Document:

f8k42010ex10iii_soko.htm

Exhibit 10.3

 

LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into on April 29, 2010 between SOKO Fitness & Spa Group, Inc., a Delaware corporation (the “Company”), and Mr. Tong Liu, the Chairman of the Board of Directors and the Chief Executive Officer of the Company, who is a citizen of the People’s Republic of China (the “Holder”).

RECITALS

A.           The Company has determined that it is advisable and in its best interest to enter into certain Stock Purchase Agreement dated the date hereof (the “Stock Purchase Agreement”) with the Investors named therein (the “Investors”), pursuant to which the Company will issue and sell in a private offering of certain securities of the Company (the “Offering”).  Capitalized terms used and not otherwise defined herein that are defined in the Stock Purchase Agreement shall have the meanings given to such terms in the Stock Purchase Agreement.

B.            It is a condition to the Investors’ respective obligations to close under the Stock Purchase Agreement and to provide the financing contemplated by the Offering that the Holder execute and deliver to the Company this Agreement.

C.            In contemplation of, and as a material inducement for the Investors to enter into, the Stock Purchase Agreement, the Holder and the Company have each agreed to execute and deliver this Agreement.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:

1.   Effectiveness of Agreement.  This Agreement shall become null and void if the Stock Purchase Agreement is terminated prior to the Closing.

The Holder has independently evaluated the merits of its decision to enter into and deliver this Agreement, and the Holder confirms that it has not relied upon the advice of the Company or any other Person.

2.   Representations and Warranties.  Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents and warrants to the other and to all third-party beneficiaries of this Agreement that (a) such party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable against such party in accordance with the terms of this Agreement, and (c) the execution, delivery and performance of such party’s obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such party is a party or to which the assets or securities of such party are bound.

The Holder hereby represents and warrants that all shares of Common Stock, or any economic interest therein or derivative therefrom, that it beneficially owns (as determined in accordance with Section 13(d) of the Exchange Act) (collectively referred to as the “Holder’s Shares”) shall be subject to the restrictions set forth in this Agreement.

 

  

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3.   Lockup.  From and after the date of this Agreement and through and including  the twelve (12) month anniversary of the Closing Date under the Stock Purchase Agreement (the “Lockup Period”), the Holder irrevocably agrees it will not 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, or announce the offering of, any of the Holder’s Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive, the Holder’s Shares).  In furtherance thereof, the Company will (x) place a stop order on all of the Holder’s Shares, (y) notify its transfer agent in writing of the stop order and the restrictions on the Holder’s Shares under this Agreement and direct the transfer agent not to process any attempts by the Holder to resell or transfer any of the Holder’s Shares in violation of this Agreement.  Notwithstanding the foregoing, the undersigned may sell or otherwise transfer Holder’s Shares: (i) as a bona fide gift or gifts or pledge or pledges, provided that the Holder provides prior written notice of such gift or gifts or pledge to the Company and the Investors and the donee or donees or pledgee or pledgees (as the case may be) thereof agree to be bound by the restrictions set forth herein; provided, that any such gifts or pledges shall not, in the aggregate (adding up all such gifts and pledges), exceed eight percent (8%) of the outstanding shares of Common Stock at the time of any such gift or pledge; and (ii) on death by will or intestacy to the undersigned’s immediate family or to a trust, the beneficiaries of which are exclusively the undersigned and a member or members of the undersigned’s immediate family, provided that the transferee thereof agrees to be bound by the restrictions set forth herein.

4.   Reliance. The Holder acknowledges that the Company is relying upon the agreements of the Holder contained herein, and that the failure of the Holder to perform the agreements contained herein could have a detrimental effect upon the Company.  Accordingly, the Holder understands and agrees that the Holder’s agreements herein are irrevocable.

5.   Third-Party Beneficiaries.  The Holder and the Company acknowledge and agree that this Agreement is entered into for the benefit of and is enforceable by the Investors and their successors and assigns.

6.   No Additional Fees/Payment.  Other than the consideration specifically referenced herein, the parties hereto agree that no fee, payment or additional consideration in any form has been or will be paid to the Holder in connection with this Agreement.

7.   Enumeration and Headings.  The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

 

  

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8.   Counterparts.  This Agreement may be executed in facsimile and in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all of which shall together constitute one and the same agreement.  In the event that any signature is delivered by facsimile transmission or other electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or other electronic signature page were an original thereof.

9.   Successors and Assigns.  This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto.

10.   Severability.  If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision will be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the parties and, in any event, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.

11.   Amendment.  This Agreement may not be amended or modified in any manner except by a written agreement executed by each of the parties hereto if and only if such modification or amendment is consented to in writing by the Investors holding a majority in interest of the Shares issued or issuable under the Stock Purchase Agreement.

12.   Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

13.   No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

14.   Remedies.  The Company and the Investors shall have the right to specifically enforce all of the obligations of the Holder under this Agreement (without posting a bond or other security), in addition to recovering damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.  Furthermore, the Holder recognizes that if it fails to perform, observe, or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company or the Investors.  Therefore, the Holder agrees that each of the Company and the Investors shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security.

15.   Future Cooperation. At any time, and from time to time, after the signing of this Agreement, the Holder will execute such additional instruments and take such action as may be reasonably requested by the Company to carry out the intent and purposes of this Agreement.

 

  

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16.   Governing Law.  This Agreement shall be governed by the internal laws of the State of New York, without reference to principles of conflict of laws or choice of laws.

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	 	COMPANY:	 
	 	 	 
	 	SOKO FITNESS & SPA GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Tong Liu	 
	 	 	Name: Tong Liu	 
	 	 	Title:   Chairman & Chief Executive Officer	 
	 	 	 	 

 

	 	HOLDER:	 
	 	 	 	 
	
 

	
By: 

	/s/ Tong Liu	 
	 	 	Mr. Tong Liu, in his personal capacity	 
	 	 	Number of shares of Common Stock beneficially owned: 8,960,000	 
	 	 	 	 

 

5f8k42010ex10iv_soko.htm

Exhibit 10.4

 

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (the “Agreement”), dated as of April 16, 2010, is by and between SOKO Fitness & Spa Group, Inc., a Delaware corporation and formerly known as American Business Holdings, Inc. (the “Company”), Guerrilla Partners, LP, Hua-Mei 21st Century Partners, LP and James J. Fuld, Jr. IRA (collectively, the “Purchasers”).

WHEREAS, the Company and Purchasers are parties to that certain Registration Rights Agreement, dated April 7, 2008 (the “RRA”);

WHEREAS, in accordance with the provisions of Section 2(b) of the RRA, the the Company is required to pay to the Purchasers US$200,000 as a penalty (the “Penalty” and such matter, “Penalty Payment Matter”);

WHEREAS, the Company, certain officers of the Company signatory thereto (“Management”) and The Crone Law Group f/k/a Crone Rozynko, LLP (the “Escrow Agent”) are parties to that certain Escrow Agreement, dated April 7, 2008 (the “Escrow Agreement”), pursuant to which Management deposited certificates representing 8,000,000 shares of the Company’s common stock (the “Shares”) to secure the Company’s obligation to the Purchasers to achieve certain financial performance thresholds (“Thresholds”) as set forth in Section 5(a) of the Escrow Agreement;

WHEREAS, the Thresholds have been achieved and, pursuant to the terms of the Escrow Agreement, the Shares are required to be returned to Management (the “Escrow Matter” and collectively with the Penalty Payment Matter, the “Disputed Matters”);

WHEREAS, the parties hereto desire to compromise and settle the Disputed Matters and any claims among themselves with respect thereto; and

WHEREAS, concurrently with the execution hereof, the Company and the Purchasers are entering into an amendment to those certain Common Stock Purchase Warrants, dated April 11, 2008, issued by the Company to the Purchasers (the “Warrant Amendment”).

NOW, THEREFORE, in consideration of the mutual promises, covenants, and agreements contained herein, and for other good and valuable consideration, the parties hereby agree as follows:

1. The recitals set forth above are hereby incorporated herein by reference thereto as if fully set forth at length in this Section 1.

2. The Company hereby acknowledges that the Penalty is due and owning.  Concurrently with the execution hereof, and in full and complete satisfaction of any and all claims by the Purchasers or any Purchaser relating to the Penalty Payment Matter, the Company shall issue to the Purchasers, pro rata in accordance with their respective investment amounts in the Company in connection with the Company’s April 11, 2008 financing, an aggregate of 88,889 shares (the “Penalty Shares”) of restricted common stock, par value $.001 (“Common Stock”) of the Company, as set forth below:

 

  

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Purchaser

	
Number of Penalty Shares

	
Guerrilla Partners, LP

	
62,222

	
Hua-Mei 21st Century Partners, LP

	
17,778

	
James J. Fuld, Jr. IRA

	
8,889

	
TOTAL

	
88,889

3. The Purchasers hereby acknowledge that the Thresholds have been achieved and that the Shares are required to be returned to Management pursuant to the terms of the Escrow Agreement.  Concurrently with the execution hereof, the Investors and the Company shall instruct the Escrow Agent to deliver all certificates representing the Shares to Management, and following such delivery, the Company and the Purchasers agree that the Escrow Agreement shall be terminated and of no further force and effect (except for the provisions thereof that survive termination in accordance with their terms).  The Purchasers shall take all actions necessary or required to authorize and/or cause the release and delivery of the Shares to Management concurrently with the execution of this Agreement.

4. Each Purchaser, in consideration of the agreements herein contain and for other good and valuable consideration received from the Company agrees to enter into the Warrant Amendment concurrently with the execution of this Agreement.

5. Each Purchaser, as RELEASOR, in consideration of the agreements herein contain and for other good and valuable consideration received from the Company and the Escrow Agent, as RELEASEES, the receipt of which is hereby acknowledged, do hereby fully, finally and unconditionally release and forever discharge the RELEASEES, their former, present, and future partners, officers, employees, representatives, stockholders, directors, agents, predecessors, former and present subsidiaries, parent entities, affiliates, divisions, licensees, receivers, distributors, successors and assigns, heirs, executors, administrators, attorneys, associates, and anyone affiliated with or acting on behalf of any of them (collectively, the “SECTION 4 RELEASED PARTIES”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, which against the SECTION 4 RELEASED PARTIES such RELEASOR, such RELEASOR’S attorneys, associates, agents, successors, assigns, heirs, parent or subsidiary corporations, and anyone affiliated with or acting on behalf of any of them, ever had, now have or hereafter can, shall or may have, from the beginning of the world to the day of the date of this Agreement which arise out of or relate to the Disputed Matters.

6. The Company, as RELEASOR, in consideration of the agreements herein contain and for other good and valuable consideration received the Purchasers and the Escrow Agent, as RELEASEES, the receipt of which is hereby acknowledged, does hereby fully, finally and unconditionally release and forever discharge the RELEASEES, their former, present, and future partners, officers, employees, representatives, stockholders, directors, agents, predecessors, former and present subsidiaries, parent entities, affiliates, divisions, licensees, receivers, distributors, successors and assigns, heirs, executors, administrators, attorneys, associates, and anyone affiliated with or acting on behalf of any of them (collectively, the “SECTION 5 RELEASED PARTIES”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, which against the SECTION 5 RELEASED PARTIES such RELEASOR, such RELEASOR’S attorneys, associates, agents, successors, assigns, heirs, parent or subsidiary corporations, and anyone affiliated with or acting on behalf of any of them, ever had, now have or hereafter can, shall or may have, from the beginning of the world to the day of the date of this Agreement which arise out of or relate to the Disputed Matters.

 

  

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7. The parties acknowledge and agree that this Agreement embodies a compromise settlement which is not in any respect, nor for any purposes, to be deemed or construed to be an admission or concession of any liability whatsoever on the part of any of the parties.  The parties agree not to disclose to any third party, or to publicize the terms of this Agreement, anything contained herein or the fact of any such agreement, execution or performance without the prior written consent of the other party to this Agreement, except to their attorneys and as is necessary for financial reporting or other similar purposes or as required by the U.S. Securities and Exchange Commission or pursuant to any law, rule or regulation or any governmental agency.

8. Representations and Warranties of the Purchasers.  Each Purchaser, severally and not jointly, hereby represents, warrants and acknowledges as to the following as of the date hereof:

(a) Own Account.  Such Purchaser understands that the Penalty Shares are “restricted securities” and have not been registered under the Securities Act of 1933 (“1933 Act”) or any applicable state securities law and is acquiring the Penalty Shares as principal for its own account and not with a view to or for distributing or reselling such Penalty Shares or any part thereof in violation of the 1933 Act or any applicable state securities law, has no present intention of distributing any of such Penalty Shares in violation of the 1933 Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Penalty Shares in violation of the 1933 Act or any applicable state securities law.

(b) Purchaser Status.  At the time such Purchaser was offered the Penalty Shares, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants or converts any Common Stock it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the 1933 Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the 1933 Act.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

(c) Experience of Such Purchaser.  Such Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks associated with its acquisition of the Penalty Shares, and has so evaluated the merits and risks of such acquisition.  Such Purchaser is able to bear the economic risk associated with the acquisition of the Penalty Shares and is able to afford a complete loss of the value of the Penalty Shares.

 

  

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(d) No General Solicitation.  Such Purchaser is not acquiring the Penalty Shares as part of a privately negotiated settlement with the Company and not as a result of any advertisement, article, notice or other communication regarding the Penalty Shares or otherwise published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet, or presented at any seminar or any other general solicitation or general advertisement.

(e) Reliance on Representations and Warranties. Each Purchaser understands that the Penalty Shares are being issuer to such Purchaser in reliance on exemptions contained in specific provisions of United States federal securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth in this Agreement in order to determine the applicability of the exemptions contained in such provisions.

(f) Legend. Each Purchaser acknowledges and agrees that the certificates representing the Penalty Shares shall bear a restricted legend, in the form and substance as set forth below, prohibiting the offer, sale, pledge, mortgage or transfer of the securities, except (1) (i) pursuant to an effective registration statement filed under the 1933 Act, (ii) pursuant to an exemption from registration provided by Rule 144 under the 1933 Act (if available), or (iii) pursuant to any other exemption from the registration requirements of the Securities Act.

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”

9. This Agreement shall be binding upon the parties hereto and their respective successors, assigns, heirs and representatives.

10. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of law principles. The invalidity or unenforceability of any one or more phrases, clauses or sections of this Agreement shall not affect the validity or enforceability of the remaining portions of it.

11. Any dispute that arises under this Agreement shall be adjudicated in the state or the federal courts located in New York, New York.

 

  

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12. This Agreement may be executed in counterparts, in PDF format or by facsimile, each of which shall be deemed an original but when taken together shall constitute one and the same agreement.

13. This Agreement may not be modified or amended orally, and no alleged amendment, modification or waiver of this Agreement shall have any force or effect, unless set forth in writing and signed by the party against whom enforcement is sought.

14. The parties herein acknowledge that they have been represented by counsel in all aspects of the negotiation and conclusion of the settlement memorialized in this Agreement or that they have voluntarily waived such right to legal counsel, that they have been afforded an opportunity to consider the terms of this Agreement for a reasonable time prior to its execution, that they carefully have reviewed and read in their entirety this Agreement, fully understand and consent to the terms and conditions herein, that they have signed this Agreement voluntarily and of their own free will; and that they intend to abide by their provisions without exception.

15. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or other negotiations, arrangements, representations, agreements, including whether in writing or oral agreements.

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed this Settlement Agreement as of the date first above written.

 

 

	 	SOKO FITNESS & SPA GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Tong Liu	 
	 	 	Name: Tong Liu	 
	 	 	Title:   Chairman & Chief Executive Officer	 
	 	 	 	 

 

	 	GUERRILLA PARTNERS, LP	 
	 	 	 
	 	By: Guerrilla Capital Management, L.L.C.	 
	 	 	 	 
	
 

	
By: 

	/s/ Peter Siris 	 
	 	 	Name:  Peter Siris	 
	 	 	Title:    Principal	 
	 	 	 	 

 

	 	HUA-MEI 21ST CENTURY PARTNER, L.P.	 
	 	 	 
	 	By: Guerrilla Capital Management, L.L.C.	 
	 	 	 	 
	
 

	
By: 

	/s/ Peter Siris	 
	 	 	Name:  Peter Siris	 
	 	 	Title:    Principal	 
	 	 	 	 

	 	JAMES J.FULD, JR. IRA	 
	 	 	 	 
	
 

	
By: 

	/s/ James J. Fuld	 
	 	 	Name:  James J. Fuld	 
	 	 	Title:    Authorized Signatory	 
	 	 	 	 

   

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