EXHIBIT 10.3
LOCK-UP AGREEMENT
AGREEMENT, dated as of February 1, 2001, by and among PALADYNE CORP., a
Delaware corporation ("Paladyne"), and the Paladyne officers and directors and
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certain of its stockholders identified on Schedule I annexed hereto and made
part of this Agreement (collectively, the "Stockholders" and each individually a
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"Stockholder").
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W I T N E S S E T H:
WHEREAS, in accordance with an Agreement and Plan of Merger, dated as of
December 21, 2000 (the "Merger Agreement"), by and among Paladyne, E-COM
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ACQUISITION CORP., a North Carolina corporation and wholly owned subsidiary of
Paladyne, and E-COMMERCE SUPPORT CENTERS, INC., a North Carolina corporation
("ECOM"), as of the date hereof, by a merger (the "Merger"), ECOM is becoming a
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wholly-owned subsidiary of Paladyne and Paladyne is issuing certain securities
convertible into and exercisable for shares of its common stock, $0.001 par
value (the "Paladyne Common Stock"), to the former stockholders of ECOM; and
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WHEREAS, the Stockholders, comprising the former stockholders of ECOM and
persons who immediately after the Closing are executive officers and directors
of Paladyne, deem it advisable and in their respective best interests to
restrict their ability to sell, transfer or otherwise dispose of their shares of
Paladyne Common Stock for a period of time following the closing of Merger.
NOW, THEREFORE, for this and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. THE LOCK-UP ARRANGEMENT.
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1.1 Each Stockholder agrees that during the two (2) year period commencing
as of the date of this Agreement and ending on February 1, 2003 (the "Lock-Up
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Period"), he shall not, directly or indirectly, offer, sell, assignment, pledge,
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grant an option in, transfer or otherwise dispose (a "Disposition") of any of
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his shares of Paladyne Common Stock (or any securities convertible into,
exercisable for, or exchangeable for Paladyne Common Stock) (collectively, the
"Paladyne Securities") listed opposite his name on Schedule I, except that
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during the Lock-Up Period, each Stockholder:
(i) May sell, on or before February 1, 2002, up to a number of shares
of Paladyne Common Stock equal to ten (10%) percent of such Stockholder's
Fully-Diluted Securities, which number is set forth in the "Cap" column on
Schedule I. The "Fully Diluted Securities" of any Stockholder shall mean all
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shares of Paladyne Common Stock issued in the name of such Stockholder or his
nominee, plus all shares of Paladyne Common Stock issuable upon exercise,
conversion or exchange of any warrants, options or convertible security owned by
such Stockholder or his nominee, which number, as of the date hereof, is set
forth on Schedule 1 hereto.
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(ii) May sell, during the period from and after February 1, 2002 and
on or before February 1, 2003, up to a number of shares of Paladyne Common Stock
equal to ten (10%) percent of such Stockholders' Fully-Diluted Securities, which
number is set forth in the "Cap" column on Schedule 1, on a non-cumulative basis
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with paragraph (i) above.
(iii) May transfer to one of his Affiliates or another member of his
immediate family, including a trust for the benefit of the Stockholder or the
benefit of a member of his immediate family; provided that the transferee enter
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into an agreement with respect to the transferred Paladyne Securities similar to
this Agreement, and for purposes of the amounts in paragraph (i) and (ii) above
hereof, sales by the transferee shall be added to any sales by the Stockholder.
"Immediate Family" of a Stockholder shall mean a spouse, a son or daughter of
such person or a descendant of either, the father or mother of such person, a
sibling of such person or an ancestor of such person, or a trust for which the
Stockholder is grantor and the beneficiary is the Stockholder or a member of his
immediate family.
(iv) May effect a bona fide pledge with a bank, securities broker or
other financial institution, provided that the pledgee holds the pledged
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Paladyne Securities subject to this Agreement.
(v) In connection with a merger or other business combination
involving Paladyne or a sale of all or substantially all of Paladyne's assets,
may sell his Paladyne Securities on terms similar to that of the other
stockholders of Paladyne.
(vi) May sell to Paladyne or any officer or director of Paladyne or
ECOM, provided that the purchaser becomes a party to this Agreement.
(vii) May make a Disposition to any person in a transaction to which
the Board of Directors had given its prior written approval.
1.2 The Stockholders authorize Paladyne during the Lock-Up Period to cause
its transfer agent to decline to transfer and/or to note stop transfer
restrictions on the transfer books and records of Paladyne with respect to any
shares of Paladyne Common Stock and any securities convertible into or
exercisable or exchangeable for Paladyne Common Stock for which the Stockholder
is the record holder and, in the case of any such shares or securities for which
the Stockholder is the beneficial but not the record holder, agrees to cause the
record holder to agree to cause the transfer agent to decline to transfer and/or
to note stop transfer restrictions on such books and records with respect to
such shares or securities to the extent that the number of shares to be
transferred exceed the Cap as set forth on Schedule 1.
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2. AUTHORITY. Each Stockholder hereby represents and warrants that he has
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full power and authority to enter into this Agreement and that, upon reasonable
request from Paladyne, he will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the Stockholder shall
be binding upon his heirs, administrators, successors and assigns. Each
Stockholder further acknowledges that he shall be responsible for compliance
with the applicable securities laws on his permitted Dispositions of Paladyne
Securities, and Paladyne shall not have any responsibility therefore except as
may be expressly assumed in writing.
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3. REMEDIES. Because of the irreparable damage Paladyne may sustain if any
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of the agreements in this Agreement is breached, each Stockholder agrees that
Paladyne shall be entitled to an injunction to specifically enforce the terms of
this Agreement, in addition to any other remedies Paladyne may then have by
reason of such breach.
4. LEGENDS. To implement the restrictions set forth in this Agreement, at
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the request of Paladyne, the following legend may be placed on the certificate
for Paladyne Securities subject to the restrictions:
"Transfer of the securities represented by this certificate is
restricted by the terms of a Lockup Agreement, dated February 1, 2001,
between the Corporation and the holder hereof, a copy of which is on
file at the office of the Corporation. No sale, transfer, assignment,
pledge or other disposition shall be effective unless and until the
terms and conditions of the Lockup Agreement shall have been complied
with in full."
5. PURCHASES. Notwithstanding the restrictions set forth herein on the
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Disposition by each Stockholder of Paladyne Securities, nothing in this
Agreement shall be construed to prohibit a Stockholder from purchasing
additional shares of Paladyne Common Stock during the Lockup Period and then
selling any or all of such additional shares, provided that Stockholder may not
sell short any shares of Paladyne Common Stock except such sales covered by the
purchase of any additional shares as provided for in this Section 5. Nothing in
this Agreement shall affect the right of the Stockholder to vote Paladyne
Securities.
6. MISCELLANEOUS.
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6.1 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware without giving effect to
conflict of laws.
6.2 Successors and Assigns. Except as otherwise provided herein, the
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provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
6.3 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which may be executed by less than all of the
Stockholders, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
6.4 Entire Agreement. This Agreement sets forth the entire understanding
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by the parties hereto with respect to the subject matter herein, and may not be
amended, modified or terminated except by an agreement executed by all of the
parties hereto.
6.5 Notices. Any notice or other communication required or otherwise to be
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made hereunder shall be in writing and delivered personally by hand or
recognized overnight courier, telecopied or mailed (by registered or certified
mail, postage prepaid) addressed or telecopied to the address or telecopier name
set forth below the party's signature, or such other address or telecopier
number as any party may hereafter give to the other parties hereto.
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6.6 Severability. In the case any provision of this Agreement shall be
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invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
PALADYNE CORP.
By: /s/ John D. Foster
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John D. Foster, Chairman
Address:
610 Executive Crescent Court, Suite 124
Lake Mary, Florida 32746
Facsimile No.: (904) 285-4916
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
STOCKHOLDER:
/s/ Terrence J. Leifheit
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Terrence J. Leifheit
Address:
1650A Gum Branch Road
Jacksonville, North Carolina 28540
Facsimile No.: (509) 692-6949
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
STOCKHOLDER:
/s/ Clifford A. Clark
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Clifford A. Clark
Address:
1806 Banbury Road
Raleigh, North Carolina 27608
Facsimile No.: (919) 833-2473
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
STOCKHOLDER:
/s/ Joseph Landis
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Joseph Landis
Address:
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Facsimile No.:
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
STOCKHOLDER:
/s/ Ronald L. Weindruch
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Ronald L. Weindruch
Address:
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Facsimile No.:
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IN WITNESS WHEREOF, the parties have executed or caused this Lock-Up
Agreement to be executed by their duly authorized agents as of the day and year
first above written.
STOCKHOLDER:
/s/ Kenneth Horn
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Kenneth Horn
Address:
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Facsimile No.:
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SCHEDULE 1
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SECURITIES SUBJECT TO LOCK-UP
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NO. OF SHARES NO. OF
OF PARENT SHARES
COMMON STOCK NO. OF NO. OF SUBJECT
ISSUABLE UPON PARENT OTHER STOCKHOLDER'S TO
CONVERSION OF STOCK NO. OF PARENT SECURITIES FULLY-DILUTED LOCK-UPR
SERIES B WARRANTS PERFORMANCE OF PARENT SECURITIES OF PER YEAR
STOCKHOLDER PREFERRED HELD WARRANTS HELD HELD PARENT (CAP)
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Terrence J. 6,821,692 3,327,654 415,957 0 10,565,303 1,056,530
Leifheit
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Clifford A. Clark 140,000 68,293 8,537 0 216,830 21,683
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John D. Foster N/A N/A N/A 77,515 N/A 7,752
Shares Shares
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108,750 10,875
Options Options
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362,500 36,250
Warrants Warrants
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500,0001 50,000
Contingent Contingent
Warrants Warrants
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Ronald L. Weindruch N/A N/A N/A 120,546 N/A 12,055
Shares Shares
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800,000 80,000
Shares 2 Shares
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562,162 56,216
Shares 3 Shares
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156,881 15,688
Shares 4 Shares
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255,000 25,500
Options Options
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33,784 3,378
Warrants 5 Warrants
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75,000 7,500
Warrants Warrants
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75,0006 7,500
Warrants Warrants
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Joseph Landis N/A N/A N/A 0 N/A 0
Shares Shares
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50,000 5,000
Options Options
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0 0
Warrants Warrants
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Kenneth Horn N/A N/A N/A 10,000 N/A 1,000
Shares Shares
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92,418 9,242
Shares 7 Shares
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152,500 15,250
Options Options
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75,000 7,500
Warrants 8 Warrants
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1 Contingent upon Paladyne's listing status
2 Issued in the name of the Ronald L.Weindruch Trust
3 Issued in the name of the M. Joy Weindruch Residuary Trust
4 Issued in the name of Ronald L. Weindruch
5 Issued in the name of the M. Joy Weindruch Revocable Trust, to be transferred
to the M. Joy Weindruch Residual Trust
6 See Footnote 5
7 Issued in the name of Kruger Management, Inc.
8 See Footnote 7.
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