EXHIBIT 10.7
LOCK-UP AGREEMENT
AGREEMENT, dated as of the 21st day of March, 2005, by and among MEDIABAY,
INC., a Florida corporation (the "Company"), Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxx
(collectively, the "Key Employees" and each individually a "Key Employee").
Unless the context otherwise requires, any terms used herein but not
defined herein shall have the meanings ascribed thereto in the Securities
Purchase Agreement.
W I T N E S S E T H :
WHEREAS, the Company has entered into a Securities Purchase Agreement (the
"Securities Purchase Agreement") dated March 21, 2005 (the "Execution Date"), by
and among the Company and the investors whose names appear on the signature
pages thereof (the "Investors"), whereby, among other things, the Company will
sell certain securities which are convertible or exercisable, as the case may
be, into the Company's common stock, no par value (the "Common Stock").
WHEREAS, the parties deem it in the best interests of the Company to
restrict the transfer of the securities of the Company by the Key Employees as
herein provided.
NOW, THEREFORE, in consideration of the agreements and mutual covenants
contained herein, the parties hereto agree as follows:
1. Lock-up Period. The Key Employees agree, for the benefit of the Company
and the Investors, that they will not, directly or indirectly, without the prior
consent of the Company (as evidenced by the vote of a majority of the members of
the Company's Board of Directors) and the execution of a written instrument by
the Company and the holders of at least two-thirds (2/3) of the Registrable
Securities into which all of the Preferred Shares and Warrants then outstanding
are convertible or exercisable (without regard to any limitation on such
conversion or exercise), sell, offer to sell, contract to sell, pledge, grant
any option or right to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option or
right to purchase or other sale or disposition) of any shares of Common Stock or
any securities convertible into, or exercisable or exchangeable for, any shares
of Common Stock, other than in connection with any 10b-5(1) trading plan in
effect as of the Execution Date and disclosed in writing to each Investor (all
such Securities held by the Key Employees and Securities transferred pursuant to
Section 2 hereof referred to as "Covered Securities") until the Effective Date.
2. Miscellaneous.
(a) Notices. Notice shall be given in writing by messenger,
overnight courier, or postage prepaid, certified mail letter sent to the address
set forth under each Key Employee's name on the signature page of this
Agreement, or to such other address as the party affected may hereafter
designate in writing to the Company and all other Key Employees; together with a
copy to the Company at the address set forth on the signature page of this
Agreement. Any such notice shall be effective when received by the party to whom
addressed; provided that if given or made by postage prepaid, certified mail
letter, it shall be deemed to have been received when actually received.
(b) Amendment; Termination. Except as hereinafter provided, no
change or modification of this Agreement shall be valid unless the same shall
have been in writing and signed by (i) the Key Employees, (ii) the Company (as
evidenced by the vote of a majority of the members of the Company's Board of
Directors), and (iii) holders of at least two-thirds (2/3) of the Registrable
Securities into which all of the Preferred Shares and Warrants then outstanding
are convertible or exercisable (without regard to any limitation on such
conversion or exercise).
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(d) Governing Law. Subject to the terms hereof, this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and performed entirely within such State.
(e) Third Party Beneficiaries. The Key Employees acknowledge and
agree that this Agreement is intended to be for the benefit of the Investors.
(f) Specific Performance. Due to the fact that the legal remedies
may be inadequate to enforce this Agreement, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforced. In the
event of a breach or threatened breach of the terms, covenants and/or conditions
of this Agreement by a Key Employee, the Company or any Investor shall, in
addition to all other remedies, be entitled to a temporary or permanent
mandatory injunction, or any appropriate decree of specific performance, without
any bond or security being required and without being required to show any
actual damage or that monetary damages would not provide an adequate remedy.
(g) Spousal Interests. To the extent that any Covered Securities of
a Key Employee constitute the community property of the Key Employee and his
spouse, the Key Employee shall obtain the spouse's acknowledgment of consent to
the existence and binding effect of this Agreement by having the spouse execute
a counterpart to this Agreement. If a Key Employee marries or remarries during
the term of this Agreement, the Key Employee shall obtain the required spousal
consent within a reasonable time, not to exceed thirty (30) days, following the
marriage.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.
MEDIABAY, INC.
By:
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Name:
Title:
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Xxxxxx Xxxxxxx, Key Employee
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Xxxxxxx Xxxxxx, Key Employee
