Englewood, CO 80111
EXECUTION
COPY
180
Connect, Inc.
0000
X.
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
July
2,
2007
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention: Xxxxx
X.
Xxxxxx
Xxxx
Xxxxxx
Dear
Gentlemen:
We
refer
to the transactions contemplated by (i) that certain Arrangement Agreement,
dated March 13, 2007, by and among 6732097 Canada Inc., a corporation
incorporated under the laws of Canada, Ad.Venture Partners, Inc. (“AVP”),
a
Delaware corporation and 180 Connect, Inc. (“180
Connect”),
a
corporation incorporated under the laws of Canada (the “180
Connect/AVP Transaction”)
and
(ii) that certain Bridge Financing (the “Bridge
Financing Transaction”)
with
180 Connect and Laurus Master Fund, Ltd. (“Laurus”).
This
letter agreement sets forth certain understandings and agreements we have
reached in connection with the 180 Connect/AVP Transaction and the Bridge
Financing Transaction.
We
have
agreed as follows:
1. If
the
180 Connect/AVP Transaction fails to close as a result of (i) 180 Connect
shareholder rejection of the 180 Connect/AVP Transaction (or if a 180 Connect
shareholders meeting is not held on or prior to August 31, 2007) or (ii) 180
Connect’s requirement for additional financing prior to the closing of the 180
Connect/AVP Transaction, which causes 180 Connect to issue additional debt
or
equity securities and which would require an amendment to the AVP proxy
statement on Form S-4 at a time such that the AVP shareholders meeting could
not
be held on or prior to August 31, 2007, then (x) on August 31, 2007 (or, in
the
event the failure to close occurs on or within five trading days prior August
31, 2007, then on the fifth trading day thereafter), 180 Connect shall issue
to
Xxxxx X. Xxxxxx and Xxxx Xxxxxx (the “AVP
Sponsors”)
250,000 warrants exerciseable at the VWAP on the Toronto Stock Exchange for
the
five trading days immediately following the date of announcement that the 180
Connect/AVP Transaction failed to close, (y) 180 Connect shall reimburse AVP
and
the AVP Sponsors for all legal fees and other expenses incurred by them with
respect to the 180 Connect/AVP Transaction up to a maximum of $1,400,000, and
(z) the AVP Sponsors shall be entitled to participate in any subsequent PIPE
or
similar financing transaction of 180 Connect consummated during the year 2007
on
the same terms and conditions as the other investors in such PIPE or other
financing transaction in an amount up to $7,000,000; provided,
however,
that
the reimbursement obligations set forth in (y) above shall be payable only
after
the Expiration Date (as defined in that certain Amendment Agreement dated as
of
July __, 2007 among Laurus, 180 Connect Inc., a Nevada corporation
(“180
Connect US”),
and
the other parties thereto) and so long as no Default or Event of Default under
and as defined in that certain Security and Purchase Agreement dated as of
July
31, 2006 among Laurus, 180 Connect US and the other parties party thereto (as
amended, restated, modified and/or supplemented from time to time) has occurred
and is continuing or would occur as a result of such reimbursement. Laurus
shall
be deemed a third party beneficiary under this Paragraph 1.
2. If
the
180 Connect/AVP Transaction fails to close as a result of an AVP no vote (or
if
an AVP shareholders meeting is not held on or prior to August 31, 2007), then
the AVP Sponsors shall be entitled to participate in any subsequent PIPE or
similar financing transaction of 180 Connect consummated during the year 2007
on
the same terms and conditions as the other investors in such PIPE or other
financing transaction in an amount up to $7,000,000.
3. Whether
or not the 180 Connect/AVP Transaction closes, 180 Connect shall reimburse
the
AVP Sponsors for legal fees (on closing of the Bridge Financing Transaction
for
the fairness opinion and three business days after 180 Connect receives an
invoice for the legal fees) incurred by the AVP Sponsors solely in connection
with the Bridge Financing Transaction, up to a maximum of $150,000.
4. If
any
provision of this letter agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this letter agreement in that jurisdiction
or the validity or enforceability of any provision of this letter agreement
in
any other jurisdiction.
5. All
questions concerning the construction, validity, enforcement and interpretation
of this letter agreement shall be governed by the laws of the State of New
York,
without giving effect to any choice of law or conflict of law provision or
rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York.
6. This
letter agreement may be executed in identical counterparts, all of which shall
be considered one and the same agreement, and shall become effective when
counterparts have been signed by each party and delivered to each other party;
provided, that a facsimile signature shall be considered due execution and
shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
[Signature
Page Follows]
If
the
foregoing accurately reflects our understanding, please so indicate by your
signature below.
|
Sincerely
Yours,
|
||
| 180 CONNECT, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxxxx | |
|
Name:
Title:
|
||
| ACCEPTED AND AGREED TO: | |||
| XXXXX X. XXXXXX | |||
| /s/ Xxxxx Xxxxxx | |||
|
|
|||
| XXXX XXXXXX | |||
| /s/ Xxxx Xxxxxx | |||
|
|
|||
| ACCEPTED AND AGREED TO: | |||
| LAURUS MASTER FUND, LTD. | |||
| By: | |||
|
Name:
Title:
|
