EXHIBIT 10.19
CONFIDENTIAL LOCK-UP AGREEMENT
December 31, 2004
BPI Industries, Inc.
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0 Xxxxxx
Attention: Board of Directors
Gentlemen:
I understand that BPI Industries Inc., a British Columbia corporation (the
"Company"), will be conducting a private placement of common shares and warrants
to purchase common shares intended to raise gross proceeds of at least
$10,000,000 and that in order to complete the private placement, the Company's
placement agent has requested that certain holders of common shares of the
Company agree not to sell, transfer, or otherwise dispose of their shares for a
certain period of time, as more fully described below. I acknowledge that
completion of the private placement will be of material benefit to the Company
and to me as a beneficial owner of the Company's common shares.
In order to facilitate the private placement described above, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, I hereby agree with the Company as set forth below with
respect to 2,794,812 common shares (the "Shares") of the Company of which I am
the sole record and beneficial owner.
Commencing upon the closing (the "Closing") of the private placement and
terminating on the earlier of (i) one (1) year from the Closing and (ii) the
effective date of a registration statement filed with the Securities and
Exchange Commission to permit the public resale of the common shares (and the
shares underlying the warrants) issued in the private placement, I will not,
without the prior written approval of the Company, directly or indirectly (A)
offer for sale, sell, or contract to sell, sell, offer to sell, or contract to
sell any option, warrant, right, or contract to purchase, purchase, offer to
purchase, or contract to purchase any option, warrant, right, or contract to
sell, grant any option, right or warrant to purchase, lend, pledge, hypothecate
or otherwise transfer or dispose of, directly or indirectly, any of the Shares
or (B) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any of the
Shares, whether any of the transactions described in clause (A) or (B) above is
to be settled by delivery of Shares, in cash or otherwise (any such transaction,
whether or not for consideration, shall be hereinafter referred to as a
"Transaction"). None of the forgoing shall be construed to restrict me from
purchasing shares in the open market, receiving options or exercising options. I
understand that your prior approval may require the concurrence of the Company's
placement agent and the investors in the private placement.
Provided, that if the registration statement becomes ineffective for any
reason during the initial one year period (the period during which the
registration statement is ineffective being referred to herein as a "Blackout
Period"), then the lock up will be reinstated and expire when the Blackout
Period ends.
A Blackout Period means a period
(a) commencing on the day immediately after the Company notifies me that
the Company is required to suspend offers and sales of the securities covered by
the registration statement, because the Company's Board of Directors, on advice
of counsel, determines (because of the existence of, or in anticipation of, any
acquisition, financing activity, or other transaction involving the Company, or
the unavailability for reasons beyond the Company's control of any required
financial statements, disclosure of information which is in its best interest
not to publicly disclose, or any other event or condition of similar
significance to the Company) that the registration and distribution of the
covered securities would be seriously detrimental to the Company and its
shareholders; and
(b) ending when the Company has completed taking all steps to make such
registration statement effective again, or has determined to allow offers and
sales under the registration statement to resume.
I understand that the Company will take such steps as may be necessary to
enforce the foregoing provisions and restrict the sale or transfer of the Shares
as provided herein including, but not limited to, notifying its transfer agent
to place stop transfer instructions reflecting the foregoing restrictions on the
Company's stock transfer records, and I hereby agree to and authorize any such
actions and acknowledge that the Company is relying upon this Lock-Up Agreement
in taking any such actions.
I understand that certain of the information contained herein may be
regarded as material non-public information under Regulation FD under the
Securities Exchange Act of 1934, as amended, the improper use of which would
violate applicable United States securities laws. Accordingly, I will not
publish, disclose or disseminate the existence or contents of this Lock-Up
Agreement to any person, and will maintain the confidentiality of the existence
and contents of this Lock-Up Agreement. I further understand that United States
securities laws provide for severe civil and criminal penalties for those
persons trading securities while in possession of material non-public
information.
This Lock-Up Agreement shall become effective upon the Closing.
Accordingly, in the event that the Closing does not occur, this Lock-Up
Agreement shall be null and void. The terms and conditions of this Lock-Up
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
Each of the undersigned represents that its signatory hereto has the full
power and authority to execute and deliver this Lock-Up Agreement on its behalf.
This Lock-Up Agreement may be executed in counterpart each of which shall
be deemed to be an original and both of which together shall constitute one and
the same instrument and delivered via facsimile.
Intending to be legally bound hereby, the undersigned have executed this
Lock-Up Agreement on and as of the date set forth above.
AGREED AND ACCEPTED Very truly yours,
BPI INDUSTRIES INC. _____________________________
Signature
By:_______________________________ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President 000 Xxxxx Xxxx
Xxxxxxx Xxxxx, Xxxx 00000
