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LOCK-UP AGREEMENT

Lockup Agreement

LOCK-UP AGREEMENT | Document Parties: ONSTREAM MEDIA CORP You are currently viewing:
This Lockup Agreement involves

ONSTREAM MEDIA CORP

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Title: LOCK-UP AGREEMENT
Governing Law: Florida     Date: 3/28/2007
Law Firm: Arnstein & Lehr LLP    

LOCK-UP AGREEMENT, Parties: onstream media corp
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LOCK-UP AGREEMENT

 

THIS LOCK-UP AGREEMENT dated __________, 2007 (the “Agreement”), is entered into by and among Onstream Media Corporation, a Florida corporation (“Onstream”) and __________________________________ (the “Principal Member,” collectively the "Principal Members").

 

W I T N E S S E T H:

 

WHEREAS, Onstream, the Principal Members, Infinite Conferencing, LLC (the "Company") and certain other parties are parties to a Merger Agreement dated ___________, 2007 (the “Merger Agreement”);

 

WHEREAS, a condition of the Merger Agreement is the execution of this Agreement;

 

WHEREAS, the Members own [_________] shares of Onstream’s common stock (the “Shares”) upon the Effective Date of the transactions set forth in the Merger Agreement; and

 

WHEREAS, under the terms of the Merger Agreement the Principal Members have agreed to a lock-up of the Shares for an agreed period commencing on the Effective Date;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.    Prohibited Transfers

 

The Members will not without the prior written consent of Onstream, offer, sell, contract to sell, assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose (collectively a “Transfer”) of any of the Shares commencing at the Effective Date except as provided for herein. The Shares may only be sold in an aggregate amount of 25% [________] shares per 90 day period beginning on the trading day following the trading day that the Shares are registered for resale pursuant to the terms of the Registration Rights Agreement of even date hereof between and among the Company and the Principal Members and each 90 days thereafter for three (3) additional periods (each, a "Quarterly Distribution"). Notwithstanding the foregoing, if there is a private sale as contemplated in Section 1(d) below, the 25% limitation shall not apply to such private sale.

 

In addition, the initial 50% [________] shares portion of the Shares having a value at the Closing of the Merger of $2,000,000 (the "Initial Tranche") shall be subject to the following additional restrictions and rights:

 

(a)    The Principal Members of the Company may sell no more than an aggregate of 30,000 Shares of the Initial Tranche per week after such Shares are eligible for resale (which amount may be increased by Onstream at its option); provided that if the Principal Members of the Company cannot reasonably effect the sale of an aggregate of 30,000 Shares for sale in any week, such unsold amount can be sold in subsequent weeks up to a maximum aggregate amount of 50,000 Shares per week unless otherwise agreed by Onstream.

 

 

 


 

(b)    190 days after the date of the Registration Statement in respect to the Shares is declared effective (the "Measurement Period"), the parties shall determine the accumulated gross proceeds received by the Principal Members from the sale of the Initial Tranche of the Shares. In the event that the accumulated gross proceeds of the sale of Initial Tranche of the Shares is less than $2,000,000, Onstream, at its sole option but provided that all securities to be issued in connection with the Merger Agreement and any related financing or other transactions do not exceed 19.99% of the Company's outstanding Common Stock at the Effective Date, will pay the difference in cash or registrable shares of Onstream common stock to the Principal Members of the Company. If payment is to be made in registered shares of Onstream, the number of shares shall be determined based upon the average closing price of Onstream's common stock for the thirty (30) trading days prior to the end of the Measurement Period. In the event at the end of any Measurement Period, the Principal Members choose not to sell any or all of such Initial Tranche of Shares, the value of such unsold Initial Tranche of Shares based on the average closing price of Onstream's common stock for period beginning on the date such shares were first authorized for resale (either under the schedule established in this Lock-Up Agreement or under such accelerated schedule that may be subsequently authorized and/or required by Onstream at its sole option) and ending on the end of the applicable Measurement Period, will be credited toward accumulated gross proceeds for valuation purposes; provided, that in the event that the Principal Members of the Company were prevented from selling any such Initial Tranche of Shares due to (i) the ineffectiveness of the Registration Statement covering the resale of such Shares; (ii) trading in a Common Stock of Onstream was suspended for any reason for consecutive trading days exceeding five (5) consecutive trading days during the M


 
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