WARRANT TO PURCHASE
COMMON STOCK OF
INSYNQ, INC.
______________________________________________
Dated: March 25, 2001
_______________________________________________________________________________
NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE; THEREFORE, THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF, IF ANY, MAY NOT BE SOLD OR
TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE CORPORATION
OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER. THIS WARRANT MAY NOT
BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE
SECURITIES ACT OR AN EXCEPTION THEREFROM IS AVAILABLE.
Bransville Investment Limited/$0.22 per share.
===============================================================================
Warrant to Purchase
2,200 Shares of
Common Stock, Subject to
Adjustment as herein provided
WARRANT TO PURCHASE COMMON STOCK
INSYNQ, INC.
Dated as of the 25th day of March 2001.
WHEREAS, the undersigned desires to acquire for investment purposes this
Warrant to Purchase Common Stock providing for the acquisition of 2,200 shares
of common stock, $0.001 par value per share (the "Common Stock"), of Insynq,
Inc. (the "Company"), subject to adjustment as provided herein.
WHEREAS, there are currently outstanding 28,244,790 shares of Common Stock
of the Company;
NOW, THEREFORE, for and in consideration of past service and of the mutual
covenants, representations, warranties and agreements contained herein, this is
to certify that:
1. The undersigned or his permitted and registered assigns ("Holder"),
is entitled to purchase from time to time, subject to the provisions and
conditions herein, not later than the termination of the Exercise Period of
this Warrant to Purchase Common Stock (this "Warrant") as set forth in
Paragraph 4 below, an aggregate of TWO THOUSAND TWO HUNDRED (2,200) shares of
Common Stock, at the Exercise Price per share set forth in Paragraph 2(c)
herein, and upon such purchase to receive a certificate or certificates
representing such shares of Common Stock. The number of shares of Common Stock
to be received upon the exercise of this Warrant may be adjusted from time to
time as hereinafter set forth.
2. DEFINED TERMS. As used in this Warrant, the following capitalized
terms shall have the meanings respectively assigned to them below, which
meanings shall be applicable equally to the singular and plural forms of the
terms so defined.
(a) "BUSINESS DAY" shall mean any day except a Saturday, Sunday or
other day on which commercial banks in the State of Washington are
authorized or required by law to close.
(b) "EXERCISE PERIOD" means the period commencing on the date of
this Warrant and terminating at 5:00 p.m., Tacoma, Washington time, on
March 24, 2004 or, in the event that March 24, 2004 is not a Business Day,
the Business Day next following.
(c) "EXERCISE PRICE" shall mean a strike price of $0.22 per share.
(d) "Holder" shall mean the Person(s) then registered as the owner of
the Warrant or Warrant Securities, as the case may be, on the books and
records of the Company.
(e) "PERSON" shall mean any natural person, corporation, limited
partnership, limited liability company, general partnership, joint
venture, association, company, or other organization, whether or not a
legal entity, and any government agency or political subdivision thereof.
(f) "WARRANT SECURITIES" shall mean the shares of Common Stock (or
other securities) of the Company purchasable or purchased from time to
time under this Warrant or acquired upon any transfer of any such shares,
together with all additional securities received in payment of dividends
or distributions on or splits of those securities or received as a result
of the adjustments provided for in Paragraph 6 hereof.
(g) "DISTRIBUTION COMPLIANCE PERIOD" means one year from the date of
this Warrant.
(h) "U.S. PERSON" means (i) any natural person resident in the
United States; (ii) any partnership or corporation organized or
incorporated under the laws of the United States; (iii) any estate of
which any executor or administrator is a U.S. Person; (iv) any trust of
which any trustee is a U.S. Person; (v) any agency or branch of a foreign
entity located in the United States; (vi) any non-discretionary account or
similar account (other than an estate or trust) held by a dealer of other
fiduciary for the benefit or account of a U.S. Person; (vii) any
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; and (viii) any partnership or
corporation if (A) organized or incorporated under the laws of any foreign
jurisdiction and (B) formed by a U.S. Person principally for the purpose
of investing in securities not registered under the Securities Act, unless
it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a) of the Securities Act) who are not natural persons,
estates or trusts.
3. EXERCISE OF WARRANT. Subject to and in accordance with the
provisions and conditions hereof, this Warrant may be exercised from time to
time in whole or in part during the term of this Warrant as set forth in
Paragraph 5 hereof.
4. TERM OF WARRANT. The term of this Warrant shall commence on the date
hereof and shall expire on the exercise in full of this Warrant by Holder or at
5:00 p.m. Tacoma, Washington time on the expiration of the Exercise Period.
5. MANNER OF EXERCISE. Holder may exercise this Warrant in whole or in
part in accordance with the terms hereof by mailing or personally delivering to
the Company (i) this Warrant, (ii) a Notice of Exercise in the form of Exhibit
I hereto duly executed by Xxxxxx, (iii) either a written certificate that
Holder is not a U.S. Person and the Warrant is not being exercised on behalf of
a U.S. Person or a written opinion of counsel stating that the Warrant and the
securities delivered upon its exercise have been registered under the Act or
are exempt from registration and (iv) payment of the Exercise Price per share,
such payment to be in the form of cash, a certified or official bank check made
payable to the Company, or a wire transfer of funds to an account designated by
the Company, or any combination of the foregoing, together with all federal and
state excise taxes applicable upon such exercise. Upon receipt by the Company
of this Warrant, the Notice of Exercise and such payment, this Warrant shall be
deemed to have been exercised with respect to the number of shares of Common
Stock subject to such exercise and specified in the Notice of Exercise, and
Holder shall thereupon become the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding the fact that the stock
transfer books of the Company may then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered
to Holder. As soon as practicable after any exercise, in whole or in part, of
the Warrant, and in any event within ten (10) Business Days thereafter, the
Company will deliver to Holder a stock certificate or certificates representing
the shares of Common Stock so purchased, with such certificate or certificates
to be in such name(s) and such denominations as Holder may specify in the
Notice of Exercise. If this Warrant is exercised for less than all of the
shares of Common Stock subject hereto, the Company shall, upon such exercise
and surrender of this Warrant for cancellation, promptly execute and deliver to
Holder a new Warrant of like tenor evidencing the right of Holder to purchase
the balance of shares of Common Stock purchasable hereunder.
6. ADJUSTMENT PROVISIONS.
(a) If the Company shall, during the term hereof, (i) declare a
dividend and make a distribution on the Common Stock payable in shares of
Common Stock, (ii) subdivide or combine its outstanding shares of Common
Stock, (iii) change the number of shares of Common Stock issuable upon
exercise of this Warrant by reclassification, exchange or substitution, or
(iv) reorganize the capital structure of the Company by merger,
reorganization, consolidation or sale of assets, then this Warrant shall,
after the happening of any such event, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
received as a result of that change with respect to the shares of Common
Stock as if such shares had been purchased under this Warrant immediately
before occurrence of such event. Such adjustment shall be made
successively whenever any event listed above shall occur. Any adjustment
under this subparagraph (a) shall become effective at the close of
business on the date any such event occurs (the "Adjustment Date") and the
exercise price shall be adjusted proportionately.
(b) If, during the term of this Warrant, the number of shares of
Common Stock of the Company is adjusted pursuant to subparagraph (a)
above, then the Exercise Price per share to be in effect after such
Adjustment Date shall be determined by multiplying the Exercise Price per
share in effect immediately prior to such Adjustment Date by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding at the closing of business on the Business Day immediately
preceding such Adjustment Date and the denominator of which shall be the
number of shares of Common Stock (or the equivalent amount of other
securities) outstanding at the opening of business on the first Business
Day after the Adjustment Date.
(c) NOTICE OF ADJUSTMENT. The Company shall give notice of each
adjustment or readjustment of the number of shares of Common Stock or
other securities issuable upon exercise of this Warrant to Holder or of
the Exercise Price per share at the address set forth in Paragraph 17
hereof.
7. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued in connection with the
exercise of this Warrant, but the Company shall pay, in lieu of any fractional
share, a cash payment on the basis of the Exercise Price per share of the
Common Stock to be acquired pursuant to such exercise for such fractional
share.
8. RESTRICTIONS ON TRANSFER. The undersigned represents and warrants
that this Warrant is being purchased for his investment account without a view
towards the resale or distribution thereof in violation of applicable
securities laws. It is understood that in case of subsequent sale of such
Warrant or the Warrant Securities under certain circumstances, such sale might
be deemed to constitute a public distribution within the meaning of, and
require registration under, the provisions of the Securities Act of 1933, as
amended (the "Act").
(a) The undersigned represents, warrants and agrees that an offer or
sale of the Warrant or the Warrant Securities, if made prior to the
expiration of the Distribution Compliance Period, shall not be made to a
U.S. Person or for the account or benefit of a U.S. Person and shall be
made pursuant to the following: (i) the purchaser certifies that it is
not a U.S. Person and is not acquiring the securities for the account or
benefit of any U.S. Person or is a U.S. Person who purchased securities in
a transaction that did not require registration under the Act, (ii) the
purchaser agrees to resell such securities only in accordance with the
provisions of Regulation S pursuant to registration under the Act, or
pursuant to an available exemption from registration and agrees not to
engage in hedging transactions with regard to such securities unless in
compliance with the Act and (iii) the securities contain a legend that
transfer is prohibited except in accordance with the provisions of
Regulation S, pursuant to registration under the Act, or pursuant to an
available exemption from registration and that hedging transactions
involving the securities may not be conducted unless in compliance with
the Act.
(b) The undersigned acknowledges and agrees that unless and until
the Warrant and the Warrant Securities are registered under the Act, this
Warrant and the Warrant Securities shall be "restricted securities" for
purposes of Rule 144 under the Act. The undersigned shall, prior to any
transfer or disposition or attempted transfer or disposition of the
Warrant or the Warrant Securities give written notice to the Company of
his intention to effect such transfer or disposition and shall deliver to
the Company an opinion of legal counsel (reasonably suitable to the
Company) that (i) the proposed transfer or disposition of the Warrant or
the Warrant Securities may be effected without registration thereof under
the Act and without taking any similar action under any other applicable
securities laws, and (ii) either the Distribution Compliance Period has
expired, or the purchaser is not a U.S. Person and is not acquiring the
securities for the account or benefit of any U.S. Person, in which case
the undersigned shall be entitled to transfer or dispose of the Warrant or
the Warrant Securities, as applicable, in accordance with the terms of the
notice delivered by such Holder to the Company. Until the Warrant
Securities are registered under the Act, each certificate evidencing the
Warrant Securities so transferred or disposed of (and each certificate
evidencing any untransferred Warrant Securities) shall bear the following
restrictive legend unless in the opinion of Company counsel such legend is
not required:
"The Warrant and the securities to be issued upon its exercise have
not been registered under the Securities Act of 1933, as amended (the
"Act") or any state securities laws. These securities may not be
exercised by or on behalf of any United States person, and may not be
offered for sale, sold or otherwise transferred except pursuant to
Regulation S under the Act, an effective registration statement under
the Act or an exemption from such registration."
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder thereof as the absolute owner
thereof for all purposes, notwithstanding any notice to the contrary.
(d) The undersigned understands and acknowledges that: (i) while the
Company has an operating history, the Warrant and the Warrant Securities
involve a high degree of risk of loss of the entire investment, and there
is no assurance of any income from such investment; (ii) the Holder must
bear the economic risk of an investment in the Warrant and the Warrant
Securities for an indefinite period because the offer and sale of the
Warrant and the Warrant Securities have not been registered under the Act
or any state securities laws and are being offered and sold in reliance
upon exemptions provided under the 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
Act and applicable state laws, or unless an exemption from such
registration is available; (iii) there may not be a public market for the
Warrant or the Warrant Securities in the future; (iv) the Holder is
purchasing the Warrant and the Warrant Securities for investment purposes
only for the Holder's account and not for the benefit of any other person
or with any view toward the resale or distribution thereof; and (v) the
Holder has no contract, undertaking, agreement or arrangement with any
person to sell, transfer or pledge to such person or anyone else the
Warrant or any of the Warrant Securities which the Holder is hereby
purchasing or any part thereof, and the Holder has no present plans to
enter into any such contract, undertaking, agreement or arrangement.
9. STOCK TO BE DELIVERED UPON EXERCISE. The Company will at all times
keep available through the term of the Exercise Period, solely for delivery
upon the exercise of this Warrant, such number of the shares of Common Stock or
other securities as shall from time to time be sufficient to effect the
exercise of this Warrant.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver, in lieu
thereof, a new warrant of like tenor to Holder.
11. SPECIFIC PERFORMANCE. The Company stipulates that the remedies at
law available to the holder of this Warrant in the event of any default or
threatened default by it in the performance of or compliance with any of the
terms of the Agreement are not and will not be adequate, and that such terms
may be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
12. APPLICABLE LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CHOICE OF LAWS OF SUCH STATE.
13. ENTIRE AGREEMENT. This Warrant constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any and all prior agreements and understandings relating to the subject matter
hereof. This Warrant and any of the terms hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
14. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon and inure
to the benefit of the Company and the undersigned and their respective
successors and permitted assigns; provided, however, nothing herein shall be
construed to permit assignment of the Warrant except in accordance with the
provisions herein.
15. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof (or portion thereof) is determined
to be illegal or unenforceable for any reason whatsoever, such illegality or
unenforceability shall not affect any other term or provision (or portion
thereof) of this Warrant.
16. NOTICES. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at the following address or at such other
address as may have been furnished to the Company in writing by such holder,
or, until an address is so furnished, to the address of the last holder of such
Warrant who has so furnished an address to the Company:
If to the Company:
Insynq, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
If to Holder:
Bransville Investment Limited
c/o Tarshish Ltd.
00 Xxxxxxxxxx Xxxxxx
Xxxxx Xxx 00000 Xxxxxx
Telecopy No.:
IN WITNESS WHEREOF, this Warrant has been executed by Insynq, Inc., by its
duly authorized officers, as of the date first above written.
INSYNQ, INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
The terms and provisions of the Warrant are accepted and agreed to by the
undersigned this 25th day of March, 2001.
BRANSVILLE INVESTMENT LIMITED
By: /s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxx
Name: Lavi Xxxxxxx Xxxx Xxxxxx
Title: Directors
===============================================================================
EXHIBIT "I"
NOTICE OF EXERCISE
(To be executed by Xxxxxx to exercise the
Warrant in whole or in part)
Insynq, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Warrant to Purchase Common Stock dated March 25, 2001 by and between
the Company and Bransville Investment Limited (the "Warrant")
Dear Sir or Madam:
The undersigned holder irrevocably elects to exercise the Warrant of
Insynq, Inc. to purchase _________ shares of Common Stock of Insynq, Inc. (the
"Company") subject to the Warrant, and hereby makes payment of the amount of
$________in the manner described below, representing the Exercise Price per
share of Common Stock multiplied by the number of shares of Common Stock to be
purchased pursuant to this exercise.
By: ____________________________________
$__________cash
$__________certified or bank cashier's check
$__________wire transfer
$__________crediting amounts payable
