SHAREHOLDER LOCK-UP AGREEMENT
EXHIBIT
10.3
THIS
AGREEMENT (this “Agreement”) is dated
as of June ___, 2010 (the “Effective Date”) by
and between Bacterin International Holdings, Inc., f/k/a K-Kitz, Inc., a
Delaware corporation (the “Company”), and the
persons set forth on the signature pages hereto (each a “Management
Shareholder” and collectively, the “Management
Shareholders”). Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Subscription Agreement (as
defined below).
WHEREAS,
the Company has entered into an Agreement and Plan of Merger (the “Merger Agreement”)
pursuant to which Bacterin International Inc., a Nevada corporation (“Bacterin”), will
become a wholly-owned subsidiary of the Company (the “Reverse Merger”) and,
contingent upon the closing of the Reverse Merger, the Investors have agreed to
acquire from the Company (the “Offering”), either
for cash or upon conversion of certain existing promissory notes (“Bridge Notes”) of
Bacterin, (i) shares of the Company’s common stock (the “Common Stock”) and
(ii) warrants (“Warrants”) to
purchase additional shares of the Common Stock, subject to the terms and
conditions set forth in a Subscription Agreement entered into between Bacterin
and each of the Investors in connection with the Offering (the “Subscription
Agreement” and such transaction, the “Financing
Transaction”); and
WHEREAS,
in order to induce the Company and the Investors to enter into the Financing
Transaction, the Management Shareholders have agreed not to sell any shares of
the Company’s Common Stock that such Management Shareholders presently own on
the date hereof, or may acquire on or after the date hereof, except in
accordance with the terms and conditions set forth herein (collectively, the
“Lock-Up
Shares”).
NOW,
THEREFORE, in consideration of the covenants and conditions hereinafter
contained, the parties hereto agree as follows:
1. Restriction on Transfer;
Term. Each Management Shareholder hereby agrees with the Company that
such Management Shareholder will not offer, sell, contract to sell, assign,
transfer, hypothecate, gift, pledge or grant a security interest in, or
otherwise dispose of, or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition of (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise, directly or indirectly) (each, a “Transfer”), any of
the Lock-Up Shares and shall not Transfer such shares until the one year
anniversary of the Effective Date; provided, however, that (a) the restrictions
set forth in this Section 1 shall not apply to any Common Stock or Warrants (or
any shares of common stock underlying the Warrants) acquired by a Management
Shareholder in the Offering which would otherwise constitute Lock Up Shares and
(b) Xxx Xxxx shall be permitted to hypothecate, pledge and grant a security
interest in up to 5,000,000 of his Lock Up Shares (excluding any shares of
Common Stock he may acquire in the Offering which are not subject to this
Section 1 pursuant to section 1(a) above) as collateral for borrowed funds used
to acquire shares of Common Stock and warrants in the Offering and, if such
collateral is executed against, shall be permitted to assign and transfer such
Lock Up Shares to the secured party free of any restrictions set forth
herein.
2. Ownership. During the
Lock-Up Period, the Management Shareholders shall retain all rights of ownership
in the Lock-Up Shares, including, without limitation, voting rights and the
right to receive any dividends that may be declared in respect thereof, except
as otherwise provided in the Subscription Agreement or the other documents to be
entered into in connection with the Offering whereby any benefits, rights, title
or otherwise shall inure to the Investors.
3. Company and Transfer
Agent. The Company is hereby authorized and required to disclose the
existence of this Agreement to its transfer agent. The Company and its transfer
agent are hereby authorized and required to decline to make any transfer of the
Common Stock if such transfer would constitute a violation or breach of this
Agreement.
4. Notices. All notices,
demands, consents, requests, instructions and other communications to be given
or delivered or permitted under or by reason of the provisions of this Agreement
or in connection with the transactions contemplated hereby shall be in writing
and shall be deemed to be delivered and received by the intended recipient as
follows: (i) if personally delivered, on the business day of such delivery (as
evidenced by the receipt of the personal delivery service), (ii) if mailed
certified or registered mail return receipt requested, two (2) business days
after being mailed, (iii) if delivered by overnight courier (with all charges
having been prepaid), on the business day of such delivery (as evidenced by the
receipt of the overnight courier service of recognized standing), or (iv) if
delivered by electronic mail or facsimile transmission, on the business day of
such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent
after that time, on the next succeeding business day (as evidenced, in the case
of facsimile transmissions by the printed confirmation of delivery generated by
the sending party’s telecopier machine). If any notice, demand, consent,
request, instruction or other communication cannot be delivered because of a
changed address of which no notice was given (in accordance with this Section
4), or the refusal to accept same, the notice, demand, consent, request,
instruction or other communication shall be deemed received on the second
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable.
If to the
Company:
Xx. Xxx
X. Xxxx
Chief
Executive Officer and President
Bacterin
International, Inc.
000
Xxxxxxx Xxxx
Xxxxxxxx,
XX 00000
Fax:
With a
copy to:
Xxxxxxxxx
Xxxxxxx, LLP
0000
00xx
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn: C.
Xxx Xxxxx
Fax:
(000) 000-0000
If to the
Investors, to the addresses listed on Schedule I
hereto:
With a
copy to:
Xxxxxxx
X. Xxxxxx
Managing
Partner, Co-Founder
Middlebury
Group, L.L.C.
000 Xxxx
Xxxxxxxxx Xxx.
Xxxxxxxxx
XX 00000
Fax:
(000) 000-0000
If to the
Management Shareholders, to such Management Shareholder c/o of the Company
at the address set forth above, or to such other address as any party may
specify by notice given to the other party in accordance with this Section
4.
5. Amendment. This
Agreement may not be modified, amended, altered or supplemented, except by a
written agreement executed by each of the parties hereto following the prior
written consent of Investors holding a majority of the shares of Common Stock
acquired in the Offering through purchase or conversion.
6. Entire Agreement.
This Agreement contains the entire understanding and agreement of the parties
relating to the subject matter hereof and supersedes all prior and/or
contemporaneous understandings and agreements of any kind and nature (whether
written or oral) among the parties with respect to such subject
matter.
7. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in that
state, without regard to any of its principles of conflicts of laws or other
laws which would result in the application of the laws of another jurisdiction.
This Agreement shall be construed and interpreted without regard to any
presumption against the party causing this Agreement to be drafted.
8. Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
PARTIES UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE
FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN NEW YORK COUNTY OR SUCH
DISTRICT, AND AGREES THAT SERVICE OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER
PROCESS RELATING TO SUCH SUIT, ACTION OR OTHER PROCEEDING MAY BE EFFECTED IN THE
MANNER PROVIDED IN SECTION 4.
9. Severability. The
parties agree that if any provision of this Agreement be held to be invalid,
illegal or unenforceable in any jurisdiction, that holding shall be effective
only to the extent of such invalidity, illegally or unenforceability without
invalidating or rendering illegal or unenforceable the remaining provisions
hereof, and any such invalidity, illegally or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is the intent of the parties that this Agreement be fully
enforced to the fullest extent permitted by applicable law.
10. Binding Effect;
Assignment. This Agreement and the rights and obligations hereunder may
not be assigned by any Management Shareholder without the prior written consent
of the Company and Investors holding a majority of the shares of Common Stock
acquired in the Offering through purchase or conversion. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11. Headings. The section
headings contained in this Agreement (including, without limitation, section
headings and headings in the exhibits and schedules) are inserted for reference
purposes only and shall not affect in any way the meaning, construction or
interpretation of this Agreement. Any reference to the masculine, feminine, or
neuter gender shall be a reference to such other gender as is appropriate.
References to the singular shall include the plural and vice versa.
12. Counterparts. This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, by facsimile or other electronic
transmission, each of which when executed shall be deemed to be an original, and
all of which, when taken together, shall constitute one and the same document.
This Agreement shall become effective when one or more counterparts, taken
together, shall have been executed and delivered by all of the parties
hereto.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGE TO LOCK-UP AGREEMENT]
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above herein.
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BACTERIN
INTERNATIONAL
HOLDINGS,
INC., f/k/a K-KITZ, Inc.
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By:
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Name:
Xxx Xxxx
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Title:
President and CEO
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SHAREHOLDER
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By:
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Name:
Xxx Xxxx
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SHAREHOLDER
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By:
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Name:
Xxxx Xxxxxxx
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SHAREHOLDER
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By:
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Name:
Xxx Xxxxxxxx
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SHAREHOLDER
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By:
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Name:
Xxxxx Xxxxxxx
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SHAREHOLDER
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By:
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Name:
Xxxxx Xxxxxxxxx
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SHAREHOLDER
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By:
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Name:
Xxxxxx Xxxxxx
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SHAREHOLDER
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By:
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Name:
Xxxx X.
Xxxxxxxx
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[SIGNATURE
PAGE TO LOCK-UP AGREEMENT CONTINUED]
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SHAREHOLDER
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Name:
Xxxxxx Xxxxx
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SHAREHOLDER
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Name:
Xxxx Xxxxx
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