LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this
“Agreement”) is made and entered into as of this 8th day of May, 2009
(“Effective Date”) by and among STS Turbo, Inc., a Nevada
corporation (hereinafter referred to as the “Company”), The Investors Registry, LLC, a
Nevada limited liability company (“TIR”), Xxxxx X. Xxxxxxx (“Xxxxxxx”),
Xxxxxxx X. Xxxxxxx
(“Xxxxxxx”), and Xxxx X.
Xxxx (“Xxxx”), each an individual, and RuffTech II, LLC (“RTII”)(each
of Xxxxxxx, Squires, Ruff, and RTII shall be referred to as a “Shareholder” and
collectively referred to as the “Shareholders”). The Company, TIR,
and the Shareholders shall be referred to as a “Party” and collectively as the
“Parties.”
RECITALS
WHEREAS, the Shareholders, and each of
them, own the number of shares of Company common stock set forth next to his or
her signature on the signature page of this Agreement (the
“Shares”);
WHEREAS, the Company is in the process
of becoming a reporting issuer under the Securities Exchange Act of 1934 (the
“’34 Act”) and applying to be listed on the Over-The-Counter Bulletin Board
(“OTCBB”), and the Company, TIR and the Shareholders believe it is in the best
interests of the Company to impose limitations on the resale and/or transfer of
the Shares held by the Shareholders to assist the Company with being listed on
the OTCBB;
NOW, THEREFORE, in reliance on
the foregoing recitals and in consideration of and for the mutual covenants
contained herein, the Parties hereto agree as follows:
AGREEMENT
1. Lock-Up
by the Shareholders. In order to assist the Company in its
application to be listed on the OTCBB, the Shareholders, and each of them,
hereby agree that for one (1) year following the Company first being listed for
trading on the OTCBB (the “Lock-Up Period”) they will not make, offer to make,
agree to make, or suffer any Disposition (as defined below) of his or her
Company stock or any interest therein, regardless of whether that stock is
currently owned by the Shareholders or they acquire ownership of the stock
during the Lock-Up Period, unless agreed to in writing by all
Parties. The restrictions contained in this Section 1 shall not apply
to (a) a Disposition under a Shareholder’s will or pursuant to the laws of
descent and distribution, or (b) a gift by a Shareholder to an immediate family
member (i.e. a spouse, child, parent, grandparent or sibling) or a family trust
for the benefit of immediate family member(s), so long as, in each case, the
transferee(s) deliver to the other Parties an executed written instrument
agreeing to be bound by the terms of this Agreement as if such transferee(s)
were the Shareholder. For the purposes of this Agreement,
“Disposition” shall mean any sale, exchange, assignment, gift, pledge, mortgage,
hypothecation, transfer or other disposition or encumbrance of all or any part
of the rights and incidents of ownership of the Company’s stock, including the
right to vote, and the right to possession of the Company stock as collateral
for indebtedness, whether such transfer is outright or conditional, or for or
without consideration.
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2. Restriction
On Proxies and Non-Interference. The Shareholders hereby agree
that, during the Lock-Up Period, such Shareholders will not (i) grant any
proxies or powers of attorney that would permit any such proxy or
attorney-in-fact to take any action inconsistent herewith, (ii) deposit his or
her Company shares into a voting trust or enter into a voting agreement with
respect to such Company shares; or (iii) take any action that would make any
representation or warranty of such Shareholder untrue or incorrect or would
result in a breach by that Shareholder of his/her obligations under this
Agreement. Each Shareholder further agrees not to enter into any
agreement or understanding with any other person or entity, the effect of which
would be inconsistent with or violative of any provision contained in this
Agreement.
3. Representations
and Warranties of the Shareholders. Each Shareholder
(severally, and not jointly and severally) hereby represents and warrants to the
other Parties the following:
a. Ownership of
Shares. Each Shareholder is the sole record and beneficial
owner of that number of shares of the Company’s common and preferred stock as
set forth next to such Shareholder’s name on the signature page of this
Agreement. On the date hereof, such shares constitute all the shares
of Company common and preferred stock owned of record or beneficially owned by
such Shareholder or any of Shareholder’s affiliates or related
parties. Such Shareholder has sole voting power and sole power to
issue instructions with respect to the matter set forth in this Agreement, sole
power of disposition, and sole power to agree to all of the matters set forth in
this Agreement, in each case with respect to all of such Company stock, with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
b. Authorization. Each
Shareholder has the requisite legal capacity and competency, and the full legal
right to execute and deliver this Agreement and perform his or her obligations
hereunder. This Agreement has been duly and validly executed and
delivered by such Shareholder and constitutes a valid and binding agreement
enforceable against such Shareholder in accordance with its terms except (i) as
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights, and (ii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
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c. No Conflicts. Except
for filings, authorizations, consents and approvals as may be required under the
Securities Act and the Exchange Act, (i) no filing with, and no permit,
authorization, consent or approval of, any state or federal governmental
authority, or any other person or entity, is necessary for the execution of this
Agreement by such Shareholder and the consummation by such Shareholder of the
transactions contemplated hereby, and (ii) neither the execution and delivery of
this Agreement by such Shareholder, the consummation by such Shareholder of the
transactions contemplated hereby, or compliance by such Shareholder with any of
the provisions hereof will (A) result in a violation or breach of, or constitute
a default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which such Shareholder is a party or by which such
Shareholder or any of its properties or assets may be bound, or (B) violate any
order, writ, injunction, decree, judgment, statute, role or regulation
applicable to such Shareholder or any of his or her properties or
assets.
d. No Encumbrances. Each
Shareholder owns his or her Company stock free and clear of all liens, claims,
security interests, proxies, voting trusts or agreements, or any other
encumbrances whatsoever, except for (i) any such matters arising hereunder and
(ii) bona fide pledges of such shares as security for obligations owed to the
Company; provided, however, in the event that the Company acquires any interest
in all or any of such shares, including, without limitation, legal or beneficial
ownership thereof or any voting rights with respect thereto, whether through
foreclosure or otherwise, the Company hereby agrees to be bound by the terms of
this Agreement with respect to such shares as if it were the
Shareholder.
e.
Shareholder
Capacity. Each Shareholder who is, or becomes during the
Lock-Up Period, a director of the Company, agrees that the terms of this
Agreement are agreed to in his or her capacity as a stockholder of the Company
and not as a director.
4. Representations
and Warranties of the Company. The Company has full legal
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
the Company has been authorized by all necessary corporate action on the part of
the Company and will not violate any other agreement to which the Company is a
party. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited in bankruptcy, insolvency, reorganization, moratorium or similar
laws.
5. Representations
and Warranties of TIR. The execution and delivery of this
Agreement by TIR has been authorized by all necessary corporate action on the
part of TIR and will not violate any other agreement to which the Company is a
party. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding agreement of TIR, enforceable
in accordance with its terms, except as the enforcement thereof may be limited
in bankruptcy, insolvency, reorganization, moratorium or similar
laws.
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6. Entire
Agreement. This Agreement
constitutes the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements or understandings, inducements or conditions, express
or implied, written or oral, between the Parties.
7. Certain
Events. Each Shareholder agrees that this Agreement and the
obligations hereunder shall attach to his or her Company stock and shall be
binding upon any other person or entity to which legal or beneficial ownership
of such Company stock shall pass, whether by operation of law or otherwise,
including, without limitation, such Shareholder’s heirs, guardians,
administrators or successors. Notwithstanding any such transfer of
Company stock, the transferor shall remain liable for the performance of all
obligations under this Agreement of the transferor.
8. Acquisition
of Additional Company Stock. Each Shareholder agrees to promptly notify
the Company of the number of shares of Company stock acquired by any
Shareholder, if any, after the date of this Agreement. The terms of
this Agreement will govern any Company stock acquired by a Shareholder after the
date of this Agreement.
9. Assignments;
Rights of Assignees; Third Party Beneficiaries. This Agreement shall not be
assignable by any Shareholder without the prior written consent of the other
Parties. This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and permitted
assigns. Nothing expressed in this Agreement is intended or shall be
construed to give any person or entity other than the Parties or their
respective heirs, executors, administrators, legal representatives, successors
or permitted assigns, any legal or equitable right, remedy or claim under this
Agreement or any provision contained herein.
10. Specific
Performance. The Parties acknowledge that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining the amount of damage that will be suffered by the non-breaching
Party or Parties in the event this Agreement is breached. Therefore,
each Party agrees that the non-breaching Party or Parties may obtain specific
performance of this Agreement without the necessity of establishing irreparable
harm or posting any bond, and will be in addition to any other remedy to which
such Party may be entitled at law or in equity.
11. Amendment
and Waivers. Any term or
provision of this Agreement may be amended, and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a writing signed by the Party to
be bound thereby. The waiver by a Party of any breach hereof for
default in the performance hereof shall not be deemed to constitute a waiver of
any other default or any succeeding breach or default.
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12. Attorneys’
Fees. Should suit be
brought to enforce or interpret any part of this Agreement, the prevailing party
shall be entitled to recover, as an element of the costs of suit and not as
damages, reasonable attorneys’ fees to be fixed by the court (including without
limitation, costs, expenses and fees on any appeal). The prevailing
party shall be the party entitled to recover its costs of suit, regardless of
whether such suit proceeds to final judgment. A party not entitled to
recover its costs shall not be entitled to recover attorneys’
fees. No sum for attorneys’ fees shall be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys’ fees.
13. Section
Headings. Headings
contained in this Agreement are inserted only as a matter of convenience and in
no way define, limit, or extend the scope or intent of this Agreement or any
provisions hereof.
14. Governing
Law and Venue. This Agreement
will be governed by and construed and enforced in accordance with the laws of
the State of Utah, without regard to its choice of law principles, applicable to
a contract executed and to be performed in the State of Utah. Each
Party hereto (i) agrees to submit to personal jurisdiction and to waive any
objection as to venue in the state or federal courts located in Salt Lake
County, Utah, (ii) agrees that any action or proceeding shall be brought
exclusively in such courts, unless subject matter jurisdiction or personal
jurisdiction cannot be obtained, and (iii) agrees that service of process on any
party in any such action shall be effective if made by registered or certified
mail addressed to such Party at the address specified herein, or to any other
addresses as he, she or it may from time to time specify to the other Parties in
writing for such purpose. The exclusive choice of forum set forth in
this paragraph shall not be deemed to preclude the enforcement of any judgment
obtained in such forum or the taking of any action under this Agreement to
enforce such judgment in any appropriate jurisdiction.
15. Independent
Counsel and Rules of Construction. All Parties to this
Agreement acknowledge and agree that they have been advised to, and have had the
opportunity to, seek independent counsel and advice with respect to the terms of
this Agreement. As such, this Agreement has been negotiated at arms
length between persons sophisticated and knowledgeable in these types of
matters. Additionally, any normal rules of construction that would require a
court to resolve matters of ambiguities against the drafting party are hereby
waived and shall not apply in interpreting this Agreement.
16. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile or by overnight mail (charges pre-paid or billed to account of
the sender) to the Parties at their addresses and/or facsimile number listed on
the signature page of this Agreement.
17. Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be an
original as against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument.
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IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the date first set forth above.
|
“Company”
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“TIR”
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STS
Turbo, Inc.,
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The
Investors Registry, LLC,
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a
Nevada corporation
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a
Nevada limited liability company
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/s/
Xxxxx X. Xxxxxxx
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/s/
Xxxxxxx Xxxxxxxxxx
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|||
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By:
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Xxxxx
X. Xxxxxxx
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By:
|
Xxxxxxx Xxxxxxxxxx
|
|
|
Its:
|
President
|
Its:
|
Manager
|
|
|
“Shareholders”
|
||||
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/s/
Xxxxx X. Xxxxxxx
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/s/
Xxxxxxx X. Xxxxxxx
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|||
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Xxxxx
X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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1,250,000
shares
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16,250,000
shares
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/s/
Xxxx X. Xxxx
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||||
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RuffTech
II, LLC
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Xxxx
X. Xxxx
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| 3,900,000 shares | ||||
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/s/
Xxxx X. Xxxx
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||||
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By:
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Xxxx
X. Xxxx
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Its:
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an individual
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|
2,500,000
shares
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