EXHIBIT 4.3
Agreement Between
Palomar Medical Technologies, Inc.
and Nexar Technologies, Inc.
This Agreement dated as of the 19th day of December, 1996 is by and
between Palomar Medical Technologies, Inc. ("Palomar") and Nexar Technologies,
Inc. ("Nexar") a wholly owned subsidiary of Palomar.
Palomar has provided all of Nexar's funds for operations to date in the
form of non-interest bearing loans. The total amount of funds provided by
Palomar through September 30, 1996 has been $19,568,449 (the "Indebtedness") .
The purpose of this Agreement, among other things, is to set forth the terms and
conditions for repayment or contribution to capital of Nexar for the
Indebtedness. Accordingly, the parties hereby agree as follows:
1. General Terms. Upon the closing of an initial public offering (an
"IPO") of the common stock of Nexar, $5,000,000 of the Indebtedness
will be repaid to Palomar, $4,568,449 will be converted into 45,684
shares of Nexar's Convertible Preferred Stock, and $10,000,000 will be
converted into 1,900,000 shares of Nexar's common stock, of which
700,000 will be issued without restriction. The balance of 1,200,000
shares (the "Contingent Shares") shall be subject to mandatory
repurchase, in whole or in part, by Nexar at $0.01 per share at any
time after the 48 month anniversary of the IPO unless released from
escrow under Section 2, below.
2. Escrow of Contingent Shares. The Contingent Shares shall be placed in
escrow, subject to release to Palomar in installments of 400,000 shares
each (upon achievement of any 3 of the 4 milestones specified below;
none, some, or all of which may occur) as follows:
(a) if Nexar achieves $7,000,000 in net income after taxes or
$100 million in total revenues for the fiscal year ended
December 31, 1997;
(b) if Nexar achieves $14,000,000 in net income after taxes or
$200 million in total revenues for the fiscal year ended
December 31, 1998;
(c) if Nexar achieves $21,000,000 in net income after taxes or
$300 million in total revenues for the fiscal year ended
December 31, 1999; and
(d) if Nexar achieves $28,000,000 in net income after taxes or
$400 million in total revenues for the fiscal year ended
December 31, 2000.
Alternatively, all of the Contingent Shares will be released
to Palomar immediately upon the happening of any one of the following:
(y) if the average per share market value closing bid price of
Nexar's common stock is (i) 175% of the IPO price for ten
consecutive trading days at any time prior to the 12 month
anniversary of the IPO, or (ii) 225% of the IPO price for ten
consecutive trading days at any time prior to the 24 month
anniversary of the IPO, or (iii) 275% of the IPO price for ten
consecutive trading days at any time prior to the 36 month
anniversary of the IPO, or (iv) 325% of the IPO price for ten
consecutive trading days at any time prior to the 48 month
anniversary of the IPO; or
(z) if Nexar achieves $70,000,000 in cumulative net income
after taxes for the four fiscal years ended December 31, 2000.
If any or all of the alternative conditions for release of the Contingent Shares
has not occurred by the 48 month anniversary of the IPO, any of the Contingent
Shares remaining subject to escrow at such time shall be repurchased by Nexar as
described above.
3. Accelerated Vesting for Performance Options. Performance stock options,
issued, or to be issued, by Nexar to key employees covering up to
800,000 shares of Nexar's common stock will vest in accordance with
their terms or, if earlier, upon the achievement of the milestones set
forth in Section 2 above, as follows:
(a) pro rata among the holders thereof in one-third
installments based on achievement of the milestones set forth
in clauses (a) through (d) in Section 2 above, or
(b) all such options shall vest immediately upon the
occurrence of any of the alternative conditions set forth in
Section 2 above prior to the 48 month anniversary of the IPO.
This Agreement amends, restates and supersedes in its entirety an
agreement between the parties hereto with respect to the subject matter hereof
dated October 1, 1996.
[Signatures appear on the following page.]
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Executed as a sealed instrument as of the date first above written.
PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/
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Xxxxxx Xxxxxxxx
Chairman and CEO
NEXAR TECHNOLOGIES, INC.
By: /s/
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Xxxxxx X. Xxxxx
President
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