Exhibit 10.04
EXHIBIT D
LOCK-UP/LEAK-OUT AGREEMENT
THIS LOCK-UP/LEAK-OUT AGREEMENT (the
“Agreement”) is made and entered into as of the
day of
December, 2004, between Two Moons Kachinas Corp., a Nevada
corporation (“Two Moons”), and the individuals that
execute and deliver a Counterpart Signature Page hereof, and
sometimes collectively referred to herein as the
“Shareholders” and each, a “Shareholder.”
For all purposes of this Agreement,
“Shareholder” includes any “affiliate,
controlling person of Shareholder, agent, representative or other
person with whom Shareholder is acting in concert with.
WHEREAS, the Buyers (as defined
herein), along with certain other persons, are acquiring Common
Stock of Two Moons from certain current stockholders of Two Moons
(respectively, the “Change in Control Transaction” and
the “Buyers”); and
WHEREAS, the Buyers that are
participating in the Change in Control Transaction have identified
a potential reorganization, merger or acquisition for Two Moons
that may or may not be completed or if completed, may or may not be
beneficial to Two Moons and its stockholders (the
“Reorganization Transaction”); and
WHEREAS, in order to facilitate the
consummation of the transactions contemplated by the Change in
Control Transaction and the Reorganization Transaction and to
protect the Company, the Shareholders have agreed to enter
into this Agreement and to restrict the public sale, assignment,
transfer, conveyance, hypothecation or alienation of the Common
Stock, all on the terms set forth below.
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants contained herein,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Except as otherwise expressly provided herein, and except as each
Shareholder may be otherwise restricted from selling shares of
Common Stock, each Shareholder may only publicly sell Common Stock
subject to the following conditions commencing on the execution and
delivery of this Agreement and for the twelve (12) month period
from the filing of a Form 8-K12g-3 (“successor issuer”
8-K Current Report) the Closing of the Reorganization Transaction
(the “Lock-Up/Leak-Out Period”):
1.1
Each Shareholder shall be allowed to
sell 1/12th of such Shareholder’s shares of Common Stock per
month during the Lock-Up/Leak-Out Period, on a non-cumulative
basis, meaning that if no Common Stock was sold during one month
while Common Stock was qualified to be sold, such
shares of Common Stock could not be sold in the next successive
month.
1.2
Except as otherwise provided herein,
all Common Stock shall only be sold in “broker’s
transactions” and each Shareholder must comply with the
“manner of sale” requirements as those terms are
defined in Rule 144 of the Securities and Exchange Commission
during the Lock-Up/Leak-Out Period.
1.3
An appropriate legend describing
this Agreement shall be imprinted on each stock certificate
representing Common Stock covered hereby, and the transfer records
of Two Moons’ transfer agent shall reflect such appropriate
restrictions.
1.4
The Shareholders agree that they
will not engage in any short selling of the Common Stock during the
Lock-Up/Leak-Out Period.
1.5
During the Lock-Up/Leak/Out Period,
Two Moons shall maintain its “reporting” status with
the Securities and Exchange Commission; file all reports that are
required to be filed by it during such period; and use its
“best efforts” to ensure that the Common Stock is
continually quoted for public trading on a nationally recognized
medium of no less significance than the OTC Electronic Bulletin
Board of the National Association of Securities Dealers, Inc. (the
“NASD”), the NASDAQ Small Cap or a recognized national
stock exchange.
1.6
During the Lock-Up/Leak-Out Period,
each Shareholder will be required to submit a legal opinion to the
Company with any requested transfer hereunder to the effect that
any monthly sale is being made in compliance with this
Agreement.
2.
The delivery of a duly executed copy of the Broker/Dealer
Agreement by a selling Shareholder’s broker and a duly
executed Seller’s Resale Agreement by the selling Shareholder
in the forms attached hereto shall be satisfactory evidence for all
purposes of this Agreement that such selling Shareholder and its
broker will comply with the “broker’s
transactions” and “manner of sale” requirements
of this Agreement, and no further evidence thereof will be required
of any selling Shareholder; provided, however, Two Moons may
confirm such compliance with any Shareholder and any selling
Shareholder’s broker, to the extent that it deems reasonably
required or necessary to assure compliance with this
Agreement.
3.
Notwithstanding anything to the contrary set forth herein, Two
Moons may, in its sole discretion and in good faith, at any time
and from time to time, waive any of the conditions or restrictions
contained herein to increase the liquidity of the Common Stock or
if such waiver would otherwise be in the best interests of the
development of the trading market for the Common Stock.
Unless otherwise agreed by the Shareholders, all such waivers shall
be pro rata, as to all of the Shareholders who
executed a Lock-Up/Leak-Out Agreement in
connection with the Change in Control Transaction whose Common
Stock can, at the time of any such waiver, be publicly sold in
accordance with the Securities Act of 1933, as amended (the
“Securities Act”), or Rule 144 promulgated thereunder
by the Securities and Exchange Comm
