EXHIBIT 10.7
___________, 2005
WEDBUSH XXXXXX SECURITIES, INC.
As representative of the several Underwriters
0000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Re: Ad.Venture Partners, Inc. Initial Public Offering - Lock-up Agreement
Dear Ladies and Gentlemen:
This letter is being delivered to you in accordance with the Underwriting
Agreement (the "UNDERWRITING AGREEMENT") entered into by and between Ad.Venture
Partners, Inc., a Delaware corporation (the "COMPANY"), and Wedbush Xxxxxx
Securities Inc., as Representative (the "REPRESENTATIVE") of the several
Underwriters named in Schedule I thereto (the "UNDERWRITERS"), relating to an
underwritten initial public offering (the "IPO") of the Company's units (the
"UNITS"), each comprised of one share of the Company's common stock, par value
$0.0001 per share (the "COMMON STOCK"), and two warrants, each of which are
exercisable for one share of Common Stock (each, a "WARRANT"). The capitalized
terms set forth on Schedule I attached hereto are hereby incorporated by
reference herein.
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the IPO, and in recognition of the
benefit that such IPO will confer upon the undersigned as a stockholder of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees with
the Representative that the undersigned will not publicly announce any intention
to, will not authorize any affiliate or subsidiary, if applicable, to, and will
not, without the prior written consent of the Representative on behalf of the
Underwriters, directly or indirectly, (i) offer, pledge, sell, transfer or
otherwise dispose of, by contract, option, right or otherwise, any Insider
Shares beneficially owned by the undersigned (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) or lend, grant or
otherwise transfer or dispose of any such Insider Shares, or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
characteristics of ownership of such Insider Shares (whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of such Insider Shares, in cash or otherwise), during the Lock-Up Period.
Notwithstanding the foregoing, the undersigned may (i) transfer Insider
Shares either during such person's lifetime or, on death, by bona fide gifts,
will or intestacy to members of the undersigned's Immediate Family or to trusts
exclusively for the benefit of members of the undersigned's Immediate Family,
(ii) transfer Insider Shares pursuant to a qualified domestic relations order,
(iii) transfer record ownership of the Insider Shares whereby there is no change
in beneficial ownership [or (iv) pledge Insider Shares as collateral to secure a
bona fide loan
Lock-up Agreement - Representative
from an unaffiliated third party ("PLEDGEE") for the purpose of financing the
undersigned's obligation to purchase Warrants in the open market (as described
more fully in the registration statement pursuant to which the IPO is
registered)]; provided, however, that, prior to any such transfer [or pledge],
such transferee [or Pledgee] executes an agreement, satisfactory to the
Representative, pursuant to which such transferee [or Pledgee] agrees to receive
and hold such Insider Shares subject to the provisions hereof [and pursuant to
which such Pledgee agrees not to repledge such Insider Shares].(1)
The undersigned agrees that during the Lock-up Period the certificates
representing such Insider Shares owned by the undersigned shall bear the legends
set forth on Exhibit A attached hereto.
The undersigned acknowledges and understands that the Underwriters and the
Company will rely upon the agreements set forth herein in proceeding with the
IPO. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of Insider
Shares except in compliance with the terms and conditions of this letter
agreement.
This letter agreement shall be binding on the undersigned and such
person's respective successors, heirs, personal representatives and assigns.
This letter agreement shall terminate on the Lock-Up Period Termination Date.
This letter agreement shall be governed by and interpreted and construed
in accordance with the laws of the State of New York applicable to contracts
formed and to be performed entirely within the State of New York, without regard
to the conflicts of law provisions thereof to the extent such principles or
rules would require or permit the application of the laws of another
jurisdiction.
No term or provision of this letter agreement may be amended, changed, waived,
altered or modified except by written instrument executed and delivered by the
party against whom such amendment, change, waiver, alteration or modification is
to be enforced.
Sincerely,
By: _____________________________
Name: ___________________________
Title: __________________________
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(1) Bracketed provisions in this paragraph are included in the lock-up
agreements with Messrs. Xxxxxx and Xxxxxx only.
Lock-up Agreement - Representative
Accepted and agreed:
WEDBUSH XXXXXX SECURITIES INC.
By: _____________________________
Name: ___________________________
Title: __________________________
Lock-up Agreement - Representative
SCHEDULE I
SUPPLEMENTAL COMMON DEFINITIONS
UNLESS THE CONTEXT SHALL OTHERWISE REQUIRE, THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING RESPECTIVE MEANINGS FOR ALL PURPOSES, AND THE FOLLOWING DEFINITIONS
ARE EQUALLY APPLICABLE TO BOTH THE SINGULAR AND THE PLURAL FORMS AND THE
FEMININE, MASCULINE AND NEUTER FORMS OF THE TERMS DEFINED.
"BUSINESS COMBINATION" shall mean the acquisition by the Company, whether by
merger, capital stock exchange, asset acquisition or other similar business
combination, of one or more operating businesses in the technology, media or
telecommunications industries, having, collectively, a fair market value (as
calculated in accordance with the Company's Amended and Restated Certificate of
Incorporation) equal to at least 80% of the Company's net assets at the time of
such merger, capital stock exchange, asset acquisition or other similar business
combination.
"BUSINESS COMBINATION DATE" shall mean the date upon which a Business
Combination is consummated.
"EFFECTIVE DATE" shall mean the date upon which the Registration Statement is
declared effective under the Securities Act of 1933, as amended, by the SEC.
"IMMEDIATE FAMILY" shall mean, with respect to any person, such person's spouse,
lineal descendents, father, mother, brothers or sisters (including any such
relatives by adoption or marriage).
"INDEPENDENT DIRECTORS" shall mean the Company's directors that qualify as
"independent" under NASD Rule 4200(a)(15), as amended.
"INSIDERS" shall mean all of the officers, directors and stockholders of the
Company immediately prior to the Company's IPO.
"INSIDER SHARES" shall mean all shares of Common Stock of the Company owned by
an Insider immediately prior to the Company's IPO. For the avoidance of doubt,
Insider Shares shall not include any IPO Shares purchased by Insiders in
connection with or subsequent to the Company's IPO.
"IPO SHARES" shall mean all shares of Common Stock issued by the Company in its
IPO, regardless of whether such shares were issued to an Insider or otherwise.
"LOCK-UP PERIOD" shall mean the period commencing on (inclusive of such date)
the closing of the IPO and delivery of the IPO Shares in connection therewith
and ending on the earlier of (i) the date that is six months immediately
following the Business Combination Date, or (ii) the Termination Date.
Lock-up Agreement - Representative
"LOCK-UP PERIOD TERMINATION DATE" shall mean the close of business on the last
day of the Lock-Up Period.
"REGISTRATION STATEMENT" shall mean the registration statement filed by the
Company on Form S-1 (No. 333-124141) with the SEC on April 18, 2005, and any
amendment or supplement thereto, in connection with the Company's IPO.
"SEC" shall mean the United States Securities and Exchange Commission.
"TERMINATION DATE" shall mean the date that is sixty (60) calendar days
immediately following the Transaction Failure Date (inclusive thereof).
"TRANSACTION FAILURE" shall mean the earlier of (i) the failure to enter into a
letter of intent, definitive agreement or agreement in principle with respect to
a Business Combination on any day during the eighteen-month period immediately
following the Effective Date, and (ii) the failure to consummate a Business
Combination on any day during the twenty-four-month period immediately following
the Effective Date.
"TRANSACTION FAILURE DATE" shall mean the date upon which a Transaction Failure
occurs.
Lock-up Agreement - Representative
EXHIBIT A
LOCK-UP LEGENDS
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT BY THE
REGISTERED HOLDER HEREOF NOT TO SELL SUCH SHARES UNTIL THE EARLIER OF 6 MONTHS
AFTER THE DATE OF A BUSINESS COMBINATION OR THE LIQUIDATION OF THE COMPANY,
UNLESS AN OPINION OF COUNSEL IS PROVIDED SATISFACTORY TO THE COMPANY THAT SUCH
EARLIER SALE IS PERMISSIBLE UNDER THE AFOREMENTIONED AGREEMENT.
Lock-up Agreement - Representative
