VIRTUALSCOPICS, LLC
EXHIBIT
10.2
VIRTUALSCOPICS,
LLC
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Rochester,
New York 14625
September
27, 2005
To:
[Non-Insider Group] Holders of VirtualScopics Securities (Common, Series
C,
Stock Options Holders and Warrant Holders)
Ladies
and Gentlemen:
VirtualScopics,
LLC (“VirtualScopics” or the “Company”)
plans
to become a wholly-owned subsidiary of a publicly-traded company through
an
exchange offer, concurrently with a private offering of a minimum of $3,000,000
of Units, each Unit consisting of one share of Series A Convertible Preferred
Stock and a warrant to purchase 200 shares of Common Stock (the “Funding
Transactions”).
The
Company plans to use the proceeds of this transaction to increase its business
development efforts, further its research and development activities and
expand
its operations to meet the growing demand of its customers. The publicly-traded
company, which is called “Pubco”
for
purposes of this lock-up agreement, will then operate the business of
VirtualScopics under the current management of VirtualScopics. We currently
expect to close these Funding Transactions on or around October 31, 2005.
Pubco
is not identified at this time due to securities regulations regarding “insider”
knowledge of upcoming transactions involving publicly-traded
securities.
You
are a
holder (a “Holder”)
of
(i) outstanding common units of VirtualScopics, (ii) Series
C
preferred units of VirtualScopics convertible into shares of common units,
and/or (iii) warrants or incentive stock options to purchase shares
of
common units of VirtualScopics, which, if we are successful in closing the
Funding Transactions, will be exchanged for Common Stock of Pubco (or, in
the
case of stock options and warrants, options or warrants to purchase Pubco
Common
Stock) (the “Pubco
Shares”)
following the Funding Transactions.
It
is essential to the success of the Funding Transactions that the Company
can
give comfort to potential investors that the “after market” for the Pubco Shares
will not be disrupted by a very substantial block of shares being sold in
a
manner that may cause an adverse effect on then existing Pubco shareholders.
We
will also be obtaining such comfort, substantially in the form provided for
below, from each of our officers, directors and principal
members.
By
signing and returning this agreement in the manner indicated below, the
undersigned, ____________________________________ [Insert
Your Name Here]
hereby
agrees not
to,
directly or indirectly, publicly sell, contract to sell or otherwise transfer
any of the Pubco Shares beneficially owned by you immediately after the closing
of the Funding Transactions (your “Initial Holdings”), except as follows.
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Beginning
at the date twelve (12) months from the Closing Date, and at three
month
intervals thereafter, you shall be permitted to sell 25.0% of your
original number of Lock-Up Shares, irrespective of the price per
share.
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All
permitted sale of Lock-Up Shares that may be made during each time
period
shall be cumulative.
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All
lock up provisions for you will be removed after 24 months after
Closing
Date.
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If
Pubco
engages an underwriter or placement agent during the 12 months after the
closing
date of the Funding Transactions to raise a minimum of $5,000,000 through
the
sale of Pubco’s Common Stock and/or other equity securities, in a public
offering or private placement, upon notice of commencing such public offering
or
private placement, all Holders of Pubco Shares subject to lock-up agreements
will, if required by the underwriter or placement agent, refrain from making
any
sales, transfers or other dispositions in the course of such offering, but,
in
any event, for not more than 90 days.
Pubco
may
waive in writing any provision of the lock-up agreements executed by Holders
if
and only if (i) any such waiver is simultaneously applicable to all other
Pubco
Shares issued to Holders, and (ii) at least five business days' advance written
notice of such waiver is provided to all Holders. In the event that a particular
waiver applies to only a percentage of the Pubco Shares held by each Holder,
then the percentage shall be identical for each such Holder.
By
signing and returning this agreement, you further (i) represent and consent
that
you have full power and authority to enter into this lock-up agreement and
that,
upon request, you will execute any additional documents necessary or desirable
in connection with this lock-up agreement and its enforcement; and (ii)
understand that this lock-up agreement is irrevocable by you, all authority
herein conferred by you or agreed to be conferred by you shall survive your
death or incapacity, and any of your obligations hereunder shall be binding
on
you and your heirs, personal representatives, successors and
assigns.
In
order
to enable the aforesaid covenant to be enforced, you hereby consent to the
placing of a legend and/or stop-transfer order with the transfer agent of
the
Common Stock with respect to any of the Pubco Shares registered in your name
or
beneficially owned by you.
Whether
the Funding Transactions actually occur depends on a number of factors.
Notwithstanding the foregoing, this lock-up agreement will terminate on December
31, 2005, in the event that the Funding Transactions are not completed on
or
before such date.
Accordingly,
to evidence your agreement to the terms hereof, please date, sign and return
this lock-up agreement to the Company by courier, Federal Express or fax
no
later than the close of business on October 15, 2005.
If you
return your signed lock-up agreement to the Company by fax, please promptly
mail
the executed copy of the lock-up agreement to the Company.
[SIGNATURE
PAGE FOLLOWS]
Acknowledged
and Agreed
this
___
day of ____________, 2005:
Name:
Entity (if any):
Title (if Shares held by Entity):
RETURN
TO THE COMPANY BY FAX: AT (▇▇▇)▇▇▇-▇▇▇▇
-AND-
BY
FEDERAL EXPRESS OR OVERNIGHT COURIER TO:
VirtualScopics,
LLC
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Rochester,
New York 14625
Tel:
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Fax:
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Accepted:
VIRTUALSCOPICS,
LLC
By: s/o
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Chief
Financial Officer