EXHIBIT 10.26
PROMOTIONAL SHARES LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement ("Agreement"), which was entered
into on the 15th day of October, 2001, by and between BioQuest
International, Inc. ("Issuer"), whose principal place of business is
located at 00000 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx 00000, and
Xxxxx Xxxxx and Xxxxx Xxxxxxx, its Board of Directors relating to shares
owned by its principals; and Xxxxx X. Xxxxx, Xxxxx Xxxxxx, Xx. Xxxxx
Xxxxxxxx and Xxxxxx Xxxxxx ("Securities Holders"), witness that:
A. The Issuer and its Board of Directors has filed an application with
the Securities Administrators of a number of States ("Administrators")
to register certain of its Equity Securities for sale to public
investors who are residents of those states ("Registration");
B. The Security Holders are the owner of the shares of common stock or similar
securities and/possesses convertible securities, warrants, options or
rights which may be converted into or exercises to purchase shares of
common stock or similar securities of Issuer aggregating 4,000,000 as to
Xx. Xxxxx, 4,000,000 as to Xx. Xxxxxx, 250,000 as to Xx. Xxxxxxxx and
250,000 as to Ms. Shoong (the "Promotional Shares"); and
C. As a condition to Registration, the Issuer and its Board of Directors agree
to bind the Securities Holders by the terms of this Agreement.
II. Therefore, the Security Holders may not sell, pledge, hypothecate, assign,
grant any option for the sale of, or otherwise transfer or dispose of,
whether or not for consideration, directly or indirectly, PROMOTIONAL
SHARES as defined in the North American Securities Administrators
Association ("NASAA") Statement of Policy on Corporation Securities
Definition and all certificates representing stock dividends, stock splits,
recapitalizations and the like, that are granted to, or received by, the
respective Securities Holders while the PROMOTIONAL SHARES are subject to
this Agreement ("Restricted Securities").
Beginning two years from the completion date of the public offering, two
and one-half percent (2 1/2 %) of the Restricted Securities may be released
each quarter pro rata among the Securities Holders. All remaining
Restricted Securities shall be released from escrow on the anniversary of
the fourth year from the date of its IPO prospectus.
III. THEREFORE, the Issuer agrees and will cause the following:
A. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the issuers assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person is not a Promoter, which results in the
distribution of the Issuer's assets or securities ("Distribution"),
while this Agreement remains in effect that:
1. All holders of the Issuer's EQUITY SECURITIES will initially
share on a pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other considerations that
they paid per share for their EQUITY SECURITIES (provided that
the Administrator has accepted the value of the other
considerations), until the shareholders who purchased the
Issuer's EQUITY SECURITIES pursuant to the public ("Public
Shareholder") have received or have had irremovably set aside for
the, an amount that is equal to one hundred percent (100%) of the
public offering's price per share pursuant to the public offering
and which they still hold at the item of the Distribution,
10.26-1
adjusted for stock splits, stock dividends recapitalizations and
the like; and
2. All holders of the Issuer's EQUITY SECURITIES shall thereafter
participate on an equal, per share basis times the number of
shares of the EQUITY SECURITIES they hold at the time all the
Distribution, adjusted for stock splits, stock dividends,
recapitalizations and the like.
3. The Distribution may proceed on lesser terms and conditions than
the terms and conditions stated in paragraphs 1 and 2 above if a
majority of the EQUITY SECURITIES that are not held by Securities
Holders, officers, directors or Promoters of the Issuer or their
associates or affiliates vote, or consent by consent procedure,
to approve the lesser terms and conditions
B. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer) or any other transaction or
proceeding with a person who is a Promoter, which results in the
Distribution while this Agreement remains in effect, the Restricted
Securities shall remain subject to the terms of this Agreement.
C. Restricted Securities may be transferred by will, the laws of descent
and distribution, the operation of law or by order of any court of
competent jurisdiction.
D. Restricted Securities of a deceased Securities Holder may be
hypothecated to pay expenses of the deceased Securities Holder's
estate. The hypothecated Restricted Securities shall remain subject to
the terms of this Agreement. Restricted Securities may not be pledged
to secure any other debt.
E. Restricted Securities may be transferred by gift to the Security
Holder's family members, provided that the Restricted Securities shall
remain subject to the terms of this Agreement.
F. With the exceptions of paragraph A.3 above, the Restricted Securities
shall have the same voting rights as similar EQUITY SECURITIES not
subject to the Agreement.
G. A notice shall be placed on the reverse side of each stock certificate
of the Restricted Securities covered by the terms of this Agreement
stating that the transfer of the stock evidenced by the certificate is
restricted in accordance with the conditions set forth on the reverse
of the certificate; and
H. A typed legend shall be placed on the reverse side of each stock
certificate of the Restricted Securities representing stock covered by
this Agreement which states that the sale or transfer of the share
evidenced by the certificate is subject to certain restrictions until
_________________[insert date of termination of the Agreement]
pursuant to an agreement between the Security Holder (whether
beneficial or of record) and the Issuer, which agreement is on file
with the Issuer and the stock transfer agent, a copy of it is
available upon request without charge.
I. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrators ("Effective
Date") and shall terminate:
1. On the anniversary of the fourth year from the date of its IPO
prospectus; and/or
2. On the date the Registration has been terminated if no securities
were sold pursuant thereto; and/or
10.26-2
3. If the Registration has been terminated if no securities were
sold pursuant thereto; and/or
4. On the date the securities subject to this Agreement become
"Covered Securities" as defined under the National Securities
Markets Improvement Act of 1996.
J. This Agreement to be modified only with the written approval of the
Administrators.
III. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of this Agreement to be filed with the
Administrators prior to the Effective Date;
B. Copies of this Agreement and a statement of the per share initial
public offering price to be provided to the Issuer's stock transfer
agent;
C. Appropriate stock transfer orders to be placed with the Issuer's stock
transfer agent against the sale or transfer of shares covered by the
Agreement prior to its expiration, except as may otherwise be provided
in this Agreement; and
D. The above stock restriction legends to be placed on the periodic
statement(s) sent to the registered owner if the securities subject to
this Agreement are uncertificated securities.
Pursuant to the requirements of this Agreement, the Members of the Board of
Directors have entered into this Agreement, which may be written in multiple
counterparts and each of which shall be considered an original.
IN WITNESS WHEREOF, Board of Directors have executed this Agreement.
BIOQUEST INTERNATIONAL, INC.
By:
--------------------------------------------
Xxxxx X. Xxxxx
Chairman, President and CEO
By:
--------------------------------------------
Xxxxx Xxxxxx
Director, Executive Vice President and Treasurer
10.26-3
