STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of December 31, 1997 (this
"Agreement"), by and between PALOMAR MEDICAL TECHNOLOGIES, INC., a Delaware
corporation, with headquarters located at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Company"), and the undersigned (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Buyer wishes to purchase, upon the terms and subject to the
conditions of this Agreement, outstanding shares of Common Stock, $.01 par value
(the "Nexar Common Stock"), of Nexar Technologies, Inc., a Delaware corporation
("Nexar"), held by the Company, upon the terms and subject to the conditions of
this Agreement; and
WHEREAS, in connection herewith the Company and the Buyer have executed and
delivered, one to the other, an Exchange Agreement, dated as of the date hereof
(the "Exchange Agreement");
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
(a) PURCHASE OF SHARES. The Buyer hereby agrees to purchase from the
Company on the Closing Date the number of shares (the "Nexar Shares") of Nexar
Common Stock set forth on the signature page of this Agreement for the purchase
price set forth on the signature page of this Agreement.
(b) DELIVERIES TO ESCROW AGENT AND FORM OF PAYMENT. Promptly after the
execution and delivery of this Agreement by the parties hereto, but in no event
later than the Closing Date, the Buyer shall deposit the purchase price for the
Nexar Shares by delivering good funds in United States Dollars to the escrow
agent (the "Escrow Agent") identified in the Joint Escrow Instructions attached
hereto as ANNEX I (the "Joint Escrow Instructions") against delivery of the
Nexar Shares to the Buyer at the closing. Promptly after the execution and
delivery of this Agreement by the parties hereto, but in no event later than the
Closing Date, the Company shall deliver a certificate for the Nexar Shares
(which will include 39,264 shares of Common Stock which are not included in the
Nexar Shares and which are not being sold or transferred to the Buyer pursuant
to this Agreement) to the Escrow Agent against delivery of the purchase price
for the Nexar Shares to the Escrow Agent. By signing this Agreement, the Buyer
and the Company each agrees to all of the terms and conditions of, and becomes a
party to, the Joint Escrow Instructions, all of the provisions of which are
incorporated herein by this reference as if set forth herein in full.
(c) METHOD OF PAYMENT. Deposit of the purchase price for the Nexar Shares
by the Buyer with the Escrow Agent shall be made by wire transfer of funds to:
Citibank, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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ABA#000000000
For Further Credit to A/C#37179446
for credit to the account of Xxxxx X. Xxxxx
Attorney Escrow Account
Reference: Advantage/Palomar
(d) CLOSING DELIVERIES. At the closing, the Nexar Shares shall be held by
the Escrow Agent until the Escrow Release Date (as defined herein) and an amount
equal to the purchase price to be paid by the Buyer for the Nexar Shares shall
be held by the Escrow Agent until the Escrow Release Date.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.
The Buyer represents and warrants to, and covenants and agrees with, the
Company as follows:
(a) PURCHASE FOR INVESTMENT. The Buyer is acquiring the rights under
Section 8 of this Agreement (the "Price Guarantee Rights") for its own account
for investment only and not with a view towards the public sale or distribution
thereof;
(b) ACCREDITED INVESTOR. The Buyer is an "accredited investor" as that term
is defined in Rule 501 of the General Rules and Regulations under the Securities
Act of 1933, as amended (the "1933 Act"), by reason of Rule 501(a)(3);
(c) REOFFERS AND RESALES. All subsequent offers and sales of the Price
Guarantee Rights by the Buyer shall be made pursuant to registration of the
Price Guarantee Rights under the 1933 Act or pursuant to an exemption from
registration;
(d) COMPANY RELIANCE. The Buyer understands that the Company is agreeing
with the Buyer concerning the Price Guarantee Rights in reliance on exemptions
from the registration requirements of the 1933 Act and exemptions from state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to receive the Price Guarantee Rights;
(e) INFORMATION PROVIDED. The Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the Price Guarantee Rights which have
been requested by the Buyer; the Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company and have received
satisfactory answers to any such inquiries. Without limiting the generality of
the foregoing, the Buyer has had the opportunity to obtain and to review the
Company's (1) Annual Report on Form 10-KSB for the fiscal year ended December
31, 1996, (2) Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, June 30 and September 30, 1997, (3) Current Report on Form 8-K dated
December 9, 1997, and (4) Amendment No. 1 to the Company's Registration
Statement on Form S-3 (Registration No. 333-42129) (the "Company Registration
Statement") filed with the SEC on December 18, 1997 (collectively, the "SEC
Reports"); the Buyer has had the opportunity to obtain and to review the
Prospectus, dated April 15, 1997 as supplemented to the date of this Agreement,
of Nexar relating to the Nexar Shares (the "Nexar Prospectus"); and the Buyer
understands that the Price Guarantee Rights and its investment in the Nexar
Shares involve a high degree of risk;
(f) ABSENCE OF APPROVALS. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Nexar Shares or the
Price Guarantee Rights;
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(g) AGREEMENT. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally; and
(h) FORWARD-LOOKING INFORMATION. The Buyer acknowledges that, except for
the historical material contained herein or in the SEC Reports, the matters
disclosed herein and therein regarding the Company and its subsidiaries are
forward-looking statements under the federal securities laws that involve risks
and uncertainties, including, but not limited to, product demand and market
acceptance risks, the effect of economic conditions, the impact of competitive
products and pricing, product development, commercialization and technological
difficulties, capacity and supply constraints or difficulties, the results of
financing efforts, actual purchases under agreements, the effect of the
Company's accounting policies, and other risks detailed in the SEC Reports.
Actual results could differ materially from those estimated or anticipated in
these forward-looking statements. Without limiting the generality of the
foregoing, the Buyer acknowledges the Risk Factors set forth in the Company
Registration Statement.
3. COMPANY REPRESENTATIONS, WARRANTIES, ETC.
The Company represents and warrants to, and covenants and agrees with, the
Buyer that:
(a) ORGANIZATION AND AUTHORITY. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority (i) to own, lease
and operate its properties and to carry on its business as now being conducted,
and (ii) to execute, deliver and perform its obligations under this Agreement
and the other agreements to be executed and delivered by the Company in
connection herewith, and to consummate the transactions contemplated hereby. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in all jurisdictions wherein such qualification is necessary and where
failure so to qualify could have a material adverse effect on the business,
properties, operations, condition (financial or other), results of operations or
prospects of the Company.
(b) CONCERNING THE NEXAR SHARES. The Nexar Shares have been duly authorized
by Nexar and are fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder. The Nexar Shares
are owned beneficially and of record by the Company, free and clear of all
liens, pledges, charges, equities, encumbrances, claims and rights of others of
any nature whatsoever and, upon transfer of the Nexar Shares to the Buyer
pursuant to this Agreement, the Buyer will acquire good and marketable title to
such shares, free and clear of all liens, pledges, charges, equities,
encumbrances, claims and rights of others of any nature whatsoever. There are no
preemptive rights or similar rights of any stockholder of the Company, as such,
to acquire any of the Nexar Shares or the Price Guarantee Rights.
(c) AGREEMENT. This Agreement has been duly and validly authorized,
executed and delivered by the Company and this Agreement is a valid and binding
agreement of the Company enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally.
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(d) NON-CONTRAVENTION. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated by
this Agreement do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under, the
certificate of incorporation or by-laws of the Company, or any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
or any applicable law, rule or regulation or any applicable decree, judgment or
order of any court, United States federal or state regulatory body,
administrative agency or other governmental body having jurisdiction over the
Company or any of its properties or assets.
(e) APPROVALS. No authorization, approval or consent of, or filing with,
any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders of the Company is required to be
obtained or made by the Company for (x) the execution, delivery and performance
by the Company of this Agreement, (y) the transfer and delivery of the Nexar
Shares to the Buyer pursuant to this Agreement and (z) the incurrence or
performance by the Company of its obligations with respect to the Price
Guarantee Rights, other than the requirements of any applicable blue sky laws.
(f) INFORMATION PROVIDED. The information provided by or on behalf of the
Company to the Buyer in connection with the transactions contemplated by this
Agreement (other than the Nexar Prospectus), including, without limitation, the
information referred to in Section 2(e) of this Agreement, does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, there has been no
material adverse change and no material adverse development in the business,
properties, operations, condition (financial or other), results of operations or
prospects of the Company and its subsidiaries taken as a whole, except as
disclosed in the SEC Reports.
(h) ABSENCE OF CERTAIN PROCEEDINGS. Except as disclosed in the SEC Reports,
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board or body pending or, to the knowledge of the Company or any
of its subsidiaries, threatened against or affecting the Company or any of its
subsidiaries, wherein an unfavorable decision, ruling or finding would have a
material adverse effect on the properties, business, condition (financial or
other), results of operations or prospects of the Company and its subsidiaries
taken as a whole or the transactions contemplated by this Agreement or any of
the documents contemplated hereby or which would adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of such other documents.
(i) PROPERTIES. The Company and its subsidiaries have good title to all
property real and personal (tangible and intangible) and other assets owned by
them, free and clear of all security interests, charges, mortgages, liens or
other encumbrances, except such as are described in the SEC Reports or such as
do not materially interfere with the use of such property made, or proposed to
be made, by the Company or its subsidiaries. The leases, licenses or other
contracts or instruments under which the Company and its subsidiaries lease,
hold or are entitled to use any property, real or personal, are valid,
subsisting and enforceable with only such exceptions as do not materially
interfere with the use of such property made, or proposed to be made, by the
Company or its subsidiaries. Neither the Company nor any of its subsidiaries has
received notice of any material violation of any applicable law, ordinance,
regulation, order or requirement relating to its owned or leased properties.
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(j) LABOR RELATIONS. No material labor problem exists or, to the knowledge
of the Company, is imminent with respect to any of the employees of the Company
or any of its subsidiaries.
(k) SEC FILINGS. The Company has timely filed all required forms, reports
and other documents with the SEC since December 31, 1996. All of such forms,
reports and other documents complied, when filed, in all material respects, with
all applicable requirements of the 1933 Act and the Securities Exchange Act of
1934, as amended (the "1934 Act").
(l) CONCERNING THE NEXAR SHARES. The Nexar Shares may be sold by the
Company to the Buyer pursuant to the Registration Statement of which the Nexar
Prospectus forms a part and upon acquisition of the Nexar Shares from the
Company pursuant to this Agreement, the Buyer may resell such shares without
registration under the 1933 Act and without restriction on the volume or manner
of sale thereof so long as the Buyer is not an "affiliate" (as such term is
defined for purposes of the 0000 Xxx) of Nexar, subject to applicable
limitations on trading in securities while in possession of material non-public
information concerning Nexar.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
(a) TRANSFER RESTRICTIONS. The Buyer acknowledges that the Price Guarantee
Rights have not been and are not being registered under the provisions of the
1933 Act and may not be transferred unless (A) subsequently registered
thereunder for resale or (B) the Buyer shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form, scope and substance to the
Company, to the effect that the Price Guarantee Rights or portion thereof to be
sold or transferred may be sold or transferred without such registration; (2)
any sale of the Price Guarantee Rights made in reliance on Rule 144 promulgated
under the 1933 Act may be made only in accordance with the terms of said Rule
and further, if said Rule is not applicable, any resale of the Price Guarantee
Rights or any portion thereof under circumstances in which the seller, or the
person through whom the sale is made, may be deemed to be an underwriter, as
that term is used in the 1933 Act, may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (3) neither the Company nor any other person is under any obligation to
register the Price Guarantee Rights under the 1933 Act or to comply with the
terms and conditions of any exemption thereunder (other than pursuant to Section
4(d) hereof).
(b) REPORTING STATUS. So long as the Company shall have any obligation
under this Agreement with respect to the Price Guarantee Rights, the Company
shall file all reports required to be filed with the SEC pursuant to Section 13
or 15(d) of the 1934 Act, and the Company shall not, prior to the date which is
two years after the Closing Date, terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination.
(c) USE OF PROCEEDS. Neither the Company nor any subsidiary of the Company
owns or has any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System ("margin stock"). The proceeds of sale of the Nexar Shares will be used
for general working capital purposes and in the operation of the Company's
business. None of such proceeds will be used, directly or indirectly (1) to make
any loan to or investment in any other person or (2) for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock or
for the purpose of maintaining, reducing or retiring any indebtedness which was
originally incurred to purchase or carry any stock that is currently a margin
stock or for any other purpose which might constitute the transactions
contemplated by this Agreement a "purpose credit" within the meaning of such
Regulation G. Neither the Company nor any agent acting on
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its behalf has taken or will take any action which might cause this Agreement or
the transactions contemplated hereby to violate Regulation G, Regulation T or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the 1934 Act, in each case as in effect now or as the same may
hereafter be in effect.
(d) BLUE SKY LAWS. On or before the Closing Date, the Company shall take
such action as shall be necessary to qualify, or to obtain an exemption for, the
Price Guarantee Rights under such of the securities or "blue sky" laws of
jurisdictions in the United States as shall be applicable to the sale of the
Price Guarantee Rights to the Buyer pursuant to this Agreement. The Company
shall furnish copies of all filings, applications, orders and grants or
confirmations of exemptions relating to such securities or "blue sky" laws on or
before the Closing Date.
(e) CERTAIN EXPENSES. Whether or not the closing occurs, the Company shall
pay or reimburse the Buyer for all reasonable expenses (including, without
limitation, legal fees and expenses of counsel to the Buyer) incurred by the
Buyer in connection with this Agreement and the transactions contemplated
hereby. For purposes of this provision, invoices of the Buyer's legal counsel
in the form customarily given by such counsel to the Buyer shall be satisfactory
detail and evidence of the same.
(f) BEST EFFORTS. Each of the parties shall use its best efforts timely to
satisfy each of the conditions to the other party's obligations to complete the
closing of the transactions contemplated by this Agreement set forth in Section
6 or 7, as the case may be, of this Agreement on or before the Closing Date and
to satisfy each of the other party's conditions to escrow release in Section
5(b)(2) or 5(b)(3), as the case may be, on or before the applicable date.
5. CLOSING DATE; ESCROW RELEASE.
(a) CLOSING DATE. The date of the sale of the Nexar Shares (the "Closing
Date") shall be January 8, 1998. Such closing shall occur on the Closing Date at
the offices of the Escrow Agent. The Buyer and the Company agree that, upon
completion of the closing on the Closing Date, the Nexar Shares shall be deemed
to be sold by the Company and purchased by the Buyer and only delivery of the
Nexar Shares to the Buyer upon release from escrow by the Escrow Agent and
delivery of the purchase price to the Company upon release from escrow by the
Escrow Agent shall not have occurred.
(b) ESCROW RELEASE. (1) The Buyer hereby instructs the Escrow Agent to
submit to Nexar or its transfer agent the certificate for the Nexar Shares
promptly after the Closing Date to register the transfer thereof to the Buyer
and to dispatch the balance of the shares of Common Stock represented by such
certificate to the Company.
(2) The release by the Escrow Agent of the Nexar Shares to the Buyer
shall be subject to the following conditions precedent, any or all of which may
be waived by the Company:
(A) on or before January 15, 1998, the Buyer and the custodian
(the "Custodian") identified in the Custody Agreement, dated as of the
date hereof in the form attached hereto as ANNEX II (the "Custody
Agreement") shall have executed and delivered, one to the other, the
Custody Agreement and the Buyer shall have furnished a copy thereof to
the Company;
(B) on or before January 15, 1998, the closing under the Exchange
Agreement shall have occurred and the Buyer shall have executed and
delivered to the Company a general release and waiver in the form
specified in the Exchange Agreement;
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(C) on or before January 29, 1998, the Nexar Shares shall have
been transferred of record to, and registered in the name of, the
Buyer, without restrictive legend; and
(D) on or before January 29, 1998, a certificate for the 39,264
shares of Common Stock included in the certificate for the Nexar
Shares shall have been returned to the Company.
(3) The release by the Escrow Agent to the Company of the purchase
price for the Nexar Shares shall be subject to satisfaction of the following
conditions precedent any or all of which may be waived by the Buyer:
(A) the representations and warranties of the Company in this
Agreement made as of the date of this Agreement and as of the Closing
Date shall have been true and correct in all material respects as of
the date of this Agreement and as of the Closing Date;
(B) the Company shall have performed on or before the Escrow
Release Date all covenants and agreements of the Company required to
be performed on or before the Escrow Release Date.
(C) on or before January 15, 1998, a notification by the Buyer to
the Attorney General of the Commonwealth of Massachusetts pursuant to
X.X. x. 271, Sec. 49(d) of the laws of the Commonwealth of
Massachusetts making the provisions of X.X. x. 271, Sec. 49(a)
inapplicable to the transactions contemplated by this Agreement shall
have been given to and accepted by the Attorney General of the
Commonwealth of Massachusetts;
(D) on or before January 15, 1998, the Buyer shall have received
a certificate, dated the Closing Date, of the Secretary of the Company
certifying (1) the certificate of incorporation and by-laws of the
Company as in effect on the Closing Date, (2) all resolutions of the
Board of Directors (and committees thereof) of the Company relating to
this Agreement and the transactions contemplated hereby and (3) such
other matters as reasonably requested by the Buyer;
(E) on or before January 29, 1998, the Nexar Shares shall have
been transferred of record to, and registered in the name of, the
Buyer, without restrictive legend; and
(F) on or before January 15, 1998, the Buyer shall have received
an opinion of counsel for the Company, dated the Closing Date, in
form, scope and substance reasonably satisfactory to the Buyer, to the
effect set forth in ANNEX III attached hereto.
(G) on or before January 15, 1998, the Buyer shall have received
a certificate, dated the Closing Date, of the Chief Executive Officer
or the Chief Financial Officer of the Company confirming the matters
set forth in Section 7(b).
(4) The date on which all of the conditions precedent in Sections
5(b)(2) and 5(b)(3) are satisfied or waived is referred to herein as the "Escrow
Release Date."
(5) On the Escrow Release Date, the Company and the Buyer shall
instruct the Escrow Agent that the Escrow Release Date has occurred.
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(6) If the Escrow Release Date does not occur on or before January 29,
1998, then the Escrow Agent shall release to the Company all shares of Nexar
Common Stock in the possession of the Escrow Agent and shall release an amount
equal to the purchase price for the Nexar Shares to the Buyer. If the Nexar
Shares have been issued in the name of the Buyer, the Buyer shall cooperate in
causing such shares to be re-issued in the Company's name.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell the Nexar
Shares to the Buyer pursuant to this Agreement on the Closing Date is
conditioned upon the satisfaction of the following conditions precedent on or
before the Closing Date (any or all of which may be waived by the Company in its
sole discretion):
(a) The receipt and acceptance by the Company of this Agreement as
evidenced by execution of this Agreement by the Company and delivery of an
executed counterpart of this Agreement to the Buyer or its legal counsel;
(b) Delivery by the Buyer to the Escrow Agent of good funds as payment in
full of an amount equal to the purchase price for the Nexar Shares in accordance
with Section 1(c) hereof; and
(c) The accuracy on the Closing Date of the representations and warranties
of the Buyer contained in this Agreement as if made on the Closing Date and the
performance by the Buyer on or before the Closing Date of all covenants and
agreements of the Buyer required to be performed on or before the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligations to purchase and pay
for the Nexar Shares pursuant to this Agreement on the Closing Date are
conditioned upon the satisfaction of the following conditions precedent on or
before the Closing Date (any or all of which may be waived by the Buyer in its
sole discretion):
(a) Delivery by the Company to the Escrow Agent of the Nexar Shares in
accordance with this Agreement; and
(b) The accuracy on the Closing Date of the representations and warranties
of the Company contained in this Agreement as if made on the Closing Date and
the performance by the Company on or before the Closing Date of all covenants
and agreements of the Company required by this Agreement and all other documents
and instruments relating hereto to be performed on or before the Closing Date.
8. PRICE GUARANTEE RIGHTS.
(a) CUSTODY DEPOSIT. If the Nexar Shares are released by the Escrow Agent
to the Buyer on the Escrow Release Date in accordance with the Joint Escrow
Instructions, immediately following such release on the Escrow Release Date, the
Buyer shall deposit 400,000 of the Nexar Shares with the Custodian pursuant to
the Custody Agreement. Such deposit shall be made solely for purposes of
administering the provisions of this Section 8 with respect to the Price
Guarantee Rights and shall not in any way limit or affect the ownership of the
Nexar Shares by the Buyer and shall not in any manner create any lien, pledge,
charge, equity, encumbrance, claim or right of the Company of any nature
whatsoever in or with respect to the Nexar Shares. For purposes of this Section
8, the Nexar Shares shall be deemed to include any
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additional shares of Nexar Common Stock distributed to or received by the
Custodian as a stock dividend, stock split or other distribution on the Nexar
Shares held by the Custodian.
(b) RELEASE FROM CUSTODY. The Buyer shall have the right from time to time
to direct the Custodian to release from custody the Nexar Shares by notice to
the Custodian in the form attached as Exhibit A to the Custody Agreement (each,
a "Release Notice"); PROVIDED, HOWEVER, that the aggregate Release Price (as
defined herein) of all Nexar Shares released from custody by the Buyer during
any period of 30 consecutive days may not exceed $666,667.00; and PROVIDED
FURTHER, HOWEVER, that the Buyer shall be required to direct the Custodian to
release all of the Nexar Shares to the Buyer on or before the date which is two
years after the Closing Date. The Buyer shall furnish to the Company a copy of
each Release Notice given by the Buyer to the Custodian within one Business Day
after the Buyer gives such Release Notice to the Custodian. A Release Notice
given by the Buyer to the Custodian shall be deemed for all purposes to be in
proper form unless the Company notifies the Buyer in writing within three
Business Days after such Release Notice has been given (which notice shall
specify all defects in such Release Notice), and any Release Notice containing
any such defect shall nonetheless be effective on the date given if the Buyer
promptly undertakes to correct all such defects. No such claim of error shall
limit or delay the buyer's right to release of the Nexar Shares to which such
Release Notice relates. Any Nexar Shares as to which the Buyer has not given a
Release Notice on or before the date which is two years after the Closing Date
shall be automatically released on the date which is two years after the Closing
Date (the "Automatic Release") and the Redemption Price for such shares shall be
calculated as of such date.
(C) RELEASE PRICE. For purposes of computing the amount of the Price
Guarantee Rights, a Release Price shall be determined for each Nexar Share
released pursuant to a Release Notice or the Automatic Release. As used herein,
the following terms shall have the following meanings:
"Market Price" of any security on any date means the closing bid price
of such security on such date on the Nasdaq National Market or such other
securities exchange or other market on which such security is listed for trading
which constitutes the principal securities market for such security, as reported
by Bloomberg, L.P. (subject to equitable adjustments from time to time on terms
reasonably acceptable to the Buyer and the Company for (1) stock splits, (2)
stock dividends, (3) combinations, (4) capital reorganizations, (5) issuance to
all holders of Nexar Common Stock rights or warrants to purchase shares of Nexar
Common Stock, (6) the distribution by Nexar to all holders of Nexar Common Stock
of evidences of indebtedness of Nexar or cash (other than regular quarterly cash
dividends), (7) repurchases of shares of Nexar Common Stock in one or more
transactions which, individually or in the aggregate, result in the purchase of
more than ten percent of the Nexar Common Stock outstanding and (8) similar
events relating to the Nexar Common Stock, in each such case which occur, or
with respect to which "ex-" trading of the Nexar Common Stock begins during a
period of five consecutive Trading Days used for determining the Release Price
of any Nexar Shares).
"Release Date" means any date on which a Release Notice is given by
the Buyer pursuant to the Custody Agreement and the date of the Automatic
Release, if any.
"Release Percentage" means, with respect to any Release Date, the
applicable percentage set forth opposite such date below:
DATE RELEASE PERCENTAGE
Closing Date through 30th day thereafter 100%
31st through 60th day after Closing Date 95%
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61st through 90th day after Closing Date 90%
91st day after Closing Date and thereafter 85%
"Release Price" means, for any Release Date, the product of (x) the
arithmetic average of the Market Price of the Nexar Common Stock for the five
consecutive Trading Days ending on the Trading Day prior to such Release Date
TIMES (y) the Release Percentage applicable to such Release Date.
"Trading Day" means a day on whichever of (x) the national securities
exchange or (y) the Nasdaq National Market which at the time constitutes the
principal securities market for the Common Stock is open for general trading.
(d) PAYMENT OF PRICE GUARANTEE RIGHTS. If after release of all of the Nexar
Shares by the Custodian under the Custody Agreement the ("Final Release Date"),
the aggregate Release Price for all of the Nexar Shares shall be less than
$2,000,000.00 then the Company shall pay to the Buyer as and when required by
this Agreement an amount equal to the amount by which $2,000,000.00 exceeds the
aggregate Release Price for all of the Nexar Shares. The amount, if any, payable
by the Company to the Buyer pursuant to this Section 8(d) shall be paid by wire
transfer in immediately available funds on the date which is two years after the
Closing Date, to such account as shall be specified for such purpose by notice
from the Buyer to the Company. Any amount due under this Section 8(d) which is
not paid when due shall accrue interest at the rate of 14% per annum until paid.
9. MISCELLANEOUS.
(a) This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be executed in counterparts and by the parties
hereto on separate counterparts, all of which together shall constitute one and
the same instrument. A facsimile transmission of this Agreement bearing a
signature on behalf of a party hereto shall be legal and binding on such party.
Although this Agreement is dated as of the date first set forth above, the
actual date of execution and delivery of this Agreement by each party is the
date set forth below such party's signature on the signature page hereof. Any
reference in this Agreement or in any of the documents executed and delivered by
the parties hereto in connection herewith to the date of execution and delivery
of this Agreement shall be deemed a reference to the later of such dates set
forth below each party's respective signature on the signature page hereof.
(c) The headings, captions and footers of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(e) This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement.
(f) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
or any course of dealings
10
between the parties, shall not operate as a waiver thereof or an amendment
hereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or exercise of any other right or
power.
(g) Any notices required or permitted to be given under the terms of this
Agreement shall be sent by mail or delivered personally (which shall include
telephone line facsimile transmission with answer back confirmation) or by
courier and shall be effective five days after being placed in the mail, if
mailed, or upon receipt, if delivered personally or by courier, in the case of
the Company addressed to the Company at its address shown in the introductory
paragraph of this Agreement, Attention: Director of Finance (telephone line
facsimile transmission number (000) 000-0000) or, in the case of the Buyer, at
its address shown on the signature page of this Agreement, with a copy to
Genesee International, Inc., 00000 X.X. 0xx Xxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxxxxxx 00000-0000 (telephone line facsimile transmission number (425)
462-4645) or such other address as a party shall have provided by notice to the
other party in accordance with this provision.
(h) Prior to the Closing Date, the Buyer shall have the right to assign its
rights and obligations under this Agreement with respect to the purchase of all
or any portion of the Nexar Shares, provided any such assignee, by written
instrument duly executed by such assignee, assumes all obligations of the Buyer
hereunder with respect to the purchase of the portion of the Nexar Shares so
assigned and makes the same representations and warranties with respect thereto
as the Buyer makes in this Agreement, whereupon the Buyer shall be relieved of
any further obligations, responsibilities and liabilities with respect to the
purchase of all or the portion of the Nexar Shares the obligation for the
purchase of which has been so assigned. Any transfer of Nexar Shares by the
Buyer of rights under this Agreement after the Closing Date shall be made in
accordance with Section 4(a).
(i) The respective representations, warranties, covenants and agreements of
the Buyer and the Company contained in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall survive the delivery of
payment for the Preferred Shares and shall remain in full force and effect
regardless of any investigation made by or on behalf of them or any person
controlling or advising any of them.
(j) This Agreement and its Annexes set forth the entire agreement between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings, whether written or oral, with respect
thereto.
(k) The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
11
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto by their respective officers thereunto duly authorized as of the date
first set forth above.
NUMBER OF NEXAR SHARES: 500,000
PURCHASE PRICE: $2,000,000.00
ADVANTAGE FUND LIMITED
By: /s/ X.X. xx Xxxxx
---------------------
X.X. xx Xxxxx
President
Address:
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Facsimile No.: 000-000-00000000
PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
ANNEX I
TO
STOCK PURCHASE
AGREEMENT
JOINT ESCROW INSTRUCTIONS
Dated as of the date of the Stock Purchase
Agreement to Which These Joint Escrow
Instructions Are Attached
Law Offices of Xxxxx X Xxxxx,
as Escrow Agent
Penthouse Suite
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Dear Sir or Madam:
As Escrow Agent for both Palomar Medial Technologies, Inc., a Delaware
corporation (the "Company"), and the purchaser (the "Buyer") of shares (the
"Nexar Shares") of Common Stock, $.01 par value per shares, of Nexar
Technologies, Inc., a Delaware corporation, which are owned by the Company, who
is named in the Stock Purchase Agreement between the Company and the Buyer to
which a copy of these Joint Escrow is attached as ANNEX I (the "Agreement"), the
Escrow Agent pursuant to the terms of the Agreement (the "Escrow Funds") and any
interest credited by the depository bank for the Escrow Funds (the "Escrow
Interest"), in accordance with the following instructions:
1. After receipt of written notice from the Company and the Buyer to
the Escrow Agent that their respective conditions precedent to the release from
this escrow have been satisfied or waived by the Company and the Buyer, the
Escrow Agent shall, after deduction of the amount referred to in the next
succeeding sentences, release the Escrow Funds to or upon the order of the
Company and shall release the Nexar Shares and the Escrow Interest to the Buyer.
After receipt of such notices (x) a portion of the Escrow Funds shall be
released to or upon the order of the Buyer in payment of the expenses of the
Buyer payable by the Company in accordance with Section 4(e) of the Agreement in
such amount as may be specified in writing by or on behalf of the Buyer to the
Escrow Agent prior to release of the Escrow Funds and (y) $10,000 of the Escrow
Funds shall be released to or upon the order of the Custodian in payment of the
Custodian's annual fees under the Custody Agreement for two years from the
Closing Date. If Escrow Funds are released to or upon the order of the Company,
the amount thereof shall be reduced by all wire transfer fees in respect of
release of the Escrow Funds. If the Company and the Buyer do not notify the
Escrow Agent on or before January 29. 1998 that their respective conditions
precedent to the release from this escrow have been satisfied or waived, then
the Escrow Agent shall release the Escrow Funds and the Escrow Interest to the
Buyer and shall release the Nexar Shares to the Company. Prior to the return of
the Escrow Funds to the Buyer, the Buyer shall furnish such tax reporting or
other information as shall be appropriate for the Escrow Agent to comply with
applicable United States laws. The Escrow Agent shall deposit all funds received
hereunder in the Escrow Agent's attorney escrow account at Citibank, N.A. Except
as otherwise specifically provided in this paragraph 1, the Escrow Agent shall
not be liable for interest on the Escrow Funds for any reason, including by
reason of any delay or mistake in delivery of the Escrow Funds or any other
funds held by the Escrow Agent hereunder.
2. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, the Buyer and the
Escrow Agent.
3. The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as Escrow Agent while acting
in good faith, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law shall be conclusive evidence of
such good faith. In no event shall the Escrow Agent incur any liability or be
held responsible, if the Nexar Shares, once released from escrow hereunder,
shall become lost, stolen, destroyed, mutilated or misplaced while in transit to
any person, provided the Escrow Agent shall have dispatched the same by a means
customarily used by the Escrow Agent.
4. The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person, firm or
corporation, excepting only order or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decree, the
Escrow Agent shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
5. The Escrow Agent shall not be liable in any respect on account of
the identities, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
6. The Escrow Agent shall not be liable for the outlawing of any rights
under the Statute of Limitations with respect to these Joint Escrow Instructions
or any documents or Escrow Funds deposited with or held by the Escrow Agent.
7. The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's obligations hereunder, may
rely upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. The Escrow Agent has acted as legal counsel for the Buyer
in connection with the transactions contemplated by the Agreement and may
continue to act as legal counsel for the Buyer notwithstanding its duties as
Escrow Agent hereunder.
8. The Escrow Agent's responsibilities as Escrow Agent hereunder shall
terminate if the Escrow Agent shall resign by written notice to the Company and
the Buyer. In the event of any such resignation, the Buyer shall appoint a
successor Escrow Agent reasonably acceptable to the Company.
9. If the Escrow Agent reasonably requires other or further instruments
in connection with theses Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
10. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or Escrow Funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed, in its sole discretion(a) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or Escrow Funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (b) at any time,
to deposit the documents or Escrow Funds with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give notice thereof to the Buyer and the Company and shall thereupon be relieved
and discharged from all further obligations hereunder.
11. The Company and the Buyer jointly and severally agree to indemnify
and hold harmless the Escrow Agent from any and all claims, liabilities, costs
or expenses in any way arising from or relating to the duties or performance of
the Escrow Agent hereunder other than any such claim, liability, cost or expense
to the extent the same shall have been determined by final unappealable judgment
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Escrow Agent.
12. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or transmission by telephone line facsimile
transmission or three business days after deposit in the United States Postal
Service, by registered or certified mail with postage and fees prepaid,
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by ten days
advance written notice to each of the other parties hereto.
COMPANY: At the address set forth in the introductory
paragraph of the Agreement
Attention: Director of Finance
Facsimile No. (000) 000-0000
with a copy to:
At the address set forth in the introductory
paragraph of the Agreement
Attention: General Counsel
Facsimile No. (000) 000-0000
BUYER: At the address set forth in the Stock Purchase
and Exchange Agreement to which these Joint
Escrow Instructions are attached
Facsimile No. (000) 000-0000
ESCROW AGENT: Law Offices of Xxxxx X Xxxxx
Penthouse Suite
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No. (000) 000-0000
13. By signing these Joint Escrow Instructions, the Escrow Agent
becomes a party hereto only for the purpose of these Joint Escrow Instructions;
the Escrow Agent does not become a party to the Agreement. The Company ;and the
Buyer have become parties hereto by their execution and delivery of the
Agreement, as provided therein.
14. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns and
shall be governed by the laws of the State of New York.
15. Capitalized terms used herein and not otherwise defined herein
shall have their respective meanings provided in the Agreement.
ACCEPTED BY ESCROW AGENT:
/s/
------------------------------
Xxxxx X. Xxxxx, as Escrow Agent
ANNEX II
TO
STOCK PURCHASE
AGREEMENT
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT, dated as of December 31, 1997 (this
"Agreement"), by and between ADVANTAGE FUND LIMITED, a British Virgin Islands
corporation (the "Company"), and XXXXX X. XXXXX, not in his individual capacity
but as custodian (the "Custodian")
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Palomar Medical Technologies, Inc., a Delaware
corporation ("Palomar"), have executed and delivered, one to the other, a Stock
Purchase Agreement, dated as of December 31, 1997 (the "Stock Purchase
Agreement"), pursuant to which, among other things, Palomar has agreed to sell
to the Company, and the Company has agreed to purchase from Palomar, upon the
terms and subject to the conditions of the Stock Purchase Agreement, 500,000
outstanding shares of Common Stock, $.01 par value (the "Nexar Common Stock"),
of Nexar Technologies, Inc., a Delaware corporation ("Nexar"); and
WHEREAS, pursuant to the Stock Purchase Agreement, the Company has
agreed with Palomar, among other things, to execute and deliver this Agreement
and, immediately following the release from escrow in connection with the
closing of the purchase of the Nexar Shares pursuant to the Stock Purchase
Agreement, to deposit 400,000 shares of Nexar Common Stock with the Custodian
pursuant to this Agreement for the purposes set forth in Section 8 of the Stock
Purchase Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEPOSIT OF CERTIFICATES. Immediately following the closing of the
purchase of the Nexar Shares by the Company pursuant to the Stock Purchase
Agreement, the Company shall deposit with the Custodian one or more certificates
for an aggregate of 400,000 shares of Nexar Common Stock. Such shares, together
with any additional shares of Nexar Common Stock distributed to or received by
the Custodian as a stock dividend, stock split or other distribution on the
shares of Nexar Common Stock held by the Custodian are referred to herein as the
"Nexar Shares". The certificates for the Nexar Shares shall be registered in the
name of the Custodian or shall be accompanied by duly executed stock powers in
blank with any necessary signature guarantees. The Custodian shall be entitled,
in its discretion, to retain possession of certificates for the Nexar Shares or
to deposit the Nexar Shares in a segregated brokerage account maintained in the
name of the Custodian with PaineWebber Incorporated or another brokerage firm
which is a member of the National Association of Securities Dealers, Inc.
2. RELEASE OF NEXAR SHARES. At any time or from time to time after the
deposit of the Nexar Shares by the Company with the Custodian, the Company may
give a Release Notice, in the form attached hereto as EXHIBIT A (each, a
"Release Notice"), to the Custodian in order to release Nexar Shares from the
custody of the Custodian. A Release Notice given by the Company shall be deemed
for all purposes to be in proper form unless the Custodian or Palomar notifies
the Company in writing within five business days after such Release Notice has
been given (which notice shall specify all defects in such Release Notice), and
any Release Notice containing any such defect shall nonetheless be effective on
the date given if the Company promptly undertakes to correct all such defects.
No such claim of error shall limit or delay performance of the Custodian's
obligation to release all Nexar Shares not in dispute. As promptly as
practicable following the date on which a Release Notice is given, the Custodian
shall release to the Company the number of Nexar Shares specified in such
Release Notice until such time as the Custodian no longer holds any Nexar
Shares. Any Nexar Shares for which the Company has not given a Release Notice on
or before the date which is two years after the Closing Date (as defined in the
Stock Purchase Agreement) shall be automatically released by the Custodian on
the date which is two years after the Closing Date.
3. DUTIES OF CUSTODIAN. The Custodian shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and
shall be protected in relying or refraining from acting on any instrument
reasonably believed by the Custodian to be genuine and to have been signed or
presented by the proper party or parties. In no event shall the Custodian have
any responsibility or liability for the accuracy of the information set forth in
any Release Notice or for the determination of any calculation to be made for
purposes of Section 8 of the Stock Purchase Agreement or otherwise. The
Custodian shall not be personally liable for any act the Custodian may do or
omit to do hereunder as Custodian while acting in good faith, and any act done
or omitted by the Custodian pursuant to the advice of the Custodian's
attorneys-at-law shall be conclusive evidence of such good faith.
4. DISREGARD OF WARNINGS; JUDICIAL ORDERS. The Custodian is hereby
expressly authorized to disregard any and all warnings given by any other
person, firm or corporation other than the Company, excepting only orders or
process of courts of law and is hereby expressly authorized to comply with and
obey orders, judgments or decrees of any court. In case the Custodian obeys or
complies with any such order, judgment or decree, the Custodian shall not be
liable to any of the parties hereto or to any other person, firm or corporation
by reason of such decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
5. NO LIABILITY FOR GENUINENESS. The Custodian shall not be liable in
any respect on account of the identity, authorities or rights of the person
executing or delivering or purporting to execute or deliver the Stock Purchase
Agreement or any notice, document or instrument deposited or called for
hereunder.
6. STATUTE OF LIMITATIONS. The Custodian shall not be liable for the
outlawing of any rights under the Statute of Limitations with respect to this
Agreement or any document or instrument deposited with or held by the Custodian
pursuant to this Agreement.
7. RETENTION AND ADVICE OF LEGAL COUNSEL. The Custodian shall be
entitled to employ such legal counsel and other experts as the Custodian may
deem necessary properly to advise the Custodian in connection with the
Custodian's obligations hereunder, may rely upon the advice of such counsel, and
may pay such counsel reasonable compensation therefor, subject to reimbursement
thereof as and to the extent provided in Section 11. The Custodian has acted as
legal counsel for the Company and the Custodian may continue to act as legal
counsel for the Company notwithstanding its duties as Custodian hereunder.
8 RESIGNATION. The Custodian's responsibilities as Custodian hereunder
shall terminate if the Custodian shall resign by 20 days' notice to the Company
and Palomar. In the event of any such resignation, the Company shall appoint a
successor Custodian who is reasonably acceptable to Palomar. The Custodian shall
transfer any Nexar Shares to any successor Custodian promptly after receipt by
the Custodian of notice from the Company of the appointment of such successor.
9. FURTHER ASSURANCES. If the Custodian reasonably requires other or
further instruments in connection with this Agreement or obligations in respect
hereto, the Company shall furnish such instruments.
10. DISPUTES. It is understood and agreed that should any dispute arise
with respect to the release and/or right of possession of the Nexar Shares held
by the Custodian hereunder, the Custodian is authorized and directed, in its
sole discretion (a) to retain in the Custodian's possession without liability to
anyone all or any part of the Nexar Shares until such disputes shall have been
settled either by mutual written agreement of the parties concerned or by a
final order, decree or judgment of a court of competent jurisdiction after the
time for appeal has expired and no appeal has been perfected, but the Custodian
shall be under no duty whatsoever to institute or defend any such proceedings or
(b) at any time, to deposit any or all of the Nexar Shares with any court of
competent jurisdiction in the State of New York, in which event the Custodian
shall give notice thereof to the Company and Palomar and shall thereupon be
relieved and discharged from all further obligations hereunder.
11. FEES AND EXPENSES; INDEMNITY. (a) The Company agrees to pay to the
Custodian an annual fee in the amount of $5,000 for the Custodian's services
under this Agreement, which fee shall be payable in advance for two years. In
the event the Custodian resigns, the Custodian shall refund a pro rata portion
of such fee to the Company, less any amounts due to the Custodian pursuant to
Section 11(b)
(b) In addition to the amounts payable pursuant to Section 11(a) the
Company agrees to pay or reimburse the Custodian for, and to indemnify and hold
harmless the Custodian from, any and all claims, liabilities, costs or expenses
in any way arising from or relating to the duties or performance of the
Custodian hereunder other than any such claim, liability, cost or expense to the
extent the same shall have been determined by final, unappealable judgment of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Custodian.
12. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery (which shall include telephone line facsimile
transmission or courier service), addressed to each person thereunto entitled at
the following addresses, or at such other address as such person may designate
by ten days advance written notice to each of the other parties hereto.
the Company: x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Facsimile No.: 000-000-000-0000
with a copy to:
Genesee International, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Custodian: Law Offices of Xxxxx X Xxxxx
Penthouse Suite
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Palomar: 00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Director of Finance
Facsimile No.: 000-000-0000
with a copy to:
Attention: General Counsel
Facsimile No.: 000-000-0000
13. AMENDMENT, MODIFICATION, ETC. No amendment, modification, waiver,
discharge or termination of any provision of this Agreement nor consent to any
departure by the Custodian or the Company therefrom shall in any event be
effective unless the same shall be in writing and signed by the party to be
charged with enforcement, and then shall be effective only in the specific
instance and for the purpose for which given. No course of dealing between the
parties hereto shall operate as an amendment of, or a waiver of any right under,
this Agreement. Notwithstanding any other provision of this Agreement, no
amendment, modification, waiver, discharge or termination of any provision of
this Agreement which materially increases the rights of the Company shall be
effective unless also signed by Palomar, which is hereby expressly made a third
party beneficiary of this Agreement for purposes of this provision of this
Agreement.
14. GOVERNING LAW. This instrument shall be binding upon and inure to
the benefit of the parties hereto, and their respective successors and permitted
assigns and shall be governed by the laws of the State of New York, without
giving effect to principles of conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by one of its officers thereunto duly authorized and the
Custodian has duly executed this Agreement, in each case as of the date first
set forth above.
ADVANTAGE FUND LIMITED
By:
--------------------------------------
X.X. xxXxxxx
President
--------------------------------------
Xxxxx X. Xxxxx, as
Custodian
EXHIBIT A
RELEASE NOTICE
TO: Law Offices of Xxxxx X Xxxxx,
as Custodian
00 Xxxx 00xx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
with a copy to:
Palomar Medical Technologies, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Director of Finance
Facsimile No.: (000) 000-0000
(1) Pursuant to the terms of the Custody Agreement, dated as of
December 31, 1997 (the "Custody Agreement"), by and between Advantage Fund
Limited, a British Virgin Islands corporation, and Xxxxx X. Xxxxx, as Custodian
(the "Custodian"), the undersigned hereby elects to release ____________________
Nexar Shares. Capitalized terms used herein and not otherwise defined herein
have the respective meanings provided in the Custody Agreement or, if not
defined in the Custody Agreement, provided in the Stock Purchase Agreement.
(2) Please release ______________ Nexar Shares to the person and
address specified immediately below or, if additional space is necessary, on an
attachment hereto:
Delivery Instructions
for Common Stock:
------------------------------
------------------------------
------------------------------
------------------------------
(3) Release Date: ------------------------------
Applicable Market Prices: $
--------------------------
$
--------------------------
$
--------------------------
$
--------------------------
$
--------------------------
Release Price: $
--------------------------
NAME:
Date By:
------------------- -----------------------------
Title:
Annex III to Stock Purchase Agreement
January 26, 1998
Advantage Fund Limited
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Re: PALOMAR MEDICAL TECHNOLOGIES, INC.
Ladies and Gentlemen:
We have acted as counsel to Palomar Medical Technologies, Inc., a
Delaware corporation (the "Company"), in connection with the sale by the Company
to you of 500,000 shares (the "Nexar Shares") of Common Stock, $.01 par value,
of Nexar Technologies, Inc., a Delaware corporation, pursuant to the Stock
Purchase Agreement, dated as of December 31, 1997 (the "Agreement"), by and
between the Company and you (the "Buyer"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Agreement.
In connection with our rendering of the opinions expressed below, we
reviewed (i) the Certificate of Incorporation (the "Charter") and By-Laws (the
"By-Laws") of the Company, each as amended to date; (ii) a certificate issued by
the Secretary of State of the State of Delaware dated January 9, 1998 with
respect to the legal existence and good standing of the Company in Delaware;
(iii) the relevant records of meetings of the directors and stockholders of the
Company and consents of the directors and stockholders filed therewith; (iv) the
Agreement, the Joint Escrow Instructions and the Custody Agreement; (v) the
other documents delivered at the Closing or in connection with the transactions
contemplated by the Agreement; (vi) the agreements, instruments and documents
listed on Exhibit A attached hereto (the "Listed Agreements") and (vii) such
other documents and certificates as we have deemed necessary to enable us to
render the opinions expressed below.
In rendering the opinion expressed in paragraph 1 below with respect to
the legal existence and good standing of the Company in Delaware, we have relied
solely upon the certificate referred to in clause (ii) of the preceding
paragraph, and such opinion is given as of the date of such certificate.
With respect to the opinion expressed in paragraph 4 below, we note
that we did not observe or supervise the activities of the Company or its
representatives in connection with the offering and sale of the Price Guarantee
Rights. In rendering such opinion we have assumed without investigation that in
connection with such offering and sale there has been no general solicitation or
general advertising by the Company or its representatives with respect to the
Price Guarantee Rights. We have also assumed that no person subject to 950
C.M.R. 14.402(b)(9)(F) has engaged in any activity prohibited thereby and that
no subsequent offer or sale of securities of the Company will adversely affect
the availability of the exemptions from registration referred to in paragraph 4
of this opinion with respect to the offer or sale of the Price Guarantee Rights.
With respect to the opinion expressed in Paragraph 5 below, we have
been orally advised by a representative of the Securities and Exchange
Commission (the "SEC") that the Registration Statement of which the Nexar
Prospectus forms a part was effective on the Closing Date and we have assumed
that such Registration Statement was effective on such date and that the Nexar
Shares constitute shares that were registered under such Registration Statement.
We express no opinion regarding the conformity of such Registration Statement to
the rules and regulations of the SEC or the accuracy or adequacy of the
information set forth therein.
When an opinion set forth below is given to our knowledge, the
knowledge is limited to the facts or other information known to Xxxxx X.
Xxxxxxxx, Esquire, Xxxxxx X. Xxxxx, Esquire, Xxxx X. Xxxxxx, Esquire and
Xxxxxxxxx X. Xxxx, Esquire, who are the individual lawyers in our firm who were
actively involved in representation of the Company with respect to the
transactions contemplated by the Agreement and, except as expressly stated
herein, without any special or additional investigation undertaken for the
purposes of this opinion.
In rendering the opinions expressed herein, we have also examined and
have relied completely upon all of the representations and warranties as to
matters of fact contained in the Agreement and contained in the related
instruments and other documents delivered by the Company to you in connection
with the Closing or the transactions contemplated by the Agreement, and we have
assumed the completeness and accuracy of all factual matters described in such
representations and warranties.
We have not, except as specifically noted above, made any independent
review or investigation of facts relating to the Company, including without
limiting the generality of the foregoing, any investigation as to the existence
of any actions, suits or proceedings pending or threatened against the Company
or agreements, judgments, injunctions, orders or decrees binding upon the
Company or which might result in the imposition of any lien or other encumbrance
on any assets of the Company.
We have assumed the authenticity and completeness of all documents
furnished to us as originals, the genuineness of all signatures, the legal
capacity of natural persons, the conformity to the originals of all documents
furnished to us as copies, and the accuracy and completeness of all corporate
records made available to us by the Company.
You have not asked us to pass upon the Buyer's power and authority to
enter into the Agreement, the Joint Escrow Instructions or the Custody
Agreement. Accordingly, for the purposes of this opinion, we have assumed that
the Buyer has all requisite power and authority to enter into the Agreement, the
Joint Escrow Instructions and the Custody Agreement and to effect all of the
transactions thereunder, and that the Agreement, the Joint Escrow Instructions,
the Custody Agreement and each other agreement or instrument we have reviewed
constitutes the legal, valid and binding obligation of all parties thereto other
than the Company.
We have made such examination of Massachusetts law, federal law and the
corporation law of the State of Delaware as we deem necessary for the purposes
of this opinion. We do not purport to pass herein on the laws of any state or
jurisdiction other than the federal law of the United States of America, the law
of The Commonwealth of Massachusetts and the corporation law of the State of
Delaware. Our opinions are given only as of the date hereof, and we expressly
disclaim any continuing obligation or undertaking to supplement or update any of
our statements herein. We have assumed that the Buyer is not an "interested
stockholder" within the meaning of Section 203 of the Delaware General
Corporation Law and is not an "affiliate" of Nexar within the meaning of the
1933 Act.
The opinions herein expressed are qualified to the extent that (i) the
validity or enforceability of any provisions of any agreement or instrument may
be subject to or affected by any bankruptcy, reorganization, insolvency,
moratorium or similar law of general application from time to time in effect and
relating to or affecting the rights or remedies of creditors generally, (ii) the
remedy of specific performance or any other equitable remedy may be unavailable
in any jurisdiction or may be withheld as a matter of judicial discretion and
(iii) the enforcement of any rights or remedies is or may be subject to an
implied duty on the part of the party seeking to enforce such rights to take
action and make determinations on a reasonable basis and in good faith. In
addition, we express no opinion herein as to: prospective waivers of rights to
notice or a hearing or of other rights granted by constitution or statute;
powers of attorney; provisions purporting to relieve parties of the consequences
of their own negligence or misconduct; provisions purporting to establish
evidentiary standards; or provisions to the effect that rights or remedies are
not exclusive, that every right or remedy is cumulative and may be exercised in
addition to any other right or remedy, or that failure to exercise or delay in
exercising rights and remedies will not operate as a waiver of any such right or
remedy. With your permission, we have assumed for all purposes under this
opinion that the Company is not, and following completion of the transactions
contemplated by the Agreement will not be, insolvent, left with unreasonably
small capital, or unable to pay its debts as they mature. We express no opinion
as to the effect of the laws of any jurisdiction other than Massachusetts
wherein the Company or you may be located, or wherein enforcement of the
Agreement may be limited, with respect to the rates of interest legally
chargeable or collectible thereunder.
Based upon and subject to the foregoing, we are of the opinion that:
(1) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to conduct its business as
currently conducted.
(2) The Company has all requisite power and authority to enter into the
Agreement and to consummate the transactions contemplated thereby. The
execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the
Company. The Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
(3) The sale and delivery in accordance with the terms of the Agreement of
the Nexar Shares will pass good and valid title to such shares, free
and clear of all liens, claims or encumbrances, to the Buyer if the
Buyer purchases the Nexar Shares in good faith and without notice of
any such lien, claim or encumbrance or any other adverse claim within
the meaning of the Uniform Commercial Code as now in effect in The
Commonwealth of Massachusetts.
(4) Assuming the accuracy as of the date hereof of the representations and
warranties of the Buyer set forth in the Agreement, the Buyer may
obtain the Price Guarantee Rights pursuant to the Agreement without
registration under the 1933 Act.
(5) The Nexar Shares could be sold by the Company to the Buyer on the
Closing Date pursuant to the Registration Statement of which the Nexar
Prospectus forms a part; and upon acquisition of the Nexar Shares from
the Company pursuant to the Agreement, the Buyer will not be subject to
restrictions on the resale thereof arising under the 1933 Act as a
result of the manner of sale of such shares contemplated by the
Agreement.
(6) No authorization, approval or consent of, or filing with, any
governmental body, regulatory agency or stock exchange, market or
automated quotation system or the stockholders of the Company is
required to be obtained or made by the Company for the sale of the
Nexar Shares to the Buyer pursuant to the Agreement or for the creation
or payment of the Price Guarantee Rights except such as have been
obtained or made.
(7) Except for the effects, if any, that may arise from lawsuits disclosed
in the SEC Reports, to our knowledge, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public
board or body pending or threatened against or affecting the Company or
any of its subsidiaries, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties,
business, condition (financial or other), results of operations or
prospects of the Company and its subsidiaries taken as a whole or the
transactions contemplated by the Agreement or any of the documents
contemplated thereby or delivered in connection therewith or which
would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under,
the Agreement or any of such other documents.
(8) The execution, delivery and performance by the Company of the
Agreement, the offer and sale of the Nexar Shares to the Buyer pursuant
to the Agreement and the fulfillment of and the compliance with the
terms of the Agreement by the Company will not result in a breach of
any of the terms or provisions of, or constitute a default under, the
Charter or By-Laws, or any law, statute, rule or regulation to which
the Company is subject or any Listed Agreement.
The opinions are limited to the matters expressly stated herein and are
rendered solely for your benefit and may not be quoted or relied upon for any
other purpose or by any other person.
Very truly yours,
XXXXX, XXXX & XXXXX LLP
By:
------------------------
A partner
cc: American Stock Transfer
& Trust Company
EXHIBIT A
EXHIBIT A
Agreement and Plan of Reorganization dated March 9, 1996 by and among the
Company, TTI Acquisition Corp., Tissue Technologies, Inc. and Xxxxx Xxxxxx
Amendment to Agreement and Plan of Reorganization dated April 29,1996 by and
among the Company, TTI Acquisition Corp., Tissue Technologies, Inc. and Xxxxx
Xxxxxx
Letter from the Company to Tissue Technologies, Inc. waiving the Company's right
to receive indemnification under Section 6 of the Agreement and Plan of
Reorganization under certain circumstances
Plan of Merger dated May 3, 1996 by and between the Company, TTI Acquisition
Corp. and Tissue Technologies, Inc.
Stock Purchase Agreement dated March 19, 1996, by and between Dynaco Acquisition
Corp., Comtel Electronics, Inc., Xxxxx X. Xxxxx, Xxxxx Xxxxx and Palomar
Electronics Corp.
Agreement for Purchase of Stock dated July 12,1996, by and between the Company,
Xxxxxxx Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx
Restated Certificate of Incorporation, as amended
Bylaws, as amended
Patent License Agreement by and between the Company and Patlex Corporation,
effective as of January 1, 1992
1996 Stock Option Plan
Amended 1996 Employee Stock Purchase Plan
Form of Stock Option Agreement under the 1996 Stock Option Plan
Securities Purchase Agreement between the Company and The Travelers Insurance
Company dated July 12, 1996
Warrant to purchase Common Stock of the Company, dated July 12, 1996
Subscription Agreement dated September 26, 1996 between the Company and Genesee
Fund Limited
Registration Rights Agreement dated September 26, 1996 between the Company and
Genesee Fund Limited
Warrant to purchase Common Stock of the Company dated September 27, 1996
Berckeley Subscription Agreement dated December 31, 1996 and Amendment thereto
dated January 10, 0000
Xxxxxxxxx Xxxxxxxxx dated December 31, 1996
High Risk Opportunities Hub Fund, Ltd. Subscription Agreement dated January 14,
1997
High Risk Opportunities Hub Fund, Ltd. Debenture dated January 13, 1997
Securities Purchase Agreement dated December 31, 1996 between Palomar
Electronics Corporation and Clearwater Fund IV, LLC
Securities Purchase Agreement dated as of December 18, 1996 between Palomar
Electronics Corporation, the Company and The Travelers Insurance Company
Securities Purchase Agreement dated December 31, 1996 between Palomar
Electronics Corporation and GFL Advantage Fund Limited
Option Agreement dated December 31, 1996 between the Company and GFL Advantage
Fund Limited
Common Stock Purchase Warrant dated December 31, 1996
Form of Net Warrant to Purchase Common Stock
Subscription Agreement dated December 27, 1996 between the Company and
Finmanagement, Inc.
Subscription Agreement dated as of April 12, 1996 between the Company and GFL
Advantage Fund Limited
Registration Rights Agreement dated as of April 17, 1996 by and between the
Company and GFL Advantage Fund Limited
Warrant dated as of April 16, 1996
Form of Warrant to purchase Common Stock dated February 1, 1996
Form of Offshore Stock Subscription Agreement dated February 1, 1996
Form of Subscription Agreement dated as of March 10, 1997
Form Registration Rights Agreement dated as of March 10, 1997
Form of 5% Convertible Debenture due March 10, 2002
Subscription Agreement dated as of March 13, 1997 between the Company and
Soginvest Bank
Form of 6% Convertible Debenture due March 13, 2002
Asset Purchase and Settlement Agreement dated February 28, 1997 by and among the
Company, Nexar Technologies, Inc., Technovation Computer Labs, Inc. and Xxxxx X.
Xxxxxxxx
Employment Agreement dated as of May 1, 1996 between the Company and Xxxxxx X.
Xxxxxxxx
Employment Agreement dated as of January 1, 1997, between the Company and Xxxxxx
Xxxxxxxx
Employment Agreement dated as of January 1, 1997, between the Company and
Xxxxxxx X. Xxxxxxxx
Employment Agreement dated as of January 1, 1997, between the Company and Xxxxxx
X. Xxxxxx
Key Employee Agreement dated as of May 15, 1997 between the Company and Xxxxx X.
Xxxxxxx
Employment Agreement dated as of January 1, 1997, between the Company and
Xxxxxxx Xxxxxxxx
Securities Purchase Agreement dated March 27, 1997 between the Company and RGC
International Investors, LDC
Registration Rights Agreement dated March 27, 1997 between the Company and RGC
International Investors, LDC
Form of 4.5% Convertible Subordinated Promissory Note dated October 17,1996
Form of Subscription Agreement dated October 16, 1996
Supplement to Securities Purchase Agreement dated May 5, 1997
Supplement to Registration Rights Agreement dated May 5, 1997
Supplement to Securities Purchase Agreement dated May 23, 1997
Supplement to Registration Rights Agreement dated May 23, 1997
Agreement dated December 30, 1993 by and between the Company, Dynaco Corporation
and Dynaco West Corporation
First Amendment to Purchase and Sale Agreement dated January 24, 1994 by and
between the Company, Dynaco Corporation and Dynaco West Corporation
Purchase and Sale Agreement dated March 14, 1995, by and between the Company and
SPMT Acquisition Corp., Spectrum Medical Technologies, Inc., Xxxxxxx X. Xxxx and
CSF Investments Ltd.
Purchase and Sale Agreement dated June 5, 1995, by and between Dynaco
Acquisition Corporation and Xxxxxx Industries, Inc.
Company's 1991 Stock Option Plan, as amended
Company's 1993 Stock Option Plan
Company's 1995 Stock Option Plan
Form of Stock Option Grant under the Company's 1991, 1993 and 1995 Stock Option
Plans
Form of Company Warrant to Purchase Common Stock
Lease for premises at 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx, dated May
25, 1993
The Company's 401(k) Plan
Form of 6%, 7% and 8% Convertible Debentures due September 30, 2002
Form of Registration Rights Agreement dated September 30, 1997
Form of Securities Purchase Agreement dated September 30, 1997
Stock Purchase Agreement dated December 9, 1997 between and among Biometric
Technologies Corp., the Company and Dynaco Corp. and certain exhibits thereto.
Securities Purchase Agreement dated as of December 29,1997 by and among the
Company and Clearwater Fund IV, LLC
