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Exhibit 10.11
SETTLEMENT AGREEMENT
AND RELEASE
This
Settlement Agreement and Release (this “ Agreement
”) is made and entered into on June 29, 2007 by
and among Newlook Industries Corp. (“ Newlook
”) and Wireless Age Communications, Inc. (“
Wireless
Age ,” and together with Newlook, each a “
Party
” and collectively the “ Parties
”):
WHEREAS,
on August 3, 2006, Wireless Age entered into a Preferred Stock
Purchase Agreement (the “ Barron Purchase
Agreement ”) with Barron Partners LP (“
Barron
”), pursuant to which Barron acquired Series A Preferred
Shares and warrants to purchase shares of Wireless Age’s
common stock; and
WHEREAS,
at the closing of the Barron Purchase Agreement on August 3,
2006 (the “ Closing
”), Wireless Age received $1,000,000 cash from Barron
and issued 7,142,900 Series A Convertible Preferred Shares,
each convertible into one share of common stock (the “
Series A
Preferred Shares ”) and warrants to purchase
7,500,000 common shares at a purchase price of $0.25 per share
(the “ Series A
Warrant ”) and 7,500,000 common shares at a
purchase price of $0.50 per share (the “ Series B
Warrant ” and together with the Series A Warrant,
the “ Warrants
”); and
WHEREAS,
it was agreed pursuant to the Barron Purchase Agreement that
the exercise prices for the Warrants and the conversion price
for the Series A Preferred Shares would be subject to certain
proportional and percentage adjustments, in respect of
Wireless Age’s earnings per share for the fiscal years
ended 2006 and 2007; and
WHEREAS,
on January 3, 2007, Barron converted 1,350,000
Series A Preferred Shares to 1,350,000 common shares;
and
WHEREAS,
on February 8, 2007, Barron converted 1,600,000 Series A
Preferred Shares to 1,600,000 common shares; and
WHEREAS,
Wireless Age failed to meet certain pre-tax earnings per share
targets during the year ended December 31, 2006, and the
conversion rate of the remaining 4,192,900 Series A Preferred
Shares was amended so that they convert into 8,385,800 common
shares, the exercise price on the Series A Warrants was
reduced from $0.25 to $0.125 per share and the exercise price
of the Series B Warrants was reduced from $0.50 to $0.25 per
share; and
WHEREAS,
on April 30, 2007, Wireless Age was informed that Newlook
exercised an option to acquire certain Wireless Age securities
held by Barron, including (i) all of Barron’s Series A
Preferred Shares; (ii) Series A Warrants to purchase 5,000,000
shares of common stock; and (iii) Series B Warrants to
purchase 5,000,000 shares of common stock; and
WHEREAS,
it is anticipated that Wireless Age will fail to meet certain
pre-tax earnings per share targets during the year ended
December 31, 2007, and the conversion rate of the remaining
4,192,900 Series A Preferred Shares will be amended such that
they convert into 16,771,600 common shares, the exercise price
on the Series A Warrants be reduced from $0.125 to $0.0625 per
share and the exercise price of the Series B Warrants be
reduced from $0.25 to $0.125 per share; and
WHEREAS,
certain covenants contained in the Barron Purchase Agreement
placed restrictions on the composition of Wireless Age’s
Board (the “ Board
”), including requirements that (i) Wireless Age
increase the membership of the Board to five persons; and (ii)
a majority of the Board must be qualified independent
directors, with a majority of outside directors serving on the
audit and compensation committees of the Board, within 30 days
of the Closing; and
WHEREAS,
effective February 4, 2007 the aforementioned requirements
regarding the Board’s composition were breached;
and
WHEREAS,
Wireless Age and Newlook wish to resolve through agreement any
claims that may have arisen or could arise between those
parties.
NOW,
THEREFORE, the Parties agree as follows:
Upon
the execution of this Agreement (the “ Effective
Date ”):
1.1
Issuance
of Common Stock . Wireless Age will issue to
Newlook an aggregate number of 26,638,267 shares of the common
stock of Wireless Age, as set forth below (such shares are
collectively referred to herein as the “ Settlement
Shares ”) as follows:
1.1.1
16,771,600 restricted shares of Wireless Age’s
common stock shall be issued to Newlook in exchange for, and
in lieu of any and all rights to the 4,192,900 Series A
Preferred Shares currently held by Newlook.
1.1.2 6,666,667
restricted shares of Wireless Age’s common stock shall
be issued to Newlook in exchange for, and in lieu of any and
all rights to (i) the Series A Warrants to purchase 5,000,000
shares of the common stock of Wireless Age; and (ii) the
Series B Warrants to purchase 5,000,000 shares of the common
stock of Wireless Age currently held by Newlook.
1.1.3 3,200,000
restricted shares of Wireless Age’s common stock shall
be issued to Newlook in settlement of any and all claims
Newlook may have or make in connection with the composition of
Wireless Age’s Board, pursuant to the Barron Purchase
Agreement or otherwise.
1.2
Board
of Directors . Upon execution hereof by the
Parties, the Board of Directors of Wireless Age shall appoint
Mr. Jason Moretto, the Chief Financial Officer of Newlook, as
a member of the Wireless Age Board of
Directors. Mr. Moretto shall serve on the Board
with such rights and powers as other members of the Board
until the next Annual Meeting of the Shareholders of Wireless
Age. Mr. Moretto shall not be compensated for
service on, and rendered to, the Board.
1.3
Waiver
. In consideration for the provisions of Section
1.1 and 1.2 hereof, Newlook hereby waives any all rights it
may currently have or have possessed in the past in the
securities or property of Wireless Age, or to any payments by
Wireless Age, including but not limited to any of
Newlook’s rights pursuant to the Barron Purchase
Agreement, that certain Registration Rights
Agreement between Wireless Age and Barron Partners L.P.
dated August 3, 2006, that certain Common Stock Purchase
Warrant “A” issued by Wireless Age Communication,
Inc. to Barron Partners L.P. dated August 3, 2006 or that
certain Common Stock Purchase Warrant “B” issued
by Wireless Age Communication, Inc. to Barron Partners L.P.
dated August 3, 2006.
1.4
Release
. In consideration for the provisions of Section
1.1 and 1.2 hereof, Newlook hereby covenants and agrees (on
behalf of itself and all of its current and former parents,
subsidiaries, affiliated entities, predecessors, successors,
officers, directors, shareholders, partners, general partners,
limited partners, members, managers, agents, attorneys,
insurers, and assigns) to fully release and discharge Wireless
Age (and its current and former parents, subsidiaries,
affiliated entities, predecessors, successors, officers,
directors, shareholders, partners, general partners, limited
partners, members, managers, employees, agents, attorneys, and
assigns), of and from any and all liability, claims, demands,
actions, causes of action, suits, grievances, debts, sums of
money, agreements, promises, damages, back and front pay,
costs, expenses, attorneys’ fees, and remedies of any
nature, kind, type, and description, whether known or unknown,
suspected or unsuspected, that arose or may have arisen
through the Effective Date which relate to the relationship or
dealings between Wireless Age, on the one hand, and either
Barron or Newlook, on the other hand, including but not
limited to any claims that were brought or could have been
brought in connection with any breach of the Barron Purchase
Agreement, that certain Registration Rights
Agreement between Wireless Age and Barron Partners L.P.
dated August 3, 2006, that certain Common Stock Purchase
Warrant “A” issued by Wireless Age Communication,
Inc. to Barron Partners L.P. dated August 3, 2006 or that
certain Common Stock Purchase Warrant “B” issued
by Wireless Age Communication, Inc. to Barron Partners L.P.
dated August 3, 2006.
1.5 The
waivers and releases contained in Sections 1.3 and 1.4 hereof
are contractual in nature and also constitute covenants not to
sue on any matter waived or released.
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2.
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Representations and
Warranties of Newlook .
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Newlook
represents and warrant to Wireless Age as
follows:
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2.1
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Organization
and Good Standing of Newlook .
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Newlook
is a corporation duly formed, validly existing and in good
standing under the laws of its jurisdiction of
incorporation.
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2.2
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Authority
and Capacity .
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Newlook
possess all requisite legal right, power, authority and
capacity to execute, deliver and perform this Agreement, and
each other agreement, instrument and document to be executed
and delivered to consummate the transactions contemplated
herein and therein.
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2.3
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Ownership
of Shares .
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Newlook
is sole beneficial and record owner of (i) the 4,192,900
Series A Preferred Shares; (ii) the Series A Warrants to
purchase 5,000,000 shares of the common stock of Wireless Age;
and (iii) the Series B Warrants to purchase 5,000,000 shares
of the common stock to be transferred and cancelled hereby
(the “ Newlook
Securities ”), and has good and marketable title
to the Newlook Securities, free and clear of all
Liens. No other Person has any right, title or
interest in the Newlook Securities, contingent or otherwise,
or any option or other right to acquire the Newlook Securities
or claim any direct or indirect interest in the Newlook
Securities (including but not limited to
Barron). The Newlook Securities are not subject of
any domestic consent decree or domestic relations
order.
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2.4
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Execution
and Delivery; Enforceability .
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The
execution, delivery and performance of this Agreement has been
duly authorized by all requisite corporate action of
Newlook. At the Effective Date, this Agreement
shall constitute the valid and binding obligations of Newlook
enforceable against Newlook in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws
relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable
principles of general application. Newlook is not a
party to, subject to, or bound by any order of any
governmental authority, or any agreement which would prevent
the execution or delivery of this Agreement by Newlook or the
transfer of the Newlook Securities to Wireless
Age.
2.5.1 Newlook
is not required to submit any notice, report or other filing
with any governmental authority in connection with its
execution, delivery or performance of this Agreement or any
other document, instrument or agreement to be executed and
delivered by Newlook in connection herewith, (ii) such
execution, delivery and performance will not result in a
breach or violation of, or constitute a default (or an event
that, with notice or lapse of time, or both, would constitute
a default) under, or give rise to a right of any party to
accelerate, amend, modify or terminate, or require payments
under, or require the authorization, consent or approval from
any third party or result in the creation of any lien upon
such Newlook Securities, pursuant to any agreement to which
Newlook is a party, and (iii) no consent, approval or
authorization of any governmental authority or any other
person is required to be obtained by Newlook in connection
with its execution, delivery and performance of this Agreement
or any other document, instrument or agreement to be executed
and delivered by Newlook in connection herewith or the
consummation of the transactions contemplated hereby or
thereby.
2.5.2 The
execution and delivery by Newlook of this Agreement and any
other document, instrument or agreement to be executed and
delivered by Newlook in connection herewith and the
consummation by Newlook of the transactions contemplated
hereby and thereby will not conflict with or violate any laws
applicable to Newlook or by which any of its properties or
assets are bound or are subject.
There
is no order and no action, suit, arbitration, proceeding,
investigation or claim of any kind whatsoever, at law or in
equity, pending or, to Newlook’s knowledge, threatened
against Newlook, which would give a third party the right to
enjoin or rescind the transactions contemplated by this
Agreement or otherwise prevent Newlook from complying with the
terms and provisions of this Agreement.
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2.7
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Accredited
Investor .
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Newlook
is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D promulgated under he
Securities Act of 1933, as amended (the “ Securities
Act ”) and Wireless Age may fully rely upon Rule
506 of Regulation D in such regard and for purposes of
construing the Acquisition as a Business Combination as such
term is defined in Rule 501(d) of Regulation D.
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2.8
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Representations
Regarding Settlement Shares .
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2.8.1
Own
Account . Newlook is acquiring the Settlement Shares
for its own account as principal, and not as a nominee or
agent; for investment purposes only, and not with a view to,
or for, resale, distribution or fractionalization
there
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