Exhibit K Form of Lock-Up Agreement Lock-Up Agreement
Exhibit
10.9
Exhibit
K
Form
of Lock-Up Agreement
[______],
2007
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Ladies
and Gentlemen:
This
letter agreement (this “Agreement”)
relates to the private placement (the “Offering”)
by
nCoat, Inc., a Delaware corporation (the “Company”),
of an
aggregate of up to $17,750,000 principal amount of notes (“Notes”)
and
warrants (“Warrants”)
to
purchase shares of common stock of the Company. The Offering is governed by
a
Securities Purchase Agreement between the Company and the investors signatory
thereto (“Investors”).
In
order
to induce the Investors to participate in the Offering, the undersigned hereby
agrees that during the period from the date hereof until and through the date
that is one year after the date on which the Securities and Exchange Commission
declares the registration statement covering the shares of common stock
underlying the Series A Notes and Series A Warrants sold in the Offering
effective (the “Lock-Up
Period”),
the
undersigned: (a) will not, directly or indirectly, offer, sell, agree to offer
or sell, solicit offers to purchase, grant any call option or purchase any
put
option with respect to, or otherwise dispose of any Relevant Security (as
defined below), (b) will not pledge or borrow against any Relevant Security
(as
defined below), unless the party receiving the pledge or collateral agrees
in
writing to be bound by the terms of this Agreement, and (c) will not establish
or increase any “put equivalent position” or liquidate or decrease any “call
equivalent position” with respect to any Relevant Security (in each case within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder), or otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any economic consequence of ownership of a
Relevant Security, whether or not such transaction is to be settled by delivery
of Relevant Securities, other securities, cash or other consideration, without
the prior written approval of 75% of the Investors still holding any Securities
issued under the terms of the Securities Purchase Agreement.
As
used
herein, the term “Relevant
Security”
means
any shares of Common Stock or other security of the Company thereof that is
convertible into, or exercisable or exchangeable for shares of Common Stock
or
equity securities of the Company or that holds the right to acquire any shares
of Common Stock or equity securities of the Company or any other such Relevant
Security.
The
undersigned hereby authorizes the Company during the Lock-Up Period to cause
any
transfer agent for the Relevant Securities to decline to transfer, and to note
stop transfer restrictions on the stock register and other records relating
to,
Relevant Securities for which the undersigned is the record holder and, in
the
case of Relevant Securities for which the undersigned is the beneficial but
not
the record holder, agrees during the Lock-Up Period to cause the record holder
to cause the relevant transfer agent to decline to transfer, and to note stop
transfer restrictions on the stock register and other records relating to,
such
Relevant Securities.
The
undersigned hereby represents and warrants to the placement agent in the
Offering and the Company that the undersigned has full power and authority
to
enter into this Agreement and that this Agreement constitutes the legal, valid
and binding obligation of the undersigned, enforceable in accordance with its
terms. Upon request, the undersigned will execute any additional documents
necessary in connection with enforcement hereof. Any obligations of the
undersigned shall be binding upon the successors and assigns of the undersigned
from the date first above written.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to the conflicts of laws principles thereof.
Delivery of a signed copy of this letter by facsimile transmission shall be
effective as delivery of the original hereof.
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Very
truly yours,
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_____________________________
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