FORM OF SECURITIES PURCHASE AGREEMENT
THIS AGREEMENT is by and between Palomar Medical Technologies, Inc.
(the "Company"), a Delaware corporation with an office at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A., and the purchasers (each a "Purchaser"
and, collectively, the "Purchasers") named on the purchaser signature pages
hereto (the "Purchaser Signature Pages").
IN CONSIDERATION of the mutual covenants contained in this Agreement
and good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
SECTION 1. AUTHORIZATION OF SHARES. The Company has authorized (a) the
sale of up to 3,000,000 shares (the "Shares") of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), and (b) the sale of warrants (the
"Warrants" and, together with the Shares, the "Securities") to purchase up to an
aggregate of _____ shares (the "Warrant Shares") of Common Stock.
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES. At each
Closing (as defined below), the Company will sell to each Purchaser
participating in such Closing, and each such Purchaser will buy from the
Company, upon the terms and conditions hereinafter set forth, the Securities
being purchased by such Purchaser. The number of shares of Common Stock to be
purchased by each Purchaser, and the number of Warrant Shares to be purchasable
under each Purchaser's Warrant, shall be determined on the basis of the total
amount payable by such Purchaser (the "Purchase Price") as set forth on such
Purchaser's Purchaser Signature Page, based on an aggregate purchase price of
$1.00 for each share of Common Stock and Warrant to purchase one share of Common
Stock.
SECTION 3. PAYMENT OF PURCHASE PRICE. On or prior to each Closing Date,
as defined below, each Purchaser that is purchasing Securities on such Closing
Date will deliver to the Company the full amount of the Purchase Price payable
by such Purchaser by check or wire transfer. Wire transfers should be directed
as follows:
Fleet Bank
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▇▇▇▇▇▇, ▇▇
ABA No.:
For further credit to:
account no.:
account name: Palomar Medical Technologies, Inc.
SECTION 4. THE CLOSING. The consummation of the transactions
contemplated by this Agreement (the "Closings") shall occur as to each Purchaser
on the date that all conditions to Closing with respect to the Company and such
Purchaser have been satisfied or at such other time as shall be agreed by the
Company and the Purchasers (the "Closing Date"). Within thirty (30) days after
each Closing Date, the Company shall deliver to each Purchaser that purchased
Securities on such Closing Date one or more certificates for the Securities
registered in the name of such Purchaser or its nominee.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
The Company hereby represents and warrants to, and covenants with, the
Purchasers as follows:
SECTION 5.1. ORGANIZATION. The Company is duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has full power and authority to own and operate its properties and to
conduct its business as currently conducted and is registered or qualified to do
business and is in good standing in each jurisdiction in which it owns or leases
property or transacts
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business and where the failure to be so qualified would have a material adverse
effect upon the business, financial condition, properties or operations of the
Company.
SECTION 5.2. DUE AUTHORIZATION. The Company has all requisite
power and authority to execute, deliver and perform its obligations under this
Agreement and the Warrants, and this Agreement and the Warrants have been duly
authorized and validly executed and delivered by the Company and constitute
valid and binding agreements of the Company enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.3. NON-CONTRAVENTION. The execution and delivery of this
Agreement and the Warrants, the issuance and sale of the Securities to be sold
by the Company hereunder, and the consummation of the transactions contemplated
hereby will not conflict with or constitute a violation of, or default (with the
passage of time or otherwise) under, any material agreement or instrument to
which the Company is a party or by which it is bound or the Certificate of
Incorporation (the "Charter") or the By-Laws of the Company nor result in the
creation or imposition of any lien, encumbrance, claim, security interest or
restriction whatsoever upon any of the material properties or assets of the
Company or an acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of trust or
any other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the Company is
subject, nor conflict with, or result in a violation of, any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company. No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body in the
United States, other than with respect to "blue sky" laws and is required by the
rules and regulations of the NASDAQ SmallCap Market, is required for the valid
issuance and sale of the Securities to be sold pursuant to this Agreement (other
than such as have been made or obtained).
SECTION 5.4. THE SHARES; THE WARRANT SHARES. The Shares have been
duly authorized, and when issued and paid for in accordance with the terms of
this Agreement, will be validly issued, fully paid and nonassessable. The
Warrant Shares have been duly authorized, and when issued and paid for in
accordance with the terms of the Warrants will be validly issued, fully paid and
nonassessable. On and after the later to occur of (i) six months after each
Purchaser's Closing Date and (ii) the first date following such Closing Date on
which the Closing Price (as defined in the Warrants) of a share of Common Stock
has equaled or exceeded $2.50 for a period of ten (10) consecutive trading days,
the Company shall reserve and keep available, solely for issuance or delivery
upon exercise of such Purchaser's Warrants, the number of shares of Common Stock
as from time to time shall be receivable upon the exercise of such Warrants.
SECTION 5.5. LEGAL PROCEEDINGS. Except as disclosed in the SEC
Filings (as defined below), there is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened or
contemplated to which the Company is or may be a party or of which the business
or property of the Company is or may be subject.
SECTION 5.6. NO VIOLATIONS. Except as disclosed in the SEC
Filings, the Company is not in violation of its Charter or By-Laws, in violation
of any law, administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the Company,
which violation, individually or in the aggregate, would have a material adverse
effect on the business or financial condition of the Company, or in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company is a party or by which the Company is bound or
by which the properties of the Company are
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bound or affected, and there exists no condition which, with the passage of time
or the giving of notice or both, would constitute a material default under any
such document or instrument or result in the imposition of any material penalty
or the acceleration of any indebtedness.
SECTION 5.7. GOVERNMENTAL PERMITS, ETC. Except as disclosed in the
SEC Filings, the Company has all necessary franchises, licenses, certificates
and other authorizations from any foreign, federal, state or local government or
governmental agency, department, or body that are currently necessary for the
operation of the business of the Company as currently conducted, the absence of
which would have a material adverse effect on the business or operations of the
Company.
SECTION 5.8. FINANCIAL STATEMENTS. Except as disclosed in the SEC
Filings, the financial statements of the Company and the related notes contained
in the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1997 and its Quarterly Report on Form 10-QSB for the quarter ended March 31,
1998, present fairly the financial position of the Company as of the dates
indicated therein and its results of operations and cash flows for the periods
therein specified. Such financial statements (including the related notes) have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods therein specified and are
true, correct and complete in all respects.
SECTION 5.9. NO MATERIAL ADVERSE CHANGE. Except as disclosed in
the SEC Filings, since March 31, 1998, the Company has not incurred any material
liabilities or obligations, direct or contingent, other than in the ordinary
course of business, and there has not been any material adverse change in its
business, financial condition or results of operations.
SECTION 5.10. ADDITIONAL INFORMATION. The Company has filed in a
timely manner all documents that the Company was required to file under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") during the 12
months preceding the date of this Agreement. The following documents
(collectively, the "SEC Filings") complied in all material respects with the
requirements of the Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act"), as the case may be, as of their respective filing or
effective dates, and the information contained therein was true and correct in
all material respects as of the date or effective date of such documents, and
each of the following documents as of the date thereof 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, in light of the
circumstances under which they were made, not misleading:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997 and its Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1998;
(b) All other documents, if any, filed by the Company with
the Securities and Exchange Commission (the "SEC") since March 31, 1998 pursuant
to the reporting requirements of the Exchange Act; and
(c) The Company's Registration statement on Form S-3 (No.
333-57261), filed with the SEC on June 19, 1998.
SECTION 5.11. INTELLECTUAL PROPERTY. The Company has the right to
use all intellectual property (the "Intellectual Property") now used by it in
its business. The Company owns all right, title and interest in and to, all of
the intellectual property it owns, free and clear of any liens or encumbrances.
In any case in which the Company does not own the Intellectual Property, it has
good and valid licenses for the same, which are in full force and effect. No
claims have been asserted with respect to the use of any such Intellectual
Property or challenging or questioning the validity or effectiveness of any such
license or agreement.
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SECTION 5.12. LISTING. The Company shall use its best efforts to
comply with all requirements of the National Association of Securities Dealers,
Inc. (the "NASD") with respect to the issuance of the Shares and the listing of
the Shares and the Warrant Shares on the NASDAQ SmallCap Market.
SECTION 5.13. USE OF PROCEEDS. The Company will use the proceeds
of the sale of the Securities for the purpose of redeeming, repurchasing and/or
repaying certain convertible preferred stock and/or convertible debentures
previously issued by it or for general working capital purposes.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.
(a) Each Purchaser, severally and not jointly, represents and warrants
to, and covenants with, the Company, as of the date hereof and as of the Closing
Date on which such Purchaser acquires the Securities, that: (i) such Purchaser
is an "accredited investor" as defined in Rule 501 of Regulation D promulgated
under the Securities Act; (ii) such Purchaser is acquiring the Securities for
its own account for investment and with no present intention of distributing any
of such Shares other than to any affiliate of such Purchaser; (iii) such
Purchaser will not, directly or indirectly, voluntarily offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Securities, except in
compliance with the Securities Act and the rules and regulations promulgated
thereunder; (iv) such Purchaser has received and reviewed copies of the SEC
Filings, (v) such Purchaser has had an opportunity to ask questions and receive
answers from the management of the Company regarding the Company, its business
and the offering of the Securities; and (vi) such Purchaser has, in connection
with its decision to purchase Shares, relied solely upon the documents described
in Section 5.10 and the representations and warranties of the Company contained
herein.
(b) Each Purchaser agrees not to make any sale of the Securities except
pursuant to an effective registration statement under the Securities Act or an
exemption from the registration requirements thereof.
(c) Each Purchaser, severally and not jointly, further represents and
warrants to, and covenants with, the Company that (i) such Purchaser has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and (ii) upon the execution and delivery of this Agreement, this Agreement shall
constitute a valid and binding obligation of such Purchaser enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(d) Each Purchaser, severally and not jointly, represents that it
understands and agrees that, until registered under the Securities Act or
transferred pursuant to the provisions of Rule 144 promulgated thereunder, all
certificates evidencing the Securities and the Warrant Shares, whether upon
initial issuance or upon any transfer thereof, shall bear a legend, prominently
stamped or printed therein, reading substantially as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or the securities laws of
any state. These securities have been acquired for investment and not
with a view toward distribution or resale. Such securities may not be
offered for sale, sold, delivered after sale, transferred, pledged or
hypothecated in the absence of an effective registration statement
covering such securities under the Act and any applicable state
securities laws, unless the holder shall have obtained an opinion of
counsel satisfactory to the corporation that such registration is not
required."
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SECTION 7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement all
covenants, agreements, representations and warranties made by the Company and
the Purchasers herein shall survive the execution of this Agreement, the
delivery to the Purchasers of the Securities being purchased and payment
therefor.
SECTION 8. REGISTRATION STATEMENT. Within 120 days after the date
hereof and, in any event, subject to the receipt of necessary information from
the Purchasers, the Company shall file with the SEC a registration statement on
Form S-3 (the "Registration Statement"), which may include other selling
stockholders, providing for the resale of the Warrant Shares and the Shares
(collectively, the "REGISTRABLE SHARES") by the Purchasers from time to time in
accordance with Rule 415 promulgated under the Securities Act. The Company shall
use its best efforts to cause the Registration Statement to become effective
within 180 days after the date hereof and the Company shall use its best efforts
to keep the Registration Statement effective until the earlier of (a) the time
all the Registrable Shares have been sold pursuant to the Registration Statement
or (b) the expiration of the Warrants. The Company shall furnish to each
Purchaser such number of copies of the prospectus contained in the Registration
Statement as such Purchaser shall reasonably require to facilitate the public
sale of the Registrable Shares.
SECTION 9. LOCKUP AGREEMENTS WITH UNDERWRITERS. In the event of an
underwritten public offering of the Company's securities, each Purchaser agrees
to enter into an agreement with the Underwriter or Underwriters' Representative
for such offering restricting the sale, transfer or other disposition of the
Securities and the Warrant Shares to the extent that such agreement is required
to be executed by members of senior management of the Company.
SECTION 10. PAYMENTS IN RESPECT OF UNSOLD SHARES. Within thirty (30)
days following November 30, 1998 and the end of each three month period
following such date, the Company shall pay to each Purchaser an amount equal to
$0.0125 multiplied by the number of Shares that continue to be held by such
Purchaser or its nominee named on the signature page to this Agreement as of
such date. Such number of Shares shall be determined by the Company solely by
reference to the monthly list of stockholders furnished to the Company by its
transfer agent, American Stock Transfer & Trust Company. Each Purchaser
understands and agrees that, in order to be eligible for the payments
contemplated by this Section, it must either continue to hold the certificate or
certificates issued to it by the Company in connection with such Purchaser's
Closing or provide evidence satisfactory to the Company that any other
certificate held by it represents the Shares or a portion thereof. The Company
shall send all payments by the Company pursuant to this Section 10 to each
Purchaser at such Purchaser's address determined in accordance with Section
13(b) of this Agreement.
SECTION 11. CONDITIONS TO CLOSING.
(a) The obligations of each Purchaser to consummate the transactions
contemplated hereby shall be subject to the satisfaction by the Company of each
of the following conditions on or before the Closing Date on which such
Purchaser is to acquire Securities, any one or more of which may be waived by
such Purchaser:
(i) The representations and warranties of the Company set forth in
this Agreement delivered to the Purchasers by or on behalf of the Company shall
be true and correct as if made on such Closing Date.
(ii) Each of the covenants, agreements and conditions to be
performed and satisfied by the Company pursuant to this Agreement at or prior to
such Purchaser's Closing shall have been duly performed and satisfied.
(iii) The Company shall have delivered an executed counterpart of
this Agreement to such Purchaser.
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(b) The obligations of the Company to consummate the transactions
contemplated hereby on each Closing Date shall be subject to the satisfaction by
each Purchaser acquiring Securities on such Closing Date of each of the
following conditions on or before such Closing Date, any one or more of which
may be waived by the Company:
(i) The representations and warranties of such Purchaser set forth
in this Agreement shall be true and correct as if made on such Closing Date.
(ii) Each of the covenants, agreements and conditions to be
performed and satisfied by such Purchaser pursuant to this Agreement at or prior
to such Purchaser's Closing shall have been duly performed and satisfied.
(iii) Such Purchaser shall have paid the Purchase Price to be paid
by it in accordance with Section 3.
(iv) Such Purchaser shall have delivered a completed and executed
Purchaser Signature Page to the Company.
(c) The Company and each Purchaser shall use their best efforts to
cause their respective conditions to closing set forth in this Section 11 to be
satisfied.
SECTION 12. NO BROKERS. The parties hereto hereby represent that there
are no brokers or finders entitled to compensation in connection with the
transactions contemplated hereby.
SECTION 13. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified mail, postage prepaid, or sent by facsimile and shall be
deemed given when actually received:
(a) if to the Company to:
Palomar Medical Technologies, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Director of Finance
(b) if to any Purchaser, to its address as set forth on such
Purchaser's Purchaser Signature Page, or to such other address or addresses as
may have been furnished to the Company in writing.
SECTION 14. CHANGES. Any term of the Agreements may be amended or
compliance therewith waived with the written consent of the Company and the
holders of a majority of the Shares purchased pursuant to this Agreement.
SECTION 15. HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 16. SEVERABILITY. If any provision contained in this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of The Commonwealth of
Massachusetts and United States federal law.
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SECTION 18. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall constitute an original, but both of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be executed by their duly authorized representatives as of
the following date.
Dated: _____________, 1998 PALOMAR MEDICAL TECHNOLOGIES, INC.
By:
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Title:
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[Purchaser Signature Page Continues on the Following Page]
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PURCHASER SIGNATURE PAGE
The undersigned Purchaser hereby executes the Securities Purchase
Agreement with Palomar Medical Technologies, Inc. (the "COMPANY") and hereby
authorizes this signature page to be attached to a counterpart of such document
executed by a duly authorized officer of the Company.
Purchaser Name:
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By:
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Title:
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Amount of Investment: $
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Name in which Securities are to be registered:
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Address, telephone number and facsimile number of registered holder:
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Attn:
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Telephone number:
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Facsimile number:
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Social Security or Tax ID Number:
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Contact name, address, telephone number and facsimile number regarding
settlement and registration if different from above:
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Attn:
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Telephone number:
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Facsimile number:
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