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EXHIBIT 99.1
FORM OF LOCK-UP AGREEMENT TO BE SIGNED BY ALL COMMON STOCKHOLDERS WHO WERE NEVER
PREFERRED STOCKHOLDERS.
Xxxxxxx Securities, Inc.
000X Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
The undersigned agrees with Xxxxxxx Securities, Inc. not to sell or
otherwise transfer the undersigned's beneficial ownership of shares of common
Stock of Pathfinder Business Resources, Inc. for a period of one year after the
final closing date of Pathfinder's initial public offering, except that the
undersigned will be permitted to sell up to 30% of the undersigned's holdings at
any time after 90 days following the final closing date of Pathfinder Business
Resources' initial public offering in accordance with Rule 144 of the Securities
Act of 1933, as amended.
Very truly yours,
Dated: , 2001
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(signature)
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(print name)
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(street address)
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(city, state, zip code)
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(social security number)
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FORM OF LOCK-UP AGREEMENT SIGNED BY FORMER PREFERRED STOCKHOLDERS WHO CONVERTED
THEIR PREFERRED SHARES INTO COMMON SHARES EFFECTIVE MAY 15, 2001.
PATHFINDER BUSINESS RESOURCES, INC.
00 XXXXXXXX XXXXXX
XXXXXXXXXX XXXXXXX, XXX XXXX 00000
Dear Preferred Stockholder: May 2, 2001
We are pleased to announce that Xxxxxxx Securities, Inc. has agreed to
act as the new lead Underwriter of our initial public offering. Unfortunately,
our prior Underwriter, Creative Management Corp., went out of business and
forced us to delay the offering for the past several months.
Xxxxxxx has imposed two conditions on our offering. The first condition
is that all Series A Preferred Stockholders must immediately convert their
Series A Preferred Stock into shares of Common Stock on a one-for-one basis and
irrevocably waive their right to receive any accrued and unpaid cash dividends
that they would otherwise have been entitled to upon the conversion thereof. The
second condition is that Pathfinder will not register any securities for sale on
behalf of present stockholders.
As you are aware in the Subscription Agreement which you signed, we
advised you of the following:
FURTHER, IN THE EVENT THAT THE COMPANY COMPLETES AN INITIAL PUBLIC
OFFERING OF ITS SECURITIES, OF WHICH NO ASSURANCES CAN BE GIVEN IN THIS
REGARD, THE UNDERSIGNED AGREES NOT TO SELL OR OTHERWISE TRANSFER THE
SECURITIES FOR A PERIOD OF ONE YEAR AFTER THE COMPLETION OF AN INITIAL
PUBLIC OFFERING WITHOUT THE PRIOR WRITTEN CONSENT OF THE MANAGING
UNDERWRITER OF SUCH OFFERING. NOTWITHSTANDING ANYTHING CONTAINED HEREIN
TO THE CONTRARY, THE COMPANY WILL REQUEST THAT THE MANAGING UNDERWRITER
PERMIT EACH INVESTOR TO SELL ON OR AFTER THE EFFECTIVE DATE AN AMOUNT
EQUAL TO 10% OF THE SECURITIES EITHER IN THE UNDERWRITING OR OUTSIDE OF
THE UNDERWRITING AND THE BALANCE OF THE SECURITIES WITHIN 150 DAYS OF
THE EFFECTIVE DATE. NO ASSURANCE CAN BE GIVEN THAT THE MANAGING
UNDERWRITER WILL PERMIT ANY SALES OF THE SECURITIES UNTIL THE END OF
THE LOCK-UP PERIOD.
Nevertheless, in view of your waiver of dividend rights and the
conversion of your Preferred Stock into common Stock, the Underwriter has agreed
that you may sell 30% of your shares of Common Stock (subject to the volume
limitations of Rule 144, if applicable, see below) commencing 90 days after the
completion of the public offering and the balance at any time one year
thereafter. We believe that these resale terms are substantially more favorable
to you than those set forth in the Subscription Agreement.. Your sales would be
made pursuant to Rule 144 of the Securities act of 1933, as amended. The
aforesaid assumes, of course, that a public market does develop in the
over-the-counter market and that the Company is current with all required
filings under the Exchange Act.
Rule 144 imposes a volume limitation so that every 90 days you may sell
up to an amount equal to the greater of one percent of the outstanding shares of
Common Stock or the average weekly trading volume over the four preceding weeks.
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We have engaged our auditors to update the financial statements and we
are hoping to refile the Registration Statement with the SEC within
approximately 30 days. As a result of the foregoing, we must ask you to sign
below indicating your agreement to have converted, effective as of May 15, 2001,
all of your shares of Series A Preferred Stock held by you into shares of Common
Stock on a one-for-one basis and to waive your right to receive any accrued and
unpaid dividend you would otherwise be entitled to. Please return a signed copy
of this letter in the enclosed stamped, pre-addressed envelope to our office as
soon as possible since we cannot go forward with the offering without your
cooperation. We would also appreciate you returning to our office your Series A
Preferred Stock certificates so that new Common Stock certificates can be
delivered to you by us.
Very truly yours,
PATHFINDER BUSINESS RESOURCES, INC.
Xxxxxxxx X. Xxxxxxxxx, Xx., President
Agreed to and accepted by:
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(signature) (acceptance date)
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(print name)
