Exhibit 10.43
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
NUWAVE TECHNOLOGIES, INC.
Xxxxx 0, 0000
Xxxxxxx to Purchase up to 400,000 Shares of Common Stock
NUWAVE Technologies, Inc., a Delaware corporation (the "Company"), hereby
acknowledges that Xxxxxxx/Xxxxxx Associates, L.P. ("Xxxxxxx/Xxxxxx") is
entitled, on the terms and conditions set forth below, to purchase from the
Company at any time during the Exercise Period up to 400,000 fully paid and
nonassessable shares of Common Stock, par value $0.01 per share, of the Company
(the "Common Stock"), as the same may be adjusted pursuant to Section 5 herein,
at the Exercise Price (hereinafter defined), as the same may be adjusted
pursuant to Section 5 herein.
Section 1. Definitions.
"Bid Price" shall mean the closing bid price of the Common Stock on the
Principal Market.
"Date of Exercise" shall mean the date on which an original Exercise
Form and the original Warrant, together with the full Exercise Price for each
share of Common Stock as to which the Warrant is exercised, if applicable, are
actually received by the Company.
"Exercise Form" shall mean either the Cash Exercise Form or the Net
Exercise Form.
"Exercise Period" shall mean the period beginning on September 3, 1999,
and ending on March 3, 2003.
"Exercise Price" shall mean $4.00 per share of Common Stock, subject to
adjustments in accordance with Section 5 herein.
"Outstanding" shall mean, at any date as of which the number of Common
Stock is to be determined, all issued and outstanding Common Stock, and shall
include all Common Stock issuable in respect of outstanding scrip or any
certificates representing fractional interests in Common Stock; provided,
however, that "Outstanding" shall not mean any Common Stock then directly or
indirectly owned or held by or for the account of the Company.
1
"Per Share Warrant Value" shall mean the difference resulting from
subtracting the Exercise Price from the Bid Price of one share of Common Stock
on the Trading Day next preceding the Date of Exercise.
"Public Offering" shall mean an underwritten public offering of
securities pursuant to an effective registration statement under the Securities
Act.
"Principal Market" shall mean the Nasdaq SmallCap Market, the Nasdaq
National Market, the American Stock Exchange or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.
"SEC Documents" shall mean the Company's latest Form 10-K as of the
time in question, all Forms 10-Q and 8-K filed thereafter, and the Proxy
Statement for its latest fiscal year as of the time in question.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
"Trading Day" shall mean any day during which the New York Stock
Exchange shall be open for business.
"Warrant Holder(s)" shall mean Xxxxxxx/Xxxxxx and/or any assignee or
transferee of all or any portion of this Warrant.
"Warrant Shares" shall mean all shares of Common Stock issued or
issuable pursuant to the exercise of this Warrant.
Section 2. Exercise.
(a) Cash Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, at any time and from time to time during the
Exercise Period by delivery to the Company at its principal executive offices at
the address set forth in Section 13 of (i) this Warrant; (ii) the form of
exercise attached hereto as Exhibit A (the "Cash Exercise Form") duly executed
by the Warrant Holder, and (iii) the full Exercise Price for each share of
Common Stock as to which this Warrant is exercised. In the event that the
Warrant is not exercised in full, the number of Warrant Shares shall be reduced
by the number of such Warrant Shares for which this Warrant is exercised, and
the Company, at its expense, shall forthwith issue and deliver to or upon the
order of the Warrant Holder a new Warrant of like tenor in the name of the
Warrant Holder or as the Warrant Holder may request, reflecting such adjusted
number of Warrant Shares within ten (10) Trading Days.
(b) Net Exercise. This Warrant may be exercised by the Warrant Holder,
in whole or in part, at any time and from time to time during the Exercise
Period by delivery to the Company at its principal executive offices at the
address set forth in Section 13 of (i) this Warrant; and (ii) the form of
exercise attached hereto as Exhibit B (the "Net Exercise Form") duly executed by
the Warrant Holder, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, the Warrant Holder
shall surrender this Warrant for that number of shares of
2
Common Stock determined by (i) multiplying the number of Warrant Shares for
which this Warrant is being exercised by the Per Share Warrant Value and (ii)
dividing the product by the Bid Price of one share of Common Stock on the
Trading Day next preceding the Date of Exercise. In the event that the Warrant
is not exercised in full, the number of Warrant Shares shall be reduced by the
number of such Warrant Shares for which this Warrant is exercised, and the
Company, at its expense, shall forthwith issue and deliver to or upon the order
of the Warrant Holder a new Warrant of like tenor in the name of the Warrant
Holder or as the Warrant Holder may request, reflecting such adjusted number of
Warrant Shares within ten (10) Trading Days.
Section 3. Delivery of Stock Certificates.
(a) Delivery. Subject to the terms and conditions of this Warrant, as
soon as practicable after the Date of Exercise of this Warrant in full or in
part, and in any event within ten (10) Trading Days thereafter, the Company at
its expense (including, without limitation, the payment by it of any applicable
issue taxes) will cause to be issued in the name of and delivered to the Warrant
Holder, or as the Warrant Holder may lawfully direct, a certificate or
certificates for the number of validly issued, fully paid and non-assessable
Warrant Shares to which the Warrant Holder shall be entitled on such exercise,
together with any other stock or other securities or property (including cash,
where applicable) to which the Warrant Holder is entitled upon such exercise in
accordance with the provisions hereof.
(b) Fractional Shares. This Warrant may not be exercised as to
fractional shares of Common Stock. In the event that the exercise of this
Warrant, in full or in part, would result in the issuance of any fractional
share of Common Stock, then in such event the Warrant Holder shall receive in
cash an amount equal to the Bid Price of such fractional share within ten (10)
Trading Days.
Section 4. Covenants of the Company.
(a) From the date hereof through the last date on which this Warrant is
exercisable, the Company shall take all steps reasonably necessary and within
its control to insure that the Common Stock remains listed or quoted on the
Principal Market. Further, the Company shall use its best efforts to effect the
listing of the Warrant Shares on the Principal Market as soon as practicable but
prior to the Date of Exercise.
(b) The Warrant Shares, when issued in accordance with the terms
hereof, will be duly authorized and, when paid for or issued in accordance with
the terms hereof, shall be validly issued, fully paid and non-assessable.
(c) The Company has authorized and reserved for issuance to the
Warrant Holder the requisite number of shares of Common Stock to be issued
pursuant to this Warrant. The Company shall at all times reserve and keep
available, solely for issuance and delivery as Warrant Shares hereunder, such
shares of Common Stock as shall from time to time be issuable as Warrant Shares.
3
Section 5. Adjustment of the Exercise Price.
The Exercise Price and, accordingly, the number of Warrant Shares
issuable upon exercise of the Warrant, shall be subject to adjustment from time
to time upon the happening of certain events as follows:
(a) Reclassification, Consolidation, Merger or Mandatory Share
Exchange. If the Company, at any time while this Warrant is unexpired and not
exercised in full (i) reclassifies or changes its Outstanding Common Stock
(other than a change in par value, or from par value to no par value per share,
or from no par value per share to par value or as a result of a subdivision or
combination of Outstanding Common Stock issuable upon exercise of the Warrant)
or (ii) consolidates, merges or effects a mandatory share exchange with or into
another corporation (other than a merger or mandatory share exchange with
another corporation in which the Company is a continuing corporation and that
does not result in any reclassification or change in its Outstanding Common
Stock, other than a change in par value, or from par value to no par value per
share, or from no par value per share to par value, or as a result of a
subdivision or combination of Outstanding Common Stock issuable upon exercise of
the Warrant), then in any such event, the Company, or such successor
corporation, as the case may be, shall, without payment of any additional
consideration therefore, amend this Warrant or issue a new Warrant providing
that the Warrant Holder shall have rights not less favorable to the Warrant
Holder than those then applicable to this Warrant and providing the right to
receive upon exercise of such amended or new Warrant, in lieu of each share of
Common Stock theretofore issuable upon exercise of the Warrant hereunder, the
kind and amount of shares of stock, other securities, money or property
receivable upon such reclassification, change, consolidation, merger or
mandatory share exchange, by the holder of one share of Common Stock issuable
upon exercise of the Warrant had the Warrant been exercised immediately prior to
such reclassification, change, consolidation, merger or mandatory share
exchange. Such amended or new Warrant shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 5. The provisions of this subsection (a) shall similarly apply to
successive reclassifications, changes, consolidations, mergers and mandatory
share exchanges.
(b) Subdivision or Combination of Shares. If the Company, at any time
while this Warrant is unexpired and not exercised in full, shall subdivide its
Common Stock, the Exercise Price shall be proportionately reduced as of the
effective date of such subdivision, or, if the Company shall take a record of
holders of its Common Stock for the purpose of so subdividing, as of such record
date, whichever is earlier. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall combine its Common Stock, the
Exercise Price shall be proportionately increased as of the effective date of
such combination, or, if the Company shall take a record of holders of its
Common Stock for the purpose of so combining, as of such record date, whichever
is earlier.
(c) Stock Dividends. If the Company, at any time while this Warrant is
unexpired and not exercised in full, shall pay a dividend on its Common Stock in
shares of Common Stock, or shall make any other distribution of its Common
Stock, then the Exercise Price shall be adjusted, as of the date the Company
shall take a record of the holders of its Common Stock for the purpose of
receiving such dividend or other distribution (or if no such record is taken, as
of the
4
date of such divided or other distribution), to that price determined by
multiplying the Exercise Price in effect immediately prior to such dividend or
other distribution by a fraction:
(1) the numerator of which shall be the total number of shares of
its Outstanding Common Stock immediately prior to such dividend or distribution,
and
(2) the denominator of which shall be the total number of shares of
its Outstanding Common Stock immediately after such dividend or distribution.
The provisions of this subsection (c) shall not apply under any of the
circumstances for which an adjustment is provided in subsection (a) or (b).
(d) Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price pursuant to any provisions of this Section 5, the number of
Warrant Shares issuable hereunder at the option of the Warrant Holder shall be
calculated, to the nearest one hundredth of a whole share, by multiplying the
number of Warrant Shares issuable prior to an adjustment by a fraction
(1) the numerator of which shall be the Exercise Price before any
adjustment pursuant to this Section 5; and
(2) the denominator of which shall be the Exercise Price after such
adjustment.
(e) No Adjustments. No adjustments to the Exercise Price shall be made
whatsoever as a result of (i) warrants and stock options granted or reserved for
issuance to employees, consultants and directors as described in the SEC
Documents on file with the SEC as of the date of this Warrant, (ii) securities
issued pursuant to an Employee Stock Purchase Plan qualified under Section 423
of the Internal Revenue Code, (iii) the Warrant or (iv) any Common Stock
issuable upon conversion or exercise of any of the foregoing.
(f) Notice of Adjustments. Whenever the Exercise Price or number of
Warrant Shares shall be adjusted pursuant to Section 5 hereof, the Company shall
promptly make a certificate signed by its President or a Vice President and by
its Treasurer or Assistant Treasurer or its Secretary or Assistant Secretary,
setting forth in reasonable detail the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Company's Board of Directors
made any determination hereunder), and the Exercise Price and number of Warrant
Shares purchasable at that Exercise Price after giving effect to such
adjustment, and shall promptly cause copies of such certificate to be mailed (by
first class and postage prepaid) to the Warrant Holder.
Section 6. No Impairment.
The Company will not, by amendment of its Articles of Incorporation or
By-Laws or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrant Holder against
impairment. Without limiting the generality of the
5
foregoing, the Company (a) will not increase the par value of any Warrant Shares
above the amount payable therefor on such exercise, and (b) will take all such
action as may be reasonably necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares on the
exercise of this Warrant.
Section 7. Registration Rights.
(a) Demand Registration Rights. The Company covenants and agrees with
the Warrant Holder(s) that, after September 3, 1999, within 60 days after
receipt of a written request from Warrant Holder(s) of more than 50% in interest
of the aggregate number of Warrant Shares issuable under the Warrant that such
holder(s) desire and intend to transfer more than 50% in interest of the
aggregate number of Warrant Shares, the Company shall file a registration
statement (or a post-effective amendment thereto, if appropriate) and use its
best efforts to cause such registration statement or post-effective amendment to
become effective under the Securities Act with respect to the resale of the
Warrant Shares by the Warrant Holder(s), provided, that the Company shall have
no obligation to comply with the foregoing provisions if, in the opinion of
counsel to the Company reasonably acceptable to the Warrant Holder(s) from whom
such written request has been received, registration under the Securities Act
(as well as any other applicable statute) is not required for the transfer of
the Warrant Shares in the manner proposed by such person or persons or that a
post-effective amendment to a existing registration statement would be legally
sufficient for such transfer (in which latter event the Company shall promptly
file such post-effective amendment and use its best efforts to cause such
amendment to become effective under the Securities Act).
The provisions of this Section 7(a) shall be subject to the following
conditions, qualifications and limitations, among others:
(1) The Company shall not be obligated to file a registration
statement or post-effective amendment pursuant to this Section 7(a) which, under
the Securities Act and the then effective rules, regulations, forms and releases
of the SEC thereunder, would be required to contain audited financial statements
as of a date other than the end of a fiscal year of the Company and the related
fiscal periods then ended unless the Warrant Holder(s) requesting registration
undertake to pay (or reimburse) the incremental expenses incurred by the Company
in preparing such audited financial statements for inclusion.
(2) The Company may defer the filing of a registration statement or
post-effective amendment for up to 90 days after the request for registration is
made if the Board of Directors of the Company determines in good faith that such
registration or post-effective amendment would adversely affect or otherwise
interfere with a proposed or pending transaction by the Company, including
without limitation, a material financing or a corporate reorganization, or
during any period of time in which the Company is in possession of material
inside information concerning the Company or its securities, which information
the Company determines in good faith is not ripe for disclosure.
(3) The Company may defer the filing of a registration statement for
up to 180 days after the request for registration is made if the Company is not
then eligible to effect a
6
registration on Form S-3 under the Securities Act or any successor form, or
similar short-form registration.
(4) If a demand registration pursuant to this Section 7(a) ("Demand
Registration") involves a Public Offering and the managing underwriter(s) shall
advise the Company that, in its view, marketing factors require a limitation of
the number of shares of Common Stock to be underwritten in such Demand
Registration, then the Company shall register the Common Stock in such Demand
Registration in the following order: (i) first, the Warrant Shares requested to
be included in such Demand Registration by the Warrant Holder(s), (ii) second,
the Common Stock requested to be included in such Demand Registration by holders
of Common Stock other than the Warrant Holder(s) (the "Electing Holders") and
(iii) any Common Stock proposed to be registered by the Company; provided that
(y) if all the Common Stock requested to be included in such Demand Registration
by members of any group set forth above are not to be included, selection of
Common Stock to be included from within such group shall be made pro rata based
on the number of Common Stock that each member of such group shall have
requested to be included therein, and (z) if any Warrant Holder has requested
inclusion in such Demand Registration and if at least 50% of the Warrant Shares
requested to be included by such Warrant Holder are not so included, the Company
shall, within 180 days after such Warrant Holder's request for inclusion in such
Demand Registration, file another registration statement (or a post-effective
amendment thereto, if appropriate) and use its best efforts to cause such
registration statement or post-effective amendment to become effective under the
Securities Act with respect to the resale of the remaining Warrant Shares by
such Warrant Holder.
(b) Incidental Registration Rights. In the event the Company proposes
to file a registration statement under the Securities Act with respect to its
Common Stock (other than a registration (i) on Form S-8 or S-4 or any successor
or similar forms or (ii) relating to Common Stock issuable upon exercise of
employee stock options or in connection with any employee benefit or similar
plan of the Company), the Company shall give written notice of such proposed
filing at least concurrently with the initial filing date of such registration
statement to the Warrant Holder(s), which notice shall set forth the Warrant
Holder(s)' rights under this Section 7(b) and shall offer the Warrant Holder(s)
the opportunity to include in such registration statement such amount of Warrant
Shares as the Warrant Holder(s) shall request (an "Incidental Registration").
Upon the written request of the Warrant Holder(s), which must be made within 15
Trading Days after the receipt of notice from the Company (which request shall
specify the amount of Warrant Shares intended to be disposed of by the Warrant
Holder(s)), the Company will use its best efforts to effect the registration
under the Securities Act of all such Warrant Shares which the Company has been
so requested to register by the Warrant Holder(s) (the "Piggy-back Shares") to
the extent required to permit the disposition of such Piggy-back Shares to be so
registered; provided that (y) if such Incidental Registration involves a Public
Offering, the Warrant Holder(s) requesting an Incidental Registration must sell
its Piggy-back Shares to the underwriters on the same terms and conditions as
applicable to the Company and other selling shareholders and (z) if, at any time
after giving written notice of its intention to register any Common Stock
pursuant to this Section 7(b) 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 such Common Stock, the Company
shall give written notice thereof to the Warrant Holder(s) and, thereupon,
7
shall be relieved of its obligation to register the Piggy-back Shares in
connection with such registration.
If a registration under this Section 7(b) involves a Public Offering
and the managing underwriter(s) shall advise the Company that, in its view,
marketing factors require a limitation of the number of shares of Common Stock
to be underwritten in such registration, then the Company shall register the
Common Stock in such registration in the following order: (i) if such
registration is a primary registration on behalf of the Company, the Company
shall register in such registration (a) first, the shares of Common Stock that
the Company proposes to sell, and (b) second, the Piggy-back Shares held by the
Warrant Holder(s) and the shares of Common Stock held by each Electing Holder,
on a pro rata basis, based upon the number of shares such holders, respectively,
originally sought to include in such registration; and (ii) if such registration
was initiated solely as a secondary registration on behalf of a holder of
securities of the Company (each a "Secondary Holder"), the Company shall
register in such registration (a) first, the number of shares of Common Stock
sought to be included in such registration by such Secondary Holders, on a pro
rata basis, based upon the number of shares such Secondary Holders,
respectively, originally sought to include in such registration, (b) second, the
shares of Common Stock, if any, that the Company seeks to include in such
registration and (c) third, the Piggy-back Shares held by the Warrant Holder(s)
and the shares of Common Stock held by each Electing Holder, on a pro rata
basis, based upon the number of shares such holders, respectively, originally
sought to include in such registration. Notwithstanding the foregoing, if any
Warrant Holder has requested inclusion in such Incidental Registration and if at
least 50% of the Piggy-back Shares requested to be included by such Warrant
Holder are not so included, the Company shall, within 180 days after such
Warrant Holder's request for inclusion in such Incidental Registration, file
another registration statement (or a post-effective amendment thereto, if
appropriate) and use its best efforts to cause such registration statement or
post-effective amendment to become effective under the Securities Act with
respect to the resale of the remaining Piggy-back Shares by such Warrant Holder.
(c) Other Conditions to Registration. The Company shall not be required
(i) to maintain the effectiveness of a registration statement or post-effective
amendment beyond the earlier to occur of 270 days after the effective date of
the registration statement or post-effective amendment or the date on which all
of the Warrant Shares have been sold (the "Termination Date"), provided, that if
at the Termination Date the Warrant Shares are covered by a registration
statement which also covers other securities and which is required to remain in
effect beyond the Termination Date, the Company shall maintain in effect such
registration statement as it relates to the Warrant Shares for so long as such
registration statement (or any substitute registration statement) remains or is
required to remain in effect for any of such other securities, or (ii) to comply
with more than one request for registration pursuant to Section 7(a) or (iii) to
honor any request to register the Warrant Shares pursuant to Section 7(a) or
7(b) received before September 3, 1999 or after March 3, 2003.
(d) Registration Expenses. The Company shall pay all registration
expenses incurred in connection with the registration of the Warrant Shares
pursuant to this Section 7 ("Registration Expenses"). Notwithstanding anything
to the contrary contained herein, Registration Expenses shall not include (i)
underwriting fees, discounts, transfer taxes or commissions, if any,
8
attributable to the sale of the Warrant Shares, which shall be payable by the
Warrant Holder(s) pro rata on the basis of the number of Warrant Shares of each
Warrant Holder that are included in a registration pursuant to Section 7(a) or
7(b), and (ii) the incremental expenses incurred by the Company as described in
Section 7(a)(1).
(e) State Securities Laws. In connection with the registration of the
Warrant Shares in accordance with Section 7(a) or 7(b) above, the Company agrees
to use its best efforts to register or qualify the Warrant Shares for resale
under the state securities or Blue Sky laws of such states which the Warrant
Holder(s) of such Warrant Shares shall designate, until the dates specified in
Section 7(c) above in connection with registration under the Securities Act,
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not otherwise qualified or planning to
so qualify or to take any action which would subject it to general service of
process in any jurisdiction where it is not otherwise so subject or to register
or obtain a license as a broker or dealer in securities in any jurisdiction
where it is not otherwise so registered or licensed.
(f) Indemnification by the Company. The Company agrees to indemnify and
hold harmless the Warrant Holder, its partners, affiliates, officers, directors,
employees and duly authorized agents, and each person or entity, if any, who
controls the Warrant Holder within the meaning of the Securities Act, together
with the partners, affiliates, officers, directors, employees and duly
authorized agents of such controlling Person or entity (collectively, the
"Controlling Persons"), from and against any loss, claim, damage, liability,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) (collectively, "Damages"), and any action or proceeding in
respect thereof to which the Warrant Holder, its partners, affiliates, officers,
directors, employees and duly authorized agents, and any such Controlling Person
may become subject under the Securities Act or otherwise as incurred and,
insofar as such Damages (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Warrant Shares or any preliminary prospectus, or arises out of, or are based
upon, any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon information furnished in writing to
the Company by the Warrant Holder expressly for use therein. Notwithstanding the
foregoing, the Company shall not be liable to the Warrant Holder, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any
such Controlling Person, to the extent that any such Damages arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) the Warrant Holder
failed to send or deliver a copy of the final prospectus delivered by the
Company to the Warrant Holder with or prior to the delivery of written
confirmation of the sale by the Warrant Holder to the person asserting the claim
from which such Damages arise, and (ii) the final prospectus would have
corrected such untrue statement or alleged untrue statement or such omission or
alleged omission.
(g) Indemnification by the Warrant Holder. The Warrant Holder agrees to
indemnify and hold harmless the Company, its partners, affiliates, officers,
directors, employees
9
and duly authorized agents, and each person or entity, if any, who controls the
Company within the meaning of the Securities Act, together with the partners,
affiliates, officers, directors, employees and duly authorized agents of such
controlling Person or entity (collectively, the "Company Controlling Persons"),
from and against any and all Damages, and any action or proceeding in respect
thereof to which the Company, its partners, affiliates, officers, directors,
employees and duly authorized agents, and any such Company Controlling Person
may become subject under the Securities Act or otherwise as incurred and,
insofar as such Damages (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Warrant Holders or any preliminary prospectus, or arises out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in said registration statement, said prospectus or said preliminary prospectus,
in reliance upon and in conformity with the information furnished in writing to
the Company by the Warrant Holder expressly for use therein.
(h) Conduct of Indemnification Proceedings. Promptly after receipt by
any person or entity in respect of which indemnity may be sought pursuant to
subsection (f) or (g) above (an "Indemnified Party") of notice of any claim or
the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the person or entity against whom such
indemnity may be sought (the "Indemnifying Party"), notify the Indemnifying
Party in writing of the claim or the commencement of such action; in the event
an Indemnified Party shall fail to give such notice as provided in this
subsection (h) and the Indemnifying Party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, the indemnification
provided for in subsection (f) or (g) shall be reduced to the extent of any
actual prejudice resulting from such failure to so notify the Indemnifying
Party; provided, that the failure to notify the Indemnifying Party shall not
relieve it from any liability that it may have to an Indemnified Party otherwise
than under subsection (f) or (g). If any such claim or action shall be brought
against an Indemnified Party, and it shall notify the Indemnifying Party
thereof, the Indemnifying Party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided that the Indemnified Party shall have the right to
employ separate counsel to represent the Indemnified Party and its controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Indemnified Party against the Indemnifying
Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of the Indemnifying Party and the Indemnified Party,
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest between them, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
claim or action or separate but substantially similar or related claims or
actions in the same jurisdiction arising out of
10
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all Indemnified Parties, or for fees and expenses
that are not reasonable. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any claim or pending
or threatened proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
(i) Contribution. If the indemnification provided for in subsection (f)
or (g) is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages as between the Company on the one
hand and the Warrant Holder on the other, in such proportion as is appropriate
to reflect the relative fault of the Company and of the Warrant Holder in
connection with such statements or omissions, as well as other equitable
considerations. The relative fault of the Company on the one hand and of the
Warrant Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Warrant Holder agree that it would not be just and
equitable if contribution pursuant to this subsection (i) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Section 8. Rights as a Stockholder.
Prior to the exercise of this Warrant, the Warrant Holder shall not be
entitled to any rights as a stockholder of the Company with respect to the
Warrant Shares, including (without limitation) the right to vote such shares,
receive dividends or other distributions thereon or be notified of stockholder
meetings. However, in the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each Warrant Holder, at least
10 days prior to the date specified therein, a notice specifying the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.
11
Section 9. Replacement of Warrant.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of the Warrant and, in the case of any
such loss, theft or destruction of the Warrant, upon delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
Section 10. Choice of Law.
This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York, without giving effect to
provisions regarding conflicts of law or choice of law.
Section 11. Entire Agreement; Amendments.
This Warrant contains the entire understanding of the parties with
respect to the matters covered hereby. No provision of this Warrant may be
waived or amended other than by a written instrument signed by the party against
whom enforcement of any such amendment or waiver is sought.
Section 12. Restricted Securities.
(a) Registration or Exemption Required. This Warrant has been issued in
a transaction exempt from the registration requirements of the Securities Act in
reliance upon the provisions of Section 4(2) promulgated by the SEC under the
Securities Act. This Warrant and the Warrant Shares issuable upon exercise of
this Warrant may not be resold except pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act
and applicable state laws.
(b) Legends.
(1) This Warrant and any new or amended Warrants issued pursuant
hereto shall bear the following legend:
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
(2) Any Warrant Shares issued upon exercise of the Warrant shall
bear the following legend:
12
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
(c) No Other Legend or Stock Transfer Restrictions. No legend other
than the one specified in Section 12(b) has been or shall be placed on any new
or amended Warrants or any share certificates representing the Common Stock and
no instructions or "stop transfer orders," so called "stock transfer
restrictions," or other restrictions have been or shall be given to the
Company's transfer agent with respect thereto other than as expressly set forth
in this Section 12.
(d) Assignment. Assuming the conditions of Section 12(a) above
regarding registration or exemption have been satisfied, the Warrant Holder may
sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole or
in part. The Warrant Holder shall deliver a written notice to the Company,
substantially in the form of the Assignment attached hereto as Exhibit C,
indicating the person or persons to whom the Warrant shall be assigned and the
respective number of warrants to be assigned to each assignee. The Company shall
effect the assignment within ten (10) Trading Days, and shall deliver to the
assignee(s) designated by the Warrant Holder a Warrant or Warrants of like tenor
and terms for the appropriate number of Warrant Shares.
(e) Warrant Holder's Compliance. Nothing in this Section 12 shall
affect in any way the Warrant Holder's obligations under any agreement to comply
with all applicable securities laws upon resale of the Common Stock.
Section 13. Notices.
Any notice or other communication required or permitted under this
Warrant shall be in writing and shall be deemed given (a) when it is personally
delivered; (b) immediately upon transmission if it is transmitted by facsimile,
telex, or telegram; (c) three days after it is sent by a nationally recognized
overnight courier service, or (d) seven days after it is sent by United States
mail with postage prepaid; to the following addresses (or to such other
addresses as each party may designate in writing to the other parties) (in the
event that any notice or communication is made on a day that is not a business
day in New York or New Jersey, such notice or communication shall be deemed to
have been given on the next succeeding business day):
If to NUWAVE Technologies, Inc.: Xxxxxxxx X'Xxxxx
Chief Financial Officer
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone (973) 882-8810 ext. 212
Facsimile (000) 000-0000
13
with a copy to: Xxxxxxx Xxxxx, Esq.
(shall not constitute notice) Dechert, Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
If to Xxxxxxx/Xxxxxx: Xxxxx Xxxxxx
Partner
Xxxxxxx/Xxxxxx Associates, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
(shall not constitute notice) Xxxxxxxxx & Xxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
Either party hereto may from time to time change its address or facsimile number
for notices under this Section 13 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
Section 14. Miscellaneous.
The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
14
IN WITNESS WHEREOF, this Warrant was duly executed on the date first
written above.
NUWAVE Technologies, Inc.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Chairman and Chief Executive Officer
Attested
By: /s/ Xxxxxxxx X. X'Xxxxx
-------------------------------------
Xxxxxxxx X. X'Xxxxx
Secretary and Chief Financial Officer
15
EXHIBIT A TO THE WARRANT
NUWAVE Technologies, Inc.
CASH EXERCISE
The undersigned hereby irrevocably exercises the right to purchase
__________________ shares of Common Stock of NUWAVE Technologies, Inc., a
Delaware corporation, evidenced by the attached Warrant, and herewith makes
payment of the Exercise Price with respect to such shares in full in the form of
[wire transfer, cash or check in the amount of $___], [_____ Warrant Shares
which represent the amount of Warrant Shares as provided in the attached Warrant
to be canceled in connection with such exercise], all in accordance with the
conditions and provisions of said Warrant.
The undersigned requests that stock certificates for such Warrant
Shares be issued, and a Warrant representing any unexercised portion hereof be
issued pursuant to this Warrant in the name of the registered Holder and
delivered to the undersigned at the address set forth below.
Dated:_______________________________________
---------------------------------------------
Signature of Registered Holder
---------------------------------------------
Name of Registered Holder (Print)
---------------------------------------------
---------------------------------------------
Address of Registered Holder (Print)
16
EXHIBIT B TO THE WARRANT
NUWAVE Technologies, Inc.
NET EXERCISE
The undersigned hereby irrevocably exercises the right to exchange the
attached Warrant for a number of shares of Common Stock of NUWAVE Technologies,
Inc., a Delaware corporation, as determined by multiplying the number of Warrant
Shares for which the Warrant is being exercised by the Per Share Warrant Value
and dividing the product by the Bid Price of one share of Common Stock on the
Trading Day next preceding the Date of Exercise as set forth below:
No. of Shares for which this Warrant is exercised:
Per Share Warrant Value $
Bid Price (as of preceding Trading Day) $
No. of Shares to be sent to Warrant Holder
The undersigned requests that stock certificates for such Warrant
Shares be issued, and a Warrant representing any unexercised portion hereof be
issued pursuant to this Warrant in the name of the registered Holder and
delivered to the undersigned at the address set forth below.
Dated:_______________________________________
---------------------------------------------
Signature of Registered Holder
---------------------------------------------
Name of Registered Holder (Print)
---------------------------------------------
---------------------------------------------
Address of Registered Holder (Print)
17
EXHIBIT C TO THE WARRANT
NUWAVE Technologies, Inc.
ASSIGNMENT
(To be executed by the registered Warrant Holder desiring to transfer
the Warrant) FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached
Warrant hereby sells, assigns and transfers unto the persons below named the
right to purchase ______________ shares of the Common Stock of NUWAVE
TECHNOLOGIES, INC. evidenced by the attached Warrant.
Name(s) of Assignee(s) Address No. of Shares
Dated:
---------------------------------------
---------------------------------------------
Signature of Registered Holder
---------------------------------------------
Name of Registered Holder (Print)
---------------------------------------------
---------------------------------------------
Address of Registered Holder (Print)
