LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement ("Agreement"), which was
entered into on the ____ day of ______, 1999, by and between
XxxxxxxxxXxxxxxXxxxxx.xxx ("Issuer"), whose principal place of
business is located in Baltimore, Maryland, and Venture Media Limited
Partnership, Xxxxx, Inc. and World Net Communications, LLC., ("Security
Holders") witnesses that:
A. The Issuer has filed an application with the Securities
Administrators of the States shown on the attached Form CER-1
("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 one year 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
escrow on the anniversary of the second 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 second 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.
XxxxxxxxxXxxxxxXxxxxx.xxx, Inc.
By: Xxxxx X. Xxxxxxx, Chief Executive Officer
By: Xxxxx Xxxxxx, Chief Accounting Officer
Venture Media Limited Partnership
By: Xxxxx X. Xxxxxxx, Managing Partner and President
Xxxxx, Inc.
By: Xxxxx Xxxxxx, President
World Net Communications, LLC.
By: Xxxxxxx Xxxxxx, President
