EXHIBIT 4.20
This Debenture and the shares of Common Stock issuable upon conversion hereof
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have not been registered under the Securities Act of 1933 (the "Act") or under
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any applicable state securities laws. This Debenture may not be offered for
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sale, sold, transferred, assigned, pledged, or otherwise disposed of except to
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the estate of heirs of the holder by will or the laws of intestate succession.
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The shares issuable upon conversion hereof may not be offered for sale, sold,
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transferred, assigned, pledged or otherwise disposed of without registration
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under the Act and any applicable satisfactory (both opinion and counsel to be
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satisfactory) to Insynq, Inc. that registration is not required.
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CONVERTIBLE DEBENTURE
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$125,000 PRINCIPAL AMOUNT -- INTEREST AT BANK OF AMERICA PRIME RATE + 1/2% ON
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DATE OF ISSUANCE
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Date of Issuance: September 11, 2000
Holder: TCA Investments, Inc.
1. Interest, Conversion Rate and Prepayments
InsynQ, Inc., (the "Company"), a Delaware corporation, promises to pay to
the Holder named above the principal amount shown above, and interest on the
principal amount of this Debenture, at the rate per annum shown above. The
Company will pay accrued interest and the entire outstanding principal amount at
the end of thirty (30) days from the date of issuance shown above ("Due Date").
Interest on the Debenture will accrue from the date of issuance. Interest will
be computed on the basis of a 360-day year. The Company shall be entitled to
pre-pay the amounts outstanding under this Debenture, in whole or in part,
without penalty.
2. Method of Payment
The Company will pay principal and interest on the Debenture to the person
who is registered as the Holder of Debenture at the close of business on the Due
Date. Holder must surrender the Debenture to the Company to collect the
principal payment. The Company will pay principal in money of the United States
that at the time of payment is legal tender for payment of public and private
debts. However, the Company may pay principal by check
payable in such money. It may mail said check to a Holder's address as shown on
the books and records of the Company at that time.
3. Conversion
A holder of a Debenture may convert all or part of the outstanding
principal and accrued interest hereunder into Common Stock of the Company at any
time on or after September 11, 2000 ("Conversion Date") and prior to the payment
by the Company of such amounts. The conversion price is (a) $1.00 per share or
(b) sixty percent (60%) of the average bid price, whichever is less on the date
of conversion. To determine the number of shares issuable upon conversion of
the Debenture, the principal amount and accrued interest, if any, to be
converted shall be divided by the conversion price in effect on the conversion
date. On conversion, the outstanding principal amount will be adjusted
hereunder and interest will continue to accrue only on such amount. No
fractional interests will be issued, and any fraction will be rounded up to the
nearest whole number of shares of Common Stock or other securities, properties
or rights issuable upon conversion.
To convert, a Debenture Holder must (1) complete and sign the conversion
notice attached to this Debenture, (2) surrender the Debenture to the Company,
(3) furnish appropriate endorsements and transfer documents if required by the
Company, and (4) pay any transfer or similar tax if required. A holder may
convert a portion of a Debenture if the portion is $10,000 or a whole multiple
of $10,000.
The conversion price will be adjusted for stock dividends, mergers,
consolidations, stock splits or distributions on Common Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distribution to all
holders of Common Stock of certain rights to purchase such Common Stock at less
than the current market price at the time; distributions to such holders of
assets or debt of the Company or certain rights to purchase debt of the Company
(excluding cash dividends or distributions from current retained earnings). If
the Company is a party to a consolidation or merger or a transfer or lease of
all or substantially all of its assets, the right to convert a Debenture into
Company Common stock may be changed into a right to convert it into stock,
debentures, cash or other assets of the Company or of the entity resulting or
surviving such merger or to which such assets shall have been sold, leased or
transferred.
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4. Denominations, Transfer, Exchange
The transfer of the Debenture must be registered with the Company or a
Trustee. The Company may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay transfer taxes and
fees required by law, if any.
5. Persons Deemed Owners
The registered holder of a Debenture may be treated as its owner for all
purposes.
6. Successor Corporation
When a successor corporation assumes all the obligations of its predecessor
under the Debenture, the predecessor corporation will be released from those
obligations.
7. Registration Rights
The Holders of this Debenture have been granted certain registration rights
as set forth the Subscription Agreement between the Holder and the Company of
even date herewith, and such Subscription Agreement shall be deemed to be
incorporated by reference herein. The Holders shall be entitled to exercise
such registration rights prior to the Conversion Date as set forth in the
Subscription Agreement.
8. Defaults and Remedies
An Event of Default is: default in payment of interest or principal on the
Debenture; failure by the Company for thirty (30) days after notice to it to
comply with any of its other agreements in the Debenture; the making of an
assignment for the benefit of the Company's creditors; the filing of a voluntary
or involuntary petition for or the appointment of a receiver of the Company's
property; the filing of a voluntary petition by or an involuntary petition
against the Company under any provision of the federal Bankruptcy Act; the
dissolution of the Company's business. If an Event of Default occurs and is
continuing, the Holder may declare the Debenture to be due and payable
immediately.
9. No Recourse Against Others
A director, officer, employee, agent or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Debenture or for any claim based on, in respect of, or by reason of
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such obligations or their creation. The Debenture Holder, by accepting this
Debenture, waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Debenture.
10. Authentication
The Debenture shall not be valid until authenticated by the manual
signature of an officer of the Company.
11. Abbreviations
Customary abbreviations may be used in the name of a Debenture Holder or an
assignee, such as TEN COM (tenants in common), TEN ENT (tenants by the
entireties), JT TEN (joint tenants with right of survivorship and not as tenants
in common), CUST (Custodian), and U/G/M/A (Uniform Gifts to Minor Acts).
INSYNQ, Inc.
By:____________________________
Xxxx X. Xxxxx
Chief Executive Officer
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EXHIBIT "A"
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NOTICE OF CONVERSION
(To be executed by Holder to convert the
Debenture in whole or in part)
InsynQ, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Convertible Debenture dated September 11, 2000 to TCA Investments,
Inc.
Dear Sir or Madam:
The undersigned holder irrevocably elects to convert $__________ of
outstanding principal and $__________ of accrued interest thereon under the
Debenture of InsynQ, Inc. to purchase ______ shares of Common Stock of InsynQ,
Inc. (the "Company"), at a conversion price per share of $__________.
By:__________________________
Its:_________________________
Date:________________________
Exhibit "A", Page 1
AMENDMENT NO. 2 TO CONVERTIBLE DEBENTURE
This AMENDMENT No. 2 TO CONVERTIBLE DEBENTURE (the "Amendment") is effective as
of October 19, 2000, by and between InsynQ, Inc., a Delaware corporation (the
"Maker"), and TCA Investments, Inc. ("Holder").
WITNESSETH
WHEREAS, the parties have executed that certain Convertible Debenture of
September 11, 2000;
WHEREAS, the parties have executed that certain Amendment No. 1 to
Convertible Debenture as of October 6, 2000 to extend the Due Date of the
Convertible Debenture; and
WHEREAS, the parties have deemed it to be in their mutual best interest to
further extend the Due Date of the Convertible Debenture to reflect a new Due
Date.
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, Section 1 of the
Convertible Debenture is hereby amended in its entirety as follows:
"1. Interest, Conversion Rate and Prepayments
InsynQ, Inc., (the "Company"), a Delaware corporation, promises to pay to
the Holder named above the principal amount shown above, and interest on the
principal amount of this Debenture, at the rate per annum shown above. The
Company will pay accrued interest and the entire outstanding principal amount on
March 1, 2001 ("Due Date"). Interest on the Debenture will accrue from the date
of issuance. Interest will be computed on the basis of a 360-day year. The
Company shall be entitled to pre-pay the amounts outstanding under this
Debenture, in whole or in part, without penalty."
IN WITNESS WHEREOF, the parties have executed this Extension effective as
of the date set forth above.
TCA INVESTMENTS, INC.
By:___________________________
Name:_________________________
Title:________________________
INSYNQ. INC.
By:___________________________
Name:_________________________
Title:________________________
AMENDMENT NO. 1 TO CONVERTIBLE DEBENTURE
This AMENDMENT NO. 1 TO CONVERTIBLE DEBENTURE (the "Amendment") is
effective as of October 6, 2000, by and between InsynQ, Inc., a Delaware
corporation (the "Maker"), and TCA Investments, Inc. ("Holder").
WITNESSETH
WHEREAS, the parties have executed that certain Convertible Debenture as of
September 11, 2000; and
WHEREAS, the parties have deemed it to be in their mutual best interest to
extend the Due Date of the Convertible Debenture to reflect a new Due Date.
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, Section 1 of the
Convertible Debenture is hereby amended in its entirety as follows:
"1. Interest, Conversion Rate and Prepayments
InsynQ, Inc., (the "Company"), a Delaware corporation, promises to pay to
the Holder named above the principal amount shown above, and interest on the
principal amount of this Debenture, at the rate per annum shown above. The
Company will pay accrued interest and the entire outstanding principal amount at
the end of sixty (60) days from the date of issuance shown above ("Due Date").
Interest on the Debenture will accrue from the date of issuance. Interest will
be computed on the basis of a 360-day year. The Company shall be entitled to
pre-pay the amounts outstanding under this Debenture, in whole or in part,
without penalty."
IN WITNESS WHEREOF, the parties have executed this Extension effective as
of the date set forth above.
TCA INVESTMENTS, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
INSYNQ, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
