EXHIBIT 10.8
PHOTOELECTRON CORPORATION
XXX XXXXX
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Name of Purchaser
(please print)
SUBSCRIPTION AGREEMENT
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SERIES B CONVERTIBLE PREFERRED STOCK
Ladies and Gentlemen:
The undersigned (the "Purchaser") acknowledges that he or she has received and
reviewed the following documentation (collectively, the "Offering Documents") of
Photoelectron Corporation (the "Company"): 1) Confidential Private Placement
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Memorandum dated April 4, 1994 ("Offering Memorandum"); 2) an Investor
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Questionnaire. The questionnaire is annexed to this Subscription Agreement and
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is deemed to be incorporated herein. To subscribe for the securities offered
hereby, the Purchaser should complete, sign and return the below-listed
documents to Photoelectron Corporation, 000-0 Xxxxxx Xxxx Xxxx, Xxxxxxx, XX
00000.
* Subscription Agreement
* Investor Questionnaire
* Check in full amount of purchase
1. Subscription: Subject to the terms and conditions hereof, the undersigned
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hereby subscribes for $ 20,000.00 of the Company's Series B Convertible
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Preferred Stock (the "Series B Preferred"), as described in the Offering
Memorandum.
2. Acceptance of Subscription: The undersigned understands and agrees that
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this subscription is made subject to the unconditional right of the Company
to reject any subscription, in whole or in part, for any reason whatsoever,
and that in such event, the Company will return to the undersigned the
amount so rejected. This subscription may be withdrawn by the undersigned
if it is not accepted by the Company on or before May 15, 1994.
3. Representations and Warranties of the Purchaser: The Purchaser hereby
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represents and warrants as follows:
3.1 Acknowledgments: The Purchaser acknowledges that: (a) the Series B
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Preferred is being offered and sold under one or more of the
exemptions from registration provided for in Sections 3(b) and 4(2) of
the Securities Act of 1933, as amended (the "1933 Act"), including
Regulation D promulgated thereunder, and any applicable state
securities laws; (b) the Purchaser is purchasing the Series B
Preferred without being offered or furnished any offering literature
or prospectus other than the Offering Documents; (c) this transaction
has not been reviewed and approved by the United States Securities and
Exchange Commission or by any regulatory authority charged with the
administration of the securities laws of any state; (d) that all
documents, records and books pertaining to this investment have been
made available to the Purchaser and his or her representatives and
advisors, including his or her attorney, tax advisor, financial
advisor accountant and/or purchaser representative(s), if any; (e) the
Company has provided to the Purchaser, and his or her representatives
and advisors, if any, the opportunity to ask
questions and receive answers concerning the terms and conditions of
this Offering and to obtain any additional information which the
Company possesses or could obtain without unreasonable effort or
expense that is necessary to verify the accuracy of the information
furnished to the Purchasers; and (f) that the books and records of the
Company will be available upon reasonable notice for inspection by the
Purchaser during reasonable business hours at the Company's principal
place of business set forth above.
3.2 Citizenship, Age and Residence: The Purchaser (i) is a citizen of
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United States, (ii) is at least 21 years of age, and (iii) is a bona
fide resident and domiciliary (not a temporary or transient resident)
of the state of Ohio (FILL IN STATE) and has no present intention of
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becoming a resident of any other state or jurisdiction.
3.3 Investment Considerations: The Purchaser confirms that he or she
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understands and has fully considered for purposes of this investment
the risks of this investment and understands that: (i) this investment
is suitable only for an investor who is able to bear the economic
consequences of losing his or her entire investment; (ii) the purchase
of the Series B Preferred is a speculative investment which involves a
high degree of risk of loss by the Purchaser, and the Purchaser has
carefully reviewed the Offering Documents and is aware of and has
considered all of the risk factors relating to an investment in the
Company, including those set forth under the caption "Investment
Considerations" in the Offering Memorandum; and (iii) there are
substantial restrictions on the transferability of, and there will be
no public market for the Series B Preferred or the shares of the
Company's voting common stock, $.01 par value, into which the Series B
Preferred is convertible ("Common Stock"), and, accordingly, it may
not be possible for the Purchaser to liquidate his or her investment
in the Series B Preferred or Common Stock in case of emergency.
3.4 Suitability: The Purchaser confirms that he or she is able (i) to
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bear the economic risk of this investment, (ii) to hold the Series B
Preferred or Common Stock for an indefinite period of time, and (iii)
presently to afford a complete loss of his or her investment; and
represents that he or she has sufficient liquid assets so that the
Illiquidity associated with this investment will not cause any undue
financial difficulties or affect the Purchaser's ability to provide
for his or her current needs and possible financial contingencies.
3.5 Knowledge and Experience: The Purchaser has such knowledge and
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experience in financial and business matters that he or she is capable
of evaluating the merits and risks of an investment in the Series B
Preferred and of making an informed investment decision.
3.6 Investment Intent: The Series B Preferred is being acquired by the
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Purchaser solely for his or her own personal account, for investment
purposes only, and not with a view to, or in connection with, any
resale or distribution thereof. The Purchaser will not sell, transfer,
assign or otherwise dispose of the Series B Preferred or any Common
Stock acquired upon conversion thereof, and neither the Company nor
any transfer agent acting on its behalf shall be required to register
or otherwise recognize any transfer resulting from any such sale,
transfer, assignment or other disposition of any such Series B
Preferred or Common Stock, unless and until (i) the Series B Preferred
or Common Stock to be disposed of and the proposed disposition thereof
are made the subject of a currently-effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), and
under any applicable state statutes, or (ii) the Company shall have
received an opinion of counsel, in form and substance satisfactory to
the Company, to the effect that the registration of the Series B
Preferred or the Common Stock is not required in connection with such
proposed disposition by virtue of an exemption from and registration
requirements contained in the 1933 Act, and the rules and regulations
promulgated thereunder, or in any applicable state statutes, rules and
regulations.
3.7 Restrictive Legend: The Purchaser hereby consents to the placement
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of a legend substantially similar to the following on each certificate
or other document evidencing the shares of Series B Preferred or other
securities issued to Purchaser upon conversion of the Series B
Preferred as provided in the Offering Memorandum and this Agreement,
and agrees to abide by the restrictions obtained therein and herein:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED UNLESS SUCH SHARES ARE REGISTERED UNDER THE
1933 ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
OBTAINED TO THE EFFECT THAT SUCH SALE, TRANSFER OR ASSIGNMENT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND ANY
APPLICABLE STATE SECURITIES LAWS."
3.8 Investment Commitment Not Disproportionate to Net Worth: The
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Purchaser's overall commitment to investments which are not readily
marketable is not disproportionate to the Purchaser's net worth, and
the Purchaser's investment in the Company will not cause such overall
commitment to become disproportionate to the Purchaser's net worth.
The foregoing representations and warranties are made by the Purchaser
with the intent that they may be relied upon in determining his or her
suitability as an investor in the Company, and the Purchaser hereby
agrees that such representations and warranties shall survive the sale
by the Company to the Purchaser of the Series B Preferred. By
initialing below, the Purchaser represents that he or she has read and
hereby acknowledges each of the representations contained herein.
/s/ DEN
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Initials
If more than one person is signing this Agreement, each representation
and warranty and undertaking made herein shall be a joint and several
representation, warranty or undertaking of each person signing. If the
Purchaser is a partnership, corporation, trust or other entity, (i)
the Purchaser has enclosed with this Agreement appropriate evidence of
the authority of the individual executing this Agreement to act on its
behalf (e.g., if a trust, a copy of the trust agreement; if a
corporation, a certified corporate resolution authorizing the
signature and a copy of the corporation's charter documents, or if a
partnership, a copy of the partnership agreement), (ii) the Purchaser
represents and warrants that it was not organized or reorganized for
the specific purpose of acquiring the Series B Preferred and, upon
request, will provide documentation supporting this representation to
the Company, and (iii) the Purchaser has the full power and
authorization from the beneficiaries, partners or directors, whichever
is applicable, of such entity to execute this Agreement on behalf of
the entity and to make the representations and warranties made herein
on their behalf and that investment in the Company has been
affirmatively authorized by the governing board of such entity and is
not prohibited by the governing documents of the entity.
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Initials (if more than one person is signing
or if signature is on behalf of an above
entity)
4. Representation and Warranties of the Company
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4.1 Organization and Qualification: The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has all requisite corporate power
and authority to own its property, to carry on its business as now
conducted and as proposed to be conducted, and to carry out the
transactions contemplated hereby.
4.2 Capitalization: The Company presently has authorized 15,000,000 shares
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of Common Stock $.0l par value, and 5,000,000 shares of "blank check"
Preferred Stock, $.01 par value. Of these, 1,936,667 shares of Common
Stock and 2,564,010 shares of Series A Convertible Preferred Stock
have been duly authorized and validly issued and are fully-
paid and non-assessable. The Company has authorized the issuance of
up to 1,250,000 shares of Series B Preferred. At present, no shares of
Preferred Stock are issued or outstanding.
4.3 Authorization of Transaction: The execution, delivery and performance
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of this Agreement and the Series B Preferred have been duly authorized
by all necessary corporate or other action of the Company, and this
Agreement, when executed and delivered, shall constitute valid and
legally binding obligations of the Company.
4.4 Compliance with Other Instruments: The Company is not in default in
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the performance of any material obligation, agreement or condition
contained in any evidence of indebtedness of the Company which default
affords to any person the unconditional right to accelerate any
material indebtedness or terminate any material right or agreement of
the Company. Neither the execution and delivery of this Agreement,
nor the fulfillment of the terms herein set forth and the consummation
of transactions contemplated hereby, will (i) conflict with or
constitute a breach of, default under or a violation of the Articles
of Organization and by-laws of the Company or any agreement,
indenture, mortgage, deed of trust or other material instrument or
undertaking by which the Company is bound or to which it or any of its
properties are subject, or (ii) result in a violation of any court
decree binding upon the Company or any applicable laws or
regulations, or (iii) result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of
the Company.
4.5 Litigation: There is no action, suit, proceeding or investigation
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pending, or, to the best of the Company's knowledge, any basis
therefor or threat thereof, against the Company or any of the officers
or directors of the Company, which questions the validity of this
Agreement or the right of the Company to enter into it, or which
might result, either individually or in the aggregate, in any
material adverse change in the assets, condition (financial or
otherwise), business or prospects of the Company.
5. Transferability. The Purchaser agrees not to transfer or assign this
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Agreement, or any of his interest herein, and further agrees that the
assignment and transfer of the Series B Preferred acquired pursuant hereto
or the Common Stock into which it is convertible shall be made only in
accordance with all applicable laws.
6. Revocation: The Purchaser agrees that he may not cancel, terminate or
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revoke this Agreement or any agreement of the Purchaser made hereunder and
that his Agreement shall survives death or disability and shall be binding
upon the Purchaser's heirs, executors, administrators, successors and
assigns.
7. Miscellaneous:
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7.1 Notices: All notices or other communications given or made hereunder
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shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, to the undersigned at the address set forth
below or to the Company at the address set forth above.
7.2 Governing Law: This Agreement shall be governed by and construed in
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accordance with the laws of the Commonwealth of Massachusetts.
7.3 Entire Agreement: This Agreement constitutes the entire agreement
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between the parties with respect to the subject matter hereof and may
be amended or superseded only be a writing executed by the parties.
8. Continuing Effecting of Representations, Warranties and Acknowledgments:
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The representations and warranties contained in Section 3 hereof are true
and accurate as of the date of this Subscription Agreement, shall be true
and accurate as of the date of delivery to and acceptance by the Company of
the Purchaser's subscription for the purchase of Series B Preferred, and
shall survive such delivery and acceptance. If in any respect such
representations, warranties and acknowledgments shall not be true and
accurate prior to such delivery and acceptance, the Purchaser shall give
immediate written notice of such fact to the Company specifying which
representations and warranties and acknowledgments are not true and
accurate and the reasons therefore.
9. Indemnification: The Purchaser acknowledges that he or she understands the
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meaning and legal consequences of the representations and warranties
contained in Section 3, and he or she hereby agrees to indemnify and hold
harmless the Company, its officers or any of its affiliates, associates,
agents or employees from and against any and all loss, damage or liability
(including costs and reasonable attorney's fees) due to or arising out
of a breach of any representation, warranty or acknowledgment of the
Purchaser contained in this Agreement or in the Investor Questionnaire
which is incorporated herein for all purposes.
IN WITNESS WHEREOF, the undersigned has hereby executed this Agreement
this 14th day of JULY , 1994.
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/s/ Xxxxxx X. Xxxxx c/o Rubbermaid Inc.
------------------------ 0000 Xxxxx Xx.
Signature of subscriber -------------------------
Street Address
(please print or type)
/s/ Xxxxxx X. Xxxxx Wooster
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Name of Subscriber City or Town
(please print or type)
Ohio 44691
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State Zip Code
000-000-0000 Ext 2346
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Telephone Number
CONFIDENTIAL OFFERING MEMORANDUM
PRIVATE PLACEMENT
OF UP TO 1,000,000 SHARES
OF SERIES B CONVERTIBLE PREFERRED STOCK
of
PHOTOELECTRON CORPORATION
April 5, 1994
MEMORANDUM NUMBER: 1
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ISSUED TO: Commonwealth of Massachusetts
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TERMS OF PROPOSED OFFERING
SERIES B CONVERTIBLE PREFERRED STOCK
FINANCIAL TERMS
Type of Securities............... Series B Convertible Preferred Stock,
$.01 par value
Number of Shares Offered......... up to 1,000,000
Price........................... $ 4.00 per share
Total Proceeds.................. maximum of $4,000,000 before offering
costs
Dividends....................... The Company does not intend to pay
dividends at this time.
Conversion Rights............... Convertible at the option of the holder
into one share of Common Stock for each
share of Series B Convertible Preferred
Stock. The conversion rate is subject to
adjustment if after the original
issuance date of the Series B
Convertible Preferred Stock, (a) any
shares of Common Stock are sold at a
price less than the conversion price in
effect (which such conversion price
shall initially be $4.00) immediately
prior to the sale of such Common Stock
or (b) the Company issues or sells any
options for the purchase of Common Stock
or any securities convertible into or
exchangeable for Common Stock at a price
less than the conversion price in effect
immediately prior to the time of such
issuance or sale or (c) the Company
engages in a stock split, recombination,
reorganization, or reclassification of
its capital stock. Mandatory conversion
in the event of an initial public
offering at a price of at least $5.00
per share of Common Stock and gross
proceeds to the Company of at least
$5,000,000.
Liquidation Value............... $4.00 per share of Series B
Convertible Preferred Stock.
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Preference Priority............. Prior to Common Stock but subordinated
to the Series A Convertible Preferred
Stock.
Use of Proceeds................. Funding of clinical trials, continuation
of Company's research and development
program and general working capital.
Voting Rights................... Except as provided by law, the shares of
Series B Convertible Preferred Stock
shall vote together with all other
classes and series of stock of the
Company as a single class on all actions
to be presented to the stockholders of
the Company. Each share of Series B
Convertible Preferred Stock shall
entitle to the holder to such number of
votes per share on each such action
equal to the number of shares of Common
Stock into which each share of Series B
Convertible Preferred Stock is
convertible, except as otherwise
required by law.
Participation Rights............ Non-transferable right to participate,
pro rata, in one additional round of
private placement of the Company's
securities at a 10% discount offering
price. This right can only be exercised
within 15 days of the purchaser's
notification by the Company of the
commencement of any such offering.
Company and Series A Preferred
Stockholder Rights of First
Refusal......................... First the Company, and then the Series A
Preferred Stockholders, will have the
right to purchase from the Series B
Preferred Stockholders any shares which
such Series B Preferred Stockholders
propose to sell to any third party, at
the purchase price proposed to be paid
by such third party.
2
Plan of Distribution............ The Series B Convertible Preferred Stock
is being offered by the Company to a
limited number of accredited investors
through the Company's officers who will
receive no commission, renumeration or
other compensation for such services.
The Company reserves the right to retain
one or more placement agents in
connection with this offering. Such
placement agents would be compensated
for the successful placement of the
Series B Convertible Preferred Stock.
Registration Rights............. Unlimited "piggy-back" rights on any
Company public offering, expected to
result in proceeds of at least
$3,000,000 subject to pro rata cutbacks
at the underwriters' discretion.
Mandatory lock-up of 180 days following
an initial public offering, unless the
underwriters agree to a shorter period.
The Company will be responsible for all
of the selling stockholders' expenses,
other than underwriters' commissions and
discounts and the fees of legal counsel
for the selling stockholders, in
connection with the exercise of
registration rights.
Purchaser Requirements.......... Each purchaser must be an "Accredited
Investor" as defined in Rule 501
under the Securities Act of 1933.
Purchase Agreement.............. The purchase of shares of Series B
Convertible Preferred Stock by investors
shall be made pursuant to a subscription
agreement containing, among other
things, customary representations and
warranties of the Company and the
investors, appropriate conditions of
closing, and customary information
rights.
Completion...................... The Company expects to complete this
offering on or before May 15, 1994.
3
Common Stock (or equivalent) 11,155,706 (if and when all options,
Outstanding After the Offering.. warrants, preferred stock and other
convertible securities are converted
into Common Stock).
The Company and the investors will
Expenses........................ each bear their own legal and other
expenses in connection with this
transaction.
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