EXHIBIT 4.2
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SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
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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. . . . . . . . . . . . 2
3.1 Organization . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . 3
3.3 Authority. . . . . . . . . . . . . . . . . . . . . . . . 3
3.4 Securities Filings . . . . . . . . . . . . . . . . . . . 3
3.5 Issuance of the Notes. . . . . . . . . . . . . . . . . . 4
3.6 No Conflict with Law or Documents. . . . . . . . . . . . 4
3.7 Consents, Approvals and Private Offering . . . . . . . . 4
3.8 Absence of Certain Developments. . . . . . . . . . . . . 4
3.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . 5
3.10 Registration Rights. . . . . . . . . . . . . . . . . . . 5
3.11 No Brokers or Finder . . . . . . . . . . . . . . . . . . 5
3.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . 5
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. . . . . . . . . . . 5
4.1 Legal Power. . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Due Execution. . . . . . . . . . . . . . . . . . . . . . 5
4.3 Investment Representations . . . . . . . . . . . . . . . 6
4.4 Subordination. . . . . . . . . . . . . . . . . . . . . . 7
5. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Information. . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Conducting the Offering. . . . . . . . . . . . . . . . . 7
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . 9
7.2 Successors and Assigns . . . . . . . . . . . . . . . . . 9
7.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . 9
7.4 Separability . . . . . . . . . . . . . . . . . . . . . . 10
7.5 Amendment and Waiver . . . . . . . . . . . . . . . . . . 10
7.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 10
7.7 Fees and Expenses. . . . . . . . . . . . . . . . . . . . 10
7.8 Titles and Subtitles . . . . . . . . . . . . . . . . . . 10
7.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . 10
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
NOTE AND WARRANT PURCHASE AGREEMENT
This note and warrant purchase 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 ▇▇▇▇▇▇ Ventures LLC, a Delaware limited liability company, with
its principal office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, which is a signatory hereto (the "Purchaser").
RECITALS
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The Company is undertaking the placement and sale (the "Offering") of
$10,000,000 5% 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") pursuant to the terms of the Notes at conversion prices
(each a "Conversion Price") as described in the Notes. The Company may, at
its option and in its sole discretion, in lieu of the payment in whole or
in part of interest in cash on the Notes, pay interest on the Notes through
the issuance of additional Notes (the "Secondary Notes") in an aggregate
principal amount equal to the amount of interest that would be payable with
respect to the Notes, if such interest were paid in cash. The Purchaser
will receive 148,950 warrants to purchase Common Stock (the "Warrants") for
the $10,000,000 in Notes purchased by the Purchaser. Each Warrant entitles
the holder to purchase one share of Common Stock for $.01 during the five
(5) year period commencing on the Closing Date (the "Warrant Shares"). The
Notes and Warrants will be sold by the Company to the Purchaser pursuant to
Regulation D under the Securities Act of 1933, as amended (the "Act"). The
offer and sale of Notes will only be made pursuant to the materials
supplied by the Company to the Purchaser, 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 the Purchaser
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 of Notes, up to 1,875,000 shares of Common Stock,
assuming the Notes remain outstanding until December 31, 2001 (the
"Conversion Shares") pursuant to the exchange of the Notes, and up to
148,950 Warrant Shares pursuant to the exercise of up to 148,950 Warrants,
pursuant to the provisions of this Agreement made as of the Closing Date.
The Company has also authorized the issuance and sale of up to 281,250
shares of Common Stock, assuming the Notes remain outstanding until
December 31, 2001 pursuant to the exchange of the Secondary Notes.
(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 the
Purchaser the aggregate amount of Notes set forth below the Purchaser's
signature on the subscription page bearing the 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, the Purchaser hereby agrees to purchase the amount of
Notes set forth on the subscription page bearing the Purchaser's name at
the purchase price set forth above. The Purchaser shall be liable for only
the amount of Notes that appear on the subscription page hereof that
relates to the Purchaser.
2. CLOSING DATE; DELIVERY.
2.1 CLOSING. The closing of the sale and purchase of the
Notes under this Agreement (the "Closing") shall be as of January 1, 1999
(the "Closing Date").
2.2 DELIVERY. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchaser the Notes
subscribed for by the Purchaser, dated as 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 Purchaser
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 the 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 Laser Biotech, Inc. (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 outstanding
capital stock of the Company on September 30, 1998 is as set forth in the
Company's Quarterly Report on Form 10-Q for the period ended September 30,
1998 (the "1998 Third Quarter Form 10-Q") which is part of the Offering
Materials. Since September 30, 1998, there has been no material change in
the capitalization of the Company, except as described in Amendment No. 1
to the Registration Statement of the Company on Form S-2, as amended to
date (the "Registration Statement"), which is a part of 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 and the Registration Rights Agreement
in substantially the form included in the Offering Materials (the
"Registration Rights Agreement"), and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
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 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 (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.
3.5 ISSUANCE OF THE NOTES. The Notes and the Secondary
Notes, when issued against payment therefor pursuant to the terms of this
Agreement, and the Common Stock, when issued upon conversion of the Notes
and the Secondary Notes and the exercise of the Warrants, each will be: (i)
duly and validly authorized and issued, fully paid and nonassessable; and
(ii) freely transferable and free of all liens and encumbrances excepting
only restrictions on transfer created by state and federal law and
encumbrances created by the Purchaser.
3.6 NO CONFLICT WITH LAW OR DOCUMENTS. The execution,
delivery and consummation of this 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 the 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, indenture, lease,
agreement or other instrument, permit, franchise, license, judgement,
order, decree, law, ordinance, rule or regulation applicable to the
Company, the Subsidiary or their respective properties, including, but not
limited to, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
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, 1998, 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, 1998 that is included in the 1998 Third Quarter Form 10-Q and as
revised in the Registration Statement, 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. The Company spent approximately $750,000 for capital
expenditures in calendar year 1998 and currently projects spending an
additional $900,000 for capital expenditures in calendar year 1999. At the
Company's current rate of cash expenditures, the Company anticipates that
it will be required to raise additional working capital during the second
quarter of 1999 to fund its operations. Except as described in the SEC
Filings, neither the Company nor any Subsidiary has entered into any
agreement since September 30, 1998 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 NO BROKERS OR FINDER. None of the Company, the
Subsidiary or any of their directors, officers, employees or agents have
retained, employed or used any broker or finder in connection with the
transaction provided for herein.
3.12 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.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents, warrants and covenants with
the Company as follows:
4.1 LEGAL POWER. Purchaser has the requisite power to enter
into this Agreement and the Registration Rights Agreement, to purchase the
Warrants and 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 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, PROVIDED THAT AN OPINION OF COUNSEL WILL NOT BE REQUIRED
FOR SALES OR TRANSFERS MADE PURSUANT TO RULE 144 UNDER THE ACT; and
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.
(e) Purchaser is not a resident of Canada or any
territory thereof.
4.4 SUBORDINATION.
The Purchaser understands that the Notes are subordinate to the
Senior Indebtedness (as defined in the Notes), and, in this regard, agrees,
on an unconditional basis, to execute, if required, subordination
agreements with respect to any Senior Indebtedness.
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 Notes 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 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 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 the Purchaser if the Company
reasonably believes the Purchaser is an "accredited investor" 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. The
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.
(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
authorizations, 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 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.
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 the 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. The Purchaser shall
have performed and complied with all agreements and conditions herein
required to be performed or complied with by it on or before the Closing
Date, and the Purchaser shall have delivered payment to the Company in
respect of his purchase of Notes.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All
authorizations, 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 Notes shall be legally permitted by all laws and
regulations to which the Purchaser and the Company are subject.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the internal laws of the State of Nevada.
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 other documents
delivered pursuant hereto, 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 Purchaser. 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 at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, or to the Purchaser at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Tomlinson, Zisko,
Morosoli & Maser LLP, 200 Page ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
7.7 FEES AND EXPENSES. The Company and the Purchaser shall
bear its own expenses and legal fees incurred on its behalf with respect to
this Agreement and the transactions contemplated hereby; provided, however,
the Company shall reimburse Purchaser for its legal fees and expenses in
connection with the acquisition of the Notes and related due diligence in
an amount not to exceed $10,000.
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.