Exhibit 10.56
Placement Agency Agreement, dated as of February 14, 2000, between
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Associates, L.P. and NUWAVE Technologies, Inc.
NUWAVE TECHNOLOGIES, INC.
Private Placement of not less than 30 Units
and not more than 60 Units
PLACEMENT AGENCY AGREEMENT
Dated as of February 14, 2000
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Associates, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
NUWAVE Technologies, Inc. (the "Company") proposes to offer for
sale (the "Offering") in a private offering pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Act"), and/or Rule 506 of Regulation D
promulgated thereunder, an aggregate of not less than 30 and not more than 60
Units ("Units"), each Unit comprised of (i) a number of shares of common stock,
par value $.01 per share ("Common Stock"), of the Company, determined by
dividing the purchase price per Unit of $100,000 (the "Offering Price") by
eighty percent (80%) of the "Average Closing Sale Price" which shall be the
average closing sale price for the Common Stock for the eight (8) consecutive
trading days prior to each closing date (a "Closing Date") of the Offering, and
(ii) Redeemable Common Stock Purchase Warrants (the "Warrants") to purchase
fifty percent (50%) of such number of shares of Common Stock of the Company (the
"Warrant Shares") included in each Unit as more particularly described in the
Offering Memorandum as defined below. The Offering shall be made on a "best
efforts - all or none" basis as to 30 Units (the "Minimum Offering") and on a
"best efforts" basis as to an additional 30 additional Units (the "Maximum
Offering"). Unless the Minimum Offering is sold, no Units will be sold and all
subscriptions will be returned to the subscribers without interest or
deductions. This agreement shall confirm our agreement concerning ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Associates, L.P. acting as our exclusive placement agent (the "Placement Agent")
in connection with the sale of the Units.
The Company shall prepare and deliver to the Placement Agent
copies of a Confidential Private Placement Memorandum (the "Offering
Memorandum"), relating to, among other things, the Company, the Units and the
terms of the sale of the Units. The Offering Memorandum, including all exhibits
and appendices thereto and documents delivered therewith, are referred to herein
as the "Offering Documents" and shall include any supplements or amendments in
accordance with this Agreement. The Offering Memorandum shall be in form
satisfactory to the Placement Agent.
1. APPOINTMENT OF PLACEMENT AGENT
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On the basis of the representations and warranties contained
herein, and subject to the terms and conditions set forth herein, the Company
hereby appoints ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Associates, L.P. as its Placement Agent and
grants to you the exclusive right to offer, as its agent, the Units pursuant to
the terms of this Agreement. On the basis of such representations and
warranties, and subject to such conditions, you hereby accept such appointment
and agree to use your reasonable best efforts to secure subscriptions to
purchase not less than 30 Units and not more than 60 Units.
2. TERMS OF THE OFFERING
(a) The Offering shall consist of not less than 30 Units and
not more than 60 Units of the Company at a purchase price equal to $100,000 per
Unit. The Offering shall be made on a "best efforts - all or none" basis as to
30 Units and on a "best efforts" basis as to an additional 30 Units. Each Unit
shall consist of: (i) a number of shares of Common Stock determined by dividing
the purchase price per Unit of $100,000 by eighty percent (80%) of the "Average
Closing Sale Price" which shall be the average closing sale price for the Common
Stock for the eight (8) consecutive trading days for the initial closing of the
Offering and also for each subsequent closing; and (ii) Warrants to purchase
fifty percent (50%) of such number of shares of Common Stock of the Company in
the Units. The Common Stock and the Warrants are being offered as Units and may
not be purchased separately. Unless the Minimum Offering is sold, no Units will
be sold and all subscriptions will be returned to subscribers without interest
or deductions. The Company and the Placement Agent may, in their discretion,
accept subscriptions for partial Units. Upon mutual agreement, the Company and
the Placement Agent may allow for an increase of up to 10% of the total number
of Units to be sold in the Offering.
(b) Provided that the Company has delivered the Offering
Memorandum to the Placement Agent, the Offering shall commence on or about the
date hereof and shall expire at 5:00 p.m., New York time, on March 23, 2000 and
may be extended up to thirty (30) additional days at the option and discretion
of Placement Agent and the Company. Such period, as same may be so extended,
shall hereinafter be referred to as the "Offering Period."
(c) The Offering shall be made solely to "accredited
investors" (as defined in Rule 501 of Regulation D). Each prospective subscriber
(the "Prospective Investor") who desires to purchase Units shall deliver to the
Placement Agent two copies of a subscription agreement (a "Subscription
Agreement"), in the form annexed to the Offering Memorandum, one copy of the
Confidential Qualified Purchaser Questionnaire (the "Investor Questionnaire"),
and payment of the purchase price for the number of Units such Prospective
Investor desires to purchase. The Placement Agent shall not have any obligation
to independently verify the accuracy or completeness of any information
contained in any Subscription Agreement or the authenticity, sufficiency, or
validity of any check delivered by any Prospective Investor in payment for
Units.
(d) The Placement Agent and the Company shall establish an
escrow account (the "Escrow Account") with HSBC Bank USA (the "Escrow Agent").
The Placement Agent shall deliver each check received from a Prospective
Investor to the Escrow Agent for deposit in the Escrow Account and shall deliver
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the executed copies of the Subscription Agreement and Investor Questionnaire
received from each Prospective Investor to the Company or its counsel. The
Company shall notify the Placement Agent promptly of the acceptance or rejection
of any subscription.
(e) If subscriptions for the Minimum Offering are not
received from Prospective Investors and accepted by the Company prior to the
expiration of the Offering Period, the Offering shall be canceled, all funds
received and held in the Escrow Account shall be refunded in full without
interest or deduction and this Agreement and the agency created hereby shall be
terminated without any further obligation on the part of either party, except as
provided in Sections 12 and 13 hereof.
(f) You may engage other persons selected by you to assist
you in the Offering (each such broker/dealers being hereinafter referred to as a
"Selling Group Member") and you may allow such Selling Group Member such part of
the compensation and payment of expenses payable to you under Section 6 hereof
as you shall determine. Any such Selling Group Member shall be a member firm in
good standing as a broker-dealer under the rules of the National Association of
Securities Dealers ("NASD"). The Company hereby agrees to make such
representations and warranties to, and covenants and agreements with, any
Selling Group Member (including an agreement to indemnify such Selling Group
Member on terms substantially similar to Section 13 hereof) as provided herein.
3. RIGHT OF FIRST REFUSAL
In the event that there shall have been an Initial Closing
hereunder prior to the expiration of the Offering Period, the Placement Agent
shall thereafter have an irrevocable right of first refusal until 18 months from
the Initial Closing Date to purchase for its account or to sell for the account
of the Company or, a subsidiary or successor of the Company, any securities of
the Company or any such subsidiary or successor of the Company, any securities
of the Company or any such subsidiary or successor of the Company (except
nonconvertible debt financing furnished by a financial institution), that the
Company or any such subsidiary or successor may seek to sell through an
underwriter, placement agent or broker-dealer whether pursuant to registration
under the Act or otherwise. The Company, any such subsidiary or successor will
consult with the Placement Agent with regard to any such offering and will
offer, in writing, the Placement Agent the opportunity to purchase or sell any
such securities on terms not more favorable to the Company, any such subsidiary
or successor than it or they can secure elsewhere. If the Placement Agent fails
to accept such offer within 10 business days after the mailing of a notice
containing such offer by registered mail addressed to the Placement Agent, then
the Placement Agent shall have no further claim or right with respect to the
financing proposal contained in such notice. If, however, the terms of such
proposal are subsequently modified in any material respect, the preferential
right referred to herein shall apply to such modified proposal as if the
original proposal had not been made. The Placement Agent's failure to exercise
its preferential right with respect to any particular proposal shall not affect
its preferential rights relative to future proposals. The Company represents and
warrants that there are presently no other rights of first refusal for future
financing now outstanding except for Trinity Capital Advisors, Inc.'s
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("Trinity") right of first refusal and those previously granted to the Placement
Agent. The right contained in this paragraph 3 is subordinate to the right of
Trinity.
4. INTERIM CLOSINGS/FINAL CLOSING
(a) If subscriptions for the Minimum Offering have been
received in escrow and accepted by the Company prior to the expiration of the
Offering Period , a closing under this Agreement (the "Initial Closing") shall
be held at the offices of the Placement Agent, or such other place as the
parties may agree, as soon as practicable (but not later than ten (10) business
days) following the date upon which the Placement Agent and the Company confirm
in writing to each other that subscriptions for the Minimum Offering have been
accepted or at such other place, time, or date as the Company and you shall
agree upon. The date upon which the Initial Closing is held shall hereinafter be
referred to as the "Initial Closing Date."
(b) At any time prior to the expiration of the Offering
Period following the Initial Closing and after receipt in escrow and acceptance
by the Company of subscriptions for the sale of additional Units in increments
of at least $500,000 of Units ("Interim Closing Amount") up to the Maximum
Offering, one or more closings (each an "Interim Closing") shall take place in
the manner herein set forth with respect to the Initial Closing. In the event
that the Offering Period expires prior to receipt in escrow and acceptance by
the Company of an Interim Closing Amount, a final closing shall be held at such
time regardless of the amount then held in escrow. The final Interim Closing to
be held in accordance herewith shall be deemed the "Final Closing" and the date
thereof shall be the "Final Closing Date". References herein to a "Closing"
shall mean the Initial Closing, any Interim Closing or the Final Closing, as the
context requires, and the date thereof shall be referred to as a "Closing Date."
5. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENT
The Placement Agent represents and warrants to the Company
as follows:
(a) The Placement Agent is duly formed and validly existing
and in good standing under the laws of its state of formation.
(b) The Placement Agent is, and at the time of each Closing
will be, a member in good standing of the NASD. No NASD approval of the
compensation which the Placement Agent is to receive with respect to the
Offering is required.
(c) Sales of Units by the Placement Agent will only be made
in such jurisdictions in which the Placement Agent or a Selling Group Member is
a registered broker-dealer or where an applicable exemption from such
registration exists.
(d) Offers and sales of Units by the Placement Agent will be
made only in accordance with this Placement Agency Agreement and in compliance
with the provisions of Rule 506 of Regulation D (to the extent applicable to the
Placement Agent) (it being understood and agreed that the Placement Agent shall
be entitled to rely upon the information and statements provided by the
Prospective Investor in the Subscription Agreement and Investor Questionnaires),
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and the Placement Agent will furnish to each Prospective Investor a copy of the
Offering Documents prior to accepting any subscription for the Units.
6. COMPENSATION
(a) If subscriptions for the Minimum Offering are received
in escrow prior to the expiration of the Offering Period and accepted by the
Company, you shall be entitled, on each Closing Date, as compensation for your
services as Placement Agent under this Agreement, to selling commissions equal
to 10% of the gross proceeds received by the Company from the sale of the Units
effected at each Closing and 3% of the gross proceeds from the sale of the Units
effected at each Closing in payment for a non-accountable expense allowance. Any
amounts payable hereunder may be deducted by you out of the funds received from
the sale of the Units and deposited in the Escrow Account, on each Closing Date.
The Company shall also pay the fees of the Placement Agent's Counsel, ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLP in the amount of $30,000 plus expenses for long distance
telephone, photocopying and mailing and similar expenses.
(b) In addition to the compensation payable to the Placement
Agent set forth in clause (a) above, the Company shall sell to the Placement
Agent, at each Closing, Unit Purchase Warrants ("Placement Agent Warrants") at a
price of $.001 to purchase 25% of the aggregate number of Units sold in the
Offering at an exercise price equal to the Offering Price until five (5) years
from the Initial Closing Date. The Placement Agent Warrants shall entitle the
Placement Agent to purchase the same securities as contained in the Units. The
Placement Agent Warrants shall be subject to anti-dilution in certain events.
The Placement Agent Warrants shall contain registration rights similar to those
provided to Prospective Investors in the Offering. The Placement Agent Warrants
shall contain cashless exercise provisions and shall not be redeemable.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(a) The Company represents and warrants to, and agrees with,
the Placement Agent that:
(i) Assuming the accuracy of the representations and
warranties of the Prospective Investors set forth in the Subscription Agreements
and the Investor Questionnaires and the representations and warranties of the
Placement Agent set forth herein, the Offering Documents (A) contain, and at all
times during the period from the date hereof to and including each Closing Date,
will contain, all information required to be contained therein, if any, pursuant
to Rules 502 and 506 of Regulation D and all applicable federal and/or state
securities laws, and (B) do not, and during the Offering Period 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 light of the circumstances made therein not misleading. Each contract,
agreement, instrument, lease, license, or other document required to be
described in the Offering Documents shall be, and have been, accurately
described therein in all material respects.
(ii) No Offering Documents or information provided by
the Company to Prospective Investors pursuant to Section 8(g) hereof shall
contain any untrue statement of a material fact or omit to state any material
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fact required to be stated therein or necessary to make the statements therein
in light of circumstances made therein not misleading.
(iii) The Company has not, directly or indirectly,
solicited any offer to buy or offered to sell any Units or any other securities
of the Company during the twelve-month period ending on the date hereof except
as may be properly described in the Offering Documents or in any filings by the
Company with the Securities and Exchange Commission ("SEC Filings") and has no
present intention to solicit any offer to buy or to offer to sell any Units or
any other securities of the Company other than pursuant to this Agreement or as
described in the Offering Documents or any SEC Filings;
(iv) The Company is, and at all times during the
period from the date hereof to and including each Closing Date will be, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, with full corporate power and authority, and has
obtained all necessary consents, authorizations, approvals, orders, licenses,
certificates, and permits and declarations of and from, and has made filings
with, all federal, state and local authorities, to own, lease, license, and use
its properties and assets and to conduct its business as presently conducted as
described in the Offering Documents and/or in any such case where the failure to
have any of the foregoing would not have a material adverse effect on the
Company's presently conducted business. As of the date hereof, the Company is,
and at all times during the period from the date hereof to and including each
Closing Date, duly qualified to do business and is in good standing in every
jurisdiction in which its ownership, leasing, licensing, or use of property and
assets or the conduct of its business makes such qualification necessary except
where the failure to be so qualified would not have a material adverse effect on
the Company's business.
(v) The Company has, as of the date hereof, and shall
have at each Closing (except as effected by the transactions contemplated hereby
and/or disclosed in the Offering Documents or any SEC Filings) an authorized
capitalization consisting of: (i) 2,000,000 shares of Preferred Stock, par value
$.01 per share, none of which are issued and outstanding; and (ii) 40,000,000
shares of Common Stock, par value $.01 per share, of which 8,468,889 shares are
issued and outstanding. Each issued and outstanding share of Common Stock is
duly authorized, validly issued, fully paid, and non-assessable, without any
personal liability attaching to the ownership thereof solely by being such a
holder, and has not been issued and is not owned or held in violation of any
preemptive rights of stockholders. There is no commitment, plan, or arrangement
to issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company other than as described in the
Offering Documents or in any of the Company's SEC Filings. There is outstanding
no security or other instrument which by its terms is convertible into or
exchangeable for any class of capital stock of the Company, except as may be
properly described in the Offering Documents or in any of the Company's SEC
Filings.
(vi) The audited financial statements for the fiscal
years ended December 31, 1997 and 1998 and the unaudited financial statement for
the nine (9) months ended September 30, 1999 (together, the "Financial
Statements") of the Company included in the Offering Documents fairly present in
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accordance with generally accepted accounting principles the financial position,
the results of operations, and the other information with respect to the Company
purported to be shown therein at the respective dates and for the respective
periods to which they apply. The Financial Statements have been prepared in
accordance with generally accepted accounting principles (except to the extent
certain footnote disclosures regarding any stub period may have been omitted in
accordance with applicable rules of the Securities and Exchange Commission
consistently applied throughout the periods involved), are correct and complete
in all material respects, and are in accordance with the books and records of
the Company. There has at no time been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company from the latest information set
forth in the Offering Documents, except as may be properly described in the
Offering Documents as having occurred or as may occur. The Company's current
audit firm, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company LLP, and the Company's former audit
firm, PriceWaterhouse Coopers, L.L.P., who have certified certain financial
statements of the Company and delivered their report with respect to the audited
financial statements included in the Offering Documents, are independent public
accountants as required by the Act.
(vii) As of the date hereof, there is no, and as of
each Closing Date there shall not be any, litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
or to the Company's knowledge threatened, with respect to the Company, or its
operations, businesses, properties, or assets, except as properly described in
the Offering Documents or in any SEC Filings or such as individually or in the
aggregate do not now have and may not be reasonably expected in the future, to
have a material adverse effect upon the operations, business, properties, or
assets of the Company. The Company is not now, nor as of each Closing Date shall
be, in violation of, or in default with respect to, any law, rule, regulation,
order, judgment, or decree, except as properly described in the Offering
Documents, or in any SEC Filings or such as individually or in the aggregate do
not have and may not be reasonably expected in the future to have a material
adverse effect upon the operations, business, properties, or assets of the
Company; nor is the Company required to take any action in order to avoid any
such violation or default.
(viii) As of the date hereof, the Company does not own
any real property and does not intend to purchase any real property between the
date hereof and the Final Closing Date.
(ix) As of the date hereof, the Company is not, and at
all times during the period from the date hereof to and including the Final
Closing Date, shall not be, in violation or breach of, or in default with
respect to complying with any material provision of any material contract,
agreement, instrument, lease, license, or arrangement, other than any such
violation or breach which would not have, individually or in the aggregate, a
material adverse effect on the Company's business, and each such contract,
agreement, instrument, lease, license, and arrangement is in full force and
effect and is the legal, valid, and binding obligation of the parties thereto
enforceable as to them in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and an implied covenant of good faith and fair
dealing. The Company enjoys peaceful and undisturbed possession under all leases
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and licenses under which it is operating as of the date hereof. As of the date
hereof, the Company is not a party to or bound by any contract, agreement,
instrument, lease, license, arrangement, or understanding, or subject to any
charter or other restriction, which has had or may in the future have a material
adverse effect on the financial condition, results of operations, business,
properties, assets or liabilities of the Company. The Company is not in
violation or breach of, or in default with respect to, any term of its
Certificate of Incorporation or By-Laws, each as amended to date.
(x) There is no right under any patent, patent
application, trademark, trademark application, trade name, service ▇▇▇▇,
copyright, franchise, or other intangible property or asset (all of the
foregoing being herein called "Intangibles") necessary to the business of the
Company as presently conducted, except as disclosed in the Offering Documents or
in any SEC Filings. To the knowledge of the Company, there is no Intangible of
others which has had or may in the future have a materially adverse effect on
the financial condition, results of operations, business, properties, assets or
liabilities of the Company, except as disclosed in the Offering Documents or in
any SEC Filings.
(xi) To its best knowledge and except as disclosed in
the Offering Documents or in any SEC Filings, the Company has not infringed, is
infringing, or has received notice of infringement with respect to asserted
Intangibles of others. To the best knowledge of the Company and except as
disclosed in the Offering Documents or in any SEC Filings, none of the patents,
patent applications, trademarks, service marks, trade names and copyrights, and
licenses and rights to the foregoing presently owned or held by the Company, if
any, materially infringe upon any like right of any other person or entity. The
Company (i) owns or has the right to use, free and clear of all liens, charges,
claims, encumbrances, pledges, security interests, defects or other restrictions
of any kind whatsoever, sufficient patents, trademarks, service marks, trade
names, copyrights, licenses and right with respect to the foregoing, to conduct
its business as presently conducted except as set forth in the Offering
Documents or in any SEC Filings and (ii) except as set forth in the Offering
Documents or in any SEC Filings, is not obligated or under any liability
whatsoever to make any payments by way of royalties, fees or otherwise to any
owner or licensee of, or other claimant to, any patent, trademark, service ▇▇▇▇,
trade name, copyright, know-how, technology or other intangible asset, with
respect to the use thereof or in connection with the conduct of its business as
now conducted or otherwise. The Company has direct ownership of title or right
to all its intellectual property (including all United States and foreign patent
applications and patents), other proprietary rights, confidential information
and know-how; owns all the rights to its Intangibles as are currently used in or
have potential for use in its business except as set forth in the Offering
Documents or in any SEC Filings.
(xii) The Company has all requisite corporate power
and authority to execute, deliver, and perform this Agreement and to consummate
the transactions contemplated hereby. All necessary corporate proceedings of the
Company have been duly taken to authorize the execution, delivery, and
performance by the Company of this Agreement, the Warrants and the Placement
Agent Warrants and the consummation of the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the Company,
and assuming due authorization, execution and delivery by the Placement Agent,
this Agreement will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as the enforceability
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may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and an implied covenant of good faith and fair dealing. Each of the
Units has been duly authorized by the Company, and, upon issuance thereof on a
Closing Date, will have been validly executed and delivered by the Company. When
each of the Units has been duly executed and delivered by the Company, each of
the Units will be a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and an implied covenant of good faith and fair
dealing. Each of the Placement Agent Warrants has been duly authorized by the
Company, and, upon issuance thereof on a Closing Date, will have been validly
executed and delivered by the Company. When each of the Placement Agent Warrants
has been duly executed and delivered by the Company, each of the Placement Agent
Warrants will be a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and an implied covenant of good faith and fair
dealing. Assuming the accuracy of the representations and warranties of the
Prospective Investors set forth in the Subscription Agreements and the Investor
Questionnaires and the representations and warranties of the Placement Agent set
forth herein, no consent, authorization, approval, order, license, certificate,
or permit of or from, or registration, qualification, declaration, or filing
with, any federal, state, local, foreign, or other governmental authority or any
court or other tribunal is required by the Company for the execution, delivery,
or performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby, except the filing of a Notice of Sale of
Securities on Form D pursuant to Regulation D, and such consents,
authorizations, approvals, registrations, and qualifications as may be required
under all applicable federal and/or state securities laws in connection with the
issuance, sale, and delivery of the certificates representing the shares of
Common Stock and the Warrants comprising the Units pursuant to this Agreement
and/or the Subscription Agreements. No consent of any party to any material
contract, agreement, instrument, lease, license, arrangement, or understanding
to which the Company is a party, or to which any of its properties or assets are
subject, is required for the execution, delivery, or performance of this
Agreement or the Subscription Agreement, and the consummation of the
transactions contemplated hereby and thereby, and such execution, delivery and
performance will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any such contract, agreement, instrument,
lease, license, arrangement, or understanding, violate or result in a breach of
any term of the certificate of incorporation or by-laws of the Company, or
assuming the accuracy of the representations and warranties of the Prospective
Investors set forth in the Subscription Agreements and Investor Questionnaires
and the representations and warranties of the Placement Agent set forth herein,
violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on the Company or to which any of its
operations, businesses, properties, or assets are subject.
(xiii) The Units, Common Stock, Warrants and Placement
Agent Warrants shall conform to all statements relating thereto as contained in
the Offering Documents. The Common Stock and Warrants when issued and delivered
to the Prospective Investor pursuant to the terms of the Subscription Agreement
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and this Agreement shall be duly authorized, validly issued, fully paid and
nonassessable, without any personal liability attaching to the ownership thereof
solely by being such holder and shall not have been issued in violation of any
preemptive rights of stockholders.
(xiv) Except and to the extent described in or
referred to in the Offering Documents or in any SEC Filings or as provided in
the private placement offering completed in June 1998 through the Placement
Agent: (A) no holders of any securities of the Company or of any options,
warrants or other convertible or exchangeable securities of the Company have the
right to include any securities issued by the Company on any registration
statement to be filed by the Company or to require the Company to file a
registration statement under the Securities Act of 1933, as amended, and (B) no
person or entity holds any securities of the Company which contain anti-dilution
rights which will be affected by the transactions contemplated hereby.
(xv) Except in connection with the exercise of
outstanding options and warrants disclosed in the Offering Documents or the SEC
Filings, during the period commencing on the date hereof and ending on the Final
Closing Date, the Company shall not, without prior notice to and consent of the
Placement Agent: (A) issue any securities or incur any liability or obligation,
primary or contingent, for borrowed money; (B) enter into any transaction not in
the ordinary course of business; or (C) declare or pay any dividend on its
capital stock.
(xvi) Neither the Company nor any of its officers,
directors, or affiliates, has engaged or will engage, directly or indirectly, in
any act or activity that may jeopardize the status of the Offering and sale of
the Units an exempt transaction under the Act or under all applicable federal
and/or state securities or "blue sky" laws of any jurisdiction in which the
Units may be offered or sold.
(xvii) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file would not
have a material adverse effect on the Company), and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in or contemplated under the Offering Documents.
(xviii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (A)
transactions are executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
10
(xix) Subsequent to the dates as of which information
is given in the Offering Documents, and except as may otherwise be properly
described in the Offering Documents or in any SEC Filings: (A) the Company has
not, except in the ordinary course of business, incurred any liability or
obligation, primary or contingent, for borrowed money; (B) there has not been
any material change in the capital stock, short-term debt or long-term debt of
the Company; (C) the Company has not purchased any of its outstanding capital
stock nor declared or paid any dividend or distribution of any kind on its
capital stock; (D) the Company has not sustained any material loss or
interference with its businesses or properties from fire, floor, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding; and (E) there has not
been any material adverse change or any development which the Company reasonably
believes could result in a material adverse change in the financial condition,
results of operations, business, properties, assets or liabilities of the
Company.
(xx) No labor dispute with the employees of the
Company exists or is threatened or imminent that could result in a material
adverse change in the financial condition, results of operations, business,
properties, assets or liabilities of the Company, except as described in or
contemplated under the Offering Documents.
(xxi) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; the
Company has not been refused any insurance coverage sought or applied for; and
the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from insurers of recognized financial responsibility as may be
necessary to continue its business at a cost that would not materially and
adversely affect the financial condition, results of operations, business,
properties, assets or liabilities of the Company, except as described in or
contemplated by the Offering Documents.
8. COVENANTS OF THE COMPANY
The Company covenants that it will:
(a) Notify you immediately, and confirm such notice in
writing: (i) when any event shall have occurred during the period commencing on
the date hereof and ending on the Final Closing Date, as a result of which the
Offering Documents would include 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 light of the circumstances under which they were
made, not misleading; and (ii) of the receipt of any notification with respect
to the modification, rescission, withdrawal, or suspension of the qualification
or registration of the Units, or of an exemption from such registration or
qualification, in any jurisdiction. The Company will use its best efforts to
prevent the issuance of any such modification, rescission, withdrawal, or
suspension and if you so request, to obtain the lifting thereof as promptly as
possible.
(b) Not make any supplement or amendment to the Offering
Documents unless such supplement or amendment complies with the requirements of
the Act and Regulation D and the applicable federal and/or state securities and
11
"blue sky" laws and unless you shall have approved of such supplement or
amendment in writing. If, at any time during the period commencing on the date
hereof and ending on the Final Closing Date, any event shall have occurred as a
result of which the Offering Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or if, in the
opinion of counsel to the Company or counsel to the Placement Agent, it is
necessary at any time to supplement or amend the Offering Documents to comply
with the Act, Regulation D, or any applicable securities or "blue sky" laws, the
Company will promptly prepare an appropriate supplement or amendment (in form
and substance satisfactory to you) which will correct such statement or omission
or which will effect such compliance.
(c) Deliver without charge to the Placement Agent such
number of copies of the Offering Documents and any supplement or amendment
thereto as may reasonably be requested by the Placement Agent.
(d) Not, directly or indirectly, solicit any offer to buy
from, or offer to sell to any person any Units or Common Stock or Warrants
underlying the Units, except through the Placement Agent.
(e) Cooperate with the Placement Agent's counsel to qualify
or register the Units, Common Stock and Warrants for offering and sale under, or
establish an exemption from such qualification or registration under, the
securities or "blue sky" laws of such jurisdictions as you may reasonably
request; provided, however, that the Company will not be obligated to qualify to
do business as a dealer in securities in any jurisdiction in which it is not so
qualified. The Company will not consummate any sale of Units in any jurisdiction
or in any manner in which such sale may not be lawfully made; in this regard the
Company shall be entitled to rely on the Placement Agent's representations
herein, and the representations of Prospective Investors in the Subscription
Agreements and Purchaser Questionnaires and on the blue sky qualifications
effected by the Placement Agent's counsel.
(f) At all times during the period commencing on the date
hereof and ending on the Final Closing Date, provide to each Prospective
Investor or his Purchaser Representative (as defined in Regulation D), if any,
on request, such information (in addition to that contained in the Offering
Documents) concerning the Offering, the Company and any other relevant matters,
as it possesses or can acquire without unreasonable effort or expense, and to
extend to each Prospective Investor or his Purchaser Representative, if any, the
opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of the Offering and the business of the
Company and to obtain any other additional information, to the extent it
possesses the same or can acquire it without unreasonable effort or expense, as
such Prospective Investor or Purchaser Representative may consider necessary in
making an informed investment decision or in order to verify the accuracy of the
information furnished to such Prospective Investor or Purchaser Representative,
as the case may be.
(g) Provide to each Prospective Investor or his Purchaser
Representative any information required to be delivered by Rule 502(b) of
Regulation D.
12
(h) Disclose to each Prospective Investor, in writing, any
material relationship between such Prospective Investor's Purchaser
Representative, if any, or its affiliates, on the one hand, and the Company or
its affiliates, on the other hand, which, to the knowledge of the Company, then
exists or is understood to be contemplated or has existed at any time during the
previous two years and any compensation received or to be received as a result
of such relationship.
(i) Cooperate with counsel to the Placement Agent in order
to file five copies of a Notice of Sales of Securities on Form D with the
Securities and Exchange Commission (the "Commission") no later than 15 days
after the first sale of the Units and file a final notice on Form D with the
Commission no later than 30 days after the last sale of Units. The Company shall
file promptly such amendments to such Notice on Form D as shall become necessary
and, as requested by you, shall also comply with any filing requirement imposed
by the laws of any state or jurisdiction in which offers and sales are made.
(j) Not, directly or indirectly, engage in any act or
activity which may jeopardize the status of the Offering and sale of the Units
as exempt transactions under the Act or under the securities or "blue sky" laws
of any jurisdiction in which the Offering maybe made. Without limiting the
generality of the foregoing, and notwithstanding anything contained herein to
the contrary, the Company shall not, directly or indirectly, engage in any
offering of securities which, if integrated with the Offering in the manner
prescribed by Rule 502(a) of Regulation D and applicable releases of the
Commission, may jeopardize the status of the offering and sale of the Units as
exempt transactions under Regulation D.
(k) Apply the net proceeds from the sale of the Units as set
forth in the Offering Memorandum.
(l) Not, during the period commencing on the date hereof and
ending on the Final Closing Date, issue any press release or other
communication, or hold any press conference with respect to the Company, its
financial condition, results of operations, business, properties, assets, or
liabilities, or the Offering, without your prior written consent, which consent
shall not be unreasonably withheld, except as required by applicable securities
laws.
13
9. PAYMENT OF EXPENSES
The Company hereby agrees to pay all fees, charges, and expenses
incident to the performance by the Company of its obligations hereunder,
including, without limitation, all fees, charges, and expenses in connection
with: (i) the preparation, printing, filing, distribution, and mailing of the
Offering Documents, and all other documents relating to the Offering, purchase,
sale, and delivery of the Units (and component parts), and any supplements or
amendments thereto, including the cost of all copies thereof; (ii) the
preparation and reproduction of this Agreement, the Common Stock certificates
and the Warrants; (iii) the issuance, sale, transfer, and delivery of the Units,
including any transfer or other taxes payable thereon and the fees of any
transfer agent or registrar; (iv) the registration or qualification of the Units
or the securing of an exemption therefrom under state or foreign "blue sky" or
securities laws, including without limitation, filing fees payable in the
jurisdictions in which such registration or qualification or exemption therefrom
is sought, disbursements in connection therewith, and the fees of counsel for
the Placement Agent in connection therewith in an amount equal to $5,000 which
shall be paid at the Initial Closing; (v) filing fees payable to the Commission,
if any; and (vi) the retention of the Escrow Agent, including the fees and
expenses of the Escrow Agent for serving as such and the fees and expenses of
its counsel, if any.
10. CONDITIONS OF PLACEMENT AGENT'S OBLIGATIONS
The obligations of the Placement Agent pursuant to this
Agreement shall be subject, in its discretion, to the continuing accuracy, in
all material respects, of the representations and warranties of the Company
contained herein and in each certificate and document contemplated under this
Agreement to be delivered to the Placement Agent, as of the date hereof and as
of each Closing Date, with respect to the performance by the Company of its
obligations hereunder, and to the following conditions:
(a) At the initial Closing, the Placement Agent shall have
received the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel for the Company, dated
each Closing Date, addressed to the Placement Agent, and in form and scope
satisfactory to counsel for the Placement Agent in the form of Exhibit A annexed
hereto. With respect to subsequent closings, counsel may provide a "bring down"
opinion.
In rendering such opinion, counsel for the Company may rely:
(A) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company; and (B) to the extent they deem proper,
upon written statements or certificates of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to counsel for the Placement Agent.
(b) On or prior to the Initial Closing Date, the Placement
Agent shall have been furnished such information, documents, certificates, and
opinions as it may reasonably require for the purpose of enabling it to review
the matters referred to in Section 7, and in order to evidence the accuracy,
completeness, or satisfaction of any of the representations, warranties,
covenants, agreements, or conditions herein contained, or as it may otherwise
reasonably request.
14
(c) At each Closing, the Placement Agent shall have received
a certificate of the chief executive officer and of the chief financial officer
of the Company, dated the applicable Closing Date to the effect that, as of the
date of this Agreement and as of the applicable Closing Date the representations
and warranties of the Company contained herein were and are accurate in all
material respects, and that as of the Closing Date the obligations to be
performed by the Company hereunder on or prior thereto have been fully
performed.
(d) All proceedings taken in connection with the issuance,
sale, and delivery of the Units shall be satisfactory in form and substance to
you and your counsel.
(e) There shall not have occurred after the date hereof, at
any time prior to each Closing: (A) any domestic or international event, act, or
occurrence which has materially disrupted, or in your opinion will in the
immediate future materially disrupt the securities markets; (B) a general
suspension of, or a general limitation on prices for, trading in securities on
the Nasdaq SmallCap Market or the over-the-counter market; (C) any banking
moratorium declared by a state or federal authority; (D) any material
interruption in the mail service or other means of communication within the
United States; (E) any material adverse change in the business, properties,
assets, results of operations, or financial condition of the Company; or (F) any
change in the market for securities in general or in political, financial, or
economic conditions which, in your judgment, makes it inadvisable to proceed
with the offering, sale, and delivery of the Units.
Any certificate or other document signed by any officer of
the Company and delivered to you or to your counsel at a Closing shall be deemed
a representation and warranty by the Company hereunder as to the statements made
therein. If any condition to your obligations hereunder has not been fulfilled
as and when required to be so fulfilled, you may terminate this Agreement or, if
you so elect, in writing waive any such conditions which have not been fulfilled
or extend the time for their fulfillment. In the event that you elect to
terminate this Agreement, you shall notify the Company of such election in
writing. Upon such termination, neither party shall have any further liability
or obligation to the other except as provided in Section 11 hereof.
11. TERMINATION
The Placement Agent shall have the right to terminate this
Agreement: (i) if any calamitous domestic or international event or act or
occurrence has materially disrupted, or in the Placement Agent's commercially
reasonable opinion will in the immediate future materially disrupt general
securities markets in the United States; or (ii) if trading on the New York
Stock Exchange, the American Stock Exchange, or in the over-the-counter market
shall have been suspended or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been required
on the over-the-counter market by the NASD or by order of the Commission or any
other government authority having jurisdiction; or (iii) if the United States
shall have become involved in a war or major hostilities; or (iv) if a banking
moratorium has been declared by a New York State or federal authority; or (v) if
a moratorium in foreign exchange trading has been declared; or (vi) if the
Company shall have sustained a material loss, whether or not insured, by reason
15
of fire, flood, accident or other calamity; or (vii) if there shall have been
such material adverse change in the conditions or prospects of the Company; or
(viii) if there shall have been such material adverse change in general
economic, political or financial conditions as in the Placement Agent's judgment
would make it inadvisable or impracticable to proceed with the Offering, sale or
delivery of the Units.
12. SOLICITATION PROHIBITION
The Company agrees that, for a period of three (3) years
from the date hereof, it shall not solicit any offer to buy from or offer to
sell to any person introduced to the Company by the Placement Agent in
connection with the Offering, directly or indirectly, any securities of the
Company or of any other entity, or provide the name of any such person to any
other securities broker or dealer or selling agent. The Placement Agent shall
provide a written list of all such persons following the Final Closing of the
Offering. In the event that the Company or any of its affiliates, directly or
indirectly, solicits, offers to buy from or offers to sell to any such person
any such securities (other than in connection with a rights offering to existing
shareholders), or provides the name of any such person to any other securities
broker or dealer or selling agent, and such person purchases such securities or
purchases securities from any other securities broker or dealer or selling
agent, the Company shall pay to the Placement Agent an amount equal to 10% of
the aggregate purchase price of the securities so purchased by such person.
13. INDEMNIFICATION AND CONTRIBUTION
(a) The Company agrees to indemnify and hold harmless the
Placement Agent, its officers, directors, partners, employees, agents, and
counsel, and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), against any and all loss, liability,
claim, damage, and expense whatsoever (which shall include, for all purposes of
this Section 13, but not be limited to, attorneys' fees and any and all expense
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation) as and when incurred
arising out of, based upon, or in connection with: (i) any untrue statement or
alleged untrue statement of a material fact contained in the Offering Documents
or in any document delivered or written statement made pursuant to Section 8(g),
or in any application or other document or communication (it being understood
that neither the Company nor any officer, director or employee shall provide any
information to any Prospective Investor which is not contained in the Offering
Documents) (in this Section 13 collectively called an "application") executed by
or on behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to register or qualify
the Units under the state or securities laws thereof or in order to secure an
exemption from such registration or qualification or filed with the Commission;
or any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to the Placement
Agent expressly for inclusion in the Offering Documents or in any application,
as the case may be; or (ii) any material breach of any representation, warranty,
16
covenant, or agreement of the Company contained in this Agreement; and (iii) any
act or omission of the Placement Agent in violation of federal or state
securities. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
If any action is brought against the Placement Agent or any
of its officers, directors, partners, employees, agent, or counsel, or any
controlling persons of the Placement Agent (an "indemnified party"), in respect
of which indemnify may be sought against the Company pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the Company
(the "indemnifying party") in writing of the institution of such action (but the
failure so to notify shall not relieve the indemnifying party from any liability
it may have other than pursuant to this Section 13(a) unless, and to the extent
the indemnifying party is prejudiced thereby) and the indemnifying party shall
promptly assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties) and payment of
expenses. Such indemnified party shall have the right to employ its own counsel
in any such case, but the fees and expense of such counsel shall be at the
expense of such indemnified party unless the employment of such counsel shall
have been authorized in writing by the indemnifying party in connection with the
defense of such action or the indemnifying party shall not have promptly
employed counsel satisfactory to such indemnified party or parties to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses available
to it or them or to other indemnified parties which are different from or
additional to those available to one or more of the indemnifying parties, in any
of which events such fees and expenses of one such counsel shall be borne by the
indemnifying party and the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties.
Anything in this paragraph to the contrary notwithstanding, the indemnifying
party shall not be liable for any settlement of any such claim or action
effected without its written consent. The Company agrees promptly to notify the
Placement Agent of the commencement of any litigation or proceedings against the
Company or any of its officers or directors in connection with the sale of the
Units, the Offering Documents, or any application.
(b) The Placement Agent agrees to indemnify and hold
harmless the Company, its officers, directors, employees, agents, and counsel,
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Placement Agent in Section
13(a), with respect to any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 13, but not be
limited to, attorneys' fees and any and all expense whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with (i) statements or omissions, if any, made in the Offering
Documents or applications in reliance upon and in conformity with written
information furnished to the Company with respect to the Placement Agent
expressly for inclusion in the Offering Documents or applications; (ii) the
failure of the Placement Agent to comply with the provisions of Section 2(c)
hereof or with the "blue sky" or securities laws of the jurisdictions in which
the Placement Agent solicits offers to buy or offers to sell any Units; (iii)
any breach of any representation, warranty, covenant or agreement of the
17
Placement Agent contained in this Agreement; or (iv) any act or omission of the
Placement Agent in violation of federal or state securities laws. The foregoing
agreement to indemnify shall be in addition to any liability the Placement Agent
may otherwise have, including liabilities arising under this Agreement. If any
action shall be brought against the Company or any other person so indemnified
based on the Offering Documents and in respect of which indemnity may be sought
against the Placement Agent pursuant to this Section 13(b), the Placement Agent
shall have the rights and duties given to the indemnifying party, and the
Company and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of Section 13(a).
(c) To provide for just and equitable contribution, if: (i)
an indemnified party makes a claim for indemnification pursuant to Section 13(a)
or 13(b) but it is found in a final judicial determination, not subject to
further appeal, that such indemnification may not be enforced in such case, even
though this Agreement expressly provides for indemnification in such case, or
(ii) any indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act, or otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any officer, director, employee, agent, or
counsel of the Company, or any controlling person of the Company), on the one
hand, and the Placement Agent (including for this purpose any contribution made
by or on behalf of an indemnified party), on the other hand, shall contribute to
the losses, liabilities, claims, damages, and expenses whatsoever to which any
of them may be subject, in such proportions as are appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Placement
Agent, on the other hand; provided, however, that if applicable law does not
permit such allocation, then other relevant equitable considerations such as the
relative fault of the Company and the Placement Agent in connection with the
facts which resulted in such losses, liabilities, claims, damages, and expenses
shall also be considered. The relative benefits received by the Company, on the
one hand, and the Placement Agent, on the other hand, shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
compensation payable to the Placement Agent pursuant to Section 6(a) hereof but
before deducting expenses) received by the Company, and (y) the compensation
received by the Placement Agent pursuant to Section 6(a) hereof.
The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, omission, or
alleged omission relates to information supplied by the Company or by the
Placement Agent, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company and the Placement Agent
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Placement Agent for contribution were determined by pro rata
or per capita allocation of the aggregate losses, liabilities, claims, damages,
and expenses or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section l3(c). In no case shall the
Placement Agent be responsible for a portion of the contribution obligation in
excess of the compensation received by it pursuant to Section 6(a) hereof. No
person guilty of a fraudulent misrepresentation shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section l3(c), each person, if any, who
controls the Placement Agent within the meaning of Section l5 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partners,
18
employee, agent, and counsel of the Placement Agent, shall have the same rights
to contribution as the Placement Agent, and each person, if any, who controls
the Company within the meaning of Section l5 of the Act or Section 20(a) of the
Exchange Act and each officer, director, employee, agent, and counsel of the
Company, shall have the same rights to contribution as the Company, subject in
each case to the provisions of this Section l3(c). Anything in this Section
l3(c) to the contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without its
written consent. This Section l3(c) is intended to supersede any right to
contribution under the Act, the Exchange Act, or otherwise.
14. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY
All representations, warranties, covenants, and agreements
contained in this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Closing Date and, such representations,
warranties, covenants, and agreements, including the indemnification and
contribution agreements contained in Section 13, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Placement Agent or any indemnified person, or by or on behalf of the Company
or any person or entity which is entitled to be indemnified under Section l3(b),
and shall survive termination of this Agreement or the issuance, sale, and
delivery of the Units for a period of three years. In addition, notwithstanding
any election hereunder or any termination of this Agreement, and whether or not
the terms of this Agreement are otherwise carried out, the provisions of
Sections 12, 13 and 14 shall survive termination of this Agreement and shall not
be affected in any way by such election or termination or failure to carry out
the terms of this Agreement or any part thereof.
15. NOTICES
All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Placement
Agent, shall be mailed, delivered, or faxed and confirmed by letter, to
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Associates L.P., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; or if sent
to the Company, shall be mailed, delivered or faxed and confirmed by letter, to
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇.
▇'▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇, Esq. All notices hereunder shall be
effective upon receipt by the party to which it is addressed.
19
16. PARTIES
This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Placement Agent and the Company and the persons and
entities referred to in Section l3 who are entitled to indemnification or
contribution, and their respective successors, legal representatives, and
assigns (which shall not include any purchaser, as such, of Units), and no other
person shall have or be construed to have any legal or equitable right remedy,
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
17. GOVERNING LAW/CONSTRUCTION/JURISDICTION
(a) This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to conflict of laws.
(b) The Company (i) agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted
exclusively in New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (ii) waives
any objection which the Company may have now or hereafter to the venue of any
such suit, action or proceeding, and (iii) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of New York and the
United States District Court for the Southern District of New York in any such
suit, action or procedure. Each of the Company and the Placement Agent further
agrees to accept and acknowledge service of any and all process which may be
served in any suit, action or proceeding in the New York State Supreme Court for
the Southern District of New York, and agrees that service of process upon the
Company mailed by certified mail to the Company's address shall be deemed in
every respect effective service of process upon the Company in any such suit,
action or proceeding. In the event of litigation between the parties arising
hereunder, the prevailing party shall be entitled to costs and reasonable
attorney's fees.
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18. COUNTERPARTS
This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement.
If the foregoing correctly sets forth the understanding
between us, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
NUWAVE TECHNOLOGIES, INC.
By:
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Name:
Title:
Accepted as of the date first above written:
▇▇▇▇▇▇▇-▇▇▇▇▇▇ ASSOCIATES L.P.
By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Securities Corp.General Partner
By:
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
21
