January __, 1997
Creative Host Services, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Cohig & Associates, Inc.
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
RE: MANDATORY SALE AND LOCK UP AGREEMENT
Ladies and Gentlemen:
This agreement is made in connection with the purchase by the undersigned
of Units of securities of Creative Host Services, Inc., a California
corporation (the "Company"), each of which consists of two shares of 8%
Convertible Preferred Stock and one Common Stock Purchase Warrant, which are
being offered to accredited investors on a private placement basis by Cohig &
Associates, Inc. (the "Private Placement"). Each share of 8% Convertible
Preferred Stock, will automatically convert to one share, subject to
adjustment in certain events, of the Company's Common Stock (the "Conversion
Shares"). No trading market currently exists for any of the Company's
securities. However, the Company intends to conduct a public offering (the
"Public Offering") of the Company's securities pursuant to a Registration
Statement to be filed with the Securities and Exchange Commission and to be
underwritten by Cohig & Associates, Inc. as representative of the several
underwriters to be named in an underwriting agreement (the "Representative").
In consideration of the offer and sale of such securities by the Company
and the underwriters and of other valuable consideration, the receipt of
which is hereby acknowledged, the undersigned agrees as follows:
The undersigned realizes that as a condition to the acceptance of his
subscription for Units by the Company, the Company has required the
undersigned to sell in the Public Offering 33% of the Conversion Shares the
undersigned purchases in the Private Placement. In connection with that
mandatory sale, the undersigned is executing this agreement as well as a
Selling Stockholders Power of Attorney and Preferred Stock Custody Agreement,
evidencing the undersigned's consent to the sale and also granting Xx. Xxxxx
Xxx, President of the Company, and Xxxx X. Xxxxxx, Chief Financial Officer
of the Company, the authority to execute an Underwriting Agreement on behalf
of the undersigned and all other purchasers in the Private Placement,
pursuant to which the underwriters will sell 33% of the undersigned's
Conversion Shares.
The undersigned recognizes that he will not receive certificates for his
shares of 8% Convertible Preferred Stock purchased in the Private Placement,
as such certificates will be held by the Company's Transfer Agent pursuant to
the terms of the Custody Agreement, pending their sale in the Registration
Statement.
The undersigned agrees that, except for the mandatory sale described in
this agreement and the other agreements referred to herein, the undersigned
shall not to offer, sell, contract to sell, pledge, hypothecate, grant any
option to purchase or otherwise dispose of (the "Resale Restrictions") any
shares of Common Stock of the Company or any securities convertible into or
exchangeable for Common Stock of the Company beneficially owned or otherwise
held by the undersigned as of the date of this letter or acquired on or prior
to the date of effectiveness of the Registration Statement or issuable upon
exercise of options or warrants (except warrants included in the Registration
Statement and Common Stock issuable upon exercise of such warrants) held by
the undersigned on such dates (collectively, the "Shares") for the period
specified hereafter without the prior written consent of the Representative.
Such restrictions shall apply to the Shares for a period of 270 days after
the date of the Final Prospectus (the "Registration Period").
As a reasonable means of ensuring compliance with the terms of this
Agreement, the undersigned further agrees that the Company may instruct the
transfer agent for the Shares to place a transfer restriction on such transfer
agent's records.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any or all of the Shares either during his or her lifetime
or on death by will or intestacy to his or her immediate family or to a
trust, beneficiaries of which are exclusively the undersigned and/or a member
or members of his or her immediate family; provided, however, that in any
such case it shall be a condition of the transfer that the transferee execute
an agreement stating that the transferee is receiving and holding the Shares
subject to the provisions of this Agreement, and there shall be no further
transfer of such Shares except in accordance with this Agreement. For
purposes of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor.
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Shares to a partner of such
partnership or a retired partner of such partnership who retires after the
date hereof, or to the estate of any such partner or retired partner, and any
partner who is an individual may transfer Shares by gift, will or intestate
succession to his or her immediate family (as defined above) or ancestors.
If the undersigned is a corporation, the corporation may transfer Shares to
any shareholder of such corporation and any shareholder who is an individual
may transfer Shares by gift, will or intestate succession to his or her
immediate family (as defined above) or ancestors. Notwithstanding anything
else herein to the contrary, in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee
is receiving and holding the Shares subject to the provisions of this
Agreement, and there shall be no further transfer of such Shares except in
accordance with this Agreement.
The undersigned recognizes that the execution of this agreement and the
consummation of the transactions referred to herein constitute a significant
part of the consideration for the sale of the Units by the Company to the
undersigned in the Private Placement, and that a breach of this agreement
will constitute a material breach of the Subscription Agreement entered into
between the Company and the undersigned with respect to the purchase of the
Units. This Agreement shall be enforceable by the Company and the
Representative, or either of them, and shall be binding on and inure to the
benefit of their respective successors, personal representatives, heirs, and
assigns.
Very truly yours,
_______________________________ By:
Shares of common stock subject ------------------------------------
to this Agreement after Signature
closing of public offering
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Print name of person or entity
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Title of signing entity
