EXHIBIT 10(uu)
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SECURITIES PURCHASE AGREEMENT
THIS AGREEMENT is by and between Palomar Medical Technologies, Inc. (the
"Company"), a Delaware corporation with an office at 00 Xxxxxx Xxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxxxx 00000 U.S.A., and The Travelers Insurance Company, a
Connecticut corporation (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement and
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION 1. Authorization of Shares. The Company has authorized (a) the
sale of 6,000 shares (the "Shares") of a series of the Company's Preferred
Stock, par value $.01 per share, designated "Series F Convertible Preferred
Stock" and (b) a warrant (the "Warrant" and, together with the Shares, the
"Securities") to purchase 500,000 shares (the "Warrant Shares") of the Company's
Common Stock, $.01 par value (the "Common Stock").
SECTION 2. Agreement to Sell and Purchase the Securities. At the Closing
(as defined below, the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions hereinafter set forth,
the Securities for an aggregate purchase price of $6,000,000 (the "Purchase
Price").
SECTION 3. Payment of Purchase Price. On or prior to the Closing Date, as
defined below, the Purchaser will deliver to the Company the full amount of the
Purchase Price by check or wire transfer.
SECTION 4. The Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall occur on July --, 1996 (the "Closing
Date") or at such other time as shall be agreed by the Company and the
Purchaser. At the Closing, the Company shall deliver to the Purchaser one or
more certificates for the Securities registered in the name of the Purchaser or
its nominee.
SECTION 5. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser 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 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 Warrant, and this
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Agreement and the Warrant 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 Warrant, 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, 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. Capitalization. The authorized and outstanding capital stock
of the Company and rights to acquire capital stock of the Company are as set
forth on Exhibit A hereto. Except as set forth above, there are no outstanding
shares of, or rights to acquire shares of, capital stock of the Company. 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 shares of Common Stock issuable upon conversion of the Shares
(the "Conversion Shares") have been duly authorized, and when issued upon
conversion in accordance with the terms thereof 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 Warrant will be validly
issued, fully paid and nonassessable.
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,
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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 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,
1995 and its Quarterly Report on Form 10-QSB for the quarter ended March 31,
1996, 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, 1996, 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 (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-K SB for the fiscal
year ended December 31, 1995, its Quarterly Report on Form
10-Q SB for the quarter
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ended March 31, 1996, and its Proxy Statement for the
Annual Meeting of Stockholders held on June 15, 1995;
(b) all other documents, if any, filed by the Company with the
Securities and Exchange Commission (the "SEC") since March
31, 1996pursuant to the reporting requirements of the
Exchange Act; and
(c) the Company's Registration Statements on Form S-3 (Nos.
33-87650, 333-000140, 33-97760, 33-99792, 33-99794,
333-001070, 333-003424, 333-005781 and 333-007097).
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.
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, the Conversion Shares and the Warrant Shares on the Nasdaq Small-Cap
Market.
SECTION 6. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants
with, the Company, as of the date hereof and as of the Closing Date, that: (i)
the Purchaser is an "accredited investor" as defined in Rule 501 of Regulation D
promulgated under the Securities Act; (ii) the 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 the Purchaser;
(iii) the 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) the Purchaser has received and reviewed copies of the SEC
Filings, (v) the Purchaser is an "institutional buyer" within the meaning of
Section 36b-21(b)(8) of the Connecticut Uniform Securities Act, (vi) the
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 (vii) the 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) The 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.
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(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the 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 the 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) The Purchaser 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, the Warrant Shares and the Conversion 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."
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 Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Securities being purchased and payment therefor.
SECTION 8. Registration Statement. On the earlier to occur of (a) the next
filing by the Company of a registration statement on Form S-3 providing for the
resale of its securities by security holders of the Company or (b) 120 days
after the date hereof and, in any event, subject to the receipt of necessary
information from the Purchaser, the Company shall file with the Securities and
Exchange Commission (the "Commission") 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 of Common Stock
issuable upon conversion of the Shares (collectively, the "Registrable Shares")
by the Purchaser from time to time in accordance with Rule 415 promulgated under
the Securities Act of 1933, as amended. 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
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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
Warrant. The Company shall furnish to the Purchaser such number of copies of the
prospectus contained in the Registration Statement as the 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, the 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, the Warrant Shares and the Conversion Shares to the extent that such
agreement is required to be executed by members of senior management of the
Company.
SECTION 10. Legal Fees. The Company agrees to pay the reasonable fees and
expenses of the Purchaser's counsel in connection with the purchase and sale of
the Securities up to a maximum of $5,000.
SECTION 11. Conditions to Closing.
(a) The obligations of the 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, any
one or more of which may be waived by the Purchaser:
(i) The representations and warranties of the
Company set forth in this Agreement delivered to the Purchaser by or on behalf
of the Company shall be true and correct as if made on the 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 Closing shall have been duly performed and satisfied.
(b) The obligations of the Company to consummate the
transactions contemplated hereby shall be subject to the satisfaction by the
Purchaser of each of the following conditions on or before the Closing Date, any
one or more of which may be waived by the Company:
(i) The representations and warranties of the
Purchaser set forth in this Agreement shall be true and correct as if made on
the Closing Date.
(ii) Each of the covenants, agreements and
conditions to be performed and satisfied by the Purchaser pursuant to this
Agreement at or prior to Closing shall have been duly performed and satisfied.
(iii) The Purchaser shall have paid the Purchase
Price in accordance with Section 3.
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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, and shall be deemed given when so
mailed:
(a) if to the Company to:
Palomar Medical Technologies, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
(b) if to the Purchaser, at its address as set forth at the
end of this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 14. Termination. Either party to this Agreement may terminate this
Agreement upon written notice to the other at any time prior to the Closing.
SECTION 15. 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 the Agreements.
SECTION 16. 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 17. 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 18. 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.
SECTION 19. 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.
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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: July __, 1996 PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Title: Chairman & CEO
[Purchaser Signature Page Continues on the Following Page]
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PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE
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.
THE TRAVELERS INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------
Title: 2nd Vice President
Name in which Securities are to be ---------------------
registered: TRAL & Co.
Address of registered holder: Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Social Security or Tax ID Number: 00-0000000
Contact name and telephone number Xxxxxx X. Xxxxxxxxxx, III
regarding settlement and ______________________________
registration: Name
(000) 000-0000
______________________________
Telephone Number
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