SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) November 17, 1999
JAWS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
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7371 98-0167013
(Commission File Number) (IRS Employer Identification Number)
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1013 17TH AVENUE SW T2T 0A7
CALGARY, ALBERTA CANADA
(Address of principal executive offices)
(403) 508-5055
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
- -----------------------
On November 17, 1999, JAWS Technologies, Inc. ("JAWS") executed a Debenture
Acquisition Agreement Amendment and Settlement Agreement with Thomson Kernaghan
& Co. ("Thomson Kernaghan") (the "Settlement Agreement") in order to settle the
outstanding obligations of the parties relating to the $5,000,000 Debenture
Acquisition Agreement dated September 25, 1998, as amended on April 27, 1999
(the "Debenture Agreement").
The Settlement Agreement settles the conversion terms of the $1,520,000
advanced under the Debenture Agreement and the exercise of outstanding warrants
issued under the Debenture Agreement and terminates all further obligations
related to the Debenture Agreement.
Debentures issued pursuant to the Debenture Agreement have been converted
to 5,127,672 restricted shares of common stock of JAWS.
Thomson Kernaghan will exercise all of the outstanding warrants issued
pursuant to the Debenture agreement for 2,180,220 restricted shares of common
stock of JAWS.
The parties have signed a mutual release of all previously existing
obligations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------
Financials
None
Exhibits
Exhibit A - Debenture Amendment and Settlement Agreement with the following
schedules:
Schedule A - Spreadsheet
Schedule B - Warrants
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JAWS TECHNOLOGIES, INC.
By:/s/Robert J. Kubbernus
------------------------
Robert J. Kubbernus, President
Date: December 1, 1999
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Exhibit A - Page 4
EXHIBIT A
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;
(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.
(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.
(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.
1013 17th Avenue S.W.
Calgary, Alberta
T2T 0A7
Telecopier: (403) 508-5058
(b) In the case of Thomson Kernaghan:
THOMSON KERNAGHAN & CO. LIMITED
365 BAY STREET
Toronto, Ontario
M5H 2V2
Telecopier: (416)367-8055
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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dated effective the day first above written.
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JAWS TECHNOLOGIES, INC. THOMSON KERNAGHAN & CO. LTD.
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Per: _______________________. Per: __________________________
Robert Kubbernus, CEO
Per: ________________________ Per: ________________________
Riaz Mamdani, CFO
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<PAGE>
SCHEDULE A
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TODAYS DATE
1-NOV-99
INITIAL 10% 90 DAY 0.986% 0.1644%
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 8-Feb-99 $ -
10-Nov-98 $110,000.00 $ 10,729.00 8-Feb-99 $ 1,084.60
12-Dec-98 $100,000.00 $ 8,876.71 12-Mar-99 $ 986.00
26-Jan-99 $250,000.00 $ 19,109.59 26-Apr-99 $ 2,465.00
26-Jan-99 $250,000.00 $ 19,109.59 26-Apr-99 $ 2,465.00
16-Apr-99 $600,000.00 $ 32,712.33 15-Jul-99 $ 5,916.00
$1,520,000.00 $94,203.77 $12,916.60
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TODAYS DATE
1-NOV-99
INITIAL . TOTAL
DATE
25-Sep-98 . $ - $ -
- ----------- ----------- -----------
10-Nov-98 . $ - $ -
10-Nov-98 . $ 42,678.24 $ 43,762.84
12-Dec-98 . $ 33,537.60 $ 34,523.60
26-Jan-99 . $ 65,349.00 $ 67,814.00
26-Jan-99 . $ 65,349.00 $ 67,814.00
16-Apr-99 . $ 77,925.60 $ 83,841.60
$284,839.44 $297,756.04
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TODAYS DATE
1-NOV-99 $ 3.50
PENALTIES TOTAL INTEREST INTEREST & TOTAL
DATE. . . . FORGIVEN & PENALTIES PENALTY SHARES CONVERSION SHARES SHARES
25-Sep-98 $ - $ 3,611.00 1,032.00 0.1118
- ----------- ------------ ------------- ----------- ---------
10-Nov-98 $ - $ 55.55 16.00 0.1118
10-Nov-98 $(43,762.84) $ 10,729.00 3,065.00 0.28
12-Dec-98 $(34,523.60) $ 8,876.71 2,536.00 0.28
26-Jan-99 $(67,814.00) $ 19,109.59 5,460.00 0.28
26-Jan-99 $(13,562.80) $ 73,360.79 20,960.00 0.4
16-Apr-99 $(27,947.20) $ 88,606.73 25,316.00 0.65
$(187,610.44) $204,349.37 58,385.00
<S> <C> <C>
TODAYS DATE
1-NOV-99
PENALTIES
DATE
25-Sep-98 . 1,788,908.00 1,789,940.00
- ----------- ------------ ------------
10-Nov-98 . 89,445.00 89,461.00
10-Nov-98 . 392,857.00 395,922.00
12-Dec-98 . 357,143.00 359,679.00
26-Jan-99 . 892,857.00 898,317.00
26-Jan-99 . 625,000.00 645,960.00
16-Apr-99 . 923,077.00 948,393.00
5,069,287.00 5,127,672.00
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<PAGE>
Exhibit A - Page 5
SCHEDULE B
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VALUE OF WARRANT EXERCISE PRICE NO. OF SHARES ISSUABLE
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400,000. . . . . $ 0.28 1,428,572
600,000. . . . . $ 0.65 923,077
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