Exhibit 10.4

 

LOCK-UP AGREEMENT

 

This LOCK-UP AGREEMENT (this “Agreement”) is made as of April 17, 2015 by and
between the undersigned person or entity (the “Restricted Holder”) and Content
Checked Holdings, Inc., a Nevada corporation formerly known as Content Checked
Holdings, Inc. (the “Parent”). Capitalized terms used and not otherwise defined
herein shall have the meanings given to such terms in the Merger Agreement (as
defined herein).

 

WHEREAS, pursuant to the transactions contemplated under that certain Agreement
and Plan of Merger and Reorganization, dated as of April 17, 2015 (the “Merger
Agreement”), by and among the Parent, Content Checked Acquisition Corp., a
Wyoming corporation (the “Acquisition Subsidiary”), and Content Checked, Inc., a
Wyoming corporation (the “Company”), the Acquisition Subsidiary will merge with
and into the Company, with the result of such merger being that the Company will
be the surviving entity and become a wholly-owned subsidiary of the Parent, with
all the Company stockholders exchanging their shares of Company Stock for shares
of Parent Common Stock pursuant to the terms of the Merger Agreement (the
“Merger”);

 

WHEREAS, simultaneously with or prior to the closing of the Merger, Parent will
complete a private placement offering (the “Private Placement Offering”) of a
minimum of $1,750,000 worth of shares of Parent Common Stock (including the
conversion of (i) $250,000 of the Company’s senior secured convertible notes
into shares of Parent Common Stock, and (ii) up to $1,500,000 of the Company’s
convertible notes into shares of Parent Common Stock, in accordance with the
terms thereof), and a maximum of $4,000,000 worth of shares of Parent Common
Stock, at a purchase price of $0.50 per share;

 

WHEREAS, the Restricted Holder will be an officer, director and/or key employee
of the Parent immediately after the closing of the Merger and/or the Restricted
Holder will be a beneficial owner of ten percent (10%) or more of the
outstanding shares of Parent Common Stock immediately after the closing of the
Merger and the Private Placement Offering; and

 

WHEREAS, the Merger Agreement provides that, among other things, all the shares
of Parent Common Stock owned by the Restricted Holder immediately after the
closing of the Merger (the “Restricted Securities”) shall be subject to certain
restrictions on Disposition (as defined herein) during the period of six (6)
months immediately following the closing date of the Merger (the “Restricted
Period”), subject to certain conditions all as more fully set forth herein.

 

NOW, THEREFORE, as an inducement to and in consideration of the Parent’s
agreement to enter into the Merger Agreement and proceed with the Merger, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:

 

1. Lock Up Period.

 

(a) During the Restricted Period, the Restricted Holder will not, directly or
indirectly: (i) 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 for the sale of, make any short sale, lend or otherwise dispose
of or transfer any Restricted Securities or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, any of the economic consequences of ownership of any Restricted
Securities (with the actions described in clause (i) or (ii) above being
hereinafter referred to as a “Disposition”); provided, however, that if the
Parent engages in an underwritten public offering of its equity or convertible
securities prior to the end of the Restricted Period, the managing underwriter
may waive the balance of the Restricted Period; provided, further however, that
such Restricted Period shall be subject to earlier termination with the written
approval of the lead underwriter of any underwritten public offering of Parent’s
equity or convertible securities for gross proceeds to Parent of at least $25
million. The foregoing restrictions are expressly agreed to preclude the
Restricted Holder from engaging in any hedging or other transaction which is
designed to or which reasonably could be expected to lead to or result in a sale
or disposition of any of the Restricted Securities of the Restricted Holder
during the Restricted Period, even if such securities would be disposed of by
someone other than the Restricted Holder.

 

 

 

 

(b) In addition, during the period of twelve (12) months immediately following
the closing date of the Merger, the Restricted Holder will not, directly or
indirectly, effect or agree to effect any short sale (as defined in Rule 200
under Regulation SHO of the Securities Exchange Act of 1934 (the “Exchange
Act”)), whether or not against the box, establish any “put equivalent position”
(as defined in Rule 16a-1(h) under the Exchange Act) with respect to any shares
of the Parent Common Stock, borrow or pre-borrow any shares of the Parent Common
Stock, or grant any other right (including, without limitation, any put or call
option) with respect to shares of the Parent Common Stock or with respect to any
security that includes, is convertible into or exercisable for or derives any
significant part of its value from shares of the Parent Common Stock or
otherwise seek to hedge the Restricted Holder’s position in the Parent Common
Stock.

 

(c) Notwithstanding anything contained herein to the contrary, the Restricted
Holder shall be permitted to engage in any Disposition (i) where the other party
to such Disposition is another Restricted Holder and the transferee agrees in
writing that the Restricted Securities shall continue to be subject to the
restrictions on transfer set forth in this Agreement, (ii) where such
Disposition is in connection with estate planning purposes, including, without
limitation to an inter-vivos trust and the transferee takes title to such shares
subject to the restrictions on transfer set forth in this Agreement, (iii) upon
the written approval of the lead underwriter in any underwritten public offering
of Parent’s securities, or (iv) where such Disposition is to an affiliate of
such Restricted Holder (including entities wholly owned by such Restricted
Holder or one or more trusts where such Restricted Holder is the grantor of such
trust(s)) as long as such affiliate executes a copy of this Agreement.

 

(d) Notwithstanding anything contained herein to the contrary, the restrictions
contained in this Agreement shall not apply to any shares of Parent Common Stock
acquired by Restricted Holder in the open market.

 

2. Legends; Stop Transfer Instructions.

 

(a) In addition to any legends to reflect applicable transfer restrictions under
federal or state securities laws, each stock certificate representing Restricted
Securities shall be stamped or otherwise imprinted with the following legend:

 

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
LOCK-UP AGREEMENT, DATED AS OF APRIL 17, 2015, BETWEEN THE HOLDER HEREOF AND THE
ISSUER AND MAY ONLY BE SOLD OR TRANSFERRED IN ACCORDANCE WITH THE TERMS
THEREOF.”

 

(b) The Restricted Holder hereby agrees and consents to the entry of stop
transfer instructions with the Parent’s transfer agent and registrar against the
transfer of the Restricted Securities or securities convertible into or
exchangeable for Restricted Securities held by the Restricted Holder except in
compliance with this Agreement.

 

3. Registration of Restricted Shares.

 

(a) During the Covered Period (as defined below), Parent shall not register for
resale any of the shares of Parent Common Stock received by the Company
stockholders in exchange for their shares of Company Common Stock pursuant to
the Merger (the “Merger Shares”) (for the sake of clarity, other than a
registration on Form S-8 or other registration relating to shares of Parent
Common Stock or any other class of Parent securities issuable upon exercise of
employee stock options or in connection with any employee benefit plan or
similar plan of Parent) unless the Restricted Holder is given at least ten (10)
business days advance notice of such registration and the right during the ten
(10) business day period following receipt of such notice to elect to include
its Restricted Securities in such registration on a pari passu basis (including
subject to cutback on a pari passu basis) with such other Merger Shares and in
accordance with the plan of distribution intended by Parent for such
registration statement. In the event that such registration involves an
underwritten public offering of Parent’s securities, the right of the Restricted
Holder to include its Restricted Shares in such registration shall be further
conditioned upon the Restricted Holder’s participation in such underwriting and
the inclusion of such Restricted Holder’s Restricted Shares in the underwriting
on the terms set forth herein. The Restricted Holders permitted to sell any of
their Parent Common Stock through such underwriting shall (together with Parent
and any other stockholders of Parent selling their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter selected for such underwriting by Parent or such other selling
stockholders, as applicable. Nothing contained herein shall require Parent to
include any Merger Shares in any registration statement registering exclusively
the resale of securities issued by Parent in the Private Placement Offering or
otherwise limit the ability of Parent to grant demand, piggy-back or other
registration rights to any other current or future stockholders of Parent.

 

 

 

 

(b) “Covered Period” shall mean the period beginning upon the closing date of
the Merger and ending on the expiration of the Restricted Period.

 

4. Miscellaneous.

 

(a) Periodic Reports. The Issuer shall be permitted to request from the
Restricted Holder such person’s brokerage statement summary with respect to the
Restricted Securities covering any period during the Restricted Period.

 

(b) Specific Performance. The Restricted Holder agrees that in the event of any
breach or threatened breach by the Restricted Holder of any covenant, obligation
or other provision contained in this Agreement, then the Parent shall be
entitled (in addition to any other remedy that may be available to the Parent)
to: (i) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision; and
(ii) an injunction restraining such breach or threatened breach. The Restricted
Holder further agrees that neither the Parent nor any other person or entity
shall be required to obtain, furnish or post any bond or similar instrument in
connection with or as a condition to obtaining any remedy referred to in this
Section 4, and the Restricted Holder irrevocably waives any right that he, she,
or it may have to require the obtaining, furnishing or posting of any such bond
or similar instrument.

 

(c) Other Agreements. Nothing in this Agreement shall limit any of the rights or
remedies of the Parent under the Merger Agreement, or any of the rights or
remedies of the Parent or any of the obligations of the Restricted Holder under
any other agreement between the Restricted Holder and the Parent or any
certificate or instrument executed by the Restricted Holder in favor of the
Parent; and nothing in the Merger Agreement or in any other agreement,
certificate or instrument shall limit any of the rights or remedies of the
Parent or any of the obligations of the Restricted Holder under this Agreement.

 

(d) Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly delivered four business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery via
a reputable nationwide overnight courier service, in each case to the intended
recipient as set forth below:

 

If to the Parent:   Copy to (which copy shall not constitute notice hereunder):
      Content Checked Holdings, Inc.   Foley Shechter, LLP 8730 Sunset Blvd,
Suite 240   65 Route 4 East West Hollywood, CA 90069   River Edge, New Jersey
07661 Attn: Kristian Finstad, CEO   Attention: Jonathan Shechter, Esq.
Facsimile: (424) 205-1777   Facsimile: (917) 688-4092       If to the Restricted
Holder:   Copy to (which copy shall not constitute notice hereunder):

 

To the address set forth on the signature page     hereto.           Attn:      
Facsimile:  

 

Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the Party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.

 

 

 

 

(e) Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the parties hereto
agree to replace such invalid or unenforceable term or provision with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

 

(f) Applicable Law; Jurisdiction. THIS AGREEMENT IS MADE UNDER, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. In any action between or among any of
the parties arising out of this Agreement, (i) each of the parties irrevocably
and unconditionally consents and submits to the exclusive jurisdiction and venue
of the state and federal courts having jurisdiction over New York County, New
York; (ii) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any
federal court having jurisdiction over New York County, New York; (iii) each of
the parties irrevocably waives the right to trial by jury; and (iv) each of the
parties irrevocably consents to service of process by first class certified
mail, return receipt requested, postage prepared, to the address at which such
party is to receive notice in accordance with this Agreement.

 

(g) Waiver; Termination. No failure on the part of the Parent to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of the Parent in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. The Parent shall not be deemed to have waived any
claim arising out of this Agreement, or any power, right, privilege or remedy
under this Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of the Parent; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given. If the
Merger Agreement is terminated, this Agreement shall thereupon terminate.

 

(h) Captions. The captions contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not
be referred to in connection with the construction or interpretation of this
Agreement.

 

(i) Further Assurances. The Restricted Holder hereby represents and warrants
that the Restricted Holder has full power and authority to enter into this
Agreement and that this Agreement constitutes the legal, valid and binding
obligation of the Restricted Holder, enforceable in accordance with its terms.
The Restricted Holder shall execute and/or cause to be delivered to the Parent
such instruments and other documents and shall take such other actions as the
Parent may reasonably request to effectuate the intent and purposes of this
Agreement.

 

(j) Entire Agreement. This Agreement and the Merger Agreement collectively set
forth the entire understanding of the Parent and the Restricted Holder relating
to the subject matter hereof and supersedes all other prior agreements and
understandings between the Parent and the Restricted Holder relating to the
subject matter hereof.

 

(k) Non-Exclusivity. The rights and remedies of the Parent hereunder are not
exclusive of or limited by any other rights or remedies which the Parent may
have, whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative).

 

 

 

 

(l) Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of the Parent and the Restricted Holder.

 

(m) Assignment. This Agreement and all obligations of the Restricted Holder
hereunder are personal to the Restricted Holder and may not be transferred or
delegated by the Restricted Holder at any time. The Parent may freely assign any
or all of its rights under this Agreement, in whole or in part, to any successor
entity without obtaining the consent or approval of the Restricted Holder.

 

(n) Binding Nature. Subject to Section 4(m) above, this Agreement will inure to
the benefit of the Parent and its successors and assigns and will be binding
upon the Restricted Holder and the Restricted Holder’s representatives,
executors, administrators, estate, heirs, successors and assigns.

 

(o) Survival. Each of the representations, warranties, covenants and obligations
contained in this Agreement shall survive the consummation of the Merger.

 

(p) Counterparts. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original and both of which shall constitute one and
the same instrument.

 

[signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first set forth above.

 

  CONTENT CHECKED HOLDINGS, INC.       By: /s/ Kristian Finstad   Name: Kristian
Finstad   Title: CEO

 

  RESTRICTED HOLDER:           (name)           Name:   Title:       Address:  
             

 

 

 

 

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