SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 12, 1997
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-17816 77-0148208
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
47257 Fremont Boulevard, Fremont, California 94538
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 510-623-9001
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
EXHIBIT DESCRIPTION
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
4.1 Form of 5% Convertible Notes due 1999
4.2 Form of Security Agreement relating to 5%
Convertible Notes due 1999
4.3 Form of Registration Rights Agreement
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
On March 12, 1997, Sunrise Technologies International, Inc.
(the "Registrant") issued and sold, without registration under
the Securities Act of 1933, as amended (the "Securities Act"), in
reliance on Regulation S thereunder, an aggregate principal
amount of $500,000 5% convertible notes due 1999 ("Regulation S
Notes") and warrants to purchase common stock of the Registrant
("Regulation S Warrants"). The Regulation S Notes are
convertible into common stock of the Registrant ("Common Stock")
at a conversion price of $1.00 of Regulation S Notes for each
share of Common Stock. A Regulation S Warrant to purchase one
share of Common Stock, at an exercise price of $1.25, was issued
without additional consideration for each $2.00 of Regulation S
Notes purchased.
The Regulation S Notes and Regulation S Warrants were issued
as part of a private placement (the "Private Placement") of an
aggregate principal amount of $4,100,750 5% convertible notes due
1999, which include the Regulation S Notes (collectively,
"Notes"), and accompanying warrants to purchase Common Stock
(collectively with the Regulation S Warrants, "Warrants").
Closings of tranches of the Private Placement were held on
February 12, 1997, February 26, 1997, March 7, 1997 and March 12,
1997 (each, a "Closing"). The Notes and Warrants other than the
Regulation S Notes and Regulation S Warrants were offered and
sold by the Registrant in reliance on Regulation D under the
Securities Act to "accredited investors" within the meaning of
Rule 501 under the Securities Act. Notes issued in reliance on
Regulation D under the Securities Act are convertible into Common
Stock at a conversion price of $0.875 of Notes for each share of
Common Stock, and a Warrant to purchase one share of Common
Stock, at an exercise price of $1.00, was issued without
additional consideration for each $1.75 of Notes, other than
Regulation S Notes, purchased.
The Notes are convertible at any time prior to maturity, at
the option of the holders thereof, at the respective conversion
price set forth above, subject to adjustment for any stock
dividends, certain distributions, stock splits or combinations or
reclassifications of Common Stock. The Warrants are exercisable
at any time for five years from the date of issuance, by
presentation and surrender thereof to the Registrant, together
with a duly executed Purchase Form and full and proper payment of
the exercise price. An aggregate of 4,686,572 shares of Common
Stock have been reserved for issuance upon conversion of the
Notes, and an aggregate
<NOTE>
of 2,343,286 shares of Common Stock have
been reserved for issuance upon exercise of the Warrants. The
Registrant has agreed to register under the Securities Act the
shares of Common Stock issuable upon conversion of the Notes and
the shares of Common Stock issuable upon exercise of the
Warrants.
As security for the payment of the Notes, the Registrant
granted to Pennsylvania Merchant Group Ltd ("PMG"), the duly
appointed agent for the purchasers of the Notes, a security
interest in the Registrant's ophthalmic patents and applications
for patents and related assets, as more particularly described in
the Security Agreement dated as of February 12, 1997, as amended.
For its services as placement agent for the Private
Placement, PMG received a fee of 7 1/2% of the gross proceeds of the
Private Placement and the right to purchase, for a nominal
purchase price, warrants to purchase an aggregate of 234,329
shares of common stock of the Registrant ("PMG Warrants"), an
amount equal to 5% of the shares of common stock into which the
Notes are convertible. The PMG Warrants, when issued, will be
exercisable, at an exercise price of $0.875 per share, at any
time from their date of issue until the fifth anniversary of the
respective Closing.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
Dated: March 25, 1997 By: /s/ David W. Light
David W. Light
Chief Executive Officer and Chairman
of the Board
NOTE
ALL CAPITALIZED TERMS SHALL BE DEEMED TO HAVE THE DEFINITIONS
ASCRIBED TO THEM IN THE PURCHASE AGREEMENTS, AS DEFINED IN
SECTION 1 OF THIS DOCUMENT.
_________________, 1997
FOR VALUE RECEIVED, SUNRISE TECHNOLOGIES INTERNATIONAL,
INC., a Delaware corporation ("Maker"), hereby promises to pay to
the order of
_________________________________________________________ or its
registered assigns ("Payee"), in legal and lawful money of the
United States of America, the aggregate sum of
_________________________________________________________
($__________________) with interest thereon according to the
terms hereof. The principal amount hereof, and all accrued and
unpaid interest hereon, shall be paid in full to Payee on
_____________ (the date two years from the Closing Date, as
defined in the Purchase Agreement).
Section 1. Purchase Agreements. This Note and certain
other similar notes aggregating $[ ] principal amount have
been issued pursuant to a U.S. Note and Warrant Purchase
Agreement dated of even date herewith among Maker, Payee,
Pennsylvania Merchant Group Ltd. ("PMG") and certain other
investors (the "U.S. Purchase Agreement") and an Offshore Note
and Warrant Purchase Agreement dated of even date herewith among
Maker, Payee, PMG and certain other investors (the "Offshore
Purchase Agreement"). Pursuant to the U.S. Purchase Agreement
and the Offshore Purchase Agreement (collectively, the "Purchase
Agreements") warrants (the "Warrants") to purchase Maker's Common
Stock have also been issued to Payee.
Section 2. Interest. Interest shall accrue on the
outstanding principal hereof at an annual rate of 5.0%. Accrued
interest shall be payable at maturity or conversion. Interest
shall be payable in cash or, at the option of Maker, shares of
Maker's Common Stock, calculated based on the average of the last
reported sale prices for the last five days prior to the payment
date.
Section 3. Conversion. Subject to the conditions
herein contained, this Note shall be convertible at any time and
from time to time, at the option of Payee, into fully paid and
nonassessable shares of Maker's Common Stock upon surrender to
Maker of this Note; and upon receipt by Maker of such surrendered
Note with any appropriate endorsement thereon, and upon written
notice to Maker by Payee of Payee's election to convert the same
and setting forth the name or names in which shares of Maker's
Common Stock are to be issued, Payee shall be entitled to receive
a certificate or certificates representing the shares of Maker's
Common Stock into which this Note is convertible. Such
conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of this Note,
and the person or persons entitled to receive the shares of
Maker's Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such
shares of Common Stock as of such date; provided, however, that
any such surrender on any date when the stock transfer books of
Maker shall be closed shall constitute the person or persons
entitled to receive the shares of
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Maker's Common Stock issuable
upon such conversion as the record holder or holders of such
shares of Maker's Common Stock for all purposes at the close of
business on the next succeeding day on which such transfer books
are open. Maker's Board of Directors shall at all times reserve
a sufficient number of authorized but unissued shares of Maker's
Common Stock to cover the conversion of any outstanding Notes.
(a) Conversion Price. The basis for the conversion of
this note shall be the Conversion Price in effect at the time of
conversion. Initially, the Conversion Price shall be $[ ].
In connection with effecting any transfer to Maker for
cancellation of this Note upon conversion of the same into
Maker's Common Stock, Maker may, but shall not be obliged to,
issue a certificate or certificates for fractions of a share of
Maker's Common Stock. If Maker elects not to issue a certificate
or certificates for fractions of a share of Maker's Common Stock,
Maker shall pay in lieu thereof an amount equal to the Conversion
Price of such fractional share (computed to the nearest hundredth
of a share) in effect at the close of business on the date of
conversion.
(b) Adjustment of Conversion Price and Number of
Shares. The number of shares of Maker's Common Stock issuable
upon the exercise or exchange of this Note and the Conversion
Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(i) Adjustment for Change in Capital Stock. If
at any time after the Closing Date, Maker:
(1) pays a dividend or makes a
distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares
of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of
Common Stock into a smaller number
of shares;
(4) makes a distribution on its Common
Stock in shares of its capital
stock other than Common Stock; or
(5) issues by reclassification of its
Common Stock any shares of its
capital stock;
then the Conversion Price in effect immediately prior to such
action shall be adjusted so that Payee may receive, upon exchange
of this Note, the number of shares of Common Stock of Maker which
Payee would have owned immediately following such action if Payee
had exchanged this Note immediately prior to such action.
Any adjustment of the Conversion Price shall become
effective immediately after the record date in the case of a
dividend or distribution, and immediately after the effective
date in the case of a subdivision, combination or
reclassification.
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(ii) Adjustment for Other Distributions. If at any
time after the Closing Date, the Maker distributes to all holders
of its Common Stock any of its assets or debt securities, the
Conversion Price following the record date shall be adjusted in
accordance with the following formula:
C' = C x M-F
M
where: C' = the adjusted Conversion Price.
C = the Conversion Price immediately prior to
the adjustment.
M = the current market price (as defined
below) per share of Maker's Common Stock
on the record date of the distribution.
F = the aggregate fair market value (as
conclusively determined by Maker's Board
of Directors) on the record date of the
assets or debt securities to be
distributed divided by the number of
outstanding shares of Maker's Common
Stock.
The adjustment shall be made successively whenever any
such distribution is made and shall become effective immediately
after the record date for the determination of stockholders
entitled to receive the distribution. In the event that such
distribution is not actually made, the Conversion Price shall
again be adjusted to the Conversion Price as determined without
giving effect to the calculation provided hereby. In no event
shall the Conversion Price be adjusted to an amount less than
zero.
This Section 3(b)(ii) does not apply to cash dividends
or cash distributions paid out of consolidated current or
retained earnings as shown on the books of Maker and paid in the
ordinary course of business.
(iii) Current Market Price. The current market
price per share of Maker's Common Stock on any date is the
average of the Quoted Prices of the Common Stock for the
30 consecutive trading days commencing 45 trading days before the
date in question. The "Quoted Price" of Maker's Common Stock is
the last reported sales price of Maker's Common Stock as reported
by Nasdaq, or the primary national securities exchange on which
Maker's Common Stock is then quoted; provided, however, that if
quotes for the Common Stock are not reported by Nasdaq and the
Maker's Common Stock is neither traded on the Nasdaq National
Market, on a national securities exchange, on the Nasdaq Small
Cap Market nor on the OTC Electronic Bulletin Board, the price
referred to above shall be the price reflected in the over-the-
counter market as reported by the National Quotation Bureau, Inc.
or any organization performing a similar function, and provided,
further, that if Maker's Common Stock is not then publicly
traded, the market price shall equal the Conversion Price.
Section 4. Optional Redemption by the Company. The
Notes are subject to redemption, at the option of the Company, in
whole but not in part, at any time on or after
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March 31, 1997,
upon not more than 60 nor fewer than 30 days' notice prior to the
date fixed by the board of directors of the Company for such
redemption (the "Redemption Date"), which notice ("Redemption
Notice") shall be irrevocable. Any such redemption shall be at a
price equal to the principal of the Notes then outstanding plus
accrued and unpaid interest to the Redemption Date. Upon issuing
a Redemption Notice, the Company shall establish an account with
a federally insured bank (the "Redemption Account") and shall
deposit into the Redemption Account an amount equal to the
Redemption Price. At any time prior to the Redemption Date, any
holder of Notes may convert such Notes into Common Stock in
accordance with Section 3 of the Notes, in which case, the
Company may withdraw from the Redemption Account the amount that
otherwise would have been payable to such Noteholder.
Section 5. Place of Payment. All payments due to
Payee hereunder shall be paid to Payee at the following address
on or before the due date of such payment as provided herein: c/o
Pennsylvania Merchant Group Ltd., Four Falls Corporate Center,
West Conshohocken, Pennsylvania 19428-2961, or to such other
address of which Payee shall give written notice to Maker.
Section 6. Events of Default and Remedies. If any of
the following events of default (individually, an "Event of
Default") shall occur for any reason whatsoever (and whether it
shall be voluntary or involuntary or occur or be affected by
operation of law or otherwise):
A. Maker fails to make payment when due of any
principal or interest payable under this Note, and such failure
continues for a period of 5 days after written notice that such
payment is due and unpaid;
B. Maker defaults in the observance or
performance of any material agreement or condition under this
Note or the Warrants, and such default continues for a period of
30 days after written notice of such default is given to Maker by
Payee;
C. Any representation or warranty made by Maker
in the Purchase Agreements shall prove to have been false in any
material respect on the date when made;
D. Maker shall default under any material
agreement for borrowed money which causes the other party thereto
to accelerate such obligation;
E. Maker shall (i) file, or consent by answer or
otherwise to the filing against it of a petition for relief or
reorganization or arrangement or any other petition in bankruptcy
or insolvency law of any jurisdiction, (ii) make an assignment
for the benefit of its creditors, (iii) consent to the
appointment of a custodian, receiver, trustee, or other officer
with similar powers of itself or of any substantial part of its
property, (iv) be adjudicated insolvent or be liquidated or
(v) take appropriate action for the purpose of any of the
foregoing;
F. A court or governmental authority of
competent jurisdiction shall enter an order appointing a
custodian, receiver, trustee or other officer with similar powers
with respect to Maker or any substantial amount of its
properties, or if an order for relief with respect to Maker shall
be entered in any case or proceeding for liquidation or
reorganization or otherwise
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to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the
dissolution, winding up or liquidation of Maker, or if any
petition for any such relief shall be filed against Maker, and
such order or petition shall not be dismissed or stayed within
60 days after the date of such filing, then automatically upon
the occurrence of such Event of Default the entire unpaid
principal amount of, and the unpaid accrued interest on, this
Note shall become immediately due and payable.
Section 7. Security. To secure Maker's obligations
under the Notes, Maker has designated Pennsylvania Merchant Group
Ltd., as agent for the Payees, and has granted a security
interest in all of its pending and issued ophthalmic patents,
pursuant to a pledge agreement dated _____________, 1997.
Section 8. Additional Remedies. If any Event of
Default hereunder shall have occurred, Payee may proceed to
protect and enforce its rights under this Note by exercising such
remedies as are available to it in respect thereof under the
terms of this Note or applicable law, either by suit in equity or
by action at law, or both, whether for specific performance of
any agreement contained in this Note or in aid of the exercise of
any power granted in this Note. No remedy is intended to be
exclusive and each such remedy shall be cumulative.
Section 9. Amendments and Waivers. PMG and the
holders of at least 80% of the outstanding principal balance of
all Notes issued pursuant to the Purchase Agreements may, by
written instrument: (a) extend the time for the performance of
any of the obligations or other acts of Maker, including without
limitation, payment obligations; (b) waive compliance with any of
the covenants of Maker contained herein and (c) waive Maker's
performance of any of its obligations hereunder. Neither the
failure of Payee nor any delay on the part of Payee to exercise
any right, power or privilege under this Note shall operate as a
waiver thereof, nor shall any single or partial exercise by Payee
of any right, power or privilege preclude any other or further
exercise of that or any other right, power or privilege.
Section 10. Expenses. Upon the occurrence of an Event
of Default hereunder, Maker shall reimburse Payee promptly for
all reasonable counsel fees, costs and other expenses incurred by
Payee in connection with the collection and/or enforcement of
this Note.
Section 11. Payment Due on Holidays. If the principal
of or interest on this Note falls due on a Saturday, Sunday or
legal holiday at the place of payment, such payment shall be made
on the next succeeding business day and such extended time shall
be included in computing interest.
Section 12. Applicable Law. The construction,
interpretation and enforcement of this Note shall be governed by
the laws of the Commonwealth of Pennsylvania.
Section 13. Severability. If any provision of this
Note shall be held invalid under any applicable laws, such
invalidity shall not affect any other provision of this Note that
can be given effect without the invalid provision and, to this
end, the provisions hereof are severable.
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IN WITNESS WHEREOF, and intending to be legally bound
hereby, Maker has caused this Note to be executed and delivered
by its proper and duly authorized officers as of the date first
above written.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
By:_____________________________________________
David Light
Chairman of the Board and Chief Executive Officer
Attest:__________________________________________
Secretary
6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is
made this ___ day of ___________, 1997 by SUNRISE TECHNOLOGIES
INTERNATIONAL, INC., a Delaware corporation ("Company"), in favor
of PENNSYLVANIA MERCHANT GROUP LTD as agent (the "Agent") for the
investors (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to a U.S. Note and Warrant Purchase
Agreement dated of even date herewith (as amended from time to
time, the "U.S. Agreement") by and among Company and each of the
persons and entities listed on the Schedule of Investors attached
hereto as Exhibit A (each such person of entity is referred to
herein as a "U.S. Investor" and collectively, the "U.S.
Investors"), and an Offshore Note and Warrant Purchase Agreement
dated of even date herewith (as amended from time to time, the
"Offshore Agreement") by and among Company and each of the
persons and entities listed on the Schedule of Investors attached
thereto as Exhibit A (each such person or entity is referred to
herein as an "Offshore Investor" and collectively the "Offshore
Investors"), Company has authorized the issue and sale of up to
$[ ] face amount of its Convertible Notes (the "Notes") and
Warrants to purchase up to [ ] of its Common Shares, $0.001
par value (the "Warrants"); and
WHEREAS, subject to the terms and conditions of the
U.S. Agreement and the Offshore Agreement (collectively, the
"Agreements"), Company has agreed to sell to the U.S. Investors
and the Offshore Investors (collectively, the "Investors") and
each of the Investors, severally and not jointly, has agreed to
purchase from Company the number of Notes and Warrants
(collectively, the "Securities") set forth opposite each
Investor's name on Exhibit A to the Agreements at the price set
forth on such Exhibit A; and
WHEREAS, it is a condition to the Investors'
obligations to purchase the Securities pursuant to the Agreements
that Company shall have executed and delivered this Security
Agreement in favor of the Agent on behalf of the Investors.
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending
to be legally bound, Company hereby agrees that the Agent, on
behalf of the Investors, shall have the rights, remedies and
benefits hereinafter set forth.
1. As security for the payment of the Notes, Company
hereby grants to the Agent, on behalf of the Investors, a
security interest in the ophthalmic patents or applications for
patents owned by Company or in which Company has an interest
listed on Schedule A attached hereto, or any related books or
records, accessions or substitutions thereof or thereto, and any
part thereof (collectively, the "Collateral").
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2. Anything herein to the contrary notwithstanding,
(a) Company shall remain liable under any contracts and
agreements related to or included in the Collateral to perform
all of its duties and obligations thereunder to the same extent
as if this Security Agreement had not been executed, (b) the
exercise by the Agent of any of the Agent's rights hereunder
shall not release Company from any of its duties or obligations
under any contracts and agreements related to or included in the
Collateral, and (c) neither the Agent nor any Investors shall
have any obligation or liability under any contracts and
agreements related to or included in the Collateral by reason of
this Security Agreement, nor shall the Agent or any Investors be
obligated to perform any of the obligations or duties of Company
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
3. Company represents and covenants that:
a. Its chief executive office and the office
where its records are kept concerning the Collateral is located
at 47257 Fremont Boulevard, Fremont, California 94538.
b. It will promptly notify and provide the agent
with a complete description of the opening of any new places of
business, the closing of any existing places of business, the
conduct of business under any names or through any entities other
than those set forth above and the relocation of any of the
records concerning the Collateral. Company will furnish to the
Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports
in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
c. It has good title to the Collateral, free and
clear of any liens and encumbrances, excepting the security
interest granted hereby.
d. This Security Agreement creates a valid and
enforceable security interest in the Collateral securing the
payment of the Notes, and upon the filing of the necessary
financing statements, such security interest will be a perfected
security interest.
e. Except for any filings required with the
United States Patent and Trademark Office, no authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i)
for the grant by Company of the security interest granted hereby
or for the execution, delivery or performance of this Security
Agreement by Company, or (ii) except the filing of financing
statements, for the perfection of or the exercise by the Agent,
on behalf of the Investors, of rights and remedies hereunder.
4. At any time and from time to time, upon the
reasonable request of the Agent, Company shall, at its own
expense:
a. Defend the Collateral against the claims and
demand of all persons and entities.
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b. Give, execute, deliver and filing in the
proper governmental offices, any instrument, paper or document,
including but not limited to one or more financing statements
under the Uniform Commercial Code, satisfactory to the Agent, or
take any action, which the Agent may deem necessary or desirable,
in order to create, preserve, perfect, extend, modify, terminate
or otherwise affect the security interest granted pursuant
hereto, or to enable the Agent to exercise or enforce any of the
Agent's rights hereunder.
c. Pay, or reimburse the Agent and the Investors
in the amount of, all expenses (including reasonable fee and
expenses of attorneys, experts and agents) reasonably incurred by
such persons in connection with the exercise, defense or
assertion of any rights or interests of the Agent and the
Investors hereunder, or the enforcement of any provisions hereof.
5. Company shall not, without the prior written
consent of the Investors, (i) transfer, sell or assign any of the
Collateral except on customary terms in the ordinary course of
business; (ii) allow or permit any other security interest or
lien to attach thereto, other than any other security interests
or liens permitted under the Agreements; (iii) file, or authorize
or permit to be filed, in any jurisdiction any financing
statement relating to any of the Collateral unless the Agent, on
behalf of the Investors, is named as sole secured party; (iv)
permit any of the Collateral to be levied upon under any legal
process; or (v) permit anything to be done that may materially
impair the value of any of the Collateral or the security
intended to be afforded hereby.
6. Company hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without
the signature of Company where permitted by law. A carbon,
photographic, or other reproduction of this Security Agreement or
any part thereof shall be sufficient as a financing statement
where permitted by law. Company shall furnish to the Agent from
time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection
with the Collateral as the Agent may request, all in reasonable
detail.
7. Upon default by Company in the performance of any
covenant or agreement herein or in the Agreement or any other
agreement or document covering the Notes, or in the discharge,
payment or performance of the Notes, or if any representation or
warranty herein should prove untrue in any material respect, the
Agent, on behalf of the Investors, shall have with respect to the
Collateral all of the rights and remedies of a secured party
under the Uniform Commercial Code or any other applicable law and
all rights provided herein or in any other applicable security,
loan or other agreement, all of which rights and remedies shall,
to the full extent permitted by law, be cumulative. The Agent
may require Company at its expense to assemble the Collateral or
any part thereof and make it available to the Agent, on behalf of
the Investors, at a place to be designated by the Agent, which is
reasonably convenient to the Agent and Company. The Agent, on
behalf of the Investors, may sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
of the Agent's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other
terms as the Agent may deem commercially reasonable. Any notice
of sale, disposition or other intended action by the Agent, sent
to Company at the address specified above, or such other address of
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Company as may from time to time be shown on the Agent's
records, at least thirty (30) days prior to such action, shall
constitute reasonable notice to Company.
8. The powers conferred on the Agent hereunder are
solely to protect the Agent's interest in the Collateral and
shall not impose any duty upon the Agent to exercise any such
powers. Except for the safe custody of any Collateral in the
Agent's possession and the accounting for monies actually
received by the Agent hereunder, the Agent shall have no duty as
to any Collateral or as to the taking of any necessary steps to
preserve any right of or against other parties pertaining to any
Collateral. Company shall indemnify the Agent and each Investor
from and against any and all claims, losses and liabilities
growing out of or resulting from this Security Agreement
(including, without limitation, enforcement of this Security
Agreement) or the Agent's or any Investor's interest in the
Collateral, except claims, losses or liabilities resulting from
the Agent's or such Investor's respective gross negligence of
wilful misconduct.
9. No provisions hereof shall be modified except by a
writing signed by the Agent and Company expressly referring to
the provision hereof so modified.
10. This Security Agreement shall be binding upon and
shall inure to the benefit of the assigns or successors of
Company and the Agent.
11. No delay, failure to enforce, or single or partial
exercise on the part of the Agent in connection with any of the
Agent's rights hereunder shall constitute an estoppel or waiver
thereof, or preclude other or further exercise or enforcement
thereof and no waiver of any default hereunder shall be a waiver
of any subsequent default.
12. This Security Agreement shall be governed as to
its validity, interpretation and effect in accordance with the
laws of the Commonwealth of Pennsylvania, except as required by
mandatory provisions of law and except if the validity or
perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed
by the laws of a jurisdiction other than Pennsylvania. Unless
the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code as enacted in Pennsylvania
shall have the meanings therein stated.
IN WITNESS WHEREOF, this Security Agreement has been
executed in Fremont, California on the day and year first above
written.
SUNRISE TECHNOLOGIES
INTERNATIONAL, INC.
By: _________________________
Name: David W. Light
Title: Chief Executive
Officer
4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement")
is entered into as of the Closing Date (as defined herein) by and
among Sunrise Technologies International, Inc., a Delaware
corporation, Pennsylvania Merchant Group Ltd, a Delaware
Corporation (the "Placement Agent") and the person whose
signatures appear on the execution pages of this Agreement.
This Agreement is made pursuant to the U.S. Note and
Warrant Purchase Agreement and the Offshore Note and Warrant
Purchase Agreement between the Company and each of the Purchasers
listed (the "Purchase Agreements"). In order to induce the
Purchasers to enter into the Purchase Agreement and in order to
induce the Placement Agent to accept the Placement Agent Warrant,
the Company has agreed to provide the registration rights set
forth in this Agreement. The execution of this Agreement by the
Company is a condition to the closing under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall
have the following meanings:
Closing Date: The date assigned thereto in the
Purchase Agreement.
Common Stock: The common stock, $.001 par value per
share, of the Company.
Company: Sunrise Technologies International, Inc., a
Delaware corporation.
Conversion Share: Shares issuable upon the conversion
of the Notes.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
Losses: See Section 7 hereof.
Notes: The Notes issued to investors pursuant to the
Purchase Agreements.
Placement Agent: Pennsylvania Merchant Group Ltd
Placement Agent Warrant: The Warrant issued to the
Placement Agent as described in Section 6 of the Purchase
Agreements.
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Prospectus: The prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement
in reliance upon Securities Act Rule 430A), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other
amendments and supplements to the prospectus, including post-
effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such prospectus.
Purchase Agreement: The U.S. Note and Warrant Purchase
Agreement and the Offshore Note and Warrant Purchase Agreement by
and among the Company and the Purchasers thereunder pursuant to
which the Note and Warrants were issued.
Purchasers: The purchasers listed on the signature
pages to the Purchase Agreements.
Registrable Securities: All Conversion Shares and
Warrant Shares which are Restricted Securities, and any Common
Stock issued or issuable in respect of the Conversion Shares and
the Warrant Shares, pursuant to any stock split, stock dividend,
recapitalization, or similar event. The Notes, Warrants and the
Placement Agent Warrant are not Registrable Securities hereunder.
Registration Expenses: All reasonable expenses
incurred by the Company in complying with Section 3 hereof,
including all registration and filing fees, printing expenses,
fees and disbursements of counsel for the Company, and blue sky
fees and expenses in all states in which there is an exemption
for issuances of stock traded on the Nasdaq National Market and
such other states listed in Schedule 1 attached hereto.
Registration Statement: Any registration statement of
the Company which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be
incorporated reference in such registration statement.
Restricted Securities: The Conversion Shares, the
Placement Agent Warrant and the Warrant Shares upon original
issuance thereof, and at all times subsequent thereto, until, in
the case of any such security, it is no longer required to bear
the legend set forth on such security pursuant to the terms of
the security, the Purchase Agreement and applicable laws.
Rule 144: Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC (excluding Rule 144A).
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
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Shelf Registration: See Section 3(a) hereof.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
Warrants: The warrants to purchase shares of Common
Stock issued to Purchasers pursuant to the Purchase Agreement.
Warrant Shares: The shares of Common Stock issued or
issuable to Purchasers pursuant to the exercise of the Warrants
and to the Placement Agent upon the exercise of the Placement
Agent Warrant.
2. Securities Subject to this Agreement
The securities entitled to the benefits of this
Agreement are the Registrable Securities.
3. Shelf Registration
(a) Shelf Registration. The Company shall, not later
than the later of the 60th day after the initial Closing Date or
the thirtieth (30th) day after the Final Closing Date of the
Offering (the "Filing Date"), prepare and file with the SEC a
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 (or any appropriate similar rule that
may be adopted by the SEC) under the Securities Act covering the
Registrable Securities (the "Shelf Registration"). The Shelf
Registration shall be on a form permitting registration of such
Registrable Securities for resale by such holders in the manner
or manners reasonably designated by them (including. without
limitation, one or more underwritten offerings).
(b) Effectiveness. The Company shall use reasonable
efforts to cause the Shelf Registration to become effective under
the Securities Act as soon as practicable following the Filing
Date. Subject to the requirements of the Securities Act
including, without limitation, requirements relating to updating
prospectuses through post-effective amendments or otherwise, the
Company shall use reasonable efforts to keep the Shelf
Registration continuously effective until the Expiration Date (as
such term is defined in the Warrants); provided, that in the
event of a Suspension Period, as set forth in Section 5(d)
hereof, the Company shall extend the period of effectiveness of
such Shelf Registration by the number of days of each such
Suspension Period, and provided further that the Company shall
not be required to keep the Shelf Registration effective with
respect to any Registrable Securities that may be sold in
accordance with Rule 144 under the Securities Act.
(c) Priority on Shelf Registration. If any of the
Registrable Securities to be registered pursuant to Shelf
Registration are to be sold in a firm commitment underwritten
offering, and if the managing underwriters advise the Company and
the holders of such Registrable Securities that in their opinion
the amount of Registrable Securities proposed to be sold in such
offering exceeds the amount of Registrable Securities which can
be sold in such offering, there shall be included in such firm
commitment underwritten offering the amount of such Registrable
Securities requested to be included in such registration which in
the opinion of
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such underwriters can be sold, and such amount
shall be allocated pro rata among the holders of such Registrable
Securities requested to be included in such registration on the
basis of the number shares of Common Stock represented by
Registrable Securities requested to be included therein by such
holders.
4. Holdback Agreements.
(a) Restrictions on Public Sale by Holders of
Registrable Securities. Each holder of Registrable Securities
whose Registrable Securities are covered by a Registration
Statement filed pursuant to Section 3 hereof agrees, if requested
by the managing underwriters in an underwritten offering (to the
extent timely notified in writing by the Company or the managing
underwriters), not to effect any public sale or distribution of
securities of the Company of any class included in such
Registration Statement, including a sale pursuant to Rule 144
(except as part of such underwritten offering), during the l0-day
period prior to, and the 90-day period beginning on, the
effective date of any underwritten offering made pursuant to such
Registration Statement.
The foregoing provisions shall not apply to any holder
of Registrable Securities if such holder is prevented by
applicable statute or regulation from entering into any such
agreement; provided, however, that any such holder shall
undertake in its request to participate in any such underwritten
offering not to effect any public sale or distribution of the
class of Registrable Securities covered by such Registration
Statement (except as part of such underwritten offering) during
such period unless it has provided five (5) business days prior
written notice of such sale or distribution to the managing
underwriter or underwriters.
5. Expenses and Procedures.
(a) Expenses of Registration. All Registration
Expenses (exclusive of underwriting discounts and commissions)
shall be borne by the Company. Each holder shall bear all
underwriting discounts, selling commissions, sales concessions
and similar expenses applicable to the sale of securities
attributable to the Registrable Securities sold by such holder.
(b) Registration Procedures. In the case of each
registration, qualification or compliance effected by the Company
pursuant to Section 3, the Company will keep the holders advised
as to the initiation of registration, qualification and
compliance and as to the completion thereof. At its expense, the
Company will furnish such number of Prospectuses and other
documents incident thereto as the holders from time to time may
reasonably request.
(c) Information. The Company may require each seller
of Registrable Securities as to which any registration is being
effected to furnish such information regarding the distribution
of such Registrable Securities as the Company may from time to
time reasonably request and the Company may exclude from such
registration the Registrable Securities of any seller who
unreasonably fails to furnish such information after receiving
such request.
(d) Delay or Suspension. Notwithstanding anything
herein to the contrary, the Company may, at any time, delay the
filing of the Shelf Registration for a period of up to 60 days
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following the Filing Date or suspend the effectiveness of any
Registration Statement for a period of up to 90 days in the
aggregate in any calendar year, as appropriate (a "Suspension
Period"), by giving notice to each holder of Registrable
Securities to be included in the Registration Statement, if the
Company shall have determined that the Company may be required to
disclose any material corporate development which disclosure may
have a material effect on the Company. Each holder of
Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of a
Suspension Period, such holder shall forthwith discontinue
disposition of such Registrable Securities covered by such
Registration Statement or Prospectus until such holder (i) is
advised in writing by the Company that the use of the applicable
Prospectus may be resumed, (ii) has received copies of a
supplemental or amended prospectus, if applicable, and (iii) has
received copies of any additional or supplemental filings which
are incorporated or deemed to be incorporated by reference in
such Prospectus. The Company shall prepare, file and furnish to
each holder of Registrable Securities immediately upon the
expiration of any Suspension Period, appropriate supplements or
amendments, if applicable, to the Prospectus and appropriate
documents, if applicable, incorporated by reference in the
Registration Statement.
6. Indemnification.
(a) Indemnification by Company. The Company shall,
without limitation as to time, indemnify and hold harmless, to
the full extent permitted by law, each holder of Registrable
Securities, its officers, directors, agents and employees, each
person who controls such holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act), and the
officers, directors, agents or employees of any such controlling
person, from and against all losses, claims, damages,
liabilities, costs (including, without limitation, all reasonable
attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus, or
arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under
which they were made (in the case of any Prospectus) not
misleading, except insofar as the same are based solely upon
information furnished to the Company by such holder for use
therein; provided, however, that the Company shall not be liable
in any such case to the extent that any such Loss arises out of
or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary
prospectus or Prospectus if (i) such holder failed to send or
deliver a copy of the Prospectus or Prospectus supplement with or
prior to the delivery of written confirmation of the sale of
Registrable Securities and (ii) the Prospectus or Prospectus
supplement would have corrected such untrue statement or
omission. If requested, the Company shall also indemnify
underwriters, selling brokers, dealers managers and similar
securities industry professionals participating in the
distribution, their officers, directors, agents and employees and
each person who controls such persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b) Indemnification by Holder of Registrable
Securities. In connection with any Registration Statement in
which a holder of Registrable Securities is participating, such
holder of Registrable Securities shall furnish to the Company in
writing such information as the Company
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may reasonably request
for use in connection with any Registration Statement or
Prospectus. Such holder hereby agrees to indemnify and hold
harmless, to the full extent permitted by law, the Company, and
its officers, directors, agents and employees, each person who
controls the Company (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents or employees of any such controlling
person, from and against all Losses arising out of or based upon
any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus, or
arising out of or based upon any omission of a material fact
required to be stated therein or necessary to make the statement
therein in light of the circumstances under which they were made
(in the case of any Prospectus) not misleading, to the extent,
but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such
holder to the Company for use in such Registration Statement,
Prospectus or preliminary prospectus. Such indemnity shall
remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any holder and any of
their respective directors, officers, agents, employees or
controlling persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and shall
survive the transfer of such securities by such holder. The
Company shall be entitled to receive indemnities from
accountants, underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution to the same extent as provided above with respect to
information so furnished by such persons specifically for
inclusion in any Registration Statement, Prospectus or
preliminary prospectus, provided, that the failure of the Company
to obtain any such indemnity shall not relieve the Company of any
of its obligations hereunder.
(c) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation or
inquiry) shall be brought or any claim shall be asserted against
any person entitled to indemnity hereunder (an "indemnified
party"), such indemnified party shall promptly notify the party
from which such indemnity is sought (the "indemnifying party") in
writing, and the indemnifying party shall assume the defense
thereof, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees
and expenses incurred in connection with the defense thereof.
All such fees and expenses (including any fees and expenses
incurred in connection with investigating or preparing to defend
such action or proceeding) shall be paid to the indemnified
party, as incurred, within 20 days of written notice thereof to
the indemnifying party; provided, however, that if, in accordance
with this Section 8, the indemnifying party is not liable to the
indemnified party, such fees and expenses shall be returned
promptly to the indemnifying party. Any such indemnified party
shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be the
expense of such indemnified party unless (a) the indemnifying
party has agreed to pay such fees and expenses, (b) the
indemnifying party shall have failed promptly to assume the
defense of such action, claim or proceeding and to employ counsel
reasonably satisfactory to the indemnified party in any such
action, claim or proceeding, or (c) the named parties to any such
action, claim or proceeding (including any impleaded parties)
include both such indemnified party and the indemnifying party,
and such indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it
which are different from or additional to those available to the
indemnifying party (in which case, if such indemnified party
notifies the
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indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the
defense of such action, claim or proceeding on behalf of such
indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such
action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified
parties, unless in the opinion of counsel for such indemnified
party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to
such action, claim or proceeding, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such
additional counsel or counsels). No indemnifying party will
consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the
release of such indemnified party from all liability in respect
to such claim or litigation without the written consent (which
consent will not be unreasonably withheld) of the indemnified
party. No indemnified party shall consent to entry of any
judgment or enter into any settlement without the written consent
(which consent will not be unreasonably withheld) of the
indemnifying party from which indemnity or contribution is
sought.
(d) Contribution. If the indemnification provided for
in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof (other than by reason of exceptions
provided in those Sections) in respect of any Losses, then each
applicable indemnifying party in lieu of indemnifying such
indemnified party shall contribute to the amount paid or payable
by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the
actions, statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. The relative
fault of such indemnifying party and the indemnified party shall
be determined by reference to, among other things, whether any
action in question, including any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or
relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in Section 6(c), any legal
or other fees or expenses reasonably incurred by such party in
connection with any action, suit, claim, investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
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7. Rule 144
The Company shall file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder, and will take such
further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of
the exemption provided by Rule 144 or Rule 144A. Upon the request
of any holder of Registrable Securities, the Company shall
deliver to such holder a written statement as to whether the
Company has complied with such information and requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities
under any section of the Exchange Act.
8. Underwritten Registrations.
If any of the Registrable Securities covered by any
Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or
managers that will administer the offering will be selected by
the Company, provided that such investment bank or manager shall
be reasonably satisfactory to a majority of the holders of
Registrable Securities to be included in the underwritten
offering.
No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such
person's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements, and (ii) completes and
executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the
terms of such underwriting arrangements.
9. Miscellaneous
(a) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company obtains the written consent of the Placement Agent and
the holders of at least 66 2/3% of the then outstanding
Registrable Securities affected by such amendment, modification
or supplement. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a
matter which relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant
to a Registration Statement and which does not directly or
indirectly affect the rights of holders of Registrable Securities
whose securities are not being sold pursuant to such Registration
Statement may be given by holders of a majority of the
Registrable Securities being sold by such holders.
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next day air courier,
telex, or telecopy: (i) If to a holder of Registrable
Securities, at the most current address given by such holder to
the Company in accordance with the provisions of this
Section 9(b),
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which address initially is, with respect to each
purchaser, the address set forth on the signature page attached
hereto; and (ii) if to the Company initially at the address set
forth on the first page of the Purchase Agreement, attention:
Secretary and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 9(b),
with a copy to Thelen, Marrin, Johnson & Bridges LLP, San Jose,
CA.
All such notices and communications shall be deemed to
have been duly given: when delivered by hand, if personally
delivered; two business days after being deposited in the mail,
postage prepaid, if mailed; one business day after being sent by
next day air courier; when answered back, if telexed; and when
receipt acknowledged, if telecopied.
(c) Transfer of Registration Rights. The rights
granted to the holders pursuant to this Agreement to cause the
Company to register securities may be assigned in connection with
the transfer, assignment or sale of any Registrable Security to
the extent such securities and rights may be transferred,
assigned or sold pursuant to applicable laws and to the
agreements to which the particular holder is a party; provided,
however, that no transfer or assignment of such rights shall be
effective or valid unless the purchaser, transferee or assignee,
after giving effect to the transfer, assignment or sale of the
Registrable Securities, owns or has the right to acquire at least
5,000 shares of Common Stock.
(d) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth
of Pennsylvania without regard to principles of conflict of laws.
(g) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto
shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid,
void or unenforceable.
(h) Entire Agreement. This Agreement is intended by
the parties to be a final expression of their agreement and a
complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties nor undertakings, other than those set forth or
referred to herein
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with respect to the registration rights
granted by the Company with respect to the securities sold
pursuant to the Purchase Agreement. This Agreement supersedes all
prior agreements and understandings between the parties with
respect to such subject matter.
(i) Attorneys' Fees. In any action proceeding brought
to enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in
addition to its costs and expenses and any other available
remedy.
(j) Expiration. This Agreement shall expire on the
earlier of (i) the date on which all Registrable Securities have
been sold by the Purchasers and (ii) the fifth anniversary of the
Closing Date.
IN WITNESS WHEREOF, the parties have executed this
agreement as of the date first written above.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
By:______________________________________
David Light
President and Chief Executive Officer
PENNSYLVANIA MERCHANT GROUP LTD
By:______________________________________
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