<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 21, 2000
----------------
Date of Report (Date of earliest event reported)
NHANCEMENT TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21999 84-1360852
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
6663 Owens Drive
Pleasanton, California 94588
----------------------------
(Address of principal executive offices, including zip code)
(925) 251-3333
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective January 21, 2000 (the "EFFECTIVE DATE"), NHancement
Technologies Inc., a Delaware corporation ("NHANCEMENT"), completed its
acquisition of Trimark Incorporated, a California corporation ("TRIMARK"),
pursuant to the Plan and Agreement of Reorganization (the "AGREEMENT"), dated
December 10, 1999, among NHancement, Trimark, and Greg Darling and Richard
Glover, the sole shareholders of Trimark (the "SHAREHOLDERS"). Under the terms
of the Agreement, Trimark merged into NHancement Acquisition Corp., a newly
formed California corporation and wholly-owned subsidiary of NHancement
("MERGER SUB"), with Merger Sub being the surviving corporation and a
wholly-owned subsidiary of NHancement (the "REORGANIZATION"). It is anticipated
that Merger Sub will be renamed NHancement Enterprise Software Solutions, Inc.,
dba Triad Marketing.
Under the Agreement, NHancement agreed to issue to the Shareholders an
aggregate of 750,000 shares, and warrants to purchase 250,000 shares, of
unregistered, restricted NHancement Common Stock. The warrants have a term of
three years and are exercisable at a warrant price equal to the average closing
price of a share of NHancement Common Stock as reported on the Nasdaq SmallCap
Market for the five consecutive trading days ending on December 9, 1999 (the
"VALUATION DATE"). NHancement's Board of Directors determined the fair value of
the Trimark business; no independent appraisal was obtained.
NHancement has agreed to use its best efforts to qualify for
registration on Form S-3 250,000 shares of the Common Stock (the "REGISTRABLE
SHARES") issued to the Shareholders as soon as practicable following the
Effective Date, but in no event later than June 10, 2000. Notwithstanding its
obligation to register the Registrable Shares, NHancement does have the right,
at its sole option , to terminate such registration obligation by irrevocably
offering, on or before March 10, 2000, to purchase all of such Registrable
Shares at a per share purchase price equal to the average closing price of a
share of NHancement Common Stock as reported on the Nasdaq SmallCap Market for
the five consecutive trading days ending on March 9, 2000, but in no event
shall such purchase price be less than $1.50 per share.
Of the remaining 500,000 shares to be issued to the Shareholders, the
transfer of 250,000 shares is restricted by a lock-up agreement for a one year
period following the Valuation Date and the transfer of the remaining 250,000
is restricted by a lock-up agreement for a two year period following the
Valuation Date. The Agreement also provides for a subsequent adjustment to the
consideration delivered to the Shareholders in the event that the average
closing price of a share of NHancement Common Stock for the five consecutive
trading days, ending on the last trading day immediately prior to the first
anniversary and second anniversary of the Valuation Date is less than $4.00 per
share. Such additional consideration may be paid, at NHancement's option, in
cash or by delivery of shares of NHancement Common Stock at then current fair
market value (or any combination of the foregoing). The amount of the
additional consideration on each such anniversary date shall be calculated by
multiplying (i) 250,000 shares (and, on the first anniversary date only, any
additional registered shares still held by the Shareholders) by (ii) the lesser
of (a) $4.00 minus the then current fair market value of a share of
NHancement's Common Stock determined in accordance with such five day average
closing price or (b) $2.50.
<PAGE>
In connection with the Reorganization, NHancement also entered into
two year non-compete and employment agreements with the Shareholders; the other
employees of Trimark will remain employed by Merger Sub, on an at-will basis,
at their current salaries and on the existing terms and conditions of their
employment. Employees other than the Shareholders may be issued stock options
consistent with NHancement's policy for stock option grants to employees
similarly situated.
Merger Sub (formerly, Trimark) designs, develops, markets and services
profile selling software products and services to corporate enterprises. The
software is designed to ascertain one-to-one customer-selling opportunities
based on marketing heuristics that are unique to the individual customer. The
company charges a recurring fee based on usage for these services and has about
30 customers currently.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired. Not applicable.
(b) ProForm Financial Information. Not applicable.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
2.3 Plan and Agreement of Reorganization, dated December
10, 1999, by and among Trimark Incorporated
("TRIMARK"), Greg Darling ("DARLING"), Richard Glover
("GLOVER") and NHancement Technologies Inc. (the
"COMPANY").*
2.4 Agreement of Merger, by and between NHancement
Acquisition Corp. ("MERGER SUB") and Trimark, filed
with the Secretary of State of the State of
California effective January 21, 2000.*
4.14 Warrant, dated January 21, 2000, delivered to Glover.
4.15 Warrant, dated January 21, 2000, delivered to Darling.
10.56 Employment Agreement, dated as of January 21, 2000,
by and between Glover and the Company.*
10.57 Employment Agreement, dated as of January 21, 2000,
by and between Darling and the Company.*
10.58 Form of Non-Compete Agreement, dated as of January
21, 2000, by and among the Company, Merger Sub and
each of Darling and Glover.*
</TABLE>
_______________
<PAGE>
* Incorporated by reference to the document bearing the same exhibit
number as contained in the Company's Report on Form 8-K, as filed with
the Securities and Exchange Commission on February 7, 2000.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NHancement Technologies Inc.
Date: February 15, 2000 By: /s/ Douglas S. Zorn
---------------------------------
Douglas S. Zorn, President and
Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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<S> <C>
2.3 Plan and Agreement of Reorganization, dated December
10, 1999, by and among Trimark Incorporated
("TRIMARK"), Greg Darling ("DARLING"), Richard Glover
("GLOVER") and NHancement Technologies Inc. (the
"COMPANY").*
2.4 Agreement of Merger, by and between NHancement
Acquisition Corp. ("MERGER SUB") and Trimark, filed
with the Secretary of State of the State of
California effective January 21, 2000.*
4.14 Warrant, dated January 21, 2000, delivered to Glover.
4.15 Warrant, dated January 21, 2000, delivered to
Darling.
10.56 Employment Agreement, dated as of January 21, 2000,
by and between Glover and the Company.*
10.57 Employment Agreement, dated as of January 21, 2000,
by and between Darling and the Company.*
10.58 Form of Non-Compete Agreement, dated as of January
21, 2000, by and among the Company, Merger Sub and
each of Darling and Glover.*
</TABLE>
_________________
* Incorporated by reference to the document bearing the same exhibit
number as contained in the Company's Report on Form 8-K, as filed with
the Securities and Exchange Commission on February 7, 2000.
<PAGE>
EXHIBIT 4.14
NHANCEMENT TECHNOLOGIES INC.
Issued as of the 21st day (1) Aggregate Price: $228,750
of January, 2000 (2) Initial Warrant Price: $1.525
(3) Number of Shares Initially
Subject to Warrant: 150,000
NEITHER THIS WARRANT, NOR THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF,
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933
SECURITIES ACT"), OR QUALIFIED OR REGISTERED UNDER CALIFORNIA OR OTHER
APPLICABLE SECURITIES LAWS ("STATE SECURITIES LAWS"), AND THIS WARRANT HAS
BEEN, AND THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF WILL BE, ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF. NO SUCH SALE OR OTHER DISPOSITION MAY BE MADE WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 SECURITIES ACT AND COMPLIANCE
WITH THE APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE ISSUER AND ITS COUNSEL, THAT SAID REGISTRATION IS NOT
REQUIRED UNDER THE 1933 SECURITIES ACT AND THAT APPLICABLE STATE SECURITIES
LAWS HAVE BEEN SATISFIED.
COMMON STOCK WARRANT
This certifies that RICHARD GLOVER, ("PURCHASER"), whose address for
notice is c/o Triad Marketing, 4725 Mercury Street, Suite 210, San Diego,
California 92111-2125 or any party to whom this Warrant is assigned in
compliance with the terms hereof (Purchaser and any such assignee being
hereinafter sometimes referenced as "HOLDER"), is entitled to subscribe for and
purchase, during the period commencing at the issue date set forth above and
ending at 5:00 p.m., California, local time, on the third (3rd) anniversary of
such issue date, the number of shares of fully paid and nonassessable
unregistered, restricted Common Stock ("COMMON STOCK") of NHANCEMENT
TECHNOLOGIES INC, A DELAWARE CORPORATION (the "COMPANY"), that have an
aggregate purchase price equal to the Aggregate Price as defined below. The
purchase price of each such share shall be equal to the Warrant Price, as
defined below.
ARTICLE 1
DEFINITIONS
1.1 "AGGREGATE PRICE" shall be $228,750.
1.2 "WARRANT PRICE" shall be One Dollar Fifty-Two and One Half Cents
($1.525), as adjusted herein.
ARTICLE 2
EXERCISE AND PAYMENT
2.1 CASH EXERCISE. The purchase rights represented by this Warrant may be
exercised by Holder, in whole or in part, by the surrender of this Warrant at
the principal office of the Company, located at the address set forth on the
signature page hereof, accompanied by the form of Notice of Cash Exercise
attached hereto as Exhibit "A-1", and by the payment to the Company, by cash or
by certified, cashier's or other check acceptable to the Company, of an amount
equal to the aggregate Warrant Price of the shares being purchased.
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Common Stock Warrant
Page 2
2.2 NET ISSUE EXERCISE. In lieu of exercising this Warrant pursuant to
Section 2.1, Holder may elect to receive shares of Common Stock equal to the
value of this Warrant determined in the manner described below (or of any
portion thereof remaining unexercised) by surrender of this Warrant at the
principal office of the Company together with the form of Notice of Cashless
Exercise attached hereto as Exhibit "A-2", in which event the Company shall
issue to Holder a number of shares of the Company's Common Stock computed using
the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under this Warrant
(at the date of such calculation).
A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation).
B = Warrant Price.
2.3 FAIR MARKET VALUE. For purposes of this Article II, fair market
value of one share of the Company's Common Stock shall mean:
(i) The average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary, the last reported sale price
of the Common Stock or the closing price quoted on the Nasdaq SmallCap
Market System ("SCMS") or on any exchange on which the Common Stock is
listed, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the trading day prior to the date of determination
of fair market value; or
(ii) If the Common Stock is not traded Over-The-Counter, on the SCMS or on
an exchange, the per share fair market value of the Common Stock shall be
as determined by mutual agreement of the Company and the Holder; provided,
however that if such agreement cannot be reached within twenty (20)
calendar days, such value shall be determined by an independent appraiser
appointed in good faith by the Company's Board of Directors. The cost of
such appraisal shall be borne equally by the Company and the Holder. Such
appraiser shall meet the following criteria: (a) it shall not be associated
or affiliated with the Company in any fashion and shall not have previously
provided services to the Company; (b) the appraiser shall have reasonable
qualifications to appraise the value of the Common Stock; (c) it is not
(and none of its affiliates is) a promoter, director or officer of the
Company or any of its affiliates or an underwriter with respect to any of
the securities of the Company; and (d) it does not provide any advice or
opinions of the Company except as an appraiser under this section. In the
event such an appraisal is required it should be conducted under the
following procedures: the Company shall select the appraiser within ten
(10) days of receipt of written notice from the Holder that agreement
cannot be reached and the Company shall submit the name of such appraiser
to Holder. Twenty (20) days after selection of the appraiser, the Company
and the Holder shall each submit to the appraiser a single value
representing such party's contention as to the fair market value of one
share of the Company's Common Stock. Within fifteen (15) days after receipt
of the submission of the Company and the Holder, the appraiser shall select
one of the two values submitted by the parties, and such value shall be the
fair market value of one share of the Common Stock for purpose of this
Warrant. The appraiser shall have no discretion to take any action other
than selection of one of the two values submitted to the appraiser. The
parties may submit to the appraiser and one another, at the time they
submit their respective single values, such supporting documentation as
they deem necessary or appropriate. The parties shall have the opportunity
seven (7) business days after receipt of the other party's proposed
valuation and supporting documentation to
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Common Stock Warrant
Page 3
provide the appraiser and each other with supplemental written information.
The appraiser may, in its discretion, hold a single six (6) hour hearing
on valuation issues. If a hearing is held, each party shall be allocated
three (3) hours. The appraiser may conduct the hearing in accordance with
any rules of procedure it deems appropriate. The value selected by the
appraiser shall be final and binding upon the parties without any further
right of appeal.
2.4 STOCK CERTIFICATES. In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to Holder within a reasonable time and, unless
this Warrant has been fully exercised or has expired, a new Warrant
representing the remaining unexercised Aggregate Price shall also be issued to
Holder at such time.
2.5 AUTOMATIC EXERCISE. To the extent this Warrant is not previously
exercised, and if the fair market value of one share of the Company's Common
Stock is greater than the Warrant Price, as adjusted, this Warrant shall be
deemed automatically exercised in accordance with Section 2.2 hereof (even if
not surrendered) immediately before its expiration. For purposes of such
automatic exercise, the fair market value of one share of the Company's Common
Stock upon such expiration shall be the fair market value determined pursuant
to Section 2.3 above. To the extent this Warrant or any portion thereof is
deemed automatically exercised pursuant to this Section 2.5, the Company agrees
to notify Holder within a reasonable period of time of the number of shares of
the Company's Common Stock, if any, Holder is to receive by reason of such
automatic exercise.
2.6 STOCK FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof (excluding taxes based on the income of Holder). The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized and reserved for issuance a sufficient number of shares of its
Common Stock or other securities as would be required upon the full exercise of
the rights represented by this Warrant (including conversion of all such Common
Stock issuable hereunder).
2.7 FRACTIONAL SHARES. No fractional share of Common Stock will be issued
in connection with any exercise hereof; in lieu of a fractional share upon
complete exercise hereof, Holder may purchase a whole share by delivering
payment equal to the appropriate portion of the then effective Warrant Price.
ARTICLE 3
CERTAIN ADJUSTMENTS OF NUMBER OF SHARES PURCHASABLE AND
WARRANT PRICE
The number and kind of securities purchasable upon the exercise of this
Warrant and the Warrant Price shall be subject to adjustment from time to time
upon the happening of certain events, as follows:
3.1 RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of: (i) any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant; (ii) any consolidation or merger of the Company with or into
another corporation (other than a merger with another corporation in which the
Company is a continuing corporation and which does not result in any
reclassification, change or exchange of outstanding securities issuable upon
exercise of this Warrant); or (iii) any sale or transfer to another corporation
of all, or substantially all, of the property of the Company, then, and in each
such event, the Company or such successor or purchasing corporation, as the
case may be, shall execute a new Warrant of like form, tenor and effect and
which will provide that Holder shall have the right to exercise such new
Warrant and purchase upon such exercise, in lieu of each share of Common Stock
theretofore issuable upon
<PAGE>
Common Stock Warrant
Page 4
exercise of this Warrant, the kind and amount of securities, money and property
receivable upon such reclassification, change, consolidation, merger, sale or
transfer by a holder of one share of Common Stock issuable upon exercise of
this Warrant had this Warrant been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or transfer. Such new
Warrant shall be as nearly equivalent in all substantive respects as
practicable to this Warrant and the adjustments provided in this Article III
and the provisions of this Section 3.1, shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and transfers.
3.2 SUBDIVISION OR COMBINATION OF SHARES. If the Company shall at any time
while this Warrant remains outstanding and less than fully exercised: (i)
divide its Company Stock, the Warrant Price shall be proportionately reduced;
or (ii) shall combine shares of its Common Stock, the Warrant Price shall be
proportionately increased.
3.3 STOCK DIVIDENDS. If the Company, at any time while this Warrant is
outstanding and unexpired, shall pay a dividend payable in, or make any other
distribution to holders of, Common Stock (except any distribution described in
Sections 3.1 and 3.2 hereof) then the Warrant Price shall be adjusted to that
price determined by multiplying the Warrant Price then in effect by a fraction,
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
3.4 OTHER ACTION AFFECTING COMMON STOCK. If the Company takes any action
affecting its Common Stock after the date hereof (including dividends and
distributions), other than an action described in any of Sections 3.1 and 3.2
hereof, which would have an adverse effect upon Holder's rights hereunder, the
Warrant Price shall be adjusted downward in such manner and at such time as the
Board of Directors of the Company shall in good faith determine to be equitable
under the circumstances.
3.5 TIME OF ADJUSTMENTS TO THE WARRANT PRICE. All adjustments to the
Warrant Price and the number of shares purchasable hereunder, unless otherwise
specified herein, shall be effective as of the earlier of:
(i) the date of issue of the security causing the adjustment;
(ii) the date of sale of the security causing the adjustment;
(iii) the effective date of a division or combination of shares;
(iv)the record date of any action of holders of any class of the Company's
capital stock taken for the purpose of entitling shareholders to receive a
distribution or dividend payable in equity securities, provided that such
division, combination, distribution or dividend actually occurs.
3.6 NOTICE OF ADJUSTMENTS. In each case of an adjustment in the Warrant
Price and the number of shares purchasable hereunder, the Company, at its
expense, shall cause the Chief Financial Officer of the Company to compute such
adjustment and prepare a certificate setting forth such adjustment and showing
in detail the facts upon which such adjustment is based. The Company shall
promptly mail a copy of each such certificate to Holder pursuant to Section 6.8
hereof.
3.7 DURATION OF ADJUSTED WARRANT PRICE. Following each adjustment of the
Warrant Price, such adjusted Warrant Price shall remain in effect until a
further adjustment of the Warrant Price.
3.8 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant
Price pursuant to this Article III, the number of shares of Common Stock
purchasable hereunder shall be
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Common Stock Warrant
Page 5
adjusted to the nearest whole share, to the number obtained by dividing the
Aggregate Price by the Warrant Price as adjusted.
ARTICLE 4
TRANSFER, EXCHANGE AND LOSS
4.1 TRANSFER. This Warrant is transferable on the books of the Company at
its principal office by the registered Holder hereof upon surrender of this
Warrant properly endorsed, subject to compliance with federal and state
securities laws. The Company shall issue and deliver to the transferee a new
Warrant or Warrants representing the Warrants so transferred. Upon any partial
transfer, the Company will issue and deliver to Holder a new Warrant or
Warrants with respect to the Warrants not so transferred. Notwithstanding the
foregoing, Holder shall not be entitled to transfer a number of shares or an
interest in this Warrant representing less than five percent (5%) of the
aggregate shares initially covered by this Warrant (as presently constituted,
with appropriate adjustment being made in the event of stock splits,
combinations, reorganizations and the like occurring after the issue date
hereof). Any transferee shall be subject to the same restrictions on transfer
with respect to this Warrant as the Purchaser.
4.2 SECURITIES LAWS. Upon any issuance of shares of Common Stock upon
exercise of this Warrant, if required by the Company, in connection with each
issuance of shares of Common Stock upon exercise of this Warrant, the Holder
will give: (i) assurances in writing, satisfactory to the Company, that such
shares are not being purchased with a view to the distribution thereof in
violation of applicable laws, (ii) sufficient information, in writing, to
enable the Company to rely on exemptions from the registration or qualification
requirements of applicable laws, if available, with respect to such exercise,
and (iii) its cooperation to the Company in connection with such compliance.
4.3 EXCHANGE. This Warrant is exchangeable at the principal office of the
Company for Warrants which represent, in the aggregate, the Aggregate Price
hereof; each new Warrant to represent the right to purchase such portion of the
Aggregate Price as Holder shall designate at the time of such exchange. Each
new Warrant shall be identical in form and content to this Warrant, except for
appropriate changes in the number of shares of Common Stock covered thereby,
the percentage stated in Section 4.1 above, and any other changes which are
necessary in order to prevent the Warrant exchange from changing the respective
rights and obligations of the Company and the Holder as they existed
immediately prior to such exchange.
4.4 LOSS OR MUTILATION. Upon receipt by the Company of evidence
satisfactory to it of the ownership of, and the loss, theft, destruction or
mutilation of, this Warrant and (in the case of loss, theft, or destruction) of
indemnity satisfactory to it, and (in the case of mutilation) upon surrender
and cancellation hereof, the Company will execute and deliver in lieu hereof a
new Warrant.
ARTICLE 5
HOLDER RIGHTS
NO SHAREHOLDER RIGHTS UNTIL EXERCISE. No Holder hereof, solely by
virtue hereof, shall be entitled to any rights as a shareholder of the Company.
Holder shall have all rights of a shareholder with respect to securities
purchased upon exercise hereof at the time: (i) the cash exercise price for
such securities is delivered pursuant to Section 2.1 hereof and this Warrant is
surrendered, (ii) of delivery of notice of cashless exercise pursuant to
Section 2.2 hereof and this Warrant is surrendered, or (iii) of automatic
exercise hereof (even if not surrendered) pursuant to Section 2.5 hereof.
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Common Stock Warrant
Page 6
ARTICLE 6
MISCELLANEOUS
6.1 GOVERNING LAWS. IT IS THE INTENTION OF THE PARTIES HERETO THAT EXCEPT
AS SET FORTH BELOW, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, U.S.A.
(IRRESPECTIVE OF ITS CHOICE OF LAW PRINCIPLES) SHALL GOVERN THE VALIDITY OF
THIS WARRANT, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION AND
ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO.
6.2 BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless otherwise
provided in, this Warrant, each and all of the covenants, terms, provisions,
and agreements contained herein shall be binding upon, and inure to the benefit
of the permitted successors, executors, heirs, representatives, administrators
and assigns of the parties hereto.
6.3 SEVERABILITY. If any one or more provisions of this Warrant, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Warrant and the application of such
provisions to other persons or circumstances shall be interpreted so as best to
reasonably effect the intent of the parties hereto. The parties further agree
to replace any such void or unenforceable provisions of this Warrant with valid
and enforceable provisions which will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provisions.
6.4 DEFAULT, AMENDMENT AND WAIVERS. This Warrant may be amended upon the
written consent of the Company and the Holder. The waiver by a party of any
breach hereof for default in payment of any amount due hereunder or default in
the performance hereof shall not be deemed to constitute a waiver of any other
default or any succeeding breach or default. The failure to cure any breach of
any term of this Warrant within ten (10) days of written notice thereof shall
constitute an event of default under this Warrant.
6.5 NO WAIVER. The failure of any party to enforce any of the provisions
hereof shall not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
6.6 ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
part of this Warrant, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including without limitation, costs, expenses and fees
on any appeal). The prevailing party shall be the party entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its costs shall not be entitled to recover
attorneys' fees. No sum for attorneys' fees shall be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys' fees.
6.7 NOTICES. Whenever any party hereto desires or is required to give any
notice, demand, or request with respect to this Warrant, each such
communication shall be in writing and shall be effective only if it is
delivered by personal service or mailed, United States certified mail, postage
prepaid, return receipt requested, addressed as follows:
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Common Stock Warrant
Page 7
Company: NHancement Technologies Inc.
39420 Liberty Street
Suite 250
Fremont, California 94538
Attn: Douglas S. Zorn
Holder: Triad Marketing
4725 Mercury Street, Suite 210
San Diego, CA 92111-2125
Such communications shall be effective when they are received by the addressee
thereof; but if sent by certified mail in the manner set forth above, they
shall be effective three (3) business days after being deposited in the United
States mail. Any party may change its address for such communications by giving
notice thereof to the other party in conformity with this Section.
6.8 TIME. Time is of the essence of this Warrant.
6.9 CONSTRUCTION OF AGREEMENT. A reference in this Warrant to any Section
shall include a reference to every Section the number of which begins with the
number of the Section to which reference is specifically made (E.G., a
reference to Section 3 shall include a reference to Sections 3.5 and 3.7). The
titles and headings herein are for reference purposes only and shall not in any
manner affect the interpretation of this Warrant.
6.10 NO ENDORSEMENT. Holder understands that no federal or state securities
administrator has made any finding or determination relating to the fairness of
investment in the Company or purchase of the Common Stock hereunder and that no
federal or state securities administrator has recommended or endorsed the
offering of securities by the Company hereunder.
6.11 PRONOUNS. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
6.12 FURTHER ASSURANCES. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances, as may be reasonably requested by
any other party to better evidence and reflect the transactions described
herein and contemplated hereby, and to carry into effect the intents and
purposes of this Warrant.
NHancement Technologies Inc., a Delaware corporation
By: /s/ Douglas S. Zorn
-------------------------------------------
Douglas S. Zorn, Chief Executive Officer
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Common Stock Warrant
Page 8
EXHIBIT A-1
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
BY CASH PAYMENT OF WARRANT PRICE
DATE: ____________
NHancement Technologies Inc.___________ Aggregate Price of Warrant
6663 Owens Drive_______________________ Before Exercise: $___________
Pleasanton, CA 94588__________________ Aggregate Price
Being Exercised: $___________
Attention: Chief Financial Officer
Warrant Price: $____________ per share
Number of Shares of Common Stock to be
Issued Under this Notice:_______________
Remainder Aggregate
Price (if any) After Issuance: $_________
CASH EXERCISE
Gentlemen:
The undersigned registered Holder of the Common Stock Warrant
delivered herewith ("WARRANT"), hereby irrevocably exercises such Warrant for,
and purchases thereunder, shares of the Common Stock of NHancement
Technologies, Inc., a Delaware corporation, as provided below. Capitalized
terms used herein, unless otherwise defined herein, shall have the meanings
given in the Warrant. The portion of the Aggregate Price (as defined in the
Warrant) to be applied toward the purchase of Common Stock pursuant to this
Notice of Exercise is $_________, thereby leaving a remainder Aggregate Price
(if any) equal to $____________. Such exercise shall be pursuant to the cash
exercise provisions of Section 2.1 of the Warrant. Therefore, Holder makes
payment with this Notice of Exercise by way of check payable to the Company in
the amount of $_____________. Such check is payment in full under the Warrant
for __________ shares of Common Stock based upon the Warrant Price of
$____________ per share, as currently in effect under the Warrant. Holder
requests that the certificates for the purchased shares of Common Stock be
issued in the name of and delivered to "_______________", ________________. To
the extent the foregoing exercise is for less than the full Aggregate Price, a
Replacement Warrant representing the remainder of the Aggregate Price and
otherwise of like form, tenor and effect should be delivered to Holder along
with the share certificates evidencing the Common Stock issued in response to
this Notice of Exercise.
By:______________________________
[NAME]
NOTE
The execution to the foregoing Notice of Exercise must exactly
correspond to the name of the Holder on the Warrant.
<PAGE>
Common Stock Warrant
Page 9
EXHIBIT A-2
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
PURSUANT TO NET ISSUE ("CASHLESS") EXERCISE PROVISIONS
[DATE]
NHancement Technologies Inc.__ Aggregate Price of Warrant
6663 Owens Drive_______________________ Before Exercise: $___________________
Pleasanton, CA 904588_________________ Aggregate Price
Being Exercised: $___________________
Warrant Price: $_______________ per share
Number of Shares of Common Stock to be
Issued Under this Notice:
Remainder Aggregate
Price (if any) After Issuance: $_________
CASHLESS EXERCISE
Gentlemen:
The undersigned, registered Holder of the Common Stock Warrant
delivered herewith ("WARRANT", hereby irrevocably exercises such Warrant for,
and purchases thereunder, shares of the Common Stock of _NHancement
Technologies Inc., a Delaware corporation, as provided below. Capitalized terms
used herein, unless otherwise defined herein, shall have the meanings given in
the Warrant. The portion of the Aggregate Price (as defined in the Warrant) to
be applied toward the purchase of Common Stock pursuant to this Notice of
Exercise is $____________, thereby leaving a remainder Aggregate Price (if any)
equal to $___________. Such exercise shall be pursuant to the net issue
exercise provisions of Section 2.2 of the Warrant; therefore, Holder makes no
payment with this Notice of Exercise. The number of shares to be issued
pursuant to this exercise shall be determined by reference to the formula in
Section 2.2 of the Warrant which, by reference to Section 2.3, requires the use
of the current per share fair market value of the Company's Common Stock. The
current fair market value of one share of the Company's Common Stock shall be
determined in the manner provided in Section 2.3, which amount has been
determined or agreed to by Holder and the Company to be $_____________, which
figure is acceptable to Holder for calculations of the number of shares of
Common Stock issuable pursuant to this Notice of Exercise [SPECIFY ANY
ALTERNATIVE ARRANGEMENTS TO THE FOREGOING, IF NECESSARY OR APPLICABLE]. Holder
requests that the certificates for the purchased shares of Common Stock be
issued in the name of and delivered to "___________________________",
___________________ . To the extent the foregoing exercise is for less than the
full Aggregate Price of the Warrant, a replacement Warrant representing the
remainder of the Aggregate Price (and otherwise of like form, tenor and effect)
shall be delivered to Holder along with the share certificate evidencing the
Common Stock issued in response to this Notice of Exercise.
By: ____________________________
[NAME]
NOTE
The execution to the foregoing Notice of Exercise must exactly
correspond to the name of the Holder on the Warrant.
<PAGE>
EXHIBIT 4.15
NHANCEMENT TECHNOLOGIES INC.
Issued as of the 21st day (1) Aggregate Price: $152,500
of January, 2000 (2) Initial Warrant Price: $1.525
(3) Number of Shares Initially Subject
to Warrant: 100,000
NEITHER THIS WARRANT, NOR THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF,
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933
SECURITIES ACT"), OR QUALIFIED OR REGISTERED UNDER CALIFORNIA OR OTHER
APPLICABLE SECURITIES LAWS ("STATE SECURITIES LAWS"), AND THIS WARRANT HAS
BEEN, AND THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF WILL BE, ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF. NO SUCH SALE OR OTHER DISPOSITION MAY BE MADE WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 SECURITIES ACT AND COMPLIANCE
WITH THE APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE ISSUER AND ITS COUNSEL, THAT SAID REGISTRATION IS NOT
REQUIRED UNDER THE 1933 SECURITIES ACT AND THAT APPLICABLE STATE SECURITIES
LAWS HAVE BEEN SATISFIED.
COMMON STOCK WARRANT
This certifies that GREG DARLING, ("PURCHASER"), whose address for
notice is c/o Triad Marketing, 4725 Mercury Street, Suite 210, San Diego,
California 92111-2125 or any party to whom this Warrant is assigned in
compliance with the terms hereof (Purchaser and any such assignee being
hereinafter sometimes referenced as "HOLDER"), is entitled to subscribe for and
purchase, during the period commencing at the issue date set forth above and
ending at 5:00 p.m., California, local time, on the third (3rd) anniversary of
such issue date, the number of shares of fully paid and nonassessable
unregistered, restricted Common Stock ("COMMON STOCK") of NHANCEMENT
TECHNOLOGIES INC, A DELAWARE CORPORATION (the "COMPANY"), that have an
aggregate purchase price equal to the Aggregate Price as defined below. The
purchase price of each such share shall be equal to the Warrant Price, as
defined below.
ARTICLE 1
DEFINITIONS
1.1 "AGGREGATE PRICE" shall be $152,500.
1.2 "WARRANT PRICE" shall be One Dollar Fifty-Two and One-Half Cents
($1.525), as adjusted herein.
ARTICLE 2
EXERCISE AND PAYMENT
2.1 CASH EXERCISE. The purchase rights represented by this Warrant may be
exercised by Holder, in whole or in part, by the surrender of this Warrant at
the principal office of the Company, located at the address set forth on the
signature page hereof, accompanied by the form of Notice of Cash Exercise
attached hereto as Exhibit "A-1", and by the payment to the Company, by cash or
by certified, cashier's or other check acceptable to the Company, of an amount
equal to the aggregate Warrant Price of the shares being purchased.
<PAGE>
Common Stock Warrant
Page 2
2.2 NET ISSUE EXERCISE. In lieu of exercising this Warrant pursuant to
Section 2.1, Holder may elect to receive shares of Common Stock equal to the
value of this Warrant determined in the manner described below (or of any
portion thereof remaining unexercised) by surrender of this Warrant at the
principal office of the Company together with the form of Notice of Cashless
Exercise attached hereto as Exhibit "A-2", in which event the Company shall
issue to Holder a number of shares of the Company's Common Stock computed using
the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y= the number of shares of Common Stock purchasable under this
Warrant (at the date of such calculation).
A= the fair market value of one share of the Company's Common Stock
(at the date of such calculation).
B= Warrant Price.
2.3 FAIR MARKET VALUE. For purposes of this Article II, fair market value
of one share of the Company's Common Stock shall mean:
(i) The average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary, the last reported sale price
of the Common Stock or the closing price quoted on the Nasdaq SmallCap
Market System ("SCMS") or on any exchange on which the Common Stock is
listed, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the trading day prior to the date of determination
of fair market value; or
(ii) If the Common Stock is not traded Over-The-Counter, on the SCMS or on
an exchange, the per share fair market value of the Common Stock shall be
as determined by mutual agreement of the Company and the Holder; provided,
however that if such agreement cannot be reached within twenty (20)
calendar days, such value shall be determined by an independent appraiser
appointed in good faith by the Company's Board of Directors. The cost of
such appraisal shall be borne equally by the Company and the Holder. Such
appraiser shall meet the following criteria: (a) it shall not be associated
or affiliated with the Company in any fashion and shall not have previously
provided services to the Company; (b) the appraiser shall have reasonable
qualifications to appraise the value of the Common Stock; (c) it is not
(and none of its affiliates is) a promoter, director or officer of the
Company or any of its affiliates or an underwriter with respect to any of
the securities of the Company; and (d) it does not provide any advice or
opinions of the Company except as an appraiser under this section. In the
event such an appraisal is required it should be conducted under the
following procedures: the Company shall select the appraiser within ten
(10) days of receipt of written notice from the Holder that agreement
cannot be reached and the Company shall submit the name of such appraiser
to Holder. Twenty (20) days after selection of the appraiser, the Company
and the Holder shall each submit to the appraiser a single value
representing such party's contention as to the fair market value of one
share of the Company's Common Stock. Within fifteen (15) days after receipt
of the submission of the Company and the Holder, the appraiser shall select
one of the two values submitted by the parties, and such value shall be the
fair market value of one share of the Common Stock for purpose of this
Warrant. The appraiser shall have no discretion to take any action other
than selection of one of the two values submitted to the appraiser. The
parties may submit to the appraiser and one another, at the time they
submit their respective single values, such supporting documentation as
they deem necessary or appropriate. The parties shall have the opportunity
seven (7) business days after receipt of the other party's proposed
valuation and supporting documentation to provide the appraiser and each
other with supplemental written information. The appraiser may, in its
discretion, hold a single six (6) hour
<PAGE>
Common Stock Warrant
Page 3
hearing on valuation issues. If a hearing is held, each party shall be
allocated three (3) hours. The appraiser may conduct the hearing in
accordance with any rules of procedure it deems appropriate. The value
selected by the appraiser shall be final and binding upon the parties
without any further right of appeal.
2.4 STOCK CERTIFICATES. In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to Holder within a reasonable time and, unless
this Warrant has been fully exercised or has expired, a new Warrant
representing the remaining unexercised Aggregate Price shall also be issued to
Holder at such time.
2.5 AUTOMATIC EXERCISE. To the extent this Warrant is not previously
exercised, and if the fair market value of one share of the Company's Common
Stock is greater than the Warrant Price, as adjusted, this Warrant shall be
deemed automatically exercised in accordance with Section 2.2 hereof (even if
not surrendered) immediately before its expiration. For purposes of such
automatic exercise, the fair market value of one share of the Company's Common
Stock upon such expiration shall be the fair market value determined pursuant
to Section 2.3 above. To the extent this Warrant or any portion thereof is
deemed automatically exercised pursuant to this Section 2.5, the Company agrees
to notify Holder within a reasonable period of time of the number of shares of
the Company's Common Stock, if any, Holder is to receive by reason of such
automatic exercise.
2.6 STOCK FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof (excluding taxes based on the income of Holder). The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized and reserved for issuance a sufficient number of shares of its
Common Stock or other securities as would be required upon the full exercise of
the rights represented by this Warrant (including conversion of all such Common
Stock issuable hereunder).
2.7 FRACTIONAL SHARES. No fractional share of Common Stock will be issued
in connection with any exercise hereof; in lieu of a fractional share upon
complete exercise hereof, Holder may purchase a whole share by delivering
payment equal to the appropriate portion of the then effective Warrant Price.
ARTICLE 3
CERTAIN ADJUSTMENTS OF NUMBER OF SHARES PURCHASABLE AND
WARRANT PRICE
The number and kind of securities purchasable upon the exercise of
this Warrant and the Warrant Price shall be subject to adjustment from time to
time upon the happening of certain events, as follows:
3.1 RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of: (i) any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant; (ii) any consolidation or merger of the Company with or into
another corporation (other than a merger with another corporation in which the
Company is a continuing corporation and which does not result in any
reclassification, change or exchange of outstanding securities issuable upon
exercise of this Warrant); or (iii) any sale or transfer to another corporation
of all, or substantially all, of the property of the Company, then, and in each
such event, the Company or such successor or purchasing corporation, as the
case may be, shall execute a new Warrant of like form, tenor and effect and
which will provide that Holder shall have the right to exercise such new
Warrant and purchase upon such exercise, in lieu of each share of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of
securities, money and property receivable upon such reclassification, change,
consolidation, merger, sale or transfer by a holder of one share of Common
Stock issuable upon exercise of this Warrant had this Warrant been exercised
immediately prior to such reclassification, change, consolidation, merger, sale
<PAGE>
Common Stock Warrant
Page 4
or transfer. Such new Warrant shall be as nearly equivalent in all substantive
respects as practicable to this Warrant and the adjustments provided in this
Article III and the provisions of this Section 3.1, shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales and
transfers.
3.2 SUBDIVISION OR COMBINATION OF SHARES. If the Company shall at any time
while this Warrant remains outstanding and less than fully exercised: (i)
divide its Company Stock, the Warrant Price shall be proportionately reduced;
or (ii) shall combine shares of its Common Stock, the Warrant Price shall be
proportionately increased.
3.3 STOCK DIVIDENDS. If the Company, at any time while this Warrant is
outstanding and unexpired, shall pay a dividend payable in, or make any other
distribution to holders of, Common Stock (except any distribution described in
Sections 3.1 and 3.2 hereof) then the Warrant Price shall be adjusted to that
price determined by multiplying the Warrant Price then in effect by a fraction,
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
3.4 OTHER ACTION AFFECTING COMMON STOCK. If the Company takes any action
affecting its Common Stock after the date hereof (including dividends and
distributions), other than an action described in any of Sections 3.1 and 3.2
hereof, which would have an adverse effect upon Holder's rights hereunder, the
Warrant Price shall be adjusted downward in such manner and at such time as the
Board of Directors of the Company shall in good faith determine to be equitable
under the circumstances.
3.5 TIME OF ADJUSTMENTS TO THE WARRANT PRICE. All adjustments to the
Warrant Price and the number of shares purchasable hereunder, unless otherwise
specified herein, shall be effective as of the earlier of:
(i) the date of issue of the security causing the adjustment;
(ii) the date of sale of the security causing the adjustment;
(iii) the effective date of a division or combination of shares;
(iv) the record date of any action of holders of any class of the
Company's capital stock taken for the purpose of entitling shareholders
to receive a distribution or dividend payable in equity securities,
provided that such division, combination, distribution or dividend
actually occurs.
3.6 NOTICE OF ADJUSTMENTS. In each case of an adjustment in the Warrant
Price and the number of shares purchasable hereunder, the Company, at its
expense, shall cause the Chief Financial Officer of the Company to compute such
adjustment and prepare a certificate setting forth such adjustment and showing
in detail the facts upon which such adjustment is based. The Company shall
promptly mail a copy of each such certificate to Holder pursuant to Section 6.8
hereof.
3.7 DURATION OF ADJUSTED WARRANT PRICE. Following each adjustment of the
Warrant Price, such adjusted Warrant Price shall remain in effect until a
further adjustment of the Warrant Price.
3.8 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant
Price pursuant to this Article III, the number of shares of Common Stock
purchasable hereunder shall be adjusted to the nearest whole share, to the
number obtained by dividing the Aggregate Price by the Warrant Price as
adjusted.
<PAGE>
Common Stock Warrant
Page 5
ARTICLE 4
TRANSFER, EXCHANGE AND LOSS
4.1 TRANSFER. This Warrant is transferable on the books of the Company at
its principal office by the registered Holder hereof upon surrender of this
Warrant properly endorsed, subject to compliance with federal and state
securities laws. The Company shall issue and deliver to the transferee a new
Warrant or Warrants representing the Warrants so transferred. Upon any partial
transfer, the Company will issue and deliver to Holder a new Warrant or
Warrants with respect to the Warrants not so transferred. Notwithstanding the
foregoing, Holder shall not be entitled to transfer a number of shares or an
interest in this Warrant representing less than five percent (5%) of the
aggregate shares initially covered by this Warrant (as presently constituted,
with appropriate adjustment being made in the event of stock splits,
combinations, reorganizations and the like occurring after the issue date
hereof). Any transferee shall be subject to the same restrictions on transfer
with respect to this Warrant as the Purchaser.
4.2 SECURITIES LAWS. Upon any issuance of shares of Common Stock upon
exercise of this Warrant, if required by the Company, in connection with each
issuance of shares of Common Stock upon exercise of this Warrant, the Holder
will give: (i) assurances in writing, satisfactory to the Company, that such
shares are not being purchased with a view to the distribution thereof in
violation of applicable laws, (ii) sufficient information, in writing, to
enable the Company to rely on exemptions from the registration or qualification
requirements of applicable laws, if available, with respect to such exercise,
and (iii) its cooperation to the Company in connection with such compliance.
4.3 EXCHANGE. This Warrant is exchangeable at the principal office of the
Company for Warrants which represent, in the aggregate, the Aggregate Price
hereof; each new Warrant to represent the right to purchase such portion of the
Aggregate Price as Holder shall designate at the time of such exchange. Each
new Warrant shall be identical in form and content to this Warrant, except for
appropriate changes in the number of shares of Common Stock covered thereby,
the percentage stated in Section 4.1 above, and any other changes which are
necessary in order to prevent the Warrant exchange from changing the respective
rights and obligations of the Company and the Holder as they existed
immediately prior to such exchange.
4.4 LOSS OR MUTILATION. Upon receipt by the Company of evidence
satisfactory to it of the ownership of, and the loss, theft, destruction or
mutilation of, this Warrant and (in the case of loss, theft, or destruction) of
indemnity satisfactory to it, and (in the case of mutilation) upon surrender
and cancellation hereof, the Company will execute and deliver in lieu hereof a
new Warrant.
ARTICLE 5
HOLDER RIGHTS
NO SHAREHOLDER RIGHTS UNTIL EXERCISE. No Holder hereof, solely by
virtue hereof, shall be entitled to any rights as a shareholder of the Company.
Holder shall have all rights of a shareholder with respect to securities
purchased upon exercise hereof at the time: (i) the cash exercise price for
such securities is delivered pursuant to Section 2.1 hereof and this Warrant is
surrendered, (ii) of delivery of notice of cashless exercise pursuant to
Section 2.2 hereof and this Warrant is surrendered, or (iii) of automatic
exercise hereof (even if not surrendered) pursuant to Section 2.5 hereof.
<PAGE>
Common Stock Warrant
Page 6
ARTICLE 6
MISCELLANEOUS
6.1 GOVERNING LAWS. IT IS THE INTENTION OF THE PARTIES HERETO THAT EXCEPT
AS SET FORTH BELOW, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, U.S.A.
(IRRESPECTIVE OF ITS CHOICE OF LAW PRINCIPLES) SHALL GOVERN THE VALIDITY OF
THIS WARRANT, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION AND
ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO.
6.2 BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless otherwise
provided in, this Warrant, each and all of the covenants, terms, provisions,
and agreements contained herein shall be binding upon, and inure to the benefit
of the permitted successors, executors, heirs, representatives, administrators
and assigns of the parties hereto.
6.3 SEVERABILITY. If any one or more provisions of this Warrant, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Warrant and the application of such
provisions to other persons or circumstances shall be interpreted so as best to
reasonably effect the intent of the parties hereto. The parties further agree
to replace any such void or unenforceable provisions of this Warrant with valid
and enforceable provisions which will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provisions.
6.4 DEFAULT, AMENDMENT AND WAIVERS. This Warrant may be amended upon the
written consent of the Company and the Holder. The waiver by a party of any
breach hereof for default in payment of any amount due hereunder or default in
the performance hereof shall not be deemed to constitute a waiver of any other
default or any succeeding breach or default. The failure to cure any breach of
any term of this Warrant within ten (10) days of written notice thereof shall
constitute an event of default under this Warrant.
6.5 NO WAIVER. The failure of any party to enforce any of the provisions
hereof shall not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
6.6 ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
part of this Warrant, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including without limitation, costs, expenses and fees
on any appeal). The prevailing party shall be the party entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its costs shall not be entitled to recover
attorneys' fees. No sum for attorneys' fees shall be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys' fees.
6.7 NOTICES. Whenever any party hereto desires or is required to give any
notice, demand, or request with respect to this Warrant, each such
communication shall be in writing and shall be effective only if it is
delivered by personal service or mailed, United States certified mail, postage
prepaid, return receipt requested, addressed as follows:
<PAGE>
Common Stock Warrant
Page 7
Company: NHancement Technologies Inc.
39420 Liberty Street
Suite 250
Fremont, California 94538
Attn: Douglas S. Zorn
Holder: Triad Marketing
4725 Mercury Street, Suite 210
San Diego, CA 92111-2125
Such communications shall be effective when they are received by the addressee
thereof; but if sent by certified mail in the manner set forth above, they
shall be effective three (3) business days after being deposited in the United
States mail. Any party may change its address for such communications by giving
notice thereof to the other party in conformity with this Section.
6.8 TIME. Time is of the essence of this Warrant.
6.9 CONSTRUCTION OF AGREEMENT. A reference in this Warrant to any Section
shall include a reference to every Section the number of which begins with the
number of the Section to which reference is specifically made (E.G., a
reference to Section 3 shall include a reference to Sections 3.5 and 3.7). The
titles and headings herein are for reference purposes only and shall not in any
manner affect the interpretation of this Warrant.
6.10 NO ENDORSEMENT. Holder understands that no federal or state securities
administrator has made any finding or determination relating to the fairness of
investment in the Company or purchase of the Common Stock hereunder and that no
federal or state securities administrator has recommended or endorsed the
offering of securities by the Company hereunder.
6.11 PRONOUNS. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
6.12 FURTHER ASSURANCES. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances, as may be reasonably requested by
any other party to better evidence and reflect the transactions described
herein and contemplated hereby, and to carry into effect the intents and
purposes of this Warrant.
NHancement Technologies Inc.,
a Delaware corporation
By: /s/ Douglas S. Zorn
------------------------------------------
Douglas S. Zorn, Chief Executive Officer
<PAGE>
Common Stock Warrant
Page 8
EXHIBIT A-1
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
BY CASH PAYMENT OF WARRANT PRICE
DATE: _______________
NHancement Technologies Inc.___________ Aggregate Price of Warrant
6663 Owens Drive_______________________ Before Exercise: $_____________
Pleasanton, CA 94588__________________ Aggregate Price
Being Exercised: $_____________
Attention: Chief Financial Officer
Warrant Price: $_____________ per share
Number of Shares of Common Stock to be
Issued
Under this Notice:_________________
Remainder Aggregate
Price (if any) After Issuance: $_________
CASH EXERCISE
Gentlemen:
The undersigned registered Holder of the Common Stock Warrant
delivered herewith ("WARRANT"), hereby irrevocably exercises such Warrant for,
and purchases thereunder, shares of the Common Stock of NHancement
Technologies, Inc., a Delaware corporation, as provided below. Capitalized
terms used herein, unless otherwise defined herein, shall have the meanings
given in the Warrant. The portion of the Aggregate Price (as defined in the
Warrant) to be applied toward the purchase of Common Stock pursuant to this
Notice of Exercise is $__________, thereby leaving a remainder Aggregate Price
(if any) equal to $____________. Such exercise shall be pursuant to the cash
exercise provisions of Section 2.1 of the Warrant. Therefore, Holder makes
payment with this Notice of Exercise by way of check payable to the Company in
the amount of $_____________. Such check is payment in full under the Warrant
for _________ shares of Common Stock based upon the Warrant Price of
$____________ per share, as currently in effect under the Warrant. Holder
requests that the certificates for the purchased shares of Common Stock be
issued in the name of and delivered to "______________", _________________. To
the extent the foregoing exercise is for less than the full Aggregate Price, a
Replacement Warrant representing the remainder of the Aggregate Price and
otherwise of like form, tenor and effect should be delivered to Holder along
with the share certificates evidencing the Common Stock issued in response to
this Notice of Exercise.
By:______________________________
[NAME]
NOTE
The execution to the foregoing Notice of Exercise must exactly
correspond to the name of the Holder on the Warrant.
<PAGE>
Common Stock Warrant
Page 9
EXHIBIT A-2
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
PURSUANT TO NET ISSUE ("CASHLESS") EXERCISE PROVISIONS
[DATE]
NHancement Technologies Inc.__ Aggregate Price of Warrant
6663 Owens Drive_______________________ Before Exercise: $____________
Pleasanton, CA 904588_________________ Aggregate Price
Being Exercised: $____________
Warrant Price: $______________ per share
Number of Shares of Common Stock to be
Issued Under this Notice: _______________
Remainder Aggregate
Price (if any) After Issuance: $_________
CASHLESS EXERCISE
Gentlemen:
The undersigned, registered Holder of the Common Stock Warrant
delivered herewith ("WARRANT", hereby irrevocably exercises such Warrant for,
and purchases thereunder, shares of the Common Stock of _NHancement
Technologies Inc., a Delaware corporation, as provided below. Capitalized terms
used herein, unless otherwise defined herein, shall have the meanings given in
the Warrant. The portion of the Aggregate Price (as defined in the Warrant) to
be applied toward the purchase of Common Stock pursuant to this Notice of
Exercise is $______________, thereby leaving a remainder Aggregate Price (if
any) equal to $_______________. Such exercise shall be pursuant to the net
issue exercise provisions of Section 2.2 of the Warrant; therefore, Holder
makes no payment with this Notice of Exercise. The number of shares to be
issued pursuant to this exercise shall be determined by reference to the
formula in Section 2.2 of the Warrant which, by reference to Section 2.3,
requires the use of the current per share fair market value of the Company's
Common Stock. The current fair market value of one share of the Company's
Common Stock shall be determined in the manner provided in Section 2.3, which
amount has been determined or agreed to by Holder and the Company to be
$__________________, which figure is acceptable to Holder for calculations of
the number of shares of Common Stock issuable pursuant to this Notice of
Exercise [SPECIFY ANY ALTERNATIVE ARRANGEMENTS TO THE FOREGOING, IF NECESSARY OR
APPLICABLE]. Holder requests that the certificates for the purchased shares of
Common Stock be issued in the name of and delivered to "______________________",
___________________. To the extent the foregoing exercise is for less than the
full Aggregate Price of the Warrant, a replacement Warrant representing the
remainder of the Aggregate Price (and otherwise of like form, tenor and effect)
shall be delivered to Holder along with the share certificate evidencing the
Common Stock issued in response to this Notice of Exercise.
By: ___________________________
[NAME]
NOTE
The execution to the foregoing Notice of Exercise must exactly correspond to the
name of the Holder on the Warrant.
