33
AMENDED DEBT/EQUITY CONVERSION
AGREEMENT
THIS AMENDED DEBT/EQUITY CONVERSION AGREEMENT (the "Agreement"), dated as
of February 19, 1998 by and between FIRETECTOR INC., a Delaware corporation
having its executive offices at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000
("Firetector") and Mirtronics Inc., an Ontario corporation having its executive
offices at 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0 ("Mirtronics") will replace
all previous versions of the Debt/Equity Agreement dated as of March 15, 1995
and subsequent extensions, modifications and amendments.
Recitals
A. Firetector has issued two (2) promissory notes to Mirtronics in face
amounts of $620,000 and $225,000 ("Note A" and "Note B", respectively), in
connection with the execution and delivery of a Securities Exchange Agreement,
dated as of the date hereof.
B. From time to time, Mirtronics may desire to convert Note A into
shares of Firetector's common stock, $.001 par value per share (the "Common
Stock") and Firetector would benefit from such a conversion of debt into equity.
NOW THEREFORE, in consideration of the foregoing and of the premises herein
contained, the mutual covenants and agreements and certain other good and
valuable consideration, the receipt and sufficiency of which each of the parties
hereby acknowledges, and subject to the terms and conditions provided in this
Agreement, Firetector and Mirtronics agree as follows:
1. Conversion Right. Mirtronics shall have the right, exercisable from time
to time and until the close of business on December 31, 2002, to convert all or
part of Note A into shares of Common Stock at the conversion price of $0.50 per
share, or two (2) shares of Common Stock for each dollar of Note A so converted
(the "Conversion Right"). All shares of Common Stock acquired by Mirtronics
pursuant to the Conversion Right are referred to herein as "Converted Shares".
Mirtronics shall have the right to specify which portion of Note A is being
converted. No Conversion Right shall apply to Note B, in whole or in part.
2. Investment Representations and Covenants
2.1 Investment Representation. Mirtronics will acquire the Converted Shares
for its own account and for investment only and not with a view to distribution
or resale thereof within the meaning of such phrase as defined under the
Securities Act of 1933, as amended (the "1933 Act"). Mirtronics will not dispose
of any part or all of the Converted Shares in violation of the provisions of the
1933 Act and the rules and regulations promulgated under such Act by the
Securities and Exchange Commission and all applicable provisions of State
securities laws and regulations.
2.2 Legend. The certificate or certificates representing all Converted
Shares shall bear a legend in substantially the following terms:
"The Shares represented hereby have not been registered under
the Securities Act of 1933, as amended (the "1933 Act") and have been
acquired for investment and not with a view to distribution or resale.
Such shares may not be sold, mortgaged, pledged, hypothecated or
otherwise transferred except pursuant to an effective registration
statement under the 1933 Act or an opinion of counsel satisfactory to
Firetector Inc. to the effect that an exemption from the registration
requirement under the 1933 Act is available.
2.3 Acknowledgment of Restrictions. Mirtronics acknowledges being informed
that the Converted Shares will be unregistered and must be held indefinitely
unless subsequently registered under the 1933 Act or an exemption from such
registration is available and that Firetector has no obligation to register the
Converted Shares for Mirtronics's account.
3. Amendments; Etc. No amendment or waiver of any provision of this
Agreement, or consent to any departure therefrom, shall be effective against any
party unless the same shall be in writing and signed by such party, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
4. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing and addressed to the parties at the address of
such parties specified in the recitals to this Agreement or, as to either party,
at such other address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of this Section. All
such notices and other communications shall be effective when delivered in
writing, addressed as aforesaid.
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of law provisions.
6. Headings. Section headings have been inserted only as a matter of
convenience of reference and shall not be used in the interpretation of any
provision of this Agreement.
7. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument
and any party hereto may execute this instrument by signing one or more
counterparts.
8. Assignment. Assuming compliance with applicable law, Mirtronics may
assign all or any part of its rights and obligations under this Agreement, the
Debt and the Preferred Stock to any person or persons.
9. Further Assurances. Each of the parties agrees that at any time and from
time to time, it will execute and deliver such further documents or cause to be
done such further acts and things as any party may reasonably request in order
to effect the purposes of this Agreement.
Execution
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
FIRETECTOR INC.
By
Name: Xxxx X. Xxxxxxxx
Title: Vice President and Treasurer
MIRTRONICS INC.
By
Name: Xxxx Xxxxxxxxxx
Title: Secretary
