EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT (this "AGREEMENT"), dated as of September 10 2003, by
and among NUWAVE TECHNOLOGIES INC., a Delaware corporation, with headquarters
located at 0 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000 (the "COMPANY"), and
CORNELL CAPITAL PARTNERS, LP, a Delaware Limited Partnership, with headquarters
located at 000 Xxxxxx Xxxxxx - Xxxxx 0000, Xxxxxx Xxxx, Xxx Xxxxxx 00000
("CORNELL")
WITNESSETH:
WHEREAS, the Company and the Cornell entered into a Securities Purchase
Agreement, Convertible Debenture, Registration Rights Agreement, Escrow
Agreement and Irrevocable Transfer Agent Instructions on (the "TRANSACTION
DOCUMENTS");
WHEREAS, the Company is in default of it obligations pursuant to the
Transaction Documents (the "OBLIGATIONS");
WHEREAS, in exchange for Cornell's agreement not to foreclose against the
Company and as a condition precedent to consideration for further financing the
parties hereto have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and Cornell hereby agree as
follows:
1. SETTLEMENT OF DEBTS.
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(a) Cornell shall enter into a new loan agreement with the Company for net
proceeds of $200,000 which will be deposited in escrow with Xxxxxx Xxxxxxxx LLP
$120,000 of which to be used for the payment of the Company's debts as outlined
in (b) & (c) below.
(b) The Company will negotiate settlement of its debts to creditors
described on Schedule "A" attached hereto for an amount riot to exceed Sixty
Thousand Dollars ($60,000) on or before September 24, 2003.
(c) The Company shall negotiate settlement of past due wages owed by the
Company and the offering of severance packages to the Company's employees for an
amount not to exceed Sixty Thousand Dollars ($60,000) on or before September 24,
2003.
2. ESCROW ARRANGEMENTS, FORM OF PAYMENT.
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(a) Upon receipt by Cornell of executed settlement and release agreements
from the creditors listed on Schedule "A" and a schedule for the payment of past
due wages owed by the Company and of the severance packages to the Company's
employees Cornell shall release payment to creditors directly from escrow and
release Sixty Thousand Dollars ($60,000) directly xxx escrow to the Company in
order for the Company to satisfy past due wages owed by the Company axed the
severance packages to the Company's employees.
3. RESIGNATIONS OF O'BRIEN AND ZARIN.
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Zarin and O'Brien shall each sign settlement agreements and releases
giving effect to the following:
(a) Zarin shall resign as Chairman, CEO and President of the Company and
O'Brien shall resign as Chief Financial Officer and Secretary of the Company
effective the following day after the release of funding from the escrow account
as outlined in this agreement.
(b) Upon resignation of their respective positions Zarin and O'Brien shall
cease to be employees of the Company, cease to be entitled to salaries and/or
any other benefits received as employees of the Company.
(c) In addition, Zarin and O'Brien shall each sign releases settling their
respective employment contracts. Upon receipt of such documents each will be
issued $40,000 and a warrant to purchase 100,000 shares of the Company's Common
Stock at an exercise price of One Dollar ($1.00) per share (the "WARRANTS"). The
Warrants shall be exercisable xxx xxx (5) years. The monies will be disbursed
directly from the escrow account.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to Cornell that, except as set forth
in the SEC Documents (defined as the Company's 10K filed for the year ended
December 31, 2002 and subsequent 10Q's filed for the periods ended, March 31,
2003 and June 30,2003).
(a) ORGANIZATION AND QUALIFICATION. The Company is duly organized and
validly existing in good standing under the laws of the jurisdiction in which it
is incorporated, and has the requisite corporate power to own its properties and
to carry on its business as now being conducted. The Company is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company taken as a whole.
(b) OUTSTANDING DEBTS. The debts outlined in Schedule "A" attached hereto
is a complete and accurate representations of the debts of the Company and the
Company represents to the best of its knowledge that there are no other
outstanding debts as of that date.
(c) AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER INSTRUMENTS. (i) The
Company has the requisite corporate power and authority to enter into and
perform this Agreement, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement and any related any and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by the Company's Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement, and any related agreements have been duly
executed and delivered by the Company, (iv) this Agreement, and any related
agreements constitute the valid and binding obligations of the Company
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enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies.
(d) Except as disclosed in the SEC Documents, as of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, (ii) there are no outstanding debt
securities and (iii) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of their securities under the
1933 Act (except pursuant to the Registration Rights Agreement) and (iv) there
are no outstanding comment letters from the SEC or any other regulatory agency.
(e) NO CONFLICTS. Except as disclosed in the SEC Documents, the execution,
delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby will not (i) result in a violation of
the Certificate of Incorporation, any certificate of designations of any
outstanding series of preferred stock of the Company or the Bylaws or (ii)
conflict with or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the rules and regulations
of The National Association of Securities Dealers Inc.'s OTC Bulletin Board on
which the Common Stock is quoted) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected. Except as disclosed in the SEC Documents,
neither the Company is in violation of any term of or in default under its
Certificate of Incorporation or By-laws or their organizational charter or
bylaws, respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company. The business of the Company is not
being conducted, and shall, not be conducted in violation of any material law,
ordinance, or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under or contemplated by this Agreement. Except as disclosed
in the SEC Documents, all consents, authorizations, orders, filings and
registrations which the Company is required, to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company and its subsidiaries are unaware of any facts or circumstance, which
might give rise to any of the foregoing.
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(f) 10(B) -5. The SEC Documents do not include any untrue statements of
material fact, nor do they omit to state any material fact required to be stated
therein necessary to make the statements made, in light of the circumstances,
under which they were made, not misleading.
(g) ABSENCE OF LITIGATION. Except as disclosed in the SEC Documents, there
is no action, suit, proceeding, inquiry oar investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a material adverse effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, thus Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a material adverse effect on the business, operations,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole.
TAX STATUS. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
know of no basis for any such claim.
5. REPRESENTATIONS AND WARRANTIES OF CORNELL.
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Cornell represents and warrants to the Company that
(a) AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER INSTRUMENTS. (i)
Cornell has the requisite corporate power and authority to enter into and
perform this Agreement, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement and any related any and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized further consent or authorization is required by Cornell
(iii) this Agreement, and any related agreements have been duly executed and
delivered by the Cornell,
(b) Cornell will recommend to the Company's current Board of Director's
for their approval a new slate of Directors and provide the Board with, the new
nominees biographies (collectively referred to as "CORNELL'S NOMINEES"
individually referred to as the "CORNELL NOMINEE"),
(c) It is Cornell's plan that the new Board of Directors as part of its
business planning will put together a management team to manage the day to day
operations of the Company, continue to maintain the Company's public filings as
required for SEC and other regulatory compliance, evaluate the existing
opportunities and determine whether or not it is in the best interest of the
shareholders for the Company to remain in its current line of business, and
pursue business alternatives including acquisitions or mergers as well as to
make recommendations regarding additional financing requirements,
(d) In its business relationship with the Company Cornell has been
informed by the Company as to the status of the Company's business, operations,
financial condition and its SEC and public filings and to the best of its
knowledge believes that implementation of this agreement is in the best interest
of the Company's creditors, shareholders and the Company as a whole.
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6. CONDITIONS TO CORNELL'S OBLIGATIONS HEREUNDER
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The obligations of Cornell hereunder is subject to the satisfaction, at or
before September 24, 2003 of each of the following conditions, provided that
these conditions are for Cornell's sole benefit and may be waived by Cornell at
any time in its sole discretion:
(a) The Company shall provide Cornell a duly executed resolution from the
Company's Board of Directors ratifying the Agreement contemplated herein.
(b) As outlined herein Zarin and O'Brien shall have resigned their
respective positions with the Company effective the following day after the
release of funding from the escrow account as outlined in this agreement.
(c) The Company's current Board of Director's shall have accepted a
nominee from Cornell's Nominees and Cornell's Nominee shall have become a member
of the Company's current Board of Directors.
(d) Upon ratification of this Agreement and acceptance of Cornell's
Nominee the Company's current Board of Directors shall resign effective the
following day after the release of funding from the escrow account as outlined
in this agreement leaving Cornell's Nominee as the only member of the Company's
Board of Directors and provide Cornell such resolution of resignation.
(e) Upon the signing of this agreement, Cornell and the Company will work
together to promptly file any required public filings with the United States
Securities and Exchange Commission and/or any other regulatory agency regarding
this matter.
(f) The representations and warranties of the Company shall be true and
correct in all material respects as of the date hereof (except for
representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Dates.
(g) The Company shall have executed and delivered to Cornell this
Agreement.
7. INDEMNIFICATION.
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(a) In consideration of the Buyer's execution and delivery of this
Agreement hereunder, and in addition to all of the Company's other obligations
under this Agreement, the Company shall defend, protect, indemnify and hold
harmless Cornell and all of their officers, directors, employees and agents
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "CORNELL
INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Cornell Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "INDEMNIFIED
LIABILITIES"), incurred by the Cornell Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement, or any other
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certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, or (c) any cause of action, suit or claim, brought or made against
such Indemnitee and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities, which is permissible under applicable law.
8. GOVERNING LAW: MISCELLANEOUS.
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(a) GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws. The parties further agree that any action
between them shall be heard in Xxxxxx County, New Jersey, and expressly consent
to the jurisdiction and venue of the Superior Court of New Jersey, sitting in
Xxxxxx County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph.
(b) COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event any signature page is delivered by
facsimile transmission, the party using such means of delivery shall cause four
(4) additional original executed signature pages to be physically delivered to
the other party within five (5) days of the execution and delivery hereof.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) ENTIRE AGREEMENT, AMENDMENTS. This Agreement supersedes all other
prior oral or written agreements between, Cornell and the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor Cornell makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.
(f) NOTICES. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of, receipt, when sent by
facsimile; (iii) three (3) days after being sent by U.S. certified mail, return
receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
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party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company, to: NUWAVE Technologies Inc.
0 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X'Xxxxx
Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Cornell to: Cornell Capital Partners, L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx - Xxxxx 0
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Cornell(s), to its address and facsimile number on Schedule I, with
copies to the Buyer's counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written notice to the other party of any change in
address or facsimile number.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parries and their respective successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto.
(h) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(i) SURVIVAL. Unless this Agreement is terminated by the mutual written
consent of the parties hereto, the representations, warranties and covenants of
the Company shall survive this Agreement for a period of one (1) year following
the date hereof.
(j) PUBLICITY. The Company and Cornell shall approve in writing, before
issuance any press release or any other public statement with respect to the
transactions contemplated hereby made by any party; provided, however, that the
Company shall be entitled, without the prior approval of Cornell to issue any
press release or other public disclosure with respect to such transactions
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required under applicable securities or other laws or regulations (the Company
shall use its best efforts to consult Cornell in connection with any such press
release or other public disclosure prior to its release and Cornell shall be
provided with a copy thereof upon release thereof).
(k) FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(1) TERMINATION. In the event that the conditions set forth herein have
not occurred on or before September 24, 2003 Cornell shall have the option to
terminate this Agreement and proceed with any and all legal remedies available.
(m) NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Cornell and the Company have cased this Agreement to
be duly executed as of the date first written above.
NUWAVE TECHNOLOGIES INC.
By: /S/ XXXXXXXX X'XXXXX
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Name: Xxxxxxxx X'Xxxxx
Title: Chief Financial Officer
CORNELL CAPITAL PARTNERS, LP
BY: YORKVILLE ADVISORS, LLC
ITS: GENERAL PARTNER
By: /S/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Portfolio Manager & President
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