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Re: Lock-Up Agreement

Lockup Agreement

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This Lockup Agreement involves

VirtualScopics, Inc.

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Title: Re: Lock-Up Agreement
Date: 11/14/2005

Re: Lock-Up Agreement, Parties: virtualscopics  inc.
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EXHIBIT 10.3

 

VIRTUALSCOPICS, LLC

350 Linden Oaks

Rochester, New York 14625

 

September 27, 2005

 

To: [Insider Group] Holders of VirtualScopics Securities (Common, Series A, Series B and Series C, Stock Options and Warrants)

 

Re:      Lock-Up Agreement

 

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 A, B or 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:

 

 

·

Beginning at the date twelve (12) months after the Closing Date, and at 3-month intervals thereafter, should the 30-day average trading pric


 
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