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EXHIBIT 10.4
KING WARRANT
NEITHER THIS WARRANT NOR THE SECURITIES TO BE ISSUED UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THIS WARRANT AND THE SECURITIES TO BE
ISSUED UPON EXERCISE HEREOF ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
No. 2000 W-K-1 67,500 Shares
FOR VALUE RECEIVED, SUNRISE TECHNOLOGIES INTERNATIONAL, INC., a corporation
duly organized and existing under the laws of the State of Delaware (the
"Company," which term includes any successor), with its principal office at 3400
West Warren Avenue, Fremont, California 94538, hereby certifies that Edward
Vincent King, Jr. (the "Holder") is entitled, subject to the provisions of this
Warrant, to purchase from the Company, at any time after the Warrant Shares, as
defined herein, are registered with the Securities and Exchange Commission (the
"SEC"), but before 5:00 p.m. (Eastern Standard Time) on June 16, 2005 (the
"Expiration Date"), the number of fully paid and nonassessable shares of Common
Stock of the Company set forth above, subject to adjustment as hereinafter
provided.
The Holder may purchase such number of shares of Common Stock at a purchase
price per share (as appropriately adjusted pursuant to Section 6 hereof) of $.01
(the "Exercise Price"). The term "Common Stock" shall mean the aforementioned
Common Stock of the Company, together with any other equity securities that may
be issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Common Stock to be received upon the exercise or
exchange of this Warrant and the price to be paid for a share of Common Stock
are subject to adjustment from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise or exchange, as adjusted from
time to time, are hereinafter sometimes referred to as "Warrant Shares."
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Section 1. Exercise of and Payment for Warrant. Subject to Sections 3, 9, 10
and 11 (and in no event later than the Expiration Date), this Warrant may be
exercised, in whole or in part on any business day on or before the Expiration
Date by presentation and surrender hereof to the secretary of the Company at its
principal office at the address set forth in the initial paragraph hereof (or at
such other address as the Company may hereafter notify the Holder in writing)
with the Purchase Form attached hereto as Exhibit A duly executed and
accompanied by proper payment of the Exercise Price in one or more of the
following methods, at the election of the Board of the Company:
(a) cash;
(b) check; or
(c) surrender of other shares of Common Stock of the Company which: (A)
either have been owned by the Holder for more than six (6) months on the date of
surrender or were not acquired, directly or indirectly, from the Company; and
(B) have a Current Market Price on the date of surrender equal to the Exercise
Price of the Warrant Shares as to which the Warrant is being exercised.
If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder. Upon receipt by the secretary of the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, the Holder shall be deemed to be the holder of record of
the Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of the Warrant Shares. Notwithstanding the above, no Warrant
Shares will be issued unless such issuance shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Common Stock may then be listed.
Section 2. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise or
exchange of this Warrant all shares of its Common Stock or other shares of
capital stock of the Company from time to time issuable upon exercise or
exchange of this Warrant. All such shares shall be duly authorized and, when
issued upon the exercise or exchange of the Warrant in accordance with the terms
hereof, shall be validly issued, fully paid and nonassessable, free and clear of
all liens, security interests, charges and other encumbrances or restrictions on
sale (other than as provided in the Company's certificate of incorporation and
any restrictions on sale set forth herein or pursuant to applicable federal and
state securities laws) and free and clear of all preemptive rights.
Section 3. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise or exchange of this Warrant. Instead, the
Company will
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deliver its check for the current market value of the fractional share. The
current market value of a fraction of a share is determined as follows: multiply
the Current Market Price of a full share by the fraction of a share and round
the result to the nearest cent.
Section 4. Assignment or Loss of Warrant.
(a) This Warrant may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Holder only by him. The terms of this Warrant shall be binding upon
the executors, administrators, heirs, successors, and assigns of the Holder.
(b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those set forth in this Warrant.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised or exchanged in accordance with its
terms.
Section 6. Adjustment of Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise or exchange of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Adjustment for Change in Capital Stock. If at any time after the
date hereof, the Company:
(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
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(5) issues by reclassification of its Common Stock any
shares of its capital stock;
then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the Holder may receive, upon exercise or exchange of this
Warrant and payment of the same aggregate consideration, the number of shares of
capital stock of the Company which the Holder would have owned immediately
following such action if the Holder had exercised or exchanged the Warrant
immediately prior to such action.
The adjustment 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.
(b) Deferral of Issuance or Payment. In any case in which an event
covered by this Section 6 shall require that an adjustment in the Exercise Price
be made effective as of a record date, the Company may elect to defer until the
occurrence of such event: (i) issuing to the Holder, if this Warrant is
exercised after such record date, the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock or other capital stock of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment; and (ii) paying to the Holder by check any amount in lieu of the
issuance of fractional shares pursuant to Section 3.
(c) When No Adjustment Required. No adjustment need be made for a change
in the par value or no par value of the Common Stock.
(d) Current Market Price. The "Current Market Price" per share of Common
Stock on any date is the average of the Quoted Prices of the Common Stock for
the 30 consecutive trading days prior to the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common Stock
as reported by NASDAQ, or the primary national securities exchange on which the
Common Stock is then quoted; provided, however, that if quotes for the Common
Stock are not reported by NASDAQ and the 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.
(e) No Adjustment Upon Exercise of Warrants. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise or exchange of the Warrants.
(f) Common Stock Defined. Whenever reference is made in Section 6(a) to
the issue of shares of Common Stock, the term "Common Stock" shall include any
equity securities of any class of the Company hereinafter authorized which shall
not be
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limited to a fixed sum or percentage in respect of the right of the holders
thereof to participate in dividends or distributions of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
Subject to the provisions of Section 8 hereof, however, shares issuable upon
exercise or exchange hereof shall include only shares of the class designated as
Common Stock of the Company as of the date hereof or shares of any class or
classes resulting from any reclassification or reclassifications thereof or as a
result of any corporate reorganization as provided for in Section 8 hereof.
Section 7. Officers' Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6, the Company shall forthwith
file in the custody of its secretary or an assistant secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairman, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Section 4 hereof.
Section 8. Reclassification, Reorganization, Consolidation or Merger. In
the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock or other change contemplated by
Section 6(a) hereof and other than a change in the par value of the Common
Stock) or in the event of any consolidation or merger of the Company with or
into another corporation (other than a merger in which merger the Company is the
continuing corporation and that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the
class issuable upon exercise or exchange of this Warrant) or in the event of any
sale, lease, transfer or conveyance to another corporation of the property and
assets of the Company as an entirety or substantially as an entirety, the
Company shall use its best efforts to cause effective provisions to be made so
that the Holder shall have the right thereafter, by exercising this Warrant, to
purchase the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock that might have been received
upon exercise or exchange of this Warrant immediately prior to such
reclassification, capital reorganization, change, consolidation, merger, sale or
conveyance. Any such provision shall include provisions for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassifications, capital reorganizations and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.
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Section 9. Transfer to Comply with the Securities Act of 1933: Registration
Rights.
(a) No sale, transfer, assignment, hypothecation or other disposition of
this Warrant or of the Warrant Shares, in whole or in part, shall be made unless
any such transfer, assignment or other disposition will comply with the rules
and statutes administered by the Securities and Exchange Commission and: (i) a
Registration Statement under the Act including such shares is currently in
effect; or (ii) in the opinion of counsel, which counsel and which opinion shall
be reasonably satisfactory to the Company, a current Registration Statement is
not required for such disposition of the shares. Each stock certificate
representing Warrant Shares issued upon exercise or exchange of this Warrant
shall bear the following legend (unless, in the opinion of counsel, which
counsel and which opinion shall be reasonably satisfactory to the Company, such
legend is not required):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS."
Section 10. Holder's Representations. In the event the Shares purchasable
pursuant to the exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended, at the time this Warrant is exercised,
Holder shall, concurrently with the exercise of all or any portion of this
Warrant, deliver to the Company his Investment Representation Statement attached
hereto as Exhibit B.
Section 11. Modification and Waiver. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the holder hereof.
Section 12. Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
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Section 13. Descriptive Headings and Governing Law. The description headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Delaware.
Section 14. Registration of Warrant Shares. The Company shall attempt to
duly register the Warrant Shares with the SEC within 90 days after the execution
of this Warrant.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by
its duly authorized officer and to be dated as of June 16, 2000.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
By: /s/ JOHN N. HENDRICK
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Name: John N. Hendrick
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Title: C.O.O.
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EXHIBIT A
NOTICE OF EXERCISE OF WARRANT
Date:
To: Sunrise Technologies International, Inc.
Attn: Secretary
3400 West Warren Avenue
Fremont, California 94538
This is my notice to exercise my Warrant:
<TABLE>
<CAPTION>
Number Exercise Total Cost of
Grant Date of Shares Price Exercised Shares
---------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C>
x =
x =
x =
x =
x =
</TABLE>
* PLEASE ENCLOSE A CASHIER'S CHECK FOR THE TOTAL COST OF SHARES YOU WISH TO
EXERCISE. YOUR REQUEST WILL NOT BE PROCESSED WITHOUT PAYMENT.
Please deliver shares to:
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Acct. No. (if applicable)
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I understand the exercise of this Warrant and my ownership of the shares is
subject to all the terms and provisions of the Warrant and its related
agreements.
Print Name as it appears on share certificate Signature of Holder
Address Telephone Number
City/State/Zip Social Security Number
Approved: Sunrise Technologies International, Inc.
By: Title:
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
----------------------------------------
COMPANY: SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
SECURITY: COMMON STOCK
AMOUNT: SHARES
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In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act")
(b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for any fixed period in the future,
including but not limited to, the minimum capital gains period specified under
tax statutes, for a deferred sale, or until an increase or decrease in the
market price of the Securities, or for a period of one year, or any other fixed
period in the future.
(c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. Moreover, I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted
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securities" acquired, directly or indirectly, from the issuer thereof, in a
non-public offering subject to the satisfaction of certain conditions. The
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires among other things: (1) the availability
of certain public information about the Company; (2) the resale occurring not
less than one year after the party has purchased, and made full payment for,
within the meaning of Rule 144, the securities to be sold; and, in the case of
an affiliate, or a non-affiliate who has held the securities less than two
years; and (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified limitations
stated therein, if applicable.
(e) I agree, in connection with a public offering of the Company's
securities, (1) not to sell, make short sale of, loan, grant any options for the
purchase of, or otherwise dispose of any shares of Common Stock of the Company
held by me (other than those shares included in the registration) without the
prior written consent of the Company or the underwriters managing such
underwritten public offering of the Company's securities for one hundred eighty
(180) days from the effective date of such registration, and (2) I further agree
to execute any agreement reflecting (1) above as may be requested by the
underwriters at the time of the public offering; provided however that the
officers and directors of the Company who own the stock of the Company also
agree to such restrictions.
(f) I further understand that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; the Staff of the SEC has expressed its opinion that persons proposing
to sell private placement securities other than in a registered offering and
otherwise than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
(Signature of Purchaser)
Date:
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DRAFTER'S INFORMATION SHEET
(for Document Number 14995)
1. Number of Warrant Shares:
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2. Name of Warrant Holder:
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3. Expiration Date:
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4. Exercise Price:
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5. Date of Warrant:
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