Document:

Exhibit 10.12
                                  -------------
         Investors Receiving Rights Pursuant to Form of Investors Rights
                      Agreement Set Forth in Exhibit 10.11

         The following entities received certain rights related to a private
placement of securities on June 21, 1999, pursuant to Investor Rights Agreements
substantially to the form set forth in Exhibit 10.13. The sole difference
between these agreements was the entity receiving such rights.

                                Thomas E. Skidmore
                                A. Allan Skidmore
                                 Arthur Skidmore
                                  Brian Skidmore
                                  Cary Skidmore
                                  Garry Skidmore
                                 Beverly Droulis
                                 Margrit Hartman
                             Margaret Alexis Kennedy
                                 Suzanne Lowndes

913576.1EXHIBIT 10.13

                             JAWS Technologies, Inc.
                             1013 17th Avenue, S.W.
                             Calgary, Alberta T2T0A7
                                     Canada

                           PLACEMENT AGENCY AGREEMENT

SmallCaps Online LLC
1285 Avenue of the Americas, 35th Floor
New York, New York 10019
Attention: Jeffrey B. Davis, President

Gentlemen:

        This Placement Agency Agreement (the "Agreement") confirms the retention
by JAWS Technologies,  Inc., a Nevada corporation (the "Company"),  of SmallCaps
Online LLC, a Delaware limited liability company (the "US Placement Agent"),  to
act as the  sales  agent  in the  United  States  on a  best  efforts  basis  in
connection with the private placement of Units (as defined below) of the Company
on the terms set forth below,  including the financial and other terms set forth
in  Schedule  A hereto,  which is hereby  incorporated  by  reference  into this
Agreement.

1.      PLACEMENT

        (a) Each unit (a "Unit") shall consist of one share of common stock, par
value $.001 per share (the "Common Stock), of the Company,  and a warrant (each,
a "Warrant" and  collectively,  the  "Warrants")  to acquire 1/2 (one-half) of a
share of Common Stock at an exercise price of US$ 6.50 per share.  The placement
of the Units (the  "Placement")  will be made  pursuant  to the  Memorandum  (as
defined in Section 2 below).  Except as  provided  in Schedule A, the Units (and
the shares of Common Stock and Warrants included therein) will not be registered
under the  Securities  Act of 1933,  as  amended,  or any  applicable  successor
statute  (the  "Act"),  but will be issued in reliance  on the private  offering
exemption  available under Section 4(2) of the Act and the rules and regulations
promulgated  thereunder,  including Regulation D, and outside the United States,
through  exemptions  from any  prospectus  requirements  of  applicable  foreign
securities laws. The US Placement Agent  understands that all  subscriptions for
Units are subject to acceptance by the Company. The Company and the US Placement
Agent reserve the right in their  reasonable  discretion to accept or reject any
or all subscriptions for Units in whole or in part.  Investors shall be required
to subscribe for a minimum number of Units with additional  increments available
at the  Company's  discretion  as set forth in  Schedule A or as provided in the
Memorandum.  Any  subscription  monies  received by the US Placement  Agent from
investors  will be handled in accordance  with Rule 15c2-4 under the  Securities
Exchange Act of 1934,  as amended (the  "Exchange  Act") , whether or not the US
Placement Agent is subject to the Exchange Act, and as otherwise may be

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prescribed by the terms of the  Memorandum.  Without  limiting the generality of
the foregoing, the Company and the US Placement Agent shall enter into an escrow
agreement (the "Escrow  Agreement")  with the United States Trust Company of New
York (or other  escrow  agent  mutually  acceptable  to the parties (the "Escrow
Agent") and shall  establish a separate  account with the Escrow Agent  entitled
"JAWS  Technologies,  Inc.--Escrow  Account."  All funds  received by either the
Company or the US Placement Agent shall be immediately  deposited in such escrow
account pending an initial closing hereunder.

        (b) The Company is making an offering of the Units,  concurrent with the
making of the  private  placement  of Units in the  United  States as  described
herein (the  "Placement"),  in Canada through the Company's  Canadian  placement
agent, Thomson Kernaghan & Co. Limited ("TK"). Such concurrent Canadian offering
is referred to herein as the "Concurrent  Offering." The US Placement Agent will
only offer Units to prospective  investors in the United States and TK will only
offer Units to prospective  investors in Canada and, with the Company's  consent
in Belgium. The terms of the Concurrent Offering are substantially  identical to
the terms of this  Placement,  except to the extent  that either the laws of the
United States and/or Canada require special  disclosure in the Memorandum and/or
terms in this Agreement for the placement  agent  agreement with TK and/or terms
in the Subscription  Agreement (as defined below) or the subscription  agreement
between the Company and Canadian investors.  The Units, Shares and Warrants sold
in the United States and Canada will be identical in all respects.  For purposes
of calculating the minimum and maximum sizes of the offering,  Units sold in the
United States and in Canada will be aggregated.

2.      OFFERING CIRCULAR

        The Company  will prepare an Offering  Circular  relating to the Company
(such Offering Circular,  together with the exhibits and attachments  thereto or
available  thereunder  and any amendments or  supplements  thereto  prepared and
furnished by the Company,  being referred to herein as the  "Memorandum")  which
describes the Placement  and certain  investment  risks  relating  thereto.  The
Company has been and will  continue to be  responsible  for preparing and filing
required documentation,  if any, with authorities in United States prior to (and
subsequent to, if required by the laws of such jurisdiction) the distribution of
the Memorandum to prospective  investors  (the parties  acknowledging,  however,
that the  offering of Units is intended  and  expected to be wholly or partially
exempt  from  filing   requirements  in  most  jurisdictions  by  reason  of  an
"accredited investor" exemption). The US Placement Agent and its counsel and the
Company and its counsel will jointly prepare a form of Subscription Agreement to
be entered into between the Company and United  States  purchasers  of the Units
(the  "Subscription   Agreement"),   with  such   representations,   warranties,
conditions  and  covenants as are  customary in private  placements of corporate
equity  securities  with United States  accredited  investors.  The US Placement
Agent and its counsel shall have an  opportunity to review the final form of the
Memorandum  and  Subscription  Agreement  prior to the  distribution  thereof to
prospective investors, and the Memorandum and the Subscription Agreement will be
the only offering  documents  (other than cover letters which may be used by the
US Placement  Agent, and any documents made available to investors in accordance
with the terms of the Memorandum)  shown to prospective  investors.  The Company
and its counsel will advise the US Placement Agent and its counsel in writing of
those  jurisdictions  in which Units may  lawfully be offered and sold,  and the
manner in which the Units may

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lawfully be offered and sold in each such  jurisdiction,  in connection with the
Placement,  and the US Placement  Agent agrees that the Units will be offered or
sold only in such jurisdictions and in the manner specified by the Company.  The
offering of Units will be made in accordance  with the  requirements  of Section
4(2) under the Act to investors that qualify as accredited investors, as defined
in Rule 501(a) under the Act ("Accredited Investors"),  purchasing for their own
account  for  investment  purposes  and not for  distribution  in  violation  of
securities laws.

3.      PLACEMENT AGENT

        (a) Upon the  terms  and  conditions  set  forth in this  Agreement  and
Schedule A hereto,  the Company  hereby  employs the US  Placement  Agent as its
sales  agent in the United  States for the  purpose of placing the Units for the
account  and risk of the  Company.  This  appointment  shall be  exclusive  with
respect to the  Placement,  and the Company  shall not have the right to appoint
additional  sales agents in the United States  without the US Placement  Agent's
express  prior  written  consent  (other than TK with respect to the  Concurrent
Offering);  provided that this Agreement  shall not give the US Placement  Agent
any right to act as sales agent or receive  compensation  in connection with any
future  offerings  sponsored by the Company absent a separate  agreement to such
effect between the US Placement Agent and the Company. Subject to the provisions
of  Section  5  hereof  and to the  performance  by  the  Company  of all of its
obligations to be performed hereunder,  the US Placement Agent agrees to use its
best efforts to assist in arranging for sales of Units.  The US Placement  Agent
will  also  assist  the  Company  in  the  preparation  of  the  Memorandum  and
presentations  to prospective  investors.  It is understood and agreed that this
Agreement  does not  create any  partnership,  joint  venture  or other  similar
relationship  between or among the US Placement Agent and the Company,  that the
US  Placement  Agent is  acting  only as a sales  agents  and  that,  except  as
specifically  set  forth  in  Schedule  A,  there  is no  undertaking  on the US
Placement Agent's part to purchase any of the Units or to arrange or participate
in any other financing in connection with the Placement.

        (b) For the services of the US Placement  Agent  hereunder,  the Company
will pay or caused to be paid to the US Placement  Agent the  commissions,  fees
and expenses stated in Schedule A.

        (c) Upon receipt by the Company  from a proposed  purchaser of completed
subscription  materials in the form set prepared by the Company,  and such other
documents as the Company  requests,  the Company and the US Placement Agent will
determine in their reasonable  discretion  whether they wish to accept or reject
the subscription.

        (d) Subject to the provisions  relating thereto contained in Schedule A,
the US Placement Agent's commissions, fees and expenses based on a percentage of
gross proceeds and all other expenses  reimbursable or payable by the Company as
provided  herein  or in Sche dule A will be paid in full  upon  transfer  to the
account of the Company of the purchase price of such Units;  provided,  however,
that no such  commissions or fees shall be payable until  subscriptions  for the
minimum number of Units  described in the Memorandum  have been accepted and the
purchase  price  of  the  Units  to be  purchased  from  the  Company  has  been
transferred  to the account of the  Company.  For  purposes of  calculating  the
minimum and

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maximum  sizes of the  offering,  Units sold in the United  States and in Canada
will be aggregated.

        (e) The Company and the US Placement Agent agree to the terms of, and to
comply with,  the agreements set forth on Schedule A hereto as if such terms and
agreements were repeated herein in their entirety.

4.      PLACEMENT EXPENSES

        (a)  The  Company  will  pay,  whether  or not  any  Units  are  sold in
connection with the Placement,  all reasonable,  accountable  costs and expenses
incurred by the US Placement  Agent in connection with the Placement as provided
in  Schedule  A  .  Reimbursement  of  the  US  Placement  Agent's   reasonable,
accountable out-of-pocket costs and expenses hereunder shall be made promptly in
full in the event the US Placement  Agent elects to terminate  this Agreement in
accordance with Section 5.

        (b) Without limiting the generality of the foregoing, the Company hereby
agrees to pay all fees,  charges and expenses incident to the performance by the
Company and the US  Placement  Agent of its  respective  obligations  hereunder,
including,  without limitation,  all fees,  charges,  and expenses in connection
with (i) the  preparation,  printing,  reproduction,  filing,  distribution  and
mailing of the  Memorandum  and all other  documents  relating to the  offering,
purchase,  sale and delivery of the Units,  and any  supplements  or  amendments
thereto, including the fees and expenses of counsel to the Company and to the US
Placement, and the cost of all copies thereof, (ii) the issuance, sale, transfer
and delivery of the Units, the Shares, and the Warrants,  including any transfer
or other taxes payable thereon and the fees of any transfer agent, warrant agent
or  registrar,  (iii)  the  registration  or  qualification  of the Units or the
securing  of an  exemption  therefrom  under  state  of  foreign  "blue  sky" or
securities  laws,  including,  without  limitation,  filing fees  payable in the
jurisdictions in which such registration or qualification or exemption therefrom
is sought, the costs of preparing preliminary,  supplemental and final "blue sky
surveys"  relating  to the  offer  and  sale  of the  Units  and  the  fees  and
disbursements  of counsel to the Placement  Agents in connection with such "blue
sky" matters,  (iv) the filing fees, if any, payable to the Commission,  and (v)
the retention of the Escrow Agent, including the reasonable fees and expenses of
the Escrow Agent for serving as such and the reasonable fees and expenses of its
counsel.

5.      TERMINATION OF PLACEMENT

        The  Placement  may  be  terminated  by  the  mutual  consent  of the US
Placement  Agent and TK at any time by them giving written notice to the Company
if (a) in the opinion of the US  Placement  Agent,  the  Memorandum  contains an
untrue  statement of a material  fact or omits to state a material fact required
to be stated  therein or  necessary  in order to make the  statements  appearing
therein  not  misleading  in the light of the  circumstances  in which they were
made, and the Company shall not have corrected such untrue statement or omission
to the  reasonable  satisfaction  of the US  Placement  Agent  and TK and  their
counsel  within ten  business  days after the  Company  receives  notice of such
untrue statement or omission,  provided that  notwithstanding  such ten business
day period, no such closing shall occur

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hereunder  until the US Placement  Agent and TK shall have  notified the Company
that they are satisfied, in their reasonable determination, that the Company has
taken such steps (including circulating amended offering materials) to allow any
such  closing to occur,  or (b) the Company  shall be in material  breach of any
representation, warranty or covenant made by it in this Agreement.

6.      CLOSING

               (a) Subject to the conditions set forth in Section 10 hereof,  if
subscriptions  to  purchase at least  2,000,000  Units in the  aggregate  in the
Placement and the Concurrent Offering have been received prior to the expiration
of the offering  period and accepted by the Company,  the initial  closing under
this  Agreement  (the  "Closing")  shall be held at the offices of Battle Fowler
LLP, Park Avenue Tower, 75 East 55th Street,  New York, New York, at 10:00 A.M.,
New York time, on December 23, 1999 (provided that  subscriptions to purchase at
least  2,000,000  Units have been accepted) or at such other place,  time and/or
date as the Company and the US Placement  Agent shall agree upon.  The date upon
which the  Closing is held shall  hereinafter  be  referred  to as the  "Closing
Date."

               (b) Subject to the conditions set forth in Section 10 hereof, if,
subsequent to the date the subscriptions  referred to in Section 6(a) hereof are
received  and  accepted  and prior to the  expiration  of the  offering  period,
additional  subscriptions  to  purchase  Shares are  received  from  prospective
investors,  which  subscriptions  are  accepted  by the  Company,  one  or  more
additional  closings under this Agreement (each, an "Additional  Closing") shall
be held at the offices of Battle  Fowler LLP,  Park Avenue  Tower,  75 East 55th
Street,  New York, New York, at 10:00 A.M., New York time, on the third business
day following the date upon which the US Placement  Agent  receives  notice from
the Company that  additional  subscriptions  have been so  accepted,  or at such
other place,  time or date as the Company and the US Placement Agent shall agree
upon. The Company shall notify the US Placement Agent as promptly as practicable
whether any additional  subscriptions  so received have been accepted.  The date
upon which any additional Closing is held shall hereinafter be referred to as an
"Additional Closing Date."

               (c) At the Closing or an Additional  Closing, as the case may be,
the Company shall instruct the Escrow Agent to pay to the US Placement  Agent at
the Closing or an Additional Closing, from the funds deposited in the applicable
Escrow  Account in payment for the Shares,  any cash  amounts  payable to the US
Placement  Agent  pursuant to Schedule A of this  Agreement.  Promptly after the
Closing  Date or an  Additional  Closing  Date,  as the case may be, the Company
shall deliver to the purchasers of Unit certificates representing the Shares and
agreements representing the Warrants to which they are entitled.

7.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

        The Company  represents  and warrants  to, and  covenants  with,  the US
Placement Agent that:

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        (a) The Company  has been  validly  formed and is legally  existing as a
corporation  in good standing  under the laws of the State of Nevada,  with full
corporate  power and  authority to conduct its business as currently  conducted,
and is in good  standing  in each  jurisdiction  in  which  the  conduct  of its
business  or the  nature  of  its  properties  requires  such  qualification  or
authorization,  except where the failure to be so qualified or authorized and in
good standing could not reasonably be expected to have a material adverse effect
on the business  and  financial  condition of the Company and its  subsidiaries,
taken as a whole (a  "Material  Adverse  Effect").  As of the date  hereof,  the
Company does not have any material  subsidiaries  other than JAWS  Technologies,
Inc. an Alberta corporation ("Jaws Canada"),  Pace Systems,  Inc.,  incorporated
under the laws of the Province of Ontario ("Pace"),  and Jaws Acquisition Corp.,
an Alberta  corporation  ("JAC" and collectively  with Jaws Canada and Pace, the
"Subsidiaries").  Each Subsidiary has been duly organized,  is validly  existing
and in good standing under the laws of the jurisdiction of its organization, has
the power and authority to own its properties and to conduct its business and is
duly  qualified and  authorized to transact  business and is in good standing in
each  jurisdiction  in which the  conduct of its  business  or the nature of its
properties  requires  such  qualification  or  authorization,  except  where the
failure  to be so  qualified  or  authorized  and in  good  standing  could  not
reasonably be expected to have a Material Adverse Effect. All of the outstanding
capital stock of each Subsidiary is owned by the Company,  free and clear of any
liens, and has been duly authorized and validly issued,  and is  non-assessable,
except for such failures as could not  reasonably be expected to have a Material
Adverse Effect.

         (b) Neither the Memorandum nor the Subscription  Agreement  contain any
untrue  statement of a material fact,  and the  Memorandum and the  Subscription
Agreement taken as a whole will not omit to state any material fact necessary in
order to make the  statements  made, in light of the  circumstances  under which
they were made, not misleading,  except that the Company shall have no liability
for any information  provided to the Company in writing by, and relating to, the
US Placement Agent, for use in and used in the Memorandum. It is understood that
any  summary in the  Memorandum  of a  document  which  appears  therein in full
(either as signed or substantially in the form to be signed) does not constitute
an untrue or  misleading  statement  merely  because it is a summary;  provided,
however,  that any such  summary  may not  contain  any  untrue  statement  of a
material  fact or  omit  to  state  any  material  fact  necessary  to make  the
statements made, in light of the  circumstances  under which they were made, not
misleading.  If, at any time before the  Placement is completed or terminated or
before all subscriptions are accepted by the Company, there should be any change
which would cause the  Memorandum  or the  Subscription  Agreement not to comply
with this  paragraph  7(b),  the Company will  promptly  advise the US Placement
Agent  thereof  and  prepare  and  furnish  the US  Placement  Agent  with,  for
distribution  to investors,  after prior review and approval by the US Placement
Agent and their counsel (such approval not to be  unreasonably  withheld),  such
copies of such  supplements or amendments to the Memorandum and the Subscription
Agreement as will cause the Memorandum  and the  Subscription  Agreement,  as so
supplemented or amended,  to comply with this paragraph 7(b), and will authorize
the US Placement Agent to make to investors,  if (i) deemed necessary by counsel
to the US  Placement  Agent and  approved by the US  Placement  Agent or (ii) if
deemed necessary by counsel to the Company, an offer of rescission.

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        (c) The execution,  delivery and performance of this Agreement,  and all
other  documents  to be  entered  into by the  Company  in  connection  with any
transaction described in the Memorandum and the consummation of the transactions
contemplated  hereby and thereby  have been or will be prior to such  execution,
delivery,  performance  or  consummation,  as the case may be,  duly and validly
authorized by the Company and do not and will not (i) constitute,  or result in,
a breach or  violation  of any of the terms,  provisions  or  conditions  of the
articles of incorporation  or bylaws of the Company or any of its  Subsidiaries,
(ii) constitute,  or result in, a material violation of any applicable  statute,
law, ordinance or regulation of any state,  territory or other jurisdiction,  or
(iii) violate, constitute, or result in, a default under (or an event which with
the passing of time or the giving of notice or both would  constitute  a default
under)  or  breach  of the  terms,  provisions  or  conditions  of any  material
indenture,  note,  contract,  commitment,  instrument  or  document to which the
Company or any of its Subsidiaries is or will be a party or by which the Company
or any of their respective properties are bound, or any award, judgment, decree,
rule or regulation  of any court or  governmental  or regulatory  agency or body
having  jurisdiction  over  the  Company  or any of its  Subsidiaries  or  their
respective  activities or  properties,  in each case which breach,  violation or
default would have a Material Adverse Effect; and no material consent, approval,
authori  zation or order of any court or  governmental  or regulatory  agency or
body is required on the part of the Company for the lawful  consummation  of the
transactions  contemplated  hereby and  thereby,  except for such  consents  and
approvals  with respect to the offer and sale of Units in certain  jurisdictions
which are identified to you by counsel for the Company.

        (d) Neither the Company nor any of its  officers,  employees,  agents or
representatives  has taken or will take any action which has caused or may cause
the Placement not to qualify for exemption from the registration requirements of
the Act or of United  States  federal or state,  or other  securities  laws.  In
connection  with the  Placement,  the  Company  shall  not  offer or cause to be
offered the Units by any form of general  solicitation or general advertising as
defined in Rule 502(c) of  Regulation  D, and shall not take any action  (except
for actions contemplated by the Memorandum) that would cause the Placement to be
integrated with other transactions under Rule 502(a) of Regulation D.

        (e) This Agreement has been duly  authorized,  executed and delivered by
the Company and  constitutes  the legal,  valid and  binding  obligation  of the
Company,  enforceable  against the Company in accordance  with its terms (except
insofar as enforcement of the in demnification or contribution provisions hereof
may be limited by applicable laws or principles of public policy and subject, as
to  enforcement,  to the  availability  of equitable  remedies  and  limitations
imposed by  bankruptcy,  insolvency,  reorganization  and other similar laws and
related court decisions relating to or affecting creditors' rights generally).

        (f) The  Company  will not  offer the Units for sale on the basis of any
communications  or  documents  relating to the US  Placement  Agent or the Units
except the  Memorandum  and the  exhibits  thereto and  documents  described  or
referred to therein (including the Subscription Agreement).

         (g) So long as the Units (or the  Shares,  Warrants or shares of Common
Stock underlying the Warrants) are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act, the Company,  during any period in which it is not
subject to and in compliance with

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Section 13 or 15(d) of the  Exchange  Act, or is not exempt from such  reporting
requirements  pursuant to and in compliance with Rule 12g3-2b under the Exchange
Act, provide to each holder of such Units and to each prospective  purchaser (as
designated  by such  holder) of such  Units,  upon the request of such holder or
prospective  holder, any information  required to be provided by Rule 144A(d)(4)
under the Act.

        (h) The Company  will  initially  invest the proceeds of the Offering of
the Units and all other funds of the Company in such a manner so as to cause the
Company not to be subject to the United States  Investment  Company Act of 1940,
as amended (the "1940 Act"),  and will  thereafter use its best efforts to avoid
the Company's becoming subject to the 1940 Act.

        (i) In addition to the  foregoing,  to the extent not set forth  herein,
the US Placement  Agent may rely on the  representations  and warranties made by
the  Company in the  Subscription  Booklet  provided  by the Company and used in
connection with the Placement.

8.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF US PLACEMENT AGENT

        The US Placement  Agent hereby  represents and warrants to, and covenant
with, the Company that:

        (a) This Agreement has been duly  authorized,  executed and delivered by
the US Placement Agent and constitutes the legal,  valid and binding  obligation
of the Placement  Agent,  enforceable  against it in  accordance  with its terms
(except insofar as enforcement of the indemnification or contribution provisions
hereof may be limited by  applicable  laws or  principles  of public  policy and
subject,  as to  enforcement,  to the  availability  of  equitable  remedies and
limitations imposed by bankruptcy, insolvency,  reorganization and other similar
laws and related  court  decisions  relating to or affecting  creditors'  rights
generally).

        (b) The US  Placement  Agent will  cooperate  with the Company to ensure
that the  offering  and sale of the Units will comply with the  requirements  of
Rule 506 under the Act, including,  without  limitation,  the general conditions
contained in Regulation D and the federal  securities  laws, and will follow the
reasonable  advice of the Company  with  respect to the manner in which to offer
and sell the Units so as to  ensure  that the  offering  and sale  thereof  will
comply  with the  securities  laws of the  jurisdictions  which is not listed in
Exhibit A or in any  jurisdiction in which Units are offered by the US Placement
Agent,  and the US  Placement  Agent  will  not  make an  offer  of Units in any
jurisdiction  which is not listed on Exhibit A or in any  jurisdiction  in which
the Company  advises it in writing  that such offer would be unlawful for the US
Placement Agent to offer or sell securities.

         (c) The US Placement Agent is (i) a registered  broker-dealer under the
Exchange Act, and (ii) a member in good standing of the National  Association of
Securities Dealers,  Inc. (the "NASD"),  and (iii) registered as a broker-dealer
in each  jurisdiction  in which it is required to be registered as such in order
to offer and sell the Units in such  jurisdiction.  The US Placement  Agent,  as
applicable,   will   comply  with  all   applicable   rules,   regulations   and
interpretations   of  the  NASD  relating  to  the  receipt  and  disclosure  of
compensation in connection with the Placement.

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        (d) The US  Placement  Agent has not and will not make an offer of Units
(or of any  securities,  the  offering  of  which  may be  integrated  with  the
Placement),  on the basis of any  communications  or  documents  relating to the
Company  or the  Units  except  the  Memorandum  and the  exhibits  thereto  and
documents   described  or  referred  to  therein   (including  the  Subscription
Agreement),  and the cover  letters  referred  to in  Section 2 hereof.  Without
limiting the  generality of the  foregoing,  the US Placement  Agent has not and
will not make any  representation as to any rate of return on investment that an
offeree  may obtain from the  ownership  of Units other than as set forth in the
Memorandum.  The Placement  Agent will deliver a copy of the  Memorandum to each
prospective  investor  solicited  by it prior to such  offeree's  execution of a
Purchase  Agreement  or,  in  the  case  of  amendments  or  supplements  to the
Memorandum  (other than those amendments and supplements  approved in writing by
the Company but designated in writing as not subject to this requirement), prior
to such offeree's execution of an acknowledgment of receipt of such amendment or
supplement and reconfirmation of intent to subscribe.

        (e) The US  Placement  Agent has not and will not make an offer of Units
on behalf of the  Company,  or of any  securities,  the offering of which may be
integrated  with the Placement,  by any form of general  solicitation or general
advertising  in violation of Rule 502(c) of Regulation D such as would cause the
offering of Units not to qualify  under Section 4(2) of the Act as a transaction
exempt  from  Section 5  thereof.  The US  Placement  Agent has not and will not
supply in writing for inclusion in the Memorandum or any related sales materials
any  information  relating  to the US  Placement  Agent  containing  any  untrue
statement of a material  fact or omitting to state any material fact required to
be  stated  therein  or  necessary  to make  such  information,  in light of the
circumstances under which it is used, not misleading.

        (f) The  Placement  Agent will not  transmit  to the Company any written
offer from an offeree to  purchase  a Unit or Units  unless,  immediately  prior
thereto, it reasonably believes that:

               (i) the offeree is an  Accredited Investor; and

               (ii)  the  offeree  meets  all  other  offeree  and/or  purchaser
        suitability standards, if any, required under applicable securities laws
        and regulations.

        (g) The US Placement  Agent will exercise  reasonable  care to determine
that prospective  investors are not "underwriters" within the meaning of Section
2(11)  of the  Act,  and in that  connection  will  obtain  from  each  investor
purchasing Units in the Placement a duly executed Subscription Agreement, in the
form provided to the US Placement Agent by the Company.

        (h) The US Placement Agent will  periodically  notify the Company of the
jurisdiction in which the Units are being offered by it or will be offered by it
pursuant  to this  Agreement,  and will  periodically  notify the Company of the
status of the offering conducted pursuant to this Agreement.

        (i) The US  Placement  Agent will take such other action or refrain from
taking such action as the Company may reasonably request in order to comply with
all applicable United

896966.8
                                        9

<PAGE>

States laws and all applicable  securities laws of those jurisdictions listed in
Schedule A of which the Company advises the US Placement Agent,  including using
its best  efforts to cause  offerees  and  subscribers  for Units to execute and
deliver such additional  documents and instruments as the Company may reasonably
require,  except that the Company  shall be required to complete  all  necessary
securities qualifications with respect to those jurisdictions listed in Schedule
A as provided in Section 2.

        (j) The US  Placement  Agent has  delivered or caused to be delivered to
each prospective  investor who received the Memorandum each of (i) the Company's
quarterly report on form 10-Q, filed with the Securities and Exchange Commission
on December  15,  1999,  (ii) the amended  form of warrant  amending the form of
warrant  attached to the  Memorandum  as Appendix F and (iii) the  supplement to
confidential private placement memorandum supplementing the Memorandum,  and has
informed  prospective  investors that such documents,  in each case,  constitute
supplements to the Memorandum.

9.      COVENANTS

               (a)    Covenants of the Company.  The Company covenants to the US
Placement Agent that it will:

                      (i) Notify the US Placement  Agent as soon as practicable,
and  confirm  such notice  promptly  in  writing,  (A) when any event shall have
occurred during the period commencing on the date hereof and ending on the later
of the Closing Date and the last Additional Closing Date (if any) as a result of
which the  Memorandum  would include any untrue  statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary to
make the  statements  therein  not  misleading,  and (B) of the  receipt  of any
notification  with  respect  to  the  modification,   recission,  withdrawal  or
suspension of the qualification or registration of the Shares or of an exemption
from such  registration or qualification in any  jurisdiction.  The Company will
use  its   reasonable   best  efforts  to  prevent  the  issuance  of  any  such
modification,   rescission,   withdrawal   or   suspension   and,  if  any  such
modification, rescission, withdrawal or suspension is issued and you so request,
to obtain the lifting thereof as promptly as possible.

                      (ii) Not supplement or amend the Memorandum  unless the US
Placement  Agent shall have approved of such supplement or amendment in writing.
If, at any time  during the period  commencing  on the date hereof and ending on
the later of the Closing Date and the last Additional Closing Date (if any), any
event  shall have  occurred  as a result of which the  Memorandum  contains  any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
or if, in the opinion of counsel to the  Company or counsel to the US  Placement
Agent,  it is necessary at any time to  supplement  or amend the  Memorandum  to
comply with the Act,  Regulation D or any  applicable  securities  or "blue sky"
laws, the Company will promptly  prepare an appropriate  supplement or amendment
(inform and substance  reasonably  satisfactory  to you) which will correct such
statement or omission or which will effect such compliance.

896966.8
                                       10

<PAGE>

                      (iii)  Deliver  without  charge to the US Placement  Agent
such number of copies of the Memorandum and any supplement or amendment  thereto
as may reasonably be requested by the US Placement Agent.

                      (iv) Not directly or indirectly,  solicit any offer to buy
from, or offer to
sell to, any person any Units except through the US Placement Agent or TK.

                      (v) Not solicit any offer to buy or offer to sell Units by
any form of general solicitation or advertising,  including, without limitation,
any  advertisement,  article,  notice or other  communication  published  in any
newspaper,  magazine or similar medium or broadcast over  television or radio or
any  seminar  or  meeting  whose  attendees  have been  invited  by any  general
solicitation or advertising.

                      (vi) At all times during the period commencing on the date
hereof  and  ending on the  later of the  Closing  Date and the last  Additional
Closing Date (if any),  provide to each  prospective  investor or his  purchaser
representative,  if any, on reasonable request, such information (in addition to
that contained in the Memorandum) concerning the Placement,  the Company and any
other  relevant  matters as it  possesses  or can acquire  without  unreasonable
effort or  expense  and extend to each  prospective  investor  or his  purchaser
representative, if any, the opportunity to ask questions of, and receive answers
from the Company  concerning  the terms and  conditions of the Placement and the
business of the Company and to obtain any other additional  information,  to the
extent it possesses  the same or can acquire it without  unreasonable  effort or
expense, as such prospective  investor or purchaser  representative may consider
necessary  i making an  informed  investment  decision or in order to verify the
accuracy of the information  furnished to such Prospective Investor or purchaser
representative, as the case may be.

                      (vii)  Notify  the  US  Placement  Agent  promptly  of the
acceptance  or  rejection of any  subscription.  Any  subscription  unreasonably
rejected  shall be deemed to have been  accepted  for  purposes  of  determining
whether  at least  2,000,000  Units  have been sold  solely  for the  purpose of
determining  whether the US  Placement  Agent is  entitled  to its  compensation
pursuant to Schedule A hereof.

                      (viii)  File  five  (5)  copies  of a  Notice  of Sales of
Securities  on  Form  D  with  the  Securities  and  Exchange   Commission  (the
"Commission")  no later  than 15 days  after the first  sale of the  Units.  The
Company shall file  promptly such  amendments to such Notices on Form D as shall
become  necessary and shall also comply with any filing  requirement  imposed by
the laws of any state or  jurisdiction  in which offers and sales are made.  The
Company shall furnish you with copies of all such filings.

                      (ix)  Place  the  following  legend  on  all  certificates
representing the Units and the Warrants:

                      "THE   SECURITIES   REPRESENTED   HEREBY   HAVE  NOT  BEEN
                REGISTERED  UNDER  THE  SECURITIES  ACT OF  1933  OR  ANY  STATE
                SECURITIES  LAWS AND NEITHER  THE  SECURITIES  NOR ANY  INTEREST
                THEREIN MAY BE OFFERED, SOLD,

896966.8
                                       11

<PAGE>

                TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
                AN EFFECTIVE  REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
                OR AN EXEMPTION FROM  REGISTRATION  UNDER SUCH ACT AND SUCH LAWS
                WHICH,  IN THE OPINION OF COUNSEL FOR THE HOLDER,  WHICH COUNSEL
                AND  OPINION  ARE  REASONABLY  SATISFACTORY  TO COUNSEL FOR THIS
                CORPORATION, IS AVAILABLE."

                      (x) Not,  directly  or  indirectly,  engage  in any act or
activity  which may  jeopardize the status of the offering and sale of the Units
as exempt  transactions under the Act or under the securities or "blue sky" laws
of any jurisdiction in which the Placement may be made.
                      (xi) Apply the net proceeds from the sale of the Units for
the purposes set forth under the caption "Use of Proceeds" in the  Memorandum in
substantially the manner indicated thereunder.

                      (xii) Not, during the period commencing on the date hereof
and ending on the later of the Closing Date and the last Additional Closing Date
(if any)  issue  any  press  release  or other  communication  or hold any press
conference  with respect to the Company,  its  financial  condition,  results of
operations,  business properties, assets, liabilities or future prospects of the
Placement,  without the prior written  consent of the US Placement Agent and TK,
which consent will not be unreasonably withheld.

                      (xiii) Not, prior to the  completion of the Offering,  bid
for,  purchase,  attempt to induce  others to  purchase,  or sell,  directly  or
indirectly,  any shares of Common Stock or any other  securities in violation of
the provisions of Regulation M under the Exchange Act.

10.     CONDITIONS OF US PLACEMENT AGENT'S OBLIGATIONS

        The  obligations  of the US Placement  Agent  pursuant to this Agreement
shall  be  subject,  in  its  discretion,  to  the  continuing  accuracy  of the
representations  and  warranties  of the  Company  contained  herein and in each
certificate  and document  contemplated  under this Agreement to be delivered to
the US Placement  Agents, as of the date hereof and as of the Closing Date (and,
if applicable,  each Additional Closing Date), to the performance by the Company
of its obligations hereunder, and to the following conditions:

               (a) At the Closing and each Additional  Closing,  as the case may
be, the Placement  Agents shall have  received the  favorable  opinion of Battle
Fowler LLP and Bennett Jones, as counsel for the Company,  in substantially  the
forms of Exhibit B hereto.

               (b) On or prior to the Closing Date and each  Additional  Closing
Date, as the case may be, the US Placement  Agent shall have been furnished such
information,  documents and  certificates  as it may reasonably  require for the
purpose of enabling it to review the matters  referred to in this Section 10 and
in order to evidence the accuracy,  completeness  or

896966.8
                                       12

<PAGE>

satisfaction of any of the representations, warranties, covenants, agreements or
conditions herein contained, or as it may otherwise reasonably request.

               (c) At the Closing and each Additional  Closing,  as the case may
be, the US  Placement  Agent  shall have  received  a  certificate  of the chief
executive  officer of the  Company,  dated the Closing  Date or such  Additional
Closing  Date,  as the case may be, to the effect  that,  as of the date of this
Agreement  and as of the Closing Date or such  Additional  Closing  Date, as the
case may be, the  representations and warranties of the Company contained herein
were  and are  accurate,  and  that as of the  Closing  Date or such  Additional
Closing Date, as the case may be, the obligations to be performed by the Company
hereunder on or prior thereto have been fully performed.

               (d) All proceedings  taken in connection with the issuance,  sale
and  delivery  of the  Shares  shall  be  reasonably  satisfactory  in form  and
substance to you and your counsel.

        Any  certificate or other document  signed by any officer of the Company
and delivered to you or to your counsel as required  hereunder shall be deemed a
representation  and warranty by the Company  hereunder as to the statements made
therein.  If any condition to your obligations  hereunder has not been fulfilled
as and when required to be so fulfilled, you may terminate this Agreement or, if
you so elect, in writing waive any such conditions which have not been fulfilled
or  extended  the time for their  fulfillment.  In the  event  that you elect to
terminate  this  Agreement,  you shall  notify the  Company of such  election in
writing.  Upon such termination,  neither party shall have any further liability
or obligation to the other except as provided in Section 11 hereof.

11.     INDEMNIFICATION

        (a) The Company  agrees to indemnify  and hold harmless the US Placement
Agent,  any person who  controls the  Placement  Agent within the meaning of the
Act,  Section  20(a) of the  Exchange  Act or any  applicable  statute  and each
partner,  director,  officer,  employee,  agent  and  representative  of  the US
Placement  Agent or any person who  controls any such  Placement  Agent from and
against any loss, damage, expense, liability or claim, or actions or proceedings
in respect thereof (including,  without limitation,  reasonable  attorneys' fees
and expenses  incurred in  investigating,  preparing  or  defending  against any
litigation  commenced)  which any such  person may incur or which may be made or
brought  against any such person  arising out of or based upon (i) any breach of
any of the agreements, representations or warranties of the Company contained in
this Agreement or Schedule A, (ii) any violation of securities laws attributable
to the offer or sale of Units in a  jurisdiction  listed in  Schedule A and in a
manner  authorized by the Company,  or (iii) any violation of law by the Company
or  any  Affiliate  thereof,  or  any  director,  officer,  employee,  agent  or
representative of any of them, related to or arising out of the Placement.  This
indemnity  agreement by, and the agreements,  warranties and representations of,
the  Company  shall  survive the offer,  sale and  delivery of the Units and the
termination  of this  Agreement  and  shall  remain  in full  force  and  effect
regardless of any investigation  made by or on behalf of any person  indemnified
hereunder,  and  termination of this Agreement and acceptance of any payment for
the Units hereunder.

896966.8
                                       13

<PAGE>

        (b) The US Placement  Agent agrees to  indemnify  and hold  harmless the
Company  and its  Affiliates,  any person who  controls  any of them  within the
meaning of the Act, Section 20(a) of the Exchange Act or any applicable statute,
and each officer, director, employee, agent and representative of the Company or
any of its Affiliates from and against any loss, damage,  expense,  liability or
claim  or  actions  or  proceedings  in  respect  thereof  (including,   without
limitation,  reasonable  attorneys' fees and expenses incurred in investigating,
preparing or defending  against any litigation  commenced) which any such person
may incur or which may be made or brought  against any such person,  but only to
the extent the same  arises out of or is based upon (i) any breach of any of the
agreements,  representations  or warranties of the respective US Placement Agent
contained  in this  Agreement  or Schedule A or (ii) any untrue  statement  of a
material  fact in any  information  provided  to the  Company in writing by, and
relating  to,  the US  Placement  Agent,  expressly  for use in and  used in the
Memorandum,  or any  omission  in any  information  provided  to the  Company in
writing by, and relating to, the US Placement  Agent,  expressly  for use in and
used in the  Memorandum  of any  material  fact  necessary  in order to make the
statements made, in light of the  circumstances  under which they were made, not
misleading.  This  indemnity  agreement by, and the  agreements,  warranties and
representations  of, the US Placement  Agent shall  survive the offer,  sale and
delivery of the Units and shall  remain in full force and effect  regardless  of
any investigation made by or on behalf of any person indemnified hereunder,  and
termination  of this  Agreement  and  acceptance  of any  payment  for the Units
hereunder.

        (c) If any action is brought against a party (the  "Indemnified  Party")
in respect of which  indemnity  may be sought  against one or more other parties
(the  "Indemnifying  Party" or "Indemnifying  Parties"),  the Indemnified  Party
shall  promptly  notify  the  Indemnifying  Party or  Parties  in writing of the
institution of such action;  provided,  however, the failure to give such notice
shall not release the Indemnifying Party or Parties from its or their obligation
to  indemnify  the  Indemnified   Party  hereunder  except  to  the  extent  the
Indemnifying  Party  actually  incurs damage by reason of such failure and shall
not release the  Indemnifying  Party or Parties  from any other  obligations  or
liabilities to the Indemnified  Party in any event.  The  Indemnifying  Party or
Parties  may at its or their own  expense  elect to assume  the  defense of such
action,  including  the  employment  of  counsel  reasonably  acceptable  to the
Indemnified Party; provided,  however, that no Indemnifying or Indemnified Party
shall consent to the entry of any judgment or enter into any settlement by which
the other party is to be bound without the prior  written  consent of such other
party,  which  consent  shall  not be  unreasonably  withheld.  In the event the
Indemnifying Party or Parties assume a defense hereunder,  the Indemnified Party
shall be entitled to retain its own counsel in connection  therewith and, except
as provided  below,  shall bear the fees and expenses of any such  counsel,  and
counsel to the Indemnified Party or Parties shall cooperate with such counsel to
the  Indemnifying  Party in connection with such  proceeding.  If an Indemnified
Party  reasonably  determines  that there are or may be differing or  additional
defenses  available  to the  Indemnified  Party which are not  available  to the
Indemnifying Party, or that there is or may be a conflict between the respective
positions of the Indemnifying  Party and of the Indemnified  Party in conducting
the defense of any action, then the Indemnifying Party shall bear the reasonable
fees and expenses of any counsel retained by the Indemnified Party in connection
with such proceeding.  All references to the Indemnified Party contained in this
paragraph 8(c) include, and extend to and protect with equal effect, any persons
who may control the  Indemnified  Party  within the meaning of the Act,  Section
20(a) of the Exchange Act or any applicable statute, any successor to the

896966.8
                                       14

<PAGE>

Indemnified  Party and each of its  partners,  officers,  directors,  employees,
Agents and representatives. The indemnity agreements set forth in this paragraph
8  shall  be in  addition  to  any  other  obligations  or  liabilities  of  the
Indemnifying Party or Parties hereunder or at common law or otherwise.

        (d) If recovery is not  available  under the  foregoing  indemnification
provisions of this  paragraph,  for any reason other than as specified  therein,
the party entitled to  indemnification by the terms thereof shall be entitled to
contribution  to  losses,  damages,  liabilities  and  expenses  of  the  nature
contemplated by such  indemnification  provisions.  In determining the amount of
such  losses,  damages,  contribution,  there shall be  considered  the relative
benefits  received by the Company on the one hand, and the US Placement Agent on
the other hand from the  Placement  (which  shall be deemed to be the portion of
the proceeds of the  Placement  realized by each party),  the parties'  relative
knowledge and access to information  concerning the matter with respect to which
the claim was asserted,  the opportunity to correct and prevent any statement or
omission,  the  relative  culpability  of the  parties  and any other  equitable
considerations appropriate under the circumstances. No party shall be liable for
contribution  with respect to any action or claim  settled  without its consent.
Any party  entitled to  contribution  will,  promptly after receipt of notice of
commencement of any action,  suit or proceeding against such party in respect of
which a claim for  contribution  may be made  against  another  party or parties
under this Section,  notify such party or parties from whom  contribution may be
sought,  but the  omission to so notify such party or parties  shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section or otherwise.  For purposes of this Section,
each person,  if any, who controls a party to this Agreement  within the meaning
of  Section 15 of the Act or Section  20(a) of the  Exchange  Act shall have the
same rights to contribution as that party to this Placement Agreement.

        (e) In any claim for  indemnification for United States Federal or state
securities law violations,  the party seeking indemnification shall place before
the  court  the  position  of (i) the  United  States  Securities  and  Exchange
Commission and (ii) if applicable,  any state securities  commissioner or agency
having  jurisdiction with respect to the issue of indemnification for securities
law violations.

12.     MISCELLANEOUS

        (a) The  agreements  set forth in this  Agreement have been made and are
made  solely for the  benefit of the  Company,  the US  Placement  Agent,  their
affiliates  and the respective  heirs,  personal  representatives  and permitted
successors and assigns thereof,  and except as expressly provided herein nothing
expressed  or  mentioned  herein is intended or shall be  construed  to give any
other person,  firm or corporation any legal or equitable right, remedy or claim
under  or in  respect  of this  Agreement  or any  representation,  warranty  or
agreement  herein  contained.  The term  "successors and assigns" as used herein
shall not include any purchaser of any Units merely because of such purchase.

        (b) Any notice or other communication  required or appropriate under the
provisions of this Agreement shall be given in writing addressed as follows: (i)
if to the Company,  at the address set forth above,  Attention:  President;  and
(ii) if to the US Placement Agent, 1285 Avenue of the Americas,  35th Floor, New
York, New York 10019,  Attention:  Jeffrey B. Davis, President, or at such other
address  as any party  may  designate  to the  others  in  accordance  with this
paragraph.

896966.8
                                       15

<PAGE>

        (c) This  Agreement  and  Schedule A  constitute  the  entire  agreement
between the parties  hereto with respect to the Placement and supercedes any and
all prior  agreements,  and may be amended or modified only by a duly authorized
writing signed by such parties. This Agreement and Schedule A may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which shall constitute a single instrument.

                            [Signature page follows]

896966.8
                                       16

<PAGE>

               This  Agreement is executed and shall be effective as of December
__, 1999, and shall be governed and construed in accordance with the laws of the
State of New York, without giving effect to conflicts of law provisions thereof.

                                            JAWS TECHNOLOGIES, INC.

                                            By: /s/Vera Gmitter
                                                -------------------------
                                                Name:Vera Gmitter
                                                Title:V.P. Administration

Agreed and accepted:

SMALLCAPS ONLINE LLC

By: /s/Jeffrey B. Davis
    ---------------------------
    Name: Jeffrey B. Davis
    Title:   President

896966.8

<PAGE>

                                   SCHEDULE A

                             JAWS Technologies, Inc.

        The parties  hereto enter into this Schedule A to the  Placement  Agency
Agreement (the  "Agreement")  effective as of December 13, 1999 (the  "Effective
Date"), and incorporate said Agreement herein by reference in full.  Capitalized
terms used in this Schedule and not otherwise defined have the meanings provided
in the Agreement. All dollar amounts are in $USD.

Issuer:

                                    JAWS    Technologies,    Inc.,    a   Nevada
                                    corporation.

Placement Agents:                   US:   SmallCaps  Online  LLC.  CDN:  Thomson
                                    Kernaghan & Co. Limited.

Security Offered:                   Units, each Unit consisting of (i) one share
                                    of common  stock,  par value $.001 per share
                                    (the  "Common  Stock"),  of the  Company and
                                    (ii) one warrant to purchase1/2(one  half) a
                                    share of Common  Stock at an exercise  price
                                    of $6.50 per share  (subject to  adjustment,
                                    as described  below),  which  warrants shall
                                    expire on the third  anniversary date of the
                                    effective date of the registration statement
                                    relating   thereto  (as  described   below).
                                    Certificates  representing  shares of Common
                                    Stock and  warrants  shall bear  appropriate
                                    legends,   including   those   relating   to
                                    "restricted securities" under the Act.

Number of Units:                    A  minimum  of  2,000,000  Units  (aggregate
                                    gross proceeds of $8,500,000)  and a maximum
                                    of  3,500,000   Units  (gross   proceeds  of
                                    $14,875,000).

 Offering Price
 (Per Unit):                        $4.25 per Unit.

Minimum Subscription:               $100,000,  or greater if  required  by local
                                    law.

Use of Proceeds:                    Working   capital  and   general   corporate
                                    purposes,   and   acquisitions   yet  to  be
                                    identified.

Placement Period:                   From  December 13, 1999 to January 14, 2000,
                                    unless  extended  by the Company in its sole
                                    discretion.  The  anticipated  date  of  the
                                    initial closing is December 23, 1999.

Sales Commissions, Warrants
and Financial Advisory Fees
to Placement Agents:                An aggregate  cash payment to the  Placement
                                    Agents  of a 7%  sales  commission  and a 3%
                                    financial  advisory fee,

896966.8
                                       A-1

<PAGE>

                                    in each case,  based upon the gross proceeds
                                    from all  Units  sold by or on behalf of the
                                    Company.

                                    On the closing date, the Company shall issue
                                    to the Placement  Agents an aggregate number
                                    of  warrants  to  purchase  shares of Common
                                    Stock  equal to 10% of the  number  of Units
                                    sold,  one-half of which shall be  allocated
                                    as a financial  advisory  fee.  The warrants
                                    will be  exercisable at an exercise price of
                                    $4.25  per  share,  and will  expire  on the
                                    third  anniversary date of the effectiveness
                                    of  the  registration   statement   relating
                                    thereto (as described  below).  The warrants
                                    will  be  issued   pursuant   to  a  warrant
                                    agreement and/or form of warrant certificate
                                    in form and  substance  satisfactory  to the
                                    Company and the Placement Agents.

Expenses of Placement Agents
to be  Reimbursed:                  Each    Placement    Agent   will    receive
                                    reimbursement of all reasonable, accountable
                                    out-of-pocket expenses, including legal fees
                                    and disbursements of one counsel, and travel
                                    and due diligence expenses.

Jurisdictions in Which
Units Will Be Offered               United   States:   New  York,   Connecticut,
                                    Massachusetts,  California,  Georgia,  Texas
                                    and Colorado.

                                    Canada:  Ontario,   Alberta,   Manitoba  and
                                    British Columbia

                                    Belgium

Registration of
Common Stock:                       The  Company  will use its best  efforts  to
                                    file,  no later than 30 days  following  the
                                    final closing date, a registration statement
                                    with  the  United  States   Securities   and
                                    Exchange  Commission  registering for resale
                                    all of the shares of Common  Stock  included
                                    in the  Units,  and  shares of Common  Stock
                                    issuable   upon  exercise  of  the  warrants
                                    included  in  the  Units  and  the  warrants
                                    issued to the Placement Agents.  The Company
                                    will use its  best  efforts  to  cause  such
                                    registration  statement to become  effective
                                    no later  than 90 days  following  the final
                                    closing date, and to cause such registration
                                    statement to remain  effective until 30 days
                                    following  the  date on which  all  warrants
                                    have been exercised or expired,  and/or have
                                    been called and  repurchased  by the Company
                                    as provided below.  During such period,  the
                                    Company will file all documents  required to
                                    be filed by it under the Securities Exchange
                                    Act of 1934, as amended.

                                    If a  registration  statement  covering such
                                    shares  of  Common  Stock  is  not  declared
                                    effective  within 90 days,  but prior to 180
                                    days,  following the final closing date, the

896966.8
                                       A-2

<PAGE>

                                    exercise  price  of  the  warrants  sold  to
                                    Investors  shall be  reduced  by  $0.25  per
                                    month,  or a pro rated  amount  thereof  for
                                    partial   months,   until   a   registration
                                    statement  covering  such shares is declared
                                    effective.   If  a  registration   statement
                                    covering  such shares of Common Stock is not
                                    declared effective within 180 days following
                                    the final closing date,  the exercise  price
                                    of the warrants  sold to Investors  shall be
                                    reduced by $0.50 per  month,  or a pro rated
                                    amount thereof for partial  months,  until a
                                    registration  statement covering such shares
                                    of  Common  Stock  is  declared   effective.
                                    Notwithstanding  the foregoing,  in no event
                                    shall  the  exercise  price of the  Warrants
                                    sold  to  Investors  be  reduced  to a price
                                    lower than $3.75 per share.

Call Rights on Warrants:            If at any time  following the  effectiveness
                                    of  the  registration   statement  described
                                    above the last reported sale price per share
                                    of  Common  Stock   exceeds  $9.75  for  any
                                    consecutive thirty day trading period,  then
                                    the  Company  may,  at any time upon  thirty
                                    days notice,  call and  repurchase  warrants
                                    issued to the  purchasers  and the Placement
                                    Agents at a call price of $.001 per warrant.

Definitive Agreements:              The purchase and sale of Units is subject to
                                    the  execution  and  delivery of  definitive
                                    agreements  containing such representations,
                                    warranties,  terms  and  conditions  as  the
                                    respective  parties  and their  counsel  may
                                    agree.

896966.8
                                       A-3

<PAGE>

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