Exhibit 10.53
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of the ___
day of November, 2000 is entered into between INSYNQ, Inc., a Delaware
corporation (the "Company"), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
("HB") (each of ▇▇▇▇▇▇▇ and HB are hereinafter referred to as a "Holder" and
collectively the "Holders").
WHEREAS, there are currently outstanding 21,204,346 shares of Common Stock
of the Company;
WHEREAS, pursuant to any Agreement dated as of the date hereof (the
"Release"), by and among the Company and the Holders, ▇▇▇▇▇▇▇ has received
1,500,000 shares of the Company's common stock, $0.001 par value ("Common
Stock") in connection with the settlement of certain claims described in the
Release, and ▇▇▇▇▇▇▇ is transferring to HB 350,000 shares of Common Stock in
connection with its representation of her, and in connection therewith, the
Holders have been granted registration rights for their shares of Common Stock
(collectively, the "Shares") received pursuant to the Release as of the date
hereof; and
WHEREAS, in order to insure liquidity in the future, the Holders wish to
have the Shares registered with the SEC (defined below) and the Company has
agreed to grant such registration rights.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, agree
as follows:
Definitions. As used herein, the following terms have the following
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meanings:
"Register," "registered" and "registration" refer to a registration
effected by filing a registration statement in compliance with the Securities
Act of 1933, as amended (the "Securities Act") and the declaration or ordering
by the Securities and Exchange Commission (the "SEC") of effectiveness of the
registration statement, other than any registration statement on Form ▇-▇, ▇▇▇▇
▇-▇ or as otherwise contemplated under Rule 145 of the Act.
1. Registration Rights
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(a) Piggyback Registration
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(i) If the Company at any time proposes to register any of its
shares of Common Stock under the Act, whether of its own accord or at the demand
of any holders of other 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 the Shares as contemplated hereunder, the
Company will give notice to Holders 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 "Registration"), and, upon
written request of the Holders made within ten (10) days after the receipt
of any such notice (which request will specify the number of Shares
intended to be disposed of by the Holders and state the intended method of
disposition thereof), the Company will use its best efforts to cause all
Shares of Holders 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, Holders' Shares to be
included in such Registration shall be offered upon the same terms and
conditions as applied to any other securities included in such Registration
with piggyback registration rights. Notwithstanding anything contained in
this Section 1(a) to the contrary, the Company shall have no obligation to
cause Shares to be registered with respect to any Shares which shall be
eligible for resale under Rule 144 of the Act. If the Company believes it
is in the best interests of the Company to terminate the Registration for
any reason, it shall have no obligations to continue the Registration but
shall promptly notify Holders of such determination.
(ii) If a 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 Holders, or other holders of the
Company's securities pursuant to any other rights granted by the Company to
participate 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, (B)
second, any other securities requested to be included by holders with
demand registration rights who are demanding registration, pro rata among
the holders thereof on the basis if the amount of such securities then
owned by such holders, (C) third, any other securities held by holders with
piggyback registration rights 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.
(iii) If a Registration is a secondary registration on behalf of
holders of securities of the Company and is 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 Holders, or
by holders of the Company's securities pursuant to any other rights granted
by the Company to participate 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 with demand registration rights who are demanding such
Registration, pro rata among the holders thereof on the basis of the amount
of such securities then owned by such holders, and (B) second, any other
securities held by
REGISTRATION RIGHTS AGREEMENT - PAGE 2
holders with piggyback registration rights, 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.
(b) Lock Up Provisions
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In connection with the Company's obligations as provided in Section 1
hereof, the Holders each agree that their Shares to be listed under any
Registration shall be subject to a lock-up restriction and shall not be
sold pursuant to such Registration or otherwise until 180 "trading days"
following the date Insynq's next registration statement filed with the SEC
becomes effective (the "Lock Up Period"), after which date the Holders may
begin selling under the Registration that number of Shares which they would
have otherwise been allowed to sell pursuant to the volume limitation
provisions of Rule 144 under the Securities Act of 1933, as amended, as if
Holders had each held their Shares for one year as required by Rule 144.
Pursuant to Rule 144, sales by each Holder after the Lock Up Period
pursuant to the Registration, during any three month calendar period, shall
not exceed the greater of:
(i) One percent (1%) of the Company's outstanding shares of
Common Stock as shown by the most recent report or statement published by
the Company with the SEC, or
(ii) The average weekly reported volume of trading in such
securities on all national securities exchanges and/or reported through the
automated quotation system of a registered securities association during
the four (4) calendar weeks preceding the sale.
If another investor or potential investor requires in the future a
lockup agreement with restrictions greater than those stated, above,
including, without limitation, a lockup for a length of time greater than
180 "trading days" from the effective date of Insynq II's next registration
statement filed with SEC (excluding registration statements on Form ▇-▇,
▇▇▇▇ ▇-▇ or any other registration for employee stock issuance), ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇-▇▇▇▇▇▇ agree to negotiate with Insynq II in good faith with
respect to such greater restrictions, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇-▇▇▇▇▇▇ having been
advised that such financing is very important to the continued existence of
Insynq II.
Any breach by a Holder of the lock up provisions provided herein shall
entitle the Company to de-register any or all of that Holder's Shares.
Once the Shares have been held by the Holders for one year after the
date hereof, the Holders will be able to sell Shares under the limitations
of Rule 144 and may continue to sell their Shares pursuant to such
limitations, provided that no lock up is in place at that time.
REGISTRATION RIGHTS AGREEMENT - PAGE 3
2. Cooperation by the Holders.
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(a) The Holders will furnish to the Company in writing such
information about the Holders as the Company may reasonably require from
the Holders in connection with the preparation of the registration
statement (and the prospectus included therein).
(b) The Holders will not (until further notice) effect sales of
Shares after receipt of telegraphic or written notice from the Company to
suspend sales to permit the Company to correct or update a registration
statement or prospectus; the Company agrees to use commercially reasonable
efforts to promptly prepare and file any such correction or update.
(c) If required by the Company, Holders agree to provide the Company
with written representations of fact about the Holders reasonably necessary
to permit the Company and its counsel to conclude that all sales of Shares
made in connection with the registration were made in compliance with all
applicable securities laws, including, without limitation, the prospectus
delivery requirements of Section 5 of the Securities Act and any applicable
restrictions of Rules 10b-6 and 10b-7 of the Securities Exchange Act of
1934, as amended.
(d) In connection with the sale of any Shares under any applicable
Registration Statement, the Holders will comply with any and all
requirements of Rule 144 promulgated under the Securities Act pursuant to
the definition therein of the term "affiliate" and the application of such
term to each Holder.
If any Registration is underwritten, Holders shall (i) agree to sell their
Shares on the basis provided in any underwriting arrangement approved by
the Company and (ii) complete and execute all questionnaires, powers of
attorney, indemnities, indemnity agreements, and other documents requested
thereunder; provided that Holders shall only be required to make
representations and warrants regarding Holders and their intended method of
distribution.
3. Expenses of Registration.
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All expenses incurred in effecting any registration pursuant to this
Agreement including, without limitation, all registration and filing fees,
printing expenses, 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 (i) all underwriting discounts and commissions
attributable to Shares being sold by the Holders, and (2) any cost or
expenses of Holders, individual accountants or attorneys or other costs or
expenses incurred in their discretion shall be borne by the Holders.
Without limiting the generality of the foregoing, the
REGISTRATION RIGHTS AGREEMENT - PAGE 4
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. Holders shall be
responsible for the fees and expenses incurred by this agreement, including
but not limited to costs of Holders' counsel.
4. Notices.
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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 Holders may specify to the Company and all other parties by
Notice):
If to Insynq: INSYNQ, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to the Holders at:
If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, #▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
If to HBLLP: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
REGISTRATION RIGHTS AGREEMENT - PAGE 5
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
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.
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The terms of this Agreement may not be amended, modified or otherwise
revised except by the written consent of the Company and each of the
Holders.
6. Binding Effect and Assignment.
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This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
administrators, executors, successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of
the rights, interests or obligations of the parties hereto may be assigned
by ▇▇▇▇▇▇▇ or HB without prior written consent of the Company. This
subdivision does not apply to shares of the Release Shares of the HB Shares
sold through a permitted brokerage transaction as allowed under applicable
law and the Registration Rights Agreement.
7. 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.
8. Choice of Law.
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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 ▇▇▇▇▇▇ COUNTY, WASHINGTON.
9. Entire Agreement.
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REGISTRATION RIGHTS AGREEMENT - PAGE 6
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.
10. Cumulative Rights.
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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.
11. Severability and Reformation.
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If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, 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 10.
12. Arbitration.
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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 HOLDERS
AGREE THAT ALL ARBITRATIONS OCCURRING UNDER THIS SECTION 11 SHALL BE HELD
IN THE CITY OF TACOMA, WASHINGTON.
13. Indemnification.
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(a) Indemnification by the Company. The Company will indemnify
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Holders 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
REGISTRATION RIGHTS AGREEMENT - PAGE 7
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 Holders 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
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 Holders for use in such prospectus, offering circular or other
document.
(b) Indemnification by Holders. Each Holder will, if securities held
--------------------------
by such Holder are included in the securities as to which such registration
qualification or compliance is being effected, 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 such
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 such 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, provided further that the
indemnity agreement contained in this Section 12(b) shall not apply to
amounts paid in settlement of any such claims, losses, damages, liabilities
and actions if such settlement is effected without the consent of the
Holder, which such consent shall not be unreasonably withheld provided
further, that in no event shall any indemnity under this Section 12(b)
exceed the net proceeds from the offering reviewed by such Holder.
(c) Indemnification Proceedings. Each party entitled to
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indemnification pursuant to this Section 12 (the "Indemnified Party") shall
give notice to the party required to provide indemnification pursuant to
this Section 12 (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
REGISTRATION RIGHTS AGREEMENT - PAGE 8
not relieve the Indemnifying Party of its obligations under Section 12
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 Indemnifying 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 12 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:_____________________________________
Name:___________________________________
Title:__________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Partner
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REGISTRATION RIGHTS AGREEMENT - PAGE 9