OPTION AGREEMENT
THIS AGREEMENT is dated for reference the ___ day of February, 2002.
BETWEEN:
IKON MANAGEMENT GROUP INC., of 000 X. Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx, X.X.X. XX 00000.
(the "Investor) OF THE FIRST PART
AND:
MARKETU INC., a company duly incorporated under the laws of the state
of Nevada and having business office at Suite 101, 20145 Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
(the "Company") OF THE SECOND PART
NOW THEREFORE in consideration of the mutual premises, warranties, covenants and
agreements herein contained, the parties hereto agree as follows:
1. OPTION
1.1 Purchase of Units. The Investor is hereby granted an option to purchase
from the Company 1,750,000 units (the "Units") at a price of US$0.857 per
Unit, for an aggregate purchase price of US$1,500,000.00 (the "Purchase
Price"). Each Unit consists of one Series C preferred share (one
"Preferred Share") and one-half of one non-transferable share purchase
warrant (the "Warrant"). Each Preferred Share is convertible into two
common shares in the capital stock 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. Each Warrant (one whole Warrant) will entitle the holder the
purchase one common share in the capital stock of the Company at a price
of US$0.50 per share for the first year the Warrant is exercisable and
US$0.60 for the second year. The warrants will expire two years from the
date of their issuance.
1.2 Payment of Units. The Purchase Price may be paid by the Investor to the
Company any time on or before March 31, 2002 (the "Expiration Date").
1.3 Issuance of Securities. Upon the exercise of the option, the Company shall
deliver or cause to be delivered to the Investor certificates representing
the number of Preferred Shares and Warrants purchased.
1.4 Registration of Securities. The Preferred Shares and Warrants, when issued,
will be registered in the name of:
Name to appear on share certificate: IKON MANAGEMENT GROUP INC.
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2. ACKNOWLEDGEMENTS BY INVESTOR
2.1 Acknowledgements by the Investor. The Investor understands and acknowledges
that:
(a) No US federal or state agency or any other securities commission has
made any finding or determination as to the fairness of this
investment, or any recommendation or endorsement of the Units.
(b) The Company has relied upon the Investor's representations and
warranties and the information set forth this Agreement to qualify
for exemptions from US federal and state securities registration
requirements.
(c) The Units were not advertised in printed media of general and
regular paid circulation, radio or television and the offer and sale
of the Units is not accomplished by the publication of any
advertisement.
2.2 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 Units.
2.3 Securities Restricted. The Investor acknowledges that the Units have not
been registered under either US federal or state securities laws. The
Investor also understands that the Company is under no obligation and has
no intention to register the Units or to take any actions to make
available exemptions from the registration requirements of state and
federal securities laws, and that the Units 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 Units; any
person will refund the purchase price of the Units; or as to the future
price or value of the Units.
2.4 Legend on Share Certificates. The Investor hereby consents to the
placement of a legend on all certificates representing the Preferred
Shares, the Warrants, and the common shares acquired upon conversion of
the Preferred Shares and the exercise of the Warrants, in substantially
the following form:
"The securities 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 securities 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"
2.5 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.
2.6 Preferred Shares Not Created. The Investor acknowledges that as of the
date of this Agreement, the Preferred Shares have not been created. The
Company agrees to create the Preferred Shares prior to any exercise of the
option.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
3.1 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) Principal Purchaser. The Investor is purchasing the Units as principal for
investment and the Investor is purchasing the Units 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 Units, and no other person,
corporation, firm or other
organization will have beneficial interest in the Units.
(c) Not an Underwriter. The Investor is not an underwriter of, or dealer in,
the common shares of the Company, nor is the Investor participating,
pursuant to a contractual agreement or otherwise, in the distribution of
the Units.
(d) Residency of Investor. The Investor is a resident of the jurisdiction of
the residential/principal address of the Investor set out on page I.
(e) 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 Units will not cause such overall commitment
to become excessive.
(f) Restrictions on Resale of Securities. The Investor acknowledges that there
are restrictions on the resale of the Units and agrees to comply with the
securities laws of the United States and the securities laws of the
residence of the Investor. The Investor agrees to resell the Units only in
accordance with the provisions of the Securities Act of 1933, as amended,
pursuant to registration under the said Act, or pursuant to an available
exemption from registration.
(g) Additional Resale Restrictions. The Investor has been independently advised
as to the rules, requirements and restrictions with respect to trading in
the United States imposed by applicable laws in jurisdictions in which the
Investor resides and other applicable jurisdictions, and confirms that no
representation has been made to the Investor by or on behalf of the Company
with respect thereto.
(h) 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 Units.
(i) No Notice of Acceptance. The Investor waives the need for the Company to
communicate its acceptance of the purchase of the Units pursuant to this
Agreement.
(j) 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.
3.2 Survival. The representations and warranties contained in subsection 3.1
will survive the exercise or expiration of the option.
4. STATUS AS AN ACCREDITED INVESTOR
4.1 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 _________________________.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 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 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.
5.2 Survival. The representations and warranties contained in subsection 5.1
will survive the exercise or expiration of the option.
6. INDEPENDENT PROFESSIONAL ADVICE
6.1 The Investor acknowledges and agrees that the Company urges the Investor
and the Investor has had the opportunity to obtain independent legal,
accounting, investment and tax advice prior to the execution and delivery
of this Agreement and in the event that the Investor did not avail itself
of that opportunity prior to signing this Agreement, the Investor did so
voluntarily and without any undue pressure or influence and agrees that
any failure to obtain independent legal, accounting, investment or tax
advice shall not be used as a defense to the enforcement of the Investor's
obligations under this Agreement.
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 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.
IKON MANAGEMENT GROUP INC.
______________________________
Authorized signing officer
MARKETU INC.
By: __________________________
Xxxxxxx Xxxxxx, President
T. MarketU Ikon Option Agreement 2-15-02
