NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE
INSYNQ, INC.
2002 DIRECTORS, OFFICERS AND CONSULTANTS STOCK OPTION, STOCK WARRANT AND STOCK
AWARD PLAN
Date of Grant: December 1, 2003
Name of Optionee: Xxxxx Xxxxxx
Number of Shares: 14,583,333 (Fourteen Million Five Hundred
Eighty three Thousand Three Hundred Thirty
three)
Price Per Share: $0.0075
INSYNQ, Inc. (the "Company"), hereby grants to the above-named Optionee
(the "Optionee") an option (the "Option") to purchase from the Company, for the
price per share set forth above, the number of shares of Common Stock, $0.001
par value (the "Stock"), of the Company set forth above pursuant to INSYNQ, Inc.
2002 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock
Award (the "Plan"). THIS OPTION IS NOT INTENDED TO CONSTITUTE AN "INCENTIVE
STOCK OPTION" WITHIN THE MEANING OF SECTION 422 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
1. TERMS. The terms and conditions of the Option granted hereby, to the
extent not controlled by the terms and conditions contained in the Plan, are as
follows:
a. PRICE. The price at which each share of Stock subject to
this Option may be purchased shall be the price set forth above,
subject to any adjustments that may be made pursuant to the terms of
the Plan.
b. EXERCISE AND VESTING. This Option may be exercised only to
the extent that such Option is vested in accordance with the following
table:
MAY BE PURCHASED
NUMBER OF SHARES NOT BEFORE NOT AFTER
14,583,333 December 1, 2003 January 15, 2004
___________ ___________ ___________
___________ ___________ ___________
___________ ___________ ___________
Subject to the preceding vesting schedule, this Option may be exercised
in whole or in part.
2. EXERCISE AND PAYMENT.
a. MANNER OF EXERCISE. The Optionee (or his representative,
guardian, devisee or heir, as applicable) may exercise any portion of
this Option that has become exercisable in accordance with the terms
hereof as to all or any of the shares of stock by giving written notice
of exercise to the Company, in form satisfactory to the Board,
specifying the number of shares to be purchased and accompanying such
notice with payment of the full purchase price therefor in (i) lawful
United States currency or (ii) partially or entirely in whole shares of
Stock of the Company with a Fair Market Value Per Share (as defined in
the Plan) equal to the Option price for such number of shares as of the
close of business on the immediately preceding business day, with the
balance, if any, to be paid in cash. This Option may not be exercised
for less than fifty (50) shares of Stock or the number of shares of
Stock remaining subject to this Option, whichever is smaller. The
election shall state the address to which dividends, notices, reports,
etc. are to be sent, and shall contain the Optionee's social security
number. Only one (1) certificate evidencing the Stock will be issued
unless the Optionee otherwise requests in writing. Shares of Stock
purchased upon exercise of the Option will be issued in the name of the
Optionee. The Optionee shall not be entitled to any rights and
privileges as a shareholder of the Company in respect of any shares of
Stock covered by this Option until such shares of Stock shall have been
paid for in full and issued to the Optionee.
b. PAYMENT. Payment shall be in cash, or by certified or
cashier's check or wire transfer payable to the order of the Company,
free from all collection charges. The Company may also agree to lend to
Consultant the amount due under the Options by promissory note secured
by such stock in the event the Consultant does not have the cash to
acquire same but such note shall be limited to and shall be due in
sixty (60) days whereafter it shall be a default if not paid.
Notwithstanding the preceding, at the direction of the Board, payment
may be made by delivery of shares of Stock already owned by the
Optionee and having a fair market value equal to the aggregate Option
Price, or by a combination of cash and shares of Stock. Options shall
be deemed to have been exercised on the first date upon which the
Company receives the notice of exercise, payment of the purchase price
and all other documents, information and amounts required in respect of
such exercise by the Plan or this Agreement.
3. THE PLAN AND THE COMMITTEE. It is understood that the Plan is
incorporated herein by reference and made a part of this Agreement as if fully
set forth herein. The Plan shall control in the event there shall be any
conflict between the Plan and this Agreement, and it shall control as to any
matters not contained in this Agreement. Terms used in this Agreement which are
defined in the Plan shall have the same meanings in this Agreement as are
assigned to such terms in the Plan. The Committee shall have authority to make
constructions of this Agreement, and to correct any defect or supply any
omission or reconcile any inconsistency in this Agreement, and to prescribe
rules and regulations relating to the administration of this Option and other
Options granted under the Plan.
4. WITHHOLDING TAX. Prior to the exercise of this Option, and as a
condition to the Company's obligation to deliver shares upon such exercise, or
in connection with any disposition of shares acquired pursuant to such exercise,
the holder of this Option shall make arrangements satisfactory to the Company
for the payment of any applicable federal or other withholding taxes
payable as a result thereof, which the Optionee may elect to satisfy by
instructing the Company to retain a sufficient number of shares of Stock to
cover the amount required to be withheld.
5. COMPLIANCE WITH LAWS. Each exercise of this Option shall, at the
election of the Committee, be contingent upon receipt by the Company from the
holder of this Option of such written representations concerning his intentions
with regard to retention or disposition of the shares being acquired by exercise
of this Option and/or such written covenants and agreements as to the manner of
disposal of such shares as, in the opinion of the Committee, may be necessary to
ensure that any disposition by such holder will not involve a violation of the
Securities Act of 1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as then in effect. This
Option shall be subject to the requirement that if at any time the Committee
shall determine, in its discretion, that the listing, registration or
qualification of the shares of Stock subject to this Option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of the
issuance or delivery of shares hereunder, this Option may not be exercised
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
6. RIGHTS AS A SHAREHOLDER. Neither the Optionee nor his guardian or
legal representatives shall be or have any of the rights or privileges of a
shareholder of the Company in respect of any of the shares deliverable upon the
exercise of this Option unless and until certificates representing such shares
shall have been issued and delivered.
7. REPRESENTATION OF OPTIONEE. Optionee hereby represents and warrants
to the Company that, if the option is exercised, the shares of Stock shall be
acquired solely for Optionee's own account, for investment purposes only and not
with a view to the distribution or resale thereof. Optionee understands and
acknowledges that (i) the share of Stock are unregistered and may not be sold
unless they are subsequently registered under the Securities Act and applicable
state securities laws, or unless an exemption from such registration is
available; (ii) the exemption from registration under Rule 144 under the
Securities Act may not ever become available; and (iii) the Company is under no
obligation to register the shares of Stock under the Securities Act or any state
securities law or to make Rule 144 (or any other exemption) available.
8. NON-TRANSFERABILITY. Except as otherwise provided in this Agreement,
this Option and the rights and privileges conferred hereby may not be
transferred, assigned, pledged or hypothecated or otherwise disposed of in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of this Option, or any right or
privilege conferred hereby, contrary to the provisions hereof, this Option and
the rights and privileges conferred hereby shall immediately become null and
void.
9. NOTICE. Every notice or other communication relating to this
Agreement shall be in writing and shall be mailed or delivered to the party for
whom it is intended, in each case properly addressed, if to the Company, at the
address of its executive offices in Tacoma, Washington, Attention: Chief
Executive Officer, or if mailed or delivered to the Optionee, at the address set
forth
below his signature to this Agreement (or at such other address or in care of
such other person as may hereafter be designated in writing by either party to
the other).
10. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Washington, other than with respect to
choice of laws rules and principles. The Optionee consents to personal
jurisdiction in any action brought in any court, federal or state, within the
State of Washington having subject matter jurisdiction in the matter.
11. ENTIRE AGREEMENT. This Agreement is the complete agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations,
either oral or written, between the parties that may have related to the subject
matter hereof in any way. No change or modification of this Agreement shall be
valid or binding on the parties hereto, nor shall any waver of any term or
condition in the future be so binding, unless such change or modification or
waver shall be in writing and signed by the parties hereto.
12. SEVERABILITY. In the event any provision of this Agreement is held
to be unenforceable for any reason, the unenforceability thereof will not affect
the remainder of the Agreement, which shall remain in full force and effect and
enforceable in accordance with its terms. However, if any provision of this
Agreement is held to be unenforceable and such unenforceability shall
substantially alter this Agreement or change the intent and/or effect hereof,
the parties hereby agree to amend and/or modify this Agreement sufficiently to
restore the original intended effect or, as close thereto as possible.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its name by its duly authorized officer on the date first above
written, and the Optionee has hereunto set his hand on such date.
COMPANY:
INSYNQ, INC.
By: /s/ Xxxx X. Xxxxx
Its: Chief Exeuctive Officer
OPTIONEE:
/s/ Xxxxx Xxxxxx
Signature
__________________________________
Xxxxx Xxxxxx
__________________________________
__________________________________
Address
__________________________________
Social Security Number
EXHIBIT "A"
NOTICE OF EXERCISE
(To be executed by Holder to exercise the
Option in whole or in part)
Insynq, Inc.
0000 Xxxxxxxx Xxxxx #000
Xxxxxx, Xxxxxxxxxx 00000
Re: Option to Purchase Common Stock dated December 1, 2003 by and between the
Company and ___________________ (the "Option")
Dear Sir or Madam:
The undersigned holder irrevocably elects to exercise the Option of Insynq,
Inc. to purchase shares of Common Stock of Insynq. (the "Company") subject to
the Option, 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: /s/ Xxxxx Xxxxxx
$__________cash
$__________certified or bank cashier's check
$__________wire transfer
$__________promissory note
