EXHIBIT 10.22
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LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (the "Lock-up Agreement") is entered into effective
as of June 9, 2003, by and between Xxxxx X. Xxxxx (the "Shareholder"), a
shareholder of AspenBio, Inc., a Colorado corporation (the ("Company"), and the
Company;
WHEREAS, after giving effect to the Agreement entered this date between the
Company and the Shareholder, Shareholder beneficially owns (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) 1,996,757
shares of common stock, no par value per share of the Company (the "Common
Stock");
WHEREAS, Shareholder understands that the Company needs additional
financing and believes that a lock-up on transfer of the Shareholder's shares
will improve the Company's prospects for obtaining additional financing;
WHEREAS, for valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Shareholder has agreed to enter into this Lock-up
Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:
1. Lock-up on Transfer of Shares
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(a) The Shareholder agrees not, directly or indirectly, to sell, offer
to sell, contract to sell, assign, pledge, hypothecate, encumber or
otherwise transfer, or enter into any contract, option or other arrangement
or understanding with respect to the sale, assignment, pledge or other
disposition of (collectively, "Transfer") any rights with respect to (i)
1,797,081 shares of the Common Stock currently owned by Shareholder and
(ii) any Common Stock owned by Shareholder as a result of additional
issuances by the Company, for a period commencing on the date hereof and
continuing through September 30, 2004 (the "Lock-up Period") except as
expressly provided herein. The foregoing restriction has been expressly
agreed to preclude Shareholder from engaging in any hedging or other
transaction during the Lock-up Period that is designed to or reasonably
expected to lead to or result in a Transfer of the Common Stock. Such
prohibited hedging or other transaction would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale, or
grant of any right (including, without limitation, any put or call option)
with respect to the Common Stock or with respect to any security (other
than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Common Stock.
(b) The Shareholder also agrees and consents to the entry of stop
transfer instructions with the Company's Transfer Agent against the
Transfer of Common Stock held by Shareholder except in compliance with the
terms and conditions of this Lock-up Agreement.
(c) The restrictions contained in this Lock-up Agreement shall apply
to Shareholder with respect to any and all Transfers of any of the
Company's Common Stock with the exception of that Common Stock acquired by
the Shareholder on the open market. Any and all other Transfers are
prohibited by this Agreement.
2. Early Termination of Lock-Up Period.
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(a) In the event any Common Stock of Shareholder is subject to any
involuntary transfer, whether by reason of death, bankruptcy or divorce
proceedings or otherwise, the transferee of such Common Stock shall take
such Common Stock subject to this Lock-up Agreement. Any purported transfer
of any Common Stock of Shareholder that is not in accordance with this
Lock-Up Agreement shall be null and void, and shall not operate to transfer
any right, title or interest in such Common Stock to the purported
transferee. The Shareholder agrees that the Company shall not cause or
permit the transfer of any Common Stock of Shareholder to be made on its
books unless the transfer is permitted by this Lock-up Agreement and has
been made in accordance with its terms.
(b) The restrictions contained in this Lock-up Agreement shall not
apply to any Transfer by Shareholder with respect to transfers of any
Common Stock acquired on the open market.
3. Price Gateways.
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Notwithstanding anything contained herein to the contrary, at such time as
the closing price of the Common Stock (OTCBB:APNB) on the OTC Bulletin Board, or
such other market as the Common Stock is then publicly traded, equals or exceeds
each price target (the "Gateway Price") set forth on Schedule A hereto for a
period of twenty consecutive trading days, the corresponding percentage of
Common Stock (the "Release Percentage") set forth on Schedule A multiplied by
the total number of shares of Common Stock (the "Total Number") subject to this
Agreement shall be released from the restrictions in this Lock-up Agreement for
so long as the price of the Common Stock remains equal to, or exceeds such
Gateway Price. Any sale of Common Stock so released shall require duplicate
confirmation (by Shareholder's broker and the Company) to the effect that it was
consummated at or above the relevant Gateway Price.
4. Representations, Warranties and Covenants of the Shareholder.
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Shareholder represents and warrants to, and agrees with, the Company that:
(a) this Lock-up Agreement has been duly executed and delivered by
Shareholder and constitutes a valid and binding obligation of Shareholder
enforceable in accordance with its terms;
(b) neither the execution and delivery of this Lock-up Agreement nor
the consummation of the transactions contemplated hereby will result in any
breach or violation of, be in conflict with or constitute a default under
any agreement or instrument to which Shareholder is a party or by which
Shareholder may be affected or is bound;
(c) Shareholder is not subject to or obligated under any provisions of
any law, regulation, order, judgment or decree which would be breached or
violated by the execution, delivery and performance of this Lock-up
Agreement by Shareholder and the consummation of the transactions
contemplated hereby; and
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(d) Shareholder is now, and will be at all times up to the termination
of this Lock-up Agreement, the record and beneficial owner of the Common
Stock which at such time is subject to Transfer restrictions pursuant to
the terms hereof, free and clear of any pledge, lien, security interest,
mortgage, charge, claim, equity, option, proxy, voting restriction, right
of first refusal, limitation on disposition, adverse claim of ownership or
use or encumbrance of any kind, other than pursuant to this Lock-up
Agreement.
5. Miscellaneous.
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(a) Specific Performance. Shareholder acknowledges that damages would
be an inadequate remedy for any breach of the provisions of this Lock-up
Agreement and agrees that the obligations of Shareholder hereunder shall be
specifically enforceable and Shareholder shall not take any action to
impede the Company from seeking to enforce such right of specific
performance. Shareholder agrees that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of his
obligations in this Lock-up Agreement and hereby agrees to waive in any
action for specific performance of any such obligation, the defense that a
remedy at law would be adequate.
(b) Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Lock-up Agreement
shall be in writing and shall be given and shall be deemed to have been
given when personally delivered or three days after being mailed, if mailed
by first class mail, return receipt requested, or one day after being sent
by reputable overnight delivery service, or when receipt is acknowledged,
if sent by facsimile, telecopy or other electronic transmission device.
Notices, demand and communications to Shareholder and the Company will,
unless another address is specified in writing, be sent to the address
indicated below, except that notices of change of address shall only be
effective upon receipt:
If to Shareholder:
Xxxxx X. Xxxxx
0000 X. Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
If to the Company:
AspenBio, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
(c) Assignment. This Lock-up Agreement and all the provisions hereof
will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Lock-up Agreement nor any of the rights, interests or obligations hereunder
may be assigned by the Shareholder hereto without the prior written consent
of the Company.
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(d) Governing Law. The internal law, without regard for conflicts of
law principals, of the State of Colorado will govern all questions
concerning the construction, validity and interpretation of this Lock-up
Agreement and the performance of the obligations imposed by this Lock-up
Agreement.
(e) Counterparts. This Lock-up Agreement may be executed in one or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute
one and the same instrument.
(f) Severability. Whenever possible, each provision of this Lock-up
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Lock-up Agreement is
held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such provision or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Lock-up Agreement.
(g) Amendment Waiver. This Lock-up Agreement may not be amended or
waived except, (i) in a writing executed by the party against which such
amendment or waiver is sought to be enforced, and (ii) without the
expressed written consent of the Company. No course of dealing between or
among any persons having any interest in this Lock-up Agreement will be
deemed effective to modify or amend any part of this Lock-up Agreement or
any rights or obligations of any person under or by reason of this Lock-up
Agreement.
(h) Review by Shareholder. The Shareholder has had the opportunity to
review this Lock-up Agreement with legal counsel and other advisors as the
Shareholder deemed advisable, prior to the Shareholder's execution of this
Agreement, and the Shareholder has not relied on any advice of Xxxxxx Xxxxx
LLP.
(i) Complete Agreement. This Lock-up Agreement contains the complete
agreement between the parties hereto and supersedes any prior
understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any
way.
IN WITNESS WHEREOF, the parties hereby have executed this Lock-up Agreement
as of the date first written above.
ASPENBIO, INC.
By: /s/ Xxxxxxx Xxxxx /s/ Xxxxx X. Xxxxx
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Name: Xxxxxxx Xxxxx Xxxxx X. Xxxxx
Title: Chairman of the Board of Directors
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SCHEDULE A
Gateway Price Release Percentage
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$4.00 20%
$5.00 30%
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