Exhibit 4.10
NHANCEMENT TECHNOLOGIES INC.
Issued as of the 15th day (1) Aggregate Price: $_______________
of June, 1999 (2) Initial Warrant Price: $1.37
(3) Number of Shares Initially
Subject to Warrant:______________
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
(IMMEDIATELY EXERCISABLE)
This certifies that_____________,("PURCHASER"), whose address for
notice is located_______________________, 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, subject to Section 2.8 hereof, 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 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. This Warrant has been issued pursuant
to the Amendment to Securities Purchase Agreement dated June 11, 1999 (the
"AMENDMENT") among Purchaser, the Company and certain others which amends the
Securities Purchase Agreement dated April 13, 1998, among the Company and
certain purchasers of the Company's Series A Preferred Stock (such Securities
Purchase Agreement as amended by the Amendment the "Securities Purchase
Agreement").
ARTICLE 1
DEFINITIONS
1.1 "AGGREGATE PRICE" shall be $_____________________.
1.2 "WARRANT PRICE" shall be One Dollar Thirty-Seven Cents ($1.37),
as adjusted herein.
ARTICLE 2
EXERCISE AND PAYMENT
2.1 CASH EXERCISE. The purchase rights represented by this Warrant may be
exercised by Xxxxxx, 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
Common Stock Warrant
Page 2
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.
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 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
National Market System ("NMS") or on any exchange on which the Common
Stock is listed, whichever is applicable, as reported by Bloomberg, LP,
or, if not so reported, as reported in the Western Edition of The Wall
Street Journal for the last five (5) trading days prior to the date of
determination of fair market value; or
(ii) If the Common Stock is not traded Over-The-Counter, on the NMS
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
Common Stock Warrant
Page 3
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 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 without any further action
by the Holder. 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.
2.8 LIMITATION ON EXERCISE. Notwithstanding the provisions of this
Warrant, the Securities Purchase Agreement or of the other Transaction
Agreements (as defined in the Securities Purchase Agreement) or of any other
warrant, right or option now or hereafter held by the Holder, in no event
(except (i) with respect to an automatic conversion, if any, of the Preferred
Stock as provided in its Certificate of Designations or the automatic
exercise of this Warrant as provided in Section 2.5 hereof, (ii) as
specifically provided in this Warrant as an exception to this provision, or
(iii) while there is outstanding a tender offer for any or all of the shares
of the Company's Common Stock) shall the Holder be entitled to exercise this
Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant, to the extent that, after
such exercise the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of
the unconverted portion of the Preferred Stock or unexercised portion of the
Warrants), and (2) the number of shares of Common Stock issuable upon the
exercise of the Warrants with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Holder and
its affiliates of more than 9.99% of the outstanding shares of Common Stock
(after taking into account the shares to be issued to the Holder upon such
exercise). For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in
Common Stock Warrant
Page 4
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended(the "1934 ACT"), except as otherwise provided in clause (1) of such
sentence. The Holder, by its acceptance of this Warrant, further agrees that
if the Holder transfers or assigns any of the Warrants to a party who or
which would not be considered such an affiliate, such assignment shall be
made subject to the transferee's or assignee's specific agreement to be bound
by the provisions of this Section 2.8 as if such transferee or assignee were
the original Holder hereof.
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
(assuming for such purposes that this Warrant was fully exercisable without
any restrictions or conditions on exercise, provided, however that any such
restrictions or conditions shall continue to remain in effect), 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 Xxxxxx'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.
Common Stock Warrant
Page 5
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.
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, it shall be the Company's responsibility to comply
with the requirements of: (1) the Securities Act of 1933, as amended; (2) the
Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; and (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. 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.
Common Stock Warrant
Page 6
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
5.1 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.
ARTICLE 6
MISCELLANEOUS
6.1 GOVERNMENTAL APPROVALS. The Company will from time to time take all
action which may be necessary to obtain and keep effective any and all
permits, consents and approvals of governmental agencies and authorities and
securities acts filings under federal and state laws, which may be or become
requisite in connection with the issuance, sale, and delivery of this
Warrant, and the issuance, sale and delivery of the Common Stock or other
securities or property issuable or deliverable upon exercise of this Warrant.
6.2 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.
6.3 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.
6.4 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.
Common Stock Warrant
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6.5 DEFAULT, AMENDMENT AND WAIVERS. This Warrant may be amended upon the
written consent of the Company and the holders in the aggregate of the right
to purchase a majority of the number of unexercised shares covered by the
Warrant initially issued by the Company pursuant to the Consulting Agreement.
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.
6.6 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.
6.7 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.
6.8 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:
Company: NHancement Technologies Inc.
00000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
Holder: __________________________________
__________________________________
__________________________________
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.
6.9 TIME. Time is of the essence of this Warrant.
6.10 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.
6.11 NO ENDORSEMENT. Xxxxxx 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.
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Page 8
6.12 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.
6.13 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: ___________________________________________
Xxxxxxx X. Xxxx, Chief Executive Officer
Common Stock Warrant
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EXHIBIT A-1
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
BY CASH PAYMENT OF WARRANT PRICE
DATE: _____________
_________________________ Aggregate Price of Warrant
_________________________ Before Exercise: $_______________
_________________________ 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, Xxxxxx 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.
Common Stock Warrant
Page 10
EXHIBIT A-2
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
PURSUANT TO NET ISSUE ("CASHLESS") EXERCISE PROVISIONS
[DATE]
___________________________ Aggregate Price of Warrant
___________________________ Before Exercise: $_______________
___________________________ Aggregate Price
Attention: Chief Financial Officer 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.
