REGISTRATION RIGHTS AGREEMENT
Between
PROFUTURES SPECIAL EQUITIES FUND, L.P.
And
NUWAVE TECHNOLOGIES, INC.
Dated as of February 6, 1998
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
February 6, 1998, is made and entered into between NUWAVE TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and PROFUTURES SPECIAL EQUITIES FUND, L.P.
(the "Investor").
WHEREAS, the Company and the Investor have entered into that certain
Private Securities Subscription Agreement (henceforth the "Investment
Agreement"), dated as of the date hereof, pursuant to which the Company will
issue to the Investor $1,000,000 worth of shares of Common Stock on the
Subscription Date;
WHEREAS, pursuant to the Investment Agreement, the Company will issue,
from time to time after the Effective Date, to the Investor up to $5,000,000
worth of shares of Common Stock;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's entering into the Investment Agreement, the Company has issued to
the Investor a warrant dated February 6, 1998, exercisable from time to time
within three (3) years following the six-month anniversary of the date of
issuance (the "Warrant") for the purchase of an aggregate of fifty thousand
(50,000) shares of Common Stock at a price specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's entering into the Investment Agreement, the Company may issue to
the Investor an additional warrant (the "Supplemental Warrant"), exercisable
from time to time within five (5) years of the Effective Date, for the purchase
of an aggregate of fifty thousand (50,000) shares of Common Stock at a price
specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Investment Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the Registrable Securities;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, in the
Supplemental Warrant, and in the Investment Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows (capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Investment Agreement):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. FORM S-3 REGISTRATION STATEMENTS.
(a) Filing of Form S-3 Registration Statements. Subject to the terms
and conditions of this Agreement, the Company shall file with the SEC within
twenty-five (25) days following the Subscription Date (the "Filing Deadline") a
registration statement on Form S-3 under the Securities Act (the "Registration
Statement") for the registration of the resale by the Investor of the
Registrable Securities. In the event the Company fails for any reason to file
the Registration Statement by Filing Deadline, the Company shall pay $20,000 to
the Investor by wire transfer of immediately available funds into an account
designated by the Investor within three (3) Trading Days of the Filing Deadline.
(b) Effectiveness of the Registration Statement. The Company shall use
its best efforts to have the Registration Statement declared effective by the
SEC as soon as possible, but no later than April 10, 1998 (the " Effectiveness
Deadline"), and to insure that the Registration Statement remains in effect
throughout the term of this Agreement as set forth in Section 4.2, subject to
the terms and conditions of this Agreement.
(c) Failure to Obtain Effectiveness of Registration Statement. In the
event the Company fails for any reason to obtain the effectiveness of a
Registration Statement by the Effectiveness Deadline, the Company shall pay
$20,000 prorated over the thirty (30) calendar days following the Effectiveness
Deadline to the Investor by the sooner of three Trading Days after the Effective
Date or thirty-three (33) days after the Effectiveness Deadline. In the event
the Company fails for any reason to obtain the effectiveness of a Registration
Statement within thirty (30) calendar days after the Effectiveness Deadline, the
Company shall pay $20,000 to the Investor within thirty-three (33) calendar days
of the Effectiveness Deadline and an additional $1,000 for each successive
calendar day that the Registration Statement is not declared effective. All such
payments accruing during a calendar month shall be paid by wire transfer of
immediately available funds into an account designated by the Investor by the
third Trading Day of the subsequent calendar month.
(d) Failure to Maintain Effectiveness of Registration Statement. In the
event the Company fails, subsequent to the Effective Date, to maintain the
effectiveness of a Registration Statement (or the use of the underlying
prospectus) throughout the period set forth in Section 4.2, and the Investor
holds any Registrable Securities at any time during the period of such
ineffectiveness (the "Ineffective Period"), the Company shall pay to the
Investor by wire transfer of immediately available funds into an account
designated by the Investor an amount equal to two percent (2.0%) of the
aggregate Purchase Price of all of the Registrable Securities then held by the
Investor for each seven calendar-day period (or portion thereof) of such
Ineffective Period. Such amounts shall not be payable with respect to
suspensions of the effectiveness of a Registration Statement (or use of the
underlying prospectus). Such payments shall be made on the first Trading Day
after the earlier to occur of (i) the expiration of the
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Commitment Period, (ii) the expiration of each twenty-eight calendar days of an
Ineffective Period, and (iii) the expiration of the Ineffective Period.
(e) If at any time subsequent to the Company's filing of the
Registration Statement, the Company receives a "no-review" letter from the SEC,
the Company shall take the Registration Statement effective within five (5)
Trading Days of receiving such approval (the "No-Review Deadline"). For each
seven calendar-day period or portion thereof after the No-Review Deadline after
which the Company does not take the Registration Statement effective, the
Company shall pay to the Investor by wire transfer of immediately available
funds into an account designated by the Investor an amount of $5,000. Such
amounts shall be payable within three Trading Days of the expiration of each
seven calendar day period during which such amounts accrue.
(f) The parties hereto acknowledge and agree that the sums payable
under Sections 1(c), 1(d), and 1(e) hereto shall constitute liquidated damages
and not penalties. The parties further acknowledge that (a) the amount of loss
or damages likely to be incurred is incapable or is difficult to precisely
estimate, (b) the amounts specified in such Sections bear a reasonable
proportion and are not plainly or grossly disproportionate to the probable loss
likely to be incurred by the Investor in connection with the failure by the
company to obtain or maintain the effectiveness of a Registration Statement or
the temporary suspension of the effectiveness of a Registration Statement, (c)
one of the reasons for the Parties reaching an agreement as to such amounts was
the uncertainty and cost of litigation regarding the question of actual damages,
and (d) the parties are sophisticated business parties and have been represented
by sophisticated and able legal and financial counsel and negotiated this
Agreement at arm's length. The rights and remedies in this subsection (f),
including the payment of liquidated damages, shall be in addition to the
provisions of Section 4.13 hereof.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company will effect the registration and
sale of such Registrable Securities in accordance with the intended methods of
disposition thereof. Without limiting the foregoing, the Company in each such
case will do the following as expeditiously as possible, but in no event later
than the deadline, if any, prescribed therefor in this Agreement:
(a) The Company shall prepare and file with the SEC a registration
statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement and in accordance with the intended method of
distribution of such Registrable Securities); use best efforts to cause such
filed Registration Statement to become and remain effective (pursuant to Rule
415 under the Securities Act or otherwise); prepare and file with the SEC such
amendments and supplements to such Registration Statement and the
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prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the time period prescribed by Section
1.1(b); and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the Investor
set forth in such Registration Statement.
(b) The Company shall file all necessary amendments to the Registration
Statement in order to effectuate the purpose of this Agreement, the Investment
Agreement, the Warrant, and the Supplemental Warrant.
(c) If so requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection with the filing of a Shelf Registration, the
Company shall (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
and such holders agree should be included therein, and (ii) make all required
filings of such prospectus supplement or post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 2.1(c) that would, in the opinion of counsel for the
Company, violate applicable law.
(d) In connection with the filing of a shelf registration, the Company
shall enter into such agreements and take all such other reasonable actions in
connection therewith (including those reasonably requested by the managing
underwriters, if any, or the holders of a majority in aggregate principal amount
of the Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, (i) make such representations and
warranties to the holders of such Registrable Securities and the underwriters,
if any, with respect to the business of the Company (including with respect to
businesses or assets acquired or to be acquired by the Company), and in the
Registration Statement, prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) if an underwriting
agreement is entered into, provide indemnification provisions and procedures no
less favorable to the selling holders of such Registrable Securities and the
underwriters, if any, than those set forth herein (or such other provisions and
procedures acceptable to the holders of a majority in aggregate principal amount
of Registrable Securities covered by such Registration Statement and the
managing underwriters, if any); and (iii) deliver such documents and
certificates as may be reasonably requested by the holders of a majority in
aggregate principal amount of the Registrable Securities being sold, their
counsel and the managing underwriters, if any, to evidence the continued
validity of their representations and warranties made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
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(e) Prior to filing a Registration Statement or prospectus, or any
amendment or supplement thereto (excluding amendments deemed to result from the
filing of documents incorporated by reference therein), the Company shall
deliver to the Investor and one firm of counsel representing the Investor, in
accordance with the notice provisions of Section 4.8, copies of such
Registration Statement as proposed to be filed, together with exhibits thereto,
which documents will be subject to review by such parties, and thereafter
deliver to the Investor and its counsel, in accordance with the notice
provisions of Section 4.8, such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents or information as the Investor
or counsel may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(f) The Company shall deliver, in accordance with the notice provisions
of Section 4.8, to each seller of Registrable Securities covered by such
Registration Statement such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus file
under Rule 424 promulgated under the Securities Act relating to such seller's
Registrable Securities, and such other documents, as such seller may reasonably
request to facilitate the disposition of its Registrable Securities.
(g) After the filing of the Registration Statement, the Company shall
promptly notify the Investor of any stop order issued or threatened by the SEC
in connection therewith and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(h) The Company shall use its best efforts to (i) register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as the Investor may reasonably (in light of
its intended plan of distribution) request, and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities in the United States as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable the Investor to
consummate the disposition of the Registrable Securities; provided that the
Company will not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (h), subject itself to taxation in any such jurisdiction, or consent
or subject itself to general service of process in any such jurisdiction.
(i) The Company shall promptly notify the Investor upon the occurrence
of any of the following events in respect of a Registration Statement or related
prospectus in respect of an offering of Registrable Securities: (i) receipt of
any request for additional information by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or related
prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any
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proceedings for that purpose; (iii) receipt of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate; and the Company will promptly make available to
the Investor any such supplement or amendment to the related prospectus.
(j) The Company shall enter into customary agreements and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).
(k) The Company shall make available to the Investor (and will deliver
to Investor's counsel), subject to restrictions imposed by the United States
federal government or any agency or instrumentality thereof, copies of all
correspondence between the SEC and the Company, its counsel or auditors and will
also make available for inspection by the Investor and any attorney, accountant
or other professional retained by the Investor (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers and employees to supply all information reasonably requested
by any Inspectors in connection with such Registration Statement. Records that
the Company determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or (ii) the disclosure
or release of such Records is requested or required pursuant to oral questions,
interrogatories, requests for information or documents or a subpoena or other
order from a court of competent jurisdiction or other process; provided that
prior to any disclosure or release pursuant to clause (ii), the Inspectors shall
provide the Company with prompt notice of any such request or requirement so
that the Company may seek an appropriate protective order or waive such
Inspectors' obligation not to disclose such Records; and, provided further, that
if failing the entry of a protective order or the waiver by the Company
permitting the disclosure or release of such Records, the Inspectors, upon
advice of counsel, are compelled to disclose such Records, the Inspectors may
disclose that portion of the Records which counsel has advised the Inspectors
that the Inspectors are compelled to disclose. The Investor agrees that
information obtained by it solely as a result of such inspections (not including
any information obtained from a third party who, insofar as is known to the
Investor after reasonable inquiry, is
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not prohibited from providing such information by a contractual, legal or
fiduciary obligation to the Company) shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Company or its Affiliates unless and until such information is made generally
available to the public. The Investor further agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(l) The Company shall deliver, in accordance with the notice provisions
of Section 4.8, to the Investor a signed counterpart, addressed to the Investor,
of (1) an opinion or opinions of counsel to the Company, and (2) to the extent
required by law or reasonably necessary to effect a sale of Registrable
Securities in accordance with prevailing business practices at the time of any
sale of Registrable Securities pursuant to a Registration Statement, a comfort
letter or comfort letters from the Company's independent public accountants,
each in customary form and covering such matters of the type customarily covered
by opinions or comfort letters, as the case may be, as the Investor reasonably
requests.
(m) The Company shall otherwise comply with all applicable rules and
regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
(n) The Company shall appoint a transfer agent and registrar for all
such Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement.
(o) The Company may require the Investor to promptly furnish in writing
to the Company such information as may be legally required in connection with
such registration including, without limitation, all such information as may be
requested by the SEC or the National Association of Securities Dealers. The
Investor agrees to provide such information requested in connection with such
registration within ten (10) business days after receiving such written request,
and the Company shall not be responsible for any delays in obtaining or
maintaining the effectiveness of the Registration Statement caused by the
Investor's failure to timely provide such information.
Section 2.2. REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National Association of Securities Dealers,
(ii) all registration, filing, qualification and other fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi) fees
and disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
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expenses of any special audits or comfort letters or costs associated with the
delivery by independent certified public accountants of such special audit(s) or
comfort letter(s) requested pursuant to Section 2.1(l) hereof), (vii) the fees
and expenses of any special experts retained by the Company in connection with
such registration, (viii) premiums and other costs of policies of insurance
against liabilities arising out of any public offering of the Registrable
Securities being registered, and (ix) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
fees, discounts, transfer taxes or commissions, if any, attributable to the sale
of Registrable Securities, which shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
such holder that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless the Investor, its partners, Affiliates, officers, directors,
employees and duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange 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 and costs and expenses
of investigating and defending any such claim) (collectively, "Damages"), joint
or several, and any action or proceeding in respect thereof to which the
Investor, 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 Registrable Securities 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
Investor expressly for use therein. The Company shall reimburse the Investor,
its partners, Affiliates, officers, directors, employees and duly authorized
agents, and each such Controlling Person for any legal and other expenses
reasonably incurred by the Investor, its partners, Affiliates, officers,
directors, employees and duly authorized agents, or any such Controlling Person,
as incurred, in investigating or defending or preparing to defend against any
such Damages or actions or proceedings. Notwithstanding the foregoing, the
Company shall not be liable to the Investor to the extent that any such Damages
arise out of or are based upon an untrue statement or omission made in any
preliminary prospectus if (i) the Investor failed to send or deliver a copy of
the final prospectus delivered by the Company to the Investor with or prior to
the delivery of written confirmation of the sale by the Investor 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.
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Section 3.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
any person or entity in respect of which indemnity may be sought pursuant to
Section 3.1 (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 Section 3.2 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 Section 3.1
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 Section 3.1. 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 Company and such 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 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 will not be unreasonably withheld.
Section 3.3. OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding paragraphs of this Article III (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the
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Securities Act. The provisions of this Article III shall be in addition to any
other rights to indemnification, contribution or other remedies which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
Section 3.4 CONTRIBUTION. If the indemnification provided for in this Article
III 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
Investor on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of the Investor 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 Investor 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 Investor agree that it would not be just and equitable if
contribution pursuant to this Section 3.4 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. The amount
paid or payable by an Indemnified Party as a result of the Damages referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 3.4, the
Investor shall in no event be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities of the
Investor were sold to the public (less underwriting discounts and commissions)
exceeds the amount of any damages which the Investor has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE IV
MISCELLANEOUS
Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. Except as disclosed in the SEC
Documents, the Company represents and warrants to the Investor that there is not
in effect on the date hereof any agreement by the Company pursuant to which any
holders of securities of the Company have a right to cause the Company to
register or qualify such securities under the Securities Act or any securities
or blue sky laws of any jurisdiction that would conflict or be inconsistent with
any provision of this Agreement or the Investment Agreement.
Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as the Registrable
Securities (i) have been disposed of
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pursuant to the Registration Statement, (ii) have been sold under circumstances
under which all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act ("Rule 144") are met, (iii)
have been otherwise transferred to holders who may trade such shares without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing a
restrictive legend, or (iv) may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act in the opinion of counsel to the Company, which counsel
shall be reasonably acceptable to the Investor; provided, however, that such
registration rights shall not terminate sooner than two years following the
Subscription Date. Notwithstanding the foregoing, paragraphs (c) and (d) of
Section 1.1, Article III, Section 4.8, and Section 4.9 shall survive the
termination of this Agreement.
Section 4.3. RULE 144. The Company covenants that it will file all reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. If at any time the Company is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144. Upon the request of the
Investor, the Company will deliver to the Investor a written statement as to
whether it has complied with such requirements.
Section 4.4 CERTIFICATE. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.
Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both
parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this
Page 11
Agreement will be deemed effective to modify, amend or discharge any part of
this Agreement or any rights or obligations of any person under or by reason of
this Agreement.
Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any subsequent holder the Registrable
Securities, provided that the Company shall have the right to require any holder
of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder. This Agreement,
together with the Investment Agreement, the Warrant, and the Supplemental
Warrant sets forth the entire agreement and understanding between the parties as
to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
Section 4.7. SEPARABILITY. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
Section 4.8. NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
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
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
Page 12
If to the Investor: Xxxx X. Xxxxxxx
President
ProFutures Special Equities Fund, L.P.
0000 Xxxxxxx 000 Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
with a copy to: Xxxx Xxxx, Esq.
(shall not constitute notice) Fishman, Jones, Xxxxx & Xxxxx, P.C.
0000 Xxxxxxx 000 Xxxxx, Xxxxx 000
Xxxxxx, XX 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 4.8 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
Section 4.9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to the
provisions governing conflict of laws.
Section 4.10. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 4.13. REMEDIES. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in
Page 13
any action for specific performance or injunctive relief that a remedy at law
would be adequate is waived.
Section 4.14 DEFINITIONS. Capitalized terms not otherwise defined herein shall
have the same meanings herein as are ascribed to them in the Investment
Agreement, the Warrant, and the Supplemental Warrant.
Page 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
NUWAVE TECHNOLOGIES, INC.
By:
-------------------------------------
Xxxxxx Xxxxx
Chairman and Chief Executive Officer
PROFUTURES SPECIAL EQUITIES FUND, L.P.
By: ProFutures Fund Management, Inc., the
co-General Partner
By:
-------------------------------------
Xxxx X. Xxxxxxx
President
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