EXHIBIT 4.3
AMENDMENT AND WAIVER OF
SUBORDINATED CONVERTIBLE NOTE
PURCHASE AGREEMENT DATED AS OF MAY 22, 1990
This Agreement, dated as of August 1, 1996, is made and entered into
by and between Photoelectron Corporation, a Massachusetts corporation
("Company"), Thermo Electron Corporation, a Delaware corporation ("Thermo"), PYC
Corporation, formerly known as Photoelectron Investments Corporation of Liberia,
a Liberian corporation ("PYC") and Peter M. Nomikos ("Nomikos").
The following sets forth the factual background to this Agreement:
A. The Company and Photoelectron Investments Corporation of Liberia
("PIC") entered into a certain Subordinated Convertible Note Purchase Agreement,
dated as of May 22, 1990 (the "1990 Agreement"), a copy of which is attached
hereto as Exhibit A. Pursuant to the 1990 Agreement, the Company issued 8%
Subordinated Notes Due 1997 to Thermo and PIC in principal amounts of $125,000
and $175,000, respectively (collectively, the "1990 Notes").
B. On or about July 11, 1991, the parties orally amended certain
provisions of the 1990 Agreement, and desire to confirm in writing the terms of
that amendment.
C. On or about July 30, 1991, PIC assigned all of its rights, title
and interest in the 1990 Agreement, and any and all Notes issued thereunder, to
Nomikos.
D. The parties desire to amend additional provisions of the 1990
Agreement, which amendments would be effective in the event of the Company's
Initial Public Offering (as defined below).
E. The parties desire to set forth in writing waivers of the rights
of Thermo and Nomikos regarding the Company's non-compliance with certain
provisions of the 1990 Agreement.
F. The parties acknowledge that the amendments and waivers set forth
in this Agreement are in the best interests of the Company and of Thermo and
Nomikos as stockholders of the Company.
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The parties agree that, effective July 11, 1991, the 1990
Agreement was amended by deleting Sections 7.02 and 7.04 in their entirety and
replacing those sections with the language set forth below. The parties hereby
confirm and ratify said amendment.
"7.02 Amendments, Waivers and Consents. Any provision in this Agreement
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to the contrary notwithstanding, changes in or additions to this Agreement
may be made, and compliance with any covenant or provision herein set forth
may be omitted or waived, only with the consent of the PIC and Thermo. Any
provision of this Agreement or the Note notwithstanding, changes in or
additions to the Note may be made, and compliance with any provision of the
Note or this Agreement relating to the Note may be omitted or waived, only
with the consent of holders of greater than 50% of the principal amount of
the Notes; provided, however, that no such consent shall be effective to
reduce or to postpone the date fixed for the payment of the principal
(including any required redemption) or interest payable on any Note,
without the consent of the holder thereof, or to reduce the percentage of
the Notes the consent of the holders of which is required under this
Section. Any waiver or consent may be given subject to satisfaction of the
conditions stated therein and any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
* * *
7.04 Binding Effect; Assignment. This Agreement shall be binding upon
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and inure to the benefit of the Company, PIC and Thermo and their
respective successors and assigns, except that the Company shall not have
the right to assign its rights hereunder or any interest herein without the
consent of Thermo and PIC obtained in accordance with Section 7.02 hereof
and the rights and interests of Thermo and PIC, respectively, including any
shares of Common Stock, Conversion Shares or Notes shall be assignable
without the consent of the Company to any Permitted Assignee."
2. The parties agree that, effective July 11, 1991, the 1990 Agreement
was amended by deleting Sections 3.01 through 3.15 in their entirety and
replacing those sections with the language set forth below. The parties hereby
confirm and ratify said amendment.
"3.01 Conversion Rights. (a) Principal: Subject to and in compliance
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with the provisions of this Article III, at the option of the holder, all
or any part of the principal amount outstanding on any Note issued pursuant
to this Agreement may be converted at any time at the Applicable Principal
Conversion Value (as defined below) into fully paid and non-assessable
shares of Common Stock in accordance with the provisions of Sections 3.02
to 3.15. (b) Interest: Subject to and in compliance with the provisions
of this Article III, at the option of the holder, all of the accrued and
unpaid interest on any Note issued pursuant to this Agreement may be
converted at any time at the Applicable Interest Conversion Value (as
defined below) into fully paid and non-assessable shares of Common Stock in
accordance with the provisions of Sections 3.02 and 3.06 to 3.15; provided,
however, that upon conversion of all or any part of the principal amount of
any
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Note pursuant to clause (a) of this Section, all accrued and unpaid
interest on such Note up to and including the Conversion Date (as defined
below) shall be converted at the Applicable Interest Conversion Value into
fully paid and non-assessable shares of Common Stock.
3.02 Conversion Values. (a) Applicable Principal Conversion Value: The
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price at which the outstanding principal of any Note issued under this
Agreement may be converted into Common Stock (the "Applicable Principal
Conversion Value") shall, subject to adjustment as provided in Sections
3.03 through 3.15, be forty cents ($.40). (b) Applicable Interest
Conversion Value: The price at which accrued and unpaid interest on the
outstanding principal balance of any Note issued under this Agreement may
be converted into Common Stock (the "Applicable Interest Conversion Value")
shall, subject to adjustment as provided in Sections 3.06 through 3.15, be
equal to the fair market value of the Common Stock on the first day of the
fiscal quarter in which the interest to be converted accrued. Prior to the
time that the Common Stock is traded over-the-counter, on the New York or
American stock exchanges or on the National Association of Securities
Dealers Automated Quotation National Market System ("NASDAQ"), the fair
market value shall be the price at which the Company most recently issued
any stock, Common or Preferred, in a private placement of securities. From
and after the date upon which the Common Stock is traded over-the-counter,
on the New York or American stock exchanges or on NASDAQ, the fair market
value of the Common Stock shall be the Market Price of such stock on the
date upon which the interest accrued as determined in accordance with the
provisions of clause (d) of this Section. (c) Applicable Conversion Value:
For the purposes of Section 3.06, the Applicable Principal Conversion Value
and the Applicable Interest Conversion Value are collectively referred to
as the "Applicable Conversion Value." (d) Market Price: The term "Market
Price" shall mean the average of the per share daily closing prices of
Common Stock for the 10 consecutive business days beginning with the first
day of the fiscal quarter in which the interest to be converted accrued.
The closing price for each day shall be (i) the last reported sales price
or, in case no such reported sale takes place on such day, the average of
the reported closing bid and ask prices, in either case on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, on NASDAQ, (ii) if the Common
Stock is not listed or admitted to trading on any national securities
exchange or quoted on NASDAQ, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm reasonably selected from time to time by the Company
for that purpose, or (iii) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on NASDAQ and the
average price cannot be determined as contemplated by clause (ii), the fair
market value as reasonably determined in good faith by the Company's Board
of Directors or in any manner reasonably prescribed by the Company's Board
of Directors. For the purposes of this Section
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3.02, the term "business day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday, other than any day on which securities are not traded
on such exchange or in such market.
3.03 Adjustments for Sale of Common Stock at Less Than Applicable
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Principal Conversion Value. Except for the issuance of up to 120,000
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shares of the Company's Common Stock to employees, directors or consultants
of the Company pursuant to an option plan or plans approved by the
Company's Board of Directors (the "Reserved Employee Shares"), if the
Company shall, while there are any Notes outstanding, issue or sell shares
of its Common Stock without consideration or at a price per share less than
the Applicable Principal Conversion Value in effect immediately prior to
such issuance or sale, then in each such case such Applicable Principal
Conversion Value upon each such issuance or sale, except as hereinafter
provided, shall be lowered so as to be equal to an amount determined by
multiplying the Applicable Principal Conversion Value by a fraction:
(1) the numerator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, plus (b) the number of shares of
Common Stock that the net aggregate consideration if any, received by
the Company for the total number of such additional shares of Common
Stock so issued would purchase at the Applicable Principal Conversion
Value in effect immediately prior to such issuance; and
(2) the denominator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus (b) the number of such
additional shares of Common Stock so issued.
For purposes of computation of the Applicable Principal Conversion Value,
if part or all of the consideration to be received by the Company in
connection with the issuance of shares of Common Stock or any of the other
securities described in this Article III consists of property other than
cash, such consideration shall be deemed to have a fair market value that
is reasonably determined in good faith by the Board of Directors.
3.04 Warrants, Options, Etc., for Common Stock. For the purposes of this
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Article III, the issuance after the date of this Agreement of any warrants,
options (other than the Reserved Employee Shares), subscriptions or
purchase rights with respect to shares of Common Stock and the issuance of
any securities convertible into or exchangeable for shares of Common Stock
(or the issuance of any warrants, options or any rights with respect to
such convertible or exchangeable securities) shall be deemed an issuance at
such time of such Common Stock if the Net Consideration Per Share (as
hereinafter determined) that may be received by
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the Company for such Common Stock shall be less than the Applicable
Principal Conversion Value at the time of such issuance. Any obligation,
agreement or undertaking to issue warrants, options, subscriptions or
purchase rights at any time in the future shall be deemed to be an issuance
at the time such obligation, agreement or undertaking is made or arises. No
adjustment of the Applicable Principal Conversion Value shall be made upon
the issuance of any shares of Common Stock that are issued pursuant to the
exercise of any conversion or exchange rights in any convertible securities
to the extent a corresponding adjustment shall previously have been made
upon the issuance of any such warrants, options or subscriptions or
purchase rights or upon the issuance of any convertible securities (or upon
the issuance of any warrants, options or any rights therefor) as provided
above. Any adjustment of the Applicable Principal Conversion Value that
relates to warrants, options, subscriptions or purchase rights with respect
to shares of Common Stock shall be disregarded if, as and when all of such
warrants, options, subscriptions or purchase rights expire or are canceled
without being exercised, so that the Applicable Principal Conversion Value
effective immediately upon such cancellation or expiration shall be equal
to the Applicable Principal Conversion Value in effect immediately prior to
the issuance of the expired or canceled warrants, options, subscriptions or
purchase rights, with such additional adjustments as would have been made
to that Applicable Principal Conversion Value had the expired or canceled
warrants, options, subscriptions or purchase rights not been issued. For
purposes of this Article III, the "Net Consideration Per Share" that may be
received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount equal to
the total amount of consideration, if any, received by the Company
for the issuance of such warrants, options, subscriptions or other
purchaser rights or convertible or exchangeable securities, plus the
minimum amount of consideration, if any, payable to the Company upon
exercise or conversion thereof, divided by the aggregate number of
shares of Common Stock that would be issued if all such warrants,
options, subscriptions or other purchase rights or convertible or
exchangeable securities were exercised, exchanged or converted.
(B) The "Net Consideration Per Share" that may be received by the
Company shall be determined in each instance as of the date of
issuance of warrants, options, subscriptions or other purchase rights
or convertible or exchangeable securities without giving effect to
any possible future price adjustments or value adjustment that may be
applicable with respect to such warrants, options, subscriptions or
other purchase rights or convertible or exchangeable securities.
(C) If a part or all of the consideration received by the Company in
connection with the issuance of shares of the Common Stock or the
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issuance of any of the securities described in this Section 3.04
consists of property other than cash, and the Board of Directors of
the Company is unable to arrive at any valuation of such property,
the Company at its expense will promptly cause independent
accountants of recognized standing selected by the Company to value
such property, whereupon such value shall be given to such
consideration and shall be recorded on the books of the Company with
respect to receipt of such property.
3.05 Dilution in Case of Other Securities. In case any Other Securities
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shall be issued or sold, or shall become subject to issue upon the
conversion or exchange of any stock (or Other Securities) of the Company
(or any other issuer of Other Securities or any other Person referred to in
Section 3.08) or to subscription, purchase or other acquisition pursuant to
any rights or options granted by the Company (or such other issuer or
Person), for a consideration per share so as to dilute the conversion
rights evidenced by the Note, the computations, adjustments and
readjustments provided for in Sections 3.03 and 3.04 with respect to the
Applicable Principal Conversion Value 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 on the conversion of the Note, so
as to protect the holders of the Note against the effect of such dilution.
3.06 Extraordinary Events. If the Company shall after the date of this
---------------------
Agreement (i) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock or (iii) combine its outstanding shares
of the Common stock into a smaller number of shares of the Common Stock,
then, in each such event, the Applicable Conversion Value shall,
simultaneously with the happening of such event, be adjusted by multiplying
the then Applicable Conversion Value by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior
to such event and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Applicable Conversion Value then in
effect. The Applicable Conversion Value, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 3.06.
3.07 Adjustment for Dividends in Other Stock, Property, Etc.;
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Reclassification, Etc. In case at any time or from time to time after the
----------------------
date of this Agreement the holders of Common Stock (or Other Securities)
shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become
entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
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(b) any cash, or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement, other than additional shares of Common Stock (or Other
Securities) issued as a stock dividend or in a stock split
(adjustments in respect of which are provided for in Section 3.06)
and normal cash dividends,
then and in each such case each holder of a Note, on the conversion thereof
as provided in this Article III, shall be entitled to receive the amount of
stock and other securities and property (including cash in the cases
referred to in clauses (b) and (c) of this Section 3.07) that such holder
would hold on the date of such conversion if on the date thereof it had
been the holder of record of the number of shares of Common Stock that it
would have received had its Note been converted into Common Stock
immediately before the date of such event to and including the Conversion
Date (as that term is defined in Section 3.11), and had thereafter, during
the period from the date hereof to and including the date of such
conversion, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3.07) receivable by it as aforesaid
during such period, giving effect to all adjustments called for during such
period under this Article III.
3.08 Adjustment for Reorganization, Consolidation, Merger, Etc. (a)
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Generally: If at any time or from time to time the Company shall (i)
effect a reorganization, (ii) consolidate with or merge into any other
Person or (iii) transfer all or substantially all of its properties or
assets to any other Person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, each holder of a Note,
on the conversion thereof as provided in this Article III at any time after
the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in
lieu of the Common Stock (or Other Securities) issuable on such exercise
prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would have
been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such holder had so converted its Note
immediately prior thereto, all subject to further adjustment thereafter as
provided under this Article III.
(b) Dissolution: In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including
cash, if applicable) receivable by the holders of the Note after the
effective date of such dissolution pursuant to this Section 3.08 to a bank
or trust company having its principal office in Boston,
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Massachusetts, as trustee for the holder or holders of the Note, which
shall establish procedures for the exchange of such property for the Note.
(c) Continuation of Terms: Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in
this Section 3.08, each Note shall continue in full force and effect and
the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the conversion of any Note after the
consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may
be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms
of the Note as provided in Section 3.09.
3.09 No Dilution or Impairment. The Company will not, by amendment of its
-------------------------
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of the Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders
of shares of Common Stock issuable upon conversion of the Note against
dilution or other impairment.
3.10 Certificate as to Adjustments. In each case of any adjustment or
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readjustment in the shares of Common Stock (or Other Securities) issuable on
the conversion of the Note, the Company at its expense will promptly provide
each holder of the Note, at the election of such holder, a certificate of
the president and of the chief financial officer of the Company setting
forth such adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based, including a statement of (a)
the consideration received or receivable by the Company for any additional
shares of Common Stock (or Other Securities) issued or sold or deemed to
have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding and (c) the Applicable
Principal Conversion Value in effect immediately prior to such issue or sale
and as adjusted and readjusted on account hereof.
3.11 Exercise of Conversion Privilege. (a) Principal: To exercise its
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principal conversion privilege, a holder of a Note shall surrender the Note
being converted to the Company at the Company's principal office, and shall
give written notice to the Company at that office that such holder elects
to convert the outstanding principal balance of such Note, or a portion
thereof. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common
Stock issuable upon such conversion shall be
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issued. The Note surrendered for conversion shall be accompanied by proper
assignment thereof to the Company or in blank. For purposes of this clause
(a), the date when such written notice is received by the Company, together
with the Note being converted, shall be the "Conversion Date." As promptly
as practicable, but in any event within 15 days after the Conversion Date,
the Company shall issue and shall deliver to the holder of the Note being
converted, or on its written order, such certificate or certificates as it
may request for the number of whole shares of Common Stock issuable upon
the conversion of such Note in accordance with the provisions of this
Article III, the number of whole shares of Common Stock issuable upon the
conversion of all accrued and unpaid interest on such Note up to and
including the Conversion Date, any property or securities issuable upon
conversion as provided in Section 3.07 and cash, as provided in Section
3.12, in respect of any fraction of a share of Common Stock issuable upon
such conversion. Such conversion shall be deemed to have been made
immediately prior to the close of business on the Conversion Date, and at
such time the rights of the holder as holder of a Note shall cease and the
Person or Persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby. (b) Interest: To exercise its interest
conversion privilege, a holder of a Note shall give written notice to the
Company at the Company's principal office that such holder elects to
convert all accrued and unpaid interest on such Note. Such notice shall
also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock issuable upon such
conversion shall be issued. For purposes of this clause (b), the date when
such written notice is received by the Company shall be the "Conversion
Date." As promptly as practicable, but in any event within 15 days after
the Conversion Date, the Company shall issue and shall deliver to the
holder of the Note, or on its written order, such certificate or
certificates as it may request for the number of whole shares of Common
Stock issuable upon the conversion of the interest and cash, as provided in
Section 3.12, in respect of any fraction of a share of Common Stock
issuable upon such conversion.
3.12 Cash in Lieu of Fractional Shares. No fractional shares of Common
----------------------------------
Stock shall be issued upon the conversion of principal and/or interest with
respect to any Note. Instead of any fractional shares of Common Stock that
would otherwise be issuable upon such conversion, the Company shall pay to
the holder of the Note a cash adjustment in respect of such fractional
shares in an amount equal to the same fraction of the Applicable Principal
Conversion Value (in a case of conversion of principal) or the Applicable
Interest Conversion Value (in a case of conversion of interest).
3.13 Partial Conversion. In the event some but not all of the principal
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amount represented by a Note surrendered by a holder is converted, the
Company shall
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execute and deliver to or on the order of the holder, at the expense of the
Company, a new Note representing the principal amount that was not
converted.
3.14 Reservation of Common Stock. The Company shall at all times reserve
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and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the Note,
sufficient shares of Common Stock to effect the conversion of all
outstanding Notes, and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of
all then outstanding Notes, the Company shall take such corporate action as
may be necessary to increase its authorized but unissued shares of Common
Stock to a number of shares that shall be sufficient for that purpose.
3.15 Notice of Record Date. In the event of:
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(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof that are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any merger or
consolidation of the Company or any transfer of all or substantially all of
the assets of the Company to any other corporation, or any other entity or
person, or
(c) any voluntary or involuntary dissolution, liquidation or winding up of
the Company, then and in each such event the Company shall mail or cause to
be mailed to each holder of a Note a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation
or winding up is expected to become effective and (iii) the time, if any,
that is to be fixed, as to when the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for securities or other property deliverable
upon such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up. Such notice
shall be mailed at least 30 days prior to the date specified in such notice
on which such action is to be taken."
3. The parties hereby amend the 1990 Agreement by deleting all references
to Photoelectron Investments Corporation of Liberia, or PIC, and inserting in
their place references to Peter M. Nomikos and Nomikos, respectively.
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4. To effectuate the amendments set forth in Paragraphs 1 and 2 above,
the Company will issue to Thermo and Nomikos, and Thermo and Nomikos will
accept, Amended and Restated 8% Subordinated Notes in the forms attached hereto
as Exhibits B and C, respectively, as replacements for the Notes originally
issued under the 1990 Agreement. The parties agree that, upon issuance of the
replacement Notes, the Notes originally issued under the 1990 Agreement shall be
deemed cancelled and of no further force and effect.
5. Effective upon the consummation of an Initial Public Offering (as
defined below), the parties hereto agree that the 1990 Agreement shall be
amended as follows:
(a) by deleting the first sentence of Section 2.01(g);
(b) by deleting Section 2.02 entitled Negative Covenants Of The
-------------------------
Company in its entirety;
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(c) by deleting Section 2.03 entitled Reporting Requirements in its
----------------------
entirety; and
(d) by deleting Article IV entitled RIGHT OF FIRST REFUSAL
in its entirety.
6. Thermo and Nomikos also waive any rights that they may have under the
1990 Agreement arising from the Company's non-compliance with the terms of
Article IV in connection with the Initial Public Offering and all prior
issuances approved by the Board of Directors of the Company of capital stock,
debt instruments, options and warrants of the Company.
7. "Initial Public Offering" means effectiveness of the Company's
Registration Statement on Form S-1 under the Securities Act of 1933, as amended,
in connection with an initial public offering of the Company's Common Stock
which yields at least $7,500,000 in gross proceeds to the Company.
8. Thermo and Nomikos hereby waive any and all defaults which may have
occurred under the following provisions of the 1990 Agreement prior to the date
hereof:
(i) the obligation to pay interest on each of the Notes issued under the
1990 Agreement at the times and place and in the manner provided in
the Notes and in the 1990 Agreement in compliance with Section 2.01(a)
(it being understood, however, that such interest has continued to
accrue and is payable in the manner set forth in the Amended and
Restated 8% Subordinated Notes Due 1997 attached hereto as Exhibits B
and C);
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(ii) the obligation to prepare, submit to, and obtain approval from a
majority of the Company's Board of Directors, of a budget for the
upcoming year in compliance with Section 2.01(e);
(iii)the obligation to maintain directors and officers insurance in
compliance with the last sentence of Section 2.01(g);
(iv) the negative covenant restricting affiliated transactions as set forth
in Section 2.02(b) as applied to transactions with Nomikos, or
affiliates of Nomikos, that were approved by the Board of Directors of
the Company and pursuant to which Nomikos or his affiliates loaned
money to or acquired capital stock, warrants or other securities in
the Company;
(v) the negative covenant restricting change in the nature of the business
of the Company as set forth in Section 2.02(c) as applied to the
change in the Company's business from the photocathode business in
which the Company was engaged at the time of its organization to the
medical devices business in which it is now engaged; and
(vi) the reporting requirements set forth in Section 2.03.
9. Except as herein waived or amended, the 1990 Agreement is hereby
confirmed in its entirety.
10. This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto, and their successors and assigns, and shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts without regard to its law relating to conflicts of law.
11. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
This Agreement is effective as a sealed instrument, except where
specifically stated otherwise, as of the date first set forth above.
THERMO ELECTRON CORPORATION, a Delaware
corporation
By: /s/ Jonathan Painter
--------------------------------
Name: Jonathan Painter
Its: Treasurer
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/s/ Peter M. Nomikos
--------------------------------
Peter M. Nomikos
PHOTOELECTRON CORPORATION, a
Massachusetts corporation
By: /s/ Peter E. Oettinger
--------------------------------
Name: Peter E. Oettinger
Its: Vice President and
Chief Operating Officer
PYC Corporation, formerly known as Photoelectron Investments Corporation of
Liberia, hereby acknowledges and confirms the accuracy of the factual
recitations set forth in paragraphs A through D above.
PHOTOELECTRON INVESTMENTS
CORPORATION OF LIBERIA
By:/s/ Peter M. Nomikos
-----------------------------
Name: Peter M. Nomikos
Title: President
-13-
PHOTOELECTRON CORPORATION
SUBORDINATED CONVERTIBLE NOTE
PURCHASE AGREEMENT
Dated as of May 22, 1990
This Agreement is dated as of the 22nd day of May, 1990, by and among
Thermo Electron Corporation ("Thermo"), Photoelectron Investments Corporation of
Liberia, a Liberian corporation ("PIC"), and Photoelectron Corporation, a
Massachusetts corporation (the "Company").
ARTICLE I
PURCHASE AND SALE OF THE SECURITIES
1.01 The Securities. The Company has authorized the issuance and sale of
---------------
the Company's $300,000 principal amount 8% Subordinated Convertible Notes Due
1997, (the "Notes"). The Notes shall be in the principal amount set forth in the
preceding sentence and shall otherwise be substantially in the form set forth in
Exhibit 1.01 hereto. The terms "Note" or "Notes" shall also include any note or
- ------- ----
notes delivered in exchange or replacement for the Notes. Any shares of Common
Stock issuable upon conversion of the Notes, and such shares when issued, are
herein referred to as the "Conversion Shares."
1.02 The Closing.
------------
The Company agrees to issue and sell to Thermo and PIC, and, subject to and
in reliance upon the terms and conditions of this Agreement, Thermo and PIC each
agrees to purchase the principal amount of the Notes, at par, set forth opposite
their names on Exhibit 1.02 hereto.
------- ----
Such transactions shall take place at a closing (the "Closing") to be held
at the offices of Thermo, on May 22, 1990, or on such other date and at such
time as may be mutually agreed upon. At the Closing, the Company will issue and
deliver the Notes, payable to the order of Thermo and PIC, respectively, against
delivery of checks payable to the order of the Company or wire transfer of funds
to an account specified by the Company.
1.03 Redemption of Notes. On or before May 31, 1997, the Company will
--------------------
redeem, without premium, the initial principal amount of the Notes, or such
lesser amount as may be then outstanding, together with all accrued and unpaid
interest then due thereon. On the stated or accelerated maturity of the Notes,
the Company will pay the principal amount of the Notes outstanding, together
with all accrued and unpaid interest then due thereon.
-2-
1.04 Transfer and Exchange of Notes. The registered holder of any Note or
-------------------------------
Notes may, prior to maturity or prepayment thereof, surrender such Note at the
principal office of the Company for transfer or exchange to any assignee. Within
a reasonable time after notice to the Company from a registered holder of its
intention to make sure exchange and without expense (other than transfer taxes,
if any) to such registered holder, the Company shall issue in exchange therefor
another Note for the same aggregate principal amount as the unpaid principal
amount of the Note so surrendered (or in such multiples thereof as may be
requested by the registered holder) and having the same maturity and rate of
interest, containing the same provisions and subject to the same terms and
conditions as the Note so surrendered. Each new Note shall be made payable to
such Person or Persons, or registered assigns, as the registered holder of such
surrendered Note may designate, and such transfer or exchange shall be made in
such a manner that no gain or loss of principal or interest shall result
therefrom.
1.05 Replacement of Notes. Upon receipt of evidence satisfactory to the
---------------------
Company of the loss, theft, destruction or mutilation of any Note and, if
requested in the case of any such loss, theft or destruction, upon delivery of
an indemnity bond or other agreement or security reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Note, the Company will issue a new Note, of like tenor and amount and
dated the date to which interest has been paid, in lieu of such lost, stolen,
destroyed or mutilated Note; provided, however, if any Note of which Thermo or
-------- -------
PIC, their nominees or any of their subsidiaries or parents is the registered
holder is lost, stolen or destroyed, the affidavit of the president, treasurer
or assistant treasurer of the registered holder, including a representation to
the effect that such Note has not been negotiated and setting forth the
circumstances with respect to such loss, theft or destruction, shall be accepted
as satisfactory evidence thereof, and no indemnity bond or other security shall
be required as a condition to the execution and delivery by the Company of a
new Note in replacement of such lost, stolen or destroyed Note other than the
registered holder's written agreement to indemnify the Company.
1.06 Subordination. The Company, for itself, its successors and assigns,
--------------
covenants and agrees, and Thermo, PIC and each successor holder of the Notes by
his or its acceptance thereof likewise covenants and agrees, that
notwithstanding any other provision of this Agreement or the Note, the payment
of the principal of and interest on each and all of the Notes shall be
subordinated in right of payment, to the extent and in the manner hereinafter
set forth, to the prior payment in full of all Senior Debt (as hereinafter
defined) at any time outstanding.
-3-
(a) Payment of Senior Debt. In the event of any insolvency or
-----------------------
bankruptcy proceedings, or any proceedings in connection therewith, relative to
the Company or to its property, or, in the event of any proceedings for the
Company of distribution or marshalling of its assets or any composition with
creditors of the Company, whether or not involving insolvency or bankruptcy,
then and in any such event all Senior Debt shall be paid in full before any
payment or distribution of any character, whether in cash, securities or other
property, shall be made on account of the Notes; and any such payment or
distribution, except securities that are subordinated and junior in right of
payment to the payment of all Senior Debt then outstanding in terms of
substantially the same tenor as this Section 1.06, which would, but for the
provisions hereof, be payable or deliverable with respect to the Notes shall be
paid or delivered directly to the holders of Senior Debt (or their duly
authorized representatives), in the proportions in which they hold the same,
until all Senior Debt shall have been paid in full, and every holder of the
Notes by becoming a holder thereof shall have designated and appointed the
holder or holders of Senior Debt (and their duly authorized representatives) as
his or its agents and attorneys-in-fact to demand, sue for, collect and receive
such Senior Debt holder's ratable share of all such payments and distributions
and to file any necessary proof of claim therefor and to take all other action
(including the right to vote such Senior Debt holder's ratable share of the
Notes), in the name of the holders (or their authorized representatives), that
such Senior Debt holder may determine to be necessary or appropriate for the
enforcement of this Section 1.06. Thermo and each successor holder of the Note
by its or his acceptance thereof agrees to execute, at the request of the
Company, a separate agreement with any holder of Senior Debt on the terms set
forth in this Section 1.06.
(b) No Payment on Note Under Certain Conditions.
--------------------------------------------
In the event that:
(i) any default occurs in the payment of principal of or
interest on any Senior Debt and during the continuance of such default, or
(if a shorter period) until such payment has been made or such default has
been cured or waived in writing by such holder of Senior Debt; or
(ii) the maturity of any Senior Debt is accelerated by any holder
thereof because of a default with respect thereto and until such
acceleration has been rescinded or said Senior Debt has been paid;
-4-
then and during the continuance of any of such events no payment shall be made
by the Company, directly or indirectly, on account of the principal of or
interest on the Notes.
(c) Payments Held in Trust. In case any payment or distribution
-----------------------
shall be paid or delivered to any holder of the Notes in violation or
contravention of the terms of this subordination, before all Senior Debt shall
have been paid in full, such payment or distribution shall be held in trust for
and paid and delivered to the holders of Senior Debt (or their duly authorized
representatives) until all Senior Debt shall have been paid in full.
(d) Subrogation. Subject to the payment in full of all Senior Debt
------------
and until the Notes shall be paid in full, the holders of the Notes shall be
subrogated to the rights of the holders of the Senior Debt (to the extent of
payments or distributions previously made to such holders of Senior Debt
pursuant to the provisions of subsections (a) and (c) of this Section 1.06) to
receive payments or distributions of assets of the Company applicable to the
Senior Debt. No such payments or distributions applicable to the Senior Debt
shall, as between the Company and its creditors, other than the holders of
Senior Debt and the holders of the Notes, be deemed to be a payment by the
Company to or on account of the Notes; and for the purposes of such subrogation,
no payments or distributions to the holders of Senior Debt to which the holders
of the Notes would be entitled except for the provisions of this Section 1.06
shall, as between the Company and its creditors, other than the holders of
Senior Debt and the holders of the Notes, be deemed to be a payment by the
Company to or on account of the Senior Debt.
(e) Scope of Section. The provisions of this Section 1.06 are
-----------------
intended solely for the purpose of defining the relative rights of the holders
of the Notes, on the one hand, and the holders of the Senior Debt, on the other
hand. Nothing contained in this Section 1.06 or elsewhere in this Agreement or
the Notes is intended to or shall impair, as between the Company and its
creditors, other than the holders of Senior Debt, and the holders of the Notes,
the obligation of the Company, which is unconditional and absolute, to pay to
the holders of the Notes the principal of and interest on the Notes as and when
the same shall become due and payable in accordance with the terms thereof, or
to affect the relative rights of the holders of the Senior Debt, nor shall
anything herein or therein prevent the holder of any Note from accepting any
payment with respect to such Note or exercising all remedies otherwise permitted
by applicable law upon default under such Note, subject to the rights, if any,
under this Section 1.06 of the holders of Senior Debt in respect of cash,
property or notes of the Company received by the holders of the Notes .
-5-
(f) Survival of Rights. The right of any present or future
-------------------
holder of Senior Debt to enforce subordination of the Notes pursuant to the
provisions of this Section 1.06 shall not at any time be prejudiced or impaired
by any act or failure to act on the part of the Company or any such holder of
Senior Debt, including without limitation, any forbearance, waiver, consent,
compromise, amendment, extension, renewal or taking or release of security of or
in respect of any Senior Debt or by noncompliance by the Company with the terms
of such subordination regardless of any knowledge thereof such holder may have
or otherwise been charged with.
(g) Amendment or Waiver. The provisions of this Section
--------------------
1.06 may not be amended or waived in any manner that is detrimental to any
Senior Debt without the consent of the holders of all then existing Senior Debt.
(h) Senior Debt Defined. The term "Senior Debt" shall mean
--------------------
(i) all Indebtedness of the Company (which is not convertible into equity
securities of the Company and is not issued in conjunction with equity
securities of the Company or options or warrants to purchase equity securities
of the Company) for money borrowed, including any extension or renewals thereof,
whether outstanding on the date hereof or thereafter created or incurred, which
is not by its terms subordinate and junior to or on a parity with the Notes, and
(ii) all other indebtedness to which the obligations of the Notes shall be
expressly subordinated by the holders of the Notes in writing, citing this
Section 1.06.
(i) Proof of Subordination. Thermo agrees that it will
-----------------------
execute and deliver any other documents evidencing the subordination of the
Notes to Senior Debt that may be reasonably requested by the Company or the
holders of Senior Debt so long as none of the provisions contained in such
documents diminish the rights of Thermo in any manner.
1.07 Representations by Thermo and PIC. Each of Thermo and PIC
----------------------------------
represents that it is its present intention to acquire the Notes for its own
account and that the Notes are being and will be acquired for the purpose of
investment and not with a view to distribution or resale thereof. The
acquisition by each of Thermo and PIC of the Notes shall constitute a
confirmation by it of this representation.
-6-
ARTICLE II
COVENANTS OF THE COMPANY
2.01 Affirmative Covenants of the Company Other Than Reporting
---------------------------------------------------------
Requirements. Without limiting any other covenants and provisions hereof,
- -------------
the Company covenants and agrees that, so long as any of the Notes are
outstanding, it will perform and observe the following covenants and
provisions:
(a) Punctual Payment. Pay the principal of and interest on each
-----------------
of the Notes at the times and place and in the manner provided in the Notes and
herein.
(b) Preservation of Corporate Existence. Preserve and maintain
------------------------------------
its corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified, as a foreign corporation
in each jurisdiction in which such qualification is necessary or desirable in
view of its business and operations or the ownership of its properties; and
preserve and maintain all material licenses and other rights to use patents,
processes, licenses, trademarks, trade names, inventions, intellectual property
rights or copyrights owned or possessed by it and necessary to the conduct of
its business.
(c) Compliance with Laws. Comply, in all material respects with
---------------------
all applicable laws, rules, regulations and orders of any governmental
authority, noncompliance with which could materially adversely affect its
business or condition, financial or otherwise.
(d) Keeping of Records and Books of Account. Keep adequate
----------------------------------------
records and books of account in which complete entries will be made in
accordance with generally accepted accounting principles consistently applied,
reflecting all financial transactions of the Company and in which, for each
fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection within its
business shall be made.
(e) Budgets and Board Approval. Prior to the commencement
---------------------------
of each fiscal year, prepare and submit to, and obtain the approval of a
majority of, the Board of Directors of a budget for the upcoming fiscal year,
including projections of research and development expenditures, capital and
operating expenses, cash flow and profits and losses, all itemized in reasonable
detail.
(f) Financing. Promptly, fully and in detail, inform the Board
---------
of Directors in advance of any commitments or contracts relating to financing of
any nature for the Company or pledge of corporate assets.
-7-
(g) Board of Directors; Indemnification. The Board of Directors shall
------------------------------------
not consist of more than four (4) directors. The By-laws of the Company shall at
all times provide for the indemnification of the Board of Directors to the full
extent provided by the law of jurisdiction in which the Company is organized.
The Company shall maintain directors and officers insurance with coverage and
premium levels consistent with policies carried by companies of similar size
engaged in similar businesses.
2.02 Negative Covenants of the Company. Without limiting any other
----------------------------------
covenants and provisions hereof, the Company covenants and agrees that, so long
as the Conversion Shares issuable upon conversion of the Notes and the shares
issued by the Company on January 4, 1989 or issuable upon conversion of the 8%
Subordinated Convertible Note issued by the Company on January 4, 1989, in the
aggregate, are greater than 50% of the total outstanding voting securities of
the Company, without the consent of both Thermo and PIC, the Company will not:
(a) Mergers, Sale of Assets, etc. Merge or consolidate with, or sell,
-----------------------------
assign, lease or otherwise dispose of or voluntarily part with the control of
(whether in one transaction or in a series of transactions) a material portion
of its assets (whether now owned or hereafter acquired) to, any Person, except
for sales or other dispositions of assets in the ordinary course of business.
(b) Dealings with Affiliates and Others. From and after the date of
------------------------------------
this Agreement, enter into any transaction, including, without limitation, any
loans or extensions of credit or royalty agreements, with any officer or
director of the Company or holder of any class of capital stock of the Company,
or any member of their respective immediate families or any corporation or other
entity directly or indirectly controlled by one or more of such officers,
directors or stockholders or members of their immediate families.
(c) Change in Nature of Business. Make any material change in the
-----------------------------
nature of its business as carried on as of the date hereof.
(d) Dividends. Declare or pay any dividends on any class of the
----------
Company's capital stock now or hereafter outstanding or purchase, redeem or
otherwise acquire or retire any of the Company's capital stock of any class now
or hereafter outstanding or otherwise return capital or make distributions of
assets to stockholders as such, except the repurchase of capital stock pursuant
to a certain Stockholders' Agreement of January 4, 1989 among the parties
hereto.
-8-
2.03 Reporting Requirements. The Company will furnish the following to
-----------------------
each holder who owns of record or beneficially or has the right to acquire from
the Company any Conversion Shares, to each holder of the Notes and to each
holder of 15% or more of the Company's Common Stock:
(a) As soon as available and in any event within thirty (30) days
after the end of each fiscal quarter of the Company, a balance sheet of the
Company as of the end of such quarter and a statement of income and retained
earnings and of changes in financial position of the Company for the period
ending with such quarter, all in reasonable detail and duly certified (subject
to year-end audit adjustments) by the chief financial officer of the Company as
having been prepared in accordance with the accounting principles applied in the
prior annual audited financial statements of the Company, and such financial
statements shall set forth in comparative form the corresponding figures for the
corresponding period of the prior fiscal year.
(b) As soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Company, a balance sheet of the Company
as of the end of such fiscal year and statements of income and retained earnings
and of changes in financial position of the Company for such fiscal year,
setting forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and, if audited, all such statements in audited form and
duly certified by a nationally recognized independent public accountant;
(c) Any written report submitted to the Company by independent
public accountants in connection with any annual or interim audit of the books
of the Company made by such accountants;
(d) Promptly after the commencement thereof, notice of all actions,
suits and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, materially
affecting the Company when considered as a whole that are not fully covered by
insurance; and
(e) At least thirty (30) days prior to the commencement of each
fiscal year of the Company, a copy of the operating plan and budget.
-9-
ARTICLE III
CONVERSION OF THE NOTE
3.01 Conversion Right. Subject to and in compliance with the provisions
-----------------
of this Article III all or any part of the principal amount outstanding of any
Note and, at the option of the holder, all accrued and unpaid interest may be
converted at any time or from time to time into fully paid and non-assessable
shares of Common Stock.
3.02 Applicable Conversion Value. The price at which the outstanding
----------------------------
principal of any Note may be converted into Common Stock (the "Applicable
Conversion Value") shall, subject to adjustment as hereinafter provided, be two
dollars ($2).
3.03 Adjustments for Sale of Common Stock at Less Than Applicable
------------------------------------------------------------
Conversion Value. Except for the issuance of up to 120,000 shares of the
- -----------------
Company's Common Stock to employees, directors or consultants of the Company
pursuant to an option plan or plans approved by the Company's Board of Directors
(the "Reserved Employee Shares"), if the Company shall, while there are any
Notes outstanding, issue or sell shares of its Common Stock without
consideration or at a price per share less than the Applicable Conversion Value
in effect immediately prior to such issuance or sale, then in each such case
such Applicable Conversion Value upon each such issuance or sale, except as
hereinafter provided, shall be lowered so as to be equal to an amount determined
by multiplying the Applicable Conversion Value by a fraction:
(1) the numerator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, plus (b) the number of shares of
Common Stock that the net aggregate consideration if any, received by the
Company for the total number of such additional shares of Common Stock so
issued would purchase at the Applicable Conversion Value in effect
immediately prior to such issuance; and
(2) the denominator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus (b) the number of such additional
shares of Common Stock so issued.
For purposes of computation of the Applicable Conversion Value, if part or all
of the consideration to be received by the Company in connection with the
issuance of shares of Common Stock or any of the other securities described in
this Article III consists of property other than cash, such consideration
-10-
shall be deemed to have a fair market value that is reasonably determined in
good faith by the Board of Directors.
3.04 Warrants, Options, etc. for Common Stock. For the purposes of this
-----------------------------------------
Article III, the issuance after the date of this Agreement of any warrants,
options (other than the Reserved Employee Shares), subscriptions or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock (or the issuance of
any warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance at such time of such Common
Stock if the Net Consideration Per Share (as hereinafter determined) that may be
received by the Company for such Common Stock shall be less than the Applicable
Conversion Value at the time of such issuance. Any obligation, agreement or
undertaking to issue warrants, options, subscriptions or purchase rights at any
time in the future shall be deemed to be an issuance at the time such
obligation, agreement or undertaking is made or arises. No adjustment of the
Applicable Conversion Value shall be made upon the issuance of any shares of
Common Stock that are issued pursuant to the exercise of any conversion or
exchange rights in any convertible securities if any adjustment shall previously
have been made upon the issuance of any such warrants, options or subscriptions
or purchase rights or upon the issuance of any convertible securities (or upon
the issuance of any warrants, options or any rights therefor) as provided above.
Any adjustment of the Applicable Conversion Value that relates to warrants,
options, subscriptions or purchase rights with respect to shares of Common Stock
shall be disregarded if, as and when all of such warrants, options,
subscriptions or purchase rights expire or are cancelled without being
exercised, so that the Applicable Conversion Value effective immediately upon
such cancellation or expiration shall be equal to the Applicable Conversion
Value in effect immediately prior to the issuance of the expired or cancelled
warrants, options, subscriptions or purchase rights, with such additional
adjustments as would have been made to that Applicable Conversion Value had the
expired or cancelled warrants, options subscriptions or purchase rights not been
issued. For purposes of this Article III, the "Net Consideration Per Share"
that may be received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount equal to
the total amount of consideration, if any, received by the Company for the
issuance of such warrants, options, subscriptions or other purchaser rights
or convertible or exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that
would
-11-
be issued if all such warrants, options, subscriptions or other purchase
rights or convertible or exchangeable securities were exercised, exchanged or
converted.
(B) The "Net Consideration Per Share" that may be received
by the Company shall be determined in each instance as of the date of
issuance of warrants, options, subscriptions or other purchase rights or
convertible or exchangeable securities without giving effect to any
possible future price adjustments or value adjustment that may be
applicable with respect to such warrants, options, subscriptions or
other purchase rights or convertible or exchangeable securities.
(C) If a part or all of the consideration received by the
Company in connection with the issuance of shares of the Common Stock or
the issuance of any of the securities described in this Section 3.04
consists of property other than cash, and the Board of Directors of the
Company is unable to arrive at any valuation of such property, the
Company at its expense will promptly cause independent accountants of
recognized standing selected by the Company to value such property,
whereupon such value shall be given to such consideration and shall be
recorded on the books of the Company with respect to receipt of such
property.
3.05 Dilution in Case of Other Securities. In case any Other
------------------------------------
Securities shall be issued or sold, or shall become subject to issue upon the
conversion or exchange of any stock (or Other Securities) of the Company (or any
other issuer of Other Securities or any other Person referred to in Section
3.08) or to subscription, purchase or other acquisition pursuant to any rights
or options granted by the Company (or such other issuer or Person), for a
consideration per share so as to dilute the conversion rights evidenced by the
Notes, the computations, adjustments and readjustments provided for in Section
3.03 with respect to the Applicable Conversion Value 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 on the conversion of the Notes, so as to
protect the holders of the Notes against the effect of such dilution.
3.06 Extraordinary Events. If the Company shall after the date of
--------------------
this Agreement (i) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock or (iii) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Applicable Conversion Value shall, simultaneously with the happening
of such event, be
-12-
adjusted by multiplying the then Applicable Conversion Value by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Applicable Conversion value then in
effect. The Applicable Conversion Value, as so adjusted, shall be readjusted in
the same manner upon the happening of any successive event or events described
herein in this Section 3.06.
3.07 Adjustment for Dividends in Other Stock, Property, etc.;
--------------------------------------------------------
Reclassification, etc. In case at any time or from time to time after the date
- ----------------------
of this Agreement the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or
property (other than cash) by way of dividend, or
(b) any cash, or
(c) other or additional stock or other securities or
property (including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock split (adjustments in respect of which are provided
for in Section 3.06) and normal cash dividends,
then and in each such case each holder of a Note, on the conversion thereof as
provided in this Article III, shall be entitled to receive the amount of stock
and other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3.07) that such holder would hold on
the date of such conversion if on the date thereof it had been the holder of
record of the number of shares of Common Stock that it would have received had
its Note been converted into Common Stock immediately before the date of such
event to and including the Conversion Date (as that term is defined in Section
3.11), and had thereafter, during the period from the date hereof to and
including the date of such conversion, retained such shares and all such other
or additional stock and other securities and property (including cash in the
cases referred to in subdivisions (b) and (c) of this Section 3.07) receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period under this Article III.
-13-
3.08 Adjustment for Reorganization, Consolidation, Merger, etc.
---------------------------------------------------------
If at any time or from time to time the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other Person or (c)
transfer all or substantially all of its properties or assets to any other
Person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, each holder of a Note, on the conversion
thereof as provided in this Article III at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
converted its Note immediately prior thereto, all subject to further adjustment
thereafter as provided under this Article III.
(i) Dissolution. In the event of any dissolution of
-----------
the Company following the transfer of all or substantially all of its properties
or assets, the Company, prior to such dissolution, shall at its expense deliver
or cause to be delivered the stock and other securities and property (including
cash, if applicable) receivable by the holders of the Notes after the effective
date of such dissolution pursuant to this Section 3.08 to a bank or trust
company having its principal office in Boston, Massachusetts, as trustee for
the holder or holders of the Notes, which shall establish procedures for the
exchange of such property for the Notes.
(ii) Continuation of Terms. Upon any reorganization,
---------------------
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 3.08, each Note shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the conversion of any Note after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may be, and shall
be binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of the Note as provided in Section 3.09.
3.09 No Dilution or Impairment. The Company will not, by amendment of
-------------------------
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or
-14-
seek to avoid the observance or performance of any of the terms of the Notes,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holders of shares of Common Stock issuable upon
conversion of the Notes against dilution or other impairment.
3.10 Certificate as to Adjustments. In each case of any adjustment or
-----------------------------
readjustment in the shares of Common Stock (or Other Securities) issuable on the
conversion of the Notes, the Company at its expense will promptly provide each
holder of the Notes, at the election of such holder, a certificate of the
president and of the chief financial officer of the Company setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding and (c) the Applicable Conversion Value
in effect immediately prior to such issue or sale and as adjusted and readjusted
on account hereof.
3.11 Exercise of Conversion Privilege. To exercise its conversion
--------------------------------
privilege, a holder of a Note shall surrender the Note being converted to the
Company at the Company's principal office, and shall give written notice to the
Company at that office that such holder elects to convert such Note, or a
portion thereof. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
issuable upon such conversion shall be issued. The Note surrendered for
conversion shall be accompanied by proper assignment thereof to the Company or
in blank. The date when such written notice is received by the Company, together
with the Note being converted, shall be the "Conversion Date." As promptly as
practicable, but in any event within 15 days after the Conversion Date, the
Company shall issue and shall deliver to the holder of the Note being converted,
or on its written order, such certificate or certificates as it may request for
the number of whole shares of Common Stock issuable upon the conversion of such
Note in accordance with the provisions of this Article III, cash in the amount
of all accrued and unpaid interest on such Note up to and including the
Conversion Date, any property or securities issuable upon conversion as provided
in Section 3.07 and cash, as provided in Section 3.12, in respect of any
fraction of a share of Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the Conversion Date, and at such time the rights of the holder as
-15-
holder of a Note shall cease and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares of Common Stock represented thereby.
3.12 Cash in Lieu of Fractional Shares. No fractional shares of Common
---------------------------------
Stock shall be issued upon the conversion of a Note. Instead of any fractional
shares of Common Stock that would otherwise be issuable upon conversion of a
Note, the Company shall pay to the holder of the Note that was converted a cash
adjustment in respect of such fractional shares in an amount equal to the same
fraction of the market price per share of the Common Stock (as determined in a
reasonable manner prescribed by the Board of Directors) at the close of business
on the Conversion Date.
3.13 Partial Conversion. In the event some but not all of the principal
------------------
amount represented by a Note surrendered by a holder is converted, the Company
shall execute and deliver to or on the order of the holder, at the expense of
the Company, a new Note representing the principal amount that was not
converted.
3.14 Reservation of Common Stock. The Company shall at all times reserve
---------------------------
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the Notes, sufficient
shares of Common Stock to effect the conversion of all outstanding Notes, and if
at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then outstanding Notes, the
Company shall take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to a number of shares that shall
be sufficient for that purpose.
3.15 Notice of Record Date. In the event of
---------------------
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof that are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company, any merger or
consolidation of the Company or any transfer of all or substantially all of the
assets of the Company to any other corporation, or any other entity or person,
or
-16-
(c) any voluntary or involuntary dissolution, liquidation or winding
up of the Company, then and in each such event the Company shall mail or cause
to be mailed to each holder of a Note a notice specifying (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right and a description of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective and (iii) the time, if any, that is to be fixed, as to when
the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up. Such notice shall be mailed at least 30 days prior to the date
specified in such notice on which such action is to be taken.
ARTICLE IV
RIGHT OF FIRST REFUSAL
4.01 Right of First Refusal. Except for the Reserved Employee shares, the
-----------------------
Company shall not issue, sell or exchange, agree to issue, sell or exchange, or
reserve or set aside for issuance, sale or exchange, (i) any shares of Common
Stock, (ii) any other equity security of the Company, including, without
limitation, shares of preferred stock, (iii) any option, warrant or other right
to subscribe for, purchase or otherwise acquire any equity security of the
Company or (iv) any Debt Security, unless in each such case the Company shall
have first received an unconditional bona fide offer from a third party to
purchase such securities (the "Offered Securities") and shall have offered to
sell such Offered Securities to Thermo and PIC as follows: The Company shall
offer to sell to each of Thermo and PIC a portion of the Offered Securities so
that the aggregate number of shares of Common Stock and Conversion Shares then
held by or issuable to each of Thermo and PIC equals forty percent (40%) of the
total number shares of Common Stock to be outstanding after the proposed
issuance by the Company (assuming the conversion of the Notes and exercise of
all options held by employees of the Company and the issuance and exercise of
all options reserved for issuance to employees of the Company by the Board of
Directors pursuant to any option plan approved by the Directors and
shareholders of the Company), at a price and on the other terms specified by the
Company in writing delivered to Thermo and PIC (the "Offer"), and the Offer by
its terms shall remain
-17-
open and irrevocable for a period of twenty (20) days, unless waived by Thermo
and PIC.
4.02 Notice of Acceptance. Notice of Thermo's or PIC's intention to
--------------------
accept, in whole or in part, an Offer made pursuant to Section 4.01 shall be
evidenced by a writing signed by Thermo or PIC, as the case may be, and
delivered to the Company prior to the end of the twenty (20) day period of the
Offer, setting forth the portion of the Offered Securities that such office
elects to purchase. If either Thermo or PIC elects not to purchase all such
portion of Offered Securities, then any such securities not elected to be
purchased shall be then offered to whichever of Thermo or PIC elected to
purchase all of its portion of the offer, in the same manner as set forth in
Section 4.01. Such secondary offer shall be open for 10 days.
4.03 Conditions to Acceptance and Purchase.
-------------------------------------
(a) Permitted Sales of Refused Securities. If Notices of Acceptance
-------------------------------------
are not given by Thermo and PIC in respect of all the Offered Securities
pursuant to Sections 4.01 and 4.02, the Company shall have sixty (60) days from
the expiration of the 10-day period set forth in Section 4.02 to sell all or any
part of such Offered Securities as to which a Notice of Acceptance has not been
given by Thermo or PIC and all of the Offered Securities not subject to the
option of Thermo or PIC pursuant to this Article IV (the "Refused Securities")
to the Person or Persons specified in the Offer, but only for cash and otherwise
in all respects upon terms and conditions, including, without limitation, unit
price and interest rates, which are not more favorable, in the aggregate, to
such other Person or Persons or less favorable to the Company than those set
forth in the Offer.
(b) Reduction in Amount of Offered Securities. In the event the
-----------------------------------------
Company shall propose to sell less than all the Refused Securities (any such
sale to be in the manner and on the terms specified in Section 4.03(a) above),
then Thermo and PIC shall reduce the number of, or other units of, the Offered
Securities specified in their respective Notices of Acceptance to an amount that
shall be not less than the amount of the Offered Securities that each of Thermo
and PIC elected to purchase pursuant to Section 4.02 multiplied by a fraction,
(i) the numerator of which shall be the amount of Offered Securities the Company
actually proposes to sell, and (ii) the denominator of which shall be the amount
of all Offered Securities. In such event, the Company may not sell or otherwise
dispose of more than the reduced amount of the Offered Securities until such
securities have again been offered to Thermo and PIC in accordance with Section
4.01.
-18-
(c) Closing. Upon the closing, which shall include full payment to
--------
the Company, of the sale to such other Person or Persons of all or less than
all the Refused Securities, Thermo and PIC shall purchase from the Company, and
the Company shall sell to Thermo and PIC, the number of Offered Securities
specified in their respective Notices of Acceptance, as reduced pursuant to
Section 4.03(b), upon the terms and conditions specified in the Offer. The
purchase by Thermo and PIC of any Offered Securities is subject in all cases to
the preparation, execution and delivery by the Company, Thermo and PIC of a
purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to Thermo, PIC and their counsel.
4.04 Further Sale. In each case, Offered Securities not purchased by
-------------
Thermo, PIC or other Person or Persons in accordance with Section 4.03 may not
be sold or otherwise disposed of until they are again offered to Thermo under
the procedures specified in Sections 4.01, 4.02 and 4.03.
4.05 Exceptions. The rights of Thermo under this Article IV shall not
-----------
apply to:
(a) Common stock issued as a stock dividend to holders of Common
Stock or upon any subdivision or combination of shares of Common Stock, or
(b) up to 120,000 shares of Common Stock, or options exercisable
therefor, including options outstanding on the date of this Agreement (such
number to be equitably adjusted in the event of any stock split, combination,
reclassification or other similar event occurring on or after the date of this
Agreement) issuable to current and future officers, employees, directors or
consultants of the Company pursuant to any stock option plan or stock purchase
plan approved by a vote of not less than a majority of the Board of Directors of
the Company.
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default. If any of the following events ("Events of
------------------
Default") shall occur and be continuing seven days after delivery of notice (as
described below) to the Company:
(a) The Company shall fail to pay any installment of principal of
any of the Notes when due; or
(b) The Company shall fail to pay any interest on any of the Notes
when due or shall default in the performance of any covenant contained in
Section 2.02 and such failure or default shall continue for seven (7) business
days; or
-19-
(c) The Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or the Note on its part to be
performed or observed and any such failure remains unremedied for thirty (30)
days after written notice thereof shall have been given to the Company by any
registered holder of the Notes; or
(d) The Company shall fail to pay any Indebtedness for borrowed
money (other than as evidenced by the Notes) owing by the Company or any
interest or premium thereon, when due (or, if permitted by the terms of the
relevant document, within any applicable grace period), whether such
Indebtedness shall become due by scheduled maturity, by required prepayment, by
acceleration, by demand or otherwise, or shall fail to perform any term,
covenant or agreement on its part to be performed under any agreement or
instrument (other than this Agreement or the Note) evidencing or securing or
relating to any Indebtedness owing by the Company when required to be performed
(or, if permitted by the terms of the relevant document, within any applicable
grace period), if the effect of such failure to pay or perform is to accelerate,
or to permit the holder or holders of such Indebtedness, or the trustee or
trustees under any such agreement or instrument, to accelerate, the maturity of
such Indebtedness, unless such failure to pay or perform shall be waived by the
holder or holders of such Indebtedness or such trustee or trustees; or
(e) The Company shall be involved in financial difficulties as
evidenced (i) by its admitting in writing its inability to pay its debts
generally as they become due (ii) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in effect, or by its
authorizing, by appropriate proceedings of its Board of Directors or other
governing body, the commencement of such a voluntary case, (iii) by its filing
an answer or other pleading admitting or failing to deny the material
allegations of a petition filed against it commencing an involuntary case under
said Title 11, or seeking, consenting to or acquiescing in the relief therein
provided, or by its failing to controvert timely the material allegations of any
such petition, (iv) by the entry of an order for relief in any involuntary case
commenced under said Title 11, (v) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or alteration of
the rights of creditors, or by its consenting to or acquiescing in such relief,
(vi) by the entry of an order by a court of competent jurisdiction (a) finding
it to be bankrupt or insolvent, (b) ordering or approving its liquidation,
reorganization or any modification or alteration of the rights of its creditors
or (c) assuming custody of, or appointing a receiver or other
-20-
custodian for, all or a substantial part of its property or (vii) by its making
an assignment for the benefit of, or entering into a composition with, its
creditors, or appointing or consenting to the appointment of a receiver or other
custodian for all or a substantial part of its property; or
(f) Any judgment, writ, warrant of attachment or execution or similar
process shall be issued or levied against a substantial part of the property of
the Company and such judgment, writ or similar process shall not be released,
vacated or fully bonded within ninety (90) days after its issue or levy; then,
and in any such event, Thermo or any other holder of the Notes may, by notice to
the Company, declare the entire unpaid principal amount of the Notes, all
interest accrued and unpaid thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes, all such accrued
interest and all such amounts shall become and be forthwith due and payable
(unless there shall have occurred an Event of Default under subsection 5.01(e)
in which case all such amounts shall automatically become due and payable),
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company.
ARTICLE VI
DEFINITIONS AND ACCOUNTING TERMS
6.01 Certain Defined Terms. As used in this Agreement, the following
----------------------
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Debt Security" means and includes (i) any debt security of the Company
that by its terms is convertible into or exchangeable for any equity security of
the Company, (ii) any security of the Company that is a combination of debt and
equity or (iii) any option, warrant or other right to subscribe for, purchase or
otherwise acquire any such debt security of the Company.
"Indebtedness" means all obligations, contingent and otherwise, which
should, in accordance with generally accepted accounting principles consistently
applied, be classified upon the obligor's balance sheet as liabilities,
excluding any liabilities in respect of deferred federal or state income taxes,
but in any event including, without limitation, liabilities secured by any
mortgage on property owned or acquired subject to such mortgage, whether or not
the liability secured thereby shall have been assumed, and also including,
without limitation, (i) all guaranties, endorsements and other
-21-
contingent obligations, in respect of Indebtedness of others, whether or not the
same are or should be so reflected in said balance sheet, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and (ii) the present value of
any lease payments due under leases required to be capitalized in accordance
with applicable Statements of Financial Accounting Standards, determined by
discounting all such payment at the interest rate determined in accordance with
applicable Statements of Financial Accounting Standards.
"Other Securities" shall mean any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or otherwise) that the
holders of the Note at any time shall be entitled to receive, or shall have
received, on the conversion of the Note, in lieu of or in addition to Common
Stock, or that at any time may be issuable or shall have been issued in exchange
for or in replacement of Common Stock or Other Securities pursuant to Article
III.
"Permitted Assignee" shall mean with respect to either Thermo or PIC any
person or entity directly or indirectly controlling, controlled by or under
common control with such assigning person. For the purposes of this definition,
"Control" shall mean the power and authority to direct the affairs of the entity
in question through the direct or indirect ownership or control over not less
than 50.1% of the such entities voting securities or equity.
"Person" means an individual, corporation, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Securities and
Exchange Commission (or of any other federal agency then administering the
Securities Act) thereunder, all as the same shall be in effect at the time.
ARTICLE VII
MISCELLANEOUS
7.01 No Waiver; Cumulative Remedies. No failure or delay on the part of
-------------------------------
Thermo or PIC, or any other holder of the Notes, in exercising any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
-22-
7.02 Amendments, Waivers and Consents. Any provision in this Agreement to
---------------------------------
the contrary notwithstanding, changes in or additions to this Agreement may be
made, and compliance with any covenant or provision herein set forth may be
omitted or waived, only upon the prior written consent of PIC and Thermo. Any
provision of this Agreement or the Note notwithstanding, changes in or additions
to the Note may be made, and compliance with any provision of the Note or this
Agreement relating to the Note may be omitted or waived, only upon the prior
written consent of holders of greater than 50% of the principal amount of the
Notes; provided, however, that no such consent shall be effective to reduce or
-------- -------
to postpone the date fixed for the payment of the principal (including any
required redemption) or interest payable on any Note, without the consent of the
holder thereof, or to reduce the percentage of the Notes the consent of the
holders of which is required under this Section. Any waiver or consent may be
given subject to satisfaction of conditions stated therein and any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
7.03 Address for Notices, etc. All notices, requests, demands and other
-------------------------
communications provided for hereunder shall be in writing and mailed by means of
certified mail (or other form of registered mail) or telegraphed or delivered to
the applicable party at the addresses indicated below:
If to the Company:
Photoelectron Corporation
580 Winter Street
Waltham, MA 02254
If to Thermo or PIC: at the address set forth opposite their respective
names as set forth on Exhibit 1.02.
------------
If to any other holder of the Notes: at such holder's address for notice as
set forth in the register maintained by the Company, or, as to each of the
foregoing, at such other address as shall be designated by such Person in a
written notice to the other party complying as to delivery with the terms of
this Section.
7.04 Binding Effect; Assignment. This Agreement shall be binding upon and
---------------------------
inure to the benefit of the Company, PIC and Thermo and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of Thermo and PIC obtained in accordance with Section 7.02 hereof and
the rights and interests of Thermo and PIC, respectively, including any shares
of Common Stock, Conversion
-23-
Shares or Notes shall be assignable without the consent of the Company to any
Permitted Assignee.
7.05 Prior Agreements. This Agreement constitutes the entire agreement
-----------------
between the parties and supersedes any prior understandings or agreements
concerning the subject matter hereof.
7.06 Severability. The invalidity or unenforceability of any provision
-------------
hereof shall in no way affect the validity or enforceability of any other
provision.
7.07 Governing Law. This Agreement and the Notes shall be governed by,
--------------
and construed in accordance with, the laws of the Commonwealth of Massachusetts.
7.08 Headings. Article, Section and subsection headings in this
---------
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
7.09 Sealed Instrument. This Agreement is deemed to be executed as an
------------------
instrument under seal.
7.10 Counterparts. This Agreement may be executed in any number of
-------------
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
PHOTOELECTRON CORPORATION
By: /s/ Peter M. Nomikos
------------------------------
THERMO ELECTRON CORPORATION
By: /s/ George N. Hatsopoulos
------------------------------
Its: PRESIDENT
PHOTOELECTRON INVESTMENTS CORPORATION OF
LIBERIA
By: /s/ Peter M. Nomikos
------------------------------
Peter M. Nomikos, President
Exhibit 1.01
------------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE TRANSFERRED (1) WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING THESE SECURITIES OR (2)
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
PHOTOELECTRON CORPORATION
8% Subordinated Note Due 1997
No. -1 Waltham, Massachusetts
May __, 1990
For value received, PHOTOELECTRON CORPORATION, a Massachusetts corporation
(the "Company"), hereby promises to pay to ______________________ (hereinafter
referred to as the "Payee"), or registered assigns, on May __, 1997, as
described below, the principal sum of _________________ ($________) or such part
thereof as then remains unpaid, to pay interest from the date hereof on the
whole amount of said principal sum remaining from time to time unpaid at the
rate of eight percent (8%) per annum, such interest to be payable on each
November __ and May __, the first such payment to be due and payable on November
__, 1990, until the whole amount of the principal hereof remaining unpaid shall
become due and payable, and to pay interest on all overdue principal (including
any overdue required redemption) and interest at a rate per annum equal to the
prime or base lending rate of the First National Bank of Boston plus three
----
percent (3%). Principal and all accrued but unpaid interest shall be repaid on
May __, 1997. Principal and interest shall be payable in lawful money of the
United States of America, in immediately available funds, at the principal
office of the Payee or at such other place as the legal holder may designate
from time to time in writing to the Company. Interest shall be computed on the
basis of a 360-day year.
This Note is issued pursuant to and is entitled to the benefits of a
certain Subordinated Convertible Note Purchase Agreement dated as of May __,
1990, between the Company, Thermo Electron Corporation and Photoelectron
Investments Corporation
of Liberia identified therein (as the same may be amended from time to time, the
"Agreement"), and each holder of this Note, by its acceptance hereof, agrees to
be bound by the provisions of the Agreement, a copy of which may be inspected by
the legal holder hereof at the principal office of the Company. As provided in
the Agreement, (i) this Note is subject to prepayment as specified in the
Agreement, (ii) the principal of and interest on this Note is subordinated to
Senior Debt, as defined in the Agreement, and (iii) this Note is convertible
into Common Stock of the Company in the manner set forth in the Agreement.
As further provided in the Agreement, upon surrender of this Note for
transfer or exchange, a new Note or new Notes of the same tenor dated the date
to which interest has been paid on the surrendered Note and in an aggregate
principal amount equal to the unpaid principal amount of the Note so surrendered
will be issued to, and registered in the name of, the transferee or transferees.
The Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes.
In case any payment herein provided for shall not be paid when due, the
Company further promises to pay all cost of collection, including all reasonable
attorney's fees.
This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts and shall have the effect of a sealed
instrument.
The Company and all endorsers and guarantors of this Note hereby waive
presentment, demand, notice of nonpayment, protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
of this Note.
PHOTOELECTRON CORPORATION
By:
-----------------------------
Title:
--------------------------
Attest:
- ---------------------------------
Exhibit 1.02
------------
Principal Amount of
Purchaser Notes Purchased
- --------- -------------------
Thermo Electron Corporation $125,000
101 First Avenue
Waltham, MA 02254
Photoelectron Investments
Corporation of Liberia $175,000
c/o Mr. Gordon Greer, Esq.
Bingham, Dana & Gould
150 Federal Street
Boston, MA. 12110
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE TRANSFERRED (1) WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING THESE SECURITIES OR (2)
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
PHOTOELECTRON CORPORATION
Amended and Restated
8% Subordinated Note Due 1997
Lexington, Massachusetts
August 1, 1996
For value received, PHOTOELECTRON CORPORATION, a Massachusetts
corporation (the "Company"), hereby promises to pay to Thermo Electron
Corporation (hereinafter referred to as the "Payee"), or registered assigns, on
May 31, 1997, as described below, the principal sum of One Hundred Twenty-Five
Thousand Dollars ($125,000.00) or such part thereof as then remains unpaid, to
pay interest from January 1, 1991 on the whole amount of said principal sum
remaining from time to time unpaid at the rate of eight percent (8%) per annum.
Such interest shall accrue on March 31, June 30, September 30 and December 31 of
each year, until the whole amount of the principal hereof remaining unpaid shall
become due and payable. The Company agrees to pay interest on all overdue
principal (including any overdue required redemption) and interest at a rate per
annum equal to the prime or base lending rate of the First National Bank of
Boston plus three percent (3%). The Company also agrees to make an additional
----
payment of previously accrued interest in the amount of One Thousand Forty-Four
Dollars ($1,044.00). Subject to the holder's option to convert the outstanding
principal and accrued but unpaid interest to Common Stock referenced below,
principal and all accrued but unpaid interest shall be repaid on May 31, 1997.
Principal and interest shall be payable in lawful money of the United States of
America, in immediately available funds, at the principal office of the Payee or
at such other place as the legal holder may designate from time to time in
writing to the Company. Interest shall be computed on the basis of a 360-day
year.
This Note is issued pursuant to and is entitled to the benefits of a
certain Subordinated Convertible Note Purchase Agreement dated as of May 22,
1990, between the Company, Payee and Photoelectron Investments Corporation of
Liberia identified therein (as the same may be amended from time to time, the
"1990 Agreement"), and each holder of this Note, by its acceptance hereof,
agrees to be bound by the provisions of the 1990 Agreement, a copy of which may
be inspected by the legal holder hereof at the principal office of the Company.
As provided in the 1990 Agreement, (i) this Note is
subject to prepayment as specified in the 1990 Agreement, (ii) the principal of
and interest on this Note is subordinated to Senior Debt, as defined in the 1990
Agreement, and (iii) the outstanding principal balance under the Note, and all
accrued but unpaid interest on such principal balance, is convertible into
Common Stock of the Company in the manner set forth in the 1990 Agreement.
As further provided in the 1990 Agreement, upon surrender of this Note
for transfer or exchange, a new Note or new Notes of the same tenor dated the
date to which interest has been paid on the surrendered Note and in an aggregate
principal amount equal to the unpaid principal amount of the Note so surrendered
will be issued to, and registered in the name of, the transferee or transferees.
The Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes.
In case any payment herein provided for shall not be paid when due,
the Company further promises to pay all costs of collection, including all
reasonable attorney's fees.
This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, without regard to its law governing
conflicts of law, and shall have the effect of a sealed instrument effective as
of the date first above written.
The Company and all endorsers and guarantors of this Note hereby waive
presentment, demand, notice of nonpayment, protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
of this Note.
PHOTOELECTRON CORPORATION
By:_____________________________
Peter E. Oettinger
Vice President and Chief Operating
Officer
Attest:
___________________________
-2-
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE TRANSFERRED (1)WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING THESE SECURITIES OR (2)
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
PHOTOELECTRON CORPORATION
Amended and Restated
8% Subordinated Note Due 1997
Lexington, Massachusetts
August 1, 1996
For value received, PHOTOELECTRON CORPORATION, a Massachusetts
corporation (the "Company"), hereby promises to pay to PYC Corporation, formerly
known as Photoelectron Investment Corporation of Liberia (hereinafter referred
to as the "Payee"), or registered assigns, on May 31, 1997, as described below,
the principal sum of One Hundred Seventy-Five Thousand Dollars ($175,000.00) or
such part thereof as then remains unpaid, to pay interest from May 4, 1990 on
the whole amount of said principal sum remaining from time to time unpaid at the
rate of eight percent (8%) per annum. Such interest shall accrue on March 31,
June 30, September 30 and December 31 of each year, until the whole amount of
the principal hereof remaining unpaid shall become due and payable. The Company
agrees to pay interest on all overdue principal (including any overdue required
redemption) and interest at a rate per annum equal to the prime or base lending
rate of the First National Bank of Boston plus three percent (3%). Subject to
----
the holder's option to convert the outstanding principal and accrued but unpaid
interest to Common Stock referenced below, principal and all accrued but unpaid
interest shall be repaid on May 31, 1997. Principal and interest shall be
payable in lawful money of the United States of America, in immediately
available funds, at the principal office of the Payee or at such other place as
the legal holder may designate from time to time in writing to the Company.
Interest shall be computed on the basis of a 360-day year.
This Note is issued pursuant to and is entitled to the benefits of a
certain Subordinated Convertible Note Purchase Agreement dated as of May 22,
1990, between the Company, Thermo Electron Corporation and Photoelectron
Investment Corporation of Liberia identified therein (as the same may be amended
from time to time, the "1990 Agreement"), and each holder of this Note, by its
acceptance hereof, agrees to be bound by the provisions of the 1990 Agreement, a
copy of which may be inspected by the legal holder hereof at the principal
office of the Company. As provided in the 1990 Agreement, (i) this Note is
subject to prepayment as specified in the 1990 Agreement, (ii) the principal of
and interest on this Note is subordinated to Senior Debt, as defined in the
1990 Agreement, and (iii) the outstanding principal balance under the Note, and
all accrued but unpaid interest on such principal balance, is convertible into
Common Stock of the Company in the manner set forth in the 1990 Agreement.
As further provided in the 1990 Agreement, upon surrender of this Note
for transfer or exchange, a new Note or new Notes of the same tenor dated the
date to which interest has been paid on the surrendered Note and in an aggregate
principal amount equal to the unpaid principal amount of the Note so surrendered
will be issued to, and registered in the name of, the transferee or transferees.
The Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes.
In case any payment herein provided for shall not be paid when due,
the Company further promises to pay all costs of collection, including all
reasonable attorney's fees.
This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, without regard to its law governing
conflicts of law, and shall have the effect of a sealed instrument effective as
of the date first above written.
The Company and all endorsers and guarantors of this Note hereby waive
presentment, demand, notice of nonpayment, protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
of this Note.
PHOTOELECTRON CORPORATION
By:
-----------------------------------
Peter E. Oettinger
Vice President and Chief Operating
Officer
Attest:
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