Document:

Unassociated Document

Exhibit 10.12

June 30, 2011

Nova Lifestyle, Inc.

c/o Robert Newman, Counsel to Nova Lifestyle, Inc.

Newman & Morrison LLP

44 Wall Street, 20th Floor

New York, NY  10005

Re:           Lock-Up Agreement

This letter agreement (“Letter Agreement”) is being entered into by the undersigned and Nova Lifestyle, Inc., a Nevada corporation (the “Company”), with the intent to be legally bound. The undersigned understands that the Company intends to commence an offering and sale (the “Offering”) of the Company’s common stock, par value $.001 per share (the “Common Stock”), and/or securities convertible thereto.

In recognition of the benefit that the Offering will confer upon the undersigned as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees that, during the Lock-Up Period (as defined below), the undersigned will not, except in the event of a Change of Control of the Company and with the prior written consent of the Company’s Board of Directors, 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, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned (collectively, the “Lock-Up Securities”) or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing sentence shall not apply to transfers of shares of Common Stock or any security convertible into Common Stock (i) to any other member of the Company’s management or (ii) as a bona fide gift by will or intestacy or to a family member or trust for the benefit of a family member; provided, that in case of any transfer of distribution pursuant to this sentence (a) each member of the Company’s management, donee or distributee shall sign and deliver a lock-up agreement substantially in the form of this letter and (b), in the case of subclause (i) of this sentence, no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be made voluntarily during the Lock-Up Period. For the purposes of this Letter Agreement, “Change of Control” means (i) the approval by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company; (iii) the consummation of any transaction as a result of which any individual or entity becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power of all voting securities of the Company then issued and outstanding; or (iv) the consummation of a merger, consolidation, reorganization or business combination, other than a merger, consolidation, reorganization or business combination that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting securities of the Company or the surviving entity immediately after such merger, consolidation, reorganization of business combination.

 

  

  

  

In furtherance thereof, the Company will (i) place a stop order on all Shares (as defined below) and (ii) notify its transfer agent in writing of the stop order and the restrictions on such Shares under this Letter Agreement and direct the transfer agent not to process any attempts by the undersigned to resell or transfer any Shares in violation of this Agreement. The undersigned shall deliver the share certificate[s] representing the Shares so they may be held in custody during the Lock-Up Period by the Company’s counsel, Newman & Morrison LLP, or such other custodian designated by the Company.

No provision in this letter shall be deemed to restrict or prohibit the exercise or exchange by the undersigned of any option or warrant to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into Common Stock, provided that the undersigned does not transfer the Common Stock acquired on such exercise or exchange during the Lock-Up Period, unless otherwise permitted pursuant to the terms of this Letter Agreement.

The undersigned hereby represents and warrants that he/she/it does not beneficially own (as determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) any shares of Common Stock, or any economic interest therein or derivative therefrom, other than those shares of Common Stock specified on the signature page to this Agreement as of the date of this Agreement (the “Shares”).

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. The undersigned has consulted an attorney and hereby waives his/her/its right to all defenses of inadequate representation of counsel.

This Letter Agreement shall commence as of the date hereof and automatically terminate upon the earliest to occur of (i) three years following the date the Company’s securities are listed on a registered national securities exchange or (ii) if the closing of an Offering does not occur within one year from the date hereof, then two years from the date hereof (the “Lock-Up Period”).

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.

If any provision of this Letter 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 Letter Agreement shall remain in full force and effect and shall be binding upon the parties hereto.

This Letter Agreement may not be amended or modified in any manner except by a written agreement executed by each of the parties hereto.

The Company shall have the right to specifically enforce all of the obligations of the undersigned under this Letter Agreement (without posting a bond or other security), in addition to recovering damages by reason of any breach of any provision of this Letter Agreement and to exercise all other rights granted by law. Furthermore, the undersigned recognizes that if it fails to perform, observe, or discharge any of its obligations under this Letter Agreement, any remedy at law may prove to be inadequate relief to the Company. Therefore, the undersigned agrees that the Company 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.

 

  

  

  

The terms and provisions of this Agreement shall be construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws, and the federal laws of the United States of America applicable therein. The parties agree to the exclusive laying of venue in a State or Federal court located in New York State.

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Very truly yours,

Qiang Liu

Holder of 1,117,500 shares of Common Stock

/s/ Qiang Liu                                 

 Qiang Liu

AGREED AND ACCEPTED

	
NOVA LIFESTYLE, INC.

 

	
By: 

	/s/ Ya Ming Wong	 
	
Name:

	
Ya Ming Wong

	
Title:

	
Chief Executive Officerex10-1.htm

Exhibit 10.1

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement (the “Agreement”) is by and among the parties to the Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of June 30, 2010, specifically, Telanetix, Inc., a Delaware corporation, (the “Company”) and EREF-TELA, LLC, HCP-TELA, LLC, and CBG-TELA, LLC (together, “Hale”), which Securities Purchase Agreement (the “Securities Purchase Agreement”), together with the exhibits thereto, comprised the documentation for the transaction (the “Hale Transaction”) between the parties that closed in July, 2010;

WITNESSETH, THAT:

WHEREAS, the trading of the Company’s common stock in the stock market has languished downward in recent months, and the disinterested directors of the Company, based in part upon the advice of the Company’s investor relations expert, MKR Group, believe that this may in large part be attributable to the market’s sensitivity to the overhang of additional shares to be issued by the Company in connection with the rights offering contemplated under Section 4(t) of the Securities Purchase Agreement, which rights offering has not yet been commenced;

WHEREAS, the registration of all of the common stock of the Company acquired by Hale in the Hale Transaction, which registration was required under the Registration Rights Agreement that was Exhibit C to the Securities Purchase Agreement, and was the subject of a registration statement (File No. 333-169670) (the “Shelf Registration Statement”) filed with the Securities and Exchange Commission (“SEC”) on September 30, 2010, was rejected by the SEC staff, and under the staff’s interpretations only 17,521,255 shares (233,616 shares post-split) out of the total of 287,501,703 shares (3,833,356 shares post-split) owned by Hale may be registered under the Shelf Registration Statement;

WHEREAS, this illiquidity of shares of common stock purchased by Hale in excess of 17,521,255 shares (233,616 shares post-split) was unanticipated and constitutes a material change in the assumptions that gave rise to the Hale Transaction;

WHEREAS, one interpretation of the representation and warranty of Section 3(ff) of the Securities Purchase Agreement places upon the Company, rather than Hale, the risk that the Company might be ineligible to register the shares of common stock acquired by Hale in the Hale Transaction, so that, although Hale has not made any claim or other assertion based upon it, Hale may be deemed to have a claim against the Company for Hale’s damages arising from the failure of the Company to register all of Hale’s shares so that they might be capable of being freely resold into the stock market;

WHEREAS, because of the potential instability to the Company’s relationship to its customers and suppliers, and to the market for its shares, that might arise should Hale assert such a claim, or even from any disclosure or rumor of the existence of such a claim, it would appear advisable for this potential claim to be resolved as soon as possible; and

 

  

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WHEREAS, based upon numerous factors, including those set forth above, the disinterested directors of the Company at a special meeting of the Board on July __, 2011, have authorized the abandonment by the Company of the pending rights offering and the relinquishment by the Company of Hale’s obligation to the Company under the Securities Purchase Agreement to exchange up to $3 million of the notes that Hale purchased in the Hale Transaction for any unsold shares of common stock offered to the Company’s minority shareholders in the rights offering;

NOW THEREFORE, in and for consideration of the mutual covenants herein contained, the parties hereto do hereby agree as follows:

1.  The Company agrees to surrender and cancel its right under Section 4(t) of the Securities Purchase Agreement and related exhibits to require Hale to exchange up to $3 million of the Notes Hale purchased in the Hale Transaction for any unsold shares of common stock offered to the Company’s minority shareholders in the rights offering, to forever relinquish, abandon and terminate the rights offering for all purposes, and to undertake any such actions as may be necessary or desirable to accomplish the same.

2.  Hale agrees to forever relinquish, abandon and terminate such rights Hale may have for the Company’s breach of the Company’s representation and warranty in Section 3(ff) of the Securities Purchase Agreement to the effect that the Company is eligible to register the shares of common stock received by Hale in the Hale Transaction for resale by Hale under Form S-1 under the Securities Act of 1933.  Hale further agrees to amend the payment of interest on $3 million of the Senior Secured Notes (and associated “PIK Interest”, as defined in Section 2(a) of the Senior Secured Notes, dated July 3, 2011) purchased by Hale in the Hale transaction to “PIK Interest” for an additional twelve months.  Hale further consents and agrees that the rights offering shall be abandoned and terminated for all purposes; provided, however, that all registration and other rights conferred in the Registration Rights Agreement and other documents in the Hale Transaction shall continue and remain in full force and effect, and the Company hereby grants Hale customary underwritten demand rights with a nationally recognized underwriter or such other underwriter acceptable to Hale, the expenses of which (except underwriter discounts and commissions) shall be borne by the Company.

3.  Each party hereby forever releases and absolves the other party and its officers, directors, employees and agents (each being a third party beneficiary hereof), from any and all claims, lawsuits, actions, and causes of action, known or unknown, and whether asserted in the past or in the future by the party, due to the other party’s abandonment and termination of rights hereunder, including those associated with the rights offering and for any claim and all causes of action in any manner, directly or indirectly, associated with a breach of the representation and warranty made by the Company in Section 3(ff) of the Securities Purchase Agreement to the effect that the Company is eligible to register the shares of common stock received by Hale in the Hale Transaction for resale by Hale under Form S-1 under the Securities Act of 1933.

 

4.  This Agreement (i) shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws, (ii) shall not be amended, modified or waived in any respect except in writing signed by the person to be bound thereby, (iii) may be signed in counterparts, each counterpart constituting an original but with only one set of rights and obligations arising therefrom, (iv) is binding upon the parties hereto, their successors and assigns (including, without limitation, the assignees of any Hale shares), and (v) contains the entire agreement of the parties with respect to the subject matter hereof, hereby superseding any and all prior agreements and understandings concerning the subject matter hereof.

 

  

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IN WITNESS WHEREOF, this Agreement has been signed by each of the parties by their respective duly authorized representatives, each such party intending to be bound thereby.

	
COMPANY:

 

TELANETIX, INC.

 

	
By: /s/ Douglas N. Johnson                      

          (Douglas N. Johnson)

          Chief Executive Officer

 

	
HALE:

 

EREF-TELA, LLC

	
 

 

By: /s/ Martin Hale Jr.                                

          (Marin Hale Jr.)

          Chief Executive Officer

 

 

	
HCP-TELA, LLC

	
 

 

By: /s/ Martin Hale Jr.                                

          (Marin Hale Jr.)

          Chief Executive Officer

 

	
CBG-TELA, LLC

	
 

 

By: /s/ Martin Hale Jr.                                

          (Marin Hale Jr.)

                      Chief Executive Officer

 

  

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