Exhibit 4.1
Execution Copy
▇▇▇▇▇ LOCK-UP AGREEMENT
-----------------------
July 15, 2005
▇▇▇▇▇▇ Capital Corp.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement (the "Purchase
Agreement") dated as of July 15, 2005 by and among ▇▇▇▇▇▇ Capital Corp.
("▇▇▇▇▇▇") and ▇▇▇▇▇▇ Products IP Holdings Corp., as Buyers (collectively,
"Buyers"), and Indian River Labs, L.L.C., Pharlo Citrus Technologies, Inc.,
Pharlo Citrus Properties Partnership, LLLP and Coast to Coast Laboratories, LLC,
as Sellers (collectively, "Sellers"), pursuant to which, among other things, (i)
Sellers are selling to Buyers, and Buyers are purchasing from Sellers, certain
assets of Sellers in consideration of, among other things, shares of ▇▇▇▇▇▇'▇
common stock, par value $0.001 per share ("Common Shares"), and (ii) on or
following the date of the Purchase Agreement (the "Effective Date"), certain
Common Shares will be distributed by Sellers to the undersigned (such Common
Shares distributed to the undersigned, the "Undersigned's Common Shares").
In connection therewith, the undersigned hereby agrees that, except as
otherwise provided herein or with the prior written consent of ▇▇▇▇▇▇, he will
not, during the period commencing on the date hereof and ending on the second
anniversary of the Effective Date, sell, transfer or otherwise dispose of,
directly or indirectly, any of the Undersigned's Common Shares (a
"Disposition"). Notwithstanding the foregoing, the undersigned may engage in the
following:
1. From and after the date the Shelf Registration Statement (as defined in
the Purchase Agreement) is declared effective by the Commission (as defined in
the Purchase Agreement), the Disposition of 25% of the aggregate number of the
Undersigned's Common Shares;
2. From and after the time (a) aggregate gross sales of ▇▇▇▇▇▇ and its
subsidiaries from and after the Effective Date total Fifty Million dollars
($50,000,000) or (b) the Closing Price (as defined below) of the Common
Shares is less than $2.50 per share on any trading day, the Disposition of
an additional 25% of the aggregate number of the Undersigned's Common
Shares;
3. From and after the time (a) aggregate gross sales of ▇▇▇▇▇▇ and its
subsidiaries from and after the Effective Date total One Hundred Million
dollars ($100,000,000) or (b) the Closing Price of the Common Shares is
less than $2.00 per share on any trading day, the Disposition of an
additional 25% of the aggregate number of the Undersigned's Common Shares;
4. From and after the time aggregate gross sales of ▇▇▇▇▇▇ and its
subsidiaries from and after the Effective Date total One Hundred Fifty
Million dollars ($150,000,000), the Disposition of an additional 25% of
the aggregate number of the Undersigned's Common Shares; and
5. From and after (a) the two year anniversary of the Effective Date or (b)
the time the Closing Price of the Common Shares is less than $1.50 per
share on any trading day, the Disposition of all of the Undersigned's
Common Shares.
Notwithstanding the foregoing, the Disposition of all of the Undersigned's
Common Shares will be permitted from and after (i) a Change in Control (as
defined below) of ▇▇▇▇▇▇ or (ii) a change in, or the resignation, removal, death
or disability of, any of the following officers of ▇▇▇▇▇▇, for any reason
whatsoever: ▇▇▇▇▇▇'▇ chief executive officer, president or chief operating
officer.
For purposes of this lock-up agreement, the following defined terms shall
have the following meanings:
"Change in Control" shall mean:
(a) the consummation of a merger or consolidation of ▇▇▇▇▇▇ with or into
another entity or any other corporate reorganization involving ▇▇▇▇▇▇, if all or
substantially all of the individuals and entities who were the beneficial owners
of the outstanding Common Shares immediately prior to such merger, consolidation
or other reorganization do not beneficially own, directly or indirectly, more
than 50% of the combined voting power of the continuing or surviving entity's
securities outstanding immediately after such merger, consolidation or other
reorganization in substantially the same proportions as their ownership,
immediately prior to such merger, consolidation or other reorganization, of the
outstanding Common Shares;
(b) the sale, transfer or other disposition of all or substantially all of
▇▇▇▇▇▇'▇ assets;
(c) a change in the composition of the Board of Directors of ▇▇▇▇▇▇ (the
"Board") , as a result of which fewer than two-thirds of the incumbent directors
are directors who either (i) had been directors of ▇▇▇▇▇▇ on the date 24 months
prior to the date of the event that may constitute a Change in Control (the
"original directors") or (ii) were elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the aggregate of the
original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved or (iii) satisfy any combination of (i) and (ii); or
(d) any transaction as a result of which any person is the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of securities of ▇▇▇▇▇▇
representing at least 50% of the total voting power represented by ▇▇▇▇▇▇'▇ then
outstanding voting securities. For purposes of this clause (d), the term
"person" shall have the same meaning as when used in Sections 13(d) and 14(d) of
the Exchange Act but shall exclude (i) a trustee or other fiduciary holding
securities under an employee benefit plan of ▇▇▇▇▇▇ or of a parent or subsidiary
of ▇▇▇▇▇▇ and (ii) a corporation owned directly or indirectly by the
stockholders of ▇▇▇▇▇▇ in substantially the same proportions as their ownership
of the Common Shares of ▇▇▇▇▇▇.
2
A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of ▇▇▇▇▇▇'▇ incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
▇▇▇▇▇▇'▇ securities immediately before such transaction.
"Closing Price" shall mean, on any trading day, the closing price per
share of the Common Shares trading on a "regular way" basis as reported on any
recognized over-the-counter quotation system.
The provisions of this agreement shall not apply (i) to any transfer of
the Undersigned's Common Shares by the laws of descent and distribution
following the undersigned's death, (ii) in the event that the Shelf Registration
Statement has not been declared effective by the Commission on or before the
Initial Registration Deadline (as defined in the Purchase Agreement) or (iii) to
any transactions relating to Common Shares acquired by the undersigned in open
market transactions after the Effective Date.
The undersigned acknowledges that the Undersigned's Common Shares will
contain (i) the legend described in Section 4.22(a) of the Purchase Agreement
until the Shelf Registration Statement has been declared effective by the
Commission and (ii) the legend described in Section 4.22(b) of the Purchase
Agreement until such Undersigned's Common Shares are no longer subject to
restrictions contained in this agreement.
Very truly yours,
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
3