EXHIBIT 4.38
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE ACT OR IN A TRANSACTION WHICH QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE
ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
DATE: December 7, 2000
INSYNQ, INC. COMMON STOCK PURCHASE WARRANT
Insynq, Inc., a Delaware corporation (the "Company"), hereby certifies that, for
value received for services rendered in connection with the Company's corporate
matters, Locke Liddell & Sapp LLP (the "Holder"), or assigns, is entitled,
subject to the terms set forth below, on or after December 7, 2000 through
December 6, 2005 to purchase from the Company One Hundred Thousand (100,000)
shares of fully paid and non-assessable common stock, par value $0.001 per share
("Common Stock"), at the exercise price of Fifty Cents ($0.50) per share (the
"Exercise Price"). The term "Common Stock" shall mean, unless the context
otherwise requires, the shares of such Common Stock or other securities or
property at the time deliverable upon the exercise of this Warrant. The term
"Warrant" as used herein shall include this Warrant and also any warrants
delivered in substitution or exchange therefor as provided herein.
1. Vesting. This Warrant and the right of the Holder to purchase shares
of Common Stock hereunder shall vest immediately on the date of this Warrant set
forth above.
2. Exercise of Warrant. Subject to compliance with the provisions hereof,
this Warrant may be exercised by the Holder, in whole or in part, during the
period of exercise specified above, at any time or from time to time, by
surrendering the Warrant at the principal office of the Company, together with
the form of Election to Exercise in substantially the form of Exhibit A, fully
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executed, and with payment of the sum obtained by multiplying the number of
shares of Common Stock for which the Warrant is being exercised by the Exercise
Price.
(a) Partial Exercise. This Warrant may be exercised for less than the
full number of shares of Common Stock or any fraction thereof called for
hereby, during the period of exercise specified above, at any time or from
time to time, in the manner set forth in Section 2. Upon any partial
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exercise, the number of shares receivable upon the exercise of this Warrant
as a whole, and the sum payable upon the exercise of this Warrant as a
whole, shall be proportionately reduced. Upon such partial exercise, this
Warrant shall be surrendered and a new Warrant of the same tenor and for
the purchase of the number of such shares not purchased upon such exercise
shall be issued by the Company to Holder. For purposes of this Section, a
Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided
above.
(b) Payment Options. Payment by the Holder of the Exercise Price
should be made, at the Holder's option, in one of the following ways: (a)
in cash or immediately
available funds; (b) by crediting any amounts due and owing to the Holder
by the Company for professional services previously rendered by the Holder
as of the date of each exercise of the Warrant by Holder as provided for
herein; or (c) if the Market Price (as defined below) for one share of
Common Stock is greater than the Exercise Price (on the date of exercise of
all or a part of this Warrant) in lieu of exercising this Warrant for cash,
Holder may elect to receive Common Stock equal to the value (as determined
below) of this Warrant (or the portion thereof being exercised) by
surrender of this Warrant at the principal office of the Company, together
with the form of Election to Exercise attached as Exhibit A hereto fully
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executed, in which event the Company shall issue to Holder that number of
shares of Common Stock computed using the following formula:
Y = Z X (C-B) / C
Where Y = the number of shares of Common Stock to be issued to Holder
Z = the aggregate number of shares of Common Stock purchasable
under this Warrant or, if only a portion of this Warrant is
being exercised, the number of shares of Common Stock for which
this Warrant is being exercised (at the date of such
calculation)
B = Exercise Price
C = Market Price of one share of Common Stock (at the date of such
calculation)
For purposes of this Section, the Market Price of one share of the Common
Stock shall be calculated as follows: If the Common Stock is traded on a
national securities exchange, the Nasdaq Stock Market or the over-the-
counter market, the last reported price on the date of valuation at which
the Common Stock has traded on such exchange or the Nasdaq Stock Market, or
the average of the bid and asked prices on the over-the-counter market on
the date of valuation or, if no sale took place on such date, the last date
on which a sale took place. If the Common Stock is not so traded, the
Market Price of one share of the Common Stock shall be as determined by
agreement of the parties hereto, or if the parties hereto cannot reach
agreement, then such value shall be determined by appraisal by an
independent investment banking firm selected by the Company and acceptable
to Holder; provided, however, that if Holder and the Company cannot agree
on such investment banking firm, such appraised value shall be determined
by an independent investment banking firm independently selected by the
agreement of investment banking firms selected by the Company and Holder.
The cost of such appraisal shall be borne equally by the Company and
Holder.
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3. Registration Rights.
(a) Demand Registration. The Holder has the right to one demand
registration to have any of the shares of Common Stock purchased or
purchasable upon the exercise of the Warrant and any other shares of Common
Stock then held by the Holder (collectively, "Registrable Securities")
included on the Company's registration statement on Form SB-2 (the
"Registration Statement") to be filed with the SEC with ninety (90) days of
the date of this Warrant set forth above. Subject to the registration
procedures outlined in this Section 3(a) the Company shall:
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(i) Prepare and file with the Securities and Exchange Commission
a Registration Statement on Form SB-2 registering resales of the
Registrable Securities 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 all of the Registrable Shares requested by the Holder to be
registered. The Company hereby agrees that it shall (a) prepare and
file such post-effective 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 Securities and Exchange Commission for resale by the Holders from
time to time as provided in this Section 3 sufficient shares of Common
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Stock to account for all Registrable Shares requested by the Holder to
be registered and (b) 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.
(ii) The Company agrees to use reasonable best efforts to keep
the Registration Statement(s) continuously effective and usable for
resale of Registration Securities until two years (the "Effectiveness
Period") from the date hereof or such shorter period which will
terminate when all Registrable Shares are freely tradable without
registration or restriction (under Rule 144(k) promulgated under the
Securities Act or otherwise).
(b) Piggyback Registration. The Company shall notify Holder in
writing at least ten (10) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company,
but excluding registration statements relating to employee benefit plans
with respect to corporate reorganizations, acquisitions or other
transactions under Rule 145 of the Securities Act) and will afford Holder
an opportunity to include in such registration statement all or part of
such Registrable Securities held by Holder. If Holder desires to include in
any such registration statement all or any part of the Registrable
Securities, it shall, within five (5) days after the above-described notice
from the Company, so notify the Company in writing. Such notice shall state
the intended method of disposition of the Registrable Securities by Holder.
If Holder decides not to include all of its Registrable
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Securities in any registration statement thereafter filed by the Company,
Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(c) Information. In connection with any registration hereunder, the
Holder will furnish promptly to the Company in writing such information
(together with such supplements as may be necessary from time to time) with
respect to itself and the proposed distribution by it as shall be necessary
or desirable in order to ensure compliance with federal and applicable
state securities laws. The Company and the Holder agree to execute and
deliver such representations, agreements, instruments and documents as may
be reasonable and customary in connection with public offerings of
securities including, without limitation, an underwriting agreement, a lock
up agreement, an indemnity agreement and power of attorney.
(d) Expenses. All expenses incurred by the Company in connection with
action taken by the Company to comply with this Section 3, including,
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without limitation, all registration and filing fees, printing expenses,
accounting fees, fees and disbursements to experts, blue sky compliance and
counsel fees shall be paid by the Company. The Holder shall pay all of its
legal expenses and its underwriting discounts and selling commissions, if
any, incurred in connection with each registration pursuant to this Section
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3.
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4. Delivery of Stock Certificates on Exercise. As soon as practicable
after any exercise of this Warrant and payment of any required Exercise Price
(and in any event within five (5) days), the Company, at its expense, will cause
to be issued in the name of and delivered to Holder a certificate or
certificates for the number of fully paid and non-assessable shares of Common
Stock, together with any other securities or property to which Holder is
entitled upon exercise, plus, in lieu of any fractional share of Common Stock to
which such holder would otherwise be entitled, cash in an amount determined in
accordance with Section 5(h) hereof. The Company agrees that the shares so
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purchased shall be deemed to be issued as of the close of business on the date
of the applicable exercise of this Warrant and payment of the required Exercise
Price.
5. Anti-Dilution Provisions And Other Adjustments. In order to prevent
dilution of the right granted hereunder, the Exercise Price shall be subject to
adjustment from time to time in accordance with this Section 5. Upon each
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adjustment of the Exercise Price pursuant to this Section 5, Holder shall
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thereafter be entitled to acquire upon exercise, at the Exercise Price resulting
from such adjustment, the number of shares of Common Stock obtainable by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares of Common Stock acquirable immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(a) Subdivisions and Combinations. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately
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reduced, and, conversely, in case the outstanding shares of Common Stock of
the Company shall be combined into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be
proportionately increased.
(b) Reorganization, Reclassification, Share Exchange,
Consolidation, Merger or Sale of Assets. If any capital reorganization or
reclassification of the capital stock of the Company, or share exchange,
consolidation or merger of the Company with another entity, or the sale of
all or substantially all of its assets to another entity shall be effected
in such a way that holders of Common Stock shall be entitled to receive
stock, securities, cash or other property with respect to or in exchange
for Common Stock, then, as a condition of such reorganization,
reclassification, share exchange, consolidation, merger or sale, lawful and
adequate provision shall be made whereby Holder shall have the right to
acquire and receive upon exercise of this Warrant such shares of stock,
securities, cash or other property issuable or payable (as part of the
reorganization, reclassification, share exchange, consolidation, merger or
sale) with respect to or in exchange for such number of outstanding shares
of Common Stock as would have been received upon exercise of this Warrant
at the Exercise Price then in effect. The Company will not effect any such
share exchange, consolidation, merger or sale unless, prior to the
consummation thereof, the successor entity (if other than the Company)
resulting from such share exchange, consolidation or merger or the entity
purchasing such assets shall assume by written instrument mailed or
delivered to Holder at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase. If a purchase, tender
or exchange offer is made to and accepted by the holders of more than 50%
of the outstanding shares of Common Stock, the Company shall not effect any
share exchange, consolidation, merger or sale with the person having made
such offer or with any Affiliate of such person, unless prior to the
consummation of such share exchange, consolidation, merger or sale Holder
shall have been given a reasonable opportunity to then elect to receive
upon the exercise of this Warrant either the stock, securities or assets
then issuable with respect to the Common Stock or the stock, securities or
assets, or the equivalent, issued to previous holders of Common Stock in
accordance with such offer. For purposes hereof the term "Affiliate" with
respect to any given person shall mean any person controlling, controlled
by or under common control with the given person.
(c) Dividends Not Paid Out of Earnings or Earned Surplus. Except
as otherwise provided in Section 5(e) hereof, in the event the Company
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shall declare a dividend or distribution upon the Common Stock payable
otherwise than out of earnings or earned surplus, as determined in
accordance with generally accepted accounting principles, then, upon the
later of the regular payment date of such dividend or distribution or the
exercise of this Warrant, the Company shall pay to the person exercising
such Warrant an amount equal to the aggregate value of such dividend or
distribution as if the Warrant were exercised prior to the record date of
such dividend or distribution (including but not limited to any shares of
Common Stock which would have been issued at the time of such earlier
exercise and all other securities which would have been issued with respect
to such Common Stock by reason of stock splits, stock dividends, mergers or
reorganizations, or for any other reason). For the purposes of this
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Section 5(d), a dividend other than in cash shall be considered payable out
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of earnings or earned surplus only to the extent that such earnings or
earned surplus are charged an amount equal to the fair value of such
dividend as determined in good faith by the Board of Directors of the
Company.
(d) Grant, Issue or Sale of Options, Convertible Securities or
Rights. If at any time or from time to time on or after the date of
issuance hereof, the Company shall grant, issue or sell any rights to
subscribe for or to purchase, or any options for the purchase of, Common
Stock or any stock or other securities convertible into or exchangeable for
Common Stock or rights to purchase other property (the "Purchase Rights")
pro rata to the record holders of any class of Common Stock of the Company,
then Holder shall be entitled to acquire (within thirty (30) days after the
later to occur of the initial exercise date of such Purchase Rights or
receipt by such holder of the notice concerning Purchase Rights to which
such holder shall be entitled under Section 5(f)) upon the terms applicable
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to such Purchase Rights either: (i) the aggregate Purchase Rights which
such Holder could have acquired if it had held the number of shares of
Common Stock acquirable upon exercise of this Warrant immediately before
the grant, issuance or sale of such Purchase Rights; provided that if any
Purchase Rights were distributed to holders of Common Stock without the
payment of additional consideration by such holders, corresponding Purchase
Rights shall be distributed to the exercising Holder as soon as possible
after such exercise, and it shall not be necessary for the exercising
Holder specifically to request delivery of such rights; or (ii) in the
event that any such Purchase Rights shall have expired or shall expire
prior to the end of said thirty (30) day period, the number of shares of
Common Stock or the amount of property which such Holder could have
acquired upon such exercise at the time or times at which the Company
granted, issued or sold such expired Purchase Rights.
(e) Notices of Record Date. If:
(i) the Company shall declare any cash dividend upon its
Common Stock, or
(ii) the Company shall declare any dividend upon its Common
Stock payable in stock or declare any special dividend or make any
other distribution to the holders of its Common Stock, or
(iii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any
class or other rights, or
(iv) there shall be any capital reorganization or
reclassification of the capital stock of the Company, including any
subdivision or combination of its outstanding shares of Common Stock,
or share exchange, consolidation or merger of the Company with, or
sale of all or substantially all of its assets to, another entity, or
(v) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in connection with such event, the Company shall give to Holder (A)
at least ten (10) days' prior written notice of the date on which the books
of the Company shall close
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or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such
reorganization, reclassification, share exchange, consolidation, merger,
sale, dissolution, liquidation or winding up; and (B) in the case of any
such reorganization, reclassification, share exchange, consolidation,
merger, sale, dissolution, liquidation or winding up, at least ten (10)
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (A) shall also specify, in
the case of any such dividend, distribution or subscription rights, the
date on which the holders of Common Stock shall be entitled thereto, and
such notice in accordance with this clause (B) shall also specify the date
on which the holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, share exchange, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be. Each such
written notice shall be addressed to Holder at the address of Holder as
shown on the books of the Company.
(f) Adjustment by Board of Directors. If any event occurs as to
which, in the opinion of the Board of Directors of the Company, the
provisions of this Section 5 are not strictly applicable or if strictly
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applicable would not fairly protect the rights of Holder in accordance with
the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions,
in accordance with such essential intent and principles, so as to protect
such rights as aforesaid, but in no event shall any adjustment have the
effect of increasing the Exercise Price as otherwise determined pursuant to
any of the provisions of this Section 5, except in the case of a
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combination of shares of a type contemplated in Section 5(a) and then in no
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event to an amount larger than the Exercise Price as adjusted pursuant to
Section 5(a).
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(g) Fractional Shares. The Company shall not issue fractions of
shares of Common Stock upon exercise, partial exercise pursuant to Section
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2(a), or net issue exercise pursuant to Section 2(b) of this Warrant. If
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any fraction of a share of Common Stock would, except for the provisions of
this paragraph, be issuable upon such exercise of this Warrant, the Company
shall in lieu thereof pay to the person entitled thereto an amount in cash
equal to the current value of such fraction of a share, calculated to the
nearest one-hundredth (1/100)of a share of Common Stock, to be computed in
the manner set forth in Section 2(b) hereof.
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(h) Officers' Statement as to Adjustments. Whenever the Exercise
Price shall be adjusted as provided in Section 5 hereof, the Company shall
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file at each office designated for the exercise of this Warrant a
statement, signed by the Chief Executive Officer, the President or any Vice
President of the Company, showing in reasonable detail the facts requiring
such adjustment and the Exercise Price that will be effective after such
adjustment. The Company shall also cause a written notice setting forth any
such adjustments to be sent to the record holder of this Warrant at its
address appearing on the stock register. If such notice relates to an
adjustment resulting from an event referred to in Section 5(f), such notice
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shall be included as part of the notice required to be mailed and published
under the provisions of Section 5(f) hereof.
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6. No Dilution or Impairment. The Company will not, by amendment of its
charter or through reorganization, share exchange, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of Holder against dilution or other impairment. Without
limiting the generality of the foregoing, the Company will not increase the par
value of any shares of stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise, and at all times will take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable stock upon the exercise
of this Warrant.
7. Reservation of Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued stock, solely for the issuance and
delivery upon the exercise of this Warrant and other similar warrants, options
and other rights to purchase Common Stock, such number of its duly authorized
shares of Common Stock as from time to time shall be issuable upon the exercise
of this Warrant and all other similar warrants, options or rights to purchase
Common Stock at the time outstanding.
8. 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 loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
9. Remedies. The Company stipulates that the remedies at law of Holder in
the event of any default by the Company in the performance of or compliance with
any of the terms of this Warrant are not and will not be adequate, and that the
same may be specifically enforced.
10. Transfers and Legends. Subject to the further provisions of this
Section 10, this Warrant and all rights hereunder are transferable, in whole or
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in part, at the agency or office of the Company by Holder hereof in person or by
duly authorized attorney, upon surrender of this Warrant properly endorsed as
provided in Exhibit B hereto. Each taker and holder of this Warrant, by taking
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or holding the same, consents and agrees that this Warrant, when endorsed in
blank, shall be deemed negotiable, and when so endorsed Holder hereof may be
treated by the Company and all other persons dealing with this Warrant as the
absolute owner hereof for any purposes and as the person entitled to exercise
the rights represented by this Warrant, or to the transfer hereof on the books
of the Company, any notice to the contrary notwithstanding; but until each
transfer on such books, the Company may treat the registered holder hereof as
the owner hereof for all purposes.
Holder acknowledges and agrees with the following provisions.
(a) Absent an effective registration statement under the Securities
Act, covering the disposition of this Warrant or the shares of Common Stock
issuable upon exercise of this Warrant, Holder will not sell or transfer
this Warrant or any or all of such shares of Common Stock without first
providing the Company with an opinion of counsel
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(which may be an opinion of Holder) to the effect that such sale or
transfer will be exempt from the registration and prospectus delivery
requirements of the Securities Act.
(b) Each certificate representing shares of Common Stock issued
pursuant to this Warrant, unless at the time of exercise such Warrant
shares are registered under the Securities Act, shall bear a legend in
substantially the following form on the face thereof: THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS AND MAY BE TRANSFERRED OR RESOLD ONLY IN
COMPLIANCE WITH SUCH SECURITIES LAWS. Any certificate issued at any time in
exchange or substitution for any certificate bearing such legend (except a
certificate issued upon completion of a distribution under a registration
statement covering the securities represented) shall also bear such legend
unless, in the opinion of counsel to the Company, the securities
represented thereby may be transferred as contemplated by such holder
without violation of the registration requirements of the Securities Act.
(c) Prior to the exercise of this Warrant, Holder will not be
entitled to any rights of a shareholder of the Company with respect to
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
(d) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any transfer
involved in the issuance or delivery of certificates for Common Stock or to
issue or deliver any certificates for Common Stock upon the exercise of
this Warrant until any and all such taxes and charges shall have been paid
by Holder or until it has been established to the Company's satisfaction
that no such tax or charge is due.
11. Representations and Warranties of the Company. The Company hereby
represents and warrants to Holder that:
(a) Authorization and Delivery. This Warrant has been duly authorized
and executed by the Company and when delivered will be the valid and
binding obligation of the Company enforceable in accordance with its terms.
(b) Warrant Shares. The shares of Common Stock issuable pursuant to
this Warrant have been duly authorized and reserved for issuance by the
Company and, when issued and paid for in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable.
(c) Rights and Privileges. The rights, preferences, privileges and
restrictions granted to or imposed upon such shares of Common Stock and the
holders thereof are as set forth herein and in the Company's Articles of
Incorporation and Bylaws, true and complete copies of which have been
delivered to the original Holder.
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(d) No Inconsistency. The execution and delivery of this Warrant are
not, and the issuance of the shares of Common Stock upon exercise of this
Warrant in accordance with the terms hereof, will not (i) violate any
provision of the Company's Articles of Incorporation and Bylaws, (ii)
contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, (iii) contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other instrument of
which the Company is a party or by which it is bound or (iv) require the
consent or approval of, the giving of notice to, the registration with the
taking of any action in respect of or by, any Federal, state or local
government authority or agency or other person.
12. Representations And Warranties Of Holder. Holder hereby represents and
warrants to the Company that:
(a) Knowledge, Skill and Experience. It has substantial knowledge,
skill and experience in making investment decisions of the type represented
by this Warrant and the shares of Common Stock issuable upon exercise of
this Warrant.
(b) Capable of Bearing Risks. It is capable of evaluating the risk of
its investment in this Warrant and the shares issuable upon exercise of
this Warrant and is able to bear the economic risk of such investment,
including the risk of losing the entire investment.
(c) Acquiring for its Own Account. This Warrant and the shares of
Common Stock issuable upon exercise of this Warrant are being acquired by
it for investment purposes only, for its own account and not with a present
view to any distribution thereof in violation of applicable securities
laws.
(d) Compliance with Securities Law. If Holder should in the future
decide to dispose of the shares issuable upon exercise of this Warrant, it
is understood that it may so do only in compliance with the Securities Act
and applicable state securities laws.
(e) Access to Information. The Company has made available to Holder
the opportunity to ask questions of and to receive answers from the
Company's officers, directors and other authorized representatives
concerning the Company and its business and prospects and Holder has been
permitted to have access to all information which it has requested in order
to evaluate the merits and risks of the purchase of the Warrant hereunder.
(f) Accredited Investor. Holder is an "Accredited Investor," as
defined in Rule 501(a) promulgated under the Securities Act.
(g) Acknowledgement. Holder understands that (i) this Warrant and the
shares of Common Stock issuable upon exercise of this Warrant have not been
registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration requirements of the Securities
Act, (ii) this Warrant and the shares of Common Stock issuable upon
exercise of this Warrant must be held indefinitely unless they are
registered under the Securities Act and applicable state securities laws or
a subsequent disposition thereof is exempt from such registration (and,
upon request,
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evidence satisfactory to the Company is provided by Holder of the
availability of such exemptions, including, upon request, the delivery to
the Company of opinions of counsel, which opinions and counsel are
satisfactory to the Company), and (iii) this Warrant and the shares of
Common Stock issuable upon exercise of this Warrant may bear a legend to
such effect.
13. Subdivision Of Rights. This Warrant (as well as any new warrants
issued pursuant to the provisions of this Warrant) is exchangeable, upon the
surrender hereof by Holder, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock that
may be subscribed for and purchased hereunder.
14. Mailing Of Notices. All notices and other communications from the
Company to Holder shall be mailed by first-class certified mail, postage
prepaid, or by a recognized overnight delivery service, to the address furnished
to the Company in writing by the last Holder who shall have furnished an address
to the Company in writing. Notice shall be deemed delivered three (3) business
days after deposit with the United States Postal Service and one (1) business
day after deposit with an overnight delivery service.
15. Headings. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect the meaning hereof.
16. Change, Waiver. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
17. Governing Law. This Warrant shall be construed and enforced in
accordance with the laws of the State of Texas.
[Signature page follows]
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IN WITNESS WHEREOF, the Company, by the undersigned thereunto duly
authorized, has duly executed this Warrant as of the date first written above.
INSYNQ, INC.,
a Delaware corporation
By:____________________________
Its:___________________________
ACCEPTED AS OF THE DATE HEREOF:
LOCKE LIDDELL & SAPP LLP
By:____________________________
Its:___________________________
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Exhibit A
Election to Exercise
[To be signed only upon exercise of Warrant]
The undersigned, Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for ______ shares of
Common Stock of Insynq, Inc., a Delaware corporation. Accordingly, Holder
(check one):
( ) Herewith makes payment of $_____ in full payment of the exercise
price.
( ) Herewith makes payment of $_____ by crediting amounts due and owing
to Holder for services previously rendered to Insynq, Inc. in accordance with
Section 2(b) of the Warrant.
- ------------
( ) Herewith elects to effect the exercise as a "cashless exercise" in
accordance with Section 2(b) of the Warrant.
------------
The undersigned requests that the certificates for such shares be issued in
the name of, and be delivered to _____________________, whose address is:
___________________________
___________________________
___________________________
Dated:____________ By_____________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
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Exhibit B
Endorsement
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________ the right represented by the within Warrant to purchase
the______ shares of the Common Stock of Insynq, Inc. to which the within Warrant
relates, and appoints _____________ attorney to transfer said right on the books
of _____________________ with full power of substitution in the premises.
Dated:_____________ By_____________________________________
(Signature must conform in all respects to
name of Holder as specified on the face of
the Warrant)
Address: __________________________________
__________________________________
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