Stock Option Agreement
THIS AGREEMENT is made as of the 25th day of September, 2001,
among:
XX. XXXXXXX MOFTHAKHAR, c/o the Ikon Group, 00000 Xxxxxxx Xxxx.
Xxxxxxx Xxxx, XX 00000
(the "Investor") OF THE FIRST PART
AND:
612559 B.C. LTD., a company duly incorporated pursuant to the laws
of Province of British Columbia and having its registered and
records office at Suite 1200, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Optionee") OF THE SECOND PART
WHEREAS:
A. Pursuant to the subscription agreement (the "Subscription Agreement")
dated the ____ day of September, 2001, between the Optionor and MarketU
Inc. ("MarketU"), the Optionor has agreed to acquire a certain number of
Series B Preferred Shares ("Preferred Shares") from MarketU. Each
Preferred Share may at any time be exchanged for one Common Share of the
Company without additional payment to the Company.
B. The Optionor desires to grant, and the Optionee desires to obtain, an
option to purchase 50% of the total number of Preferred Shares of the
Company acquired by the Optionor pursuant to the Subscription Agreement,
including any Common Shares acquired by the Optionor upon conversion of
the Preferred Shares, during the term of this share option agreement (this
"Agreement") and pursuant to the terms and conditions of this Agreement.
NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
1. Consideration for Option. Subject to the terms and conditions of this
Agreement, the Optionee hereby pays to the Optionor, and the Optionor
hereby accepts from the Optionee, the sum of US$2.00 as consideration for
the granting of the Option (as hereinafter defined).
2. The Option. The Optionor hereby irrevocably grants to the Optionee an
option (the "Option") to purchase 50% of the total number of Preferred
Shares of the Company acquired by the Optionor pursuant to the Subscription
Agreement, including any Common Shares acquired by the Optionor upon
conversion of the Preferred Shares, (collectively, the Preferred Shares and
Common Shares which are subject to the Option are referred to as "Subject
Shares") on the terms and conditions herein described.
3. Option Expiry Date. The expiry date of the Option (the "Expiry Date") shall
be 4:00 p.m. Vancouver time on the 181st day after the PP3 Closing Date (as
that term is defined in the Subscription Agreement).
4. Effect of Expiry. If the Option is not exercised by the Optionee on or
before the Expiry Date, the Option shall be null and void, and neither
party will have any further or ongoing obligation to each other as may be
described in this Agreement on and after the Expiry Date, unless the
parties agree to in writing to extend the Expiry Date.
5. Effect of Exercise. If the Option is exercised before the Expiry Date, the
Optionor and the Optionee shall be deemed to have entered into a binding
agreement for the sale and purchase of the Subject Shares pursuant to the
Option on the terms and conditions set forth in this Agreement.
6. Exercise Price. The purchase price for the Subject Shares (the "Exercise
Price") is as follows:
(a) if the Optionor acquired 100% of PP1 Units, PP2 Units and PP3 Units
(as those terms are defined in the Subscription Agreement) on the
closing dates set out in the Subscription Agreement, the Exercise
Price shall be US$1,680,000; or
(b) if the Optionor acquired less than 100% of PP1 Units, PP2 Units and
PP3 Units on the closing dates set out in the Subscription
Agreement, the Exercise Price shall be the determined by:
(actual amount of PP1 Purchase Price paid + actual amount of PP2
Purchase Price paid + actual amount of PP3 Purchase Price paid,
as the capitalized terms are defined in the Subscription
Agreement) x 1,680,000
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divided by 1,500,000
7. Notice to Exercise Option. To exercise the Option to purchase any of the
Subject Shares, the Optionee shall deliver to the Optionor a notice in the
form attached hereto as Schedule "A" (the "Notice") in writing specifying
the number of Subject Shares (the "Exercised Shares") the Optionee will
purchase.
8. Completion Date. The acquisition of the Exercised Shares shall be completed
on the 3rd business day after the date the Notice is delivered (the
"Completion Date"), or such other date as agreed to between the Optionor
and Optionee.
9. Optionee's Delivery. Upon any Option being exercised and at the Completion
Date, the Optionee shall deliver a certified cheque or bank draft
representing the Exercise Price, determined pursuant to paragraph 6, of
the Exercised Shares, made payable to the Optionor.
10. Optionor's Delivery. Upon any Option being exercised and at the Completion
Date, the Optionor shall deliver or cause to be delivered to the Optionee
share certificate or share certificates duly registered in the name of the
Optionee or its assignee, as specified in the Notice.
11. Legal and Beneficial Title. Upon completion of the purchase and sale on the
Completion Date, the Optionee shall own the legal and beneficial title to
the Exercised Shares.
12. Optionor's Representations and Warranties. The Optionor represents and
warrants to the Optionee that as of the date hereof:
(a) the Optionor has due and sufficient right and authority to enter into this
Agreement;
(b) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby will not result in the creation of any
lien, encumbrance or other charge on the Subject Shares; and
(c) no person, firm or corporation has any agreement or option or any
right or privilege capable of becoming an agreement or option for
the purchase from the Optionor of any or all of the Subject Shares.
The Optionor represents and warrants to the Optionee that immediately
before the Completion Date:
(d) the Optionor is the beneficial owner of the Subject Shares, and the
Subject Shares are free and clear of all liens, claims, security
interests, charges and encumbrances of every nature and kind
whatsoever; and
(e) the Optionor has due and sufficient right and authority to sell and
transfer legal title and beneficial ownership of the Subject Shares
to the Optionee.
13. Optionor's Covenant. The Optionor agrees with the Optionee that, from the
day the Subject Shares are issued to the Optionor to the day after the
Expiry Date:
(a) the Optionor shall remain the beneficial owner of the Subject Shares
and keep the Subject Shares free and clear of all liens, claims,
security interests, charges and encumbrances of every nature and
kind whatsoever; and
(b) subject to the Options granted herein, the Optionor shall not sell,
transfer, enter into any agreement or option or any right or
privilege capable of becoming an agreement or option for the
purchase from the Optionor of any of the Subject Shares.
14. Assignment. The Optionee may assign its rights in whole or in part to any
part of this Agreement to any person or persons it determines in its sole
discretion.
15. Time of Essence. Time is of the essence of this Agreement and of the
agreement of purchase and sale resulting from the exercise of the Option
herein.
16. Notice. Any notice required to be given hereunder by any party shall be
deemed to have been well and sufficiently given if mailed by prepaid
registered mail, telecopied, telexed or telegraphed to, or delivered at,
the address of the other party set forth at the beginning of this Agreement
or at such other address as the other party may from time to time direct in
writing, and any such notice shall be deemed to have been received, if
mailed, five (5) days after the time of mailing, or if telecopied, telexed
or telegraphed, one (1) business day after the time of telecopy, telex or
telegraph transmission, and if delivered, upon the date of delivery. If
normal mail, telecopy, telex or telegraph service or services is or are
interrupted by strike, slow-down, force majeure or other cause, a notice
sent by the impaired means of communication will not be deemed to be
received until actually received, and the party sending the notice shall
utilize any other such services which have not been so interrupted or shall
deliver such notice in order to ensure prompt receipt thereof.
17. Headings. The headings in this Agreement have been inserted for ease of
reference only, and shall not be considered a part of this Agreement.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and the
federal laws of Canada applicable therein which shall be deemed to be the
proper law hereof.
19. Currency. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are expressed in Canadian funds. References to "Cdn$" are to
Canadian dollars and references to "US$" and "$" are to United States
dollars.
20. Recitals. The recitals to this Agreement shall form a part of and are an
integral part of this Agreement.
21. Arbitration. Should there be a disagreement or dispute between or among
the parties hereto with respect to this Agreement or the interpretation
thereof, the same shall be referred to a single arbitrator pursuant to the
Commercial Arbitration Act of British Columbia, and the determination of
such arbitrator will be final and binding upon the parties hereto unless
otherwise provided for in this Agreement. The cost of such arbitrator
shall be awarded by the arbitrator within the arbitrator's discretion.
22. Enurement. This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective personal representatives, heirs,
successors and permitted assigns.
23. Execution by Counterparts. This Agreement may be executed by the parties
hereto in as many counterparts as may be necessary or by telecopied
facsimile and each such agreement or telecopied facsimile so executed
shall be deemed to be an original and, provided that all of the parties
have executed a counterpart, such counterparts together shall constitute a
valid and binding agreement, and notwithstanding the date of execution
shall be deemed to bear the date as set forth above.
IN WITNESS WHEREOF the parties hereto have subscribed their names as of the date
and year first above written.
SIGNED, SEALED and DELIVERED by DR. )))))))))))))))))
XXXXXXX MOFTHAKHAR in the presence of:
Witness Name - Signature
(seal)
-------------------------------------- -------------------------------
Witness Name - Print XX. XXXXXXX MOFTHAKHAR
Address
City, Province
Occupation
612559 B.C. LTD.
per:
Xxx Xxxxxx, President
Schedule "A"
NOTICE TO EXERCISE STOCK OPTIONS
TO: Xx. Xxxxxxx Mofthakhar
Please be advised that the undersigned wishes to exercise its right and option
to purchase ______________________ Series B Preferred Shares (or Common Shares
acquired by Xx. Xxxxxxx Mofthakhar upon conversion of the Series B Preferred
Shares) at US$______ per share pursuant to the Stock Option Agreement made as of
the ______ day of September, 2001 between Xx. Xxxxxxx Mofthakhar and 612559 B.C.
Ltd. The undersigned hereby tenders a certified cheque or bank draft as payment
of the purchase price of the said shares in the amount of US$____________ made
payable to Xx. Xxxxxxx Mofthakhar .
Registration Instruction
Please register the share certificates representing the Exercised Shares as
follows:
[name and address]
Dated this __________ day of ________________, 20________.
WITNESS: )))))))))
Signature Signature of Optionee
Print Name Print name of Optionee
