LOCK-UP AGREEMENTLockup Agreement |
|
|
|
You are currently viewing: This Lockup Agreement involves
DIRT MOTOR SPORTS, INC. | Paul A. Kruger. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Lockup Agreement by:
EXHIBIT 4.10
LOCK-UP AGREEMENT
This
Lock-up Agreement (this “Agreement”), dated as of May ___,
2006 (the “Effective Date”) by and among Dirt Motor Sports, Inc., a
Delaware corporation (the “Company”), and Paul A. Kruger
(the “Shareholder”).
WHEREAS,
to induce certain investors (the “Investors”) to enter into
that certain Series D Convertible Preferred Stock Purchase Agreement dated
as of the date hereof (the “Purchase Agreement”) by and
among the Company and the Investors, the Shareholder has agreed not to sell any
shares of the common stock, par value $.0001 per share, of the Company that the
Shareholder presently owns (the “Common Stock”), except in
accordance with the terms and conditions set forth herein. Capitalized terms
used herein without definition shall have the meanings assigned to such terms
in the Purchase Agreement.
NOW,
THEREFORE, in consideration of the covenants and conditions hereinafter
contained, the parties hereto agree as follows:
1. Restriction
on Transfer; Term.
(a) From
the Effective Date through the period of twenty-four (24) months following
the Effective Date (the “Initial Period”), the Shareholder
hereby agrees with the Company that the Shareholder will not offer, sell,
contract to sell, assign, transfer, hypothecate, pledge or grant a security
interest in, or otherwise dispose of (each, a “Transfer”),
or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition of (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company), directly or indirectly, any of such
Shareholder’s shares of Common Stock; provided, however,
that (i) if the Company undertakes an underwritten public offering within
twelve months of the Effective Date, Shareholder may sell up to one half of
Shareholder’s Common Stock in the underwritten public offering,
(ii) if the Company does not complete an underwritten public offering
within six months of the Effective Date, then if the Company undertakes a
private placement of shares of its common stock, Shareholder shall also have
the right, but not the obligation, to participate in such private placement and
sell, upon the same terms and conditions, up to one third (1/3) of the number
of shares of common stock to be sold by the Company in the private placement,
and (iii) the Shareholder may Transfer up to one twelfth (1/12) of such
Shareholder’s shares of Common Stock per month, on a non-cumulative
basis, beginning with the first month following the one year anniversary of the
Effective Date. Following the Initial Period, the Shareholder may freely
Transfer all of his shares of Common Stock in accordance with applicable
securities laws.
(b) Notwithstanding
the foregoing, the restrictions set forth in Section 1 above: (i) may
be waived in whole or in part by the consent of the holders of at least seventy
five percent (75%) of the Company’s outstanding shares of preferred
stock, par value $.01 per share; and (ii) shall not apply to a block trade
by Shareholder if Shareholder provides the Company’s financial advisor at
least five days written notice to match the terms of sale of such block trade.
Notwithstanding
anything in this Agreement to the contrary; the parties acknowledge that
Shareholder has pledged 1,500,000 shares of Common Stock to F&M Bank as
collateral for a credit facility (the “F&M Loan”), and that
F&M Bank, or its successors and assigns, shall not be bound by the terms
and conditions of this Agreement. Shareholder shall, within three business day
after the Effective Date, provide F&M Bank with the names of the
Company’s financial advisors to assist F&M Bank in selling any of the
above pledged shares in the event of the default by Shareholder on the F&M
Loan
2. Ownership.
Notwithstanding anything to the contrary in this Agreement, the Shareholder
shall retain all rights of ownership in the Common Stock, including, without
limitation, voting rights and the right to receive any dividends, if any, that
may be declared in respect thereof.
3. Notification
of Transfer Agent. The Company is hereby authorized to disclose the
existence of this Agreement to its transfer agent. The Company and its transfer
agent are hereby authorized to decline to make any transfer of the Common Stock
if such transfer would constitute a violation or breach of this Agreement and
the Purchase Agreement.
4. Notices.
All notices, demands, consents, requests, instructions and other communications
to be given or delivered or permitted under or by reason of the provisions of
this Agreement or in connection with the transactions contemplated hereby shall
be in writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of
such delivery (as evidenced by the receipt of the personal delivery service),
(ii) if mailed certified or registered mail return receipt requested, four
(4) business days after being mailed, (iii) if delivered by overnight
courier (with all charges having been prepaid), on the business day of such
delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission, on
the business day of such delivery if sent by 6:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding business day (as
evidenced by the printed confirmation of delivery generated by the sending
party’s telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 4),
or the refusal to accept same, the notice, demand, consent, request,
instruction or other communication shall be deemed received on the second
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable.
|
|
|
|
|
If to the Company: |
|
Dirt Motor Sports, Inc. |
|
|
|
2500 McGee Drive,
Suite 147 |
|
|
|
Norman, Oklahoma 73072 |
|
|
|
Attention: |
|
|
|
Tel. No.:
(405) 360-5047 |
|
|
|
Fax No.: (405) - |
2
|
|
|






