EXHIBIT 4.2
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SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
_______________________________________________
U.S. NOTE AND WARRANT PURCHASE AGREEMENT
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TABLE OF CONTENTS
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Page
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1. PURCHASE AND SALE OF NOTES AND WARRANTS . . . . . . . 1
1.1 Issue of Notes and Warrants . . . . . . . . 1
2. CLOSING DATE; DELIVERY. . . . . . . . . . . . . . . . 2
2.1 Closing . . . . . . . . . . . . . . . . . . 2
2.2 Delivery. . . . . . . . . . . . . . . . . . 2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . 3
3.1 Organization. . . . . . . . . . . . . . . . 3
3.2 Capitalization. . . . . . . . . . . . . . . 3
3.3 Authority . . . . . . . . . . . . . . . . . 3
3.4 Securities Filings. . . . . . . . . . . . . 4
3.5 Issuance of the Notes . . . . . . . . . . . 4
3.6 No Conflict with Law or Documents . . . . . 4
3.7 Consents, Approvals and Private Offering. . 5
3.8 Absence of Certain Developments . . . . . . 5
3.9 Litigation. . . . . . . . . . . . . . . . . 5
3.10 Registration Rights . . . . . . . . . . . . 5
3.11 Disclosure. . . . . . . . . . . . . . . . . 5
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. . . 6
4.1 Legal Power . . . . . . . . . . . . . . . . 6
4.2 Due Execution . . . . . . . . . . . . . . . 6
4.3 Investment Representations. . . . . . . . . 6
4.4 Pennsylvania Requirements . . . . . . . . . 7
5. COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . 7
5.1 Information . . . . . . . . . . . . . . . . 7
5.2 Conducting the Offering . . . . . . . . . . 8
6. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . 8
6.1 Conditions to Obligations of the Purchaser. 8
6.2 Conditions to Obligations of the Company. . 9
7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 10
7.1 Governing Law . . . . . . . . . . . . . . . 10
7.2 Successors and Assigns. . . . . . . . . . . 10
7.3 Entire Agreement. . . . . . . . . . . . . . 10
7.4 Separability. . . . . . . . . . . . . . . . 10
7.5 Amendment and Waiver. . . . . . . . . . . . 10
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TABLE OF CONTENTS (Continued)
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7.6 Notices . . . . . . . . . . . . . . . . . . 10
7.7 Fees and Expenses . . . . . . . . . . . . . 10
7.8 Titles and Subtitles. . . . . . . . . . . . 11
7.9 Counterparts. . . . . . . . . . . . . . . . 11
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SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
U.S. NOTE AND WARRANT PURCHASE AGREEMENT
This agreement (the "Agreement") is made as of the Closing Date (as
hereinafter defined) by and between Sunrise Technologies International,
Inc., a Delaware corporation (the "Company"), with its principal office at
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and each of the
purchasers who are signatories hereto and any other purchasers who are made
a party to this Agreement pursuant to Section 1(d) (individually, a
"Purchaser" and collectively, the "Purchasers").
RECITALS
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The Company is undertaking the placement and sale (the "Offering") of
up to $10,000,000 12% Convertible Subordinated Pay-In-Kind Notes due 2001
(the "Notes") with Warrants, as hereinafter defined. The Notes will be
convertible into shares of the Company's $.001 par value common stock (the
"Common Stock") commencing on the Closing Date (as hereinafter defined) at
a conversion price (the "Conversion Price") as described in the Notes.
Each Purchaser will receive one warrant to purchase Common Stock (the
"Warrants") for each $5.00 in Notes purchased by such Purchaser. Each
Warrant entitles the holder to purchase one share of Common Stock for $3.00
during the five year period commencing on the Closing Date. The Notes and
Warrants will be sold by the Company to Purchasers pursuant to Regulations
D and S under the Securities Act of 1933, as amended (the "Act")
(individually, the "Regulation D Purchasers" and "Regulation S
Purchasers"). Regulation D Purchasers will purchase Notes and Warrants
pursuant to this Agreement and Regulation S Purchasers will purchase Notes
and Warrants pursuant to an Offshore Unit and Warrant Purchase Agreement of
even date herewith (the "Offshore Agreement"). Offers and sales of Notes
will only be made pursuant to the Confidential Private Offering Summary
dated November 24, 1997, as supplemented (together with all amendments,
exhibits and attachments thereto, the "Offering Materials").
AGREEMENT
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In consideration of the mutual promises, representations, warranties
and conditions set forth in the Agreement, the Company and each Purchaser
(severally and not jointly) agree as follows:
1. PURCHASE AND SALE OF NOTES AND WARRANTS.
1.1 ISSUE OF NOTES AND WARRANTS.
(a) The Company has authorized the issuance and sale of
up to $10,000,000 Notes, up to 5,969,492 shares of Common Stock, assuming
the term of the Notes is extended and the Notes remain outstanding until
January 15, 2003 (the "Conversion Shares") pursuant to the exchange of the
Notes, and up to 4,837,038 additional shares of Common Stock (the "Warrant
Shares") pursuant to the exercise of up to 4,837,038 Warrants, assuming the
term
of the Notes is extended after January 15, 2001 and additional Warrants are
issued at an assumed price of $3.00, pursuant to the provisions of this
Agreement and an Offshore Agreement made as of the Closing Date.
(b) In reliance upon the Purchaser's representations
and warranties contained in Section 4 hereof, and subject to the terms and
conditions set forth herein, the Company hereby agrees to sell to each
Purchaser the aggregate amount of Notes set forth below such Purchaser's
signature on the subscription page bearing such Purchaser's name.
(c) In reliance upon the representations and warranties
of the Company contained herein, and subject to the terms and conditions
set forth herein, each Purchaser hereby agrees to purchase the amount of
Notes set forth on the subscription page bearing such Purchaser's name at
the purchase price set forth above. Each Purchaser shall severally, and
not jointly, be liable for only the amount of Notes that appear on the
subscription page hereof that relates to such Purchaser.
(d) The Company's agreement with each of the Purchasers
is a separate agreement, and the sale of the Notes to each of the
Purchasers is a separate sale.
2. CLOSING DATE; DELIVERY.
2.1 CLOSING.
(a) The initial closing of the sale and purchase of the
Notes under this Agreement (the "Closing"), together with the initial
closing of the sale and purchase of the Notes under the Offshore Agreement,
shall be held at 10:00 a.m. (Pacific Standard Time) on or before January
15, 1998 (the "Closing Date"), at the offices of the Company, Fremont,
California, or at such other time and place as the Company decides. There
is no minimum amount of Notes required for an initial closing.
(b) From time to time prior to and following the
Closing Date, the Company may, but shall not be obligated to, offer and
sell the balance of the Notes authorized but not sold as of the Closing
Date herein to other purchasers (the "Other Purchasers") at one or more
subsequent closings in the sole discretion of the Company. By executing
this Agreement, the Purchasers hereunder agree to the inclusion of such
Other Purchasers as parties to this Agreement and the Registration Rights
Agreement referenced in Section 6.1(d) herein (the "Registration Rights
Agreement"), and it shall be a condition to each subsequent closing that
the Other Purchasers shall become parties to this Agreement and the
Registration Rights Agreement and subject to the terms hereof and thereof.
If such a subsequent closing is held, the terms "Closing" and "Closing
Date", as used herein, shall be deemed to apply to the initial closing and
each such subsequent closing.
2.2 DELIVERY. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to each Purchaser the Notes
subscribed for by such Purchasers, dated as
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of the Closing Date, and Warrants, against payment of the purchase price
therefor by wire transfer, unless other means of payment shall have been
agreed upon by the Purchasers and the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Subject to and except as disclosed by the Company in the Offering
Materials, the Company hereby represents and warrants to each Purchaser as
of the date hereof as follows, and all such representations and warranties
shall be true and correct as of the Closing Date as if then made and shall
survive the Closing:
3.1 ORGANIZATION. The Company and a corporation identified
in the SEC Filings (as hereinafter defined) as its subsidiary (the
"Subsidiary") are each a corporation, duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation. The Company and the Subsidiary have all requisite power and
authority to own or lease their properties and to conduct their businesses
as now conducted. The Company holds all licenses and permits required for
the conduct of its business as now conducted, which, if not obtained, would
have a material adverse effect on the business, financial condition or
results of operations of the Company taken as a whole. Each of the Company
and the Subsidiary is qualified as a foreign or domestic corporation and is
in good standing in all states where the conduct of its business or its
ownership or leasing of property requires such qualification, except where
failure to so qualify would not have a material adverse effect on the
business, financial condition or results of operations of the Company taken
as a whole.
3.2 CAPITALIZATION. The authorized, issued and out-standing
capital stock of the Company on September 30, 1997 is as set forth in the
Company's Quarterly Report on Form 10-Q for the period ended September 30,
1997 (the "1997 Third Quarter Form 10-Q") which is included in the Offering
Materials (Tab B). Since September 30, 1997, there has been no material
change in the capitalization of the Company, except as has been described
in the Offering Materials. All of the issued and outstanding shares of
Common Stock have been duly authorized, validly issued and are fully paid
and nonassessable. Except as stated in the Offering Materials and except
for rights granted under the Company's stock plans, there are no existing
subscriptions, options, warrants, calls, commitments, agreements,
conversion or other rights of any character (contingent or otherwise) to
purchase or otherwise acquire from the Company at any time, or upon the
happening of any stated event, any shares of the capital stock of the
Company.
3.3 AUTHORITY. The Company has all requisite corporate power
and authority to enter this Agreement, the Warrant Agreement and the
Registration Rights Agreement, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement, the Warrant Agreement and the Registration Rights Agreement and
the consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action on the part of the
Company, and upon their execution and delivery by the Company, such
documents will constitute valid and binding obligations of the
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Company, enforceable against the Company in accordance with their terms,
except as the indemnification provisions of the Registration Rights
Agreement may be limited by principles of public policy, and subject as to
enforceability to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditor's rights from
time to time in effect and subject to general equity principles.
3.4 SECURITIES FILINGS. The Company has filed with the
Securities and Exchange Commission (the "SEC") the documents set forth in
the Offering Materials included herein under Tab A (the "SEC Filings").
The Company has filed with the SEC all reports and all other filings
required to be filed with the SEC under the rules and regulations of the
SEC.
(a) The SEC Filings, when filed, conformed in all
material respects to the requirements of the Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the SEC thereunder as of their respective filing dates and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The documents or portions thereof that
were incorporated by reference in the SEC Filings pursuant to the
requirements of the Exchange Act, when such incorporated documents or
portions were first filed with the SEC, conformed in all material respects
with any applicable requirements of the Exchange Act and the rules and
regulations of the SEC thereunder.
(b) The consolidated financial statements of the
Company included in the SEC Filings fairly presented in all material
respects the financial position and results of operations of the Company
and the Subsidiary at their respective dates and for the respective periods
to which they apply; and such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as otherwise stated therein.
(c) Notwithstanding any provision therein to the
contrary, it is understood by the Company and the Purchaser that the
Company is not representing or warranting any statement in the SEC Filings
relating to future, anticipated or possible circumstances, occurrences or
developments.
3.5 ISSUANCE OF THE NOTES. The Notes, when issued against
payment therefor pursuant to the terms of this Agreement, will be duly and
validly authorized and issued, fully paid and nonassessable.
3.6 NO CONFLICT WITH LAW OR DOCUMENTS. The execution,
delivery and consummation of this Agreement, the Warrant Agreement and the
Registration Rights Agreement and the transactions contemplated hereby and
thereby will not: (a) conflict with any provisions of the certificate of
incorporation of the Company, as amended to date, or the bylaws of the
Company, as amended to date, or the governing documents of any Subsidiary;
or (b) result in any violation of or default or loss of a benefit under, or
permit the acceleration of any obligation under (in each case, upon the
giving of notice, the passage of time, or both) any mortgage,
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indenture, lease, agreement or other instrument, permit, franchise,
license, judgement, order, decree, law, ordinance, rule or regulation
applicable to the Company, any Subsidiary or their respective properties.
3.7 CONSENTS, APPROVALS AND PRIVATE OFFERING. Except for any
filings required under federal and applicable state securities laws, all of
which shall have been made as of the Closing Date to the extent required as
of such time, no consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state, local or
foreign governmental authority is required to be made or obtained by the
Company in connection with the execution and delivery of this Agreement,
the Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby.
3.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as described in
the Offering Materials, since September 30, 1997, the Company has not: (a)
incurred or become subject to any material liabilities (absolute or
contingent) except current liabilities incurred, and liabilities under
contracts entered into, in the ordinary course of business, consistent with
past practices; (b) mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of its assets, tangible or intangible; (c) sold,
assigned or transferred any of its assets or canceled any debts or
obligations except in the ordinary course of business, consistent with past
practices; (d) suffered any extraordinary losses, or waived any rights of
substantial value; (e) entered into any material transaction other than in
the ordinary course of business, consistent with past practices; or (f)
otherwise had any change in its condition, financial or otherwise, except
as shown on or reflected in the consolidated balance sheet as of
September 30, 1997 that is included in the 1997 Third Quarter Form 10-Q,
except for changes in the ordinary course of business, consistent with past
practices, none of which individually or in the aggregate has been
materially adverse, and excepted further that the Company continues to
incur additional substantial losses of the nature set forth in and/or
otherwise contemplated by the Offering Materials. Except as described in
the SEC Filings, neither the Company nor any Subsidiary has entered into
any agreement since September 30, 1997 of the type that would be required
under the SEC's rules and regulations to be filed as an exhibit to an
Annual Report on Form 10-K.
3.9 LITIGATION. Except as described in the Offering
Materials, to the Company's knowledge, there are no actions, suits,
proceedings or investigations pending against or affecting the Company or
any Subsidiary that in the aggregate could reasonably be anticipated to
result in any material adverse effect on the Company.
3.10 REGISTRATION RIGHTS. Except for shares issued or
issuable in connection with the Company's existing stock option plans and
those disclosed in the Offering Materials, the Company has not granted any
rights to have any of the Company's securities registered under the Act.
3.11 DISCLOSURE. The Offering Materials taken as a whole do
not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
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4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents, warrants and covenants with
the Company as follows:
4.1 LEGAL POWER. Purchaser has the requisite corporate,
partnership, trust or fiduciary power, as appropriate, and is authorized,
if Purchaser is a corporation, partnership, limited liability company or
trust, to enter into this Agreement and the Registration Rights Agreement,
to purchase the Notes hereunder, and to carry out and perform its
obligations under the terms of this Agreement and the Registration Rights
Agreement.
4.2 DUE EXECUTION. Each of this Agreement and the
Registration Rights Agreement has been duly authorized, if Purchaser is a
corporation, partnership, limited liability company, trust or fiduciary,
executed and delivered by the Purchaser and, upon due execution and
delivery by the Company, this Agreement and the Registration Rights
Agreement will be valid and binding agreements of the Purchaser.
4.3 INVESTMENT REPRESENTATIONS.
(a) Purchaser is acquiring the Notes for its own
account, not as nominee or agent, for investment and not with a view to or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Act, except pursuant to an effective registration
statement under the Act.
(b) Purchaser understands that: (i) neither the Notes,
the Conversion and Warrant Shares nor the Warrants have not been registered
under the Act by reason of a specific exemption therefrom, and may not be
transferred or resold except pursuant to an effective registration
statement or exemption from registration; (ii) each certificate
representing the Shares and shares issuable pursuant to the Warrants
(unless such shares have been registered prior to the exercise of such
Warrants) will be endorsed with the following legends:
A) 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; and
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B) Any legend required to be placed thereon by applicable
federal or state securities laws;
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the
foregoing legends are satisfied.
(c) Purchaser has received and reviewed the Offering
Materials. In addition, Purchaser has been furnished with such materials
and has been given access to such information relating to the Company as it
or its qualified representative has requested and has been afforded the
opportunity to ask questions regarding the Company and the Notes, all as
Purchaser has found necessary to make an informed investment decision.
(d) Purchaser is an "accredited investor" as such term
is defined in Rule 501 of the Act and was not formed for the specific
purpose of acquiring the Notes and Warrants.
(e) Purchaser is not a resident of Canada or any
territory thereof.
4.4 PENNSYLVANIA REQUIREMENTS.
Each Purchaser who is a Pennsylvania resident, or which has its
principal place of business in Pennsylvania and is not an "institutional
investor" within the meaning of the Pennsylvania Securities Act of 1972 and
the regulations thereunder, hereby agrees not to sell the Shares for a
period of 12 months from the date hereof, except in accordance with the
requirements of section 203(d) of such act and regulation 204.011
thereunder.
5. COVENANTS OF THE COMPANY.
5.1 INFORMATION. So long as the Company is subject to the
periodic reporting requirements of the Exchange Act pursuant to Section 13
or 15(d), the Company shall deliver to each holder of Notes or Warrants all
annual, quarterly or other reports furnished to the public security
holders; provided that if the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish
to each holder of Shares or Warrants: (i) as soon as available, and in any
event within 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all prepared in accordance with
generally accepted accounting principles and reported on by independent
certified public accountants of recognized national standing; and (ii) as
soon as available, and in any event within 45 days after the end of each of
the first three fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such quarter and the related
consolidated statements of income and stockholders' equity (together with
any other quarterly financial statements being prepared by the Company
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at such time), setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the
Company's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation and consistency by the chief
financial officer or the chief accounting officer of the Company.
5.2 CONDUCTING THE OFFERING. The Company will conduct the
offering under Regulation D and Regulation S of the Act, and the Company
represents as follows:
(a) SALES TO ACCREDITED INVESTORS. The Company will
only make offers and sales of the Notes to Regulation D Purchasers or
potential Regulation D Purchasers it reasonably believes to be "accredited
investors" as that term is defined in Rule 501(a) under the Act;
(b) REGULATION D COMPLIANCE. Offers and sales of Notes
will be made in compliance with Regulation D, and the Company has not and
shall not offer to sell the Notes by any form of general solicitation or
general advertising that is prohibited by Rule 502(c) promulgated under the
Act.
(c) COMPLIANCE GENERALLY. The Company has and will
observe all securities laws and regulations applicable to it in any
jurisdiction in which it has or may offer, sell or deliver Notes and it
will not, directly or indirectly, offer, sell or deliver Notes or
distribute or publish any prospectus, circular, advertisement or other
offering material in relation to the Notes in or from any state in the
United States or country or jurisdiction except under circumstances that
will result in compliance with any applicable laws and regulations.
(d) BLUE SKY COMPLIANCE. The Company will comply with
the state securities or blue sky laws of each state in which Notes will be
offered.
6. CONDITIONS TO CLOSING.
6.1 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. Each
Purchaser's obligation to purchase the Notes at the Closing is subject to
the fulfillment, at or prior to such Closing, of all of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in
Section 3 hereof shall be true and correct in all material respects on the
Closing Date with the same force and effect as if they had been made on and
as of said date; except as described in or contemplated by the Offering
Materials, the business, assets, financial condition and results of
operations of the Company shall not have been adversely affected in any
material way prior to the Closing Date; and the Company shall have
performed all obligations and conditions herein required to be performed by
it on or prior to the Closing Date.
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(b) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to the Purchaser.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All authori-
zations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful sale and issuance of the Notes pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of
the Closing Date. No stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC, or any
commissioner of corporations or similar officer of any state having
jurisdiction over this transaction. At the time of the Closing, the sale
and issuance of the Notes shall be legally permitted by all laws and
regulations to which the Purchaser and the Company are subject.
(d) REGISTRATION RIGHTS AGREEMENT. The Company shall
have entered into the Registration Rights Agreement in substantially the
form included in the Offering Materials (Tab C).
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Notes at the Closing is subject to the
fulfillment to the Company's satisfaction, on or prior to the Closing, of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by each Purchaser in Section 4 hereof
shall be true and correct at the Closing Date with the same force and
effect as if they had been made on and as of the Closing Date.
(b) PERFORMANCE OF OBLIGATIONS. Each Purchaser shall
have performed and complied with all agreements and conditions herein
required to be performed or complied with by them on or before the Closing
Date, and each Purchaser shall have delivered payment to the Company in
respect of its purchase of Notes. Notwithstanding the above, the Company
may reject any subscription for the Notes in its sole and absolute
discretion.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All authori-
zations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful sale and issuance of the Notes pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of
the Closing Date. No stop order or other order enjoining the Sale of the
Notes shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC or any
commissioner of corporations or similar officer of any state having
jurisdiction over this transaction. At the time of the Closing, the sale
and issuance of the Share shall be legally permitted by all laws and
regulations to which each Purchaser and the Company are subject.
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7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to
agreements among California residents, made and to be performed entirely
within the State of California without regard to principles of conflict of
laws.
7.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and
be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
7.3 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto
and thereto, and the other documents delivered pursuant hereto and thereto,
constitute the full and entire understanding and agreement among the
parties with regard to the subjects hereof and no party shall be liable or
bound to any other party in any manner by any representations, warranties,
covenants or agreements except as specifically set forth herein or therein.
Nothing in this Agreement, express or implied, is intended to confer upon
any party, other than the parties hereto and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided herein.
7.4 SEPARABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall to the extent
practicable, be modified so as to make it valid, legal and enforceable and
to retain as nearly as practicable the intent of the parties, and the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
7.5 AMENDMENT AND WAIVER. Except as otherwise provided
herein, any term of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely), with the written consent of
the Company and the Purchasers owning a majority of the Notes. Any
amendment or waiver effected in accordance with this section shall be
binding upon each future holder of any security purchased under this
Agreement (including securities into which such securities have been
converted) and the Company.
7.6 NOTICES. All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively
given upon personal delivery, on the first business day following mailing
by overnight courier, or on the fifth day following mailing by registered
or certified mail, return receipt requested, postage prepaid, addressed to
the Company and the Purchaser at the respective addresses included herein.
7.7 FEES AND EXPENSES. The Company and each Purchaser shall
bear its own expenses and legal fees incurred on its behalf with respect to
this Agreement and the transactions contemplated hereby.
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7.8 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and
are not to be considered in construing this Agreement.
7.9 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one instrument.
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