<Name of Stockholder>

<Address of Stockholder>

January 25, 2006

 

Patient Infosystems, Inc.

46 Prince Street

Rochester, NY 14601

 

RE:

Lock-up Agreement

 

Ladies and Gentlemen:

The undersigned, the holder (the “Stockholder”) of a warrant to purchase shres
of Common Stock (as defined below) of Patient Infosystems, Inc., a Delaware
corporation (the “Company”), understands that CCS Consolidated, Inc., a Delaware
corporation (“CCS”), Paty Acquisition Corp., a Delaware corporation (the “Merger
Sub”), and the Company have entered into an Agreement and Plan of Merger, dated
as of September 19, 2005 (the “Merger Agreement”) pursuant to which (i) Merger
Sub shall be merged into and with CCS and CCS shall continue as the surviving
corporation (the “Merger”), and (ii) each share of CCS common stock, $.01 par
value, shall be converted into a number of shares of the Company’s common stock,
$.01 par value (the “Common Stock”), determined pursuant to the formula set
forth in Section 2.2 of the Merger Agreement. In recognition of the benefit that
such Merger will confer upon the Stockholder, including the issuance of warrants
to purchase additional shares of Common Stock, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees that for a period of eighteen months from the Closing Date
(as defined in the Merger Agreement) (the “Lock-up Period”), and, to the extent
that the undersigned’s Securities (as defined below) are designated as Locked-up
Securities (as defined below) during the Release Period (as defined below), the
undersigned will not directly or indirectly, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale of, make any
short sale or otherwise dispose of or transfer any shares of the Company’s
Common Stock, or any options or warrants to purchase any shares of the Company’s
Common Stock, or any securities convertible into or exchangeable or exercisable
for the Company’s Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition (collectively, the “Securities”) or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Securities, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. The foregoing
restriction is expressly intended to preclude the undersigned from engaging in
any hedging or other transaction which is designed to or which reasonably could
be expected to lead to or result in a sale or disposition of the undersigned’s
Securities even if such securities would be disposed of by someone other than
the undersigned. Such prohibited hedging or other transaction would include
without limitation any short sale or any purchase, sale or grant of any right
(including without limitation any put or call option) with respect to any of the
undersigned’s Securities or with respect to any security that includes, related
to, or derives any significant part of its value from such Securities.
Notwithstanding the foregoing, the undersigned may (a) exercise Securities
convertible into shares of Common Stock

 

 

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owned by the undersigned as of the date of the Merger Agreement, it being
understood and acknowledged that any shares of Common Stock acquired by the
undersigned in connection with any such exercise or conversion shall be subject
to this letter agreement; or (b) transfer Securities (i) by bona fide gift, (ii)
to a member of the undersigned’s immediate family or to a trust of which the
undersigned or an immediate family member is the beneficiary, or (iii) to the
undersigned’s limited and general partners, members, stockholders or other
equity holders in connection with an in kind distribution thereof; provided
that, prior to any transfer described in clause (b), each transferee shall
execute an agreement, in form reasonably satisfactory to the Company, pursuant
to which each transferee shall agree to be bound by the terms of this agreement
for the remainder of the above-referenced 18-month period and the Release Period
and pursuant to which the undersigned and its transferees agree to the
allocation among themselves of the maximum number of Securities which are to be
released in accordance with the release schedule set forth below (it being
expressly understood that the purpose of this provision is to ensure that any
dispositions of the undersigned’s Securities do not enable the undersigned and
its direct and indirect transferees to engage in any transactions with respect
to the undersigned’s Securities in an aggregate amount in excess of that which
would be permitted under the terms of this agreement in the absence of such
dispositions).

Prior to the expiration of the Lock-up Period or the Release Period (as the case
may be), the undersigned shall not announce or disclose any intention to take
any action after the expiration of such period which the undersigned is
otherwise prohibited from taking during such period.

Following the expiration of the Lock-up Period (the “Release Period”), the
undersigned’s Securities shall remain subject to the restrictions of this
agreement as if the Lock-up Period had not expired (the “Locked-up Securities”)
except to the extent that such Securities are released from such restrictions in
accordance with the following release schedule, at which point they will cease
to be “Locked-up Securities”:

Release Trigger

Number of
Securities Released

18 months after Closing Date

Rule 144 Amount (as defined below)

21 months after Closing Date

Rule 144 amount (as defined below)

24 months after Closing Date

Rule 144 amount (as defined below)

27 months after Closing Date

Rule 144 amount (as defined below)

30 months after Closing date, or if the Closing Date occurs after January 1,
2006, June 30, 2008; provided that if the Closing Date occurs after March 1,
2006 the Release Trigger date shall be extended by that number of days between
Closing Date and March 1, 2006, but shall not exceed 30 months after the Closing
Date (e.g., if the Closing Date occurs on March 15, 2006, the Release Trigger
date is July 15, 2008)

All Remaining Locked-Up Securities

             For the purposes of this agreement, the term “Rule 144 Amount”
shall mean the greater of: (a) 1% of the number of shares of Common Stock of the
Company outstanding as of the date

 

 

ME1\5459677.1

 

 

of determination; or (b) the average weekly reported volume of trading of the
Common Stock of the Company on all national securities exchanges and/or reported
through the automated quotation system of a registered securities association
during the four calendar weeks preceding the date of determination.

Notwithstanding the foregoing, in the event that after the expiration of the
Lock-up Period there occurs a Change of Control or there occurs or has occurred
a Significant Equity Offering (each, as defined below), any and all Securities
of the undersigned that remain Locked-up Securities at such time shall
immediately cease to be Locked-up Securities. For the purposes of this
agreement, the term “Change of Control” shall mean the first to occur of: (a)
any consolidation or merger of the Company with or into any other corporation or
other entity or person, or any other corporate reorganization, in which the
capital stock of the Company immediately prior to such consolidation, merger or
reorganization, represents less than 50% of the voting power of the surviving
entity (or, if the surviving entity is a wholly owned subsidiary, its parent)
immediately after such consolidation, merger or reorganization, provided that a
“Change of Control” shall not include the Merger; (b) any transaction or series
of related transactions to which the Company is a party in which in excess of
fifty percent (50%) of the Company’s voting power is transferred, provided that
a “Change of Control” shall not include any transaction or series of
transactions principally for bona fide equity financing purposes in which cash
is received by the Company or any successor or indebtedness of the Company is
cancelled or converted or a combination thereof; or (c) a sale, lease, exclusive
license or other disposition of all or substantially all of the assets of the
Company. For the purposes of this agreement, the term “Significant Equity
Offering” shall mean one or more primary offerings, after the Closing Date, of
shares of Common Stock (and/or securities convertible into Common Stock for no
additional consideration) of the Company in aggregate amount equal to or greater
than 25% of the outstanding shares of the Company’s Common Stock immediately
prior to the first such offering.

The Company may not amend or waive any term or condition of any lock-up
agreement entered into in connection with the Merger, unless such amendment or
waiver also is granted or effected with respect to this letter agreement.

Notwithstanding anything herein in to the contrary, if the Stockholder shall
cease to be an employee of the Company or any affiliate thereof for any reason,
all obligations of the Stockholder hereunder shall terminate 30 days following
the date of such cessation.

Once all of the undersigned’s Securities cease to be Locked-up Securities, the
Release Period shall terminate.

 

 

ME1\5459677.1

 

 

 

This lock-up letter is dated January 25, 2006

Very truly yours,

Accepted and Agreed:

 

 

PATIENT INFOSYSTEMS, INC.

 

__________________________

By: __________________________

 

<Name>

 

 

<Title>

 

 

 

 

 

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