DEBT MATCHING AGREEMENT
THIS DEBT MATCHING AGREEMENT (the "Agreement"), dated as of
September 30, 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").
Recitals
A. Firetector is indebted to Mirtronics in an amount aggregating
$897,089.04 and evidenced by two (2) promissory notes in principal face amounts
of $620,000 and $225,000 ("Note A" and "Note B", respectively), issued pursuant
a Securities Exchange Agreement, dated as of February 17, 1998 between
Firetector and Mirtronics. The balances owing on Notes A and B, inclusive of
accrued interest as of the date hereof are $658,219.16 and $238,869.88
respectively.
B. Note A is convertible into shares of Firetector common stock, $0.001
par value per share (the "Common Stock") at a conversion price of $1.50 per
share, pursuant to the terms of the Amended Debt/Equity Conversion Agreement,
dated as of February 17, 1998 between Firetector and Mirtronics (the "Conversion
Right").
C. Mirtronics and its subsidiaries are indebted to Firetector for an
aggregate of $508,618.89 (the "Mirtronics Debt").
D. Firetector and Mirtronics wish to satisfy the Mirtronics Debt by
matching said amount against amounts owed to Mirtronics pursuant to Notes A and
B.
E. On September 23, 1998, Firetector effected a one for three reverse
recapitalization of the Common Stock which caused a modification of the
Conversion Right.
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. Debt Matching. The parties hereby agree to apply the Mirtronics Debt in
the following manner: First, $237,482.89 of the Mirtronics Debt shall be applied
to fully satisfy the principal and accrued interest represented by Note B; and
second, $261,424.60 of the
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Mirtronics Debt shall be applied to reduce the principal and accrued interest
represented by Note A. The aggregate balance owed on Note A, as so reduced,
shall then be $392,972.64. Each of Mirtronics and Firetector agree to withhold
and pay the requisite withholding taxes that shall become due and payable on the
transactions contemplated herein.
2. Warrant. Mirtronics agrees to surrender the Conversion Right in
consideration of warrants to purchase up to 310,000 shares of the Common Stock
(the "Warrants") . Said Warrants shall be exercisable from time to time and
until the close of business on December 31, 2003, at an exercise price of $1.02
per share. The exercise price shall be satisfied in cash, by wire transfer of
immediately available funds or by certified or official bank check. The Warrants
shall contain such other terms and conditions as shall be reasonable and
customary.
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. 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.
5. 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.
6. 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.
7. 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.
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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: Chief Financial Officer and Treasurer
MIRTRONICS INC.
By
Name: Xxxx Xxxxxxxxxx
Title: Secretary