EXHIBIT 10.5
LOCK-UP AND STOCK DIVIDEND RETURN AGREEMENT
Xxxxxxx Investment Company, Inc.
000 X.X. Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Ladies and Gentlemen:
1. The undersigned understands that you ("Xxxxxxx"), as representative
of the several underwriters (the "Underwriters"), propose to enter into an
underwriting agreement (the "Underwriting Agreement") with Data Conversion
Laboratory, Inc. (the "Company") providing for the public offering (the "Public
Offering") by the Underwriters of Units, each consisting of one share of common
stock of the Company, $.01 par value (the "Common Stock"), and one redeemable
warrant to purchase one share of Common Stock pursuant to a registration
statement filed by the Company with the Securities and Exchange Commission (SEC
Registration No. 333-__________). The Underwriting Agreement provides that if
the Company's audited pre-tax income for the year ended December 31, 2002 is
less tan $1.3 million it will issue a 10% stock dividend to all holders of
Common Stock of record on the record date of the dividend (the "Stock
Dividend").
2. In consideration of the Underwriters' agreement to undertake the
Public Offering and of other good and valuable consideration, the receipt of
which is hereby acknowledged, the undersigned agrees that the undersigned will
not, for a period of one (1) year after the effective date of the Public
Offering (the "Effective Date"), without prior written consent of Xxxxxxx (which
shall not be unreasonably withheld), sell, offer to sell, contract to sell, sell
short or otherwise dispose of any shares of Common Stock, preferred stock or
other capital stock of the Company or any securities convertible, exchangeable
or exercisable for Common Stock or derivatives of Common Stock, or request the
registration of the offer or sale of any of the foregoing, owned by the
undersigned (or as to which the undersigned has the right to direct the
disposition of), directly or indirectly, pursuant to Rule 144 under the
Securities Act of 1933 ("Rule 144") or otherwise, other than pursuant to (i)
transfers by the undersigned to the undersigned's ancestors, descendants, spouse
or trust for the benefit of the undersigned or any such persons, so long as such
persons or trusts agree in writing to be bound by this Agreement, or (ii) bona
fide gifts to persons who agree in writing to be bound by this Agreement.
3. In addition, for a period of five (5) years from the Effective Date,
the undersigned agrees to give Xxxxxxx prior notice if the undersigned offers to
sell, sells, contracts to sell or otherwise disposes of any securities of the
Company pursuant to Rule 144 or similar provisions enacted subsequent to the
date of this Agreement.
4. The undersigned agrees that if the Company issues the Stock
Dividend, the undersigned will immediately upon receipt of the shares of Common
Stock issued as part of the Stock Dividend return the shares to the Company as a
contribution to capital.
5. The undersigned hereby acknowledges that this Agreement is valid and
binding notwithstanding any prior agreements relating to this matter and further
agrees and consents to the entry of stop-transfer instructions with the
Company's transfer agent against the transfer of shares of Common Stock held by
the undersigned except in compliance with this Agreement.
The undersigned also understands that the Company and the Underwriters will
proceed with the Public Offering in reliance on this Agreement.
Dated as of _____________, 2002
Signature:
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Print name:
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