Exhibit 4.33
AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of November
1, 2000 by and between Insynq, Inc., a Delaware corporation (the "Company"), and
Garnier Holdings, Ltd. ("Garnier").
WHEREAS, the Company has issued that certain Promissory Note dated as of
July 17, 2000 (the "Note") under which Garnier has loaned the Company $127,500;
and
WHEREAS, the parties agree that it will be less burdensome and more
administratively feasible for the Company, in exchange for canceling Garnier's
right to receive payment under the Note, which is due and payable on March 1,
2001, to issue 255,000 shares of its Common Stock to Garnier at an agreed to,
arms-length negotiated value of $0.50 per share (the "Conversion Shares"); and
WHEREAS, on July 17, 2000, the parties also executed a Warrant Agreement
under which Garnier was issued warrants to purchase 325,000 shares of Common
Stock at an exercise price of $2.00 per share, which included piggyback
registration rights for the Common Stock (the "Warrant Agreement"); and
WHEREAS, the parties desire to fix the exercise price under the Warrant
Agreement at $0.50.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants hereinafter contained, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Conversion of Shares. The Note under which Garnier has the right to
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receive payment from the Company on March 1, 2001, is hereby converted into
the right to receive 255,000 shares of Common Stock pursuant to an agreed-
to value of $0.50 per share. Such shares shall be issued upon the
execution of this Agreement by Garnier and the return of the $127,500 Note
to the Company.
2. Warrant Exercise Price. The exercise price to purchase up to 325,000
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shares of Common Stock under the Warrant Agreement held by Garnier shall be
fixed at $0.50 per share.
3. Registration Rights. The 255,000 shares issued pursuant to this
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Agreement and the shares of Common Stock underlying the Warrants are hereby
granted the registration rights set forth under the Warrant Agreement
pursuant to which the Company will promptly file a registration statement
with the SEC.
4. Certain Acknowledgements and Agreements of Garnier. Garnier hereby
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acknowledges and agrees that:
(a) All documents pertaining to the investment in the Shares have been
made available for inspection by the Company, and the books and records of
the Company will be available, upon reasonable notice, for inspection by
Garnier during reasonable business hours at the Company's principal place
of business.
(b) NO FEDERAL OR STATE AUTHORITY HAS MADE ANY FINDINGS OR DETERMINATIONS
TO THE FAIRNESS FOR INVESTMENT IN THE SHARES, AND NO FEDERAL OR STATE
AUTHORITY HAS RECOMMENDED OR ENDORSED OR WILL RECOMMEND OR ENDORSE THE
PLACEMENT.
(c) The issuance of the Shares was made only through direct, personal
communication between Garnier and an authorized representative of the
Company.
(d) Garnier agrees not to sell nor attempt to sell all or any part of the
Shares allocated to Garnier unless the offer and sale of such Shares have
first been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable state securities laws, or the
undersigned furnishes, at the option of the Company, an opinion of counsel
satisfactory to the Company and its counsel and knowledgeable as to the
securities matters stating that exemptions from such registration
requirements are available and that the proposed sale is not, and will not
place the Company or any affiliate thereof, in violation of any applicable
Federal or state securities law, or any rule or regulation promulgated
thereunder.
(e) The certificate evidencing Shares shall bear a legend substantially as
follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. AS A
PREREQUISITE TO ANY TRANSFER OF SHARES WITHOUT SUCH
REGISTRATION, THE CORPORATION MAY REQUIRE THAT IT BE
FURNISHED AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH TRANSFER DOES NOT REQUIRE SUCH
REGISTRATION.
5. Representations and Warranties of Garnier. Garnier
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understands that the Shares are being sold in reliance upon the
exemptions provided in the Securities Act and/or Regulation D
thereunder, together with exemptions provided under applicable
state securities laws, for transactions involving limited offers
and sales, and Garnier, for itself and for his heirs, personal
representatives, successors and assigns, makes the following
representations, declarations and warranties with the intention
that the same may be relied on by the Company in determining the
suitability of Garnier as an investor in the Company:
(a) Garnier has consulted its attorney, accountant or investment
advisor with respect to the investment contemplated hereby and
its suitability for Garnier. The undersigned has received no
representations or warranties from the Company or its officers,
directors, employees or agents, or any other person, and, in
making an investment decision, Garnier is relying solely on
independent investigations made by Garnier or representative(s)
of Garnier.
(b) Garnier has read and fully understands the public filings of
the Company as filed with the SEC.
(c) The Company has made available to Garnier, during the course
of this transaction and prior to the purchase of any of the
Shares, the opportunity to ask questions of and receive answers
from the Company or any of its representatives concerning the
Company, and to obtain any additional information relative to the
financial condition and business of the Company, to the extent
that such parties possess such information or can acquire it
without unreasonable effort or expense. All such questions, if
asked, have been answered satisfactorily, and all such documents,
if requested, have been received and found to be fully
satisfactory. In connection therewith, Garnier is not relying on
any documents, records or other information, except that
contained in written form and signed by the President of the
Company.
(d) Garnier understands and acknowledges that: (i) while the
Company has an operating history, the purchase of Shares by
Garnier involves a high degree of risk of loss of Garnier's
entire investment, and there is no assurance of any income from
such investment; (ii) Garnier must bear the economic risk of an
investment in the Shares for an indefinite period because the
offer and sale of the Shares have not been registered under the
Securities Act or any state securities laws and are being offered
and sold in reliance upon exemptions provided in the Securities
Act and state securities laws for transactions not involving any
public offering and, therefore, cannot be resold or transferred
unless they are subsequently registered under the Securities Act
and applicable state laws, or unless an exemption from such
registration is available; (iii) there may not be a public market
for the Shares in the future; (iv) Garnier is purchasing the
Shares for investment purposes only for Garnier's account and not
for the benefit of any other person or with any view toward the
resale or distribution thereof; (v) because there are substantial
restrictions on the transferability of the Shares, it may not be
possible for Garnier to liquidate an investment therein readily
in case of an emergency; and (vi) Garnier has no contract,
undertaking, agreement or arrangement with any person to sell,
transfer or pledge to such person or anyone else any of the
Shares which Garnier hereby subscribes to purchase or any part
thereof, and Garnier has no present plans to enter into any such
contract, undertaking, agreement or arrangement.
(e) The undersigned is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act. The
net worth, annual
income and total assets, as the case may be, of Garnier and the
other information set forth in Section 8 are true, correct and
complete in all material respects. Any information which Garnier
has heretofore furnished to the Company with respect to Garnier
is correct and complete as of the date of this Agreement, and if
there should be any material change in such information prior to
the purchase of Shares, Garnier will immediately furnish such
revised or corrected information to the Company.
(f) Garnier is at least 21 years of age, is knowledgeable and
experienced in evaluating investments and is experienced in
financial and business matters and he has evaluated the risks of
investing in the Shares, and has determined that the Shares are a
suitable investment for him. Garnier has adequate net worth and
means of providing for his current needs and possible personal
contingencies and has no need, and anticipates no need in the
foreseeable future, to sell the Shares the purchase of which is
subscribed. Garnier can bear the economic risk of an investment
in the Shares and has a sufficient net worth to sustain a
complete loss of his investment. The aggregate amount of the
investments of Garnier in, and his commitments to, all similar
investments that are illiquid is reasonable in relation to his
net worth.
(g) Garnier maintains its domicile, and is not merely a
transient or temporary resident, at the residence address shown
on the signature page of this Agreement.
(h) Garnier is a United States citizen or is otherwise a U.S.
Person/*/ as defined below.
(i) The representations, warranties, agreements and
acknowledgements made by Garnier in this Agreement are made with
the intention that they be relied upon by the Company in
determining the suitability of Garnier as a purchaser of Shares,
and shall survive their purchase. In addition, Garnier undertakes
to notify the Company immediately of any change in any
representation or warranty of Garnier set forth herein.
6. Indemnification. Garnier understands that the offer and sale of
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Shares to him is being made, and the sale of Shares will be made,
in reliance upon the acknowledgments and agreements of Garnier
set forth in Section 4 and the representations and warranties of
Garnier set forth in Section 5. Garnier agrees to provide, if
requested, any additional information that may reasonably be
required to determine the eligibility of Garnier to purchase
Shares. Garnier hereby agrees
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* For purpose of this representation, a U.S. Person is (i) a natural person
who is a citizen of or resident in the United States, (ii) a partnership or
corporation organized or incorporated under the laws of the United States, (iii)
an estate of which any executor or administrator is a U.S. person; (iv) a trust
of which any trustee is a U.S. person, (v) an agency or branch of a foreign
entity located in the United States, or (vi) a non-discretionary account or
similar account (other than an estate or trust) held by a dealer or other
fiduciary organized, incorporated or (if an individual) resident in the United
States.
to indemnify the Company and its affiliates, agents, attorneys
and representatives and to hold each of them harmless, from and
against all claims, losses, damages or liability, including costs
and reasonable attorneys' fees (collectively, "Claims"), that may
arise in connection with, due to or as a result of the breach of
any representation, warranty, acknowledgement or agreement of
Garnier contained in this Agreement or in any other document
provided by Garnier to the Company in connection with Garnier's
offer to purchase Shares. Garnier agrees to indemnify the Company
and any of its affiliates, agents, attorneys and representatives
and to hold each of them harmless, from and against all Claims
that may arise in connection with, due to or as a result of the
sale or distribution of Shares by Garnier in violation of the
Securities Act or other applicable law. Notwithstanding any
provision of this Agreement, Garnier does not waive any rights
granted to him under applicable securities laws. Garnier agrees
that the affiliates, agents, attorneys and representatives of the
Company are intended third-party beneficiaries to this Agreement
for the purposes of the indemnification provided above.
7. Arbitration. Any dispute or controversy arising under or in
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connection with this Agreement shall be resolved by binding
arbitration. The arbitration shall be held in the City of Tacoma,
Washington, and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the rules of the
American Arbitration Association in effect at the time of the
arbitration, and otherwise in accordance with principles which
would be applied by a court of law or equity. The arbitrator
shall be acceptable to both the Company and Garnier. If the
parties cannot agree on an acceptable arbitrator, the dispute
shall be heard by a panel of three arbitrators, one of which
shall be appointed by each of the parties, and the third shall be
appointed by the other two arbitrators.
8. Suitability. Garnier warrants and represents to the Company
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that the following information supplied by Garnier pursuant to
Section 5 is correct and complete:
(a) Those of the following statements indicated by a check marked in
the box opposite such statement are true and correct with respect to the
undersigned:
[ ] (i) The undersigned is a natural person whose individual
net worth, or joint net worth with its spouse, exceeds $1,000,000.00.
[ ] (ii) The undersigned is a natural person who had an
individual income in excess of $200,000.00 or joint income with its
spouse in excess of $300,000.00 in both 1998 and 1999, and who
reasonably expects an income in excess of $200,000.00, if individual,
or $300,000.00, if joint, in 2000.
[ ] (iii) The undersigned is an entity or institution that
qualifies as one or more of the following:
(A) Any bank as defined in Section 3(a)(2) of the
Securities Act, or any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities
Act whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; any insurance company as defined
in Section 2(13) of the Securities Act; any investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that act;
any Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions for
the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the
meaning of the Employee Retirement income Security Act of 1974 if
the investment decision is made by a plan fiduciary, as defined
in Section 3(21) of such act, which is either a bank, savings and
loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed plan, with investment
decisions made solely by persons that are accredited investors;
(B) Any private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
(C) Any organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or company, nor formed for the specific purpose
of acquiring the securities offered, with total assets in excess
of $5,000,000;
[ ] (iv) The undersigned is a director or executive officer of
the Company.
[ ] (v) The undersigned is a trust, with total assets in
excess of $5,000,000.00, not formed for the specific purpose of
acquiring the Securities, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the
Securities Act.
[ ] (vi) The undersigned is an entity in which all of the
equity owners meet the criteria set forth under either (i), (ii),
(iii), (iv), or (v) above.
[ ] (vii) None of the statements in (i), (ii), (iii), (iv), (v),
or (vi) above is a true statement with regard to the undersigned.
(b) The undersigned has knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of,
and protecting its own
interest in connection with, investing in the Securities.
9. General. This Agreement (i) shall be binding on Garnier and the
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heirs, personal representatives, successors and permitted assigns of
Garnier, (ii) shall be governed construed and enforced in accordance with
the laws of the State of Washington, without reference to any principles of
conflicts of law, and (iii) shall survive the acceptance by the Company of
the subscription evidenced by this Agreement and the admission of Garnier
as a shareholder in the Company.
10. Notices. Any notice, request, instruction or other document to be
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given under this Agreement after the date hereof by any party hereto to any
other party shall be in writing and shall be deemed to have been duly given
on the date of service if delivered personally or by telecopier with
confirmed receipt via overnight delivery, or on the third day after mailing
if sent by certified mail, postage prepaid, at the addresses set forth
below, or to such other address or person as any party may designate by
written notice to the others:
If to the Company: Insynq, Inc.
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1101 Broadway Plaza
Tacoma, Washington 98402
Attention: President
Telecopier No.: (253) 404-3842
If to Garnier: At the last address indicated on the Company's books
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and records.
11. Assignment. Garnier agrees that neither this Agreement nor any rights
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which may accrue to him hereunder may be transferred or assigned.
12. Entire Agreement. This Agreement contains the entire understanding of
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the parties relating to the subject matter contained herein and supersedes
all prior agreements and understandings, written or oral, relating to the
subject matter hereof. This Agreement shall not be modified, amended or
terminated except in a writing signed by the party against whom enforcement
is sought.
13. Confidentiality. Garnier acknowledges that all Confidential
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Information (as defined herein) shall be and remain the exclusive property
of the Company at all times. Garnier hereby agrees to keep in strict
confidence all Confidential Information. Garnier shall not disclose any
Confidential Information, or any portion thereof, to any person or entity
nor use, license, sell, convey or otherwise exploit any Confidential
Information, or any portion thereof, for any purpose other than for the
benefit of the Company. As used in this Agreement, the term "Confidential
Information" refers to all information proprietary to, used by or in the
possession of the Company and not generally known in the industry, which is
disclosed to or learned by Garnier, whether or not reduced to writing and
whether or not conceived, originated, discovered or developed in whole or
in part by Garnier, including, without limitation: (a) information not
generally known in the
industry which relates to the business, products or work of the Company (x)
of a technical nature, such as trade secrets, methods, know-how, formulas,
compositions, designs, processes, information regarding product development
and other similar information and materials, and (y) of a business or
commercial nature, such as information or compilation of data about the
Company's costs, pricing, profits, compensation, sales, product plans,
markets, marketing plans and strategies, equipment and operational
requirements, operating policies or plans, finances, financial records,
methods of operation and competition, management organization customers and
suppliers, and other similar information and materials; and (b) any other
technical business or commercial information designated as confidential or
proprietary that the Company or any of its affiliates may receive belonging
to any supplier, customer or others who do business with the Company or any
of its affiliates. The foregoing limitations on use and disclosure shall
not apply to information that (i) was lawfully known to the recipient
before the receipt thereof, (ii) is learned by the recipient from a third
party that is entitled to disclose same, (iii) becomes publicly known other
than through the actions of the recipient, or (iv) is required by law or
court order to be disclosed by the recipient.
14. Pronouns; Headings. All pronouns and any variations thereof shall be
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deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the entities or persons referred may require. The headings
of the sections of this Agreement are inserted for convenience only and
shall not constitute a part hereof nor affect in any way the meaning or
interpretation of this agreement.
15. Severability. In the event that any provision contained herein shall
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be held to be invalid, illegal or unenforceable for any reason, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
16. Conflict. If any conflict shall arise between the terms of the
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Registration Agreement and this Agreement, or the Warrant Agreement and
this Agreement, this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INSYNQ, INC.
a Delaware corporation
By: /s/ John P. Gorst
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Name: John P. Gorst
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Title: Chairman CEO
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GARNIER HOLDINGS, LTD.
By: /s/ [ILLEGIBLE]
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Name:
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Title:
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