DropCar, Inc. Form of Lock-Up Agreement December __, 2019
Exhibit 2.4
Form of
Lock-Up Agreement
December
__, 2019
This
Lock-Up Agreement (this “Agreement”) is
executed in connection with the Agreement and Plan of Merger (the
“Merger
Agreement”) by and among DropCar, Inc.
(“Parent”), ABC
Merger Sub, Inc., (“Merger Sub”),
and Ayro, Inc. (“Company”),
dated as of December 20, 2019. Capitalized terms used herein but
not defined shall have the meanings ascribed to such terms in the
Merger Agreement.
In
connection with, and as an inducement to, the parties entering into
the Merger Agreement and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the
undersigned, by executing this Agreement, agrees that, without the
prior written consent of Parent and Company, during the period
commencing at the Effective Time and continuing until the end of
the Lock-Up Period (as hereinafter defined), the undersigned will
not: (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, make any short sale
or otherwise transfer or dispose of or lend, directly or
indirectly, any shares of Common Stock of Parent (the
“Parent
Common Stock”) or any securities convertible into,
exercisable or exchangeable for or that represent the right to
receive Parent Common Stock (including without limitation, Parent
Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and securities which may be
issued upon exercise of a stock option or warrant) whether now
owned or hereafter acquired (the “Securities”);
(2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the
Securities, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Parent Common Stock or
such other securities, in cash or otherwise; (3) make any demand
for or exercise any right with respect to, the registration of any
Parent Common Stock or any security convertible into or exercisable
or exchangeable for Parent Common Stock; (4) except for the Voting
Agreement, grant any proxies or powers of attorney with respect to
any Securities, deposit any Securities into a voting trust or enter
into a voting agreement or similar arrangement or commitment with
respect to any Securities; or (5) publicly disclose the intention
to do any of the foregoing (each of the foregoing restrictions, the
“Lock-Up
Restrictions”).
Notwithstanding
the terms of the foregoing paragraph, the Lock-Up Restrictions
shall automatically terminate and cease to be effective on the date
that is the one (1) year anniversary of the Effective Time. The
period during which the Lock-Up Restrictions apply to the
Securities shall be deemed the “Lock-Up
Period” with respect thereto.
The
undersigned agrees that the Lock-Up Restrictions preclude the
undersigned from engaging in any hedging or other transaction with
respect to any then-subject Securities which is designed to or
which reasonably could be expected to lead to or result in a sale
or disposition of such Securities even if such Securities would be
disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with
respect to such Securities or with respect to any security that
includes, relates to, or derives any significant part of its value
from such Securities.
Notwithstanding the foregoing, the undersigned may
transfer any of the Securities (i) as a bona fide gift or gifts or charitable
contribution(s), (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the
undersigned, (iii) if the undersigned is a corporation,
partnership, limited liability company, trust or other business
entity (1) to another corporation, partnership, limited liability
company, trust or other business entity that is a direct or
indirect affiliate (as defined in Rule 405 promulgated under the
Securities Act of 1933, as amended) of the undersigned or (2) as
distributions of shares of Parent Common Stock or any security
convertible into or exercisable for Parent Common Stock to limited
partners, limited liability company members or stockholders of the
undersigned or holders of similar equity interests in the
undersigned, (iv) if the undersigned is a trust, to the beneficiary
of such trust, (v) by testate succession or intestate succession,
(vi) to any immediate family member, any investment fund, family
partnership, family limited liability company or other entity
controlled or managed by the undersigned, (vii) to a nominee or
custodian of a person or entity to whom a disposition or transfer
would be permissible under clauses (i) through (vi), (viii) to
Parent in a transaction exempt from Section 16(b) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
upon a vesting event of the Securities or upon the exercise of
options or warrants to purchase Parent Common Stock on a
“cashless” or “net exercise” basis or to
cover tax withholding obligations of the undersigned in connection
with such vesting or exercise (but for the avoidance of doubt,
excluding all manners of exercise that would involve a sale in the
open market of any securities relating to such options or warrants,
whether to cover the applicable aggregate exercise price,
withholding tax obligations or otherwise), (ix) to Parent in
connection with the termination of employment or other termination
of a service provider and pursuant to agreements in effect as of
the Effective Time whereby Parent has the option to repurchase such
shares or securities, (x) acquired by the undersigned in open
market transactions after the Effective Time, (xi) pursuant to a
bona fide third party tender offer, merger, consolidation or other
similar transaction made to all holders of Parent’s capital
stock involving a change of control of Parent, provided that in the
event that such tender offer, merger, consolidation or other such
transaction is not completed, the Securities shall remain subject
to the restrictions contained in this Agreement, or (xii) pursuant
to an order of a court or regulatory agency; provided, in the case of clauses
(i)-(vii), that (A) such transfer shall not involve a disposition
for value and (B) the transferee agrees in writing with Parent to
be bound by the terms of this Agreement; and provided, further, in the case of
clauses (i)-(ix), no filing by any party under Section 16(a) of the
Exchange Act shall be required or shall be made voluntarily in
connection with such transfer. For purposes of this
Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than
first cousin.
In
addition, the foregoing restrictions shall not apply to
(i) the exercise of stock options granted pursuant to equity
incentive plans existing immediately following the Effective Time,
including the “net” exercise of such options in
accordance with their terms and the surrender of Parent Common
Stock in lieu of payment in cash of the exercise price and any tax
withholding obligations due as a result of such exercise (but for
the avoidance of doubt, excluding all manners of exercise that
would involve a sale in the open market of any securities relating
to such options, whether to cover the applicable aggregate exercise
price, withholding tax obligations or otherwise); provided that it shall apply to any of
the Securities issued upon such exercise, (ii) conversion or
exercise of warrants into Parent Common Stock or into any other
security convertible into or exercisable for Parent Common Stock
that are outstanding as of the Effective Time (but for the
avoidance of doubt, excluding all manners of conversion or exercise
that would involve a sale in the open market of any securities
relating to such warrants, whether to cover the applicable
aggregate exercise price, withholding tax obligations or
otherwise); provided that
it shall apply to any of the Securities issued upon such conversion
or exercise; and provided,
further that the recipient of Parent Common Stock agrees in
writing with Parent to be bound by the terms of this Agreement, or
(iii) the establishment of any contract, instruction or plan (a
“Plan”) that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under
the Exchange Act; provided
that no sales of the Securities shall be made pursuant to such a
Plan prior to the expiration of the Lock-Up Period, and such a Plan
may only be established if no public announcement of the
establishment or existence thereof and no filing with the
Securities and Exchange Commission or other regulatory authority in
respect thereof or transactions thereunder or contemplated thereby,
by the undersigned, Parent or any other person, shall be required,
and no such announcement or filing is made voluntarily, by the
undersigned, Parent or any other person, prior to the expiration of
the applicable Lock-Up Period. In furtherance of the
foregoing, Parent and its transfer agent and registrar are hereby
authorized to decline to make any transfer of shares of Parent
Common Stock if such transfer would constitute a violation or
breach of this Agreement.
The
undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that upon
request, the undersigned will execute any additional documents
reasonably necessary to ensure the validity or enforcement of this
Agreement. All authority herein conferred or agreed to be conferred
and any obligations of the undersigned shall be binding upon the
successors, assigns, heirs or personal representatives of the
undersigned.
The
undersigned understands that the undersigned shall be released from
all obligations under this Agreement if the Merger Agreement is
terminated prior to the Effective Date pursuant to its terms, upon
the date of such termination.
The
undersigned understands that Parent, Merger Sub and Company are
entering into the Merger Agreement in reliance upon this
Agreement.
This
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
This
Agreement, and any certificates, documents, instruments and
writings that are delivered pursuant hereto, constitutes the entire
agreement and understanding of Parent, Company and the undersigned
in respect of the subject matter hereof and supersedes all prior
understandings, agreements or representations by or among Parent,
Company and the undersigned, written or oral, to the extent they
relate in any way to the subject matter hereof
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Very
truly yours,
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Printed
Name of Holder
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By:
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Signature
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Printed Name of Person Signing
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(and
indicate capacity of person signing if
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signing
as custodian, trustee, or on behalf of an entity)
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