CHINA XD PLASTICS COMPANY LIMITED November 27, 2009
Exhibit 10.3
CHINA
XD PLASTICS COMPANY LIMITED
November
27, 2009
China XD
Plastics Company Limited
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Telephone: (▇▇▇)
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Re: China XD Plastics
Company Limited - Lock-Up
Agreement
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Dear
Sirs:
This Lock-Up Agreement is being
delivered to you in connection with the Securities Purchase Agreement (the
"Purchase Agreement"),
dated as of November 27, 2009 by and among China XD Plastics Company Limited
(the "Company") and the
investors party thereto (the "Buyers"), with respect to the
issuance of (i) Series C Convertible Preferred Shares (the "Preferred Shares") convertible
into the Company's common stock, $0.0001 par value per share (the "Common Stock") and (ii) two
(2) series of warrants which will be exercisable to purchase shares of Common
Stock. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Purchase
Agreement.
In order to induce the Buyers to enter
into the Purchase Agreement, the undersigned agrees that, commencing on the date
hereof and ending on the one year anniversary of the Closing Date (the "Lock-Up Period"), the
undersigned will not (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase, make any short sale or
otherwise dispose of or agree to dispose of, directly or indirectly, any shares
of Common Stock, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities and Exchange Act of 1934, as amended and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder with respect to
any shares of Common Stock owned directly by the undersigned (including holding
as a custodian) or with respect to which the undersigned has beneficial
ownership within the rules and regulations of the Securities and Exchange
Commission, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any shares of Common Stock, owned directly by the undersigned (including holding
as a custodian) or with respect to which the undersigned has beneficial
ownership within the rules and regulations of the Securities and Exchange
Commission, whether any such transaction is to be settled by delivery of such
securities, in cash or otherwise, (collectively, the "Undersigned’s
Shares").
In addition, during each of (i) the
First Pricing Period and (ii) the Second Pricing Period (each, as defined in the
Purchase Agreement), the undersigned shall not, and shall cause each of its
affiliates and each of their respective agents, not to, directly or indirectly,
purchase any shares of Common Stock.
The foregoing restriction is expressly
agreed to preclude the undersigned or any affiliate of the undersigned from
engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Undersigned’s Shares even if the Undersigned’s Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or
other transactions would include, without limitation, any short sale or any
purchase, sale or grant of any right (including, without limitation, any put or
call option) with respect to any of the Undersigned’s Shares or with respect to
any security that includes, relates to, or derives any significant part of its
value from the Undersigned’s Shares.
Notwithstanding the foregoing, the
undersigned may transfer the Undersigned’s Shares (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein or (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value. For purposes of this Lock-Up Agreement,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. The undersigned now has, and,
except as contemplated by clauses (i) and (ii) above, for the duration of this
Lock-Up Agreement will have, good and marketable title to the Undersigned’s
Shares, free and clear of all liens, encumbrances, and claims
whatsoever. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company’s transfer agent and registrar
against the transfer of the Undersigned’s Shares except in compliance with the
foregoing restrictions.
The undersigned understands and agrees
that this Lock-Up Agreement is irrevocable and shall be binding upon the
undersigned’s heirs, legal representatives, successors, and
assigns.
This Lock-Up Agreement may be executed
in two counterparts, each of which shall be deemed an original but both of which
shall be considered one and the same instrument.
This Lock-Up Agreement will be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflicting provision or rule (whether of
the State of New York, or any other jurisdiction) that would cause the laws of
any jurisdiction other than the State of New York to be applied. In
furtherance of the foregoing, the internal laws of the State of New York will
control the interpretation and construction of this Lock-Up Agreement, even if
under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
Each of the Company and the undersigned
hereby appoints Loeb & Loeb LLP with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent for service of process in New York.
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Very
truly yours,
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______________________________
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Exact
Name of Stockholder
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______________________________
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Authorized
Signature
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______________________________
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Title
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Agreed to
and Acknowledged:
CHINA
XD PLASTICS COMPANY LIMITED
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By: _______________________
Name:
Title: