Exhibit 10.2
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "AGREEMENT) is made and entered into as of
February , 2003 by and among Ugomedia Interactive Corporation, a corporation
incorporated under the laws of the State of Nevada ("UGOMEDIA"), Sciax
Technology Inc., a corporation incorporated under the laws of Canada ("SCIAX")
and Xxx Xxxxx, a resident of the Province of Ontario ("SMART").
RECITALS
WHEREAS Ugomedia, Sciax and 4137639 Canada Inc. entered into a common stock
purchase agreement (THE "PURCHASE AGREEMENT") dated January 8, 2003, as amended,
relating to a share exchange transaction;
AND WHEREAS Smart is a founding shareholder of Sciax;
AND WHEREAS it is a condition to the completion of the transactions
contemplated by the Purchase Agreement that this Agreement be entered into by
the parties granting to Smart the option to purchase certain intellectual
property currently owned by Sciax in accordance with the terms and conditions
set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter contained, the value and sufficiency of which is hereby
acknowledged by the parties, the parties hereto agree as follows:
1. OPTION TO PURCHASE INTELLECTUAL PROPERTY ASSETS.
(a) Option to Purchase. Subject to applicable law, upon the occurrence of
a Triggering Event (as hereinafter defined), Smart shall have an
irrevocable first option to purchase (the "PURCHASE OPTION") the
intellectual property described in Schedule "A" attached hereto (the
"IP ASSETS") together with all such additions, variations,
improvements, derivatives and amendments to such IP Assets made from
time to time following the date hereof for an amount equal to the Fair
Market Value (as hereinafter defined). For greater certainty, the IP
Assets shall not include any new intellectual property (not related to
the IP Assets) acquired by Sciax or Ugomedia from third parties
following the date of this Agreement.
(b) Triggering Event. The term "Triggering Event" shall mean the
occurrence of any of the following events:
(i) an offer by Sciax to sell any of the IP Assets to a third party;
(ii) a change of control of Sciax;
(iii) Sciax determines to cease to carry on its business;
(iv) a general assignment by Sciax or Ugomedia for the benefit of its
creditors or a proposal or arrangement under the Bankruptcy and
Insolvency Act (Canada) or similar legislation;
(v) Sciax or Ugomedia shall be declared or adjudicated a bankrupt or
a liquidator, trustee in bankruptcy, custodian, receiver, manager
or any other officer with similar powers is appointed by or for
Sciax or Ugomedia or Sciax or Ugomedia's business or Sciax or
Ugomedia consents to such appointment;
(vi) Sciax or Ugomedia shall propose a compromise or arrangement,
shall institute proceedings to be adjudged bankrupt or insolvent,
shall consent to the initiation of such proceedings, or seeks
formal protection from its creditors;or
(vii) a breach of this Agreement by Ugomedia and/or Sciax.
(c) Notice of Triggering Event. Sciax and Ugomedia shall provide a written
notice of the Triggering Event (the "EVENT NOTICE") to Smart at least
thirty (30) Business Days prior to the occurrence of such Triggering
Event or in the case of (v) above, as soon as knowledge of such event
is known to Sciax or Ugomedia. For the purposes of this Agreement, a
"Business Day" shall mean any day except Saturday, Sunday or any day
on which banks are generally not open for business in the City of
Xxxxxxx, Xxxxxxx.
(d) Exercise of Purchase Right. To exercise the Purchase Right, Smart
shall notify Sciax and Ugomedia in writing of its intent to do so (the
"EXERCISE NOTICE") within five (5) Business Days (the "EXERCISE
PERIOD") of receiving the Event Notice. Upon giving such Exercise
Notice, Smart shall be bound to acquire the IP Assets at the Fair
Market Value. Failure by Smart to deliver the Exercise Notice during
the Exercise Period shall be deemed a waiver by Smart of his right to
acquire the IP Assets.
(e) Selection of Valuator. Within five (5) Business Days of delivering the
Exercise Notice, Smart shall deliver to Sciax and Ugomedia a list
setting forth the names of at least three (3) certified business
valuators ("VALUATORS") for the determination of the Fair Market Value
of the IP Assets. Sciax and Ugomedia shall select one of the proposed
Valuators following which Smart, Sciax and Ugomedia shall jointly
retain the Valuator to determine the Fair Market Value, as at the date
of the Triggering Event, of the IP Assets, applying such principles of
valuation as the Valuator considers appropriate in the circumstances.
(f) Co-operation and Delivery of Valuation. Each of the parties hereto
shall in all respects co-operate with the Valuator in the
determination of the Fair Market Value of the IP Assets. In
particular, each of the parties shall make available to the Valuator
all such documents and information with respect to the affairs of the
parties as the Valuator may reasonably require to make its
determination of the Fair Market Value, and shall make their personnel
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available at all reasonable times to assist in such determination.
Within ten (10) Business Days following its appointment, the Valuator
shall provide each of Smart, Sciax and Ugomedia with its determination
of Fair Market Value. If the Valuator specifies a range of values for
the Fair Market Value, the Fair Market Value shall be the mid-point of
the range.
(g) No Appeal of Valuation. The valuation of the IP Assets as determined
by the Valuator shall be final and binding on all parties and there
shall be no appeal from the valuation determined by the Valuator.
(h) Fees and Disbursements. All fees, disbursements and other costs and
expenses associated with the determination of the Fair Market Value by
the Valuator in accordance with the provisions of this Section shall
be borne by Smart.
(i) Delivery of IP Assets. Following the determination of the Fair Market
Value by the Valuator, the transfer of the IP Assets shall occur
within ten (10) Business Days (the "CLOSING DATE") of such
determination and Sciax shall cause the IP Assets to be sold to Smart
free and clear of all mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions or other
restrictions in consideration for the payment of the Fair Market Value
by Smart to Sciax which Sciax acknowledges shall be the sole
consideration to be paid for the IP Assets. In the event Smart fails
to pay the Fair Market Value for the IP Assets on or before the
Closing Date, Smart's right to acquire the IP Assets shall terminate.
2. ENFORCEABILITY.
The parties hereto acknowledge and agree that the enforceability of this
Agreement may be limited by any applicable bankruptcy, insolvency,
winding-up, reorganization, arrangement, moratorium or other laws affecting
creditors' rights generally.
3. NOTICES.
Any notice to any party hereto given pursuant to this Agreement shall be in
writing addressed as follows:
If to Sciax:
000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
If to Ugomedia:
000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
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If to Smart:
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Any such address may be changed by any party by written notice to the other
party. Any notice shall be deemed delivered (i) if delivered personally,
when received, or (ii) if mailed by registered or certified mail, postage
pre-paid, return receipt requested, when received; or (iii) if delivered by
courier service when received; or (iv) if sent by facsimile on the day so
faxed if sent before 5:00pm (Toronto time) on such day.
4. DISPUTE RESOLUTION.
(a) Arbitration. All disputes between parties arising in connection with
this Agreement shall be finally settled by an arbitrator chosen in
accordance herewith. The arbitration shall be held in Toronto, Ontario
in accordance with the Arbitration Act (Ontario), as amended from time
to time. The law governing the procedures and substance of the
arbitration will be that of the Province of Ontario. The arbitration
proceedings, all documents and all testimony, written or oral,
produced in connection therewith shall be kept confidential. The
arbitrator may determine all questions of law and jurisdiction
(including questions as to whether the dispute is arbitrable) and has
the right to grant legal and equitable relief (including injunctive
and other interim relief and the right to grant permanent and interim
injunctive relief), and shall apportion all costs between the parties
taking into consideration, among other factors, the percentage of the
total amount in dispute that is represented by the amount of claims
asserted by a party but rejected by the arbitrator, including
reasonable legal fees, interest and costs of the arbitration, provided
that nothing herein shall prevent the parties hereto from seeking
interim injunctive relief in a court of competent jurisdiction pending
resolution of the dispute in accordance with this section. The
arbitrator may not amend or otherwise alter the terms and conditions
of the Agreement.
(b) Selection of Arbitrator. The parties shall have ten (10) Business Days
to agree upon the arbitrator commencing on the day on which written
notice was given by the party initiating the arbitration. Upon expiry
for the fifteen day period and regardless of an agreement being
reached as the arbitrator, either or both parties may apply to the
court to appoint the arbitrator. The court shall appoint the
arbitrator within twenty (20) Business Days after such request and
shall notify the parties of the appointment.
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(c) Discovery. The parties shall make available to the arbitrator all
information requested in accordance with the applicable rules of
arbitration, including production of all relevant records and
documents. All notices and other communications required to be
delivered pursuant to the applicable rules of arbitration shall be
delivered to the address specified in the Agreement.
5. MISCELLANEOUS.
(a) No Assignment. Neither party to this Agreement may assign, transfer or
otherwise convey any or all of its rights or obligations hereunder
without the prior written approval of the other party.
(b) Amendment. No amendment to this Agreement shall be effective unless it
is in writing and executed by both parties.
(c) Expenses of the Parties. Each party shall pay its respective expenses
incurred in connection with the negotiation, execution and performance
of this Agreement.
(d) Severability. If any one or more of the provisions contained in this
Agreement or in any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under the applicable
law, the validity, legality, and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired; provided, however, that in such case the parties shall use
their best efforts to achieve the purpose of the invalid provision.
(e) Governing Law. This Agreement and all actions contemplated hereby
shall be governed by and construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable
therein, including the principles of conflict of laws thereof. The
parties hereby irrevocably attorn to the exclusive jurisdiction of the
courts of the Province of Ontario in respect of the subject matter of
this Agreement and irrevocably agree to be bound by any judgment
rendered thereby in connection with this Agreement, subject in each
case to all rights to appeal such decisions to the extend available to
such parties.
(f) No Waiver of Rights. No failure or delay on the part of either party
in the exercise of any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
power or right preclude other or further exercise thereof or of any
other right or power. The waiver by any party or parties hereto of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach hereunder. All
rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.
(g) Counterparts. This Agreement may be executed simultaneously 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.
Counterparts may be executed either in original or faxed form and the
parties adopt any signatures received by a receiving fax machine as
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original signatures of the parties; provided, however, that any party
providing its signature in such manner shall promptly forward to the
other party an original of the signed copy of this Agreement which was
so faxed.
(h) Headings. The inserted headings are for convenience only and should
not be used to construe or interpret this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SCIAX TECHNOLOGY INC.
Per:
------------------------------
Name:
Title:
UGOMEDIA INTERACTIVE CORPORATION
Per:
------------------------------
Name:
Title:
-------------------------- ------------------------------
WITNESS XXX XXXXX
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SCHEDULE "A"
IP ASSETS
For the purposes of the Agreement, the term "IP Assets" shall include all rights
to and interests in:
(a) all business and trade names, corporate names, brand names and slogans
related to the business of Ugomedia and/or Sciax;
(b) Confidential or proprietary information or material regarding Ugomedia
and/or Sciax, both existing and contemplated, including, without
limitation, corporate information, contractual licensing arrangements,
plans strategies, tactics, policies, patent, trade-xxxx and trade name
applications, information concerning suppliers; marketing information,
including sales, investment and product plans, customer lists, strategies,
methods, customer, prospects and market research data; financial
information, including cost and performance data; operational and
scientific information, including trade secrets; software, technical
information, including technical drawings and designs; inventions (whether
or not protectable under patent laws), works of authorship, information
fixed in any tangible medium of expression (whether or not protectable
under copyright laws) and personnel information;
(c) right, title, and interest in and to, each of the Innovations, and any
associated intellectual property rights, which are from time to time
reduced to practice, created, derived, developed or made by employees and
or agents or consultants of Ugomedia and/or Sciax, which either (i) relate,
at the time of conception, reduction to practice, creation, derivation,
development, or making of such Innovation, to Ugomedia's and/or Sciax's
business or actual or demonstrably anticipated research or development, or
(ii) were developed with the use of any of Ugomedia's and/or Sciax's
equipment, supplies, facilities or trade secret information, or (iii)
resulted from any work performed for by the employees and/or agents or
consultants of Ugomedia and/or Sciax. As used in this Agreement, the term
"Innovations" means all processes, improvements, inventions (whether or not
protectable under patent laws), works of authorship, information fixed in
any tangible medium of expression (whether or not protectable under
copyright laws), moral right, mask works, trademarks, trade names, trade
dress, trade secrets, know-how, ideas (whether or not protectable under
trade secret laws), and all other intellectual property protectable under
intellectual property laws.
(d) all inventions, patents, patent rights, patent applications (including all
reissues, divisions, continuations, continuations-in-part and extensions of
any patent or patent application), industrial designs and applications for
registration of industrial designs related to the business of Ugomedia
and/or Sciax;
(e) all copyrights and trade-marks (whether used with wares or services and
including the goodwill attaching to such trade-marks), registrations and
applications for trade-marks and copyrights (and all future income from
such trade-marks and copyrights) related to the business of Ugomedia and/or
Sciax;
(f) all rights and interests in and to processes, lab journals, notebooks,
data, trade secrets, designs, know-how, product formulae and information,
manufacturing, engineering and other drawings and manuals, technology, blue
prints, research and development reports, agency agreements, technical
information, technical assistance, engineering data, design and engineering
specifications, and similar materials recording or evidencing expertise or
information related to the business of Ugomedia and/or Sciax;
(g) all other intellectual and industrial property rights throughout the world
related to the business of Ugomedia and/or Sciax;
(h) all licences of the intellectual property listed in items (a) to (g) above;
(i) all future income and proceeds from any of the intellectual property listed
in items (a) to (g) above and the licences listed in item (h) above; and
(j) all rights to damages and profits by reason of the infringement of any of
the intellectual property listed in items (a) to (i) above.
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SCHEDULE 3.3
SHAREHOLDINGS
---------------------------------------- ---------------------------- ------------------------------------------------
SHAREHOLDER # OF SCIAX SHARES SHARE CONSIDERATION PAYABLE
---------------------------------------- ---------------------------- ------------------------------------------------
Xxx Xxxxx 20,782,000 18,812,142 Exchangeable Shares
4,703,036 Preferred Shares
---------------------------------------- ---------------------------- ------------------------------------------------
Xxxxx Xxxxxx 42,000 38,019 Ugomedia Common Shares
---------------------------------------- ---------------------------- ------------------------------------------------
Xxxxxxxxx X. Xxxxx 30,000 27,156 Ugomedia Common Shares
---------------------------------------- ---------------------------- ------------------------------------------------
1144193 Ontario Ltd. 30,000 27,156 Ugomedia Common Shares
---------------------------------------- ---------------------------- ------------------------------------------------
Yazdan Mazair 50,000 45,261 Ugomedia Common Shares
---------------------------------------- ---------------------------- ------------------------------------------------
Xxxxxxx Xxxxxxxx 166,000 150,265 Ugomedia Common Shares
---------------------------------------- ---------------------------- ------------------------------------------------
TOTAL 21,100,000
---------------------------------------- ---------------------------- ------------------------------------------------
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SCHEDULE 3.6
SHAREHOLDERS
---------------------------------------- -----------------------------------------------------------------------------
NAME ADDRESS/COUNTRY OF RESIDENCE
---------------------------------------- -----------------------------------------------------------------------------
Xxx Xxxxx 00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
Xxxxx Xxxxxx 000 Xxxxxxx Xxx
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxx 000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
1144193 Ontario Ltd. 0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
Yazdan Mazair 000 Xxxxx Xx.
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx 000 Xxxxxx Xxxx, Xxxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
---------------------------------------- -----------------------------------------------------------------------------
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