<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ION LASER TECHNOLOGY, INC.
(Name of Issuer)
LCO INVESTMENTS LIMITED
RICHARD S. BRADDOCK
LYNN B. BARNEY
ANDREW HOFMEISTER
(Names of Persons Filing Statements)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)
461909 20 2
(CUSIP Number)
CRAIGH LEONARD, ESQ.
RICHARDS & O'NEIL, LLP
885 THIRD AVENUE
NEW YORK, NEW YORK
10022
(212) 207-1200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 12, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with this statement. / /
<PAGE>
SCHEDULE 13D
CUSIP NO. 461909 20 2
(1) Name of reporting persons
LCO INVESTMENTS LIMITED
S.S. or I.R.S. identification Nos.
of above persons
(2) Check the appropriate box if (a) /X/
a member of a group
(see instructions) (b) / /
(3) SEC use only
(4) Source of funds (see instructions) WC
(5) Check if disclosure of legal
proceedings is required pursuant to
items 2(d) or 2(e) / /
(6) Citizenship or place of
organization GUERNSEY, CHANNEL ISLANDS
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power 1,820,092 (which includes
1,173,334 shares subject to
purchase within 60 days upon
the exercise of certain
options)
(8) Shared voting power 243,100 (which includes
229,100 shares subject to
purchase within 60 days upon
the exercise by Lynn B.
Barney of certain options)
Page 2 of 73
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(9) Sole dispositive power 1,820,092 (which includes
1,173,334 shares subject to
purchase within 60 days
upon the exercise of
certain options)
(10) Shared dispositive power None
(11) Aggregate amount beneficially owned
by each reporting person 2,063,192
(12) Check if the aggregate amount in
Row (11) excludes certain shares (see
instructions) / /
(13) Percent of class represented by
amount in Row (11) 31.4%
(14) Type of reporting person (see
instructions) CO
Page 3 of 73
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CUSIP NO. 461909 20 2
(1) Names of reporting persons
RICHARD S. BRADDOCK
S.S. or I.R.S. identification
Nos. of above persons
(2) Check the appropriate box (a) /X/
if a member of a group
(see instructions) (b) / /
(3) SEC use only
(4) Source of funds (see
instructions) PF
(5) Check if disclosure of legal
procedures is required pursuant to
items 2(d) or 2(e) / /
(6) Citizenship or place of
organization UNITED STATES
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power 463,047 (which includes
308,333 shares subject to
purchase within 60 days
upon the exercise of
certain options)
(8) Shared voting power None
(9) Sole dispositive power 463,047 (which includes
308,333 shares subject to
purchase within 60 days
upon the exercise
of certain options)
(10) Shared dispositive power None
Page 4 of 73
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(11) Aggregate amount beneficially owned
by each reporting person 463,047
(12) Check if the aggregate amount
in Row (11) excludes certain shares (see
instructions) / /
(13) Percent of class represented by
amount in Row (11) 8.4%
(14) Type of reporting person
(see instructions) IN
Page 5 of 73
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CUSIP NO. 461909 20 2
(1) Names of reporting persons
LYNN B. BARNEY
S.S. or I.R.S. identification
Nos. of above persons
2) Check the appropriate box (a) /X/
if a member of a group
(see instructions) (b) / /
(3) SEC use only
(4) Source of funds (see
instructions) PF
(5) Check if disclosure of legal
procedures is required pursuant to
items 2(d) or 2(e) / /
(6) Citizenship or place of
organization UNITED STATES
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power None
(8) Shared voting power 243,100 (which includes
229,100 shares subject to
purchase within 60 days upon
the exercise by Lynn B.
Barney of certain options)
(9) Sole dispositive power 243,100 (which includes
229,100 shares subject to
purchase within 60 days upon
the exercise by Lynn B.
Barney of certain options)
(10) Shared dispositive power None
Page 6 of 73
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(11) Aggregate amount beneficially owned
by each reporting person 243,100
(12) Check if the aggregate amount in
Row (11) excludes certain shares (see
instructions) /X/
(13) Percent of class represented by
amount in Row (11) 4.5%
(14) Type of reporting person
(see instructions) IN
Page 7 of 73
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CUSIP NO. 461909 20 2
(1) Names of reporting persons
ANDREW HOFMEISTER
S.S. or I.R.S. identification
Nos. of above persons
(2) Check the appropriate box (a) /X/
if a member of a group
(see instructions) (b)
(3) SEC use only
(4) Source of funds (see
instructions) PF
(5) Check if disclosure of legal
procedures is required pursuant to
items 2(d) or 2(e) / /
(6) Citizenship or place of
organization UNITED STATES
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power 5,000 (all of which shares
are subject to purchase
within 60 days upon the
exercise of certain
options)
(8) Shared voting power None
(9) Sole dispositive power 5,000 (all of which shares
are subject to purchase
within 60 days upon the
exercise of certain
options)
(10) Shared dispositive power None
(11) Aggregate amount beneficially owned
by each reporting person 5,000 (all of which shares
are subject to purchase
within 60 days upon the
exercise of certain
options)
Page 8 of 73
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(12) Check if the aggregate amount in
Row (11) excludes certain shares (see
instructions) / /
(13) Percent of class represented by
amount in Row (11) 0.1%
(14) Type of reporting person
(see instructions) IN
Page 9 of 73
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ION LASER TECHNOLOGY, INC. SCHEDULE 13D
AMENDMENT NO. 2
NOTE: This Amendment No. 2 amends and restates a Statement on Schedule 13D
filed on April 11, 1996, as amended by an Amendment No. 1 filed on Decemberr 6,
1996 (the "INITIAL SCHEDULE 13D") on behalf of LCO Investments Limited ("LCO
INVESTMENTS"), Richard S. Braddock, Lynn B. Barney and Andrew Hofmeister.
This Amendment No. 2 is being filed to amend Items 3, 4, 5 and 6 of the
Schedule 13D. The information reported in Items 1 and 2 of the Schedule 13D has
not changed since the date of the Initial Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The following paragraphs are added at the end of Item 3:
On March 14, 1997, LCO Investments acquired 15,500 shares of
Common Stock through open market purchases for an aggregate purchase
price of $113,150. On March 20, 1997, LCO Investments acquired 500
shares of Common Stock through open market purchases for an aggregate
purchase price of $3,655. The source of funds for such purchases was
the capital funds of LCO Investments.
On February 25, 1997, Mr. Braddock acquired 2,400 shares of
Common Stock for an aggregate purchase price of $21,456 and 7,600
shares of Common Stock for an aggregate purchase price of $68,400, in
each case through open market purchases. The source of funds for such
purchases was his personal funds.
On May 12, 1997, LCO Investments and Mr. Braddock acquired from
the Company shares of the Company's Common Stock at a purchase price
of $7.00 per share, pursuant to a Securities Purchase Agreement dated
as of May 8, 1997 (the "MAY 1997 PURCHASE AGREEMENT"). LCO
Investments acquired 342,858 shares of Common Stock for an aggregate
purchase price of $2,400,000. Mr. Braddock acquired 85,714 shares of
Common Stock for an aggregate purchase price of $600,000. The source
of funds for such purchase by LCO Investments was its own capital
Page 10 of 73
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funds. The sources of funds for such purchase by Mr. Braddock were
$300,000 of his own personal funds and a $300,000 loan from Excimer Vision
Leasing, L.P. See Item 6 below.
ITEM 4. PURPOSE OF TRANSACTIONS
Subclause (ii) of the first paragraph of Item 4 is hereby amended and
restated in its entirety as follows:
(ii) Under the Purchase Agreement, LCO Investments and Mr. Braddock
acquired from the Company options to purchase shares of the
Company's Common Stock. LCO Investments acquired options to
purchase 773,334 shares of Common Stock. Mr. Braddock acquired
options to purchase 193,333 shares of Common Stock. Pursuant to
the May 1997 Purchase Agreement, the exercise price of these
options was reduced from $20.00 to $9.00 per share and such
options became exercisable at any time until the close of
business on March 31, 2006. Under the May 1997 Purchase
Agreement, LCO Investment and Mr. Braddock also acquired from the
Company new options to purchase shares of the Company's Common
Stock at an exercise price of $9.00 per share. LCO Investments
acquired options to purchase 400,000 shares of Common Stock. Mr.
Braddock acquired options to purchase 100,000 shares of Common
Stock. Such options are exercisable at any time until the close
of business on May 1, 2007.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Paragraph (a) of Item 5 is hereby amended and restated to read in its
entirety as follows:
(a) As of the date hereof, LCO Investments, CAP Advisers and
ERSE Trust each beneficially owns 2,063,192 shares of Common Stock,
which constitutes 31.4% of the 6,580,289 shares of Common Stock which
are believed to be the total number of shares of Common Stock
outstanding on the date hereof (which includes 1,173,334 shares
subject to purchase within 60 days upon the exercise by LCO
Investments of certain options and 229,100
Page 11 of 73
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shares subject to purchase within 60 days upon the exercise by Mr. Barney
of certain options). LCO Investments is the direct beneficial owner of
such shares. ERSE Trust (as the 100% owner of LCO Investments) and CAP
Advisers (as the sole trustee of ERSE Trust) are beneficial owners of such
shares for purposes of this Item 5(a). Mr. Braddock beneficially owns
463,047 shares of Common Stock which constitutes 8.4% of the 5,496,188
outstanding shares (which includes 308,333 shares subject to purchase
within 60 days upon the exercise by Mr. Braddock of certain options). Mr.
Barney beneficially owns 243,100 shares of Common Stock which constitutes
4.5% of the 5,406,955 outstanding shares (which includes 229,100 shares
subject to purchase within 60 days upon the exercise by Mr. Barney of
certain options). Mr. Hofmeister beneficially owns 5,000 shares of Common
Stock which constitutes 0.1% of the 5,182,855 outstanding shares (all of
which shares are subject to purchase within 60 days upon the exercise by
Mr. Hofmeister of certain options). After eliminating shares under common
beneficial ownership, the group owns an aggregate of 2,531,239 shares of
Common Stock which constitutes 36.8% of the 6,878,622 shares outstanding
(which includes the shares subject to purchase within 60 days upon the
exercise by LCO Investments, Mr. Braddock, Mr. Barney or Mr. Hofmeister of
certain options).
The fourth subparagraph of paragraph (b) of Item 5 is hereby amended and
restated to read in its entirety as follows:
The voting and dispositive power of each person listed in Item
5(a) is set forth in the following table. CAP Advisers (Dublin
Branch) is the sole trustee of ERSE Trust, which wholly-owns LCO
Investments. CAP Advisers and ERSE Trust are listed because of such
trustee and ownership relationships, although neither entity has a
contractual or legal right to vote or dispose of any shares of Common
Stock listed below.
Sole Shared Sole Shared
Name Vote Vote Disposition Disposition
- ---- ---- ------ ----------- -----------
LCO Investments 1,820,092 243,100 1,820,092 0
CAP Advisers 1,820,092 243,100 1,820,092 0
ERSE Trust 1,820,092 243,100 1,820,092 0
Richard S. Braddock 463,047 0 463,047 0
Lynn B. Barney 0 243,100 243,100 0
Page 12 of 73
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Sole Shared Sole Shared
Name Vote Vote Disposition Disposition
- ---- ---- ------ ----------- -----------
Andrew Hofmeister 5,000 0 5,000 0
The 1,820,092 shares of Common Stock listed in the above table for
which LCO Investments has sole voting power and sole dispositive power
includes 1,173,334 shares subject to purchase within 60 days upon the
exercise by LCO Investments of certain options. The 243,100 shares of
Common Stock listed in the above table for which LCO Investments, CAP
Advisers, ERSE Trust and Mr. Barney have shared voting power and Mr.
Barney has sole dispositive power includes 229,100 shares subject to
purchase within 60 days upon the exercise by Mr. Barney of certain
options. The 463,047 shares listed above with respect to Mr. Braddock
includes 308,333 shares subject to purchase within 60 days upon the
exercise by Mr. Braddock of certain options. All of the 5,000 shares
listed above with respect to Mr. Hofmeister are subject to purchase
within 60 days upon the exercise by Mr. Hofmeister of certain options.
Paragraph (c) of Item 5 is hereby amended by amending and restating the
third sentence of the first subparagraph thereof in its entirety as follows:
The options acquired by LCO Investments and Mr. Braddock under the
Purchase Agreement are exercisable at $9.00 per share.
Paragraph (c) of Item 5 is hereby further amended by adding the following
subparagraphs at the end thereof:
On May 12, 1997, LCO Investments and Mr. Braddock acquired shares
of Common Stock pursuant to the May 1997 Purchase Agreement. LCO
Investments acquired 342,858 shares of Common Stock at $7.00 per share
for an aggregate purchase price of $2,400,000. Mr. Braddock acquired
85,714 shares of Common Stock for an aggregate purchase price of
$600,000. The options acquired by LCO Investments and Mr. Braddock
under the May 1997 Purchase Agreement are exercisable at $9.00 per
share. LCO Investments was issued options to purchase an aggregate of
400,000 shares of Common Stock. Mr. Braddock was issued options to
purchase an aggregate of 100,000 shares of Common Stock. The sources
of funds for such purchases were the capital funds of LCO Investments
and, with respect to Mr. Braddock,
Page 13 of 73
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$300,000 of the private funds of Mr. Braddock and a $300,000 loan from
Excimer Vision Leasing, Inc.
On March 14, 1997, LCO Investments acquired 15,500 shares of
Common Stock through open market purchases for an aggregate purchase
price of $113,150. On March 20, 1997, LCO Investments acquired 500
shares of Common Stock through open market purchases for an aggregate
purchase price of $3,655. The source of funds for such purchases was
the capital funds of LCO Investments.
On February 25, 1997, Mr. Braddock acquired 2,400 shares of
Common Stock for an aggregate purchase price of $21,456 and 7,600
shares of Common Stock for an aggregate purchase price of $68,400, in
each case through open market purchases. The source of funds for such
purchases was the personal funds of Mr. Braddock.
Mr. Barney and Mr. Hofmeister did not effect any transactions in
shares of Common Stock during the 60 day period ended the date hereof.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
---------------------------------------------------------------------
Item 6 is amended by adding the following at the end thereof:
On May 12, 1997, Excimer Vision Leasing, L.P. ("EVL") extended a
$300,000 loan (the "LOAN") to Mr. Braddock for purposes of providing a
source of funds for the purchase by Mr. Braddock of a portion of the
shares of Common Stock purchased by him under the May 1997 Purchase
Agreement. As of the date hereof, the terms of the Loan have not been
finalized.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
---------------------------------
EXHIBIT K, which appears on page 16 of this Amendment No. 2 to
Schedule 13D, is a Joint Filing Agreement among LCO Investments, Mr. Braddock,
Mr. Barney and Mr. Hofmeister (the "AMENDMENT NO. 2 JOINT FILING AGREEMENT").
Page 14 of 73
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EXHIBIT L, which appears on page 17 of this Amendment No. 2 to
Schedule 13D, is the Authorizing Agreement authorizing Craigh Leonard as
Attorney-in-Fact to sign the Amendment No. 2 Joint Filing Agreement on behalf of
LCO Investments.
EXHIBIT M, which appears on pages 18 through 73 of this Amendment No. 2 to
Schedule 13D, is the May 1997 Purchase Agreement described in Items 3 and 5
hereof.
Page 15 of 73
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SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Dated: May 22, 1997
CO INVESTMENTS LIMITED
By: /s/ Craigh Leonard
-------------------------------
Craigh Leonard
Attorney-in-Fact
/s/ Richard S. Braddock
-------------------------------
Richard S. Braddock
/s/ Lynn B. Barney
--------------------------------
Lynn B. Barney
/s/ Andrew Hofmeister
---------------------------------
Andrew Hofmeister
Page 16 of 73
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EXHIBIT K
JOINT FILING AGREEMENT AMONG
LCO INVESTMENTS LIMITED,
RICHARD S. BRADDOCK,
LYNN B. BARNEY AND ANDREW HOFMEISTER
AGREEMENT, dated as of May 21, 1997, among LCO Investments Limited, Richard
S. Braddock, Lynn B. Barney and Andrew Hofmeister.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, in accordance with Rule 13d-1(f) under the Securities and Exchange
Act of 1934 (the "ACT"), only one Statement and any amendments thereto need be
filed whenever two or more persons are required to file such a Statement or any
amendments thereto pursuant to Section 13(d) of the Act with respect to the same
securities, provided that said persons agree in writing that such Statement or
any amendments thereto is filed on behalf of them.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
LCO Investments Limited, Richard S. Braddock, Lynn B. Barney and Andrew
Hofmeister do hereby agree, in accordance with Rule 13d-1(f) under the Act, to
file an Amendment No. 2 to Schedule 13D relating to their ownership of the
Common Stock of Ion Laser Technology, Inc., and do hereby further agree that
said Amendment shall be filed on behalf of each of them.
LCO INVESTMENTS LIMITED
By: /s/Craigh Leonard
-----------------------
Craigh Leonard
Attorney-in-Fact
/s/Richard S. Braddock
------------------------
Richard S. Braddock
/s/Lynn B. Barney
-------------------------
Lynn B. Barney
/s/ Andrew Hofmeister
--_-----------------------
Andrew Hofmeister
Page 17 of 73
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EXHIBIT L
LCO INVESTMENTS LIMITED
JOINT FILING AGREEMENT AUTHORIZATION
The undersigned hereby authorizes Craigh Leonard to sign on the
undersigned's behalf a Joint Filing Agreement relating to the filing of a
Schedule 13D with the United States Securities and Exchange Commission that will
include references to 1,820,092 shares of Common Stock of Ion Laser Technology,
Inc., which are owned directly by LCO Investments Limited and 243,100 additional
shares of such Common Stock of which LCO Investments is deemed to be a
beneficial owner.
It is understood that the persons who will be parties to the Joint Filing
Agreement will include LCO Investments Limited, Richard S. Braddock, Lynn B.
Barney and Andrew Hofmeister.
Dated: May 21, 1997
LCO INVESTMENTS LIMITED
By: /s/ Chin Meng Yong
------------------------
Chin Meng Yong
Vice President
Page 18 of 73
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EXHIBIT M
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND WILL BE OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE LAW BY VIRTUE
OF THE COMPANY'S INTENDED COMPLIANCE WITH SECTION 4(2) OF THE ACT, THE
PROVISIONS OF REGULATION D PROMULGATED THEREUNDER AND PARALLEL EXEMPTIONS UNDER
STATE LAW, AND THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE ACT. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY REGULATORY AUTHORITY.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
428,572 SHARES OF COMMON STOCK
(PAR VALUE $.001 PER SHARE)
OPTIONS TO PURCHASE 500,000 SHARES COMMON STOCK
AT $9.00 PER SHARE, EXERCISABLE UNTIL MAY 1, 2007
-------------------------
SECURITIES PURCHASE AGREEMENT
-------------------------
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84121
Attn: E. Wyatt Cannady
President and Chief Executive Officer
Gentlemen:
In connection with the offer and proposed issuance of up to $3,000,000 in
Common Stock and options to purchase Common Stock (the "OFFERING") by Ion Laser
Technology, Inc., a Utah corporation ("ILT" or the "COMPANY"), in reliance on
exemptions from the registration requirements of the U.S. Securities Act of
1933, as amended (the "ACT"), and similar provisions of state law, the
undersigned purchasers (collectively, the "PURCHASERS") and the Company hereby
agree as follows:
Page 19 of 73
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1. PURCHASE OF SECURITIES. Subject to the terms and conditions
of this Agreement, each of the Purchasers hereby agrees to acquire, and the
Company agrees to sell, the following securities (collectively the "PURCHASED
SECURITIES"):
1.1 COMMON STOCK. Each of the Purchasers shall purchase and the
Company shall sell to each such Purchaser that number of shares of the
Company's Common Stock, par value $.001 per share (the "COMMON SHARES"),
set forth opposite such Purchaser's name on SCHEDULE I to this Agreement.
The consideration for the issuance of the Common Shares shall be $7.00 per
share. The total purchase price (the "PURCHASE PRICE") for the 428,572
shares of Common Stock being purchased hereunder shall be Three Million
Dollars ($3,000,000). Each Purchaser shall pay his or its portion of the
Purchase Price in full at Closing, as hereinafter defined, via wire
transfer to the Company on or before the Closing Date, as that term is
defined in Section 5 of this Agreement. Wire instructions shall be
provided to Purchasers by the Company prior to the Closing.
1.2 OPTIONS TO ACQUIRE COMMON STOCK. As additional consideration for
the Purchase Price, the Company shall grant to each of the Purchasers, in
addition to the Common Shares, options to purchase up to that number of
shares of Common Stock set forth opposite such Purchaser's name on
SCHEDULE I hereto over a ten-year period at a price of $9.00 per share (the
"NEW OPTIONS"). The rights of each Purchaser to acquire Common Stock under
the New Options shall be as set forth in written option agreements in the
form attached to this Agreement as EXHIBIT A (the "NEW OPTION AGREEMENTS")
and by this reference made a part hereof.
2. AMENDMENT OF OLD OPTIONS. The Company hereby agrees to amend that
certain Option Agreement No. 001 dated April 1, 1996 issued to LCO Investments
Limited, relating to 773,334 shares of Common Stock, and that certain Option
Agreement No. 002 dated April 1, 1996 issued to Richard S. Braddock
("BRADDOCK"), relating to 193,333 shares of Common Stock (together the "OLD
OPTIONS"), such that: (i) the purchase price of the shares underlying the Old
Options shall be changed from $20.00 per share to $9.00 per share, and (ii) any
provisions in the Old Options, or in the original Securities Purchase Agreement
dated April 1, 1996 between the Company and the Purchasers, purporting to
restrict by contractual agreement the resale of shares of Common Stock
underlying the Old Options for a period of two years from April 1, 1996, shall
be deleted. The amendments to the Old Options shall be in the form set forth in
EXHIBIT B (the "AMENDED OPTION AGREEMENTS") and by this reference made a part
hereof.
3. DELIVERY OF SHARE CERTIFICATES AND OPTION AGREEMENTS. At the Closing,
the Company shall deliver to Purchasers certificates representing the Common
Shares, which
Page 20 of 73
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shall be fully paid and nonassessable upon issuance, as well as the New Option
Agreements and the Amended Option Agreements. The Common Shares and the New
Options shall be issued in increments and in the names of the Purchasers as set
forth in SCHEDULE I hereto.
4. REGISTRATION RIGHTS AND EXCHANGE FILINGS. The Common Shares and the
shares of Common Stock underlying the exercise of the New Options shall be
subject to certain registration rights, as provided in that certain Registration
Rights Agreement attached hereto as EXHIBIT C and by reference made a part
hereof. (Such Registration Rights Agreement, together with this Securities
Purchase Agreement, the New Option Agreements, and the Amended Option
Agreements, constitute the "TRANSACTION DOCUMENTS"). In addition, ILT shall
make appropriate filings under the rules of the American Stock Exchange ("AMEX")
in order that the Common Shares and the shares of Common Stock underlying the
New Options will be included in the Company's listing with the AMEX.
5. CLOSING. Payment of the Purchase Price by the Purchasers and delivery
of the Common Shares and the fully executed New Option Agreements and Amended
Option Agreements by ILT shall be deemed to be the completion of the
transactions contemplated by this Agreement ("CLOSING"). Closing shall occur
concurrently with the execution of this Agreement (the "CLOSING DATE"), or such
later date as the parties may hereafter agree in writing (the "CLOSING DATE").
6. FAILURE OF ANY PURCHASER TO CLOSE. The Company shall not be obligated
to issue and sell any of the Purchased Securities unless all 428,572 of the
Common Shares and all of the New Options to be purchased and sold hereunder are
purchased by the Purchasers. In the event any Purchaser fails to purchase at
the Closing any of the Common Shares and New Options scheduled to be purchased
by him or it, the other Purchasers shall have the right to purchase at the
Closing (or on such other date as the Company and such Purchaser(s) shall agree)
the Common Shares and New Options that are not so purchased, and the Company
shall issue and sell such Common Shares and New Options to such other
Purchaser(s).
7. USE AND DISPOSITION OF PROCEEDS. The gross proceeds of this
transaction will be Three Million Dollars ($3,000,000). The Company intends to
use the proceeds as follows:
Page 21 of 73
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Approximate
Application of Proceeds Dollar Amount Percentage
----------------------- ------------- ----------
Promote BriteSMILE products $ 1,500,000 50%
Equipment and improvements 300,000 10%
Research and development 500,000 17%
Working capital and payment of
offering expenses 700,000 23%
----------- ----
Total $ 3,000,000 100%
The foregoing represents the Company's present intention and best estimates with
respect to the use of the offering proceeds. Pending use of the net proceeds
for the above purposes, the Company intends to invest the funds in certificates
of deposit or other fully-insured investment grade securities. Any funds
received from the exercise of the New Options will be added to working capital.
Purchasers acknowledge and agree that the Company shall have immediate access to
such funds, according to the Company's management's discretion, following the
Closing and delivery of the Common Shares and the New Options to Purchasers.
8. SPECIAL COVENANTS.
8.1 FINANCIAL REPORTS. While any of the New Options remain
outstanding and unexercised, ILT shall provide Purchasers with copies of
its annual report to shareholders, annual report on Form 10-KSB (or such
other form as ILT may be qualified to use for such purpose), quarterly
reports on Form 10-QSB (or such other form as may properly be available to
ILT for such reports), any report on Form 8-K, and internally prepared
(unaudited) financial statements, to the extent prepared by ILT. In the
case of the reports described above which are filed with the Securities and
Exchange Commission, copies of the same will be provided to Purchasers
within five (5) working days of filing with the Commission. In the case of
the other documents, to the extent the same are prepared by ILT, they shall
be provided on or before the 20th day following the month then ended.
8.2 At the Closing, or as soon thereafter as practical (but in no
event later than May 7, 1997), the Company shall deliver to Purchasers a
Cashflow Analysis, including estimations of the rate at which the proceeds
of this Offering will be used by the Company.
9. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. To induce the Company's
acceptance of this Agreement, each Purchaser hereby represents and warrants,
severally as to itself or himself and not jointly, to the Company and its agents
and attorneys as follows:
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9.1 ACCREDITED STATUS. Purchaser is an "accredited investor" within
the meaning of Section 501(a) of Regulation D under the Act or is not a
"U.S. Person" as that term is defined under Rule 902(o)(1) of Regulation S
under the Act, because the undersigned is [THE UNDERSIGNED MUST INITIAL ALL
OF THE FOLLOWING PARAGRAPHS WHICH ACCURATELY DESCRIBE THE UNDERSIGNED'S
STATUS]:
(1) Purchaser is an accredited person because Purchaser is:
(a) A director or executive officer of the
Company.
______(Initial)
(b) A natural person whose net worth (i.e. the excess of
his/her total assets over his/her total liabilities, including
the value of his/her personal residence), individually or jointly
with his/her spouse, as of the date hereof, exceeds $1,000,000.
______(Initial)
(c) A natural person who had an individual income in excess
of $200,000 in each of the past two years, or whose joint income
with that person's spouse during each of the past two was in
excess of $300,000, and who reasonably expects to reach the same
income level in the present year.
______(Initial)
(d) A corporation or partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000.
______(Initial)
(e) A broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
______(Initial)
(f) An entity in which all of the equity owners are
"accredited investors" pursuant to one of the categories set
forth above.
______(Initial)
(g) None of the above.
______(Initial)
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(2) Purchaser is not a "U.S. Person" as defined under Regulation
S because (mark and complete each applicable item):
(a) Purchaser is a corporation organized under the laws of
__________________, which is outside the United States and is not
a territory or possession of the United States and in addition to
the foregoing, Purchaser was not formed by a U.S. Person for the
purpose of investment in securities not registered under the Act
and Purchaser will not purchase the Purchased Securities on
behalf of a U.S. Person as defined by the Act.;
______(Initial)
(b) Purchaser is a natural person resident in
________________ and a citizen of _____________________.
______________________________________________________________________ (Initial)
9.2 LIQUIDITY. Purchaser presently has sufficient liquid assets to
pay that portion of the Purchase Price to be paid by such Purchaser
hereunder. Purchaser's overall commitments to investments that are not
readily marketable is not disproportionate to Purchaser's total assets, and
Purchaser's investment in the Company will not cause such overall
commitment to become excessive. Purchaser has adequate means of providing
for its current needs and contingencies and has no need for liquidity in
its investment in the Company or for a source of income from the Company.
Purchaser is capable of bearing the economic risk and the burden of the
investment contemplated by this Agreement, including, but not limited to,
the possibility of the complete loss of the value of the Purchased
Securities and the limited transferability of the Purchased Securities,
which may make the liquidation of the Purchased Securities impossible in
the near future.
9.3 ORGANIZATION, STANDING, AUTHORIZATION. If not an individual,
Purchaser is duly organized, validly existing, and in good standing under
the laws of the country of organization described in SCHEDULE I hereto and
has the requisite power and authority to enter into this Agreement, acquire
the Purchased Securities and execute and deliver any documents or
instruments in connection with this Agreement. The execution and delivery
of this Agreement, and all other documents and instruments executed by
Purchaser in connection with any of the transactions contemplated by this
Agreement have been duly authorized by all required action of Purchaser's
members or managers. The person executing, on Purchaser's behalf, this
Agreement and any other documents or instruments executed by Purchaser in
connection with this Agreement is duly authorized to do so.
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<PAGE>
9.4 ABSENCE OF CONFLICTS. Purchaser represents and warrants that the
execution and delivery of this Agreement and any other document or
instrument executed in connection with this Agreement, and the consummation
of the transactions contemplated thereby, and compliance with the
requirements thereof, will not violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on Purchaser, or the
provision of any indenture, instrument or agreement to which Purchaser is
a party or is subject, or by which Purchaser or any of their properties is
bound, or conflict with or constitute a material default thereunder, or
result in the creation or imposition of any lien pursuant to the terms of
any such indenture, instrument or agreement, or constitute a breach of any
fiduciary duty owed by such Purchaser to any third party, or require the
approval of any third-party pursuant to any material contract, agreement,
instrument, relationship or legal obligation to which Purchaser are subject
or to which any of their properties, operations or management may be
subject.
9.5 SOLE PARTY IN INTEREST. Purchaser represents that it is the sole
and true party in interest, and no other person or entity has or will have
upon the issuance of the Purchased Securities any beneficial ownership
interest in the Purchased Securities or any portion of the Purchased
Securities, whether direct or indirect, other than the equity holders or
beneficiaries of such Purchaser.
9.6 INVESTMENT PURPOSE. Purchaser represents that it is acquiring
the Purchased Securities for its own account and for investment purposes
and not on behalf of any other person or entity or for or with a view to
resale or distribution.
9.7 KNOWLEDGE AND EXPERIENCE. Purchaser is experienced in evaluating
and making speculative investments, and has the capacity to protect
Purchaser's interests in connection with the acquisition of the Purchased
Securities. Purchaser has such knowledge and experience in financial and
business matters in general, and investments in the laser industry in
particular, that Purchaser is capable, on Purchaser's behalf, of evaluating
the merits and risks of Purchaser's investment in the Company. Purchaser
has been informed that an investment in the Company is speculative and has
concluded that Purchaser's proposed investment is appropriate in light of
its overall investment objectives and financial situation.
9.8 INVESTMENT ADVISORS. No party has received or will receive any
compensation or other remuneration for advising Purchaser with respect to
this investment, and Purchaser represents that no investment advisor or
purchaser representative has been consulted or retained in connection with
Purchaser's decision to invest in the Company.
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<PAGE>
9.9 DISCLOSURE, ACCESS TO INFORMATION. Purchaser confirms that it
has received and thoroughly read and is familiar with and understands this
Agreement, and that all documents, records, books and other information
pertaining to Purchaser's investment in the Company requested by Purchaser
have been made available for inspection and copying and that there are no
additional materials or documents that have been requested by Purchaser
that have not been made available by the Company. Purchaser further
acknowledges that on behalf of the Purchasers and as Purchasers
representatives, since May 2, 1996, Braddock and Andrew Hofmeister have
served as members of the Board of Directors of the Company. Purchaser
further acknowledges that the Company is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and Purchaser has reviewed or received copies of any such
reports that have been requested by it. Without limiting the generality of
the foregoing, Purchaser acknowledges that it has received and has reviewed
copies of the following documents and materials, all of which are
incorporated herein by reference:
(1) Articles of Incorporation of the Company, as amended;
(2) Bylaws of the Company, as amended;
(3) Asset Purchase Agreement with Brite Smile, Inc., dated as of
February 6, 1996;
(4) Annual Report on Form 10-KSB for the fiscal year ended March
31, 1995 and 1996;
(5) Quarterly Reports on Form 10-QSB for the quarters ended June
30, September 30, and December 31, 1995 and 1996;
9.10 EXCLUSIVE RELIANCE ON THIS AGREEMENT. In making the decision to
purchase the Purchased Securities, Purchaser has relied exclusively upon
information included in this Agreement or incorporated herein by reference
pursuant to Section 9.9, and not on any other representations, promises or
information, whether written or verbal, by any person.
9.11 ACCURACY OF UNINCORPORATED DOCUMENTS AND OTHER UNINCORPORATED
MATERIALS. To the extent Purchaser has received documents or other
materials, other than as expressly incorporated herein by reference
pursuant to Section 9.9, and subject to Section 9.15 of this Agreement,
Purchaser acknowledges the following with respect to such documents and
materials:
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<PAGE>
(1) Such documents and materials and any projections contained
therein may be incomplete, may contain errors or misstatements, and do
not purport to adequately describe the transactions contemplated by
this Agreement or the status of the development of the Company's
technology. Purchaser agrees that such documents and materials cannot
be relied upon in making a decision as to whether to purchase the
Purchased Securities and acknowledges that there can be no assurance
that any of the projections contained therein will be accomplished by
the Company; and
(2) Purchaser has been advised and fully understands that any
summaries, projections, forecasts or estimates included in such
documents and materials, including those relating to product
development schedules and projections, possible revenues, income,
profitability of the Company or an investment therein inherently
involve uncertainties and may be affected by circumstances in the
future which cannot be reasonably predicted and are beyond the control
of the Company. Further, the projections, forecasts and estimates are
speculative and may be optimistic, and there can be no assurance that
any of the projections, forecasts or estimates will be reached, or
that the Company will successfully produce a commercially viable
product or that the Company will realize any income or profits or that
any dividends or distributions of profits will be paid on the
Company's securities. The use of the words "believes," "estimates,"
"anticipates" and similar expressions are intended to identify
forward-looking statements, all of which are subject to certain risks
and uncertainties that could cause actual results to differ materially
from those projected. Purchaser should not place undue reliance on
such forward-looking statements, which speak only as of the date(s)
made. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
9.12 RESIDENCY. Each Purchaser has its principal place of business
as set forth in SCHEDULE I hereto.
9.13 ADVICE OF COUNSEL. Purchaser understands the terms and
conditions of this Agreement, has investigated all issues to Purchaser's
satisfaction, has consulted with such of Purchaser's own legal counsel or
other advisors as Purchaser deems necessary, and is not relying, and has
not relied on the Company for an explanation of the terms or conditions of
this Agreement or any document or instrument related to the transactions
contemplated thereby. Purchaser further acknowledges, understands and
agrees that, in arranging for the
Page 27 of 73
<PAGE>
preparation of this Agreement and all other documents and materials related
thereto, the Company has not attempted to procure, and has not procured,
legal representation for Purchaser.
9.14 ACCURACY OF REPRESENTATIONS AND INFORMATION. All representations
made by Purchaser in this Agreement and all documents and instruments
related to this Agreement, and all information provided by Purchaser to the
Company concerning Purchaser and its financial position is correct and
complete in all material respects as of the date hereof. If there is any
material change in such information before the actual issuance of the
Purchased Securities, Purchaser immediately will provide such information
to the Company.
9.15 NO REPRESENTATIONS. None of the following have ever been
represented, guaranteed, or warranted to Purchaser by the Company or any of
its employees, agents, representatives or affiliates, or any broker or any
other person, expressly or by implication:
(1) The approximate or exact length of time that Purchaser
will be required to remain as owner of the Purchased Securities;
(2) The percentage of profit or amount of or type of
consideration, profit or loss (including tax write-offs or other
tax benefits) to be realized, if any, as a result of an
investment in the Purchased Securities; or
(3) The past performance or experience on the part of the
Company or any affiliate or their associates, agents or
employees, or of any other person as being indicative of future
results of an investment in the Purchased Securities.
9.16 FEDERAL TAX MATTERS. Purchaser has reviewed and understands the
federal income tax aspects of its purchase of the Purchased Securities, and
has received such advice in this regard as Purchaser deems necessary from
qualified sources such as attorneys, tax advisors or accountants, and is
not relying on any representative or employee of the Company for such
advice.
9.17 NO BROKERS OR FINDERS. Purchaser represents that no third
person has in any way brought the parties together or been instrumental
in the negotiation, execution, or consummation of this Agreement or any
instrument, document or agreement related to this Agreement, or will
receive a fee or any
Page 28 of 73
<PAGE>
compensation for doing so. Purchaser agrees to indemnify the Company
against any claim by any third person for any commission, brokerage fee,
finders fee, or other payment with respect to this Agreement or the
transactions contemplated hereby based upon any alleged agreement or
understanding between such party and such third person, whether expressed
or implied, arising from the actions of such party. The covenants set
forth in this Section 9.17 shall survive the Closing Date and the
consummation of the transactions contemplated by this Agreement.
10. CERTAIN RISK FACTORS. Purchasers have been informed about and fully
understand that there are risks associated with an investment in the Company.
Such risks may include, but not necessarily be limited to, the following:
10.1 FORWARD LOOKING STATEMENTS. Statements contained in the
Company's annual and quarterly reports on Forms 10-KSB and 10-QSB that are
not purely historical are forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements include statements regarding the
Company's expectations, beliefs, hopes, intentions or strategies regarding
the future. All forward looking statements included in such reports are
based on information available to the Company on the date thereof and the
Company assumes no obligation to update any such statements. The Company
cautions that actual results could differ materially from those in such
forward looking statements. Among other things, the Company's business and
its results of operations may be affected by factors which could cause
actual results to differ materially from those described in the forward
looking statements contained in the reports. Such factors include, but are
not limited to, the following additional risks set forth in this section
10.
10.2 GOVERNMENT REGULATION. The Company's products are subject to
the provisions of the Federal Food, Drug and Cosmetic Act (the "ACT")
and the Safe Medical Devices Amendment of the Act. The Act is
administered by the Food and Drug Administration ("FDA") and similar
laws are administered by similar agencies in other countries. The Act
generally classifies medical devices into categories, and establishes
varying degrees of labeling and marketing clearance procedures. The
Company is subject to FDA standards and procedures governing the
manufacture of medical devices and to FDA inspection for compliance with
such standards. The Company has obtained FDA clearance for the use of
its lasers in the tooth whitening process. The Company is required to
manufacture its regulated products in accordance with Good Manufacturing
Procedures ("GMP") and is subject to periodic audits by the FDA. In
addition, the use of the Company's products may be regulated by various
state agencies. Although the Company believes it has been and is now in
compliance with the
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<PAGE>
FDA's rules and GMP, there can be no assurance that the Company's products
will be able to comply successfully with any such requirements or
regulations. Federal and state regulations regarding the manufacture and
sale of medical devices are subject to future change. The Company cannot
predict what material impact, if any, such changes might have on its
business. In addition, the introduction of the Company's products in
foreign markets will require obtaining foreign regulatory clearances.
There can be no assurance that the Company will be able to obtain
regulatory clearances for all of its products in the U.S. or in foreign
markets. Although the Company believes that it will continue to be able to
comply with all applicable regulations of the FDA, including GMP
guidelines, current regulations depend heavily on administrative
interpretations, and there can be no assurance that future interpretations
made by the FDA or other regulatory btive effect, will not adversely affect
the Company.
10.3 CERTAIN RESTRICTIONS ON DENTAL TECHNICIANS RELATED TO LASER
PROCEDURES. Many dentists who have acquired and who desire to acquire the
Company's laser tooth whitening system also desire to utilize a dental
hygienist and/or dental technician to perform many aspects of the laser
tooth whitening procedure. The dental licensing boards or similar
regulatory bodies in several states of the United States have recently
promulgated or proposed rules which prohibit dental hygienists and/or
dental technicians from operating or using lasers in connection with dental
procedures, including tooth whitening procedures. Dental licensing boards
or similar regulatory bodies in other states and countries can and may
adopt similar rules, the effect of which is to discourage some dentists
from acquiring the Company's laser tooth whitening system because they are
not able to utilize less expensive employees and staff (dental hygienists
and/or dental technicians) for a significant portion of the laser tooth
whitening procedure. The Company has determined to challenge rules adopted
by states prohibiting dental hygienists and/or dental technicians from
operating laser equipment in tooth whitening procedures. Further, the
Company has determined to initiate rulemaking procedures in other states
which would expressly allow dental hygienists, and in some cases, dental
technicians, to utilize lasers in tooth whitening procedures. However,
there can be no assurance that the Company's efforts opposing rules
prohibiting dental hygienists and/or dental technicians from operating
lasers in tooth whitening procedures or advancing rules allowing such will
be successful. To the extent that state licensing boards or similar
regulatory bodies in a majority of the states of the United States and/or
in foreign countries adopt rules prohibiting dental hygienists and/or
dental technicians from operating lasers in tooth whitening procedures, the
Company believes that the appeal of its laser tooth whitening products as a
s dentists engaged in cosmetic dentistry practices will be reduced.
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<PAGE>
10.4 TECHNOLOGICAL OBSOLESCENCE. The business of designing and
manufacturing technical products such as lasers is characterized by rapid
technological change. In addition, there is increasing competition in the
creation and manufacture of tooth whitening compounds used in the tooth
whitening process. Although the Company has obtained or applied for
patents on certain aspects of its technology and processes used by it,
there can be no assurance that the Company's competitors will not develop
or manufacture products technologically superior to those of the Company.
The Company also relies upon trade secrets and no assurance can be given
that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the
Company's trade secrets or disclose such technology, or that the Company
can meaningfully protect its rights to unpatented trade secrets. The
Company requires its key employees, consultants and advisors to execute
confidentiality agreements upon the commencement of an employment or
consulting relationship with the Company.
10.5 COMPETITION. The Company operates in a highly competitive
industry and competes with firms which may have greater financial
resources, broader experience and more substantial marketing operations
than the Company. Other laser manufacturers have also begun to market and
use lasers in the tooth whitening process. Although the Company believes
its process to be superior to those of its competitors, there can be no
assurance that the Company will be able to effectively compete with larger,
better financed companies in the same industry.
10.6 PRODUCT LIABILITY. Manufacturers and distributors of products
used in the medical industry are from time to time subject to lawsuits
alleging product liability, negligence or related theories of recovery,
which have become an increasingly frequent risk of doing business in these
industries. Although lawsuits may arise or claims may be asserted based on
product liability or other legal theories against the Company, all such
actions have been insured against and there are no such actions pending.
While the Company does not anticipate any such lawsuits, there can be no
assurance that the Company will not be subjected to claims for and suffer
substantial losses arising out of the use of any of its products which may
be defective. Such claims and losses, and the expense of defending against
such claims, would be costly and could have a materially adverse effect on
the Company's results of operations. Although the Company presently
maintains product liability insurance coverage, there can be no assurance
that such coverage will be available for such risks in the future or that,
if available, it would prove sufficient to cover potential claims or that
the present amount of insurance can be maintained in force at an acceptable
cost. Furthermore, the assertion of such claims, regardless of their merit
or eventual
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<PAGE>
outcome, also may have a material adverse effect on the Company, its
business reputation and its operations.
10.7 DEPENDENCE UPON MARKET ACCEPTANCE OF COMPANY'S PRODUCTS. The
Company's ability to expand its product line and market its new products
and processes (including the BriteSmile process) will depend upon the
willingness of potential customers to purchase the products, in many
instances to replace products presently purchased from the Company's
competitors. In addition, there can be no assurance that any new products
or technologies developed or acquired by the Company, including those
currently being developed by the Company, will be accepted by the industry.
The Company currently has limited marketing capabilities and will need to
hire additional sales and marketing personnel for the new products. There
can be no assurance that any sales and marketing effort undertaken by the
Company will be successful. Furthermore, marketing is expensive and
amounts spent to promote the products and processes of the Company will
affect its results of operations.
10.8 DEPENDENCE ON PATENTS AND PROPRIETARY RIGHTS. The Company has
several United States patents and has filed additional patent applications
in the U.S. Patent and Trademark Office. These patents and pending
applications relate to the Company's multiplexer, collinated beam delivery
system for composite curing, laser resonator, krypton or "mixed gas" ion
laser device, and the BriteSmile process. The Company believes patents and
proprietary rights have been and will continue to be important in enabling
the Company to compete. However, there can be no assurance that the
pending patents will issue or, if they do issue, that they and the other
patents of the Company will not be challenged or circumvented or will
provide the Company with any competitive advantages or that any patents
will issue from pending patent applications. Failure to obtain patents in
certain foreign countries may materially adversely affect the ability of
the Company to compete effectively in certain international markets. The
Company also relies on trade secrets that it seeks to protect, in part,
through confidentiality agreements with employees and other parties. There
can be no assurance that these agreements will not be breached, that the
Company would have adequate remedies for any breach or that the Company's
trade secrets will not otherwise become known to or independently developed
by competitors. The Company may become involved from time to time in
litigation to determine the enforceability, scope and validity of
proprietary rights. Any such litigation could result in substantial cost
to the Company and divert the efforts of its management and technical
personnel and adversely affect results of operations.
10.9 RISKS OF FOREIGN SALES; FOREIGN OPERATIONS. The Company's
expanded marketing strategy includes increased marketing of its products in
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foreign countries. Accordingly, the Company's business is subject to many
of the risks of international operations, including tariff restrictions,
foreign currency fluctuations, currency control regulations, competing or
conflicting manufacturing standards, government regulation and approval
policies for medical testing and therapy devices and licensing
requirements. In addition to the foreign sales activity of the Company,
since 1989 the Company has been engaged in manufacturing operations in
Shanghai, China, through its wholly-owned subsidiary, Ion Laser Technology
Development Company and its ownership in Shanghai Laser Technology Company,
a Chinese joint venture. The joint venture manufactures and sells lasers
to markets in China and other parts of the world. In recent years, the
political and economic climate in China has been subject to volatile
change. Political and economic changes in the future could adversely
affect the Company's investment in the joint venture.
10.10 RECENT NET LOSS; POSSIBLE FUTURE LOSSES. Although the Company
realized a modest net profit in its last fiscal year, the Company realized
net losses in prior years. The Company's operations continue to use
significant amounts of cash as the Company endeavors to promote its
BriteSmile tooth whitening products and services. Although the Company
has experienced revenue growth since its inception, there can be no
assurance that such growth will continue or that net losses will not be
incurred in future operating periods.
10.11 BACKLOG; QUALITY ASSURANCE. The Company has recently increased
its production capacity and is in the process of adding to that capacity at
its Salt Lake City facility. The increased demand for its lasers and for
the chemical reagents used in the tooth whitening process resulting from
increased sales activity in this industry has resulted in an increase in
orders for the Company's products. Inventories of finished products and
work in progress have increased substantially. In the past nine months the
Company has experienced delays in delivering some finished products to
customers. In some cases there have also been an unusually high number of
warranty claims related to delivered product. While some quality assurance
problems may reasonably be expected as a new product line is started or as
new personnel are hired and trained to meet increasing demand, warranty
claims are a significant expense to the Company and the delays caused by
backlogs or by quality assurance problems adversely affect operating
results. The Company constantly works to improve quality and to reduce
backlog, but there can be no assurance that these trends will not continue
in the foreseeable future.
10.12 CHANGE IN BUSINESS FOCUS. The Company is currently
transitioning its business to rely more heavily on the sale of laser tooth
whitening chemicals and lasers used in the cosmetic dental market. In
addition to the foregoing,
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factors that may affect the Company's results of operations include the
volume and timing of orders received, changes in the mix of product sold,
market acceptance of the Company's products, competitive pricing pressures,
the Company's ability to meet increasing demand, the Company's ability to
introduce new products on a timely basis, the timing of new product
announcements and introductions by the Company or its competitors, changing
customer requirements, delays in meeting new product qualifications, the
time of research and development, and the timing and extent of expenses
related tosuch research and development.
10.13 FUTURE CAPITAL REQUIREMENTS. In the course of expansion, there
is no guarantee that the Company will be able to raise adequate capital to
fund subsequent growth, whether via the capital markets, private
placements, lines of credit or other means.
10.14 ABSENCE OF DIVIDEND POLICY. The Company has never declared or
paid any cash dividends on its shares and does not anticipate paying cash
dividends in the foreseeable future.
10.15 IMMEDIATE AND SUBSTANTIAL DILUTION. The Purchasers will incur
immediate, substantial dilution of their interests, because the net
tangible book value per share of the common stock after the offering will
be substantially less than the price per share paid by the Purchasers.
11. MANNER OF SALE. At no time were Purchasers presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
12. RESTRICTED SHARES. Purchasers understand and acknowledge that neither
the Purchased Securities nor the Common Stock underlying the New Options have
been registered under the Act, or any state securities laws, and that they will
be issued in reliance upon certain exemptions from the registration requirements
of those laws, and thus cannot be resold unless they are registered under the
Act or unless the Company has first received an opinion of competent securities
counsel that an exemption from registration is available for such resale. As to
certain of the Purchasers which are not U.S. persons within the meaning of
Regulation S, the offer and sale contemplated hereunder has been and will be
made in an "offshore transaction" with no "directed selling efforts" in the U.S.
(all within the meaning of Regulation S), and each such Purchaser has agreed and
hereby confirms that during the Holding Period (as defined below) commencing on
the Closing Date, no offer or sale of any Purchased Securities shall be made in
the U.S. or to a "U.S. person" (as defined in Regulation S) or for the account
or benefit of a "U.S. person." The "Holding Period" shall expire on the 360th
day after the Closing Date. With regard to the restrictions on resales of the
Purchased Securities or
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any security underlying or into which the Purchased Securities are or may be
convertible, Purchasers are aware (i) of the limitations and applicability of
Securities and Exchange Commission Rule 144; (ii) that the Company will issue
stop transfer orders to its stock transfer agent in the event of attempts to
improperly transfer any such securities; and (iii) that a restrictive legend
will be placed on certificates representing the Purchased Securities and any
security underlying or into which any of the Purchased Securities are or will be
convertible, which legend will read substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS AND THEREFORE HAVE
NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT OR APPLICABLE
STATE LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS [AS TO HOLDERS WHICH ARE NOT "U.S.
PERSONS" WITHIN THE MEANING OF REGULATION S]. SUBJECT TO CERTAIN
REGISTRATION RIGHTS, THE HOLDER OF THESE SECURITIES HAS AGREED
AND COVENANTED NOT TO OFFER OR SELL THESE SECURITIES IN THE
UNITED STATES, ITS TERRITORIES OR POSSESSIONS, OR TO PERSONS
KNOWN TO BE NATIONALS OR RESIDENTS OF THE UNITED STATES, UNTIL
THE 361ST DAY FOLLOWING THE CLOSING DATE, 1998, AND THEREAFTER
ONLY IF THE SHARES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREUNDER IS AVAILABLE.
FURTHERMORE, THE COMPANY WILL INSTRUCT ITS STOCK TRANSFER AGENT
NOT TO RECOGNIZE ANY SALE OF THESE SECURITIES UNLESS THE COMPANY
HAS FIRST RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS SECURITIES COUNSEL, THAT AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS IS AVAILABLE.
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<PAGE>
13. INDEMNIFICATION. The Company agrees to indemnify each of the
Purchasers and their respective officers, employees and agents, and hold them
harmless from and against any and all liability, damage, cost or expense,
including attorney's fees, incurred on account or arising out of any inaccuracy
in or breach of the declarations, covenants, agreements, representations, and
warranties by the Company set forth herein.
14. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchasers as follows:
14.1 ORGANIZATION, STANDING, ETC. The Company is duly organized,
validly existing, and in good standing under the laws of the State of Utah,
and has the requisite power and authority to enter into and perform this
Agreement and to execute and perform under the documents, instruments and
agreements related to this Agreement.
14.2 AUTHORIZATION. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all required action of the Company, including any necessary
approval by its Board of Directors or shareholders, and each of the
Transaction Documents and all instruments and agreements to be delivered in
connection therewith constitute its legal, valid and binding obligation,
enforceable against the Company in accordance with their respective terms,
subject to laws of general application relating to the rights of creditors
generally.
14.3 ABSENCE OF CONFLICTS. Neither the execution and delivery of the
Transactions Documents or any other agreement or instrument to be delivered
to the Purchasers in connection therewith, nor the consummation of the
transactions contemplated thereby, by the Company, shall (i) conflict with
or result in a breach of or constitute a violation or default under (A) any
provision of the Articles of Incorporation or By-laws, each as amended to
date, or the Company, or (B) the provision of any indenture, instrument or
agreement to which the Company is a party or by which it or any of its
properties is bound, or (C) any order, writ, judgment, award, injunction,
decree, law, statute, rule or regulation, license or permit applicable to
the Company; (ii) result in the creation or imposition of any lien pursuant
to the terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owned by the Company to any third party, or
(iii) require the approval of any third party pursuant to any material
contract, agreement, instrument, relationship or legal obligation to which
the Company is subject or to which it or any of its properties, operations
or management may be subject.
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<PAGE>
14.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock par value $.001 per share.
As of April 30, 1997, 5,177,855 shares of Common Stock were issued and
outstanding, 118,875 shares were held in the company's treasury, and
1,862,600 shares were reserved for issuance in connection with options
outstanding as shown on SCHEDULE II, attached. All of the outstanding
shares of Common Stock are, and the Common Shares and the shares of Common
Stock to be issued to the Purchasers pursuant to exercise of the New
Options will be, when paid for and issued, duly authorized, validly issued,
fully paid and non-assessable and free of any preemptive rights.
14.5 FINANCIAL STATEMENTS. The Company, the Company's annual reports
on Form 10-KSB for the fiscal years ended March 31, 1995 and 1996 (the
"10-K'S"), and its quarterly reports on Form 10-QSB for the periods ended
June 30, September 30, and December 31, 1995 and 1996 (the "10-QS"), and
all 8-K's filed by the Company since March 31, 1995 (the "8-K'S") and its
1995 and 1996 Annual Proxy Statements, copies of which have been filed with
or furnished to the Securities and Exchange Commission, were when filed or
furnished, accurate in all material respects and did not include any untrue
statement of material fact or omit to state material facts necessary to
make the statements therein not misleading. The financial statements
included in the 10-K's and the 10-Qs present fairly the financial position
of the Company at such dates and the results of its operations and cash
flows for the periods then ended, in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered by such statements.
14.6 LITIGATION, ETC. Except as disclosed in the 10-K's and the
10-Q's and 8-K's, there are no suits, actions or legal, administrative,
arbitration or other proceedings or governmental investigations or other
controversies pending, or to the knowledge of the Company threatened, or as
to which the Company has received any notice, claim or assertion, which
involve a potential cost or liability to the Company which would singly or
in the aggregate, materially or adversely affect the financial condition,
results of operations, business or prospects of the company. The Company
is not in default with respect to any order, writ, injunction or decree of
any court or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign affecting or relating to it which is material to the financial
condition, results of operations or business of the Company.
14.7 NO MATERIAL ADVERSE CHANGE. Since March 31, 1996, other than as
disclosed in 1996 10-Qs and 8-Ks, there has been no material adverse change
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<PAGE>
in the assets, business, prospects, operations or financial condition of
the Company.
14.8 BROKERS AND FINDERS. Neither the Company nor any person acting
on behalf of the Company has employed any broker, agent or finder, or
incurred any liability for any brokerage fees, agents' commissions or
finders' fees, in connection with the transactions contemplated herein.
The Company agrees to indemnify Purchasers against any claim by any third
person for any commission, brokerage fee, finders fee, or other payment
with respect to this Agreement or the transactions contemplated hereby
based upon any alleged agreement or understanding between such party and
such third person, whether expressed or implied, arising from the actions
of such party. The covenants set forth in this Section 14.8 shall survive
the Closing Date and the consummation of the transactions contemplated by
this Agreement.
14.9 REGULATORY COMPLIANCE. To the best knowledge of the Company, it
has operated and is currently operating in compliance in all material
respects with all laws, rules, regulations, orders, decrees, licenses or
permits applicable to it or to its business. The Company has not received
any notice from the FDA or any other governmental agency or authority of
any noncompliance by the Company with any law, rule, regulation, order,
decree, license or permit applicable to it or its business or properties.
14.10 ARTICLES OF INCORPORATION AND BY-LAWS. The Company has
delivered to the Purchasers copies of its Articles of Incorporation and all
amendments thereto, which copies are complete and correct. The Company is
not in default under or in violation of any provisions of its Articles of
Incorporation. The Company's Articles of Incorporation have not been
amended since the date of certification thereof and no action has been
taken for the purpose of effecting any amendment thereto. The Company has
delivered to the Purchasers copies of its By-laws and all amendments
thereto, which copies are complete and correct. The Company is not in
default under or in violation of any provision of its By-laws.
14.11 PRODUCT LIABILITY. The Company has not received any notice,
claim or assertion regarding an actual or alleged liability of the Company
with respect to any of its products.
14.12 OEM RELATIONSHIPS. The Company has not received any notice,
claim or assertion from or with respect to any OEM counterparty of the
Company regarding intention of such OEM party to either discontinue its
relationship with the Company or develop or market products in competition
with the Company.
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<PAGE>
14.13 PATENTS AND PROPRIETARY RIGHTS. The Company received FDA
market clearance for the argon laser in February 1996. The Company also
received formal notice of allowance for its initial patent application
concerning laser teeth whitening in April, 1997. The Company has no
reason to believe that any of its patents or proprietary rights
infringes upon or otherwise violates the patents or proprietary rights
of any other party. Except for the demand letter dated March 14, 1996
received from BioLase Technology, Inc. and an action filed in the
Circuit Court of Jefferson County, Alabama, against the Company, Dr.
David Yarborough and others by Jerry B. Black, the company has not
received any notice, claim or assertion that its patents or proprietary
rights infringe upon or otherwise violate the patents or proprietary
rights of any other party.
14.14 UNINCORPORATED DOCUMENTS OR MATERIALS. With respect to any
document or other materials received by the Purchasers from the Company or
its representatives which are incorporated herein by reference pursuant to
Section 9.9 hereof, (i) the Company has no reason to believe any of such
documents and materials or any projections contained therein contain errors
or misstatements or do not adequately describe the transactions
contemplated by this Agreement or the status of the development of the
Company's technology, and (ii) such documents, materials and projections
were prepared by the Company and its management in good faith.
14.15 INFORMATION. To the best knowledge of the Company, the
information concerning the Company set forth in this Agreement is complete
and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they
were made, not misleading. The Company is not aware of any facts or
circumstances existing or any event which has had or which reasonably could
be expected to have in the future a material adverse effect with respect to
the financial condition, business, affairs or prospects of the Company
since the last day of its most recent fiscal year which is not otherwise
disclosed in the documents provided to Purchasers hereunder.
14.16 NATURE OF COMPANY. The Company is not an open ended investment
company or a unit investment trust, registered or required to be
registered, or a closed end investment company required to be registered,
but not registered, under the Investment Company Act of 1940.
15. CONFIDENTIALITY. Purchasers acknowledge and agree that the Company
has provided them with certain information about the Company that is proprietary
and confidential
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<PAGE>
in connection with the consummation of the transactions contemplated by this
Agreement (the "CONFIDENTIAL INFORMATION"). Purchasers covenant to preserve the
confidentiality of the Confidential Information and to use the Confidential
Information only for the purpose of determining to proceed with the transactions
contemplated by this Agreement, except that information (i) in the public domain
without violation of any confidentiality agreement, if known by the party
receiving it before receipt, or (ii) received from a third party without
violation of a non-disclosure obligation of that third party of the party
delivering or disclosing information shall not be considered Confidential
Information subject to this Section 15.
16. NONDISCLOSURE. Except as required by applicable securities laws,
rules and regulations, prior to the Closing Date, no press release or other
announcement concerning the proposed transactions will be issued except by
mutual consent of the parties. This Agreement and all negotiations and
discussions between the parties in connection with this Agreement shall be
strictly confidential and will not be disclosed in any manner prior to the
Closing Date, except to employees and agents of the parties on a need-to-know
basis, as required by applicable law or regulations or as otherwise agreed by
the parties. After Closing, disclosure shall be at the sole discretion of the
Company.
17. CONDITIONS TO CLOSING. Closing of the transactions contemplated by
this Agreement shall be contingent upon the satisfaction of the following
conditions precedent:
17.1 APPROVALS, WAIVERS, ETC. ILT shall have delivered to Purchasers
evidence of all approvals of its board of directors, government or
third-parties which may be required for the sale of the Purchased
Securities, in full force and effect as of the Closing Date.
17.2 SECURITIES LAWS FILINGS. ILT shall have made or obtained all
federal, state or local government filings, permits and authorizations
(including without limitation federal and state securities laws filings)
necessary for the sale of the Purchased Securities.
17.3 OPINIONS. The Company shall have delivered to the Purchasers an
opinion of counsel to the Company that any shares of Common Stock of the
Company issued since the Securities Purchase Agreement dated April 1, 1996
were validly issued, fully paid and non-assessable, that the Purchased
Securities, when paid for and issued, will be validly issued, fully paid
and non-assessable, and that the Transaction Documents have been duly
authorized and constitute legal and binding obligations of the Company
enforceable according to their terms.
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<PAGE>
18. GENERAL PROVISIONS.
18.1 ATTORNEYS' FEES. In the event of a default in the performance
of this Agreement or any document or instrument executed in connection with
this Agreement, the defaulting party, in addition to all other obligations
of performance hereunder, shall pay reasonable attorneys' fees and costs
incurred by the non-defaulting party to enforce performance of this
Agreement.
18.2 CHOICE OF LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah, including choice of law
rules.
18.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when so signed shall be deemed to be an
original, and such counterparts together shall constitute one and the same
instrument.
18.4 ENTIRE AGREEMENT. This Agreement, and the Exhibits, Schedules
and other attachments referred to herein (all of which are incorporated in
this Agreement by reference) collectively set forth the entire agreement
between the parties as to the subject matter hereof, supersede any and all
prior or contemporaneous agreements or understandings of the parties
relating to the subject matter of this Agreement (including without
limitation the letter agreement between the Company and CAP Advisors
Limited dated April 9, 1997), and may not be amended except by an
instrument in writing signed by all of the parties to this Agreement.
18.5 EXPENSES. The parties shall be responsible for and shall pay
their own costs and expenses, including without limitation attorneys' fees
and accountants' fees and expenses, in connection with the conduct of the
due diligence inquiry, negotiation, execution and delivery of this
Agreement and the instruments, documents and agreements executed in
connection with this Agreement. Notwithstanding the foregoing, the Company
shall pay any stock transfer taxes payable in connection with the issue and
sale of the Purchased Securities to the Purchasers.
18.6 HEADINGS. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
18.7 NOTICES. All notices or other communications provided for under
this Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by overnight courier service, to the parties at their
respective
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<PAGE>
addresses as indicated below or at such other address as the parties may
designate in writing:
(1) If to Purchaser, then to the address set forth in SCHEDULE I
hereto.
(2) If to the Company:
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84115
Fax: (801) 262-5770
With a copy to:
Jeffrey M. Jones, Esq.
DURHAM, EVANS, JONES & PINEGAR, P.C.
Key Bank Tower, Suite 850
50 South Main Street
Salt Lake City, Utah 84144
Fax: (801) 363-1835
All notices and communications shall be effective as follows: When mailed,
upon three (3) business days after deposit in the mail (postage prepaid);
when telecopied, upon confirmed transmission of the telecopied notice; when
hand delivered, upon delivery; and when sent by overnight courier, the next
business day after deposit of the notice with the overnight courier.
18.8 SEVERABILITY. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall
not be affected thereby.
18.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors, but shall
not be assignable by Purchasers without the prior written consent of the
Company.
18.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS CLOSING.
All warranties, representations, indemnities and agreements made in this
Agreement by a party hereto shall survive the date of this Agreement, the
Closing Date, the consummation of the transactions contemplated by this
Agreement, and the issuance by the Company of the Purchased Securities.
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<PAGE>
IN WITNESS WHEREOF, the party named below has caused this Agreement to be
executed, as of the date first above written.
LCO INVESTMENTS LIMITED
By: /s/ Michael C.M. Yong
-----------------------------
Name: Michael C.M. Yong
Title: Director
Date: May 8, 1997
/s/ Richard S. Braddock
--------------------------------
RICHARD S. BRADDOCK
Date: May 8, 1997
ACCEPTED AND AGREED:
ION LASER TECHNOLOGY, INC.
By: /s/E. Wyatt Cannady
-------------------------------------------------
Name: E. Wyatt Cannady
Title: President and Chief Executive Officer
Date: May 8, 1997
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<PAGE>
SCHEDULE I
TO THE SECURITIES PURCHASE AGREEMENT
PURCHASERS SIGNATORY THERETO AND
ION LASER TECHNOLOGY, INC.
================================================================================
OPTIONS
NUMBER OF PURCHASED FOR
SHARES OF THE FOLLOWING
NAME AND ADDRESS OF COMMON STOCK NUMBER OF RESIDENCY OR
PURCHASER PURCHASED SHARES INCORPORATION
- --------------------------------------------------------------------------------
LCO Investments Limited 342,858 400,000 Channel Islands
Canada Court
Upland Road, St. Peter Port
Guernsey, Channel Islands
- --------------------------------------------------------------------------------
Richard S. Braddock 85,714 100,000 New York
10 Gracie Square
New York, NY 10028
- --------------------------------------------------------------------------------
TOTAL 428,572 500,000
================================================================================
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<PAGE>
EXHIBIT A TO
SECURITIES PURCHASE AGREEMENT
ION LASER TECHNOLOGY, INC.
---------------------------------------------------------------------------
OPTION TO PURCHASE
SHARES OF COMMON STOCK
---------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT, THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND UPON
OBTAINING AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE
COMPANY), SATISFACTORY TO THE COMPANY, THAT SUCH DISPOSITION MAY BE
MADE WITHOUT REGISTRATION OF THE SECURITIES UNDER SUCH ACT, OR UNLESS
SOLD PURSUANT TO RULE 144. THE HOLDER OF THESE SECURITIES HAS AGREED
AND COVENANTED NOT TO OFFER OR SELL THESE SECURITIES IN THE UNITED
STATES, ITS TERRITORIES OR POSSESSIONS, OR TO PERSONS KNOWN TO BE
NATIONALS OR RESIDENTS OF THE UNITED STATES, UNTIL THE EXPIRATION OF
365 DAYS AFTER THE ISSUANCE THEREOF, AND THEREAFTER ONLY IF THE SHARES
ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS THEREUNDER IS AVAILABLE.
THIS CERTIFIES THAT LCO INVESTMENTS LIMITED (the "HOLDER") is entitled to
purchase, on the terms hereof, 400,000 shares of Common Stock of ION LASER
TECHNOLOGY, INC. a Utah corporation (the "COMPANY"), subject to adjustment as
provided herein.
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<PAGE>
1. EXERCISE OF OPTION. The terms and conditions upon which this Option
may be exercised, and the Common Stock covered hereby (the "OPTION STOCK") may
be purchased, are as follows:
1.1 TERM. This Option may be exercised in whole or in part at any
time and from time to time commencing after the date hereof, but in no case may
this Option be exercised later than the close of business on May 1, 2007 (the
"TERMINATION DATE"), after which time this Option shall terminate and shall be
void and of no further force or effect.
1.2 PURCHASE PRICE. Except as adjusted pursuant to Section 2 hereof,
the per share purchase price for the shares of Common Stock to be issued upon
exercise of this Option shall be Nine Dollars ($9.00) per share of Common Stock
purchased.
1.3 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Option shall be effected by (a) the surrender of the Option,
together with a duly executed copy of the form of subscription attached hereto,
to the Company at its principal offices and (b) the delivery of the purchase
price by cashier's check payable to the Company's order for the number of shares
for which the purchase rights hereunder are being exercised. In the event this
Option is exercised in part at any time and not in whole, the Company shall
promptly issue and deliver to the Holder a replacement Option Agreement
reflecting the number of shares of Common Stock of the Company subject to such
Option after giving effect to such partial exercise.
1.4 ISSUANCE OF SHARES. Upon the exercise of the purchase rights
evidenced by this Option, a certificate or certificates for the purchased shares
shall be issued to the Holder as soon as practicable (and in any event within
three business days after exercise).
2. CERTAIN ADJUSTMENTS.
2.1 MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. If at any time there
shall be a capital reorganization (other than a combination or subdivision of
Option Stock otherwise provided for herein), or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation or sale, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Option, during the period specified in this Option
and upon payment of the purchase price, the number of shares of stock or other
securities or property of the Company or the successor corporation resulting
from such reorganization, merger, consolidation or sale, to which a holder of
the Common Stock deliverable upon exercise of this Option would have been
entitled under the provisions of the agreement in such reorganization, merger,
consolidation or sale if this Option had been exercised
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<PAGE>
immediately before that reorganization, merger, consolidation or sale. In any
such case, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Option with respect to the rights and interests of the Holder after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Option (including adjustment of the purchase price then in effect and the
number of shares of Option Stock) shall be applicable after that event, as near
as reasonably may be, in relation to any shares or other property deliverable
after that event upon exercise of this Option.
2.2 SPLITS AND SUBDIVISIONS. In the event the Company should at any
time or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
"COMMON STOCK EQUIVALENTS") without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution, split
or subdivision if no record date is fixed), the purchase price hereunder shall
be appropriately decreased and the number of shares of Option Stock shall be
appropriately increased in proportion to such increase in outstanding shares.
2.3 COMBINATION OF SHARES. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the purchase price hereunder shall be
appropriately increased and the number of shares of Option Stock shall be
appropriately decreased in proportion to such decrease in outstanding shares.
2.4 OTHER ADJUSTMENTS. If at any time on or before May 8, 1998 the
Company issues and sells pursuant to a public offering any shares of Common
Stock for a sale price less than $7.00 per share, or any securities convertible
into shares of Common Stock at a conversion price of less than $7.00 per share
(in either case, "DILUTIVE SECURITIES"), then, as of the date of issue of such
Dilutive Securities, the purchase price hereunder shall be appropriately
decreased to the purchase price or conversion price (as the case may be) of such
Dilutive Securities.
2.5 CERTIFICATE AS TO ADJUSTMENTS. In the case of each adjustment or
readjustment of the purchase price pursuant to this Section 2, the Company will
promptly compute such adjustment or readjustment in accordance with the terms
hereof and cause a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based
to be delivered to the Holder of this Option.
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<PAGE>
The Company will, upon the written request at any time of the Holder of this
Option, furnish or cause to be furnished to such Holder a certificate setting
forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Option Stock and the
amount, if any, of other property at the time
receivable upon the exercise of the Option.
3. FRACTIONAL SHARES. No fractional shares shall be issued in connection
with any exercise of this Option.
4. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Option, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the exercise of this Option; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of the entire Option, in addition to such other remedies as shall be available
to the Holder of this Option, the Company will use its reasonable best efforts
to take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.
5. PRIVILEGE OF STOCK OWNERSHIP. Prior to the exercise of this Option,
the Holder shall not be entitled, by virtue of holding this Option, to any
rights of a stockholder of the Company.
6. TRANSFERS AND EXCHANGES.
6.1 Subject to the limitations set forth below and subject to
compliance with applicable federal and state securities laws, all or any part of
this Option and all rights hereunder are transferable in whole or in part by
Holder, provided such transfer is made in accordance with the provisions of that
certain Securities Purchase Agreement of even date herewith entered into by the
Holder, certain other Purchasers signatory thereto and the Company (the
"SECURITIES PURCHASE AGREEMENT"). The terms and conditions of such Securities
Purchase Agreement are hereby incorporated in and made a part of this Option
Agreement. The transfer shall be recorded on the books of the Company upon the
surrender of this Option, properly endorsed, to the Company at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. In addition, the transferee
shall at the same time submit its written consent
Page 48 of 73
<PAGE>
and acknowledgment, by which the transferee shall covenant and agree to be bound
by and comply with the Securities Purchase Agreement. In the event of a partial
transfer, the Company shall issue to the several holders one or more appropriate
new Options. The Company may deem and treat the registered Holder as the
absolute owner of the Option (notwithstanding any notice of ownership or writing
thereon made by anyone other than the Company) for all purposes, and the Company
will not be affected by any notice to the contrary. No rights under and by
virtue of this Option shall pass and be transferred separately and apart from
this Option.
6.2 All new Options issued in connection with transfers, exchanges or
partial exercises shall be identical in form and provision to this Option except
as to the number of shares issuable upon exercise thereof.
7. SUCCESSORS AND ASSIGNS. The terms and provisions of this Option
Agreement shall be binding upon the Company and the Holder and their respective
successors and assigns, subject at all times to the restrictions set forth in
this Option Agreement and the Securities Purchase Agreement.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF OPTION. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Option Agreement, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Option Agreement, if
mutilated, the Company will make and deliver a new Option Agreement of like
tenor and dated as of such cancellation, in lieu of this Option Agreement.
9. AMENDMENT. This Option Agreement and the terms of the Options may be
amended only with the written consent of the Holder and the Company set forth in
a writing specifying such amendment.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised, except as to the purchase
price, on the next succeeding day not a Saturday, Sunday or legal holiday.
11. NOTICES. Any notice or demand authorized by this Option shall be
sufficiently given or made, if in writing and personally served, sent by
telecopy followed by written confirmation of receipt, or deposited in the United
States mail, registered or certified, return receipt requested, postage prepaid,
at or to the address or telecopy number as the receiving party shall have
specified most recently by written notice to the other party. Notice shall be
deemed given on the date of service if personally served or if sent by
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<PAGE>
telecopy. Notice mailed as provided herein shall be deemed given on the next
business day following the date sent by Federal Express or comparable
next-day-delivery courier service, or on the third business day following the
date mailed.
To the Company: E. Wyatt Cannady, President and CEO
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, UT 84115
Telecopy No.: (801) 262-5770
To the Holder: LCO Investments Limited
Canada Court
Upland Road, St. Peter Port
Guernsey, Channel Islands
12. INVESTMENT REPRESENTATION. The Holder, by accepting this Option,
represents that the Holder is acquiring the Option for his own account for
investment purposes and not with a view to any offer or distribution thereof and
that the Holder will not sell or otherwise dispose of the Option or the
underlying Option Stock in violation of applicable securities laws.
DATED May ___, 1997.
ION LASER TECHNOLOGY, INC.
By:__________________________________
E. Wyatt Cannady, President and CEO
LCO INVESTMENTS LIMITED
By:___________________________________
Title:________________________________
Page 50 of 73
<PAGE>
SUBSCRIPTION AND EXERCISE OF OPTION
-----------------------------------
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84115
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions of
the Option held by the undersigned, ____________ shares of the Common Stock of
Ion Laser Technology, Inc., a Utah corporation (the "COMPANY").
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for its own account and not for resale or with a view to
distribution of any part thereof.
[Consider Reg S representations re. citizenship and holding period, and
reference to restrictive legend on underlying shares to be issued.]
The [Option exercise price of $9.00 per share] [the adjusted Option
exercise price of $____ per share] being purchased hereby is enclosed with this
notice of exercise. The aggregate purchase price is $________________.
Dated:___________________
LCO INVESTMENTS LIMITED
By:_______________________________
Title:____________________________
Address: Canada Court
Upland Road, St. Peter Port
Guernsey, Channel Islands
-------------------------------------------
(Social Security or Taxpayer Identification
Number of Holder)
Page 51 of 73
<PAGE>
ION LASER TECHNOLOGY, INC.
--------------------------------------------------------------------
OPTION TO PURCHASE
SHARES OF COMMON STOCK
--------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT, THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND UPON
OBTAINING AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE
COMPANY), SATISFACTORY TO THE COMPANY, THAT SUCH DISPOSITION MAY BE
MADE WITHOUT REGISTRATION OF THE SECURITIES UNDER SUCH ACT, OR UNLESS
SOLD PURSUANT TO RULE 144.
THIS CERTIFIES THAT RICHARD S. BRADDOCK (the "HOLDER") is entitled to
purchase, on the terms hereof, 100,000 shares of Common Stock of ION LASER
TECHNOLOGY, INC. a Utah corporation (the "COMPANY"), subject to adjustment as
provided herein.
1. EXERCISE OF OPTION. The terms and conditions upon which this Option
may be exercised, and the Common Stock covered hereby (the "OPTION STOCK") may
be purchased, are as follows:
1.1 TERM. This Option may be exercised in whole or in part at any
time and from time to time commencing after the date hereof, but in no case may
this Option be exercised later than the close of business on May 1, 2007 (the
"TERMINATION DATE"), after which time this Option shall terminate and shall be
void and of no further force or effect.
1.2 PURCHASE PRICE. Except as adjusted pursuant to Section 2 hereof,
the per share purchase price for the shares of Common Stock to be issued upon
exercise of this Option shall be Nine Dollars ($9.00) per share of Common Stock
purchased.
1.3 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Option shall be effected by (a) the surrender of the Option,
together with a duly executed copy of the form of subscription attached hereto,
to the Company at its
Page 52 of 73
<PAGE>
principal offices and (b) the delivery of the purchase price by cashier's check
payable to the Company's order for the number of shares for which the purchase
rights hereunder are being exercised. In the event this Option is exercised in
part at any time and not in whole, the Company shall promptly issue and deliver
to the Holder a replacement Option Agreement reflecting the number of shares of
Common Stock of the Company subject to such Option after giving effect to such
partial exercise.
1.4 ISSUANCE OF SHARES. Upon the exercise of the purchase rights
evidenced by this Option, a certificate or certificates for the purchased shares
shall be issued to the Holder as soon as practicable (and in any event within
three business days after exercise).
2. CERTAIN ADJUSTMENTS.
2.1 MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. If at any time there
shall be a capital reorganization (other than a combination or subdivision of
Option Stock otherwise provided for herein), or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation or sale, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Option, during the period specified in this Option
and upon payment of the purchase price, the number of shares of stock or other
securities or property of the Company or the successor corporation resulting
from such reorganization, merger, consolidation or sale, to which a holder of
the Common Stock deliverable upon exercise of this Option would have been
entitled under the provisions of the agreement in such reorganization, merger,
consolidation or sale if this Option had been exercised immediately before that
reorganization, merger, consolidation or sale. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Option with respect
to the rights and interests of the Holder after the reorganization, merger,
consolidation or sale to the end that the provisions of this Option (including
adjustment of the purchase price then in effect and the number of shares of
Option Stock) shall be applicable after that event, as near as reasonably may
be, in relation to any shares or other property deliverable after that event
upon exercise of this Option.
2.2 SPLITS AND SUBDIVISIONS. In the event the Company should at any
time or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
"COMMON STOCK EQUIVALENTS") without payment of any consideration by such holder
for
Page 53 of 73
<PAGE>
the additional shares of Common Stock or Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such distribution, split or
subdivision if no record date is fixed), the purchase price hereunder shall be
appropriately decreased and the number of shares of Option Stock shall be
appropriately increased in proportion to such increase in outstanding shares.
2.3 COMBINATION OF SHARES. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the purchase price hereunder shall be
appropriately increased and the number of shares of Option Stock shall be
appropriately decreased in proportion to such decrease in outstanding shares.
2.4 OTHER ADJUSTMENTS. If at any time on or before May 1, 1998 the
Company issues and sells pursuant to a public offering any shares of Common
Stock for a sale price less than $7.00 per share, or any securities convertible
into shares of Common Stock at a conversion price of less than $7.00 per share
(in either case, "DILUTIVE SECURITIES"), then, as of the date of issue of such
Dilutive Securities, the purchase price hereunder shall be appropriately
decreased to the purchase price or conversion price (as the case may be) of such
Dilutive Securities.
2.5 CERTIFICATE AS TO ADJUSTMENTS. In the case of each adjustment or
readjustment of the purchase price pursuant to this Section 2, the Company will
promptly compute such adjustment or readjustment in accordance with the terms
hereof and cause a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based
to be delivered to the Holder of this Option. The Company will, upon the
written request at any time of the Holder of this Option, furnish or cause to be
furnished to such Holder a certificate setting forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Option Stock and the amount, if any,
of other property at the time receivable upon the exercise
of the Option.
3. FRACTIONAL SHARES. No fractional shares shall be issued in connection
with any exercise of this Option.
4. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the
Page 54 of 73
<PAGE>
purpose of effecting the exercise of this Option, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the exercise of
this Option; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the exercise of the entire
Option, in addition to such other remedies as shall be available to the Holder
of this Option, the Company will use its reasonable best efforts to take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.
5. PRIVILEGE OF STOCK OWNERSHIP. Prior to the exercise of this Option,
the Holder shall not be entitled, by virtue of holding this Option, to any
rights of a stockholder of the Company.
6. TRANSFERS AND EXCHANGES.
6.1 Subject to the limitations set forth below and subject to
compliance with applicable federal and state securities laws, all or any part of
this Option and all rights hereunder are transferable in whole or in part by
Holder, provided such transfer is made in accordance with the provisions of that
certain Securities Purchase Agreement of even date herewith entered into by the
Holder, certain other Purchasers signatory thereto and the Company (the
"SECURITIES PURCHASE AGREEMENT"). The terms and conditions of such Securities
Purchase Agreement are hereby incorporated in and made a part of this Option
Agreement. The transfer shall be recorded on the books of the Company upon the
surrender of this Option, properly endorsed, to the Company at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. In addition, the transferee
shall at the same time submit its written consent and acknowledgment, by which
the transferee shall covenant and agree to be bound by and comply with the
Securities Purchase Agreement. In the event of a partial transfer, the Company
shall issue to the several holders one or more appropriate new Options. The
Company may deem and treat the registered Holder as the absolute owner of the
Option (notwithstanding any notice of ownership or writing thereon made by
anyone other than the Company) for all purposes, and the Company will not be
affected by any notice to the contrary. No rights under and by virtue of this
Option shall pass and be transferred separately and apart from this Option.
6.2 All new Options issued in connection with transfers, exchanges or
partial exercises shall be identical in form and provision to this Option except
as to the number of shares issuable upon exercise thereof.
7. SUCCESSORS AND ASSIGNS. The terms and provisions of this Option
Agreement shall be binding upon the Company and the Holder and their respective
Page 55 of 73
<PAGE>
successors and assigns, subject at all times to the restrictions set forth in
this Option Agreement and the Securities Purchase Agreement.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF OPTION. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Option Agreement, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Option Agreement, if
mutilated, the Company will make and deliver a new Option Agreement of like
tenor and dated as of such cancellation, in lieu of this Option Agreement.
9. AMENDMENT. This Option Agreement and the terms of the Options may be
amended only with the written consent of the Holder and the Company set forth in
a writing specifying such amendment.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised, except as to the purchase
price, on the next succeeding day not a Saturday, Sunday or legal holiday.
11. NOTICES. Any notice or demand authorized by this Option shall be
sufficiently given or made, if in writing and personally served, sent by
telecopy followed by written confirmation of receipt, or deposited in the United
States mail, registered or certified, return receipt requested, postage prepaid,
at or to the address or telecopy number as the receiving party shall have
specified most recently by written notice to the other party. Notice shall be
deemed given on the date of service if personally served or if sent by telecopy.
Notice mailed as provided herein shall be deemed given on the next business day
following the date sent by Federal Express or comparable next-day-delivery
courier service, or on the third business day following the date mailed.
To the Company: E. Wyatt Cannady, President and CEO
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, UT 84115
Telecopy No.: (801) 262-5770
To the Holder: Richard S. Braddock
10 Gracie Square
New York, NY 10028
Page 56 of 73
<PAGE>
12. INVESTMENT REPRESENTATION. The Holder, by accepting this Option,
represents that the Holder is acquiring the Option for his own account for
investment purposes and not with aview to any offer or distribution thereof and
that the Holder will not sell or otherwise dispose of the Option or the
underlying Option Stock in violation of applicable securities laws.
DATED May ___, 1997.
ION LASER TECHNOLOGY, INC.
By:
-----------------------------------
E. Wyatt Cannady, President and CEO
RICHARD S. BRADDOCK
By:____________________________________
Title:_________________________________
Page 57 of 73
<PAGE>
SUBSCRIPTION AND EXERCISE OF OPTION
-----------------------------------
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84115
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions of
the Option held by the undersigned, ____________ shares of the Common Stock of
Ion Laser Technology, Inc., a Utah corporation (the "COMPANY").
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for its own account and not for resale or with a view to
distribution of any part thereof.
The [Option exercise price of $9.00 per share] [the adjusted Option
exercise price of $____ per share] being purchased hereby is enclosed with this
notice of exercise. The aggregate purchase price is $________________.
Dated:___________________
RICHARD S. BRADDOCK
By:_______________________________
Title:____________________________
Address:
Richard S. Braddock
10 Gracie Square
New York, NY 10028
- -------------------------------------------
(Social Security or Taxpayer Identification
Number of Holder)
Page 58 of 73
<PAGE>
EXHIBIT B TO
SECURITIES PURCHASE AGREEMENT
ION LASER TECHNOLOGY, INC.
--------------------------------------------------------------------------
AMENDED AND RESTATED
OPTION TO PURCHASE
SHARES OF COMMON STOCK
--------------------------------------------------------------------------
THIS AMENDED AND RESTATED OPTION AGREEMENT (this "AGREEMENT") between Ion
Laser Technology, Inc., a Utah corporation (the "COMPANY") and LCO Investments
Limited (the "HOLDER"), is entered into as of May 8, 1997.
RECITALS
A. The Company granted to Holder that certain Option to Purchase Common
Stock, Number 001, dated April 1, 1996 the ("ORIGINAL OPTION AGREEMENT").
B. Pursuant to the Original Option Agreement, the Company granted to
Holder the right and option to purchase 773,334 shares of Common Stock of the
Company at an exercise price of $20.00 per share.
C. As of the date hereof, the Company and Holder have entered into a
Securities Purchase Agreement (the "PURCHASE AGREEMENT") pursuant to which
Holder has agreed to purchase additional shares of Common Stock and Options to
Purchase shares of Common Stock of the Company.
D. As a condition to the obligations of Holder under the Purchase
Agreement, the Company has agreed to amend the Original Option Agreement to
adjust the exercise price of the options granted to Holder thereunder, and to
delete any provisions preventing resale of the underlying Common Stock for two
years from the date of the Purchase Agreement, other than resale restrictions
applicable pursuant to Regulation S promulgated by the Securities and Exchange
Commission.
NOW, THEREFORE, in consideration of the mutual promises under this
Agreement and the Purchase Agreement, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and
Holder hereby
Page 59 of 73
<PAGE>
agree to amend and restate the Original Option Agreement so that, as amended,
the Original Option Agreement reads in its entirety as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT, THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND UPON
OBTAINING AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE
COMPANY), SATISFACTORY TO THE COMPANY, THAT SUCH DISPOSITION MAY BE
MADE WITHOUT REGISTRATION OF THE SECURITIES UNDER SUCH ACT, OR UNLESS
SOLD PURSUANT TO RULE 144.
THIS CERTIFIES THAT LCO Investments Limited (the "HOLDER") is entitled to
purchase, on the terms hereof, 773,334 shares of Common Stock of ION LASER
TECHNOLOGY, INC. a Utah corporation (the "COMPANY"), subject to adjustment as
provided herein.
1. EXERCISE OF OPTION. The terms and conditions upon which this Option
may be exercised, and the Common Stock covered hereby (the "OPTION STOCK") may
be purchased, are as follows:
1.1 TERM. This Option may be exercised in whole or in part at any
time commencing after the date hereof, but in no case may this Option be
exercised later than the close of business on March 31, 2006 (the "TERMINATION
DATE"), after which time this Option shall terminate and shall be void and of no
further force or effect.
1.2 PURCHASE PRICE. Except as adjusted pursuant to Section 2 hereof,
the per share purchase price for the shares of Common Stock to be issued upon
exercise of this Option shall be Nine Dollars ($9.00) per share of Common Stock
purchased.
1.3 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Option shall be effected by (a) the surrender of the Option,
together with a duly executed copy of the form of subscription attached hereto,
to the Company at its principal offices and (b) the delivery of the purchase
price by cashier's check payable to the Company's order for the number of shares
for which the purchase rights hereunder are being exercised. In the event this
Option is exercised in part at any time and not in whole, the Company shall
promptly issue and deliver to the Holder a replacement Option Agreement
Page 60 of 73
<PAGE>
reflecting the number of shares of Common Stock of the Company subject to such
Option after giving effect to such partial exercise.
1.4 ISSUANCE OF SHARES. Upon the exercise of the purchase rights
evidenced by this Option, a certificate or certificates for the purchased shares
shall be issued to the Holder as soon as practicable (and in any event within
three business days after exercise).
2. CERTAIN ADJUSTMENTS.
2.1 MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. If at any time there
shall be a capital reorganization (other than a combination or subdivision of
Option Stock otherwise provided for herein), or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation or sale, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Option, during the period specified in this Option
and upon payment of the purchase price, the number of shares of stock or other
securities or property of the Company or the successor corporation resulting
from such reorganization, merger, consolidation or sale, to which a holder of
the Common Stock deliverable upon exercise of this Option would have been
entitled under the provisions of the agreement in such reorganization, merger,
consolidation or sale if this Option had been exercised immediately before that
reorganization, merger, consolidation or sale. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Option with respect
to the rights and interests of the Holder after the reorganization, merger,
consolidation or sale to the end that the provisions of this Option (including
adjustment of the purchase price then in effect and the number of shares of
Option Stock) shall be applicable after that event, as near as reasonably may
be, in relation to any shares or other property deliverable after that event
upon exercise of this Option.
2.2 SPLITS AND SUBDIVISIONS. In the event the Company should at any
time or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
"COMMON STOCK EQUIVALENTS") without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution, split
or subdivision if no record date is fixed), the purchase price hereunder shall
be appropriately decreased and the number of
Page 61 of 73
<PAGE>
shares of Option Stock shall be appropriately increased in proportion to such
increase in outstanding shares.
2.3 COMBINATION OF SHARES. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the purchase price hereunder shall be
appropriately increased and the number of shares of Option Stock shall be
appropriately decreased in proportion to such decrease in outstanding shares.
2.4 CERTIFICATE AS TO ADJUSTMENTS. In the case of each adjustment or
readjustment of the purchase price pursuant to this Section 2, the Company will
promptly compute such adjustment or readjustment in accordance with the terms
hereof and cause a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based
to be delivered to the Holder of this Option. The Company will, upon the
written request at any time of the Holder of this Option, furnish or cause to be
furnished to such Holder a certificate setting forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Option Stock and the amount, if any,
of other property at the time receivable upon the exercise
of the Option.
3. FRACTIONAL SHARES. No fractional shares shall be issued in connection
with any exercise of this Option.
4. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Option, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the exercise of this Option; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of the entire Option, in addition to such other remedies as shall be available
to the Holder of this Option, the Company will use its reasonable best efforts
to take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.
5. PRIVILEGE OF STOCK OWNERSHIP. Prior to the exercise of this Option,
the Holder shall not be entitled, by virtue of holding this Option, to any
rights of a stockholder of the Company.
Page 62 of 73
<PAGE>
6. TRANSFERS AND EXCHANGES.
6.1 Subject to the limitations set forth below and subject to
compliance with applicable federal and state securities laws, all or any part of
this Option and all rights hereunder are transferable in whole or in part by
Holder, provided such transfer is made in accordance with the provisions of that
certain Securities Purchase Agreement of even date herewith entered into by the
Holder, certain other Purchasers signatory thereto and the Company (the
"SECURITIES PURCHASE AGREEMENT"). The terms and conditions of such Securities
Purchase Agreement are hereby incorporated in and made a part of this Option
Agreement. The transfer shall be recorded on the books of the Company upon the
surrender of this Option, properly endorsed, to the Company at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. In addition, the transferee
shall at the same time submit its written consent and acknowledgment, by which
the transferee shall covenant and agree to be bound by and comply with the
Securities Purchase Agreement. In the event of a partial transfer, the Company
shall issue to the several holders one or more appropriate new Options. The
Company may deem and treat the registered Holder as the absolute owner of the
Option (notwithstanding any notice of ownership or writing thereon made by
anyone other than the Company) for all purposes, and the Company will not be
affected by any notice to the contrary. No rights under and by virtue of this
Option shall pass and be transferred separately and apart from this Option.
6.2 All new Options issued in connection with transfers, exchanges or
partial exercises shall be identical in form and provision to this Option except
as to the number of shares issuable upon exercise thereof.
7. SUCCESSORS AND ASSIGNS. The terms and provisions of this Option
Agreement shall be binding upon the Company and the Holder and their respective
successors and assigns, subject at all times to the restrictions set forth in
this Option Agreement and the Securities Purchase Agreement.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF OPTION. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Option Agreement, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Option Agreement, if
mutilated, the Company will make and deliver a new Option Agreement of like
tenor and dated as of such cancellation, in lieu of this Option Agreement.
9. AMENDMENT. This Option Agreement and the terms of the Options may be
amended only with the written consent of the Holder and the Company set forth in
a writing specifying such amendment.
Page 63 of 73
<PAGE>
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised, except as to the purchase
price, on the next succeeding day not a Saturday, Sunday or legal holiday.
11. NOTICES. Any notice or demand authorized by this Option shall be
sufficiently given or made, if in writing and personally served, sent by
telecopy followed by written confirmation of receipt, or deposited in the United
States mail, registered or certified, return receipt requested, postage prepaid,
at or to the address or telecopy number as the receiving party shall have
specified most recently by written notice to the other party. Notice shall be
deemed given on the date of service if personally served or if sent by telecopy.
Notice mailed as provided herein shall be deemed given on the next business day
following the date sent by Federal Express or comparable next-day-delivery
courier service, or on the third business day following the date mailed.
To the Company: E. Wyatt Cannady, President and CEO
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, UT 84115
Telecopy No.: (801) 262-5770
To the Holder: LCO Investments Limited
Canada Court
Upland Road, St. Peter Port
Guernsey, Channel Islands
12. INVESTMENT REPRESENTATION. The Holder, by accepting this Option,
represents that the Holder is acquiring the Option for its own account, for
investment purposes, and not with a view to any offer or distribution thereof
and that the Holder will not sell or otherwise dispose of the Option or the
underlying Option Stock in violation of applicable securities laws.
DATED MAY ____, 1997
ION LASER TECHNOLOGY, INC.
By:____________________________
E. Wyatt Cannady
President and CEO
Page 64 of 73
<PAGE>
LCO INVESTMENTS LIMITED
By:___________________________________
Title:________________________________
Page 65 of 73
<PAGE>
SUBSCRIPTION AND EXERCISE OF OPTION
-----------------------------------
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84115
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions of
that certain Amended and Restated Option to Purchase Shares of Common Stock,
dated April ___, 1997, held by the undersigned, ____________ shares of the
Common Stock of Ion Laser Technology, Inc., a Utah corporation (the "COMPANY").
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for its own account and not for resale or with a view to
distribution of any part thereof.
[Consider Reg S representations re. citizenship and holding period, and
reference to restrictive legend on underlying shares to be issued.]
The [Option exercise price of $9.00 per share] [the adjusted Option
exercise price of $ per share] being purchased hereby is enclosed with
this notice of exercise. The aggregate purchase price is $________________.
Dated:_______________________
LCO INVESTMENTS LIMITED
By:_______________________________
Title:____________________________
Address: Canada Court
Upland Road, St. Peter Port
Guernsey, Channel Islands
- --------------------------------------------
(Social Security or Taxpayer Identification
Number of Holder)
Page 66 of 73
<PAGE>
ION LASER TECHNOLOGY, INC.
---------------------------------------------------------------------------
AMENDED AND RESTATED
OPTION TO PURCHASE
SHARES OF COMMON STOCK
---------------------------------------------------------------------------
THIS AMENDED AND RESTATED OPTION AGREEMENT (this "AGREEMENT") between Ion
Laser Technology, Inc., a Utah corporation (the "COMPANY") and Richard S.
Braddock (the "HOLDER"), is entered into as of May 8, 1997.
RECITALS
A. The Company granted to Holder that certain Option to Purchase Common
Stock, Number 002, dated April 1, 1996 the ("ORIGINAL OPTION AGREEMENT").
B. Pursuant to the Original Option Agreement, the Company granted to
Holder the right and option to purchase 193,333 shares of Common Stock of the
Company at an exercise price of $20.00 per share.
C. As of the date hereof, the Company and Holder have entered into a
Securities Purchase Agreement (the "PURCHASE AGREEMENT") pursuant to which
Holder has agreed to purchase additional shares of Common Stock and Options to
Purchase shares of Common Stock of the Company.
D. As a condition to the obligations of Holder under the Purchase
Agreement, the Company has agreed to amend the Original Option Agreement to
adjust the exercise price of the options granted to Holder thereunder, and to
delete any provisions preventing resale of the underlying Common Stock for two
years from the date of the Purchase Agreement, other than resale restrictions
applicable pursuant to regulations promulgated by the Securities and Exchange
Commission.
NOW, THEREFORE, in consideration of the mutual promises under this
Agreement and the Purchase Agreement, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and
Holder hereby agree to amend and restate the Original Option Agreement so that,
as amended, the Original Option Agreement reads in its entirety as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. IN THE
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ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, THESE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF,
EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND UPON OBTAINING AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE COMPANY), SATISFACTORY TO THE COMPANY, THAT SUCH
DISPOSITION MAY BE MADE WITHOUT REGISTRATION OF THE SECURITIES UNDER SUCH
ACT, OR UNLESS SOLD PURSUANT TO RULE 144.
THIS CERTIFIES THAT Richard S. Braddock (the "HOLDER") is entitled to
purchase, on the terms hereof, 193,333 shares of Common Stock of ION LASER
TECHNOLOGY, INC. a Utah corporation (the "COMPANY"), subject to adjustment as
provided herein.
1. EXERCISE OF OPTION. The terms and conditions upon which this Option
may be exercised, and the Common Stock covered hereby (the "OPTION STOCK") may
be purchased, are as follows:
1.1 TERM. This Option may be exercised in whole or in part at any
time commencing after the date hereof, but in no case may this Option be
exercised later than the close of business on March 31, 2006 (the "TERMINATION
DATE"), after which time this Option shall terminate and shall be void and of no
further force or effect.
1.2 PURCHASE PRICE. Except as adjusted pursuant to Section 2 hereof,
the per share purchase price for the shares of Common Stock to be issued upon
exercise of this Option shall be Nine Dollars ($9.00) per share of Common Stock
purchased.
1.3 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Option shall be effected by (a) the surrender of the Option,
together with a duly executed copy of the form of subscription attached hereto,
to the Company at its principal offices and (b) the delivery of the purchase
price by cashier's check payable to the Company's order for the number of shares
for which the purchase rights hereunder are being exercised. In the event this
Option is exercised in part at any time and not in whole, the Company shall
promptly issue and deliver to the Holder a replacement Option Agreement
reflecting the number of shares of Common Stock of the Company subject to such
Option after giving effect to such partial exercise.
1.4 ISSUANCE OF SHARES. Upon the exercise of the purchase rights
evidenced by this Option, a certificate or certificates for the purchased shares
shall be issued
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to the Holder as soon as practicable (and in any event within three business
days after exercise).
2. CERTAIN ADJUSTMENTS.
2.1 MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. If at any time there
shall be a capital reorganization (other than a combination or subdivision of
Option Stock otherwise provided for herein), or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation or sale, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Option, during the period specified in this Option
and upon payment of the purchase price, the number of shares of stock or other
securities or property of the Company or the successor corporation resulting
from such reorganization, merger, consolidation or sale, to which a holder of
the Common Stock deliverable upon exercise of this Option would have been
entitled under the provisions of the agreement in such reorganization, merger,
consolidation or sale if this Option had been exercised immediately before that
reorganization, merger, consolidation or sale. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Option with respect
to the rights and interests of the Holder after the reorganization, merger,
consolidation or sale to the end that the provisions of this Option (including
adjustment of the purchase price then in effect and the number of shares of
Option Stock) shall be applicable after that event, as near as reasonably may
be, in relation to any shares or other property deliverable after that event
upon exercise of this Option.
2.2 SPLITS AND SUBDIVISIONS. In the event the Company should at any
time or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
"COMMON STOCK EQUIVALENTS") without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution, split
or subdivision if no record date is fixed), the purchase price hereunder shall
be appropriately decreased and the number of shares of Option Stock shall be
appropriately increased in proportion to such increase in outstanding shares.
2.3 COMBINATION OF SHARES. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the
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outstanding shares of Common Stock, the purchase price hereunder shall be
appropriately increased and the number of shares of Option Stock shall be
appropriately decreased in proportion to such decrease in outstanding shares.
2.4 CERTIFICATE AS TO ADJUSTMENTS. In the case of each adjustment or
readjustment of the purchase price pursuant to this Section 2, the Company will
promptly compute such adjustment or readjustment in accordance with the terms
hereof and cause a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based
to be delivered to the Holder of this Option. The Company will, upon the
written request at any time of the Holder of this Option, furnish or cause to be
furnished to such Holder a certificate setting forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Option Stock and the amount, if any,
of other property at the time receivable upon the exercise
of the Option.
3. FRACTIONAL SHARES. No fractional shares shall be issued in connection
with any exercise of this Option.
4. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Option, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the exercise of this Option; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of the entire Option, in addition to such other remedies as shall be available
to the Holder of this Option, the Company will use its reasonable best efforts
to take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.
5. PRIVILEGE OF STOCK OWNERSHIP. Prior to the exercise of this Option,
the Holder shall not be entitled, by virtue of holding this Option, to any
rights of a stockholder of the Company.
6. TRANSFERS AND EXCHANGES.
6.1 Subject to the limitations set forth below and subject to
compliance with applicable federal and state securities laws, all or any part of
this Option
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<PAGE>
and all rights hereunder are transferable in whole or in part by Holder,
provided such transfer is made in accordance with the provisions of that certain
Securities Purchase Agreement of even date herewith entered into by the Holder,
certain other Purchasers signatory thereto and the Company (the "SECURITIES
PURCHASE AGREEMENT"). The terms and conditions of such Securities Purchase
Agreement are hereby incorporated in and made a part of this Option Agreement.
The transfer shall be recorded on the books of the Company upon the surrender of
this Option, properly endorsed, to the Company at its principal offices and the
payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer. In addition, the transferee shall at the same time
submit its written consent and acknowledgment, by which the transferee shall
covenant and agree to be bound by and comply with the Securities Purchase
Agreement. In the event of a partial transfer, the Company shall issue to the
several holders one or more appropriate new Options. The Company may deem and
treat the registered Holder as the absolute owner of the Option (notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Company) for all purposes, and the Company will not be affected by any notice to
the contrary. No rights under and by virtue of this Option shall pass and be
transferred separately and apart from this Option.
6.2 All new Options issued in connection with transfers, exchanges or
partial exercises shall be identical in form and provision to this Option except
as to the number of shares issuable upon exercise thereof.
7. SUCCESSORS AND ASSIGNS. The terms and provisions of this Option
Agreement shall be binding upon the Company and the Holder and their respective
successors and assigns, subject at all times to the restrictions set forth in
this Option Agreement and the Securities Purchase Agreement.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF OPTION. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Option Agreement, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Option Agreement, if
mutilated, the Company will make and deliver a new Option Agreement of like
tenor and dated as of such cancellation, in lieu of this Option Agreement.
9. AMENDMENT. This Option Agreement and the terms of the Options may be
amended only with the written consent of the Holder and the Company set forth in
a writing specifying such amendment.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or Sunday or shall be a legal holiday, then such
action may be taken or such right
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may be exercised, except as to the purchase price, on the next succeeding day
not a Saturday, Sunday or legal holiday.
11. NOTICES. Any notice or demand authorized by this Option shall be
sufficiently given or made, if in writing and personally served, sent by
telecopy followed by written confirmation of receipt, or deposited in the United
States mail, registered or certified, return receipt requested, postage prepaid,
at or to the address or telecopy number as the receiving party shall have
specified most recently by written notice to the other party. Notice shall be
deemed given on the date of service if personally served or if sent by telecopy.
Notice mailed as provided herein shall be deemed given on the next business day
following the date sent by Federal Express or comparable next-day-delivery
courier service, or on the third business day following the date mailed.
To the Company: E. Wyatt Cannady, President and CEO
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, UT 84115
Telecopy No.: (801) 262-5770
To the Holder: Richard S. Braddock
10 Gracie Square
New York, NY 10028
12. INVESTMENT REPRESENTATION. The Holder, by accepting this Option,
represents that the Holder is acquiring the Option for its own account, for
investment purposes, and not with a view to any offer or distribution thereof
and that the Holder will not sell or otherwise dispose of the Option or the
underlying Option Stock in violation of applicable securities laws.
DATED MAY ____, 1997
ION LASER TECHNOLOGY, INC.
By:_____________________________
E. Wyatt Cannady
President and CEO
________________________________
RICHARD S. BRADDOCK
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SUBSCRIPTION AND EXERCISE OF OPTION
-----------------------------------
Ion Laser Technology, Inc.
3828 South Main Street
Salt Lake City, Utah 84115
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions of
that certain Amended and Restated Option to Purchase Shares of Common Stock,
dated May ___, 1997, held by the undersigned, ____________ shares of the Common
Stock of Ion Laser Technology, Inc., a Utah corporation (the "COMPANY").
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for its own account and not for resale or with a view to
distribution of any part thereof.
The [Option exercise price of $9.00 per share] [the adjusted Option
exercise price of $ per share] being purchased hereby is enclosed with
this notice of exercise. The aggregate purchase price is $________________.
Dated:_____________________
______________________________
RICHARD S. BRADDOCK
Address: 10 Gracie Square
New York, NY 10028
- --------------------------------------------
(Social Security or Taxpayer Identification
Number of Holder)
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