EXHIBIT 10.3
BUSINESS SERVICES CONTRACT
This Service Agreement is made between Consulting & Strategy International,
L.L.C. ("CSI"), 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, and InsynQ,
Inc. ("Company"), 000 Xxxxx 0/xx/ Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx, 00000,
the Parties hereto hereby agree as follows:
WHEREAS, Company is going public by and through whatever process is most,
appropriate, and
WHEREAS, CSI is in the business of consulting with public companies
regarding issues of corporate image, business development and management and
planning strategies, and
IT IS, THEREFORE agreed that:
CSI or its designee(s) shall have the right to purchase up to 600,000
additional shares ("Option Shares") of Company or its successor's stock, upon
Company becoming publicly traded all at a price of $1.00 (one dollar) per
share; however, such right to purchase up to said 600,000 shares shall not vest
in CSI, or its designee(s); until Company, or its subsidiaries, shall have been
funded a total of four (4) million dollars in any form from whatever source(s).
Such Option Shares shall have continuing priority rights on registration(s) and
shall be registered with and as part of the first block of shares registered by
Company after the date of Company becoming publicly traded, or any subsequent
registrations if the option to purchase such Option Shares has been exercised,
in whole or part, by CSI prior to the final preparation date of any registration
statement. CSI must exercise this option on or before thirty six (36) months
after the first day upon which the stock of Company begins full reporting, full
compliance, public trading, and Company receives said four (4) million dollars
in funding.
CSI or its designee(s) shall be granted warrants to purchase additional
shares of Company immediately upon Company becoming a "publicly" traded firm.
Such warrants shall be valid to be exercised in whole or parts, for a period of
three (3) years from the date of signing a Warrant Agreement which shall be in
the form as attached hereto as Exhibit "A" which Warrant Agreement shall be
executed immediately upon Company becoming a publicly traded firm and which
fully executed Warrant Agreement with attached Warrant(s) shall be delivered to
CSI by Company immediately at that time. The amount of stock covered by the
Warrants and the exercise prices shall be as follows:
250,000 shares at $2.50 (two dollars and fifty cents) per share, which
warrant must be exercised within one year of the average of the bid/ask
price of Company remaining at a minimum $5.00 (five dollars) per share
price for any continuous 30 trading day period, or the warrant may be
exercised at any other time in the sole discretion of CSI.
Page 1
250,000 shares at $3.00 (three dollars) per share, which warrant must be
exercised within one year of the average of the bid/ask price of Company
remaining at a minimum $7.00 (seven dollars) per share price for any
continuous 30 trading day period, or the warrant may be exercised at any
other time in the sole discretion of CSI.
250,000 shares at $4.00 (four dollars) per share, which warrant must be
exercised within one year of the average of the bid/ask price of Company
remaining at a minimum $8.00 (eight dollars) per share price for any
continuous 30 trading day period, or the warrant may be exercised at any
other time in the sole discretion of CSI.
250,000 shares at $4.50 (four dollars and fifty cents) per share, which
warrant must be exercised within one year of the average of the bid/ask
price of Company remaining at a minimum $10.00 (ten dollars) per share
price for any continuous 30 trading day period, or the warrant may be
exercised at any other time in the sole discretion of CSI.
Company hereby agrees to the following terms plus agrees that Company shall
execute a detailed Consulting Agreement Contract with CSI and/or its
successor(s) and or designee(s), immediately upon completion of Company becoming
publicly traded, which Consulting Agreement shall be for a minimum term of three
(3) years from the date of execution and be on CSI's standard form Consulting
Agreement which shall call for monthly payments of $2,500 (twenty-five hundred
dollars) per month beginning thirty (30) days after the date Company becomes
publicly traded until the Company's stock bid price exceeds $6.00 (six dollars)
per share for five (5) consecutive trading days, at which time the monthly
retainer paid to CSI shall permanently increase to $5,000 (five thousand
dollars) per month until the contract expires or until the stock bid price of
Company exceeds $8.00 (eight dollars) per share for five (5) consecutive trading
days, at which time the monthly retainer paid CSI shall permanently increase to
$7,500 (seventy-five hundred dollars) per month until the contract expires or
until the stock bid price of Company exceeds $10.00 (ten dollars) per share for
five (5) consecutive trading days, or until Company or any of its subsidiaries
have signed a commitment sheet with any funding sources(s) for a minimum of five
(5) million dollars of funding from any source(s), in any form, and has received
a minimum of two (2) million dollars of said funding(s), at any of which times
the monthly retainer paid CSI shall permanently increase to $10,000 (ten
thousand dollars) per month until the contract expires. If CSI's monthly payment
has been increased to $10,000 (ten thousand dollars) per month solely based on
Company signing a funding term sheet and Company, through no fault of its own,
fails to receive a total of five (5) million dollars of funding from whatever
sources according to the schedule on the term sheet(s), CSI's monthly payment
shall revert to the level it was before being raised to $10,000 (ten thousand
dollars) per month until Company shall have received a cumulative total of five
(5) million dollars in funding from whatever sources, at which time CSI's
monthly payment, if not already at $10,000 (ten thousand dollars) per month
under other terms, shall permanently revert to $10,000 per month until this
contract expires. (Note: The share price of Company is used as a benchmark for
timing of consulting compensation increases for no other reason than because the
stock price is an indicator of Company's earnings and/or ability to obtain
additional financing or raise additional funds, and therefore, pay higher
consulting fees. CSI shall not be expected to, nor shall it be allowed to,
promote Company's stock or solicit purchases for Company's shares or be involved
in any activities which prevent the issuance of S-8 stock to CSI under SEC
rules.
Page 2
CSI shall have the right to name two (2) member to Company's Board of
Directors for the term of CSI's consulting agreement subject to Company's Board
of Directors' acceptance of CSI's board candidate, which acceptance shall not be
unreasonably withheld. Such member is not to exceed 40% (forty percent) of
Company's board members which Board of Directors Company shall expand to
accommodate such additional member.
If the foregoing is agreeable, please execute below with the understanding
this contract is totally contingent on Company becoming a publicly traded firm.
A facsimile signature shall be valid as an original and this Agreement may be
executed separately in counterparts with all such parts constituting one whole
agreement.
Executed this 18/th/ day of November __, 1999.
InsynQ, Inc.
("Company")
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx, CEO and Chairman
Consulting & Strategy International, L.L.C.
("CSI")
By: /s/ Xxxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Xxxxxxxx X. Xxxxxx, Xx., C.E.O.
Attachment(s):
Disclosure
Warrant Agreement
Page 3
"DISCLOSURE"
Xxxxxxxx X. Xxxxxx, Xx. is a licensed Texas attorney who performs
consulting work for Consulting & Strategy International, L.L.C. ("CSI"), in his
capacity as a consultant, and not as an attorney. Xx Xxxxxx may, or will, have
contact with InsynQ, Inc. ("Company"). It is clearly understood and acknowledged
that Xx. Xxxxxx does not represent CSI or Company as an attorney, nor will Xx.
Xxxxxx be performing any function for CSI or Company, as an attorney, but rather
only in his capacity as a business consultant.
Please sign below to acknowledge this disclosure and your waiver of any
potential conflict of interests claim.
Very Truly Yours,
/s/ Xxxxxxxx X. Xxxxxx, Xx.
Xxxxxxxx X. Xxxxxx, Xx.
Date: November 18, 1999
Consulting & Strategy International, L.L.C. InsynQ, Inc.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxx
--------------------------------------- --------------------------
Xxxxx X. Xxxx, President Xxxx X. Xxxxx, CEO
Page 4
AMENDMENT NO. 1 TO
BUSINESS SERVICES CONTRACT
THIS AMENDMENT NO. 1 TO BUSINESS SERVICES CONTRACT (this "Amendment") is
effective as of August 31, 2000 by and between Insynq, Inc., a Delaware
corporation (the "Company"), and Consulting and Strategy International, LLC
("Holder").
W I T N E S S E T H
WHEREAS, the parties have executed that certain Business Services Contract
as of November 18, 1999; and
WHEREAS, the parties have deemed it to be in their mutual best interests to
amend the Business Services Contract to reflect a new exercise date for options
to purchase common stock, $0.001 par value per share (the "Common Stock"), of
the Company thereunder.
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 to amend paragraph 1 in its entirety as follows:
"CSI or its designee(s) shall have the right to purchase up to 600,000
additional shares ("Option Shares") of Company or its successor's stock, upon
Company becoming publicly traded at a price of $1.00 (one dollar) per share;
however, such right to purchase up to said 600,000 shares shall not vest in CSI,
or its designee(s), until Company, or its subsidiaries, shall have been funded a
total of four (4) million dollars in any form from whatever source (s); provided
further, however, that under no circumstances shall the option to purchase the
600,000 additional shares become exercisable before November 15, 2000. Such
Option Shares shall have continuing priority rights on registration(s) and shall
be registered with and as part of the first block of shares registered by
Company after the date of Company becoming publicly traded, or any subsequent
registration if the option to purchase such Option Shares has been exercised, in
whole or in part, by CSI prior to the final preparation date of any registration
statement. CSI must exercise this option on or before thirty six (36) months
after the first day upon which the stock of Company begins full reporting, full
compliance, public trading, and Company receives said four (4) million dollars
in funding."
IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the date set forth above.
CONSULTING & STRATEGY INTERNATIONAL, LLC
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
--------------------------------
Title:
-------------------------------
INSYNQ, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
---------------------------------
Title: CEO
--------------------------------
