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LOCK-UP/LEAK-OUT AGREEMENT
THIS
LOCK-UP/LEAK-OUT AGREEMENT (the “Agreement”) is
made and entered into as of July 15, 2008, between those
individuals set forth on Schedule A attached hereto (each, a
“Shareholder;” collectively, the
“Shareholders”) and Platinum Studios, Inc., a
California corporation (the
“Company”).
RECITALS
WHEREAS,
the Shareholders collectively own all of the issued and
outstanding membership interest in WOWIO, LLC, a Pennsylvania
limited liability company (the “Membership
Interests”);
WHEREAS,
simultaneously herewith, the Company has entered into an
Acquisition Agreement with the Shareholders pursuant to which
the Company is acquiring all of the Membership Interests (the
“Acquisition Agreement”);
WHEREAS,
all capitalized terms not defined herein shall have the
meanings ascribed to them in the Acquisition
Agreement;
WHEREAS,
in consideration for the sale and transfer of the Membership
Interests, the Shareholders have agreed to accept shares of
common stock of the Company in the form of Purchase Price
Shares and Earn Out Shares (collectively, the
“Acquisition Stock”), some of which shall be
issued as of the Closing Date and some of which shall be
issued after the Closing Date, all in accordance with the
terms of the Acquisition Agreement;
WHEREAS,
as a material inducement for the Company to issue the
Acquisition Stock as consideration for the sale of the
Membership Interests, and as a condition precedent to the
closing of the purchase and sale of the Membership Interests
under the Acquisition Agreement, the Company and the
Shareholders have agreed to enter into this Agreement and to
restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of the Acquisition 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.
Notwithstanding
anything contained in this Agreement, each of the Shareholders
may transfer such Shareholder’s shares of Acquisition
Stock to such Shareholder’s affiliates, partners in a
partnership, subsidiaries and trusts, or spouses and lineal
descendants (individually, a “Transferee”) for
estate planning purposes, at such value as determined by such
Shareholder to be appropriate, provided that the Transferee
(or the legal representative of the Transferee) executes an
agreement to be bound by all of the terms and conditions of
this Agreement in connection with the resale of any shares of
the Acquisition Stock. Transfers pursuant to this Section 1
shall not be subject to the requirements of Section 2. Upon
completion of a transfer under this Section 1, the Transferee
shall be a “Shareholder” under this Agreement for
all purposes.
2.
Except
as otherwise expressly provided herein, and except as the
Shareholders may be otherwise restricted from selling shares
of the Acquisition Stock under applicable United States or
state securities laws, rules and regulations, the Shareholders
may only sell shares of the Acquisition Stock subject to the
following conditions for the twelve (12) month period
following the lapsing of the Rule 144 holding period
applicable to the Acquisition Stock (the
“Lock-Up/Leak-Out Period”), it being acknowledged
that because the Acquisition Stock is issuable over a period
of time at and following the Closing Date, each issuance of
Acquisition Stock shall have a separate, applicable
Lock-Up/Leak Out Period :
2.1
Each
Shareholder shall be allowed to sell 1/12
th of
such Shareholder’s shares of Acquisition Stock per month for
the twelve (12) months of the applicable Lock-Up/Leak-Out
Period.
2.2
All
shares of a Shareholder’s Acquisition Stock shall be
sold on a non-cumulative basis, meaning that if no shares of
Acquisition Stock was sold by such Shareholder during a month
while Acquisition Stock was qualified to be sold by such
Shareholder, those unsold shares could not be sold in the next
successive month; and likewise, if part of the Acquisition
Stock that could be sold during any monthly period was sold,
such Shareholder may not cumulate the unsold portion of that
month’s allotment to the next month, and so forth. Each
Shareholder agrees that all sales will be made at no less than
the best “asked” prices, and no sales will be made
at the “bid” prices for the Acquisition
Stock.
2.3
Except
as otherwise provided herein, all Acquisition Stock shall be
sold in “broker’s transactions” and each
Shareholder will comply with the “manner of sale”
requirements as those terms are defined in Rule 144 of the
Securities and Exchange Commission duri
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