LOCK-UP AGREEMENT
This Lock-Up Agreement (this
“Agreement”), dated as of July 9, 2009, by and between Suspect Detection Systems
Inc., a Delaware corporation (the “Company”), and NG-The Northern Group LP (the
"Investor").
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt of
which consideration are hereby acknowledged, the Investor agrees as
follows:
1. Background. As a
condition to the exchange by the Investor of all its shares of ordinary stock in
Suspect Detection Systems, Ltd. for 3,199,891 shares of common stock of the
Company (the “Shares”), the Investor hereby agrees that the shares of the Common
Stock of the Company (“Common Stock”) received by the Investor shall be subject
to the terms and conditions of this Agreement.
2. Share
Restriction.
a. Investor
hereby agrees that during the period commencing on the date hereof and
continuing until the one (1) year anniversary of the date hereof (the
“Restriction Period”), Investor will not, directly or indirectly, offer, sell,
assign, gift, transfer, grant a participation in, pledge, or otherwise dispose
or encumber or agree to dispose or encumber in any manner any share of Common
Stock. Any attempt by Investor to transfer or encumber any of its
Common Stock in violation of the terms of this Agreement shall be void and
ineffective. Investor further agrees that the Company is authorized
to and the Company agrees to place "stop orders" on its books to prevent any
transfer of shares of Common Stock or other securities of the Company held by
Investor in violation of this Agreement.
b. Any
subsequent issuance to and/or acquisition of shares or the right to acquire
shares by Investor during the Restriction Period will be subject to the
provisions of this Agreement.
c. Notwithstanding
the foregoing restrictions on transfer, the Investor may, at any time and from
time to time during the Restriction Period, transfer the Common Stock (i) as
bona fide gifts or transfers by will or intestacy, (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
Investor, provided that any such transfer shall not involve a disposition for
value, (iii) to a partnership which is the general partner of a partnership of
which the Investor is a general partner, provided, that, in the case
of any gift or transfer described in clauses (i), (ii) or (iii), each donee or
transferee agrees in writing to be bound by the terms and conditions contained
herein in the same manner as such terms and conditions apply to the undersigned.
For purposes hereof, "immediate family" means any relationship by blood,
marriage or adoption, not more remote than first cousin. As a condition to any
transferee receiving the Common Stock pursuant to this section, such transferee
shall execute this Agreement so that the transferee is expressly bound by the
terms and conditions hereof.
3. Miscellaneous.
a. At
any time, and from time to time, after the signing of this Agreement Investor
will execute such additional instruments and take such action as may be
reasonably requested by the Company to carry out the intent and purposes of this
Agreement.
b. This
Agreement shall be governed, construed and enforced in accordance with the laws
of the State of New York without regard to conflicts of laws principles that
would result in the application of the substantive laws of another jurisdiction,
except to the extent that the securities laws of the state in which Investor
resides and federal securities laws may apply. Any proceeding brought
to enforce this Agreement may be brought exclusively in courts sitting in New
York County, New York.
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c. This
Agreement contains the entire agreement of the Investor with respect to the
subject matter hereof.
d. This
Agreement shall be binding upon Investor, its legal representatives, heirs,
successors and assigns.
e. This
Agreement may be signed and delivered by facsimile and such facsimile signed and
delivered shall be enforceable.
f. The
Company and Investor agree not to take any action or allow any act to be taken
which would be inconsistent with this Agreement nor to amend or terminate this
Agreement.
g. The
current officers and directors of the Company are third party beneficiaries of
this Agreement, with right of enforcement.
IN
WITNESS WHEREOF, and intending to be legally bound hereby, Investor has executed
this Agreement as of the day and year first above written.
SUSPECT
DETECTION SYSTEMS INC.
By: /s/ Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
CFO and Interim CEO
NG – The
Northern Group LP
By: /s/ Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chief Executive Officer
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