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EXHIBIT 10.3
SAND 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-S-1 750,000 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 Dr. Bruce Sand, M.D. (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
--------------------------------
Name: John N. Hendrick
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Title: C.O.O.
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EXHIBIT A
NOTICE OF EXERCISE OF WARRANT
Date:
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To: Sunrise Technologies International, Inc.
Attn: Secretary
3400 West Warren Avenue
Fremont, California 94538
This is my notice to exercise my Warrant:
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C> <C>
Grant Date Number of Shares Exercise Price Total Cost of
Exercised Shares
------------------------------------------------------------------------------------------------
x =
------------------------------------------------------------------------------------------------
x =
------------------------------------------------------------------------------------------------
x =
------------------------------------------------------------------------------------------------
x =
------------------------------------------------------------------------------------------------
x =
------------------------------------------------------------------------------------------------
*PLEASE ENCLOSE A CASHIER'S CHECK FOR THE TOTAL COST OF SHARES YOU WISH TO
EXERCISE. YOUR REQUEST WILL NOT BE PROCESSED WITHOUT PAYMENT.
</TABLE>
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:
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COMPANY: SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
SECURITY: COMMON STOCK
AMOUNT: SHARES
----------------------
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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