EXHIBIT 4.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of the 4th
day of August, 2000 is entered into between INSYNQ, Inc., a Delaware corporation
(the "Company") and ONE CLICK INVESTMENTS LLC, a Washington corporation
("Holder").
WHEREAS, there are currently outstanding 19,830,848 shares of Common Stock
of the Company;
WHEREAS, pursuant to a Subscription Agreement dated August 4, 2000 (the
"Subscription Agreement"), by and among the Company and Holder, Holder has
purchased 200,000 shares (the "Shares") of common stock, $0.001 par value per
share (the "Common Stock"), of the Company;
WHEREAS, pursuant to a Warrant Agreement dated August 4, 2000 (the "Warrant
Agreement"), by and among the Company and Holder, Holder has warrants to
purchase 200,000 shares of Common Stock at an exercise price of $2.00 per share;
and
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 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 "Commission") of effectiveness of
the registration statement, other than any registration statement on Form X-0,
Xxxx X-0 or as otherwise contemplated under Rule 145 of the Act.
1. Piggyback Registration Rights.
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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 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 "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 number of Shares
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
Shares 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 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. 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 Holder of such determination.
(b) 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 Holder, 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, and
(B) second, any other securities held by holders with 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.
(c) If a Registration is a secondary registration on behalf of
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 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 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.
2. Demand Registration Rights
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(a) Holder has the right to one demand registration right on or after
November 1, 2000. Subject to (i) the registration procedures outlined in
Section (b) below and (ii) the Common Stock of the Company being publicly
traded at the time of the request set forth below, the Company shall, upon
the request of Holder,
(b) Prepare and file with the SEC a Registration Statement on Form
S-3 (or any other form of registration statement on which it may file for
registration under the
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Securities Act) registering resales of the Common Shares by the Holder from
time to time through the over-the-counter quotation system of the Nasdaq
Market or the facilities of any national securities exchange or the Nasdaq
National Market if the Common Stock is then listed or quoted thereon or in
privately-negotiated transactions. The Registration Statement shall
register (i) all of the Common Shares and (ii) such number of additional
shares of Common Stock as may become issuable as Common Shares as a result
of the anti-dilution provisions of the Common Shares. The Company will use
commercially reasonable efforts to cause the initial Registration Statement
to be declared effective by the SEC as soon as possible after the filing
thereof. The Company hereby agrees that it shall (i) prepare and file such
post-amendments to the initial Registration Statement and/or such
additional Registration Statements as may be necessary to ensure that at
all times there shall be registered with the SEC for resale by the Holder
from time to time as provided in this Section 2 sufficient shares of Common
Stock to account for all Common Shares which become issuable from time to
time with respect to the Common Shares (as a result of anti-dilution
provisions), and (ii) cause such post-effective amendments to the initial
Registration Statement and/or such additional Registration Statements to be
declared effective as soon as possible after the filing thereof.
The Company agrees to use diligent efforts to keep the Registration
Statement(s) continuously effective and usable for resale of Registration
Securities until two years (the "Effectiveness Period") from the Closing Date or
such shorter period which will terminate when all Common Shares have ceased to
be Registrable Securities.
(c) Registration Procedures
-----------------------
In connection with the Company's obligation to file Registration
Statements as provided in Section 3 hereof, the Company will as
expeditiously as possible:
(i) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the
Securities Act or rules and regulations thereunder for shelf registration
or otherwise necessary to keep the Registration Statement effective for the
applicable period and cause the Prospectus as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the methods of disposition by the sellers thereof
set forth in such Registration Statement or supplement to the Prospectus;
(ii) Notify the Holder of Registrable Securities promptly, and confirm
such advice in writing,
(a) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective,
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(b) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, and
(c) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(iii) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the
earliest possible moment;
(iv) furnish, without charge, to Holder at least one conformed copy
of the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, all documents incorporated
therein by reference and all exhibits (including those incorporated by
reference);
(v) deliver to Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as Holder may reasonably request; the Company consents
to the use of the Prospectus or any amendment or supplement thereto by
Holder in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto;
(vi) use its reasonable efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by
such governmental agencies or authorities as may be necessary to enable the
Holder thereof to consummate the disposition of such Registrable Securities
in such jurisdictions as the Holder may reasonably specify in response to
inquiries to be made by the Company, provided that the Company will not be
required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to
general service of process in any such jurisdiction where it is not then so
subject;
(vii) if any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Company, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered by Holder, prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
Holders of the Registrable Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
(viii) obtain a CUSIP number for all Registrable Securities (unless
already obtained);
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(ix) make available for inspection during normal business hours by a
representative of the Holder and any attorney or accountant retained by
such representative, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by
Holder or any such attorney or accountant in connection with the
Registration Statement; provided that all such records, information or
documents shall be kept confidential by Holder or any such attorney or
accountant unless disclosure of such records, information or documents is
required by court or administrative order or is generally available to the
public other than as a result of disclosure in violation of this paragraph
(ix);
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make generally available to its
security holders an earnings statement satisfying the provisions of Section
11(a) of the Securities Act (in accordance with Rule 158 thereunder or
otherwise), no later than 45 days after the end of the 12-month period (or
90 days, if such period is a fiscal year) beginning with the first month of
the Company's first fiscal quarter commencing after the Effective Date,
which statements shall cover said 12-month period;
(xi) if at any time an event of the kind described in Section 4(g)
shall occur, notify Holder that the use of the Prospectus must be
discontinued (the Company will not declare any such "black-out" periods in
excess of twenty business days during any twelve month period, unless
otherwise required.
Holder agrees, as a condition to the registration obligations with
respect to such Holder provided herein, to furnish to the Company such
information regarding the distribution of such Registrable Securities as
the Company may from time to time reasonably request in writing.
Holder agrees by acquisition of such Registrable Securities that, upon
receipt of any notice from the Company described in this paragraph 2(c),
Holder will forthwith discontinue disposition of Registrable Securities
until Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 2(c)(vii) hereof, or until it is advised
in writing by the Company (which notice the Company shall give as promptly
as possible), that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and if so directed by the
Company, Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in Holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
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3. Cooperation by the Holder.
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(a) The Holder will furnish to the Company in writing such
information about the Holder as the Company may reasonably require from the
Holder in connection with the preparation of the registration statement
(and the prospectus included therein).
(b) The Holder 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. At the end of the
period during which the Company has decided to keep a registration
statement current and effective (and any extensions thereof), the Holder
shall discontinue sales of Shares pursuant to the registration statement
upon receipt of notice from the Company of its intention to remove from
registration the Shares covered by the registration statement which remain
unsold, and the Holder shall notify the Company of the number of Shares
registered which remain unsold immediately upon receipt of the notice from
the Company.
(c) The Holder agrees to provide the Company with written
representations of fact about the Holder 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.
If any Registration is underwritten, Holder shall (i) agree to sell its Shares
on the basis provided in any underwriting arrangement approved by the Company
and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, indemnity agreements, and other documents requested thereunder;
provided that Holder shall only be required to make representations and warrants
regarding Holder and its intended method of distribution.
4. 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
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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.
5. 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 Holder may specify to the Company and all other parties by
Notice):
INSYNQ, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
and to the Holder at:
One Click Investments LLC
_____________________
_____________________
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.
6. 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 the Holder.
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.
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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 XXXXXX COUNTY, WASHINGTON.
9. 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.
10. 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.
11. 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.
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 HOLDER
AGREE THAT ALL ARBITRATIONS OCCURRING UNDER THIS SECTION 12 SHALL BE HELD
IN THE CITY OF TACOMA, WASHINGTON.
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13. Indemnification.
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(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
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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.
14. Reimbursement of Expenses.
-------------------------
The Company shall reimburse Holder his legal and accounting fees
incurred by Holder in connection with his acquisition of the Common Stock
and the Warrants referenced herein, up to but not exceeding $5,000.00.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INSYNQ, INC.
a Utah corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
ONE CLICK INVESTMENTS LLC
a Washington corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
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