SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is made this 17ay of May" 2001 by and
between: Xxxx/Horizon Holdings LLC ("Xxxx"); Horizon Holdings I" LLC
("Horizon"); and InsynQ, Inc. d/b/a InsynQ Data Utilities, a Delaware
corporation ("InsynQ"). Xxxx/ Horizon and InsynQ may from time to time be
referred to individually or as Parties.
Recitals
X. Xxxx has commenced a lawsuit against InsynQ in Xxxxxx County Superior
Court of Washington, Cause No.00-2-12519-0 ("Lawsuit 1")" arising out of
InsynQ's breach of a written lease agreement dated January 3, 2000, as amended
("Lease 1 "), for real property situated at 0000 Xxxxxxxx Xxxxx, Xxxxxx 000 and
300m Tacoma, W A.
B. Horizon has also commenced a lawsuit against InsynQ in Xxxxxx County
Superior Court of Washington" Cause No.01-2-07657-0 ("Lawsuit 2"), arising
out of InsynQ's breach of a written lease agreement dated December 21, 2000
("Lease 2"), for real property situated at Tacoma Technology Center,
1441 Court A Street, Tacoma, W A.
C. Except as otherwise provided herein, the Parties seek to avoid the burdens
and uncertainties of litigation and wish by this Agreement to compromise and
settle their claims and causes of action against one another as of the date of
this Agreement as set forth herein.
Agreement
Now, therefore, in consideration of the mutual promises and releases herein
contained, the Parties agree as follows:
1. PAYMENT TO XXXX. Within 24 hours of execution of this Agreement, InsynQ
shall issue to Xxxx (a) 290,000 shares of InsynQ's restricted common stock; and
(b) a warrant to purchase 800,000 shares of InsynQ's common stock at an
exercise price of $0.50 per share, all in accordance with InsynQ's Written
Consent of Directors in Lieu of Special meeting dated May 2001 attached hereto
as Ex. A.
2. PAYMENT TO HORIZON. Within 24 hours of execution of this Agreement,
InsynQ shall issue to Horizon (a) 210,000 shares of InsynQ's restricted common
stock; and (b) a warrant to purchase 200,000 shares of InsynQ's common stock at
an exercise price of $0.50 per share, all in accordance with InsynQ's Written
Consent of Directors in Lieu of Special Meeting dated May 10 2001 attached
hereto as Ex. A.
3. PIGGYBACK AND DEMAND REGISTRATION RIGHTS. Upon execution of this
Agreement, the Parties shall execute two Registration Rights Agreements, in the
forms attached hereto as Ex. B.
4. WARRANT. Upon execution of this Agreement, the Parties shall execute
and acknowledge issuance of two stock warrants, in the forms attached hereto
as Ex. C.
5. AMEND LEASE 1. Upon execution of this Agreement, InsynQ shall transfer to
Xxxx $21,000, which monies shall be deemed and treated as an amendment and part
of InsynQ's security deposit under Lease 1. By tendering said $21,000, the
Parties acknowledge and agree that InsynQ's total security deposit held to date
by Xxxx under Lease 1 is $71,000, which consists of $50,000 balance from
original security deposit amount plus this new $21,000
transfer.
Additionally, for the leased space under Lease 1, InsynQ agrees to relocate
from Suite 200 to Suite 400 of said premises on or before August 1,2001, so
that effective August 1, 2001, InsynQ will be leasing Suites 300 and 400 of
the subject leased premises. This amendment and any other changes to Lease 1
are memorialized in a new lease agreement, a copy of which is attached hereto
as Ex. D.
6. AMEND LEASE 2. Upon the execution of this Agreement, InsynQ shall execute
for the leased space under the Lease 2, an Equipment Co-Location License
Agreement, a copy of which is attached hereto as Ex. E.
7. REPRESENTATIONS AND WARRANTIES. InsynQ represents and warrants as
follows: (a) InsynQ has sufficient common stock authorized to meet its
issuance obligations in Sections 1 and 2 and to issue upon exercise of the
warrants which it is obligated to issue pursuant to Sections 1 and 2 above;
(b) Except for the filing of a Form D with the U.S. Securities and Exchange
Commission and any equivalent forms with the Secretary of State of Washington,
no consent, authorization, approval, permit, or order of or filing with any
governmental or regulatory authority is required under current laws and
regulations in connection with the issuance of the stock; and ( c ) no third
party has any contractual or other rights ( such as preemptive rights) to
acquire said stock.
8. CROSS-DEFAULT PROVISION. In the event InsynQ fails to timely perform
and/or breaches any of its obligations referenced in this Agreement, said event
shall be deemed not only a breach of this Agreement, but also defaults under
Lease 1 as amended and Lease 2 as amended.
9. CONFESSIONS OF JUDGMENT AND WRITS OF RESTITUTION. Upon execution of this
Agreement, InsynQ shall execute in favor of Xxxx and Horizon, Confessions of
Judgment and Orders for Writs of Restitution, in the forms attached hereto as
Ex. F ("Confessions").
The Confessions shall be held by Xxxx'x and Horizon's legal counsel and shall
be filed with the Court only in the event InsynQ fails to timely perform and/or
comply with its obligations under this Agreement and/or fails to timely tender
its June and July 2000 rental obligations under Lease 1 as amended or Lease 2
as amended.
Should it become necessary to file with the Court either of the Confessions,
Xxxx and/or Horizon shall provide InsynQ's legal counsel Xxxxx Xxxxx with
Twenty-Four (24) hours advance written notice by either fax or letter
10. DISMISSAL OF LAWSUITS. Upon InsynQ's execution of this Agreement and
delivery of all documents and payments contained herein, the Parties'
respective legal counsel shall execute and file with the Court, Stipulations
and Orders of Dismissal of Lawsuit 1 and Lawsuit 2, in the forms attached
hereto as Ex. G.
11. MUTUAL RELEASES. Except as otherwise provided herein, the Parties hereby
release each other from any and all claims, demands, rights, and causes of
action of any kind and nature whatsoever, whether presently known or unknown,
suspected or unsuspected, including, but not limited to, those arising from or
alleged to have arisen in connection with the events alleged in Lawsuit 1,
Lawsuit 2, Lease 1 and Lease 2 as of the date of execution of this Agreement.
12. EXECUTION OF DOCUMENTS. The Parties agree to sign, execute and deliver,
or cause others within their control (by way of powers of attorney, documents
and instruments) to do, or cause to be done, all such other acts and things as
may be necessary to carry out the provisions and intent of this Agreement or
any part thereof.
13. SUCCESSORS. This Agreement shall be binding on, and shall inure to the
benefit of, the Parties and their respective heirs, assigns, legal
representatives, and successors.
14. INTERPRETATION AND FAIR CONSTRUCTION. This Agreement has been reviewed
and approved by each of the Parties and their attorneys. In the event it
should be determined that any provision of this Agreement is uncertain or
ambiguous, the language in all parts of this Agreement shall be in all cases
construed as a whole according to its fair meaning and not strictly construed
for nor against any Party.
15. VALIDITY. In case any term of this Agreement shall be invalid, illegal,
or unenforceable, in whole or in part, the validity of any of the other terms
of this Agreement shall not in any way be affected thereby.
16. WAIVER OF BREACH. The failure of any Party hereto to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred, in anyone or more instances,
shall not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, but the same shall be and
remain in full force and effect.
17. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Washington, without giving
effect to principles and provisions thereof relating to conflict or choice of
laws irrespective of the fact that anyone of the Parties may become a resident
of a different state.
18. COSTS AND ATTORNEYS' FEES. Should any Party initiate legal action to
enforce any of the terms of this Agreement, the prevailing Party shall be
awarded its reasonable attorneys' fees and costs, including any and all fees
and costs incurred in any bankruptcy, appeal and/or post-judgment collection
efforts.
19. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.
20. FINAL AGREEMENT. No amendment or waiver of any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and signed by the Parties hereto, and then any such waiver shall be effective
only in the specific instance and for the specific purpose for which given.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY
EXTEND CREDIT. OR TO FORBEAR FROM ENFORCING
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW .
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on
the date and year first above written.
XXXX/HORIZON HOLDINGS LLC
Xxxx/Horizon Holdings LLC
By /s/ Xxxxxx X. Xxxx Date 5/18/01
Its: Co-Managing Member
HORIZON HOLDINGS I LLC
/s/ Xxxxxxx X. Xxxxxxxx Date 5/18/01
By: Xxxxxxx X. Xxxxxxxx
Its: Manager
INSYNQ INC. d/b/a InsynQ Data Utilities
/s/ Xxxx X. Xxxxx Date 5/18/01
By: Xxxx X. Xxxxx
Its: President CEO
