SETTLEMENT AGREEMENT
--------------------
Agreement made this 24th day of April, 2002 by LAURUS MASTER FUND, LTD, KESHET
L.P. and THE KESHET FUND, L.P. (each an "Investor" and collectively the
"Investors") and The Tirex Corporation (the "Company").
WHEREAS, the Investors are holders of certain convertible notes of the Company
originally issued on or about February 26, 2001 (the "Notes"); and
WHEREAS, the Company and the Investors are entering into this Agreement with
respect to the repayment and final disposition of the Notes.
NOW THEREFORE, for good and valid consideration, the receipt of which is
acknowledged.
1. The Company shall pay to the Investors $1000 on May 15th.
2. The Company shall pay to the Investors $1000 on June 15th.
3. The Company shall pay to the Investors over the twenty-four (24)
months commencing August 1, 2002, in equal monthly installments, the
outstanding principal amount of the Notes plus interest and fees
calculated over such period of time, as more fully set forth in
Schedule A attached hereto, less any amounts received by the Investors
from proceeds of sales of Collateral Shares or Rule 144 Shares (both
defined below). The Company shall continue to make the required
monthly payments until the obligations under the Notes shall have been
paid in full.
The Company shall have the right to pay amounts in excess of the
monthly payments due or to make additional payments to the Investors
during the repayment term and such payments in excess of the required
monthly payments will reduce the balance of principal owed to the
Investors, Such payments can be made free of any penalties for early
payments of the Notes and shall reduce the value of the Notes
outstanding for purposes of calculation of interest.
The Investors will provide to the Company quarterly statements of the
amounts due, starting with the previous statement balance and listing
all subsequent entries in the account to finish with the closing
balance payable.
The final payment due to the Investors will be the amount payable
rather than the prescribed monthly payment.
The Tirex Corporation / Laurus Master Fund, Ltd., Keshet L.P., The Keshet Fund,
LP Settlement Agreement
4. With respect to the shares (the "Collateral Shares") owned by ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Shareholders"), which
were pledged as security for repayment of the Notes, the Investors may
continue until December 31, 2002 to dispose of the Collateral Shares
in accordance with previous agreements with respect thereto. In
addition, once all of the Collateral Shares will have been disposed
of, the Investors may convert all or a portion of the remaining
balance of the Notes into shares of the Company's common stock (the
"Rule 144 Shares"), up to a maximum of 600,000 shares per month,
pursuant to the conversion provisions of the Notes and sell such
shares pursuant to Rule 144. On or about December 31, 2002, the
Investors shall exchange one-half of the Collateral Shares it
currently holds to the Company, which shares will be replaced by
Restricted Common Shares of the Company. Notwithstanding Article 4
following, the Investor shall retain the remaining Collateral Shares
and Restricted Common Shares solely as security for the payment in
full of the obligations under the Notes pursuant to this Agreement.
5. In addition to receiving payments with respect to the Notes as per
Article 1 preceding, the Investors will have the right to sell through
a licensed securities trader into the daily OTC market up to a total
of 600,000 Collateral Shares and / or Rule 144 Shares per month, to an
overall maximum of the original number of Collateral Shares less those
shares sold by the Investors prior to the signing of this Settlement
Agreement. Upon presentation of the trading slips, the proceeds of
such sales of Collateral Shares and Rule 144 Shares by the Investors
to unaffiliated and unrelated bona fide purchasers will be deducted
from the amount due to the Investors, first against unpaid interest
and fees and thence against unpaid principal. The Investors will
promptly advise the Company of intent to dispose of Collateral Shares
or Rule 144 Shares prior to the time of the order to sell, informing
the Company of the selling instructions on the day of the confirmation
of the sale, all by e-mail or fax.
6. If the Investors still have in their possession Collateral Shares or
Rule 144 Shares at the time the Notes plus accrued interest and fees
will have been completely paid, the Investors will promptly return
such remaining Collateral Shares and/or Rule 144 Shares to the Company
at no charge to the Company.
7. The Company hereby confirms that it has paid all outstanding debts
owed to its Transfer Agent and hereby agrees to pay all future debts
to the Transfer Agent and is now in good standing as prescribed by the
Transfer Agent.
8. The Company shall have its securities counsel issue a legal opinion to
the Company's Transfer Agent with respect to the sale of Collateral
Shares of Rule 144 shares within five (5) business days of having
received the request to do so with accompanying documentation. If such
2
The Tirex Corporation / Laurus Master Fund, Ltd., Keshet L.P., The Keshet Fund,
LP Settlement Agreement
opinion is not received within such three (3) business day period, the
Company hereby irrevocably appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. to render
such opinion.
9. On the date hereof, the Company shall issue to the Investors three
series of warrants to purchase 500,000 shares for each series. The
first series may be exercised at any time during the three-year period
following the date of the signature of this Agreement at a price of
$0.01 (1) cent per share. The second series may be exercised at any
time during the two-year period starting twelve months following the
date of signing of this Agreement, at a price per share of five (5)
cents. The third series may be exercised at any time during the
one-year period starting twenty four months (24) following the date of
signing of this Agreement, at a price per share of ten (10) cents.
10. Any failure of the Company to effect payment to the Investors under
the terms of Article 1 preceding or to maintain the good standing of
the Collateral Shares shall be deemed an Event of Default. Upon
receipt of written notice of such default from the Investors, the
Company shall have ten business days to correct the default. In the
event that the default is not corrected, the Investors shall have the
right to sell the Collateral Shares and/or the Rule 144 Shares in
their possession.
LAURUS MASTER FUND, LTD THE TIREX CORPORATION
Per: /s/ ▇▇▇▇▇ GRIN Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------- -------------------------
Name: ▇▇▇▇▇ Grin ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
Title: Authorized Signatory President & CEO
THE KESHET FUND, L.P.
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
KESHET, L.P.
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
3
The Tirex Corporation / Laurus Master Fund, Ltd., Keshet L.P., The Keshet Fund,
LP Settlement Agreement
Schedule A
----------
Original Principal Amount of Note $ 750,000
---------------------------------
Interest Rate of 8% calculated through June 30, 2002 $ 80,000
----------------------------------------------------
Fees Accrued through June 30, 2002 $ 118,500 in Penalty
---------------------------------- Payments accrued under
the note
Proceeds to date with respect to sales of Collateral Shares $ (16,260)
-----------------------------------------------------------
Total amount payable $ 932,240
--------------------
Payments to be made at the end of each month over 24 months,
------------------------------------------------------------
commencing August 1st, 2002 $ 38,843.33 per month
---------------------------- (the last monthly payment
shall also include any
adjustments necessary for
updated interest and fee
amounts)
4
