AGREEMENT
THIS
AGREEMENT
is made
as of February 13, 2006 between Iview Digital Video Solutions Inc., a Canadian
corporation (“Iview
Canada”),
Iview
Holding Corp., a Delaware Corporation (“Iview
Parent”),
Creative Vistas Acquisition Corp., an Ontario Corporation (“CVAC”),
and
Creative Vistas, Inc., an Arizona Corporation (“Parent”)
and
Laurus Master Fund, Ltd., (“Laurus”).
WHEREAS,
Iview
Parent has issued an Option (as amended, modified or supplemented from time
to
time, the “Option”)
to
Laurus to purchase up to 20% of the common stock of Iview Parent (subject to
adjustment as set forth therein).
NOW
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. |
Unanimous
Shareholders Agreement.
Forthwith following the exercise of the Option in whole or in part
pursuant to Section 1.1 of the Option, each of Iview Parent, Creative
Vistas, Inc. and Laurus agree to negotiate in good faith the terms
of a
unanimous shareholder agreement mutually agreeable to each of them,
which
unanimous shareholder agreement shall at a minimum set forth the
requirement for Laurus to consent to those matters described in Section
3
hereof and addressing other matters typical of a unanimous shareholder
agreement such as governance and transfer
restrictions.
|
2. |
Dividend.
Within 30 days of the end of each fiscal quarter following the later
of
(i) the exercise of the Option in whole or in part and (ii) payment
in full to Laurus of all amounts (including interest) owing and
outstanding under the Secured Term Note executed by Iview Canada
in the
aggregate principal amount of US$2,000,000 dated the date hereof
(the
“Secured
Term Note”)
(it being acknowledged and agreed that failure to pay any amount
owing and
outstanding under the Secured Term Note when due will not operate
or
otherwise serve to delay payment of the dividend contemplated hereby),
Iview Parent (to the extent permitted by applicable law) shall, and
shall
cause Iview Canada to declare and pay a dividend to each of its common
stockholders, equal to 25% of (A) the net operating cashflow generated
by
the respective company for such fiscal quarter (calculated (1) in
accordance with US GAAP, (2) in a manner consistent with prior fiscal
periods, (3) in a manner reasonably acceptable to Laurus and, for
greater certainty, (4) without deduction for capital expenditures)
less (B) capital expenditures made by the respective company in such
fiscal quarter (to a maximum of 25% of the net operating cash flow
calculated in accordance with clause (A)). In the event that Iview
Parent
establishes or acquires any direct or indirect subsidiary after the
date
hereof, Iview Parent shall also cause such subsidiary to declare
and pay a
dividend to each of its common stockholders, equal to 25% (A) the
net
operating cashflow generated by such subsidiary for such fiscal quarter
(calculated (1) in accordance with US GAAP, (2) in a manner consistent
with prior fiscal periods, (3) in a manner reasonably acceptable to
Laurus and, for greater certainty, (4) without deduction for capital
expenditures) less (B) capital expenditures made by such subsidiary
in
such fiscal quarter (to a maximum of 25% of the net operating cash
flow
calculated in accordance with clause
(A)).
|
3. |
Material
Decisions.
Until such time as Laurus and its affiliates no longer hold common
shares
representing 5% or more of the outstanding common shares of Iview
Parent
(or securities representing the right to acquire 5% or more of the
outstanding common shares of Iview Parent), each of Iview Parent
and Iview
Canada shall neither implement or effect (or otherwise resolve or
agree to
implement or effect), nor in any manner cause or permit any of their
respective subsidiaries to implement or effect (or otherwise resolve
or
agree to implement or effect) any of the following actions without
the
prior approval of Laurus (which approval shall not be unreasonably
withheld)
and CVAC and Parent shall neither implement or effect (or otherwise
resolve or agree to implement or effect) the action set forth in
paragraph
(j) below, nor cause or permit Iview Parent, Iview Canada or any
of their
respective subsidiaries to implement or effect (or otherwise resolve
to
implement or effect) any of the following actions without the prior
approval of Laurus (which shall not be unreasonably
withheld):
|
(a) |
except
as contemplated by this Agreement, (i) declare or pay any dividends
or
make any other distribution in respect of any securities of each
of Iview
Parent and Iview Canada, and (ii) make any distribution of any nature
(including repayment of loans) to any person not acting at arm’s length
with Iview Parent, and/or Iview Canada or any of their respective
shareholders other than, in each case, (A) contributions to the corporate
expenses and overhead of Parent not to exceed, when aggregated with
all
distributions made to Parent contemplated by this paragraph (a) and
all
management services and analogous fees paid to Parent, Cdn.$350,000
per
annum and (B) any payments made to A.C. Technical Systems Ltd. in
connection with operation costs or services rendered with respect
to
product development and marketing
services.
|
(b) |
sell
or dispose of any assets or property by Iview Parent and/or Iview
Canada
during any fiscal year in which any amount remains outstanding under
the
Secured Term Note (whether in one or more transactions) in contravention
of the provisions of the Secured Term Note and in any fiscal year
thereafter (whether in one or more transactions) with an aggregate
book
value in excess of Cdn.$250,000;
|
(c) |
make
or commit to make during any fiscal quarter, capital expenditures
exceeding, in the aggregate, 25% of the net operating cash flow of
the
company for such fiscal quarter (calculated in accordance with section
2
of
this Agreement);
|
(d) |
establish,
acquire or otherwise become an equity holder (including, for greater
certainty, a holder of securities convertible into equity) in any
corporate entity or any partnership, equity joint venture or similar
arrangements;
|
(e) |
hire
any employee whose annual remuneration exceeds Cdn.$300,000 per annum
(inclusive of all benefits), or amend, terminate or otherwise alter
or
waive the terms of any employment, consulting or management contract
with
respect to an individual whose annual remuneration exceeds that
amount;
|
(f) |
enter
into any transactions outside the ordinary course with officers,
directors
or employees or members of their families or other persons with whom
they
do not act at arm’s length;
|
(g) |
enter
into (other than in the ordinary course to fund working capital needs)
or
materially modify any credit
facility;
|
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2 -
(h) |
create
any mortgage, lien, charge or other form of encumbrance with respect
to
any of the assets of Iview Parent and/or Iview Canada or their respective
subsidiaries other than for the benefit of Laurus and other than
Permitted
Liens within the meaning ascribed thereto in Schedule A
hereto;
|
(i) |
materially
alter the fundamental nature of the business of Iview Parent and/or
Iview
Canada (other than in a manner consistent with the fundamental business
presently undertaken by Parent) or otherwise engage in other businesses
or
activities that are not incidental to the businesses or activities
presently undertaken by Iview Parent and/or Iview Canada;
|
(j) |
enter
into any agreement with a term in excess of one year which contemplates
the payment by Iview Parent and/or Iview Canada of more than Cdn.$750,000
in the aggregate during its term;
|
(k) |
issue
or sell any of the share in the capital of, or any rights, warrants
or
securities convertible into or exercisable or exchangeable for any
share
in the capital of, Iview Parent and/or Iview Canada, including by
way of
initial public offering;
|
(l) |
purchase
any of the shares in the capital of Iview Parent and/or Iview Canada,
except pursuant to the exercise of any retraction or redemption right
which attached to such shares in the capital of Iview Parent and/or
Iview
Canada;
|
(m) |
wind
up, dissolve or liquidate Iview Parent and/or Iview
Canada;
|
(n) |
continue
under the laws of another jurisdiction of Iview Parent and/or Iview
Canada;
|
(o) |
change
the fiscal year of Iview Parent and/or Iview Canada;
or
|
(p) |
amend
the articles or by-laws of Iview Parent and/or Iview Canada in such
a
manner as to adversely affect the interests of
Laurus.
|
4. |
Term
of Agreement.
This Agreement shall be effective for so long as Laurus holds the
Option
or any portion thereof or any shares of the common stock of Iview
Parent
acquired upon the exercise of the Option in whole or in
part.
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5. |
Governing
Law.
This Agreement shall be governed by and construed and enforced in
all
respects in accordance with the laws of the Province of Ontario and
the
Federal laws of Canada.
|
6. |
Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed an original and all of which when taken together
shall
constitute one and the same agreement. Any signature delivered by
a party
by facsimile transmission or by sending a scanned copy by electronic
mail
shall be deemed an original signature
hereto.
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***
THE BALANCE OF THIS PAGE INTENTIONALLY BLANK.
SIGNATURE
PAGES TO FOLLOW ***
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3 -
IVIEW
HOLDING CORP.
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|||
Per:
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/s/
XXXXXXX XXXXX
|
||
Name: Xxxxxxx
Xxxxx
Title: President
|
IVIEW
DIGITAL VIDEO SOLUTIONS INC.
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|||
Per:
|
/s/
XXXXX XXXXXXXXXX
|
||
Name: Xxxxx
Xxxxxxxxxx
Title: President
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CREATIVE
VISTAS ACQUISITION CORP.
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|||
Per:
|
/s/
XXXXX XXXXXXXXXX
|
||
Name: Xxxxx
Xxxxxxxxxx
Title: President
and Secretary
|
LAURUS
MASTER FUND, LTD.
|
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Per:
|
/s/
XXXXXX GRIN
|
||
Name:
Xxxxxx Grin
Title:
Director
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4 -
SCHEDULE
A
DEFINITIONS
“Permitted
Liens”
means
(a) liens for taxes not yet due and payable; (b) mechanics’,
materialmans’, suppliers’, vendors’ or similar liens arising in the ordinary
course of business securing amounts which are not delinquent and for which
adequate reserves are kept on the financial statements and books and records
of
the appropriate person; and (c) liens created pursuant to equipment leases
entered into in the ordinary course of business which encumber the property
which is the subject of the lease.