EXHIBIT 4.37
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
Travin Partners, L.L.L.P. ("Travin").
WHEREAS, in exchange for Travin lending the Company $325,000 the Company
issued to Travin that certain Convertible Debenture dated as of June 16, 2000
(the "Convertible Debenture") under which Travin has the right to convert the
principal amount of the debenture into 457,746 shares of common stock, par value
$.001 per share (the "Common Stock"), and accrued interest thereon can be
converted into shares of the Company's Common Stock at a conversion price of
$0.71 per share; and
WHEREAS, in exchange for Travin lending the Company $125,000, the Company
issued to Travin that certain Convertible Debenture dated as of September 11,
2000 (the "September Convertible Debenture") under which Travin has the right to
convert the principal amount of the debenture into 125,000 shares of Common
Stock and accrued interest thereon can be converted into shares of the Company's
Common Stock at a conversion price of the lesser of $1.00 or 60% of the average
of the bid price on the date of conversion; and
WHEREAS, the parties agree that it will be less burdensome and more
administratively feasible for the Company, in exchange for Travin's agreement to
terminate the June Convertible Debenture and the September Convertible
Debenture, to issue shares of its Common Stock to Travin at the agreed upon,
arms-length negotiated value of $0.50 per share; and
WHEREAS, the Company wishes further to grant registration rights for the
shares issued hereunder to Travin as partial consideration for its agreement
hereunder; and
WHEREAS, on June 16 the parties also executed a Warrant Agreement under
which the Company issued warrants to purchase 457,746 shares of Common Stock to
Travin at an exercise price of $1.00 per share (the "June Warrants"); and
WHEREAS, on September 11 the parties also executed a Warrant Agreement
under which the Company issued warrants to purchase 125,000 shares of Common
Stock to Travin at an exercise price of $1.00 per share (the "September
Warrants"); and
WHEREAS, on each of June 16 and September 11, 2000, the parties executed a
Subscription Agreement. the "June Subscription Agreement" and the "September
Subscription Agreement," respectively, under which the Warrants, the September
Warrants, the June Debentures and the September Debentures were granted demand
and piggyback registration rights.
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. June Debenture Conversion. All principal and accrued interest
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currently outstanding under the June Convertible Debenture which may be
converted into shares of the Company's Common Stock at $0.71 per share is
hereby converted into [650,000 plus accrued interest] 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 Travin and the return of
the June Convertible Debenture to the Company, marked cancelled.
2. September Debenture Conversion. All principal and accrued interest
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currently outstanding under the September Convertible Debenture which may
be converted into shares of the Company's Common Stock at the lesser of
$1.00 or 60% of the bid price on the date of conversion is hereby converted
into [250,000 plus accrued interest] 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 Travin and the return of the September
Convertible Debenture to the Company, marked cancelled.
3. Termination of Certain Provisions of June Subscription Agreement.
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Sections 5.3, 5.6 and 5.7 of the June Subscription Agreement are hereby
terminated in their entirety. The remaining provisions of the June
Subscription Agreement shall remain in effect with respect to the June
Warrants and the Common Stock subject to the June Warrants.
4. Termination of Certain Provisions of September Subscription Agreement.
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Section 5.1 of the September Subscription Agreement is hereby terminated in
its entirety. The remaining provisions of the September Subscription
Agreement shall remain in effect with respect to the September Warrants and
the Common Stock subject to the September Warrants.
5. Registration Rights for June Conversion. The [650,000 plus accrued
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interest] shares issued pursuant to this Agreement are hereby granted the
same registration rights as set forth in Section 5.4 of the June
Subscription Agreement, pursuant to which the Company will promptly file a
registration statement with the SEC.
6. Registration Rights for September Conversion. The [250,000 plus
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accrued interest] shares issued pursuant to this Agreement are hereby
granted the same registration rights as set forth in Section 5.1 of the
September Subscription Agreement, pursuant to which the Company will
promptly file a registration statement with the SEC.
7. Certain Acknowledgements and Agreements of Travin. Travin 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
Travin 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 Travin and an authorized representative of the
Company.
(d) Travin agrees not to sell nor attempt to sell all or any part of the
Shares allocated to Travin 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.
8. Representations and Warranties of Travin. Travin understands
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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 Travin, 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 Travin as an investor in the Company:
(a) Travin has consulted its attorney, accountant or investment
advisor with respect to the investment contemplated hereby and
its suitability for Travin. 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, Travin is relying solely on
independent investigations made by Travin or representative(s) of
Travin.
(b) Travin has read and fully understands the public filings of
the Company as filed with the SEC.
(c) The Company has made available to Travin, 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, Travin 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) Travin understands and acknowledges that: (i) while the
Company has an operating history, the purchase of Shares by
Travin involves a high degree of risk of loss of Travin's entire
investment, and there is no assurance of any income from such
investment; (ii) Travin 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) Travin is purchasing the
Shares for investment purposes only for Travin'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 Travin to liquidate an investment therein readily in
case of an emergency; and (vi) Travin 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 Travin hereby subscribes to purchase or any part
thereof, and Travin 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
Travin and the other information set forth in Section 11 are
true, correct and complete in all material respects. Any
information which Travin has heretofore furnished to the Company
with respect to Travin 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, Travin will
immediately furnish such revised or corrected information to the
Company.
(f) Travin 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. Travin 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. Travin 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 Travin in, and his commitments to, all similar investments
that are illiquid is reasonable in relation to his net worth.
(g) Travin 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) Travin is a United States citizen or is otherwise a U.S.
Person* as defined below.
(i) The representations, warranties, agreements and
acknowledgements made by Travin in this Agreement are made with
the intention that they be relied upon by the Company in
determining the suitability of Travin as a purchaser of Shares,
and shall survive their purchase. In addition, Travin undertakes
to notify the Company immediately of any change in any
representation or warranty of Travin set forth herein.
9. Indemnification. Travin understands that the offer and sale
of Shares to him is being made, and the sale of Shares will be
made, in reliance upon the acknowledgments and agreements of
Travin set forth in Section 7 and the representations and
warranties of Travin set forth in Section 8. Travin agrees to
provide, if requested, any additional information that may
reasonably be required to determine the eligibility of Travin to
purchase Shares. Travin hereby agrees 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 Travin contained in
this Agreement or in any other document provided by Travin to the
Company in connection with Travin's offer to purchase Shares.
Travin agrees to indemnify
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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.
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 Travin in
violation of the Securities Act or other applicable law.
Notwithstanding any provision of this Agreement, Travin does not
waive any rights granted to him under applicable securities laws.
Travin 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.
10. 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 Travin. 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.
11. Suitability. Travin warrants and represents to the Company
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that the following information supplied by Travin pursuant to
Section 4 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.
12. General. This Agreement (i) shall be binding on Travin and the heirs,
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personal representatives, successors and permitted assigns of Travin, (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
Travin as a shareholder in the Company.
13. 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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0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier No.: (000) 000-0000
If to Travin: At the last address indicated on the Company's books and
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records.
14. Assignment. Travin agrees that neither this Agreement nor any rights
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which may accrue to him hereunder may be transferred or assigned.
15. 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.
16. Confidentiality. Travin acknowledges that all Confidential Information
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(as defined herein) shall be and remain the exclusive property of the
Company at all times. Travin hereby agrees to keep in strict confidence all
Confidential Information. Travin 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 Travin, whether or not reduced to writing and whether or not
conceived, originated, discovered or developed in whole or in part by
Travin, 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.
17. 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.
18. 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.
19. Conflict. If any conflict shall arise between the terms of either of
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the June Subscription Agreement or September Subscription Agreement and
this Agreement, or the June or September Warrants 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.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Chairman CEO
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TRAVIN PARTNERS, L.L.L.P.
By: /s/ Xxxxxxx X. Xxxx
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Name:______________________________
Title: [ILLEGIBLE]
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