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EXHIBIT 10.1
NHANCEMENT TECHNOLOGIES INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
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October 31, 2000
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TABLE OF CONTENTS
NHANCEMENT TECHNOLOGIES INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PAGE
1. PURCHASE AND SALE OF STOCK......................................................1
1.1 Sale and Issuance of Series B Preferred Stock..........................1
1.2 Closings...............................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................2
2.1 Organization, Good Standing and Qualification..........................2
2.2 Capitalization and Voting Rights.......................................2
2.3 Authorization..........................................................3
2.4 Valid Issuance of Preferred and Common Stock...........................3
2.5 Governmental Consents..................................................3
2.6 Compliance with Other Instruments......................................4
2.7 SEC Documents, Financial Statements....................................4
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.................................4
3.1 Authorization..........................................................5
3.2 Purchase Entirely for Own Account......................................5
3.3 Disclosure of Information..............................................5
3.4 Investment Experience..................................................5
3.5 Accredited Investor....................................................5
3.6 Restricted Securities..................................................5
3.7 Further Limitations on Disposition.....................................5
3.8 Legends. ..............................................................6
3.9 Further Representations by Foreign Investors...........................6
4. COVENANTS OF THE COMPANY........................................................6
4.1 Registration Rights....................................................6
4.2 Reservation of Common Stock............................................7
4.3 Listing of Common Stock................................................7
4.4 Exchange Act Registration..............................................7
5. COVENANTS OF THE INVESTORS......................................................7
5.1 Compliance with Law....................................................7
5.2 No Short Sales.........................................................7
6. CONDITIONS OF INVESTOR'S OBLIGATIONS AT THE CLOSINGS............................8
6.1 Representations and Warranties.........................................8
6.2 Performance............................................................8
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TABLE OF CONTENTS
(Continued)
PAGE
6.3 Compliance Certificate.................................................8
6.4 Certificate of Designation.............................................8
6.5 Registration Rights....................................................8
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSINGS.........................8
7.1 Representations and Warranties.........................................8
7.2 Payment of Purchase Price..............................................8
7.3 Registration Rights....................................................8
8. MISCELLANEOUS. .................................................................8
8.1 Survival of Warranties.................................................8
8.2 Successors and Assigns.................................................9
8.3 Governing Law..........................................................9
8.4 Counterparts...........................................................9
8.5 Titles and Subtitles...................................................9
8.6 Notices. ..............................................................9
8.7 Finder's Fee...........................................................9
8.8 Expenses...............................................................9
8.9 Amendments and Waivers................................................10
8.10 Severability..........................................................10
8.11 Aggregation of Stock..................................................10
8.12 Entire Agreement......................................................10
8.13 California Commissioner of Corporations...............................10
EXHIBIT A - Schedule of Investors
EXHIBIT B - Certificate of Designation
EXHIBIT C - Form of Shelf Registration Agreement
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NHANCEMENT TECHNOLOGIES INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of October 31, 2000, by, between and among NHancement Technologies
Inc., a Delaware corporation (the "Company"), and the investors identified on
Exhibit A hereto, each of which is herein referred to as an "Investor."
RECITAL
The Company, whose stock is traded on the Nasdaq Small Cap Market (the
"Small Cap Market") under the symbol ▇▇▇▇, desires to sell shares of its Series
B Preferred Stock to accredited investors in a private sale pursuant to the
terms hereof. The number of shares of Series B Preferred Stock to be sold
hereunder shall be less than 20% of all outstanding shares of capital stock of
the Company at the time of such sale.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 Sale and Issuance of Series B Preferred Stock.
(a) The Company shall adopt and file with the
Secretary of State of the State of Delaware on or before the Initial Closing (as
defined below) a Certificate of Designation in the form attached hereto as
Exhibit B (the "Certificate").
(b) On or prior to each Closing (as defined in
Section 1.3), the Company shall have authorized (i) the sale and issuance to the
Investors of the Series B Preferred Stock and (ii) the reservation of the shares
of Common Stock to be issued upon conversion of such Series B Preferred Stock
(the "Conversion Shares"). The Series B Preferred Stock shall have the rights,
preferences, privileges and restrictions set forth in the Certificate.
(c) Subject to the terms and conditions of this
Agreement, each Investor agrees, severally and not jointly, to purchase at the
relevant Closing and the Company agrees to sell and issue to each Investor at
the relevant Closing, that number of shares of the Company's Series B Preferred
Stock set forth opposite each Investor's name on Exhibit A hereto for the
purchase price set forth thereon.
1.2 Closings.
(a) Closing. The initial purchase and sale of the
shares of Series B Preferred Stock set forth on Schedule A shall take place at
the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 755 Page ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, at 11:00 A.M., on October 31, 2000, or at such other time
and place as the Company and Investors acquiring in the aggregate more than
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half the shares of Series B Preferred Stock sold pursuant hereto mutually agree
upon orally or in writing (which time and place are designated as the "Initial
Closing"); provided, however, that the Company shall not hold an Initial Closing
until the aggregate purchase price of the Series B Preferred Stock to be sold
hereunder equals at least $7,000,000.
(b) Delivery. At the Initial Closing, the Company
shall deliver to each Investor a certificate representing the Stock that such
Investor is purchasing as listed on Schedule A against payment of the purchase
price of $100 per share by check or wire transfer.
(c) Subsequent Closings. The Company may sell up to
the balance of the authorized number of shares of Series B Preferred Stock not
sold at the Initial Closing to such purchasers as it shall select, at a price
not less than the price per share paid at the Initial Closing, provided that any
such sale shall be consummated not later than ninety (90) days after the Initial
Closing. The subsequent sale and purchase of Series B Preferred Stock hereunder
shall take place at such time and place as the Company and Investors acquiring
in the aggregate more than half the shares of Series B Preferred Stock sold in
such subsequent sale shall mutually agree upon orally or in writing (which time
and place, together with the Initial Closing, are designated as a "Closing").
Any such purchaser shall be deemed an Investor hereunder and under the Shelf
Registration Agreement (as defined below). At such subsequent Closing, the
Company shall deliver to each Investor a certificate representing the Stock that
such Investor is purchasing against payment of the purchase price therefor by
check or wire transfer.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Investor that:
2.1 Organization, Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted.
2.2 Capitalization and Voting Rights.
The authorized capital of the Company will consist, as of August 31,
2000, of:
(a) Preferred Stock. Two Million (2,000,000) shares,
$.01 par value per share, of Preferred Stock (the "Preferred Stock") authorized,
of which one hundred twenty thousand (120,000) shares have been designated
Series B Preferred Stock (the "Series B Preferred Stock"), and up to all of
which may be sold pursuant to this Agreement. The rights, privileges and
preferences of the Series B Preferred Stock are as set forth in the Certificate.
(b) Common Stock. Twenty Million (20,000,000) shares,
$0.01 par value per share, of common stock ("Common Stock") authorized, of which
Twelve Million One-Hundred Thirty Thousand Four Hundred (12,130,400) shares are
issued and outstanding.
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(c) Other Rights. Except for (i) the conversion
privileges of the Series B Preferred Stock, (ii) currently outstanding options
to purchase two million five-hundred ninety-four thousand three hundred
(2,594,300) shares of Common Stock granted to employees and other service
providers pursuant to the Company's stock option plans (the "Option Plans"), and
(iii) currently outstanding warrants to purchase one million seven-hundred
seventy-nine thousand six hundred (1,779,600) shares of Common Stock, there are
not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. The Company has reserved an
additional one million one-hundred twenty-nine thousand two-hundred fifty
(1,129,250) shares of Common Stock for grant to employees and other service
providers pursuant to the Option Plans. In addition to the foregoing, the
Company may, in connection with this offering, issue shares of its Common Stock
and warrants to purchase shares of its Common Stock as a placement fee to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co.
2.3 Authorization. All corporate action on the part of the
Company, its officers and directors necessary for the authorization, execution
and delivery of this Agreement and the transaction contemplated hereby, the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance (or reservation for issuance), sale and delivery of the
Series B Preferred Stock being sold hereunder and the Conversion Shares has been
taken or will be taken prior to the Initial Closing, and this Agreement,
constitutes valid and legally binding obligations of the Company, enforceable in
accordance with its respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
2.4 Valid Issuance of Preferred and Common Stock. The Series B
Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Bylaws of the Company and
under applicable state and federal securities laws. The Conversion Shares have
been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Amended Restated Certificate of Incorporation of the
Company (the "Charter"), will be duly and validly issued, fully paid, and
nonassessable and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Bylaws of the Company and
under applicable state and federal securities laws.
2.5 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for (i) the filing of the Certificate
with the Secretary of State of the State of Delaware, which filing shall be
effective before the Initial Closing, and (ii) the filing pursuant to Section
25102(f) of the California
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Corporate Securities Law of 1968, as amended, and the rules thereunder, which
filing will be effected on a timely basis.
2.6 Compliance with Other Instruments. The execution, delivery
and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby do not (i) result in a violation
of the Charter or Bylaws or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or result in a violation of any law, rule, regulation, order,
judgement, or decree applicable to the Company, or by which any property or any
asset of the Company is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have this materially impair the Company's
ability to perform its obligations under Agreement).
2.7 SEC Documents, Financial Statements. Since January 1,
2000, the Company has timely filed reports, schedules, forms, statements and
other documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") pursuant to the reporting requirements of Section 13 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the
foregoing filed prior to the date hereof being hereinafter referred to as the
"SEC Documents"). The Company has delivered (or made available on ▇▇▇▇▇) to the
Investor all of the information material to making a decision whether to
purchase the Series B Preferred Stock, including true and complete copies of the
SEC Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of the SEC Documents (when read together with all exhibits included
therein and financial statement schedules thereto and documents (other than
exhibits) incorporated by reference) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of the Company included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) or in the
case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
Each Investor, severally and not jointly, hereby represents and
warrants to the Company that:
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3.1 Authorization. Such Investor has full power and authority
to enter into this Agreement and the agreements contemplated hereby, and each
such agreement constitutes the valid and legally binding obligations of such
Investor, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
3.2 Purchase Entirely for Own Account This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series B Preferred Stock to be received by such
Investor and the Conversion Shares (collectively, the "Securities") will be
acquired for investment for such Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, such Investor further represents that such Investor does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities.
3.3 Disclosure of Information. Such Investor represents that
it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series B Preferred
Stock and the business, properties, prospects and financial condition of the
Company. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the right of the
Investors to rely thereon.
3.4 Investment Experience. Such Investor acknowledges that it
is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series B
Preferred Stock. If other than an individual, Investor represents that the
entity is entirely composed of accredited investors as defined in Section 3.5,
or the entity has not been organized for the purpose of acquiring the Series B
Preferred Stock.
3.5 Accredited Investor. Such Investor is an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
3.6 Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances.
3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless:
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(a) There is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, (ii) the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3, and (iii) if reasonably requested by the Company, such Investor
shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company that such disposition will not require registration
of such shares under the Act. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
3.8 Legends. It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by the Bylaws of the Company
or applicable state securities laws.
3.9 Further Representations by Foreign Investors. If an
Investor is not a United States person, such Investor hereby represents that he
or she has satisfied himself or herself as to the full observance of the laws of
his or her jurisdiction in connection with any invitation to subscribe for the
Securities or any use of this Agreement, including (i) the legal requirements
within his or her jurisdiction for the purchase of the Securities, (ii) any
foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale, or transfer of the Securities. Such Investor's
subscription and payment for, and his or her continued beneficial ownership of
the Securities, will not violate any applicable securities or other laws of his
or her jurisdiction.
4. COVENANTS OF THE COMPANY.
The Company covenants with each of the Investors that:
4.1 Registration Rights. The Company shall cause the Shelf
Registration Agreement to remain in full force and effect and the Company shall
comply in all material respects with the terms thereof.
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4.2 Reservation of Common Stock. As of the Initial Closing,
the Company shall have reserved, and the Company shall continue to reserve and
keep available at all times, shares of Common Stock of the Company for the
purpose of enabling the Company to issue Conversion Shares pursuant to any
conversion of the Series B Preferred Stock.
4.3 Listing of Common Stock. The Company hereby agrees to use
its best efforts to maintain the listing of its Common Stock on the Small Cap
Market, the Nasdaq National Market, or the New York Stock Exchange, subject to
the rules and regulations of such markets.
4.4 Exchange Act Registration. The Company will cause its
Common Stock to continue to be registered under Section 12(b) or (g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), will use its
best efforts to comply in all respects with its reporting and filing obligations
under the Exchange Act, and will not take any action or file any document
(whether or not permitted by the Exchange Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under said Act until the Investors have disposed of all
of their Series B Preferred Stock and Conversion Shares acquired hereunder.
5. COVENANTS OF THE INVESTORS.
Each Investor, severally and not jointly, covenants
with the Company that:
5.1 Compliance with Law. The Investor's trading activities
with respect to shares of the Company's Common Stock will be in compliance with
all applicable state and federal securities laws, rules and regulations and
rules and regulations of the Market on which the Company's Common Stock is
listed.
5.2 No Short Sales. For so long as such Investor owns any of
the shares of the Series B Preferred Stock or the Conversion Shares, neither the
Investor or any of its affiliates will be in a net short position with regard to
the Common Stock of the Company in any accounts directly or indirectly owned or
controlled by the Investor. In the event that an Investor or any of its
affiliates engages in a short transaction with regard to the Common Stock during
any time that the Investor owns any of the Series B Preferred Stock or the
Conversion Shares, or otherwise is in a net short position regarding the same,
Investor hereby agrees to forfeit (i) any and all profits generated from such
transaction or position, and (ii) any and all Series B Preferred Stock and/or
Conversion Shares to the Company. Each Investor hereto further agrees to execute
a (y) "No-Short" affidavit at each and every conversion of the Common Stock, and
(z) any other document reasonably requested by the Company to give effect to
this Section 5.2.
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6. CONDITIONS OF INVESTOR'S OBLIGATIONS AT THE CLOSINGS. The obligations
of each Investor under subsection 1.2(b) of this Agreement are subject to the
fulfillment on or before each Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
thereto:
6.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
6.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
6.3 Compliance Certificate. The President of the Company shall
deliver to each Investor at the Closing a certificate stating that the
conditions specified in Sections 6.1 have been fulfilled in all material
respects.
6.4 Certificate of Designation. The Certificate of Designation
shall have been filed with the Secretary of State of the State of Delaware.
6.5 Registration Rights. The Company shall have duly
authorized, executed and delivered to the Investor the Shelf Registration
Agreement attached as Exhibit C (the "Shelf Registration Agreement").
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSINGS. The
obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before each Closing of each of the following conditions by
that Investor:
7.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
7.2 Payment of Purchase Price. Each of the Investors shall
have delivered the purchase price specified in Section 1 for the numbers of
shares of Series B Preferred Stock set forth opposite such Investor's name on
Exhibit A hereto.
7.3 Registration Rights. Each of the Investors shall have
delivered to the Company a duly executed Shelf Registration Agreement attached
as Exhibit C.
8. MISCELLANEOUS.
8.1 Survival of Warranties. The warranties, representations
and covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closings and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
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8.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3 Governing Law. This Agreement shall be governed in all
respects by and construed in accordance with the laws of the State of California
without regard to provisions regarding choice of laws.
8.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, by
deposit with an overnight delivery service, or upon deposit with the United
States Post Office, by certified mail, postage prepaid and addressed to the
party to be notified at the address indicated for such party on Exhibit A
hereto, or at such other address as such party may designate by ten (10) days'
advance written notice to the other parties, or (ii) by electronic facsimile
(fax) to such party with receipt confirmed within three (3) days by notice
delivered in accordance with Section 8.6(i).
8.7 Finder's Fee. Each Investor represents that it neither is
nor will be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
8.8 Expenses. Irrespective of whether the Initial Closing is
effected, each of the Company and the Investors, separately, shall bear their
own costs and expenses incurred with respect to the negotiation, execution,
delivery and performance of this Agreement and the transactions contemplated
thereby. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
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8.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Conversion Shares issued or issuable hereunder. Any amendment
or waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities, and the Company.
8.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms
8.11 Aggregation of Stock. All shares of Series B Preferred
Stock held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.
8.12 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
8.13 California Commissioner of Corporations. THE SALE OF THE
SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR
SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
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IN WITNESS WHEREOF, the parties have executed this Series B Preferred
Stock Purchase Agreement as of the date first above written.
NHANCEMENT TECHNOLOGIES INC.
By:
--------------------------------
Its:
--------------------------------
[Signature Page to the NHancement Technologies Inc.
Series B Preferred Stock Purchase Agreement Dated as of October ___, 2000]
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IN WITNESS WHEREOF, the parties have executed this Series B Preferred
Stock Purchase Agreement as of the date first above written.
INVESTOR(S) (INDIVIDUAL) INVESTOR (ENTITY)
------------------------------------- ---------------------------------------
Signature (Name of Corporation or Other Entity)
------------------------------------- ---------------------------------------
Type/Print Name of Individual Investor By:
(Specify "as joint tenant," as Signature of Authorized Officer,
trustee," etc. if applicable) Trustee or Partner
------------------------------------- ---------------------------------------
Signature of Joint Investor Title
-------------------------------------
Type/Print Name of Individual Investor
(Specify "as joint tenant," as
trustee," etc. if applicable)
------------------------------------- ---------------------------------------
Tax Identification or Social Security Tax Identification Number for Investor
Number for Investor(s)
[Signature Page to the NHancement Technologies Inc.
Series B Preferred Stock Purchase Agreement Dated as of October ___, 2000]
-12-
16
EXHIBIT A
Schedule of Investors
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INVESTOR SHARES PURCHASED PRICE PER SHARE AGGREGATE PURCHASE PRICE
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▇▇▇ ▇▇▇▇▇▇▇ 35,000 $100.00 3,500,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,000 $100.00 100,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,250 $100.00 125,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Trustee 1,000 $100.00 100,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500 $100.00 250,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 500 $100.00 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ 500 $100.00 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,000 $100.00 100,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 $100.00 50,000
▇▇▇ ▇▇▇▇▇▇ 1,000 $100.00 100,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust 2,000 $100.00 200,000
▇▇▇▇▇ ▇▇▇▇▇ 3,500 $100.00 350,000
▇▇▇ ▇▇▇▇▇▇ 1,000 $100.00 100,000
First Options 300 $100.00 30,000
First Options 250 $100.00 25,000
▇. ▇▇▇▇▇▇▇ Trust 10,000 $100.00 1,000,000
▇▇▇▇▇▇ D & ▇▇▇▇▇▇ 2,500 $100.00 25,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,000 $100.00 100,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,500 $100.00 150,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ 3,150 $100.00 315,000
Bladwin
Commonwealth Central 1,000 $100.00 100,000
▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000 $100.00 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,250 $100.00 125,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,135 $100.00 113,500
First Options 1,000 $100.00 100,000
First Options 200 $100.00 20,000
TOTAL 79,035 NA $7,228,500.00
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17
EXHIBIT B
CERTIFICATE OF DESIGNATION
[See attached]
18
EXHIBIT C
SHELF REGISTRATION AGREEMENT
[See attached]
