Exhibit 10.57
Warrant Agreement, dated March 13, 2000, between NUWAVE Technologies, Inc.
and American Stock Transfer & Trust Company.
WARRANT AGREEMENT
By and Between
NUWAVE TECHNOLOGIES, INC.,
a Delaware corporation
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
TABLE OF CONTENTS
Section Page
------- ----
Section 1. Appointment of Warrant Agent; Issuance of Warrants.............1
Section 2. Form of Warrant................................................1
Section 3. Countersignature and Registration..............................2
Section 4. Transfers and Exchanges........................................2
Section 5. Exercise of Warrants...........................................3
Section 6. Payment of Taxes...............................................4
Section 7. Mutilated or Missing Warrants..................................4
Section 8. Reservation of Common Stock....................................5
Section 9. Adjustments of Exercise Price and Number of Securities.........5
Section 10. Registration...................................................7
Section 11. Indemnification................................................8
Section 12. Disposition of Proceeds on Exercise of Warrants...............11
Section 13. Redemption of Warrants........................................11
Section 14. Merger or Consolidation or Change of Name of Warrant Agent....12
Section 15. Duties of Warrant Agent.......................................12
Section 16. Change of Warrant Agent.......................................14
Section 17. Legends.......................................................14
Section 18. Notices.......................................................15
Section 19. Supplements and Amendments....................................15
Section 20. New York Contract.............................................16
Section 21. Benefits of this Agreement....................................16
Section 22. Successors....................................................16
i
WARRANT AGREEMENT, dated as of March 10, 2000, between NUWAVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and AMERICAN STOCK
TRANSFER & TRUST COMPANY, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to offer for sale in a private offering
(the "Offering") pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), and/or Rule 506 of Regulation D promulgated
thereunder, an aggregate of not less than 30 and not more than 60 Units
("Units"), each Unit comprised of (i) a number of shares of common stock, par
value $.0l per share (the "Common Stock"), of the Company, determined by
dividing the purchase price per Unit of $100,000 (the "Offering Price") by, for
each closing of the Offering, eighty percent (80%) of the then "Average Closing
Sale Price," and (ii) Common Stock Purchase Warrants (the "Warrants") to
purchase fifty percent (50%) of such number of shares of Common Stock of the
Company (the "Warrant Shares") included in each Unit. The Average Closing Sale
Price shall be the average closing sale price for the Common Stock for the eight
(8) consecutive trading days preceding the initial closing (the "Initial
Closing") date or each subsequent closing date (a "Closing Date") of the
Offering, as more particularly described in the Confidential Private Placement
Memorandum dated February 14, 2000 (the "Offering Memorandum");
WHEREAS, in connection with the Offering, and in partial compensation
for acting as placement agent therein, the Company will give to ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Associates, L.P. ("▇▇▇▇▇▇▇-▇▇▇▇▇▇") Placement Agent Warrants (the "Placement
Agent Warrants") to purchase 25% of the aggregate number of shares sold in the
Offering at an exercise price equal to the Exercise Price until March 14,
2003; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and exercise of the Warrants.
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent; Issuance of Warrants.
--------------------------------------------------
(a) The Company hereby appoints the Warrant Agent to act as
warrant agent for the Company in accordance with the instructions hereinafter
set forth in this Agreement, and the Warrant Agent hereby accepts such
appointment.
(b) At each Closing contemplated in the Offering
Memorandum, and upon exercise of the Placement Agent Warrants as provided
therein, appropriate number of Warrants shall be executed by the Company and
delivered to the Warrant Agent.
Section 2. Form of Warrant.
---------------
The text of the Warrants and the forms of election to purchase Common
Stock attached to the Warrants shall be substantially as set forth in Exhibit A
attached hereto (the provisions of which are hereby incorporated herein). All of
the certificates for the Warrants may have such letters, numbers or other marks
of identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. Each Warrant shall initially
entitle the registered holder thereof to purchase one share of Common Stock at a
purchase price equal to the Initial Average Closing Sale Price (as adjusted as
hereinafter provided, the "Exercise Price"), at any time during the period (the
"Exercise Period") commencing on the Final Closing Date (as defined in the
Offering Memorandum) and expiring at 5:00 p.m. Eastern Time on March ___, 2003.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events, all as hereinafter provided. The Warrants shall be executed on
behalf of the Company by the manual or facsimile signature of the present or any
future President or Vice President of the Company, and attested to by the manual
or facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company.
Warrants shall be dated as of the date of issuance by the Warrant
Agent either upon initial issuance or upon transfer or exchange.
In the event the aforesaid expiration date of the Warrants falls on a
day that is not a business day, then the Warrants shall expire at 5:00 p.m. New
York time on the next succeeding business day. For purposes hereof, the term
"business day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in New York City, New York, are authorized or
obligated by law to be closed.
Section 3. Countersignature and Registration.
---------------------------------
The Warrant Agent shall maintain books (the "Warrant Register") for
the transfer and registration of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof. The Warrants shall be countersigned manually
or by facsimile by the Warrant Agent (or by any successor to the Warrant Agent
then acting as warrant agent under this Agreement) and shall not be valid for
any purpose unless so countersigned. The Warrants may, however, be so
countersigned by the Warrant Agent (or by its successor as Warrant Agent) and be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature or delivery.
Section 4. Transfers and Exchanges.
-----------------------
The Warrant Agent shall transfer, from time to time, any outstanding
Warrants upon the books to be maintained by the Warrant Agent for that purpose,
upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be cancelled
by the Warrant Agent. Warrants so cancelled shall be delivered by the Warrant
Agent to the Company from time to time upon request. Warrants may be exchanged
at the option of the holder thereof, when surrendered at the office of the
Warrant Agent, for another Warrant, or other Warrants of different denominations
of like tenor and representing in the aggregate the right to purchase a like
2
number of shares of Common Stock. No certificates for Warrants shall be issued
except for (i) Warrants initially issued hereunder in accordance with Section 1
hereof, (ii) Warrants issued upon any transfer or exchange of Warrants, (iii)
Warrants issued in replacement of lost, stolen, destroyed or mutilated
certificates for Warrants pursuant to Section 7 hereof, and (iv) at the option
of the Board of Directors of the Company, Warrants in such form as may be
approved by its Board of Directors, to reflect any adjustment or change in the
Exercise Price or the number of shares of Common Stock purchasable upon exercise
of the Warrants made pursuant to Section 9 hereof. Notwithstanding any of the
foregoing, the Warrant Agent and the Company shall have no obligation to cause
Warrants to be transferred on the Warrant Register to any person if, in the
opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act and the rules and regulations promulgated
thereunder.
Section 5. Exercise of Warrants.
--------------------
(a) The Warrant may be exercised, in whole or in part, at
any time and from time to time during the Exercise Period by delivery to the
Warrant Agent of (i) the Warrant; (ii) the Cash Exercise Form attached to the
Warrant duly executed by the registered holder and (iii) the full Exercise Price
for each share of Warrant Shares as to which the Warrant is exercised.. Payment
of any Exercise Price shall be made by wire transfer in cash or by certified or
bank check payable to the Company.
(b) Subject to Section 6 hereof, upon receipt by the
Company of the Warrant, the Cash Exercise Form and the aggregate Exercise Price
for the Warrant Shares, the registered holder shall be deemed to be the holder
of record of the Warrant Shares issuable upon such exercise; provided, however,
that if the date of such receipt is a date upon which the transfer books of the
Company are closed, the registered holder shall be deemed to be the record
holder on the next succeeding business day on which such books are open. As soon
as practicable after each such exercise of the Warrant, the Warrant Agent shall
issue and cause to be delivered to the registered holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in
the name of the holder or its designee. If the Warrant should be exercised in
part only, the Warrant Agent shall, upon surrender of the Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
holder to purchase the remaining unexercised balance of the Warrant Shares (or
portions thereof) subject to purchase thereunder. The Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrants
pursuant to the provisions of this Section and the Company, whenever requested
by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed
on behalf of the Company for such purpose. Upon the exercise of any one or more
Warrants, the Warrant Agent shall promptly notify the Company in writing of such
fact and of the number of securities delivered upon such exercise and, subject
to the provisions below, shall cause all payments of an amount (if any), by wire
transfer or in cash or by check made payable to the order of the Company, equal
to the aggregate Exercise Price for such Warrants to be deposited promptly in
the Company's bank account. The Company and Warrant Agent shall determine, in
their sole and absolute discretion, whether a Warrant certificate has been
properly completed for exercise by the registered holder thereof.
3
(c) The Warrant Agent and the Company shall be entitled
to treat the registered holder of any Warrant on the Warrant Register as the
owner in fact thereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration or transfer of Warrants
which are registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration or
transfer, or with the knowledge of such facts that its participation therein
amounts to bad faith.
(d) Notwithstanding anything to the contrary contained
herein, no Warrant will be exercisable and the Company shall not be obligated to
deliver any securities pursuant to the exercise of any Warrant unless at the
time of exercise (i) the Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), covering the securities issuable
upon exercise of such Warrant and such registration statement shall have been
declared and shall remain effective and shall be current, and such shares have
been registered or qualified or be exempt under the securities laws of the state
or other jurisdiction of residence of the holder of such Warrant and the
exercise of such Warrant in any such state or other jurisdiction shall not
otherwise be unlawful, or (ii) the Company has received an opinion of counsel to
the registered holder of such Warrant, which counsel and opinion are reasonably
satisfactory to the Company, that such securities may be issued in the manner
contemplated without an effective registration statement under the Securities
Act or applicable state securities laws.
Section 6. Payment of Taxes.
----------------
The issuance of any shares or other securities upon the exercise of
the Warrant, and the delivery of certificates or other instruments representing
such shares or other securities, shall be made without charge to the registered
holder for any tax or other charge in respect of such issuance. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer or delivery of the Warrant to a person other than, or the
issuance and delivery of any certificate in a name other than, that of the
registered holder and the Company shall not be required to issue or deliver any
new Warrant or such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
Section 7. Mutilated or Missing Warrants.
-----------------------------
In case any of the Warrants shall be mutilated, lost, stolen or
destroyed, the Company may, in its discretion, issue and the Warrant Agent shall
countersign and deliver in exchange and substitution for and upon cancellation
of the mutilated Warrant, or in lieu of and in substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction and, in
case of a lost, stolen or destroyed Warrant, indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrants shall also comply
with such other reasonable regulations and pay such reasonable charges as the
Company or the Warrant Agent may prescribe.
4
Section 8. Reservation of Common Stock.
---------------------------
There have been reserved, and the Company shall at all times keep
reserved, out of its authorized shares of Common Stock, a number of shares of
Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the Warrants, and the transfer agent for the shares of Common
Stock and every subsequent transfer agent for any shares of Common Stock
issuable upon the exercise of any of the aforesaid rights of purchase are
irrevocably authorized and directed at all times to reserve such number of
authorized shares of Common Stock as shall be required for such purpose. The
Company agrees that all shares of Common Stock issued upon exercise of the
Warrants shall be, at the time of delivery of the certificates for such shares
against payment of the Exercise Price therefor, if any, validly issued, fully
paid and nonassessable. The Company will keep a copy of this Agreement on file
with the transfer agent for the shares of Common Stock (which may be the Warrant
Agent) and with every subsequent transfer agent for any shares of Common Stock
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is irrevocably authorized to requisition from time
to time from such transfer agent stock certificates required to honor
outstanding Warrants. The Company will supply such transfer agent with duly
executed stock certificates for that purpose. All Warrants surrendered in the
exercise of the rights thereby evidenced shall be cancelled by the Warrant Agent
and shall thereafter be delivered to the Company, and such cancelled Warrants
shall constitute sufficient evidence of the number of shares of Common Stock
which have been issued upon the exercise of such Warrants. Promptly after the
date of expiration of the Warrants, the Warrant Agent shall certify to the
Company the total aggregate amount of Warrants then outstanding, and thereafter
no shares of Common Stock shall be subject to reservation in respect of such
Warrants which shall have expired.
Section 9. Adjustments of Exercise Price and Number of Securities.
------------------------------------------------------
(a) (i) In case the Company shall at any time after the date
the Warrant is first issued (A) declare a dividend on any class of the
outstanding capital stock of the Company (the "Capital Stock") payable in shares
of its Capital Stock, (B) subdivide any class of the outstanding Capital Stock,
or (C) combine any class of the outstanding Capital Stock into a smaller number
of shares, but only if such combination is effective after such time as, were an
exercise of the Warrant to take place, in whole or in part, then, in each case,
the Exercise Price, and the number of Warrant Shares issuable upon exercise of
the Warrant, in effect at the time of the record date for such dividend or of
the effective date of such subdivision, or combination, shall be proportionately
adjusted so that the holder after such time shall be entitled to receive the
aggregate number and kind of shares for such consideration which, if such
Warrant had been exercised immediately prior to such time at the then-current
Exercise Price, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, or combination. Such adjustment
shall be made successively whenever any event listed above shall occur.
(ii) No adjustment in the Exercise Price shall be
required if such adjustment is less than $.05; provided, however, that any
adjustments which by reason of this Section 9(a)(ii) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 9(a) shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be.
5
(iii)Whenever there shall be an adjustment as provided
in this Section 9(a), the Company shall promptly cause written notice thereof to
be sent by certified mail, postage prepaid, to the Warrant Agent and the
holders, at its address as it shall appear in the Warrant Register, which notice
shall be accompanied by an officer's certificate setting forth the number of
Warrant Shares purchasable upon the exercise of the Warrant and the Exercise
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
(iv) The Company shall not be required to issue
fractions of shares of Common Stock of the Company upon the exercise of the
Warrant. If any fraction of a share would be issuable on the exercise of the
Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the current market
price of such share of Common Stock on the date of exercise of the Warrant.
(b) (i) In case of any consolidation with or merger of the
Company with or into another corporation (other than a merger or consolidation
in which the Company is the surviving or continuing corporation), or in case of
any sale, lease, or conveyance to another corporation of the property and assets
of any nature of the Company as an entirety or substantially as an entirety,
such successor, leasing, or purchasing corporation, as the case may be, shall
(i) provide the registered holder with an executed agreement stating that the
holder shall have the right thereafter to receive upon exercise of the Warrant
solely the kind and amount of shares of stock and other securities, property,
cash, or any combination thereof receivable upon such consolidation, merger,
sale, lease, or conveyance by a holder of the number of shares of Common Stock
for which the Warrant might have been exercised immediately prior to such
consolidation, merger, sale, lease, or conveyance. Such agreement shall provide
for adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 9(a).
(ii) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrant (other than a
change in par value or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
shares of Common Stock (other than a change in par value, or from no par value
to a specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the registered holder shall have the right thereafter to receive upon
exercise of the Warrant solely the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the number of
shares of Common Stock for which the Warrant might have been exercised
immediately prior to such reclassification, change, consolidation, or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 9(a).
6
(iii)The above provisions of this Section 9(b) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales, leases, or conveyances.
(c) Notwithstanding anything herein to the contrary, no
adjustment of the Exercise Price shall be made:
(i) Upon the issuance or sale of the Placement Agent
Warrants, the shares of Common Stock or Warrants issuable upon the exercise of
the Placement Agent Warrants or the shares of Common Stock issuable upon
exercise of the Warrants underlying the Placement Agent Warrants; or
(ii) Upon the issuance or sale of (A) the shares of
Common Stock or Warrants issued by the Company in the Offering, or (B) the
shares of Common Stock (or other securities) issuable upon exercise of Warrants;
or
(iii)Upon (A) the issuance of options pursuant to the
Company's incentive stock option plan in effect on the date hereof or as
hereafter amended in accordance with the terms thereof or any other employee or
executive stock option plan approved by the stockholders of the Company or the
sale by the Company of any shares of Common Stock pursuant to the exercise of
any such options, or (B) the sale by the Company of any shares of Common Stock
pursuant to the exercise of any options or warrants issued and outstanding on
the date hereof.
(d) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrants and the Placement Agent Warrants
shall terminate on a date fixed by the Company, such date to be no earlier than
ten (10) days prior to the effectiveness of such dissolution, liquidation or
winding-up and not later than five (5) days prior to such effectiveness. Notice
of such termination of purchase rights shall be given to each registered holder
of the Warrants, as the same shall appear on the books of the Company maintained
by the Warrant Agent, by registered mail at least thirty (30) days prior to such
termination date.
Section 10. Registration.
-------------
(a) The Company will use its best efforts to file a
registration statement (the "Registration Statement") under the Securities Act,
therein registering the Warrants and the Warrant Shares (the "Registrable
Securities") upon demand by a majority of the holders of the Shares or the
Warrant Shares, after 180 days of the final closing of the Offering (the "Filing
Date"), and use its best efforts to have the Registration Statement declared
effective by the Commission as soon as possible thereafter (the "Effective
Date"). In the event the Registration Statement is not declared effective within
60 days after a demand for registration, the then number of Warrants shall be
increased by two percent (2%), effective as of the end of such 60 day period and
by an additional two percent (2%) on each one month anniversary thereafter,
until such time that the number of Warrants should equal 120% of the original
number of Warrants. The Company agrees to keep the Registration Statement
effective until the expiration period of the Warrants.
7
(b) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall use its best efforts to cause
the Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the holder or
such holders (the "Eligible Holders") may reasonably request; provided, however,
that the Company shall not by reason of this Section 10(b) be required to
qualify to do business in any state in which it is not otherwise required to
qualify to do business or to file a general consent to service of process.
(c) The Company shall keep effective any registration or
qualification contemplated by this Section 10 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document, and communication for such period of
time as shall be required to permit the Eligible Holders to complete the offer
and sale of the Registrable Securities covered thereby.
(d) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall furnish to each Eligible Holder
such reasonable number of copies of the registration statement and of each
amendment and supplement thereto (in each case, including all exhibits), such
reasonable number of copies of each prospectus contained in such registration
statement and each supplement or amendment thereto (including each preliminary
prospectus), all of which shall conform to the requirements of the Securities
Act and the rules and regulations thereunder, and such other documents, as any
Eligible Holder may reasonably request to facilitate the disposition of the
Registrable Securities included in such registration.
(e) In the event of a registration pursuant to the provision
of this Section 10, the Company and each Eligible Holder shall enter into a
cross-indemnity agreement and a contribution agreement, each in customary form,
with each underwriter, if any, and, if requested, enter into an underwriting
agreement containing customary representations, warranties, allocation of
expenses, and customary closing conditions, including, without limitation,
opinions of counsel and accountants' cold comfort letters, with any underwriter
who acquires any Registrable Securities.
(f) The Company agrees that until all the Registrable
Securities have been sold under a registration statement or pursuant to Rule 144
under the Securities Act, it shall keep current in filing all reports,
statements and other materials required to be filed with the Commission to
permit holders of the Registrable Securities to sell such securities under Rule
144.
Section 11. Indemnification.
---------------
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless each Eligible Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), from and against any and all loss, liability, charge, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 11,
without limitation, reasonable attorneys, fees and any and all expense
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
8
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with, any breach of any
representation, warranty, covenant, or agreement of the Company contained in any
of the Warrants, any untrue statement or alleged untrue statement of a material
fact contained (i) in any registration statement, preliminary prospectus, or
final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, relating to the sale of any of the Registrable
Securities, or (ii) in any application or other document or communication (in
this Section 11, collectively called an "application") executed by or on behalf
of the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to register or qualify any of the
Registrable Securities under the securities or Blue Sky laws thereof or filed
with the commission or any securities exchange; or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company with respect to such Eligible Holder by or on behalf of such
person expressly for inclusion in any registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. Notwithstanding the foregoing, the Company
shall not be responsible for any failure of ▇▇▇▇▇▇▇-▇▇▇▇▇▇ to file, on behalf of
the Company, blue sky applications in jurisdictions where ▇▇▇▇▇▇▇-▇▇▇▇▇▇ is
offering Units and where such application is required by law. The foregoing
agreement to indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under any of the Warrants.
If any action is brought against any Eligible Holder or any of
its officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such indemnified party or parties shall promptly notify the Company in writing
of the institution of such action (but the failure to so notify shall not
relieve the Company from any liability under this Section 11(a) unless the
Company shall have been materially prejudiced by such failure or relieve the
Company from any liability other than pursuant to this Section 11(a)) and the
Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties) and payment of expenses. Such indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have employed counsel reasonably satisfactory to such
indemnified party or parties to have charge of the defense of such action or
such indemnified party or parties shall have reasonably concluded that there may
be one or more legal defenses available to it or them or to other indemnified
parties which are different from or additional to those available to the
Company, in any of which events such fees and expenses shall be borne by the
Company and the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties. Anything in this Section
11 to the contrary notwithstanding, the Company shall not be liable for any
settlement of any such claim or action effected without its written consent,
which shall not be unreasonably withheld. The Company agrees promptly to notify
the Eligible Holders of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with the
sale of any Registrable Securities or any preliminary prospectus, final
prospectus, registration statement, or amendment or supplement thereto, or any
9
application relating to any sale of any Registrable Securities.
(b) The registered holder of Warrants agrees to indemnify
and hold harmless the Company, each director of the Company, each officer of the
Company who shall have signed any registration statement covering Registrable
Securities held by the holder, each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, and its or their respective counsel, to the same extent as
the foregoing indemnity from the Company to the Eligible Holders in Section
11(a), but only with respect to statements or omissions, if any, made in any
registration statement, preliminary prospectus, or final prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
or in any application, in reliance upon and in conformity with written
information furnished to the Company with respect to the registered holder by or
on behalf of the registered holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified (an "indemnified party") based on any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, and in respect of which indemnity may be sought
against the registered holder pursuant to this Section 11(b), the registered
holder shall have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and duties given to
the indemnified parties, by the provisions of Section 11(a).
(c) To provide for just and equitable contribution, if (i)
an indemnified party makes a claim for indemnification pursuant to Section 11(a)
or 11(b) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, even though this Agreement expressly provides
for indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise, then
the Company, as one entity, and the Eligible Holders of the Registrable
Securities included in such registration in the aggregate, as a second entity,
shall contribute to the losses, liabilities, claims, damages, and expenses
whatsoever to which any of them may be subject, on the basis of relevant
equitable considerations such as the relative fault of the Company and such
Eligible Holders in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission,
shall be determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by the
Company or by such Eligible Holders, and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement, alleged statement, omission, or alleged omission. The Company and the
Eligible Holders agree that it would be unjust and inequitable if the respective
obligations of the Company and the Eligible Holders for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages, and expenses (even if the Eligible Holders and the
other indemnified parties were treated as one entity for such purpose) or by any
other method of allocation that does not reflect the equitable considerations
referred to in this Section 11(c). In no case shall any Eligible Holder be
responsible for a portion of the contribution obligation imposed on all Eligible
10
Holders in excess of its pro rata share based on the number of shares of Common
Stock owned (or which would be owned upon exercise of all Registrable
Securities) by it and included in such registration as compared to the number of
shares of Common Stock owned (or which would be owned upon exercise of all
Registrable Securities) by all Eligible Holders and included in such
registration. No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
representation. For purposes of this Section 11(c), each person, if any, who
controls any Eligible Holder within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent, and counsel of each such Eligible Holder or control person
shall have the same rights to contribution as each Eligible Holder or control
person and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed any such registration statement,
each director of the Company, and its or their respective counsel shall have the
same rights to contribution as the Company, subject in each case to the
provisions of this Section 11(c). Anything in this Section 11(c) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 11(c) is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
Section 12. Disposition of Proceeds on Exercise of Warrants.
-----------------------------------------------
(a) The Warrant Agent shall promptly forward to the Company
all monies received by the Warrant Agent for the purchase of shares of Common
Stock through the exercise of the Warrants.
(b) The Warrant Agent shall keep copies of this Agreement
available for inspection by holders of Warrants during normal business hours.
Section 13. Redemption of Warrants.
----------------------
The Warrants are redeemable by the Company commencing twelve (12)
months after the Effective Date, in whole or in part, on not less than thirty
(30) days prior written notice at a redemption price of $.01 per Warrant (or
earlier with the prior consent of ▇▇▇▇▇▇▇-▇▇▇▇▇▇), provided the average closing
bid quotation of the Common Stock as reported on the Nasdaq SmallCap Market, if
traded thereon, or if not traded thereon, the average closing sale price if
listed on a national securities exchange (or other reporting system that
provides last sale prices), has been at least 250% of the then current Exercise
Price of the Warrants, for a period of 30 consecutive trading days ending within
five days prior to the date on which the Company gives notice of redemption. Any
redemption in part shall be made pro rata to all Warrant holders. The redemption
notice shall be mailed to the holders of the Warrants at their respective
addresses appearing in the Warrant Register. Any such notice mailed in the
manner provided herein shall be conclusively presumed to have been duly given in
accordance with this Agreement whether or not the registered holder receives
such notice. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a registered holder of a Warrant (i) to whom notice was not mailed
or (ii) whose notice was defective. An affidavit of the Warrant Agent or the
Secretary or Assistant Secretary of the Company that notice of redemption has
11
been mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein. Holders of the Warrants will have exercise rights until the
close of business on the day immediately preceding the date fixed for
redemption. On and after the date fixed for redemption, the holder shall have no
right with respect to the Warrant except to receive $.01 per Warrant upon
surrender of the Warrant.
Notwithstanding anything to the contrary contained herein, no Warrant
will be redeemable unless at the time of redemption, the Company has filed with
the Commission a registration statement under the Securities Act, covering the
Warrant Shares and such registration statement shall have been declared and
shall remain effective and shall be current, and such Warrant Shares have been
registered or qualified or be exempt under the securities laws of the state or
other jurisdiction of residence of the holder of such Warrant and the redemption
of such Warrant in any such state or other jurisdiction shall not otherwise be
unlawful.
Section 14. Merger or Consolidation or Change of Name of Warrant
----------------------------------------------------
Agent.
-----
Any corporation or company which may succeed to the corporate trust
business of the Warrant Agent by any merger or consolidation or otherwise shall
be the successor to the Warrant Agent hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto;
provided, that such corporation would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 16 of this Agreement. In case at
the time such successor to the Warrant Agent shall succeed to the agency created
by this Agreement any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrants so countersigned. In all such cases such Warrants shall
have the full force provided in the Warrants and in this Agreement.
Section 15. Duties of Warrant Agent.
-----------------------
The Warrant Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Warrants, by their acceptance thereof, shall be
bound:
(a) The statements of fact and recitals contained herein and
in the Warrants shall be taken as statements of the Company, and the Warrant
Agent assumes no responsibility for the correctness of any of the same except as
such describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrants except as herein expressly provided.
(b) The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants in this Agreement or
in the Warrants.
12
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant for any action
taken in reliance on any notice, resolution, waiver, consent, order, certificate
or other instrument believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and other charges incurred by the Warrant Agent
in the execution of this Agreement and to indemnify the Warrant Agent and save
it harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement except as a result of the Warrant Agent's
negligence, willful misconduct or bad faith.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expenses unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceeding.
(g) The Warrant Agent and any stockholder, director,
officer, partner or employee of the Warrant Agent may buy, sell or deal in any
of the Warrants or other securities of the Company or become peculiarly
interested in any transaction in which the Company may be interested, or
contract with or lend money to or otherwise act as fully and freely as though it
were not the Warrant Agent under this Agreement. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent
and its duties shall be determined solely by the provisions hereof.
(i) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys, agents or employees, and the Warrant Agent shall
not be answerable or accountable for any such attorneys, agents or employees or
for any loss to the Company resulting from such neglect or misconduct provided
reasonable care had been exercised in the selection and continued employment
thereof.
13
(j) Any request, direction, election, order or demand of the
Company shall be sufficiently evidenced by an instrument signed in the name of
the Company by its President or a Vice President or its Secretary or an
Assistant Secretary or its Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.
Section 16. Change of Warrant Agent.
-----------------------
The Warrant Agent may resign and be discharged from its duties under
this Agreement by giving to the Company notice in writing, and to the holders of
the Warrants notice by mailing such notice to the holders at their respective
addresses appearing on the Warrant Register, of such resignation, specifying a
date when such resignation shall take effect. The Warrant Agent may be removed
by like notice to the Warrant Agent from the Company and the like mailing of
notice to the holders of the Warrants. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of action, the Company shall appoint
a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after such removal or after it
has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Warrant Agent or after the Company has received such notice
from a registered holder of a Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under New York or federal law. After appointment, the
successor Warrant Agent shall be vested with the same powers, rights, duties and
responsibility as if it had been originally named as Warrant Agent without
further act or deed and the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent all canceled Warrants, records and property at the
time held by it hereunder, and execute and deliver any further assurance or
conveyance necessary for this purpose. Failure to file or mail any notice
provided for in this Section, however, or any defect therein, shall not affect
the validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.
Section 17. Legends.
-------
Unless registered pursuant to the provisions of Section 10 hereof, the
Warrant Shares issued upon exercise of the Warrants shall be subject to a stop
transfer order and the certificate or certificates evidencing such Warrant
Shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO
14
IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO
THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS."
In addition, unless registered pursuant to the provisions of Section
10 hereof, any Warrants issued upon transfer or any new Warrants issued shall
bear a similar legend.
Section 18. Notices.
--------
Any notice pursuant to this Agreement to be given by the Warrant Agent
or the registered holder of any Warrant to the Company, shall be sufficiently
given if sent by first-class mail, postage prepaid, addressed (until another is
filed in writing by the Company with the Warrant Agent) as follows:
NUWAVE Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
and a copy thereof to:
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Any notice pursuant to this Agreement to be given by the Company or
the registered holder of any Warrant to the Warrant Agent shall be sufficiently
given if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company) as follows:
American Stock Transfer & Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Section 19. Supplements and Amendments.
---------------------------
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters or
15
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and which shall not materially adversely affect the interest of
the holders of Warrants; and in addition the Company and the Warrant Agent may
modify, supplement or alter this Agreement with the consent in writing of the
registered holders of the Warrants representing not less than a majority of the
Warrants then outstanding.
Section 20. New York Contract.
-----------------
This Agreement and each Warrant issued hereunder shall be deemed to be
a contract made under the laws of the State of New York and shall be construed
in accordance with the laws of New York without regard to the conflicts of law
principles thereof.
Section 21. Benefits of this Agreement.
--------------------------
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the registered holders
of the Warrants any legal or equitable right, remedy or claim under this
Agreement. This Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent and the registered holders of the Warrants.
Section 22. Successors.
----------
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
16
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
NUWAVE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Chief Financial Officer and
Corporate Secretary
AMERICAN STOCK
TRANSFER & TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
17