Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of the ______ day of November, 1999 by and among INSYNQ, INC., a
Washington corporation (the "Company"), and ______________ ("Holder").
WITNESSETH:
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WHEREAS, the Holder is the owner of Three hundred Thousand (300,000)
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shares of common stock of the Company, par value $.50 per share; and
WHEREAS, the Company and the Holder desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Registration Rights.
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1.1 Definitions. As used herein:
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(a) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing with the Securities
and Exchange Commission (the "SEC") a registration statement pursuant
to the Securities Act of 1933, as amended (the "Act"), and the
declaration or order of effectiveness of such registration statement.
(b) For the purposes hereof the term "Registerable Securities"
means shares of (i) common stock, preferred stock or debt securities
of the Company (the "Securities"), (ii) stock or debt securities
issued in lieu of the Securities in any reorganization which have not
been sold to the public and (iii) stock issued in respect of the stock
referred in (i) and (ii) as a result of a stock split, stock
dividend, recapitalization or combination, which have not been sold to
the public.
(c) The term "Holder" means International Fluid Dynamics, Inc.
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1.2 Incidental Registration.
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(a) If the Company at any time proposes to register any of its
securities under the Act, whether of its own accord or at the demand
of any holder of such securities pursuant to an agreement with respect
to the registration thereof (provided such agreement does not prohibit
third parties from including additional securities in such
registration), and if the form of registration statement proposed to
be used may be used for the registration of Registerable Securities,
the Company will give notice to Holder not less than 10 days nor more
than 30 days prior to the filing of such registration statement of its
intention to proceed with the proposed registration (the "Incidental
Registration"), and, upon written request of the Holder made within
ten (10) days after the receipt of any such notice (which request will
specify the Registerable Securities intended to be disposed of by the
Holder and state the intended method of disposition thereof), the
Company will use its best efforts to cause all Registerable Securities
of Holder as to which registration has been requested to be registered
under the Act, provided that if such registration is in connection
with an underwritten public offering,
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Holder's Registerable Securities to be included in such registration shall
be offered upon the same terms and conditions as apply to any other
securities included in such registration. Notwithstanding anything
contained in this Section 1.2 to the contrary, the Company shall have no
obligation to cause Registerable Securities to be registered with respect
to any Registerable Securities which shall be eligible for resale under
Rule 144(k) of the Securities Act.
(b) If an Incidental Registration is a primary registration on behalf
of the Company and is in connection with an underwritten public offering,
and if the managing underwriters advise the Company in writing that in
their opinion the amount of securities requested to be included in such
registration (whether by the Company, the Holder, or other holders of the
Company's securities pursuant to any other rights granted by the Company to
demand inclusion of any such securities in such registration) exceeds the
amount of such securities which can be successfully sold in such offering,
the Company will include in such registration the amount of securities
requested to be included which in the opinion of such underwriters can be
sold, in the following order (A) first, all of the securities the Company
proposes to sell, and (B) second, any other securities requested to be
included in such registration, pro rata among the holders thereof on the
basis of the amount of such securities then owned by such holders.
(c) If an Incidental Registration is a secondary registration on
behalf of holders of securities of the Company and is in connection with an
underwritten public offering, and if the managing underwriters advise the
Company in writing that in their opinion the amount of securities requested
to be included in such registration (whether by such holders, by the
Holder, or by holders of the Company's securities pursuant to any other
rights granted by the Company to demand inclusion of securities in such
registration) exceeds the amount of such securities which can be sold in
such offering, the Company will include in, such registration the amount of
securities requested to be included which in the opinion of such
underwriters can be sold, in the following order (A) first, all of the
securities requested to be included by holders demanding or requesting such
registration, and (B) second, any other securities requested to be included
in such registration, pro rata among the holders thereof on the basis of
the amount of such securities then owned by such holders.
1.3 Registration Procedures. The Company will advise the Holder in
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writing as to the effective date of the registration and as to the completion
thereof. At its expense the Company will:
(a) keep the registration effective for a period of days or until the
Holder has completed the distribution described in the registration
statement relating thereto, whichever first occurs; and
(b) furnish such number of prospectuses and any other documents
incident thereto as the Holder from time to time may reasonably request.
1.4 Indemnification. To the extent permitted by law, the Company will
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indemnify the Holder against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made, or
any violation by the Company of any rule or regulation promulgated under the Act
or any state securities law applicable to the Company in connection with any
such
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registration, and will reimburse the Holder for any reasonable legal and any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, provided that the indemnity
contained in this Section shall not apply to amounts paid in settlement of any
such claim, loss, damage, liability or action if such settlement is effected
without the consent of the Company (which consent will not be reasonably
withheld) and provided further that the Company will not be liable in any such
case to the extent that any such claim, loss, damage or liability arises out
of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Holder relating to Holder.
1.5 Information by Holder. The Holder shall promptly furnish to the
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Company in writing such information regarding the Holder as the Company may
request in writing and as shall be required in connection with any registration
referred to herein.
1.6 Rule 14 Reporting. With a view to making available to Holder the
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benefits of certain rules and regulations of the SEC which may permit the sale
of the Registerable Securities to the public without registration, the Company
agrees at all times during the period commencing on the date hereof and ending
upon the termination of the registration rights of Holder pursuant to Section
1.8, to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144(c);
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities
Exchange Act of 1934, as amended; and
(c) so long as Holder owns any Registerable Securities, to furnish to
each Holder forthwith upon Holder's request a written statement by the
Company as to its compliance with the reporting requirements of said Rule
144, a copy of the most recent annual or quarterly report of the Company,
and such other reports and documents so filed by the Company as each Holder
may reasonably request in availing itself of any rule or regulation of the
SEC allowing Holder to sell any such securities without registration.
1.7 "Market Standoff" Agreement. Holder agrees that, if requested by the
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Company and an underwriter of Securities (or other securities) of the Company,
not to sell or otherwise transfer or dispose of any Securities (or other
securities) of the Company held by Holder during a period of up to 10 days as
agreed to between the Company and the underwriters following the effective date
of a registration statement of the Company filed under the Act covering the
offer and sale of common stock or other securities of the Company. The Company
may impose stock transfer restrictions with respect to the Registerable
Securities until the end of said 120-day period, provided that:
(a) such agreement shall only apply to the first registration
statement of the Company including Securities (or other securities) to be
sold on its behalf to the public in an underwritten offering; and
(b) all officers and directors of the Company enter into similar
agreements.
Such agreement shall be confirmed in writing in the form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the Securities (or other securities) subject to the
foregoing restriction until the end of said lock-up period.
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1.8 Termination of Registration Rights. The registration rights granted
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pursuant to this Section 1 shall terminate as to each Holder at such time as all
Registerable Securities of the Holder can, in the opinion of counsel to the
Company (which opinion shall be concurred in by counsel to the Holders), be sold
within a given three-month period pursuant to Rule 144 or other applicable
exemption.
1.9 Delay of Registration. No Holder shall have any right to take any
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action to restrain, enjoin or otherwise delay any registration as the result
of any controversy that may arise with respect to the interpretation or
implementation of this Section 1.
1.10 Legend Requirement. Each stock certificate representing the
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Registerable Securities shall bear a legend in, or substantially in, the
following form and any other legend required by any applicable state securities
or Blue Sky laws:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, pledged or
otherwise transferred without an effective registration under said Act or
unless the Company shall have received an opinion satisfactory to the
Company of counsel satisfactory to the Company than an exemption from
registration under such Act is then available.
1.11 Prospectus Requirements. Holder hereby covenants with the Company
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that he will promptly advise the Company of any changes in the information
concerning Holder contained in a registration statement filed hereunder and that
Holder will not make any sale of Registerable Securities pursuant to any
registration statement without complying with the prospectus delivery
requirements of the 1933 Act. Holder acknowledges that occasionally there may be
times when the Company must temporarily suspend the use of the prospectus
forming a part of any such registration statement until such time as an
amendment to such registration statement has been filed by the Company and
declared effective by the SEC, the relevant prospectus supplemented by the
Company or until such time as the Company has filed an appropriate report with
the SEC pursuant to the 1934 Act. During any period in which sales are suspended
and upon notice of such suspension from the Company, Holder agrees not to sell
any such Registerable Securities pursuant to any such prospectus. Holder
covenants that he will not sell Registerable Securities pursuant to any such
prospectus during the period commencing at the time at which the Company gives
Holder notice of the suspension of the use of said prospectus and ending at the
time the Company gives notice that Holder may thereafter effect sales pursuant
to said prospectus.
2. Miscellaneous.
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2.1 Assignment. This Agreement shall inure to the benefit of any
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subsequent transferee or assignee of the Securities covered by this Agreement.
2.2 Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, representations, warranties, statements,
promises and understandings, whether oral or written, with respect to the
subject matter hereof.
2.3 Governing Law. All questions concerning the construction, validity and
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interpretation of this Agreement will be governed by the laws of the State of
Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INSYNQ, INC.
By:______________________
Name:____________________
Title:___________________
International Fluid Dynamics, Inc.
By /s/ X X Xxxxxx, Xx President
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X X Xxxxxx, Xx President
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