BLEED-OUT LETTER
XXXXXXXXXX
BLEED OUT AGREEMENT
TO ARRANGE THE SALE OF CERTAIN SHARES AND
AGREEING TO RESTRICT THE SALE OF SHARES
OF COMMON STOCK
AFTER THE EFFECTIVENESS OF THE PLAN OF MERGER
November ___, 1999
The Board of Directors
Attn: Xx. Xxxxxxxx Xxxxxx
LEAPFROG SMART PRODUCTS, INC.
f/k/a ALBARA CORPORATION
000 Xxxxxxx Xxxxxx, Xxxx. 0
Xxxxxxx, XX 00000
Re: Leapfrog Smart Products, Inc., a Colorado corporation
f/k/a Albara Corporation ( Corporation )
Dear Sirs:
We have agreed to the following regarding the arrangement of the sale of
shares of Common Stock (the Shares ) of the Corporation owned by me
and restrictions imposed on my remaining Shares. You will arrange the
sale of:
30,000 to 40,000 Shares of the Corporation that I own for the sum of
approximately $150,000, on substantially the same terms and conditions
as a contemplated private offering, such shares to be sold at or about the
time of execution of this letter; and
20,000 to 30,000 Shares of the Corporation (60,000 shares in the aggregate
between (A) and (B)) that I own on substantially the same terms and
conditions as a contemplated private offering at the time such offering
is closed.
In exchange for arranging the foregoing sale, I hereby agree not to
offer for sale, sell, distribute or otherwise dispose (the Transfer ) of any
Shares not sold as provided in (A) or (B) above for a period of one year
from the date hereof, except as follows:
(i) No Shares may be sold during the first sixty (60) days following the
date hereof; and
(ii) Sixty thousand (60,000) Shares will be released and may be sold without
restriction beginning on the sixty-first (61st) day after the date hereof; and
An additional twenty thousand (20,000) Shares will be released every thirty
days thereafter and may be sold without restriction on a cumulative basis at
any time thereafter; and
All restrictions imposed by this Letter shall be extinguished on the 151st
day from the date hereof in the event the Company shall not have closed
within 150 days of the date hereof an equity offering raising an aggregate
of at least $2,500,000; and
If a registration statement is filed by the Corporation pursuant to the
Securities Act of 1933 (the "Act"), and subsequently declared effective
by the SEC, all restrictions imposed by this Letter shall be extinguished;
and
In any event, all restrictions imposed by this Agreement shall be
extinguished one (1) calendar year from the date hereof.
The Corporation may consent to Transfers prior to expiration of the
above restrictions. Such consent notice and other communication
required or permitted under this Agreement and the transactions
contemplated hereby shall be in writing and shall be deemed to
have been duly given, made and received on the date when delivered
by hand delivery with receipt acknowledged, or upon the next
"Business Day" (meaning a day, other than a Saturday or a Sunday,
or a federal holiday upon which offices of the federal government are
not open for business) following receipt of facsimile transmission,
or upon the fifth day after deposit in the United States mail,
registered or certified with postage prepaid, return receipt requested,
addressed as set forth below:
If to LEAPFROG SMART PRODUCTS, INC.:
000 Xxxxxxx Xxxxxx, Xxxx. 0
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
Xxxxxx & Xxxxxxx, P.C.
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxxx Xxxx & Company, LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, III
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The Corporation may act upon any instrument or other writing believed
by it in good faith to be genuine and to be signed or presented by the
proper person or persons and shall not be liable in connection with
the performance by it of its duties pursuant to the paragraphs hereof,
except for its own willful misconduct or gross negligence.
Sincerely yours,
Real Xxxxxxxxxx
XX
cc: Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
