EXHIBIT 10.6
LOCK-UP/LEAK-OUT AGREEMENT
THIS LOCK-UP/LEAK-OUT AGREEMENT (the "Agreement") is made and
entered into as of the _____ day of ______________, 2003 between SecureD
Services, Inc., a Delaware corporation ("SSI"), and the individuals and entities
that execute and deliver a Counterpart Signature Page hereof, each an SSI
Stockholder (as defined below) and sometimes collectively referred to herein as
the "Shareholders" and each, a "Shareholder."
WHEREAS, the SSI Shareholders currently own shares of SSI's common
stock, par value $0.0001 per share (the "Common Stock") or warrants to purchase
Common Stock or preferred stock or debt instruments that may be convertible into
shares of Common Stock; and
WHEREAS, in order to facilitate an orderly market for the Common
Stock of SSI, the SSI Shareholders have agreed to enter into this Agreement and
to restrict the sale, assignment, transfer, conveyance, hypothecation or
alienation of the Common Stock, all on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Notwithstanding anything contained in this Agreement, an SSI
Shareholder may transfer his/her/its shares of Common Stock to his/her/its
affiliates, partners in a partnership, subsidiaries and trusts, or spouses and
lineal descendants for estate planning purposes provided that the transferee (or
the legal representative of the transferee) executes an agreement to be bound by
all of the terms and conditions of this Agreement.
2. Except as otherwise expressly provided herein, and except as each
Shareholder may be otherwise restricted from selling shares of Common Stock,
each Shareholder may only sell Common Stock subject to the following conditions
during the eighteen (18) month period beginning on the date of this Agreement is
executed (the "Lock-Up/Leak-Out Period"):
2.1 No Shareholder may sell any Common Stock except as covered by this
Agreement, unless approved in a prior writing by the Board of
Directors of SSI, pro rata as to all Shareholders, with respect to
all SSI Shareholders covered hereby.
2.2 If an SSI Shareholder has an approved brokerage account (meaning an
account with a broker/dealer who has executed and delivered to SSI a
broker/dealer agreement in a form satisfactory to SSI, a reasonable
facsimile of which is attached hereto as Exhibit A and incorporated
herein
by reference (the "Broker/Dealer Agreement"),) to the effect that
any such broker/dealer will comply with and monitor the terms and
conditions of this Agreement for the benefit of SSI and the SSI
Shareholders (the "Approved Broker/Dealer"), then the Common Stock
of the SSI Shareholder that can be sold or has qualified to be sold
hereunder will be delivered to the SSI Shareholder's account at the
Approved Broker Dealer through the Depository Trust Corporation
("DTC") or by paper delivery; and provided, however, that if the SSI
Shareholder does not have an account with an Approved Broker/Dealer,
the Common Stock of the SSI Shareholder that can be sold or has
qualified to be sold hereunder will be delivered to the SSI
Shareholder in the form of an actual stock certificate that is
imprinted with a legend indicating that resale of the Common Stock
is subject to the terms and conditions of this Agreement, one of
which shall be a resale through an Approved Broker/Dealer.
2.3 Each SSI Shareholder shall be allowed to sell no more than 3,000
shares of Common Stock per month during the Lock-Up/Leak-Out Period,
on a cumulative basis, meaning that if no Common Stock was sold
during one month while Common Stock was qualified to be sold, up to
6,000 shares of Common Stock could be sold in the next successive
month and so forth; provided, however, with respect to (i) shares of
Common Stock that are "restricted securities" that SSI has agreed to
register for resale with the Securities and Exchange Commission (the
"SEC"), the commencement of the right of any such SSI Shareholder to
sell shares of Common Stock and to cumulate unsold Common Stock into
sales in the next successive month hereunder shall begin on the
earlier of the month in which the Securities and Exchange Commission
grants SSI an effective date (the "Effective Date") on any such
registration statement, or in the month in which any such SSI
Shareholder qualifies in all respects to sell the Common Stock under
Rule 144 of the SEC and with respect to (ii) shares of Common Stock
that are "restricted securities" that SSI has not agreed to register
for resale with the SEC, in the month in which any such Shareholder
qualifies in all respects to sell the Common Stock under Rule 144 of
the SEC (the "Resale Qualification Dates"). All SSI Shareholders
fully understand that certain shares of Common Stock covered by this
Agreement have already satisfied the Resale Qualification Dates
(approximately 280,000 shares of Common Stock held by five (5)
persons); that the Resale Qualification Date of some other shares of
Common Stock that may be allowed to be registered by SSI for resale
on Form S-3 of the SEC (Common Stock that can be acquired on the
exercise of warrants or the conversion of preferred stock or debt
instruments may qualify for use of Form S-3) may be earlier than
Common Stock required to be registered on some other Form; and that
Common Stock required to be registered on some other Form of the
SEC, like Form SB-2, may not have a Resale
Qualification Date for up to six (6) to nine (9) months, depending
upon the time involved in the SEC review and comment process.
2.4 The Common Stock may only be sold at or above the lowest "offer" or
"ask" prices stated by the relevant market maker for the Common
Stock on the OTC Bulletin Board or any nationally recognized medium
on which the Common Stock is publicly traded. Each SSI Shareholder
agrees that no sales will be made at the "bid" prices for the Common
Stock.
2.5 The Common Stock may not be sold at a price below $2.00 per share
(the "Price Floor").
2.6 The Shareholders agree that they will not engage in any short
selling of the Common Stock during the Lock-Up/Leak-Out Period.
2.7 From the date hereof and for a period of not less than eighteen (18)
months from the expiration of the Lock-Up/Leak/Out Period, SSI shall
maintain its "reporting" status with the SEC; file all reports that
are required to be filed by it during such period; and use its "best
efforts" to ensure that the Common Stock is continually quoted for
public trading on a nationally recognized medium of no less
significance than the OTC Electronic Bulletin Board of the National
Association of Securities Dealers, Inc. (the "NASD"), or if its
existence ceases, the BBX, the NASDAQ Small Cap or a recognized
national stock exchange.
3. By executing this Agreement, each Shareholder represents that the
Common Stock set forth in his/her/its Counterpart Signature Page is all of the
shares of SSI Common Stock that such SSI Shareholder beneficially owns as of the
date hereof. In addition to the Common Stock set forth in the Counterpart
Signature Page, this Agreement shall apply to all Common Stock of which each SSI
Shareholder becomes the beneficial owner of during the Lock-Up/Leak-Out Period.
4. Notwithstanding anything to the contrary set forth herein, SSI
may, at any time and from time to time, waive any of the conditions or
restrictions contained herein to increase the liquidity of the Common Stock or
if such waiver would otherwise be in the best interests of the development of
the trading market for the Common Stock.
5. In the event of a tender offer to purchase all or substantially
all of SSI's issued and outstanding securities, or a merger, consolidation or
other reorganization with or into an unaffiliated entity, and if the requisite
number of the record and beneficial owners of SSI securities then outstanding
are voted in favor of such tender offer, merger, consolidation or
reorganization, and such tender offer, merger, consolidation or reorganization
is completed this Agreement shall terminate as of the closing of such event and
the Common Stock restricted pursuant hereto shall be released from such
restrictions.
6. Except as otherwise provided in this Agreement or any other
agreements between the parties, the SSI Shareholders shall be entitled to their
respective beneficial rights of ownership of the Common Stock, including the
right to vote the Common Stock for any and all purposes.
7. The Common Stock and per share price restrictions covered by this
Agreement shall be appropriately adjusted should SSI make a dividend or
distribution, undergo a forward split or a reverse split or otherwise reclassify
its shares of Common Stock.
8. No transfer of any of the shares of Common Stock that are subject
to this Agreement shall be made in any transaction other than a "broker's
transaction" unless the transferee executes and delivers a copy of this
Agreement prior to the transfer of any stock certificate representing any of the
Common Stock so transferred.
9. This Agreement may be executed in any number of counterparts with
the same force and effect as if all parties had executed the same document.
10. All notices, instructions or other communications required or
permitted to be given pursuant to this Agreement shall be given in writing and
delivered by certified mail, return receipt requested, overnight delivery or
hand-delivered to all parties to this Agreement, to SSI, at 0000 Xxxxx Xxxxxxx
Xxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx X0X 0X0, and to the SSI Shareholders, at
the addresses in their Counterpart Signature Pages. All notices shall be deemed
to be given on the same day if delivered by hand or on the following business
day if sent by overnight delivery or the second business day following the date
of mailing.
11. The resale restrictions on the Common Stock set forth in this
Agreement shall be in addition to all other restrictions on transfer imposed by
applicable United States and state securities laws, rules and regulations.
12. SSI or each SSI Shareholder who fails to fully adhere to the
terms and conditions of this Agreement shall be liable to every other party for
any damages suffered by any party by reason of any such breach of the terms and
conditions hereof. Each SSI Shareholder agrees that in the event of a breach of
any of the terms and conditions of this Agreement by any such SSI Shareholder,
that in addition to all other remedies that may be available in law or in equity
to the non-defaulting parties, a preliminary and permanent injunction and an
order of a court requiring such defaulting SSI Shareholder to cease and desist
from violating the terms and conditions of this Agreement and specifically
requiring such SSI Shareholder to perform his/her/its obligations hereunder is
fair and reasonable by reason of the inability of the parties to this Agreement
to presently determine the type, extent or amount of damages that SSI or the
non-defaulting SSI Shareholders may suffer as a result of any breach or
continuation thereof.
13. This Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter hereof, and may not be amended
except by a written instrument executed by the parties hereto.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts entered into and
to be performed wholly within said State; and SSI and the SSI Shareholders agree
that any action based upon this Agreement may be brought in the United States
and state courts of Delaware only, and each submits himself/herself/itself to
the jurisdiction of such courts for all purposes hereunder.
15. In the event of default hereunder, the non-defaulting parties
shall be entitled to recover reasonable attorney's fees incurred in the
enforcement of this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the day and year first above written.
Date: _______________. SecureD Services, Inc.
By
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Its
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LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the day of ______________,
among SecureD Services, Inc., a Delaware corporation ("SSI"); and certain
persons who are "Shareholders" of SSI, by which the undersigned, through
execution and delivery of this Counterpart Signature Page, intends to be legally
bound by the terms of the Agreement, as a Shareholder, of the number of shares
of SSI set forth below or hereafter acquired during the Lock-Up/Leak-Out Period
as defined in the Agreement.
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(Printed Name)
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(Signature)
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(Street Address)
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(City and State)
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(Number of Shares Owned or
Underlying Other Securities)
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(Date)
