"Model Promotional Shares Lock-In Agreement Form - Class B Issuer"

ADVERTISEMENT
ADVERTISEMENT

Download "Model Promotional Shares Lock-In Agreement Form - Class B Issuer"

264 times
Rate (4.7 / 5) 13 votes
MODEL PROMOTIONAL SHARES LOCK-IN AGREEMENT
Class B Issuer
I.
This Promotional Shares Lock-In Agreement ("Agreement"), which was entered into on
the _____ day of ________________, 20___, by and between
_____________________________ ("Issuer"), whose principal place of business is
located in ________________________, and _________________________________
("Security Holder") witnesses that:
A.
The Issuer has filed an application with the Securities Administrator of the States
of _____________________ ("Administrators") to register certain of its Equity
Securities for sale to public investors who are residents of those states
("Registration");
B.
The Security Holder is the owner of the shares of common stock or similar
securities and/or possesses convertible securities, warrants, options or rights
which may be converted into, or exercised to purchase shares of common stock or
similar securities of Issuer.
C.
As a condition to Registration, the Issuer and Security Holder ("Signatories")
agree to be bound by the terms of this Agreement.
II.
THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate, assign, grant
any option for the sale of, or otherwise transfer or dispose of, whether or not for
consideration, directly or indirectly, PROMOTIONAL SHARES as defined in the North
American Securities Administrators Association ("NASAA") Statement of Policy on
Corporate Securities Definitions and all certificates representing stock dividends, stock
splits, recapitalizations, and the like, that are granted to, or received by, the Security
Holder while the PROMOTIONAL SHARES are subject to this Agreement ("Restricted
Securities").
Beginning two years from the completion date of the public offering, two and one-half
percent (2 1/2%) of the Restricted Securities may be released each quarter pro rata
among the Security Holders. All remaining Restricted Securities shall be released from
this Agreement on the anniversary of the fourth year from the completion date of the
public offering.
III.
THEREFORE, the Signatories agree and will cause the following:
MODEL PROMOTIONAL SHARES LOCK-IN AGREEMENT
Class B Issuer
I.
This Promotional Shares Lock-In Agreement ("Agreement"), which was entered into on
the _____ day of ________________, 20___, by and between
_____________________________ ("Issuer"), whose principal place of business is
located in ________________________, and _________________________________
("Security Holder") witnesses that:
A.
The Issuer has filed an application with the Securities Administrator of the States
of _____________________ ("Administrators") to register certain of its Equity
Securities for sale to public investors who are residents of those states
("Registration");
B.
The Security Holder is the owner of the shares of common stock or similar
securities and/or possesses convertible securities, warrants, options or rights
which may be converted into, or exercised to purchase shares of common stock or
similar securities of Issuer.
C.
As a condition to Registration, the Issuer and Security Holder ("Signatories")
agree to be bound by the terms of this Agreement.
II.
THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate, assign, grant
any option for the sale of, or otherwise transfer or dispose of, whether or not for
consideration, directly or indirectly, PROMOTIONAL SHARES as defined in the North
American Securities Administrators Association ("NASAA") Statement of Policy on
Corporate Securities Definitions and all certificates representing stock dividends, stock
splits, recapitalizations, and the like, that are granted to, or received by, the Security
Holder while the PROMOTIONAL SHARES are subject to this Agreement ("Restricted
Securities").
Beginning two years from the completion date of the public offering, two and one-half
percent (2 1/2%) of the Restricted Securities may be released each quarter pro rata
among the Security Holders. All remaining Restricted Securities shall be released from
this Agreement on the anniversary of the fourth year from the completion date of the
public offering.
III.
THEREFORE, the Signatories agree and will cause the following:
A.
In the event of a dissolution, liquidation, merger, consolidation, reorganization,
sale or exchange of the Issuer's assets or securities (including by way of tender
offer), or any other transaction or proceeding with a person who is not a Promoter,
which results in the distribution of the Issuer's assets or securities ("Distribution"),
while this Agreement remains in effect that:
1.
All holders of the Issuer's EQUITY SECURITIES will
initially share on a pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other consideration that they paid per
share for their EQUITY SECURITIES (provided that the Administrator
has accepted the value of the other consideration), until the shareholders
who purchased the Issuer's EQUITY SECURITIES pursuant to the public
offering ("Public Shareholders") have received, or have had irrevocably set
aside for them, an amount that is equal to one hundred percent (100%) of
the public offering's price per share times the number of shares of
EQUITY SECURITIES that they purchased pursuant to the public offering
and which they still hold at the time of the Distribution, adjusted for stock
splits, stock dividends recapitalizations and the like; and
2.
All holders of the Issuer's EQUITY SECURITIES shall
thereafter participate on an equal, per share basis times the number of
shares of EQUITY SECURITIES they hold at the time of the Distribution,
adjusted for stock splits, stock dividends, recapitalizations and the like.
3.
The Distribution may proceed on lesser terms and
conditions than the terms and conditions stated in paragraphs 1 and 2
above if a majority of the EQUITY SECURITIES that are not held by
Security Holders, officers, directors, or Promoters of the Issuer, or their
associates or affiliates vote, or consent by consent procedure, to approve
the lesser terms and conditions.
B.
In the event of a dissolution, liquidation, merger, consolidation, reorganization,
sale or exchange of the Issuer's assets or securities (including by way of tender
offer), or any other transaction or proceeding with a person who is a Promoter,
which results in a Distribution while this Agreement remains in effect, the
Restricted Securities shall remain subject to the terms of this Agreement.
C.
Restricted Securities may be transferred by will, the laws of descent and
distribution, the operation of law, or by order of any court of competent
jurisdiction and proper venue.
D.
Restricted Securities of a deceased Security Holder may be hypothecated to pay
the expenses of the deceased Security Holder's estate. The hypothecated
Restricted Securities shall remain subject to the terms of this Agreement.
Restricted Securities may not be pledged to secure any other debt.
E.
Restricted Securities may be transferred by gift to the Security Holder's family
members, provided that the Restricted Securities shall remain subject to the terms
of this Agreement.
F.
With the exception of paragraph A.3 above, the Restricted
Securities shall have the same voting rights as similar EQUITY
SECURITIES not subject to the Agreement.
G.
A notice shall be placed on the face of each stock certificate of the Restricted
Securities covered by the terms of the Agreement stating that the transfer of the
stock evidenced by the certificate is restricted in accordance with the conditions
set forth on the reverse side of the certificate; and
H.
A typed legend shall be placed on the reverse side of each stock certificate of the
Restricted Securities representing stock covered by the Agreement which states
that the sale or transfer of the shares evidenced by the certificate is subject to
certain restrictions until _________________ (insert date of termination of the
Agreement) pursuant to an agreement between the Security Holder (whether
beneficial or of record) and the Issuer, which agreement is on file with the Issuer
and the stock transfer agent from which a copy is available upon request and
without charge.
I.
The term of this Agreement shall begin on the date that the Registration is
declared effective by the Administrators ("Effective Date") and shall terminate:
1.
On the anniversary of the fourth year from the completion
date of the public offering; or
2.
On the date the Registration has been terminated if no
securities were sold pursuant thereto; or
3.
If the Registration has been terminated, the date that checks
representing all of the gross proceeds that were derived therefrom and
addressed to the public investors have been placed in the U.S. Postal
Service with first class postage affixed; or
4.
On the date the securities subject to this Agreement become
"Covered Securities," as defined under the National Securities Markets
Improvement Act of 1996.
J.
This Agreement to be modified only with the written approval of the
Administrators.
IV. THEREFORE, the Issuer will cause the following:
A.
A manually signed copy of the Agreement signed by the Signatories to be filed
with the Administrators prior to the Effective Date;
B.
Copies of the Agreement and a statement of the per share initial public offering
price to be provided to the Issuer's stock transfer agent;
C.
Appropriate stock transfer orders to be placed with the Issuer's stock transfer agent
against the sale or transfer of the shares covered by the Agreement prior to its
expiration, except as may otherwise be provided in this Agreement;
D.
The above stock restriction legends to be placed on the periodic statement sent to
the registered owner if the securities subject to this Agreement are uncertificated
securities.
Pursuant to the requirements of this Agreement, the Signatories have entered into this
Agreement, which may be written in multiple counterparts and each of which shall be considered
an original. The Signatories have signed the Agreement in the capacities, and on the dates,
indicated.
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
(ISSUERS NAME)
By______________________________________
________________________________________
President
_________________________________________
Signature
_________________________________________
Printed Name of Security Holder
_________________________________________
Title, if applicable
Page of 4