REGISTRATION AGREEMENT
This Registration Agreement (the "Agreement"), dated as of the 20th day of
February 2001 is entered into between Insynq, Inc., a Delaware corporation (the
"Company") and TCA Investments, Inc. ("TCA").
WHEREAS, pursuant to a Promissory Note dated February 20, 2001 (the
"Note"), by and among the Company and TCA, for $40,000 was granted a Warrant to
Purchase Common Stock;
WHEREAS, pursuant to that certain Warrant to Purchase Common Stock dated
February 20, 2001, TCA has acquired the right to purchase 10,000 shares of
Common Stock (the Common Stock;
WHEREAS, in order to insure liquidity in the future the Holder wishes to
have the Shares registered and the Company wishes to grant such registration
rights.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. As used herein:
(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 these
terms do not include a registration statement filed on
Form S-8 nor Rule l145 transactions.
(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 "holder" means any holder of this Warrant.
1.2 Piggyback Registration Rights
(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 "Piggyback
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, 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 a PiggyBack Registration is a primary registration on
behalf of the Company and is in connection with an
underwritten 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 Piggyback Registration is a secondary registration on
behalf of the 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 is requested to be
included which in the option 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.
2. ADJUSTMENT PROVISIONS
(a) If the Company shall, during the term hereof, (i) declare a
dividend and make a distribution on the Common Stock payable in shares of
Common Stock, (ii) subdivide or combine its outstanding shares of Common
Stock, (iii) change the number of shares of Common Stock evidence by this
Agreement by reclassification, exchange or substitution, or (iv)
reorganize the capital structure of the Company by merger, reorganization,
consolidation or sale of assets, then after the occurrence of such event,
this Agreement shall apply to the number of shares of Common Stock or
other securities into which the Shares subject to each provision herein
shall have been converted, substituted, combined, subdivided, reorganized,
reclassified or exchanged as a result of such event. Such adjustment
shall be made successively whenever any event listed above shall occur.
Any adjustment under this subparagraph (a) shall become effective at the
close of business on the date any such event occurs (the "Adjustment
Date").
(b) If, during the term of this Agreement, the number of shares of
Common Stock of the Company is adjusted pursuant to subparagraph (a)
above, then the Warrant Price per share to be in effect after such
Adjustment Date shall be determined by multiplying the Warrant Price per
share in effect immediately prior to such Adjustment Date by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding at the closing of business on the Business Day immediately
preceding such Adjustment Date and the denominator of which shall be the
number of shares of Common Stock (or the equivalent amount of other
securities) outstanding at the opening of business on the first Business
Day after the Adjustment Date.
(c) NOTICE OF ADJUSTMENT. The Company shall give notice of each
adjustment or readjustment of the number of shares of Common Stock or
other securities issuable upon exercise of this Warrant to Holder or of
the Exercise Price per share at the address set forth in Paragraph 17
hereof.
3. EXPENSES OF REGISTRATION. All expenses incurred in effecting any
registration pursuant to this Agreement including, without limitation, all
registration and filing fees, expenses of compliance with blue sky laws, fees
and disbursements of counsel for the Company and expenses of any audits
incidental to or required by any such registration, shall be borne by the
Company, except that the costs of prospectus printing and all underwriting
discounts and commissions attributable to Shares being sold by the Holder shall
be borne by the Holder. Without limiting the generality of the foregoing, the
Company shall pay all of the following registration expenses: (a) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (b) to the
extent not already incurred, the fees and expenses incurred in connection with
the listing on an exchange, the Nasdaq Stock Market, or inter-dealer quotation
system of the Shares, (c) all registration and filing fees, (d) fees and
expenses of compliance with securities or blue sky laws (including fees and
disbursements of counsel in connection with blue sky qualifications of the
Shares), (e) printing expenses and engraving expenses, (f) fees and
disbursements of counsel to the Company and customary fees and expenses for
independent certified public accountants retained by the Company, and (g) the
fees and expenses of any special experts retained by the Company.
4. NOTICES. Any and all notices, designations, consents, offers,
acceptances or other communications provided for herein (each a "Notice") shall
be given in writing by overnight courier, telegram or telecopy which shall be
addressed, or sent, to the Company as follows (or such other address as the
Company or the Holder may specify to the Company and all other parties by
Notice):
Insynq, Inc.
1101 Broadway Plaza
Tacoma, Washington 98402
Attn: President
Telecopy: (253) 284-2035
and to the Holder at
TCA Investments, Inc.
_____________________
_____________________
Telecopy:
All Notices shall be deemed effective and received (a) if given by telecopy,
when the telecopy is transmitted to the telecopy number specified above and
receipt thereof is confirmed; (b) given by overnight courier, on the business
day immediately following the date on which the Notice is delivered to a
reputable overnight courier service; or (c) if given by telegram, when the
Notice is delivered at the address specified above.
5. AMENDMENT. The terms of this Agreement may not be amended, modified
or otherwise revised except by the written consent of the Company and the
Holder.
6. COUNTERPARTS; FACSIMILE EXECUTION. This Agreement may be executed in
two or more counterparts and each counterpart shall be deemed to be an original
and which counterparts together shall constitute one and the same agreement of
the parties hereto. Each party to this Agreement agrees that it will be bound
by its own telecopy signature and that it accepts the telecopy signature of
each other party to this Agreement.
7. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF WASHINGTON WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF AND WILL, TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR
PERFORMANCE IN PIERCE COUNTY, WASHINGTON.
8. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto respecting the subject matter hereof and supersedes all
prior agreements, discussions and understandings with respect thereto.
9. CUMULATIVE RIGHTS. The rights of the parties under this Agreement
are cumulative and in addition to all similar and other rights of the parties
under other agreements.
10. SEVERABILITY AND REFORMATION. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of the parties under this Agreement would not
be materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom, and in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of
this Agreement, a legal, valid and enforceable provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible, and the
parties hereto request the court or any arbitrator to whom disputes relating to
this Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 11.
11. ARBITRATION. IN THE EVENT OF A DISPUTE HEREUNDER WHICH CANNOT BE
RESOLVED BY THE PARTIES AMONG THEMSELVES, SUCH DISPUTE SHALL BE SETTLED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATION
PANEL (WHICH SHALL BE A ONE PERSON PANEL) MAY BE ENTERED IN ANY COURT OR
TRIBUNAL OF COMPETENT JURISDICTION. THE COMPANY AND THE HOLDER AGREE THAT ALL
ARBITRATIONS OCCURRING UNDER THIS SECTION 12 SHALL BE HELD IN THE CITY OF
TACOMA, WASHINGTON.
12. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify
Holder against any and all claims, losses, damages, and liabilities
(or actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of any material fact contained in
any prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related registration
statement, notification or the like) or any omission (or alleged omission)
to state therein any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation
by the Company of any rule or regulation promulgated under the Securities
Act applicable to, and relating to any action or inaction required of, the
Company in connection with any such registration, qualification or
compliance, and the Company will reimburse Holder for any legal and any
other expenses reasonably incurred by them in connection with
investigating or defending any such claim, loss, damage, liability or
action; provided, however, 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 Holder for use in such prospectus,
offering circular or other document.
(b) INDEMNIFICATION BY HOLDER. Holder will indemnify the Company
and its officers and directors and each entity or individual who controls
the Company (within the meaning of the Securities Act) and their
respective successors in title and assigns against any and all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of
any material fact contained in any prospectus, offering circular or other
document incident to any registration, qualification or compliance (or in
any related registration statement, notification or the like) or any
omission (or alleged omission) to state therein any material fact required
to be stated therein or necessary to make the statement therein not
misleading, and Holder will reimburse the Company and its officers,
directors, and controlling entities or individuals for any legal and any
other expenses reasonably by them incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action; provided, however, that this paragraph (b) shall apply only if
(and only to the extent that) such statement or omission was made in
reliance upon written information furnished to the Company in an
instrument duly executed by Holder or any of its officers, directors, or
controlling entities or individuals and stated to be specifically for use
in such prospectus, offering circular or other document (or related
registration statement, notification or the like) or any amendment or
supplement thereto.
(c) INDEMNIFICATION PROCEEDINGS. Each party entitled to
indemnification pursuant to this Section 13 (the "Indemnified Party")
shall give notice to the party required to provide indemnification
pursuant to this Section 13 (the "Indemnifying Party") promptly after such
Indemnified Party acquires actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party (at its
expense) to assume the defense of any claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be acceptable to
the Indemnified Party, and the Indemnified Party may participate in such
defense at such party's expense; and provided, further, that the failure
by any Indemnified Party to give notice as provided in this
paragraph (c) shall not relieve the Indemnifying Party of its obligations
under Section 13 except to the extent that the failure results in a
failure of actual notice to the Indemnifying Party and such Indemnifying
Party is damaged solely as a result of the failure to give notice.
No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation. The reimbursement required by this Section 13 shall be
made by periodic payments during the course of the investigation or
defense, as and when bills are received or expenses incurred.
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
John P. Gorst
Chief Executive Officer
TCA Investments, Inc.
By: /s/ F. C. Fisher, Jr.
Name: F. C. Fisher, Jr.
Title: President
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