AMENDMENT NO. 1 TO ARRANGEMENT AGREEMENT
AMENDMENT
NO. 1 TO ARRANGEMENT AGREEMENT
This
Amendment No. 1 (this “Amendment”)
to the
Arrangement Agreement (the “Arrangement
Agreement”)
dated
March 13, 2007, between 6732097 Canada Inc., Ad.Venture Partners, Inc.
(“Parent”)
and
180 Connect Inc. (the “Company”)
is
executed as of July 2, 2007. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Arrangement
Agreement.
In
connection with: (i) the amendment dated July 2, 2007 to that certain Secured
Non-Convertible Revolving Note dated July 31, 2006 by and among Laurus Master
Fund, Ltd. (“Laurus”),
the
Company and the other parties thereto to increase the Company’s revolving loan
facility from $37.0 million to $45.0 million; (ii) the amendment dated July
2,
2007 to that certain overadvance letter dated July 31, 2006 by and among Laurus,
the Company and the other parties thereto to extend the maturity of the existing
$9 million overadvance to the earlier of (y) the closing of the arrangement
(the
“Arrangement”)
pursuant to the Arrangement Agreement or (z) 45 days following a no vote on
the
Arrangement by Parent’s stockholders (but in no event later than September 30,
2007); (iii) the Common Stock Purchase Warrant dated July 2, 2007 issued by
the
Company granting Laurus the right to purchase up to 1,000,000 common shares
of
the Company; (iv) the Letter Agreement dated July 2, 2007 by and between the
Company, Xxxxx Xxxxxx and Xxxx Xxxxxx regarding compensation of Messrs. Xxxxxx
and Slasky upon the occurrence of certain events described therein; (v) the
Reaffirmation and Ratification Agreement dated July 2, 2007 executed and
delivered by the Company and its subsidiaries in favor of Laurus to reaffirm
and
ratify the terms and provisions of the Agreements and Amended Documents as
defined therein and (vi) the Amendment Agreement dated July 2, 2007 by and
among
Laurus, the Company and its subsidiaries to, among other things, amend the
(a)
Security and Purchase Agreement dated as of July 31, 2006 by and among Laurus,
the Company and the other parties thereto and (b) Secured Non-Convertible Term
Note by and among Laurus, the Company and the other parties thereto ((i) through
(vi) above collectively referred to as the “Laurus
Bridge Financing”),
and
for other good and valuable consideration, the parties to the Arrangement
Agreement desire to amend the Arrangement Agreement as follows:
(I)
The
definition of “Exchange Ratio” shall be amended to read in its entirety as
follows:
““Exchange
Ratio” shall mean 0.60.”
(II)
Section 7.4(a) of the Arrangement Agreement shall be deleted in its entirety
and
shall have no further force or effect.
(III)
Exhibit A to the Arrangement Agreement shall be deleted in its entirety and
shall have no further force or effect.
(IV)
Parent hereby consents to the Company’s participation in the Laurus Bridge
Financing and hereby acknowledges and agrees that such action on the part of
the
Company shall not constitute a breach of the Company’s covenants set forth in
Section 5.2(b) of the Arrangement Agreement. The consent and waiver set forth
in
this Section IV shall be limited precisely as written, and nothing in this
Amendment shall be deemed to (i) constitute a waiver of compliance by Parent
with respect to the provisions of the Arrangement Agreement in any other
instance or any other term, provision or condition of the Arrangement Agreement
or any instrument or agreement referred to therein or (ii) prejudice any right
or remedy that Parent may now have or may have in the future under or in
connection with the Arrangement Agreement or any instrument or agreement
referred to therein.
(V)
The
Company hereby consents to Parent’s entry into the Letter Agreement dated July
2, 2007 providing for the issuance by Parent to Laurus of 250,000 warrants
to
purchase shares of Parent’s Common Stock pursuant to a Warrant Certificate upon
the closing of the Arrangement and hereby acknowledges and agrees that such
action on the part of Parent shall not constitute a breach of Parent’s covenants
set forth in Section 5.3 of the Arrangement Agreement. The consent and waiver
set forth in this Section V shall be limited precisely as written, and nothing
in this Amendment shall be deemed to (i) constitute a waiver of compliance
by
the Company with respect to the provisions of the Arrangement Agreement in
any
other instance or any other term, provision or condition of the Arrangement
Agreement or any instrument or agreement referred to therein or (ii) prejudice
any right or remedy that the Company may now have or may have in the future
under or in connection with the Arrangement Agreement or any instrument or
agreement referred to therein.
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AD.VENTURE
PARTNERS,
INC.
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| By: | /s/ Xxxxxx X. Xxxxxx | |
|
Name: Xxxxxx X. Xxxxxx |
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| Title: Chief Executive Officer | ||
| By: | /s/ Xxxx X. Xxxxxx | |
|
Name: Xxxx X. Xxxxxx |
||
| Title: President | ||
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6732097
CANADA
INC.
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| |
|
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| By: | /s/ Xxxx X. Xxxxxx | |
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Name: Xxxx X. Xxxxxx |
||
| Title: Chief Executive Officer and President | ||
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180
CONNECT
INC.
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| |
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| By: | /s/ Xxxxx Xxxxxxxxx | |
|
Name: Xxxxx Xxxxxxxxx |
||
| Title: Chief Executive Officer | ||
| By: | /s/ Xxxxxx Xxxxxxxx | |
|
Name: Xxxxxx Xxxxxxxx |
||
| Title: Chief Financial Officer | ||
