Document:

Unassociated Document

LOCK-UP AGREEMENT

        

This LOCK-UP AGREEMENT (the “Agreement”) is made as of June 3, 2013, by and between Converted Organics, Inc., a Delaware corporation (the “Company”), and the undersigned (the “Stockholder”) holder of common stock (the "Common Stock") of the Company.

 

WHEREAS, the Company has agreed to file with the Securities and Exchange Commission (the “SEC”) a registration statement (the “Registration Statement”) registering the resale of the shares of Common Stock issuable to the Stockholder and certain other persons pursuant to that certain Agreement and Plan of Merger, dated as of the date hereof, among the Company, Finjan, Inc., and COIN Merger Sub, Inc. (the “Merger Agreement”) and pursuant to the Exchange Agreement (as defined in the Merger Agreement);

 

WHEREAS, pursuant to the Merger Agreement, immediately following the Merger (as defined in the Merger Agreement), the Company shall change its name to Finjan Holdings, Inc. through a short-form merger pursuant to Section 253 of the General Corporation Law of the State of Delaware; and

 

WHEREAS, to facilitate the development of an orderly trading market in the Company’s Common Stock, the Company and the undersigned are entering into this Agreement which provides the circumstances under which the undersigned may sell or otherwise dispose of the Company’s securities.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the undersigned Stockholder agree as follows:

 

1. Prohibition on Sales or Transfers. Other than as set forth in Sections 2 or 3 below, the Stockholder hereby agrees that for a period (the “Lock-Up Period”) beginning on the date hereof and ending on the ten (10) month anniversary of the Effective Date, the Stockholder will not offer, sell, contract to sell, pledge, give, donate, transfer, or otherwise dispose of, directly or indirectly, any shares of the Common Stock or securities convertible into or exchangeable or exercisable for Common Stock issued to the Stockholder by the Company (collectively, the “Lock-Up Shares”) or securities or rights convertible into or exchangeable or exercisable for any Lock-Up Shares, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such securities, whether any such aforementioned transaction is to be settled by delivery of the Lock-Up Shares or such other securities, in cash or otherwise, or publicly disclose the intention to do any of the foregoing (the “Lock-Up Agreement”).   As used herein, the "Effective Date" means the date the SEC declares the Registration Statement effective.

 

2. Post-Effective Date Release. Ten percent (10%) of the undersigned’s Lock-Up Shares shall be automatically released from the restrictions set forth in this Agreement (including, without limitation, Section 1) on the Effective Date and on each monthly anniversary of the Effective Date; provided, however, that until the six month anniversary of the Effective Time (as defined in the Merger Agreement) of the Merger (as defined in the Merger Agreement), the release of the undersigned’s Lock-Up Shares in accordance with this provision shall be suspended to the extent (but only to the extent) that the percentage of the undersigned's Lock-Up Shares that would be released pursuant to this provision but for this proviso would exceed the percentage of Exchange Shares of any Investor (each as defined in the Exchange Agreement) registered for resale pursuant to the Registration Statement.  Any Lock-Up Shares whose release is suspended pursuant to the immediately preceding proviso shall accrue and the suspension of the release of such shares shall automatically cease from and after the earlier of (x) the six-month anniversary of the Effective Time of the Merger and (y) the date on which the lowest percentage of Exchange Shares of any Investor registered for resale pursuant to the Registration Statement equals or exceeds the aggregate percentage of the undersigned’s Lock-Up Shares that are released pursuant to the immediately preceding sentence.

 

3. Allowable Sales During Lock-Up Period and Thereafter. Notwithstanding the terms of Section 1 above, during the Lock-Up Period the Stockholder may:

 

(a) Transfer Lock-Up Shares to the Company;

 

(b) Transfer Lock-Up Shares to one of the Stockholder’s Affiliated Entities (as defined below), so long as such Stockholder’s Affiliated Entity agrees in an additional written instrument delivered to the Company to be subject to the terms and conditions of this Agreement; and

 

  

  

  

 

(c) Transfer Lock-up Shares in open market sales at a per share sales price of $0.56 or above (subject to appropriate adjustment for any stock split, reclassification, recapitalization or other similar events).

 

As used in this Agreement “Affiliated Entities” shall mean any legal entity, including any corporation, limited liability company, partnership, not-for-profit corporation, estate planning vehicle or trust, which is directly or indirectly majority controlled by the Stockholder or his or her descendants or spouse, of which such Stockholder or his or her descendants or spouse are beneficial owners, or which is under joint control or ownership with any other person or entity subject to a lock-up agreement regarding the Company’s stock with terms substantially identical to this Agreement.

 

4. Application of this Agreement to Shares Sold or Otherwise Transferred. Except as otherwise provided herein, Lock-up Shares that are sold or otherwise Transferred in compliance with the requirements of this Agreement shall thereafter not be subject to the restrictions on sale or other Transfer contained in this Agreement.  

 

5. Attempted Transfers. Any attempted or purported sale or other Transfer of any Lock-Up Shares by the Stockholder in violation or contravention of the terms of this Agreement shall be null and void ab initio. The Company shall, and shall instruct its transfer agent to, reject and refuse to transfer on its books any Lock-Up Shares that may have been attempted to be sold or otherwise Transferred in violation or contravention of any of the provisions of this Agreement and shall not recognize any person or entity.

 

6. Consent or Approval of Company. Whenever the waiver, consent or approval of the Company is required herein or is desired to amend this Agreement or waive any requirement in this Agreement, such consent, approval, amendment or waiver may only be given by the Company if and when approved by a majority of the Company’s then independent directors; provided, however, that the independent directors may delegate this authority to executive officers of the Company if the Stockholder seeking or benefiting from the consent, approval, amendment or waiver is not serving as an officer or director of the Company.

 

7. Authority and Acknowledgement of Representation. The Stockholder represents and warrants to the Company that (i) the Stockholder has the power and authority to execute, deliver and perform this Agreement, that it has received adequate consideration therefor and (ii) the Stockholder was or had the opportunity to be represented by legal counsel and other advisors selected by Stockholder in connection with this Agreement. The Stockholder has reviewed this Agreement with his, her or its legal counsel and other advisors and understands the terms and conditions hereof.

 

8. Legends on Certificates.

 

(a) All Lock-Up Shares owned by the Stockholder, shall be subject to the provisions of this Agreement and the certificates representing such Lock-Up Shares shall bear the following legends (in addition to any other applicable legends otherwise required to be placed on such certificates pursuant to the Merger Agreement or otherwise):

 

THE SALE, ASSIGNMENT, GIFT, BEQUEST, TRANSFER, DISTRIBUTION, PLEDGE, HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND MAY BE MADE ONLY IN ACCORDANCE WITH THE TERMS OF A LOCK-UP AGREEMENT, A COPY OF WHICH MAY BE EXAMINED AT THE OFFICE OF THE CORPORATION.

 

(b) The Company shall coordinate with the Company's transfer agent to replace the certificates representing the Lock-Up Shares with new certificates that do not contain the above legend (i) as soon as practicable following the expiration of the Lock-Up Period or (ii) as soon as practicable following the request of the Stockholder to remove such legend from a number of shares equal to the number of shares for which the restrictions hereunder have been released in accordance with Section 2 above or (iii) upon a sale of such shares pursuant to Section 3(c) above.

 

9. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware.

 

10. Notices. Any notices and other communications given pursuant to this Agreement shall be in writing and shall be effective upon delivery by hand or on the fifth (5th) day after deposit in the mail if sent by certified or registered mail (postage prepaid and return receipt requested) or on the next business day if sent by a nationally recognized overnight courier service (appropriately marked for overnight delivery) or upon transmission if sent by facsimile (with immediate electronic confirmation of receipt in a manner customary for communications of such type). Notices are to be addressed as follows:

 

If to the Company, to:

 

Finjan Holdings, Inc.

261 Madison Avenue

New York, NY  10016

 

  

2

  

 

If to the Stockholder, to the address listed on the Company’s books and records or such other address specified in writing by the Stockholder.

 

11. Binding Effect. This Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns and to the Stockholder and their respective permitted heirs, personal representatives, successors and assigns.

 

12. Entire Understanding. This Agreement sets forth the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and the transactions contemplated hereby and supersedes all prior written and oral agreements, arrangements and understandings relating to the subject matter hereof.  This Agreement may not be changed orally, but may only be changed by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

13. Remedies. The parties hereto acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any party may, in such party’s sole discretion, apply to any court of competent jurisdiction for specific performance or injunctive relief or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party hereto waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof, whether at law or in equity, shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party hereto shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

 

14. Counterparts. This Agreement may be executed by facsimile and in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Each counterpart may consist of a number of copies each signed by less than all, but together signed by all, of the parties hereto.

 

[Signature pages follow]

 

  

3

  

 

IN WITNESS WHEREOF, this Agreement has been signed as of the date first above written.

	 	
CONVERTED ORGANICS, INC.

	 
	 	 	 	 
	 	
By: 

	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR STOCKHOLDER FOLLOWS]

 

LOCK-UP AGREEMENT

  

  

  

 

IN WITNESS WHEREOF, the undersigned have caused this Lock-Up Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

	Name of Stockholder:   	 	 	 
	 	 	 	 
	 	 	 	 
	 	
By: 

	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

LOCK-UP AGREEMENTUnassociated Document

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of the 29th day of March 2013 (the Effective Date”), by and between Finjan, Inc. (together with its successors and assigns, the “Company”), a Delaware corporation; and Philip Hartstein (“Consultant”).

 

W I T N E S S E T H:

WHEREAS, the Company wishes to retain Consultant, and the Consultant wishes to accept such assignment as an independent contractor in accordance with the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is agreed as follows:

 

1. Services

 

The Consultant is hereby engaged by the Company effective as of the Effective Date (as defined below) as an independent contractor providing services of President of the Company with responsibility for IP strategy and licensing (all such services shall be the “Services”).  The Services shall be provided at such reasonable times as shall be deemed necessary by the parties to perform the engagement contemplated hereunder.  The Services shall be performed at the Company's offices or at such places as mutually agreed between the parties. In the performance of the Services, the Contractor shall conform to such policies established by the Company which are necessary to satisfy applicable statutes, rules or regulations governing the provision of the Services. The Consultant will perform all Services in a workmanlike and professional manner and will comply at all times with all applicable laws, regulations, codes and standards.  The Consultant undertakes that it shall dedicate at least 40 hours per week in the performance of the Services.

 

2. Term

 

The Consultant’s engagement under this Agreement will begin on April 1, 2013, and shall continue until December 31, 2013 (the “Term”); provided, however, that commencing on January 1, 2014 and on the annual anniversary of that date thereafter, the Term shall be extended for an additional one year period unless the Company gives notice of the intention not to extend the Term to Consultant at least 90 days prior to the conclusion of the Term on the same terms contained herein. Consultant represents that he is bound by no restrictions, contractual or otherwise, precluding her from providing the Services to the Company as of the beginning of the Term or from carrying out of any of her duties during the Term.

 

3. Compensation.

 

The Company shall pay to the Consultant, as a fee for the Services provided hereunder, $25,000 per month through the Term.  Such amounts shall be paid twice monthly after the provision of invoices by the Consultant to the Company. Each invoice shall be for $12,500 which shall be issued on the 15th and the last day of each month. Subject to approval of the Board of Directors of the Company, the Consultant shall be granted options to purchase shares of the common stock of the Company, in the number, upon the terms and subject to the conditions, set forth in Exhibit A hereto. In the event that, at the time of grant of the options, the Company will be a wholly owned subsidiary of a parent company, then the options will be for shares of common stock of such parent company. In addition, the Company may award a discretionary bonus at the end of each four month period based upon the Consultant’s performance and overall Company progress in an amount of up to $75,000 per annum.

 

  

1

  

 

4. Expenses.

 

Company shall reimburse Consultant for travel and other business expenses reasonably incurred by Consultant, subject to the submission by Consultant of receipts or other appropriate documentation as required by the Company.

 

5. Termination.

 

Either party may conclude the Term earlier than the end date specified in Section 2 upon 90 days advance written notice to the other. Upon such termination, Consultant will be paid all earned but unpaid compensation pursuant to Section 3, such compensation to be paid in the next bi-weekly pay cycle. In the event that the Term is extended as detailed in Section 2, then, after October 1, 2013, either party may conclude the Term earlier than the end date specified in Section 2 upon 90 days advance written notice to the other.

 

6. Confidential Information.

 

Consultant acknowledges that, during the term of Consultant’s engagement with the Company, Consultant will have access to unpublished and otherwise confidential information (“Confidential Information”), both of a technical and non-technical nature, relating to the business of the Company its actual or anticipated business, research or development, its technology or the implementation or exploitation thereof.  Confidential Information includes, but is not limited to, the Company’s business plans (both current and under development), data, investor and client list and contact information, promotional and marketing programs and strategies, research or development, information pertaining to trading, processes, codes, system designs, system specifications, techniques, computer programs, applications developed by or for Company, projections, financial information, costs, revenues, profits, investments, analysis, potential investors and clients, personal information concerning employees of the Company, business methods and models, trade secrets, databases, simulation software, trading systems, mathematical models and programs, algorithms, numerical techniques, procedural guidelines, knowledge of the Company’s facilities, supervisory and risk control techniques and procedures, fee and compensation structures, or other confidential, secret or proprietary information and any other Confidential Information relating to the business affairs of Company or its clients.  However, Confidential Information does not include any information that is generally known to the public or the financial services industry, other than as a result of Consultant’s unauthorized disclosure.

 

  

2

  

 

a. During the Term or at any time thereafter, Consultant covenants and agrees that Consultant will not use for Consultant’s personal benefit or for the benefit of any third party, nor will Consultant disclose any Confidential Information unless authorized to do so by the Company in writing, except that Consultant may disclose and use such Confidential Information when necessary in the performance of Consultant’s duties hereunder, or as required to be disclosed by order of a proper legal authority.

 

b. Upon termination of this Agreement with the Company for any reason, Consultant covenants and agrees that Consultant will promptly deliver to the Company all documents, records, files, notebooks, manuals, letters, notes, reports, customer and supplier lists, cost and profit data, e-mail, and any other material of Company, including all materials pertaining to Confidential Information, whether developed by Consultant or others, and all copies of such materials, whether of a technical, business or fiscal nature and whether on hard copy, tape, disk or any other format, which are in Consultant’s possession, custody or control.

 

7. Independent Contractor. Nothing contained in this agreement shall be deemed, or construed to create an employer/employee relationship between Consultant and the Company. Consultant acknowledges that her relationship with the Company is that of an independent contractor. Consultant shall, in no way, act as the legal representative or agent of the Company, and shall have no authority or right to enter into any contract or agreement or otherwise to create or assume any obligation of any kind on behalf of the Company, without the written consent of the Company. Consultant shall not make any representation, warranty or guaranty on behalf of the Company in the performance of her services. As an independent contractor, Consultant agrees to comply with all applicable tax reporting and/or payment obligations arising from any payments made to Consultant or on Consultant’s behalf.  The Company will provide Consultant  with Internal Revenue Form 1099 as required.  Consultant shall be responsible for the payment of all income taxes, workers compensation premiums and payroll taxes, as well as any other taxes, impounds or impositions that my be applicable to the compensation that Consultant receives pursuant to Section 3 hereof. Except for the payments provided for in Section 3 above, and except as may be specifically set forth herein to the contrary, the Company shall not make any other payments on behalf of Consultant in consideration of the services to be rendered by Consultant.

 

8. Non-Competition; Non-Solicitation of Consultants; Non-Interference with Business Relationships

 

a.           During the Term, the Consultant shall not render any services to or engage in any activity on behalf of any Competitive Enterprise, directly or indirectly, for herself or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an Consultant, agent, officer, director, shareholder, partner, joint venturer, investor or otherwise. A “Competitive Enterprise” shall mean any entity, person, partnership, corporation or otherwise which engages as its principal business in network security, intellectual property rights or patent litigation or licensing.

 

  

3

  

 

b.           During the Term, and for a period of twelve (12) months thereafter, Consultant will not, directly or indirectly, either for herself or any other person or entity, (1) induce or attempt to induce any employee of Company to leave the employ of Company, (2) in any way interfere with the relationship between Company and any employee of Company, or (3) induce or attempt to induce any customer, client, supplier or licensee of Company to cease doing business with Company, or in any way interfere with the relationship between Company and any customer, client, supplier or licensee of Company.

 

9. Non-Disparagement.

 

Consultant agrees that she will not, at any time after the date hereof, disparage Company (including any of its shareholders or affiliates or its or their respective directors, officers, employees, or agents) or the business of Company.

 

10. Remedies.

 

Any breach or threatened breach of paragraphs 6 or 8 of this Agreement will irreparably injure Company, and money damages will not be an adequate remedy.  Therefore, Company may obtain and enforce an injunction, to the extent allowed by applicable law, prohibiting Consultant from violating or threatening to violate these provisions.  This is not Company’s only remedy, it is in addition to any other remedy available and is without prejudice to Company’s right to seek additional remedies, where applicable.

 

11. Miscellaneous.

 

a. Arbitration.  Any dispute or controversy arising under or in connection with this Agreement that cannot be mutually resolved by the parties hereto shall be settled exclusively by arbitration in New York, New York conducted in accordance with the rules of the American Arbitration Association.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  The costs and expenses of the arbitrator shall be shared equally between the Company and the Consultant.

 

b. Transfer And Assignment.  This Agreement is personal as to the Consultant and shall not be assigned or transferred by Consultant.  This Agreement may be assigned by the Company to any entity which is a successor in interest or operator of the Company’s business.

 

c. Severability.  Nothing contained herein shall be construed to require the commission of any act contrary to law.  Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.

 

  

4

  

 

d. Governing Law.  This Agreement is made under and shall be construed pursuant to the laws of the State of New York, without reference to its choice of law rules.

 

e. Counterparts.  This Agreement may be executed in counterparts and all documents so executed shall constitute one agreement, binding on all the parties hereto.

 

f. Entire Agreement.  This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, arrangements, or understandings with respect thereto.  No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein and no party shall be bound or be liable for any alleged representation, promise, inducement, or statement not so set forth herein.

 

g. Modification.  This Agreement may be modified, amended, superseded or cancelled, and any of the terms, covenants, representations, warranties and conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, cancellation, or waiver.

 

h. Waiver.  Neither this Agreement nor any term or condition hereof or right hereunder may be waived or shall be deemed to have been waived or modified in whole or in part by any party or by the forbearance of any party to exercise any of its rights hereunder, except by written instrument executed by or on behalf of that party.  The waiver by either party of a breach by the other party of any of the provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

 

i. Headings.  The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.

 

j. Notices.  Any notices required under this Agreement or during the Term shall be sent to Consultant at the last address on file and to Company at the address set forth below:

 

  

5

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

	 	
FINJAN, INC.

By: /s/ Daniel Chinn                                       

            March 31, 2013                                   

Date

PHILIP HARTSTEIN

        /s/ Philip Hartstein                                  

(Signature)

         March 29, 2013                                       

Date

 

  

6

  

 

EXHIBIT A

OPTIONS

Number of options: Such number of options as shall represent, on the date of grant, 1.75% of the issued share capital of the Company or its parent company, as the case may be

Exercise Price: To be determined on the date of grant.

Vesting: 25% of the options shall vest on March 31, 2014 and thereafter 6.25% of the options shall vest every three calendar months thereafter. Vesting shall cease upon termination of this Agreement for whatever reason.

All other terms and conditions shall be set out in the Stock Option Plan applicable to these options.

Unvested options shall accelerate upon the occurrence of both (a) a change of control in the Parent and (b) termination by the Company of this Agreement within one (1) year of such change of control, all as shall be more fully set out in the Company’s Stock Option Plan.

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}]]