UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number: 0-14961B
LUXTEC CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2741310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
326 Clark Street, Worcester, Massachusetts 01606
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code)
(508) 856-9454
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding for each of the issuer's classes of
Common Stock, as of the latest practicable date.
The number of shares outstanding of registrant's common stock, par value $.01
per share, at July 31, 1996, was 2,776,981.
<PAGE>
LUXTEC CORPORATION
TABLE OF CONTENTS
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
July 31, 1996 and October 31, 1995 3
Consolidated Condensed Statements of Operations -
Nine months ended July 31, 1996 and July 31, 1995 4
Consolidated Condensed Statements of Cash Flows -
Nine months ended July 31, 1996 and July 31, 1995 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
<TABLE>
<CAPTION>
LUXTEC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
July 31, October 31,
1996 1995
- ---------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 991 $ 11,721
Accounts receivable 1,652,428 1,534,267
Inventories 2,451,579 1,696,001
Prepaid expenses 124,588 82,738
- ---------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 4,229,586 3,324,727
- ---------------------------------------------------------------------------------------------------
PROPERTY & EQUIPMENT AT COST 2,190,312 1,910,189
ACCUMULATED DEPRECIATION (1,570,875) (1,409,960)
- ---------------------------------------------------------------------------------------------------
PROPERTY & EQUIPMENT - NET 619,437 500,229
- ---------------------------------------------------------------------------------------------------
OTHER ASSETS 318,397 297,087
- ---------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 5,167,420 $ 4,122,043
===================================================================================================
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ 1,713,522 $ 1,730,308
Accounts payable 917,549 1,553,869
Accrued expenses 396,859 639,969
- ---------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 3,027,930 3,924,146
- ---------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES:
Long term debt 159,448 0
Subordinated debt 1,000,000 0
- ---------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES 1,159,448 0
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 4,187,378 3,924,146
- ---------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value
Authorized 10,000,000 shares; Issued
and outstanding - 2,436,541 shares in
1995 and 2,776,981 in 1996 27,770 24,365
Additional paid-in capital 8,149,737 7,141,576
Accumulated deficit (7,197,465) (6,968,044)
- ---------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 980,042 197,897
- ---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,167,420 $ 4,122,043
===================================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
LUXTEC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
July 31, July 31, July 31, July 31,
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET REVENUES $ 2,432,179 $ 2,257,972 $ 6,653,494 $ 6,031,394
COST OF GOODS SOLD 1,379,072 1,182,500 3,632,840 3,133,217
- --------------------------------------------------------------------------------------------------------------------
GROSS PROFIT 1,053,107 1,075,472 3,020,654 2,898,177
- ---------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Selling and marketing 564,846 506,655 1,526,704 1,376,493
Research & development 171,776 145,341 486,734 495,725
General & administrative 416,005 359,419 1,087,347 1,024,254
- --------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 1,152,627 1,011,415 3,100,785 2,896,472
- ---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS (99,520) 64,057 (80,131) 1,705
OTHER EXPENSES, NET (57,854) (28,089) (149,290) (63,405)
- ---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (157,374) 35,968 (229,421) (61,700)
PROVISION FOR INCOME TAXES 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (157,374) $ 35,968 $ (229,421) $ (61,700)
=====================================================================================================================
NET INCOME (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE $ (0.06) $ 0.02 $ (0.08) $ (0.04)
=====================================================================================================================
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 2,776,981 1,502,242 2,773,927 1,494,377
=====================================================================================================================
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LUXTEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
July 31, July 31,
1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET INCOME (LOSS) $ (229,421) (61,700)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Depreciation and amortization 160,915 120,407
Provision for uncollectible accounts receivable 3,651 7,500
Changes in current assets and liabilities:
Accounts receivable (121,812) 1,986
Inventories (755,578) (446,005)
Prepaid expenses and other current assets (41,850) (198,054)
Accounts payable (636,321) 325,312
Accrued expenses (243,109) (223,530)
- ------------------------------------------------------------------------------------------------------------
NET CASH USED FOR OPERATING ACTIVITIES (1,863,525) (474,084)
- ------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (280,123) (83,413)
Change in other assets (21,310) (46,838)
- ------------------------------------------------------------------------------------------------------------
NET CASH USED FOR INVESTING ACTIVITIES (301,433) (130,251)
- ------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on revolving line of credit (16,786) 578,098
Net borrowings on long term debt 159,448 0
Net borrowings on subordinated debt 1,000,000 0
Private Placement Proceeds 994,665 0
Employee stock purchase plan 16,900 36,474
- ------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,154,227 614,572
- ------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS (10,731) 10,237
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,721 10,329
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 990 20,566
============================================================================================================
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
LUXTEC CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated condensed financial statements have been
prepared in conformity with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments necessary
for a fair presentation have been made which comprise only normal recurring
adjustments. Operating results for the nine months ended July 31, 1996, are not
necessarily indicative of the results that may be expected for the entire year.
2) Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first in, first out (FIFO) method and includes materials, labor and
manufacturing overhead. Inventories are as follows:
<TABLE>
<CAPTION>
July 31, 1996 October 31, 1995
---------------------------------------------------------------------------------------------
<S> <C> <C>
Raw material $ 1,778,487 $ 978,477
Work in process 234,821 203,833
Finished goods 438,271 513,691
------------------------------------------------------------------------------------------------
Total $ 2,451,579 $ 1,696,001
------------------------------------------------------------------------------------------------
</TABLE>
3) Revolving Line of Credit
The Company has a $2,500,000 revolving line of credit agreement with a
bank. Borrowings bear interest at the bank's prime rate (8.5% at July 31, 1996)
plus .25%. Unused portions of the revolving line of credit accrue a fee at an
annual rate of .25%. Borrowings are secured by substantially all assets of the
Company. The agreement contains covenants, including the maintenance of certain
financial ratios, as defined. The line of credit expires on March 31, 1997.
The Company has a $750,000 equipment facility agreement with a bank.
Borrowings are based on the purchase price of new equipment and conditions
determined by the bank. Borrowings bear interest at the bank's base rate plus
.5%. Borrowings under this facility are secured by substantially all assets of
the Company. The equipment facility agreement expires on March 31, 1997.
4) Private Placements
On December 18, 1995, the Company issued Senior Subordinated Notes (the
Notes) to an investor for $1,000,000 in cash. Interest accrues on the Notes at
the rate of 8% per annum and is payable annually in arrears. Principal on the
Notes is due January 1, 2001. In connection with the financing, the Company
issued a detachable stock warrant to the investor. The warrant entitles the
holder to purchase 450,000 shares of common stock at an exercise price of $3.00,
adjusted for certain dilutive events, as defined. In accordance with the terms
of the Note Purchase Agreement between the Company and the investor, the Company
is currently in the process of requiring the investor to exchange the Notes for
10,000 shares of Series A Preferred Stock of the Company.
During the third quarter of FY96, the Company authorized a private
placement of units comprised of one share of Luxtec common stock and one warrant
to purchase a share of Luxtec common stock at an exercise price of $6.00,
exercisable after six months for five years. Each unit was priced at $3.00 and
during the third quarter of FY96, the Company received $994,665 for 331,555
units. An additional 63,000 units were purchased by investors during August,
1996, for $189,000 bringing the total proceeds of the private placement to
$1,183,665 at the time that the investment was closed.
<PAGE>
LUXTEC CORPORATION
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements as a result of the risk factors set
forth below. The industry in which the Company competes is characterized by
rapid changes in technology and frequent new product introductions. The Company
believes that its long-term growth depends largely on its ability to continue to
enhance existing products and to introduce new products and features that meet
the continually changing requirements of its customers. While the Company has
invested heavily in new products and processes, there can be no assurance that
it can continue to introduce new products and features on a timely basis or that
certain of its products and processes will not be rendered noncompetitive or
obsolete by its competitors.
RESULTS OF OPERATIONS
Net revenues for the three months ended July 31, 1996 were $2,432,179 or
7.7% greater than the $2,257,972 reported for the same period in fiscal 1995.
For the nine months ended July 31, 1996 net revenues increased 10.3% to
$6,653,494 from $6,031,394 reported for the same period last year. The year to
date sales increase of 10.3% was primarily the result of higher sales in the
international and OEM markets for Luxtec products and the royalties recorded
during both the first and second quarter for the CardioDyne products.
Cost of sales for the three months ended July 31, 1996 were $1,379,072 or
56.7% of net revenues, compared with $1,182,500 or 52.4% for the same period in
fiscal 1995. For the nine month period ended July 31, 1996, cost of sales was
$3,632,840 or 54.6% of net revenues compared with $3,133,217 or 51.9% for the
same period in fiscal 1995. The increase in cost of sales as a percentage of net
revenues was primarily the result of a mix shift toward OEM business and startup
costs related to the new line of Luxtec products introduced during the later
part of the second quarter, with significant shipments beginning in the third
quarter of fiscal 1996.
Gross profit was $1,053,107 or 43.3% of net revenues for the quarter ended
July 31, 1996 compared to $1,075,472 or 47.6% for the same period in fiscal
1995. For the nine month period ended July 31, 1996 gross profit was $3,020,654
or 45.4% compared with $2,898,177 or 48.1% for the same period in fiscal 1995.
The Company has continued to face increased competition during the past quarter.
Overall margins as a percent of net revenue are lower primarily because of the
mix shift toward lower margin OEM business, partly brought about because of some
business interruption while an upgrade to the primary product line of the
Company was being developed. The Company introduced a line of redesigned
products at the end of the second quarter of fiscal 1996 that the Company
anticipates will help to maintain historical margin levels after absorbing the
startup costs relating to the improved products.
Selling and marketing expenses were $564,846 for the three months ended
July 31, 1996 compared to $506,655 for the same period in fiscal 1995, an
increase of 11.5%. For the nine month period ended July 31, 1996 selling and
marketing expenses were $1,526,704 compared with $1,376,493 for the same period
in fiscal 1995, an increase of 10.9%. Marketing activities related to the
CardioDyne motion tolerant blood pressure monitor introduction planned for the
last quarter of fiscal 1996, were primarily responsible for the increase in
selling and marketing expenses. The level of selling and marketing activities
associated with the CardioDyne product introduction are expected to continue to
increase throughout fiscal 1996.
<PAGE>
LUXTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 2. (Continued)
Research and development expenditures were $171,776 for the three months
ended July 31, 1996 compared to $145,341 for the same period in fiscal 1995, an
increase of 18.2%. For the nine month period ended July 31, 1996 research and
development expenditures were $486,734 compared with $495,725 for the same
period in fiscal 1995, a decrease of 1.8%. The third quarter increase resulted
from continuing work on future generations of the CardioDyne product line. The
decrease for the first nine months of fiscal 1996 is attributed to the
completion of the fiscal 1995 development of a new halogen light source product
line and the Mark II line of illuminated and standard telescopes. The Company
believes that the introduction of the fiscal 1996 new product plan and the
efforts related to the CardioDyne product lines will result in an increased rate
of spending for research and development during the remainder of fiscal 1996.
General and administrative expenses were $416,005 for the three months
ended July 31, 1996, compared to $359,419 for the same period in fiscal 1995,
representing an increase of 15.7%. For the nine months ended July 31, 1996
general and administrative expenses totaled $1,087,347 compared to $1,024,254
during the same period in fiscal 1995, an increase of 6.2%. The increase is
primarily the result of the costs attributable to the integration of the
operations of CardioDyne into the Company.
Interest and other expenses of $57,854 for the three months ended July 31,
1996 compared to $28,089 for the same period in fiscal 1995, an increase of
106%. For the nine months ended July 31, 1996 interest and other expenses were
$149,290 compared to $63,405 for the same period in fiscal 1995, an increase of
135%. The third quarter and nine month increases were the result of higher
revolving credit line balances and the issuance of Senior Subordinated Notes to
an investor for $1,000,000 in cash. Interest accrues on the Notes at the rate of
8% per annum.
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1996 the Company had working capital of $1,201,656 compared to
negative working capital of $599,419 at October 31, 1995. The major reason for
the change from negative working capital to positive working capital was the
completion of a private placement of $1,000,000 during the first quarter of
fiscal 1996 and the partial completion of a private placement of approximately
$1,200,000 during the third quarter of fiscal 1996.
During the Company's first fiscal quarter, the Company issued Senior
Subordinated Notes (the "Notes") to an investor for $1,000,000 in cash. Interest
accrues on the Notes at a rate of 8% per annum and is payable annually in
arrears. Principal on the Notes is due January 1, 2001. In accordance with the
terms of the Note Purchase Agreement between the Company and the investor, the
Company is currently in the process of requiring the investor to exchange the
Notes for 10,000 shares of Series A Preferred Stock of the Company (the "Series
A Stock"). Dividends on the Series A Stock are cumulative and accrue at the
annual rate of $8.00 per share, payable quarterly in arrears. The Company is
required to redeem the Series A Stock on January 1, 2001 for $100 per share.
Cash used by operating activities was primarily funded by the private
placement of $1,000,000 executed during the first quarter and the third quarter
private placement of approximately $1,000,000. At July 31, 1996 the Company had
used $159,448 from a $750,000 equipment facility agreement with a bank and had
used $1,713,522 from a $2,500,000 revolving credit line.
The Company anticipates that its current cash requirements will be
satisfied by cash flow from existing operations, the continuation of its
revolving credit arrangement with a bank, and the additional private placement
begun during the third quarter and completed during August, 1996.
<PAGE>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings
The Company was the defendant in a suit brought by Republic Lens
Corporation ("Republic") of New Jersey. The suit, filed on September 29, 1995,
in United States District Court, District of New Jersey alleged that the Company
breached a contract with Republic in which the Company was obliged to use
Republic as its sole supplier of components to be used in the development and
sale of a product that would result from a patent assigned to the Company by
Republic. Republic was seeking damages of $2,000,000 together with attorneys'
fees and rescission of the contract. The suit was settled for the return of the
rights to the patent to Republic in return for a release from liability from
Republic.
ITEM 5. Other Information
When used in this Form 10-Q and in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases and in oral
statements made with the approval of an authorized executive officer, the words
or phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project", or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties, including those discussed under the caption "Risk
Factors and Cautionary Statements" below, that could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed below could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The Company will NOT undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
Risk Factors and Cautionary Statements
The Company's revenues and income are derived primarily from the sale of
medical devices. The medical device industry is highly competitive. Such
competition could negatively impact the Company's market share and therefore
reduce the Company's revenues and income.
Another result of competition could be the reduction of average unit
prices paid for the Company's products. This could have the impact of reducing
the percentage of profit margin available to the Company for its product sales.
<PAGE>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 5. (Continued)
Factors That May Affect Future Results
From time to time, information provided by the Company or statements made
by its employees may contain "forward-looking" information, as that term is
defined in the Private Securities Litigation Reform Act of 1995 (the "Act"). The
Company cautions investors that there can be no assurance that actual results or
business conditions will not differ materially from those projected or suggested
in such forward-looking statements as a result of various factors, including but
not limited to the following:
The Company's future operating results are dependent on its ability
to develop, produce and market new and innovative products and services. There
are numerous risks inherent in this complex process, including rapid
technological change and the requirement that the Company bring to market in a
timely fashion new products and services that meet customers' needs.
Historically, the Company's operating results have varied from
fiscal period to fiscal period; accordingly, the Company's financial results in
any particular fiscal period are not necessarily indicative of results for
future periods.
The Company offers a broad variety of products and services to
customers around the world. Changes in the mix of products and services
comprising revenues could cause actual operating results to vary from those
expected.
The Company's success is partly dependent on its ability to
successfully predict and adjust production capacity to meet demand, which is
partly dependent upon the ability of external suppliers to deliver components at
reasonable prices and in a timely manner; capacity or supply constraints, as
well as purchase commitments, could adversely affect future operating results.
The Company operates in a highly competitive environment and in a
highly competitive industry, which includes significant competitive pricing
pressures and intense competition for skilled employees.
The Company offers its products and services directly and through
indirect distribution channels. Changes in the financial condition of, or the
Company's relationship with, distributors and other indirect channel partners,
could cause actual operating results to vary from those expected.
The Company does business worldwide in over 50 countries. Global
and/or regional economic factors and potential changes in laws and regulations
affecting the Company's business, including without limitation, currency
exchange rate fluctuations, changes in monetary policy and tariffs, and federal,
state and international laws regulating the environment, could impact the
Company's financial condition or future results of operations.
The market price of the Company's securities could be subject to
fluctuations in response to quarter to quarter variations in operating results,
market conditions in the medical device industry, as well as general economic
conditions and other factors external to the Company.
<PAGE>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 6. Exhibits and reports on Form 8-K
<TABLE>
<CAPTION>
(a) Exhibits
<S> <C> <C>
3G.* Amendment dated September __, 1996 to Articles of Organization
3H.* Certificate of Vote of Directors Establishing a Series of a Class of Stock
4B.* Note Purchase Agreement dated as of December 18, 1995, by and between the
Company and Geneva Middle Market Investors, L.P. (`GMMI')
4C.* 8% Senior Subordinated Note due June 1, 2001, dated
December 18, 1995 in the principal amount of $1,000,000,
made by the Company in favor of GMMI
4D.* Rights Agreement made as of December 18, 1995, between the Company and GMMI
4E. Registration Rights Agreement made as of June __, 1996, between the Company and
the Purchasers (as defined therein)
10R.* Warrant Agreement made as of December 18, 1995, between the Company and GMMI
10S.* Warrant for 450,000 shares of Common Stock of the Company dated as of December
18, 1995, in the name of GMMI
10T. Form of Subscription Agreement and Letter of Investment Intent between the
Purchaser named therein and the Company
10U. Warrant Agreement made as of June __, 1996, between the Company and the
Purchasers (as defined therein)
10V. Form of Warrant
27. Financial Data Schedule
* Previously filed a exhibits to the Company's Proxy Statement dated
June 21, 1996 and incorporated by reference herein.
(b) Reports on Form 8-K
None.
</TABLE>
<PAGE>
LUXTEC CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LUXTEC CORPORATION
(Registrant)
----------------- --------------------------
Date Samuel M. Stein
Chief Financial Officer
(Principal Accounting Officer and Duly
Authorized Executive Officer)
<PAGE>
LUXTEC CORPORATION
TABLE OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Page Number
<S> <C>
3G.* Amendment dated September __, 1996 to Articles of Organization..........................
3H.* Certificate of Vote of Directors Establishing a Series of a Class of Stock..............
4B.* Note Purchase Agreement dated as of December 18, 1995, by and between the Company
and Geneva Middle Market Investors, L.P. (`GMMI').......................................
4C.* 8% Senior Subordinated Note due June 1, 2001, dated December 18, 1995 in the principal
amount of $1,000,000, made by the Company in favor of GMMI................................
4D.* Rights Agreement made as of December 18, 1995, between the Company and GMMI..............
4E. Registration Rights Agreement made as of June __, 1996, between the Company
and the Purchasers (as defined therein)...................................................14
10R.* Warrant Agreement made as of December 18, 1995, between the Company and GMMI..............
10S.* Warrant for 450,000 shares of Common Stock of the Company dated as of December 18,
1995, in the name of GMMI.................................................................
10T. Form of Subscription Agreement and Letter of Investment Intent between
the Purchaser named therein and the Company...............................................23
10U. Warrant Agreement made as of June __, 1996, between the Company and
the Purchasers (as define therein)........................................................29
10V. Form of Warrant...........................................................................50
27. Financial Data Schedule...................................................................xx
</TABLE>
* Previously filed a exhibits to the Company's Proxy Statement dated
June 21, 1996 and incorporated by reference herein.
<PAGE>
Exhibit 4E
LUXTEC CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of June ___, 1996, between Luxtec
Corporation, a Massachusetts corporation ("Luxtec" or the "Company") and the
Persons identified on the signature pages hereto (each a "Purchaser" and
collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, Luxtec is offering to sell to prospective investors, in a
private placement (the "Private Placement"), up to 333,334 units (the "Units"),
with each Unit consisting of one (1) share of common stock, $0.01 par value per
share (the "Common Stock"), and one Common Stock Purchase Warrant (the
"Warrants") for the purchase of one (1) share of Common Stock, of Luxtec, upon
the terms and conditions described in the Company's private placement memorandum
relating to the Private Placement and dated May 29, 1996 (the "Private Placement
Memorandum");
WHEREAS, in order to induce the Purchasers to purchase the Units in the
Private Placement, the Company has agreed to provide certain registration rights
to the Purchasers upon the terms and conditions set forth in this Agreement.
WHEREAS, certain terms used in this Agreement are defined in ss.7, and
capitalized terms not otherwise defined in this Agreement have the meanings
given therefor in the Private Placement Memorandum.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Demand Registration.
(a) Subject to the limitations set forth in this ss.1(a) and
ss.ss.1(b), (c) and (d) below, any time beginning on the first anniversary of
the Closing Date, and ending on October 31, 2001, subject, however, to the
provisions of ss.8(b) herein, the Required Stockholders may notify Luxtec in
writing that such Required Stockholders desire for Luxtec to cause all or a
portion of such Required Stockholders' Registrable Securities to be registered
for sale to the public pursuant to a registration statement on Form S-3 (or
comparable or successor form) under the Securities Act, which shall, if so
elected by the Required Stockholders, be a "shelf registration" made pursuant to
Rule 415 adopted pursuant to the Securities Act; provided however, that if
Luxtec becomes ineligible to file registration statements on Form S-3 solely
because Luxtec fails to timely make its required filings pursuant to the
Exchange Act, the filing of the foregoing registration statement may be on Form
S-1 (or comparable or successor form) under the Securities Act, but in no case
whatsoever, shall the Required Stockholders be permitted to elect, nor shall
Luxtec be obligated to cause, such Form S-1 registration statement to be a
"shelf registration" pursuant to Rule 415 adopted pursuant to the Securities Act
except under the circumstances described in ss.1(c) below. Notwithstanding the
foregoing, the Required Stockholders shall not be entitled to request that
Luxtec register Registrable Securities for sale to the public at any time within
one hundred twenty (120) days after the effective date of a registration
statement filed by Luxtec with respect to which the Stockholders were given the
opportunity to include Registrable Securities (whether or not all Registrable
Securities requested to be included were actually included) pursuant to ss.2
herein. Upon receipt of such written request by the Required Stockholders,
Luxtec shall promptly notify in writing all other Stockholders of such request,
and such other Stockholders shall have a period of ten (10) Business Days
following such notice from Luxtec to notify Luxtec in writing whether such other
Stockholders, or any of them, desire to have Registrable Securities held by them
registered for sale to the public under the Securities Act. Thereafter, subject
to the conditions, limitations and provisions set forth below in this ss.1(a)
and in ss.ss.1(b), (c) and (d) hereof, Luxtec shall, promptly following the
expiration of such ten (10) Business Day period, prepare and file, and use its
best efforts to prosecute to effectiveness, an appropriate filing with the SEC
of a registration statement covering all of those Registrable Securities of the
Required Stockholders and of such other Stockholders with respect to which
registration under the Securities Act has been requested pursuant to this
ss.1(a). Notwithstanding anything to the contrary contained in this ss.1(a),
Luxtec shall have no obligation of any kind whatsoever under this ss.1(a) with
respect to any request to register Registrable Securities under the Securities
Act unless the number of Registrable Securities requested to be registered for
sale to the public under the Securities Act by the selling Stockholders (net of
Registrable Securities that have been withdrawn from registration pursuant to
the last two sentences of ss.1(c) below) represents at least thirty-three
percent (33%) of the total number of Registrable Securities held by
Stockholders.
<PAGE>
(b) Notwithstanding anything to the contrary contained in ss.1(a)
above, Luxtec shall not be obligated to prepare or file any registration
statement pursuant to ss.1(a) hereof, or to prepare or file any amendment or
supplement thereto, at any time when Luxtec in the good faith judgment of its
Board of Directors, reasonably believes that the filing thereof at the time
requested, or the offering of Registrable Securities pursuant thereto, (a) would
materially adversely affect a pending or proposed public offering of Luxtec
Common Stock, or an acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction, or any negotiations, discussions or
pending proposals with respect thereto or (b) would materially adversely affect
the business of Luxtec in view of the disclosures that may be required thereby
of information about the business, assets, liabilities or operations of Luxtec
not theretofore disclosed; provided, however, that the filing of a registration
statement, or any supplement or amendment thereto, by Luxtec may be deferred
pursuant to this ss.1(b) only for the minimum period of time necessary under the
circumstances and in no event for more than an aggregate of one hundred twenty
(120) calendar days within any period of twelve (12) consecutive months.
(c) Luxtec shall be entitled to include in any registration statement
filed or to be filed by Luxtec pursuant to ss.1(a) above shares of Luxtec Common
Stock to be sold by Luxtec for its own account, but if this causes the
registration statement to be required to be on a Form S-1 (or comparable or
successor form) then such Form S-1 may be a "shelf" registration under Rule 415
notwithstanding anything to the contrary in ss.1(a). If any offering pursuant to
ss.1(a) above shall be in the form of an underwritten offering, and the managing
underwriter or underwriters of such offering, in good faith, advise Luxtec and
the selling Stockholders in writing that in its or their opinion the aggregate
amount of shares of Luxtec Common Stock requested to be included in such
offering (including the Registrable Securities, any shares of Luxtec Common
Stock to be offered for the account of Luxtec and any shares of Luxtec Common
Stock to be offered for the account of any other security holders of Luxtec)
would materially adversely affect the success of such offering or the price of
the shares of Luxtec Common Stock to be offered, then Luxtec shall reduce the
number of shares of Luxtec Common Stock to be included in such offering to the
amount of Luxtec Common Stock which the managing underwriter or underwriters
have advised can be sold in such offering, said reduction to be effected in the
following order: (x) first, any or all shares of Luxtec Common Stock requested
to be included in such offering by such other security holders of Luxtec, pro
rata among such other stockholders in proportion to the number of shares of
Luxtec Common Stock sought to be registered by such other security holders, (y)
second, any or all shares of Luxtec Common Stock to be sold by Luxtec pursuant
to such offering, and (z) third, any or all Registrable Securities requested to
be included in such offering by the selling Stockholders, pro rata among the
selling Stockholders in proportion to the respective number of Registrable
Securities sought to be registered by the selling Stockholders. The Stockholders
proposing to distribute Registrable Securities through such underwriting shall
enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting. If any selling Stockholder
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to Luxtec and the managing underwriter or
underwriters. The Registrable Securities so withdrawn shall also be withdrawn
from registration.
(d) Notwithstanding anything in this ss.1 to the contrary, Luxtec shall
not be required to consummate more than one (1) offering of Registrable
Securities pursuant to ss.1(a) above.
<PAGE>
2. Piggyback Registrations.
(a) If at any time from and after the first anniversary of the Closing
Date, subject, however, to the provisions of ss.8(b) herein, Luxtec proposes to
file a registration statement under the Securities Act covering a proposed sale
of its Luxtec Common Stock, whether for its own account or for the account of
any other security holder or both (other than a registration statement on Form
S-4 or S-8, or any form substituting therefor for shares of Luxtec Common Stock
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of Luxtec pursuant to any employee benefit plan,
respectively, and other than a registration statement filed in connection with
an offering effected pursuant to ss.1(a) hereof), Luxtec shall give each
Stockholder written notice of such proposed filing at least 20 Business Days
prior to the anticipated filing date, and such notice shall offer each such
Stockholder the opportunity to register such number of Registrable Securities as
they may request, which request must be delivered to Luxtec in writing within
ten (10) Business Days after the notice given by Luxtec. Luxtec shall use its
best efforts to cause the Registrable Securities as to which registration shall
have been so requested by the requesting Stockholders to be included among the
shares of Luxtec Common Stock to be covered by the registration statement
proposed to be filed by Luxtec pursuant to this ss.2. In the event that any such
registration statement shall be, in whole or in part, an underwritten public
offering, Luxtec shall use its best efforts to cause the managing underwriter or
underwriters to include such Registrable Securities as to which registration
shall have been so requested by the requesting Stockholders, all upon the same
terms and conditions as the other shares of Luxtec Common Stock included
therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering, in good faith, determine that the total number of
shares of Luxtec Common Stock which the requesting Stockholders, Luxtec and any
other security holders of Luxtec intend to include in such offering would
materially adversely affect the success of such offering or the price of the
shares of Luxtec Common Stock to be offered, then Luxtec shall reduce the number
of shares of Luxtec Common Stock to be included in such offering to the number
of shares of Luxtec Common Stock which the managing underwriter or underwriters
shall have advised can be sold in such offering, said reduction to be effected
in the following order: (x) first, any or all shares of Luxtec Common Stock
requested to be included in such offering by the Stockholders and any other
security holders of Luxtec (other than security holders exercising demand
registration rights), pro rata among the Stockholders and such other security
holders in proportion to their respective number of shares of Luxtec Common
Stock sought to be registered pursuant to such offering, (y) second, any or all
shares of Luxtec Common Stock proposed to be sold by Luxtec pursuant to such
offering and (z) any or all shares of Luxtec Common Stock requested to be
included in such offering by security holders of Luxtec exercising demand
registration rights, pro rata among such security holders in proportion to the
number of shares of Luxtec Common Stock sought to be registered by each and in
accordance with their respective priorities. In the event that the contemplated
registration does not involve an underwritten public offering, the determination
that the inclusion of any Registrable Securities requested to be included in
such registration by the requesting Stockholders would have a material adverse
effect on the success of such offering or the price of the shares of Luxtec
Common Stock to be offered shall be made in the good faith reasonable judgment
of Luxtec's Board of Directors.
(b) Notwithstanding anything in this ss.2 to the contrary, Luxtec shall
not be required to consummate more than an aggregate of three (3) offerings of
Registrable Securities pursuant to ss.2(a) above.
3. Further Obligations of Luxtec. Whenever Luxtec is required to
register Registrable Securities under this Agreement, it agrees that it shall
also do the following:
(a) prepare and file with the SEC a registration statement on Form S-3
or Form S-1 as the case may be for registrations pursuant to ss.1(a) with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective for a period of time
required for the disposition of such Registrable Securities by the Stockholders
thereof, provided, however, that in the event of a shelf registration such
period shall not be longer than the third anniversary of the effective date of
such registration statement, and provided further that in the case of other
registrations such period shall not be longer than one hundred eighty (180) days
from the effective date of such registration statement, unless, in either such
case, Luxtec otherwise agrees in its sole discretion;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective;
<PAGE>
(c) furnish to each Stockholder offering Registrable Securities under
such registration statement such number of copies of a summary prospectus or
other prospectus, including a preliminary prospectus complying with the
requirements of the Securities Act, as such Stockholder may reasonably request;
and
(d) register or qualify the Registrable Securities covered by such
registration statement under the securities or blue sky laws of such
jurisdictions within the United States and Puerto Rico as the underwriter or
manager shall request or in the event that the registration does not involve an
underwritten public offering as each such Stockholder shall reasonably request;
provided that Luxtec shall not be obligated to register or qualify such
Registrable Securities in any jurisdiction in which such registration or
qualification would require Luxtec to qualify as a foreign corporation or file
any general consent to service of process where it is not then so qualified or
otherwise required to be qualified or has not theretofore so consented.
4. Holdback Agreements. If any registration of any Luxtec Common Stock
shall be made by Luxtec with the SEC in connection with an underwritten public
offering of such Luxtec Common Stock, each such Stockholder agrees (and shall
enter into an agreement which shall so state), if requested by the managing
underwriter or underwriters, not to effect any public sale or distribution,
including a sale pursuant to Rule 144 under the Securities Act, of any shares of
Luxtec Common Stock or any other equity security of Luxtec or of any security
convertible into or exchangeable or exercisable for Luxtec Common Stock or any
such other equity security of Luxtec (in each case, other than as part of such
underwritten public offering) within ten days before or three hundred sixty-five
(365) days after the effective date of the registration statement filed in
connection with such underwritten offering, provided, however, that all 5%
stockholders of Luxtec and the then-serving officers and directors of Luxtec who
are not also Stockholders shall so agree for a like period.
5. Expenses; Limitations on Registration.
(a) All expenses incurred in complying with this Agreement, including,
without limitation, all registration and filing fees (including all expenses
incident to filing with the AMEX), printing expenses, fees and disbursements of
counsel for Luxtec, expenses of any special audits incident to or required by
any such registration and expenses of complying with the securities or blue sky
laws of any jurisdictions pursuant to ss.3(d) hereof, shall be paid by Luxtec,
except that Luxtec shall not be liable for any fees, discounts or commissions to
any underwriter or any fees or disbursements of counsel for any underwriter or
any Stockholder (other than up to $10,000 for one firm of attorneys to represent
all selling Stockholders in connection with each registration statement
hereunder) in respect of the Registrable Securities sold by any selling
Stockholders.
(b) It shall be a condition precedent to the obligation of Luxtec to
take any action pursuant to this Agreement in respect of the Registrable
Securities which are to be registered at the request of any Stockholder that
such Stockholder shall furnish to Luxtec or the underwriters such information
regarding the Stockholder and the Registrable Securities held by such
Stockholder as Luxtec or the underwriters shall reasonably request and shall be
required in connection with the action taken by Luxtec.
<PAGE>
6. Indemnification and Contribution.
(a) Indemnification by Luxtec. In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Agreement,
Luxtec shall indemnify and hold harmless each Stockholder of such Registrable
Securities, such Stockholder's directors, officers, employees and agents, each
underwriter who participated in the offering of such Registrable Securities and
each other Person, if any, who controls such Stockholder or such underwriter
within the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Stockholder or any such
director, officer, employee or agent or underwriter or controlling Person may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse such Stockholder or such director, officer, employee or agent or
underwriter or controlling Person for any legal or any other expenses reasonably
incurred by such Stockholder or such director, officer, employee or agent or
underwriter or controlling Person in connection with investigating or defending,
settling or satisfying any such loss, claim, damage, liability, expense or
action; provided, however, that Luxtec shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense arises out of
or is based upon any untrue statement or alleged untrue statement or any
omission or alleged omission made in such registration statement, preliminary
prospectus, or amendment or supplement in reliance upon and in conformity with
written information furnished to Luxtec by such Stockholder specifically for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Stockholder or such director,
officer, employee or agent or underwriter or controlling Person, and shall
survive the transfer of such Registrable Securities by such Stockholder.
(b) Stockholders' Indemnification. In connection with any registration
statement in which a Stockholder is participating, each such Stockholder will
furnish to Luxtec in writing such information as shall reasonably be requested
by Luxtec for use in any such registration statement or prospectus and shall
severally and not jointly indemnify, to the extent permitted by law, Luxtec, its
directors, officers, employees and agents, each underwriter and each Person, if
any, who controls Luxtec or such underwriter within the meaning of the
Securities Act (collectively, the "Indemnitees"), against any losses, claims,
damages, liabilities and expenses (under the Securities Act, at common law or
otherwise) caused by or resulting from any untrue statement or alleged untrue
statement of a material fact contained in any registration statement filed by
Luxtec under the Securities Act, or any prospectus or preliminary prospectus
included therein (in each case as amended or supplemented), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement of a material fact is contained
in, or such material fact is omitted from, information furnished in writing by
such Stockholder for use therein, and such Stockholder shall reimburse the
Indemnitees for any legal and any other expenses reasonably incurred in
connection with investigating or defending, settling or satisfying any such
loss, claim, damage, liability or expense; provided, however, that the
obligations of such Stockholders hereunder shall be limited to an amount equal
to the proceeds to each Stockholder or Registrable Securities sold in connection
with such registration.
(c) Contribution. If the indemnification provided for in this ss.6 from
the indemnifying party (which term shall, for purposes of this ss.6, include all
indemnifying parties if there be more than one) is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party under this ss.6(c) as
a result of the losses claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
<PAGE>
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this ss.6(c) were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of ss.11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each of the
Stockholders under this ss.6(c) to contribute shall be several and not joint.
(d) Indemnification Procedures. Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this ss.6(d) for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof; provided, however,
that, if the counsel selected by the Indemnifying Parties concludes that such
counsel has a conflict of interest due to the existence of conflicting or
different defenses available to the Indemnifying Parties and the Indemnified
Parties with respect to such action, suit or proceeding, the reasonable fees and
expenses of one firm of separate counsel for all Indemnified Parties shall be
paid by the Indemnifying Parties.
7. Definitions.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which the commercial banks in Boston, Massachusetts are required or
authorized to be closed.
"Closing Date" shall mean, with respect to any Purchaser, the date on
which the Company and such Purchaser shall have entered into a Subscription
Agreement.
"AMEX" shall mean the American Stock Exchange, or any successor entity
thereto.
"Indemnitees" shall have the meaning set forth in ss.6(b) hereof.
"Person" shall mean and include any individual, partnership, joint
venture, corporation, limited liability company, trust, government or any
department or agency thereof, and any other form of business organization
(whether or not a legal entity).
"Registrable Securities" shall mean (i) the shares of Common Stock
issued in connection with the sale of the Units, and (ii) the shares of Common
Stock that may be or that have been issued upon the exercise of the Warrants,
and any other shares of capital stock issued or issuable in exchange or
substitution therefor.
"Required Stockholders" shall mean, at the relevant time of reference
thereto, those Stockholders holding, in the aggregate, a majority of the
Registrable Securities then held by all Stockholders.
"Stockholder" shall mean, at the relevant time of reference thereto,
any Person holding Registrable Securities.
"Subscription Agreement" shall mean, with respect to any Purchaser, the
Subscription Agreement and Letter of Investment Intent, by and between the
Company and such Purchaser, pursuant to which such Purchaser originally
purchased the Units.
8. Miscellaneous.
(a) Benefits: Assignment. The provisions of this Agreement shall inure
to the benefit of and be binding upon each Stockholder and its, his or her heirs
and successors. Whether or not any express assignment has been made by any
Stockholder of such Stockholder's rights under this Agreement, the provisions of
this Agreement that are for the benefit of such Stockholder are also for the
benefit of all transferees who acquire Registrable Securities from such
Stockholder, and the applicable provisions of this Agreement that bind such
Stockholder shall bind all transferees who acquire Registrable Securities from
such Stockholder, provided, however, that such transferee acquires at least
fifteen percent (15%) of the amount of Registrable Securities initially issued
to such Stockholder pursuant to the Subscription Agreement and provided, further
that such transferee executes and delivers to Luxtec a counterpart signature
page to this Agreement in the form attached to this Agreement.
<PAGE>
(b) Termination of Registration Rights; Securities. Notwithstanding
anything in this Agreement to the contrary, the registration rights provided to
the Stockholders (and their qualified transferees pursuant to ss.8(a) above)
pursuant to this Agreement shall terminate and be of no further force or effect
(i) as to particular Registrable Securities, when such Registrable Securities
may be publicly sold without restriction under Rule 144 under the Securities
Act, or (ii) as to any particular Stockholder and/or a qualified transferee
pursuant to ss.8(a) above, at such time as (and only so long as) such
Stockholder, and/or such qualified transferee pursuant to ss.8(a) above, holds
of record (or if it has not fully exercised its Warrants, holds of record and
has Warrants then exercisable for) less than fifteen percent (15%) of the
aggregate amount of Registrable Securities issued (or issuable) to such
Stockholder pursuant to the Units.
(c) No Inconsistent Agreements. Luxtec shall not hereafter enter
into any agreement with respect to its securities or amend its charter in any
manner which is inconsistent with or violates the rights granted to the
Stockholders.
(d) Amendments and Waivers. This Agreement may not be amended, and
Luxtec may not take any action herein prohibited, or omit to perform any act
herein required to be performed by it, without the written consent of the
Required Stockholders. Each Stockholder shall be bound by any consent so
authorized by this ss.8(d). No course of dealing between Luxtec and any
Stockholder nor any delay in exercising any rights under this Agreement shall
operate as a waiver of any rights of any Stockholder.
(e) Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction because of
the conflicting of any provision with any constitution or statute or rule of
public policy or for any other reason, such circumstance shall not have the
effect of rendering the provision or provisions in question invalid,
inoperative, illegal or unenforceable in any other jurisdiction or in any other
case or circumstance or of rendering any other provision or provisions herein
contained invalid, inoperative, illegal or unenforceable to the extent that such
other provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Agreement shall be reformed and
construed in any such jurisdiction or case as if such invalid, inoperative,
illegal or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.
(g) Descriptive Headings. The descriptive headings of the Sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(h) Notices. All notices and other written communications provided for
hereunder shall be given in writing and sent by overnight delivery service (with
charges prepaid) or by facsimile transmission with the original of such
transmission being sent by overnight delivery service (with charges prepaid) by
the next succeeding Business Day and (i) if to a Stockholder addressed to such
Stockholder at such address or fax number as is specified for such Stockholder
in the stock records of Luxtec; and (ii) if to Luxtec, addressed to it at 326
Clark Street, Worcester, Massachusetts 01606-1214, Attention: Chief Executive
Officer, Fax No. 508-856-9462 or at such other address or fax number as Luxtec
shall have specified to each Stockholder in writing given in accordance with
this ss.8(h). Notice given in accordance with this ss.8(h) shall be effective
upon the earlier of the date of delivery or the second Business Day at the place
of delivery after dispatch.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first written above.
LUXTEC CORPORATION
By:
Name:
Title:
<PAGE>
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of June __, 1996, by and among Luxtec Corporation, a Delaware
corporation (the "Company"), and the Purchaser parties thereto, as amended and
in effect from time to time (the "Registration Rights Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a Purchaser party to the Registration Rights
Agreement. This Signature Page shall take effect and shall become a part of the
Registration Rights Agreement immediately upon execution by the undersigned and
the Company.
Executed under seal as of the date set forth below under the laws of
the Commonwealth of Massachusetts.
Signature:
Name:
Accepted:
LUXTEC CORPORATION
By:
Name:
Title:
Date:
<PAGE>
Exhibit 10T
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING: SIGNIFICANT REPRESENTATIONS
ARE CALLED FOR HEREIN. THE INTRODUCTORY PARAGRAPH AND PARAGRAPH 4 REQUIRE
COMPLETION.
SUBSCRIPTION AGREEMENT
AND
LETTER OF INVESTMENT INTENT
Luxtec Corporation
326 Clark Street
Worcester, MA 01606-1214
Ladies and Gentlemen:
The undersigned hereby tenders this subscription and desires to
purchase __________ Units (the "Units"), with each Unit consisting of one (1)
share of common stock, $0.01 par value per share (the "Common Stock"), and one
Common Stock Purchase Warrant (the "Warrants") for the purchase of one (1) share
of Common Stock, of Luxtec Corporation, a Massachusetts corporation ("Luxtec" or
the "Company"), at a per Unit price of $3.00. In consideration therefor, the
undersigned agrees to deliver to the Company, by wire transfer or a check
representing immediately available funds, the amount of $___________. The
undersigned understands that the Company has the right to reject all or any part
of this subscription for any reason and that, in the event of such rejection,
the Company will promptly return the amount of funds delivered herewith
corresponding to the rejected portion of this subscription. By execution below,
the undersigned acknowledges that the Company is relying upon the accuracy and
completeness of the representations contained herein in complying with its
obligations under applicable securities laws.
1. General Representations: The undersigned acknowledges and
represents as follows:
(a) The undersigned has received, carefully reviewed and is
familiar with the Confidential Private Placement Memorandum of the
Company dated May 29, 1996, and all materials incorporated by reference
therein or delivered therewith (the "Memorandum");
(b) The undersigned is in a financial position to hold and
bear the economic risk of the investment in the Units;
(c) The undersigned believes that he or she, either alone or
with his or her purchaser representative, or it has such knowledge and
experience in financial and business matters that he, she or it is
capable of reading and interpreting financial statements and evaluating
the merits and risks of the prospective investment in the Units and has
the net worth to undertake such risks. If the undersigned has
designated a purchaser representative, the undersigned acknowledges
that the undersigned has discussed the investment fully with such
purchaser representative and has had all inquiries answered to the
undersigned's satisfaction;
(d) The undersigned has obtained, to the extent he, she or it
deems necessary, his, her or its own personal professional advice with
respect to the risks inherent in an investment in the Units, and the
suitability of the investment in the Units in light of his, her or its
financial condition and investment needs;
<PAGE>
(e) The undersigned believes that an investment in the Units
is suitable for him, her or it based upon his, her or its investment
objectives and financial needs, and the undersigned has adequate means
for providing for his, her or its current financial needs and personal
contingencies and has no need for liquidity of investment with respect
to the Units;
(f) The undersigned has been given access to full and complete
information regarding the Company and has utilized such access to his,
her or its satisfaction for the purpose of obtaining information on the
Company; and, particularly, the undersigned has been given a reasonable
opportunity to meet with representatives of the Company for the purpose
of asking questions of, and receiving answers from, such
representatives concerning the terms and conditions of the offering of
the Units and to obtain any additional information, necessary to verify
the accuracy of the information provided in the Memorandum;
(g) The undersigned recognizes that the Units as an investment
involve a high degree of risk including, but not limited to, the risks
described in the Memorandum under the heading "Risk Factors";
(h) The undersigned realizes that (i) the purchase of the
Units is a long-term investment, (ii) the purchaser of the Units must
bear the economic risk of the investment for an indefinite period of
time because the Units have not been registered under the Securities
Act of 1933, as amended (the "Act"), or applicable state laws and,
therefore, cannot be sold unless subsequently registered under the Act
and such laws or any exemptions from such registration are available,
(iii) the undersigned may not be able to liquidate his or her
investment in the event of an emergency or pledge the Units as
collateral security for loans, and (iv) the transferability of the
Units is restricted and requires conformity with the restrictions
contained in paragraph 2 below.
2. No Securities Law Registration. The undersigned has been advised
that the Units have not been registered under the Act or the relevant state
securities laws but are being offered and sold pursuant to exemptions from such
laws and that the Company's reliance upon such exemptions is predicated in part
on the undersigned's representations to the Company as contained herein. The
undersigned represents and warrants that the Units are being purchased for his,
her or its own account and for investment and without the intention of reselling
or redistributing the same, that he, she or it has made no agreement with others
regarding any of such Units and that his, her or its financial condition is such
that it is not likely that it will be necessary to dispose of the Units in the
foreseeable future. The undersigned is aware that, in the view of the Securities
and Exchange Commission, a purchase of Units with an intent to resell by reason
of any foreseeable specific contingency or anticipated change in market values,
or any change in the condition of the Company, or in connection with a
contemplated liquidation of settlement of any loan obtained for the acquisition
of the Units and for which the Units were pledged as security, would represent
an intent inconsistent with the representations set forth above. The undersigned
further represents and agrees that if, contrary to his, her or its foregoing
intentions, he, she or it should later desire to dispose of or transfer the
Units in any manner, he or she shall not do so without first obtaining (i) the
opinion of counsel satisfactory to the Company that such proposed disposition or
transfer lawfully may be made without the registration of such securities
pursuant to the Act, and applicable state securities laws or (ii) the
registration of the Units.
3. Lock-Up. The undersigned recognizes that it is in the best financial
interest of the Company and the undersigned, as a stockholder, director and/or
officer of the Company that the undersigned agree not to sell any Units for a
period commencing on the date hereof, until and including the first anniversary
of such date. The undersigned further recognizes that the undersigned Units are,
or may be, subject to certain restrictions on their transferability, including
those imposed by the Company and the federal securities laws. Notwithstanding
these restrictions, the undersigned hereby acknowledges and agrees that, except
in connection with a transaction providing for the sale of all or substantially
all of the assets or stock of the Company, the undersigned will not, directly or
indirectly, without the prior written consent of the Company, sell, offer,
contract to sell, make any short sale, pledge, grant any option to purchase or
otherwise dispose of (i) any of the Units subscribed for herewith, (ii) any of
the shares of Common Stock that are a component of such Units, (iii) any of the
Warrants that are a component of such Units, or (iv) any of the shares of Common
Stock issuable upon exercise of such Warrants, for a period commencing on the
date hereof, until and including the first anniversary of such date.
<PAGE>
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any Units, or components thereof, either during his or her
lifetime or on death (i) by gift, will or intestacy or (ii) to his or her
immediate family or to a trust the beneficiaries of which are exclusively the
undersigned and/or a member or members of his or her immediate family; provided,
however, that prior to any such transfer each transferee shall execute an
agreement, satisfactory to the Company, pursuant to which each transferee shall
agree to receive and hold such Units, or components thereof, subject to the
provisions hereof, and there shall be no further transfer except in accordance
with the provisions hereof. For the purposes of this paragraph, "immediate
family" shall mean spouse, lineal descendant, father, mother, brother, sister,
niece or nephew of the transferor.
4. Accredited or Qualified Investor Questionnaire and Representations.
The undersigned represents and warrants that he, she or it comes within each
category marked below, and that for any category marked, he, she or it has
truthfully set forth the factual basis or reason the undersigned comes within
that category.
Category I
Individuals please respond to the following questions by placing an "X"
next to the appropriate answer.
(a) Did your individual income without regard to that of your
spouse exceed $200,000 in the last two full calendar years and
do you reasonably expect such individual income to exceed
$200,000 in the current year?
Yes No
(b) Did your joint income with your spouse exceed $300,000 in the
last two full calendar years and do you reasonably expect such
joint income to exceed $300,000 in the current year?
Yes No
(c) Does your net worth or joint net worth with that of your
spouse exceed $1,000,000?
Yes No
(d) Are you a director or executive officer of Luxtec Corporation?
Yes No
(e) Does the amount to be paid by you for the purchase of the
Units exceed 10% of your net worth or joint net worth with
that of your spouse?
Yes No
(f) Set forth in the space provided below the state(s) in which
you maintained your residence during the past two years and
the dates during which you resided in each state:
<PAGE>
Category II
Corporations, partnerships and investors other than individuals, please
answer the following questions:
(a) Are you an employee benefit plan under the Employee Retirement
Income Security Act of 1974, as amended, (a "Plan") with
assets in excess of $5,000,000?
Yes No
If you are such a Plan, but if the Plan's total assets do not
exceed $5,000,000, are investment decisions for the Plan made
by a bank, savings and loan association, insurance company or
registered investment adviser acting as fiduciary? (If yes,
please specify the name of the fiduciary.)
Yes No
Name of Fiduciary
If you are a self-directed Plan, but if the Plan's total
assets do not exceed $5,000,000, are investment decisions made
solely by individuals that can answer yes to one or more of
the questions under paragraphs (a) - (d) of Category 1, or by
entities that can answer yes to the question under paragraph
(b) of this Category 2? (If yes, please specify the applicable
Item and paragraph.)
Yes No
Category and Paragraph:
(b) Are you (A)(i) a tax exempt organization which is qualified
under Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended, or (ii) a corporation, or (iii) a Massachusetts or
similar business trust, or (iv) partnership, not formed for
the specific purpose of acquiring the securities offered, and
(B) which has assets in excess of $5,000,000?
Yes No
(c) Set forth in the space provided below the (i) state(s) in
which you maintained your principal office during the past two
years and the dates during which you maintained your office in
each state, (ii) the state(s) in which you are incorporated or
otherwise organized and (iii) the state(s), if any, in which
you still pay income taxes:
5. Right to Rely. The undersigned is informed of the significanc
to the Company of the foregoing representations, and they are made with the
intention that the Company will rely on them.
6. Entity Representation. The undersigned, if other than an
individual, makes the following additional representations:
(a) the undersigned was not organized for the specific purpos
of acquiring the Units; and
(b) this Agreement has been duly authorized by all necessary
action on the part of the undersigned, has been duly executed by an
authorized officer or representative of the undersigned, and is a
legal, valid and binding obligation of the undersigned enforceable in
accordance with its terms.
7. Notice to Investor. Correspondence and notices to the undersigned
should be sent to the address listed below in the signature page of this
Agreement until such time as the undersigned shall notify the Company, in
writing, of a different address to which such correspondence and notices are to
be sent.
<PAGE>
8. Miscellaneous.
(a) The undersigned agrees that this Agreement is not
transferable or assignable.
(b) The undersigned agrees that, except as expressly permitted
by any applicable state law, the undersigned may not cancel, terminate
or revoke this Agreement or any agreement of the undersigned made
hereunder and this Agreement shall survive the death or legal
disability of the undersigned and shall be binding upon the
undersigned's heirs, executors, administrators, successors and assigns.
(c) This Agreement constitutes the entire Agreement among the
parties hereto with respect to the subject matter hereto and may be
amended only by a writing executed by both parties.
(d) Headings are for convenience only and are not deemed to
be part of this Agreement.
(e) This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more
than one such counterpart.
(f) This Agreement shall be enforced, governed and construed
in all respects in accordance with the internal substantive laws of the
Commonwealth of Massachusetts (without reference to principles of
conflicts or choice of law that would cause the application of the
internal laws of any other jurisdiction). The undersigned hereby
irrevocably submits and consents to the jurisdiction of any
Massachusetts state or federal court sitting in Boston, Massachusetts,
over any action or proceeding arising out of or relating to this
investment, and the undersigned hereby irrevocably agrees that all
claims in respect of such action may be heard and determined in such
Massachusetts state or federal court.
(g) The undersigned agrees to provide such information and to
execute and deliver such documents as reasonably may be necessary to
comply with any and all laws and ordinances to which the Company is
subject and in order to verify any of the information provided by or
representations or warranties made by the undersigned to the Company.
(h) The undersigned acknowledges that if he, she or it is a
resident of or domiciled in any state whose "blue sky laws" or other
local securities laws require a restriction on transferability of
securities, he, she or it will comply with such restrictions.
<PAGE>
IN WITNESS WHEREOF, the undersigned has exercised this Subscription
Agreement and Letter of Investment Intent as an instrument under seal as of this
_____ day of June, 1996.
Signature of Purchaser
Name (Typed or Printed)
Address
City, State and Zip Code
Tax Identification or
Social Security Number
This Subscription Agreement and Letter of Investment Intent is accepted as of
June __, 1996.
LUXTEC CORPORATION
By:
Name:
Title:
<PAGE>
Exhibit 10U
LUXTEC CORPORATION
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is made as of June ___, 1996, by and among
Luxtec Corporation, a Massachusetts corporation ("Luxtec" or the "Company"), and
the Persons identified on the signature pages hereto (each a "Purchaser" and
collectively, the "Purchasers").
RECITAL
The parties to this Agreement are also parties to a series of
Subscription Agreements (the "Subscription Agreements") between Luxtec and each
Purchaser, respectively. Pursuant to the Subscription Agreements, Luxtec has
agreed to issue warrants (the "Warrants") to the Purchasers, to purchase up to
an aggregate of 333,334 shares of common stock of Luxtec, par value $0.01 per
share (the "Common Stock") pursuant to the terms of the Subscription Agreements
and this Agreement. The shares of Common Stock (and any other securities)
issuable upon exercise of the Warrants are referred to in this Agreement as the
"Warrant Shares". Capitalized terms not otherwise defined in this Agreement have
the meanings given therefor in the Subscription Agreement.
NOW, THEREFORE, the parties agree:
1. Purchase and Sale of the Warrants. On the date hereof, Luxtec hereby
issues to the Purchaser and, subject to the terms and conditions hereof, the
Purchaser hereby acquires from Luxtec, Warrants to purchase up to the aggregate
number of shares of Common Stock specified below the Purchaser's name under the
caption "Warrants" on Schedule 1 attached (collectively, the "Warrants"). The
exercise price for the Warrants shall be $6.00 per share (the "Exercise Price").
Each Warrant entitles the holder thereof to purchase one Warrant Share (subject
to adjustment as provided herein).
2. Warrant Certificates. The certificates evidencing the Warrants
(the "Warrant Certificates") to be delivered pursuant to this Agreement
shall be in registered form only and shall be substantially in the form of
Exhibit A, attached hereto.
3. Execution of Warrant Certificates. Warrant Certificates shall be
signed on behalf of Luxtec by its Chairman of the Board, its President, Chief
Financial Officer or any Vice President and by its Secretary or an Assistant
Secretary under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose Luxtec may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Chief Financial Officer, Vice President, Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Warrant Certificates shall be
disposed of he or she shall have ceased to hold such office.
In case any officer of Luxtec who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificates so
signed shall have been disposed of by Luxtec, such Warrant Certificates
nevertheless may be disposed of as though such person had not ceased to be such
officer of Luxtec; and any Warrant Certificate may be signed on behalf of Luxtec
by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of Luxtec to sign such Warrant
Certificate, although at the date of the execution of this Warrant Agreement any
such person was not such an officer.
<PAGE>
4. Registration. Luxtec shall keep at its principal office in
Worcester, Massachusetts or, if such office is no longer located in Worcester,
Massachusetts, at its principal office in the United States, a register or
registers in which Luxtec shall record the registrations of the Warrants and the
names and addresses of the holders thereof from time to time and all transfers
thereof. Luxtec shall number and register the Warrant Certificates in such
register as they are issued by Luxtec and shall give the holders of the Warrants
prior written notice of any change of the address at which such register is
kept.
Luxtec may deem and treat the registered holders of the Warrant
Certificates as the absolute owners thereof, for all purposes, and Luxtec shall
not be affected by any notice to the contrary.
5. Registration of Transfers, Exchanges or Assignment of Warrants.
Subject to the limitations of this Section 5 and those contained in the
Subscription Agreement, the Warrant holders shall be entitled to assign their
Warrants in whole or in part to any Person. Luxtec shall, from time to time,
register the transfer of any outstanding Warrant Certificates upon the register
maintained by it for that purpose pursuant to Section 4, upon surrender thereof
accompanied (if so required by it) by a written instrument or instruments of
transfer in the form of the Assignment Form attached hereto as Exhibit B, duly
executed by the registered holder or holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney. In the event of
any assignment in part, the Exercise Price shall be apportioned between the
Warrants to be issued to the holder with respect to that portion not transferred
and the Warrants to be issued to the transferee, based on their respective
number of Warrants.
If a transfer is not made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), Luxtec may
require the transferor to deliver, prior to such transfer, an opinion of
counsel, which may be counsel to such transferor, reasonably satisfactory to
Luxtec, that the Warrant or Warrant Shares may be sold without registration
under the Act. In such event, regardless of whether Luxtec requires delivery of
an opinion of counsel, Luxtec may also require that the transferee provide,
prior to such transfer:
(a) a written representation, signed by the proposed
transferee, that such transferee is purchasing the Warrants or Warrant
Shares for investment and not with a view toward distribution;
(b) an agreement by such transferee to the impression of
the restrictive investment legend set forth below on the Warrant or
Warrant Shares for investment and not with a view toward distribution;
<PAGE>
(c) an agreement by such transferee that Luxtec may place a
notation in the stock books of Luxtec in respect of the restrictions on
transfer described in the legend set forth below; and
(d) an agreement by such transferee to be bound by the
provisions of this Section 5 relating to the restrictions on transfer
of such Warrant or Warrant Shares.
If such transfer is made in reliance on Regulation S under the Act,
Luxtec may require execution by the transferee of the Transferee Certificate in
the form attached hereto as Exhibit C.
Each Warrant Certificate and each certificate representing Warrant
Shares shall, until the Warrants or Warrant Shares represented by such
certificates have been distributed to the public pursuant to an offering
registered under the Act or Luxtec has received an opinion of counsel, which may
be counsel to the holder of such certificate, that such legend is not required
under the Act, bear legends in substantially the following form:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO LUXTEC CORPORATION TO THE EFFECT THAT SUCH REGISTRATION
IS NOT REQUIRED.
Each certificate representing Warrant Shares, until such Warrant Shares
have been distributed to the public pursuant to an offering registered under the
Act or repurchased by Luxtec or any of its Affiliates, shall also bear the
following legend:
THE SECURITY REPRESENTED BY THIS CERTIFICATE IS ENTITLED TO THE
BENEFITS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY
___, 1996 BETWEEN THE ISSUER AND THE PURCHASER IDENTIFIED THEREIN, A
COPY OF WHICH WILL BE FURNISHED TO THE REGISTERED HOLDER HEREOF WITHOUT
CHARGE BY THE ISSUER, UPON REQUEST.
Warrant Certificates may be exchanged or combined at the option of the
holder(s) thereof for another Warrant Certificate or other Warrant Certificates
of like tenor and representing in the aggregate a like number of Warrants upon
presentation thereof to Luxtec at its principal office, together with a written
notice signed by the holders specifying the names and denominations in which the
new Warrants are to be issued.
Upon surrender for transfer or exchange of a Warrant Certificate to
Luxtec at its principal office for transfer or exchange, in accordance with this
Section 5, Luxtec shall, without charge, execute and deliver a new Warrant
Certificate of like tenor and of a like aggregate amount in the name of the
assignee named in such instrument of assignment and, if the holder's entire
interest is not being assigned, in the name of the holder with respect to that
portion not transferred, and the Warrant Certificate so surrendered shall
promptly be canceled.
<PAGE>
6. Terms of Warrants; Exercise of Warrants. Subject to the terms of
this Agreement, each Warrant holder shall have the right, which may be exercised
at any time during the period from (and including) the date of issuance of any
Warrant and until 5:00 p.m., Boston, Massachusetts local time, on December 31,
2001, (the "Expiration Date" for such Warrant), or, provided the holder of any
Warrants shall have given Luxtec written notice of its intention to exercise
such Warrants on or before 5:00 p.m., Boston, Massachusetts local time, on the
Expiration Date therefor, a holder may exercise such Warrants at any time
through (and including) the Business Day next following the date that all
applicable required regulatory holding periods have expired and all applicable
required governmental approvals have been obtained in connection with such
exercise of Warrants by such holder, if such Business Day is later than on the
Expiration Date for such Warrants (such period being herein referred to as the
"Exercise Period"), to receive from Luxtec the number of Warrant Shares which
the holder may at the time be entitled to receive on exercise of such Warrants
and payment of the Exercise Price then in effect for such Warrant Shares, and
the Warrant Shares issued to a Warrant holder upon exercise of its Warrants
shall be fully paid, nonassessable and subject to no preemptive rights. Each
Warrant not exercised prior to the expiration of the Exercise Period therefor
shall become void and all rights thereunder and all rights in respect thereof
under this Agreement shall cease as of such time.
Notwithstanding the foregoing, upon the completion of a Qualified
Offering in which the holders would be entitled to include for sale all of their
respective Warrant Shares, the Expiration Date shall be deemed to be the date of
completion of such Qualified Offering.
During the Exercise Period, each Warrant holder may exercise, at any
time or from time to time, some or all of the Warrants represented by its
Warrant Certificates by (i) surrendering to Luxtec at its principal office such
Warrant Certificates with the Form of Election to Purchase attached to hereto as
Exhibit D, duly filled in and signed, which signature shall be guaranteed by a
bank or trust company having an office or correspondent in the United States or
a broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc. and (ii) paying to Luxtec the
Exercise Price for the number of Warrant Shares in respect of which such
Warrants are then being exercised. Warrants shall be deemed exercised on the
date Warrant Certificates representing the Warrants are surrendered to Luxtec,
provided that the Exercise Price for such Warrants is paid not later than the
following Business Day, and the Warrant Shares in respect of which the Warrants
are exercised shall be deemed issued on that date, and the Person in whose name
the certificate representing the Warrant Shares is to be issued shall be deemed
the holder of such Warrant Shares as of that date for all purposes. Payment of
the aggregate Exercise Price by the Warrant holder shall be made as follows: (i)
by wire transfer, (ii) by certified or official bank check payable to the order
of Luxtec, (iii) by the holder directing Luxtec to withhold from the shares
issuable upon exercise of the Warrants shares of Common Stock with an aggregate
market value equal to the Exercise Price or (iv) by any combination thereof.
<PAGE>
Subject to the provisions of Section 8, upon the exercise of any
Warrants, Luxtec shall issue and cause to be delivered with all reasonable
dispatch (but in any event within three Business Days) to or upon the written
order of the holder and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants together with such other property,
including cash, which may be deliverable upon such exercise.
The Warrants shall be exercisable at any time or from time to time
during the Exercise Period therefor, at the election of the holders thereof,
either in full or from time to time in part and if fewer than all of the
Warrants represented by a Warrant Certificate surrendered are exercised, a new
certificate evidencing the Warrants not exercised will be issued by Luxtec at
Luxtec's expense, to the holder of such Warrants with all reasonable dispatch
(but in any event within three Business Days). All Warrant Certificates
surrendered upon exercise of Warrants shall be canceled by Luxtec.
7. Payment of Taxes. Luxtec will pay all documentary stamp taxes
attributable to the initial issuance of the Warrants or the initial issuance of
the Warrant Shares upon the exercise of Warrants; provided, however, that Luxtec
shall not be required to pay any transfer tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the registered
holder of the Warrant Certificate surrendered for exercise or transfer of a
Warrant, and Luxtec shall not be required to issue or deliver such Warrant
Certificate or certificates representing such Warrant Shares unless or until the
Person or Persons requesting the issuance thereof shall have paid to Luxtec the
amount of such tax or shall have established to the satisfaction of Luxtec that
such tax has been paid.
8. Mutilated or Missing Warrant Certificates. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, Luxtec shall issue in
exchange and substitution for, upon surrender of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
Luxtec of such loss, theft or destruction of such Warrant Certificate. The new
Warrant Certificate shall be dated the date of issue of the lost, stolen or
destroyed Warrant Certificate. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable requests (including,
without limitation, in the case of any such loss, theft or destruction a request
to provide an indemnity agreement).
9. Reservation of Warrant Shares. Luxtec will at all times reserve and
keep available, free from preemptive rights and liens, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
Luxtec, or, if appointed, the transfer agent for the Common Stock (the
"Transfer Agent") and every subsequent transfer agent for any shares of Luxtec's
capital stock issuable upon the exercise of any of the rights of purchase
aforesaid will be irrevocably authorized and directed at all times to reserve
such number of authorized shares as shall be required for such purpose. Luxtec
will keep a copy of this Agreement on file with the Transfer Agent and with
every subsequent transfer agent for any such shares of Luxtec's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants.
<PAGE>
10. Certain Other Agreements of Luxtec. Luxtec hereby covenants and
agrees that it: (i) will not increase the par value of the shares of Common
Stock receivable upon the exercise of the Warrants above the Exercise Price then
in effect, (ii) before taking any action which would cause an adjustment
reducing the Exercise Price below the then par value of the shares of Common
Stock so receivable, will take all such corporate action as may be necessary or
appropriate in order that Luxtec may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Exercise Price upon the
exercise of the Warrants, and (iii) will not take any action which results in
any adjustment of the Exercise Price if the total number of shares of Common
Stock or Other Securities (as defined in Section 12 hereof) issuable after the
action upon the exercise of the Warrants would exceed the total number of shares
of Common Stock or Other Securities then authorized by Luxtec's charter and
available for the purpose of issue upon such exercise.
11. Antidilution Provisions. The Exercise Price and the number of
Warrant Shares receivable on exercise of a Warrant shall be subject to further
adjustment from time to time as provided in this Section 11. Upon each
adjustment of the Exercise Price in accordance with this Section 11, the holder
of each Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the largest whole number of Warrant Shares
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable under such Warrant
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.
(a) Extraordinary Dividends and Distributions. In case Luxtec, at any
time or from time to time after the date hereof, shall declare, order, pay, or
make a dividend or other distribution (including, without limitation, any
distribution of cash or other or additional stock or other securities or
property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) to all holders, on the
Capital Stock, other than additional shares of Capital Stock issued as a stock
dividend or in a stock-split (adjustments in respect of which are provided for
in Section 11(c)), then, subject to Section 11(d), the Exercise Price in effect
immediately prior to the close of business on the record date fixed for the
determination of holders of any class of securities entitled to receive such
dividend or distribution shall be reduced, effective as of the close of business
on such record date, to a price determined by multiplying such Exercise Price by
a fraction
(A) the numerator of which shall be the Market Price in effect
on such record date or, if any class of Capital Stock trades on an
ex-dividend basis, the date prior to the commencement of ex-dividend
trading, less the value of such dividend or distribution (as determined
by the Board of Directors of Luxtec in the good faith, reasonable
exercise of its business judgment) applicable to one share of Capital
Stock, and
(B) the denominator of which shall be such Market Price in
effect on such record date.
(b) Changes in Capital Stock. If Luxtec shall be a party to any
transaction (including, without limitation, a merger, consolidation, sale of all
or substantially all of Luxtec's assets, liquidation or recapitalization of the
Capital Stock) in which the previously outstanding Capital Stock shall be
changed into or exchanged for different securities of Luxtec or common stock or
other securities of another corporation or interests in a noncorporate entity or
other property (including cash) or any combination of any of the foregoing (each
such transaction, a "Transaction" and the date of consummation of such a
Transaction, the "Consummation Date") Luxtec (in the case of a recapitalization
of the Capital Stock or any other such transaction in which Luxtec retains
substantially all of its assets and survives as a corporation) or such other
corporation or entity (in each other case, the "Acquiring Company") then, as a
condition of the consummation of the Transaction, lawful and adequate provisions
shall be made so that the holders of the Warrants, upon the exercise thereof at
any time on or after the Consummation Date (but during the Exercise Period),
shall be entitled to receive, and the Warrant shall thereafter represent the
right to receive, in lieu of the Capital Stock issuable upon such exercise prior
to the Consummation Date, the highest amount of securities or other property to
which such holder would actually have been entitled as a shareholder upon the
consummation of the Transaction if such holder had exercised the Warrant
immediately prior thereto (subject to adjustments from and after the
Consummation Date as nearly equivalent as possible to the adjustments provided
for in this Section 11).
<PAGE>
Notwithstanding anything contained herein to the contrary, Luxtec shall
not effect any Transaction unless prior to the consummation thereof each
Acquiring Company which may be required to deliver any securities or other
property upon the exercise of the Warrants, the surrender of the Warrants or the
satisfaction of exercise rights as provided herein shall assume, by written
instrument delivered to the holders of the Warrants, the obligation to deliver
to such holders such securities or other property to which, in accordance with
the foregoing provisions, such holders may be entitled, and such Acquiring
Company shall have similarly delivered to the holders of the Warrants an opinion
of counsel for such corporation or entity, which opinion shall state that the
Warrants, including, without limitation, the exercise provisions applicable to
the Warrants, if any, shall thereafter continue in full force and effect and
shall be enforceable against such Acquiring Company in accordance with the terms
hereof.
(c) Extraordinary Events Regarding Common Stock. In the event that the
Company shall (i) issue additional shares of Capital Stock as a dividend or
other distribution on outstanding Capital Stock, (ii) subdivide its outstanding
shares of Capital Stock, or (iii) combine its outstanding shares of the Capital
Stock into a smaller number of shares of Capital Stock, then, in each such
event, (X) the Exercise Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then current Exercise Price by a fraction,
(a) the numerator of which shall be the number of shares of Capital Stock
outstanding immediately prior to such event, and (b) the denominator of which
shall be the number of shares of Capital Stock outstanding immediately after
such event, and the product so obtained shall thereafter be the Exercise Price
then in effect and (Y) the number of Warrant Shares for which each Warrant is
then exercisable shall be increased or decreased, as the case may be, by the
percentage increase or decrease in the total number of shares of Capital Stock
outstanding immediately after such event over the total number of shares of
Capital Stock outstanding immediately prior to such event and the result so
obtained shall be the number of Warrant Shares for which each Warrant is
exercisable then in effect. The Exercise Price and the number of Warrant Shares
for which each Warrant is then exercisable, as so adjusted, shall be readjusted
in the same manner upon the happening of any successive event or events
described in this Section 11(c).
(d) Minimum Adjustment of Exercise Price; Effective Date for
Adjustments. If the amount of any adjustment of the Exercise Price required
pursuant to this Section 11 would result in an increase in the number of Warrant
Shares purchasable under the Warrants which is less than one half of one percent
(0.5%) of the number of Warrant Shares purchasable under the Warrants
immediately before such adjustment is otherwise so required to be made, such
amount shall be carried forward and adjustment with respect thereto made at the
time of and together with any subsequent adjustment which, together with such
amount and any other amount or amounts so carried forward, shall result in an
increase in the number of Warrant Shares purchasable under the Warrants which is
at least one half of one percent (0.5%) of the number of Warrant Shares
purchasable under the Warrants immediately before such adjustment; provided
that, upon the exercise of the Warrants, all adjustments carried forward and not
theretofore made up to and including the date of such exercise shall, with
respect to the portion of the Warrants then exercised, be made. All calculations
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(e) Certain Issues Excepted. Anything herein to the contrary
notwithstanding, Luxtec shall not be required to make any adjustment of the
Exercise Price or the number of Warrant Shares issued hereunder in the case of
(i) the issuance of the Warrants; (ii) the issuance of shares of Common Stock
issuable upon exercise of the Warrants or (iii) the issuance of any Options in
an amount not exceeding, in the aggregate, 30% of the issued and outstanding
Common Stock on a fully diluted basis, granted or issued pursuant to any stock
option plans or other similar plans created or maintained by Luxtec providing
for the issuance of Common Stock, or the issuance of any shares of Common Stock
issuable upon exercise of such Options.
<PAGE>
(f) Certain Notices. If:
(A) Luxtec shall declare, pay or make, directly or indirectly,
any dividend, payment or other distribution, on or in respect of any of
the Capital Stock (other than dividends payable solely in Common Stock
or on or in respect of the capital stock of any Subsidiary (other than
dividends payable solely on capital stock of such Subsidiary, owned
beneficially and of record by Luxtec or a Wholly-Owned Subsidiary of
Luxtec));
(B) Luxtec shall offer for subscription pro rata to the
holders of Capital Stock any additional shares of stock of any class or
other rights;
(C) there shall be any capital reorganization or
reclassification of the Capital Stock of Luxtec, or consolidation or
merger of Luxtec with, or sale of all or substantially all of its
assets to, another corporation or other entity;
(D) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of Luxtec; or
(E) Luxtec has taken or proposes to take any other action
which would require the adjustment of the Exercise Price and/or the
number of Warrant Shares issuable upon exercise of a Warrant; then, in
any one or more of such cases, Luxtec shall give to each registered
holder of Warrant Certificates at its address appearing on the Warrant
register (a) at least 30 days prior notice of the date on which the
books of Luxtec shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights
to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding up or
other action, and (b) at least 30 days prior written notice of the date
(or, if not then known, a reasonable approximation thereof by Luxtec)
when the same shall take place. Such notice shall also specify, in the
case of any such dividend, distribution or subscription rights, the
date on which the holders of Capital Stock shall be entitled thereto,
or the date on which the holders of Capital Stock shall be entitled to
exchange their Capital Stock for securities or other property
deliverable upon any reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, as the case may
be. Such notice shall also state whether the action in question or the
record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote of security holders, if
either is required, and Luxtec shall, at its expense, promptly compute
each adjustment in Exercise Price and/or number of Warrant Shares
issuable upon exercise of a Warrant in accordance with the terms of
this Agreement as a result of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding up or
other action that would require the adjustment of the Exercise Price
and/or the number of Warrant Shares issuable upon exercise of a
Warrant, and prepare a report of its chief financial officer setting
forth such adjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment is based,
including a statement of (i) the consideration received or to be
received by Luxtec for any shares of Common Stock issued or sold or
deemed to have been issued, (ii) the number of shares of Common Stock
outstanding or deemed to be outstanding, and (iii) the Exercise Price
in effect immediately prior to such issue or sale and as adjusted on
account thereof. Luxtec will forthwith mail a copy of each such report
to each holder of a Warrant and will, at any time and from time to time
upon the written request of the Required Holders, furnish to each
holder a like report setting forth the Exercise Price at the time in
effect and showing in reasonable detail how it was calculated. Luxtec
will also keep copies of all such reports at its principal executive
offices and at the office of each Transfer Agent (other than Luxtec)
and will cause the same to be available for inspection (and copying) at
each such offices during normal business hours by any holder of
Warrants.
<PAGE>
(g) Certain Events. If any event occurs as to which, in the good faith
judgment of the Board of Directors of Luxtec, the other provisions of this
Section 11 are not strictly applicable or if strictly applicable would not
fairly protect the exercise rights of the holders of the Warrants in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of Luxtec in the good faith, reasonable exercise of its business
judgment shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles so as to protect such
exercise rights as aforesaid; provided that no such adjustment shall have the
effect of increasing the Exercise Price as otherwise determined pursuant to this
Section 11. Luxtec may make such reductions in the Exercise Price or increase in
the number of shares of Common Stock purchasable hereunder as it deems
advisable, including any reductions or increases, as the case may be, necessary
to ensure that any event treated for federal income tax purposes as a
distribution of stock or stock rights not be taxable to recipients; provided if
the reduction in Exercise Price or increase in number of shares of Common Stock
is not permanent, Luxtec shall provide each holder of Warrants prompt notice as
to the dates such reduction or increase is to be in effect and during such
period the reduction or increase will be irrevocable.
(h) Warrant Certificate Terms. Irrespective of any adjustments in the
Exercise Price or the number or kind of shares or other securities purchasable
upon the exercise of the Warrants, the Warrants theretofore or thereafter issued
may continue to express the same price and number and kind of shares of Common
Stock as are stated in the Warrant Certificate.
<PAGE>
12. Definitions. The following terms shall have the following
meanings:
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in Boston, Massachusetts are required or authorized to
be closed.
"Capital Stock" means the Common Stock and any additional class of
stock of Luxtec having no preference as to dividends or distributions on
liquidation which may be authorized in the future by an amendment to Luxtec's
charter.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock or securities directly or indirectly convertible into or
exchangeable for additional shares of Capital Stock.
"Market Price" means, on any date specified herein, the price obtained
by taking the volume weighted arithmetic mean over a period of 20 consecutive
Trading Days ending the second Trading Day prior to such date of the average, on
each such Trading Day, of the high and low sale prices of shares of each such
class of Capital Stock (or if no such sale takes place on any such Trading Day,
the average of the highest closing bid and lowest closing asked prices thereof
on such Trading Day, in each case as officially reported on all national
securities exchanges on which each such class of Capital Stock is then listed or
admitted to trading).
"Nationally Recognized Underwriter" means Bear, Stearns & Co., William
Blair & Company, Alex, Brown & Sons, CS First Boston Corporation, Dean Witter
Reynolds Inc., Dillon, Read & Co., Donaldson, Lufkin & Jenrette, Furman Selz
Incorporated, Goldman, Sachs & Co., Hambrecht & Quist, J.P. Morgan, Lazard
Freres & Co., Lehman Brothers, Merrill Lynch, Montgomery Securities, Morgan
Stanley & Co., Oppenheimer & Co., Paine Webber, Prudential Securities
Incorporated, Robertson, Stephens & Company, Salomon Brothers, Inc., Smith
Barney, Wertheim Schroeder & Co., Tucker Anthony Incorporated and Cowen &
Company.
"Options" means rights, options or warrants to subscribe for, purchase
or otherwise acquire either additional shares of Capital Stock or Convertible
Securities.
"Other Securities" means any stock (other than Common Stock) and any
other securities of Luxtec or any other person (corporate or otherwise) which
the holders of the Warrants at any time shall be entitled to receive, or shall
have received, upon the exercise or partial exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 11(b) or otherwise.
"Person" shall mean and include any individual, partnership, joint
venture, corporation, limited liability company, trust, government or any
department or agency thereof, and any other form of business organization
(whether or not a legal entity).
"Public Offering" means a public offering of Common Stock pursuant to a
registration statement effective under the Securities Act.
<PAGE>
"Qualified Offering" means a Public Offering on behalf of Luxtec
shareholders underwritten by a Nationally Recognized Underwriter where the
aggregate proceeds are not less than $10,000,000 and the price per share is not
less than $6.00 and in which the Purchaser is permitted to include all Warrant
Shares.
"Required Holders" means, at any time, the registered holder or
holders of at least 66-2/3% of the aggregate Warrants then outstanding
"Subsidiary" means, any corporation, association or other business
entity in which Luxtec and/or one or more of its Subsidiaries collectively owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is collectively owned by Luxtec and/or one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of Luxtec or one or more of its
Subsidiaries).
"Trading Day" means any day on which American Stock Exchange is open
for trading on a regular basis.
"Warrant Shares" has the meaning specified in the Recital paragraph of
this Agreement.
"Wholly-Owned Subsidiary" means a Subsidiary all of the voting power of
all classes of the Voting Stock and all of the beneficial ownership of which is
owned directly or indirectly through one or more other Wholly-Owned
Subsidiaries, by Luxtec.
13. Fractional Interests. Luxtec shall not issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so presented. If any fraction of a Warrant Share would,
except for the provisions of this Section 13, be issuable on the exercise of any
Warrants (or specified portion thereof), Luxtec shall pay a cash adjustment to
the holder in respect of such fraction on the basis of the Market Price per
share of Common Stock on the Business Day next preceding the date of such
exercise.
14. No Rights as Stockholders. Nothing contained in this Warrant
Agreement shall be construed as conferring upon the holder or any Transferee of
any Warrant prior to the time of the exercise thereof, the right to vote, to
receive dividends or to consent to or receive notice as a stockholder in respect
of any meeting of stockholders for the election of directors of Luxtec, or
otherwise to enjoy the rights of a stockholder of Luxtec.
15. Notices. All notices and other written communications provided for
hereunder shall be given in writing and delivered in person or sent by overnight
delivery service (with charges prepaid) or by facsimile transmission, if the
original of such facsimile transmission is sent by overnight delivery service
(with charges prepaid) by the next succeeding Business Day and (i) if to the
Purchaser or its nominee, addressed to such person at the address or fax number
specified for such communications on Schedule 1 hereto or at such other address
or fax number as such person shall have specified to Luxtec in writing, (ii) if
to any other holder, addressed to such other holder at such address or fax
number as is specified for such holder in the register referenced in Section 4
and (iii) if to Luxtec, addressed to it at 326 Clark Street, Worcester,
Massachusetts 01606-1214, Attention: Chief Financial Officer (with a copy to the
attention of Luxtec's general counsel), Fax No. (508) 856-9462 or at such other
address or fax number as Luxtec shall specify to each holder in writing given in
accordance with this Section 15. Notice given in accordance with this Section
shall be effective upon the earlier of the date of delivery or the second
Business Day at the place of delivery after dispatch.
<PAGE>
16. Supplements and Amendments. Luxtec and the Purchaser who is a
holder of Warrant Certificates at the time may from time to time supplement or
amend this Agreement without the further approval of any holders of Warrant
Certificates or Warrant Shares in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provision in regard to
matters or questions arising hereunder which Luxtec and the Purchaser may deem
necessary or desirable and which shall not have a material adverse effect on the
interests of the holders of Warrant Certificates or Warrant Shares. Any other
amendment or supplement to this Agreement shall require the written consent of
Required Holders.
17. Successors. All the covenants and provisions of this Agreement
by or for the benefit of Luxtec or the Purchaser shall bind and inure to the
benefit of their respective successors and assigns hereunder.
18. Termination. This Agreement shall terminate at 5:00 p.m., Boston,
Massachusetts, local time on the last day of the Exercise Period.
Notwithstanding the foregoing, this Agreement will terminate on any earlier
date if all Warrants have been exercised.
19. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person, company or entity other than Luxtec, the
Purchaser and the registered holders of the Warrants and Warrant Shares any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of Luxtec, the Purchaser
and the registered holders of the Warrants and Warrant Shares.
20. Availability of Information.
(a) Luxtec shall comply with the reporting requirements of Sections 13
and 15(d) of the Exchange Act to the extent it is required to do so under the
Exchange Act. Luxtec shall also cooperate with each holder of any Warrants and
holder of any Warrant Shares in supplying such information as may be necessary
for such holder to complete and file any information reporting forms currently
or hereafter required by the SEC as a condition to the availability of an
exemption from the Securities Act for the sale of any Warrants or Warrant
Shares, provided, that each such holder obtain a confidentiality agreement, in
the form reasonably satisfactory to Luxtec, from each prospective purchaser.
<PAGE>
(b) Luxtec shall cause copies of all financial statements and reports,
proxy statements and other documents as it shall send to its stockholders to be
sent by first-class mail, postage prepaid, on the date of mailing to such
stockholders, to each holder of Warrants and holders of Warrant Shares at its
address appearing on the register as of the record date for the determination of
the stockholders entitled to such documents.
21. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument. This Agreement shall become effective on the
date on which each party hereto shall have received counterparts hereof executed
by each of the parties hereto. The execution and delivery hereof by Luxtec is
irrevocable.
22. The Transaction Documents embody the entire agreement and
understanding between the Purchaser and Luxtec and supersede all prior
agreements and understandings relating to the subject matter hereof and thereof.
23. Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction because of
the conflict of such provision with any constitution or statute or rule of
public policy or for any other reason, such circumstance shall not have the
effect of rendering the provision or provisions in question invalid,
inoperative, illegal or unenforceable in any other jurisdiction or in any other
case or circumstance or of rendering any other provision or provisions herein
contained invalid, inoperative, illegal or unenforceable to the extent that such
other provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Agreement shall be reformed and
construed in any such jurisdiction or case as if such invalid, inoperative,
illegal or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
24. Governing Law. All issues and questions concerning the
construction, validity, interpretation and enforcement of this Warrant Agreement
shall be governed by, the laws of the Commonwealth of Massachusetts (without
giving effect to any laws or rules relating to conflicts of laws that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts).
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first written above.
LUXTEC CORPORATION
By:
Name:
Title:
<PAGE>
SIGNATURE PAGE
TO
WARRANT AGREEMENT
Reference is hereby made to that certain Warrant Agreement, dated as of
June __, 1996, by and among Luxtec Corporation, a Delaware corporation (the
"Company"), and the Purchaser parties thereto, as amended and in effect from
time to time (the "Warrant Agreement").
The undersigned hereby agrees that, from and after the date that the
Company countersigned this Signature Page in the space provided therefor below,
the undersigned shall become a Purchaser party to the Warrant Agreement. This
Signature Page shall take effect and shall become a part of the Warrant
Agreement immediately upon execution by the undersigned and the Company.
Executed under seal as of the date set forth below under the laws of
the Commonwealth of Massachusetts.
Signature:
Name:
Accepted:
LUXTEC CORPORATION
By:
Name:
Title:
Date:
<PAGE>
Schedule 1
PURCHASER SCHEDULE
Purchaser Name Number of Warrants
<PAGE>
Exhibit A
FORM OF WARRANT CERTIFICATE
<PAGE>
Exhibit B
ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________, being duly authorized, hereby
sells, assigns and transfers unto
Name
(please typewrite or print in block letters)
Address
its right to purchase _______ shares of Common Stock represented by this Warrant
and does hereby irrevocably constitute and appoint ________________________
Attorney, to transfer the same on the books of Luxtec, with full power of
substitution in the premises.
Date:_____________, _____
Signature/ Title___________________________________________________
Note: The signature must conform in all respects to name of the holder as
specified on the face of the Warrant Certificate.
- ----------------------------------
Social Security or other
identifying number of holder
- ----------------------------------
Signature Guarantee
<PAGE>
Exhibit C
FORM OF TRANSFEREE CERTIFICATE
[Letterhead of Prospective Purchaser or
U.S. Registered Broker-Dealer]
Luxtec Corporation
326 Clark Street
Worcester, MA 01606-1214 Date: _______________
Attention: _________________________
Dear Sirs:
1. We hereby request that __________ Warrants to purchase common stock,
par value $0.01 per share (the "Common Stock"), of Luxtec Corporation, a
Massachusetts corporation ("Luxtec"), be registered in the name set forth below
and confirm that:
Each person in whose name the Warrants or the Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") are to be registered upon
transfer (or, in the case of a transfer to a nominee, each beneficial owner of
such Warrant or Warrant Share) has been advised that such Warrant or Warrant
Share has been sold or transferred to it in reliance upon Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and the address of
the person in whose name the Warrant or Warrant Share is to be registered upon
transfer is an address outside the United States (as defined in Regulation S)
and such person is not a U.S. Person (as defined in Regulation S).
If this letter is being filled out by a prospective purchaser, the
undersigned purchaser confirms that the Warrants or Warrant Shares, as the case
may be, will be transferred only in accordance with and subject to the
provisions of Section 5 of the Warrant Agreement between Luxtec and the
Purchasers named therein (the "Warrant Agreement"), a copy of which has been
previously delivered to such prospective purchaser, and the legend on the
Warrant Certificates, and further, that it understands that in connection with
any such transfer, Luxtec may request, and if so requested the undersigned
purchaser will furnish, such certificates and other information as may
reasonably be required to confirm that any such transfer complies with the
restrictions set forth therein.
We also confirm that we will transfer the Warrants or Warrant Shares
only in accordance with and subject to the provisions of the Warrant Agreement.
<PAGE>
2. The Warrants and Warrant Shares should be registered as follows:
Name:
Address:
Tax Identification Number:
Physical Location of Warrant or Warrant Share
Certificates (including address):
Address:
Contact:
3. If this letter is being completed by a U.S. registered broker-dealer
on behalf of the transferee, the undersigned broker-dealer confirms that (a) it
has delivered to the transferee a copy of the Warrant Agreement or a notice
regarding the restrictions on transfer of the Warrants and Warrant Shares by
such transferee as set forth in the legend on the Warrants and (b) to the best
of its knowledge, the information provided herein about the transferee is true
and correct.
You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Prospective Purchaser or
U.S. Registered Broker Dealer]
By:
Title:
<PAGE>
Exhibit D
FORM OF ELECTION TO PURCHASE
Dated ___________, ____
The undersigned, being duly authorized, hereby irrevocably elects to
exercise the within Warrant to the extent of purchasing ______ shares of Common
Stock and hereby makes payment of $___________ in payment of the exercise price
thereof.
-----------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(please typewrite or print in block letters)
Address
Signature/ Title
Note: The signature must conform in all respects to the name of the
holder as specified on the face of the Warrant Certificate.
- --------------------------------------
Social Security or other identifying
number of holder
- --------------------------------------
Signature Guarantee
<PAGE>
Exhibit 10V
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO LUXTEC CORPORATION TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THE SECURITY REPRESENTED BY THIS
CERTIFICATE IS ENTITLED TO THE BENEFITS OF A CERTAIN REGISTRATION RIGHTS
AGREEMENT DATED AS OF MAY ___, 1996 BETWEEN THE ISSUER AND THE PURCHASER
IDENTIFIED THEREIN, A COPY OF WHICH WILL BE FURNISHED TO THE REGISTERED HOLDER
HEREOF WITHOUT CHARGE BY THE ISSUER, UPON REQUEST.
_______________ Warrants
W-__ Warrant Certificate
LUXTEC CORPORATION
This Warrant Certificate certifies that ____________________ or its
assigns, is the registered holder of ___________ warrants (the "Warrants"),
expiring at 5:00 p.m., Boston, Massachusetts local time, on December 31, 2001
(the "Expiration Date") (as defined in the Warrant Agreement referred to below)
(or such later date as is specified in the Warrant Agreement) to purchase shares
of the common stock, $0.01 par value per share (the "Common Stock") of Luxtec
Corporation, a Massachusetts corporation ("Luxtec" or the "Company"). Each
Warrant entitles the holder, upon exercise, to receive from the Company, if
exercised on or before 5:00 p.m., Boston, Massachusetts, local time, on the
Expiration Date (or such later date as is specified in the Warrant Agreement),
one fully paid share of Common Stock (a "Warrant Share") at the initial exercise
price (the "Exercise Price") of $6.00 per share payable as provided in the
Warrant Agreement upon surrender of this Warrant Certificate and payment of the
Exercise Price at the principal office of the Company at 326 Clark Street,
Worcester, Massachusetts 01606-1214, subject to the conditions set forth herein
and in the Warrant Agreement referred below. The Exercise Price and number of
Warrant Shares issuable upon exercise of the Warrants are subject to adjustment
upon the occurrence of certain events as set forth in the Warrant Agreement.
The Warrants represented by this Warrant Certificate may not be
exercised before the date hereof or after 5:00 p.m., Boston, Massachusetts local
time on the Expiration Date (or such later date as is specified in the Warrant
Agreement) and, to the extent not exercised on or before 5:00 p.m., Boston,
Massachusetts local time, on such date, such Warrants shall become void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date (or such later date
as is specified in the Warrant Agreement) entitling the holder on exercise to
receive shares of Common Stock of the Luxtec, and are issued or to be issued
pursuant to a Warrant Agreement dated as of June ___, 1996 (the "Warrant
Agreement") by and between the Company and the Purchasers (as defined therein),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants. A copy of the Warrant Agreement
may be obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after the date hereof and
before 5:00 p.m. Boston, Massachusetts local time on the Expiration Date (or
such later date as is specified in the Warrant Agreement). The holder of
Warrants evidenced by this Warrant Certificate may (i) exercise them, by
surrendering this Warrant Certificate, with the Form of Election to Purchase
attached properly completed and executed, together with payment of the Exercise
Price as provided in the Warrant Agreement at the principal office of the
Company located at 326 Clark Street, Worcester, Massachusetts 01606-1214. In the
event that upon any exercise or conversion of Warrants evidenced hereby the
number of Warrants exercised or converted shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the Warrants not exercised or
converted.
<PAGE>
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant may be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the principal office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, without charge, for
another Warrant Certificate or Warrant Certificates of like tenor evidencing in
the aggregate a like number of Warrants. Upon due presentation for registration
of transfer of this Warrant Certificate at the principal office of the Company,
a new Warrant Certificate or Warrant Certificates of like tenor and evidencing
in the aggregate a like number of Warrants shall be issued to the transferees in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge.
Neither the Warrants nor this Warrant Certificate entitles any holder
hereof to any rights of a stockholder of the Company.
All issues and questions concerning the construction, validity,
interpretation and enforcement of this Warrant Certificate shall be governed by
the laws of the Commonwealth of Massachusetts without regard to principles of
conflicts of laws.
<PAGE>
IN WITNESS WHEREOF, Luxtec Corporation has caused this Warrant
Certificate to be signed by its Chairman of the Board, President, or Vice
President and by its Secretary or Assistant Secretary, thereunto duly
authorized, and has caused this Warrant Certificate to be duly executed, as of
June __, 1996.
Attest: LUXTEC CORPORATION
Dated: By:
Name:
Title
<PAGE>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
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0
0
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<SALES> 6,654
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<INCOME-PRETAX> (229)
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