Document:

Exhibit 10.02

 

THE
SECURITIES REPRESENTED BY THIS AGREEMENT ARE OFFERED FOR INVESTMENT ONLY AND
HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OF
1933 FROM REGISTRATION AS AMENDED (“SECURITIES ACT”), AND HAVE BEEN OFFERED AND
SOLD IN RELIANCE UPON THE EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE
SECURITIES ACT AND RULE 506 OF REGULATION D PROMULGATED PURSUANT THERETO.  WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCH
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THE
COMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN VIOLATION OF THE SECURITIES ACT, APPLICABLE STATE SECURITIES LAWS OR
ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.

 

	
  No. WC-1-2004

  	
   

  	
  775,000 Warrants

  

 

WARRANTS TO PURCHASE

775,000 SHARES OF

A.C.T. HOLDINGS, INC.

COMMON STOCK

WARRANT CERTIFICATE

 

Date of Issuance:  December 30,
2004

 

WARRANT AGREEMENT

 

This Warrant Certificate certifies that Quantum
Merchant Bankers, LLC, or registered assigns, in consideration of
$2,480.07 received, is the registered holder of Warrants (the “Warrants”) to
purchase initially, at any time from December 30, 2005 (the “Effective Date”)
until 5:30 p.m. Los Angeles time, on December 30, 2014 (“Expiration Date”), up
to the number of fully paid and nonassessable shares of common stock (“Common
Stock”) of A.C.T. Holdings, Inc., a Nevada corporation (the “Company”) set
forth above, at the initial exercise price, subject to adjustment in certain
events, of $2.00 per share (the “Exercise
Price”) of Common Stock upon surrender of this Warrant Certificate and payment
of the Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein.

 

The
Warrants are subject to the following provisions, terms and conditions:

 

1

 

1.
EXERCISE OF WARRANTS

 

Exercise of Warrants.
The Warrants may be exercised by the Holder, in whole or in part (but not as to
a fractional share of Common Stock), by surrender of this Warrant Agreement at
the principal office of the Company located at 38 Plantation Street, Worcester,
MA 01605 (or such other office or agency of the Company as may be designated by
notice in writing to the Holder at the address of such Holder appearing on the
books and records of the Company), with the appropriate form attached hereto
duly exercised, at any time within the period beginning on the date of this
Warrant Agreement, which is specified above and ending on that date exactly ten
(10) years from the Effective Date (the “Exercise Period”) and (i) by certified
or official bank check.  The Company
agrees that the shares of Common Stock so purchased shall be deemed to be
issued to the Holder as the record owner of such shares of Common Stock as of
the close of business on the date on which the Warrant Agreement shall have
been surrendered and payment made for such shares of Common Stock. Certificates
representing the shares of Common Stock so purchased shall be delivered to the
Holder promptly and in no event later than thirty (30) days after the Warrants
shall have been so exercised.

 

2.
ADJUSTMENTS AND NOTICES

 

A.  Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time, as
follows:

 

(1)                                 Stock
Dividends; Stock Splits; Reverse Stock Splits; and Reclassifications. In
the event that the Company shall (a) pay a dividend with respect to its capital
stock in shares of Common Stock, (b) subdivide its issued and outstanding
shares of Common Stock, (c) combine its issued and outstanding shares of common
stock into a smaller number of shares of any class of Common Stock or (d) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a merger, consolidation
or other business combination in which the Company is the continuing
corporation) (any one of which actions is herein referred to as an “Adjustment
Event”), the number of shares of Common Stock purchasable upon exercise of each
Warrant immediately prior to the record date for such Adjustment Event shall be
adjusted so that the Holder shall thereafter be entitled to receive the number
of shares of Common Stock or other securities of the Company (such other
securities thereafter enjoying the rights of shares of Common Stock pursuant to
this Warrant Agreement) that such Holder would have owned or have been entitled
to receive after the happening of such Adjustment Event, had such Warrant been
exercised immediately prior to the happening of such Adjustment Event or any
record date with respect thereto. An adjustment made pursuant to this Section
2A(1) shall become effective immediately after the effective date

 

2

 

                                                of
such Adjustment Event retroactive to the record date, if any, for such
Adjustment Event.

 

(2)                                 Adjustment
of Exercise Price. Whenever the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted pursuant to Section
2A(1) of this Warrant Agreement, the Exercise Price for each share of Common
Stock payable upon exercise of each Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.

 

(3)                                 De
Minimis Adjustments. No adjustment in the number of shares of Common Stock
purchasable pursuant to this Warrant Agreement shall be required, unless such
adjustment would require an increase or decease of at least one percent (1%) in
the number of shares of Common Stock purchasable upon an exercise of each
Warrant; provided, however, that any adjustments which by reason of this
Section 2A(3) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations shall be made to
the nearest full share.

 

B. Notice of Adjustment. Whenever the number
of shares of Common Stock purchasable upon the exercise of each Warrant or the
Exercise Price is adjusted, as herein provided, the Company shall promptly
notify the Holder in writing (such writing referred to as an “Adjustment Notice”)
of such adjustment or adjustments and shall deliver to the Holder a certificate
of a firm of independent public accountants selected by the Board of Directors
of the Company (who may be the regular accountants employed by the Company) or
of the Independent Financial Expert, if any, which makes a determination of
Current Market Value with respect to any such adjustment setting forth the number
of shares of Common Stock purchasable upon the exercise of each Warrant and the
Exercise Price after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made.

 

C.   Amendment of Warrant Agreement. This Warrant Agreement may not be changed
because of any change in the Exercise Price or in the number of shares of
Common Stock purchasable upon the exercise of a Warrant. The Company may at the
time in the Company’s sole discretion make any change in the form of a warrant
agreement that the Company may deem appropriate and that does not affect the
substance thereof and any warrant agreement thereafter issued, whether in
exchange or substitution for any outstanding warrant agreement or otherwise,
may be in the form so changed.

 

D.   Notice to Holder of Record Date,
Dissolution, Liquidation or Winding Up. The Company shall cause to be mailed (by
first class mail, postage prepaid) to the Holder notice of the record date for
any dividend, distribution or payment, in cash or in kind

 

3

 

(including,
without limitation, evidence of indebtedness and assets), with respect to
shares of Common Stock at least twenty (20) calendar days before any such date.
In the event that at any time after the date hereof, there shall be a voluntary
or involuntary dissolution, liquidation or winding up of the Company, then the
Company shall cause to be mailed (by first class mail, postage prepaid) to the
Holder at the Holder’s address as shown on the books of the Company, at the
earliest practicable time (and, in any event, not less than twenty (20)
calendar days before any date set for definitive action), notice of the date on
which such dissolution, liquidation or winding up shall take place, as the case
may be. The notices referred to above shall also specify the date as of which
the holders of the shares of Common Stock of record or other securities
underlying the Warrants shall be entitled to receive such dividend, money or
the property deliverable upon such dissolution, liquidation or winding up, as
the case may be (the “Entitlement Date”). In the case of a distribution of
evidence of indebtedness or assets (other than in dissolution, liquidation or
winding up), if the Holder elects to exercise the Warrants in accordance with
Section 1 of this Warrant Agreement and become a holder of the Common Stock on
the Entitlement Date, the Holder shall thereafter receive the evidence of
indebtedness or assets distributed in respect of shares of Common Stock.

 

E.   Fractional Interest.
The Company shall not be required to issue fractional shares of Common Stock on
the exercise of the Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full shares
of Common Stock which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of whole shares of Common Stock purchasable
on exercise of the Warrants so presented. If any fraction of a share of Common
Stock would, except for the provisions of this Section 2E be issuable on the
exercise of the Warrants (or specified proportion thereof), the Company shall
pay an amount in cash calculated by it to be equal to the then fair value of
one share of Common Stock, as determined by the Board of Directors of the
Company in good faith, multiplied by such fraction computed to the nearest
whole cent.

 

3.
RESERVATION AND AUTHORIZATION OF COMMON STOCK

 

The
Company covenants and agrees (a) that all shares of Common Stock which may be
issued upon the exercise of the Warrants will, upon issuance, be validly
issued, fully paid and nonassessable and free of all insurance or transfer
taxes, liens and charges with respect to the issue thereof; (b) that during the
Exercise Period, the Company will at all times have authorized, and reserved
for the purpose of issue or transfer upon exercise of the Warrants, sufficient
shares of Common Stock to provide for the exercise of the Warrants, and (c)
that the Company will take all such action as may be necessary to ensure that
the shares of Common Stock issuable upon the exercise of the Warrants may be so
issued without violation of any applicable law or regulation, or any
requirements of any domestic securities exchange upon which any capital stock
of the Company may be listed; provided, however, that nothing contained herein
shall impose upon the Company any obligation to register the Warrants or the
Common Stock pursuant to applicable securities laws. In the event that any
securities of the Company, other than the Common Stock, are issuable upon
exercise of the Warrants, the Company will take or refrain from

 

4

 

taking
any action referred to in clauses (a) through (c) of this Section 3 as though
such clauses applied, mutatis mutandis, to such other securities then issuable
upon the exercise the Warrants.

 

4. NO
VOTING RIGHTS

 

This
Warrant Agreement shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.

 

5.  CALL OF WARRANTS BY THE COMPANY.

 

The
Company shall have the right to force the purchase, at the Exercise Price, of
any or all Warrants on or after the date (the “Call Date”) on which: (i) the
price (“price” shall be determined by taking the average between the bid and
ask prices over the preceding five (5) day period) of the Company’s common
stock as reported on the Over the Counter Bulletin Board, or other nationally
recognized exchange, as the case may be, equals or exceeds 150% of the Exercise
Price; and (ii) the average trading volume of the Company’s common stock on the
Over the Counter Bulletin Board or other nationally recognized exchange, as the
case may be, equals or exceeds 20,000 shares per day over the previous thirty
(30) day period (collectively, the “Conditions to Call”). Should the Company
determine that the Conditions to Call have been satisfied, the Company shall
provide the Holder with written notice of its intent to call the Warrants. The
Holder shall have ten (10) days from the date appearing on such notice to
exercise the Warrants as specified herein and tender the Exercise Price to the
Company. If the Holder fails to exercise the warrants within the specified
period, all Warrants issued in the name of Holder shall, without any other
action by the Company, terminate.

 

6.  EXERCISE OR TRANSFER OF WARRANTS OR COMMON
STOCK

 

The
Holder agrees to be obligated by any and all provisions with respect to any and
all limitations, including limitations imposed by the Securities Act of 1933,
as amended, regarding the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Warrants. The Holder acknowledges and
agrees that he or she is aware that there are substantial restrictions on the
transferability of the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Warrants. The undersigned also
acknowledges and agrees that he or she shall be responsible for compliance with
all conditions on transfer imposed by a Securities Administrator of any state,
province or territory and for any expenses incurred by the Company for legal
and accounting services in connection with reviewing such a proposed transfer
and issuing opinions in connection therewith.

 

7.
LOCK-UP PROVISION

 

In
the event that the Board of Directors of the Company determines, in its sole
and absolute discretion, that it is in the best interests of the Company and
its shareholders to cause Holder to execute a lockup/leak-out agreement related
to the common stock

 

5

 

underlying
the Warrants (whether such underlying common stock is registered or not),
Holder specifically agrees to execute such an agreement as presented by the
Company.  The terms and conditions of
such lockup/leak-out agreement, if necessary, shall be set by the Company, in
its sole and absolute discretion, and will include, but not be limited to, at
least a twelve (12) month lockup/leak-out provision. In the event that Holder
refuses to execute the lockup/leak-out agreement (which may be a condition
precedent to the issuance of the stock underlying the Warrants), the Holder
herewith specifically agrees that the Company may refuse to issue the common
stock issuable upon exercise of the Warrants.

 

8.  PIGGY-BACK REGISTRATION RIGHTS

 

Subject
to the exceptions specified in this Section 8, in the event that the Company
decides to file a registration statement with the Securities and Exchange
Commission  pursuant to the Securities
Act, the Company shall provide Holder with written notice of its intent to file
a registration statement. Holder will then have fifteen (15) days from the date
appearing on the notice to request, in writing, that the Company use its best
efforts to include in that registration statement, for registration, all or any
portion of the common stock issuable upon exercise of these Warrants. If Holder
does not provide the Company with written notice within fifteen (15) days,
Holder loses Holder’s right to request registration of the shares issuable upon
the exercise of these Warrants. If proper notice is given, the Company agrees
to use its best efforts to prepare and file with the Securities and Exchange
Commission such amendments and supplements to the registration statement and
the prospectus used in connection with such registration statement necessary to
comply with the provisions of the Securities Act and to cause such registration
statement to become effective. The Company shall pay all expenses and fees
incurred by Holder in registering all or any portion of the shares issuable
upon exercise of these Warrants. The exceptions to the piggy-back registration
rights granted herein (i.e., Holder will not have the right to request that the
Company register the common stock underlying the Warrants) are as follows: (i)
the registration statement filed by the Company is related or a condition to a
secondary offering conducted by the Company; or (ii) the registration statement
filed by the Company seeks to register stock whose aggregate value (exclusive
of the common stock issuable upon exercise of the Warrants) is less than Ten
Million Dollars ($10,000,000).

 

9.
MERGERS, CONSOLIDATIONS, ETC.

 

A.
Except as may otherwise be provided, if the Company shall merge or consolidate
with another corporation, the Holder shall thereafter have the right, upon
exercise of the rights specified in this Warrant Agreement and payment of the
Exercise Price, to receive solely the kind and amount of shares of stock
(including, if applicable, Common Stock), other securities, property or cash or
any combination thereof receivable by a holder of the number of shares of
Common Stock for which this Warrant Agreement might have been exercised
immediately prior to such merger or consolidation (assuming, if applicable,
that the holder of such Common Stock failed to exercise its rights of election,
if any, as to the

 

6

 

kind
or amount of shares of stock, other securities, property or cash or combination
thereof receivable upon such merger or consolidation).

 

B. In case of any
reclassification or change of the shares of Common Stock issuable upon exercise
of (other than elimination or par value, a change in par value, or from par
value to no par value, or as the result of a subdivision or combination of
shares (which is provided for elsewhere herein), but including any
reclassification of the shares of Common stock into two (2) or more classes or
series of shares) or in case of any merger or consolidation of another
corporation into the Company in which the Company is the surviving corporation
and in which there is a reclassification or change of the shares of Common
Stock (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination (which is provided for elsewhere
herein), but including any reclassification of the shares of Common Stock, the
Holder shall thereafter have the right, upon exercise hereof and payment of the
Exercise Price, to receive solely the kind and amount of shares of stock
(including, if applicable, Common Stock), other securities, property or cash or
any combination thereof receivable upon such reclassification, change, merger
or consolidation by a holder of the number of shares of Common Stock for which
the rights specified in this Warrant Agreement might have been exercised
immediately prior to such reclassification, change, merger or consolidation
(assuming, if applicable, that the holder of such Common Stock failed to exercise
its rights of election, if any, as to the kind or amount of shares of stock,
other securities, property or cash or combination thereof receivable upon such
reclassification, change, merger or consolidation).

 

10.
RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS

 

The
rights and obligations of the Company, of the Holder, and of the holders of
shares of Common Stock or other securities issued upon exercise of the
Warrants, specified in this Warrant Agreement shall survive the exercise of the
Warrants.

 

	
  Dated:
  December 30, 2004

  	
   

  
	
   

  	
   

  
	
  COMPANY

  	
   

  
	
   

  	
   

  
	
  A.C.T.
  HOLDINGS, INC.,

  	
   

  
	
  A
  Nevada corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  David
  C. Merrell

  	
   

  
	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
  HOLDER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  of Holder)

  	
   

  
					

 

7

 

	
   

  	
   

  	
   

  
	
  (Print
  Name of Holder)

  	
   

  

 

8Exhibit
10.03

 

EXHIBIT
D-1

 

LOCK-UP/LEAK-OUT AGREEMENT

 

THIS LOCK-UP/LEAK-OUT AGREEMENT (the “Agreement”)
is made and entered into as of the        
day of December, 2004, between Two Moons Kachinas Corp., a Nevada corporation (“Two
Moons”), and the individuals that execute and deliver a Counterpart Signature
Page hereof, and sometimes collectively referred to herein as the “Shareholders”
and each, a “Shareholder.”  For all
purposes of this Agreement, “Shareholder” includes any “affiliate, controlling
person of Shareholder, agent, representative or other person with whom
Shareholder is acting in concert with.

 

WHEREAS, the Buyers (as defined herein),
along with certain other persons, are acquiring Common Stock of Two Moons from
certain current stockholders of Two Moons (respectively, the “Change in Control
Transaction” and the “Buyers”); and

 

WHEREAS, the Buyers that are participating in
the Change in Control Transaction have identified a potential reorganization,
merger or acquisition for Two Moons that may or may not be completed or if
completed, may or may not be beneficial to Two Moons and its stockholders (the “Reorganization
Transaction”); and

 

WHEREAS, in order to facilitate the
consummation of the transactions contemplated by the Change in Control Transaction
and to protect the Company,  the
Shareholders have agreed to enter into this Agreement and to restrict the
public sale, assignment, transfer, conveyance, hypothecation or alienation of
the Common Stock, all on the terms set forth below.

 

NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.                                       Except as
otherwise expressly provided herein, and except as each Shareholder may be
otherwise restricted from selling shares of Common Stock, each Shareholder may
only publicly sell Common Stock subject to the following conditions commencing
on the execution and delivery of this Agreement and for the twelve (12) month
period from the Closing of the Change in Control Transaction (the “Lock-Up/Leak-Out
Period”):

 

1.1                                 Each
Shareholder shall be allowed to sell 1/12th of such Shareholder’s shares of
Common Stock per month during the Lock-Up/Leak-Out Period, on a non-cumulative
basis, meaning that if no Common Stock was sold during one month while Common
Stock was qualified to be sold, such 
shares of Common Stock could not be sold in the next successive month.

 

 

1.2                                 Except
as otherwise provided herein, all Common Stock shall be only sold in “broker’s
transactions” and each Shareholder must comply with the “manner of sale”
requirements as those terms are defined in Rule 144 of the Securities and
Exchange Commission during the Lock-Up/Leak-Out Period.

 

1.3                                 An
appropriate legend describing this Agreement shall be imprinted on each stock
certificate representing Common Stock covered hereby, and the transfer records
of Two Moons’ transfer agent shall reflect such appropriate restrictions.

 

1.4                                 The
Shareholders agree that they will not engage in any short selling of the Common
Stock during the Lock-Up/Leak-Out Period.

 

1.5                                 During
the Lock-Up/Leak/Out Period, Two Moons shall maintain its “reporting” status
with the Securities and Exchange Commission; file all reports that are required
to be filed by it during such period; and use its “best efforts” to ensure that
the Common Stock is continually quoted for public trading on a nationally
recognized medium of no less significance than the OTC Electronic Bulletin
Board of the National Association of Securities Dealers, Inc. (the “NASD”), the
NASDAQ Small Cap or a recognized national stock exchange.

 

1.6                                 During
the Lock-Up/Leak-Out Period, each Shareholder will be required to submit a
legal opinion to the Company with any requested transfer hereunder to the
effect that any monthly sale is being made in compliance with this Agreement.

 

2.                                       The delivery of
a duly executed copy of the Broker/Dealer Agreement  by a selling Shareholder’s broker and a duly
executed Seller’s Resale Agreement by the selling Shareholder in the forms
attached hereto shall be satisfactory evidence for all purposes of this
Agreement that such selling Shareholder and its broker will comply with the “broker’s
transactions” and “manner of sale” requirements of this Agreement, and no
further evidence thereof will be required of any selling Shareholder; provided,
however, Two Moons may confirm such compliance with any Shareholder and any
selling Shareholder’s broker, to the extent that it deems reasonably required
or necessary to assure compliance with this Agreement.

 

3.                                       Notwithstanding
anything to the contrary set forth herein, Two Moons may, in its sole
discretion and in good faith, at any time and from time to time, waive any of
the conditions or restrictions contained herein to increase the liquidity of
the Common Stock or if such waiver would otherwise be in the best interests of
the development of the trading market for the Common Stock.  Unless otherwise agreed by the Shareholders,
all such waivers shall be pro rata, as to all of the Shareholders who 

 

 

executed a Lock-Up/Leak-Out Agreement in connection with the Change in
Control Transaction whose Common Stock can, at the time of any such waiver, be
publicly sold in accordance with the Securities Act of 1933, as amended (the “Securities
Act”), or Rule 144 promulgated thereunder by the Securities and Exchange
Commission or otherwise.

 

4.                                       Other than the
contemplated Reorganization Transaction or any merger with a subsidiary, in the
event of:  (a) a completed tender offer
to purchase all or substantially all of Two Moons’ issued and outstanding
securities; or (b) a merger, consolidation or other reorganization of Two Moons
with or into an unaffiliated entity, then this Agreement shall terminate as of
the closing of such event and the Common Stock restricted pursuant hereto shall
be released from such restrictions.

 

5.                                       Except as
otherwise provided in this Agreement or any other agreements between the
parties, the Shareholders shall be entitled to their respective beneficial
rights of ownership of the Common Stock, including the right to vote the Common
Stock for any and all purposes.

 

6.                                       The number of
shares of Common Stock included in any monthly allotment that can be sold by a
Shareholder shall be appropriately adjusted should Two Moons make a dividend or
distribution, undergo a forward split or a reverse split or otherwise
reclassify its shares of Common Stock.

 

7.                                       This Agreement
may be executed in any number of counterparts with the same force and effect as
if all parties had executed the same document.

 

8.                                       All notices,
instructions or other communications required or permitted to be given pursuant
to this Agreement shall be given in writing and delivered by certified mail,
return receipt requested, overnight delivery or hand-delivered to all parties
to this Agreement, to Two Moons, at 9005 Cobble Canyon Lane, Sandy, Utah 84093;
or, subsequent to the Closing of the Change in Control Transaction and the
Reorganization Transaction, to One Innovation Drive, Worcester, MA 01605; and
to the Shareholders, at the addresses in their Counterpart Signature
Pages.  All notices shall be deemed to be
given on the same day if delivered by hand or on the following business day if
sent by overnight delivery or the second business day following the date of
mailing.

 

9.                                       The resale
restrictions on the Common Stock set forth in this Agreement shall be in
addition to all other restrictions on transfer imposed by applicable United
States and state securities laws, rules and regulations.

 

10.                                 Two Moons or each
Shareholder who fails to fully adhere to the terms and conditions of this
Agreement shall be liable to every other party for any damages suffered by any
party by reason of any such breach of the terms and conditions hereof.  Each Shareholder agrees that in the event of
a breach of any of the terms and conditions of this Agreement by any such
Shareholder, that in addition to all other remedies that may be available in
law or in equity to the non-defaulting parties, a

 

 

preliminary and permanent injunction, without bond or surety, and an
order of a court requiring such defaulting Shareholder to cease and desist from
violating the terms and conditions of this Agreement and specifically requiring
such Shareholder to perform his/her/its obligations hereunder is fair and
reasonable by reason of the inability of the parties to this Agreement to
presently determine the type, extent or amount of damages that Two Moons or the
non-defaulting Shareholders may suffer as a result of any breach or continuation
thereof.

 

11.                                 This Agreement sets
forth the entire understanding of the parties hereto with respect to the
subject matter hereof, and may not be amended except by a written instrument
executed by the parties hereto.

 

12.                                 This Agreement shall
be governed by and construed in accordance with the laws of the State of Utah
applicable to contracts entered into and to be performed wholly within said
State; and Two Moons and the Shareholders agree that any action based upon this
Agreement may be brought in the United States and state courts of Utah only,
and each submits himself/herself/itself to the jurisdiction of such courts for
all purposes hereunder.

 

13.                                 In the event of
default hereunder, the non-defaulting parties shall be entitled to recover
reasonable attorney’s fees incurred in the enforcement of this Agreement.

 

IN WITNESS WHEREOF, the undersigned have duly
executed and delivered this Agreement as of the day and year first above
written.

 

 

	
   

  	
  TWO MOONS KACHINAS CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  .

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
						

 

 

LOCK-UP/LEAK-OUT AGREEMENT

COUNTERPART SIGNATURE PAGE

 

This Counterpart Signature Page for that
certain Lock-Up/Leak-Out Agreement (the “Agreement”) dated as of the       day of December, 2004, among Two Moons
Kachinas Corp., a Nevada corporation (“Two Moons”); and certain persons who are
“Shareholders” of Two Moons, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by the
terms of the Agreement, as a Shareholder, of the number of shares of Two Moons
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Entity Name, if Applicable)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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Broker/Dealer Agreement

 

Two Moons Kachinas Corp.

9005 Cobble Canyon Lane

Sandy, Utah 84093

 

Interwest Transfer Company

1981 East Murray-Holladay Blvd.

Salt Lake City, Utah 84117

 

Re:                                                                               Resale
restriction of certain shares of common stock of Two Moons Kachinas Corp., a
Nevada corporation (“Two Moons” or the “Company”)

 

Dear Ladies and Gentlemen:

 

The undersigned broker hereby acknowledges
receipt of stock certificates representing                         
shares of common stock of the Company that are owned by                                                                        
(the “Customer”).

 

In consideration of transferring these
securities free of any legend or other notation respecting the resale of these
securities so that the undersigned broker can effect a sale of such shares (a “Company
Approved Sale”), the undersigned broker agrees:

 

(i)            That
all sales of these securities or any other securities of Two Moons on deposit
in the accounts of the Customer will be made in “broker’s transactions” only as
that term is defined in Rule 144 of the Securities and Exchange Commission
until                          ,
200  (the “Resale Restriction Period”);

 

(ii)           That
there will be no legend removal or DTC’s of any securities of the Customer
prior to a Company Approved Sale during the “Resale Restrictions Period”;

 

(iii)          That
if any of the securities of the Company are ordered out by the Customer for
delivery prior to the expiration of the Resale Restriction Period, that
instructions will be given to the Company’s transfer agent to re-issue the
stock certificates for the Customer with the appropriate restriction or
restrictions as are outlined in the Letter Agreement of the Customer, and to
the effect that such securities can only be sold in “broker’s transactions.”

 

 

The undersigned broker further agrees that we
will provide you with reasonable documentation on your request to verify our
compliance with this Letter Agreement.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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Seller’s Resale Agreement

 

Two Moons Kachinas Corp.

9005 Cobble Canyon Lane

Sandy, Utah 84093

 

Interwest Transfer Company

1981 East Murray-Holladay Blvd.

Salt Lake City, Utah 84117

 

Re:                                                                               Resale
restriction of certain shares of common stock of Two Moons Kachinas Corp., a
Nevada corporation (“Two Moons” or the “Company”)

 

Dear Ladies and Gentlemen:

 

The undersigned agrees to effect all sales of
shares of common stock of Stock Certificate No.                          
representing                             
shares of common stock of Two Moons in accordance with the “manner of sale”
requirements of Rule 144 as outlined in Schedule 1 hereto until on or
before                              ,
200 .

 

DATED this                       
day of                                                               ,
200   .

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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SCHEDULE 1

 

SELLER’S REQUIREMENTS IN “BROKERS’
TRANSACTIONS”

RULE 144 “MANNER OF SALE”
REQUIREMENTS

 

The securities shall be sold in “brokers’
transactions” within the meaning of Section 4(4) of the Securities Act or
in transactions directly with a “market maker,” as that term is defined in Section 3(a)(38)
of the Securities Exchange Act of 1934, and the person selling the securities
shall not (1) solicit or arrange for the solicitation of orders to buy the securities
in anticipation of or in connection with such transaction, or (2) make any
payment in connection with the offer or sale of the securities to any person
other than the broker who executes the order to sell the securities.

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