREAS, pursuant to the Merger Agreement, at the Closing the
Stockholders and other holders of the Company's Common Stock, including the
Typaldos Group, will enter into a Stockholders and Voting Agreement
("Stockholders Agreement"), which, among other things, will restrict the sale,
assignment, transfer, encumbrance or other disposition of the Miletos shares
issued to the Typaldos Group; and
WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Shares and obligations in
respect thereof as hereinafter provided.
NOW THEREFORE, in consideration of the premises and of the terms and
conditions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
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Section 1. Prohibition on Transfers.
(a) Prohibition on Transfers During Restricted Period. Except as set
forth in Section 3, no Stockholder shall, at any time prior to the first
anniversary of the Closing Date (the "Restricted Period"), directly or
indirectly, without the consent of the Company (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any of the Shares or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any of the
Shares, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Shares, in cash or otherwise (any such transaction,
whether or not for consideration, being referred to herein as a "Transfer" and
each Person to whom a Transfer is made, regardless of the method of Transfer, is
referred as a "Transferee") if, after giving effect to such transfer, the
Stockholder shall have transferred in the aggregate amount of 50% of the Common
Stock held by such Stockholder as of the date hereof. The restrictions set forth
in this paragraph shall not prohibit, with respect to any Stockholder, (i) a
Transfer to a trust for the benefit of such Stockholder's spouse or issue or to
a family partnership, limited liability company or similar entity of which the
members are solely such Stockholder or such Stockholder's spouse or issue and as
to which such Person exercises voting control, (ii) a Transfer to an Affiliate
of such Stockholder, (iii) a Transfer between Stockholders, (iv) if such
Stockholder is a limited or general partnership, a Transfer to its partners in
connection with a distribution of securities held by such Stockholder to its
partners; or (v) a Transfer in connection with merger, consolidation, or other
business combination of the Company (each a "Permitted Transfer").
(b) Obligations of Transferees. Except for Transfers described in
Section 3, no Transfer by a Stockholder (including a Permitted Transfer pursuant
to paragraph 1(a), shall be effective unless the Transferee shall have executed
and delivered to the Company an appropriate document in form and substance
reasonably satisfactory to the Company confirming that the Transferee takes such
Shares subject to all the terms and conditions of this Agreement and the
Registration Rights Agreement to the same extent as its transferor was bound by
such provisions (including without limitation that the Transferred Shares bear
legends substantially in the forms required by Section 4(a) of this Agreement).
Transfers by such Transferees shall be subject to the terms of this Agreement.
Section 2. Compliance with Securities Laws. No Stockholder shall at any time
during or following the Restricted Period make any Transfer, except (a)
Transfers pursuant to an effective registration statement under the Securities
Act, (b) Rule 144 Transfers or (c) if such Stockholder shall have furnished the
Company with an opinion of counsel, if reasonably requested by the Company,
which opinion and counsel shall be reasonably satisfactory to the Company, to
the effect that the Transfer is otherwise exempt from registration under the
Securities Act and that the Transfer otherwise complies with the terms of this
Agreement.
Section 3. Volume Restricted Transfers. The restrictions on Transfers set forth
in Section 1(a) of this Agreement shall not apply to a Transfer (a) a Transfer
pursuant to a Tag Along Notice (defined in the Stockholders Agreement); or (b) a
Transfer pursuant to Rule 144 or an effective registration statement provided,
(i) during the period commencing 180 days after the Closing Date and ending 90
days thereafter such Transfer shall not exceed 20% of the number of shares owned
by each Stockholder as set forth on the signature page hereto (the
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"Commencement Amount"), (ii) during the period commencing 270 days after the
Closing Date and ending 90 days thereafter shall not exceed 20% of the
Commencement Amount, and (iii) during the period commencing 360 days and ending
90 days thereafter such Transfers shall not exceed 25% of the Commencement
Amount. The numerical limitations above shall be absolute for each period.
Section 4. Other Restrictions.
(a) Legends. Each of the Stockholders hereby agrees that each
outstanding certificate representing Shares and issued during the Restricted
Period shall bear legends reading substantially as follows:
(i) The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, or under the securities laws of any state
and may not be transferred, sold or otherwise
disposed of except while such a registration is in
effect or pursuant to an exemption from registration
under said Act and applicable state securities laws.
(ii)The securities represented by this certificate are
subject to the terms and conditions set forth in a
Lock-up Agreement, dated as of ________, 2004, copies
of which may be obtained from the issuer or from the
holder of this security. No transfer of such
securities will be made on the books of the issuer
unless accompanied by evidence of compliance with the
terms of such agreement.
(b) Termination of Restrictive Legends. The restrictions referred to in
Section 4(a)(i) shall cease and terminate as to any particular Shares (x) when,
in the opinion of counsel for the Company, such restriction is no longer
required in order to assure compliance with the Securities Act or (y) when such
Shares shall have been transferred in a Rule 144 Transfer or effectively
registered under the Securities Act. The restrictions referred to in Section
4(a)(ii) shall cease and terminate at the end of the Restricted Period. Whenever
such restrictions shall cease and terminate as to any Shares, the Stockholder
holding such shares shall be entitled to receive from the Company, in exchange
for such legended certificates, without expense (other than applicable transfer
taxes, if any, if such unlegended Shares are being delivered and transferred to
any Person other than the registered holder thereof), new certificates for a
like number of Shares not bearing the relevant legend(s) set forth in Section
4(a). The Company may request from any Stockholder a certificate or an opinion
of such Stockholder's counsel with respect to any relevant matters in connection
with the removal of the legend(s) set forth in Section 4(a)(i) from such
Stockholder's stock certificates, any such certificate or opinion of counsel to
be reasonably satisfactory to the Company.
(c) Copy of Agreement. A copy of this Agreement shall be filed with the
corporate secretary of the Company and shall be kept with the records of the
Company and shall be made available for inspection by any stockholder of the
Company.
(d) Recordation. The Company shall not record upon its books any
Transfer to any Person except Transfers in accordance with this Agreement.
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Section 5. No Other Rights. The Stockholders understand and agree that the
Company is under no obligation to register the sale, transfer or other
disposition of the Shares by such Stockholder or on such Stockholder's behalf
under the Securities Act or to take any other action necessary in order to make
compliance with an exemption from such registration available, other than
pursuant to the Registration Rights Agreement.
Section 6. Specific Performance. The Stockholders acknowledge that there would
be no adequate remedy at law if any Stockholder fails to perform any of its
obligations hereunder, and accordingly agree that the Company, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any Stockholder
under this Agreement in accordance with the terms and conditions of this
Agreement. Any remedy under this Section 6 is subject to certain equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.
Section 7. Notices. All notices, statements, instructions or other documents
required to be given hereunder shall be in writing and shall be given either
personally or by mailing the same in a sealed envelope, first-class mail,
postage prepaid and either certified or registered, return receipt requested, or
by telecopy, and shall be addressed to the Company at its principal offices and
to one or more Stockholders at the respective addresses furnished to the Company
by such Stockholders.
Section 8. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns.
Section 9. Recapitalizations and Exchanges Affecting Shares. The provisions of
this Agreement shall apply, to the full extent set forth herein with respect to
the Shares, to any and all shares of capital stock or equity securities of the
Company which may be issued by reason of any stock dividend, stock split,
reverse stock split, combination, recapitalization, reclassification or
otherwise.
Section 10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York as applied to contracts to be
performed in New York.
Section 11. Jurisdiction; Waiver of Trial by Jury. The parties hereby consent to
the jurisdiction of the United States District Court for the Southern District
of New York and any of the courts of the state of New York in any dispute
arising under this Agreement and agree further that service of process or notice
in any such action, suit or proceeding shall be effective if in writing and
delivered in person or sent as provided in Section 8 hereof. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS AGREEMENT OR IN
CONNECTION HEREWITH IS HEREBY WAIVED.
Section 12. Descriptive Headings, Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires, references to "hereof," "herein," "hereby," "hereunder" and
similar terms shall refer to this entire Agreement.
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Section 13. Amendment. This Agreement may not be amended or supplemented except
by an instrument in writing signed by the Company and the Stockholders owning a
majority of the Shares.
Section 14. Severability. If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
Section 15. Complete Agreement; Counterparts. This Agreement (together with the
Merger Agreement, Stockholder and Voting Agreement and the Registration Rights
Agreement) constitutes the entire agreement and supersedes all other agreements
and understandings, both written and oral, among the parties or any of them,
with respect to the subject matter hereof. This Agreement may be executed by any
one or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed on the date first written above.
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: CEO
STOCKHOLDERS
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No. of Shares
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1,081,261 /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
770,000 TARGET GROWTH FUND, LTD.
By: /s/ Xxxxxxx Xxxxx
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458,176 INCENTIVE MANAGEMENT, INC.
By: /s/ illegible
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537,810 STORTFORD HOLDINGS LIMITED
By: /s/ Xxxxx Xxxxx
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385,000 SCARBOROUGH LTD.
By: /s/ Xxxxx Xxxxx
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110,000
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Xxxxx Xxxx
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Wolf
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STOCKHOLDERS (Continued)
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No. of Shares
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5,194
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Xxxxx Xxxx
10,386 /s/ Xxxxx Xxxx
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3,357,827 Xxxxx Xxxx
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