OPTION AGREEMENT
AGREEMENT, dated as of August 14, 2001, by and between NUWAVE TECHNOLOGIES,
INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇ (the "Optionee").
W I T N E S S E T H
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WHEREAS, in consideration of the Optionee agreeing to assist the Company in
obtaining orders for the Company's products and in entering into strategic
relationships, the Company desires to provide the Optionee with an opportunity
to acquire shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), and thereby obtain a proprietary interest in the continued
progress and success of the business of the Company, and the Optionee desires to
so obtain such proprietary interest, subject to the terms and conditions herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Optionee hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee an option
(the "Option") to purchase an aggregate of ________ shares (the "Option Shares")
of Common Stock at an exercise price of $____ per share (the "Exercise Price"),
and the Optionee hereby accepts the grant of the Option, subject to vesting as
provided in Section 2 hereof, and subject to adjustment as provided in Section 6
hereof.
2. Vesting of Option.
2.1 Initial Vesting. The Option shall vest to the extent of _______ Option
Shares (A) for each (i) OEM order obtained or (ii) alliance or partnership
entered into between the Company and a third party as a result of the Optionee's
efforts (any such order, alliance or partnership shall be a "Transaction"), up
to a maximum of five (5) such Transactions or an aggregate of 75,000 Option
Shares, and (B) a majority of the non-employee directors of the Company then in
office (excluding the Optionee if he is then a non-employee director) authorized
the Company to enter into the Transaction and also agreed that the Transaction
would give rise to vesting of the Option under this Section 2.1 or Section 2.2
hereof (any such approved Transaction shall be a "Vesting Transaction"). The
non-employee directors' approval of a Transaction and agreement that such
Transaction would be a Vesting Transaction shall be in their discretion, and
such decision shall be final and binding on the Company and the Optionee. The
Company shall give notice to the Optionee of the decision of the non-employee
directors as to whether a proposed Transaction became a Vested Transaction.
2.2 Aggregate Vesting. The Option shall vest for _______ Option Shares
after either five (5) OEM orders have been placed with the Company or five (5)
alliances or partnerships with the Company have been created, or an aggregate of
five (5) orders, alliances or partnerships have occurred as a result of the
Optionee's efforts, provided that at least two (2) of the Vesting Transactions
were OEM orders. The terms of the Transactions which may give rise to Vesting
under this Section 2.2 must be approved in advance and become vested by the
non-employee directors of the Company as provided for in Section 2.1 hereof.
2.3 Notice of Transaction. Upon the Optionee identifying a third party
which has indicated a desire to place an OEM order or enter into an alliance or
partnership with the Company which may result in a Transaction, the Optionee
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shall notify the Company's President specifying the terms of the Transaction.
Upon the request of the Company, the Optionee shall cooperate with the Company
in seeking to consummate the Transaction.
2.4 Expiration. Any Option Shares which do not vest pursuant to Sections
2.1 and 2.2 hereof by _________, 20__ (or the Cancellation Date by reason of
Section 2.5 hereof) shall be forfeited. Forfeiture of unvested Option Shares
shall not effect Option Shares which become vested prior to the aforementioned
forfeiture.
2.5 Review of Option in One Year. At any time after ________, 2001 and
prior to ________, 2002, the non-employee directors of the Company may review
the nature of the proposed Transactions previously presented by the Optionee and
based upon their review recommend that the Board of Directors cancel this
Agreement as to any future Transactions. The effective date of such cancellation
of this Agreement shall be the "Cancellation Date." Such cancellation shall not
effect Options which have vested prior to the Cancellation Date. Additionally,
if a proposed Transaction that would give rise to vesting of a portion of Option
Shares under Section 2.1 hereof is entered into within six (6) months after the
Cancellation Date, such cancellation shall not prevent such Transaction from
vesting subsequent to the Cancellation Date. Notwithstanding the previous
sentence, if at the time the Board of Directors cancels this Agreement pursuant
to this Section 2.5 there are fewer than five (5) Vesting Transactions whereby
the Option for the final _________ Option Shares, as described in Section 2.2
hereof, has not vested as of the Cancellation Date, the Option for those
_________ Option Shares shall be terminated as of the Cancellation Date.
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3. Exercise of Option.
3.1 Exercise. The Option may be exercised at any time, or from time to
time, in whole or in part, for the Option Shares which have vested pursuant to
Section 2 hereof, commencing upon the respective vesting date thereof and
terminating at 5:00 p.m., Eastern Time, on __________, 20__ (the "Expiration
Date"), and may not be exercised thereafter.
3.2 Method of Exercise. The Option will be exercisable by notice (the
"Exercise Notice") and payment in accordance with the procedure prescribed
herein. Each Exercise Notice shall state the election to exercise the Option and
the number of Option Shares (the "Purchased Shares") in respect of which it is
being exercised, the name, address and tax identification number of the persons
to whom the Purchased Shares are to be issued and delivered, and if the
Purchased Shares are not registered under the Securities Act of 1933, as amended
(the "Securities Act"), contain a representation and agreement as to investment
intent with respect to the Purchased Shares, and an acknowledgment as to
restrictions on resale or transfer of such Purchased Shares by reason of the
Securities Act. Accompanying the Exercise Notice shall be a certified check or a
wire transfer payable to the order of the Company in the full amount of the
purchase price for the Purchased Shares.
3.3 Stock Certificate. Upon receipt of the documents to be provided for in
Section 3.2 hereof, the Company shall deliver to the Optionee or other person
specified in the Exercise Notice certificates for the Purchased Shares. If
required under the Securities Act, each certificate shall bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY
MAY NOT PUBLICLY BE OFFERED FOR SALE, SOLD OR DELIVERED AFTER
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SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER SUCH ACT EXCEPT AS AUTHORIZED UNDER SAID
ACT, AND UNLESS HEREAFTER REGISTERED WILL NOT BE TRANSFERRED
UPON THE RECORDS OF THE CORPORATION IN THE ABSENCE OF AN
OPINION OF COUNSEL TO THE CORPORATION THAT SUCH REGISTRATION
IS NOT REQUIRED.
4. Rights of Holder. The Optionee shall not, by virtue hereof, have any
rights to dividends or any other rights (including voting rights) of a
stockholder with respect to the Option Shares subject to the Option until such
Shares shall have been issued to him, as evidenced by the appropriate entry on
the transfer books of the Company upon purchase of such Option Shares upon
exercise of the Option.
5. Transferability of Option. The Option shall not be transferable in whole
or in part by the Optionee other than (i) by will or the laws of descent and
distribution, (ii) to an entity wholly-owned by the Optionee or (iii) to a
member of the immediate family (which shall be a spouse, parent or child) of the
Optionee, and such transferee agrees to be bound by this Section 5. Any transfer
or attempted transfer of the Option in violation of this Section 5 shall be null
and void, and of no force or effect.
6. Adjustments; Anti-Dilution. In the event of a stock dividend, stock
split-up, share combination, exchange of shares, recapitalization, merger,
consolidation, acquisition or disposition of property or shares, reorganization,
liquidation or other similar changes or transactions, of or by the Company, the
Board of Directors of the Company shall make (or shall undertake to have the
Board of Directors of any corporation which merges with, or acquires the stock
or assets of, the Company make) such adjustment of the number and class of
Option Shares then covered by the Option, or of the Exercise Price, or both. To
the extent practicable, the Company shall give the Optionee prior notice of any
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such event, provided that the failure by the Company to give such notice shall
not subject the Company to any liability herein. After an event which results in
an adjustment in the Option, the Company shall give notice to the Optionee
specifying the adjusted number or type of Option Shares or other security and/or
the Exercise Price, together with a calculation of the adjustment. The
determination of the adjustment by the Company shall be final and binding on the
Optionee.
7. Reservation of Shares. The Company shall at all times during the term of
the Option reserve and keep available such number of Option Shares or such other
class of stock then subject to the Option as shall be sufficient to satisfy the
requirements of this Agreement.
8. Registration. At any time after the initial vesting of Option Shares the
Optionee may request the Company to file a registration statement on Form S-8
(or successor form) under the Securities Act with respect to the Option Shares.
Assuming the Company is eligible to file a Form S-8 (or successor form) for the
Option Shares, it shall use its best efforts to file and cause such registration
statement to become effective and thereafter maintain the effectiveness thereof
for at least the earliest of (i) one year after the Expiration Date, (ii) the
termination of this Agreement, assuming no Option Shares have been purchased
hereunder or (iii) the date when all the Purchased Shares may be sold in
accordance with Rule 144 under the Securities Act. The Company shall bear all
costs related to such registration statement.
9. Notices. Any notice to be given under this Agreement shall be in writing
and delivered in person, by facsimile, express mail, courier or by certified
mail to the following address.
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If to the Company:
NUWAVE Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President.
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Optionee:
Mr. ▇▇▇▇▇▇ ▇▇▇▇
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FAX:
Either party hereto may designate a new address by notice to that effect duly
given to the other party hereto.
10. Miscellaneous.
10.1 Benefits of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their respective successors,
assigns, heirs and administrators.
10.2 Entire Agreement. This Agreement contains the complete and exclusive
agreement between the parties hereto as to the subject matter herein, and
supersedes any and all other prior agreements, oral or written, between them as
to the subject matter herein. The Option granted herein constitutes the full
compensation payable by the Company to the Optionee for his services in
connection with finding and helping to negotiate a Transaction.
10.3 Amendments. This Agreement may not be amended, modified, supplemented
or terminated nor any term or condition hereof waived except in writing signed
by the parties hereto.
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10.4 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware.
10.5 Severability. In the event one or more provisions of this Agreement
are held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not be affected or
impaired hereby.
10.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which shall constitute a single
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
THE OPTIONEE:
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▇▇▇▇▇▇ ▇▇▇▇
NUWAVE TECHNOLOGIES, INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇
President
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