EXHIBIT 10.16
DEBENTURE AMENDMENT AND SETTLEMENT AGREEMENT
DATED the 17th day of November, 1999 to be effective the 1st day of
November, 1999.
BETWEEN:
JAWS TECHNOLOGIES, INC.
A corporation incorporated in the State of Nevada, USA
("JAWS")
- and -
THOMSON KERNAGHAN & CO. LTD.
A corporation incorporated in the Province of Ontario, Canada
("TK")
BACKGROUND:
(1) JAWS and TK entered into a debenture acquisition agreement on September
25, 1998 and amended the agreement on April 27, 1999, (the "Debenture
Agreement");
(2) Pursuant to the terms of the Debenture Agreement, TK has advanced and
JAWS has issued debentures as set out in Schedule "A" attached hereto and
JAWS has granted warrants to TK as set out in Schedule "B" hereto; and
(3) JAWS and TK wish to enter into this agreement in order to amend the
Debenture Agreement as required, clarify the number of Warrants to be
exercised and settle all outstanding obligations under the Debenture
Agreement in accordance with the terms set out herein below.
NOW THEREFORE, in consideration of the foregoing facts and the mutual covenants
and agreements contained herein, the parties hereby agree as follows:
(1) Conversion of Debentures
The debentures (the "Debentures"), issued in accordance with the terms of
the Debenture Agreement, shall be converted in accordance with the
calculations set out in Schedule "A" and JAWS will issue 5,127,672 shares
of the common stock of JAWS (the "Debenture Conversion Shares") using
available exemptions pursuant to the Securities Act of 1933, or the
Securities Exchange Act of 1934;
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(2) Exercise of $0.28 Warrants
TK shall exercise warrants to purchase 1,428,572 shares in the common
stock of JAWS at an exercise price of $0.28, pursuant to the Debenture
Agreement (the "$0.28 Shares") and shall immediately upon the execution
of this Agreement forward Four Hundred Thousand ($400,000 USD) to JAWS.
(3) Exercise of $0.65 Warrants
TK shall exercise warrants to purchase 923,077 shares in the common stock
of JAWS at an exercise price of $0.65 (the "$0.65 Shares"), pursuant to
the Debenture Agreement. The warrants shall be exercisable in accordance
with the following terms and the warrant agreement shall be amended as
follows by inserting the following provision after paragraph (j) in the
warrant agreement:
(k) Relinquishment Of Warrants.
(a) TK shall have right of relinquishment as hereinafter provided
by this Section (k):
(i) TK, its heirs or other legal representatives to the extent
entitled to exercise the Warrant under the terms thereof, in
lieu of purchasing the entire number of shares subject to
purchase thereunder, shall have the right to relinquish all of
the then unexercised portion of the Warrant (to the extent
then exercisable) in exchange for 751,648 shares of the common
stock of JAWS (the "$0.65 Shares"); and
(ii) such right of relinquishment may be exercised only upon
receipt by JAWS of a written notice of such relinquishment
which shall be dated the date of election to make such
relinquishment; and that, for the purposes of this Agreement,
such date of election shall be deemed to be November 1, 1999.
(4) Termination Of All Other Debenture Agreement Terms and Conditions
All other terms, conditions, representations, and warranties as contained
in the Debenture Agreement, or any other document related thereto, shall
be terminated on the date of the issuance of the Debenture Conversion
Shares, the $0.28 Shares and the $0.65 Shares.
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(5) Mutual Release
JAWS and TK agree to execute a mutual release relating to the Debenture
Agreement, and the settlement thereof including a settlement of all
penalty provisions, on the date of issuance of the Debenture Conversion
Shares, the $0.28 Shares and the $0.65 Shares.
(6) Further Assurances
Each of the parties hereto shall from time to time execute and deliver
all such further documents and instruments and do all acts and things as
any of the other parties may reasonably require to effectively carry out
or better evidence or perfect the full intent and meaning of this
Agreement.
(7) Time of the Essence
Time shall be of the essence of this Agreement.
(8) Entire Agreement
This Agreement shall constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and cancels and
supersedes any prior understandings and agreements between the parties
hereto with respect thereto. There are no representations, warranties,
terms, conditions, undertakings or collateral agreements, express,
implied or statutory, between the parties with respect to the subject
matter hereof other than as expressly set forth in this Agreement.
(9) Amendments and Waiver
No modification of or amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by all of the
parties hereto whose rights are affected by amendment and no waiver of
any breach of any term or provision of this Agreement shall be effective
or binding unless made in writing and signed by the party purporting to
give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
(10) Assignment
This Agreement may not be assigned by any party hereto without the
written consent of the other parties hereto.
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(11) Notice
Any demand, notice, statutory declaration, direction or other
communication to be given in connection with this Agreement shall be
given in writing simultaneously to all of the parties hereto and shall be
given by personal delivery, registered mail, or by telecopier addressed
to the recipients as follows:
(a) In the case of Jaws:
Jaws Technologies, Inc.
0000 00xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Telecopier: (000) 000-0000
(b) In the case of Thomson Kernaghan:
Thomson Kernaghan & Co. Limited
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Telecopier: (000)000-0000
or to other such address, individual, or electronic communication number as may
be designated by notice given by any part to the other parties. Any demand,
notice or other communication given by personal delivery shall be conclusively
deemed to have been given on the day of actual delivery thereof and, if given by
registered mail, on the third business day following the deposit thereof in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on the
business day during which such normal business hours next occur if not given
during such hours on any day. If the party giving any demand, notice or other
communication knows or ought reasonably to know of any difficulties with the
postal system which might affect the delivery of mail, any such demand, notice
or other communication shall not be mailed but shall be given by personal
delivery or by electronic communication.
(12) Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable
therein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dated effective the day first above written.
JAWS TECHNOLOGIES, INC. THOMSON KERNAGHAN & CO. LTD.
Per: _______________________ Per: __________________________
Xxxxxx Xxxxxxxxx, CEO
Per: ________________________ Per: __________________________
Xxxx Xxxxxxx, CFO
MUTUAL RELEASE
--------------
KNOW ALL MEN BY THESE PRESENTS THAT:
Thomson Kernaghan & Co. Ltd. their directors, officers and employees,
agents, successors and assigns (all of whom are hereinafter referred to
collectively as the "TK Releasors"), of the City of Toronto, in the Province of
Ontario, in consideration of the fufillment of all the settlement terms, as set
out in the Debenture Amendment and Settlement Agreement, dated effective
November 1, 1999, and all consideration relating thereto being given, the
receipt and sufficiency of which is hereby acknowledged, do hereby remise,
release and forever discharge Jaws Technologies, Inc., their directors, officers
and employees, agents, successors and assigns of and from any and all manner of
action and actions, cause and causes of action, suits, debts, sums of money,
indemnities, expenses, general damages, special damages, interest, costs and
claims of any and every kind and nature whatsoever, at law or in equity, or
under any statute, which the TK Releasors ever had or now have by reason of or
existing out of any cause of action arising out of the debenture acquisition
agreement between JAWS Technologies, Inc. and Thomson Kernaghan & Co. Ltd.,
dated September 25, 1998, as amended on April 27, 1999.
JAWS Technologies Inc., their directors, officers and employees,
agents, successors and assigns (all of whom are hereinafter referred to
collectively as the "JAWS Releasors"), of the City of Calgary, in the Province
of Alberta, in consideration of the sum of One Dollar ($1.00), and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, do hereby remise, release and forever discharge Thomson Kernaghan
& Co. Ltd. their directors, officers and employees, agents, successors and
assigns of and from any and all manner of action and actions, cause and causes
of action, suits, debts, sums of money, indemnities, expenses, general damages,
special damages, interest, costs and claims of any and every kind and nature
whatsoever, at law or in equity, or under any statute, which the JAWS Releasors
ever had or now have by reason of or existing out of any cause of action action
arising out of the debenture acquisition agreement between JAWS Technologies,
Inc. and Thomson Kernaghan & Co. Ltd., dated September 25, 1998, as amended on
April 27, 1999.
This Mutual Release shall be governed by and construed in accordance
with the laws of the Province of Alberta, Canada.
DATED this _______ day of ____________________, 1999.
JAWS TECHNOLOGIES, INC. THOMSON KERNAGHAN & CO. LTD.
Per: ______________________________ Per: ________________________
Xxxxxx Xxxxxxxxx, CEO
Per: ______________________________
Xxxx Xxxxxxx, CFO
Todays Date
01-Nov-99
Initial 10% 90 day 0.986% 0.1644% Total
Date Advance Annual Penalty free 30 day penalty 90 day penalty Penalties
25-Sep-98 $ 200,000.00 $ 3,611.00 24-Dec-98 $ - $ - $ -
10-Nov-98 $ 10,000.00 $ 55.55 08-Feb-99 $ - $ - $ -
10-Nov-98 $ 110,000.00 $ 10,729.00 08-Feb-99 $ 1,084.60 $ 42,678.24 $ 43,762.84
12-Dec-98 $ 100,000.00 $ 8,876.71 12-Mar-99 $ 986.00 $ 33,537.60 $ 34,523.60
26-Jan-99 $ 250,000.00 $ 19,109.59 26-Apr-99 $ 2,465.00 $ 65,349.00 $ 67,814.00
26-Jan-99 $ 250,000.00 $ 19,109.59 26-Apr-99 $ 2,465.00 $ 65,349.00 $ 67,814.00
16-Apr-99 $ 600,000.00 $ 32,712.33 15-Jul-99 $ 5,916.00 $ 77,925.60 $ 83,841.60
$ 1,520,000.00 $ 94,203.77 $ 12,916.60 $ 284,839.44 $ 297,756.04
$3.50
Penalties Total Interest Interest & Total
Forgiven & Penalties Penalty shares Conversion Shares Shares
25-Sep-98 $ - $ 3,611.00 1,032.00 0.1118 1,788,908.00 1,789,940.00
10-Nov-98 $ - $ 55.55 16.00 0.1118 89,445.00 89,461.00
10-Nov-98 $ (43,762.84) $ 10,729.00 3,065.00 0.28 392,857.00 395,922.00
12-Dec-98 $ (34,523.60) $ 8,876.71 2,536.00 0.28 357,143.00 359,679.00
26-Jan-99 $ (67,814.00) $ 19,109.59 5,460.00 0.28 892,857.00 898,317.00
26-Jan-99 $ (13,562.80) $ 73,360.79 20,960.00 0.4 625,000.00 645,960.00
16-Apr-99 $ (27,947.20) $ 88,606.73 25,316.00 0.65 923,077.00 948,393.00
$ (187,610.44) $ 204,349.37 58,385.00 5,069,287.00 5,127,672.00
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SCHEDULE "B"
------------------------ --------------------------- -------------------------
Value of Warrant Exercise Price No. of Shares Issuable
------------------------ --------------------------- -------------------------
$ 400,000 $0.28 1,428,572
------------------------ --------------------------- -------------------------
$ 600,000 $0.65 923,077
------------------------ --------------------------- -------------------------
