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SUBSCRIPTION AGREEMENT
PALOMAR MEDICAL TECHNOLOGIES, INC.
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER SECTIONS 4(2) AND
4(6) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS SUBSCRIPTION
AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR
TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.
IN REACHING THE CONCLUSION THAT BUYER DESIRES TO PURCHASE THE UNITS,
BUYER HAS CAREFULLY EVALUATED BUYER'S FINANCIAL RESOURCES AND INVESTMENT
POSITION, AND THE RISKS ASSOCIATED WITH THIS INVESTMENT, AND ACKNOWLEDGES THAT
THE UNITS INVOLVE A HIGH DEGREE OF RISK AND THAT BUYER COULD LOSE THE ENTIRE
INVESTMENT.
This Subscription Agreement (the "Agreement") is entered into by and
between Palomar Medical Technologies, Inc., a Delaware corporation (the
"Company", "PMTI" or "Seller"), and the undersigned (the "Buyer") in connection
with the offer and subscription by the Buyer to purchase 60 Units, each Unit for
$XXXXXX, for an aggregate amount of ($XXXXXXUS). Each Unit consists of 10,000
shares of PMTI Common Stock (the "Common Stock") and three (3) warrants to
purchase Common Stock (the "Warrants") expiring on February 28, 1997 as follows:
Warrant A - representing 7,000 shares of Common Stock at $7.50 per share;
Warrant B - representing 5,000 shares of Common Stock at $9.50 per share and;
Warrant C - representing 3,000 shares of Common Stock at $11.50 per share
(collectively, the "Warrant Shares"). The number of shares of Common Stock
issuable upon a cashless exercise shall be determined by multiplying (1) the
difference between (a) the closing bid price of the Common Stock on the day
prior to the date exercised, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), and (b) the exercise
price, by (2) the number of Warrant Shares. The shares of Common Stock and the
shares of Common Stock underlying the Warrants are collectively referred to as
the "Shares". This Subscription and, if accepted by the Company, the offer and
sale of the Units, are being made in reliance upon the provisions of Sections
4(2) and 4(6) of the United States Securities Act of 1933, as amended (the
"Act"). The undersigned, in order to induce the Company will rely thereon,
represents, warrants and agrees as follows:
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1. OFFER TO SUBSCRIBE; PURCHASE PRICE
The Buyer hereby offers to purchase and subscribes for the number of
Units set forth above. The Closing shall be deemed to occur when this
Agreement has been executed by both Buyer and Company (the "Closing
Date"). The Company agrees to deliver certificates representing the
Common Stock and Warrants subscribed within 10 days of Closing. On or
prior to the Closing Date, the Buyer shall pay the purchase price by
delivering good funds in United States Dollars to the Company by wire
transfer to the account set forth below.
Citibank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA 000000000
Account Number: 00000000
Account Name: Xxxx Xxxxxx Xxxxxxxx, Inc.
For Further Credit to: Account Number: 593109782
Account Name: Palomar Medical Technologies, Inc.
2. REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer hereby represents and warrants as follows:
(a) Buyer is an Accredited Investor as evidenced by the Buyer
meeting at least one of the following standards:
(A) is an individual and had income in excess of
$200,000 in the two most recent tax years (or $300,000 income
jointly with his spouse) and reasonably expect to have income at
the same level in the current tax year; or
(B) is an individual and his net worth (i.e. excess of
total assets over total liabilities), either individually or
together with my spouse, is at least $1,000,000; or
(C) is a trust, corporation, partnership, or
organization defined in Section 501(c)(3) of the Code, not
formed for the purpose or purchasing the Units, with assets in
excess of $5,000,000; or
(D) is a national bank; a state banking institution, the
business of which is substantially confined to banking and is
supervised by state banking officials; a savings and loan
association; a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934; an insurance company;
an investment company registered under the Investment Company
Act of 1940; a business development company as defined in
Section 2(a)(48) of that Act or a private business development
company as defined in Section 202(a)(22) of the
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Investment Advisors Act of 1940; a Small Business Investment
Company licensed by the Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of
1958; or an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and
loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in
excess of $5,000,000 or, a self-directed plan where the
investment decisions are made by accredited investors; or
(E) is an entity in which each of the equity owners meet
the standards set forth in any of the immediately preceding
subparagraphs (A), (B), (C), or (D). (IF YOU MEET THE STANDARDS
IN THIS SUBPARAGRAPH, PLEASE ALSO COMPLETE THE FOLLOWING:)
I certify that the following is a complete list of all owners of
equity or trustees, that each such owner or trustee has
initialed the space opposite his name and that each such owner
or trustee understands that by initialing that space he is
representing that he is an accredited investor satisfying either
A, B, C or D above.
Name of Owner of Type of
Equity or Trustee Accredited Investor Initials
----------------- ------------------- --------
----------------- ------------------- --------
----------------- ------------------- --------
(b) 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 offer and sale of the Units and
the offer of the Shares 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 complete and 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, 1995 (as amended by Amendment No. 1 thereto on Form
10-KSB/A filed with the Securities and Exchange Commission (the "SEC" on
August 23, 1996), (2) Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, 1996 (as amended by Amendment No. 1 thereto on
Form 10-QSB/A filed with SEC on August 23, 1996), June 30, 1996 and
September 30, 1996, (3) Current Report on Form 8-K, dated May 3, 1996,
as amended by Amendment No. 1 thereto on Form 8-K/A dated May 3, 1996,
(4) definitive Proxy Statement for its 1996 Annual Meeting of
Stockholders, and (5) Registration Statement on Form S-3 (the "October
Registration Statement") declared effective on October 17, 1996
(Registration No. 333-10681), in each case as filed with the SEC.
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(c) Buyer is acquiring the Units solely for Buyer's own account,
for investment, and not with a view to the distribution thereof. Buyer's
financial condition is such that he is not under any present necessity
or constraint to dispose of the Units to satisfy any existing or
contemplated debt or undertaking. If Buyer is a corporation, trust,
association, partnership, or any other entity other than an individual,
the purchase of the Units by Buyer has been duly authorized as required
by law or agreement to be taken, and the Units constitute a legal
investment for such entity.
(d) Buyer is aware of the fact that the Units have not been
registered under the Securities Act of 1933 (the "Act"), and,
accordingly, no federal agency has recommended or endorsed the purchase
of the Units or passed on the adequacy or accuracy of the information
provided by the Company. Buyer understands that since the Units have not
been registered under the Act, they must be held indefinitely unless
they are subsequently registered under the Act or unless, in the opinion
of counsel for the Company, a sale or transfer may be made without
registration thereunder. Buyer agrees that the Units, the Shares and the
Warrants may bear a legend restricting the transfer thereof consistent
with the foregoing and that a notation may be made in the records of the
Company's transfer agent restricting the transfer of the Units in manner
consistent with the foregoing.
(e) Buyer, in electing to subscribe for the Units hereunder, has
relied upon an independent investigation made by it and its
representative, if any. Buyer has been given no oral or written
representations or assurances from the Company or any representation of
the Company other than as set forth in this Agreement or in a document
executed by a duly authorized representative of the Company making
reference to this Agreement.
3. REGISTRATION RIGHTS
The Company agrees to file and use reasonable efforts to make effective
a registration statement with the Securities and Exchange Commission (the "SEC")
(on Form S-3, its successor form, or any other form under the Securities Act of
1933 under which the Shares underlying the Units are eligible to be registered),
by January 31, 1997, covering the Shares underlying the Units, at the Company's
cost and expense (excluding the costs of legal counsel to the holders of the
Units). The Buyer shall furnish the Company with such information as the Company
may request in writing and as shall be required in connection with any
registration thereunder.
4. RESALES
Buyer acknowledges and agrees that the Securities may only be resold (a)
pursuant to a Registration Statement under the Act; or (b) pursuant to an
exemption from registration.
If Buyer desires to sell and distribute Shares pursuant to an effective
registration statement, then Buyer shall execute and deliver to the Company such
written undertakings as the Company and its Counsel may reasonably require in
order to assure full compliance with relevant provisions of the Securities Act
and the Exchange Act including, without limitation, providing the Company with
48 hours' prior written notice of each such sale and providing the Company with
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assurances, reasonably satisfactory to the Company, that Buyer will meet the
prospectus delivery requirements under the Security Act.
5. SUBSEQUENT TRANSFER OF SECURITIES
Once a registration statement has been filed and declared effective as
contemplated in Section 3 above, the Company agrees, and shall instruct its
transfer agent, that the Securities may be transferred to any person or entity
who is not an affiliate of the Company without (a) any further restriction on
transfer or (b) the entry of a "stop transfer" order against such Securities,
provided that the person(s) or entity(ies) requesting transfer furnish the
appropriate representations to the Company's legal counsel.
6. RELEASE OF PROCEEDS TO THE COMPANY
The proceeds of the offering shall be released to the Company upon the
Closing of this offering, as defined in Section 1 of this Agreement.
7. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts except for matter arising under the
Act or the Securities Exchange Act of 1934 which matters shall be construed and
interpreted in accordance with such laws.
8. NOTICES
All communications hereunder shall be in writing, and, if sent to the
Buyer shall be sufficient in all respects if delivered, sent by registered mail,
or by telecopy and confirmed to the Buyer at:
Name:
Address:
City:
Country:
Attention:
or, if sent to the Company, shall be delivered, sent by registered mail or by
telecopy and confirmed to the Company at:
Palomar Medical Technologies, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Director of Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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9. FEES AND EXPENSES
Each of the Buyer and the Seller agrees to pay its own expenses incident
on the performance of its obligations hereunder, including but not limited to,
the fees, expenses and disbursements of such party's counsel.
The undersigned acknowledges that this subscription shall not be
effective unless accepted by the Company as indicated below.
Dated this 19 day of December, 1996.
Finmanagement, Inc.
(Printed Name)
/s/
--------------------------------
Xxxxxx Xxxxx
(Signature)
(Mailing Address)
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 27 DAY OF December, 1996.
PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/
----------------------------------------
Printed Name/Title: Xxxxxx Xxxxxxxx
Chief Executive Officer
Chairman