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Exhibit 10.22  

 
 

Agreement    
    

        This Agreement is by and between Roger R. Adams ("Adams") and Robert J. Ward ("Ward")(collectively called "Parties") 

        For
and in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Parties covenant and agree as follows: 

        1)    The
Parties shall execute and deliver to each other such additional forms, documents, consents, agreements, and releases as may be reasonably requested to effectuate the
intent of this Agreement and to facilitate the successful, efficient, and timely contemplated initial public offering of Heelys, Inc. ("Heelys") (which, including the underwriters'
over-allotment option to purchase shares from Heelys' existing shareholders and resell them to the public, is referred to as the "IPO"). 

        2)    Effective
as of the initial public offering, and in consideration solely for the fulfillment of all rights, obligations, duties, claims and demands owed to Ward by Adams
arising out of the Stockholders Agreement dated May 24, 2000 ("Stockholders Agreement"), Adams shall assign and transfer to Ward 136,775 shares in Heelys (subject to the provisions of
paragraph 7 of this Agreement), such that Ward shall own a total of 386,775 shares, and provide Ward with the right to sell up to 136,775 shares transferred from Adams to Ward at the initial
public offering. Effective as of the initial public offering, Ward hereby authorizes Heelys to remove the "Legend" referenced in the Stockholders Agreement from all shares of legended stock owned by
Adams. For purposes of the initial public offering, Ward consents to the immediate removal of the "Legend" from 1.25 million shares of legended stock owned by Adams. 

        3)    The
Parties understand and agree that if the 136,775 shares are transferred to Ward by Adams pursuant to this Agreement, these 136,775 shares will be sold at the initial
public offering and neither those shares nor the legended shares owned by Adams and referenced in the prior paragraph (whether sold in the IPO or retained) shall bear any restrictive legend or
otherwise be encumbered. The Parties
further understand and agree that none of such stock is being transferred to Ward from Heelys, but all such stock is being transferred from Adams to Ward. 

        4)    Adams
acknowledges and agrees that the 136,775 shares transferred by Adams to Ward, and the allocation of 136,775 shares to be sold by Ward at the initial public
offering, will be exchanged solely for all of Ward's contract rights set forth in the Stockholders Agreement, and none of that represents compensation for services rendered by Ward or anyone else.
Adams further agrees that he will not take a deduction from ordinary income for said transfer, or otherwise claim a right to a deduction for the transfer of said shares in any filing with the Internal
Revenue Service on a tax return or otherwise, or take a tax position that is in any way inconsistent with the provisions of this Agreement. 

        5)    Heelys
has represented in its November 17, 2006 S-1 filing with the SEC that Ward shall be permitted to sell up to 272,269 of the 386,775 shares owned
by Ward at the IPO, and that Ward has the right to sell up to a total of 136,775 shares at the initial public offering, and up to a total of 135,494 shares in the over-allotment, if any.
Heelys has represented in its November 17, 2006 S-1 filing with the SEC that Adams shall be permitted to sell up to 1,123,581 shares at the IPO, and that Adams has the right to sell
up to a total of 815,656 shares at the initial public offering, and up to a total of 307,925 shares in the over-allotment, if any. 

        6)    If
the over-allotment (also referred to as the "Greenshoe") is not exercised, the Parties agree to use commercially reasonably efforts to register Ward's
allocation of 135,494 shares upon Heelys' first firm underwritten secondary offering. The Parties agree that the numbers of shares of stock to be sold as stated in paragraphs 3 and 5 herein above are
based upon calculations provided 

 

by
Heelys, and in the event the calculations prove to be incorrect and the actual shares available to be sold in the over-allotment, if any, are materially different from what is stated
herein, Adams and Ward shall mediate such issues in good faith in Dallas County, Texas, but in no event shall Ward be liable to Adams or shall Adams be liable to Ward for such error, and neither Ward
nor Adams waive any rights, benefits, or remedies pursuant to existing agreements or understandings with Heelys. 

        7)    If
Heelys does not close an initial public offering by June 30, 2007, then this Agreement is void ab initio and
Adams and Ward shall immediately be placed in the same position as to the Stockholders Agreement as if this Agreement had never existed, with all of their rights, obligations, claims, and defenses. 

        8)    The
Parties each acknowledge that he/it is fully and completely informed by independent counsel and by his/its independent investigation of the facts relating to the
subject matter of this Agreement and of the rights and liabilities of all Parties; that each enter into this Agreement voluntarily, after having given careful and mature consideration to the making of
this Agreement; that this Agreement represents the entire agreement of the parties with regard to the subject matter of this Agreement; that each Party is legally competent to execute this Agreement
and, if executed in a representative capacity, that the individual executing this Agreement has the actual authority to execute this Agreement; and that this Agreement shall not be suspended, amended,
or modified in any manner except by an instrument in writing signed by all Parties sought to be bound. 

        9)    Where
applicable, the terms hereof shall survive the closing of this Agreement. As used in this Agreement, whenever the context so indicates, the masculine, feminine, or
neuter gender, and the singular or plural number, shall each be defined to include the others. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the
other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted, while still carrying out the intent of this Agreement. 

        10)  This
Agreement may be signed in counterpart copies. A set of counterpart copies that collectively contains the signature of all Parties shall constitute an original. 

        11)  It
is expressly understood and agreed that the terms hereof are contractual and not merely recitals. Each Party expressly warrants and represents that he/it owns the
rights being compromised and released; that no persons or entities not expressly made a Party to this Agreement are required to join in this Agreement on behalf of any of them in order to make this
Agreement and the documents to be executed by each of the Parties pursuant to this Agreement, valid, binding, and enforceable against each of them; and that none of them have compromised, settled,
sold, assigned, or transferred any rights or interests made the subject of this Agreement. 

        12)  This
Agreement shall be binding on and shall inure to the benefit of the Parties and their respective heirs, legal representatives, successors, and assigns. 

        13)  This
Agreement has been drafted after negotiation between and among all the Parties, all of whom are represented by counsel, and contains the work product of all
Parties. Therefore, it is not to be construed strictly against any Party, but instead is to be construed fairly, according to the plain meaning of its terms. 

        14)  This
Agreement shall be governed by the laws of the State of Texas and is expressly performable in Dallas County, Texas. 

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Agreed
on this 17th day of November 2006. 

	/s/ Roger R. Adams
 Roger R. Adams, Individually	 	 
	

/s/ Robert J. Ward
 Robert J. Ward, Individually	
 	

 

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AgreementFORM OF NOTE

Exhibit 4.1

THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS 10% CONVERTIBLE NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.  THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF.  THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION OR (II) AN EXEMPTION FROM THE ACT IS AVAILABLE AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

10% CONVERTIBLE NOTE

$___________

(date)

For value received, Validian Corporation, a Nevada corporation (together with its successors and assigns, the “Company”), with an address at 30 Metcalfe Street, Ottawa, Ontario, Canada K1P 5L4, promises to pay to ___________(the “Holder”) with an address at _________________, the principal amount of ____________ ($________) and to pay interest thereon, all as hereinafter specified.

1.

Identification of Note.  This Note is issued as part of the Holder’s investment into the Company.

2.

Maturity.  

2.1

Maturity Date.  Unless earlier converted as provided in Section 3 hereof, this Note will automatically mature and be due and payable on the earlier of (a) ___________ (the “Maturity Date”) or (b) the occurrence of an Event of Default (as defined in Section 8 hereof).

2.2

Interest.  Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to ten percent (10%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days from the date of this Note until the principal amount and all interest accrued thereon are paid (or converted, as provided in Section 3 hereof).  Interest shall be due and paid to the Holder quarterly.  The first quarterly payment shall be paid to the Holder on __________.  At the Company’s option, interest can be paid in either (a) cash or (b) shares of common stock, calculated at a ten percent (10%) discount to the average closing price of the common stock, as listed on the exchange where the Company’s Common Stock is traded, for the ten (10) trading days prior to the date the interest is due to the Holder.  The stock referenced in this Section 2.2 shall be included in the registration rights provisions in Section 5 and be subject to the calculation for purposes of Section 4.

2.3

Prepayment.  The Company shall not have the right to prepay this Note without first obtaining prior written consent from the Holder.  Such consent shall not be unreasonably withheld.

3.

Conversion.

3.1

Voluntary Conversion.  The holder may voluntarily convert the Note, in whole or in part, into Common Stock of the Company at any time.

3.2

Mechanics and Effect of Conversion. 

(a)

The principal and any unpaid and accrued interest of this Note shall convert into shares of Common Stock at a conversion price of ten cents ($0.10) per share (“Conversion Price”).

(b)

No fractional shares will be issued upon conversion of this Note.  In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the unconverted amount that would otherwise be converted into such fractional shares. 

(c)

In the event that the Outstanding Amount under this Note is converted into Common Stock pursuant to Section 3.1 hereof, the Holder shall surrender this Note, duly endorsed, to the Company and the Note shall thereupon be canceled, provided that if Holder partially converts pursuant to Section 3.2(a) hereof, the Company shall issue a Note to Holder for the remaining amount of principal that was not converted.  At its expense, the Company will issue and deliver to such Holder, a certificate or certificates representing the number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock to which such Holder is entitled upon such conversion, together with a check payable to the Holder for any cash amounts payable pursuant to Section 3.2(b) hereof.

(d)

Unless a registration statement under the Securities Act of 1933, as amended, with respect to the shares of Common Stock issued upon conversion of this Note has been filed with the Securities and Exchange Commission, each share issued upon conversion of this Note shall be stamped or otherwise imprinted with a legend substantially in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE 1933 ACT AND SUCH LAWS OR AN EXCEPTION FROM REGISTRATION IS AVAILABLE.”

(e)

Upon conversion of this Note in accordance with Section 3 hereof, all rights with respect to this Note shall terminate, whether or not the Note has been surrendered for cancellation, and the Company will be forever released from all of its obligations and liabilities under this Note except its obligations pursuant to Section 3.2(c) hereof, except if Holder partially 

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converts the Note pursuant to Section 3 hereof, whereby all rights with respect to the portion of the Note that has been converted will terminate pursuant to this Section 3.2(e), but the remainder Note will possess all of the rights granted in this Note.

4.

Limitations on Conversion.  In no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower (including, without limitation, the warrants issued by the Borrower pursuant to the Purchase Agreement) subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 9.9% of the outstanding shares of Common Stock.  For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso.  Holder may waive the limitations set forth herein by sixty-one (61) days prior written notice to the Company.

5.

Registration Rights.  The Company shall file a registration statement, and any amendments thereto, with the Securities and Exchange Commission (the “SEC”) by _________________ and cooperate with the SEC to have such registration statement, and any amendments thereto, declared effective, which includes the shares underlying this Note and those shares issued pursuant to Section 2.2 hereof, as soon as reasonably practicable, provided that Holder shall have piggy-back rights with respect to any registration statement filed by the Company.  If a registration statement covering the shares underlying this Note is not filed prior to _____________, then in addition to any rights the Holder may have hereunder or under applicable law, the Company shall pay to the Holder, as partial liquidated damages and not as a penalty, an amount in cash of 2% of the value of the shares underlying this Note for the first month the registration statement is not filed after _______________ and an amount in cash of 1% of the value of the shares underlying this Note for any month after the first month where a registration statement has not been filed.  For purposes of calculating the liquidated damages in this Section 5, the calculation provided in Section 4 is not applicable.  The Company shall bear the full cost of filing the registration statement pursuant to a demand by Holder.

6.

Payment.  Except as set forth herein, all payments shall be made in lawful money of the United States of America at the principal offices of the Holder.  Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal.

7.

Subordination.  To the extent bankruptcy proceedings are initiated by the Company or a third party, the Holder shall receive the same percentage of ownership pari passu as the Holder would have under Section 3 hereof, regardless of any bankruptcy protection afforded to the Company.

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8.

Events of Default.  The entire unpaid Outstanding Amount shall become immediately due and payable upon the occurrence of an Event of Default.  An “Event of Default” shall be deemed to have occurred if:

(a)

the Company shall: (i) be unable, or admit in writing its inability, to pay its debts as they mature; (ii) make a general assignment for the benefit of creditors; (iii) be adjudicated a bankrupt or insolvent; (iv) file a voluntary petition in bankruptcy, or a petition or answer seeking reorganization or an arrangement with creditors to take advantage of any insolvency law, or an answer admitting the material allegations of a bankruptcy, reorganization or insolvency petition filed against it; (v) take corporate action for the purpose of effecting any of the foregoing; or (vi) have an order for relief entered against it in any proceeding under the United States Bankruptcy Code; 

(b)

an order, judgment or decree shall be entered, without the application, approval or consent of the Company by any court of competent jurisdiction, approving a petition seeking reorganization of the Company or appointing a receiver, trustee or liquidator of the Company or of all or a substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days; or

(c)

the Company shall fail to pay as and when due any principal or interest hereunder and such nonpayment shall continue uncured for a period of ten (10) business days after written notice by the Holder thereof.

9.

Transfer; Successors and Assigns.  This Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company.  Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name, of, the transferee.  Interest and principal are payable only to the registered holder of this Note.  The terms and conditions of this Note shall inure to the benefit of and binding upon the respective successors and assigns of the parties.  

10.

Governing Law.  This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law and choice of law that would cause the laws of any other jurisdiction to apply.  

11.

Notices.  Whenever any notice is required to be given by the Company to a Holder, such notice shall be sent in writing via first class mail, postage prepaid, to the Holder at the Holder’s last address appearing on the books maintained by the Company for registration, which notice shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.  Whenever any notice is required to be given by the Holder of this Note to the Company, such notice shall be sent in writing via first class mail, postage prepaid, to the Company at the Company’s address above.

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12.

Amendments and Waivers.  This Note and any term hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the party against whom enforcement of such amendment, waiver, discharge or termination is sought.  No waivers of any term, condition or provision of this Note, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

13.

Immunity of Members, Officers, Directors and Employees.  No recourse shall be had for the payment of the principal or interest on this Note or for any claim based thereon or otherwise in any manner in respect thereof, to or against any subsidiary, member, officer, director or employee, as such, past, present or future, of the Company or any respective subsidiary, member, officer, director or employees, as such, past, present or future, of any predecessor or successor company, either directly or through the Company or such predecessor or successor company, whether by virtue of any constitutional provision or statute or rule of law, or by the enforcement of any assessment or penalty, or in any other manner, all such liability being expressly waived and released by the acceptance of this Note and as part of the consideration for the issuance thereof.

[Signatures on Following Page]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and delivered by its authorized officer, as of the date first above written.

VALIDIAN CORPORATION

By:

       Name:  Bruce Benn

       Title:    Chief Executive Officer

By:

       Name:  Ronald I. Benn

       Title:    Chief Financial Officer

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AGREEMENT

This Agreement entered into on the ___ day of _______ 2006, between Validian Corporation, a Nevada corporation (together with its successors and assigns, the “Company”), with an address at 30 Metcalfe Street, Ottawa, Ontario, Canada K1P 5L4, and __________ (the “Holder”) with an address at ____________________________________________, agree as follows:

WHEREAS, on the date hereof, the Company issued a Senior 10% Convertible Note pursuant to which the Company promised to pay the Holder a principal amount of _____________($_______) and to pay interest thereon at a rate of 10%;

NOW THEREFORE, BE IT RESOLVED, that the Company and Holder, intending to be legally bound, hereby agree as follows:

1.

Grant of Common Stock

1.1.

In consideration of the Holder’s investment in the Company, the Company hereby agrees to grant ________________ (__________) shares of the Company’s common stock, par value $0.001 (the “Common Stock”) to the Holder.

1.2

Unless a registration statement under the Securities Act of 1933, as amended, with respect to the shares of Common Stock granted pursuant to Section 1.1 hereof has been filed with the Securities and Exchange Commission, each share granted pursuant to Section 1.1 hereof shall be restricted and stamped or otherwise imprinted with a legend substantially in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE 1933 ACT AND SUCH LAWS OR AN EXCEPTION FROM REGISTRATION IS AVAILABLE.”

2.

Governing Law.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law and choice of law that would cause the laws of any other jurisdiction to apply.  

[Signatures on the Following Page]

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IN WITNESS WHEREOF, the parties hereby cause this Agreement to be duly executed and delivered by its authorized officers, as of the date first above written.

VALIDIAN CORPORATION

By:__________________________

       Name:  Bruce Benn

       Title:    Chief Executive Officer

By:__________________________

       Name:  Ronald I. Benn

       Title:    Chief Financial Officer

HOLDER

By:__________________________

       Name:  ______________

          

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