EXHIBIT 10.39
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of February 27, 2002, by and between NUWAVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and XXXX X.
XXXXXXXX, (the "Purchaser").
WHEREAS, the Company desires to sell 214,286 shares (the "Shares") of its
common stock, $.01 par value (the "Common Stock"), and warrants to purchase
50,000 shares of its Common Stock (the "Warrants"), and
WHEREAS, the Purchaser desires to purchase the Shares and the Warrants from
the Company, and the Company desires to sell such Shares and Warrants, upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
obligations contained herein and other valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
ARTICLE I.
STOCK PURCHASE AND DELIVERY OF THE SHARES AND THE WARRANTS
1.1 Purchase of the Shares and the Warrants. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations,
warranties and agreements contained herein, the Purchaser hereby purchases from
the Company, and the Company hereby sells to the Purchaser, the Shares and the
Warrants at an aggregate purchase price of $150,000 (the "Purchase Price"). The
Warrants shall be exercisable until five (5) years from the date hereof, at an
exercise price of $1.00 per share, and upon such other terms as set in the
Warrant Agreement in or substantially in the form attached hereto as Exhibit A.
1.2 Payment of Purchase Price. The Purchaser is paying for the Shares and
the Warrants by contemporaneous delivery to the Company of the Purchase Price,
by wire transfer to an account designated by the Company, and the Company is
delivering to the Purchaser a certificate for the Shares and the Warrant
Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereunder, the Company hereby
represents and warrants to the Purchaser as follows:
2.1 Existence. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and is in good
standing as a foreign corporation in the State of New Jersey.
2.2 Capitalization. The authorized capital stock of the Company consists of
40,000,000 shares of Common Stock, $.01 par value, and 2,000,000 shares of
preferred stock, $.01 par value (the "Preferred Stock"). As of February 7, 2002,
12,002,651 shares of the Company's Common Stock and no shares of the Company's
Preferred Stock were issued and outstanding. In addition, at that date there
were 9,349,980 warrants and 1,638,000 options outstanding for the purchase of
shares of Common Stock.
2.3 Fully Paid and Non-Assessable Shares. The Shares, when issued, sold and
delivered pursuant to the provisions of this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock of the
Company. The Common Stock underlying the Warrants (the "Warrant Shares"), when
issued upon due exercise of the Warrants, will be duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of the Company.
2.4 Authority. The execution, delivery and performance by the Company of
this Agreement and the Warrant Agreement and the issuance of the Shares and the
Warrants have been duly authorized by the Company, and the Company has all
necessary power and authority to issue the Shares and the Warrants and to
execute, deliver and perform this Agreement and the Warrant Agreement. This
Agreement and the Warrant Agreement each has been duly and validly executed and
delivered by the Company and (assuming the valid execution and delivery hereof
and thereof by the Purchaser) constitutes the legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its
respective terms, except that such validity, binding effect and enforceability
may be limited by applicable bankruptcy and other similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before which any
proceeding therefor may be brought (whether at law or in equity).
2.5 No Conflicts; Consents. The execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby will not (i) violate any provision of the Company's Certificate of
Incorporation or By-Laws, each as amended to date; (ii) require the Company to
obtain any consent, approval, permit or action of or waiver from, or make any
filing with, or give any notice to, any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any court or
arbitrator, or any governmental agency or political subdivision (a "Governmental
Body") or any other person; (iii) violate, conflict with or result in a breach
or default under any contract or restriction relating to, or which affects, the
Shares or to which the Company is a party or by which the Company may be bound
or subject; or (iv) violate any law or order of any Governmental Body against,
or binding upon, the Company.
2.6 Securities. The Company's Common Stock is registered under the
Securities Exchange Act of 1934, as amended, and the Company is current in
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filing its reports on Forms 10-QSB and 10-KSB thereunder. The Common Stock is
listed on the NASDAQ SmallCap Market.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
In order to induce the Company to enter into this Agreement and to
consummate the transactions contemplated hereunder, the Purchaser hereby
represents and warrants to the Company as follows:
3.1 Authority and Performance of this Agreement. This Agreement constitutes
the legal, valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except that such validity, binding
effect and enforceability may be limited by applicable bankruptcy and other
similar laws affecting the enforcement of creditors' rights generally and except
that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought (whether at law or in
equity).
3.2 Investment Representations.
(a) Accredited Investor. The Purchaser is an "accredited investor" as
such term is defined in Rule 501 of Regulation D under the Securities Act of
1933, as amended (the "Securities Act"). The Purchaser has such knowledge, skill
and experience in business, financial and investment matters so that he is
capable of evaluating the merits and risks of an investment in the Securities.
The Purchaser has prior experience in investing in "restricted securities" under
Regulation D. The investment herein is consistent with the Purchaser's
investment objectives.
(b) Shares and Warrants Acquired for Investment Purposes. The
Purchaser is acquiring the Shares and Warrants hereunder solely for his own
account, for investment purposes, and not with a view to the resale, transfer or
assignment of any of the Shares or the Warrants. The Purchaser acknowledges that
the delivery to the Purchaser by the Company of the Shares and the Warrants
pursuant to this Agreement has not been registered under the Securities Act or
any state securities law, and that neither the Shares nor the Warrants may be
sold or transferred other than pursuant to an effective registration statement
under the Securities Act or pursuant to an available exemption from such
registration, and he may have to bear the economic risk for a substantial
period.
(c) Risks. The Purchaser understands the fundamental aspects of and
risks involved in an investment in the Company, including (i) the speculative
nature of the investment, (ii) the financial hazards involved, including the
risk of losing the entire investment, (iii) the lack of liquidity, (iv) the
restrictions on transferability of the Shares and the Warrants and (v) the
inherent risks relating to the business of the Company. A memorandum summarizing
such risks has been furnished to the Purchaser from the Company.
(d) Access. The Purchaser has received and read the Company's Form
10-KSB for the fiscal year ended December 31, 2000, each of its Form 10-QSB's
for the fiscal quarters ended March 31, 2001, June 30, 2001 and September 30,
2001, and its Proxy Statements on Schedule 14A filed on April 30, 2001 and
November 9, 2001. The Purchaser has been afforded the opportunity to obtain
information about the Company and to have all of his inquiries to the Company
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answered in full, and to have been furnished all materials reasonably requested
relating to the Company, his purchase of the Shares and the Warrants and any
other material information.
(e) Legend; Stop Transfer. The Purchaser acknowledges that the
certificate or certificates representing the Shares and the certificate
representing the Warrants the Purchaser is purchasing hereby shall bear the
following restrictive legends on the reverse side thereof:
THE SECURITIES 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 ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
STATE LAWS. THE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD
WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, UNLESS (IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY) AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE LAWS IS
THEN AVAILABLE.
The Purchaser is aware that the Company will instruct its transfer agent to make
a stop transfer notation in its appropriate records with respect to the
restrictions on the transferability of the Shares.
(f) Finder's Fee. The Purchaser acknowledges that the Company will pay
a finder's fee for the sale of the Shares and the Warrants to Xxxxx Xxxxxx
Associates in the amount equal to 1% of the Purchase Price.
ARTICLE IV.
REGISTRATION RIGHTS
4.1 "Piggyback" Registration. If the Company, at any time from the date
hereof until July 31, 2002, proposes to register any shares of its Common Stock
under the Securities Act (other than registrations (i) solely for the
registration of shares in connection with an employee benefit plan or a merger
or consolidation, (ii) pursuant to Section 4.2, or (iii) for the registration of
Common Stock underlying warrants or other rights issued and outstanding as of
the date hereof), whether or not for sale of its own account, and the
registration form to be used may be used for the registration of the Shares and
the Warrant Shares (a "Piggyback Registration"), the Company will give prompt
written notice to the Purchaser of its intention to do so and of the Purchaser's
rights under this Section 4.1). Upon the written request of the Purchaser made
within fifteen (15) days after the receipt of any such notice (which request
shall specify the number of Shares and the number of Warrant Shares (the
"Registrable Shares") intended to be disposed of by the Purchaser and the
intended method of distribution thereof), the Company will use its best efforts
to effect the registration under the Securities Act of Registrable Shares which
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the Company has been so requested to register by the Purchaser. If, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to the Purchaser and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Shares in connection with such
registration (but not from its obligation to pay the expenses in connection
therewith), and (ii) in the case of a determination to delay registering or to
delay the sale of the Registrable Shares thereunder, shall be permitted to delay
registering any Registrable Shares or the sale thereunder, for the same period
as the delay in registering such other securities or as requested by any
underwriter of other securities being included therein (provided that all
sellers of included securities (other than the Company) are similarly treated).
4.2 "Demand" Registration. The Purchaser shall have the right, beginning
thirty (30) days after the Company files its Form 10-KSB for the fiscal year
ended December 31, 2001, with the Securities and Exchange Commission (the
"SEC"), to demand by written notice to the Company ("Notice of Demand") that the
Company use its best efforts to effect the registration of the Shares (which
would include the Warrant Shares if the Warrants are exercised prior to the
filing of the Form S-3) the Securities Act on Form S-3 or such applicable form
as properly designated by the Company. The Company shall as expeditiously as
practicable, but in no event later than one hundred fifty (150) days after the
delivery of such Notice of Demand, prepare and file with the SEC a registration
statement (the "Demand Registration") under the Securities Act and use its best
efforts to cause such Demand Registration to become effective. The Company shall
use its best efforts to maintain the Registration Statement current under the
Securities Act from its effective date until the date which is two (2) years
from the date of this Agreement or until all Shares included therein have been
sold, if earlier. Subject to Section 4.1 hereof the Company may include the
Shares in a registration statement being filed by the Company with respect to
other securities of the Company.
4.3 Costs; Prospectuses; Qualification for Sale. The Company shall bear the
entire cost and expense of registering the Registrable Shares under any
Registration Statement filed by it under this Article. The Company shall supply
prospectuses and such other documents as the Purchaser may request and shall
qualify the Registrable Shares for sale in such jurisdictions as requested;
provided, however, that the Company reserves the right, in its sole discretion,
not to qualify the Registrable Shares in any jurisdiction where the Company
would be required to qualify as a foreign corporation and is not otherwise
required to be qualified therein. The obligation of the Company under this
Article shall be limited to one Registration Statement which is declared
effective under the Securities Act.
4.4 Indemnification; Selling Stockholder Agreement. As a condition to the
Company filing a registration under this Article, the Purchaser agrees to
provide to the Company the usual and customary indemnifications and to enter
into a customary selling shareholder agreement with the Company in connection
with the Registrable Shares, as may be reasonably requested by the Company.
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ARTICLE V.
INDEMNIFICATION
5.1 The Purchaser acknowledges that it understands the meaning and legal
consequences of the representations and warranties contained in Article 3. The
Purchaser hereby agrees to indemnify and hold harmless the Company, and the
Company's officers and directors, from and against any and all loss, damage or
liability due to or arising out of a breach of any representation or warranty
made by it in this Agreement.
ARTICLE VI.
MISCELLANEOUS.
6.1 Entire Agreement. This Agreement contains the entire agreement between
the Purchaser and the Company with respect to the matters set forth herein, and
this Agreement supersedes all prior agreements and understandings between them
as to the subject matter hereof.
6.2 Benefits. All of the terms and provisions of this Agreement shall bind
and inure to the benefit of the Company and the Purchaser and their respective
successors and assigns. The Purchaser may not transfer or assign this Agreement
without the prior written consent of the Company.
6.3 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of Delaware, without giving effect to the principles of
conflicts of law.
6.4 Severability. If any provision of this Agreement shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.
6.5 Modification, Waivers, Etc. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
6.6 Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given and shall be effective upon
receipt if delivered by hand, or sent by certified or registered United States
mail, postage prepaid and return receipt requested, or by prepaid overnight
express service or facsimile transmission (with receipt confirmed). Notices
shall be sent to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice; provided that such
notice shall be effective only upon receipt thereof):
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If to the Company:
NUWAVE Technologies, Inc.
Xxx Xxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
Attn: Chief Financial Officer
If to the Purchaser:
Xxxx X. Xxxxxxxx
c/o Pathfinder Advisory Services
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
6.7 Captions. The captions of articles and sections of this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
NUWAVE TECHNOLOGIES, INC.
By:
-----------------------------
THE PURCHASER
-------------------------------
XXXX X. XXXXXXXX
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