WARNER PRIVATE PLACEMENT AGREEMENT
Exhibit
10.63
FINANCING
AGREEMENT
THIS
AGREEMENT MADE EFFECTIVE AS OF THE 15th, day of March, 2005 (the “Effective
Date”).
BETWEEN:
Moving
Bytes Inc., a
Canada Business Corporations Act company;
(the
“Company”),
Warner
Technology and Investments Corp., a New Jersey corporation (the
“Purchaser”)
AND:
Guzov
Ofsink, LLC (the “Escrow Agent”).
WHEREAS:
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A.
|
The
Purchaser has subscribed for Shares of the Company in accordance with a
Subscription Agreement entered into by and between the parties hereto
concurrent with this Agreement and of which this Agreement is a part;
and |
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B.
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The
parties have agreed that the financing terms and conditions of the
Subscription and the Purchaser’s investment in the Company shall be
governed by this Agreement; |
NOW,
THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements hereto contained, the receipt of which is hereby
acknowledged, the parties covenant and agree with each other as
follows:
1.
Subscription for Capital Stock.
1.1
a.
Purchaser agrees to purchase Shares of Company as follows:
i) One
Hundred Thirty-nine Million Two Hundred Forty-six Thousand Sixty-five
(139,246,065) Shares at a subscription price of Seventy Thousand dollars US
($70,000 USD) or $0.0005027 per share,
b.
Purchaser shall be obligated to purchase the Shares immediately upon execution
of this Agreement and shall fund the purchase of Shares by depositing the entire
subscription price in escrow with the Escrow Agent pursuant to the provisions of
Section 3 of this Agreement and directing the Escrow Agent to immediately make
the following payments:
| i) |
A
check or wire transfer in the amount of Five Thousand dollars US
($5,000.00 USD) to Bagell , Josephs & Company, LLC on behalf of the
Company for payment in regard to the preparation of the Company’s annual
audit for its fiscal year ended December 31, 2004, with evidence of such
payment to be provided to the Company under the following
instructions: |
Bagell,
Josephs & Company, LLC
Attn:
Xxxx Xxxxxx
000
Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxx
000-000
Xxxxxxxxx,
XX 00000
Tel:
000-000-0000
;
and
| ii) |
a
wire transfer of Five Thousand dollars US ($5,000 USD) to G2 Solutions,
LLC on behalf of the Company for full payment in regard to the preparation
of the Company’s books, working papers, schedules and financial statements
for its fiscal year ended December 31, 2004, with evidence of such payment
to be provided to Seller, under the following
instructions: |
G2
Solutions, LLC Tax Account
Xxxxx
Fargo Bank, Xxxxxxxxxx, XX 00000
ABA
Routing # 000000000
Account
# 0000000000
Tel.
000.000.0000
;
and
| iii) |
a
wire transfer of Fifteen Thousand dollars US ($15,000 USD) to Securities
Compliance, Inc. on behalf of the Company for payment of one-half of the
total amount payable by the Company under an agreement entered into by the
Company and Securities Compliance, Inc. in regard to the termination of
prior agreements between the Company and Securities Compliance, Inc. and
the preparation of SEC filings related to this Agreement and the Company’s
Form 10-KSB for its fiscal year ended December 31, 2004, under the
following instructions: |
Securities
Compliance, Inc.
Xxxxx
Fargo Bank, Xxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xx 00000
ABA
Routing # 000000000
Account
# 0000000000
Tel.
000.000.0000
;
and
| iv) |
a
wire transfer of Ten Thousand dollars US ($10,000 USD) to the Company,
with the following instructions: |
Xxxxx
Fargo Bank, Xxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xx 00000
ABA
Routing # 000000000
Account
# 0000000000
Tel.
000.000.0000
1.2 Immediately
upon execution of this Agreement the Company is depositing with the Escrow Agent
certificates for an aggregate of One Hundred Thirty-nine Million Two Hundred
Forty-six Thousand Sixty-five (139,246,065) Shares in the following
denominations: 9,946,148 Shares, 9,946,148 Shares, 9,946,147 Shares, 9,946,147
Shares, 29,838,443 Shares, 29,838,442 Shares, 19,892,295 Shares and 19,892,295
Shares.
1.3
Subject to applicable securities laws, the Shares referred to hereto, shall be
issued on a private placement basis and shall be subject to a minimum one year
holding period.
1.4
Simultaneously with or before the execution of this Agreement, the board of
directors of the Company shall appoint two nominees of Purchaser to the
Company’s board of directors and the current members of the board of directors,
with the exception of Xxxxxx Xxxxxxx and Xxxx Xxx shall resign from the
Company’s board of directors.The election of the two nominees of the Purchaser
shall be effective only if, and ten days after, the Company both files with the
Securities and Exchange Commission an Information Statement prepared in
accordance with Schedule 14f-1 and disseminates such information statement to
its stockholders of record.
1.5 After
the consummation of this Agreement, the Purchaser contemplates causing the
Company to enter into a share exchange agreement with the shareholders of a
Chinese operating company (the “Share Exchange Agreement”). As a result of the
consummation of this Agreement and the Share Exchange Agreement, the
stockholders of the Company who are stockholders immediately prior to the
execution of this Agreement, shall immediately after the consummation of the
Share Exchange Agreement own 5.00% of the outstanding shares of common stock of
the Company. Nothing herein shall be deemed to require the Company to enter into
any transaction with any person after the consummation of this
Agreement.
2. Representations
of the Company.
The
Company hereby represents and warrants to Purchaser as follows:
2.1. Corporate
Organization.
The
Company is duly formed, validly existing and in good standing under the Canada
Business Corporations Act.
2.2 Authorization.
The
Company has full power and authority (i) to execute, deliver and perform this
Agreement and all other documents, instruments and agreements required to be
executed, delivered and performed by it in connection with the transactions
contemplated by this Agreement and (ii) to sell and issue the Shares. All action
on the part of the Company and its officers, directors and stockholders
necessary for the authorization, execution, delivery and performance by the
Company of all of the Company’s obligations under this Agreement and for the
sale and issuance of the Shares has been taken or will be taken prior to the
Closing. This Agreement, when executed and delivered by the Company will
constitute the legally binding and valid obligations of the Company, enforceable
against it in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, moratorium, creditors’ rights and other
similar laws.
2.3. Capitalization.
Immediately
prior to the execution of this Agreement, the Company had an unlimited number of
authorized common stock, no par value, 10,000,000 shares of Class A Preferred
Stock, no par value and 20,000,000 shares of Class B Preferred Stock, no par
value and there were 36,203,977 shares of Common Stock and no shares of Class A
Preferred Stock outstanding and no shares of Class B Preferred Stock
outstanding. There are no commitments to issue and there are no outstanding
warrants, options, convertible securities or debt, preferred stock, or any other
securities except for 470,000 common stock options. In addition, there are no
conversion or exchange privileges, preemptive rights, or other rights or
agreements to purchase or otherwise acquire or issue any securities of the
Company, and there is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of written consents
with respect to any security of the Company or any instrument or security
exercisable or exchangeable for, or convertible into any security of the
Company, other than as set forth in the convertible note agreement with
Innerloop Mobile Communications A.S.
2.4. Validity
of Shares.
The
Shares, when issued, sold and delivered in accordance with the terms and for the
consideration expressed in this Agreement, shall be duly and validly issued,
fully paid and nonassessable, and free and clear of all liens, encumbrances and
restrictions on transfer of every kind and nature whatsoever, other than
restrictions on transfer imposed on Purchaser under applicable state and federal
securities laws. The issuance, sale and delivery of the Shares is not subject to
any preemptive right, right of first refusal or other similar right in favor of
any person, other than as may be set forth in the convertible note agreement
with Innerloop Mobile Communications A.S.
2.5. No
Conflict with Other Instruments.
The
execution, delivery and performance by the Company of this Agreement, and the
consummation of the transactions contemplated hereby, will not result in any
violation of, conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under, with or without the
passage of time or the giving of notice, or both, (i) any provision of the
Company’s Certificate of Incorporation or By-laws (each as may have been
amended, supplemented or restated); (ii) any provision of any judgment, writ,
injunction, decree or order to which the Company is a party; or (iii) any law,
statute, rule or regulation applicable to the Company.
2.6. Governmental
Consents.
No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with
(i) the execution, delivery and performance this Agreement, and (ii) the
issuance, sale and delivery of the Shares, except for such filings required
pursuant to applicable federal and state securities laws and blue sky laws,
which filings, if any, will be effected by the Company within the required
statutory period.
2.7. No
Defaults or Violations.
The
Company is not in violation of, in conflict with, in breach of or in default
under any term or provision of, and no right of any party to accelerate,
terminate, modify or cancel has come into existence under, (i) its Certificate
of Incorporation or By-laws (each as may have been amended, supplemented or
restated), (ii) any provision of any judgment, writ, injunction, decree or order
to which the Company is a party. Immediately prior to the execution of this
Agreement there were no outstanding orders from any regulatory authority halting
the issuance or trading in any securities of the Company except for cease trade
orders in the provinces of British Columbia and Alberta, Canada.
2.8. Private
Offering.
Subject
to the truth and accuracy of Purchaser’s representations set forth in the
Subscription Agreement between the Company and the Purchaser and in this
Agreement, the offer and sale of the Shares, as contemplated by this Agreement
will be made in reliance on one or more exemptions from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and the qualification or registration requirements of applicable blue sky
laws.
2.9. Litigation.
There is
no action, suit, proceeding or investigation pending or, to the best knowledge
of the Company, currently threatened, against the Company that may affect the
validity of this Agreement or the right of the Company to enter into this
Agreement or to consummate the transactions contemplated hereby. There is no
action, suit, proceeding or investigation pending or, to the best knowledge of
the Company, currently threatened, against the Company, before any court or by
or before any governmental body or any arbitration board or tribunal, nor is
there any judgment, decree, injunction or order of any court, governmental
department, commission, agency, instrumentality or arbitrator against the
Company. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate. When any
reference to the “knowledge” or “best knowledge” of the Company is made in this
Agreement, such terms shall mean the knowledge that would be gained from due
inquiry into the matters referenced.
2.10. Brokers’
Fees and Commissions.
Neither
the Company nor any of its officers, directors, employees, stockholders, agents
or representatives has employed any investment banker, broker, or finder in
connection with the transactions contemplated by this Agreement and no such
person or entity is entitled to a fee with respect to the transactions
contemplated by this Agreement.
2.11. Full
Disclosure.
The
Company has fully provided or made available to Purchaser all the information
that Purchaser has requested for deciding whether to purchase the Shares. The
information so provided to Purchaser by the Company does not contain any untrue
statement of a material fact.
3.
Escrow
Provisions.
3.1. Appointment
of Escrow Agent. The
Purchaser and the Company hereby appoint Escrow Agent as escrow agent in
accordance with the terms and conditions set forth herein, and the Escrow Agent
hereby accepts such appointment.
3.2. Delivery
of Funds and Certificates to Escrow Agent. Upon
the execution of this Agreement, the Purchaser is depositing the entire
subscription price (the “Escrowed Funds”) with the Escrow Agent and the Company
is depositing the certificates (the “Escrowed Certificates”) for the Shares (the
Escrowed Shares”) referred to in Section 1.2 with the Escrow Agent
..
3.3. Escrow
Agent to Hold and Disburse Escrowed Funds and Escrowed
Certificates. The
Escrow Agent will hold and disburse all Escrowed Funds, Escrowed Shares and
Escrowed Certificates received by it pursuant to the terms of this Escrow
Agreement, as follows:
3.3.1.
Immediately upon the execution of this Agreement, the Escrow Agent shall make
the wire transfers set forth in Section 1.1(b) and deliver to the Purchaser
certificates totalling for 69,623,033 Shares.
3.3.2
Promptly upon the filing by the Company of its Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2004, the Escrow Agent shall wire transfer
(in accordance with the wire transfer instructions set forth in Section
1(b)(iii) Fifteen Thousand Dollars to Securities Compliance, Inc. on behalf of
the Company for payment of the remaining one-half of the total amount payable by
the Company under an agreement entered into by the Company and Securities
Compliance, Inc. and deliver a certificate for 29,838,442 Shares to the
Purchaser.
3.3.3 Promptly
after receipt of any other written instructions signed by the Company and the
Purchaser, the Escrow Agent shall disburse Escrowed Funds and deliver Escrowed
Shares in an amount equivalent to the Escrowed Funds disbursed divided by
0.0005027072. The Company and Purchaser authorize the Escrow Agent to divide the
Escrowed Certificates as necessary to perform its obligations under this Section
3.3.3, each of which newly issued certificate shall itself be an “Escrowed
Certificate”. The Company agrees to authorize and instruct its transfer agent,
Pacific Corporate Trust Company, to divide Escrowed Certificates into new
certificates as may be requested by the Escrow Agent. At such time as the
Company has filed its Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2004 or on April 15, 2005, whichever should occur first, the Escrow
Agent shall disburse the remaining balance of the Escrowed Funds to the Company,
less all interest earned on the Escrowed Funds from the inception of this
Agreement and deliver the remaining Escrowed Certificates to the Purchaser. The
Escrow Agent shall also send a check for the interest on the Escrowed Funds to
the Purchaser.
3.3.4 All the
funds received by the Escrow Agent pursuant to the terms of this Agreement may
be held in a bank XXXX account which is a non-interest bearing
account.
3.4
The
Escrow Agent shall have no duties or responsibilities other than those expressly
set forth herein. The Escrow Agent shall have no duty to enforce any obligation
of any person to make any payment or delivery, or to direct or cause any payment
or delivery to be made, or to enforce any obligation of any person to perform
any other act. The Escrow Agent shall be under no liability to the other parties
hereto to anyone else, by reason of any failure, on the part of any party hereto
or any maker, guarantor, endorser or other signatory of any document or any
other person, to perform such person’s obligations under any such document.
Except for amendments to this Agreement, and except as provided in Section 3.3,
the Escrow Agent shall not be obligated to recognize any instructions or
agreement between any and all of the persons referred to herein, notwithstanding
that references hereto may be made herein and whether or not it has knowledge
thereof.
3.5 The Escrow Agent shall not be liable to the parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent) statement, instrument, report, or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained), which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any of the terms thereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto.
3.6 The
Escrow Agent shall not be responsible for the sufficiency or accuracy of the
form, or of the execution, validity, value or genuineness of, any document or
property received, held or delivered by it hereunder, or of any signature or
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable to the
other parties hereto or to anyone else in any respect on account of the
identity, authority or rights, of the person executing or delivering or
purporting to execute or deliver any document or property or this agreement. The
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof.
3.7 The
Escrow Agent shall have the right to assume, in the absence of written notice to
the contrary from the proper person or persons, that a fact or an event, by
reason of which an action would or might be taken by the Escrow Agent, does not
exist or has not occurred, without incurring liability to the other parties
hereto or to anyone else for any action taken or omitted, or any action suffered
by it to betaken or omitted, in good faith and in the exercise of its own best
judgment, in reliance upon such assumption.
3.8
To the
extent that the Escrow Agent becomes liable for the payment of taxes, including
withholding taxes, in respect of income derived from the investment of funds
held hereunder or any payment made hereunder, the Escrow Agent may pay such
taxes. The Escrow Agent may withhold from any payment of monies held by it
hereunder such amount as the Escrow Agent estimates to be sufficient to provide
for the payment of such taxes not yet paid, and may use the sum withheld for
that purpose. The Escrow Agent shall be indemnified and held harmless against
any liability for taxes and for any penalties in respect of taxes, on such
investment income or payments in the manner provided in Section 3.9.
3.9
The
Escrow Agent will be indemnified and held harmless by the Company and the
Purchaser from and against all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or proceeding involving any claim, or in connection with any claim
or demand, which in any way, directly or indirectly, arises out of or relates to
this Agreement, the services of the Escrow Agent hereunder, the monies or other
property held by it hereunder. The Escrow Agent shall have a lien for the amount
of any such expense or loss on the monies and any other property held by it
hereunder and shall be entitled to reimburse itself from such monies or property
to the amount of any such expense or loss. Promptly after the receipt of the
Escrow Agent of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Escrow Agent shall, if a claim in respect thereof is to
be made against the Company and/or the Purchaser, notify the proper party in
writing, but the failure by the Escrow Agent to give such notice shall not
relieve the any party from any liability which it may have to the Escrow Agent
hereunder. Notwithstanding any obligation to make payments and deliveries
hereunder, the Escrow Agent may retain and hold for such time as it deems
necessary such amount of monies or property as it shall, from time to time, in
its sole discretion, deem sufficient to indemnify itself for any such loss or
expense.
3.10
The
Escrow Agent may resign at any time and be discharged from its duties as Escrow
Agent hereunder by giving the parties at least 10 days’ written notice thereof.
As soon as practicable after its resignation, the Escrow Agent shall turn over
to a successor escrow agent appointed by the Company and the Purchaser all
monies and properties held hereunder (less such amount as the Escrow Agent
entitled to retain) upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new agent is so appointed within the
60-day period following such notice of resignation, the Escrow Agent may deposit
the aforesaid monies and property with any court it deems appropriate.
3.11 Any payments by the Escrow Agent pursuant to the terms of the Agreement shall be made by check or wire transfer.
3.12 All
amounts referred to herein are expressed in United States Dollars and all
payments by the Escrow Agent shall be made in such dollars.
4.
Term and
Termination.
|
4.1
|
This
Agreement shall commence on the Effective Date of this Agreement.
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5.
Notices.
|
5.1 |
Any
demand, notice or other communication (a “Notice”) to be given in
connection with this Agreement shall be given in writing and may be given
by personal delivery or by registered mail addressed to the recipient as
follows: |
To Moving
Bytes: Secretary
of the Corporation
Xxxx
Xxxxx
0000
Xxxxxxx Xxx. Xxx. X000
Xxx
Xxxxxx, Xx 00000
To
Purchaser:
Warner
Technology and Investments Corp.
000 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
To Escrow
Agent:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxx, Esq.
|
or
such other address or individual as may be designated by notice by either
party to the other. Any Notice given by personal delivery shall be deemed
to have been given on the day of actual delivery thereof and, if made or
given by registered mail, on the fifth day following the deposit thereof
in the mail. |
6.
Miscellaneous.
|
6.1
|
The
Subscription Agreement and the terms and provisions hereto contained
constitute the entire agreement between the parties and supersede all
previous oral or written communications. |
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6.2
|
This
Agreement shall be governed by, construed and enforced in accordance with
the laws of the state of California without giving effect to conflicts of
law principles, and the parties hereto submit and attorn to the exclusive
jurisdiction of the courts of the state of
California. |
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6.3
|
In
the event any provision of this Agreement shall held for any reason to be
invalid, illegal or unenforceable, such provision shall be deemed amended
or deleted only to the extent necessary to bring it within the
requirements of the law, and shall not affect the validity of the
remaining provisions hereof. |
|
6.4 |
The
prevailing party in any court action over this Agreement shall be entitled
to recover from the other party its’ attorneys fees, costs and expenses in
connection therewith, or on any appeal
therefrom. |
IN
WITNESS WHEREOF this agreement has been executed as of the day and year first
above written.
Warner
Technology and Investments Corp.
/s/
XxxXxxx Xxxx
Name:
XxxXxxx Xxxx
Title:
Chairman
/s/Xxxx
X.
Xxxxx
/s/ J. Xxxx
Mustad
Xxxx X.
Xxxxx, President J. Xxxx
Mustad, Chief Executive Officer
Guzov
Ofsink, LLC
/s/ Xxxxxx
Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Member
