Subscription Agreement
THIS AGREEMENT is dated for reference the 11th day of January, 2002.
BETWEEN:
XX. XXXXXXX XXXXXXXXX, of 00000 Xxxxxxx Xxxxxxxxx,
0xx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000
(the "Investor") OF THE FIRST PART
AND:
MARKETU INC., a company duly incorporated under the
laws of the state of Nevada and having a business
office at Suite 101, 20145 Xxxxxxx Xxxxxxxx, Xxxxx
Xxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(the "Company") OF THE SECOND PART
WHEREAS:
A. The Investor and the Company entered into that subscription agreement
(the "2001 Subscription Agreement) executed by the Investor on
September 22, 2001 and accepted by the Company on September 25, 2001;
B. Section 1, entitled Private Placement I, of the 2001 Subscription
Agreement provided for the Investor to subscribe for and purchase
1,666,667 PP1 Units at the price of US$0.15 per PP1 Unit but the Investor
has only paid for 666,667 PP1 Units; and
C. The parties agree to amend the 2001 Subscription Agreement as herein
described.
NOW THEREFORE this Agreement witnesses that in consideration of the mutual
premises, warranties, covenants and agreements herein contained, the parties
hereto agree as follows:
1. amendment of 2001 subscription agreement
1.1 Capitalized terms not defined herein shall have the meaning defined in the
2001 Subscription Agreement.
1.2 The Investor and the Company agree that the 2001 Subscription Agreement is
hereby amended as follows:
(a) the obligation of the Investor to subscribe for the remaining
1,000,000 PP1 Units pursuant to section 1 of the 2001 Subscription
Agreement is terminated;
(b) section 2 of the 2001 Subscription Agreement, entitled Private
Placement II, is deleted in its entirety; and
(c) section 3 of the 2001 Subscription Agreement, entitled Private
Placement III, is deleted in its entirety.
1.3 The 2001 Subscription Agreement shall remain in full force and effect and
unamended in all respects except as amended by this Agreement and this
Agreement and the 2001 Subscription Agreement shall hereafter be read as
one agreement.
2. 02.01.11 Private Placement
2.1 Purchase of 02.01.11 Units. The Investor hereby unconditionally subscribes
for and agrees to purchase from the Company 1,000,000 units (the "02.01.11
Units") at a price of US$0.40 per unit, for an aggregate purchase price of
US$400,000.00 (the "02.01.11 Purchase Price"). Each 02.01.11 Unit consists
of one voting Series B Preferred Share in the capital stock of the Company
(a "Preferred Share") and one-half of one non-transferable share purchase
warrant (a "02.01.11 Warrant"). Each Preferred Share may at any time be
exchanged for one Common Share of the Company without additional payment
to the Company. Any Preferred Shares that remain unexercised on the date
which is one year from the date of issuance will be deemed converted. In
the event of liquidation, dissolution or winding up of the Company, the
holders of the Preferred Shares will be entitled to receive an amount
equal to the paid-up capital of each such share, before any amount shall
be paid or the assets of the Company will be distributed to the holders of
Common Shares and Series A Preferred Shares. After payment of the
aforesaid amounts to the holders of the Preferred Shares they shall not as
such be entitled to share any further in the distribution of the assets of
the Company. Each 02.01.11 Warrant (one whole warrant) will entitle the
Investor to purchase one Common Share in the capital stock of the Company
at a price of US$0.50 per share for a 12-month period commencing on the
date of issuance of the 02.01.11 Warrants.
2.2 Payment of 02.01.11 Units. The 02.01.11 Purchase Price will be paid by the
Investor to the Company any time on or before February 28, 2002.
2.3 Closing. The Investor and the Company agree that the closing of the
02.01.11 Units private placement will occur on the date that the full
amount of the 02.01.11 Purchase Price is paid by the Investor to the
Company, such date is hereby agreed to be February 28, 2002 (the "Closing
Date") or such other date as mutually agreed to between the parties. On
the Closing Date, the Company shall deliver or cause to be delivered to
the Investor certificates representing the number of Preferred Shares and
02.01.11 Warrants subscribed for pursuant to subsection 2.1 issued in the
name of the Investor as set out in subsection 7.9.
2.4 Loan Before Securities are Issued. All funds paid to the Company pursuant
to this Agreement may be used by the Company forthwith and from time to
time and constitute an interest-free loan to the Company from the Investor
until such time as the Preferred Shares and the 02.01.11 Warrants are
allotted and issued to the Investor. The Company and the Investor agree
that if the Preferred Shares and 02.01.11 Warrants are not allotted and
issued on or before 14 days after the Closing Date, the Investor may give
written notice to the Company in which event the Company shall allot and
issue the Preferred Shares and 02.01.11 Warrants to the Investor. Until
such time as the Company allots and issues the Preferred Shares and
02.01.11 Warrants to the Investor the Company will not be required to make
such allotment or issuance and reserves the option to repay the 02.01.11
Purchase Price. If on the Closing Date the Company has not received from
the Investor the full amount of the 02.01.11 Purchase Price, the Company
will issue the number of Preferred Shares and 02.01.11 Warrants for the
portion of the 02.01.11 Purchase Price received by the Company at the
price of US$0.40 per 02.01.11 Unit.
3. acknowledgements by investor
3.1 Acknowledgements by the Investor. The Investor understands and
acknowledges that:
(a) The Company may accept or reject this Agreement, in whole or in
part, in its sole and absolute discretion.
(b) This Agreement is and shall be irrevocable. This Agreement and the
rights, powers and duties set forth herein shall be binding upon the
Investor, the Investor's heirs, estate, legal representatives,
successors and assigns and shall enure to the benefit of the
Company, its successors and assigns.
(c) No US federal or state agency or the B.C. Securities Commission has
made any finding or determination as to the fairness of this
investment, or any recommendation or endorsement of the 02.01.11
Units.
(d) No prospectus has been filed by the Company with the B.C. Securities
Commission or any similar regulatory authority in connection with
the issuance of the 02.01.11 Units, the issuance is exempted from
the prospectus requirements of the Securities Act (British Columbia)
(the "Act") and any rules and regulations (the "Rules") promulgated
pursuant to the Act and that:
(i) the Investor is restricted from using most of the civil remedies
available under the Act and the Rules;
(ii) the Investor may not receive information that would otherwise be
required to be provided to the Investor under the Act and the Rules;
and
(iii) the Company is relieved from certain obligations that would otherwise
apply under the Act and the Rules.
(e) The Company has relied upon the Investor's representations and
warranties and the information set forth this Agreement to qualify
for exemptions from British Columbia and US federal and state
securities registration requirements.
(f) The 02.01.11 Units were not advertised in printed media of general
and regular paid circulation, radio or television.
3.2 Investor Responsibility for Due Diligence Investigation. The Investor
acknowledges that the Investor must rely upon the Investor's own
examination of the Company, including the merits and risks involved in
making an investment decision regarding the 02.01.11 Units.
3.3 Securities Restricted. The Investor acknowledges that the 02.01.11 Units
have not been registered under either British Columbia or US federal or
state securities laws, and the Investor represents and warrants that the
Investor is purchasing the 02.01.11 Units for investment for the
Investor's own account and not on behalf of any other person, nor with a
view to, or for resale or other distribution of, the 02.01.11 Units. The
Investor also understands that the Company is under no obligation and has
no intention to register the Preferred Shares or to take any actions to
make available exemptions from the registration requirements of state and
federal and British Columbia securities laws, and that the Preferred
Shares, the Common Shares acquired upon conversion of the Preferred Shares
and exercise of the 02.01.11 Warrants, cannot be sold or otherwise
distributed in the absence of an exemption from such registration
requirements. No person has made to the Investor any written or oral
representations that any person will resell or repurchase the Preferred
Shares or the shares acquired upon exercise of the 02.01.11 Warrants; any
person will refund the purchase price of the 02.01.11 Units; or as to the
future price or value of the Preferred Shares or the Common Shares.
3.4 Legend on Share Certificates. The Investor hereby consents to the
placement of a legend on all certificates representing the Preferred
Shares and the Common Shares acquired upon conversion of the Preferred
Shares and the exercise of the 02.01.11 Warrants, in substantially the
following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "restricted
stock" as that term is defined in Rule 144 under the Act. The shares
may not be offered for sale, sold or otherwise transferred except
pursuant to the effective registration statement under the act or
pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of
the Company."
3.5 Investor Indemnification of the Company. The Investor hereby agrees to
indemnify and hold the Company harmless from any and all liabilities or
damages incurred by the Company arising as a result of any false statement
or misrepresentation made by the Investor in this Agreement including, but
not limited to, liabilities or damages incurred in connection with the
loss of exemptions from securities registration requirements.
4. representations and warranties of the Investor
4.1 Representations and Warranties of the Investor. The Investor hereby
represents and warrants as follows:
(a) Availability of Information. The Company has made available to the
Investor, or to the Investor's attorney, accountant or representative,
all documents that the Investor has requested, and the Investor has
requested all documents and other information that the Investor has
deemed necessary to consider respecting an investment in the Company.
The Company has provided answers to all questions concerning the
investment in the Company. The Investor has carefully considered and
has, to the extent the Investor believes necessary, discussed with the
Investor's professional legal, tax and financial advisers and the
Investor's representative (if any) the suitability of an investment in
the Company for the Investor's particular tax and financial situation.
All information the Investor has provided to the Company concerning
the Investor and the Investor's financial position is correct and
complete as of the date set forth below, and if there should be any
material adverse change in such information prior to the acceptance of
this Agreement by the Company, the Investor will immediately provide
such information to the Company.
(b) Purchaser not Created Solely to Use BC Exemption. The purchase of the
02.01.11 Units by the Purchaser is to be made under the exemption from
prospectus requirements available under section 74(2)(4) of the
Securities Act (British Columbia), and the Investor represents and
warrants that it is not a syndicate, partnership or other form of
unincorporated entity or organization created solely to permit the
purchase of the 02.01.11 Units (or other similar purchases) by a group
of individuals whose individual share of the aggregate acquisition
cost of the 02.01.11 Units is less than Cdn$97,000.
(c) Principal Purchaser. The Investor is purchasing the 02.01.11 Units as
principal and no other person, corporation, firm or other organization
will have a beneficial interest in the 02.01.11 Units.
(d) Investment in Not Readily Marketable Securities Not Disproportionate.
The Investor's overall commitment to investments that are not readily
marketable is not disproportionate to the Investor's net worth. The
Investor's investment in the 02.01.11 Units will not cause such
overall commitment to become excessive.
(e) Adequate Net Worth. The Investor has adequate net worth and means of
providing for the Investor's current needs and personal contingencies
to sustain a complete loss of the investment in the Company at the
time of investment, and the Investor has no need for liquidity in the
investment in the 02.01.11 Units.
(f) No Notice of Acceptance. The Investor waives the need for the Company
to communicate its acceptance of the purchase of the 02.01.11 Units
pursuant to this Agreement.
(g) Additional Documents. The Investor will execute and deliver such
agreements and other documents and things and will do or cause to be
done all such acts or things as are or may be necessary or desirable
to give effect to the provisions hereof and to carry out the intent of
this subscription offer.
4.2 Survival. The representations and warranties contained in subsection
4.1 will survive the closings.
5. Status as an Accredited Investor
5.1 Accredited Investor. By initialing the appropriate space(s) below, the
Investor represents and warrants that he/she/it is an "accredited
investor" within the meaning of Regulation D. Specifically, the Investor
represents and warrants that he/she/it qualifies under the following
category or categories of "accredited investor" (INVESTOR MUST INDICATE
THE APPLICABLE CATEGORY OR CATEGORIES BY INITIALING EACH APPLICABLE SPACE
BELOW; IF JOINT INVESTORS, BOTH PARTIES MUST INITIAL):
_____ (a) Investor is a director or executive officer of the Company;
_____ (b) Investor is a natural person whose individual income
exceeded US$200,000 in each of 2000 and 2001, or whose joint
income with spouse exceeded US$300,000 in each of those years,
and who reasonably expects to receive at least the same level
of income in 2002;
_____ (c) Investor is a natural person whose individual net worth, or
joint net worth with his or her spouse, exceeds
US$1,000,000;
_____ (d) Investor is an organization or entity consisting solely of
persons who meet the requirements specified in (a), (b) or
(c) above;
_____ (e) Investor is a trust, corporation or partnership with total
assets in excess of US$5,000,000 not formed for the
specific purpose of acquiring the Securities;
_____ (f) Investor is another type of "accredited investor" as that
term is defined in Regulation D, namely
-------------------------.
6. representations and warranties of the Company
6.1 Representations and Warranties of the Company. The Company hereby
represents and warrants as follows:
(a) Organization, Good Standing. The Company is a valid and subsisting
corporation duly incorporated and in good standing under the laws of
the jurisdictions in which it is incorporated.
(b) Due Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the
authorization, execution, delivery of, and the performance of all
obligations of the Company under this Agreement and the authorization,
issuance, reservation and delivery of all of the 02.01.11 Units being
sold under this Agreement, will have been taken on the closing dates,
and this Agreement, when executed by the Company, will constitute,
valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or others laws
of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law
governing the availability of equitable remedies.
6.2 Survival. The representations and warranties contained in subsection
6.1 will survive the closings.
7. MISCELLANEOUS
7.1 Time of Essence. Time is of the essence of this Agreement.
7.2 Entire Agreement. This Agreement constitutes the entire agreement
between the Investor and the Company, or their respective representatives
and there are no other agreements, warranties, representations, conditions
or covenants, written or oral, express or implied, in respect of, or which
affect, the transactions herein contemplated, and this Agreement
supersedes and supplants any previous dealings whatsoever between the
Investor and the Company in respect of the said transactions.
7.3 Amendment in Writing. The parties to this Agreement may amend this
Agreement only in writing.
7.4 Severability. Should any part of this Agreement be declared or held
invalid for any reason, that invalidity shall not affect the validity of
the remainder which shall continue in force and effect and be construed as
if this Agreement had been executed without the invalid portion and it is
hereby declared the intention of the parties hereto that this Agreement
would have been executed without reference to any portion which may, for
any reason, be hereafter declared or held invalid.
7.5 Notice. A party to this Agreement will give all notice to or other written
communications with the other party to this Agreement concerning this
Agreement by hand or by registered mail addressed to the address given
above.
7.6 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada.
7.7 Currency. All monies which are referred to in this Agreement are, unless
expressly stated otherwise, expressed in lawful money of United States of
America.
7.8 Execution by Counterpart. This Agreement may be signed by a Director of
the Company and the Investor in as many counterparts as may be necessary,
each of which so signed shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument, and
notwithstanding the date of execution shall be deemed to bear the date as
set forth above.
7.9 Registered Name of 02.01.11 Units. The Preferred Shares and 02.01.11
Warrants, when issued, will be registered in the name of:
Xx. Xxxxxxx Xxxxxxxxx
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The Investor has executed this Subscription Agreement as of the ______ day of
January, 2002.
___________________________
XX. XXXXXXXXX
This Subscription Agreement is accepted by the Company, on the ______ day of
January, 2002.
MARKETU INC.
per:______________________________________
Xxxxxxx Xxxxxx, President and Director
MarketU Moftakhar Sub Agree amend 1-15-02
