EXHIBIT 10.25
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OPTION AND LOCK-UP AGREEMENT
THIS OPTION AND LOCK-UP AGREEMENT (the "Agreement") is entered into
effective as of June 9, 2003, by and between MCL Trust (the "Shareholder"), a
shareholder of AspenBio, Inc., a Colorado corporation (the "Company"), and the
Company;
WHEREAS, Shareholder beneficially owns (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) 1,085,060 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 the grant of an option to purchase substantially all
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 Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:
1. Option to Purchase the Shares.
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The Shareholder grants to the Company the option ( the "Option") to
purchase from the Shareholder at any time commencing on the date hereof and
continuing through September 30, 2003 ( the "Termination Date") up to 500,000
shares of Common Stock owned by Shareholder (the "Shares") at a purchase price
of $0.20 per Share. The Company may exercise the Option at any time, and from
time to time, prior to the Termination Date, upon notice to the Shareholder.
Payment shall be made by check or wire transfer to the Shareholder upon transfer
of the Shares.
2. 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 any of
the Shares, for a period commencing on the date hereof and continuing
through the Termination Date, except as expressly provided herein.
(b) The Shareholder also agrees not to Transfer any rights with
respect to 526,554 shares of the Common Stock currently owned directly by
the Shareholder 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.
(c) 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 Agreement.
(d) The restrictions contained in this 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. 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 Agreement.
Any purported transfer of any Common Stock of Shareholder that is not in
accordance with this 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 Agreement and has
been made in accordance with its terms.
(e) 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 subsequent to the Termination Date, 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 Agreement
for so long as the price of the Common Stock remains equal to, or exceeds
such Gateway Price. It is understood by Shareholder that no Shares shall be
released pursuant to this Section 2(e) that are subject to the Option prior
to the Termination Date. 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.
(f) In the event that Xxxxxxxxx Xxxxxxxx is involuntarily terminated
from the Company for any reason, the lock-up period and this agreement is
null and void. The remaining stock is free to trade on the market without
restriction.
3. Representations, Warranties and Covenants of the Shareholder.
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Shareholder represents and warrants to, and agrees with, the Company that:
(a) this Agreement has been duly executed and delivered by Shareholder
and constitutes a valid and binding obligation of Shareholder enforceable
in accordance with its terms;
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(b) neither the execution and delivery of this 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 Agreement by
Shareholder and the consummation of the transactions contemplated hereby;
and
(d) Shareholder is now, and will be at all times up to the Termination
Date, the record and beneficial owner of the Shares 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 Agreement.
4. 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 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 her
obligations in this 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 Agreement shall
be in writing and shall be given and shall be deemed to have been given w
hen 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:
MCL Trust
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Fax: ________________
If to the Company:
AspenBio, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
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(c) Assignment. This 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
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.
(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 Agreement
and the performance of the obligations imposed by this Agreement.
(e) Counterparts. This 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 Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this 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 Agreement.
(g) Amendment Waiver. This 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 Agreement will be deemed effective to modify or
amend any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
(h) Review by Shareholder. The Shareholder has had the opportunity to
review this 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 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.
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IN WITNESS WHEREOF, the parties hereby have executed this Agreement as of
the date first written above.
ASPENBIO, INC.
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx X. Xxxxx Xxxxx Xxxxxxxx, Title
Title: President
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, Title
]
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