LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT dated __________, 2007 (the “Agreement”), is entered into by
and among Onstream Media Corporation, a Florida corporation (“Onstream”) and
__________________________________ (the “Principal Member,” collectively the
"Principal Members").
W
I T N E
S S E T H:
WHEREAS,
Onstream, the Principal Members, Infinite Conferencing, LLC (the "Company")
and
certain other parties are parties to a Merger Agreement dated ___________,
2007
(the “Merger Agreement”);
WHEREAS,
a condition of the Merger Agreement is the execution of this
Agreement;
WHEREAS,
the Members own [_________] shares of Onstream’s common stock (the “Shares”)
upon the Effective Date of the transactions set forth in the Merger Agreement;
and
WHEREAS,
under the terms of the Merger Agreement the Principal Members have agreed to
a
lock-up of the Shares for an agreed period commencing on the Effective
Date;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties agree as follows:
1. Prohibited
Transfers
The
Members will not without the prior written consent of Onstream, offer, sell,
contract to sell, assign, transfer, pledge, hypothecate, mortgage, encumber
or
otherwise dispose (collectively a “Transfer”) of any of the Shares commencing at
the Effective Date except as provided for herein. The Shares may only be sold
in
an aggregate amount of 25% [________] shares per 90 day period beginning on
the
trading day following the trading day that the Shares are registered for resale
pursuant to the terms of the Registration Rights Agreement of even date hereof
between and among the Company and the Principal Members and each 90 days
thereafter for three (3) additional periods (each, a "Quarterly Distribution").
Notwithstanding the foregoing, if there is a private sale as contemplated in
Section 1(d) below, the 25% limitation shall not apply to such private sale.
In
addition, the initial 50% [________] shares portion of the Shares having a
value
at the Closing of the Merger of $2,000,000 (the "Initial Tranche") shall be
subject to the following additional restrictions and rights:
(a) The
Principal Members of the Company may sell no more than an aggregate of 30,000
Shares of the Initial Tranche per week after such Shares are eligible for resale
(which amount may be increased by Onstream at its option); provided that if
the
Principal Members of the Company cannot reasonably effect the sale of an
aggregate of 30,000 Shares for sale in any week, such unsold amount can be
sold
in subsequent weeks up to a maximum aggregate amount of 50,000 Shares per week
unless otherwise agreed by Onstream.
(b) 190
days
after the date of the Registration Statement in respect to the Shares is
declared effective (the "Measurement Period"), the parties shall determine
the
accumulated gross proceeds received by the Principal Members from the sale
of
the Initial Tranche of the Shares. In the event that the accumulated gross
proceeds of the sale of Initial Tranche of the Shares is less than $2,000,000,
Onstream, at its sole option but provided that all securities to be issued
in
connection with the Merger Agreement and any related financing or other
transactions do not exceed 19.99% of the Company's outstanding Common Stock
at
the Effective Date, will pay the difference in cash or registrable shares of
Onstream common stock to the Principal Members of the Company. If payment is
to
be made in registered shares of Onstream, the number of shares shall be
determined based upon the average closing price of Onstream's common stock
for
the thirty (30) trading days prior to the end of the Measurement Period. In
the
event at the end of any Measurement Period, the Principal Members choose not
to
sell any or all of such Initial Tranche of Shares, the value of such unsold
Initial Tranche of Shares based on the average closing price of Onstream's
common stock for period beginning on the date such shares were first authorized
for resale (either under the schedule established in this Lock-Up Agreement
or
under such accelerated schedule that may be subsequently authorized and/or
required by Onstream at its sole option) and ending on the end of the applicable
Measurement Period, will be credited toward accumulated gross proceeds for
valuation purposes; provided, that in the event that the Principal Members
of
the Company were prevented from selling any such Initial Tranche of Shares
due
to (i) the ineffectiveness of the Registration Statement covering the resale
of
such Shares; (ii) trading in a Common Stock of Onstream was suspended for any
reason for consecutive trading days exceeding five (5) consecutive trading
days
during the Measurement Period then the Measurement Period; or (iii) any other
reason by which the Principal Members where prevented from selling the Shares
provided, however, that the Principal Members notify the Company in writing
promptly of the basis for such prevention and the value of protections set
forth
herein shall be extended for a proportional amount of time equal to the amount
of time such Shares could not be sold.
(c) The
Principal Members shall deliver to Onstream within ten (10) business days after
the end of each Measurement Period a written statement setting forth the number
of Shares sold by the Principal Members, the date on which such Shares were
sold
and the gross proceeds received by such Principal Members for such sales (a
"Measurement Notice"). The Measurement Notice shall be conclusive against
Onstream in all respects twenty (20) days after receipt by Onstream unless,
within such period, Onstream sends the Principal Members a notice disputing
the
propriety of the amounts set forth of such notice (a "Dispute Notice"). A
Dispute Notice shall describe the basis for such objection and the amount that
Onstream does not believe is a correct calculation. Upon receipt of any Dispute
Notice, the Principal Members and Onstream shall use their reasonable efforts
to
cooperate and arrive at a mutually acceptable resolution of the dispute within
the next thirty (30) days. If a resolution is not reached within the thirty
(30)
day period, either party may submit the dispute to a court in accordance with
the provisions set forth in Section 7 of this Agreement.
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(d) With
respect to the Initial Tranche of Shares only, the Principal Members will agree
to accept any bona fide cash offer received during Measurement Period so long
as
that offer equals or exceeds the Issue Price as defined in the Merger Agreement
($_______ per share). A bona fide cash offer whether or not accepted shall
be
credited towards accumulated gross proceeds.
(e) Any
Transfer of the Shares in violation of the restrictions contained herein shall
be null and void.
2. Adjustments
The
amounts and number of Shares shall be appropriately adjusted in the event of
any
stock split, stock dividend, reclassification or other similar transaction
by
Onstream.
3. Specific
Enforcement
The
parties hereby acknowledge and agree that Onstream may be irreparably damaged
in
the event that this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement
by
the Members, Onstream shall, in addition to all other remedies, be entitled
to a
temporary or permanent injunction, without showing any actual damage, and/or
a
decree for specific performance, in accordance with the provisions
hereof.
4. Legend
All
certificates evidencing any of the Shares shall bear a legend substantially
as
follows during the term of this Agreement:
“The
securities represented by this certificate are subject to restrictions on
transfer and may not be sold, exchanged, transferred, pledged, hypothecated
or
otherwise disposed of except in accordance with and subject to all the terms
and
conditions of that certain Lock-Up Agreement dated as of __________, 2007,
a
copy of which may be obtained from Onstream upon request and without charge.”
5. Notices
All
notices, requests, consents, instructions and other communications required
or
permitted to be given hereunder shall be in writing and sent by
nationally-recognized, next-day delivery service or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed as set
forth below or by facsimile transmission confirmed in writing by next-day
delivery service; receipt shall be deemed to occur on the date of actual receipt
if by registered or certified mail and from the time of transmission if sent
by
facsimile and confirmed in writing by next-day delivery service.
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if
to Onstream, to:
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Onstream
Media Corporation
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0000
X.X. 00xx Xxxxxx
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Xxxxxxx
Xxxxx, Xxxxxxx 00000
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Attention:
Xxxxx X. Xxxxxx
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Fax:
000-000-0000
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with
a copy to:
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Xxxxxxxx
& Xxxx LLP
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000
Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
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Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
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Attention:
Xxxx X. Xxxxxxxxx, Esq.
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Fax:
000-000-0000
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if
to the Members:
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________________________ |
| ________________________ | |
| ________________________ | |
| ________________________ | |
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Fax:
_____________________
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with
a copy to:
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________________________ |
| ________________________ | |
| ________________________ | |
| ________________________ | |
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Fax:
_____________________
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6. Governing
Law; Jurisdiction
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Florida, without regard to its principles of conflict of laws.
Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any party in the
applicable courts located in Fort Lauderdale, Florida, and each of the parties
consents to the jurisdiction of such courts and hereby waives, to the maximum
extent permitted by law, any objection, including any objections based on forum
non conveniens, to the bringing of any such proceeding in such
jurisdictions.
7. Miscellaneous
(a) Entire
Agreement.
This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof. This Agreement, including
any
certificate, schedule, exhibit or other document delivered pursuant to its
terms, constitutes the entire agreement among the parties hereto with respect
to
the subject matters hereof and thereof, and supersedes all prior agreements
and
understandings, whether written or oral, among the parties with respect to
such
subject matters.
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(b) Waiver.
No
waiver of any provision of this Agreement shall be deemed a waiver of any other
provisions or shall a waiver of the performance of a provision in one or more
instances be deemed a waiver of future performance thereof.
(c) Binding
Effect of Agreement.
This
Agreement shall inure to the benefit of, and be binding upon the successors
and
assigns of each of the parties hereto.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
unenforceability of this Agreement in any other jurisdiction.
(e) Headings.
The
headings of this Agreement are for convenience of reference only and shall
not
form part of, or affect the interpretation of this Agreement.
(f) Counterparts.
This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original and all of which, when taken together, will be deemed to
constitute one and the same agreement.
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IN
WITNESS WHEREOF, this Agreement has been duly executed by each of the
undersigned.
ONSTREAM
MEDIA CORPORATION
By:_______________________________________
Name:
_____________________________________
Its:
_______________________________________
MEMBERS
___________________________________________
Name:
______________________________________
Its:
________________________________________
___________________________________________
Name:
______________________________________
Its:
________________________________________
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