SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to S 240.14a-11(c) or S 240.14a-12
Luxtec Corporation
(Name of Registrant as Specified In Its Charter)
Luxtec Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)
(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
N/A
4) Proposed maximum aggregate value of transaction:
N/A
5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
N/A
2) Form, Schedule or Registration Statement No.:
N/A
3) Filing Party:
N/A
4) Date Filed:
N/A
<PAGE>
LUXTEC CORPORATION
May __, 1996
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
LUXTEC CORPORATION, to be held on Thursday, June 20, 1996, at 11:00 A.M. at the
Company's Board Room, 326 Clark Street, Worcester, Massachusetts.
The Notice of Meeting and the Proxy Statement that follow describe the
business to be considered and acted upon by the stockholders at the Meeting,
after which management will also report on the affairs of the Company.
The Board of Directors of the Company encourages your participation in the
Company's electoral process and, to that end, solicits your proxy. You may give
your proxy by completing, dating and signing the Proxy Card and returning it
promptly in the enclosed envelope. You are urged to do so even if you plan to
attend the meeting.
A copy of the Company's 1995 Annual Report to Stockholders is also
enclosed, but is not to be considered a part of the proxy solicitation material.
This Proxy Statement and the Proxy Card were first mailed to stockholders on or
about May 20, 1996.
Sincerely,
JAMES W. HOBBS
President
<PAGE>
LUXTEC CORPORATION
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 20, 1996
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting') of Luxtec Corporation (the "Company") will be held at the Corporate
Offices of the Company located at 326 Clark Street, Worcester, Massachusetts.,
on Thursday, June 20, 1996, at 11:00 A.M., local time, to consider and act upon
the following matters:
1. A proposal to approve an amendment of the Company's
Articles of Organization to (i) authorize 500,000 shares of
preferred stock, par value of $1.00 per share (the
"Preferred Stock"), with such designations, powers,
privileges and rights, and qualifications, limitations and
restrictions in respect of each class or series of Preferred
Stock as determined by vote of the Board of Directors or a
committee thereof, and (ii) authorize the Board of Directors
to issue the Preferred Stock in such classes or series and
to determine the powers, privileges and rights, and the
qualifications, limitations and restrictions in respect to
each class or series of Preferred Stock by vote of the Board
of Directors or a committee thereof.
2. A proposal to elect two (2) Class III directors of
the Company, each to hold a three-year term.
3. A proposal to ratify the amendment of the Company's
1993 Employee Stock Purchase Plan (the "Plan") to increase
the number of shares authorized for issuance under the Plan
to 75,000 shares and to increase the maximum number of
shares that each employee may purchase during each six-month
period to 1,000 shares.
4. A proposal to ratify the appointment of Arthur
Andersen LLP as independent public accountants of the
Company.
5. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
Stockholders of record at the close of business on May 17, 1996 are
entitled to notice of and to vote at the Meeting and any adjourned sessions
thereof. All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
JAMES W. HOBBS
Director
Worcester, Massachusetts
May __, 1996
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND PROMPTLY RETURN IT IN THE PRE-ADDRESSED ENVELOPE
PROVIDED FOR THAT PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW ANY PROXY
GIVEN BY YOU AND VOTE YOUR SHARES IN PERSON.
<PAGE>
LUXTEC CORPORATION
326 Clark Street
Worcester, MA 01606
___________________________________
PROXY STATEMENT
May __, 1996
___________________________________
This Proxy Statement (the "Proxy Statement") is being furnished to
stockholders of Luxtec Corporation, a Massachusetts corporation ("Luxtec" or the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of Luxtec Corporation (the "Luxtec Board"), for use at the 1996 Annual
Meeting of Stockholders of the Company, including any adjournments or
postponements thereof (the "Meeting"), scheduled to be held on Thursday, June
20, 1996, at 11:00 A.M. in the Company's Board Room, 326 Clark Street,
Worcester, Massachusetts. This Proxy Statement relates to the amendment of
Luxtec's Articles of Organization, as amended (the "Luxtec Charter"), the
election of Class III Directors of Luxtec, the amendment of Luxtec's 1993
Employee Stock Purchase Plan (the "Plan"), and the ratification of the
appointment of Arthur Andersen LLP as the independent public accountants of
Luxtec, each of which is described herein. This Proxy Statement was first mailed
to Luxtec Stockholders on or about May 20, 1996. All solicitation expenses,
including costs of preparing, assembling and mailing proxy material, will be
borne by the Company.
With respect to the Meeting, the close of business on May 17, 1996 has been
established as the record date for determining the stockholders entitled to
notice of and to vote at the Meeting and at any adjournments or postponements
thereof. As of the record date, there were issued and outstanding and entitled
to vote 2,445,398 shares of Luxtec common stock, par value $0.01 per share
("Common Stock"). Holders of shares of Luxtec Common Stock are entitled to one
vote for each share owned at the record date on all matters to come before the
Meeting and any adjournments or postponements thereof. The presence in person or
by proxy of holders of a majority of the shares of Luxtec Common Stock entitled
to vote at the Meeting constitutes a quorum for the transaction of business.
In connection with the Meeting, any proxy may be revoked at any time before
it is voted by written notice received by the Clerk of Luxtec or by attending
the Meeting and voting in person; but if not so revoked, the shares represented
by such proxy will be voted. Attendance at the Meeting will not by itself
constitute revocation of a proxy unless the stockholder so attending so notifies
the Clerk of Luxtec in writing at any time prior to the voting of the proxy. All
proxies will be voted in accordance with the instructions contained therein. If
no choice is specified for one or more proposals in a proxy submitted by or on
behalf of a stockholder, the shares represented by such proxy will be voted in
favor of such proposals and in the discretion of the named proxies with respect
to any other proposals which may properly come before the Meeting. Broker
non-votes (i.e., shares held by brokers or nominees as to which (i) instructions
have not been received from the beneficial owners or the persons entitled to
vote and (ii) the broker or nominee does not have discretionary voting power on
a particular matter) and proxies that withhold authority to vote for election as
a director or that reflect abstentions will be deemed present for the purpose of
determining the presence of a quorum for the transaction of business. With
respect to Proposal 1 (amendment of Luxtec Charter), broker non-votes and
abstentions will have the effect of a vote against such proposal. With respect
to Proposal 3 (amendment of the Plan), a broker non-vote will have no effect on
the outcome of voting on such proposal and an abstention will have the effect of
a vote against such proposal. With respect to Proposals 2 (election of
Directors) and 4 (ratification of appointment of accountants), broker non-votes
and abstentions will have no effect on the outcome of voting on such proposals.
The Luxtec Board does not know of any matters which will be brought before
the Meeting other than those matters specifically set forth in the Notice of
Meeting. However, if any other matter properly comes before the Meeting, it is
intended that the persons named in the enclosed form of Proxy, or their
substitute acting thereunder, will vote on such matter in accordance with their
best judgment.
<PAGE>
A representative of Arthur Andersen LLP is expected to be present at the
Meeting. This representative is expected to be available to respond to
appropriate questions.
___________________________
AVAILABLE INFORMATION
Luxtec is subject to the reporting requirements of the Exchange Act, and in
accordance therewith files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information concerning Luxtec may be
inspected and copies may be obtained (at prescribed rates) at the Commission's
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, as
well as the following regional offices: 7 World Trade Center, 13th Floor, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60604.
This Proxy Statement incorporates by reference certain documents which are
not presented herein or delivered herewith. Upon written or oral request, Luxtec
will provide without charge to each person to whom a copy of this Proxy
Statement is delivered a copy of the documents incorporated by reference herein
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference therein). Requests should be submitted in writing or
by telephone at (508) 856-9454 to Samuel M. Stein, Luxtec Corporation, 326 Clark
Street, Worcester, Massachusetts 01606-1214. In order to ensure timely delivery
of the documents, any request should be made by June 1, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Proxy Statement:
1. Luxtec's Annual Report on Form 10-K, as amended, for the year ended
October 31, 1995.
2. Luxtec's Quarterly Report on Form 10-Q for the period ended January 31,
1996.
3. The description of the Luxtec Common Stock contained in its Registration
Statement on Form 8-A (File No. 1-12960) filed on April 4, 1994.
4. All other reports filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act since October 31, 1995.
All documents subsequently filed by Luxtec pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the date of Meeting shall be
deemed to be incorporated by reference into this Proxy Statement and to be part
of this Proxy Statement from the date of filing thereof. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Proxy Statement.
This Proxy Statement is accompanied by copies of Luxtec's Annual Report on
Form 10-K, as amended, for the year ended October 31, 1995, Luxtec's quarterly
report on Form 10-Q for the period ended January 31, 1996, and Luxtec's 1995
Annual Report to Stockholders.
<PAGE>
PROPOSAL 1
APPROVAL OF THE AMENDMENT TO THE COMPANY'S
ARTICLES OF ORGANIZATION IN CONNECTION WITH
THE CREATION OF A NEW CLASS OF PREFERRED STOCK
The Luxtec Board, by votes adopted by unanimous written consent on May ___,
1996, has recommended the adoption of an amendment (attached as Annex A to this
Proxy Statement, the "Amendment"), amending the Luxtec Charter (attached as
Annex B to this Proxy Statement) in order to (i) authorize 500,000 shares of
preferred stock, par value of $1.00 per share (the "Preferred Stock"), with such
designations, powers, privileges and rights, and qualifications, limitations and
restrictions in respect of each class or series of Preferred Stock as determined
by vote of the Luxtec Board or a committee thereof, and (ii) authorize the
Luxtec Board to issue the Preferred Stock in such classes or series and to
determine the powers, privileges and rights, and the qualifications, limitations
and restrictions in respect to each class or series of Preferred Stock by a vote
of the Luxtec Board or a committee thereof.
The following sets forth a summary of the amendments to be effectuated by
the approval of the Amendment.
Change in the Company's Authorized Capital Stock.
Article 3 of the Luxtec Charter now provides that the Company has the
authority to issue only one class of stock, consisting of 10,000,000 shares
Luxtec Common Stock. The Amendment would amend Articles 3 and 4 of the Luxtec
Charter to (i) authorize 500,000 shares of Preferred Stock, with such
designations, powers, privileges and rights, and qualifications, limitations and
restrictions in respect of each class or series of Preferred Stock as determined
by vote of the Luxtec Board or a committee thereof, and (ii) authorize the
Luxtec Board to issue the Preferred Stock in such classes or series and to
determine the powers, privileges and rights, and the qualifications, limitations
and restrictions in respect to each class or series of Preferred Stock by a vote
of the Luxtec Board or a committee thereof.
The Luxtec Board believes it to be in the best interests of the Company to
change the capital structure of the Company as provided in the Amendment. The
new shares of authorized Luxtec Preferred Stock will allow the Company to
complete the Investment Transaction referred to and described below. The new
shares of authorized Luxtec Preferred Stock will also allow the Company the
flexibility to respond to future developments, including other potential
acquisitions, stock splits, joint ventures and additional corporate financings.
If this proposal is approved by the shareholders of Luxtec, the Luxtec Board
will be able to issue the Preferred Stock in classes or series and to determine
the designations, powers, privileges, rights, qualifications, limitations and
restrictions without the further approval of the stockholders. The Preferred
Stock could be used for any other corporate purpose, including the acquisition
of desirable securities or properties. The issuance of any such Preferred Stock
may have a dilutive effect on the holdings of current shareholders. Other than
the Investment Transaction referred to and described below, the Company has no
present intention to issue any of the shares of Preferred Stock. Notwithstanding
the foregoing, the AMEX Listing Standards and Requirements will still generally
require shareholder approval for listing shares reserved for certain acquisition
and sale transactions. Although no transactions other than the Investment
Transaction described below are currently under consideration by the Luxtec
Board, the Luxtec Board believes that the complexity of modern business
financing and acquisition transactions requires that it be able to respond
promptly and effectively to changes in market conditions. The authorization of
new shares of Luxtec Preferred Stock will enable the Luxtec Board to do so.
Assuming the approval of this proposal and the completion of the Investment
Transaction described below, the number of unissued shares of Luxtec Preferred
Stock not otherwise reserved for issuance will be approximately 490,000 shares.
If this proposal is adopted, the Company is considering the authorization
of the issuance of 10,000 shares of Preferred Stock to be designated as Series A
Preferred Stock (the "Series A Preferred Stock"). If so authorized, the Company
intends to exchange the Series A Preferred Stock for the Notes (as hereinafter
defined) as provided below. As described below, the Series A Preferred Stock is
exchangeable for the Notes at the option of the Company and thus may not occur
immediately after the Meeting if the proposal is adopted, if at all. If the
Exchange (as hereinafter defined) occurs, there will be no net proceeds to the
Company therefrom.
<PAGE>
If the Company decides to complete the Exchange, it is expected that the
Luxtec Board will adopt a vote fixing the powers, preferences, rights,
qualifications, limitations and restrictions of the Series A Preferred Stock.
Such powers, preferences, rights, qualifications, limitations and restrictions
of the Series A Preferred Stock will be as set forth in a Certificate of Vote of
Directors Establishing A Series of a Class of Stock (attached as Annex C to this
Proxy Statement, the "Directors Certificate") and will become part of the Luxtec
Charter upon filing of the Directors Certificate with the Secretary of the
Commonwealth of Massachusetts. The following is a summary description of the
Series A Preferred Stock of the Company and a summary statement of the powers,
preferences, qualifications, privileges, limitations, restrictions, and other
special or relative rights granted to or imposed upon the shares of such class,
as more fully described in the Directors Certificate (attached as Annex C to
this Proxy Statement). The following description of such powers, preferences,
rights, qualifications, limitations and restrictions is subject to change,
qualified by the provisions of the Directors Certificate as it may actually be
filed:
Series A Preferred Stock.
(a) Voting.
Except as otherwise provided by the laws of The
Commonwealth of Massachusetts, and except as hereinafter
provided, the holders of shares of Series A Preferred Stock
shall have no right to vote with respect to any matters to
be voted on by the stockholders of the Company, nor to take
any action in meetings with respect to any such matters.
(b) Dividends.
The holders of record of shares of the Series A
Preferred Stock shall be entitled to receive cash dividends,
when, as and if declared by the Luxtec Board out of assets
which are legally available for the payment of such
dividends, at the annual rate of $8.00 per share of Series A
Preferred Stock, and no more, payable quarterly on the last
day of January, April, July and October in each year.
Dividends shall be cumulative and will accrue on each share
of Series A Preferred Stock from the date of issue thereof,
whether or not declared by the Luxtec Board. Dividends
payable on the Series A Preferred Stock for any period less
than a full quarter shall be computed on the basis of the
actual number of days elapsed and a 360-day year, consisting
of four 90-day quarters.
(c) Redemption.
(i)Redemption Price. The Series A Preferred Stock shall
be redeemable, at the option of the Company, upon notice
given to the holders of record of the Series A Preferred
Stock to be redeemed, at a price of one hundred dollars
($100.00) per share (the "Redemption Price"). Subject to the
provisions in the Directors Certificate, the Luxtec Board
shall have authority to prescribe the manner in which the
Preferred Stock shall be redeemed from time to time.
(ii)Shares to be Redeemed. In case of the redemption of
only a part of the outstanding shares of the Series A
Preferred Stock, all shares of Series A Preferred Stock to
be redeemed shall be selected pro rata and there shall be so
redeemed from each registered holder in whole shares, as
nearly as practicable to the nearest share, that proportion
of all of the shares to be redeemed which the number of
shares held of record by such holder bears to the total
number of shares of Preferred Stock at the time outstanding.
(iii)All Past Dividends Must Be Paid Prior to
Redemption. Except with the consent of the holders of all
the shares of Series A Preferred Stock at the time
outstanding, the Company shall not, and shall not permit any
subsidiary to, purchase or redeem shares of the Series A
Preferred Stock at the time outstanding unless all dividends
on such shares for all past quarterly dividend periods shall
have been paid or declared and a sum sufficient for the
payment thereof set apart.
<PAGE>
(iv)Required Redemptions. On January 1, 2001, the
Company shall redeem, in the manner and with the effect
provided in the Directors Certificate, at the Redemption
Price of all shares of Series A Preferred Stock as shall
then remain outstanding, or at such other time or times as
may be provided for in the Note Purchase Agreement (as
hereinafter defined).
(v)Optional Redemptions. The Company at the option of
the Luxtec Board may redeem, in the manner and with the
effect provided in Directors Certificate, on or at any time
or times part or all of the outstanding shares of Series A
Preferred Stock at the Redemption Price.
(d) Liquidation.
Upon any liquidation, dissolution or winding up of the
Company, after payment or provision for payment of all debts
and other obligations and liabilities of the Company, the
holders of the shares of Series A Preferred Stock shall be
entitled, before any distribution or payment is made upon
any Common Stock, to be paid an amount equal to the
Redemption Price plus an amount equal to all accrued
dividends, and the holders of the Series A Preferred Stock
shall not be entitled to any further payment. Upon any such
liquidation, dissolution or winding up of the Company, after
the holders of the Series A Preferred Stock, at the time
outstanding, shall have been paid in full the amounts to
which they shall be entitled, the remaining net assets of
the Company may be distributed to the holders of Common
Stock. If, upon any such liquidation, dissolution or winding
up of the Company, the assets of the Company distributable
as aforesaid among the holders of the Series A Preferred
Stock at the time outstanding shall be insufficient to
permit the payment to them of the full preferential amounts
to which they are entitled, then the entire assets of the
Company so available for distribution shall be distributed
ratably among the holders of the Series A Preferred Stock at
the time outstanding in proportion to the full preferential
amounts to which they are entitled. The consolidation or
merger of the Company into or with any other corporation or
corporations, or the sale or transfer by the Company of all
or any part of its assets, or the reorganization or
recapitalization of the Company, or the reduction of the
capital stock of the Company, shall be deemed to be a
liquidation, dissolution or winding up of the Company within
the meaning of any of the provisions of this paragraph.
(e) Restrictions.
At any time when shares of Series A Preferred Stock are
outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Company is
required by law or by the Luxtec Charter, and in addition to
any other vote required by law or the Luxtec Charter,
without the approval of the holders of at least 60% of the
then outstanding shares of Series A Preferred Stock, given
in writing or by vote at a meeting, consenting or voting (as
the case may be) separately as a class, the Company will
not:
(i)Create or authorize the creation of any additional
class or series of shares of stock unless the same ranks
equal or junior to the Series A Preferred Stock as to the
distribution of assets on the liquidation, dissolution or
winding up of the Company, or increase the authorized amount
of the Series A Preferred Stock or increase the authorized
amount of any additional class or series of shares of stock
unless the same ranks equal or junior to the Series A
Preferred Stock as to the distribution of assets on the
liquidation, dissolution or winding up of the Company, or
create or authorize any obligation or security, convertible
into shares of the Series A Preferred Stock or into shares
of any other class or series of stock unless the same ranks
equal or junior to the Series A Preferred Stock as to the
distribution of assets on the liquidation, dissolution or
winding up of the Company, whether any such creation,
authorization or increase shall be by means of amendment to
the Luxtec Charter or by merger, consolidation or otherwise;
or
<PAGE>
(ii)Purchase or set aside any sums for the purchase of,
or pay any dividend or make any distribution on, any shares
of stock other than the Series A Preferred Stock, except for
dividends or other distributions payable on the Common Stock
solely in the form of additional shares of Common Stock.
The Luxtec Board recommends that the shareholders vote "FOR" the proposed
amendment of the Luxtec Charter, and the enclosed proxy will be so voted unless
a contrary vote is indicated. The affirmative vote of the holders of a
two-thirds of the shares of Luxtec Common Stock outstanding and entitled to vote
thereon is required for approval of the Amendment to the Luxtec Charter.
INVESTMENT TRANSACTION SUMMARY
On December 18, 1995 the Company entered in to a Note Purchase Agreement
(attached as Annex D to this Proxy Statement, the "Note Purchase Agreement")
with Geneva Middle Market Investors, L.P. ("GMMI" or the "Purchaser"), pursuant
to which the Company received $1,000,000 in cash in exchange for certain notes,
warrants and other consideration. Subject to approval of this proposal for the
authorization of the Preferred Stock, the Company may, at the Company's option,
require the Purchaser to exchange its Notes (as hereinafter defined) for shares
of Series A Preferred Stock of the Company with an aggregate Redemption Price
equal to 100% of the principal amount of the Notes so exchanged together with
accrued interest thereon (the "Exchange").
Terms of the Note Purchase Agreement
On December 18, 1995, pursuant to the Note Purchase Agreement, the Company
issued to GMMI Senior Subordinated Notes (the "Notes"), in the aggregate
principal amount of $1,000,000 to mature January 1, 2001, to bear interest on
the unpaid principal balance at the rate of 8% per annum, payable annually in
arrears, and authorized the issuance to GMMI of warrants (collectively the
"Warrants") entitling the holder to purchase 450,000 shares of Luxtec Common
Stock at an exercise price of $3.00 per share.
The Notes are subordinated to certain of the Company's bank and
institutional debt, but otherwise rank senior in priority of payment to all
other debt of the Company (whether then existing or thereafter incurred) that is
subordinate to the bank and institutional debt. The Company has the privilege of
prepaying the Notes at any time, without premium or penalty, at 100% of the
principal amount, plus interest accrued thereon.
On any exercise of its Warrants by a holder, an aggregate principal amount
of its Notes then outstanding, together with accrued interest, equal to the
exercise price of such Warrants shall be prepaid and applied by the Company to
the exercise price of the Warrants. If the Notes have been exchanged for Series
A Preferred Stock then, on any exercise of its Warrants by a holder, such number
of shares of its Series A Preferred Stock with an aggregate Redemption Price,
together with accrued dividends thereon, equal to the exercise price of such
Warrants shall be surrendered to the Company and applied to the exercise price
of the Warrants.
Upon the merger or consolidation of the Company or any of its subsidiaries
or the sale, lease, transfer or other disposition of the Company's or any of its
subsidiary's assets to any person or persons, each Note then outstanding shall
become due and payable at 100% of the principal amount thereof together with all
interest accrued thereon except under certain circumstances.
The Note Purchase Agreement includes certain affirmative covenants
concerning financial and other reporting by the Company; allowable inspections
of property; corporate existence; payment of taxes and claims; compliance with
laws; maintenance of properties and leases; insurance; use of proceeds;
environmental compliance; and maintenance of books and records. Additionally,
the Company shall, prior to any issuance by the Company of any of its securities
(other than debt securities with no equity feature), offer to the Purchaser by
written notice the right, for a period of 20 days, to purchase the Purchaser's
pro rata share of such securities based on the Purchaser's portion of the
outstanding Common Stock of the Company (or if the Purchaser has not fully
exercised its Warrants, based upon the Purchaser's portion of the outstanding
Common Stock of the Company plus the number of shares of Common Stock of the
Company which the Purchaser would then be entitled to purchase upon exercise of
its Warrants), for cash at an amount equal to the price or other consideration
for which such securities are to be issued. However, the preemptive rights of
the Purchaser shall not apply to securities issued (i) as a stock dividend or
split, (ii) pursuant to the Warrants, options, convertible securities, or other
rights listed as outstanding on December 18, 1995, (iii) solely in consideration
for the acquisition of another entity, (iv) pursuant to a firm commitment or
best efforts underwritten public offering, (v) pursuant to the Agreement of
Merger and Plan of Reorganization, dated as of June 28, 1995, by and among the
Company, Luxtec CD Acquisition Co. Inc., CardioDyne, Inc., Paul Epstein and
Patrick G. Phillips, (vi) pursuant to any employee benefit plan or to any
director of consultant to the Company in exchange for personal services, and
(vii) upon the exercise of any right which was not itself in violation of the
terms of the agreement. The Note Purchase Agreement also contains certain
negative covenants that proscribe certain transactions with affiliates of the
Company.
<PAGE>
The Notes are further subject to certain limitations, terms and conditions
as are set forth in the 8% Senior Subordinated Note due June 1, 2001 attached to
this Proxy Statement as Annex E.
Warrants.
Pursuant to the Note Purchase Agreement and a Warrant Agreement dated as of
December 18, 1995 (attached as Annex F to this Proxy Statement, the "Warrant
Agreement"), Luxtec has issued the Warrants to the Purchaser, to purchase up to
an aggregate of 450,000 shares of Luxtec Common Stock. The shares of Common
Stock issuable upon exercise of the Warrants are referred to as the "Warrant
Shares". The initial exercise price for the Warrants is $3.00 per share, subject
to adjustment pursuant tor certain antidilution provisions. Each Warrant holder
has the right to exercise the Warrants at any time during the period from (and
including) the date of issuance of any Warrant and until the October 31, 2003,
subject to certain restrictions. The issuance of any such Warrant Shares may
have a dilutive effect on the holdings of current shareholders. The Warrants are
further subject to certain limitations, terms and conditions as are set forth in
the Warrant Certficate dated as of December 18, 1995, attached to this Proxy
Statement as Annex G.
The Warrant Agreement includes certain antidilution provisions concerning:
(i) issuance of additional shares of capital stock; (ii) extraordinary dividends
and distributions; (iii) treatment of options and convertible securities; and
(iv) treatment of stock dividends, stock splits, etc. The Warrant Agreement also
includes certain tag-along rights attached to certain management stockholders
and the Warrants are further subject to certain limitations, terms and
conditions as are set forth in Warrant Agreement. Additionally, the holders of
the Warrant Shares have certain demand and "piggyback" registration rights with
respect to the Warrant Shares, subject to certain limitations, terms, and
conditions, all as set forth in the Registration Rights Agreement dated as of
December 18, 1995 (attached as Annex H to this Proxy Statement, the
"Registration Rights Agreement").
Comparison of Series A Preferred Stock and the Notes
Pursuant to the Note Purchase Agreement, the Company may, at the Company's
option, require the Purchaser to exchange the Notes for shares of Series A
Preferred Stock at an aggregate redemption price equal to 100% of the principal
amount of the Notes together with accrued interest thereon. From an economic
standpoint, the Notes and the Series A Preferred Stock are substantially
equivalent: (i) as non-voting, non-convertible preferred stock, the Series A
Preferred Stock is substantially equivalent to debt; (ii) the dividends on the
Series A Preferred Stock and the interest on the Notes accrue at the same 8% per
annum rate; (iii) the Notes mature and the Series A Preferred Stock is required
to be redeemed by the Company on the same date, January 1, 2001; and (iv) at the
option of the Company at any time, the Notes are subject to prepayment and the
Series A Preferred Stock is subject to redemption. With respect to liquidation,
both the Series A Preferred Stock and the Notes are senior to the Common Stock,
but unlike the Notes, the Series A Preferred Stock will be junior to any
outstanding debt obligations of the Company. Finally, the issuance of the Series
A Preferred Stock will not have a dilutive effect on the holdings of current
shareholders as the Series A Preferred Stock is non-voting and is not
convertible into Luxtec Common Stock.
The foregoing is a brief summary of certain provisions of the agreements
executed and delivered in connection with the Investment Transaction. This
summary is not intended to be a complete statement of all material provisions of
such agreements and is qualified in its entirety by reference to the full text
of such agreements, copies of which are attached to this Proxy Statement and
incorporated by reference. For a complete description of the terms of the
Investment Transaction, see the Note Purchase Agreement (attached as Annex D to
this Proxy Statement), the Note (attached at Annex E to this Proxy Statement),
the Warrant Agreement (attached as Annex F to this Proxy Statement), the Warrant
Certificate (attached as Annex G to this Proxy Statement), and the Registration
Rights Agreement (attached as Annex H to this Proxy Statement). The stockholders
of Luxtec are urged to review the text of the foregoing agreements in their
entirety.
<PAGE>
PROPOSAL 2
ELECTION OF LUXTEC DIRECTORS
Section 50A of Chapter 156B of the Massachusetts General Laws provides for
a Board of Directors of such number as is fixed by the directors, and which is
divided into three classes serving staggered three-year terms. The Luxtec Board
has fixed the number of Directors at seven (7). At the Meeting, the terms of the
members of Class III, Dr. Thomas J. VanderSalm and Mr. James Berardo, expire.
Dr. VanderSalm and Mr. Berardo are the only nominees for election as Class III
Directors for a term to expire at the 1999 Annual Meeting of Stockholders.
Unless authority is withheld, it is the intention of the persons voting
under the enclosed proxy to vote such proxy in favor of the election of Dr.
VanderSalm and Mr. Berardo to be directors of the Company until the 1999 Annual
Meeting of Stockholders and until their successors are elected and qualified.
The affirmative vote of a plurality of the shares of Luxtec Common Stock present
or represented by proxy, and entitled to vote at the Meeting is required for the
election of Dr. VanderSalm and Mr. Berardo.
The current members of Class I, with a term expiring at the 1997 Annual
Meeting of Stockholders, are Louis C. Wallace and Patrick G. Phillipps. The
members of Class II, with a term expiring at the 1998 Annual Meeting of
Stockholders are Mr. Paul Epstein, Ms. Lynn Friedel, and Mr. James W. Hobbs.
The following table sets forth , with respect to the members of the Luxtec
Board and management of the Company, (i) the name, age and length of service as
a director or executive officer, (ii) the principal occupation and business
experience of such person for at least the past five years, (iii) the names of
other companies of which such person currently serves as a director or executive
officer, and (iv) the amount and percentage of Luxtec Common Stock owned by each
such person as of February 29, 1996. The address for each person listed below is
c/o the Company at 326 Clark Street, Worcester, Massachusetts 01606-1214.
<TABLE>
<CAPTION>
(1) Amount of Percent of Common
Position and Offices with the Company and Other Business Common Stock Stock Outstanding
Name Experience During Last Five Years Owned Directly
- --------------------------- ------------------------------------------------------------ ------------------- -------------------
<S> <C> <C> <C>
James Berardo James Berardo has been a Director of the Company since 154,520 (2) 6.32%
Age 36 1995. Mr. Berardo currently serves as President of
Darlco, Inc., a real estate development and investment
management company. Mr. Berardo joined Darlco in 1986,
serving in various financial capacities prior to assuming
his current position in March, 1995. Mr. Berardo is a
member of the Audit and Compensation Committees of the
Board of Directors.
Paul Epstein Paul Epstein joined the Company in 1995 as Vice President 166,894 (3) 6.82%
Age 65 of Business Development and Strategic Planning and as a
Director. Mr. Epstein, a co-founder of CardioDyne, Inc.,
served as Chairman, Vice President and Chief Financial
Officer from the time of CardioDyne's founding in
February, 1989, until the merger with Luxtec in October,
1995 Previously, Mr. Epstein co-founded Electronic Image
Systems Corporation, Brattle Instrument Corporation and,
most recently, Omni-Flow, Inc., which introduced the first
multiple medication, programmable infusion pump and was
acquired by Abbott Laboratories in 1989. Mr. Epstein
holds B.S. and M.S. degrees in Chemical Engineering and a
B.S. degree in Business Management from MIT. Mr. Epstein
has been jointly awarded eleven patents in the medical
instrumentation and communication fields.
<PAGE>
(1) Amount of Percent of Common
Position and Offices with the Company and Other Business Common Stock Stock Outstanding
Name Experience During Last Five Years Owned Directly
Lynn K. Friedel Lynn K. Friedel has been a Director of the Company since 13,500 *
Age 46 1988. Since 1994, Ms. Friedel has been Vice President of
IQ Systems, Inc., a semiconductor company based in
Newtown, CT. Ms. Friedel was employed at Termiflex
Corporation of Merrimack, NH, a manufacturer of hand held
computer terminals, from 1986 to 1993, most recently as
Vice President, Finance, Administration and
Manufacturing. Ms. Friedel is a member of the Audit and
Compensation Committees of the Board of Directors.
James W. Hobbs James W. Hobbs was elected to the positions of President, 45,100 1.81%
Age 47 Chief Executive Officer and Director in 1993. Mr. Hobbs
was Chief Executive Officer of Graylyn Associates from
1992 to 1993. Graylyn was an investment firm founded by
Mr. Hobbs to invest in early stage medical technology.
Prior to Graylyn, Mr. Hobbs served as the President and
Chief Executive Officer of Genica Pharmaceuticals from
1990 to 1992. Genica Pharmaceuticals is a corporation
engaged in providing new diagnostic assays and conducting
therapeutic research for neurological disorders. Mr.
Hobbs was with Johnson and Johnson Professional
Diagnostics as Vice President and General Manager from
1985 to 1989. Mr. Hobbs is a member of the Nominating
Committee of the Board of Directors.
David Mutch David Mutch is Vice President of Sales and Marketing of 26,710 1.09%
Age 51 the Company. Mr. Mutch joined the Company in September,
1992 as Director of Sales and Marketing and assumed his
present position in December, 1994. Previously, Mr. Mutch
held various management positions with Hewlett Packard
Company over a twenty-one year career. During his last
five years at Hewlett Packard, Mr. Mutch was the Marketing
Manager for the Health Care Information Systems Division.
Patrick G. Phillipps Patrick G. Phillipps joined the Company in 1995 as Vice 225,064 (4) 9.20%
Age 50 President of Engineering and a Director. Mr. Phillipps, a
co-founder of CardioDyne, Inc., served as President and
Chief Executive Officer from the time of CardioDyne's
founding in February, 1989, until the merger with Luxtec
in October, 1995. Previously, Mr. Phillipps founded the
Engineering Department of Lifeline Systems, Inc., where he
served as Vice President of Engineering and oversaw the
development and introduction of a new generation of
Lifeline's hospital based emergency call system for home
use by the elderly. Mr. Phillipps holds an S.B. degree in
Electrical Engineering from MIT and has been jointly
awarded over a dozen patents in the medical monitoring and
related fields.
<PAGE>
(1) Amount of Percent of Common
Position and Offices with the Company and Other Business Common Stock Stock Outstanding
Name Experience During Last Five Years Owned Directly
Samuel M. Stein Samuel Stein is Vice President, Chief Financial Officer, 7,045 *
Age 56 Treasurer and Assistant Clerk of the Company. Mr. Stein
joined the Company in October, 1993 as Vice President of
Finance and Chief Financial Officer and was elected to the
further offices of Treasurer and Assistant Clerk during
1994. From 1990 to 1993, Mr. Stein was employed as the
Corporate Controller of Great American Software, Inc., an
accounting software manufacturer.
Thomas J. Vander Salm Dr. Thomas Vander Salm has been a Director of the Company 53,700 (5) 2.19%
Age 55 since 1984. Dr. Vander Salm is Chief of Cardio Thoracic
Surgery and has been a Professor of Surgery at the
University of Massachusetts Medical School in Worcester,
MA since 1970. Dr. Vander Salm is a member of the Audit
and Compensation Committees of the Board of Directors.
Louis C. Wallace Louis C. Wallace has been a Director of the Company since 37,250 1.52%
Age 55 1989. Mr. Wallace is the founder and President of
Specialty Surgical Instrumentation, Inc. (S.S.I.), a
manufacturer and distributor of surgical instruments.
S.S.I. was established in Nashville, TN in 1976. Mr.
Wallace is a member of the Compensation and Nominating
Committees of the Board of Directors.
Nominees, directors and 729,783 28.90%
officers as a group (9 persons)
=========================================================================================
</TABLE>
* Indicates less than 1.0%
(1) Shares of Common Stock subject to options or warrants exercisable as of
April 30, 1996 (or exercisable within 60 days after such date), are deemed
outstanding for purposes of computing the percentage ownership of the person
holding such option or warrant but are not outstanding for purposes of computing
the percentage of any other person. Unless otherwise indicated in these
footnotes, each stockholder has sole voting and investment power with respect to
the shares beneficially owned.
(2) Mr. Berardo beneficially owns, as trustee of various trusts, 154,520
shares of the Company's Common Stock.
(3) Mr. Epstein owns 84,676 shares in his name and may be deemed to be the
beneficial owner of 82,218 shares in the name of his wife, Mary Epstein.
(4) Mr. Phillipps owns 118,159 shares in his name and may be deemed to be
the beneficial owner of 106,905 shares in the name of his wife, Janice B.
Phillipps.
(5) The 45,700 shares of the Company's Common Stock owned of record and
beneficially by Thomas J. Vander Salm includes 32,000 shares of the Company's
Common Stock owned of record by the trustees of the Vander Salm Family Trust, of
which he may be deemed to be a beneficial owner.
<PAGE>
The following table sets forth as of April 30, 1996, the name of each
person who, to the knowledge of the Company, owned beneficially more than 5% of
the shares of Common Stock of the Company outstanding at such date, the number
of shares owned by each of such persons and the percentage of the outstanding
shares represented thereby.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percentage of Common
of Beneficial Owner Beneficial Ownership (1) Stock Outstanding
<S> <C> <C> <C>
James Berardo 154,520 (2) 6.32%
6624 Fannin Suite 2700
Houston, TX 77030
Denton A. Cooley, MD 352,378 14.41%
6624 Fannin, Suite 2700
Houston, TX 77030
Paul Epstein 166,894 (3) 6.82%
95 Clinton Road
Brookline, MA 02146
G&G Diagnostics Fund, L.P. III 142,816 5.84%
30 Ossipee Road
Newton, MA 02164
Geneva Middle Market Investors, L.P. 450,000 (4) 15.54%
70 Walnut Street
Wellesley, MA 02181
Rita Kloots 155,100 6.34%
Box 1077
Sturbridge, MA 01566
Patrick G. Phillips 225,064 (5) 9.20%
224 Old County Road
Lincoln, MA 01773
David Tweed 126,433 5.17%
2011 Tall Palm Road
Melbourne, FL 32935
</TABLE>
(1) Shares of Common Stock subject to options or warrants exercisable as of
April 30, 1996 (or exercisable within 60 days after such date), are deemed
outstanding for purposes of computing the percentage ownership of the person
holding such option or warrant but are not outstanding for purposes of computing
the percentage of any other person.
(2) Mr. Berardo beneficially owns, as trustee of various trusts, 154,520
shares of the Company's Common Stock.
(3) Mr. Epstein owns 84,676 shares in his name and may be deemed to be the
beneficial owner of 82,218 shares in the name of his wife, Mary Epstein.
(4) Consists of shares issuable to GMMI upon exercise of a warrant.
(5) Mr. Phillipps owns 118,159 shares in his name and may be deemed to be
the beneficial owner of 106,905 shares in the name of his wife, Janice B.
Phillipps.
<PAGE>
Board of Directors Meetings and Committees
During the fiscal year ended October 31, 1995 (the "1995 Fiscal Year"), the
Luxtec Board held four (4) meetings, and one (1) meeting where action was taken
by written consent. During the 1995 Fiscal Year, each incumbent director
attended at least 75% of the aggregate of the number of meetings of the Luxtec
Board and the total number of meetings held by all committees on which the
individual served.
The Audit Committee presently is composed of four directors: James Berardo,
Paul Epstein, Lynn K. Friedel and Thomas J. VanderSalm. Responsibilities of this
committee include engagement of independent auditors, review of audit fees,
supervision of matters relating to audit functions, review and setting of
internal policies and procedures regarding audits, accounting and other
financial controls, and reviewing related party transactions. During the 1995
Fiscal Year, the Audit Committee met one (1) time.
The Compensation Committee presently is compose of three directors: James
Berardo, Lynn K. Friedel and Louis C. Wallace. Responsibilities of this
committee include approval of remuneration arrangements for executive officers
of the Company, review and approval of compensation plans relating to executive
officers and directors, including grants of stock options and other benefits
under the Company's stock option plan, and general review of the Company's
employee compensation policies. None of the members of the Compensation
Committee has been an employee of the Company at any time and none has any
relationship with either the Company or the Company's officers requiring
disclosure under applicable regulations of the Securities and Exchange
Commission. During the 1995 Fiscal Year, the Compensation Committee met two (2)
times.
Executive Compensation
The table below sets forth certain compensation information for the fiscal
years ended October 31, 1995, 1994 and 1993 of those persons who were at October
31, 1995: (i) the Chief Executive Officer, and (ii) the most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000
(collectively, the "Named Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
----------------------------------------- --------------------------------------------
Name and Fiscal All Other
Principal Position Year Salary($) Bonus($) Options (#) Compensation ($)
<S> <C> <C> <C> <C>
James Hobbs 1995 $154,827 $23,500 50,000 --
President, CEO and 1994 $154,903 $16,000 0 --
Director 1993 $115,385 -- 50,000 --
Samuel M. Stein 1995 $86,716 $21,750 40,000 --
CFO and Treasurer 1994 $83,366 -- 0 --
1993 $4,904 -- 10,000 --
David Mutch 1995 $86,827 $21,750 40,000 --
VP Marketing and 1994 $83,768 $17,000 0 --
Sales 1993 $76,924 -- 10,000 --
</TABLE>
The following table sets forth grants of stock options pursuant to the
Company's 1993 Stock Plan, as amended, during the fiscal year ended October 31,
1995 to the Named Officers listed in the Summary Compensation Table above.
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
- -------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Percent of Total Assumed Annual Rates of Stock
Options Granted Price Appreciation for Option
Options to Employees in Exercise or Term (1)
Granted Fiscal Year Base Price Expiration
Name (#) ($/Share) Date 5% ($) 10%
($)
- -------------------- ------------ ------------------ ------------- ------------ --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
James W. Hobbs 50,000 38% $4.63 12/8/04 $145,500 $369,000
Samuel M. Stein 40,000 31% $4.63 12/8/04 $116,500 $295,000
David Mutch 40,000 31% $4.63 12/8/04 $116,500 $295,000
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the 1993 Stock Option Plan, as
amended, including (i) the number of shares purchased upon exercise of options
in the most recent fiscal year, (ii) the net value realized upon such exercise,
(iii) the number of unexercised options outstanding at October 31, 1995, and
(iv) the value of such unexercised options at October 31, 1995:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OCTOBER 31, 1995 OPTION VALUES
- --------------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options at October In-The-Money Options at October
31, 1995 (#) 31, 1995 ($)
- ----------------- --------------- ----------------- ----------------------------------- ----------------------------------
Shares
Acquired on Value Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable/Unexercisable (1)
- ----------------- --------------- ----------------- --------------- ------------------- ----------------------------------
<S> <C> <C> <C> <C>
James Hobbs - - 30,000 70,000 $82,500 $55,000
Samuel Stein - - 4,000 46,000 $ 9,480 $14,220
David Mutch - - 4,000 46,000 $ 9,480 $14,220
================= ===============
</TABLE>
(1) Value is based on the closing sale price of the Common Stock
as of October 31, 1995 ($4.00) minus the exercise price.
Executive Employment Agreements
The Company has entered into an employment agreement with James W. Hobbs,
pursuant to which the Company has agreed to employ Mr. Hobbs as President and
Chief Executive Officer. The agreement with Mr. Hobbs was entered into on June
10, 1993 with an initial term of one year with automatic renewals for successive
terms of one year each unless either party gives notice of intention not to
renew. The Compensation Committee of the Luxtec Board set Mr. Hobbs' base salary
for 1995 at $162,000 and for 1996 at $168,500. Mr. Hobbs is entitled to receive
an annual bonus in cash and/or equity of the Company from an annual bonus pool
based, in Fiscal Year 1995, on 1.5% of the net sales of the Company, with such
bonus to be determined by the Compensation Committee. Factors taken into account
by the Compensation Committee in determining bonuses include return on
investment, net sales, and net income compared to the business plan. Although
there is no maximum percentage bonus, 30% of base salary is the expected
guideline. Mr. Hobbs is entitled to severance pay in an amount equal to six
months of his then current annual salary if his employment is terminated by (i)
the Company without cause or (ii) Mr. Hobbs for Good Reason (as defined in the
agreement).
<PAGE>
Director Compensation
The Company pays non-employee directors $500 for attendance at each meeting
of the Luxtec Board, $250 per each meeting of a committee thereof ($150 per
meeting of a committee if such meeting is concurrent with a regular meeting of
the Luxtec Board), and $100 per meeting held by telephone conference. The
Company also pays expenses for attendance at meetings of the Luxtec Board and
committees thereof. Additionally, non-employee Directors are compensated with
options to purchase shares of Common Stock of the Company, in accordance with
the 1995 Stock Option Plan For Non-Employee Directors.
REPORTS OF BENEFICIAL OWNERSHIP
Based solely on a review of reports furnished to the Company (none having
been so received) or written representations from the Company's directors and
executive officers, the Company believes that all reports required to be filed
pursuant to Section 16 of the Exchange Act were satisfied by the Company's
directors, executive officers and ten percent (10%) holders during the 1995
fiscal year.
CERTAIN TRANSACTIONS
Mr. Louis C. Wallace is currently, and has been since 1989, a member of the
Board of Directors of the Company. Mr. Wallace is the founder and President of
Specialty Surgical Instrumentation, Inc. ("SSI"), a surgical distributor in ten
(10) southeastern states. SSI is the largest single customer of the Company,
representing approximately fifteen percent (15%) of net sales during fiscal
1995. SSI and the Company operate at arms length with a contract substantially
the same as the other domestic distributors of the Company's products. The
Company expects that SSI will represent approximately the same percentage of net
sales during fiscal 1996 as occurred during fiscal 1995.
<PAGE>
PROPOSAL 3
AMENDMENT OF THE COMPANY'S 1993 EMPLOYEE STOCK PURCHASE PLAN TO
INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE PLAN
AND TO INCREASE THE MAXIMUM NUMBER OF SHARES THAT EACH EMPLOYEE MAY
PURCHASE DURING EACH PERIOD TO 1,000 SHARES
The Luxtec Board has authorized, by votes adopted at a meeting on December
14, 1995, subject to stockholder ratification, changes to the Company's 1993
Employee Stock Purchase Plan (the "Plan") to (i) increase the maximum number of
shares authorized by 50,000 shares from 25,000 to 75,000 shares and (ii) to
increase the maximum number of shares purchasable by a participant thereunder
from 500 shares every six months to 1,000 shares every six months.
Purpose.
The Plan is intended to provide an incentive to, and to encourage stock
ownership by, all eligible employees of the Company, and participating
subsidiaries so that they may share in the growth of the Company by acquiring or
increasing their proprietary interest in the Company. The Plan is designed to
encourage eligible employees to remain in the employ of the Company. Under the
Plan, payroll deductions are used to purchase the Company's Common Stock for
eligible, participating employees through the exercise of stock options.
It is intended that options issued pursuant to this Plan will constitute
options issued pursuant to an "employee stock purchase plan" within the meaning
of Section 423 (b) of the Internal Revenue Code of 1986, as amended (the
"Code").
Administration.
The Plan is administered by the Board of Directors of the Company. The
Board may appoint a committee of not less than two directors to administer the
Plan. The Board of Directors, subject to the provisions of the Plan, has the
power to construe the Plan, to determine all questions thereunder, and to adopt
and amend such rules and regulations for administration of the Plan as it may
deem appropriate.
Creation, Amendment and Termination of the Plan
The Plan was adopted by the Company's Board of Directors on February 24,
1994, and was approved by the Company's shareholders on April 24, 1994.
The Board of Directors may from time to time adopt amendments to the Plan
provided that, without the approval of the Company's shareholders, no amendment
may increase the number of shares that may be issued under the Plan or change
the class of employees eligible to receive options under the Plan, or cause Rule
16b-3 under the Securities Exchange Act of 1934 to become inapplicable to the
Plan.
Unless terminated sooner as provided below, the Plan shall terminate on
October 31, 1999. The Plan may be terminated at any time by the Company's Board
of Directors but such termination will not affect options then outstanding under
the Plan. The Plan will terminate in any case when all or substantially all of
the unissued shares of Common Stock reserved for the purposes of the Plan have
been purchased. If at any time shares of Common Stock reserved for the purpose
of the Plan remain available for purchase but not in sufficient number to
satisfy all then unfilled purchase requirements, the available shares will be
apportioned among participants in proportion to their options and the Plan will
terminate. Upon such termination or any other termination of the Plan, all
payroll deductions not used to purchase Common Stock will be refunded to Plan
participants without interest.
<PAGE>
Shares Subject to the Plan
Previously, the Plan authorized the issuance of up to 25,000 shares of
Common Stock (subject to adjustment for capital changes) pursuant to the
exercise of non-transferable options granted to participating employees. The
Common Stock subject to the options under the Plan included shares of the
Company's authorized but unissued Common Stock and shares of Common Stock
reacquired by the Company, including shares purchased in the open market. Option
holders are protected against dilution in the event of a recapitalization, stock
split, merger, consolidation, reorganization, combination, liquidation, stock
dividend or similar transaction.
Participation in the Plan
An employee electing to participate in the Plan must authorize an amount (a
whole percentage not less than 1% nor more than 10% of the employee's regular
pay) to be deducted by the Company from the employee's pay during six-month
payroll deduction periods in each year (the "Payment Periods"). The designated
Payment Periods are November 1st to April 30th and May 1st to October 31st. The
Company will accumulate and hold for the employee's account the amounts deducted
from his pay. No interest will be paid on these amounts. On the first business
day of each Payment Period, the Company will grant to each Plan participant an
option to purchase shares of the Common Stock of the Company, previously, each
option covered a maximum of 500 shares. On the last day of the Payment Period,
the employee will be deemed to have exercised this option, at the option price,
to the extent of such employee's accumulated payroll deductions, on the
condition that the employee remains eligible to participate in the Plan
throughout the Payment Period. Under the terms of the Plan, the option price is
an amount equal to 85% of the fair market value of the Common Stock, rounded up
to avoid fractions of a dollar other than 1/4, 1/2 and 3/4, on either the first
business day or the last business day of the Payment Period, whichever is lower.
An employee may enter the Plan by delivering to the Company, at least 10
days before the beginning date of the next succeeding Payment Period, an
authorization stating the percentage to be deducted regularly from the
employee's pay and authorizing the purchase of shares of Common Stock for the
employee in each Payment Period in accordance with the terms of the Plan.
Unless an employee files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the employee has on file
under the Plan will continue from the initial Payment Period to succeeding
Payment Periods as long as the Plan remains in effect. Deductions may not be
increased or decreased during a Payment Period. However, an employee may
withdraw in full from the Plan as described below.
An employee may withdraw from the Plan, in whole but not in part, at any
time prior to the last business day of each Payment Period by delivering a
withdrawal notice to the Company, in which event the Company will refund the
entire balance of the employee's deductions not previously used to purchase
stock under the Plan without interest.
Eligibility
Employees of the Company (and participating subsidiaries) whose customary
employment is more than 20 hours per week and more than 5 months per calendar
year, and who have been on the Company payroll for more than 6 consecutive
calendar months at the beginning of a payment period, are eligible to
participate in the Plan. An employee may not be granted an option under the
Plan, if after the granting of the option such employee would be treated as
owning 5% or more of the combined voting power or value of all classes of stock
of the Company or its subsidiaries. Directors who are not employees of the
Company may not participate in the Plan.
If an employee is not a participant in the Plan on the last day of the
Payment Period, the employee is not entitled to exercise his option. An
employee's rights under the Plan terminate upon his voluntary withdrawal from
the Plan at any time, or when he ceases employment because of retirement,
resignation, lay-off, discharge, death, change of status or any other reason,
except that if an employee is on a leave of absence from work during the last
three months of any Payment Period, he is nevertheless deemed to be a
participant in the Plan on the last day of the Payment Period.
<PAGE>
An employee's rights under the Plan are the employee's alone and may not be
transferred or assigned to, or availed of by, any other person, other than by
the laws of descent and distribution. Any option granted to an employee may be
exercised, during the employee's lifetime, only by the employee.
Miscellaneous
The proceeds received by the Company from the sale of Common Stock pursuant
to the Plan will be used for general corporate purposes. The Company's
obligation to deliver shares of Common Stock is subject to the approval of any
governmental authority required in connection with the sale or issuance of such
shares. The date of commencement of the first Payment Period was May 1, 1994.
The Plan is not an employee benefit plan that is subject to the provisions
of the Employee Retirement Income Security Act of 1974, and the provisions of
Section 401(a) of the Code are not applicable to the Plan.
Federal Income Tax Consequences
An option granted under the Plan is intended to qualify as an option
granted under an employee stock purchase plan as defined in Section 423 of the
Code, and is taxed in accordance with Sections 421 and 423 of the Code and the
regulations issued thereunder.
The following general rules are currently applicable for United States
federal income tax purposes to employees who receive grants of options for
Common Stock and purchase shares of Common Stock pursuant to the Plan:
1.The amounts deducted from an employee's pay under the Plan will be
included in the employee's compensation subject to federal income tax. No
additional income will be realized by the employee either at the time options
are granted pursuant to the Plan or at the time the employee purchases shares
pursuant to the Plan.
2.If the employee disposes of shares of Common Stock more than two years
after the first business day of the Payment Period in respect of which the
employee acquired the shares, then upon such disposition the employee will
recognize ordinary compensation income in an amount equal to:
(a)the lesser of the fair market value of the shares (i) on the
date of disposition and (ii) on the first business day of the Payment
Period in which the shares were purchased; minus
(b)the amount the employee paid for the shares.
In addition, the employee generally will recognize long-term capital gain
or loss in an amount equal to the difference between the amount realized upon
the sale of the shares and the employee's basis in the shares (i.e., the amount
the employee paid for the shares plus the amount, if any, taxed as ordinary
compensation income).
3.If the employee disposes of shares of Common Stock within two years after
the first business day of the Payment Period in respect of which the employee
acquired the shares, then upon disposition the employee will recognize ordinary
compensation income in an amount equal to the excess of the fair market value of
the shares on the date the employee purchased them (the last business day of the
applicable Payment Period) over the amount the employee paid for the shares.
In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the sale
of the shares and the employee's basis in the shares (i.e., the amount the
employee paid for the shares plus the amount taxed to the employee as ordinary
compensation income). If the employee has held the shares for more than one
year, this gain or loss will be long-term capital gain or loss.
<PAGE>
4.If the two-year holding period is satisfied, the Company will not receive
any deduction for federal income tax purposes with respect to the options or the
shares of Common Stock issued upon their exercise. If the two-year holding
period is not satisfied, the Company generally will be entitled to a deduction
in an amount equal to the amount that is considered ordinary compensation
income, subject to general limitations on the deductibility of compensation
expense.
Proposed Action
The Luxtec Board recommends that shareholders vote "FOR" the proposed
amendment of the Plan and the enclosed proxy will be so voted unless a contrary
vote is indicated. The affirmative vote of the holders of a majority of the
shares of Luxtec Common Stock represented in person or by proxy, and entitled to
vote, at the Meeting is required for approval of the amendment of the Plan.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
Arthur Andersen LLP, independent certified public accountants, have been
auditors of the Company since 1991. The Luxtec Board has recommended that the
stockholders ratify the reappointment of Arthur Andersen LLP as the Company's
auditors for the current fiscal year.
A representative of Arthur Andersen LLP is expected to be present at the
Meeting and will be available to answer any appropriate questions.
The Luxtec Board recommends that the shareholders vote "FOR" the proposal
to ratify the appointment of Arthur Andersen LLP, and the enclosed proxy will be
so voted unless a contrary vote is indicated. The affirmative vote of the
holders of a majority of the shares of Luxtec Common Stock represented in person
or by proxy, and voting, at the Meeting is required to ratify the appointment of
Arthur Andersen LLP. In the event the appointment of Arthur Andersen LLP should
not be approved by the shareholders, the Luxtec Board will make another
appointment to be effective at the earliest possible time.
<PAGE>
STOCKHOLDER PROPOSALS
The Luxtec Board will make provision for presentation of proposals by
shareholders at the 1997 Annual Meeting of Stockholders (or special meeting in
lieu thereof) provided such proposals are submitted by eligible shareholders who
have complied with the relevant regulations of the Securities and Exchange
Commission. Such proposals must be received by the Company no later than
December 31, 1996 to be considered for inclusion to the Company's proxy
materials relating to that meeting.
GENERAL
The management of the Company knows of no matter other than the foregoing
to be brought before the Meeting. However, the enclosed proxy gives
discretionary authority in the event any additional matters should be presented.
The Company will provide free of charge to any stockholder from whom a
proxy is solicited pursuant to this Proxy Statement, upon written request from
such stockholder, a copy of the Company's annual report filed with the
Securities and Exchange Commission on Form 10-K for the Company's fiscal year
ended October 31, 1995. Requests for such report should be directed to Luxtec
Corporation, 326 Clark Street, Worcester, Massachusetts 01606-1214, Attention:
Chief Financial Officer.
The Company expects to hold its next stockholder meeting on or about April
17, 1997 and proxy materials in connection with that meeting are expected to be
mailed approximately 30 days prior to the meeting.
JAMES W. HOBBS
President
<PAGE>
Appendix 1
LUXTEC CORPORATION
326 Clark Street
Worcester, Massachusetts 01606-1214
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints James W. Hobbs and Samuel M. Stein or
either of them as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated below, all the
shares of common stock of Luxtec Corporation (the "Company") held of record by
the undersigned on May 17, 1996, at the 1996 Annual Meetings of Stockholders
(the "Meeting") to be held on June 20, 1995 or any postponement or adjournment
thereof.
1. To approve an amendment to the Company's Articles of Organization to (i)
authorize 500,000 shares of preferred stock, par value $1.00 per share (the
"Preferred Stock"), with such designations, powers, privileges and rights, and
qualifications, limitations and restrictions in respect of each class or series
of Preferred Stock as determined by vote of the Company's Board of Directors or
a committee thereof, and (ii) authorize the Company's Board of Directors to
issue the Preferred Stock in such classes or series and to determine the powers,
privileges and rights, and the qualifications, limitations and restrictions in
respect to each class or series of Preferred Stock by vote thereof.
____ FOR ____ AGAINST ____ ABSTAIN
2. To elect directors
____ FOR all nominees (except as marked to the contrary below)
____ WITHHOLD AUTHORITY for all nominees listed below
James Berardo
Dr. Thomas J. VanderSalm
(Instruction: To withhold authority to vote for any individual,
write the nominee's name on the space provided
below.)
________________________________________________ __________________________
<PAGE>
3. To ratify the amendment of the Company's 1993 Employee Stock Purchase
Plan to (i) increase the maximum number of shares authorized thereunder by
50,000 shares, from 25,000 to 75,000 shares, and (ii) increase the maximum
number of shares purchasable by a participant thereunder from 500 shares every
six months to 1,000 shares every six months.
____ FOR ____ AGAINST ____ ABSTAIN
4. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company.
____ FOR ____ AGAINST ____ ABSTAIN
Account No. No. of Shares Proxy No.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR all nominees for director and FOR the action described in each of the Items
above. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournment thereof.
Please sign exactly as the name appears below. When shares are held by
joint tenants, both should sign.
Dated________________________________________________
Signature____________________________________________
Signature____________________________________________
(if held jointly)
______________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PAPER PROMPTLY USING THE ENCLOSED
ENVELOPE.
______________________________
<PAGE>
Federal Identification
No. 04-2741310
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, _________James W. Hobbs, President,
and _________Justin P. Morreale, Clerk
of _________ Luxtec Corporation
(Exact name of corporation)
located at:_______ 326 Clark Street, Worcester, Massachusetts 01606
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment effecting articles numbered:
_________ 3, 4
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on
, 1996, by vote of:
_________ shares of Common Stock out of__________ shares outstanding,
type, class & series (if any)
_________ shares of ____________ out of__________ shares outstanding,
type, class & series (if any)
_________ shares of ____________ out of__________ shares outstanding,
type, class & series (if any)
being at least a two-thirds of each type, class or series outstanding and
entitled to vote thereon and of each type, class or series of stock whose
rights are adversely affected thereby:
VOTED: To amend the Articles of Organization of the Corporation to
authorize 1,000,000 shares of preferred stock, par value $1.00
per share, with such designations, powers, privileges and rights,
and qualifications, limitations and restrictions in respect of
each class or series of preferred stock as determined by vote of
the Board of Directors or a committee thereof, and to authorize
the Board of Directors to issue the preferred stock in such
classes or series and to determine the powers, privileges and
rights, and the qualifications, limitations and restrictions in
respect to each class or series of preferred stock by vote. (See
Continuation Page IV attached hereto as Exhibit A)
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8 1/2 x
11 sheets of paper with a left margin of at least 1 inch. Additions to more than
one article may be made on a single sheet so long as each article requiring each
addition is clearly indicated.
<PAGE>
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
To total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
<TABLE>
<CAPTION>
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
<S> <C> <C> <C> <C>
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 10,000,000 $.01
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
Change the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 10,000,000 $.01
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED: 500,000 $1.00
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
</TABLE>
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date: __________________________
SIGNED UNDER THE PENALTIES OF PERJURY, this ________ day of ________, 1996.
___________________________________________, President
___________________________________________, Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
===============================================================================
I hereby approve the within Articles of Amendment, and the filing fee
in the amount of $_________having been paid, said articles are deemed
to have been filed with me this____________day of ___________________,
19_____.
Effective Date:_____________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Victor J. Paci, Esq.
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110
Telephone: (617) 951-8000
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
to
ARTICLES OF ORGANIZATION
of
LUXTEC CORPORATION
Continuation Page IV
ARTICLE IV
The total number of shares of all classes of stock which Luxtec Corporation
(the "Corporation") shall have authority to issue shall be 10,500,000 shares,
consisting of (i) 10,000,000 shares of the Corporation's Common Stock, $0.01
value per share ("Common Stock"), and (ii) 500,000 shares of the Corporation's
preferred stock, par value $1.00 per share (the "Preferred Stock").
The following is a statement of the designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof in respect of each such class of stock of
the Corporation:
A. COMMON STOCK
In all respects, including but not limited to, dividend, liquidation and
voting rights, the Common Stock shall, on a share for share basis, have equal
rights. No dividend shall be paid on any shares of Common Stock unless the same
dividend is paid on all shares of Common Stock outstanding at the time of such
payment. Each holder of shares of Common Stock shall be entitled to one vote for
all purposes for each share of Common Stock held.
Except for and subject to those rights expressly granted to the holders of
any series of Preferred Stock, and except to the extent otherwise provided in
the Corporation's Articles of Organization or Bylaws or by applicable law, the
holders of Common Stock shall have exclusively all rights of stockholders of the
Corporation under the Massachusetts Business Corporation Law, including, without
limitation, (a) the right to receive dividends, when and as declared by the
Board of Directors, out of assets lawfully available therefor, and (b) in the
event of any distribution of assets upon a liquidation or otherwise, the right
to receive ratably and equally all the assets and funds of the Corporation
remaining after the payment to the holders of the Preferred Stock of the
specific amounts which they are entitled to receive upon liquidation, as
provided in the Corporation's Articles of Organization, as amended.
<PAGE>
B. PREFERRED STOCK
The Board of Directors (or a committee thereof) is authorized to establish
one or more series of Preferred Stock and, to the extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts, to fix and determine
the preferences, voting powers, qualifications and special or relative rights or
privileges of the Preferred Stock including, but not limited to:
(a) the number of shares to constitute such series and the
distinguishing designation thereof;
(b) the dividend rate (cumulative or noncumulative) on the shares
of such series and the preferences, if any, and the special and
relative rights of such shares of such series as to dividends;
(c) whether or not the shares of such series shall be redeemable,
and, if redeemable, the price, terms and manner of redemption;
(d) the preferences, if any, and the special and relative rights
of the shares of such series upon liquidation of the Corporation;
(e) whether or not the shares of such series shall be subject to
the operation of a sinking or purchase fund and, if so, the terms and
provisions of such fund;
(f) whether or not the shares of such series shall be convertible
into shares of any other class or any other series of the same or any
other class of stock of the Corporation and, if so, the conversion
price or ratio and other conversion rights;
(g) the conditions under which the shares of such series shall
have separate voting rights or no voting rights; and
(h) such other designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions of such series to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts.
The Preferred Stock may consist of one or more series. In the event that at
any time the Board of Directors (or a committee thereof) shall have established
and designated one or more series of Preferred Stock consisting of a number of
shares less than all of the authorized number of shares of Preferred Stock, the
remaining authorized shares of Preferred Stock shall be deemed to be shares of
an undesignated series of Preferred Stock until designated by the Board of
Directors (or a committee thereof) as being a part of a series previously
established or a new series then being established by the Board of Directors.
Notwithstanding the fixing of the number of shares constituting a particular
series, the Board of Directors (or a committee thereof) may at any time
authorize the issuance of additional shares of the same series. The preferences,
voting powers, qualifications and special or relative rights or privileges of
each series of Preferred Stock may be made dependent on facts ascertainable
outside of this Restated Articles of Organization or any amendment hereto or
outside the vote or votes providing for the issuance of such Preferred Stock,
provided that such vote or votes shall expressly set forth the manner in which
any such facts shall operate upon the preferences, voting powers, qualifications
and special or relative rights or privileges of such Preferred Stock.
<PAGE>
The Commonwealth of Massachusetts
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
ARTICLES OF ORGANIZATION
(Under G.L. Ch. 156B)
Incorporators
NAME POST OFFICE ADDRESS
Include given name in full in case of natural persons: in case of a corporation,
give state of incorporation.
Jack Kloots Wells Park Road
Sturbridge, MA 01566
The above-named incorporator(s) do hereby associate (themselves) with the
intention of forming a corporation under the provisions of General Laws, Chapter
156B and hereby state(s):
1. The name by which the corporation shall be known is:
LUXTEC CORPORATION
2. The purpose for which the corporation is formed is as follows: To
engage in the research, development, manufacturing, sale and
distribution, at wholesale or retail, of all products dealing with
optics or fiber optics, including without limitation, the manufacture
of glass and lenses, and to do any act which a corporation may lawfully
do in this Commonwealth.
In general, to carry on any or all of the business of the corporation as
principal, agent or contractor, and to carry on any other business incidental to
and in connection with the foregoing and to have and exercise all the powers
conferred by the laws of Massachusetts upon corporations formed under the
General Laws of Massachusetts, and to do any or all of the things hereinbefore
set forth to the same extent its natural persons might or could do.
To do everything necessary and proper for the accomplishment of any of the
purposes, or the attainment of any of the objects, or the furtherance of any of
the powers hereinbefore set forth, either alone or in association with other
corporations, firms or individuals, and to do every other act or acts, thing or
things, incidental to or growing out of or connected with the aforesaid business
or powers, or any part or parts whereof; provided, the same is not inconsistent
with the laws under which this Corporation is organized.
To act as designers and manufacturers of electro-mechanical-fiber-optical
and special equipment and devices for the hospital, medical, microsurgical,
veterinary, industrial, scientific and other related fields.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions to
more than one article may be continued on a single sheet so long as each article
requiring each addition is clearly indicated.
<PAGE>
3. The total number of shares and the par value, if any, of each class of
stock within the corporation is authorized as below:
Without Par Value With Par Value
Class of Stock Number of Number of
Shares Shares Par Value Amount
$
Preferred
Common 12,500
*4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting
powers, qualifications, special or relative rights or privileges
as to each class thereof and any series now established:
Not applicable
*5. The restrictions, if any, imposed by the Articles of Organization upon
the transfer of shares of stock of any class are as follows: Any
stockholder, including the heirs, assigns, executors or administrators
of a deceased stockholder desiring to sell or transfer such stock
owned by him or them, shall first offer it to the corporation through
the Board of Directors, in the manner following:
He shall notify the directors of his desire to sell or transfer by notice
in writing, which notice shall contain the price at which he is willing to sell
or transfer and the name of one arbitrator. The directors shall within thirty
(30) days thereafter either accept the offer, or by notice to him in writing
name a second arbitrator and these two shall name a third. It shall then be the
duty of the arbitrators to ascertain the value of the stock, and if any
arbitrator shall neglect or refuse to appear at any meeting appointed by the
arbitrators, a majority may act in the absence of such arbitrator.
After the acceptance of the offer, or the report of the arbitrators as to
the value of the stock, the directors shall have thirty (30) days with which to
purchase the same at such valuation, but if at the expiration of thirty (30)
days, the corporation shall not have exercised the right so to purchase, the
owner of the stock shall be at liberty to dispose of the same in any manner he
may see fit.
No shares of stock shall be sold or transferred on the books of the
corporation until these provisions have been complied with but the Board of
Directors may at or in any particular instance waive the requirement.
*6. Other lawful provisions, if any, for the conduct and regulation of
business and affairs of the corporation, for its voluntary dissolution,
or for limiting, defining, or regulating the powers of the
corporation, or of its directors or stockholders, or of any class of
stockholders.
None
* If there are no provisions state "None".
<PAGE>
7. By-laws of the corporation have been duly adopted and the initial
directors, president, treasurer and clerk, whose names are set out
below, have been duly elected.
8. The effective date of organization of the corporation shall be the
date of filing with the Secretary of the Commonwealth or if later date
is desired, specify date (not more than 30 days after the
date of filing).
Effective Date Nov. 1, 1981
9. The following information shall not for any purpose be treated as a
permanent part of the Articles of Organization of the corporation.
a. The post office address of the initial principal office of the
corporation of Massachusetts is: Technology Park, P.O. Box 225,
Sturbridge, MA 01566
b. The name, residence, and post office address of each of the
initial directors and following officers of the corporation are as
follows:
POST OFFICE
NAME RESIDENCE ADDRESS
President: Jack Kloots Wells Park Road Sturbridge, MA 01566
Treasurer: Jack Kloots Wells Park Road Sturbridge, MA 01566
Clerk: Charlene Gravel Cottage Road Holland, MA 01550
Directors: Jack Kloots Wells Park Road Sturbridge, MA 01566
Rita Kloots Wells Park Road Sturbridge, MA 01566
Charlene Gravel Cottage Road Holland, MA 01550
c. The date initially adopted on which the corporation's fiscal
year ends is: October 31
d. The date initially fixed in the by-laws for the annual meeting
of stockholders of the corporation is:
Second Tuesday of December
e. The name and business address of the resident agent, if any,
of the corporation is:
None
IN WITNESS WHEREOF and under the penalties of perjury the INCORPORATOR(S)
sign(s) these Articles of Organization this _____ day of October, 1981.
Jack Kloots
The signature or each incorporator which is not a natural person must be an
individual who shall show the capacity in which he acts and by signing shall
represent under penalty of perjury that he is duly authorized on its behalf to
sign these Articles of Organization.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
==============================================================================
==============================================================================
ARTICLES OF ORGANIZATION
===============================================================================
GENERAL LAWS, CHAPTER 156B, SECTION 12
===============================================================================
===============================================================================
I hereby certify that, upon examination of the within-written
articles of organization, duly submitted to me, it appears that the
provisions of the General Laws relative to the organization of
corporations have been complied with, and I hereby approve said
articles; and the filing fee in the amount of $150.00 having been
paid, said articles are deemed to have been filed with me this 23rd
day of October 1981.
Effective date: 11-1-81
MICHAEL JOSEPH CONNOLLY
Secretary of State
PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE
SENT TO BE FILLED IN BY CORPORATION
TO:
Robert E. George, Esq.
511 Main Street, P.O. Box F
Fiskdale, Massachusetts 01518
Tel: (508) 347-7114
FILING FEE: 1/20 of 1% of the total amount of the authorized capital
stock with par value, and one cent a share for all authorized shares
without par value, but not less than $125. General Laws, Chapter
156B. Shares of stock with a par value less than one dollar shall be
deemed to have par value of one dollar per share.
<PAGE>
===============================================================================
THE COMMONWEALTH OF MASSACHUSETTS
===============================================================================
MICHAEL JOSEPH CONNOLLY
Secretary of State
One Ashburton Place Federal Identification
Boston, MA 02108-1512 No. 04-2741310
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114. Make check payable to the Commonwealth of
Massachusetts.
__________
We, Jack Kloots, President and
Charlene Gravel, Clerk of
Luxtec Corporation
(Name of Corporation)
located at Technology Park, P.O. Box 225, Sturbridge, MA 01566
do hereby certify that the following amendment to the articles of organization
of the corporation was duly adopted at a meeting held on March 12, 1982, by a
vote of the incorporator prior to the initial issue of stock by the corporation,
per Ch. 156B, Sec. 44
n/a shares of out of shares outstanding,
(Class of Stock)
n/a shares of out of shares outstanding,
(Class of Stock)
n/a shares of out of shares outstanding,
(Class of Stock)
See Appendix A hereto
Note:If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions to
more than one article may be continued on a single sheet so long as each article
requiring each addition is clearly indicated.
<PAGE>
FOR INCREASE IN CAPITAL FILL IN THE FOLLOWING:
The total amount of capital stock already authorized is:
____________ shares preferred
with par value (1)
12,500 shares common
____________ shares preferred
without par value
____________ shares common
(1) par value added by these Articles of Amendment
The amount of additional capital stock authorized is:
___________ shares preferred
with par value
987,500 shares common
___________ shares preferred
without par value
___________ shares common
<PAGE>
APPENDIX A
VOTED: To amend the Articles of Organization to delete the
restrictions on transfer of stock set forth in part 5 thereof.
VOTED: To amend the Articles of Organization to provide, in part 6, thereof,
the following provisions:
To the extent permitted by the By-Laws, meetings of the stockholders
of this corporation may be held anywhere in the United States.
To the extent permitted by law and by the By-Laws, the directors
(as well as the stockholders) of this corporation shall have the
power to make, amend or repeal, in whole or in part, the By-Laws.
The corporation may at any time enter into agreements to redeem
and/or redeem its outstanding stock from any stockholder or
stockholders without having to extend the same offer to its other
stockholders.
VOTED: To amend the Articles of Organization to (i) change the par value of
the presently authorized 12,500 shares from no par value to $.10 par
value and (ii) increase authorized capital by 987,500 shares of Common
Stock, $.10 par value, so that the authorized capital of the Corporation
will be 1,000,000 shares of common Stock, $.10 par value.
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this twenty-second day of March, in the year 1982.
Jack Kloots President
Charlene Gravel Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of amendment and, the filing fee
in the amount of $718.75 having been paid, said articles are deemed to
have been filed with me this 30th day of March, 1982.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo copy of amendment to be sent
To:
John R. Blake, Esq.
Bowditch & Dewey
311 Main Street, Worcester, MA 01608
Telephone: (617) 791-3511
<PAGE>
==============================================================================
The Commonwealth of Massachusetts
===============================================================================
Office of the Massachusetts Secretary of State
MICHAEL JOSEPH CONNOLLY, Secretary
One Ashburton Place, Boston, Mass. 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114. Make check payable to the Commonwealth of
Massachusetts.
We Jack Kloots, President and
John R. Blake, Clerk of
Luxtec Corporation
(Name of Corporation)
located at Technology Park, P.O. Box 225, Sturbridge, MA 01566
do hereby certify that the following amendment to the articles of organization
of the corporation was duly adopted at a meeting held on June 29, 1984, by a
vote of
1,000,000 shares of Common out of 1,000,000 shares outstanding
shares of out of shares outstanding,
shares of out of shares outstanding,
being at least a majority of each class outstanding and entitled to vote
thereon:
VOTED: To amend the Articles of Organization by increasing authorized capital
by 1,000,000 shares of Common Stock, $.10 par value.
Note:If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions to
more than one article may be continued on a single sheet so long as each article
requiring each addition is clearly indicated.
<PAGE>
TO CHANGE the number of shares and the par value, if any, of each class of
stock within the corporation fill in the following:
The total presently authorized is:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------ ---------------------------------- ------------------------------------ -------------
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
COMMON 1,000,000 $.10
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
PREFERRED
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
CHANGE the total to:
- ------------------------------ ---------------------------------- ------------------------------------ -------------
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
COMMON 2,000,000 $.10
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
PREFERRED
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
</TABLE>
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed
our names this 31st day of July, 1984.
Jack Kloots President
John R. Blake Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of amendment and, the filing fee
in the amount of $500.00 having been paid, said articles are deemed to have
been filed with me this 9th day of August, 1984.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo copy of amendment to be sent
To:
John R. Blake, Esq.
Bowditch & Dewey
311 Main Street, Worcester, MA 01608
Telephone: (617) 791-3511
<PAGE>
- -------------------------------------------------------------------------------
The Commonwealth of Massachusetts
- -------------------------------------------------------------------------------
Office of the Massachusetts Secretary of State
MICHAEL JOSEPH CONNOLLY, Secretary
One Ashburton Place, Boston, Mass. 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114. Make check payable to the Commonwealth of
Massachusetts.
We Jack Kloots, President and
John D. Ronnquist, Clerk of
Luxtec Corporation
(Name of Corporation)
located at Technology Park, P.O. Box 225, Sturbridge, MA 01566
do hereby certify that the following amendment to the articles of organization
of the corporation was duly adopted at a meeting held on May 2, 1986, by a
vote of
1,064,965 shares of Common out of 1,155,710 shares outstanding,
shares of out of shares outstanding, and
shares of out of shares outstanding,
being at least a majority of each class outstanding and entitled to vote
thereon:
VOTED: To change the par value of authorized capital stock from $.10 to $.001
and to increase authorized capital by 18,000,000 shares of Common Stock.
Note:If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions to
more than one article may be continued on a single sheet so long as each article
requiring each addition is clearly indicated.
<PAGE>
TO CHANGE the number of shares and the par value, if any, of each class of stock
within the corporation fill in the following:
The total presently authorized is:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------ ---------------------------------- ------------------------------------ -------------
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
COMMON 2,000,000 $.10
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
PREFERRED
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
CHANGE the total to:
- ------------------------------ ---------------------------------- ------------------------------------ -------------
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
COMMON 20,000,000 $.001
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
PREFERRED
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
- ------------------------------ ---------------------------------- ------------------------------------ -------------
</TABLE>
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date. IN
WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our
names this 2nd day of May, in the year 1986.
Jack Kloots President
John D. Ronnquist Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of amendment and, the filing fee
in the amount of $9,000.00 having been paid, said articles are deemed to have
been filed with me this 5th day of May, 1986.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo copy of amendment to be sent
To:
John R. Blake, Esq.
Bowditch & Dewey
311 Main Street, Worcester, MA 01608
Telephone: (617) 791-3511
<PAGE>
- -------------------------------------------------------------------------------
The Commonwealth of Massachusetts
- -------------------------------------------------------------------------------
Office of the Massachusetts Secretary of State
MICHAEL JOSEPH CONNOLLY, Secretary
One Ashburton Place, Boston, Massachusetts 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
We Bernard A. Clark, President and
Joseph D. Campbell, Clerk
Luxtec Corporation
(EXACT Name of Corporation)
located at: 326 Clark Street, Worcester, Massachusetts 01606
(MASSACHUSETTS Address of Corporation
do hereby certify that these ARTICLES OF AMENDMENT effecting Articles
NUMBERED: 3
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended hereby)
of the Articles of Organization were duly adopted at a meeting held on
April 3, 1992, by vote of:
10,074,640 shares of Common Stock out of 14,011,986 shares outstanding,
__________ shares of ____________ out of __________ shares outstanding, and
__________ shares of ____________ out of __________ shares outstanding,
being at least a majority of each type, class or series outstanding
and entitled to vote thereon:
SEE EXHIBIT A
Note:If the space provided under any Amendment or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left-hand margin of at least 1 inch for binding. Additions to
more than one Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
To total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
<TABLE>
<S> <C> <C> <C> <C>
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 20,000,000 $.001
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 2,000,000 $.01
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
</TABLE>
<PAGE>
EXHIBIT A
VOTED: That, upon approval of the proposed one-for-ten reverse stock
split of the Corporation's Common Stock, par value $.001 per
shares, Article 3 of the Corporation's Articles of Organization
as amended to date, shall be amended as follows:
Article 3 shall be amended so that the Corporation shall be
authorized to issue one class of stock to be designed "Common
Stock". The total number of shares of Common Stock which
the Corporation shall have authority to issue is Two Million
(2,000,000) with a par value of one cent ($.01) per share.
At the effective time of this amendment each share of Common
Stock, par value $0.001 per share, authorized immediately prior to
this amendment shall be reclassified into one-tenth of one fully paid
and non-assessable share of Common Stock, par value $0.01 per share,
so that every ten shares of Common Stock par value $0.001 per share,
authorized immediately prior to this amendment shall be combined
together to form one full share of Common Stock par value $0.01 per
share. Certificates for fractional shares of Common Stock will not be
issued by reason of this amendment and instead a whole share will be
issued to any stockholder entitled to a fraction of a share.
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date. EFFECTIVE
DATE April 10, 1992
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this 9th day of April, in the year 1992.
Bernard Clark President
Joseph Campbell Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
===============================================================================
I hereby approve the within articles of amendment and, the filing
fee in the amount of $100 having been paid, said articles are deemed
to have been filed with me this 10th day of April, 1992.
MICHAEL J. CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO:
Mitchell S. Bloom, Esquire
Testa, Hurwitz & Thibeault
Exchange Place, Suite 1700
Boston, MA 02109
Telephone: (617) 248-7425
<PAGE>
The Commonwealth of Massachusetts
Office Of The Massachusetts Secretary Of State
MICHAEL JOSEPH CONNOLLY, Secretary
One Ashburton Place, Boston, Massachusetts 02108
ARTICLES OF AMENDMENT Federal Identification
General Laws, Chapter 156B, Section 72 No. 04-2741310
We James W. Hobbs, President and
Justin P. Morreale, Clerk
Luxtec Corporation
(EXACT Name of Corporation)
located at: 326 Clark Street, Worcester, Massachusetts 01606
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT effecting Articles
NUMBERED: 3
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended hereby)
of the Articles of Organization were duly adopted at a meeting held on
April 3, 1992, by vote of:
_____________shares of Common Stock out of_______________shares outstanding,
type, class & series (if any)
_____________shares of _____________out of_______________shares outstanding, and
type, class & series (if any)
_____________shares of _____________out of_______________shares outstanding,
type, class & series (if any)
being at least a majority of each type, class or series outstanding and
entitled to vote thereon:
VOTED: To amend the Articles of Organization of the Corporation
to increase the authorized number of shares of Common Stock of the
Corporation from 2,000,000 to 10,000,000.
Note:If the space provided under any Amendment or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left-hand margin of at least 1 inch for binding. Additions to
more than one Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type,
class or series of stock which the corporation is authorized to issue,
fill in the following:
To total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
<TABLE>
<S> <C> <C> <C> <C>
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 2,000,000 $.01
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON: 10,000,000 $.01
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
</TABLE>
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date. LATER
EFFECTIVE DATE: ______________________
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this ______ day of September, in the year 1995.
_____________________________________ President
_____________________________________ Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
==============================================================================
I hereby approve the within articles of amendment and, the filing
fee in the amount of $________ having been paid, said articles are
deemed to have been filed with me this ________________day of
_________________, 19___.
MICHAEL J. CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO:
Victor J. Paci, Esq.
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
Telephone: (617) 951-8000
<PAGE>
The Commonwealth of Massachusetts
Office Of The Massachusetts Secretary Of State
MICHAEL JOSEPH CONNOLLY, Secretary
One Ashburton Place, Boston, Massachusetts 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
We James W. Hobbs, President and
Justin P. Morreale, Clerk
Luxtec Corporation
(EXACT Name of Corporation)
located at: 326 Clark Street, Worcester, Massachusetts 01606
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT effecting Articles
NUMBERED: 6
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended hereby)
of the Articles of Organization were duly adopted at a meeting held on
April 3, 1992, by vote of:
______________shares of Common Stock out of_________________shares outstanding,
type, class & series (if any)
______________shares of _____________out of________________ shares outstanding,
type, class & series (if any)
______________shares of _____________out of_________________shares outstanding,
type, class & series (if any)
being at least two-thirds of each type, class or series outstanding and entitled
to vote thereon and of each type, class or series of stock whose rights are
adversely affected thereby:
VOTED: To amend the Articles of Organization of the Corporation to limit the
personal liability and provide for the indemnification of officers and
directors of the Corporation in certain situations.
SEE CONTINUATION SHEET VI (attached hereto as Exhibit A)
Note:If the space provided under any Amendment or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left-hand margin of at least 1 inch for binding. Additions to
more than one Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
To total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
<TABLE>
<S> <C> <C> <C> <C>
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCK
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
COMMON: COMMON:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
PREFERRED: PREFERRED:
- --------------------- ---------------------------- ------------------- --------------------------- -----------------
</TABLE>
<PAGE>
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date. LATER
EFFECTIVE DATE: ______________________
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this_________ day of September, in the year 1995.
____________________________________________ President
____________________________________________ Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
===============================================================================
I hereby approve the within articles of amendment and, the filing fee
in the amount of $_________ having been paid, said articles are deemed to have
been filed with me this__________day of____________, 19_____.
MICHAEL J. CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO:
Victor J. Paci, Esq.
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
Telephone: (617) 951-8000
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
to
ARTICLES OF ORGANIZATION
of
LUXTEC CORPORATION
Continuation Sheet VI
ARTICLE VI
Other lawful provisions, if any, for the conduct and regulation of business
and affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholders: (If there are no provisions state
"None".)
1. No director shall be personally liable to the corporation or to any of
its stockholders for monetary damages for any breach of fiduciary duty by such
director as a director notwithstanding any provision of law imposing such
liability; provided, however, that, to the extent required from time to time by
applicable law, this provision shall not eliminate the liability of a director,
to the extent such liability is provided by applicable law, (a) for any breach
of the director's duty of loyalty to the corporation or its stockholders, (b)
for acts or omissions not in good faith which involve intentional misconduct or
a knowing violation of law, (c) under Section 61 or Section 62 of the Business
Corporation Law of The Commonwealth of Massachusetts, or (d) for any transaction
from which the director derived an improper personal benefit. No amendment to or
repeal of this Article VI-A shall apply to or have any effect on the liability
or alleged liability of any director for or with respect to any acts or
omissions of such director occurring prior to the effective date of such
amendment or repeal.
2. Indemnification.
2.1. Right to Indemnification. The corporation shall indemnify
and hold harmless each person who was or is a party or is threatened
to be made a party to or is otherwise involved in any threatened,
pending or completed action, suit, proceeding or investigation,
whether civil, criminal or administrative (a "Proceeding"), by reason
of being, having been or having agreed to become, a director or
officer of the corporation, or serving, having served or having agreed
to serve, at the request of the corporation, as a director or officer
of, or in a similar capacity with, another organization or in any
capacity with respect to any employee benefit plan (any such person
being referred to hereafter as an "Indemnitee"), or by reason of any
action alleged to have been taken or omitted in such capacity, against
all expense, liability and loss (including without limitation
reasonable attorneys' fees, judgments, fines, "ERISA" excise taxes or
penalties) incurred or suffered by the Indemnitee or on behalf of the
Indemnitee in connection with such Proceeding and any appeal
therefrom, unless the Indemnitee shall have been adjudicated in such
Proceeding not to have acted in good faith in the reasonable belief
that his or her action was in the best interest of the corporation or,
to the extent such matter relates to service with respect to an
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan. Notwithstanding anything
to the contrary in this Article, except as set forth in Section 2.6
below, the corporation shall not indemnify or advance expenses to an
Indemnitee seeking indemnification in connection with a Proceeding (or
part thereof) initiated by the Indemnitee, unless the initiation
thereof was approved by the Board of Directors of the corporation.
2.2. Settlements. Subject to compliance by the Indemnitee with
the applicable provisions of Section 2.5 below, the right to
indemnification conferred in this Article shall include the right to
be paid by the corporation for amounts paid in settlement of any such
Proceeding and any appeal therefrom, and all expenses (including
attorneys' fees) incurred in connection with such settlement, pursuant
to a consent decree or otherwise, unless it is held or determined
pursuant to Section 2.5 below that the Indemnitee did not act in good
faith in the reasonable belief that his or her action was in the best
interest of the corporation or, to the extent such matter relates to
service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee
benefit plan.
<PAGE>
2.3. Notification and Defense of Proceedings. The Indemnitee
shall notify the corporation in writing as soon as reasonably
practicable of any Proceeding involving the Indemnitee for which
indemnity or advancement of expenses is intended to be sought. Any
omission so to notify the corporation shall not relieve it from any
liability that it may have to the Indemnitee under this Article
unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the corporation. With
respect to any Proceeding of which the corporation is so notified, the
corporation shall be entitled, but not obligated, to participate
therein at its own expense and/or to assume the defense thereof at its
own expense, with legal counsel reasonably acceptable to the
Indemnitee, except as provided in the last sentence of this Section
2.3. After notice from the corporation to the Indemnitee of its
election so to assume such defense (subject to the limitations in the
last sentence of this Section 2.3), the corporation shall not be
liable to the Indemnitee for any fees and expenses of counsel
subsequently incurred by the Indemnitee in connection with such
Proceeding, other than as provided below in this Section 2.3. The
Indemnitee shall have the right to employ his or her own counsel in
connection with such Proceeding, but the fees and expenses of such
counsel incurred after notice from the corporation of its assumption
of the defense thereof at its expense with counsel reasonably
acceptable to Indemnitee shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee at the
corporation's expense has been authorized by the corporation, (ii)
counsel to the Indemnitee shall have reasonably concluded that there
may be a conflict of interest or position on any significant issue
between the corporation and the Indemnitee in the conduct of the
defense of such action or (iii) the corporation shall not in fact have
employed counsel reasonably acceptable to the Indemnitee to assume the
defense of such Proceeding within a reasonable time after receiving
notice thereof, in each of which cases the fees and expenses of
counsel for the Indemnitee shall be at the expense of the corporation,
except as otherwise expressly provided by this Article. The
corporation shall not be entitled, without the consent of the
Indemnitee, to assume the defense of any Proceeding brought by or in
the right of the corporation or as to which counsel for the Indemnitee
shall have reasonably made the conclusion provided for in clause (ii)
above.
2.4. Advancement of Expenses. Except as provided in Section 2.3
of this Article, as part of the right to indemnification granted by
this Article, any expenses (including attorneys' fees) incurred by an
Indemnitee in defending any Proceeding within the scope of Section 2.1
of this Article or any appeal therefrom shall be paid by the
corporation in advance of the final disposition of such matter,
provided, however, that the payment of such expenses incurred by an
Indemnitee in advance of the final disposition of such matter shall be
made only upon receipt of a written undertaking by or on behalf of the
Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined that the Indemnitee is not entitled to be
indemnified by the corporation as authorized by Section 2.1 or Section
2.2 of this Article. Such undertaking need not be secured and shall be
accepted without reference to the financial ability of the Indemnitee
to make such repayment. Such advancement of expenses shall be made by
the corporation promptly following its receipt of written requests
therefor by the Indemnitee, accompanied by reasonably detailed
documentation, and of the foregoing undertaking.
<PAGE>
2.5. Certain Presumptions and Determinations. If, in a
Proceeding brought by or in the right of the corporation, a director
or officer of the corporation is held not liable for monetary damages,
whether because that director or officer is relieved of personal
liability under the provisions of Section 1 of this Article or
otherwise, that director or officer shall be deemed to have met the
standard of conduct set forth in Section 2.1 and thus to be entitled
to be indemnified by the corporation thereunder. In any adjudicated
Proceeding against an Indemnitee brought by reason of the Indemnitee's
serving, having served or agreed to serve, at the request of the
corporation, an organization other than the corporation in one or more
of the capacities indicated in Section 2.1, if the Indemnitee shall
not have been adjudicated not to have acted in good faith in the
reasonable belief that the Indemnitee's action was in the best
interest of such other organization, the Indemnitee shall be deemed to
have met the standard of conduct set forth in Section 2.1 and thus be
entitled to be indemnified thereunder. An adjudication in such a
Proceeding that the Indemnitee did not act in good faith in the
reasonable belief that the Indemnitee's action was in the best
interest of such other organization shall not create a presumption
that the Indemnitee has not met the standard of conduct set forth in
Section 2.1. In order to obtain indemnification of amounts paid in
settlement pursuant to Section 2.2 of this Article, the Indemnitee
shall submit to the corporation a written request, including in such
request such documentation and information as is reasonably available
to the Indemnitee and is reasonably necessary to determine whether and
to what extent the Indemnitee is entitled to such indemnification. Any
such indemnification under Section 2.2 shall be made promptly, and in
any event within 60 days after receipt by the corporation of the
written request of the Indemnitee, unless a court of competent
jurisdiction holds within such 60-day period that the Indemnitee did
not meet the standard of conduct set forth in Section 2.2 or the
corporation determines, by clear and convincing evidence, within such
60-day period that the Indemnitee did not meet such standard. Such
determination shall be made by the Board of Directors of the
corporation, based on advice of independent legal counsel (who may,
with the consent of the Indemnitee, be regular legal counsel to the
corporation). The corporation and the directors shall be under no
obligation to undertake any such determination or to seek any ruling
from any court.
2.6. Remedies. The right to indemnification or advances as
granted by this Article shall be enforceable by the Indemnitee in any
court of competent jurisdiction if the corporation denies such a
request, in whole or in part, or, with respect to indemnification
pursuant to Section 2.2, if no disposition thereof is made within the
60-day period referred to above in Section 2.5. Unless otherwise
provided by law, the burden of proving that the Indemnitee is not
entitled to indemnification or advancement of expenses under this
Article shall be on the corporation. Neither absence of any
determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee
has met any applicable standard of conduct, nor an actual
determination by the corporation pursuant to Section 2.5 that the
Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the Indemnitee has
not met the applicable standard of conduct. The Indemnitee's expenses
(including reasonable attorneys' fees) incurred in connection with
successfully establishing his or her right to indemnification, in
whole or in part, in any such Proceeding shall also be paid by the
corporation.
2.7. Contract Right; Subsequent Amendment. The right to
indemnification and advancement of expenses conferred in this Article
shall be a contract right. No amendment, termination or repeal of this
Article or of the relevant provisions of Chapter 156B of the
Massachusetts General Laws or any other applicable laws shall affect
or diminish in any way the rights of any Indemnitee to indemnification
or advancement of expenses under the provisions hereof with respect to
any Proceeding arising out of or relating to any action, omission,
transaction or facts occurring prior to the final adoption of such
amendment, termination or repeal, except with the consent of the
Indemnitee.
2.8. Other Rights. The indemnification and advancement of
expenses provided by this Article shall not be deemed exclusive of any
other rights to which an Indemnitee seeking indemnification or
advancement of expenses may be entitled under any law (common or
statutory), agreement or vote of stockholders or directors or
otherwise, both as to action in his or her official capacity and as to
action in any other capacity while holding office for the corporation,
and shall continue as to an Indemnitee who has ceased to be a director
or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in
this Article shall be deemed to prohibit, and the corporation is
specifically authorized to enter into, agreements with any Indemnitee
providing indemnification rights and procedures different from those
set forth in the Article.
<PAGE>
2.9. Partial Indemnification. If an Indemnitee is entitled
under any provision of this Article to indemnification by the
corporation for some or a portion of the expenses (including
attorneys' fees), judgments, fines or amounts paid in settlement
actually and reasonably incurred by the Indemnitee or on his or her
behalf in connection with any Proceeding and any appeal therefrom but
not, however, for the total amount thereof, the corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in
settlement to which the Indemnitee is entitled.
2.10. Insurance. The corporation may purchase and maintain
insurance, at its expense, to protect itself and any director,
officer, employee or agent of the corporation or another organization
or employee benefit plan against any expense, liability or loss
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such expense, liability or loss
under Chapter 156B of the Massachusetts General Laws.
2.11. Merger or Consolidation. If the corporation is merged
into or consolidated with another corporation and the corporation is
not the surviving corporation, the surviving corporation shall assume
the obligations of the corporation under this Article with respect to
any Proceeding arising out of or relating to any action, omission,
transaction or facts occurring on or prior to the date of such merger
or consolidation.
2.12. Savings Clause. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify and
advance expenses to each Indemnitee as to any expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any Proceeding, including an action by or in the right
of the corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to
the fullest extent permitted by applicable law.
2.13. Subsequent Legislation. If the Massachusetts General Laws
are amended after adoption of this Article to expand further the
indemnification permitted to Indemnitees, then the corporation shall
indemnify such persons to the fullest extent permitted by the
Massachusetts General Laws as so amended.
2.14. Indemnification of Others. The corporation may, to the
extent authorized from time to time by its Board of Directors, grant
indemnification rights to employees or agents of the corporation or
other persons serving the corporation who are not Indemnitees, and
such rights may be equivalent to, or greater or less than, those set
forth in this Article.
3. Meeting of the stockholders of the corporation may be held anywhere in
the United States.
4. The directors may make, amend, or repeal the By-Laws in whole or in part
except with respect to any provision thereof which by law or the By-Laws
requires action by the stockholders.
5. The corporation may be a partner in any business enterprise which the
corporation would have power to conduct by itself.
6. The corporation may at any time enter into agreements to redeem an/or
redeem its outstanding stock from any stockholder or stockholders without having
to extend the same offer to its other stockholders.
<PAGE>
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth Federal Identification
One Ashburton Place, Boston, Massachusetts 02108 No.04-2741310
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws, Chapter 156B, Section 26
We James W. Hobbs, President and
Justin P. Morreale, Clerk
Luxtec Corporation
(Name of Corporation)
located at 326 Clark Street, Worcester, Massachusetts 01606
do hereby certify that by unanimous wriiten consent in lieu of a meeting of the
directors of the corporation dated as of May ___, 1996, the following vote
establishing and designating a series of a class of stock and determining the
relative rights and preferences thereof was duly adopted:
VOTED: That, subject to obtaining the requisite approval of the Amendment by
stockholders of the Corporation and pursuant to the authority vested in
the Board of Directors by Article IV of the Charter, as amended by the
Amendment, a series of preferred stock, par value $1.00 per share, be
and hereby is established and designated as Series A Preferred Stock,
consisting of 10,000 shares, with, in addition to any set forth in the
Charter, such designations, powers, privileges and rights, and
qualifications, limitations and restrictions in respect thereof as
contained in the Certificate of Vote of Directors Establishing A Series
of a Class of Stock (the "Directors Certificate"), substantially in
the form attached hereto as Exhibit B; and that the form of Directors
Certificate attached hereto as Exhibit B be, and the same hereby is,
adopted and approved by the Board of Directors of the Corporation.
(See Continuation Page 2 attached as Exhibit B hereto)
Note: Votes for which the space provided above is not sufficient should be
set out on continuation sheets to be numbered 2A, 2B, etc. Continuation sheets
must have a left-hand margin 1 inch wide for binding and shall be 8 1/2" x 11".
Only one side should be used.
<PAGE>
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have signed our names
this ______ day of_______________, in the year 1996.
______________________________________________President
______________________________________________Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Certificate of Vote of Directors Establishing
A Series of a Class of Stock
(General Laws, Chapter 156B, Section 26)
I hereby approve the within certificate and, the filing fee
in the amount of $________________________having been paid, said certificate
is hereby filed this ______________day of ________________, 19___.
William Francis Galvin
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF CERTIFICATE TO BE SENT
TO:
Victor J. Paci, Esq.
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
Telephone: (617) 951-8000
<PAGE>
EXHIBIT B
LUXTEC CORPORATION
TERMS, RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A PREFERRED STOCK, $1.00 PAR VALUE
CONTINUATION PAGE 2
The following is a description of the Series A Preferred Stock of Luxtec
Corporation (the Company") and a statement of the preferences, qualifications,
privileges, limitations, restrictions, and other special or relative rights
granted to or imposed upon the shares of such class:
Series A Preferred Stock.
(a) Designation: Number of Shares.
There is hereby established a series of Preferred Stock consisting of
10,000 shares of Preferred Stock par value $1.00 per share and the designation
of such series shall be "Series A Preferred Stock" (the "Preferred Stock")
(b) Voting.
Except as otherwise provided by the laws of The Commonwealth of
Massachusetts, and except as hereinafter provided, the holders of shares of
Preferred Stock shall have no right to vote with respect to any matters to be
voted on by the stockholders of the Company, nor to take any action in meetings
with respect to any such matters.
(c) Dividends.
The holders of record of shares of the Preferred Stock shall be entitled to
receive cash dividends, when, as and if declared by the Board of Directors out
of assets which are legally available for the payment of such dividends, at the
annual rate of $8.00 per share of Preferred Stock, and no more, payable
quarterly on the last day of January, April, July and October in each year.
Dividends shall be cumulative and will accrue on each share of Preferred Stock
from the date of issue thereof, whether or not declared by the Board of
Directors. Dividends payable on the Preferred Stock for any period less than a
full quarter shall be computed on the basis of the actual number of days elapsed
and a 360-day year, consisting of four 90-day quarters.
<PAGE>
(d) Redemption.
(i) Redemption Price. The Preferred Stock shall be
redeemable as hereinafter provided, upon notice given as
hereinafter provided, by paying for each share in cash the
sum of $100 (the "Redemption Price"). Not less than 10 days'
prior written notice shall be given by mail, postage
prepaid, to the holders of record of the Preferred Stock to
be redeemed, such notice to be addressed to each such
stockholder at its post office address as shown by the
records of the Company. Said notice shall specify the place
at which and the date, which date shall be a business day,
on which the shares called for redemption will be redeemed
and shall specify the shares called for redemption. If such
notice of redemption shall have been duly given and if on or
before the redemption date specified in such notice the
funds necessary for such redemption shall have been set
aside so as to be and continue to be available therefor,
then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for
cancellation, after the close of business on such redemption
date, the shares so called for redemption shall no longer be
deemed outstanding, the dividends thereon shall cease to
accrue, and all rights with respect to shares so called for
redemption, including the rights, if any, to receive notice
and to vote, shall forthwith after the close of business on
such redemption date cease and determine, except only the
right of the holders thereof to receive the amount payable
upon redemption thereof, without interest. Subject to the
provisions hereof, the Board of Directors shall have
authority to prescribe the manner in which the Preferred
Stock shall be redeemed from time to time.
(ii) Shares to be Redeemed. In case of the redemption
of only a part of the outstanding shares of the Preferred
Stock, all shares of Preferred Stock to be redeemed shall be
selected pro rata there shall be so redeemed from each
registered holder in whole shares, as nearly as practicable
to the nearest share, that proportion of all of the shares
to be redeemed which the number of shares held of record by
such holder bears to the total number of shares of Preferred
Stock at the time outstanding.
(iii) All Past Dividends Must Be Paid Prior to
Redemption. Except with the consent of the holders of all
the shares of Preferred Stock at the time outstanding, the
Company shall not, and shall not permit any subsidiary to,
purchase or redeem shares of the Preferred Stock at the time
outstanding unless all dividends on such shares for all past
quarterly dividend periods shall have been paid or declared
and a sum sufficient for the payment thereof set apart.
(iv) Required Redemptions. On January 1, 2001, the
Company shall redeem, in the manner and with the effect
provided in this paragraph, at the Redemption Price of all
shares of Preferred Stock as shall then remain outstanding,
or at such other time or times as may be provided for in the
Note Purchase Agreement dated as of December 18, 1995
between the Company and Geneva Middle Market Investors, L.P.
(v) Optional Redemptions. The Company at the option of
the Board of Directors may redeem, in the manner and with
the effect provided in this paragraph, on or at any time or
times part or all of the outstanding shares of Preferred
Stock at the Redemption Price.
<PAGE>
(e) Liquidation.
Upon any liquidation, dissolution or winding up of the Company, after
payment or provision for payment of all debts and other obligations and
liabilities of the Company, the holders of the shares of Preferred Stock shall
be entitled, before any distribution or payment is made upon any Common Stock,
to be paid an amount equal to the Redemption Price plus an amount equal to all
accrued dividends, and the holders of the Preferred Stock shall not be entitled
to any further payment. Upon any such liquidation, dissolution or winding up of
the Company, after the holders of the Preferred Stock, at the time outstanding,
shall have been paid in full the amounts to which they shall be entitled, the
remaining net assets of the Company may be distributed to the holders of Common
Stock. If, upon any such liquidation, dissolution or winding up of the Company,
the assets of the Company distributable as aforesaid among the holders of the
Preferred Stock at the time outstanding shall be insufficient to permit the
payment to them of the full preferential amounts to which they are entitled,
then the entire assets of the Company so available for distribution shall be
distributed ratably among the holders of the Preferred Stock at the time
outstanding in proportion to the full preferential amounts to which they are
entitled. Written notice of such liquidation, dissolution or winding up, stating
a payment date, the amount of the Redemption Price and the place where said sums
shall be payable shall be given by mail, postage prepaid, not less than thirty
(30) days prior to the payment date stated therein, to the holders of record of
the Preferred Stock, such notice to be addressed to each stockholder at its post
office address as shown by the records of the Company. The consolidation or
merger of the Company into or with any other corporation or corporations, or the
sale or transfer by the Company of all or any part of its assets, or the
reorganization or recapitalization of the Company, or the reduction of the
capital stock of the Company, shall be deemed to be a liquidation, dissolution
or winding up of the Company within the meaning of any of the provisions of this
paragraph.
(f) Restrictions. At any time when shares of Preferred Stock are
outstanding, except where the vote or written consent of the holders of a
greater number of shares of the Company is required by law or by the Articles of
Organization, and in addition to any other vote required by law or the Articles
of Organization, without the approval of the holders of at least 60% of the then
outstanding shares of Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class, the Company
will not:
(i) Create or authorize the creation of any additional class or
series of shares of stock unless the same ranks equal or junior to the
Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Company, or increase the authorized
amount of the Preferred Stock or increase the authorized amount of the
Preferred Stock or increase the authorized amount of any additional
class or series of shares of stock unless the same ranks equal or
junior to the Preferred Stock as to the distribution of assets on the
liquidation, dissolution or winding up of the Company, or create or
authorize any obligation or security, convertible into shares of the
Preferred Stock or into shares of any other class or series of stock
unless the same ranks equal or junior to the Preferred Stock as to the
distribution of assets on the liquidation, dissolution or winding up
of the Company, whether any such creation, authorization or increase
shall be by means of amendment to the Articles of Organization or by
merger, consolidation or otherwise; or
(ii) Purchase or set aside any sums for the purchase of, or pay
any dividend or make any distribution on, any shares of stock other
than the Preferred Stock, except for dividends or other distributions
payable on the Common Stock solely in the form of additional shares of
Common Stock.
<PAGE>
LUXTEC CORPORATION
$1,000,000 8% SENIOR SUBORDINATED NOTES
DUE JANUARY 1, 2001
AND
WARRANTS TO PURCHASE 450,000 SHARES OF
COMMON STOCK, $.01 PAR VALUE
_____________________________________________________________________
NOTE PURCHASE AGREEMENT
_____________________________________________________________________
Dated as of December 18, 1995
<PAGE>
TABLE OF CONTENTS
1. AUTHORIZATION AND RANKING. .....................................-1-
1A. Authorization of Issue of Notes and Warrants............-1-
1B. Ranking.................................................-1-
2. PURCHASE AND SALE OF NOTES; CLOSING..............................-1-
2A. Purchase and Sale of Notes..............................-1-
2B. Closing.................................................-1-
3. CONDITIONS OF CLOSING............................................-1-
3A. Warrants and Registration Rights Agreement..............-1-
3B. Opinion of Company Counsel..............................-2-
3C. Representations and Warranties; Compliance;
No Default..............................................-2-
3D. Proceedings.............................................-2-
3E. Consent of Other Persons................................-2-
4. PREPAYMENT AND SCHEDULED REPAYMENTB..............................-2-
4A. Optional Prepayment.....................................-2-
4B. Required Prepayment.....................................-3-
4C. Notice of Optional Prepayment...........................-3-
4D. Scheduled Payment of Note...............................-3-
4E. Exchange of Notes.......................................-3-
5. AFFIRMATIVE COVENANTS............................................-3-
5A. Financial and Other Reporting by the Company............-3-
5B. Inspection of Property..................................-4-
5C. Corporate Existence, etc................................-4-
5D. Payment of Taxes and Claims.............................-4-
5E. Compliance with Laws, etc...............................-4-
5F. Maintenance of Properties and Leases....................-5-
5G. Insurance...............................................-5-
5H. Use of Proceeds.........................................-5-
5I. Environmental Compliance................................-5-
5J. Maintenance of Books and Records........................-5-
5K. Preemptive Rights......................................-5-
6. NEGATIVE COVENANTS...............................................-6-
6A. Transactions with Affiliates............................-6-
7. EVENTS OF DEFAULT................................................-6-
7A. Acceleration............................................-6-
7B. Other Remedies..........................................-7-
<PAGE>
8. REPRESENTATIONS AND WARRANTIES...................................-8-
8A. Organization, etc.......................................-8-
8B. Authorized Capital Stock and Stock Ownership............-8-
8C. Business; Financial Statements; No Changes..............-8-
8D. Events Subsequent to the Date of the
Financial Statements....................................-9-
8E. Actions Pending.........................................-9-
8F. Title to Properties.....................................-9-
8G. Affiliates and Investments in Others.................. -10-
8H. Tax Returns and Payments...............................-10-
8I. Conflicting Agreements and Other Matters...............-10-
8J. Offering of Notes and Warrants.........................-10-
8K. ERISA..................................................-11-
8L. Governmental and Other Consents........................-11-
8M. Environmental Matters..................................-11-
8N. Financial Condition....................................-11-
8O. Disclosure.............................................-12-
8P. Proprietary Information of Third Parties...............-12-
8Q. Patents, Trademarks Etc................................-12-
8R. Brokers................................................-12-
9. REPRESENTATIONS OF THE PURCHASER................................-12-
9A. Organization, etc......................................-12-
9B. Actions Pending........................................-13-
9C. Conflicting Agreements and Other Matters...............-13-
9D. Governmental and Other Consents........................-13-
9E. Brokers................................................-13-
9F. Nature of Transaction..................................-13-
10. DEFINITIONS.....................................................-13-
11. MISCELLANEOUS...................................................-18-
11A. Payments...............................................-18-
11A.(1) Payments in Respect of Notes...........................-18-
11A.(2) No Deduction or Set-off................................-18-
11B. Expenses...............................................-18-
11C. Indemnity..............................................-19-
11D. Consent to Amendments..................................-19-
11E. Survival of Representations and Warranties;
Entire Agreement.......................................-19-
11F. Successors and Assigns.................................-19-
11G. Disclosure to Other Persons............................-19-
11H. Notices................................................-20-
11I. Descriptive Headings...................................-20-
11J. Reproduction of Documents..............................-20-
11K. Governing Law..........................................-20-
11L. Counterparts...........................................-20-
11M. Replacement of Notes...................................-20-
11N. Compliance by Subsidiaries.............................-20-
11O. Severability...........................................-21-
11P. Termination............................................-21-
11Q. Construction...........................................-21-
11R. Brokerage..............................................-21-
<PAGE>
SCHEDULES AND EXHIBITS
PURCHASER SCHEDULE
EXHIBIT A - Form of Note
EXHIBIT B - Form of Warrant
EXHIBIT C - Wiring Instructions
EXHIBIT D - Warrant Agreement
EXHIBIT E - Registration Rights Agreement
EXHIBIT F - Form of Opinion of Counsel to the Company
EXHIBIT G - Form of Officers' Certificate
EXHIBIT H - Form of Secretary's Certificate
EXHIBIT I - Terms of Preferred Stock
SCHEDULE 5H - Use of Proceeds
SCHEDULE 8A - Foreign Qualifications
SCHEDULE 8B - Stock Ownership
SCHEDULE 8E - Litigation
SCHEDULE 8G - Affiliates and Investments in Others
SCHEDULE 8M - Environmental Matters
<PAGE>
LUXTEC CORPORATION
As of December 18, 1995
To: Geneva Middle Market Investors, L.P.
Gentlemen:
The undersigned, Luxtec Corporation, a Massachusetts corporation
(the "Company"), agrees with you as follows:
1. AUTHORIZATION AND RANKING.
1. Authorization of Issue of Notes and Warranys.
The Company will authorize the issue and sale of its Senior
Subordinated Notes, in the aggregate principal amount of $1,000,000,
to be dated the date of issue, to mature January 1, 2001, to bear
interest on the unpaid principal balance from the date of issue until
the principal shall have become due and payable at the rate of 8% per
annum, payable annually in arrears, and to bear interest on overdue
principal, and, to the extent permitted by law, overdue interest at
the rate of 10% per annum, and to be substantially in the form of
Exhibit A and will authorize the issue of warrants (collectively, the
"Warrants") to be dated the date of issue, entitling the holder to
purchase 450,000 shares of the Common Stock of the Company, par value
$.01 per share (the "Common Stock") substantially in the form of
Exhibit B. The notes issued pursuant to this Agreement and any notes
which may be issued hereunder in substitution or exchange for such
notes are collectively referred to as the "Notes".
2. Ranking The Notes are to be subordinated to the Company's
Senior Obligations, but will otherwise rank senior in priority of
payment to all other Debt of the Company (whether now existing or
hereafter incurred) that is subordinate to the Senior Obligations.
2. PURCHASE AND SALE OF NOTES; CLOSING
1. Purchase and Sale of Notes. Subject to the terms and
conditions of this Agreement, the Company shall sell to you (the
"Purchaser"), and the Purchaser shall purchase from the Company, Notes
of the principal amounts, or aggregate principal amount, set forth
after the Purchaser's name in the attached Purchasers Schedule at a
price equal to 100% of such principal amount, registered in the
Purchaser's name or that of the Purchaser's nominee or nominees
specified in the Purchasers Schedule.
2. Closing. The purchase and sale of the Notes shall take place
at the offices of Sullivan & Worcester ("Special Counsel"), One Post
Office Square, Boston, Massachusetts 02109, at a closing (the
"Closing") to be held on December 18, 1995 or on such other date as
the Purchaser and the Company may agree (the "Closing Date"). At the
Closing, the Company will deliver to the Purchaser the Notes or Note
to be purchased by it, against payment of the purchase price therefor
by transfer of immediately available funds in accordance with the
wiring instructions stated on Exhibit C.
3. CONDITIONS OF CLOSING. The Purchaser's obligation to purchase and pay
for the Notes is subject to the fulfillment to their satisfaction or their
written waiver, on or before the Closing Date, of the following conditions:
1. Warrants and Registration Rights Agreement. The Company shall
have executed and delivered the Warrants for the amount of Common
Stock set forth after the Purchaser's name in the Purchasers Schedule,
a Warrant Agreement substantially in the form of Exhibit D (the
"Warrant Agreement") and a Registration Rights Agreement providing for
registration of the resale by the Purchaser of the shares of Common
Stock issuable upon exercise of the Warrants substantially in the form
of Exhibit E (the "Registration Rights Agreement").
<PAGE>
2. Opinion of Company Counsel. The Purchaser shall have received
an opinion from Bingham, Dana & Gould, dated the Closing Date,
addressed to the Purchaser and in form and substance satisfactory to
it covering the matters set forth in Exhibit F. To the extent that the
opinion referred to in this paragraph 3B is rendered in reliance upon
the opinion of any other counsel, the Purchaser shall have received a
copy of the opinion of such other counsel, dated the Closing Date and
addressed to it, or a letter from such other counsel, dated the
Closing Date and addressed to it, authorizing it to rely on such other
counsel's opinion.
3. Representations and Warranties; Compliance; No Default (1) The
representations and warranties contained in paragraph 8 shall be true
on and as of the Closing Date both immediately before and after giving
effect to the consummation of the transactions contemplated by this
Agreement; no Default or no Event of Default shall have occurred or be
continuing as of the Closing Date both immediately before and after
giving effect to the consummation of the transactions contemplated by
this Agreement; the Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be
performed or complied with or by it on or prior to the Closing; and
the Company shall have delivered to the Purchaser an Officers'
Certificate in the form of Exhibit G, dated the Closing Date,
certifying as to the matters set forth in this paragraph and the other
matters set forth therein.
3. The Company shall have delivered to the Purchaser a
certificate from its Secretary in the form of Exhibit H certifying as
to its corporate documentation, the resolutions and other corporate
proceedings relating to the authorization, execution and delivery of
the Transaction Documents.
4. Proceedings. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated by this
Agreement and all documents incident thereto shall be satisfactory in
substance and form to the Purchaser and its Special Counsel, and the
Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably
request.
5. Consent of Other Persons. The Company shall have received the
written consent of all Persons whose consent is necessary for the
transactions contemplated by this Agreement satisfactory in form and
substance to the Purchaser.
6. Appointment of Advisory Director. The Company shall have
appointed a person designated by the Purchaser and reasonably
acceptable to the Company, initially, James Goodman, as representative
for the Purchaser, to serve as a non-voting advisory director to the
Company, granting him the right to observe and participate in the
Company's board of directors' meetings and discussions. Such
non-voting advisory director shall not be compensated for his services
as an advisory director but, consistent with the other directors,
shall be reimbursed for expenses incurred in performing such services.
4. PREPAYMENT AND SCHEDULED REPAYMENT. The Notes may be prepaid only under the
circumstances set forth in paragraph 4A and shall be repaid in accordance with
paragraphs 4B and 4D or upon any acceleration of final maturity as provided in
paragraph 7A.
<PAGE>
1. Optional Prepayment. The Company shall have the privilege at
any time of prepaying the Notes at any time, without premium or
penalty, at 100% of the principal amount, plus interest accrued
thereon to the Settlement Date.
2. Required Prepayment. (i) On any exercise of its Warrants by a
holder, an aggregate principal amount of its Notes then outstanding,
together with accrued interest, equal to the exercise price of such
Warrants shall be prepaid and applied by the Company to the exercise
price of the Warrants. If the Notes have been exchanged for Preferred
Stock in accordance with paragraph 4E, then, on any exercise of its
Warrants by a holder, such number of shares of its Preferred Stock
with an aggregate Redemption Price, together with accrued dividends
thereon, equal to the exercise price of such Warrants shall be
surrendered to the Company and applied to the exercise price of the
Warrants.
(ii) Upon the merger or consolidation of the Company or any of
its Subsidiaries or the sale, lease, transfer or other disposition of
the Company's or any of its Subsidiary's assets to any Person or
Persons, each Note then outstanding shall become due and payable at
100% of the principal amount thereof together with all interest
accrued thereon except, that (a) any Subsidiary of the Company may
merge or consolidate with or sell, lease, transfer or otherwise
dispose of all or any of its assets to the Company or a Wholly-Owned
Subsidiary of the Company (provided, that the Company or such
Wholly-Owned Subsidiary shall be the continuing or surviving
corporation and the acquiring or surviving entity is a corporation
organized under the laws of, and having its principal place of
business in, a state of the United States of America or the District
of Columbia), (b) the Company may merge or consolidate with any other
corporation provided the Company shall be the continuing or surviving
corporation, and (c) the Company and its Subsidiaries may sell
inventory in the ordinary course of business and dispose of fully
depreciated, obsolete Fixed Assets for salvage or scrap and no such
prepayment shall be required.
3. Notice of Optional Prepayment. The Company shall give the
Purchaser written notice of its intention to prepay the Notes, in
whole or in part, pursuant to paragraph 4A at least 30 days and not
more than 60 days prior to the Settlement Date, specifying the
Settlement Date and stating that such prepayment is to be made
pursuant to paragraph 4A. Upon the giving of such notice, the Called
Principal as specified in such notice, together with interest thereon
to the Settlement Date shall become due and payable on the Settlement
Date. The Company may revoke notice given pursuant to this paragraph
4C by delivering written notice of such revocation to the Purchaser
not later than 15 days prior to the Settlement Date, provided however,
the Company may not revoke such notice of optional prepayment more
than twice during the term of the Notes.
4. Scheduled Payment of Notes. The Company shall, on January 1,
2001, repay in full all remaining principal and accrued interest then
outstanding under the Notes.
<PAGE>
5. Exchange of Notes. At any time before December 31, 1996, the
Company may, at the Company's option, require the Purchaser to
exchange its Notes for shares of Preferred Stock of the Company with
an aggregate Redemption Price equal to 100% of the principal amount of
the Notes so exchanged together with accrued interest thereon, and
having the rights, privileges and preferences set forth in Exhibit I.
5. AFFIRMATIVE COVENANTS
1. Financial and Other Reporting by the Company. The Company will
deliver to the Purchaser:
2. within ninety (90) days after the end of each fiscal year of
the Company a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows
for the fiscal year then ended, prepared in accordance with GAAP and
certified by an Approved Auditor;
3. within forty-five (45) days after the end of each fiscal
quarter in each fiscal year (other than the last fiscal quarter in
each fiscal year) a consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of income,
stockholders' equity and cash flows, unaudited but prepared in
accordance with GAAP and certified by the chief financial officer of
the Company, such consolidated balance sheet to be as of the end of
such fiscal quarter and such consolidated statements of income,
stockholders' equity and cash flows to be for such fiscal quarter and
for the period from the beginning of the fiscal year to the end of
such fiscal quarter, in each case with comparative statements for the
corresponding period in the prior fiscal year;
4. at the time of delivery of each annual financial statement
pursuant to paragraph 5A(i), a certificate executed by the chief
financial officer of the Company stating that such officer has caused
this Agreement, the Notes and Warrants to be reviewed and has no
knowledge of any default by the Company in the performance or
observance of any of the provisions of this Agreement, the Notes or
Warrants or, if such officer has such knowledge, specifying such
default and the nature thereof; and
5. promptly upon sending, making available or filing the same,
all press releases, reports and financial statements that the Company
sends or makes available to its stockholders or directors or files
with the SEC.
6. Inspection of Property. The Company shall permit and cause
each of its Subsidiaries to permit the Purchaser and such persons as
it may reasonably designate, at the Purchaser's expense, to visit and
inspect any of the properties of the Company and its Subsidiaries, to
examine their books and take copies and extracts therefrom, to discuss
the affairs, finances and accounts of the Company and its Subsidiaries
with their officers, employees and public accountants (and the Company
hereby authorizes said accountants to discuss with the Purchaser and
such designees such affairs, finances and accounts), and to consult
with and advise the management of the Company and its Subsidiaries as
to their affairs, finances and accounts, all at reasonable times and
upon reasonable notice.
<PAGE>
7. Corporate Existence, etc. Each of the Company and its
Subsidiaries will at all times preserve and keep in full force and
effect its corporate existence, and rights and franchises material to
its business, and qualify and maintain its qualification to do
business and good standing in any jurisdiction where the failure to do
so individually or in the aggregate would have a Material Adverse
Effect.
8. Payment of Taxes and Claims
1. The Company and each of its Subsidiaries will file all Tax
returns required to be filed in any jurisdiction and pay any Taxes
shown to be due and payable on such returns and all other Taxes
imposed upon them or any of their properties or assets or in respect
of any of their franchises, business, income, sales and services, or
profits when the same become due and payable, but in any event before
any penalty or interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law
have or might become a Lien upon any of their properties or assets,
provided that no such Tax or claim need be paid if (i) it is being
contested in good faith by appropriate proceedings promptly initiated
and diligently conducted and if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor and (ii) the failure to pay such Tax or claim would not, if
such contest were adversely determined, have a Material Adverse
Effect.
2. The Company will not consent to or permit the filing of or be
a party to any consolidated income tax return on behalf of itself or
any of its Subsidiaries with any Person (other than a consolidated
return that includes solely the Company and its Subsidiaries).
9. Compliance with Laws, etc. Each of the Company and its
Subsidiaries will comply with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority
(including, without limitation, the Occupational Safety and Health Act
of 1970, as amended, ERISA and all Environmental Laws), the violation
of which would either individually or in the aggregate have a Material
Adverse Effect and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failure to
obtain or maintain in effect such licenses, permits, franchises and
other governmental authorizations would not, individually and in the
aggregate, have a Material Adverse Effect.
10. Maintenance of Properties and Leases. Each of the Company and
its Subsidiaries will maintain, in good repair and working order and
condition (other than ordinary wear and tear) all properties used or
useful in their respective businesses, and from time to time make or
cause to be made all appropriate repairs, renewals, replacements,
additions and improvements thereof as needed and comply in all
material respects with the provisions of all leases or licenses under
which it leases or licenses any such properties.
<PAGE>
11. Insurance. Each of the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance
with respect to its properties and business of such type and in such
forms and amounts and against such risks as is reasonable and prudent
in the circumstances and in any event as are customarily insured
against by Persons of like size and established reputation engaged in
the same or similar business and similarly situated.
12. Use of Proceeds. Each of the Company and its Subsidiaries
will use the proceeds of the sale of the Notes only as designated on
Schedule 5H and not for any purpose which would violate any applicable
law or governmental regulation or which is otherwise prohibited under
paragraph 8J.
13. Environmental Compliance. Each of the Company and its
Subsidiaries will (i) obtain and maintain, all permits, licenses, and
other authorizations that are required under all Environmental Laws,
and (ii) comply with all terms and conditions of all such permits,
licenses, and authorizations and with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in all Environmental
Laws or in any regulation, ordinance, code, plan, order, decree,
judgment, injunction, notice, or demand letter issued, entered,
promulgated, or approved thereunder, except to the extent that failure
so to do does not have a Material Adverse Effect and (iii) operate all
property owned or leased by it such that no claim or obligation,
including a clean-up obligation, which would have a Material Adverse
Effect, shall arise under any Environmental Law, and if any claim is
made against the Company or any of its Subsidiaries or any such
obligation shall arise (regardless of whether such claim or obligation
would have a Material Adverse Effect) under any Environmental Law, the
Company or such Subsidiary at its own cost and expense, shall timely
satisfy such claim or obligation.
14. Maintenance of Books and Records. Each of the Company and its
Subsidiaries will do the following: (i) keep proper records and books
of account with respect to its business activities in which proper
entries are made in the ordinary course of all dealings or
transactions of or in relation to its business and affairs; (ii) set
up on its books adequate reserves with respect to all Taxes,
assessments, charges, levies and claims; and (iii) set up on its books
reserves against doubtful accounts receivable, advances and all other
proper reserves (including reserves for depreciation, obsolescence or
amortization of its property). All determinations pursuant to this
paragraph 5J shall be made in accordance with, or as required by, GAAP
reflecting all of the Company's and its Subsidiaries' financial
transactions.
<PAGE>
15. Preemptive Rights. The Company shall, prior to any issuance
by the Company of any of its securities (other than debt securities
with no equity feature), offer to the Purchaser by written notice the
right, for a period of 20 days, to purchase the Purchaser's pro rata
share of such securities based on the Purchaser's portion of the
outstanding Common Stock of the Company (or if the Purchaser has not
fully exercised its Warrants, based upon the Purchaser's portion of
the outstanding Common Stock of the Company plus the number of shares
of Common Stock of the Company which the Purchaser would then be
entitled to purchase upon exercise of its Warrants, but in any event
exclusive of any shares of Common Stock of the Company acquired by the
Purchaser other than by exercise of its Warrants or rights granted
under this paragraph 5K), for cash at an amount equal to the price or
other consideration for which such securities are to be issued;
provided, however, that the preemptive rights of the Purchaser
pursuant to this paragraph 5K shall not apply to securities issued (i)
as a stock dividend or upon any subdivision of shares of Common Stock,
provided that the securities issued pursuant to such stock dividend or
subdivision are limited to additional shares of Common Stock, (ii)
pursuant to the Warrants or subscriptions, warrants, options,
convertible securities, or other rights which are listed in Schedule
8B as being outstanding on the Closing Date, (iii) solely in
consideration for the acquisition (whether by merger or otherwise) by
the Company or any of its Subsidiaries of all or substantially all of
the stock or assets of any other entity, (iv) pursuant to a firm
commitment or best efforts underwritten public offering, (v) pursuant
to that certain Agreement of Merger and Plan of Reorganization, dated
as of June 28, 1995, by and among the Company, Luxtec CD Acquisition
Co. Inc., Cardiodyne, Inc., Paul Epstein and Patrick G. Phillips, (vi)
pursuant to any employee benefit plan or to any director or consultant
to the Company in exchange for personal services, and (vii) upon the
exercise of any right which was not itself in violation of the terms
of this paragraph 5K. The Company's written notice to the Purchaser
shall describe the securities proposed to be issued by the Company and
specify the number, price and payment terms. The Purchaser may accept
the Company's offer as to the full amount of its pro rata share or any
lesser number, by written notice thereof given by it to the Company
prior to the expiration of the aforesaid 30 day period, in which event
the Company shall promptly sell and the Purchaser shall buy, upon the
terms specified, the number of securities agreed to be purchased by
the Purchaser. The Company shall be free at any time prior to 180 days
after the date of this notice of offer to the Purchaser, to offer and
sell to any third party or parties the number of such securities not
agreed by the Purchaser to be purchased by it, at a price and on
payment terms no less favorable to the Company than those specified in
such notice of offer to the Purchaser. However, if such third party
sale or sales are not consummated within such 180 day period, the
Company shall not sell such securities as shall not have been
purchased within such period without again complying with this
paragraph 5K.
6. NEGATIVE COVENANTS
1. Transactions with Afffiliates. The Company and its
Subsidiaries will not directly or indirectly, engage in any
transaction (including, without limitation, the purchase, sale or
exchange of assets or the payment of salary, bonuses and other
compensation for services rendered) with any present or former
stockholder, officer or Affiliate (other than the Company or another
Wholly-Owned Subsidiary), or to any successor, assign, Affiliate or
transferee thereof, except upon commercially reasonable terms which
are no less favorable to the Company or such Subsidiary than those
which might be obtained at arms' length between unaffiliated parties.
<PAGE>
7. EVENTS OF DEFAULT
1. Acceleration. If any of the following events shall occur or
conditions shall exist and be continuing for any reason whatsoever
while the Notes are outstanding, and whether such occurrence or
condition shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise (any such occurrence or
condition and continuance shall constitute an "Event of Default"):
1. the Company defaults in the payment of any principal of any
Note when the same becomes due, whether by the terms thereof or
otherwise as provided by the terms of this Agreement; or
2. the Company defaults in the payment of any interest on any
Note when the same shall become due, either by the terms thereof
or otherwise as provided by the terms of this Agreement and such
default continues for 10 days after notice from the Purchaser; or
3. any representation or warranty made by the Company in the
Transaction Documents, or in any writing furnished in connection
with or pursuant to this Agreement shall be false,
incorrect or misleading in any material adverse respect as of the
date when made; or
4. the Company or any Subsidiary fails to perform or observe
any other agreement, term or condition of any of the
Transaction Documents and such failure shall not be remedied within
30 days of written note of such failure (or such additional time,
up to 180 days, as is reasonably required to cure such failure if
the same is not capable of cure within 30 days despite the
use of all reasonable efforts by the Company and/or its Subsidiary
to do so); or
5. the Company or any Subsidiary voluntarily or involuntarily
suspends or discontinues operations (other than temporary
shutdowns in accordance with customary business practices); or
liquidates all or substantially all of its assets; or is generally
not paying, or admits in writing that it is not able to pay, its
debts as such debts become due or otherwise becomes insolvent; or
files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction;
or makes an assignment for the benefit of its creditors; or
consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to it or with
respect to any substantial part of its property; or takes
corporate action for the purpose of any of the foregoing; or
6. a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation, dissolution or
winding up of the Company or any Subsidiary or to take advantage
of any bankruptcy or insolvency law of any jurisdiction is filed
against the Company or any Subsidiary without the consent or
other acquiescence of the Company or such Subsidiary and such
petition is not dismissed within 30 days; or
7. a Governmental Authority enters an order appointing,
without consent by the Company or any Subsidiary, a
custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of
its property, or constituting an order for relief or approving a
petition for relief of reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any
Subsidiary, and such order remains unstayed and in effect for 30
days; then (a) if such occurrence or continuance is an Event of
Default specified in subparagraph (v), (vi) or (vii) of
this paragraph 7A, each Note at the time outstanding
shall automatically become due and payable at 100% of the
principal amount thereof together with all interest accrued
thereon, without presentment, demand, protest or notice of any
kind, all of which are expressly waived by the Company; (b) if such
occurrence or continuance is any other Event of Default, the
Purchaser may at its option declare each Note to be, and each
Note shall thereupon be and become, immediately due and
payable at 100% of the principal amount thereof together with all
interest accrued thereon with respect to each Note, without
presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Company.
<PAGE>
2. Other Remedies.. If any one or more Defaults or Events of
Default shall occur and be continuing, irrespective of whether any
Notes have become or have been declared immediately due and payable,
the Purchaser may proceed to protect and enforce its rights under the
Transaction Documents by exercising such remedies as are available to
the Purchaser in respect thereof under applicable law, either by suit
in equity or by action at law or by any other appropriate proceeding,
whether for specific performance of any covenant or other agreement
contained in a Transaction Document or in aid of the exercise of any
power granted in a Transaction Document, in such order as the
Purchaser may determine in its sole discretion. No remedy conferred in
a Transaction Document upon the Purchaser is intended to be exclusive
of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute
or otherwise. No course of dealing or failure or delay by the
Purchaser in exercising any right, power or remedy under a Transaction
Document or any other document executed in connection therewith shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right or remedy preclude any other right or remedy
hereunder or thereunder.
8. REPRESENTATION AND WARRANTIES. The Company represents and warrants that:
1. Organization, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, each of its Subsidiaries is duly
organized and validly existing and in good standing under the laws of
the jurisdiction of its incorporation as set forth in Schedule 8A and
each of the Company and its Subsidiaries has all requisite corporate
power and authority to own, operate and lease its property and to
carry on its business as now being conducted and to execute, deliver
and perform each Transaction Document and issue and sell the Notes.
The Company and each of its Subsidiaries is duly qualified and in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the failure to be so would, individually or in
the aggregate, have a Material Adverse Effect. Schedule 8A sets forth
each jurisdiction in which the Company or any of its Subsidiaries is
qualified or authorized to do business as a foreign corporation. Each
Transaction Document has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed
and delivered by authorized officers of the Company and are the legal,
valid and binding obligations of the Company, and, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement or priority of creditors' rights generally,
now or hereafter in effect, and subject to the provision that
equitable remedies shall be within the discretion of the court having
jurisdiction to exercise the same, are enforceable in accordance with
their respective terms.
<PAGE>
2. Authorized Capital Stock and Stock Ownership. The authorized
capital stock of the Company consists of 10,000,000 shares of Common
Stock. Immediately prior to the Closing, 2,443,898 shares of Common
Stock will be validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the ownership
thereof. All of the outstanding capital stock of the Company is
validly issued, fully paid and non-assessable. Except as set forth in
Schedule 8B, no Person or group of Persons (including all directors
and executive officers as a group) owns beneficially or of record more
than 5% of the Voting Stock of the Company. There are no Subsidiaries
of the Company other than those listed in Schedule 8A. All of the
outstanding capital stock of each of the Subsidiaries is validly
issued and, except as set forth in Schedule 8B, fully paid and
non-assessable, and is 100% owned directly by the Company or, if not,
is owned by the Persons and in the amounts listed on Schedule 8B,
which Persons collectively, with the Company, own 100% of the issued
and outstanding shares of capital stock of each such Subsidiary, and
all such capital stock owned by the Company or any other Subsidiary is
owned free and clear of any Lien of any kind and the Company or such
other Subsidiary has the right, subject only to limitations imposed by
applicable law to receive dividends and distributions on such capital
stock. Except as set forth in Schedule 8B, the Company and its
Subsidiaries do not have outstanding any rights, options, warrants or
other agreements which would require them to issue any additional
shares of their capital stock.
3. Business; Financial Statements; No Changes. The Company has
furnished the Purchaser with the audited consolidated balance sheets
of the Company and its Subsidiaries as of October 31 in each of the
years 1993 and 1994 and the related consolidated statements of
operations and stockholders' equity for the periods of twelve months
ended on each such date and with the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of July 31, 1995 and the
related consolidated statements of operations and stockholders' equity
for the three months ended on such date. The financial statements
referred to in this paragraph 8C, including any related schedules
and/or notes (the "Financial Statements"), are true and correct in all
material respects, have been prepared in accordance with GAAP and show
all liabilities of the Company and its Subsidiaries required to be
shown therein in accordance with such principles. The balance sheets
included in the Financial Statements fairly present the condition of
the Company and its Subsidiaries on a consolidated basis as at the
dates thereof, and the statements of operations and stockholders'
equity included in the Financial Statements fairly present the results
of the operations and the stockholders' equity of the Company and its
Subsidiaries on a consolidated basis for the periods indicated. Since
October 31, 1994, there have been no developments or changes affecting
the business, assets, liabilities, condition (financial or otherwise)
of the Company or any of its Subsidiaries which has had or, could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
<PAGE>
4. Events Subsequent to the Date of the Financial Statements. Except
pursuant to the merger described in the Joint Proxy Statement and
except pursuant to a Loan and Security Agreement, dated as of October
20, 1995 by and between the Company and the First National Bank of
Boston, since October 31, 1994 the Company has not (i) issued any
stock, bond or other corporate security, (ii) borrowed any amount or
incurred or become subject to any liability (absolute, accrued or
contingent), except for current liabilities incurred and liabilities
under contracts entered into in the ordinary course of business, (iii)
discharged or satisfied any Lien or incurred or paid any obligation or
liability (absolute, accrued or contingent) other than current
liabilities shown on the Financial Statements or disclosed in the
Joint Proxy Statement and current liabilities incurred since October
31, 1994 in the ordinary course of business, (iv) declared or made any
payment or distribution to stockholders or purchased or redeemed any
share of its capital stock or other security, (v) mortgaged, pledged
or subjected to a Lien any of its assets, tangible or intangible,
other than Liens of current real property taxes not yet due and
payable, (vi) sold, assigned or transferred any of its tangible assets
except in the ordinary course of business, or canceled any Debt or
claim, (vii) sold, assigned, transferred or granted any exclusive
license with respect to any patent, trademark, trade name, service
mark, copyright, trade secret or other intangible asset, (viii)
suffered any loss of property or waived any right of substantial value
whether or not in the ordinary course of business, (ix) made any
change in officer compensation except in the ordinary course of
business and consistent with past practice, (x) made any material
change in the manner of business or operations of the Company, (xi)
entered into any transaction except in the ordinary course of business
or as otherwise contemplated hereby or (xii) entered into any
commitment (contingent or otherwise) to do any of the foregoing.
5. Actions Pending. Except as set forth on Schedule 8E, there are no
actions, suits, investigations or proceedings pending or, to the
knowledge of the Company threatened, against the Company or any of its
Subsidiaries, or any properties or rights of the Company or any of its
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body other than those which individually and in the
aggregate do not and will not, in the future have a Material Adverse
Effect.
6. Title to Properties. Each of the Company and its Subsidiaries has
good and marketable title to its real properties (other than
properties which it leases) and good title to all of its other
properties and assets, including the properties and assets reflected
in the balance sheet as of October 31, 1994 included in the Financial
Statements and those acquired pursuant to the merger described in the
Joint Proxy Statement (other than properties and assets disposed of
since such date in the ordinary course of business), subject to no
Lien of any kind except Liens for current Taxes not yet due and
payable and minor imperfections of title, if any, which could not
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. The Company and each of its
Subsidiaries enjoys peaceful and undisturbed possession under all
leases necessary in any material respect for the conduct of their
respective businesses as now conducted and to the best of the
Company's knowledge, all such leases are valid and subsisting and are
in full force and effect.
<PAGE>
7. Affiliates and Investments. Except as set forth on Schedule 8G, the
Company and its Subsidiaries have no Affiliates and do not own any
stock or securities or have any beneficial or equity interest in any
Person other than ownership of stock or securities of a Person of a
class publicly traded on a national securities exchange representing
not more than 5% of the total combined voting power of all classes of
Voting Stock of such Person or more than 5% of beneficial or equity
interest in such Person.
8. Tax Returns and Payments. Each of the Company and its Subsidiaries
has filed all Federal, State, local and foreign income tax returns,
franchise tax returns, real and personal property tax returns and
other tax returns required by law to be filed by or on its behalf of
or with respect to its properties or assets, and all Taxes,
assessments and other governmental charges imposed upon the Company
and any of its properties, assets, income or franchises which are due
and payable have been paid, other than those presently payable without
penalty or interest and those presently being contested in good faith
by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as may be required
by GAAP have been made. The changes, accruals and reserves on the
books of the Company and its Subsidiaries in respect of any Taxes for
all periods are adequate and the Company knows of no unpaid assessment
for additional Taxes for any period or any basis for any such
assessment for which adequate provision has not been made in its
accounts. No charges or Taxes will be imposed by any Governmental
Authority on the execution, delivery or enforcement of the Transaction
Documents and the issue and sale of the Notes and the Warrants or any
transfer of the Notes or the Warrants.
9. Conflicting Agreements and Other Matters. Neither the Company nor
any Subsidiary is in violation of any term of its charter or by-laws,
or in violation or breach of any term of any agreement (including any
agreement with stockholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which it is subject, the
consequences of which violation or breach are reasonably likely to
have a Material Adverse Effect. The execution and delivery of the
Transaction Documents, and the offering, issuance and sale of the
Notes and the Warrants, and fulfillment of and compliance with the
terms and provisions of the Transaction Documents, do not and will not
conflict with the provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, the charter or by-laws of the Company or any
of its Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the
Company or any of its Subsidiaries is subject. Neither the Company nor
any of its Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Debt, any agreement
relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions
on the incurring of the Debt of the Company to be evidenced by the
Notes which has not been waived or otherwise complied with in
connection with the issuance of the Notes.
<PAGE>
10. Offering of Notes and Warrants. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or
the Warrants or any similar security of the Company for sale to, or
solicited any offers to buy the Notes or the Warrants or any similar
security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than the Purchaser, and
neither the Company nor any agent acting on its behalf has taken or
will take any action which would subject the issuance or sale of the
Notes or the Warrants to the provisions of Section 5 of the Securities
Act or to the registration provisions of any securities or Blue Sky
law of any applicable jurisdiction.
11. ERISA. The Company and each ERISA Affiliate has operated and
administered each Plan operated and administered by it in compliance
with all applicable laws except for such instances of noncompliance as
have not resulted in and could not reasonably be expected to result in
a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably
be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to Section 401(a)(29) or 412
of the Code, other than such liabilities or Liens as individually or
in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
12. Governmental and Other Consents. Neither the nature of the Company
nor any of its Subsidiaries, nor any of their businesses or
properties, nor any relationship between the Company or any Subsidiary
and any other Person, nor any circumstance in connection with the
execution and delivery of any Transaction Document, or the offering,
issuance, sale or delivery of the Notes or the Warrants is such as to
require any authorization, consent, approval, exemption or any action
by or notice to or filing with any Governmental Authority or any other
Person (other than the Company's Board of Directors) in connection
with the execution and delivery of the Transaction Documents and the
offering, issuance, sale or delivery of the Notes and the Warrants
(other than any filing required in connection with an exemption from
the registration requirements of any federal or state securities laws)
or fulfillment of or compliance with the terms and provisions of the
Transaction Documents.
13. Environmental Matters. Neither the Company nor any Subsidiary has
any knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim, against any
of them or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environment Laws,
except, in each case, such as could not reasonably be expected to
result in a Material Adverse Effect. Except as otherwise disclosed in
Schedule 8M:
<PAGE>
1. neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
2. neither the Company nor any Subsidiary has stored
any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them in a manner
contrary to any Environmental Laws or has disposed of any
Hazardous Materials in a manner contrary to any
Environmental Laws, in each case in any manner that could
reasonably be expected to result in a Material Adverse
Effect; and
3. to the best of the Company's knowledge, all
buildings on all real properties now owned, leased or
operated by the Company or any Subsidiary are in compliance
with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a
Material Adverse Effect.
14. Financial Condition. After giving effect to the transactions
contemplated hereby, (i) the aggregate present fair saleable value of
the assets of the Company will be greater than the amount that will be
required to pay the probable liabilities of the Company on its debts,
including contingent liabilities, as they become absolute and mature;
(ii) the Company has (and has no reason to believe that it will not
have) sufficient capital for the conduct of its business; and (iii)
the Company does not intend to incur, and does not believe it has
incurred, debts beyond its ability to pay as they mature.
15. Disclosure. No Transaction Document nor any other document,
certificate or statement furnished to the Purchaser by or on behalf of
the Company in connection herewith contains any untrue statement of a
material fact or, to the best of the Company's knowledge, omits to
state a material fact necessary in order to make the statements
contained herein and therein in light of the circumstances under which
they were made not misleading.
16. Proprietary Information of Third Parties. To the best of the
Company's knowledge, no third party has claimed or has reason to claim
that any person employed by or affiliated with the Company has (a)
violated or may be violating any of the terms or conditions of his
employment, non-competition or nondisclosure agreement with such third
party, (b) disclosed or may be disclosing or utilized or may be
utilizing any trade secret or proprietary information or documentation
of such third party or (c) interfered or may be interfering in the
employment relationship between such third party and any of its
present or former employees. No third party has requested information
from the Company which suggests that such a claim might be
contemplated. To the best of the Company's knowledge, no person
employed by or affiliated with the Company has employed or proposes to
employ any trade secret or any information or documentation
proprietary to any former employer, and to the best of the Company's
knowledge, no person employed by or affiliated with the Company has
violated any confidential relationship which such person may have had
with any third party, in connection with the development, manufacture
or sale of any product or proposed product or the development or sale
of any service or proposed service of the Company, and the Company has
no reason to believe there will be any such employment or violation.
<PAGE>
17. Patents, Trademarks Etc. The Company owns or possesses adequate
licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service mark
applications, trade names, copyrights, manufacturing processes,
formulae, trade secrets and know how (collectively, "Intellectual
Property") necessary or desirable to the conduct of its business as
conducted and as proposed to be conducted, and no claim is pending or,
to the best of the Company's knowledge, threatened to the effect that
the operations of the Company infringe upon or conflict with the
asserted rights of any other person under any Intellectual Property,
and there is no basis for any such claim (whether or not pending or
threatened). No claim is pending or threatened to the effect that any
such Intellectual Property owned or licensed by the Company, or which
the Company otherwise has the right to use, is invalid or
unenforceable by the Company, and, to the best of the Company's
knowledge, there is no basis for any such claim (whether or not
pending or threatened). The Company has not granted or assigned to any
other person or entity any right to manufacture, have manufactured,
assemble or sell the products or proposed products or to provide the
services or proposed services of the Company.
18. Brokers. The Company has no contract, arrangement or understanding
with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement other than Wax & Company,
Inc.
9. REPRESENTATIONS OF THE PURCHASER. The Purchaser represents that:
1. Organization; etc. The Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to own,
operate and lease its property and to carry on its business as now
being conducted and to execute, deliver and perform each Transaction
Document and to purchase the Notes. The Purchaser is duly qualified
and in good standing as a foreign limited partnership authorized to do
business in each jurisdiction in which the failure to be so would,
individually or in the aggregate, have a Material Adverse Effect. Each
Transaction Document has been duly authorized by all necessary
partnership action on the part of the Purchaser, has been duly
executed and delivered by the Purchaser and are the legal, valid and
binding obligations of the Purchaser, and, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement or priority of creditors' rights generally, now or
hereafter in effect, and subject to the provision that equitable
remedies shall be within the discretion of the court having
jurisdiction to exercise the same, are enforceable in accordance with
their respective terms.
2. Actions Pending. There are no actions, suits, investigations or
proceedings pending or, to the knowledge of the Purchaser threatened,
against the Purchaser or any properties or rights of the Purchaser, by
or before any court, arbitrator or administrative or governmental
body.
<PAGE>
3. Conflicting Agreememts and Other Matters. The Purchaser is not in
violation of any term of its Certificate of Limited Partnership or
Agreement of Limited Partnership, or in violation or breach of any
term of any agreement, instrument, order, judgment, decree, statute,
law, rule or regulation to which it is subject, the consequences of
which violation or breach are reasonably likely to have a material
adverse effect. The execution and delivery of the Transaction
Documents, and the purchase of the Notes and the Warrants, and
fulfillment of and compliance with the terms and provisions of the
Transaction Documents, do not and will not conflict with the
provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the
properties or assets of the Purchaser pursuant to, its Certificate of
Limited Partnership or Agreement of Limited Partnership, any award of
any arbitrator or any agreement, instrument, order, judgment, decree,
statute, law, rule or regulation to which the Purchaser is subject.
4. Governmental and Other Consents. Neither the nature of the
Purchaser, nor any of its businesses or properties, nor any
relationship between the Purchaser and any other Person, nor any
circumstance in connection with the execution and delivery of any
Transaction Document, or the purchase of the Notes or the Warrants is
such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any Governmental Authority
or any other Person in connection with the execution and delivery of
the Transaction Documents and the purchase of the Notes and the
Warrants or fulfillment of or compliance with the terms and provisions
of the Transaction Documents.
5. Brokers. The Purchaser has no contract, arrangement or
understanding with any broker, finder or similar agent with respect to
the transactions contemplated by this Agreement.
6. Nature of Transaction. (i) The Purchaser is an "accredited
investor" within the meaning of Rule 501 under the Securities Act and
was not organized for the specific purpose of acquiring the Notes or
Warrants or its purchase of the Notes and Warrants is otherwise exempt
from the registration requirements of the Securities Act; (ii) it has
sufficient knowledge and experience in investing in companies similar
to the Company in terms of the Company's stage of development so as to
be able to evaluate the risks and merits of its investment in the
Company and it is able financially to bear the risks thereof; (iii) it
has had an opportunity to discuss the Company's business, management
and financial affairs with the Company's management; (iv) the Notes
and Warrants being purchased by it are being acquired for its own
account for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof; and (v) it
understands that (a) the Notes and Warrants have not been registered
under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated under
the Securities Act, (b) the Preferred Stock, if issued in exchange for
the Notes and the Common Stock issued upon exercise of the Warrants,
must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such
registration, (c) the certificates evidencing such Preferred Stock and
such Common Stock will bear a legend to such effect and (d) the
Company will make a notation on its transfer books to such effect.
<PAGE>
10. DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the respective meanings specified with respect thereto:
"Affiliate" means as to any Person, any other Person directly or indirectly
(i) controlling, controlled by, or under direct common control with, such Person
or (ii) owning 5% or more of the beneficial interest or Voting Stock of such
Person as well as, in the case of an individual, such individual's spouse,
issue, parents, siblings and issue of siblings (in each case by blood, adoption
or marriage). A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agreement" has the meaning specified in paragraph 11C.
"Approved Auditor" means Deloitte & Touche, Arthur Andersen & Co., Coopers
& Lybrand, Ernst & Young, KPMG Peat Marwick or Price Waterhouse.
"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.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person which would, in
accordance with GAAP, be required to be classified and accounted for as a
capitalized lease on a balance sheet of such Person, other than, in the case of
the Company, any such lease under which the Company is the lessor.
"Capitalized Lease Obligation" means any rental obligation under a
Capitalized Lease taken at the amount thereof accounted for as indebtedness (net
of interest expense) in accordance with GAAP.
"Called Principal" means, with respect to any Note, the unpaid principal of
such Note which is to be prepaid pursuant to paragraph 4C.
"Closing" and "Closing Date" have the meanings specified in paragraph 2B.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time and the rules and regulations promulgated thereunder as from time to time
in effect.
"Company" has the meaning specified in the first paragraph of this
Agreement.
"Consolidated Group" means the Company and its Subsidiaries taken as a
whole.
<PAGE>
"Debt" means, as applied to any Person without duplication, (i) obligations
of such Person for borrowed money, (ii) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services, (iv)
Capitalized Lease Obligations of such Person, (v) obligations of such Person to
purchase securities or other property that arise out of or in connection with
the sale of the same or substantially similar securities or property, (vi)
obligations of such Person to reimburse any other Person in respect of amounts
paid under a letter of credit or similar instrument, (vii) obligations with
respect to interest rate and currency swaps and similar obligations requiring
such Person to make payments, whether periodically or upon the happening of a
contingency, except that if any agreement relating to such obligations provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligations shall be the net
amount thereof, (viii) any obligations secured by (or for which the holder of
such obligation has an existing right, contingent or otherwise, to be secured
by) a Lien on any asset of such Person, whether or not such obligation is
assumed by such Person, (ix) any recourse obligations of such Person in
connection with a sale of receivables, (x) obligations of such Person to make
payment for any products, materials or supplies or for any transportation or
services regardless of the non-delivery or non-furnishing thereof, (xi)
Guaranties by such Person of Debt of others, (xii) any outstanding Preferred
Stock of a Subsidiary of such Person (other than Preferred Stock owned
beneficially and of record by such Person) and any outstanding Redeemable Stock
of such Person and (xiii) any other items (excluding Trade Payables and, other
than obligations described in clause (x) of this paragraph, items of contingency
reserves or reserves for deferred income Taxes or other reserves to the extent
such reserves do not represent an obligation) which in accordance with GAAP
would be shown on the liabilities side of the balance sheet of such Person.
"Default" means any occurrence or condition which with the giving of notice
or the passage of time, or both, would be an Event of Default.
"Environmental Laws"means any and all Federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder
as from time to time in effect.
"ERISA Affiliate", for Plan purposes, means, with respect to any Person,
any trade or business, whether or not incorporated, which, is treated as a
single employer together with such person under Section 414 of the Code.
"Event of Default" has the meaning specified in paragraph 7A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE>
"Financial Statements" has the meaning specified in paragraph 8C.
"Fixed Assets" means all assets of the Company which are classified as
"property, plant and equipment" on its balance sheet in accordance with GAAP.
"GAAP" means accounting principles generally accepted in the United States
applied on a consistent basis throughout the relevant periods.
"Governmental Authority" means (a) the governments of (i) the United States
of America and (ii) any state or other jurisdiction in which the Company or any
Subsidiary is organized or conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any Subsidiary, and
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such governments.
"Guaranty", as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to advance to or provide funds for
the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the working capital, equity capital, net worth, solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to make payment
for any securities, products, materials or supplies or for any transportation or
services regardless of the non-delivery or nonfurnishing thereof, in any such
case if the purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected against loss in respect thereof. The amount of any Guaranty shall be
equal to the amount of the obligation guaranteed.
"Hazardous Materials" means any substance: (a) the presence of which
requires notification, investigation, monitoring or remediation under any
Environmental Law; (b) which is defined as a "hazardous waste", "hazardous
material", "hazardous substance" or "toxic substance" under any Environmental
Law, including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and any other
applicable federal, state or local statutes or ordinances and the regulations
promulgated thereunder; or (c) without limitation, which contains gasoline,
diesel fuel or other petroleum products, natural gas, natural gas liquids,
liquefied natural gas or synthetic gas, asbestos or polychlorinated biphenyls.
"Impermissible Qualification" means, with respect to the opinion or report
of the Approved Auditor as to any financial statements supplied under paragraph
8C, any qualification or exception to such opinion or certification which is of
a "going concern" or similar nature; indicates that the scope of the examination
of matters relevant to such financial statements was limited to an extent not
consistent with generally accepted auditing standards.
<PAGE>
"Joint Proxy Statement" means the Joint Proxy Statement of the Company and
Cardiodyne, Inc. dated September 21, 1995.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute, court decision or contract, and including,
without limitation, any mortgage, pledge, security interest, encumbrance, lien,
purchase option, call or right, or charge of any kind (including any agreement
to give or permit any of the foregoing), any conditional sale or other title
retention agreement, any Capitalized Lease, and the filing of or agreement to
give or permit the filing on its behalf of any financing statement under the
Uniform Commercial Code or personal property security legislation of any
jurisdiction.
"Material Adverse Effect" means, (i) any material adverse effect on the
Company's business, assets, liabilities, financial condition or results of
operations, (ii) any material adverse effect on the Consolidated Group's
business, assets, liabilities, financial condition or results of operations on,
where appropriate, a consolidated basis in accordance with GAAP, and (iii) any
adverse effect, WHETHER OR NOT MATERIAL, on the binding nature, validity or
enforceability of any Transaction Document as the obligation of the Company or
any material adverse effect on the ability of the Company to perform its
obligations under any Transaction Document.
"Note" and "Notes" have the meaning specified in paragraph 1A.
"Officers' Certificate" means a certificate signed in the name of the
Company by any two Senior Officers of the Company.
"Person" means and includes an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, a government or any
department or agency thereof, and any other form of business organization
(whether or not a legal entity).
"Preferred Stock" means any Redeemable Stock and any other class or series
of capital stock that has a priority as to the payment of any dividends or
distributions over the holders of common stock.
"Plan" means an "employee pension benefit plan" (as defined in section 3(2)
of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Company or any of its Related
Persons.
"Purchaser" has the meaning specified in paragraph 2A and shall include any
Transferee.
"Qualified Offering" has the meaning specified in the Warrant Agreement.
<PAGE>
"Redeemable Stock" means any class or series of capital stock which has
fixed payment obligations or is redeemable at the option of the holder unless
such fixed payment obligations or repurchase obligations on exercise of such
redemption option can be satisfied, at the election of the issuer, through the
issuance of shares of its common stock.
"Redemption Price" has the meaning specified in Exhibit I.
"SEC" means the United States Securities and Exchange Commission, or any
governmental body or agency hereafter succeeding to the functions of such
Securities and Exchange Commission in the administration of the Securities Act
and/or the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended from time to
time and the rules and regulations promulgated thereunder from time to time in
effect.
"Senior Obligations" means the amounts owing to the First National Bank of
Boston pursuant to a Loan and Security Agreement dated as of October 20, 1995 by
and between the Company and the Bank of Boston providing for a credit facility
in the principal amount of $3,250,000 and other Debt (having no equity features)
for money borrowed from institutional lenders.
"Senior Officer" means the President, Chief Executive Officer, any Vice
President, Chief Financial Officer, Treasurer, principal Accounting Officer,
Controller of the Company or any other person, whether or not an officer, who
performs similar functions, on behalf of the Company.
"Settlement Date" means, with respect to any Note, the date of which such
Note is to be prepaid in whole or in part pursuant to paragraph 4C.
"Special Counsel" has the meaning specified in paragraph 2B.
"Subsidiary" shall mean as to any Person (i) of which such Person shall, at
the time as of which any determination is being made, own, either directly or
indirectly through its other Subsidiaries, more than (x) 50% of the total
combined voting power of all classes of the Voting Stock and (y) 50% of the
beneficial interest and (ii) any partnership, association, joint venture or
other form of business organization, whether or not it constitutes a legal
entity which such Person shall, at the time the determination is being made, own
directly or indirectly through its other Subsidiaries, own more than 50% of the
equity interest at the time and which does not ordinarily take major business
actions without the prior approval of such Person. Unless the context otherwise
clearly requires any reference to a "Subsidiary" is a reference to a Subsidiary
of the Company.
"Taxes" means any and all present or future taxes, assessments, stamps,
duties, fees, levies, imposts, deductions, withholdings or other governmental
charges of any nature whatsoever and any liabilities with respect thereto,
including any surcharge, penalties, additions to tax, fines or interest thereon,
now or hereafter imposed, levied, collected, withheld or assessed by any
government or taxing authority of any country or political subdivision of any
country or any international taxing authority.
<PAGE>
"Trade Payables" means amounts payable by the Company or any of its
Subsidiaries to suppliers (not Affiliates) of goods and services incurred in the
ordinary course of business.
"Transaction Documents" means this Agreement, the Notes, the Registration
Rights Agreement and the Warrants.
"Transferee" means any direct or indirect transferee of all or any part of
the Notes.
"Voting Stock" means any securities of any class of a Person whose holders
are entitled under ordinary circumstances to vote for the election of directors
of such Person (or Persons performing similar functions) (irrespective of
whether at the time securities of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).
"Warrant Agreement" has the meaning specified in paragraph 3A.
"Warrants" has the meaning specified in paragraph 1.
"Wholly-Owned Subsidiary" means a Subsidiary all of 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 the Company.
11. MISCELLANEOUS
1. Payments
11A.(1) Payments in Respect of Notes. The Company agrees that, so long
as the Purchaser shall hold any Notes, all payments in respect of such
Notes, required by the terms thereof or otherwise by this Agreement,
will be made in compliance with the applicable terms thereof or hereof
and by wire transfer to the Purchaser of immediately available funds
for credit to the account or accounts as specified in the Purchasers
Schedule for the Purchaser, or such other account or accounts in the
United States as the Purchaser may designate in writing,
notwithstanding any contrary provision in this Agreement or the Notes,
with respect to the place of payment. The Purchaser agrees that,
before disposing of any Note, it will make a notation thereon (or on a
schedule attached thereto) of all principal payments previously made
and of the date to which interest has been paid. The Company agrees to
afford the benefits of this paragraph 11A(1) to any Transferee which
shall have made the same agreement in writing as the Purchaser has
made in this paragraph 11A(1).
11A.(2) No Deduction of Set-off. The obligation of the Company to pay
principal, interest, and any other amounts under the Transaction
Documents shall be absolute and unconditional and shall not be
affected by any circumstances, including without limitation any
set-off, counterclaim, recoupment, defense or other right which the
Company may have against the Purchaser or any Transferee for any
reason whatsoever and all payments shall be free of and without
deduction for or on account of any present or future Taxes.
<PAGE>
2. Expenses. The Company agrees, whether or not the transactions
provided for hereby shall be consummated, to pay on demand, and save
the Purchaser harmless against liability for the payment of,
out-of-pocket expenses up to $15,000, and thereafter 50% of all
out-of-pocket expenses up to $20,000, arising in connection with such
transactions. The Company's maximum liability for such out-of-pocket
expenses, therefore, is $17,500.
3. Indemnity. Notwithstanding the Closing, and regardless of any
investigation made at any time by or on behalf of the Purchaser or any
information or knowledge the Purchaser may have, the Company covenants
and agrees that it will indemnify, defend and hold harmless the
Purchaser and its Affiliates, and their respective officers,
directors, partners, agents and employees from all actions, suits,
proceedings, demands, liabilities, claims, settlements, losses,
damages, assessments, judgments, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses), to the
extent the Purchaser is not reimbursed by the proceeds of insurance
actually received resulting from or arising as a result of the
purchase of the Notes or Warrants, unless such actions, suits,
proceedings, demands, liabilities, claims, settlements, losses,
damages, assessments, judgments, costs or expenses are the result of
the Purchaser's gross negligence, wilful misconduct or wilful breach
of this Agreement.
4. Consent to Amendments. This Agreement may not be amended, and the
Company 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 Purchaser. The Purchaser at the time or thereafter
shall be bound by any consent authorized by this paragraph 11D,
whether or not the Notes shall have been marked to indicate such
consent, but any Note issued thereafter may bear a notation referring
to any such consent. No course of dealing between the Company and the
Purchaser nor any delay in exercising any rights hereunder or under
any Note shall operate as a waiver of any rights of the Purchaser. As
used herein the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or
supplemented.
5. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained in paragraphs 8 and 9 of this
Agreement shall survive the execution and delivery of this Agreement
and the Notes, the transfer by the Purchaser of any Note or portion
thereof or interest therein and the payment of the Notes and may be
relied upon by any Transferee as having been true and correct on the
Closing Date, regardless of any investigation made at any time by or
on behalf of the Purchaser or any Transferee. The Transaction
Documents embody the entire agreement and understanding between the
Purchaser and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof and thereof.
6. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto
shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
<PAGE>
7. Disclosure to Other Persons. The Purchaser agrees to maintain in
confidence and not disclose, and agrees to require any Transferee to
agree to maintain in confidence and not disclose, any Confidential
Information delivered to it or its agents by or on behalf of the
Company or received by it or its agents from the Company or its agents
pursuant to the terms of this Agreement provided the Company
acknowledges that the Purchaser and any Transferee may deliver copies
of any financial statements and other documents delivered to the
Purchaser or such Transferee and disclose any other information
disclosed to the Purchaser or such Transferee by or on behalf of the
Company in connection with or pursuant to this Agreement whether or
not Confidential Information, to (i) such Person's directors,
officers, employees, agents and professional consultants, (ii) any
Governmental Authority and any other governmental authority having
jurisdiction over a Transferee if required by such authority, or (iii)
any other Person to which such delivery or disclosure may be necessary
or appropriate (a) in compliance with any law, rule, regulation or
order applicable to the Purchaser or such Transferee, (b) in response
to any subpoena or other legal process or (c) in connection with any
litigation to which the Purchaser or such Transferee is a party. For
the purpose of this paragraph 11G, "Confidential Information" means
any information now or hereafter delivered to the Purchaser or such
Transferee by or on behalf of the Company or received by the Purchaser
or such Transferee from the Company or its agents in connection with
the transactions contemplated by or otherwise pursuant to the
Transaction Documents which is proprietary in nature and which was
clearly marked or labeled when received by the Purchaser or such
Transferee as being confidential information of the Company or its
Subsidiaries, provided that such term does not include any information
(a) which was publicly known to the Purchaser or such Transferee prior
to the time of such disclosure or (b) which subsequently becomes
publicly known through no act or omission by or any Person acting on
the Purchaser's or such Transferee's behalf.
8. 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 the Purchaser or its nominee, addressed to such Person at the
address or fax number specified for such communications to such
Purchaser in the Purchasers Schedule, or at such other address or fax
number as such Person shall have specified to the Company in writing,
(ii) if to any Transferee, addressed to such Transferee at such
address or fax number as is specified for such Transferee to the
Company in writing and (iii) if to the Company, addressed to it at 326
Clark Street, Worcester, Massachusetts 01601, Attention: President, or
to Vice President-Finance, Fax No. (508) 856-9462 or at such other
address or fax number as the Company shall have specified to the
Purchaser or Transferee in writing given in accordance with this
paragraph 11H. Notice given in accordance with this paragraph 11H
shall be effective upon the earlier of the date of delivery or the
second Business Day at the place of delivery after dispatch.
9. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
10. Reproduction of Documents. This Agreement, the Notes, the
Warrants, the Registration Rights Agreement and all related documents,
including (a) consents, waivers and modifications which may
subsequently be executed, (b) documents received by the Purchaser on
the purchase of the Notes (except the Notes themselves) and (c)
financial statements, certificates and other information previously or
subsequently furnished to the Purchaser, may be reproduced by the
Purchaser by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process and the Purchaser may
destroy any original document so reproduced. The Company agrees and
stipulates that any such reproduction shall, to the extent permitted
by applicable law, be admissible in evidence as the original itself in
any judicial or administrative proceeding whether or not the original
is in existence and whether or not the reproduction was made by the
Purchaser in the regular course of business, and that any enlargement,
facsimile or further reproduction of the reproduction shall likewise
be admissible in evidence.
<PAGE>
11. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by,
the law of The Commonwealth of Massachusetts (without giving effect to
principles of conflicts of law).
12. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement to produce
or account for more than one such counterpart.
13. Replacement of Notes. Upon receipt of written notice from the
Purchaser or Transferee of the loss, theft, destruction or mutilation
of a Note and, in the case of any such loss, theft or destruction,
upon receipt of an indemnification agreement of such Purchaser or
Transferee satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company
will make and deliver a new Note, at its expense, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note, and each new
Note will bear from the date to which interest shall have been paid on
such lost, stolen, destroyed or mutilated Note or if no interest has
been paid thereon, the date of such lost, stolen, destroyed or
mutilated Note.
14. Compliance by Subsidiaries. The Company, as a shareholder of its
Subsidiaries, shall cause such meetings to be held, votes to be cast,
resolutions to be passed, by-laws to be made and confirmed, documents
to be executed and all other things and acts to be done to ensure
that, at all times, the provisions of this Agreement relating to the
Subsidiaries are complied with by such Subsidiaries, or in respect of
any provision which is not entirely within the control or power of the
Company to cause compliance therewith, the Company shall use its best
efforts to cause such compliance to occur.
15. 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.
16. Termination. This Agreement and the rights of the Purchaser and
the obligations of the Company hereunder shall not terminate until the
earlier of: (i) the day each of the Notes including all principal,
interest and interest on overdue interest shall have been indefeasibly
paid in full in United States dollars (or if the Notes have been
exchanged for Preferred Stock, until all the Preferred Stock has been
redeemed and all accrued dividends thereon paid in full) and all other
amounts owed to the Purchaser pursuant to the terms of any Transaction
Document shall have been indefeasibly paid in full in United States
dollars or (ii) upon completion of a Qualified Offering.
<PAGE>
17. Construction. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be
deemed to execute compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such
Person.
18. Brokerage. Each party hereto will indemnify and hold harmless the
others against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions
contemplated hereby, based in any way on agreements, arrangements or
understandings made or claimed to have been made by such party with
any third party.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement executed under
seal, among you and the Company.
Very truly yours,
LUXTEC CORPORATION
By:________________________
Name:
Title:
The foregoing Agreement is hereby accepted as of
the date first above written.
GENEVA MIDDLE MARKET INVESTORS, L.P.
By:____________________________
Name:
Title:
<PAGE>
PURCHASER SCHEDULE
GENEVA MIDDLE MARKET INVESTORS, L.P.
Note - $1,000,000
Warrant No. W-1 for 450,000 Shares of Common Stock
1. All payments on account of the Note or other obligations in accordance
with the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
First National Bank of Boston
ABA No.:011000390
100 Federal Street
Boston, MA 02110
Account of: Geneva Middle Market Investors, L.P.
Account Number: 50188846
On Order of: LUXTEC CORPORATION
2. Contemporaneous with the above wire transfer, advice setting forth (1)
the full name, interest rate and maturity date of the Note or other obligations;
(2) allocation of payment between principal and interest and any special
payment; and (3) name and address of bank (or Trustee) from which wire transfer
was sent, shall be delivered or mailed to:
Geneva Middle Market Investors, L.P.
70 Walnut Street
Wellesley, MA 02181
Attention: James Goodman
3. All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or mailed
to:
Geneva Middle Market Investors, L.P.
70 Walnut Street
Wellesley, MA 02181
Attention: James Goodman
<PAGE>
4. All other communications which shall include, but not be limited to,
financial statements and certificates of compliance with financial covenants,
shall be delivered or mailed to:
Geneva Middle Market Investors, L.P.
70 Walnut Street
Wellesley, MA 02181
Attention: James Goodman
Fax No: (617) 239-8064
<PAGE>
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, OR (B) IF SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE
RULES AND REGULATIONS IN EFFECT THEREUNDER AND ANY APPLICABLE STATE SECURITIES
LAWS.
Luxtec Corporation
8% Senior Subordinated Note due June 1, 2001
$1,000,000 December 18, 1995
FOR VALUE RECEIVED, the undersigned, Luxtec Corporation, a Massachusetts
corporation (the "Company") hereby promises to pay to Geneva Middle Market
Investors, L.P. , or its assigns ("Holder"), the principal sum of One Million
Dollars ($1,000,000), with interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time unpaid and not
yet due at the annual rate of 8% from the date hereof. Principal, shall be due
and payable on January 1, 2001. Interest on this Note shall be due and payable
annually in arrears on the 18th day of December in each calendar year with the
first of such payments to be made on December 18, 1996. Any overdue payment of
principal and, to the extent permitted by applicable law, any overdue payment of
interest, shall bear interest at the annual rate of 10%, whether overdue by
acceleration or otherwise. All unpaid principal and accrued and unpaid interest
shall in all events be paid in full on January 1, 2001.
All dollar amounts in this Note refer to United States dollars. Payments of
principal and interest are to be made at the place and in the manner specified
by the Purchaser of this Note in the Purchasers Schedule to the Agreement or at
such other place or manner as the Holder shall designate to the Company in
writing in accordance with the Agreement, in lawful money of the United States
of America. So long as the unpaid principal amount has not become due and
payable, the Company may pay up to 65% of each installment of interest through
the issuance of additional promissory notes, with terms (other than the date of
issue which shall be the date on which interest is then payable) identical to
the Note. If any payment of principal or interest on or in respect of this Note
becomes due and payable on any day which is not a Business Day, the payment
shall be due and payable on the next succeeding Business Day.
This Note may be declared or may otherwise become due and payable prior to
its expressed maturity in the events, on the terms and in the manner and amounts
as provided in the Agreement.
This Note is subject to prepayment or redemption at the option of the
Company prior to its expressed maturity as provided in the Agreement.
The Company and every maker, endorser and guarantor hereof or of the
indebtedness evidenced hereby waive presentment, demand, notice protest, and all
other demands, notices (other than notices expressly required by the Agreement)
and suretyship defenses generally, in connection with the delivery, acceptance,
performance, default or enforcement of or under this Note.
<PAGE>
This Note is delivered under seal in Boston, Massachusetts and is to be
construed and enforced in accordance with, and the rights of the parties 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).
Capitalized terms used in this Note and not defined herein have the
meanings given therefor in the Agreement.
WITNESS: MAKER:
LUXTEC CORPORATION
_____________________________
By:__________________________
Title:
<PAGE>
LUXTEC CORPORATION
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is made as of December 18, 1995 among Luxtec
Corporation, a Massachusetts corporation ("Luxtec"), and Geneva Middle Market
Investors, L.P. (the "Purchaser").
RECITAL
The parties to this Agreement are also parties to a Note Purchase Agreement
of even date (the "Purchase Agreement") between Luxtec and the Purchaser.
Pursuant to the Purchase Agreement, Luxtec has agreed to issue warrants (the
"Warrants") to the Purchaser, to purchase up to an aggregate of 450,000 shares
of common stock of Luxtec, par value $0.01 per share (the "Common Stock")
pursuant to the terms of 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 Purchase Agreement.
NOW, THEREFORE, the parties agree:
12. 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
initial exercise price for the Warrants shall be $3.00 per share, subject to
adjustment pursuant to Sections 11 and 12 hereof (the "Exercise Price"). Each
Warrant entitles the holder thereof to purchase one Warrant Share (subject to
adjustment as provided herein).
13. 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.
14. 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>
15. 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.
16. Registration of Transfers, Exchanges or Assignment of Warrants. Subject
to the limitations of this Section 5, 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 to the
Warrant Certificate 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 (defined in
Section 6) 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:
1. 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;
2. an agreement by such transferee to the impression of the restrictive
investment legend set forth below on the Warrant or the Warrant Shares;
3. 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
(4) 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.
<PAGE>
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 to the Warrant Certificate.
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 RIGHTS AGREEMENT DATED AS OF DECEMBER 18, 1995 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.
17. 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 the earlier of
30 days after the Purchaser has received written notice from Luxtec that the
price obtained by taking the volume weighted arithmetic mean over a period of
twenty consecutive Trading Days ending on any day during the 15 consecutive days
immediately prior to such notice of the average, on each such Trading Day, of
the high and low sale prices of shares of Common 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 such Common Stock is then
listed or admitted to trading) was not less than $7.50 per share, provided such
notice may not be given prior to December 31, 2000, or October 31, 2003, (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.
<PAGE>
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 the Warrant
Certificate 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: (a)
if all or a portion of such Warrant holder's Notes are prepaid in accordance
with paragraph 4B of the Purchase Agreement or such Warrant holder's shares of
Luxtec Preferred Stock are surrendered for cancellation in accordance with
paragraph 4B of the Purchase Agreement, then with the proceeds of such
prepayment or cancellation or (b) if subparagraph (a) does not apply or, to the
extent such proceeds are less than the Exercise Price, the Exercise Price or
such shortfall shall be paid, at the option of the Warrant holder, (i) in cash,
(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.
18. 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.
19. 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).
20. 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>
21. 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, (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(m) 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, and (iv) will cause its
officers and directors to agree not to purchase or sell any Common Stock on any
of the Trading Days with respect to which the 1995 or 1996 Trading Prices are
determined.
22. Adjustment of Exercise Price. If the 1995 Trading Price is less than
$3.00 per share, the Exercise Price shall be the 1995 Trading Price. If there is
an Exercise Price adjustment pursuant to the next prior sentence and the 1996
Trading Price is greater than the 1995 Trading Price, the Exercise Price shall
be the lesser of $3.00 or the 1996 Trading Price.
23. 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 12. Upon each
adjustment of the Exercise Price in accordance with this Section 12, 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.
1. Issuance of Additional Shares of Capital Stock. If Luxtec,
at any time or from time to time after the date hereof, shall issue
or sell Additional Shares of Capital Stock without
consideration or for a consideration per share less than the
Exercise Price in effect on the date of and immediately prior to such
issue or sale, then, and in each such case, subject to Section
12(h), the Exercise Price in effect immediately prior to such
issuance or sale shall be reduced, concurrently with such issue or
sale, to a price determined by multiplying such Exercise Price by
a fraction
1. the numerator of which shall be (i) the number of
shares of Capital Stock outstanding immediately prior to
such issue or sale plus (ii) the number of shares of
Capital Stock which the aggregate consideration received
by Luxtec for the total number of such Additional Shares of
Capital Stock so issued or sold would purchase at such
Exercise Price, and
2. the denominator of which shall be the number of shares of
Capital Stock outstanding immediately after such issue
or sale, provided that, for the purposes of this Section
12(a), (x) immediately after any Additional Shares of
Capital Stock are deemed to have been issued pursuant to
Section 12(c) or 12(d) hereof, such Additional Shares
shall be deemed to be outstanding, and (y) treasury
shares shall not be deemed to be outstanding.
For the purpose of calculating the number of Warrant Shares
issuable upon any actual exercise of Warrants, if any other
person shall be entitled to receive Additional Shares of Capital
Stock as a result of such exercise and related issuance of Warrant
Shares (whether before or after the date of such exercise), an
adjustment shall be made to the Exercise Price in accordance with
the provisions of this Section 12 (a) as if such issuance of
Additional Shares had been made immediately prior to such
exercise.
<PAGE>
2. 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 a
dividend payable in Additional Shares of Capital Stock or in Options
for Capital Stock, then, subject to Section 12(h), 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
1. 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
2. the denominator of which shall be such Market Price in
effect on such record date.
3. Treatment of Options and Convertible Securities. In case
Luxtec, at any time or from time to time after the date hereof,
shall issue, sell, grant or assume, or shall fix a record date for
the determination of holders of any class of securities entitled to
receive, any Options or Convertible Securities, then, and in each
such case, the maximum number of Additional Shares of Capital
Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent
adjustment of such number and whether or not the right to convert or
exchange or exercise is immediate or conditioned upon the passage o
time, the occurrence or non-occurrence of some event or otherwise)
issuable upon the exercise of such Options or, in the case of
Convertible Securities and options therefor, the conversion or
exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Capital Stock issued as of the time of such
issue, sale, grant or assumption or, in case such a record date shal
have been fixed, as of the close of business on such record date;
provided that such Additional Shares of Capital Stock shall not
be deemed to have been issued unless the consideration per share
(determined pursuant to Section 12(e) hereof) of such shares would be
less than the Exercise Price in effect on the date of and
immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date or,
if the Capital Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading, as the case
may be; and provided, further, that in any such case in which
Additional Shares of Capital Stock are deemed to be issued,
<PAGE>
1. no further adjustment of the Exercise Price shall be made upon
the subsequent issue or sale of Additional Shares of Capital Stock or
Convertible Securities upon the exercise of such Options or the
conversion or exchange of such Convertible Securities;
2. if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any change in the
consideration payable to Luxtec or change in the number of Additional
Shares of Capital stock issuable, upon the exercise, conversion or
exchange thereof (by change of rate or otherwise), the Exercise Price
computed upon the original issue, sale, grant or assumption thereof
(or upon the occurrence of the record date with respect thereto) , and
any subsequent adjustments based thereon, shall, upon any such change
becoming effective, be recomputed to reflect such change insofar as it
affects such Options, or the rights of conversion or exchange under
such Convertible Securities, which are outstanding at such time;
3. upon the expiration of any such Options or of the rights of
conversion or exchange under any such Convertible Securities which
shall not have been exercised (or upon purchase by Luxtec and
cancellation or retirement of any such Options which shall not have
been exercised or of any such Convertible Securities the rights of
conversion or exchange under which shall not have been exercised), the
Exercise Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date with
respect thereto) , and any subsequent adjustments based thereon,
shall, upon such expiration (or such cancellation or retirement, as
the case may be), be recomputed as if:
i. in the case of Options for Capital Stock or of Convertible
Securities, the only Additional Shares of Capital Stock issued or sold
(or deemed issued or sold) were the Additional Shares of Capital
Stock, if any, actually issued or sold upon the exercise of such
Options or the conversion or exchange of such Convertible Securities
and the consideration received therefor were (1) an amount equal to
(A) the consideration actually received by Luxtec for the issue, sale,
grant or assumption of all such Options, whether or not exercised,
plus (B) the consideration actually received by Luxtec upon such
exercise, minus (C) the consideration paid by Luxtec for any purchase
of such Options which were not exercised, or (2) an amount equal to
(A) the consideration actually received by Luxtec for the issue, sale,
grant or assumption of all such Convertible Securities which were
actually converted or exchanged, plus (B) the additional
consideration, if any, actually received by Luxtec upon such
conversion or exchange, minus (C) the excess, if any, of the
consideration paid by Luxtec for any purchase of such Convertible
Securities, the rights of conversion or exchange under which were not
exercised, over an amount that would be equal to the fair value (as
determined in good faith by the Board of Directors of Luxtec) of the
Convertible Securities so purchased if such Convertible Securities
were not convertible into or exchangeable for Additional Shares of
Capital Stock, and
ii. in the case of Options for Convertible Securities, only th
Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue, sale,
grant or assumption of such options, and the consideration received by
Luxtec for the Additional Shares of Capital Stock deemed to have then
been issued were an amount equal to (1) the consideration actually
received by Luxtec for the issue, sale, grant or assumption of all
such Options, whether or not exercised, plus (2) the consideration
deemed to have been received by Luxtec (pursuant to Section 12(e)
hereof) upon the issue or sale of the Convertible Securities with
respect to which such Options were actually exercised, minus (3) the
consideration paid by Luxtec for any purchase of such Options which
were not exercised; provided, however, that no such recomputation
shall have the effect of decreasing the number of Warrant Shares
issuable upon exercise of each Warrant by an amount in excess of the
amount of the adjustment initially made for the issuance, sale or
grant of such Options or Convertible Securities.
<PAGE>
4. Treatment of Stock Dividends, Stock Splits, etc. If Luxtec, at
any time or from time to time after the date hereof, shall declare or
pay any dividend or other distribution on the Capital Stock payable in
Capital Stock, or shall effect a subdivision of the outstanding shares
of Capital Stock into a greater number of shares of Capital Stock (by
reclassification or otherwise than by payment of a dividend in Capital
Stock), then, and in each such case, Additional Shares of Capital
Stock shall be deemed to have been issued (i) in the case of any such
dividend, immediately after the close of business on the record date
for the determination of holders of any class of securities entitled
to receive such dividend, or (ii) in the case of any such subdivision,
at the close of business on the day immediately prior to the day upon
which such corporate action becomes effective. Notwithstanding the
above, if Luxtec shall thereafter, before the distribution or
subdivision, legally abandon its plan to pay such dividend or
distribution or effect such subdivision, then no adjustment under this
Section 12 shall be made.
5. Computation of Consideration. For the purposes of this Section
12:
1. the consideration for the issue or sale of any Additional
Shares of Capital Stock or for the issue, sale, grant or
assumption of any Options or Convertible Securities,
irrespective of the accounting treatment of such
consideration,
1. insofar as it consists of cash, shall be computed as
the amount of cash received by Luxtec, and insofar as it
consists of securities or other property, shall be computed
as of the date immediately preceding such issue, sale, grant
or assumption as the fair value (as determined by the Board
of Directors of Luxtec in the good faith, reasonable
exercise of its business judgment) of such consideration
(or, if such consideration is received for the issue or sale
of Additional Shares of Capital Stock and the Market Price
thereof is less than the fair value, as so determined, of
such consideration, then such consideration shall be
computed as the Market Price of such Additional Shares of
Capital Stock), in each case without deducting any expenses
paid or incurred by Luxtec, any commissions or compensation
paid or concessions or discounts allowed to underwriters,
dealers or others performing similar services, and any
accrued interest or dividends in connection with such issue
or sale, and
2. in case Additional Shares of Capital Stock are
issued or sold or Options or Convertible Securities are
issued, sold, granted or assumed together with other stock
or securities or other assets of Luxtec for a consideration
which covers both, shall be the proportion of such
consideration so received, computed as provided in
subdivision (A) above, allocable to such Additional Shares
of Capital Stock or Options or Convertible Securities, as
the case may be, all as determined by the Board of Directors
of Luxtec in the good faith reasonable exercise of its
business judgment;
2. all Additional Shares of Capital Stock and all Options or
Convertible Securities issued in payment of any dividend or
other distribution on any class of stock of Luxtec and all
Additional Shares of Capital Stock issued to effect a
subdivision of the outstanding shares of Capital Stock into
a greater number of shares of Capital Stock (by
reclassification or otherwise than by payment of a dividend
in Capital Stock) shall be deemed to have been issued
without consideration;
3. Additional Shares of Capital Stock deemed to have
been issued upon the issue, sale, grant, assumption,
distribution or dividend of Options and Convertible
Securities, shall be deemed to have been issued for a
consideration per share determined by dividing
<PAGE>
1. the total amount, if any, received and receivable
(or, pursuant to Section 12(e)(ii), deemed to have been
received) by Luxtec as consideration for the issue, sale,
grant or assumption of the Options or Convertible Securities
in question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable
to Luxtec upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, in
each case comprising such consideration as provided in the
foregoing subdivision (i), by
2. the maximum number of shares of Capital Stock (as
set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of
such Options or the conversion or exchange of such
Convertible Securities;
3. In case Luxtec shall issue any Additional Shares of
Capital Stock, Options or Convertible Securities in
connection with the acquisition by Luxtec of the stock or
assets of any other corporation or the merger of any other
corporation into Luxtec under circumstances where on the
date of issue of such Additional Shares of Capital Stock,
Options or Convertible Securities the consideration received
for such Additional Shares of Capital Stock or deemed to
have been received for the Additional Shares of Capital
Stock deemed to be issued pursuant to Section 12(c) is less
than the Exercise Price in effect immediately prior to such
issue but on the date the number of Additional Shares of
Capital Stock or the amount and the exercise price or
conversion price of such Options or Convertible Securities
to be so issued were set forth in a binding agreement
between Luxtec and the other party or parties to such
transaction the consideration received for such Additional
Shares of Capital Stock or deemed to have been received for
the Additional Shares of Capital Stock deemed to be issued
pursuant to Section 12(c) would not have been less than the
Exercise Price of the Capital Stock then in effect, such
Additional Shares of Capital Stock shall not be deemed to
have been issued for less than the Exercise Price of the
Capital Stock if such terms so set forth in such binding
agreement are not changed prior to the date of issue.
6. Adjustments for Combinations, etc. In case the outstanding
shares of Capital Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of
Capital Stock, the Exercise Price in effect immediately prior to such
combination or consolidation shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
increased.
7. Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or
sale upon the conversion or exchange of any securities of Luxtec or to
subscription, purchase or other acquisition pursuant to any options
issued or granted by Luxtec for a consideration such as to dilute, on
a basis to which the standards established in the other provisions of
this Section 12 are applicable, the exercise rights of the holders of
the Warrants, then, and in each such case, the computations,
adjustments, and readjustments provided for in this Section 12 with
respect to the Exercise Price shall be made as nearly as possible in
the manner so provided and applied to determine the amount of Other
Securities from time to time receivable upon the exercise of the
Warrants, so as to protect the holder of the Warrants against the
effect of such dilution.
<PAGE>
8. Minimum Adjustment of Exercise Price; Effective Date for
Adjustments. If the amount of any adjustment of the Exercise Price
required pursuant to this Section 12 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.
9. 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 12). 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.
10. 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>
11. Certain Notices. If:
1. 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));
2. Luxtec shall offer for subscription pro rata to the
holders of Capital Stock any additional shares of stock of any
class or other rights;
3. 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;
4. there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of Luxtec; or
5. 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 (x) 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>
12. 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 12 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 12. 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.
13. 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.
24. Tag-Along Rights. (a) If a Management Stockholder (a "Tag-Along
Transferor", which term shall include Permitted Transferees to the extent a
Management Stockholder transferred any Common Stock of Luxtec to such Permitted
Transferee after the date of this Agreement, provided such Management
Stockholder is still alive) wishes to transfer any Common Stock of the Company
owned of record and beneficially by it to any person other than a Permitted
Transferee (a "Tag-Along Transferee"), in a transaction or series of
transactions with a single person or group of persons (as defined in Rule 13d-5
under the Securities Exchange Act of 1934) in which 5% or more of Luxtec's
issued and outstanding Common Stock is sold or otherwise exchanged during a
period of 180 consecutive days, the Purchaser shall have the right (the
"Tag-Along Right") to require, as a condition to such transfer by the Tag-Along
Transferor, that the Tag-Along Transferee purchase from the Purchaser, at the
same price and on the same terms and conditions as involved in the transfer by
the Tag-Along Transferor, up to that number of Warrant Shares owned by the
Purchaser equaling the number derived by multiplying the total number of Warrant
Shares owned by the Purchaser by a fraction, the numerator of which is the
actual number of shares of Common Stock to be transferred to the Tag-Along
Transferee by the Tag-Along Transferor, and the denominator of which is the
aggregate number of shares of Common Stock owned by the Tag-Along Transferor
immediately prior to such transfer. If the Tag-Along Transferee is unwilling to
purchase the sum of the shares of Common Stock that the Tag-Along Transferor
desires to transfer and the Warrant Shares the Purchaser desires to transfer to
the Tag-Along Transferee pursuant hereto, the number of shares of Common Stock
that the Tag-Along Transferor and the number of Warrant Shares that the
Purchaser shall be entitled to transfer to the Tag-Along Transferee shall be
calculated as follows:
<PAGE>
(i) The Purchaser shall be entitled to transfer that
number of Warrant Shares equal to the number of Warrant
Shares which the Purchaser desires to transfer to such
Tag-Along Transferee, as set forth in his Tag-Along Notice
(as hereinafter defined), multiplied by a fraction, the
numerator of which is the total number of shares of Common
Stock which the Tag-Along Transferee is willing to acquire
and the denominator of which is the total number of shares
of Common Stock and Warrant Shares which the Tag-Along
Transferor and the Purchaser desire to transfer to such
Tag-Along Transferee by operation of the prior paragraph;
and
(ii) The Tag-Along Transferor shall be entitled to
transfer that number of shares of Common Stock equal to the
total number of shares of Common Stock which the Tag-Along
Transferee is willing to acquire, minus the total number of
shares of Warrant Shares which the Purchaser is entitled to
transfer to such Tag-Along Transferee, as determined in
accordance with clause (i) above;
but, in no event will the Purchaser have the right to require any Tag-Along
Transferee to purchase from it more than 50% of any shares of the Common
Stock of Luxtec proposed to be purchased by any such Tag-Along Transferee.
(b) For the purpose of the foregoing, if more than one transfer subject to
the terms of this Section 13 is occurring substantially concurrently to a single
Tag-Along Transferee, the rights of the Purchaser shall be aggregated.
(c) Any attempted transfer by a Tag-Along Transferor which is subject to
this Section 13 but does not comply with the requirements of this Section 13
shall be null and void.
(d) Any Tag-Along Transferor who proposes to transfer any shares of Common
Stock in a transaction subject to this Section 13 shall notify the Purchaser in
writing of each such proposed transfer (a "Tag-Along Offer Notice"). Such
Tag-Along Offer Notice shall set forth: (i) the name of the Tag-Along
Transferee, (ii) the number of shares of Common Stock proposed to be
transferred, (iii) the proposed amount and form of consideration and terms and
conditions, including payment, offered by the Tag-Along transfer (the "Tag-Along
Transferee Terms"), (iv) the total number of shares of Common Stock owned by
such Tag-Along Transferor, and (v) that the Tag-Along Transferee has been
informed of the "tag-along right" provided for in this Section 13 and has agreed
to purchase shares of Common Stock subject hereto. The Tag-Along Right may be
exercised by the Purchaser by delivery of a written notice to the Tag-Along
Transferor (the "Tag-Along Notice") within 10 Business Days following delivery
of the Tag-Along Offer Notice (the "Tag-Along Notice Deadline") provided the
failure by the Purchaser to provide the Tag-Along Notice on or before the
Tag-Along Notice Deadline shall be deemed to be an election by the Purchaser not
to exercise the Tag-Along Right with respect to the transaction described in the
Tag-Along Offer Notice.
<PAGE>
(e) Upon delivery of a Tag-Along Notice, the Purchaser shall be entitled,
and obligated, to sell to the Tag-Along Transferee on the Tag-Along Transfer
Terms (including subject to the same representations made by the Tag-Along
Transferor, but with any liability limited to the proceeds actually received by
the Purchaser and, in any event except for any liability occasioned by the
specific wrongdoing of any Person, with the liability of the Purchaser and the
Tag-Along Transferor being further limited to its proportion of such proceeds
received by them) the number of Warrant Shares owned by it determined in
accordance with subparagraph (a) of Section 13. In the event that the Purchaser
elects not to participate in the transfer described in the Tag-Along Offer
Notice, the Tag-Along Transferor shall have the right to transfer the shares of
Common Stock to the Tag-Along Transferee subject to the following:
(i) such transfer shall be consummated within ninety
(90) days following the Tag-Along Notice Deadline;
(ii) such transfer shall be of the number of shares of
Common Stock, to the Tag-Along Transferee, for the price,
and upon all other of the terms and conditions, set forth in
the Tag-Along Offer Notice; and
(iii) such transfer must in all events be made in
compliance with the provisions hereof.
(f) At the closing of the transfer of shares of Common Stock to any
Tag-Along Transferee (of which the Tag-Along Transferor shall give the Purchaser
at least five (5) business days' prior written notice), the Tag-Along Transferee
shall remit to the Purchaser the consideration for the total sales price of
shares of Common Stock of the Purchaser sold pursuant hereto, against delivery
by the Purchaser of such evidences of ownership of the Purchaser's Common Stock
as may be requested by the Tag-Along Transferee, and the compliance by the
Purchaser with any other conditions to closing generally applicable to the
Tag-Along Transferor and the Purchaser.
(g) Anything in this Section 13 to the contrary notwithstanding, the
Purchaser shall have no Tag-Along Rights with respect to any sale of shares of
the Common Stock of Luxtec by a Management Stockholder pursuant to an effective
registration statement under the Securities Act of 1933 or pursuant to an
exemption from registration under Rule 144 thereunder.
25. Advisory Director. So long as the Warrant Shares outstanding represent
at least 10% of the issued and outstanding Common Stock of Luxtec, James Goodman
or such other person as is designated by the Required Holders and reasonably
acceptable to Luxtec shall be a non-voting advisory director to Luxtec, entitled
to receive notice of and attend and observe meetings of the board of directors
of Luxtec. Such non-voting advisory director shall not be compensated for his
services as an advisory director but, consistent with the other directors, shall
be reimbursed for expenses incurred in performing such services.
<PAGE>
26. Definitions. The following terms shall have the following meanings:
"1995 Earning Announcement" means a press release announcing the earnings
per share of Common Stock.
"1995 Trading Price" means the price obtained by taking the volume weighted
arithmetic mean over the 5 Trading Days next prior to December 31, 1995, 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), provided that if a 1995 Earnings Announcement shall not have
occurred by December 20, 1995 the 1995 Trading Price shall mean the price
obtained by taking the volume weighted arithmetic mean over the 10 Trading Days
beginning the 3rd Trading Day following the 1995 Earnings Announcement, 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).
"1996 Trading Price" means the price obtained by taking the volume weighted
arithmetic mean over the 10 Trading Days next prior to March 31, 1996, 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).
"Additional Shares of Capital Stock" shall mean all shares (including
treasury shares) of Capital Stock issued or sold (or, pursuant to Section 12(c)
or 12(d) deemed to be issued) by Luxtec after the date hereof, whether or not
subsequently reacquired or retired by Luxtec, other than shares of Capital Stock
issued upon the circumstances set forth in Section 12(j) above.
"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.
"Management Stockholder" means Paul Epstein and Pat Phillips.
"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).
<PAGE>
"Nationally Recognized Underwriter" means Bear, Steans & 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 12(i) or otherwise.
"Permitted Transferee" means an inter vivos trust of which the Management
Stockholder is settlor or a husband, wife or child of the Management
Stockholder.
"Public Offering" means a public offering of Common Stock pursuant to a
registration statement effective under the Securities Act.
"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 $7.50 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).
<PAGE>
"Trading Day" means any day on which AMEX 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.
27. 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 16, 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.
28. 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.
29. 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 01601, Attention: Chief Operating 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 18. 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.
30. 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, provided that the consent of each holder of a Warrant affected shall be
required for any amendment to this Agreement pursuant to which the Exercise
Price would be increased or the number of shares of Common Stock purchasable at
the time of such amendment upon exercise of Warrants would be decreased, other
than pursuant to adjustments provided in Section 12 of this Agreement.
<PAGE>
31. 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.
32. 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.
33. 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.
1. Availability of Information.
1. 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.
2. 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.
34. 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.
35. Entire Agreement. 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.
<PAGE>
36. 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.
37. 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).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal, as of the day and year first above written.
LUXTEC CORPORATION
By:
Name:
Title:
GENEVA MIDDLE MARKET INVESTORS, L.P.
By:
its general partner
By:
Name:
Title:
<PAGE>
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 this Warrant Certificate.
______________________________________
Social Security or other identifying
number of holder
______________________________________
Signature Guarantee
<PAGE>
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 this Warrant Certificate.
__________________________________
Social Security or other
identifying number of holder
__________________________________
Signature Guarantee
<PAGE>
FORM OF TRANSFEREE CERTIFICATE
[Letterhead of Prospective Purchaser or
U.S. Registered Broker-Dealer]
Luxtec Corporation
___________________________
___________________________ 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.
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:
<PAGE>
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 B
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 RIGHTS
AGREEMENT DATED AS OF DECEMBER 18, 1995 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.
450,000 Warrants
W-1 Warrant Certificate
LUXTEC CORPORATION
This Warrant Certificate certifies that Geneva Middle Market Investors,
L.P. or its assigns, is the registered holder of 450,000 warrants (the
"Warrants"), expiring at 5:00 p.m., Boston, Massachusetts local time, on the
"Expiration Date" (as defined in the Warrant Agreement referred to on the
reverse hereof) (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 (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 $3.00 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 01601 subject to the conditions set forth herein and in
the Warrant Agreement referred to on the reverse hereof. 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.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
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.
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 December 18, 1995.
Attest:___________________ LUXTEC CORPORATION
DATED:____________________ By: ____________________________
Name:
Title:
<PAGE>
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, par value $0.01 per share, of the Company (the
"Common Stock"), and are issued or to be issued pursuant to a Warrant Agreement
dated as of December 18, 1995 (the "Warrant Agreement") by and between the
Company and Geneva Middle Market Investors, L.P., 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 December 18, 1995 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 01601. 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.
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.
<PAGE>
LUXTEC CORPORATION
RIGHTS AGREEMENT
THIS AGREEMENT is made as of December 18, 1995, between Luxtec Corporation,
a Massachusetts corporation ("Luxtec") and Geneva Middle Market Investors, L.P.
(the "Purchaser").
RECITAL:
The parties to this Agreement are also parties to a Note Purchase Agreement
of even date (the "NoteAgreement"). In order to induce the Purchaser to enter
into the Note Agreement, Luxtec has agreed to provide the rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the Closing under the Note Agreement. Certain terms used in this Agreement are
defined in 7. Capitalized terms not otherwise defined in this Agreement have
the meanings given therefor in the Note Agreement.
NOW THEREFORE, the parties agree as follows:
38. Demand Registration.
1. Subject to the limitations set forth in this S 1(a) and SS
1(b), (c) and (d) below, any time beginning on the Closing Date, and
ending on the Expiration Date of the Warrants, subject, however, to
the provisions of S 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 S 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 S2 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
S 1(a) and in 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 S 1(a).
Notwithstanding anything to the contrary contained in this S 1(a),
Luxtec shall have no obligation of any kind whatsoever under this S
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 S 1(c) below) represents at least thirty-three percent
(33%) of the total number of Registrable Securities held by
Stockholders.
<PAGE>
2. Notwithstanding anything to the contrary contained in S 1(a)
above, Luxtec shall not be obligated to prepare or file any
registration statement pursuant to S 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 S1(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.
3. Luxtec shall be entitled to include in any registration
statement filed or to be filed by Luxtec pursuant to S 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 S 1(a). If any offering pursuant to S 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.
4. Notwithstanding anything in this S 1 to the contrary, Luxtec
shall not be required to consummate more than an aggregate of two (2)
offerings of Registrable Securities pursuant to S 1(a) above as
follows: not more than one (1) such offering during the period from
the Closing Date up to and including the third anniversary thereof,
and not more than one (1) such offering during the period after the
third anniversary of the Closing Date; provided that if the
Stockholders acquire Registrable Securities within the 30 day period
referred to in Section 6 of the Warrant Agreement, Luxtec shall be
required to consummate an aggregate of three (3) offerings of
Registrable Securities pursuant to S 1(a).
<PAGE>
39. Piggyback Registrations.
If at any time from and after the Closing Date, subject, however, to the
provisions of S 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 S 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 S 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.
<PAGE>
40. Further Obligations of Luxtec. Whenever Luxtec is required to register
Registrable Securities under this Agreement, it agrees that it shall also do the
following:
1. 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 S
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;
2. 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;
3. 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
4. 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.
<PAGE>
41. 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.
42. Expenses; Limitations on Registration.
1. All expenses incurred in complying with this Agreement,
including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), 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 S 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.
2. 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.
43. Indemnification and Contribution.
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.
<PAGE>
1. 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.
2. Contribution. If the indemnification provided for in this S 6
from the indemnifying party (which term shall, for purposes of this S
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 S 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 S 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 S 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 S 6(c) to contribute shall be several and not joint.
3. 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 S 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.
<PAGE>
44. Definitions.
"Indemnitees" shall have the meaning set forth in S 6(b) hereof.
"NASD" shall mean the National Association of Securities Dealers, Inc., or
any successor corporation thereto.
"Registrable Securities" shall mean 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.
45. Miscellaneous.
1. 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 Note Agreement and provided, further that such transferee
executes and delivers to Luxtec a counterpart signature page to this
Agreement in the form attached as Exhibit A to this Agreement.
2. 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 S 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 S 8(a) above, at such time as (and only so long
as) such Stockholder, and/or such qualified transferee pursuant to S
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
Warrants.
3. 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.
4. 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 S 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.
<PAGE>
5. 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.
6. 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.
7. 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.
8. 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 01601, 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 S 8(h). Notice given in accordance with this S
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.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of
the date first written above.
LUXTEC CORPORATION
By: __________________________________
Name:_________________________________
Title:________________________________
GENEVA MIDDLE MARKET INVESTORS, L.P.
By: ______________________________
Name:______________________________
Title:_____________________________
<PAGE>
Appendix 2
LUXTEC CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
Article 1 - Purpose.
This 1993 Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by all eligible employees of Luxtec Corporation, a
Massachusetts Corporation (the "Company"), and its participating subsidiaries
(as defined in Article 17) so that they may share in the growth of the Company
by acquiring or increasing their proprietary interest in the Company. The Plan
is designed to encourage eligible employees to remain in the employ of the
Company. It is intended that options issued pursuant to this Plan will
constitute options issued pursuant to an "employee stock purchase plan" within
the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended
(the "Code").
Article 2 - Administration of the Plan.
The plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board of Directors. The Committee may select one of its members as Chairman, and
shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have power and authority to
administer the Plan. In such event, the word "Committee" wherever used herein
shall be deemed to mean the Board of Directors.
1
<PAGE>
Article 3 - Eligible Employees
All employees of the Company or any of its participating subsidiaries shall
be eligible to receive options under this Plan to purchase the Company's Common
Stock, and all eligible employees shall have the same rights and privileges
hereunder. Persons who have been employed by the Company for at least six months
on the first day of any Payment Period ( as defined in Article 5) shall receive
their options as of such day. Persons who have been employed for less than six
months on the first day of any Payment Period are eligible on the first day of
the next succeeding Payment Period on which options are granted to all eligible
employees. In no event may an employee be granted options under this plan if the
employee owns stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of its parent
corporation or subsidiary corporations, as the terms "parent corporation" and
"subsidiary corporation," are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424 (d) of the code shall apply, and stock that the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.
For purposes of this Article 3, the term "employee" shall not include an
employee whose customary employment is twenty (20) hours or less per week or
whose customary employment is for not more than five (5) months in any calendar
year.
Article 4 - Stock Subject to the Plan.
The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued Common Stock, par value $.01 per share, or
shares of such Common Stock reacquired by the Company, including shares
purchased in the open market. The aggregate number of shares that may be issued
pursuant to the Plan is 25,000, subject to adjustment as provided in Article 12.
In the event any option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto shall
again be available under the Plan.
2
<PAGE>
Article 5 - Payment Period and Stock Optioms.
The six-month periods, November 1st to April 30th and May 1st to October
31st, are Payment Periods during which payroll deductions will be accumulated
under the Plan. Each Payment Period includes only regular pay days falling
within it. The first Payment Period under the Plan will commence on May 1, 1994
and expire on October 31, 1994.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the Option
Price hereinafter provided for, a maximum of 500 shares, on condition that such
employee remains eligible to participate in the Plan throughout such Payment
Period. The participant shall be entitled to exercise such option so granted
only to the extent of the participant's accumulated payroll deductions on the
last day of such Payment Period. In the event that the participant's accumulated
payroll deductions on ;the last day of the Payment Period would enable the
participant to purchase more than 500 shares except for the 500-share
limitation, the excess of the amount of the accumulated payroll deductions over
the aggregate purchase price of the 500 shares shall be promptly refunded to the
participant by the Company, without interest. The Option Price for each Payment
Period shall be the lesser of (i) 85% of the average market price of the
Company's Common Stock on the first business day of the Payment Period or (ii)
85% of the average market price of the Company's Common Stock on the last
business day of the Payment Period, in either event rounded up to avoid
fractions of a dollar other than 1/4, 1/2, and 3/4. The foregoing limitation on
the number of shares that may be granted in any Payment Period and the Option
Price per share shall be subject to adjustment as provided in Article 12.
For purposes of this Plan, the term "average market price" on any date
means (i) the average (on that date) of the high and low prices of the Company's
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded in a national securities
exchange; or (ii) the average (on that date) of the closing bid and asked prices
of the Common Stock on the NASDAQ National Market List, if the Common Stock is
not then traded on a national securities exchange; or (iii) the average of the
closing bid and asked prices last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the NASDAQ National Market List. If the Company's Common Stock is
not publicly traded at the time an option is granted under this Plan, "average
market price" shall mean the fair market value of the Common Stock as determined
by the Committee after taking into consideration all factors that it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
For purposes of this Plan, the term "business day" means a day on which
there is trading on the NASDAQ National Market System or on the aforementioned
national securities exchange, whichever is applicable pursuant to the preceding
paragraph.
3
<PAGE>
No employee shall be granted an option which permits the employee's right
to purchase Common Stock under this Plan, and under all other Section 423(b)
employee stock purchase plans of the Company or any parent or subsidiary
corporation, to accrue at a rate that exceeds $25,000 of fair market value of
such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time. The purpose of the
limitation in the preceding sentence is to comply with Section 423(b)(8) of the
Code.
Article 6 - Exercise of Option
Each eligible employee who continues to be a participant in the Plan in the
last business day of a Payment Period shall be deemed to have exercised his/her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his/her accumulated payroll deductions on such date will pay for at the Option
Price, subject to the 500-share limit of the option. If a participant is not an
employee on the last business day of the Payment Period, he/she shall not be
entitled to exercise his/her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions remaining in an employee's
account at the end of a Payment Period (other than amounts refunded to the
employee pursuant to Article 5) will be carried forward to the succeeding
Payment Period.
Article 7 - Authorization for Entering the Plan.
An Employee may enter the Plan by filling out, signing and delivering to
the Company an authorization:
A. Stating the percentage to be deducted regularly from the
employee's pay;
B. Authorizing the purchase of the stock for the employee in each
Payment Period in accordance with the terms of the Plan; and
C. Specifying the exact name in which stock purchased for the
employee is to be issued as provided under Article 11 hereof.
Such authorization must be received by the Company at least ten (10) days
before the beginning date of the next succeeding Payment Period.
Unless an employee files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the employee has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.
The Company will accumulate and hold for the employee's account the amounts
deducted from his/her pay. No interest will be paid on these amounts.
4
<PAGE>
Article 8 - Maximum Amount of Payroll Deductions.
An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and any
bonuses or commissions.
Article 9 - Change in Payroll Deductions.
Deductions may not be increased or decreased during a Payment Period.
However, an employee may withdraw in full from the Plan.
Article 10 - Withdrawal from the Plan.
An employee may withdraw from the Plan in whole but not in part, at any
time prior to the last business day of each Payment Period by delivering a
withdrawal notice to the Company, in which event the Company will promptly
refund the entire balance of the employee's deductions not previously used to
purchase stock under the Plan.
To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least ten (10) days before the beginning date of the next
Payment Period. The employee's re-entry into the Plan cannot, however, become
effective before the beginning of the Next Payment Period following his/her
withdrawal.
Article 11 - Issuance of Stock
Certificates for stock issued to participants will be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.
Stock purchased under the Plan will be issued only in the name of the
employee, or if his/her authorization so specifies, in the name of the employee
and another person of legal age as joint tenants with right of survivorship.
5
<PAGE>
Article 12 - Adjustments.
Upon the happening of any of the following described events, an optionee's
rights under options granted under the Plan shall be adjusted as hereinafter
provided:
A. In the event shares of Common Stock of the Company shall be
subdivided or combined into a greater or smaller number of shares or
if, upon reorganization, split-up, liquidation, recapitalization or
the like of the Company, the shares of the Company's Common Stock
shall be exchanged for the other securities of the Company, each
optionee shall be entitled, subject to the conditions herein stated,
to purchase such number of shares of Common Stock or amount of other
securities of the Company as were exchangeable for the number of
shares of Common Stock of the Company which such optionee would have
been entitled to purchase except for such action, and appropriate
adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or exchange; and
B. In the event the Company shall issue any of its shares as a
stock dividend upon or with respect to the shares of stock of the
class which shall at the time be subject to option hereunder, each
optionee upon exercising such an option shall be entitled to receive
(for the purchase price paid upon such exercise) the shares as to
which he/she is exercising his/her options and, in addition thereto
(at no additional cost), such number of shares of the class or classes
in which such stock dividend or dividends were declared or paid, and
such amount of cash in lieu of fractional shares, as is equal to the
number of shares thereof and the amount of cash in lieu of fractional
shares, respectively, which he/she would have received if he/she had
been the holder of the shares as to which he/she is exercising his/her
option at all times between the date of granting of such option and
the date of its exercise.
Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options that
have been or may be granted under the Plan and the limitations set forth in the
second paragraph of Article 5 shall also be appropriately adjusted to reflect
the events specified in paragraphs A and B above. Notwithstanding the foregoing
and adjustments made pursuant to paragraphs A or B shall be made only to the
extent that the Committee, based on advice of counsel for the Company,
determines that such adjustments will not constitute a change requiring
stockholder approval under Section 423(b) (2) of the Code.
If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise ( an "Acquisition"). the Committee shall, with respect to options then
outstanding under this Plan, either (i) make appropriate provision for the
continuation of such options by arranging for the substitution on an equitable
basis for the shares then subject to such options either (a) the consideration
payable with respect to the outstanding shares of the Company's Common Stock in
6
<PAGE>
connection with the Acquisition or (b) shares of stock of the surviving
corporation; or (ii) terminate all outstanding options in exchange for a cash
payment equal to the excess of the fair market value of the shares subject to
the options (determined as of the dater of the Acquisition) over the Option
price thereof (determined with reference only to the first business day of the
applicable Payment Period).
The Committee or Board of Directors shall determine the adjustments to be
made under this Article 12, and its determination shall be conclusive.
Article 13 - No Transfer or Assignment of Employee's Rights.
An employee's rights under the Plan are the employee's alone and may not be
transferred or assigned to, or availed of by, any other person other than by
will or the laws of descent and distribution. Any option granted under the Plan
to an employee may be exercised, during the employee's lifetime, only by the
employee.
Article 14 - Termination of Employee's Rights.
An employee's rights under the Plan will terminate when he/she ceases to be
an employee because of retirement, voluntary termination, resignation, lay-off,
discharge, death, change of status or for any other reason, except that if an
employee is on leave of absence from work during the last three months of any
Payment Period, he/she hall be deemed to be a participant in the Plan on the
last day of that Payment Period. A withdrawal notice will be considered as
having been received from the employee on the day his/her employment ceases, and
all payroll deductions not used to purchase stodk will be refunded.
If an employee's payroll deductions are interrupted by any legal process, a
withdrawal notice will be considered as having been received from the employee
on the day the interruption occurs.
Article 15 - Termination and Amendments to Plan.
The 1993 Purchase Plan may be terminated at any time by the Company's Board
of Directors but such termination will not affect options then outstanding under
the 1993 Purchase Plan. The 1993 Purchase Plan will terminate in any case when
all or substantially all of the unissued shares of Common Stock reserved for the
purposes of the 1993 Purchase Plan have been purchased. If at any time shares of
Common Stock reserved for the purpose of the 1993 Purchase Plan remain available
for purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares will be apportioned among participants in
proportion to their options and the 1993 Purchase Plan will terminate. Upon such
termination or any other termination of the 1993 Purchase Plan, all payroll
deductions not used to purchase Common Stock will be refunded to 1993 Purchase
Plan participants without interest.
7
<PAGE>
The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) materially increase the number of shares
that may be issued under the Plan (except pursuant to Article 12) or change the
class of the employees eligible to receive options under the Plan or (ii) cause
Rule 16b-3 under the Securities Exchange Act of 1934 to become inapplicable to
the Plan.
Article 16 - Limits on Sale of Stock Purchased Under tha Plan.
The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his/her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject to
compliance with any applicable Federal or State securities laws; provided,
however, that because of certain Federal tax requirements, each employee agrees
by entering the Plan, promptly to give the Company notice of any such stock
disposed of within two years after the date of grant of the applicable option
showing the number of such shares disposed of. THE EMPLOYEE ASSUMES THE RISK OF
ANY MARKET FLUCTUATIONS IN THE PRICE OF STOCK.
Article 17 - Participating Subsidiaries.
The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424 (f) of the
Code, which is designed from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designations before or after the Plan is approved by the stockholders.
Article 18 - Optionees Not Stockholders.
Neither the granting of an option to an employee nor the deductions from
his/her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been actually purchased by the employee.
Article 19 - Application of Funds.
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
Article 20 - Governmental Regulations.
The Company's obligations to sell and deliver shares of the Company's
Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such shares, including the Securities and Exchange Commission and the Internal
Revenue Service.
Article 21 - Approval of Board of Directors and Stockholders of the Company.
The Plan was adopted by the Board of Directors on February 24, 1994 and the
stockholders of the Company on April 21, 1994.
8
<PAGE>
