dispositions not involving a change in beneficial ownership and (7) if Securityholder is a trust, transfers or dispositions to any beneficiary of Securityholder or the estate of any such beneficiary; provided that in the case of any transfer or distribution pursuant to clauses (1)-(7), (x) each transferee, donee or distributee shall execute and deliver to Salarius (or, from and after the Effective Time, Flex) a lock-up letter in substantially the form of this Lock-Up Agreement, (y) such transfer or distribution shall not involve a disposition of value and (z) no filing by any party (donor, donee, transferor or transferee) under the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than (A) a filing at any time on a Form 5 or (B) a filing after the expiration of the Lock-Up Period on a Schedule 13D or Schedule 13G (or Schedule 13D/A or Schedule 13G/A). For purposes of this Lock-Up Agreement, immediate family shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.
2. Furthermore, notwithstanding the restrictions imposed by this Lock-Up Agreement, Securityholder may, without the prior written consent of Salarius (or, from and after the Effective Time, Flex), (a) exercise an option (including a net or cashless exercise of an option to the extent permitted pursuant to the terms thereof) to purchase shares of Flex Common Stock, and transfer shares of Flex Common Stock to Flex to cover tax withholding obligations of Securityholder in connection with any such option exercise, provided that the underlying shares of Flex Common Stock shall continue to be subject to the restrictions on transfer set forth in this Lock-Up Agreement, (b) establish a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Flex Common Stock, provided that such plan does not provide for any transfers of Flex Common Stock during the Lock-Up Period, (c) transfer or dispose of shares of Flex Common Stock acquired on the open market following the Closing Date, (d) transfer Locked-Up Securities to Salarius or Flex, as applicable, pursuant to arrangements under which Salarius or Flex, as applicable, has the option to repurchase such Locked-Up Securities or a right of first refusal with respect to transfers of such Locked-Up Securities, (e) convert the Series A units of Salarius into common units prior to or in connection with the consummation of the Merger, provided that any such common units received upon such conversion shall be subject to the terms of this Lock-Up Agreement and (f) sell, exchange or dispose of Salarius Securities in the Merger; provided that, with respect to each of clauses (a)-(b), no filing under the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with such transfer or disposition during the Lock-Up Period (other than in respect of a required filing under the Exchange Act in connection with the exercise of an option to purchase Flex Common Stock following such individuals termination of employment with Salarius or Flex (or termination of such individuals service as a member of the board of directors or board of managers of Salarius or Flex) that would otherwise expire during the Lock-Up Period, provided that reasonable notice shall be provided to Salarius and Flex prior to any such filing, and provided, further, that, for the avoidance of doubt, the underlying shares of Flex Common Stock shall continue to be subject to the restrictions on transfer set forth in this Lock-Up Agreement).
3. As used in this Lock-Up Agreement, the term Lock-Up Period shall mean from and after the date hereof until the earlier to occur of (a) 90 days after the closing of the Merger or (b) such date and time as the Merger Agreement shall be terminated pursuant to Article 9 thereof or otherwise. Upon termination or expiration of the Lock-Up Period, this Lock-Up Agreement shall terminate and be of no further force or effect and no party shall have any further obligations or liabilities hereunder; provided, however, such termination or expiration shall not relieve any party from liability for any willful breach of this Lock-Up Agreement or acts of bad faith prior to termination hereof. As used in this Lock-Up Agreement, the term Encumbrance means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right or similar restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).
Securityholder also agrees and consents to the entry of stop transfer instructions with Salarius or Flexs transfer agent and registrar against the transfer of the Locked-Up Securities, except in compliance with this Lock-Up Agreement. In furtherance of the foregoing, Flex, Salarius and their respective transfer agents are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Agreement. An attempted transfer in violation of this Lock-Up Agreement will be of no effect and null and void, regardless of whether the purported transferee has any actual or constructive knowledge of the transfer restrictions set forth in this Lock-Up Agreement, and will not be recorded on the stock transfer books of Salarius or Flex.
Securityholder understands that Salarius will proceed with the Merger in reliance on this Lock-Up Agreement. Moreover, Securityholder understands and agrees that Salarius is relying upon the accuracy, completeness, and truth of Securityholders representations, warranties, agreements, and certifications contained in this Lock-Up Agreement.