AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of
January 30, 2001 by and between Insynq, Inc., a Delaware corporation
(the "Company"), and One Click Investments, LLC ("One Click").
WHEREAS, the Company has issued that certain Promissory Note dated
as of December 1, 2000 (the "Note") under which One Click has loaned the
Company $50,000; and
WHEREAS, the parties agree that it will be less burdensome and more
administratively feasible for the Company, in exchange for canceling One
Click's right to receive payment, together with interest$1,050.29, under the
Note, which is due and payable on January 31, 2001, to issue 148,488 shares of
its Common Stock to One Click at an exercise price of $0.3438 per share (the
"Note Conversion Shares").
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. CONVERSION OF NOTE. The $50,000 Note under which One Click currently has
the right to receive payment from the Company on January 31, 2001 and
interest in the amount of $1,050.29, is hereby converted into 148,488
shares of Common Stock pursuant to the fair market value at market
close of $0.3438 per share. Such shares shall be issued upon the
execution of this Agreement by One Click and the return of the
$50,000 Note to the Company.
2. REGISTRATION RIGHTS. The 148,488 shares issued pursuant to this Agreement
are hereby granted Registration Rights pursuant to a Registration
Agreement dated January 30, 2001. In such Registration Rights
Agreement, the Company has agreed to Piggyback Registration Rights.
3. CERTAIN ACKNOWLEDGEMENTS AND AGREEMENTS OF ONE CLICK. One Click hereby
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
One Click 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 One Click and an authorized representative of the
Company.
(d) One Click agrees not to sell nor attempt to sell all or any part of
the Shares allocated to One Click 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.
4. REPRESENTATIONS AND WARRANTIES OF ONE CLICK. One Click understands 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 One Click, 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 One Click as an investor in
the Company:
(a) One Click has consulted its attorney, accountant or investment
advisor with respect to the investment contemplated hereby and its
suitability for One Click. 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, One Click is relying solely on independent investigations made
by One Click or representative(s) of One Click.
(b) One Click has read and fully understands the public filings of the
Company as filed with the SEC.
(c) The Company has made available to One Click, 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, One Click 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) One Click understands and acknowledges that: (i) while the Company
has an operating history, the purchase of Shares by One Click involves a
high degree of risk of loss of One Click's entire investment, and there is
no assurance of any income from such investment; (ii) One Click 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) One Click is purchasing
the Shares for investment purposes only for One Click'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 One Click to
liquidate an investment therein readily in case of an emergency; and
(vi) One Click 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 One Click hereby subscribes to purchase or any part
thereof, and One Click 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 One Click and the other
information set forth in Section 10 are true, correct and complete in all
material respects. Any information which One Click has heretofore
furnished to the Company with respect to One Click 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, One Click will
immediately furnish such revised or corrected information to the Company.
(f) One Click 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. One Click 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. One Click
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 One Click in, and his commitments
to, all similar investments that are illiquid is reasonable in relation to
his net worth.
(g) One Click 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) One Click is a United States citizen or is otherwise a U.S. Person*
as defined below.
(i) The representations, warranties, agreements and acknowledgements made
by One Click in this Agreement are made with the intention that they be
relied upon by the Company in determining the suitability of One Click as
a purchaser of Shares, and shall survive their purchase. In addition, One
Click undertakes to notify the Company immediately of any change in any
representation or warranty of One Click set forth herein.
5. INDEMNIFICATION. One Click 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 One Click set
forth in Section 6 and the representations and warranties of One
Click set forth in Section 7. One Click agrees to provide, if
requested, any additional information that may reasonably be required
to determine the eligibility of One Click to purchase Shares. One
Click 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 One Click contained in this Agreement or in any other
document provided by One Click to the Company in connection with One
Click's offer to purchase Shares. One Click agrees to indemnify 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 One Click in violation of
the Securities Act or other applicable law. Notwithstanding any
provision of this Agreement, One Click does not waive any rights
granted to him under applicable securities laws. One Click 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.
6. ARBITRATION. Any dispute or controversy arising under or in 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 One Click. 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.
7. SUITABILITY. One Click warrants and represents to the Company that the
following information supplied by One Click pursuant to Section 7 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 1999 and 2000, and who reasonably
expects an income in excess of $200,000.00, if individual, or
$300,000.00, if joint, in 2001.
[ ] (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.
8. GENERAL. This Agreement (i) shall be binding on One Click and the heirs,
personal representatives, successors and permitted assigns of One
Click, (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 One Click as a shareholder in the
Company.
9. NOTICES. Any notice, request, instruction or other document to be 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.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier No.: (000) 000-0000
If to One Click: At the last address indicated on the
Company's books and records.
10. ASSIGNMENT. One Click agrees that neither this Agreement nor any rights
which may accrue to him hereunder may be transferred or assigned.
11. ENTIRE AGREEMENT. This Agreement contains the entire understanding of 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.
12. CONFIDENTIALITY. One Click acknowledges that all Confidential Information
(as defined herein) shall be and remain the exclusive property of the
Company at all times. One Click hereby agrees to keep in strict
confidence all Confidential Information. One Click 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 One Click, whether or not reduced to writing and
whether or not conceived, originated, discovered or developed in
whole or in part by One Click, 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.
13. PRONOUNS; HEADINGS. All pronouns and any variations thereof shall be
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.
14. SEVERABILITY. In the event that any provision contained herein shall 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.
15 CONFLICT. If any conflict shall arise between the terms of the
Registration Agreement and this Agreement, or the Warrant Agreement
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.
a Delaware corporation
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
ONE CLICK INVESTMENTS, LLC.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Senior Managing Partner
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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.
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