EXHIBIT 10.12
LOCK-UP AGREEMENT
January __, 2007
Each Purchaser referenced below:
Re: Securities Purchase Agreement, dated as of January __, 2007 (the
"Purchase Agreement"), between Towerstream Corporation, a Delaware
corporation (the "Company") and the purchasers signatory thereto
(each, a "Purchaser" and, collectively, the "Purchasers")
Ladies and Gentlemen:
Defined terms not otherwise defined in this letter agreement (the "Letter
Agreement") shall have the meanings set forth in the Purchase Agreement.
Pursuant to Section 2.2(a)(vi) of the Purchase Agreement and in satisfaction of
a condition of the Company's obligations under the Purchase Agreement, the
undersigned irrevocably agrees with the Company that, from the date hereof until
the 30th Trading Day after the Effective Date (such period, the "Restriction
Period"), the undersigned will not offer, sell, contract to sell, hypothecate,
pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any Affiliate of the undersigned or any person
in privity with the undersigned or any Affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act with respect to,
any shares of Common Stock or Common Stock Equivalents beneficially owned, held
or hereafter acquired by the undersigned (the "Securities") without the prior
written approval of the Requisite Percentage, as defined in the Purchase
Agreement. In addition, in the context of an underwritten public offering at any
time that the market stand-off provision in Section 1.9 of the Registration
Rights Agreement is effective, the undersigned agrees, without the prior written
consent of the Company and the managing underwriter (if a managing or lead
underwriter is appointed), during the period commencing on the date of the final
prospectus relating to the Company's initial underwritten public offering (firm
commitment or best-efforts) and ending on the date specified by the Company and
the managing underwriter (such period not to exceed 180 calendar days) not to:
(i) lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any securities of the Company, including (without limitation) shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether now owned or hereafter acquired), or (ii)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of any securities of the
Company, including (without limitation) shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock (whether now
owned or hereafter acquired); whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of securities, in cash or otherwise.
Beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act. In order to enforce this covenant, the Company shall impose
irrevocable stop-transfer instructions preventing the Transfer Agent from
effecting any actions in violation of this Letter Agreement.
The undersigned acknowledges that the execution, delivery and performance
of this Letter Agreement is a material inducement to each Purchaser to complete
the transactions contemplated by the Purchase Agreement and that each Purchaser
(which shall be a third party beneficiary of this Letter Agreement) and the
Company shall be entitled to specific performance of the undersigned's
obligations hereunder. The undersigned hereby represents that the undersigned
has the power and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration therefor and
that the undersigned will indirectly benefit from the closing of the
transactions contemplated by the Purchase Agreement.
This Letter Agreement may not be amended or otherwise modified in any
respect without the written consent of each of the Company, each Purchaser and
the undersigned. This Letter Agreement shall be construed and enforced in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws. The undersigned hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New York located in
Manhattan, for the purposes of any suit, action or proceeding arising out of or
relating to this Letter Agreement, and hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that (i) it is not personally
subject to the jurisdiction of such court, (ii) the suit, action or proceeding
is brought in an inconvenient forum, or (iii) the venue of the suit, action or
proceeding is improper. The undersigned hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by receiving a copy thereof sent to the Company at the address in
effect for notices to it under the Purchase Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. The undersigned hereby waives any right to a trial by jury. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. The undersigned agrees and understands that this
Letter Agreement does not intend to create any relationship between the
undersigned and each Purchaser and that each Purchaser is not entitled to cast
any votes on the matters herein contemplated and that no issuance or sale of the
Securities is created or intended by virtue of this Letter Agreement.
By its signature below, the Company's Transfer Agent hereby acknowledges
and agrees that, reflecting this Letter Agreement, it has placed an irrevocable
stop transfer instruction on all Securities beneficially owned by the
undersigned until the end of the Restriction Period. This Letter Agreement shall
be binding on successors and assigns of the undersigned with respect to the
Securities and any such successor or assign shall enter into a similar agreement
for the benefit of the Purchasers.
SIGNATURE PAGE FOLLOWS
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This Letter Agreement may be executed in two or more counterparts, all of
which when taken together may be considered one and the same agreement.
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Signature
_________________________
Print Name
_________________________
Position in Company
Address for Notice:
________________________________________
________________________________________
________________________________________
Number of shares of Common Stock
________________________________________________________________________________
Number of shares of Common Stock underlying subject to warrants, options,
debentures or other convertible securities
By signing below, the Company agrees to enforce the restrictions on
transfer set forth in this Letter Agreement.
________________________________________
By:
------------------------------------
Name:
Title:
Acknowledged and agreed to
as of the date set forth above:
Pacific Stock Transfer Company
By:
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Name:
Title:
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