HEADS OF AGREEMENT
1. Each of Ladenburg Xxxxxxxx & Co. Inc., Sundowner Investments Limited and
AMRO International S.A. shall release and discharge Sand Technology Inc.
("Sand") and its directors and officers from any all actions, suits,
contracts, agreements, claims and obligations whatsoever which any one
of them may have against Sand, and Sand shall release and discharge each
of Ladenburg Xxxxxxxx & Co. Inc., Sundowner Investments Limited and AMRO
International S.A. and each of their respective directors and officers
from any all actions, suits, contracts, agreements, claims and
obligations whatsoever which Sand may have against any of them, in any
way arising out of or relating to (i) the Common Share Purchase
Agreement with Sundowner Investments Limited dated May 26, 2000 (the
"Equity Line of Credit"), (ii) the Common Shares and Warrant Purchase
Agreement with AMRO International S.A. dated May 24, 2000 (the "AMRO
Agreement"), and (iii) the Engagement Agreement with Ladenburg Xxxxxxxx
& Co. Inc. dated March 15, 2000, and all ancillary documents thereto,
provided that
a) Subject to clause (d) below, Sand shall pay US$250,000 to
Ladenburg Xxxxxxxx & Co. Inc. upon the closing (the "Closing") of
the Financing Agreement between Sprott Securities Inc. and Sand
dated November 6, 2000 and anticipated to close on or about
November 22, 2000 and upon such payment, all terms and conditions
of the Engagement Agreement shall be terminated and of no force or
effect whatsoever;
b) Sand shall issue up to 500,000 Common Shares at US$6.00 per share
during the period November 7, 2000 to November 17, 2000 upon the
request of Sundowner Investments Limited pursuant to the Equity
Line of Credit. Whether Sundowner exercises it rights pursuant to
this clause or not, the Equity Line of Credit shall be terminated
upon the Closing pursuant to section 7.1 of the Equity Line of
Credit and be of no force or effect whatsoever.
c) As of the Closing, provided that the AMRO repricing notice of
November 6, 2000 has been honored in accordance with its terms,
all terms and conditions of the AMRO Agreement shall be terminated
and be of no force or effect whatsoever.
d) In the event that Sundowner elects not to exercise option (b)
above, the payment due to Ladenburg Xxxxxxx in (a) above shall be
US$300,000. For clarity, if Sundowner purchases any shares under
(b), then the termination payment to Ladenburg Xxxxxxxx shall be
$250,000, and Ladenburg shall also receive its commission on the
shares purchased by Sundowner per the March 15, 2000 letter in
addition to the $250,000. If Sand closes on any amount with Sprott
Securities, the full $250,000 will be due. If Sand closes on
nothing with Sprott, then all of the above-referenced agreements
will remain in full force and effect.
2. The parties shall do all things and provide all such reasonable
assurances as may be required to consummate the transaction contemplated
above, and each party shall provide such further documents and
instruments required by any other party as may be reasonably necessary
or desirable to effect the purpose of these Heads of Agreement and to
carry out their provisions. In addition, Sand undertakes that it shall
not withdraw the registration statement or statements registering the
shares underlying any warrants held by any of AMRO, Sundowner or
Ladenburg Xxxxxxxx until and unless Sand includes such shares on another
registration statement, whether for the purchasers in the Sprott
transaction, or otherwise.
Dated this 6th day of November 2000.
LADENBURG XXXXXXXX & CO. INC. SUNDOWNER INVESTMENTS LIMITED
/s/ Xxxxxx Xxxxx /s/ Xxxx Xxxxxxx
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Xxxxxx Xxxxx, Director of Xxxx Xxxxxxx - Director
Investment Banking
AMRO INTERNATIONAL S.A. SAND TECHNOLOGY INC.
/s/ X.X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxx
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X.X. Xxxxxxxx - Director
