EXHIBIT 10.1
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT ("Agreement") is made as of the 11th
day of January, 2000 by and between Sunrise Technologies International,
Inc., a corporation organized under the laws of Delaware, with headquarters
located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the
"Company"), and the persons listed as investors on the signature page
hereof (collectively, the "Investors").
RECITALS
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A. The Company and the Investors are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of the U.S. Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended;
B. The Investors wish to purchase, and the Company wishes to
sell and issue to the Investors, upon the terms and conditions stated in
this Agreement, an aggregate of up to $13 million in principal amount of
the Company's 7% Convertible Debentures due June 30, 2002 in the form
attached hereto as Exhibit A (the "Debentures") and warrants to acquire
shares of Common Stock; and
C. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, in the form attached hereto as Exhibit B (the
"Registration Rights Agreement"), pursuant to which the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, and
applicable state securities laws;
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the
following terms shall have the meanings here set forth:
1.1 "Affiliate" means, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person.
1.2 "Agreements" means this Agreement, the Registration
Rights Agreement, the Debentures and the Warrants.
1.3 "A Warrants" means warrants to acquire shares of Common
Stock with an exercise price equal to 115% of the Conversion Price and
exercisable from the date of issuance until the fifth (5th) anniversary
thereafter, in the form attached hereto as Exhibit C-1.
1.4 "B Warrants" means warrants to acquire shares of Common
Stock with an exercise price equal to 115% of the Conversion Price and
exercisable from the date of issuance until the second (2nd) anniversary
thereafter, in the form attached hereto as Exhibit C-2.
1.5 "Closing" means the consummation of the transactions
contemplated by this Agreement, and "Closing Date" means the date of such
Closing.
1.6 "Common Stock" means the Company's common stock, par
value $.001 per share.
1.7 "Control" means the possession , direct or indirect, of
the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
1.8 "Conversion Price" means:
(A) for the period after February 29, 2000, 75% of the
average of the ten (10) lowest Market Prices during the month of February
2000; provided, that such Conversion Price shall not be less than $3.00 or
more than $13.67;
(B) for the period from the tenth (10th) trading day in
February 2000 until the end of February 2000, the Conversion Price shall be
75% of the average of the ten (10) lowest Market Prices during February
2000 up until the applicable conversion date; and
(C) for the period prior to the 10th trading day in
February 2000, the Conversion Price shall be $13.67.
1.9 "Market Price" means the closing bid price of the Common
Stock on a trading day as reported by NASDAQ National Market (the "Nasdaq
Stock Market") or other principal exchange or market on which the Common
Stock is listed.
1.10 "Material Adverse Effect" means a material adverse effect
on the (i) condition (financial or otherwise), business, assets, or
results of operations of the Company and its subsidiaries, taken as a
whole; (ii) ability of the Company to perform any of its material
obligations under the Agreements; or (iii) rights and remedies of any
Investor under the Agreements.
1.11 "Person" means an individual, corporation, partnership,
trust, business trust, association, joint stock company, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
1.12 "SEC Filings" has the meaning set forth in Section 4.6.
1.13 "Securities" means the Debentures, the Warrants, the
Underlying Shares and the Warrant Shares (defined below).
1.14 "Shares" means the Underlying Shares and Warrant Shares.
1.15 "Underlying Shares" means the shares of Common Stock
issuable upon conversion of, as payment for interest under, or otherwise
pursuant to the Debentures.
1.16 "Warrants" means collectively the A Warrants and B
Warrants.
1.17 "Warrant Shares" means the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants.
1.18 "1933 Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
1.19 "1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares and Warrants. Subject to the
terms and conditions of this Agreement, each Investor hereby severally (and
not jointly) agrees to purchase, and the Company hereby agrees to sell and
issue to such Investor:
(a) The principal amount of Debentures set forth on
such Investor's signature page attached hereto (with respect to such
Investor, the "Purchase Price);
(b) A Warrants to purchase such number of shares of
Common Stock equal to 25% of the sum of the Underlying Shares (i) issued
prior to March 1, 2000 and (ii) issuable on March 1, 2000, in each case
upon conversion of the Debentures purchased by such Investor hereunder and
without considering any limitations or restrictions contained in Section
3(i) of the Debentures; and
(c) B Warrants to purchase such number of shares of
Common Stock equal to 25% of the sum of the Underlying Shares (i) issued
prior to March 1, 2000 and (ii) issuable on March 1, 2000, in each case
upon conversion of the Debentures purchased by such Investor hereunder and
without considering any limitations or restrictions contained in Section
3(i) of the Debentures.
The Company agrees that within ten (10) business days after
March 1, 2000, it shall deliver to each Investor (or then holder of
Securities) new Debentures and Warrants in substitution of the Debentures
and Warrants issued on the Closing Date which are identical in all respects
except that the then fixed Conversion Price shall be appropriately
specified in the Debentures, the then fixed exercise price under the
Warrants shall be appropriately specified in the Warrants, and the Warrants
shall specify the fixed number of Warrant Shares into which the Warrants
are then exercisable. Such changes are intended not as amendments to the
Debentures or Warrants but only as clarification of the foregoing numbers
for convenience purposes, and such changes shall not affect any provisions
concerning adjustments to the Conversion Price, exercise price or number of
Warrant Shares contained therein.
The Debentures shall be callable by the Company at any time
after the second anniversary of the issuance date thereof at a price
consisting of (i) cash equal to 130% of the outstanding Principal Amount
and accrued but unpaid interest thereunder, and (ii) additional A Warrants
to purchase such number of shares of Common Stock equal to 30% of the
Underlying Shares which would have been issued or issuable upon conversion
of the portion of the outstanding Principal Amount called. The B Warrants
shall be callable by the Company for $.01 per Warrant Share issuable under
such called B Warrants if the Market Price of the Common Stock is more that
125% of the then applicable exercise price for the B Warrants for twenty
(20) consecutive trading days (the "Pre-Call Period").
Notwithstanding the foregoing, to execute either of the
foregoing call rights, (i) the Company must exercise its rights pro rata
among all Investors; (ii) the Company must give each Investor at least
thirty (30) business days prior written notice of the call date (the period
from the Notice to the call date being referred to as the "Post-Call
Period"); (iii) during the entire Post-Call Period and, in the case of B
Warrants, the entire Pre-Call Period, and in the case of Debentures, the
entire twenty (20) consecutive trading day period immediately preceding the
call notice, the Underlying Shares and Warrant Shares must either be (A)
covered by an effective registration statement under the 1933 Act and a
deliverable prospectus or (B) freely tradeable under Rule 144(k) thereunder
and (iv) the Underlying Shares and Warrant Shares must be listed and traded
on the Nasdaq Stock Market or another acceptable exchange or market.
3. Closing. The Company shall promptly deliver to Kleinberg,
Kaplan, Xxxxx & Xxxxx, P.C. ("KKWC"), on the date hereof, in trust, (i) the
Warrants and Debentures registered in such name or names as the Investors
may designate, representing all of the Warrants and Debentures, and (ii)
payment in full of the fees and expenses referred to in Section 10.5(c)
below, with instructions that such Debentures, Warrants and dollar amounts
are to be held for release only upon payment of the Purchase Price
pertaining thereto to the Company. Upon receipt by KKWC of such
Debentures, Warrants and dollar amounts, such Investor shall promptly cause
wire transfers in same day funds to be sent to the account of the Company
as instructed in writing by the Company, in amounts representing each
Investor's aggregate Purchase Price. On the date the Company receives each
such wire transfer it shall immediately notify KKWC, and the Debentures and
the Warrants pertaining to such wire transfers shall be released to the
applicable Investor(s) and the dollar amounts shall be released to the
payee as contemplated by Sections 10.5 (c) (and the first such date shall
be deemed the "Closing Date"). The portion of the dollar amounts due under
Section 10.5(c) below upon execution hereof shall be paid directly to the
payee herein or, if same is paid to KKWC, may be immediately released to
such payee.
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Investor that:
4.1 Organization, Good Standing and Qualification. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of Delaware and has all requisite power and
authority to carry on its business and own its properties as now conducted
and owned. The Company is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property makes
such qualification or licensing necessary unless the failure to so qualify
or be licensed would not have a Material Adverse Effect. Schedule 4.1
lists all subsidiaries of the Company. Except when the context otherwise
requires, representations and warranties in this Section 4 by the Company
shall be deemed to include representations and warranties as to its
subsidiaries as well.
4.2 Authorization. The Company has full power and authority
and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Agreements, (ii) the performance of all
obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Securities. The Agreements constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors' rights generally.
4.3 Capitalization. Set forth on Schedule 4.3 hereto is (a)
the authorized capital stock of the Company on the date hereof; (b) the
number of shares of capital stock issued and outstanding; (c) the number of
shares of capital stock issuable pursuant to the Company's stock plans; and
(d) the number of shares of capital stock issuable and reserved for
issuance pursuant to securities (other than the Shares) exercisable for, or
convertible into or exchangeable for any shares of capital stock. All of
the issued and outstanding shares of the Company's capital stock have been
duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights. Except as set forth on Schedule 4.3, no Person
is entitled to preemptive or similar statutory or contractual rights with
respect to any securities of the Company, including the Securities. Except
as set forth on Schedule 4.3, there are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements of any
character under which the Company is or may be obligated to issue any
equity securities of any kind, or to transfer any equity securities of any
kind, and except as contemplated by this Agreement, the Company does not
have any present plan or intention to issue any equity securities of any
kind, or to transfer any equity securities of any kind owned by it. Except
as set forth on Schedule 4.3, the Company does not know of any voting
agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among any of the securityholders
of the Company relating to the securities held by them. Except as set
forth on Schedule 4.3, the Company has not granted any Person the right to
require the Company to register any securities of the Company under the
1933 Act, whether on a demand basis or in connection with the registration
of securities of the Company for its own account or for the account of any
other Person.
4.4 Valid Issuance. The Company has reserved a sufficient
number of shares of Common Stock for issuance upon conversion of, as
payment for interest on and otherwise pursuant to the Debentures, and upon
exercise of the Warrants. The Company will take such steps as may be
necessary to reserve sufficient additional shares for issuance pursuant to
Section 7 below when such issuance is determinable (if not already
reserved). The Debentures and Warrants are duly authorized, and such
Securities, along with the Underlying Shares and the Warrant Shares when
issued in accordance herewith and with the terms of the Debentures and
Warrants, will be duly authorized, validly issued, fully paid, non-
assessable and free and clear of all encumbrances and restrictions, except
for restrictions on transfer imposed by applicable securities laws.
4.5 Consents. The execution, delivery and performance by the
Company of the Agreements and the offer, issuance and sale of the
Securities require no consent of, action by or in respect of, or filing
with, any Person, governmental body, agency, or official other than
(i) filings that have been made pursuant to applicable state securities
laws and the requirements of the Nasdaq Stock Market and (ii) post-sale
filings pursuant to applicable state and federal securities laws and the
requirements of the Nasdaq Stock Market which the Company undertakes to
file within the applicable time periods.
4.6 Delivery of SEC Filings; Business. The Company has
provided each Investor with copies of the Company's most recent Annual
Report on Form 10K for the fiscal year ended December 31, 1998, and all
other reports filed by the Company pursuant to the 1934 Act since the
filing of the Annual Report on Form 10K (collectively, the "SEC Filings").
The Company is engaged only in the business described in the SEC Filings
and the SEC Filings contain a complete and accurate description of the
business of the Company. The Company has not provided to the Investors (i)
any information required to be filed under the 1934 Act that has not been
so filed or (ii) any non-public information.
4.7 Use of Proceeds. The proceeds of the sale of the
Securities hereunder shall be used by the Company for working capital and
general corporate purposes.
4.8 No Material Adverse Change. Since the filing of the
Company's most recent Annual Report on Form 10K or as otherwise identified
and described in subsequent reports filed by the Company pursuant to the
1934 Act, there has not been:
(i) any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected
in the financial statements included in the Company's most recent Report on
Form 10Q, except changes in the ordinary course of business which have not
had, in the aggregate, a Material Adverse Effect;
(ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock
of the Company, or any redemption or repurchase of any securities of the
Company;
(iii) any material damage, destruction or loss, whether
or not covered by insurance to any assets or properties of the Company or
any of its subsidiaries;
(iv) any waiver by the Company of a valuable right or of
a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and which is not material to the assets,
properties, financial condition, operating results or business of the
Company taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);
(vi) any material change or amendment to a material
contract or arrangement by which the Company or any of its assets or
properties is bound or subject;
(vii) any labor difficulties or labor union organizing
activities with respect to employees of the Company;
(viii) any transaction entered into by the Company other
than in the ordinary course of business; or
(ix) any other event or condition of any character that
might have a Material Adverse Effect.
4.9 SEC Filings; Material Contracts.
(a) As of its filing date, each report filed by the
Company with the SEC pursuant to the 1934 Act, complied as to form in all
material respects with the requirements of the 1934 Act and did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment
thereto filed by the Company pursuant to the 1933 Act and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act
and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and each prospectus filed pursuant to Rule 424(b)
under the 1933 Act, as of its issue date and as of the closing of any sale
of securities pursuant thereto did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Except as set forth on Schedule 4.3 hereto, there
are no agreements or instruments currently in force and effect that
constitute a warrant, option, convertible security or other right,
agreement or arrangement of any character under which the Company is or may
be obligated to issue any material amounts of any equity security of any
kind, or to transfer any material amounts of any equity security of any
kind.
4.10 Form S-3 Eligibility.
The Company is currently eligible to register the resale of its
Common Stock on a registration statement on Form S-3 under the 1933 Act.
4.11 No Conflict, Breach, Violation or Default. (a) The
execution, delivery and performance of the Agreements by the Company and
the issuance and sale of the Securities will not conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute
a default under (i) the Company's Certificate of Incorporation ("Articles")
or Bylaws, each as in effect on the date hereof, or (ii) except where it
would not have a Material Adverse Effect, (a) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any of its properties, or
(b) any agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the properties of the Company are
subject.
(b) Except as set forth on Schedule 4.11 hereto, or
where it would not have a Material Adverse Effect, the Company (i) is not
in violation of any statute, rule or regulation applicable to the Company
or its assets, (ii) is not in violation of any judgment, order or decree
applicable to the Company or its assets; and (iii) is not in breach or
violation of any agreement, note or instrument to which it or its assets
are a party or are bound. The Company has not received notice from any
Person of any claim or investigation that, if adversely determined, would
render the preceding sentence untrue or incomplete.
4.12 Tax Matters. The Company has correctly and timely
prepared and filed or timely obtained extensions for, all tax returns
required to have been filed by it with all appropriate governmental
agencies and timely paid all taxes owed by it. The charges, accruals and
reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material
unpaid assessments of the Company nor, to the knowledge of the Company, any
basis for the assessment of any additional taxes, penalties or interest for
any fiscal period or audits by any federal, state or local taxing authority
except such as which are not material. All material taxes and other
assessments and levies that the Company is required to withhold or to
collect for payment have been duly withheld and collected and paid to the
proper governmental entity or third party. There are no tax liens or
claims pending or threatened against the Company or any of its assets or
property. There are no outstanding tax sharing agreements or other such
arrangements between the Company and any other corporation or entity.
4.13 Title to Properties. Except as disclosed in the SEC
Filings, the Company has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from
liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to
be made thereof by them; and except as disclosed in the SEC Filings, the
Company holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with
the use made or currently planned to be made thereof by them.
4.14 Certificates, Authorities and Permits. The Company
possesses adequate certificates, authorizations or permits issued by
appropriate governmental agencies or bodies necessary to conduct its
business as presently operated and has not received any written notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company, would individually or in the aggregate have a Material Adverse
Effect.
4.15 No Labor Disputes. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent.
4.16 Intellectual Property. The Company owns or possesses
adequate trademarks and trade names and have all other rights to
inventions, know-how, patents, copyrights, trademarks, trade names,
confidential information and other intellectual property (collectively,
"Intellectual Property Rights"), free and clear of all liens, security
interests, charges, encumbrances, equities and other adverse claims,
necessary to conduct the business now operated by it, or presently employed
by it, and presently contemplated to be operated by it, and has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property Rights. Schedule 4.16
sets forth a list by serial number and title of the patents and/or patent
applications owned or possessed by the Company. No proprietary technology
of any Person was used in the design or development by the Company of (or
otherwise with respect to) any of the Intellectual Property Rights, which
technology was not properly acquired by the Company from such Person.
4.17 Environmental Matters. The Company is not in violation
of any statute, rule, regulation, decision or order of any governmental
agency or body or any court, U.S. or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "Environmental Laws"), does not own or operate
any real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or
contamination pursuant to any Environmental Laws, and is not subject to any
claim relating to any Environmental Laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
that might lead to such a claim.
4.18 Litigation. Except as disclosed in the SEC Filings,
there are no pending actions, suits or proceedings against or affecting the
Company, or any of its properties that, if determined adversely to the
Company, would individually or in the aggregate have a Material Adverse
Effect or would materially and adversely affect the ability of the Company
to perform its obligations under the Agreements, or which are otherwise
material in the context of the sale of the Securities; and to the Company's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
4.19 Financial Statements. The financial statements included
in each SEC Filing present fairly and accurately the consolidated financial
position of the Company as of the dates shown and its results of operations
and cash flows for the periods shown, and such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis. Except as set forth on Schedule 4.19 or in
the financial statements of the Company included in the SEC Filings filed
prior to the date hereof, the Company has no liabilities, contingent or
otherwise, except those which individually or in the aggregate are not
material to the financial condition or operating results of the Company.
4.20 Insurance Coverage. The Company maintains in full force
and effect insurance coverage that is customary for comparably situated
companies for the business being conducted, and properties owned or leased,
by the Company, and the Company reasonably believes such insurance coverage
to be adequate against all liabilities, claims and risks against which it
is customary for comparably situated companies to insure.
4.21 Compliance with Nasdaq Continued Listing Requirements.
The Company is in compliance with all applicable Nasdaq continued listing
requirements for the Nasdaq Stock Market. There are no proceedings pending
or, to the Company's knowledge, threatened against the Company relating to
the continued listing of the Company's Common Stock on the Nasdaq Stock
Market and the Company has not received any notice of, nor to the knowledge
of the Company is there any basis for, the delisting of the Common Stock
from the Nasdaq Stock Market.
4.22 Acknowledgement of Dilution. The number of shares of
Common Stock issuable pursuant to the Debentures and Warrants may increase
significantly. The Company's executive officers and directors have studied
and fully understand the nature of the transactions being contemplated
hereunder and recognize that they have a potential dilutive effect.
4.23 Brokers and Finders. The Investors shall have no
liability or responsibility for the payment of any commission or finder's
fee to any third party in connection with or resulting from this agreement
or the transactions contemplated by this Agreement by virtue of any
agreement made by the Company to a third party, and except as set forth in
Section 10.5 below, the Company shall have no such liability or
responsibility for any such commission or finder's fee.
4.24 No Directed Selling Efforts or General Solicitation.
Neither the Company nor, to its knowledge, any Person acting on its behalf
has conducted any general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offer or sale of any
of the Securities.
4.25 No Integrated Offering. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration
for the transactions contemplated hereby or would require registration of
the Securities under the 1933 Act; or would require the integration of this
offering with any other offering of securities for purposes of determining
the need to obtain shareholder approval of the transactions contemplated
hereby under the rules of the Nasdaq Stock Market.
4.26 Disclosures. No representation or warranty made under
any Section hereof and no information furnished by the Company pursuant
hereto, or in any other document, certificate or statement furnished by the
Company to the Investor or any authorized representative of the Investor,
pursuant to the Agreements or in connection therewith, contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the respective statements contained herein or therein, in light of the
circumstances under which the statements were made, not misleading.
5. Representations and Warranties of the Investors. Each Investor
hereby severally represents and warrants to the Company as to itself only
that:
5.1 Organization and Existence. The Investor is a validly
existing company and has all requisite corporate, partnership or limited
liability company power and authority to invest in the Securities pursuant
to this Agreement.
5.2 Authorization. The execution, delivery and performance
by the Investor of the Agreements have been duly authorized and the
Agreements will each constitute the valid and legally binding obligation of
the Investor, enforceable against the Investor in accordance with their
terms.
5.3 Purchase Entirely for Own Account. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of securities laws, and the
Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same in violation of securities laws.
The Investor is not a registered broker dealer or an entity engaged in the
business of being a broker dealer.
5.4 Investment Experience. The Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the
Securities and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby.
5.5 Disclosure of Information. The Investor has had an
opportunity to receive documents related to the Company and to ask
questions of and receive answers from the Company regarding the Company,
its business and the terms and conditions of the offering of the
Securities. Neither such inquiries nor any other due diligence
investigation conducted by the Investor shall modify, amend or affect the
Investor's right to rely on the Company's representations and warranties
contained in this Agreement or made pursuant to this Agreement.
5.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S.
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 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, until registration for
resale pursuant to the Registration Rights Agreement or until sales under
Rule 144 are permitted, certificates evidencing the Securities will bear
one or all of the following legends or legends substantially similar
thereto:
"These securities have not been registered under the Securities
Act of 1933, as amended (the "Act"), and may not be offered, sold, pledged,
hypothecated, assigned or transferred except (i) pursuant to a registration
statement under the Act which has become effective and is current with
respect to these securities, or (ii) pursuant to a specific exemption from
registration under the Act but only upon a holder hereof first having
obtained the written opinion of counsel to the Corporation, or other
counsel reasonably acceptable to the Corporation, that the proposed
disposition is consistent with all applicable provisions of the Act."
Upon registration for resale pursuant to the Registration
Rights Agreement, or when sales under Rule 144 are permitted, the Company
shall promptly cause certificates evidencing the Shares previously issued
hereunder to be replaced with certificates which do not bear such
restrictive legends. Upon conversion of the Debentures, exercise of the
Warrants, and payment of interest on the Debentures in Common Stock, the
Company shall promptly cause certificates evidencing the Shares issued
thereunder to be delivered to the holder thereof without any restrictive
legends thereon, so long as such Shares have been registered for resale
under the 1933 Act or sales of such Shares are permitted under Rule 144.
5.8 Accredited Investor. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the
0000 Xxx.
5.9 No General Solicitation. The Investor did not learn of
the investment in the Securities as a result of any public advertising or
general solicitation.
6. Registration Rights Agreement. The parties acknowledge and
agree that part of the inducement for the Investors to enter into this
Agreement is the Company's execution and delivery of the Registration
Rights Agreement. The parties acknowledge and agree that simultaneously
with the execution hereof, the Registration Rights Agreement is being duly
executed and delivered by the parties thereto.
7. Covenants and Agreements of the Company.
7.1 Subsequent Sale at Lower Price.
(a) Required Adjustments. If during the period ending
on the later of (i) thirty (30) months following the Closing Date or (ii)
twenty-seven (27) months following the effective date of the Registration
Statement contemplated by the Registration Rights Agreement (the "MFN
Period"), the Company sells any shares of its Common Stock at a per share
selling price ("Per Share Selling Price") lower than the Conversion Price
per share set forth in the definition hereof, then (1) the Conversion Price
per share under the Debentures shall be adjusted downward to equal such
lower Per Share Selling Price, and (2) the then exercise price under the
Warrants shall be adjusted downward to equal such lower Per Share Selling
Price, as set forth in the Debentures and Warrants, respectively; provided,
however, that this provision shall not apply to (w) any issuances or sales
of securities pursuant to employee or director option plans of the Company
approved by shareholders or pursuant to contracts currently in effect and
disclosed to Investors, (x) any issuances of securities in connection with
any acquisition, merger or licensing arrangement for products or
intellectual property, (y) any issuances to consultants as reasonable
consideration for services rendered, or (z) any issuances of securities to
liquidate royalty interests, so long as all such issuances under this
clause (z) in the aggregate do not cause a dilution of greater than 5% of
the Investors' equity ownership in the Company during the one year period
following the Closing Date (for clarification purposes, such 5% dilution
provision shall apply only to this clause (z) and shall not affect any
other provisions of this Section 7.1(a)). If such dilution is greater than
5% at any time or from time to time during the one year period following
the Closing Date, then (1) the Conversion Price per share under the
Debentures shall be adjusted downward, and (2) the then exercise price
under the Warrants shall be adjusted downward, to the extent necessary such
that the Investors shall be entitled to receive in the aggregate, upon
conversion and exercise thereof in full, such additional number of shares
of Common Stock as is necessary to eliminate such dilution over 5% without
any additional consideration therefor. For purposes of the preceding
sentence and clause (z) above, any issuances of Common Stock to third
parties shall be deemed to have occurred upon the issuance of "derivative
securities" as set forth in Section 7.1(b)(i) below, and dilution
calculations shall be computed as if all the Debenture and Warrants issued
on the date hereof were already converted and exercised in full and any
"derivative securities" were already converted, exchanged and exercised in
full.
(b) Definitions.
(i) For the purposes of adjustments contained in
the Debentures and Warrants as described in Section 7.1(a) above, the term
"Per Share Selling Price" shall include the amount actually paid by third
parties for each share of Common Stock; in the event a fee is paid by the
Company in connection with the transaction, any such fee shall be deducted
from the selling price pro rata to all shares sold in the transaction to
arrive at the Per Share Selling Price. A sale of shares of Common Stock
shall include the sale or issuance of rights, options, warrants or
convertible securities ("derivative securities") under which the Company is
or may become obligated to issue shares of Common Stock, and in such
circumstances the sale of Common Stock shall be deemed to have occurred at
the time of the issuance of the derivative securities and the Per Share
Selling Price of the Common Stock covered thereby shall also include the
exercise or conversion price thereof (in addition to the consideration per
underlying share of Common Stock received by the Company upon such sale or
issuance of the derivative security, less the fee amount as provided
above). In case of any such security issued within the MFN Period in a
"Variable Rate Transaction" or an "MFN Transaction" (each as defined
below), the Per Share Selling Price shall be deemed to be the lowest
conversion or exercise price at which such securities are converted or
exercised or might have been converted or exercised in the case of a
Variable Rate Transaction, or the lowest adjustment price in the case of an
MFN Transaction. If shares are issued for a consideration other than cash,
the per share selling price shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company.
(ii) The term "Variable Rate Transaction" shall mean a
transaction in which the Company issues or sells (a) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (x)
at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the Common
Stock at any time after the initial issuance of such debt or equity
securities, or (y) with a fixed conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of the
Company or the market for the Common Stock (but excluding standard stock
split anti-dilution provisions), or (b) any securities of the Company
pursuant to an "equity line" structure which provides for the sale, from
time to time, of securities of the Company which are registered for resale
pursuant to the 1933 Act.
(iii) The term "MFN Transaction" shall mean a transaction
in which the Company issues or sells any securities in a capital raising
transaction or series of related transactions (the "New Offering") which
grants to an investor (the "New Investor") the right to receive additional
shares (including without limitation as a result of a lower conversion,
exchange or exercise price) based upon subsequent transactions of the
Company on terms more favorable than those granted to such New Investor in
such New Offering.
(iv) The term "MFN Period" shall have the meaning set
forth in Section 7.1(a), above.
7.2 Limitation on Transactions.
(a) Until the date of effectiveness of the registration
statement contemplated by the Registration Rights Agreement, without the
prior written consent of a majority-in-interest of the Investors (which
consent may be withheld in the Investors' discretion), the Company shall
not (i) issue or sell or agree to issue or sell any securities for cash in
a non-public MFN Transaction; or (ii) issue or sell, or agree to issue or
sell, any securities for cash in a non-public Variable Rate Transaction.
(b) During the period after effectiveness of the
registration statement contemplated by the Registration Rights Agreement
and until the expiration of the MFN Period, without the prior written
consent of a majority-in-interest of the Investors (which consent may be
withheld in the Investors' discretion), the Company shall not (i) issue or
sell or agree to issue or sell any securities for cash in a non-public MFN
Transaction; or (ii) issue or sell, or agree to issue or sell, any
securities for cash in a non-public Variable Rate Transactions.
(c) The Company shall not issue any securities in any
transaction that would be integrated with the Securities issued pursuant to
this Agreement for federal or state securities laws purposes or under NASD
or NASDAQ rules or regulations.
7.3 Right of Investors to Participate in Future Transactions.
(a) The Company agrees that during the MFN Period the
Investors will have a right to participate in future non-public capital
raising transactions as set forth in this Section 7.3. The Company shall
give advance written notice to the Investors prior to any offer or sale of
any of its equity securities or any securities convertible into or
exchangeable or exercisable for such securities in a non-public capital
raising transaction. Prior to the closing of any such transaction, the
Investors shall have the right to participate, on a pro rata basis among
those Investors interested in participating, in up to 33 1/3% of such new
offering (or in the case of a Variable Rate Transaction, up to 75% of such
new offering) and purchase such securities for the same consideration and
on the same terms and conditions as contemplated for such third-party sale.
In order to exercise this right, an Investor must give written notice to
the Company of the Investor's election to participate and such notice must
be given within ten (10) days following receipt of the notice from the
Company. In the event the Company gives notice to the Investors of an
expected transaction pursuant to this Section 7.3 but cannot consummate
such transaction, the Company will give the Investors prompt written notice
of the cancellation of such transaction. If, subsequent to the Company
giving notice to the Investors hereunder, the terms and conditions of the
proposed third-party sale are changed in any way, the Company shall be
required to provide a new notice to the Investors hereunder and the
Investors shall have the right to participate in the offering on such
changed terms and conditions as provided hereunder.
(b) Notwithstanding anything contained in Section
7.3(a) above, such Section 7.3(a) shall not apply if an investment bank,
which has been ranked as one of the top ten firms for dollar value of
equity underwritings for the prior calendar year (as reported by Dow Xxxxx,
Bloomberg or other national financial publication or reporting service), is
providing the capital in such offering and such investment bank reasonably
requires as a condition thereto that such bank be the sole investor (not
acting as agent) in such offering.
(c) The Company agrees that during the MFN Period, if
the Company desires to seek or enter into any non-public capital raising
transaction from time to time, it shall first discuss such potential
transaction with the Investors and offer the Investors the right to provide
such capital in whole or in part prior to seeking capital from other
sources ("Right of First Discussion"). If after any such discussions
and/or offer the terms or conditions of such potential capital raising
transaction shall change in any way, the Right of First Discussion
contained herein shall again apply as if a new potential capital raising
transaction were contemplated. Notwithstanding anything contained in this
Section 7.3(c), this Section 7.3(c) is intended to be in addition to
Section 7.1(a) and shall not in any way affect the Investors' rights or the
Company's obligations under Section 7.3(a).
7.4 Opinion of Counsel. On or prior to the Closing Date, the
Company will deliver to the Investors the opinions of independent legal
counsel to the Company, in form and substance reasonably acceptable to the
Investors, addressing those legal matters set forth in Schedule 7.4 hereto.
7.5 Reservation of Common Stock. The Company hereby agrees,
at all times with respect to shares issuable upon conversion of and
interest payable pursuant to the Debentures and upon exercise of the
Warrants, (including without limitation additional shares issuable
following any adjustment described in Section 7.1 above), to reserve and
keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of providing for such issuance(s) of Common Stock
upon conversion of and for interest payable pursuant to the Debentures and
upon exercise of the Warrants, such number of shares of Common Stock as
shall from time to time equal the number of shares sufficient to permit the
exercise of the Warrants and conversion of and payment of interest under
the Debentures in full in accordance with the terms of the Warrants and
Debentures.
7.6 Reports. Within one week of filing the following reports
with the SEC, or in the absence of such filing within the time periods
specified below, the Company shall send a copy of the following reports to
each Investor by regular mail:
(a) Quarterly Reports. As soon as available the
Company's quarter-annual report on Form 10-Q or, in the absence of such
report, consolidated balance sheets of the Company and its subsidiaries as
at the end of such period and the related consolidated statements of
operations, stockholders' equity and cash flows for such period and for the
portion of the Company's fiscal year ended on the last day of such quarter,
all in reasonable detail and certified by a principal financial officer of
the Company to have been prepared in accordance with generally accepted
accounting principles, subject to year-end and audit adjustments.
(b) Annual Reports. As soon as available after the end
of each fiscal year of the Company, the Company's Form 10K or, in the
absence of a Form 10K, consolidated balance sheets of the Company and its
subsidiaries as at the end of such year and the related consolidated
statements of earnings, stockholders' equity and cash flows for such year,
all in reasonable detail and accompanied by the report on such consolidated
financial statements of an independent certified public accountant,
currently PricewaterhouseCoopers LLP, or an equivalent accounting firm as
appointed by the Company's stockholders.
(c) Securities Filings. As promptly as practicable and
in any event within one week after the same are issued or filed, copies of
(i) all notices, proxy statements, financial statements, reports and
documents as the Company or any subsidiary shall send or make available
generally to its stockholders or to financial analysts, and (ii) all
periodic and special reports, documents and registration statements which
the Company or any subsidiary furnishes or files, or any officer or
director of the Company or any of its subsidiaries (in such person's
capacity as such) furnishes or files with the SEC.
(d) Other Information. Such other information relating
to the Company or its subsidiaries as from time to time may reasonably be
requested by any Investor provided the Company produces such information in
its ordinary course of business, and further provided that the Company,
solely in its own discretion, determines that such information is not
confidential in nature and disclosure to the Investors would not be harmful
to the Company.
(e) Rule 144. The Company agrees to make publicly
available on a timely basis the information necessary to enable Rule 144 to
be available for resale.
7.7 Press Releases. Any press release or other publicity
concerning this Agreement or the transactions contemplated by this
Agreement shall be submitted to the Investors for comment at least two (2)
business days prior to issuance, unless the release is required to be
issued within a shorter period of time by law or pursuant to the rules of a
national securities exchange. The Company shall issue a press release
concerning the fact and material terms of this Agreement within one
business day of the Closing.
7.8 No Conflicting Agreements. The Company will not, and
will not permit its subsidiaries to, take any action, enter into any
agreement or make any commitment that would conflict or interfere in any
material respect with the obligations to the Investors under the
Agreements.
7.9 Insurance. For so long as any Investor beneficially owns
any of the Securities, the Company shall, and shall cause each subsidiary
to, have in full force and effect (a) insurance reasonably believed to be
adequate on all assets and activities of a type customarily insured,
covering property damage and loss of income by fire or other casualty, and
(b) insurance reasonably believed to be adequate protection against all
liabilities, claims and risks against which it is customary for companies
similarly situated as the Company and the subsidiaries to insure.
7.10 Compliance with Laws. For so long as any Investor
beneficially owns any of the Securities, the Company will use reasonable
efforts, and will cause each of its subsidiaries to use reasonable efforts,
to comply with all applicable laws, rules, regulations, orders and decrees
of all governmental authorities, except to the extent non-compliance (in
one instance or in the aggregate) would not have a Material Adverse Effect.
7.11 Listing of Shares and Related Matters. The Company
hereby agrees, promptly following the Closing of the transactions
contemplated by this Agreement, to take such action to cause the Shares to
be listed on the Nasdaq Stock Market as promptly as possible but no later
than the effective date of the registration contemplated by the
Registration Rights Agreement. The Company further agrees that if the
Company applies to have its Common Stock or other securities traded on any
other principal stock exchange or market, it will include in such
application the Common Stock underlying the Debentures and Warrants, and
will take such other action as is necessary to cause such Common Stock to
be so listed. The Company will take all action necessary to continue the
listing and trading of its Common Stock on the Nasdaq Stock Market and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of such exchange, as applicable, to
ensure the continued eligibility for trading of the Shares thereon.
7.12 Corporate Existence. So long as any Investor
beneficially owns any of the Securities, the Company shall maintain its
corporate existence, except in the event of a merger, consolidation or sale
of all or substantially all of the Company's assets, as long as the
surviving or successor entity in such transaction (a) assumes the Company's
obligations hereunder and under the agreements and instruments entered into
in connection herewith, regardless of whether or not the Company would have
had a sufficient number of shares of Common Stock authorized and available
for issuance in order to fulfill its obligations hereunder and effect the
conversion and exercise in full of all Debentures and Warrants outstanding
as of the date of such transaction; (b) has no legal, contractual or other
restrictions on its ability to perform the obligations of the Company
hereunder and under the agreements and instruments entered into in
connection herewith; and (c) (i) is a publicly traded corporation whose
common stock and the shares of capital stock issuable upon conversion and
exercise of the Debentures and Warrants are (or would be upon issuance
thereof) listed for trading on the Nasdaq Stock Market, New York Stock
Exchange or American Stock Exchange, or (ii) if not such a publicly traded
corporation, then the buyer agrees that it will, at the election of the
Investors, purchase such Investors' Securities at a price equal to 120% of
the Purchase Price of such Securities.
8. Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be
representations, warranties, covenants and agreements as of the date hereof
and shall survive the execution and delivery of this Agreement.
9. Litigation. The parties hereby agree that all actions or
proceedings arising directly or indirectly from or in connection with this
Agreement or the other Agreements shall be litigated only in the Supreme
Court of the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York. The
parties consent to the jurisdiction and venue of the foregoing courts and
consent that any process or notice of motion or other application to either
of said courts or a judge thereof may be served inside or outside the State
of New York or the Southern District of New York by registered mail, return
receipt requested, directed to the party being served at its address set
forth in this Agreement (and service so made shall be deemed complete three
(3) days after the same has been posted as aforesaid) or by personal
service or in such other manner as may be permissible under the rules of
said courts. The Company hereby waives any right to a jury trial in
connection with any litigation pursuant to this Agreement or the other
Agreements.
10. Miscellaneous.
10.1 Successors and Assigns. This Agreement may not be
assigned by a party hereto without the prior written consent of the other
party hereto which consent may not be unreasonably withheld or delayed,
except that without the prior written consent of the Company, but after
notice duly given, an Investor may assign its rights hereunder in whole or
in part to any purchaser of Securities from such Investor or to such
Investor's affiliates. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. 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.
10.2 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.
10.3 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.
10.4 Notices. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be
deemed effectively given only upon delivery to each party to be notified by
(i) personal delivery, (ii) telex or telecopier, upon receipt of the
electronically generated confirmation of delivery, or (iii) a recognized
overnight air courier, addressed to the party to be notified at the address
as follows, or at such other address as such party may designate by ten
days' advance written notice to the other party:
If to the Company:
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Chief Financial Officer
with a copy to:
Duane, Morris & Heckscher LLP
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investors:
To the address listed for such Investor on its signature
page.
with a copy to:
Tail Wind, Inc.
c/o European American Securities, Inc.
Xxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attn: Xxxxx Xxxxx
Telephone: 00-000-000-0000
Facsimile: 00-000-000-0000
and with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10.5 Fees and Expenses.
(a) Except as set forth below, the parties hereto shall
pay their own costs and expenses in connection herewith.
(b) The Investors shall have no liability or
responsibility for the payment of any commission or finder's fee to any
third party in connection with or resulting from this agreement or the
transactions contemplated by this Agreement. A cash fee equal to 4.5% of
the gross proceeds received by the Company hereunder from Investors
procured by Dunwoody will be paid by the Company to Dunwoody Brokerage
Services, Inc. ("Dunwoody") at closing. The company will also issue to
Dunwoody a five-year warrant (the "Dunwoody Warrant") for the purchase of
100,000 shares of Common Stock. The Dunwoody Warrant shall have an
exercise price per share equal to the five-day average closing bid price of
the Company's Common Stock as reported on the Nasdaq National Market over
the five trading days immediately preceding the Closing Date. The shares
of Common Stock underlying the Dunwoody Warrants shall be included in the
definition of "Registrable Securities" under the Registration Rights
Agreement and Dunwoody shall be made a party thereto.
(c) Tail Wind Inc. shall receive an expense allowance to
cover due diligence expenses and legal expenses, in an amount equal to the
sum of (i) 1% of the aggregate Purchase Price of The Tail Wind Fund, Ltd.,
Jeddy Development Inc. (or other investor in substitution thereof) and LBI
Group Inc. and (ii) 0.5% of the aggregate Purchase Price of all other
Investors. Half of such expense allowance shall be paid by the Company
upon execution hereof and the remainder shall be paid at the Closing.
10.6 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 a
majority-in-interest of the Investors, provided, however, that (a) any such
amendment or waiver shall not be effective against any Investor not
consenting to same in writing to the extent such Investor's rights or
obligations hereunder are or may be adversely affected thereby, and (b) 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, each future holder of all such securities, and the
Company.
10.7 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 this Agreement
shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
10.8 Entire Agreement. This Agreement, including the Exhibits
and Schedules hereto, and the Registration Rights Agreement constitute the
entire agreement among the parties hereof with respect to the subject
matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to
the subject matter hereof and thereof.
10.9 Further Assurances. The parties shall execute and
deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements
herein contained.
10.10 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.
10.11 Remedies.
(a) The Investors shall be entitled to specific
performance of the Company's obligations under the Agreements.
(b) Each party shall indemnify the other and hold it
harmless from any loss, cost, expense or fees (including attorneys' fees
and expenses) arising out of any breach of any representation, warranty,
covenant or agreement in any of the Agreements, or arising out of the
enforcement of this Section 10.11
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
The Company:
-----------
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
By:_________________________
Name:
Title:
The Investors:
-------------
THE TAIL WIND FUND, LTD.
By:_________________________
Name:
Title:
Aggregate Purchase Price: $1,500,000
Address for Notices: The Tail Wind Fund, Ltd.
Windermere House
000 Xxxx Xxx Xxxxxx
X.X. Xxx XX-0000
Nassau, Bahamas
Attn: X. XxXxxxxxx
Telephone: 242/000-0000
Facsimile: 242/393-9021
with a copy to:
Tail Wind, Inc.
c/o European American Securities, Inc.
Xxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attn: Xxxxx Xxxxx
Telephone: 00-000-000-0000
Facsimile: 00-000-000-0000
and with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LBI GROUP INC.
By:_________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
Aggregate Purchase Price: $5,000,000
Address for Notices: LBI Group Inc.
c/x Xxxxxx Brothers, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
JEDDY DEVELOPMENT INC.
By:_________________________
Name: Pablo Xxxxxx Xxxxxx
Title: Director
Aggregate Purchase Price: $2,000,000
Address for Notices: JEDDY DEVELOPMENT INC.
00 Xxxxxx
Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxx of Panama
Attn: Pablo Xxxxxx Xxxxxx
Phone: (000) 000-0000
Fax: 001718-339-7079
with a copy to:
Xxx Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
____________________________
Xxxxxx Xxxxxxx MD, PhD
Aggregate Purchase Price: $800,000
Address for Notices: XXXXXX XXXXXXX MD, PhD
000 X. Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: XXXXXX XXXXXXX MD, PhD
Phone: (000) 000-0000
Fax: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
XXXXXX XXXXXXX, XXX,
CIBC XXXXXXXXXXX CORP AS CUSTODIAN
By:_________________________
Name: Xxxxxx Xxxxxxx MD, PhD
Title: Beneficiary
Aggregate Purchase Price: $700,000
Address for Notices: XXXXXX XXXXXXX MD, PhD
000 X. Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: XXXXXX XXXXXXX MD, PhD
Phone: (000) 000-0000
Fax: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
XXXXXX XXXXXXX
By:_________________________
Name:Xxxxxx Xxxxxxx MD, PhD,
as guardian for
Xxxxxx Xxxxxxx
Aggregate Purchase Price: $100,000
Address for Notices: XXXXXX XXXXXXX MD, PhD
000 X. Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: XXXXXX XXXXXXX MD, PhD
Phone: (000) 000-0000
Fax: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
XXXXXX XXXXXXX
By:_________________________
Name:Xxxxxx Xxxxxxx MD, PhD,
as guardian for
Xxxxxx Xxxxxxx
Aggregate Purchase Price: $100,000
Address for Notices: XXXXXX XXXXXXX MD, PhD
000 X. Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: XXXXXX XXXXXXX MD, PhD
Phone: (000) 000-0000
Fax: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
XXXXX XXXXXXX, XXX,
CIBC XXXXXXXXXXX CORP AS CUSTODIAN
By:_________________________
Name: Xxxxx Xxxxxxx
Title: Beneficiary
Aggregate Purchase Price: $300,000
Address for Notices: XXXXXX XXXXXXX MD, PhD
000 X. Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: XXXXXX XXXXXXX MD, PhD
Phone: (000) 000-0000
Fax: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
____________________________
Xxxxx Xxxxxx
Aggregate Purchase Price: $200,000
Address for Notices: Xxxxx Xxxxxx
00 Xxxxx Xxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The undersigned Investor agrees that he, she or it will permit all
decisions with respect to amendments, waivers and remedies of the Purchase
Agreement, Registration Rights Agreement, Debenture and Warrant to be made
by LBI Group Inc. ("LBI") and The Tail Wind Fund, Ltd. ("Tail Wind"),
provided that no amendment, waiver or remedy shall discriminate to the
detriment of such undersigned but not LBI and Tail Wind. The undersigned
has had the opportunity to consult with separate counsel with respect to
such documents. The undersigned Investor does not make the representation
contained in Section 5.1 hereof.
____________________________
Xxxxxxx X. Xxxxxx, M.D.
Aggregate Purchase Price: $1,000,000
Address for Notices: Xxxxxxx X. Xxxxxx, M.D.
000 Xxxxx Xxxxx Xxxx.
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, M.D.
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
