SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 1997
LCA-Vision Inc.
(Exact name of Registrant as specified in its Charter)
Delaware 0-27610 11-2882328
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification Number)
incorporation)
7840 Montgomery Road, Cincinnati, Ohio 45236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 792-9292
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On August 18, 1997, LCA-Vision Inc. ("LCAV") closed an
acquisition of assets ("Closing" or "Closing Date"). On July 23,
1997, LCAV, Summit Technology, Inc. ("Summit") and Refractive
Centers International, Inc., a wholly-owned subsidiary of Summit
("RCII"), entered into an Acquisition Agreement (the "Agreement"),
pursuant to which LCA at Closing purchased from Summit 5,000,000
shares of RCII's Common Stock, par value $.01(which represented 100%
of the issued and outstanding shares of Common Stock of RCII held by
Summit) in exchange for 16,164,361 newly-issued shares of LCAV
Common Stock. Nineteen (19) individuals (the "Option Holders") held
options for 312,500 shares of RCII Common Stock, 278,767 of which
were exercisable at Closing ("Exercisable Shares"). All 19 of the
Option Holders exercised their options prior to Closing and LCAV
also purchased all 278,767 shares of RCII Common Stock owned by the
Option Holders in exchange for 901,218 newly-issued shares of LCAV
Common Stock. As a result of these transactions, LCAV in the
aggregate issued 17,065,579 shares of its Common Stock and came to
own 100% of the issued and outstanding RCII Common Stock. The per
share consideration for RCII Common Stock was a number of shares of
LCAV Common Stock equal to the quotient of (a) 17,065,579 divided by
(b) the sum of the number of shares of issued and outstanding RCII
Common Stock on the Closing Date (5,278,767 shares) plus the number
of shares of RCII Common Stock into which options to purchase shares
of RCII Common Stock were exercisable on the Closing Date (0
shares).
RCII owns and operates 19 laser vision correction centers and
has a working relationship with six (6) additional treatment sites
at university medical centers/hospitals, all in the U.S.A.
(collectively, the "Centers"). LCAV intends to continue to own and
operate or work with, as applicable, the Centers, subject to an
ongoing evaluation of the costs and benefits of maintaining each
Center, the economies of scale and market share created by the
addition of the Centers to similar centers already owned and
operated by LCAV and LCAV's business generally.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired
Will be filed by amendment as soon as practicable.
(b) Proforma financial information
Will be filed by amendment as soon as practicable.
(c) Exhibits
Exhibit No. Description Page
2 Acquisition Agreement dated as of July 23, 1997
by and among LCA-Vision Inc., Summit Technology,
Inc. and Refractive Centers International, Inc.
99.1 LCA-Vision Inc. Press Release dated August 19,
1997
99.2 LCA-Vision Inc. Press Release dated August 21,
1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
LCA-Vision Inc.
Date: August 26, 1997 By:/s/ Larry P. Rapp
-------------------------
Larry P. Rapp
Chief Financial Officer
<PAGE>
Execution Copy
ACQUISITION AGREEMENT
between
LCA-VISION INC.,
SUMMIT TECHNOLOGY, INC.
and
REFRACTIVE CENTERS INTERNATIONAL, INC.
Dated
July 23, 1997
<PAGE>
INDEX
ARTICLE I DEFINITIONS 1
ARTICLE II PURCHASE AND SALE OF STOCK 1
2.1 Purchase and Sale of RCII Common Stock 1
2.2 Closing 1
2.3 Consideration 1
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SUMMIT 2
3.1 Organization, Qualification, Corporate Power,
Competence, Etc 2
3.2 Capitalization 2
3.3 Noncontravention 3
3.4 Title 4
3.5 Subsidiaries 4
3.6 Financial Statements 4
3.7 Events Subsequent to Most Recent RCII
Fiscal Year End 4
3.8 Undisclosed Liabilities 5
3.9 Legal Compliance 5
3.10 Tax Matters 6
3.11 Real Property 6
3.12 Material Contracts 6
3.13 Notes and Accounts Receivable 7
3.14 Powers of Attorney 7
3.15 Insurance 7
3.16 Litigation 7
3.17 Employees 7
3.18 Employee Benefit Plans 8
3.19 Brokers 8
3.20 Guaranties 8
3.21 Activities in LCA Common Stock 8
3.22 Disclosure 8
3.23 Incorporation 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LCA 9
4.1 Organization, Qualification, Corporate
Power, Competence, Etc 9
4.2 Capitalization 9
4.3 Noncontravention 10
4.4 Financial Statements 11
4.5 Events Subsequent to Most Recent LCA Fiscal Year End 11
4.6 SEC Filings 12
4.7 Tax Matters 13
4.8 Undisclosed Liabilities 14
4.9 Legal Compliance 14
4.10 Title 14
4.11 Notes Payable to Shareholders 14
4.12 Brokers 14
4.13 Material Contracts 14
4.14 Litigation 15
4.15 Activities in LCA Common Stock 15
4.16 Disclosure 15
4.17 Incorporation 16
ARTICLE V COVENANTS 16
5.1 Conduct of Business 16
5.2 Access to Premises and Information 16
5.3 Fulfillment of Conditions 16
5.4 Forbearances 16
5.5 No Transactions in LCA Common Stock 17
5.6 Advice of Changes 17
5.7 No Restrictions on Summit's Conduct of Business 17
5.8 Public Announcement 17
5.9 HSR Act Compliance 17
5.10 LCA SEC Reports 18
5.11 RCII Option Holders 18
5.12 NASDAQ Listing 18
5.13 Business Restrictions 18
ARTICLE VI CONDITIONS TO LCA'S OBLIGATION TO CLOSE 18
6.1 Representations and Warranties; Covenants 19
6.2 RCII Cash Balance 19
6.3 Third Party Consents 19
6.4 No Injunctions or Restraints; Illegality 19
6.5 Deliveries at Closing 19
6.6 No Material Adverse Change 19
6.7 HSR Act 19
6.8 RCII Stock 19
ARTICLE VII CONDITIONS TO SUMMIT'S AND
RCII'S OBLIGATION TO CLOSE 20
7.1 Representations and Warranties; Covenants 20
7.2 Board of Directors 20
7.3 Restructuring of Bank Debt 20
7.4 Shareholder Debt 20
7.5 No Injunctions or Restraints; Illegality 20
7.6 Deliveries at Closing 20
7.7 No Material Adverse Change 21
7.8 HSR Act 21
7.9 Rights and Preferences of Interim Series Preferred Stock21
ARTICLE VIII DELIVERIES AT CLOSING 21
8.1 Summit and RCII Deliveries 21
8.2 LCA Deliveries 22
ARTICLE IX POST-CLOSING OBLIGATIONS 22
9.1 Upgrade of Summit Laser Systems 22
9.2 Release of Summit Guaranties 22
9.3 Payment of LCA Shareholder Debt 23
9.4 Registration of Distribution Shares and
Selling Shareholder Registrable Shares 23
9.5 NASDAQ Listing 24
9.6 Compliance With SEC Disclosure Requirements 24
9.7 Distribution of Distribution Shares 25
9.8 Occupancy of Summit Space 25
9.9 Post-Approval Support Services 25
9.10 Interim Series Preferred Stock 25
9.11 Access to Records 25
ARTICLE X INDEMNIFICATION; BREACH 25
10.1 Indemnity Obligations of Summit 25
10.2 Indemnity Obligations of LCA 25
10.3 Procedures for Indemnification for Third Party Claims 25
10.4 Claims by Summit or LCA 26
10.5 Survival of Representations and Warranties 26
10.6 Limitations on Indemnification and Damages 27
10.7 Subrogation 27
ARTICLE XI TERMINATION 27
11.1 Mutual Agreement 27
11.2 Termination for Breach 27
11.3 Failure of Condition Precedent 27
11.4 Effect of Termination 27
ARTICLE XII MISCELLANEOUS 28
12.1 Fees and Expenses 28
12.2 Governing Law 28
12.3 Notices 28
12.4 Waiver 28
12.5 Binding Effect 29
12.6 Entire Agreement 29
12.7 Survival of Confidentiality Agreement 29
12.8 Severability 29
12.9 Amendment 29
12.10 Exhibits and Schedules 29
12.11 Third Party Beneficiaries 29
12.12 Construction 29
12.13 Counterparts 29
SCHEDULE A DEFINITIONS 31
SCHEDULE B RCII DISCLOSURE SCHEDULE 35
SCHEDULE C LCA DISCLOSURE SCHEDULE 36
EXHIBIT A FORM OPINION OF GOLDSTEIN & MANELLO, P.C. 37
EXHIBIT B SHAREHOLDERS' AGREEMENT 38
EXHIBIT C REGISTRATION RIGHTS AGREEMENT 47
EXHIBIT D FORM OPINION OF DINSMORE & SHOHL LLP 66
EXHIBIT E HERSKOWITZ EMPLOYMENT DOCUMENTS 67
<PAGE>
This Acquisition Agreement is made and entered into this 23rd day of
July, 1997 by and between LCA-Vision Inc., a Delaware corporation
("LCA"), Refractive Centers International, Inc., a Delaware
corporation ("RCII") and Summit Technology, Inc., a Massachusetts
corporation ("Summit").
WHEREAS, the Boards of Directors of each of LCA, RCII and Summit
deem it advisable and in the best interests of their respective
corporations that LCA acquire issued and outstanding common stock of
RCII, all on the terms and subject to the conditions contained in
this Agreement (the "Acquisition").
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set
forth on Schedule A, unless the context otherwise requires.
ARTICLE II
PURCHASE AND SALE OF STOCK
2.1 Purchase and Sale of RCII Common Stock. Subject to the terms
and conditions of this Agreement, at the Closing Summit agrees to
sell, assign and transfer and LCA agrees to purchase and acquire,
all of the issued and outstanding shares of the RCII Common Stock
owned by Summit (the "Subject Stock"). LCA further agrees to
purchase and acquire any Selling Shareholder Shares.
2.2 Closing. Subject to Article XI, the closing of the Acquisition
and the other transactions contemplated hereunder (the "Closing")
shall take place at the offices of Goldstein & Manello, P.C., 265
Franklin Street, Boston, Massachusetts 02110, or such other place as
is mutually agreed to between the parties, at 10:00 a.m. on the next
business day after expiration of the applicable waiting period under
the HSR Act; or, if the conditions to Closing set forth in Article
VI shall not have been satisfied on or prior to such date, at such
later time or date as LCA shall specify, by notice to Summit, not
less than three (3) nor more than five (5) business days after
receipt of a Conditions Notice from Summit; or, if the conditions to
Closing set forth in Article VII shall not have been satisfied on or
prior to such date, at such later time or date as Summit shall
specify, by notice to LCA, not less than three (3) nor more than
five (5) business days after receipt of a Conditions Notice from
LCA; provided that the Closing shall not take place later than the
Outside Closing Date (the "Closing Date").
2.3 Consideration. The aggregate consideration payable by LCA at
the Closing (the "Stock Consideration") shall be a number of shares
of LCA Common Stock determined as follows:
2.3.1 To Summit for the Subject Stock, the number of shares of
Subject Stock multiplied by the Per Share Consideration; and
2.3.2 To each Selling Shareholder for the Selling Shareholder
Shares, the number of Selling Shareholder Shares sold by each such
Selling Shareholder multiplied by the Per Share Consideration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT
Summit hereby represents and warrants to LCA as follows:
3.1 Organization, Qualification, Corporate Power, Competence, Etc.
3.1.1 RCII is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Except as
set forth in Section 3.1.1 of the RCII Disclosure Schedule, RCII is
duly authorized to conduct business and is in good standing under
the laws of each jurisdiction where such qualification is required,
except where the failure to so qualify or obtain authorization would
not have a Material Adverse Effect on RCII. RCII has full corporate
power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged, to own
and use the properties owned and used by it and to execute, deliver
and perform this Agreement. The execution and delivery of this
Agreement and the consummation of the Acquisition and the other
transactions contemplated hereby by RCII have been duly and validly
authorized by all necessary corporate action. No other corporate
acts or proceedings on the part of RCII are necessary to authorize
this Agreement or the transactions contemplated hereby.
3.1.2 Summit is a corporation duly organized, validly existing and
in good standing under the laws of The Commonwealth of
Massachusetts. Summit has full corporate power and authority and
all licenses, permits, and authorizations necessary to execute,
deliver and perform this Agreement. The execution and delivery of
this Agreement and the consummation of the Acquisition and the other
transactions contemplated hereby by Summit have been duly and
validly authorized by all necessary corporate action. No other
corporate acts or proceedings on the part of Summit are necessary to
authorize this Agreement or the transactions contemplated hereby.
3.1.3 This Agreement has been duly executed and delivered by RCII
and Summit and constitutes the legal, valid and binding obligations
of RCII and Summit, enforceable against each of them in accordance
with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application and equitable principles applied by a court of competent
jurisdiction.
3.1.4 Section 3.1.4 of the RCII Disclosure Schedule lists the
directors and officers of RCII. Summit has delivered to LCA correct
and complete copies of RCII's Certificate of Incorporation and By-Laws (each
as amended to date). RCII is not in default under or in
violation of any provision of its Certificate of Incorporation or
By-Laws.
3.2 Capitalization. Subject to adjustment as contemplated in
Section 5.11 hereof:
3.2.1 The entire authorized capital stock of RCII consists of
10,000,000 shares of RCII Common Stock, of which 5,000,000 shares
are issued and outstanding;
3.2.2 All such issued and outstanding shares of RCII Common Stock
have been duly authorized, are validly issued, fully paid, and
nonassessable and are owned, of record and beneficially, by Summit,
free and clear of all pledges, liens, encumbrances, charges or other
security interests;
3.2.3 The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of the RCII Common Stock are
as set forth in RCII's Certificate of Incorporation; and
3.2.4 Except as set forth in Section 3.2.4 of the RCII Disclosure
Schedule, (a) no person owns of record or is known to Summit to own
beneficially any shares of capital stock of RCII, (b) no
subscription, warrant, option, convertible security, or other right
(contingent or otherwise) to purchase or otherwise acquire equity
securities of RCII is authorized or outstanding, (c) there is no
commitment by RCII to issue shares, subscriptions, warrants,
options, convertible securities, or other such rights or to
distribute to holders of any of its equity securities any evidence
of indebtedness, and (d) there is no written or oral agreement by
RCII or Summit to sell or transfer any RCII Common Stock to any
third Person. RCII has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities
or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Except as set forth in Section
3.2.4 of the RCII Disclosure Schedule, there are no voting trusts or
agreements, stockholders' agreements, pledge agreements, buy-sell
agreements, rights of first refusal, preemptive rights or proxies
relating to any securities of RCII. All of the outstanding
securities of RCII were issued in compliance with all applicable
Federal and state securities laws.
3.3 Noncontravention. Except as set forth in Section 3.3 of the
RCII Disclosure Schedule, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any government, governmental agency
or court to which RCII or Summit is subject or any provision of the
Certificate of Incorporation or By-Laws of RCII or of the Articles
of Organization or By-Laws of Summit, or (b) result in a breach of,
constitute a default under, result in the acceleration of, create in
any Person the right to accelerate, terminate, modify, or cancel, or
require any notice or consent under any agreement, contract, lease,
license, instrument, or other arrangement to which RCII is a party
or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest upon any of its
assets). Neither RCII nor Summit is required to give any notice to,
make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency in order for the
parties to consummate the transactions contemplated by this
Agreement, other than pursuant to the HSR Act and as contemplated
under Section 9.4 hereof.
3.4 Title.
3.4.1 Summit has good and marketable title to the Subject Stock,
free and clear of all liens, charges, claims or encumbrances
whatsoever. At the Closing and upon the consummation of the
transactions contemplated by this Agreement, Summit shall transfer
such title to the Subject Stock to LCA.
3.4.2 Except as set forth in Section 3.4.2 of the RCII Disclosure
Schedule, RCII has good title to, or a valid leasehold interest in
or license to, all properties and assets (a) used by it in the
operations of its business, (b) located on its premises (except
personal items not material to the operations of the business), (c)
shown on the Most Recent RCII Balance Sheet or (d) acquired after
the date thereof, free and clear of all Security Interests, except
for properties and assets disposed of in the Ordinary Course of
Business since the date of the Most Recent RCII Balance Sheet.
3.5 Subsidiaries. Except as set forth in Section 3.5 of the RCII
Disclosure Schedule, RCII does not have any subsidiaries, operating
or otherwise, and does not own any capital stock or other equity
interest in any Person, and is not a partner, joint venturer or
member in any joint venture, partnership or other enterprise.
3.6 Financial Statements. Summit has delivered separately to LCA
the following RCII consolidated financial statements (collectively
the "RCII Financial Statements"): audited consolidated balance
sheets and statements of operations, stockholder's equity and cash
flow as of and for the fiscal years ended December 31, 1994, 1995
and 1996 (the last being the "Most Recent RCII Fiscal Year End"),
and for the five month period ended May 31, 1997. The RCII
Financial Statements (including the notes thereto) have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered
thereby, and present fairly in all material respects the financial
condition of RCII as of such dates and the results of operations of
RCII for such periods.
3.7 Events Subsequent to Most Recent RCII Fiscal Year End. Since
the Most Recent RCII Fiscal Year End, RCII has conducted its
business only in the Ordinary Course of Business and there has not
been any Material Adverse Effect in the business, financial
condition, operations or results of operations of RCII, and RCII has
not engaged in or been party to any agreement or occurrence outside
the Ordinary Course of Business. Without limiting the generality of
the foregoing, since that date (or such other date as may be
specified below) and except as disclosed in Section 3.7 of the RCII
Disclosure Schedule:
3.7.1 No Person (including RCII) has accelerated, terminated,
modified or canceled any agreement, contract, lease or license (or
series of related agreements, contracts, leases or licenses) to
which RCII is a party or by which it or any of its properties are
bound, except in the Ordinary Course of Business;
3.7.2 RCII has not delayed or postponed the payment of accounts
payable and other Liabilities outside the Ordinary Course of
Business;
3.7.3 RCII has not canceled, compromised, waived or released any
right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
3.7.4 RCII has not (a) issued, sold or otherwise disposed of any of
its capital stock, (b) granted any options, warrants, or other
rights to purchase or obtain (including upon conversion, exchange or
exercise) any of its capital stock, (c) declared, set aside or paid
any dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or (d) redeemed, purchased or
otherwise acquired any of its capital stock;
3.7.5 RCII has not made any loan to or agreement with any of its
directors, officers or employees and it has not entered into any
other transaction with any of its directors, officers or employees
outside the Ordinary Course of Business;
3.7.6 There has been no sale, assignment or transfer of any of the
assets of RCII, except in the Ordinary Course of Business;
3.7.7 There have been no capital expenditures in excess of One
Hundred Thousand Dollars ($100,000) individually or Five Hundred
Thousand Dollars ($500,000) in the aggregate;
3.7.8 RCII has not failed to perform in any material respects all of
its obligations under agreements, contracts, leases, licenses and
instruments relating to or affecting its properties, assets and
business, and has not changed materially the prices or offer terms
of sale or license of any of its products or services;
3.7.9 RCII has not failed to maintain its books of account and
records in the usual, regular and ordinary manner;
3.7.10 RCII has not made any material change in its accounting
methods or materially revalued any of its assets outside the
Ordinary Course of Business; and
3.7.11 There has not been any increase in the wages, salaries,
compensation, stock option, pension or other fringe benefits payable
to Ronald Herskowitz from those set forth in the definitive proxy
materials filed by Summit with the SEC with respect to its annual
meeting of stockholders held on June 25, 1997.
RCII is not under any legal obligation, whether written or oral, to
do any of the foregoing.
3.8 Undisclosed Liabilities. To Summit's Knowledge and except as
set forth in Section 3.8 of the RCII Disclosure Schedule, RCII does
not have any Liability except for (a) Liabilities set forth in the
Most Recent RCII Balance Sheet and (b) Liabilities which have arisen
after the Most Recent RCII Fiscal Year End in the Ordinary Course of
Business.
3.9 Legal Compliance. Except as disclosed in Section 3.9 of the
RCII Disclosure Schedule, RCII has complied in all material respects
(including without limitation in its capacity as a tenant), with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings and charges
thereunder) of federal, state, local and foreign governments (and
all agencies thereof), including, without limitation, federal and
state health care laws, rules and regulations restricting fee-splitting,
patient referrals to entities in which physicians hold an
interest and the corporate practice of medicine, and no material
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand or notice has been filed or commenced against it
alleging any failure so to comply. Except as set forth in Section
3.9 of the RCII Disclosure Schedule and as contemplated by Sections
5.9 and 9.4 hereof, no consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency
or authority is required for the execution and delivery of this
Agreement by RCII or Summit or for the consummation by RCII and
Summit of the transactions contemplated hereby or thereby. All of
RCII's material rights under all of its permits, approvals and
licenses, both governmental and private, related to the operation of
its business will continue unimpaired by the Acquisition
contemplated hereby, except as set forth in Section 3.9 of the RCII
Disclosure Schedule.
3.10 Tax Matters.
3.10.1 RCII has filed all Tax Returns that it was required to file,
including, without limitation, any Tax Returns required to be filed
with any state. All such Tax Returns were correct and complete in
all material respects. All Taxes owed by RCII shown on any Tax
Return have been paid. Except as set forth in Section 3.10 of the
RCII Disclosure Schedule, RCII currently is not the beneficiary of
any extension of time within which to file any Tax Return. No claim
has ever been made by an authority in a jurisdiction where RCII does
not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. There are no Security Interests on any of the
assets of RCII that arose in connection with any failure (or alleged
failure) to pay any Tax.
3.10.2 RCII has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other
third party.
3.10.3 There is no dispute or claim concerning any Tax Liability of
RCII either (a) claimed or raised by any authority in writing or (b)
as to which RCII or Summit has Knowledge.
3.10.4 Section 3.10 of the RCII Disclosure Schedule lists all
federal, state, local and foreign income Tax Returns filed with
respect to RCII for taxable periods ended on or after December 31,
1993; no such Tax Returns have been audited or currently are the
subject of audit. RCII has delivered to LCA correct and complete
copies of all federal income Tax Returns, examination reports and
statements of deficiencies assessed against or agreed to by RCII
since December 31, 1993.
3.10.5 RCII has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
3.10.6 RCII will not have as of the Closing Date any liability for
Taxes, except for Taxes which have been specifically accrued for in
full on the books and records of RCII in the Ordinary Course of
Business and Taxes not yet due and payable.
3.11 Real Property. Except for the leases described in Section 3.11
of the RCII Disclosure Schedule, RCII does not own or lease any real
property.
3.12 Material Contracts. Section 3.12 of the RCII Disclosure
Schedule lists and briefly describes all written contracts,
agreements and instruments to which RCII is a party, or by which it
or its properties are bound, and which involve on the part of any
Person provision of goods or services or payment of money in excess
of $20,000 or which, if breached, could result in damages or loss of
benefits to RCII in excess of $20,000 (the "RCII Material
Contracts"), and sets forth, as to each contract, agreement or
instrument, whether consummation of the transactions contemplated
hereby will require consent of any third party to avoid the
occurrence of a breach or default of, or termination or change of
rights or benefits under, such contract, agreement or instrument.
Summit has delivered to LCA a correct and complete copy of each
written agreement listed in Section 3.12 of the RCII Disclosure
Schedule (as amended to date) and a written summary setting forth
the terms and conditions of each oral agreement referred to in
Section 3.12 of the RCII Disclosure Schedule. With respect to each
RCII Material Contract and except as set forth in Section 3.12 of
the RCII Disclosure Schedule, (a) the RCII Material Contract is
legal, valid, binding, enforceable and in full force and effect, (b)
no material breach, default, termination or loss or change of rights
or benefits shall occur with respect to such RCII Material Contract
as a result of the consummation of the transactions contemplated
hereby, (c) RCII is not, and to Summit's Knowledge no other party
is, in material breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default,
or permit termination, modification, or acceleration, under an RCII
Material Contract, (d) no party has repudiated any provision of an
RCII Material Contract and (e) RCII has not incurred any penalty or
similar charges for delays in delivery of any product or service or
any indemnification or warranty obligations under such RCII Material
Contract.
3.13 Notes and Accounts Receivable. All notes and accounts
receivable of RCII are reflected properly on its books and records,
are valid receivables subject to no setoffs or counterclaims and are
current and collectible in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts set
forth in the Most Recent RCII Balance Sheet as adjusted for the
passage of time through the Closing Date in accordance with the past
custom and practice of RCII.
3.14 Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of RCII.
3.15 Insurance. Section 3.15 of the RCII Disclosure Schedule
contains a true and complete list and brief description of all
insurance policies currently in force with respect to RCII. Except
as set forth in such Section 3.15, each of the insurance policies is
in full force and effect and the premiums with respect thereto have
been fully paid through the current billed date. RCII has delivered
to LCA a copy of each insurance policy (including policies providing
property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) to which RCII has been a party, a
named insured, or otherwise the beneficiary of coverage at any time
within the past two years.
3.16 Litigation. Section 3.16 of the RCII Disclosure Schedule sets
forth each instance in which RCII (a) is subject to any outstanding
injunction, judgment, order, decree, ruling or charge or (b) is a
party or is threatened in writing to be made a party to any action,
suit, proceeding, hearing or investigation of, in, or before any
court or quasi judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator.
3.17 Employees. RCII is not a party to or bound by any collective
bargaining agreement, nor has it experienced during the last four
years any strikes, grievances, claims of unfair labor practices or
other collective bargaining disputes. Summit has no Knowledge of
any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of RCII.
3.18 Employee Benefit Plans.
3.18.1 RCII does not maintain, and has not at any time maintained,
any Employee Benefit Plans for the benefit of its employees.
Certain of its employees participate in Employee Benefit Plans of
Summit, as set forth in Section 3.18.1 of the RCII Disclosure
Schedule.
3.18.2 Except as set forth in Section 3.18.2 of the RCII Disclosure
Schedule, RCII does not maintain any bonus, stock option, stock
purchase, incentive, deferred compensation, supplemental retirement,
severance or other similar fringe benefit or employee benefit plans
or have any written employment agreements with any of its employees.
RCII has provided to LCA true, correct any complete copies of all
plans and agreements set forth in such Section 3.18.2.
3.19 Brokers. Neither RCII nor Summit has retained, utilized or
been represented by any broker or finder in connection with the
transactions contemplated by this Agreement other than Piper Jaffray
Inc.
3.20 Guaranties. Except as disclosed in Section 3.20 of the RCII
Disclosure Schedule, RCII is not a guarantor or otherwise liable for
any Liability or obligation (including indebtedness) of any other
Person.
3.21 Activities in LCA Common Stock. To Summit's Knowledge, neither
Summit nor any of its Affiliates, nor any Person acting on behalf of
either or all of Summit or any of its Affiliates, have at any time
engaged in any purchase, sale, transfer, hedging, derivative or
other activities of any kind relating to the LCA Common Stock that
constitutes, or reasonably could be construed as constituting, a
manipulative or deceptive device or contrivance in violation of
applicable federal or state securities laws or common law.
3.22 Disclosure. The representations and warranties contained in
this Article 3 do not contain any untrue statement of a material
fact or, in light of any other information regarding RCII and Summit
contained in this Agreement, omit to state any material fact
necessary in order to make the statements and information contained
in this Article 3 not misleading.
3.23 Incorporation. Each item of disclosure contained in a numbered
section of the RCII Disclosure Schedule shall be deemed incorporated
by reference in each other numbered section of the RCII Disclosure
Schedule, as if fully set forth therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LCA
LCA hereby represents and warrants to Summit as follows:
4.1 Organization, Qualification, Corporate Power, Competence, Etc.
4.1.1 LCA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. LCA is duly
authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required,
except where the failure to so qualify or obtain authorization would
not have a Material Adverse Effect on LCA. LCA has full corporate
power and authority and all licenses, permits and authorizations
necessary to carry on the businesses in which it is engaged, to own
and use the properties owned and used by it and to execute, deliver
and perform this Agreement. The execution and delivery of this
Agreement and the consummation of the Acquisition and the other
transactions contemplated hereby by LCA have been duly and validly
authorized by all necessary corporate action. No other corporate
acts or proceedings on the part of LCA are necessary to authorize
this Agreement or the transactions contemplated hereby.
4.1.2 This Agreement has been duly executed and delivered by LCA
and constitutes the legal valid and binding obligations of LCA,
enforceable against it in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application and equitable
principles applied by a court of competent jurisdiction.
4.1.3 Section 4.1.3 of the LCA Disclosure Schedule lists the
directors and officers of LCA. LCA has delivered to Summit correct
and complete copies of its Certificate of Incorporation and By-Laws
(each as amended to date). LCA is not in default under or in
violation of any provision of its Certificate of Incorporation or
By-Laws.
4.2 Capitalization.
4.2.1 The entire authorized capital stock of LCA consists of (a)
110,000,000 shares of LCA Common Stock, of which 19,599,237 shares
are issued and outstanding and (b) 10,000,000 shares of preferred
stock, $.001 par value per share (the "LCA Preferred Stock"), 1,688
shares of which are designated as Class A Preferred Stock (all of
which are issued and outstanding), and 12.6 shares of which are
designated as Class B Preferred Stock (6 shares of which are issued
and outstanding as the "First Interim Series" and 6.6 of which are
issued and outstanding as the "Second Interim Series", such Series
together, the "Interim Series Preferred Stock"). In addition,
2,500,000 shares of LCA Common Stock are reserved for future
issuance under the LCA-Vision Inc. 1995 Long-Term Stock Incentive
Plan and 1,250,000 shares of LCA Common Stock are reserved for
future issuance under the LCA-Vision Inc. Directors' Non-Discretionary Stock
Option Plan (such plans together being the "LCA
Option Plans"). No additional classes of the LCA Preferred Stock
have been designated and there are no current commitments,
arrangements, understandings or agreements to do so. Section 4.2.1
of the LCA Disclosure Schedule is a true, accurate and complete
statement of all issued and outstanding shares of LCA Common Stock
and LCA Preferred Stock, and all shares of LCA Common Stock subject
to options.
4.2.2 All issued and outstanding shares of LCA Common Stock and LCA
Preferred Stock have been duly authorized and are validly issued,
fully paid and nonassessable.
4.2.3 The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of the LCA Common Stock and
LCA Preferred Stock are as set forth in LCA's Certificate of
Incorporation, as amended, and Certificates of Designations
previously provided to Summit.
4.2.4 Except as set forth in Section 4.2.4 of the LCA Disclosure
Schedule, (a) no person owns of record or is known to LCA to own
beneficially more than five percent (5%) of any shares of capital
stock of LCA, (b) no subscription, warrant, option, convertible
security, or other right (contingent or other) to purchase or
otherwise acquire equity securities of LCA is authorized or
outstanding, (c) there is no commitment by LCA to issue shares,
subscriptions, warrants, options, convertible securities or other
such rights or to distribute to holders of any of its equity
securities any evidence of indebtedness and (d) there is no written
or oral agreement by LCA to sell or transfer any LCA Common Stock or
LCA Preferred Stock to any third Person. LCA has no obligation
(contingent or other) to purchase, redeem or otherwise acquire any
of its equity securities or any interest therein, or to pay any
dividend or make any other distribution in respect of the LCA Common
Stock or LCA Preferred Stock. Except as set forth in Section 4.2.4
of the LCA Disclosure Schedule, there are no voting trusts or
agreements, stockholders' agreements, pledge agreements, buy-sell
agreements, rights of first refusal, preemptive rights or proxies
relating to any securities of LCA. All of the outstanding
securities of LCA were issued in compliance with all applicable
Federal and state securities laws.
4.2.5 The shares of LCA Common Stock that constitute the Stock
Consideration will be duly authorized and validly issued, and as of
the date of issuance shall be fully paid and nonassessable and free
of all liens, charges, claims, encumbrance and Liabilities
whatsoever.
4.3 Noncontravention. Except as set forth in Section 4.3 of the
LCA Disclosure Schedule, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency,
or court to which LCA is subject or any provision of the Certificate
of Incorporation or By-Laws of LCA or (b) result in a breach of,
constitute a default under, result in the acceleration of, create in
any Person the right to accelerate, terminate, modify, or cancel, or
require any notice or consent under any agreement, contract, lease,
license, instrument, or other arrangement to which LCA is a party or
by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest upon any of its
assets). LCA is not required to give any notice to, make any filing
with, or obtain any authorization, consent or approval of any
federal, state or local government or governmental agency in order
for the parties to consummate the transactions contemplated by this
Agreement, other than pursuant to the HSR Act and as contemplated
under Section 9.4 hereof.
4.4 Financial Statements. LCA has delivered separately to Summit
the following LCA consolidated financial statements (collectively
the "LCA Financial Statements"): audited consolidated balance sheets
and statements of operations stockholder's equity and cash flow as
of and for the fiscal years ended December 31, 1995 and 1996 (the
last being the "Most Recent LCA Fiscal Year End"). LCA has also
delivered to Summit unaudited monthly income statements and balance
sheets for the period ended May 31, 1997, together with account
analysis and other supporting detail relating thereto (the "May
Financial Statements"). The LCA Financial Statements (including the
notes thereto) and the May Financial Statements have been prepared
in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods covered thereby,
present fairly in all material respects the financial condition of
LCA as of such dates and the results of operations of LCA for such
periods.
4.5 Events Subsequent to Most Recent LCA Fiscal Year End. Since the
Most Recent LCA Fiscal Year End, LCA has conducted its business only
in the Ordinary Course of Business and there has not been any
Material Adverse Effect in the business, financial condition,
operations or results of operations of LCA, and LCA has not engaged
in or been party to any agreement or occurrence outside the Ordinary
Course of Business. Without limiting the generality of the
foregoing, since that date (or such other date as may be specified
below) and except as disclosed in Section 4.5 of the LCA Disclosure
Schedule:
4.5.1 No Person (including LCA) has accelerated, terminated,
modified or canceled any agreement, contract, lease or license (or
series of related agreements, contracts, leases or licenses) to
which LCA is a party or by which it or any of its properties are
bound, except in the Ordinary Course of Business;
4.5.2 LCA has not delayed or postponed the payment of accounts
payable and other Liabilities outside the Ordinary Course of
Business;
4.5.3 LCA has not canceled, compromised, waived or released any
right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
4.5.4 LCA has not (a) issued, sold or otherwise disposed of any of
its capital stock, (b) granted any options, warrants, or other
rights to purchase or obtain (including upon conversion, exchange or
exercise) any of its capital stock, (c) declared, set aside or paid
any dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or (d) redeemed, purchased or
otherwise acquired any of its capital stock;
4.5.5 LCA has not made any loan to or agreement with any of its
directors, officers or employees and it has not entered into any
other transaction with any of its directors, officers or employees
outside the Ordinary Course of Business;
4.5.6 There has been no sale, assignment or transfer of any of the
assets of LCA, except in the Ordinary Course of Business;
4.5.7 There have been no capital expenditures in excess of One
Hundred Thousand Dollars ($100,000) individually or Five Hundred
Thousand Dollars ($500,000) in the aggregate;
4.5.8 LCA has not failed to perform in any material respects all of
its obligations under agreements, contracts, leases, licenses and
instruments relating to or affecting its properties, assets and
business, and has not changed materially the prices or offer terms
of sale or license of any of its products or services;
4.5.9 LCA has not failed to maintain its books of account and
records in the usual, regular and ordinary manner;
4.5.10 LCA has not made any material change in its accounting
methods or materially revalued any of its assets outside the
Ordinary Course of Business;
4.5.11 There has not been any increase in the wages, salaries,
compensation, stock option, pension or other fringe benefits payable
to any executive officer, employee or director of LCA from those set
forth in the definitive proxy materials filed by LCA with the SEC
with respect to its annual meeting of stockholders held on June 9,
1997 (the "LCA Proxy Statement"); and
4.5.12 There has not occurred any event that would require the
filing by LCA of a report on Form 8-K with the SEC.
LCA is not under any legal obligation, whether written or oral, to
do any of the foregoing.
4.6 SEC Filings.
4.6.1 LCA has timely filed all forms, reports and documents required
to be filed by it with the SEC at all times from and after LCA
became obligated to make such filings with the SEC (collectively,
the "LCA SEC Reports"), and has heretofore delivered to RCII and
Summit, in the form filed with the SEC, (a) all Annual Reports on
Form 10-K filed by LCA with the SEC, (b) all proxy statements
relating to LCA's meetings of stockholders (whether annual or
special) for which definitive proxy statements have been required to
be filed with the SEC, (c) all other reports or registration
statements filed by LCA with the SEC, and (d) all amendments and
supplements to all such reports and registration statements filed by
LCA with the SEC.
4.6.2 The LCA SEC Reports (a) were prepared in all material respects
in accordance with, and comply with, the requirements of the 1933
Act or the 1934 Act, as the case may be, and (b) did not at the time
they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
4.6.3 None of LCA's subsidiaries is required to file any forms,
reports or other documents with the SEC.
4.6.4 Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the LCA SEC
Reports are identical to the LCA Financial Statements provided to
Summit by LCA.
4.6.5 Except as set forth in Section 4.6.5 of the LCA Disclosure
Schedule, there are no impediments to LCA's eligibility to register
its equity securities with the SEC by use of any SEC Form
appropriate for purposes of filing and causing to become effective
the Distribution Shares Registration Statement and the Selling
Shareholders Registration Statement, as contemplated by Section 9.4,
including, without limitation, impediments resulting from current or
past violations of filing or reporting obligations under the 1933
Act or the 1934 Act, the listing of the LCA Common Stock on the
NASDAQ SmallCap Market, magnitude of market capitalization or any
actions or inactions of any of its officers, directors or
shareholders.
4.6.6 Except as set forth in Section 4.6.6 of the LCA Disclosure
Schedule, from and after the respective filing dates of the most
recent annual report on Form 10-KSB, quarterly report on Form 10-QSB
and definitive proxy statement filed under Section 14A of the 1934
Act, there has been no material change in the statements, facts or
information contained in any one or more of such LCA SEC Reports,
whether or not such material change constitutes a Material Adverse
Effect and whether or not such material change would be required to
be contained in an amendment to an LCA SEC Report as filed with the
SEC, a filing on any Form approved for use by the SEC or in a press
release.
4.7 Tax Matters.
4.7.1 LCA has filed all Tax Returns that it was required to file,
including, without limitation, any Tax Returns required to be filed
with any state. All such Tax Returns were correct and complete in
all material respects. All Taxes owed by LCA (whether or not shown
on any Tax Return) have been paid. Except as disclosed in Section
4.7 of the LCA Disclosure Schedule, LCA currently is not the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a
jurisdiction where LCA does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of LCA that arose in connection with
any failure (or alleged failure) to pay any Tax.
4.7.2 LCA has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other
third party.
4.7.3 There are no disputes or claims concerning any Tax Liability
of LCA either (a) claimed or raised by any authority in writing or
(b) as to which LCA has Knowledge, which in the aggregate exceed
$10,000.00.
4.7.4 Section 4.7 of the LCA Disclosure Schedule lists all federal,
state, local and foreign income Tax Returns filed with respect to
LCA for taxable periods ended on or after December 31, 1995; no such
Tax Returns have been audited or currently are the subject of audit.
LCA has delivered to RCII and Summit correct and complete copies of
all federal income Tax Returns, examination reports and statements
of deficiencies assessed against or agreed to by LCA since December
31, 1995.
4.7.5 LCA has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
4.7.6 LCA will not have as of the Closing Date any liability for
Taxes, except for Taxes which have been specifically accrued for in
full on the books and records of LCA in the Ordinary Course of
Business and Taxes not yet due and payable.
4.7.7 LCA has no liability with respect to any Taxes resulting from
operations of any predecessor entity (by merger, consolidation, sale
of stock or assets or otherwise) taxed under Subchapter S of the
Code. LCA is not bound by any agreement pursuant to which it has
any obligation to reimburse any shareholder or other person with
respect to any tax liability incurred by such shareholder or Person
during the period for which LCA was taxed under Subchapter S of the
Code.
4.8 Undisclosed Liabilities. To LCA's Knowledge and except as set
forth in Section 4.8 of the LCA Disclosure Schedule, LCA does not
have any Liability except for (a) Liabilities set forth in the Most
Recent LCA Balance Sheet and (b) Liabilities which have arisen after
the Most Recent LCA Fiscal Year End in the Ordinary Course of
Business.
4.9 Legal Compliance. LCA has complied in all material respects
(including without limitation in its capacity as a tenant), with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings and charges
thereunder) of federal, state, local and foreign governments (and
all agencies thereof), including, without limitation, federal and
state health care laws, rules and regulations restricting fee-splitting, patient
referrals to entities in which physicians hold an
interest and the corporate practice of medicine, and no material
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand or notice has been filed or commenced against it
alleging any failure so to comply. Except as set forth in Section
4.9 of the LCA Disclosure Schedule and as contemplated by Sections
5.9 and 9.4 hereof, no consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency
or authority is required for the execution and delivery of this
Agreement by LCA or for the consummation by LCA of the transactions
contemplated hereby or thereby. All of LCA's material rights under
all of its permits, approvals and licenses, both governmental and
private, related to the operation of its business will continue
unimpaired by the Acquisition contemplated hereby, except as set
forth in Section 4.9 of the LCA Disclosure Schedule.
4.10 Title. LCA has good and marketable title to the shares that
constitute the Stock Consideration, free and clear of any liens,
charges, claims or encumbrances whatsoever. At the Closing and upon
the consummation of the transactions contemplated by this Agreement,
LCA shall transfer such title to Summit and any Selling
Shareholders. Except as set forth in Section 4.10 of the LCA
Disclosure Schedule, LCA owns all of its assets and properties free
and clear of all liens, claims, encumbrances, security interests and
mortgages.
4.11 Notes Payable to Shareholders. The aggregate indebtedness of
LCA to its shareholders (the "LCA Shareholder Debt") on all notes
payable as of the date of this Agreement is $1,901,339 as of May
31, 1997.
4.12 Brokers. LCA has not retained, utilized or been represented by
any broker or finder in connection with the transactions
contemplated by this Agreement.
4.13 Material Contracts. Section 4.13 of the LCA Disclosure
Schedule lists and briefly describes all written contracts,
agreements and instruments to which LCA is a party, or by which it
or its properties are bound, and which involve on the part of any
Person provision of goods or services or payment of money in excess
of $20,000 or which, if breached, could result in damages or loss of
benefits to RCII in excess of $20,000 (the "LCA Material
Contracts"), and sets forth, as to each contract, agreement or
instrument, whether consummation of the transactions contemplated
hereby will require consent of any third party to avoid the
occurrence of a breach or default of, or termination or change of
rights or benefits under, such contract, agreement or instrument.
LCA has delivered to Summit a correct and complete copy of each
agreement listed in Section 4.13 of the LCA Disclosure Schedule
relating in any way to its laser refractive surgery centers, and
upon request, shall deliver to Summit a correct and complete copy of
each other written agreement listed in Section 4.13 of the LCA
Disclosure Schedule (as amended to date) and a written summary
setting forth the terms and conditions of each oral agreement
referred to in Section 4.13 of the LCA Disclosure Schedule. With
respect to each LCA Material Contract and except as set forth in
Section 4.13 of the LCA Disclosure Schedule, (a) the LCA Material
Contract is legal, valid, binding, enforceable and in full force and
effect, (b) no material breach, default, termination or loss or
change of rights or benefits shall occur with respect to such LCA
Material Contract as a result of the consummation of the
transactions contemplated hereby, (c) LCA is not, and to LCA's
Knowledge no other party is, in material breach or default, and no
event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification,
or acceleration, under an LCA Material Contract, (d) no party has
repudiated any provision of an LCA Material Contract and (e) LCA has
not icurred any penalty or similar charges for delays in delivery of
any product or service or any indemnification or warranty
obligations under such LCA Material Contract. Except as disclosed
in Section 4.13 of the LCA Disclosure Schedule, all contracts,
understandings and arrangements between LCA and Stephen N. Joffe
(and his Affiliates)(a) have been disclosed in LCA's annual report
on Form 10-KSB for the fiscal year ended December 31, 1996 or in the
LCA Financial Statements for the fiscal year ended December 31,
1996, including the notes thereto, or the LCA Proxy Statement,
whether or not such contracts, understandings and arrangements meet
the criteria of materiality set forth in this Section 4.13 and (b)
reflect arms'-length transactions, in each case at fair market value
for the relevant services, goods or property.
4.14 Litigation. Section 4.14 of the LCA Disclosure Schedule sets
forth each instance in which LCA (a) is subject to any outstanding
injunction, judgment, order, decree, ruling or charge or (b) is a
party or is threatened in writing to be made a party to any action,
suit, proceeding, hearing or investigation of, in, or before any
court or quasi judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator.
4.15 Activities in LCA Common Stock. To LCA's Knowledge, neither
LCA nor any of its Affiliates, nor any Person acting on behalf of
either or all of LCA or any of its Affiliates, have at any time
engaged in any purchase, sale, transfer, hedging, derivative or
other activities of any kind relating to the LCA Common Stock that
constitutes, or reasonably could be construed as constituting, a
manipulative or deceptive device or contrivance in violation of
applicable federal or state securities laws or common law.
4.16 Disclosure. The representations and warranties contained in
this Article 4 do not contain any untrue statement of a material
fact or, in light of any other information regarding LCA contained
in this Agreement, omit to state any material fact necessary in
order to make the statements and information contained in this
Article 4 not misleading.
4.17 Incorporation. Each item of disclosure contained in a numbered
section of the RCII Disclosure Schedule shall be deemed incorporated
by reference in each other numbered section of the RCII Disclosure
Schedule, as if fully set forth therein.
ARTICLE V
COVENANTS
5.1 Conduct of Business. From and after the date of this Agreement
(and with respect to LCA from and after the date of filing of its
most recent Annual Report on Form 10-K with the SEC) through the
Closing Date, except as expressly contemplated or permitted by this
Agreement, each of RCII and LCA shall (a) conduct its business in
the Ordinary Course of Business, and(b) use reasonable efforts to
maintain and preserve its business organizations, assets, employees
and advantageous business relationships.
5.2 Access to Premises and Information. Prior to Closing, each
party shall permit the other party and their respective authorized
representatives to have reasonable access, during regular business
hours, to their premises and documents, books and records, and such
financial and operating data and other information as a party may
reasonably request (with respect to Summit solely relating to RCII),
and to make copies at their own expense.
5.3 Fulfillment of Conditions. The parties will use their best
efforts to bring about the fulfillment of each of the conditions
precedent to the obligations of the other party to close the
transactions contemplated by this Agreement, and will render
reasonable assistance to the other party as requested by such other
party to enable it to fulfill its obligations hereunder. Summit and
LCA each shall give notice to the other party, by telecopy, when
they, respectively, have satisfied all of the conditions to the
other party's obligation to close for which they, respectively, are
responsible (a "Conditions Notice").
5.4 Forbearances. Prior to Closing, neither LCA, on the one hand,
nor RCII, on the other, shall, without the prior written consent of
the other party:
5.4.1 Other than in the Ordinary Course of Business incur any
indebtedness for borrowed money, assume, guarantee, endorse or
otherwise become responsible for the obligations of any other
Person, or make any loan or advance to any other Person;
5.4.2 Issue or grant any rights with respect to issuance of, any
shares of its capital stock, or adjust, split, combine or reclassify
any capital stock, make, declare or pay any dividend or make any
other distribution on, or redeem, purchase or otherwise acquire, any
shares of its capital stock, except for issuance of shares of LCA
Common Stock or RCII Common Stock, as the case may be, pursuant to
the exercise of stock options outstanding on the date of this
Agreement and which (a) in the case of LCA, are listed on Section
4.2.1 and or 4.2.4 of the LCA Disclosure Schedule and (b) in the
case of RCII are contemplated under Section 5.11 hereof, and except
that LCA may grant options in the Ordinary Course of Business under
the LCA Option Plans to directors and employees, except executive
employees listed in the LCA Proxy Statement;
5.4.3 Other than in the Ordinary Course of Business sell, transfer,
mortgage, encumber or otherwise dispose of any of its properties or
assets, or cancel, release or assign any indebtedness to any Person;
5.4.4 Make any material investment in another Person, either by
purchase of stock or securities, contributions to capital, property
transfers or otherwise;
5.4.5 Except in the Ordinary Course of Business, enter into, amend
or terminate any material contracts or agreements, including,
without limitation, any agreements of employment, stock or asset
sale, acquisition, merger, consolidation or other business
acquisition, disposition or combination, or make any change in any
material leases or contracts; or
5.4.6 Amend its Certificate of Incorporation or By-Laws.
5.5 No Transactions in LCA Common Stock. Except as otherwise
expressly permitted by this Agreement, neither LCA nor any of its
Affiliates, nor Summit nor any of its Affiliates, shall have engaged
in any transactions directly or indirectly involving LCA Common
Stock, including, without limitation, purchases, sales, transfers,
dispositions, transactions in derivatives, pledges or grants of
options, proxies or voting rights.
5.6 Advice of Changes. The parties shall promptly advise the other
party of any change or event having a Material Adverse Effect on it
(with respect to Summit solely relating to RCII) or which it
believes would or would be reasonably likely to cause or constitute
a material breach of any of their respective representations,
warranties or covenants hereunder.
5.7 No Restrictions on Summit's Conduct of Business. LCA
acknowledges and agrees that the covenants, obligations and
restrictions contained in this Article V and elsewhere in this
Agreement, as they relate to activities involving Summit, relate
solely to Summit in its capacity as shareholder of RCII, and not
generally to Summit and its business and assets. Except as
expressly provided herein, there shall be no express or implied
limitation on Summit's ability to conduct its business, other than
as it relates solely to RCII, whether or not in the Ordinary Course
of Business.
5.8 Public Announcement. Neither Summit and RCII, on the one hand,
nor LCA, on the other, nor any of their respective officers,
employees, representatives or agents, will make any public
announcement or issue any press release regarding this Agreement and
the transactions contemplated hereby, without the advance consent of
the other party, provided, however, that any party may make any
announcements that, upon advice of counsel and after notice to the
other party, it believes to be necessary to comply with the
disclosure obligations under any federal or state securities laws or
the rules and regulations of any self-regulatory organization by
which such party is bound.
5.9 HSR Act Compliance. Each of Summit and LCA represents that it
has sent for filing with the Federal Trade Commission and the United
States Department of Justice a Premerger Notification and Report
Form with respect to the Acquisition. Summit and LCA shall each
prepare and file all such other documents with the Federal Trade
Commission and the United States Department of Justice as are
required for the parties to comply with the HSR Act, and shall
promptly furnish all material thereafter requested by any of the
regulatory agencies having jurisdiction over such filings. Each of
the parties represents that it has not requested an acceleration of
the applicable waiting period under the HSR Act, and agrees that it
shall not make such a request for acceleration unless the parties
shall mutually agree to make such request.
5.10 LCA SEC Reports. Any reports, forms and other documents filed
by LCA with the SEC after the date of this Agreement (a) will be
prepared in all material respects in accordance with, and will
comply with, the requirements of the 1933 Act or the 1934 Act, as
the case may be, and (b) will not at the time they are filed contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
5.11 RCII Option Holders. RCII shall use its reasonable best
efforts to cause each of the holders (the "Option Holders") of
options to purchase shares of RCII Common Stock (the "RCII Options")
to exercise the RCII Options and acquire shares of RCII Common Stock
(the "Option Shares") and sell the Option Shares to LCA
simultaneously with consummation of the Acquisition. Any Option
Holder so electing (a "Selling Shareholder") shall, as of the
Closing Date, (a) sell, assign and transfer the Option Shares (the
"Selling Shareholder Shares") to LCA for the Stock Consideration
contemplated under Section 2.3 hereof, (b) make the representations
and warranties to LCA contained in Sections 3.1.3 and 3.4.1, revised
to relate solely to the Selling Shareholders, upon LCA making to
them the representations and warranties contained in Sections 4.2.5
and 4.10 hereof and agreeing to register the shares of LCA Common
Stock constituting the Stock Consideration pursuant to the Selling
Shareholder Registration Statement as provided in Section 9.4
hereof, and (c) deliver to LCA a stock certificate representing the
Selling Shareholder's Option Shares, duly endorsed for transfer.
LCA agrees to include all shares of LCA Common Stock constituting
the Stock Consideration (the "Selling Shareholder Registrable
Shares") in a registration statement under the 1933 Act to permit
resale of such Selling Shareholder Registrable Shares by the Selling
Shareholders, as provided in Section 9.4 hereof.
5.12 NASDAQ Listing. LCA shall apply for and use its best efforts
to obtain, prior the Closing Date, a listing for the trading of the
LCA Common Stock (including the shares of LCA Common Stock that
constitute the Stock Consideration) on the NASDAQ National Market
System.
5.13 Business Restrictions. Prior to the date that is the earlier
of (i) three (3) years after the date of this Agreement, and (ii)
the expiration of the Shareholders' Agreement, Summit shall not own
or operate laser vision correction centers. This shall not,
however, restrict Summit in any way from providing support services
to its customers, including without limitation, leasing of laser
systems, marketing support and results analysis.
ARTICLE VI
CONDITIONS TO LCA'S
OBLIGATION TO CLOSE
The obligation of LCA to consummate the Acquisition and the other
transactions contemplated by this Agreement is subject to
satisfaction or waiver by LCA, on or prior to the Closing Date, of
the following conditions:
6.1 Representations and Warranties; Covenants. The representations
and warranties of Summit set forth in this Agreement shall be true
and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date, as
though made on and as of the Closing Date, except as contemplated in
Section 5.11 hereof. RCII and Summit shall have complied with all
of their obligations under this Agreement which are to be performed
or complied with by them on or prior to the Closing, including
without limitation covenants contained in Article V hereof. LCA
shall have received an officer's certificate signed on behalf of
Summit to the foregoing effect.
6.2 RCII Cash Balance. RCII shall have a cash balance of not less
than Ten Million Dollars ($10,000,000) on the Closing Date.
6.3 Third Party Consents. Summit and RCII shall have obtained the
third party consents to the Acquisition called for under those RCII
Material Contracts identified in Section 3.12 of the RCII Disclosure
Schedule.
6.4 No Injunctions or Restraints; Illegality. No order, injunction
or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of
the Acquisition or any of the other transactions contemplated by
this Agreement shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered,
promulgated or enforced which prohibits, restricts or makes illegal
consummation of the Acquisition or any of the other transactions
contemplated by this Agreement.
6.5 Deliveries at Closing. At Closing, Summit and RCII shall have
executed and delivered all of the agreements, instruments and
documents, and made other deliveries, required of them under Section
8.1 and such other agreements, instruments and documents LCA may
reasonably request in order to fulfill the intents and purposes of
this Agreement.
6.6 No Material Adverse Change. Without limiting the generality of
Section 6.1, since the Most Recent RCII Fiscal Year End, no Material
Adverse Effect with respect to RCII shall have occurred, nor shall
any event or events have occurred which could reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect on RCII. LCA shall have received an officer's
certificate signed on behalf of Summit to the foregoing effect.
6.7 HSR Act. The waiting period under the HSR Act shall have
expired and there shall not be any outstanding order of a court of
competent jurisdiction restraining the consummation of the
transactions contemplated hereby.
6.8 RCII Stock. As of the Closing Date, (a) Summit shall own no
less than ninety six percent (96%) of the then issued and
outstanding shares of RCII Common Stock and (b) any Selling
Shareholders shall have complied with the obligations set forth in
Section 5.11(a), (b) and (c) hereof.
ARTICLE VII
CONDITIONS TO SUMMIT'S AND RCII'S
OBLIGATION TO CLOSE
The obligation of RCII and Summit to consummate the Acquisition and
the other transactions contemplated by this Agreement is subject to
satisfaction or waiver by Summit and RCII, on or prior to the
Closing Date, of the following conditions:
7.1 Representations and Warranties; Covenants. The representations
and warranties of LCA set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement
and (except to the extent such representations and warranties speak
as of an earlier date) as of the Closing Date, as though made on and
as of the Closing Date. LCA shall have complied with all of its
obligations under this Agreement which are to be performed or
complied with by it on or prior to the Closing, including without
limitation covenants contained in Article V hereof. RCII and Summit
shall have received an officer's certificate signed on behalf of LCA
to the foregoing effect.
7.2 Board of Directors. The Board of Directors of LCA shall consist
of the following five (5) members: Stephen N. Joffe, John C. Hassan,
John H. Gutfreund, Ronald Herskowitz and William O. Coleman. If
Ronald Herskowitz shall not have become employed by LCA pursuant to
the Employment Documents, he shall not serve as a director of LCA
and the fifth director shall be mutually agreed to between LCA and
Summit.
7.3 Restructuring of Bank Debt. LCA shall have restructured its
bank indebtedness in a manner acceptable to Summit in its sole
discretion. Without limiting the generality of the foregoing, the
restructured facility will not be acceptable to Summit unless it has
a maturity date of not less than thirteen (13) months from the date
of restructuring, provides for LCA property to serve as collateral
only for indebtedness as to which LCA is the sole, primary obligor
and permits borrowings of not less than the current facility.
7.4 Shareholder Debt. LCA shall not have repaid any of the
Shareholder Debt (including payments of principal and interest) from
and after the date of this Agreement through the Closing Date and
LCA shall have delivered to Summit, on or prior to the Closing Date,
evidence that the instruments representing Shareholder Debt have
been legended as required by Section 9.3.
7.5 No Injunctions or Restraints; Illegality. No order, injunction
or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of
the Acquisition or any of the other transactions contemplated by
this Agreement shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered,
promulgated or enforced which prohibits, restricts or makes illegal
consummation of the Acquisition or any of the other transactions
contemplated by this Agreement.
7.6 Deliveries at Closing. At Closing, LCA shall have executed and
delivered all of the agreements, instruments and documents, and made
other deliveries, required of them under Section 8.2 and such other
agreements, instruments and documents RCII and Summit may reasonably
request in order to fulfill the intents and purposes of this
Agreement.
7.7 No Material Adverse Change. Without limiting the generality of
Section 7.1, since the Most Recent LCA Fiscal Year End, no Material
Adverse Effect with respect to LCA shall have occurred, nor shall
any event or events have occurred which could reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect on LCA. RCII and Summit shall have received an
officer's certificate signed on behalf of LCA to the foregoing
effect.
7.8 HSR Act. The waiting period under the HSR Act shall have
expired and there shall not be any outstanding order of a court of
competent jurisdiction restraining the consummation of the
transactions contemplated hereby.
7.9 Rights and Preferences of Interim Series Preferred Stock. LCA
shall have amended, and shall have obtained all necessary consents
and taken all necessary corporate action to amend the Certificates
of Designations, Preferences and Rights (the "Certificates of
Designations") of the Interim Series Preferred Stock to (i)
establish the "per share Conversion Price of Interim Series Class B
Preferred Stock" in Section 4(a) of the Certificates of Designations
at Three and 50/100 Dollars ($3.50) per share, (ii) to delete
Section 4(b) from the Certificates of Designations, and (iii) to
delete the two parenthetical phrases in Section 4(c) of the
Certificates of Designations.
ARTICLE VIII
DELIVERIES AT CLOSING
8.1 Summit and RCII Deliveries. At the Closing, Summit shall
deliver the following, duly executed:
8.1.1 Certificate of an officer of Summit contemplated under
Sections 6.1 and 6.6.
8.1.2 One or more stock certificates representing the shares of
Subject Stock acquired by LCA, duly endorsed for transfer.
8.1.3 An opinion of Goldstein & Manello, P.C., counsel to Summit
and RCII, dated as of the Closing Date and addressed to LCA,
substantially in the form attached as Exhibit A hereto.
8.1.4 Contracts pursuant to which Summit will provide maintenance
services to LCA for all Summit excimer laser systems owned or leased
by LCA as of the Closing Date, including without limitation those
owned or leased by LCA and by RCII prior to the Acquisition, such
contracts to be in Summit's standard form (the "Service Contracts").
The Service Contracts shall have a term of three (3) years and
require fees of $80,000 per laser system for such three (3) year
period. Notwithstanding the foregoing, with respect to no more than
five (5) such service contracts, if during the term of a service
contract LCA discontinues all use of the laser system subject to a
service contract (except in connection with the closing of a laser
vision correction center), and does not replace such laser system,
either at the original location of such laser system or at a new
location, with any Summit excimer laser system, then LCA may
terminate such contract.
8.1.5 A shareholders' agreement between Summit, Stephen N. Joffe,
Sandra F.W. Joffe and any holder of five percent (5%) or more of LCA
Common Stock in the form attached as Exhibit B (the "Shareholders'
Agreement").
8.1.6 The Registration Rights Agreement in the form attached as
Exhibit C.
8.1.7 The documents contemplated under Section 5.11.
8.2 LCA Deliveries. At the Closing, LCA shall deliver the
following, duly executed:
8.2.1 Certificate of an officer of LCA contemplated under Sections
7.1 and 7.7.
8.2.2 One or more certificates representing the Stock
Consideration, issued in the names and amounts designated by Summit
no less than three (3) business days prior to the Closing.
8.2.3 An opinion of Dinsmore & Shohl, L.L.P., counsel to LCA, dated
as of the Closing Date and addressed to Summit and RCII,
substantially in the form attached as Exhibit D hereto.
8.2.4 The Service Contracts.
8.2.5 The Shareholders' Agreement.
8.2.6 The Registration Rights Agreement.
8.2.7 The Employment Documents in the form attached as Exhibit E
hereto, provided that LCA shall be relieved of its obligation to
execute and deliver the Employment Documents if Mr. Herskowitz does
not, at or prior to the Closing, execute the Employment Documents.
ARTICLE IX
POST-CLOSING OBLIGATIONS
9.1 Upgrade of Summit Laser Systems. Summit shall, at LCA's
request, and subject to the execution and delivery of Summit's
standard sales contract, upgrade any Summit Apex laser system to an
Apex Plus laser system. The charge per system for any such upgrade
shall be the lesser of (a) Fifty Five Thousand Dollars ($55,000) and
(b) Summit's cost of the upgrade.
9.2 Release of Summit Guaranties. LCA shall use its best efforts to
obtain releases of Summit's guaranties of RCII real estate leases,
as identified in Section 3.12 of the RCII Disclosure Schedule,
including without limitation, offering its own guaranties in place
of Summit's. LCA shall indemnify, defend and hold Summit harmless
from and against any Liabilities Summit may incur from and after the
Closing Date with respect to any such guaranties from which it has
not been released.
9.3 Payment of LCA Shareholder Debt. Regardless of the payment
terms contained in the instruments representing the LCA Shareholder
Debt, LCA shall not make principal payments under the LCA
Shareholder Debt unless the earnings of LCA for the prior fiscal
year (before taxes, amortization of goodwill and depreciation, net
of capital expenditures for such fiscal year) exceeded One Million
Dollars ($1,000,000), and then payment may be made only to the
extent of twenty-five percent (25%) of such excess. LCA shall cause
the instruments representing the LCA Shareholder Debt to contain a
legend to the effect of the foregoing.
9.4 Registration of Distribution Shares and Selling Shareholder
Registrable Shares.
9.4.1 Within sixty (60) days of the Closing, LCA shall prepare, file
and cause to become effective one or more registration statements
under the 1933 Act registering (a) the Distribution Shares for
distribution by Summit pro rata to its shareholders (the
"Distribution Shares Registration Statement"), and (b) the Selling
Shareholder Registerable Shares (either separately or in combination
with the Distribution Shares Registration Statement the "Selling
Shareholders Registration Statement"). If LCA is unable, after
using its best efforts throughout such sixty-day period, to cause
the Distribution Shares Registration Statement and/or the Selling
Shareholders Registration Statement to become effective, the sixty-day period
shall be extended for an additional thirty (30) days,
provided that LCA continues to use its best efforts to bring about
such effectiveness throughout such additional thirty-day period.
9.4.2 LCA shall consult with Summit throughout the registration
process, and shall permit Summit to (a) review and comment upon all
drafts of the Registration Statements and preliminary and final
prospectuses contained therein, and all amendments and supplements
thereto, prior to filing with the SEC, and(b) conduct such due
diligence regarding the combined business operations of LCA and RCII
as Summit, in its reasonable discretion, shall determine to be
necessary and appropriate, including, without limitation, the
inspection and copying of corporate documents of LCA. The
Registration Statements, and the preliminary and final prospectuses
contained therein, and all amendments and supplements thereto, shall
be satisfactory in form and substance to Summit and its counsel
before being filed.
9.4.3 Unless application of state securities laws (other than anti-fraud laws
and filing requirements) is preempted by federal
legislation under the National Securities Markets Improvement Act of
1996, LCA further shall register or otherwise qualify the
Distribution Shares and the Selling Shareholder Registrable Shares
covered by the Registration Statements under the applicable
securities or "blue sky" laws of those jurisdictions which purport
to regulate distributions of securities as contemplated by the
Registration Statements.
9.4.4 LCA further shall (a) furnish to Summit a copy of all
documents filed and all correspondence from and to the SEC in
connection with the Registration Statements, (b) insure the
obtaining of any necessary approvals from the National Association
of Securities Dealers, Inc. and (c) cause the Distribution Shares
and the Selling Shareholder Registrable Shares to be listed with
NASDAQ.
9.4.5 LCA shall use its best efforts to maintain the effectiveness
of the Registration Statements until all of the Distribution Shares
have been distributed by Summit to its shareholders and then, if
later, until the earlier to occur of (a) completion of the sale of
all Selling Shareholder Registrable Shares registered thereunder and
(b) one year from the effective date of the Selling Shareholders
Registration Statement. LCA shall promptly notify Summit of any
material event or change in circumstances that renders any
Registration Statement or prospectus incomplete, inaccurate or
misleading in any material way, and LCA promptly will amend the
Registration Statements and the prospectuses contained therein as
and to the extent necessary to comply with all applicable securities
laws.
9.4.6 All expenses of such registration, including without
limitation filing and registration fees and expenses of complying
with state securities laws, shall be borne by LCA.
9.4.7 LCA shall effect the registration of the Distribution Shares
in accordance with Summit's intended method of distribution to its
shareholders.
9.4.8 In connection with the Distribution Shares Registration
Statement and the Selling Shareholders Registration Statement, LCA
shall provide to Summit and the Selling Shareholders such
representations, warranties, covenants, indemnifications, opinions
of counsel, accountants' "comfort letters" (if obtainable) and such
other protections as are customarily provided to underwriters and
selling shareholders, as the case may be, in public underwritten
offerings, including but not limited to, those provided in Section
7 of the Registration Rights Agreement.
9.4.9 LCA shall, as promptly as practicable, notify Summit, at any
time when a prospectus relating to the sale of the Distribution
Shares is required by law to be delivered in connection with sales
by an underwriter or dealer, of the occurrence of any event
requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of the
registered Distribution Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, and as promptly as practicable make
available to Summit and to the underwriters any such supplement or
prospectus.
9.5 NASDAQ Listing. If the LCA listing for the trading of the LCA
Common Stock (including the shares of LCA Common Stock that
constitute the Stock Consideration) on the NASDAQ National Market
System has not been completed prior to Closing, LCA shall continue
to use its best efforts to obtain such listing as soon as
practicable after the Closing.
9.6 Compliance With SEC Disclosure Requirements. From and after the
Closing Date and with respect solely to the Acquisition and the
other transactions contemplated by this Agreement, each of LCA and
Summit shall comply with all disclosure obligations under any
federal or state securities laws or the rules and regulations of any
self-regulatory organization by which such party is bound. At all
times that LCA has a class of equity securities registered under the
1934 Act, LCA shall comply with all disclosure obligations under any
federal or state securities laws or the rules and regulations of any
self-regulatory organization by which LCA is bound.
9.7 Distribution of Distribution Shares. Subject to compliance with
Section 9.4 hereof, Summit shall, as soon as practicable after the
effective date of the Distribution Shares Registration Statement,
distribute to its shareholders, as a dividend, the Distribution
Shares.
9.8 Occupancy of Summit Space. RCII may continue to occupy the
space it currently occupies at Summit's facility at 21 Hickory
Drive, Waltham, Massachusetts for ninety (90) days after the Closing
Date, upon such terms and conditions to which the parties shall
mutually agree. During such period, LCA shall use its best efforts
to obtain alternate space and to relocate RCII.
9.9 Post-Approval Support Services. After the Closing Date, LCA
shall cause RCII to continue to comply with its existing obligations
to Summit to provide post-approval support services, related to
Summit's obligation to provide information to the U.S. Food and Drug
Administration.
9.10 Interim Series Preferred Stock. LCA shall not amend the rights
and preferences of the Interim Series Preferred Stock without
Summit's prior written approval in each instance for a period
commencing on the date of this Agreement and terminating on the
earlier of (i) five (5) years from the date of this Agreement and
(ii) the date on which Summit owns less than 5% of LCA's
outstanding Common Stock.
9.11 Access to Records. After the Closing Date, LCA shall have the
right to review and copy, at reasonable times on reasonable notice
to Summit, RCII records which predate the Closing Date.
ARTICLE X
INDEMNIFICATION; BREACH
10.1 Indemnity Obligations of Summit. Summit hereby agrees to
indemnify and hold LCA harmless from, and to reimburse LCA for, any
and all losses, damages, deficiencies, claims, liabilities,
obligations, suits, actions, fees, costs, penalties, charges and
expenses (including, without limitation, reasonable attorneys' fees)
of any nature whatsoever (collectively, "Losses"), suffered or
incurred by LCA resulting from or in connection with breach of any
representation, warranty, covenant or agreement of Summit contained
in this Agreement or any document, agreement, instrument or
certificate delivered or filed pursuant hereto.
10.2 Indemnity Obligations of LCA. LCA hereby agrees to indemnify
and hold Summit harmless from, and to reimburse Summit for, any and
all Losses suffered or incurred by Summit resulting from or in
connection with breach of any representation, warranty, covenant or
agreement of LCA contained in this Agreement or any document,
agreement, instrument or certificate delivered or filed pursuant
hereto.
10.3 Procedures for Indemnification for Third Party Claims. If any
third party shall make a claim for which Summit or LCA is entitled
to indemnification under Section 10.1 or 10.2 hereof, the following
procedures shall apply:
10.3.1 Within thirty (30) days after receipt by an Indemnified Party
of any third party notice of any demand, claim or circumstance that,
with the lapse of time, would or could give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding
or investigation with respect to which the Indemnified Party intends
to seek indemnification hereunder ("Asserted Liability"), the
Indemnitee shall give notice thereof (the "Claims Notice") to the
Indemnifying Party. The Claims Notice shall describe the Asserted
Liability in reasonable detail and shall indicate the amount
(estimated, if necessary) of the indemnification claim that is being
or may be asserted by the Indemnified Party.
10.3.2 Promptly after receipt of a Claims Notice, but no later than
fifteen (15) days after such receipt, the Indemnifying Party shall
proceed to compromise or defend such Asserted Liability at its own
expense, employing counsel of its own choosing reasonably
satisfactory to the Indemnified Party. The Indemnifying Party shall
immediately notify the Indemnified Party of the initiation of such
compromise or defense, and shall keep the Indemnified Party informed
as to the status and progress of such compromise or defense. The
Indemnified Party shall reasonably cooperate in the compromising of
or the defending against such Asserted Liability, and shall have the
right to participate in any such compromise or defense, and such
participation shall not limit, impair or affect its rights to
indemnification hereunder. If within fifteen (15) days after
delivery of the Claims Notice, the Indemnified Party has not
received from the Indemnifying Party any notice of the initiation of
the defense or compromise of the Asserted Liability, the Indemnified
Party shall be free to compromise or defend the Asserted Liability
at its sole election at the expense and risk of the Indemnifying
Party, and with full right of indemnification as provided herein.
10.3.3 If any Indemnifying Party reasonably determines that its
interests in any Asserted Liability conflict or may conflict with
those of any Indemnifying Party, it may retain separate counsel and
separately participate in the defense or compromise of any Asserted
Liability, with full right of indemnification with respect to any
expense related thereto, including attorney's fees.
10.3.4 All parties shall make available to each other party any
books, records or other documents within its control which are
necessary or useful for the defense or compromise of any Asserted
Liability, and shall in all cases cooperate fully with one another
in the defense or compromise of any Asserted Liability. In the
event that the interests of any one or more parties conflict with
the interests of any one or more other parties, such cooperation
shall not be required if it would jeopardize the defense of any such
party or parties.
10.4 Claims by Summit or LCA. Summit and LCA shall be entitled to
bring a direct claim against the other in connection with any breach
of any provision of this Agreement, including without limitation,
any claim for indemnification for any such breach under Section 10.1
or 10.2 hereof, as the case may be.
10.5 Survival of Representations and Warranties. All
representations and warranties and, except as otherwise contemplated
in this Agreement, all covenants and agreements of the parties
contained in or made pursuant to this Agreement, and the rights of
the parties to seek indemnification with respect thereto, or
otherwise to seek recovery with respect to a breach thereof, shall
survive the Closing and shall expire eighteen (18) months after the
Closing Date. The expiration of indemnification rights shall not
relate to any claim made by an Indemnified Party or claiming party
under Section 10.3 or 10.4 until such claim has been fully and
finally resolved.
10.6 Limitations on Indemnification and Damages. An Indemnifying
Party, both in its capacity as an indemnitor and as a party to this
Agreement, shall not be liable to an Indemnified Party, both in its
capacity as an indemnitee and as a party to this Agreement, unless
the aggregate amount of all Losses suffered by the Indemnified Party
in any capacity exceed $2,000,000 (the "Claims Basket"), and shall
not be liable for any individual Loss suffered by the Indemnified
Party in any capacity unless the amount of such Loss exceeds
$200,000 (the "Claims Minimum"). At such time as the Claims Basket
has been exceeded, the Indemnifying Party shall be liable to the
Indemnified Party for all Losses that are in excess of the Claims
Minimum, without further reference to the Claims Basket.
Notwithstanding the foregoing, claims by an Indemnified Party under
Sections 3.2 , 3.4.1, 4.2 and 4.10 of this Agreement shall not be
subject to the Claims Basket.
10.7 Subrogation. Any Indemnifying Party which indemnifies an
Indemnified Party for any matter pursuant to this Article X shall,
upon payment in full of the amount owed with respect to such matter,
be subrogated to the rights of such Indemnified Party against all
other Persons with respect to such matter, and, in its own name or
in the name of the Indemnified Party, may assert any claim against
any such Person with the Indemnified Party may have with respect
thereto.
ARTICLE XI
TERMINATION
This Agreement may be terminated in the following manner:
11.1 Mutual Agreement. The parties may terminate this Agreement by
mutual written agreement.
11.2 Termination for Breach. Summit and RCII, on the one hand, and
LCA, on the other, may terminate this Agreement at any time prior to
the Closing if there has been (a) a material breach of a
representation or warranty of the other party to this Agreement or
(b) a material breach of a covenant, agreement or undertaking to be
performed by the other party under this Agreement. Any party
seeking to terminate this Agreement under this Section 11.2 shall
give written notice to the other party specifying the basis for the
claim of breach, and the party receiving such notice shall have
fifteen (15) days to attempt to cure such breach, unless the Outside
Closing Date is less than fifteen days after the date of such
notice, in which case the receiving party shall have through the
Outside Closing Date to attempt such cure.
11.3 Failure of Condition Precedent. Summit and RCII, on the one
hand, and LCA, on the other, may terminate this Agreement as of the
Outside Closing Date, if any of the conditions precedent to such
party's obligation to close have not been met on or prior to the
Outside Closing Date.
11.4 Effect of Termination. Upon any termination of this Agreement,
this Agreement shall terminate and be of no further force and effect
without any further liability of any party, provided, however, that
no termination of this Agreement shall relieve or release any of the
parties hereto from liability with respect to any breaches or
violations of any representations, warranties, covenants or
agreements contained in this Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses. Each party to this Agreement shall bear its
own expenses, including, without limitation, legal expenses,
incurred in connection with the negotiation, drafting and
consummation of the Agreement and like matters. Notwithstanding the
foregoing, LCA shall pay all stock transfer Taxes, sales Taxes,
documentary stamp Taxes, recording charges and other similar Taxes
arising with respect to the transactions consummated under this
Agreement. Summit hereby represents that it has paid the filing
fees required to be paid under the HSR Act.
12.2 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
without application of principles of conflict of laws, any suit for
the enforcement of this Agreement may be brought in the courts of
such state and all parties consent to the exclusive jurisdiction of
such courts and to service of process in any such suit being made
upon any party by mail at their respective addresses set forth in
below.
12.3 Notices. All notices hereunder shall be in writing and shall
be deemed to have been duly given (i) when delivered in hand, (ii)
five (5) business days after dispatch by certified mail, postage
prepaid, return receipt requested, (iii) one (1) business day after
dispatch via a courier service which guaranties delivery within one
business day or (iv) upon receipt of confirmation of a telecopy to
a party, in each case to the parties at their respective addresses
set forth below, or to such other address as a party may specify by
notice:
If to Summit or RCII: If to LCA:
Summit Technology, Inc. LCA-Vision, Inc.
21 Hickory Drive 7840 Montgomery Road
Waltham, MA 02154 Cincinnati, OH 45236
Attn: Chief Executive Officer Attn: President
with a copy to: with a copy to:
Goldstein & Manello, P.C. Dinsmore & Shohl LLP
265 Franklin Street 1900 Chemed Center
Boston, MA 02110 255 East Fifth Street
Attn: Lauren Jennings, Esq. Cincinnati, OH 45202-3172
Attn: Charles F. Hertlein, Jr., Esq.
12.4 Waiver. All of the parties hereby waive any rights they may
have for a rescission of the Acquisition and the other transactions
contemplated by this Agreement, whether by reason of a claim under
securities laws, common law, contract or otherwise. Waiver of any
provision of this Agreement, in whole or in part, in any one
instance shall not constitute a waiver of any other provision in the
same instance, nor any waiver of the same or another provision in
another instance, but each provision shall continue in full force
and effect with respect to any other then-existing or subsequent
breaches.
12.5 Binding Effect. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors,
heirs, representatives and assigns, except that no party may
delegate any of his or its obligations under this Agreement or
assign this Agreement without the prior written consent of the other
party.
12.6 Entire Agreement. This Agreement, together with the
Confidentiality Agreement dated October 18, 1996 (the
"Confidentiality Agreement"), the Shareholders' Agreement and the
Registration Rights Agreement constitutes the entire agreement
between the parties hereto with respect to its subject matter,
superseding all prior negotiations, communications, contracts and
other agreements, courses of dealing and the like between or among
the parties.
12.7 Survival of Confidentiality Agreement. The Confidentiality
Agreement shall survive execution of this Agreement and shall remain
binding on the parties hereto through any Closing and any
termination of this Agreement, in accordance with its terms.
12.8 Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and this Agreement shall be
interpreted as if such provision or provisions were not a part
hereof.
12.9 Amendment. This Agreement may be amended, modified or
terminated, and any right under this Agreement may be waived in
whole or in part, only by a writing signed by all parties hereto.
12.10 Exhibits and Schedules. All Exhibits and Schedules to this
Agreement shall be incorporated in and deemed for all purposes a
part of this Agreement.
12.11 Third Party Beneficiaries. Nothing in this Agreement, whether
express or implied, is intended to or shall be deemed to confer upon
any Person other than the parties hereto any rights or remedies,
under this Agreement or otherwise.
12.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
12.13 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
REMAINDER OF PAGE DELIBERATELY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
officers, have executed this Agreement under seal, as of the day and
year first above written.
SUMMIT TECHNOLOGY, INC. LCA-VISION INC.
By: /s/Robert J. Palmisano By:/s/Stephen N. Joffe
Chief Executive Officer President
REFRACTIVE CENTERS
INTERNATIONAL, INC.
By: /s/Robert J. Palmisano
Chief Executive Officer
The undersigned shareholders of LCA-Vision, Inc. hereby execute this
Acquisition Agreement solely with respect to the obligations
contained in Sections 7.9, 8.2.5 and 9.3.
/s/Stephen N. Joffe
Stephen N. Joffe
/s/Sandra F.W. Joffe
Sandra F.W. Joffe
<PAGE>
SCHEDULE A
DEFINITIONS
"Acquisition" has the meaning set forth in the recitals.
"Affiliate" means any director, officer or ten percent or greater
stockholder of a corporate Person, and any entity controlled by or
under common control with a Person, as well as a Person's immediate
family members.
"Agreement" means this Acquisition Agreement dated July 23, 1997.
"Asserted Liability" has the meaning set forth in Section 10.3.1.
"Certificates of Designations" has the meaning set forth in Section
7.9.
"Claims Basket" has the meaning set forth in Section 10.6.
"Claims Minimum" has the meaning set forth in Section 10.6.
"Claims Notice" has the meaning set forth in Section 10.3.1.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder, as amended, and in the case of any
referenced section of any such statute, rule or regulation, any
successor section thereto.
"Conditions Notice" has the meaning set forth in Section 5.3.
"Confidentiality Agreement" has the meaning set forth in Section
12.6.
"Distribution Shares" means those shares of the Stock Consideration
that Summit intends to distribute to its shareholders. The total
number of Distribution Shares shall be approximately Nine Million
Seven Hundred Thirty Two Thousand Six Hundred Twenty One
(9,732,621), but not less than Nine Million (9,000,000).
"Distribution Shares Registration Statement" has the meaning set
forth in Section 9.4.
"Employee Benefit Plans" means any employee pension plans (as
defined in section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) and employee welfare plans (as defined
in section 3(1) of ERISA).
"Employment Documents" means the documents setting forth the terms
and conditions of LCA's employment of Ronald Herskowitz with RCII,
including, without limitation, his position, compensation package
and stock options.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the regulations promulgated thereunder.
"Indemnified Party" means a party seeking indemnification from the
other party pursuant to Article X.
"Indemnifying Party" means a party from whom indemnification is
being sought pursuant to Article X.
"Interim Series Preferred Stock" has the meaning set forth in
Section 4.2.1.
"Knowledge" means actual knowledge of a Person and any information
that Person would have discovered by conducting a reasonable
investigation of the subject matter as to which information is being
sought, which investigation shall include, without limitation,
information obtained upon consultation with executive officers of
any corporation as to which Knowledge is imputed.
"LCA Common Stock" means the class of common stock of LCA, $0.001
par value per share, registered under Section 12(g) of the 1934 Act.
"LCA Financial Statements" has the meaning set forth in Section 4.4.
"LCA Material Contract" has the meaning set forth in Section 4.13.
"LCA Option Plans" means the LCA-Vision Inc. 1995 Long-Term Stock
Incentive Plan and the LCA-Vision Inc. Directors' Non-Discretionary
Stock Option Plan.
"LCA Preferred Stock" has the meaning set forth in Section 4.2.1.
"LCA Proxy Statement" has the meaning set forth in Section 4.5.11.
"LCA SEC Reports" has the meaning set forth in Section 4.6.1.
"LCA Shareholder Debt" has the meaning set forth in Section 4.11.
"Liability" means any liability or obligation of a Person, whether
absolute, accrued, contingent or otherwise, of a type and nature
that would be reported on a financial statement (including the notes
thereto) prepared in accordance with generally accepted accounting
principles and would be material, whether individually or in the
aggregate, to the consolidated financial condition or business of
the Person taken as a whole.
"Losses" has the meaning set forth in Section 10.1.
"Material Adverse Effect" means any change in or effect on the
assets, condition or prospects, financial or otherwise, of LCA or
RCII, as the case may be, which, when considered either singly or in
the aggregate together with all other adverse changes or effects
with respect to a party, is materially adverse to LCA or RCII, as
the case may be.
"May Financial Statements" has the meaning set forth in Section 4.4.
"Most Recent LCA Balance Sheet" means the balance sheet of LCA
contained within the LCA Financial Statements for the year ended
December 31, 1996.
"Most Recent LCA Fiscal Year End" has the meaning set forth in
Section 4.4.
"Most Recent RCII Balance Sheet" means the balance sheet of RCII
contained within the RCII Financial Statements for the year ended
December 31, 1996.
"Most Recent RCII Fiscal Year End" has the meaning set forth in
Section 3.6.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"1933" Act" means the Securities Act of 1933, as from time to time
amended.
"1934 Act" means the Securities Exchange Act of 1934, as from time
to time amended.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
"Option Holders" has the meaning set forth in Section 5.11.
"Option Shares" has the meaning set forth in Section 5.11.
"Outside Closing Date" means forty-five (45) calendar days after
execution of this Agreement.
"Per Share Consideration" means the quotient of (a) seventeen
million sixty five thousand five hundred seventy nine (17,065,579)
divided by (b) the sum of the number of shares of issued and
outstanding RCII Common Stock on the Closing Date plus the number of
shares of RCII Common Stock into which options to purchase shares of
RCII Common Stock are exercisable on the Closing Date.
"Person" means an individual, partnership, corporation, association,
joint stock company, trust, joint venture, unincorporated
organization, or governmental entity (or any department, agency, or
political subdivision thereof).
"RCII Common Stock" means common stock of RCII, $0.01 par value per
share.
"RCII Financial Statements" has the meaning set forth in Section
3.6.
"RCII Material Contracts" has the meaning set forth in Section 3.12.
"RCII Options" has the meaning set forth in Section 5.11.
"Registration Rights Agreement" has the meaning set forth in Section
8.1.6.
"Registration Statements" means the Distribution Shares Registration
Statement and the Selling Shareholders Registration Statement.
"SEC" means the United States Securities and Exchange Commission.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge or other security interest, other than (a) mechanic's,
materialmen's and similar liens, (b) liens for Taxes not yet due and
payable or for Taxes the taxpayer is contesting in good faith
through appropriate proceedings, (c) purchase money liens and liens
securing rental payments under capital lease arrangements and (d)
other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
"Selling Shareholder" has the meaning set forth in Section 5.11.
"Selling Shareholder Shares" has the meaning set forth in Section
5.11.
"Selling Shareholders Registrable Shares" has the meaning set forth
in Section 5.11.
"Selling Shareholders Registration Statement" has the meaning set
forth in Section 9.4.
"Service Contracts" has the meaning set forth in Section 8.1.4.
"Shareholders' Agreement" has the meaning set forth in Section
8.1.5.
"Stock Consideration" has the meaning set forth in Section 2.3.
"Subject Stock" has the meaning set forth in Section 2.1.
"Summit Retained Shares" means the shares of LCA Common Stock
representing Stock Consideration retained by Summit after
distribution of the Distribution Shares.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including
taxes under Code section 59A), customs, duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated
or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.
"Tax Returns" means any return, declaration, report, claim for
refund or information return relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
SCHEDULE B
RCII DISCLOSURE SCHEDULE
Not filed herewith but available on request
SCHEDULE C
LCA DISCLOSURE SCHEDULE
Not filed herewith but available on request
EXHIBIT A
FORM OPINION OF GOLDSTEIN & MANELLO, P.C.
Not filed herewith but available on request
EXHIBIT B
SHAREHOLDERS' AGREEMENT
This Shareholders' Agreement is made and entered into this 18th day
of August, 1997 by and between LCA-Vision Inc., a Delaware
corporation ("LCA"), Summit Technology, Inc., a Massachusetts
corporation ("Summit") and the LCA shareholders listed on Schedule
A hereto ("Shareholders").
WHEREAS, the LCA and Summit have entered into a certain Acquisition
Agreement dated as of even date herewith (the "Acquisition
Agreement") pursuant to which LCA is acquiring from Summit all of
its shares of common stock of Refractive Centers International,
Inc., a Delaware Corporation ("RCII"), in consideration for shares
of LCA common stock; and
WHEREAS, one of the conditions to the closing of the Acquisition
Agreement is the execution and delivery of this Shareholders'
Agreement.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings ascribed to them in the Acquisition
Agreement.
ARTICLE II
BOARD OF DIRECTORS
2.1 Nomination of Directors. For the term of this Agreement, the
Shareholders agree, consistent with their fiduciary duties in any
and all capacities as shareholders, officers and directors of LCA,
to cause LCA, whether itself or through its Board of Directors (the
"Board") or a committee thereof, (a) to set the number of directors
that constitute the full Board at five (5) and (b) to nominate
individuals for election to the Board at each annual meeting of the
shareholders of LCA in the manner provided in this Agreement (the
"Designated Nominees"). The following individuals shall be the
initial Designated Nominees:
Stephen N. Joffe
John C. Hassan
John H. Gutfreund
Ronald Herskowitz
William O. Coleman
2.2 Alternate Designated Nominees. If there is a vacancy in the
Board occurring between annual meetings, or if one or more of the
initial Designated Nominees shall decline to stand for election to
the Board, the Shareholders and Summit shall appoint one or more
alternate Designated Nominees (each an "Alternate Designated
Nominee") in the following manner. The Shareholders shall select an
individual to serve as the Alternate Designated Nominee, which
individual shall be independent both of LCA (except through proposed
service as a member of the Board) and of the Shareholders. The
selected individual shall be subject to Summit's approval, which
shall not unreasonably be withheld. Summit's approval shall be
deemed given if Summit has not responded to the Shareholders within
thirty (30) days of notice of the identity of the selected
individual. Upon selection and approval, such Alternate Designated
Nominee shall for all purposes be deemed a Designated Nominee under
this Agreement.
2.3 Voting of Shares. In any and all elections of directors of the
Board, whether in person or by proxy at a meeting of LCA
shareholders, or at a meeting of the Board called for the purpose of
filling a vacancy in the Board (to the extent not inconsistent with
the fiduciary duties of any director who is also a Shareholder), the
Shareholders and Summit shall vote all shares of LCA stock owned by
them to elect the Designated Nominees to the Board and shall vote
against any proposal that would violate any term or provision of
this Agreement.
ARTICLE III
COVENANTS OF SHAREHOLDERS
3.1 Payment of LCA Shareholder Debt. The Shareholders agree that
they will not accept, demand or request any payment on the LCA
Shareholder Debt unless the earnings of LCA for the prior fiscal
year (before taxes, amortization of goodwill and depreciation, net
of capital expenditures for such fiscal year) exceeded One Million
Dollars ($1,000,000), and agree that payment in such event may be
made only to the extent of twenty-five percent (25%) of such excess.
The Shareholders understand and agree that LCA shall cause the
instruments representing the LCA Shareholder Debt to contain a
legend to the effect of the foregoing.
3.2 Conversion of LCA Preferred Stock. The Shareholders agree that
the per share Conversion Price of the LCA Interim Series Preferred
Stock shall not be less than Three and 50/100 Dollars ($3.50) per
share.
3.3 Arms' Length Transactions. During the term of this Agreement,
none of the Shareholders shall enter into any transaction with LCA
unless such transaction is at fair market value and approved by a
majority of LCA's independent directors.
ARTICLE IV
MISCELLANEOUS
4.1 Binding Effect. This Agreement shall be binding upon the
parties hereto and their respective heirs, successors and assigns.
All shares of LCA Common Stock and LCA Preferred Stock at any time
owned by a party to this Agreement shall be subject to this
Agreement. Shares of LCA Common Stock and LCA Preferred Stock can
be transferred by a party only if the transferee of such shares
agrees to be bound by this Agreement, except for transfers by Summit
pursuant to or not in violation of this Agreement or the
Registration Rights Agreement or to any Person who is not an
Affiliate of Summit.
4.2 Duration of Agreement. This Agreement shall remain in effect
until the earlier of (i) the date which is five (5) years from the
date of this Agreement, and (ii) the date on which Summit owns less
than five percent (5%) of the issued and outstanding shares of LCA
Common Stock. At any time that Summit owns less than such
percentage, this Agreement shall terminate and be of no further
force and effect, without the necessity of any action on the part of
any of the parties hereto.
4.3 Injunctive Relief. It is acknowledged that it would be
impossible to measure the damages that would be suffered by a party
to this Agreement if the other parties were to fail to comply with
the provisions of this Agreement, and that in the event of any such
failure, monetary damages would not provide the injured party an
adequate remedy. The parties shall, therefore, be entitled to seek
specific performance and injunctive relief for any breach of this
Agreement in a court of competent jurisdiction.
4.4 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
without application of principles of conflict of laws, any suit for
the enforcement of this Agreement may be brought in the courts of
that state and all parties consent to the exclusive jurisdiction of
such courts and to service of process in any such suit being made
upon any party by mail at their respective addresses set forth in
below.
4.5 Notices. All notices hereunder shall be in writing and shall be
deemed to have been duly given when actually received. Notices
hereunder may be given (i) by hand, (ii) by certified mail, postage
prepaid, return receipt requested, (iii) by a courier service which
guaranties delivery within one business day or (iv) by telecopy to
a party; in each case to the parties at their respective addresses
set forth below, or to such other address as a party may specify by
notice:
If to Summit or RCII: If to LCA:
Summit Technology, Inc. LCA-Vision, Inc.
21 Hickory Drive 7840 Montgomery Road
Waltham, MA 02154 Cincinnati, OH 45236
Attn: Chief Executive
Officer Attn: President
with a copy to: with a copy to:
Goldstein & Manello, P.C. Dinsmore & Shohl, L.L.P.
265 Franklin Street 1900 Chemed Center
Boston, MA 02110 255 East Fifth Street
Attn: Lauren Jennings, Esq. Cincinnati, OH 45202-3172
Attn: Charles F. Hertlein, Jr., Esq.
If to the Shareholders:
Stephen N. Joffe, M.D. Sandra F.W. Joffe
8750 Red Fox Lane 8750 Red Fox Lane
Cincinnati, Ohio 45243 Cincinnati, Ohio 45243
Craig P.R. Joffe
22 Bigelow Street, #2B
Cambridge, MA 02139
4.6 Waiver. Waiver of any provision of this Agreement, in whole or
in part, in any one instance shall not constitute a waiver of any
other provision in the same instance, nor any waiver of the same or
another provision in another instance, but each provision shall
continue in full force and effect with respect to any other then-existing or
subsequent breaches.
4.7 Entire Agreement. This Agreement, together with the Acquisition
Agreement, the Confidentiality Agreement and the Registration Rights
Agreement constitutes the entire agreement between the parties
hereto with respect to its subject matter, superseding all prior
negotiations, communications, contracts and other agreements,
courses of dealing and the like between or among the parties.
4.8 Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and this Agreement shall be
interpreted as if such provision or provisions were not a part
hereof. Moreover, if any provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration,
geographical scope, activity or subject, it shall be construed by
limiting and reducing it, so as to be enforceable to the extent
compatible with applicable laws as they shall then be in force.
4.9 Amendment. This Agreement may be amended, modified or
terminated, and any right under this Agreement may be waived in
whole or in part, only by a writing signed by all parties hereto.
4.10 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
4.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
4.12 Defaults. Any breach or default by a party under the
Acquisition Agreement shall be deemed a default by such party under
this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
officers in the case of corporate parties, have executed this
Agreement under seal, as of the day and year first above written.
SUMMIT TECHNOLOGY, INC. LCA-VISION INC.
By: /s/Robert J. Palmisano By: /s/Stephen N. Joffe
Chief Executive Officer President
SHAREHOLDERS:
/s/Stephen N. Joffe
/s/Sandra F.W. Joffe
/s/Craig P.R. Joffe
SCHEDULE A
Stephen N. Joffe
Sandra F.W. Joffe
Craig P.R. Joffe
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, made and effective as of the 18th day
of August, 1997 (the "Effective Date"), is entered into by and
between LCA-Vision Inc., a Delaware corporation (the "Company"), and
Summit Technology, Inc., a Massachusetts corporation ("Summit").
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
1.1. "Acquisition Agreement" means the Acquisition Agreement of even
date herewith, by and between the Company, Summit and Refractive
Centers International, Inc. ("RCII").
1.2. "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities
Act and the Exchange Act.
1.3. "Common Stock" means the Company's Common Stock, $.001 par
value, as authorized on the date of this Agreement, and any other
securities into which or for which any of the Common Stock may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
1.4. "Exchange Act" means the Securities Exchange Act of 1934, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
1.5. "Person" means an individual, corporation, partnership, joint
venture, limited liability company, trust, or unincorporated
organization, or a government or any agency or political subdivision
thereof.
1.6 "Retained Shares" means the shares of Common Stock representing
Stock Consideration (as defined in the Acquisition Agreement)
retained by Summit after distribution of the Distribution Shares (as
defined in the Acquisition Agreement).
1.7 "Rule 144" means Rule 144 promulgated under the Securities Act,
as the same shall be in effect at the time, or any successor Rule.
1.8. "Securities Act" means the Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
1.9 "Shelf Registration Statement" has the meaning set forth in
Section 4.2 hereof.
2. Transfer Restrictions. Summit agrees that it shall not sell,
assign or otherwise transfer any of the Retained Shares for a period
of nine (9) months from the date of this Agreement. After such nine
(9) month period, Summit agrees that it shall not sell, assign or
otherwise transfer any of the Retained Shares except as hereinafter
provided. Nothing in this Agreement shall be construed as
prohibiting Summit from distributing the Distribution Shares to
shareholders of Summit as contemplated under the Acquisition
Agreement.
3. Demand Registrations. If, at any time on or after the date that
is nine (9) months from the date hereof, Summit shall request in
writing that the Company file a registration statement under the
Securities Act for all or part of the shares of Common Stock held by
Summit on the date of such request, the Company will use its best
efforts to cause such number of shares of Common Stock as requested
by Summit to be registered under the Securities Act as expeditiously
as possible.
Summit agrees that it shall provide the Company such information as
the Company may reasonably request to enable the Company to comply
with any applicable law or regulation or to facilitate preparation
of the registration statement. The Company shall not be required to
effect more than two (2) such demand registrations.
4. Sales Other Than by Demand Registrations.
4.1 Rule 144. If, at any time, the Company and/or Summit has not
been able to engage an underwriter to sell the Retained Shares under
Section 3 hereof at a price that is acceptable to Summit, or if, at
any time after the date that is twenty-four (24) months from the
date of this Agreement, Summit shall not have sold or otherwise
transferred all of the Retained Shares, Summit shall be entitled to
sell, assign or otherwise transfer the Retained Shares pursuant to
the provisions of Rule 144, (to the extent the provisions of Rule
144 are available to Summit). In such event, the Company agrees to
use its best efforts to facilitate and expedite transfers of the
Retained Shares pursuant to Rule 144, which efforts shall include
timely notice to its transfer agent to expedite such transfers of
Retained Shares.
4.2 "Shelf" Registrations. (a) If the provisions of subsection
(k) of Rule 144 are not available to Summit at any time that Summit
is entitled hereunder to transfer the Retained Shares pursuant to
Section 4.1 hereof, the Company shall, upon written request of
Summit, as expeditiously as possible, use its best efforts to effect
one or more so-called "shelf" qualifications and registrations
(collectively the "Shelf Registration Statement") on the appropriate
form for an offering to be made on a continuous basis under Rule 415
promulgated under the Securities Act (or any successor rule or
similar provision then in effect) covering all or such portion of
the Retained Shares as Summit shall specify.
(b) The Company shall, from time to time, upon written request of
Summit, prepare and file with the Commission such prospectus
supplements and/or amendments to the Shelf Registration Statements
with respect to all or such portion of the Retained Shares that
Summit may determine to sell or transfer under the Shelf
Registration Statements (each, a "Take Down") and shall comply with
the provisions of the Securities Act and all rules thereunder
applicable to the Company, and shall otherwise cooperate with
Summit, with respect to the disposition of all Retained Shares
covered by such Shelf Registration Statement during the applicable
period in accordance with the intended methods of disposition of the
Retained Shares by Summit set forth in such Shelf Registration
Statement or amendment thereto or such prospectus or supplement
thereto, until all of the Retained Shares so registered shall have
been sold or transferred.
5. Effectiveness of Registration Statements. The Company will use
its best efforts to maintain the effectiveness of any registration
statement (including any Shelf Registration Statement) pursuant to
which any of the Retained Shares are being offered until the
completion by the underwriters of the distribution pursuant to such
registration statement and the sale by Summit of all of the shares
of Common Stock registered pursuant to its request under Section 3
or 4 hereof, and from time to time will amend or supplement such
registration statement, and shall cause the prospectus included in
any Shelf Registration Statement to be supplemented by any required
prospectus supplement and, as so supplemented, to be filed pursuant
to Rule 424 under the Securities Act, in each case to the extent
necessary to comply with the Securities Act and rules promulgated
thereunder and any applicable state securities statute or
regulation. The Company will also provide Summit with as many
copies of the prospectus and prospectus supplements contained in any
such registration statement as Summit may reasonably request.
6. Right of First Offer Upon Sale for Cash.
(a) Notwithstanding the provision of Sections 3 and 4 hereof, if at
any time during the term of this Agreement Summit wishes to sell for
cash all or any part of the Retained Shares, Summit shall submit a
written offer (the "Offer") to sell such shares (the "Offered
Shares") to LCA. The Offer shall contain (a) the number of Offered
Shares, (b) the price at which the Offered Shares are offered, which
shall be the greater of (i) the average closing price during the
thirty (30) day period preceding the date of the Offer less any
commissions that would be applicable if Summit were to sell the
Offered Shares through a broker or placement agent and (ii) any bona
fide offer received by Summit for the Offered Shares from another
party within such 30 day period, (c) the proposed closing date for
the sale and purchase of the Offered Shares and (d) such other terms
and conditions as Summit shall deem relevant.
This section shall not apply to any sale or other transfer by Summit
of all or any part of the Retained Shares for any non-cash
consideration, including without limitation, any stock swap. Summit
shall give the Company twenty-one (21) days' notice of any such non-cash
transaction.
(b) If the Company desires to purchase the Offered Shares on the
terms and conditions in the Offer, it shall so notify Summit within
fifteen (15) days after submission of the Offer, and such notice,
together with the Offer, shall constitute a binding and enforceable
agreement for the sale and purchase of the Offered Shares on the
terms set forth in the Offer. If the Company fails to respond
within such time period, or declines to purchase the Offered Shares,
Summit shall be free to dispose of the Offered Shares in any manner
it deems appropriate, consistent with the other provisions of this
Agreement or any other agreement Summit has with the Company.
(c) The foregoing rights of first offer shall be operative only if
they can be offered and exercised in compliance with all applicable
federal and state securities laws.
7. Indemnification of Summit.
7.1. In the event that the Company registers any shares of Common
Stock under the Securities Act, whether pursuant to this Agreement
or the Acquisition Agreement, the Company will, to the extent
permitted by law, indemnify and hold harmless Summit, (including its
officers, directors, affiliates and partners), each Selling
Shareholder (as defined in the Acquisition Agreement) and each
Person, if any, who controls Summit or such Selling Shareholder
within the meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages, expenses (including
reasonable attorneys' fees and expenses) or liabilities joint or
several, to which they or any of them become subject under the
Securities Act or under any other statute or at common law or
otherwise, and, except as hereinafter provided, will reimburse
Summit, each Selling Shareholder and each such controlling Person,
if any, for any legal or other expenses reasonably incurred by them
or any of them in connection with investigating or defending any
actions whether or not resulting in any liability, including but not
limited to any losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement or any filing with any state securities
commission or agency, in any preliminary or amended preliminary
prospectus or in the final prospectus (or the registration statement
or prospectus as from time to time amended or supplemented by the
Company) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state
securities laws or regulations applicable to the Company and
relating to action or inaction required of the Company in connection
with such registration, unless such untrue statement or alleged
untrue statement or omission or alleged omission was made in such
registration statement, preliminary or amended preliminary
prospectus or final prospectus in reliance upon and in conformity
with information furnished in writing to the Company in connection
therewith by Summit, any Selling Shareholder or any such controlling
Person, as the case may be, expressly for use therein.
7.2. Promptly after receipt by Summit, a Selling Shareholder or any
controlling Person of notice of the commencement of any action in
respect of which indemnity may be sought against the Company,
Summit, such Selling Shareholder or such controlling Person, as the
case may be, will notify the Company in writing of the commencement
thereof, and, subject to the provisions hereinafter stated, the
Company shall assume the defense of such action (including the
employment of counsel, who shall be counsel reasonably satisfactory
to Summit, such Selling Shareholder or such controlling Person, as
the case may be), and the payment of expenses insofar as such action
shall relate to any alleged liability in respect of which indemnity
may be sought against the Company. Summit, such Selling Shareholder
or any such controlling Person shall have the right to employ
separate counsel in any such action and to participate in the
defense thereof but the fees and expenses of such counsel shall not
be at the expense of the Company unless the employment of such
counsel has been specifically authorized by the Company. The
Company shall not be liable to indemnify any Person for any
settlement of any such action effected without the Company's consent
(which consent shall not be unreasonably withheld or delayed). The
Company shall not, except with the approval of each party being
indemnified under this Section, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to the parties
being so indemnified of a release from all liability in respect to
such claim or litigation.
7.3. In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which
Summit, a Selling Shareholder or any controlling Person of Summit,
makes a claim for indemnification pursuant to this Section but it is
judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the
fact that this Section provides for indemnification in such case,
then the Company and Summit, such Selling Shareholder or such
controlling Person, as the case may be, will contribute to the
aggregate losses, claims, damages or liabilities to which they may
be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the Company on the one
hand and of Summit, such Selling Shareholder or controlling Person
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative fault of
the Company on the one hand and of Summit, such Selling Shareholder
or controlling Person on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company
on the one hand or by Summit, such Selling Shareholder or
controlling Person on the other, and each party's relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any
such case, (A) Summit, such Selling Shareholder or controlling
Person shall not be required to contribute any amount in excess of
the public offering price of all such shares of Common Stock offered
by it pursuant to such registration statement; and (B) no Person or
entity guilt of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to
contribution from any Person or entity who was not guilty of such
fraudulent misrepresentation.
8. Indemnification of Company.
8.1. In the event that the Company registers any of the Common
Stock under the Securities Act at the request of Summit pursuant to
Section 3 of this Agreement, Summit, to the extent permitted by law,
will indemnify and hold harmless the Company, each of its directors,
each of its officers who have signed or otherwise participated in
the preparation of the registration statement and each Person, if
any, who controls the Company within the meaning of Section 15 of
the Securities Act from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act or under any
other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Company and each such
director, officer or controlling Person for any legal or other
expenses reasonably incurred by them or any of them in connection
with investigating or defending any actions whether or not resulting
in any liability, insofar as such loses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained
in the registration statement or any filing with any state
securities commission or agency, in any preliminary or amended
preliminary prospectus or in the final prospectus (or in the
registration statement or prospectus as from time to time amended or
supplemented) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the therein not
misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished
in writing to the Company in connection therewith by Summit
expressly for use therein; provided, however, that Summit's
obligations hereunder shall be limited to an amount equal to the
proceeds received by Summit of the shares of Common Stock sold in
such registration.
8.2. Promptly after receipt of notice of the commencement of any
action in respect of which indemnity may be sought against Summit,
the Company will notify Summit in writing of the commencement
thereof, and Summit shall, subject to the provisions hereinafter
stated, assume the defense of such action (including the employment
of counsel, who shall be counsel reasonably satisfactory to the
Company) and the payment of expenses insofar as such action shall
relate to the alleged liability in respect of which indemnity may be
sought against Summit.
8.3. The Company and each such director, officer or controlling
Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of Summit
unless employment of such counsel has been specifically authorized
by Summit. Summit shall not be liable to indemnify any Person for
any settlement of any such action effected without Summit's consent
(which consent shall not be unreasonably withheld or delayed).
9. Damages. The Company recognizes and agrees that Summit will not
have an adequate remedy if the Company fails to comply with this
Agreement and that damages may not be readily ascertainable, and the
Company expressly agrees that, in the event of such failure, it
shall not oppose an application by Summit or any other Person
entitled to the benefits of this Agreement requiring specific
performance of any and all provisions hereof or enjoining the
Company from continuing to commit any such breach of this Agreement.
10. Further Obligations of the Company. Whenever under the
preceding Sections of this Agreement, the Company is required
hereunder to register shares of Common Stock, it agrees that it
shall also do the following:
10.1 Within 60 days of any request hereunder, file with the
Commission a registration statement, in form and substance required
by the Securities Act, with respect to such Common Stock and use its
best efforts to cause that registration statement to become
effective;
10.2 As expeditiously as reasonably possible, furnish to Summit,
such reasonable number of copies of such registration statement,
each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein)
and the prospectus included in such registration statement,
including each preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents Summit
may reasonably request in order to facilitate the public sale or
other disposition of the Common Stock owned by it;
10.3 After the filing of the registration statement, promptly notify
Summit of any stop order issued or, to the knowledge of the Company,
threatened to be issued by the Commission and use all commercially
reasonable efforts to prevent the entry of such stop order or to
remove it if entered;
10.4 Enter into a written agreement with the managing underwriter in
such form and containing such provisions as are customary in the
securities business for such an arrangement between such underwriter
and companies of the Company's size and investment stature;
10.5. Furnish to Summit such copies of each preliminary and final
prospectus and such other documents as Summit may reasonably request
to facilitate the public offering of shares of Common Stock held by
Summit;
10.6. Use its best efforts to register or qualify the Common Stock
covered by said registration statement under the applicable
securities or "blue sky" laws of such jurisdictions as Summit may
reasonably request;
10.7 Cooperate with Summit in taking all action in connection with
completing the public offering of Common Stock, including but not
limited to hiring, at the expense of the Company, investment bankers
acceptable to Summit to, among other things, execute an
institutional investor "roadshow", sell the Common Stock in the
offering, make a market in the Common Stock, and provide research
coverage on the Company;
10.8. Furnish to Summit a "signed counterpart" of:
(a) an opinion of counsel for the Company, dated the effective date
of the registration statement, and
(b) "comfort" letters signed by the Company's independent public
accountants who have examined and reported on the Company's
financial statements included in the registration statement, to the
extent permitted by the standards of the American Institute of
Certified Public Accountants, covering substantially the same
matters with respect to the registration statement (and the
prospectus included therein) and tin the case of the accountants'
"comfort" letters) with respect to events subsequent to the date of
the financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' "comfort" letters delivered to
the underwriters in underwritten public offerings of securities,
in each case to the extent that the Company is required to deliver
or cause the delivery of such opinion or "comfort" letters to the
underwriters in an underwritten public offering of securities;
10.9 As promptly as practicable, notify Summit, at any time when a
prospectus relating to the sale of the Common Stock is required by
law to be delivered in connection with sales by an underwriter or
dealer, of the occurrence of any event requiring the preparation of
a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of the registered Common Stock, such
prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and as
promptly as practicable make available to Summit and to the
underwriters any such supplement or prospectus;
10.10. Permit Summit and its counsel or other representatives to
inspect and copy such corporate documents and records as may
reasonably be requested by them;
10.11. Furnish to Summit a copy of all documents filed and all
correspondence from or to the Commission in connection with any such
offering of securities;
10.12. Use its best efforts to insure the obtaining of all
necessary approvals from the National Association of Securities
Dealers, Inc.; and
10.13. Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not
more than eighteen months, beginning with the first month after the
effective date of the registration statement filed in connection
with the consummation of the Acquisition Agreement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
11. Expenses. The Company shall bear all costs and expenses of each
registration under this Agreement, including, but not limited to,
printing, legal and accounting expenses, Securities and Exchange
Commission and National Association of Securities Dealers, Inc.
filing fees and expenses, and "blue sky" fees and expenses and the
reasonable expenses of Summit in connection with the registration of
its shares of Common Stock; provided, however, that Summit shall
bear the expenses of any underwriter's fees, commissions or
discounts in connection with such registrations, and that the
Company and Summit shall share the costs of any accountant's
"comfort letters" obtained in connection with any Take Downs under
a Shelf Registration Statement pursuant to Section 4.2 hereof.
The Company shall also pay all expenses in connection with any
registration initiated pursuant to this Agreement which is
withdrawn, delayed or abandoned at the request of the Company,
unless such registration is withdrawn, delayed or abandoned solely
because of any actions of Summit.
12. Delay of Registration. For a period not to exceed 90 days, the
Company shall not be obligated to prepare and file, or prevented
from delaying or abandoning, a registration statement pursuant to
this Agreement at any time when the Company, in its good faith
judgment with advice of counsel (as certified by an officer of the
Company in a certificate delivered to Summit) reasonably believes:
12.1. That the filing thereof at the time requested, or the offering
of Common Stock pursuant thereto, would materially and adversely
affect (a) a pending or scheduled public offering of the Company's
securities, (b) an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction by or of the
Company, (c) preexisting and continuing negotiations, discussions or
pending proposals with respect to any of the foregoing transactions,
(d) the financial condition of the Company in view of the disclosure
of any pending or threatened litigation, claim, assessment or
governmental investigation which may be required thereby or any
other material Company matter; and
12.2. That the failure to disclose any material information with
respect to the foregoing would cause a violation of the Securities
Act or the Exchange Act.
The Company may exercise its rights under this Section only once
during any twelve (12) month period.
13. Approval of Underwriter. Any managing underwriter engaged by
the Company in any registration made pursuant under this Agreement
shall require the approval in writing of Summit and the consent of
the Company, which consent shall not be unreasonably withheld.
14. No Waiver; Cumulative Remedies. No failure or delay on the part
of any party to this Agreement 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.
15. Amendments, Waivers and Consents. Except as hereinafter
provided, changes in or additions to this Agreement may be made,
termination of this Agreement, and compliance with any covenant or
provision set forth herein may be omitted or waived, if consented to
in writing by the Company and Summit. 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.
16. Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including
telegraphic communication) and mailed, telegraphed or delivered to
each party at the address set forth in below or at such other
address as to which such party may inform the other parties in
writing in compliance with the terms of this Section. All such
notices, requests, demands and other communications shall, when
mailed (which mailing must be accomplished by first class mail,
postage prepaid; electronic facsimile transmission; express
overnight courier service; or registered mail, return receipt
requested) or telegraphed, and shall be considered to be delivered
three (3) days after dispatch.
If to Summit:
Summit Technology, Inc.
21 Hickory Drive
Waltham, MA 02154
Attn: Chief Executive Officer
with a copy to:
Goldstein & Manello, P.C.
265 Franklin Street
Boston, MA 02110
Attn: Lauren Jennings, Esq.
If to the Company:
LCA-Vision Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
Attn: President
with a copy to:
Dinsmore & Shohl, L.L.P.
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-3172
Attn: Charles F. Hertlein, Jr., Esq.
17. Binding Effect, Assignment. This Agreement shall be binding
upon and inure to the benefit of the Company and Summit and their
respective successors and assigns, except that the Company shall not
have the right to delegate its obligations hereunder or to assign
its rights hereunder or any interest herein without the prior
written consent of Summit.
18. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
Delaware, and without giving effect to choice of laws provisions.
19. 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.
20. Counterparts. This Agreement may be executed in one or more of
counterparts, all of which taken together shall constitute one and
the same instrument, and either party hereto may execute this
Agreement by signing any such counterpart.
21. Term. This Agreement shall remain in full force and effect
until all of the Retained Shares shall have been sold hereunder;
provided that the provisions of Section 7 and 8 hereof shall survive
any termination of this Agreement.
22. Further Assurances. From and after the date of this Agreement,
upon the request of Summit or the Company, the Company and Summit
shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under seal as of the date set forth in the first
paragraph hereof.
LCA-VISION INC.
By:/s/Stephen N. Joffe
Name: Stephen N. Joffe
Title: President
SUMMIT TECHNOLOGY, INC.
By: /s/Robert J. Palmisano
Name: Robert J. Palmisano
Title: Chief Executive Officer
EXHIBIT D
FORM OPINION OF DINSMORE & SHOHL LLP
Not filed herewith but available on request
EXHIBIT E
HERSKOWITZ EMPLOYMENT DOCUMENTS
Not filed herewith but available on request
Contacts: Dr. Stephen Joffe, CEO Joel Pomerantz
Larry Rapp, CFO The Dilenschneider Group
LCA-Vision, Inc. (212) 922-0900
(513) 792-9292
LCA-VISION COMPLETES ACQUISITION OF
ALL SUMMIT LASER EYE SURGERY CENTERS
NOW NATION'S LARGEST PROVIDER
OF NEW VISION CORRECTION PROCEDURE
Dr. Ronald Herskowitz Named Chief Officer of Expanded Company
LCA's Board Of Directors Will Also Be Enlarged
CINCINNATI, August 19 -- LCA-Vision Inc. (NASDAQ:LCAV), the leading
facility chain operator in the fast-growing laser vision correction
sector, said today it has completed acquisition of Summit
Technology, Inc.'s Refractive Centers International subsidiary in
exchange for 17 million shares of common stock. The transaction
positions LCA-Vision as the nation's largest provider of the new
laser vision treatment procedure with twice the number of locations
as its nearest competitor.
Refractive Centers International has 19 wholly owned-and-operated
facilities around the country and a working relationship with six
additional treatment sites at prestigious university medical
centers/hospitals. Refractive Centers International's total 1997
revenues are projected at $6 million. LCA-Vision's projected
annualized 1997 revenues are $14.4 million.
Under terms of the agreement, LCA-Vision will file a registration
statement with the Securities and Exchange Commission for the newly-issued
shares within 90 days. Summit has announced its plans to
retain a just-under 20 percent stake in LCA and distribute the
balance of the new shares to its shareholders after the shares have
been registered with the S.E.C.
Consistent with terms of the acquisition agreement, LCA-Vision also
announced that Dr. Ronald Herskowitz has been named chief operating
officer of LCA-Vision and that the company's board will be changed
and enlarged. Dr. Herskowitz was formerly executive vice president
of Refractive Centers International, Inc., the acquired Summit
subsidiary. Prior to that, he was a vice president at Bausch &
Lomb.
With the acquisition, LCA-Vision will have 40 major vision
correction centers in the U.S., two facilities in Canada, and one in
Europe. The company now provides the most advanced, state-of-the-art laser
technology available for the correction of myopia, or
near-sightedness, and astigmatism. The one-hour, out-patient
treatment effectively eliminates patients' dependence on glasses or
contact lenses.
Dr. Stephen Joffe, LCA-Vision president and chief executive officer,
who remains the company's largest shareholder, commented: "This
acquisition dramatically alters the retail laser eye surgery market,
strategically positioning LCA-Vision as the clear industry leader
with an aggressive new senior management team headed by Dr.
Herskowitz. We are unchallenged in terms of locations, number of
affiliated physicians and optometrists, procedures performed,
clinical experience, and marketing expertise.
"The acquired Summit centers will give us a presence in many major
new markets, making LCA-Vision a national player. We have the most
recognizable brand-name in the field and an unmatched track record
for the correction of myopia and astigmatism using FDA-approved,
laser-assisted technology. Today, LCA has the size, critical mass,
and capital resources to define and lead this young, rapidly-growing,
potentially huge industry."
Dr. Joffe added that the combination of the two companies with their
proven management and marketing techniques will also produce
significant economics of scale and improved profitability.
He noted further that patient acceptance of laser treatment for
vision correction continues to accelerate rapidly, reflecting the
impact of strong word-of-mouth and media exposure. "We are already
well ahead of projections for 1997. Patient procedure volume at our
existing 18 centers for the second quarter was up 44 percent over
the first quarter and we are running well ahead of plan for the
first six months of 1997."
LCA-Vision centers have, to date, completed over 10,000 of these
procedures, known technically as photo refractive keratectomy, at an
average cost of $2,000-$2,500 per eye. An estimated 130 million
Americans require some kind of vision correction, including 25 to 30
million contact lens wearers. Additionally, new procedures are now
undergoing FDA evaluation for the treatment of hyperopia, or far-sightedness,
which will further increase the potential market beyond
the current 70 million myopic and astigmatic patients.
Among the laser vision correction centers that LCA-Vision will
acquire from Summit are sites in Agoura Hills, Glendale, San
Bernardino, and Torrance, California (UCLA Laser Refractive Centers
in the L.A. area); San Jose, Concord, and San Francisco, California
(Stanford University Laser Centers); Costa Mesa, California;
Chicago, Vernon Hills, and Schaumburg in Illinois (Rush Eye Laser
Centers); and Columbus (Worthington), Ohio.
Also, West Palm Beach, Miami, and Plantation in Florida; Bethesda,
Maryland; and Tysons Corner, Virginia (George Washington University
Refractive Laser Centers in the D.C. area); Towson, Maryland; and
Minneapolis (Edina), Minnesota.
The hospital/university medical center-based sites include those
affiliated with the UCLA/Jules Stein Eye Institute in Los Angeles;
Stanford Medical Center in Stanford, California; Rush-Presbyterian -
St. Luke's Medical Center in Chicago; George Washington University
Medical Center in Washington, D.C.; the Cleveland Clinic Foundation
in Cleveland; and the University of Iowa.
LCA-Vision's existing facilities are located in Cincinnati,
Columbus, Cleveland, Warren, Dayton, and Toledo, Ohio; Buffalo,
Albany, New York City, and Westchester County, New York State;
Charlotte, North Carolina; Toronto and Ft. Erie, Canada; Savannah,
Georgia; Baltimore, Maryland; Clearwater, Florida; Mountain View
(Silicon Valley), California; and Helsinki, Finland.
# # #
August 19, 1997
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995:
This release contains forward-looking statements that are subject to
risks and uncertainties, including, but not limited to, the impact
of competitive products and pricing, product demand and market
acceptance, reliance on key strategic alliances, fluctuations in
operating results and other risks detailed from time to time in the
company's filings with the Securities and Exchange Commission.
Contacts: Dr. Stephen Joffe or Larry Rapp Joel Pomerantz
LCA-Vision, Inc. The Dilenschneider Group
(513) 792-9292 (212) 922-0900
LCA-VISION NAMES THREE NEW MEMBERS TO COMPANY'S BOARD
INCLUDING PROMINENT WALL STREETER JOHN GUTFREUND
CINCINNATI, August 21 -- LCA-Vision (NASDAQ-LCAV) today announced
the appointments of John H. Gutfreund, William O. Coleman, and Dr.
Ronald Herskowitz to the company's board of directors and the
resignations from the board of founding family members Sandra Joffe
and Craig Joffe.
The new appointments will increase the number of LCA-Vision's
directors to five and bring strong financial and specialized
management expertise to the company. Continuing on the board are
Dr. Stephen Joffe, chairman, president, and chief executive officer
and outside director John Hassan.
Naming of the new directors implements provisions of LCA-Vision's
recently-completed acquisition of Summit Technology, Inc.'s laser
vision correction subsidiary. LCA-Vision now operates the largest
chain of laser eye treatment sites in the U.S. with 40 locations
across the country plus two centers in Canada and one in Europe.
Mr. Gutfreund, 67, a leading Wall Street figure for over three
decades, was chief executive officer and board chairman of Salomon
Brothers from 1981 to 1991. He is currently president of Gutfreund
& Company, a New York-based financial consulting firm. Mr. Coleman,
68, a retired senior executive with Procter & Gamble Corporation,
currently serves as trustee of the multi-billion-dollar P&G
Retirement Trusts.
Dr. Herskowitz, 43, was recently named chief operating officer of
LCA-Vision. He had been executive vice president of Summit
Technology, Inc. in charge of the chain of vision correction centers
acquired by LCA earlier this month.
Commenting on the appointments, Dr. Joffe said: "We are extremely
gratified that two such distinguished representatives from the world
of finance and business as Mr. Gutfreund and Mr. Coleman have agreed
to serve on LCA's board as outside directors and that our newly-named chief
operating officer, Ron Herskovitz, will be joining them.
"Their presence underscores LCA's new dominant position in the laser
eye surgery sector, following the Summit acquisition. With the
number of LCA shareholders and locations now significantly
increased, the managerial experience, expertise and guidance
provided by the new directors will be especially valuable."
Mr. Gutfreund, whose financial consulting firm has advised some of
the nation's top companies, is a past vice chairman of the New York
Stock Exchange (1985-87) and a former member of the Board of
Directors of the Securities Industry Association. He has also
served as president of the Bond Club of New York and as a member of
The Trilateral Commission. LCA-Vision's newest board member is a
1951 graduate of Oberlin College.
Mr. Coleman spent most of his professional career at Procter &
Gamble. He held a series of key managerial positions with the
company, rising, successively, from general sales manager to vice
president, food products, vice president, International/Latin
America, vice president, professional affairs, and most recently,
vice president, special projects.
In the public sphere, he has served as general chairman of the
United Way Campaign, vice president of the University of Cincinnati
Foundation, president of the Boys & Girls Clubs of Cincinnati, and
director of the Greater Cincinnati Foundation. Mr. Coleman is a
graduate of the University of Oklahoma and served as an officer with
the U.S. Navy during the Korean War.
Dr. Herskowitz, who holds university degrees in optometry and
chemistry, joined Summit in 1993. Previously, he had been vice
president, research and development and vice president, technical
affairs, with the Polymer Technology Corp. subsidiary of Bausch &
Lomb. Dr. Herskowitz is a graduate of Knox College and the Illinois
College of Optometry.
August 21, 1997
