LOCK-UP AGREEMENT
THIS AGREEMENT (this " Agreement
") is dated as of January 16, 2007 by and among Edgewater Foods
International, Inc., a Nevada corporation (the " Company "),
and the shareholders of the Company listed on Schedule A
attached hereto (collectively, the " Shareholders
").
WHEREAS, to induce the Company and the
investors (the “ Investors ”) to enter into the
Series B Convertible Preferred Stock Purchase Agreement dated as of
the date hereof (the “ Purchase Agreement ”) by
and among the Company and the Investors, the Shareholders have
agreed not to sell any shares of the Company’s common stock,
$0.001 par value per share (the " Common Stock "), that such
Shareholders presently own or may acquire after the date hereof,
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 . The Shareholders
hereby agree with the Company that the Shareholders will not offer,
sell, contract to sell, assign, transfer, hypothecate, pledge or
grant a security interest in, or otherwise dispose of, 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 the shares of
Common Stock from the period commencing on the Closing Date and
expiring on the date that is six (6) months following the effective
date of the registration statement filed by the Company with the
Securities and Exchange Commission providing for the resale of the
shares of Common Stock issuable upon conversion of the Preferred
Shares and exercise of the Warrants issued pursuant to the Purchase
Agreement (the “ Period ”).
2.
Ownership .
During the Period, the Shareholders 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.
Company and 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
