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EXHIBIT 4.13
THIS WARRANT ("WARRANT") HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT COVERING THIS WARRANT UNDER SAID ACT
OR AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.
VOID AFTER 5:00 P.M. EASTERN TIME ON JANUARY 10, 2005 ("EXPIRATION DATE").
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
WARRANT TO PURCHASE SHARES OF
COMMON STOCK, PAR VALUE $.001 PER SHARE
This is to certify that, for VALUE RECEIVED, DUNWOODY BROKERAGE SERVICES,
INC. ("Warrantholder"), is entitled to purchase, subject to the provisions of
this Warrant, from Sunrise Technologies International, Inc., a corporation
organized under the laws of Delaware ("Company"), at any time not later than
5:00 P.M., Eastern Time, on the Expiration Date, at an exercise price per share
equal to $10.68 (the exercise price in effect from time to time hereafter being
herein called the "Warrant Price"), 100,000 shares ("Warrant Shares") of Common
Stock, par value $.001 per share ("Common Stock") of the Company. The number of
Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time as described herein.
This Warrant has been issued pursuant to the terms of the Purchase
Agreement ("Purchase Agreement") dated on or about the date hereof between the
Company and the Warrantholder. Capitalized terms used herein and not defined
shall have the meaning specified in the Purchase Agreement.
Section 1. Registration. The Company shall maintain books for the
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, the Warrant may be
transferred only pursuant to a registration statement filed under the
Securities Act of 1933, as amended ("Securities Act") or an exemption from
registration thereunder. Subject to such restrictions, the Company shall
transfer from time to time, the Warrant, upon the books to be maintained by the
Company for that purpose, upon surrender thereof for transfer properly endorsed
or accompanied
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by appropriate instructions for transfer upon any such transfer, and a new
Warrant shall be issued to the transferee and the surrendered Warrant shall be
canceled by the Company.
Section 3.
(a) Exercise of Warrant. Subject to the provisions hereof, the
Warrantholder may exercise the Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), and upon (i) payment to the Company in cash, by
certified or official bank check or by wire transfer for the account of the
Company of the Warrant Price for the Warrant Shares specified in the Exercise
Agreement or (ii) delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined below) for the Warrant Shares specified
in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or such holder's designee, as the record owner of
such shares, as of the close of business on the date on which this Warrant (or
evidence of loss, theft or destruction thereof) shall have been surrendered, the
completed Exercise Agreement shall have been delivered, and payment shall have
been made for such shares as set forth above. Certificates for the Warrant
Shares so purchased, representing the aggregate number of shares specified in
the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time, not exceeding two (2) business days, after this Warrant shall
have been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new Warrant representing
the number of shares with respect to which this Warrant shall not then have been
exercised.
To effect a Cashless Exercise, the holder shall submit to the Company with
the Exercise Agreement, written notice of the holder's intention to do so,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof. In the event of a
Cashless Exercise, in lieu of paying the Warrant Price in cash, the holder shall
surrender this Warrant for that number of shares of Common Stock determined by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Warrant Price, and
the denominator of which shall be the then current Market Price per share of the
Common Stock. For this purpose, the "Market Price" of the Common Stock shall be
the Market Price on the trading day immediately preceding the date of the
Exercise Agreement.
(b) No Redemption of Warrant. The Company may not redeem this Warrant in
whole or in part.
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Section 4. Compliance with the Securities Act of 1933. Neither this Warrant
not the Common Stock issued upon exercise hereof nor any other security issued
or issuable upon exercise of this Warrant may be offered or sold except as
provided in this agreement and in conformity with the Securities Act of 1933, as
amended, and then only against receipt of an agreement of such person to whom
such offer of sale is made to comply with the provisions of this Section 4 with
respect to any resale or other disposition of such security. The Company may
cause the legend set forth on the first page of this Warrant to be set forth on
each Warrant or similar legend on any security issued or issuable upon exercise
of this Warrant until the Warrant Shares have been registered for resale under
the Registration Rights Agreement or until Rule 144 is available, unless counsel
for the Company is of the opinion as to any such security that such legend is
unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any certificates for Warrant Shares in a
name other than that of the registered holder of the Warrant in respect of which
such shares are issued, and in such case, the Company shall not be required to
issue or deliver any certificate for Warrant Shares or any Warrant until the
person requesting the same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has been paid. The
holder shall be responsible for income taxes due under federal or state law, if
any such tax is due.
Section 6. Mutilated or Missing Warrants. In case the Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond, if requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents and
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved, out of the authorized and unissued Common Stock, a number
of shares sufficient to provide for the exercise of the rights of purchase
represented by the Warrant, and the transfer agent for the Common Stock
("Transfer Agent"), and every subsequent transfer agent for the Common Stock or
other shares of the Company's capital stock issuable upon the exercise of any of
the right of purchase aforesaid, shall be irrevocably authorized and directed at
all times to reserve such number of authorized and unissued shares of Common
Stock as shall be requisite for such purpose. The Company agrees that all
Warrant Shares issued upon exercise of the Warrant shall be, at the time of
delivery of the certificates for such Warrant Shares, duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of the Company. The
Company will keep a conformed copy of this Warrant on file with the Transfer
Agent and with every subsequent transfer agent for the Common Stock or other
shares of the
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Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrant. The Company will supply from time to time the
Transfer Agent with duly executed stock certificates required to honor the
outstanding Warrant.
Section 8. Warrant Price. The Warrant Price, subject to adjustment as
provided in Section 9, shall, if payment is made in cash or by certified check,
be payable in lawful money of the United States of America.
Section 9. Adjustments. Subject and pursuant to the provisions of this
Section 9, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while the
Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter
exercising the Warrant shall be entitled to receive the number of shares of
Common Stock or other capital stock which the Warrantholder would have received
if the Warrant had been exercised immediately prior to such event. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation, or sale, transfer or other disposition of all or substantially all
of the Company's properties to another corporation shall be effected, then, as
a condition of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition, lawful and adequate provision shall be
made whereby each Warrantholder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions herein specified and
in lieu of the Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, such shares of stock, securities or properties as may be issuable
or payable with respect to or in exchange for a number of outstanding Warrant
Shares equal to the number of Warrant Shares immediately theretofore issuable
upon exercise of the Warrant, had such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition not taken place, and
in any such case appropriate provision shall be made with respect to the rights
and interests of each Warrantholder to the end that the provisions hereof
(including, without limitations, provision for adjustment of the Warrant Price)
shall thereafter be applicable, as nearly equivalent as may be practicable in
relation to any shares of stock, securities or properties thereafter
deliverable upon the exercise hereof. The Company shall not effect any such
consolidation, merger, sale, transfer or other disposition unless prior to or
simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting
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from such consolidation or merger, or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume,
by written instrument executed and delivered to the Company, the obligation to
deliver to the holder of the Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such holder may be entitled to
purchase and the other obligations under this Warrant. The provisions of this
paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) or evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends or distributions referred to in Section
9(a)), or subscription rights or warrants, the Warrant Price to be in effect
after such record date shall be determined by multiplying the Warrant Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
multiplied by the Market Price per share of Common Stock (as determined pursuant
to Section 3), less the fair market value (as determined by the Company's Board
of Directors in good faith) of said assets or evidences of indebtedness so
distributed, or of such subscription rights or warrants, and the denominator of
which shall be the total number of shares of Common Stock outstanding multiplied
by such current Market Price per share of Common Stock. Such adjustment shall
be made successively whenever such a record date is fixed.
(d) An adjustment shall become effective immediately after
the record date in the case of each dividend or distribution and immediately
after the effective date of each other event which requires an adjustment.
(e) In the event that, as a result of an adjustment made
pursuant to Section 9, the holder of the Warrant shall become entitled to
receive any shares of capital stock of the Company other than shares of Common
Stock, the number of such other shares so receivable upon exercise of the
Warrant shall be subject thereafter to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect
to the Warrant Shares contained in this Warrant.
Section 10. Fractional Interest. The Company shall not be required to
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section,
be issuable upon the exercise of the Warrant (or specified portions thereof),
the Company shall round such calculation to the nearest whole number and
disregard the fraction.
Section 11. Benefits. Nothing in this Warrant shall be construed to
give any person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right, remedy or claim, it being agreed
that this Warrant shall be for the sole and exclusive benefit of the Company
and the Warrantholder.
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Section 12. Notices to Warrantholder. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall forthwith give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The certificate of the Company's independent certified
public accountants shall be conclusive evidence of the correctness of any
computation made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity
of the subject adjustment. At the Warrantholder's request, the Company shall
deliver to the Warrantholder as of a requested date a notice specifying the
number of Warrant Shares into which this Warrant is exercisable as of such date.
Section 13. Identity of Transfer Agent. The Transfer Agent for the Common
Stock is ChaseMellon Shareholder Services, c/o Xxxxxx Xxxxxxx, 000 Xxxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Phone: (000) 000-0000. Forthwith
upon the appointment of any subsequent transfer agent for the Common Stock or
other shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by the Warrant, the Company will fax to the
Warrantholder a statement setting forth the name and address of such transfer
agent.
Section 14. Notices. Any notice pursuant hereto to be given or made by
the Warrantholder to or on the Company shall be sufficiently given or made
personally or if sent by an internationally recognized courier by next day or
two day delivery service, addressed as follows:
Sunrise Technologies International, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: Mr. Xxxxx Xxxxxx
Chief Financial Officer
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 14.
Any notice pursuant hereto to be given or made by the Company to or on
the Warrantholder shall be sufficiently given or made if personally delivered
or if sent by an internationally recognized courier service by overnight or
two-day service, to the address set forth on the books of the Company or, as to
each of the Company and the Warrantholder, at such other address as shall be
designated by such party by written notice to the other party complying as to
delivery with the terms of this Section 14.
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All such notices, requests, demands, directions and other communications
shall, when sent by courier, be effective two (2) days after delivery to such
courier as provided and addressed as aforesaid.
Section 15. Registration Rights. The initial holder of this Warrant is
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement.
Section 16. Successors. All the covenants and provisions hereof by or for
the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and permitted assigns hereunder. The Warrantholder may
assign or transfer this Warrant to any transferee only with the prior consent of
the Company, which may not be unreasonably withheld or delayed, provided that
the Warrantholder may assign or transfer this Warrant to any of its affiliates
without the consent of the Company.
Section 17. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State.
Section 18. 9.9% and 19.9% Limitations.
(a) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the holder upon
exercise pursuant to the terms hereof shall not exceed a number that, when added
to the total number of shares of Common Stock deemed beneficially owned by such
holder (other than by virtue of the ownership of securities or rights to acquire
securities that have limitations on the Holder's right to convert, exercise or
purchase similar to the limitation set forth herein), together with all shares
of Common Stock deemed beneficially owned by the holder's "affiliates" (as
defined in Rule 144 of the Securities Act) that would be aggregated for purposes
of determining whether a group under Section 13(d) of the Securities Exchange
Act of 1934, as amended, exists, would exceed 9.99% of the total issued and
outstanding shares of the Company's Common Stock (the "RESTRICTED OWNERSHIP
PERCENTAGE"); provided that (w) each holder shall have the right at any time and
from time to time to reduce its Restricted Ownership Percentage immediately upon
notice to the Company and (x) each holder shall have the right at any time and
from time to time, to increase its Restricted Ownership Percentage immediately
(subject to waiver) in the event of a pending or announced change of control
transaction (including without limitation a transaction that would result in a
transfer of more than 50% of the Company's voting power or equity, or a
transaction that would result in a person or "group" being deemed the beneficial
owner of 50% or more of the Company's voting power or equity).
(b) Each time (a "COVENANT TIME") the holder makes a Triggering
Acquisition (as defined below) of shares of Common Stock (the "TRIGGERING
SHARES") pursuant to the Agreement, the holder will be deemed to covenant that
it will not, during the balance of the day on which such Triggering Acquisition
occurs, and during the 61-day period beginning immediately after that day,
acquire additional shares of Common Stock pursuant to Warrants
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existing at that Covenant Time, if the aggregate amount of such additional
shares so acquired (without reducing that amount by any dispositions) would
exceed (x) 9.99% of the number of shares of Common Stock outstanding at that
Covenant Time (including the Triggering Shares) minus (y) the number of shares
of Common Stock actually owned by the Holder at that Covenant Time (regardless
of how or when acquired, and including the Triggering Shares). "TRIGGERING
ACQUISITION" means the exercise of the Warrant by the holder; provided, however,
that with respect to the exercise of this Warrant, if the associated issuance of
shares of Common Stock does not occur, such event shall cease to be a Triggering
Acquisition and the related covenant under this paragraph shall terminate. At
each Covenant Time, the Holder shall be deemed to waive any right it would
otherwise have to acquire shares of Common Stock to the extent that such
acquisition would violate any covenant given by the Holder under this paragraph.
(i) The covenant to be given pursuant to this paragraph will be given
at every Covenant Time and shall be calculated based on the circumstances
then in effect. The making of a covenant at one Covenant Time shall not
terminate or modify any prior covenants.
(ii) The Warrantholder may therefore from time to time be subject to
multiple such covenants, each one having been made at a different Covenant
Time, and some possibly being more restrictive than others. The Warrant-
holder must comply with all such covenants then in effect.
(c) Notwithstanding anything contained herein, in no event shall the
Company issue shares of Common Stock hereunder to the extent that the total
number of shares issued or deemed issued to the Investors (when added to the
Underlying Shares and Warrant Shares) under the Purchase Agreement would exceed
19.9% of the Company's issued and outstanding shares of Common Stock on the date
hereof. Instead, the Company shall redeem this Warrant to the extent necessary
at such consideration required to place the Investors in the same economic
position they would have been if not for such limitation. Only shares acquired
pursuant to the Purchase Agreement will be included in determining whether the
limitation would be exceeded for purposes of this paragraph.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of January 10th, 2000.
SUNRISE TECHNOLOGIES
INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: VP Finance & CFO
Attest:
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