SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 13, 1997
(July 29, 1997)
LASERSIGHT INCORPORATED
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Exact name of registrant as specified in its charter
Delaware
State or other jurisdiction of incorporation
0-19671 65-0273162
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Commission File Number I.R.S. Employer
Identification No.
12161 Lackland Road, St. Louis, Missouri 63146
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Address of Principal Executive Offices
Registrant's telephone number, including area code: (314) 469-3220
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Item 2. Acquisition or Disposition of Assets.
On July 29, 1997, LaserSight Incorporated acquired the rights to a Pre-Market
Approval (PMA) application filed with the Food and Drug Administration (FDA) for
a laser dedicated to perform Laser In-Situ Keratomileusis (LASIK), a refractive
surgery alternative to surface Photorefractive Keratectomy (PRK). The PMA
application was acquired from Dr. Frederic B. Kremer, an internationally known
ophthalmologist and U.S. pioneer of LASIK. The transaction was completed by
means of the merger of Photomed, Inc. into a newly-formed, wholly-owned
subsidiary of Registrant. In addition, LaserSight purchased from Dr. Kremer his
U.S. patent number 5,586,980 for a microkeratome, the instrument necessary to
create the corneal "flap" in the LASIK procedure. LaserSight issued a
combination of 535,515 unregistered shares of common stock and $383,300 as
consideration for the PMA application, the microkeratome patent and a one-year
consulting agreement with Dr. Kremer. Dr. Kremer will also receive a royalty on
any microkeratome made for or by LaserSight using this patented technology,
together with a percentage (initially 30% and increasing to 70% under certain
circumstances) of the aggregate amount of fees received by LaserSight from the
licensing or sale of the microkeratome patent to third parties. If the FDA
approves the PMA so as to allow LaserSight to commercialize a laser to perform
LASIK in the U.S., LaserSight will pay an additional $1.75 million. If such FDA
approval is not obtained by July 29, 1998, LaserSight has the option to unwind
the PMA transaction and receive back 274,285 of the 535,515 shares. In addition,
if the FDA approves the use of a LaserSight-manufactured laser system for the
treatment of hyperopia (farsightedness), LaserSight will make an additional
payment in the form of LaserSight common stock with a market value of $1 million
at the time of such approval. In addition, if certain target dates are met for
FDA approval of LaserSight's scanning laser system that is currently in clinical
trials, LaserSight will make an additional payment of up to $1 million in cash.
Finally, to the extent that U.S. gross sales of all LaserSight manufactured
laser systems exceed $14 million before March 31, 1999 or one year after
LaserSight's first commercial sale of a laser system in the U.S. (whichever
occurs first), Dr. Kremer will receive additional payments equal to 25% of such
excess. Dr. Kremer also has the right to purchase laser systems from LaserSight
on favorable terms.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
<PAGE>
(c) Exhibits
Exhibit 2.(i) Patent Purchase Agreement dated July 15, 1997 by and between
LaserSight Incorporated and Frederic B. Kremer, M.D.
Exhibit 2.(ii)Agreement and Plan of Merger dated July 15, 1997 by and
among LaserSight Incorporated, Photomed Acquisition, Inc.,
Photomed, Inc., Frederic B. Kremer, M.D., Linda Kremer,
Robert Satalof, Trustee for Alan Stewart Kremer and Robert
Satalof, Trustee for Mark Adam Kremer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LaserSight Incorporated
Date: August 13, 1997 By: /s/ Michael R. Farris
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Michael R. Farris
Chief Executive Officer
EXHIBIT 2.(i)
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PATENT PURCHASE AGREEMENT
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This PATENT PURCHASE AGREEMENT is made and entered into as of July 15,
1997 by and between LASERSIGHT INCORPORATED, a Delaware corporation
("LaserSight") and FREDERIC B. KREMER, M.D. ("Kremer").
RECITALS
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A. LaserSight, Photomed Acquisition, Inc., Photomed, Inc. Kremer, and
the other shareholders of Photomed, Inc. entered in an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement").
A. Kremer is the owner of the entire right, title and interest in and
to a certain U.S. letters patent known as patent number 5,586,980, dated
December 24, 1996, pertaining to a microkeratome (the "Patent"), as identified
on Schedule 5.6 attached hereto and made a part hereof.
B. Kremer desires to sell and assign to LaserSight, and LaserSight
desires to purchase from Kremer, all right, title and interest in and to the
Patent and all know-how and information related to the Patent.
THEREFORE, intending to be bound and for good and valuable
consideration, the parties agree as follows:
SECTION 1. TRANSFER OF THE PATENT
1.1 Patent. Kremer shall sell, assign, transfer and convey to
LaserSight, free and clear of any lien, pledge, contract right, security
interest or option, and LaserSight shall purchase and accept (i) the Patent and
any and all reissues, divisionals, continuations, and continuations-in-part
thereof, and (ii) all know-how and confidential technical information related to
the Patent, including, all books, records, files, manuals, plans, specifications
and other information related to the Patent (collectively, the "Patent Assets").
1.2 Transfer of the Patent Assets. The transfer of the Patent Assets
contemplated by this Agreement shall be evidenced by delivery by Kremer to
LaserSight of a Bill of Sale substantially in the form attached hereto as
Exhibit A (the "Bill of Sale"), a Patent Assignment substantially in the form
attached hereto as Exhibit B (the "Patent Assignment"), and other documents
reasonably necessary to effectuate the transfer contemplated by Section 1.1.
1.3 Evidence of Transfer. At the Closing (as defined herein) and
thereafter, as LaserSight may from time to time reasonably request, Kremer shall
execute and deliver to LaserSight such documents and instruments of conveyance,
which were prepared at LaserSight's cost and expense, as may be appropriate and
Kremer shall take or cause to be taken such actions necessary to effectuate the
transfer contemplated by Section 1.1. All such documents shall be in form and
substance reasonably satisfactory to LaserSight.
1.4 No Further Interest. On and after the Closing Date (as defined
herein) Kremer shall cease to have any right, title or interest in or to the
Patent Assets, except for (i) the rights set forth in this Agreement, and (ii)
the right to use general knowledge gained while developing or using the Patent
in connection with the development of other products and procedures so long as
such use does not violate the terms of any agreement between LaserSight and
Kremer.
SECTION 2. PURCHASE PRICE
2.1 Purchase Price for the Patent. In consideration for the transfer
of the Patent Assets LaserSight agrees as follows:
(a) Cash. At the Closing LaserSight shall pay to Kremer
$333,300.00 via wire transfer of immediately available funds to an account
designated by Kremer (the "Cash Consideration").
(b) LaserSight Common Stock. At the Closing LaserSight shall
deliver to Kremer that number of shares of unregistered, validly issued, fully
paid and nonassessable common stock, $.001 par value, of LaserSight ("LaserSight
Common Stock") which results from dividing (i) $666,700.00, by (ii) the average
closing price of a share of LaserSight common stock for the ten (10) day period
immediately preceding the Closing. The total number of shares of LaserSight
Common Stock issued to Kremer pursuant to this Section 2.1(b) shall be referred
to herein as the "Patent Closing Shares."
(c) Royalty. After the Closing Date LaserSight agrees to pay
Kremer a royalty equal to 30% of the Licensing Fees (as defined herein),
provided that if the aggregate amount of Licensing Fees exceed $1,428,600, then
the royalty payable to Kremer shall increase to 70% of Licensing Fees received
in excess of $1,428,600.00. If the license of the Patent is bundled with
licenses of other patents or intellectual property rights owned by or licensed
to LaserSight, then LaserSight agrees that such a licensing agreement will
specifically state the amount being paid to LaserSight for licensing the Patent
and the royalty payments contemplated by this Section will be calculated based
on such allocated amount. Within 45 days after the end of each of LaserSight's
fiscal quarters which commence after the Closing Date LaserSight will (i)
provide Kremer with a statement setting forth the amount of licensing fees
associated with the Patent which were actually received by LaserSight during
such quarter, and (ii) deliver to Kremer a LaserSight check in the amount any
royalties then due, if any. LaserSight shall use reasonable efforts to license
the Patent.
For purposes hereof, "Licensing Fees " shall mean (i) the gross amount
of any fees LaserSight may receive from licensing the Patent, (ii) the gross
amount of any fees (including, without limitation, royalties) that LaserSight
may receive from any exclusive or co-exclusive license LaserSight grants in
connection with the Patent, (iii) the gross amount of payments that LaserSight
receives from the sale of the Patent, (iv) 3% of the sales price of any
microkeratome which is manufactured by or for LaserSight utilizing the Patent,
and (v) 3% of the sales price of any microkeratome which is manufactured by or
for LaserSight utilizing technology or know how which would be deemed by a court
of competent jurisdiction to infringe the Patent.
If the Patent is bundled with licenses of other patents or
intellectual property rights and Kremer does not agree with the allocation of
the amount paid for the license of the Patent, Kremer and LaserSight will
mutually agree on an independent third party with expertise in the area of
valuing patent license fees (the "Expert") who will review the allocation in
question. If the Expert determines that the allocation in question is not
reasonable in light of current market conditions and the nature of the
transaction in question then LaserSight will pay the fee of the Expert and
Kremer shall promptly receive from LaserSight (i) payment of the royalty amount
that had been miscalculated by LaserSight, (ii) interest thereon at the prime
interest rate stated in the Wall Street Journal plus four percent (4%) per annum
from the date the payment should have originally been made, and (iii)
reimbursement for all reasonable costs and expenses incurred by Kremer in
determining the miscalculation and collecting the amount due (including, without
limitation, reasonable legal fees and costs). If it is determined by the Expert
that the allocation in question is reasonable in light of current market
conditions and the nature of the transaction in question, then Kremer will pay
the fee of the Expert and shall reimburse LaserSight for all reasonable costs
and expenses incurred by LaserSight in connection with the Expert's review of
such allocation (including, without limitation, reasonable legal fees and
costs).
2.2 Transfer of LaserSight Common Stock. All LaserSight Common Stock
issued and delivered pursuant to this Agreement will be authorized but
previously unissued shares of LaserSight Common Stock which have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
Unless and until otherwise permitted by this Agreement, each certificate of
LaserSight Common Stock issued pursuant to this Agreement shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"These shares have not been registered under the Securities Act
of 1933 and may not be offered for sale, sold, pledged or
otherwise disposed of except pursuant to an effective
registration statement under such Act or pursuant to an exemption
from the registration requirements of such Act. Further, any such
offer, sale, pledge or transfer is subject to the conditions
specified in a Patent Purchase Agreement dated as of July 15,
1997 ("Agreement") delivered in connection with the issuance of
such shares by LaserSight Incorporated, a copy of which Agreement
will be furnished to the holder hereof upon request and without
charge."
2.3 Fractional Shares. No fraction of a share of LaserSight Common
Stock will be issued; therefore, when calculating the number of shares to be
issued pursuant to this Agreement LaserSight shall round to the nearest whole
number, with .500 and greater being rounded up to the next whole number, and
anything less than .500 being rounded down to the next whole number.
SECTION 3. ASSUMPTION OF LIABILITIES.
LaserSight does not and shall not assume, nor will in any way be
liable or responsible for, any liabilities or obligations of Kremer whether
known or unknown, and whether now existing or hereafter accruing, except to the
extent provided in Section 8.
SECTION 4. CLOSING.
4.1. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on July 15, 1997 if the conditions
set forth in Section 7 have been satisfied, or as soon thereafter as such
conditions have either been satisfied or waived by the party benefiting from
such conditions, at the offices of Sonnenschein, Nath & Rosenthal, One
Metropolitan Square, Suite 3000, St. Louis, Missouri or at such other place as
the parties shall agree, and shall be effective as of the Effective Time (the
"Closing Date"). At the Closing:
(a) Kremer shall deliver to LaserSight all other previously
undelivered documents required to be delivered by Kremer to LaserSight at or
prior to the Closing pursuant to the terms of this Agreement.
(b) LaserSight shall deliver or cause to be delivered to Kremer the
following:
(i) the Cash Consideration;
(ii) a copy of the letter sent via facsimile on the Closing Date
to LaserSight's transfer agent instructing that the Patent Closing
Shares be issued and delivered to Kremer at the address set forth in
Section 10.6 hereof (the "Transfer Agent Letter"); and
(iii) all other previously undelivered documents required to be
delivered by LaserSight to Kremer at or prior to the Closing pursuant
to the terms of this Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
KREMER.
Kremer hereby represents and warrants to LaserSight as of the date
hereof and as of the Closing Date as follows.
5.1 Authority. This Agreement has been duly and validly executed and
delivered by Kremer and, assuming this Agreement constitutes valid and binding
obligations of LaserSight and Kremer, will constitute a valid and binding
obligation of Kremer enforceable against him in accordance with its terms,
except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought. Kremer has the necessary legal capacity
to enter into and perform this Agreement and the other agreements contemplated
hereby.
5.2 No Violation. Neither the execution, delivery nor the performance
by Kremer of this Agreement violates or will violate any provision of any
material law, of any order, judgment or decree of any court or other
governmental or regulatory authority, nor violates or will result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which Kremer is a party or by which he is
bound or to which any of his properties or assets is subject, nor will result in
the creation or imposition of any lien, charge or encumbrance of any kind
whatsoever upon any of the properties or assets of Kremer.
5.3 Consents and Approvals. No consent, waiver, authorization, or
approval of any governmental or regulatory authority, domestic or foreign, or of
any other person, firm or corporation, and no declaration to or filing or
registration with any such governmental or regulatory authority, is required in
connection with the execution and delivery of this Agreement by Kremer or the
performance by Kremer of his obligations hereunder, except that an assignment
form will have to be filed with the United States Patent and Trademark Office to
record the transfer of the Patent.
5.4 Litigation. Except as set forth on Schedule 5.4, there are no
claims, actions, suits, proceedings, disputes or investigations pending or, to
Kremer's actual knowledge, threatened before any federal, state or local court
or governmental or regulatory authority, domestic or foreign, or before any
arbitrator of any nature, brought by or against Kremer involving, affecting or
relating to any assets, properties or operations of Kremer or the transactions
contemplated by this Agreement which, if determined adversely, would have a
material adverse effect upon Kremer. Neither Kremer nor any of his assets or
properties is subject to any order, writ, judgment, award, injunction or decree
of any federal, state or local court or governmental or regulatory authority or
arbitrator, which could materially and adversely effect the assets, properties,
operations, prospects, net income or financial condition or which would
interfere with the transactions contemplated by this Agreement.
5.5 Title. Kremer is the owner of all right, title and interest in and
to the Patent Assets. Kremer has the legal right to transfer the Patent Assets
as set forth in this Agreement, and Kremer has not executed an agreement which
is in conflict with the terms of this Agreement.
5.6 Patent Protection. Schedule 5.6 represents a complete and accurate
list of all jurisdictions and registration numbers related to such jurisdictions
where the Patent has been registered, or where any continuation or reissue
applications corresponding to the Patent have been filed and there are no other
jurisdictions where the Patent has been registered or an application for
registration has been made.
5.7 Third-Party Rights. Except as provided in Schedule 5.7, Kremer has
not previously used or disclosed the Patent Assets or any part thereof anywhere
in the world, and will not do so without LaserSight's prior consent. Except as
provided in Schedule 5.7, to Kremer's actual knowledge, no part of the Patent
Assets are being infringed anywhere in the world. The Patent is valid and
enforceable, and to Kremer's actual knowledge, no part of the Patent will
infringe the rights of any third parties anywhere in the world. Kremer has not
granted any license, right or option in or to any of the Patent Assets.
5.8 Accuracy of Information. None of the representations, warranties
or statements contained in this Agreement, in the exhibits hereto, or in any
other agreement, instrument or document executed or delivered by or on behalf of
Kremer in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make any of such representations, warranties or
statements not misleading.
5.9 Agreements, Judgments and Decrees. Kremer represents and warrants
that he is not subject to any agreement, judgment or decree which could
materially and adversely affect his ability to satisfy his obligations
hereunder.
5.10 Purchase for Investment; Restricted Securities. Kremer will
acquire the LaserSight Common Stock for his own account for investment purposes
and, except for the registration contemplated by Section 7.7, not with a present
view toward any resale or distribution thereof. Certificates representing the
acquired LaserSight Common Stock shall bear the restrictive legend set forth in
Section 2.2 hereof indicating the absence of registration under the Securities
Act and imposing all applicable transfer restrictions thereon. Kremer
acknowledges that (i) LaserSight Common Stock has not been registered under the
Securities Act, (ii) LaserSight Common Stock cannot be sold, assigned, pledged
or otherwise transferred unless registered or qualified under the Securities Act
and any applicable state securities laws or unless an exemption from such
registration and qualification is available, as established by an opinion of
counsel which is accepted by LaserSight in its sole discretion based upon
applicable law, (iii) except as set forth in Section 7.7 LaserSight is not
required to cause any of LaserSight Common Stock to be registered or qualified
under the Securities Act or any applicable state securities laws, and (iv)
Kremer is prepared to bear the economic risk of an investment in LaserSight
Common Stock for an indefinite period of time.
5.11 LaserSight Common Stock.
(a) Kremer acknowledges the receipt of (i) LaserSight's Proxy
Statement dated May 21, 1997 (filed May 19, 1997), (ii) LaserSight's Annual
Report on Form 10-K for the year ended December 31, 1996, (iii) LaserSight's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, (iv)
LaserSight's Current Reports on Form 8-K filed on February 25, March 18, March
27, April 8, April 25 and July 1, 1997, (v) Form 8-A/A (Amendment No. 2) filed
April 26, 1996 describing LaserSight's Common Stock, and (vi) such other
publicly available information relating to LaserSight as was requested by Kremer
(collectively, the "SEC Filings").
(b) Kremer acknowledges that representatives of LaserSight have
responded to all questions of such parties relating to the SEC Filings.
(c) Kremer has relied upon consultations with his or her legal,
financial and other advisers with respect to this transaction, and the nature of
the investment together with the additional information concerning LaserSight
set forth in the SEC Filings.
(d) Kremer has completed, dated and executed an Seller's Certificate
(the "Certificate") substantially in the form attached hereto as Exhibit C, and
the information and representations contained in the Certificate are true and
accurate as of the Closing Date.
(e) The representations and warranties contained in this Section 4.22
shall survive the execution and delivery of this Agreement and the issuance by
LaserSight of the LaserSight Common Stock.
Except as provided in Section 5.6 (i) no representation or warranty is
made by Kremer that the Patent and the Patent Assets do not infringe upon any
person's or entity's patent or patents and LaserSight assumes all risks of
infringement claims by others which (A) relate to the Patent, (B) are made after
the Closing Date, and (C) relate to the period after the Closing Date, and (ii)
no representation or warranty is made by Kremer that the Patent can be developed
for commercial use.
Except as set forth in this Section 5, Kremer does not make any
representation or warranty to LaserSight.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LASERSIGHT.
LaserSight hereby represents and warrants to Kremer and covenants and
agrees, as of the date hereof and the Closing Date, as follows:
6.1 Corporate Organization. LaserSight is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with all requisite power and authority
(corporate and other) to own its properties and assets and to conduct its
business as now conducted.
6.2 Corporate Authority. As of the Closing Date, LaserSight will have
the corporate power to enter into this Agreement and to carry out its respective
obligations hereunder and thereunder. As of the Closing Date, the execution and
delivery of this Agreement and all agreements contemplated hereunder and the
performance of LaserSight's obligations hereunder and thereunder, will have been
duly authorized by the Board of Directors of LaserSight, and no other corporate
proceedings on the part of LaserSight will be necessary to authorize such
execution, delivery and performance. This Agreement and all agreements
contemplated hereunder have been duly executed by LaserSight and, as of the
Closing Date, will constitute valid and legally binding obligations of
LaserSight, enforceable against LaserSight in accordance with the terms hereof
and thereof, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
6.3 No Violation. Neither the execution, delivery nor the performance
by LaserSight of this Agreement and all agreements contemplated hereunder
violates or will violate any provision of law, of any order, judgment or decree
of any court or other governmental or regulatory authority, or of the charter
documents or by-laws of LaserSight, nor violates or will result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which LaserSight is a party or by which it
is bound or to which any of its properties or assets is subject, nor will result
in the creation or imposition of any lien, charge or encumbrance of any kind
whatsoever upon any of the properties or assets of LaserSight.
6.4 Consents and Approvals. Other than requirements of federal and
state securities laws, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any third party or any public or
governmental body or authority is necessary for the consummation by LaserSight
of the transactions contemplated by this Agreement.
6.5 Litigation. Except for matters expressly disclosed to Kremer in a
writing addressed to Kremer on or prior to the Closing Date or as set forth on
Schedule 5.5, there are no material claims, actions, suits, proceedings,
disputes or investigations pending or, to the best of LaserSight's knowledge,
threatened before any federal, state or local court or governmental or
regulatory authority, domestic or foreign, or before any arbitrator of any
nature, brought by or against LaserSight. Except for matters expressly disclosed
to Kremer in a writing addressed to Kremer on or prior to the Closing Date or as
set forth on Schedule 5.5, neither LaserSight nor any of its assets or
properties is subject to any order, writ, judgment, award, injunction or decree
of any federal, state or local court or governmental or regulatory authority or
arbitrator. As of the date of this Agreement LaserSight is not subject to an FDA
investigation.
6.6 Capitalization. As of May 31, 1997, the authorized capital stock
of LaserSight consisted of (i) 20,000,000 shares of LaserSight Common Stock of
which 9,423,907 shares were issued and outstanding and 170,200 shares were held
in treasury, and (ii) 10,000,000 shares of preferred stock, par value $.001, of
which none are issued and outstanding. No material change in such capitalization
has occurred between May 31, 1997 and the date hereof. The shares of LaserSight
Common Stock to be issued pursuant to this Agreement will be duly authorized,
validly issued, fully paid and nonassessable.
6.7 Accuracy of Information. None of the representations, warranties
or statements contained in the SEC Filings, this Agreement, in the exhibits
hereto or in any other agreement, instrument or document executed or delivered
by or on behalf of LaserSight in connection with the transactions contemplated
by this Agreement contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make any of such representations,
warranties or statements not misleading.
Except as set forth in this Section 6, LaserSight does not make any
representation or warranty to Kremer.
SECTION 7. CONDITIONS AND ADDITIONAL AGREEMENTS.
7.1 IBM Patent. If LaserSight acquires all right, title and interest
in and to United States Patent No. 4,784,135 (the "IBM Patent"), or otherwise
acquires the right to enforce the IBM Patent against infringement, LaserSight
will not assert against Kremer, Eyes of the Future, P.C., a Pennsylvania
professional corporation ("EOTF"), or Frederic B. Kremer, M.D., P.C., a
Pennsylvania professional corporation ("PC"), for so long as Kremer maintains an
ownership interest of at least 25% in EOTF and PC, any claim for infringement of
the IBM Patent based on Kremer's, EOTF's or PC's manufacture, use, sale or offer
to sell any laser described on Schedule 6.7 to the Merger Agreement (the "Kremer
Laser Assets"). LaserSight further covenants that for any lasers purchased or
obtained by Kremer or a Kremer Affiliate (as defined herein) from LaserSight for
use by Kremer or a Kremer Affiliate in connection with the private medical
practice located at 200 Mall Boulevard, King of Prussia, Pennsylvania (or such
other addresses as may be used by Kremer in connection with his private medical
practice), or by a Kremer Affiliate in connection with a Center or Centers (as
defined in the Merger Agreement), LaserSight will not assert any claim for
infringement of the IBM Patent based on the use of any such LaserSight laser.
The non-assertion clauses of this Section 7.1 apply to normal repairs or
replacement of parts to the Kremer Laser Assets necessary for continued use, but
does not include reconstruction of a worn-out laser. The non-assertion clauses
of this Section 7.1 do not constitute a license or convey any right or interest
in the IBM Patent and is not assignable or otherwise transferable by Kremer,
EOTF, PC or a Kremer Affiliate (collectively, the "Kremer Parties"), provided
that if a laser is subject to the non-assertion clauses of this Section 7.1,
such laser will continue to be subject to such clauses if such laser is
transferred from one of the Kremer Parties to another of the Kremer Parties. For
purposes hereof "Kremer Affiliate" shall mean an entity in which Kremer (i) has
an ownership interest of 40% or greater, or (ii) has the ability to appoint or
elect a majority of the board of directors or similar governing body, for
example, a general partner in a limited partnership or board of managers or
manager in a limited liability company, provided that in no event will the term
"Kremer Affiliate" include an entity in which any ownership interest is held,
directly or indirectly, by an individual or entity which is a competitor of
LaserSight and (i) manufactures or services refractive lasers, or (ii)
distributes or sells refractive lasers on a commercial basis.
7.2 Consignment of Laser. Within 90 days after the Closing Date
LaserSight will deliver to Kremer's office located at 200 Mall Boulevard, King
of Prussia, Pennsylvania LaserSight's LaserScan 2000 model refractive laser to
be utilized in connection with LaserSight clinical trials (the "Consignment
Laser"). Within 90 days after the date LaserSight has filled its first three
outstanding purchase orders for LaserSight's LSX model refractive laser,
LaserSight will deliver a LSX model excimer laser to Kremer's office and remove
the LaserScan 2000 excimer laser and thereafter the LSX model laser will be
considered the Consignment Laser. The parties agree (i) the Consignment Laser
will be labeled for non-human use, (ii) to cooperate in obtaining an
investigational device exemption from the United States Food and Drug
Administration for the Consignment Laser, and (iii) that the Consignment Laser
will remain the property of LaserSight and is only being delivered to Kremer on
a consignment basis.
7.3 Option to Purchase. LaserSight hereby grants Kremer or a Kremer
Affiliate the option to purchase up to a total of four refractive lasers which
are the most advanced model then manufactured by or for LaserSight. This option
will include the scanning laser currently manufactured by LaserSight and the
laser which may be manufactured by LaserSight if the FDA Approval (as defined in
the Merger Agreement) is received. The option to purchase the laser which is the
then most advanced type of laser manufactured by LaserSight will be at a price
of $100,000.00 per laser, provided that the option to purchase the laser which
may be manufactured based on the Kremer Laser as a result of the FDA Approval
will be at a price of $150,000.00. If the option to purchase granted under this
Section 7.3 is not exercised on or before the date which is 36 months after the
date of the FDA Approval (such date to be referred to as the "Option Termination
Date") then such option will expire and will be of no further force or effect.
The terms for the purchase of any laser pursuant to this Section 7.3 shall be as
follows: (i) Kremer shall pay as a deposit ten percent (10%) of the purchase
price for each laser at the time Kremer orders a laser and the balance of the
purchase price within 90 days after Kremer's or a Kremer Affiliates' receipt
thereof, (ii) LaserSight will use all reasonable efforts to ship such laser
within 30 days after LaserSight's receipt of the deposit associated with such
laser, (iii) the cost of delivery for each laser shall be the responsibility of
Kremer, (iv) each laser will be covered by LaserSight's standard warranty then
in effect for domestic sales at no cost to Kremer or the Kremer Affiliate, as
applicable, and (v) LaserSight shall provide one year of maintenance for each
such laser in accordance with its standard practice at no cost to Kremer or the
Kremer Affiliate, as applicable. LaserSight's obligations under this Section 7.3
shall terminate upon the Termination Date.
7.4 Sale of Lasers. LaserSight agrees that in addition to the options
to purchase described in Section 7.3, after the date of the FDA Approval,
LaserSight, if requested by Kremer or a Kremer Affiliate, will sell additional
lasers to Kremer or a Kremer Affiliate, as the case may be, on the same as or
better Terms (as defined herein) as LaserSight has utilized in the immediately
preceding 12 months when selling other lasers of the same type in the United
States. These Terms will only be offered for lasers which are purchased for
Kremer's use in connection with his private medical practice located at 200 Mall
Boulevard, King of Prussia, Pennsylvania (or such other addresses as may be used
by Kremer in connection with his private medical practice) or for the use of a
Kremer Affiliate in connection with a Center or Centers, and neither Kremer nor
any Kremer Affiliate will have the right to assign this right except to one
another. For purposes hereof, "Terms" shall mean (i) purchase price for an equal
quantity of lasers, (ii) amount of down payment, (iii) payment terms, (iv)
length of warranty period, (v) length of maintenance received at no additional
cost, and (vi) type of purchase (e.g., cash purchase, per procedure lease,
etc.). The parties agree that the sale of an excimer laser to Kremer or a Kremer
Affiliate pursuant to Section 7.3 will not be deemed a sale by LaserSight which
grants Kremer or a Kremer Affiliate any right under this Section 7.4.
7.5 Patent Royalties. LaserSight agrees that, unless otherwise
approved in writing in advance by Kremer, LaserSight will only enter into
agreements to license the Patent to a third party which provide for a licensing
fee of five percent (5%) or greater of the ultimate sales price of the
microkeratome manufactured utilizing the Patent.
7.6 Inspection of Records. LaserSight shall maintain complete and
accurate books, accounts, records and other materials used to calculate the
royalty payments described in Section 7.5 in a manner such that the information
contained in the statements referred to in Section 7.5 may be readily
determined. Kremer and/or his duly authorized representatives, shall have the
right to inspect and audit such materials during reasonable business hours and
upon at least 48 hours advance notice to LaserSight. If Kremer's (or his
representative's) inspection and audit reveals that a miscalculation has been
made in the amount of the royalty, Kremer shall promptly receive from LaserSight
(i) payment of the royalty amount that had been miscalculated by LaserSight,
(ii) interest thereon at the prime interest rate stated in the Wall Street
Journal plus four percent (4%) per annum from the date the payment should have
originally been made, and (iii) reimbursement for all reasonable costs and
expenses incurred by Kremer in determining the miscalculation and collecting the
amount due (including, without limitation, reasonable legal fees and costs). If
it is determined by a court of competent jurisdiction or other neutral party
chosen by the parties to resolve their dispute, that there was no miscalculation
notwithstanding Kremer's assertion to the contrary, has been made in the amount
of the royalty, then Kremer will reimburse LaserSight for all reasonable costs
and expenses incurred by LaserSight in connection with Kremer's inspection and
audit (including, without limitation, reasonable legal fees and costs). The
right to audit described in this Section 7.6 shall terminate 90 days after
LaserSight make its final payment of royalty fees to Kremer.
7.7 Registration.
(a) Demand Registration Rights. Upon LaserSight's receipt of a written
request executed by Kremer stating that Kremer desires to sell all or a portion
of the LaserSight Common Stock then held by Kremer (the "Demand Registration
Request"), LaserSight shall, subject to the limitations of this Section 7.7, (i)
promptly file with the Securities and Exchange Commission ("SEC") a registration
statement in compliance with the Securities Act on Form S-3, if available, or
such other appropriate registration form promulgated by the SEC as shall be
selected by LaserSight if Form S-3 is unavailable registering at least the
number of shares of LaserSight Common Stock requested to be registered in the
Demand Registration Request, provided that in no event will LaserSight be
required to register more than the total number of Closing Shares (as defined in
the Merger Agreement) and Patent Closing Shares (the "Demand Registration
Statement"), and (ii) use all commercially reasonable efforts to cause the
Demand Registration Statement to become effective under the Securities Act as
soon as reasonably possible after the filing thereof and remain effective for
150 days or such shorter period as may be required if all such LaserSight Common
Stock covered by the Demand Registration Statement is sold prior to the
expiration of such 90-day period.
Kremer agrees (i) that a Demand Registration Request shall only be
valid if delivered to LaserSight at the same time the Shareholders (as defined
in the Merger Agreement) deliver a similar request pursuant to Section 6.4(a) of
the Merger Agreement, and (ii) subject to the limitations of this Section 7.7,
the Demand Registration Statement related to such Demand Registration Request
will include the Patent Closing Shares and the shares of LaserSight Common Stock
to be registered pursuant to Section 6.4(a) of the Merger Agreement. LaserSight
shall only be obligated to effect one such registration pursuant to this Section
7.7(a) and LaserSight shall not be obligated to effect such registration after
the first anniversary of the Closing Date (provided that a registration
effective on or before such anniversary date shall remain effective for the full
150-day period (or such shorter period as is provided for in this Section
7.7(a)).
(b) Piggy-Back Registration Rights. If during the period commencing on
the Closing Date and concluding on the first anniversary of the Closing Date
LaserSight proposes or is required to file with the SEC a registration statement
under the Securities Act relating to any shares of LaserSight Common Stock
(other than a registration statement on Form S-8 or Form S-4 or any successor
forms thereto, or any registration form that does not permit the inclusion
therein of the Patent Closing Shares) (the "Piggy-Back Registration Statement"),
LaserSight will each such time give prompt written notice of its intention to do
so to Kremer. Upon the written request of Kremer received by LaserSight within
10 days after the delivery or mailing of such notice from LaserSight (the
"Piggy-Back Registration Request"), subject to the limitations of this Section
7.7, LaserSight will use all commercially reasonable efforts to register at
least the number of shares of LaserSight Common Stock then outstanding which are
not then the subject of another registration statement and which are requested
to be registered in the Piggy-Back Registration Request, provided that in no
event will LaserSight, on behalf of Kremer, be required to include in such
registration more than the total number of Closing Shares and Patent Closing
Shares (the "Requested Shares").
Kremer agrees (i) that a Piggy-Back Registration Request shall only be
valid if delivered to LaserSight at the same time the Shareholders deliver a
similar request pursuant to Section 6.4(b) of the Merger Agreement, and (ii)
subject to the limitations of this Section 7.7, the Piggy-Back Registration
Statement related to such Piggy-Back Registration Request will include the
Patent Closing Shares and the shares of LaserSight Common Stock to be registered
pursuant to Section 6.4(b) of the Merger Agreement. Kremer's right pursuant to
this Section 7.7(b) to receive notice and participate in a Piggy-Back
Registration Statement shall cease on the day after the first anniversary of the
Closing Date.
(c) Limitations. The foregoing notwithstanding, in the event of an
underwritten offering pursuant to Sections 7.7(b), if the managing underwriter
of such offering shall advise LaserSight that, in its opinion, the distribution
of a specified portion of the securities requested to be included in the
Piggy-Back Registration Statement, would materially adversely affect the
distribution of such securities by increasing the aggregate amount of the
offering in excess of the maximum amount of securities which such managing
underwriter believes can reasonably be sold in the contemplated distribution,
then LaserSight may (subject to the limitations set forth below) exclude all
Requested Shares from, or limit the number of Requested Shares to be included in
the Piggy-Back Registration Statement. In such event, LaserSight shall so advise
Kremer, and the number of Requested Shares and other shares ("Other Shares") to
be included in the Piggy-Back Registration Statement by other persons or
entities that are then stockholders of LaserSight ("Other Holders"), after
providing for all shares that LaserSight proposes to offer and sell for its own
account, shall be allocated among Kremer and Other Holders pro rata on the basis
of (i) the sum of (A) the number of Requested Shares then held by Kremer, and
(B) the number of Closing Shares (as defined in the Merger Agreement) then held
by the Shareholders (as defined in the Merger Agreement), and (ii) the aggregate
number of Other Shares then held by Other Holders.
LaserSight shall be entitled to suspend the right of Kremer to sell
any Patent Closing Shares pursuant to a Demand Registration Statement and a
Piggy-Back Registration Statement if the LaserSight Board of Directors ("Board")
determines reasonably and in good faith that such sales pursuant to a Demand
Registration Statement or Piggy-Back Registration Statement, as applicable,
would materially impede, delay or interfere with any material financing, offer
or sale of securities by LaserSight, acquisition, corporate reorganization or
other significant transaction involving LaserSight or any of its subsidiaries,
which material financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration by
LaserSight at the time of such suspension described above; provided, however,
that LaserSight shall not be entitled to more than one such suspension and the
suspension shall not be longer than four weeks duration. If LaserSight shall so
suspend Kremer's right to sell, Kremer shall receive an extension of the
registration period equal to the number of days of the suspension.
(d) Execution of Agreements. If a Demand Registration Statement or
Piggy-Back Registration Statement relates to an underwritten public offering,
LaserSight shall so advise Kremer. In such event, the right of Kremer to
registration shall be conditioned upon Kremer's execution of the underwriting
agreement agreed to among LaserSight and the managing underwriters selected by
LaserSight for such underwritten offering.
(e) Notice. LaserSight will promptly advise Kremer as to the initial
filing of a Demand Registration Statement or Piggy-Back Registration Statement
and as to the effectiveness thereof. LaserSight will promptly furnish such
number of prospectuses, and any amendments thereof or supplements thereto, as
Kremer from time to time may reasonably request.
(f) Information. Kremer shall from time to time promptly supply to
LaserSight in writing any information relating to any holdings of LaserSight
Common Stock by Kremer, and his intended plan of distribution, all as LaserSight
may reasonably request in order for LaserSight to comply with the rules of the
SEC applicable to the Demand Registration Statement and Piggy-Back Registration
Statement. In addition, Kremer agrees to furnish promptly to LaserSight all
information required to be disclosed in order to make the information previously
furnished to LaserSight by Kremer not materially misleading.
(g) Expenses. All expenses incurred in connection with a Demand
Registration Statement and a Piggy-Back Registration Statement, including
without limitation all filing fees, duplication expenses, fees and expenses of
legal counsel for LaserSight, and the fees and expenses of LaserSight's
independent accountants, shall be paid by LaserSight, except that Kremer shall
pay any and all brokers' or underwriters' fees, commissions and discounts and
any fees and expenses of their legal counsel, if any.
7.8 LaserSight's Conditions to Close. The Closing and all obligations
of LaserSight pursuant to this Agreement shall be conditioned upon the
following:
(a) all representations and warranties contained in Section 5 shall be
true in all material respects as of the Closing Date;
(b) there shall not have been any material adverse change in the
Patent Assets (either individually or in the aggregate) from the date of
LaserSight's execution of this Agreement through the Closing Date if the date of
execution of this Agreement and the Closing Date are not one and the same;
(c) Kremer shall have performed all of his obligations under this
Agreement required to be performed as of the Closing Date;
(d) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement;
(e) LaserSight shall have received an executed original of the Merger
Agreement and all documents contemplated thereby;
(f) LaserSight shall have received an executed original of the Patent
Assignment from Kremer;
(g) LaserSight shall have received an executed original of the
Certificate from Kremer;
(h) Foothill Capital Corporation shall have taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; and
(i) The Board of Directors of LaserSight, or the appropriate committee
thereof, shall have taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby.
In the event that any of the foregoing conditions is not satisfied, then
LaserSight may, at its option, terminate this Agreement in which event
LaserSight shall be relieved of all obligations hereunder, so long as it is not
in breach of this Agreement at such time, and this Agreement shall be deemed
null, void and of no force or effect.
7.9 LaserSight's Deliveries. At or prior to the Closing, LaserSight
shall deliver to Kremer:
(a) the Cash Consideration; and
(b) the Transfer Agent Letter.
7.10 Kremer's Conditions To Close. The Closing and all obligations of
Kremer pursuant to this Agreement shall be conditioned upon the following:
(a) all representations and warranties contained in Section 6 shall be
true as of the Closing Date;
(b) LaserSight shall have performed all of its obligations under this
Agreement required to be performed as of the Closing Date;
(c) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement; and
(d) Kremer shall have received an executed original of the Merger
Agreement and the Consulting Agreement.
In the event Kremer believes that any of the foregoing conditions is not
satisfied, then Kremer may, at his option, terminate this Agreement in which
event Kremer shall be relieved of all obligations hereunder, so long as he is
not in breach of this Agreement at such time, and this Agreement shall be deemed
null, void and of no force or effect.
7.11 Kremer's Deliveries. At or prior to the Closing, Kremer shall
deliver to LaserSight the following documents:
(a) the Bill of Sale, conveying all of Kremer's right, title and
interest in the Patent Assets;
(b) The Patent Assignment;
(c) all such documents and instruments LaserSight and its counsel may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement; and
(d) An executed original of the Certificate.
SECTION 8. TERMINATION AND ABANDONMENT.
8.1 Methods of Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) By the mutual written consent of Kremer and LaserSight;
(b) By LaserSight, if all of the conditions set forth in Section 7.8
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date;
(c) By Kremer, if all of the conditions set forth in Section 7.10 of
this Agreement shall not have been satisfied or waived on or prior to the
Closing Date; or
(d) By Kremer or LaserSight at any time after August 31, 1997.
If this Agreement is terminated pursuant to this Section 8.1, it shall become
null and void and of no further force or effect, except as provided in Section
8.2.
8.2 Procedure Upon Termination. In the event of termination and
abandonment of this Agreement by Kremer or LaserSight pursuant to Section 8.1
hereof, written notice thereof shall forthwith be given to the other party or
parties as provided herein and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
Kremer or LaserSight, and Kremer and LaserSight shall each return to the other
party any documents or copies thereof in possession of such party furnished by
such other party in connection with the transactions contemplated by this
Agreement. If this Agreement is terminated as provided herein, no party to this
Agreement shall have any liability or further obligation to any other party to
this Agreement with respect to this Agreement or the transactions contemplated
hereby except as provided in this Section 8.2; provided, however, that no
termination of this Agreement pursuant to the provisions of this Section 8 shall
relieve any party of liability for a breach of any provision of this Agreement
occurring prior to such termination.
SECTION 9. INDEMNIFICATION.
9.1 Indemnification.
(a) From and after the Closing Date and subject to the other
provisions of this Section 9, Kremer agrees to indemnify and hold LaserSight and
LaserSight's affiliates, officers, directors and agents harmless from damages,
losses or expenses suffered or paid, directly or indirectly ("Loss"), as a
result of any and all claims, demands, suits, causes of action, proceedings,
judgments and liabilities, including reasonable counsel fees and other expenses
incurred in litigation or otherwise, assessed, incurred or sustained
(collectively "LaserSight Loss") by or against any of them with respect to or
arising out of (i) the failure of any representation or warranty made by Kremer
in this Agreement or in any Schedule delivered pursuant hereto to be true and
correct in all material respects as of the date of this Agreement as of the
Closing Date, (ii) claims of third parties that microkeratomes manufactured by
Kremer prior to the Closing Date which are based on the Patent and its related
know-how infringes on the rights or properties of such third party, and (iii)
the breach by or nonperformance of Kremer of any covenants or agreements
contained in this Agreement, provided that the indemnification covenant
contained in this Section will not require Kremer to indemnify in connection
with consequential damages sustained by the parties eligible for indemnification
hereunder.
(b) From and after the Closing Date and subject to the other
provisions of this Section 9, LaserSight agrees to indemnify and hold Kremer
harmless from damages, losses or expenses suffered or paid, directly or
indirectly, as a result of any and all claims, demands, suits, causes of action,
proceedings, judgments and liabilities, including reasonable counsel fees and
other expenses incurred in litigation or otherwise, assessed, incurred or
sustained (collectively "Kremer Loss") by or against any of them with respect to
or arising out of (i) the failure of any representation or warranty made by
LaserSight in this Agreement or in any Schedule delivered pursuant hereto to be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date, (ii) claims of third parties that microkeratomes
manufactured by or for LaserSight after the Closing Date which are based on the
Patent and its related know-how infringes on the rights or properties of such
third party, and (iii) the breach by or nonperformance of LaserSight of any
covenants or agreements contained in this Agreement, provided that the
indemnification covenant contained in this Section will not require LaserSight
to indemnify in connection with consequential damages sustained by the parties
eligible for indemnification hereunder.
(c) If any action or proceeding be commenced, or if any claim, demand
or assessment be asserted, in respect of which a party indemnified hereunder
(the "Indemnified Party") proposes to hold any one or more of the indemnifying
party or parties (the "Indemnifying Party") liable under the provisions of this
Agreement, the Indemnifying Party shall have no liability therefor unless (i)
the Indemnifying Party shall receive written notice of such claim, demand or
assessment ("Claims Notice") within 30 days after the Indemnified Party acquires
knowledge thereof, and (ii) the Indemnifying Party shall have received copies of
all information and documents relating thereto within twenty (20) days after the
Indemnified Party's receipt thereof. If any one or more of the Indemnifying
Party or Parties shall, at its or his option, elect to contest or defend any
such action, proceeding, claim, demand or assessment, such Indemnifying Party
shall be entitled, at its or his sole cost and expense, to contest or defend the
same with counsel of their own choosing, and the Indemnified Party and its or
his respective successors or assigns shall not admit any liability with respect
thereto or settle, compromise, pay or discharge the same without the prior
written consent of the Indemnifying Party so long as any Indemnifying Party is
contesting or defending the same in good faith, and the Indemnified Party (and
their respective successors and assigns) shall cooperate with the Indemnifying
Party in the contest or defense thereof and shall accept any settlement thereof
recommended by a majority in interest of the Indemnifying Party so long as the
amount of such settlement is paid by the Indemnifying Party. If the Indemnified
Party fails to notify the Indemnifying Party of a claim in accordance with the
terms of this Section 9.1(c), and the Indemnifying Party is thereby prejudiced
by such failure of notice in its defense of the claim, the Indemnifying Party's
obligation to indemnify hereunder shall be extinguished with respect to such
claim to the extent that the Indemnifying Party has been prejudiced by the
failure to give such notice.
(d) LaserSight shall not be entitled to indemnification for any claim
until the aggregate amount of claims against Kremer hereunder exceeds $10,000.00
(the "Threshold Amount"), and then the LaserSight may only recover the amount in
excess of the Threshold Amount. Prior to seeking indemnification hereunder the
parties must first utilize proceeds available from relevant insurance policies
of the Indemnified Party.
(e) Notwithstanding anything to the contrary contained in this
Agreement, Kremer shall not be liable under the indemnification provisions of
this Section hereof or otherwise have any liability for any misrepresentation or
breach of warranty or covenant under this Agreement or otherwise have any
liability in connection with the transactions contemplated by this Agreement to
the extent that:
(i) the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which such
liability would be based is disclosed in any of the contracts and
documents referred to in this Agreement, in the Schedules attached
hereto or in any other contracts, documents, records or other
instruments made available to LaserSight hereunder or which is
disclosed in a written notice furnished to LaserSight prior to the
Closing; provided, however, that any such misrepresentation or breach
of warranty or covenant so disclosed to LaserSight after the execution
and delivery of this Agreement and prior to the Closing shall not
affect the right of LaserSight to elect not to close the transactions
contemplated by this Agreement as provided in Section 8 hereof (it
being understood and agreed that if, despite such right of LaserSight
to elect not to close by reason of the misrepresentation or breach so
disclosed, LaserSight nevertheless elect to close, thereby waiving
such misrepresentation or breach, LaserSight shall thereafter have no
claim against Kremer by reason of any such disclosed misrepresentation
or breach of warranty or covenant); or
(ii) such liability is based upon a claim, assessment or
deficiency for federal, state and/or local income or franchise taxes
which arise from adjustments which have the effect only of shifting
income, credits and/or deductions from one fiscal period to another;
or
(iii) such liability is offset by a credit in accordance with the
provisions of subsection 9.1(j) below.
(f) Notwithstanding anything to the contrary contained in this
Agreement, LaserSight shall not be liable under the indemnification provisions
of this Section hereof or otherwise have any liability for any misrepresentation
or breach of warranty or covenant under this Agreement or otherwise have any
liability in connection with the transactions contemplated by this Agreement to
the extent that the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which such liability would be
based is disclosed in this Agreement, in the Schedules attached hereto, in the
SEC Filings, or which is disclosed in a written notice furnished to Kremer prior
to the Closing; provided, however, that any such misrepresentation or breach of
warranty or covenant so disclosed to Kremer after the execution and delivery of
this Agreement and prior to the Closing shall not affect the right of Kremer to
elect not to close the transactions contemplated by this Agreement as provided
in Section 8 hereof (it being understood and agreed that if, despite such right
of Kremer to elect not to close by reason of the misrepresentation or breach so
disclosed, Kremer nevertheless elects to close, thereby waiving such
misrepresentation or breach, Kremer shall thereafter have no claim against
LaserSight by reason of any such disclosed misrepresentation or breach of
warranty or covenant).
(g) All representations and warranties contained in Section 5, and the
indemnities set forth in Sections 9.1(a)(i) and (iii) (except for indemnities
pursuant to Section 9.1(a)(iii) which relate to Sections 7.1, 7.2, 7.3, 7.4,
7.6, 7.8(f) and 7.8(g)) shall expire on the first anniversary of the Closing
Date, and Kremer shall have no liability under the indemnification provisions of
Section 9 with respect to such Sections or, except pursuant to Section 9.1(n),
otherwise have any liability under this Agreement or otherwise in connection
with the transactions contemplated by this Agreement unless (i) with respect to
other than third party claims, LaserSight gives written notice to Kremer of its
claim for any such liability, setting forth in reasonable detail the specific
facts and circumstances pertaining thereto, on or before the date which is 12
months after the Closing Date, and (ii) with respect to other than third party
claims, if Kremer does not satisfy such claim within 30 days after the giving of
such notice, LaserSight commences a legal action or proceeding against Kremer
with respect to such claim within 45 days after the giving of such notice. With
respect to third party claims for which a Claims Notice has been sent, no
indemnification or other liability shall be due or owing under Section 9 with
respect to any LaserSight Loss to the extent it (i) is a potential claim or
cause of action which LaserSight believes may be asserted rather than a
LaserSight Loss, claim, cause of action liability which has, in fact, been
asserted, or (ii) is a LaserSight Loss, claim cause of action or liability with
respect to which LaserSight has taken action to accelerate the time period in
which such matter is asserted, wherein a material purpose of such action was to
facilitate a claim prior to the expiration of the survival period set forth in
this subsection (g) of Section 9 so that LaserSight could make an
indemnification claim prior to the expiration of such period.
(h) All representations and warranties contained in Sections 6.1 and
6.2 shall expire on the first anniversary of the Closing Date, and the
indemnities set forth in Section 9.1(b)(i) hereof and all representations and
warranties contained in Sections 6.3, 6.4, 6.5, 6.6 and 6.7 shall expire on the
fourth anniversary of the Closing Date, and after such dates LaserSight shall
have no liability under the indemnification provisions of Section 9 hereof with
respect to such Sections or, except pursuant to Section 9.1(m), otherwise have
any liability under this Agreement or otherwise in connection with the
transactions contemplated by this Agreement unless (i) with respect to other
than third party claims, Kremer give written notice to LaserSight of Kremer's
claim for any such liability, setting forth in reasonable detail the specific
facts and circumstances pertaining thereto, on or before the first anniversary
of the Closing Date or the fourth anniversary of the Closing Date, as
applicable, and (ii) with respect to other than third party claims, if Kremer
does not satisfy such claim within 30 days after the giving of such notice,
Kremer commences a legal action or proceeding against LaserSight with respect to
such claim within 45 days after the giving of such notice. With respect to third
party claims for which a Claims Notice has been sent, no indemnification or
other liability shall be due or owing under Section 9 with respect to any Kremer
Loss to the extent it (i) is a potential claim or cause of action which Kremer
believes may be asserted rather than a Kremer Loss, claim, cause of action
liability which has, in fact, been asserted, or (ii) is a Kremer Loss, claim
cause of action or liability with respect to which Kremer has taken action to
accelerate the time period in which such matter is asserted, wherein a material
purpose of such action was to facilitate a claim prior to the expiration of the
survival period set forth in this subsection (h) of Section 9 so that Kremer
could make an indemnification claim prior to the expiration of such period.
(i) It is specifically understood and agreed that, except as provided
in the last sentence of Section 9.1(k), in the event a misrepresentation or
breach of warranty, covenant or agreement is discovered by a party hereto after
the Closing, the remedy of such party shall be limited to indemnification as set
forth in Section 9 hereof (as limited by the provisions set forth therein or
elsewhere in this Agreement), which shall be such party's sole and exclusive
remedy, and such party shall not be entitled to a rescission of this Agreement.
(j) In the event that, notwithstanding the limitations contained in
this Section 9 or elsewhere in this Agreement, Kremer becomes liable to
LaserSight under the provisions of this Agreement or otherwise, Kremer shall be
entitled to a credit or offset against any such liability of an amount equal to
the value of any net tax benefit realized (by reason of a tax deduction, basis
reduction, shifting of income, credits and/or deductions or otherwise) by
LaserSight in connection with the loss or damage suffered by LaserSight which
forms the basis of Kremer's liability hereunder. Such net tax benefit shall be
calculated by LaserSight's independent certified public accountant utilizing, to
the extent possible, generally accepted accounting principles.
(k) Notwithstanding anything to the contrary contained in this
Agreement, in the event that, notwithstanding the limitations contained in this
Section 9 or elsewhere in this Agreement, Kremer become liable to LaserSight
pursuant to this Section 9 as a result of a misrepresentation or breach of a
warranty, in no event shall the aggregate amount of such liability of Kremer
(including all costs, expenses and attorneys' fees paid or incurred by Kremer in
connection therewith or the curing of any and all misrepresentations or breaches
of warranties under this Agreement) exceed the number which results from
multiplying 66% times the total dollar amount received by Kremer pursuant to
this Agreement. The total dollar amount received by Kremer pursuant to this
Agreement shall be the sum of (i) all amounts paid to Kremer in immediately
available funds, and (ii) the dollar amount utilized to calculate the number of
shares of LaserSight Common Stock actually issued pursuant to this Agreement.
Nothing contained herein shall limit LaserSight's rights and remedies associated
with a breach or nonperformance by Kremer of an agreement or covenant contained
in Sections 7.1, 7.2, 7.3, 7.4, 7.6, 7.8(f), 7.8(g) and indemnities pursuant to
Section 9.1(a)(iii) which relate to Sections 7.1, 7.2, 7.3, 7.4, 7.6, 7.8(f),
7.8(g).
(l) Notwithstanding anything to the contrary contained in Section 7 or
elsewhere in this Agreement, LaserSight shall not, except as otherwise expressly
provided in subsection (e)(i) of this Section 9, have the right to elect not to
close the transactions contemplated by this Agreement by reason of any
misrepresentation or breach of warranty or covenant contained in this Agreement
or otherwise if (i) Kremer shall have no liability therefor to LaserSight by
reason of the provisions contained in this Section 9 or elsewhere in this
Agreement, or (ii) Kremer undertakes, at his sole cost and expense (but subject
to the limitations and other provisions contained in this Section 9 or elsewhere
in this Agreement), to promptly cure such misrepresentation or breach (and/or
defend, settle, compromise and/or discharge any third party claim which forms
the basis thereof) prior to the Closing. The Threshold Amount shall not be
considered when determining whether Kremer has liability pursuant to subsection
(i) of this Section 9.1(l) and determining the limitations on liability referred
to in subsection (ii) of this Section 9.1(l).
(m) Notwithstanding anything to the contrary contained in this
Agreement LaserSight's obligations pursuant to Sections 9.1(b)(ii)-(iii) shall
survive the termination of this Agreement.
(n) Notwithstanding anything to the contrary contained in this
Agreement Kremer's indemnification obligations pursuant to Section 9.1(a)(iii)
which relate to Sections 7.1, 7.2, 7.3, 7.4, 7.6, 7.8(f), 7.8(g) shall survive
the termination of this Agreement.
(o) The parties agree that there will be no ability to offset amounts
owed to a party pursuant to this Section 8 against amounts such party is
required to pay pursuant to the terms of this Agreement, the Merger Agreement or
the Consulting Agreement (as defined in the Merger Agreement).
SECTION 10. GENERAL PROVISIONS.
10.1 Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
(except covenants and agreements which are expressly required to be performed
and are performed in full on or prior to the Closing Date) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement, provided that the representations and warranties contained herein
shall only survive until such time as described in Sections 9.1(g) and 9.1(h),
as applicable.
10.2 Publicity. So long as this Agreement shall be in effect, neither
Kremer nor LaserSight shall issue or cause the publication of any press release
or other announcement with respect to this Agreement or the transactions
contemplated hereby without the consent of the other party, which consent shall
not be withheld where such release or announcement is required by applicable
law.
10.3 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors and
assigns; provided, however, that neither party shall assign or delegate this
Agreement or any of the rights or obligations created hereunder without the
prior written consent of the other party. Notwithstanding the foregoing,
LaserSight shall have the unrestricted right to assign this Agreement and all or
any part of its rights hereunder and to delegate all or any part of its
obligations hereunder to any affiliate of LaserSight, but in such event
LaserSight shall remain fully liable for the performance of all of such
obligations in the manner prescribed in this Agreement. Nothing in this
Agreement shall confer upon any person, firm or corporation not a party to this
Agreement, or the legal representatives of such person, firm or corporation, any
rights or remedies of any nature or kind whatsoever under or by reason of this
Agreement.
10.4 Brokers and Finders. Each of parties represents and warrants to
the other that he or it has not engaged any broker, finder or investment banker
in connection with the transactions contemplated by this Agreement. Each of
LaserSight and Kremer agrees to indemnify and hold harmless the other against
any brokerage fee, commission, finder's fee, or financial advisory fee due to
any person, firm or corporation acting on his or its behalf in connection with
the transactions contemplated by this Agreement.
10.5 Expenses. Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
10.6 Notices. Any notice required or permitted hereunder shall be
given in writing and shall be effective for all purposes if hand delivered to
the party designated below, sent via overnight delivery utilizing a nationally
recognized overnight delivery service or placed in the United States mail,
postage prepaid, addressed to the addresses set forth below, or to such other
address and persons as shall be designated from time to time by any party hereto
in a written notice to the other in the manner provided for in this paragraph.
The notice shall be deemed to have been given upon deposit in the United States
mail, postage prepaid, or at the time of delivery if hand delivered. A party
receiving notice which does not comply with the technical requirements for
notice under this paragraph may elect to waive any deficiencies and treat the
notice as having been properly given.
1. if to Kremer, to:
Photomed, Inc.
200 Mall Boulevard
King of Prussia, Pennsylvania 19406
Attn: Frederic B. Kremer, M.D.
with a copy to:
Blank Rome Comisky & McCauley
Four Penn Center Plaza
Philadelphia, Pennsylvania 19103
Attn: Steven Dubow, Esq.
or, from and after
September 1, 1997:
Blank Rome Comisky & McCauley
One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Steven Dubow, Esq.
2. if to LaserSight, to:
LaserSight Incorporated
12161 Lackland Road
St. Louis, Missouri 63146
Attn: Chief Executive Officer
with a copy to:
Sonnenschein Nath & Rosenthal
One Metropolitan Square
Suite 3000
St. Louis, Missouri 63102
Attn: Alan Bornstein, Esq.
10.7 Entire Agreement. This Agreement, together with the exhibits
hereto, represents the entire agreement and understanding of the parties with
reference to the transactions set forth herein and no representations or
warranties have been made in connection with this Agreement other than those
expressly set forth herein or in the exhibits, certificates and other documents
delivered in accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this
Agreement.
10.8 Waivers and Amendments. Each of LaserSight and Kremer may by
written notice to the other (a) extend the time for the performance of any of
the obligations or other actions of the other; (b) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement; (c)
waive compliance with any of the covenants of the other contained in this
Agreement; (d) waive performance of any of the obligations of the other created
under this Agreement; or (e) waive fulfillment of any of the conditions to his
own obligations under this Agreement. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties hereto.
10.9 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof.
10.10 Article and Section Headings. The Article and Section headings
contained in this Agreement are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.
10.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
10.12 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Pennsylvania, without regard to such
state's conflict of law provisions.
10.13 LaserSight Venue. LaserSight hereby irrevocably and
unconditionally consents and submits to the jurisdiction of Pennsylvania courts
in connection with all actions, suits or proceedings filed by Kremer relating
LaserSight's misrepresentation or breach of the terms of this Agreement.
LaserSight irrevocably waives any objection it may have to the venue of any such
action, suit or proceeding brought in such courts or the convenience of the
forum and LaserSight irrevocably waives the right to proceed in any other
jurisdiction in connection with such action, suit or proceeding. Final judgment
in any such action, suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment, a certified or true copy of
which shall be conclusive evidence of the fact and the amount of any
indebtedness or liability of LaserSight therein described. LaserSight agrees
that services of process in any action or proceeding hereunder may be made upon
LaserSight by certified mail, return receipt requested to the address for notice
set forth in Section 10.6.
10.14 Kremer Venue. Kremer hereby irrevocably and unconditionally
consents and submits to the jurisdiction of a court chosen by LaserSight from
time to time which has legal jurisdiction as a matter of law, without reference
to this Section 10.14, over any actions, suits or proceedings filed by
LaserSight relating to any of Kremer's misrepresentation or breach of the terms
of this Agreement, provided that in no event will Kremer be required to consent
to the jurisdiction of a court which as a matter of law has legal jurisdiction
other than the courts of Delaware, Missouri or Pennsylvania, provided further
that if it is determined that none of the courts of Delaware, Missouri or
Pennsylvania has jurisdiction, Kremer will consent to the jurisdiction of the
courts of the state in which he then resides. Kremer irrevocably waives any
objection he may have to the venue of any such action, suit or proceeding
brought in such courts or the convenience of the forum and Kremer irrevocably
waives the right to proceed in any other jurisdiction in connection with such
action, suit or proceeding if venue exists as a matter of law or as a result of
Kremer being domiciled in such jurisdiction. Final judgment in any such action,
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, a certified or true copy of which shall
be conclusive evidence of the fact and the amount of any indebtedness or
liability of Kremer therein described. Kremer agrees that services of process in
any action or proceeding hereunder may be made upon Kremer by certified mail,
return receipt requested to the address for notice set forth in Section 10.6.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Patent
Purchase Agreement as of the date and year first above written.
Kremer: LaserSight:
LASERSIGHT INCORPORATED
/s/ Frederic B. Kremer By: /s/ Michael R. Farris
- ------------------------ -----------------------------
Frederic B. Kremer, M.D. Michael R. Farris
President/Chief Executive Officer
EXHIBIT 2.(ii)
--------------
AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT AND PLAN OF MERGER is made and entered into as of July
15, 1997 by and among LASERSIGHT INCORPORATED, a Delaware corporation
("LaserSight"), PHOTOMED ACQUISITION, INC., a Delaware corporation ("Newco"),
PHOTOMED, INC., a Pennsylvania corporation (the "Company"), FREDERIC B. KREMER,
M.D. ("Kremer"), LINDA KREMER ("LK"), ROBERT SATALOF, Trustee for Alan Stewart
Kremer, u/t/d December 27, 1991 ("ASK"), and ROBERT SATALOF, Trustee for Mark
Adam Kremer, u/t/d December 27, 1991 ("MAK" and collectively with Kremer, LK and
ASK, the "Shareholders").
RECITALS
--------
A. The Company has developed a refractive laser which is utilized to
perform LASIK procedures (the "Kremer Laser") and in connection therewith the
Company has submitted a request to the United States Food and Drug
Administration (the "FDA") for pre-market approval to manufacture the Kremer
Laser (the "PMA").
B. LaserSight desires to acquire all of the issued and outstanding
shares of the Company's common stock, no par value per share ("Company Common
Stock") by means of a merger (the "Merger") of the Company with and into Newco
(with Newco being the surviving corporation), pursuant to which the Shareholders
shall receive shares of stock of LaserSight.
C. For federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
D. The Company and LaserSight each desires to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions thereto.
THEREFORE, the parties agree as follows:
SECTION 1. THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the provisions of the Pennsylvania Business Corporation
Law of 1988, as amended (the "PA Act"), and the Delaware General Corporation
Law, as amended (the "DE Act") the Company shall be merged with and into Newco
as soon as practicable after satisfaction or waiver of the conditions set forth
in Article VI. Following the Merger, the separate existence of the Company shall
cease, and Newco shall continue as the surviving corporation in the Merger (the
"Surviving Corporation"). The Company and Newco are sometimes herein
collectively referred to as the "Constituent Corporations".
1.2 Effect of the Merger. The Merger shall have the effects set forth
in the PA Act and the DE Act. From and after the Effective Time (as defined
below), the Surviving Corporation shall be a wholly-owned subsidiary of
LaserSight.
1.3 Articles of Incorporation of the Surviving Corporation. At the
Effective Time and without any further action on the part of the Constituent
Corporations, the Articles of Incorporation of Newco, as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation until duly amended or repealed as provided therein or as
otherwise provided by law.
1.4 Bylaws of the Surviving Corporation. At the Effective Time and
without any further action on the part of the Constituent Corporations, the
Bylaws of Newco, as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation until duly amended or repealed as
provided therein or as otherwise provided by law.
1.5 Board of Directors and Officers of the Surviving Corporation. At
the Effective Time and without any further action on the part of the Constituent
Corporations, the directors and the officers of Newco immediately prior to the
Effective Time shall be the directors and initial officers of the Surviving
Corporation, respectively, each of such directors and officers to hold office
until their respective successors are duly elected and qualified, or their
earlier death, resignation or removal.
1.6 Effective Time of the Merger. The Constituent Corporations will
cause (i) articles of merger related to the Merger of the Company into Newco
(the "Articles of Merger") and such other documents as are required by the PA
Act to be duly filed with the Pennsylvania Secretary of State, and (ii) a
certificate of merger related to the Merger of the Company into Newco (the
"Certificate of Merger") and such other documents as are required by the DE Act
to be duly filed with the Delaware Secretary of State, both prior to 4:00 p.m.
eastern time on the Closing Date (as hereinafter defined), provided that the
conditions set forth in Article VI have been satisfied or waived. The Merger
shall become effective upon the filing of the Articles of Merger and Certificate
of Merger and such other documents as are required by the PA Act and the DE Act
to be filed (the time of the later of such filings being the "Effective Time").
SECTION 2. CONVERSION OF COMPANY COMMON STOCK
2.1 Conversion of Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holders of the capital
stock of the Constituent Corporations:
(a) Cancellation of Treasury Stock. All shares of Company Common Stock
that are owned directly or indirectly by the Company ("Treasury Company Common
Stock"), shall be canceled, and no consideration shall be delivered in exchange
therefor.
(b) Conversion of the Company Common Stock. Subject to Section 2.8,
each issued and outstanding share of the Company Common Stock, other than
Treasury Company Common Stock, shall be converted into, or become exchangeable
for, the number of shares of validly issued, fully paid and nonassessable common
stock, $.001 par value, of LaserSight ("LaserSight Common Stock") equal to the
Company Conversion Ratio (as defined herein). For purposes of this Agreement,
"Company Conversion Ratio" means a fraction, the numerator of which is equal to
the number resulting from dividing (i) $2,750,000.00, by (ii) the average
closing price of a share of LaserSight Common Stock for the 10 day period
immediately preceding the Closing, and the denominator of which is equal to the
number of shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time. The total number of shares of LaserSight Common
Stock issued to the Shareholders pursuant to this Section 2.1(b) shall be
referred to herein as the "Closing Shares." The Closing Shares will be allocated
among the Shareholders based on their percentage ownership interest in the
Company immediately prior to the Effective Time.
2.2 Additional Consideration.
(a) FDA Approval. If (i) the FDA panel which has been assigned to
review the PMA recommends the PMA application substantially in the form attached
hereto as Exhibit A (the "Panel Approval") or as amended as contemplated by this
Agreement or in a form acceptable to LaserSight, and if the FDA approves the PMA
in such a form that would allow LaserSight or its designee to (A) commercially
manufacture a refractive laser modeled after the Kremer Laser, or a modification
of a laser manufactured by LaserSight, which is approved to correct myopia, and
(B) commercially sell such laser within the United States without restrictions
which are materially greater than those restrictions imposed by the FDA as of
the date of this Agreement on excimer lasers which are currently sold within the
United States by Summit Technology, Inc. and Visx Incorporated (collectively,
the "FDA Approval"), or (ii) LaserSight receives the FDA Approval, whether or
not LaserSight has received Panel Approval, then within 10 business days after
receiving the FDA Approval LaserSight shall pay the Shareholders, based on their
respective ownership interests in Company immediately prior to the Effective
Time, the total amount of $1,750,000.00. Such amount will be paid via wire
transfer of immediately available funds to an account or accounts designated by
Kremer as agent for himself and the other shareholders of the Company.
(b) Unwind. If FDA Approval, as contemplated by Section 2.2(a), is not
obtained prior to the date which is 12 months immediately after the Closing
Date, then LaserSight may extend the deadline for receiving FDA Approval to such
other date or dates thereafter that LaserSight may establish in its sole
discretion from time to time, provided that (i) in no event may LaserSight
extend such date if Panel Approval is not obtained on or prior to the date which
is 12 months immediately after the Closing Date, (ii) in no event may LaserSight
extend such date beyond the date which is nine months immediately after the date
of the Panel Approval, and (iii) in no event will LaserSight be able to extend
such date if LaserSight is then in material breach of its obligations pursuant
to Section 6.5. For purposes hereof, "Termination Date" shall mean either (i)
the date which is 12 months immediately after the Closing Date, or (ii) the
later date established by LaserSight pursuant to the preceding sentence. Upon
the Termination Date LaserSight will have no further obligation under this
Agreement (except for its obligation to transfer the PMA Assets (as defined
herein) pursuant to this Section 2.2(b) and except for those indemnification
obligations contained in Section 8 which are to survive the termination of this
Agreement), including, without limitation the obligation to make any payments to
Company or the Shareholders.
Within two business days after the Termination Date the Shareholders
agree to pay LaserSight liquidated damages in the amount of that number of
shares of LaserSight Common Stock which results from multiplying the total
number of the Closing Shares by 63.6363% (the "Unwind Shares"). This payment
does not represent a penalty but represents the parties' good faith estimate of
damages and costs which will be incurred by LaserSight as a result of the
failure to obtain the contemplated FDA Approval. Simultaneously with the
Shareholders' delivery of the Unwind Shares to LaserSight, LaserSight and/or its
transferee(s) shall transfer to Kremer all of LaserSight's and/or its
transferee(s)' right, title and interest in the PMA Assets (as defined herein)
then in LaserSight's and/or its transferee(s)' possession, such transfer will be
made free and clear of any liens or other encumbrances and will be evidenced by
a bill of sale which will contain representations and warranties which are
customarily contained in asset transfer agreements. The parties agree to execute
such additional agreements and documents as may be reasonably requested by
LaserSight or the Shareholders, as applicable, in order to carry out the
requirements of this Section 2.2(b). If LaserSight transfers the PMA Assets to a
third party prior to the Termination Date (i) LaserSight will require such third
party to assume LaserSight's obligations under this Agreement (including,
without limitation, its obligation to require any transferee of any transferee
to assume LaserSight's obligations under this Agreement), (ii) LaserSight will
act as surety guaranteeing that such third party will satisfy LaserSight's
obligations under this Agreement (such surety to be in a form reasonably
satisfactory to the Shareholders), and (iii) the terms of such transfer will
provide that the Unwind Shares will be paid to the transferee of the PMA Assets.
(c) Hyperopia Approval. If (i) the FDA Approval is granted, and (ii) a
laser manufactured by LaserSight is subsequently approved by the FDA for general
commercial use for the treatment of hyperopia (the "FDA Hyperopia Approval"),
then within 30 days after the date of the FDA Hyperopia Approval LaserSight will
pay to the Shareholders that number of shares of LaserSight Common Stock which
results from dividing (A) $1,000,000.00, by (B) the average closing price of a
share of LaserSight Common Stock for the 10 day period immediately preceding the
date of the FDA Hyperopia Approval. The shares of LaserSight Common Stock issued
pursuant to this Section 2.2(c) shall be referred to herein as the "Hyperopia
Shares". The Hyperopia Shares will be allocated among the Shareholders based on
their percentage ownership interest in the Company immediately prior to the
Effective Time. Except for those indemnification obligations contained in
Section 8 which are to survive the termination of this Agreement, LaserSight
will have no obligation pursuant to this Section 2.2(c) if the FDA Hyperopia
Approval is obtained after the Termination Date.
(d) Scanning Laser Approval. If on or prior to April 1, 1998 (i) the
FDA Approval is granted, and (ii) as a result of or in connection with the FDA
Approval, the FDA grants final approval to the commercial sale within the United
States of LaserSight's refractive laser which is currently in clinical trials
(the "FDA Scanning Approval"), then LaserSight will pay the Shareholders
$1,000,000.00. If such approval is received after April 1, 1998 but prior to
January 1, 1999 then LaserSight shall pay the Shareholders $1,000,000.00 less
the number resulting from multiplying $3,663.00 by the number of days which have
elapsed since April 1, 1998. If such approval is granted after January 1, 1999
then there shall be no payment due pursuant to this Section 2.2(d). The amount
payable pursuant to this Section 2.2(d) shall be referred to as the "Scanning
Payment Amount." LaserSight shall use all reasonable efforts to obtain the FDA
Scanning Approval prior to April 1, 1998.
The Scanning Payment Amount shall be paid within 30 days after the
date the FDA Scanning Approval is obtained by wire transferring, in immediately
available funds, the Scanning Payment Amount to an account or accounts
designated by Kremer as agent for the Shareholders. The Scanning Payment Amount
will be allocated among the Shareholders based on their percentage ownership
interest in the Company immediately prior to the Effective Time. Except for
those indemnification obligations contained in Section 8 which are to survive
the termination of this Agreement, LaserSight will have no obligation pursuant
to this Section 2.2(d) if the FDA Scanning Approval is obtained after the
Termination Date.
2.3 Limitation on the Number of Shares. Notwithstanding Section 2.2,
in no event will LaserSight be required to issue LaserSight Common Stock
pursuant to such Section in an amount which would (i) result in LaserSight's
violation of any applicable rule or regulation promulgated by the Securities and
Exchange Commission, the NASDAQ Stock Market or such other securities exchange
or national market system on which LaserSight Common Stock is then listed, or
(ii) affect LaserSight's ability to have LaserSight Common Stock listed or sold
on the NASDAQ Stock Market or such other securities exchange or national market
system on which LaserSight Common Stock is then listed. If the number of shares
of LaserSight Common Stock to be issued pursuant to Section 2.2 is limited by
this Section 2.3 then LaserSight shall issue the maximum number of shares of
LaserSight Common Stock which may be issued, subject to the limitations in this
Section 2.3, and shall pay the balance of any amounts owed in cash.
2.4 Status of Newco Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any capital stock of
Newco, each issued and outstanding share of common stock of Newco shall continue
unchanged and remain outstanding as a share of common stock of Newco.
2.5 Payment Exchange of Certificates. At Closing the Company shall
deliver to LaserSight the certificates representing all of the issued and
outstanding shares of capital stock of the Company, duly endorsed in blank for
transfer or accompanied by appropriate stock powers duly executed in blank. In
exchange for the delivery of such certificates, LaserSight shall deliver to the
Shareholders the consideration as described in Section 2.1. LaserSight shall
have no obligation to deliver the consideration described in Section 2.1 except
to the extent that Shareholders have caused certificates representing all of
Company Common Stock (or affidavits of lost certificate in form and substance
reasonably acceptable to LaserSight, if applicable) to be tendered to
LaserSight.
2.6 No Further Ownership Rights in Company. At and after the Effective
Time, each holder of shares of Company Common Stock immediately prior to the
Effective Time shall cease to have any rights as a stockholder of the Company,
except for the right to surrender such Shareholder's certificates in exchange
for receipt of the consideration described in Section 2.1, and after the
Effective Time, no transfer of shares of Company Common Stock which were
outstanding immediately prior to the Effective Time shall be made on the stock
transfer books of the Company.
2.7 Transfer of LaserSight Common Stock. All LaserSight Common Stock
issued and delivered pursuant to this Agreement will be authorized but
previously unissued shares of LaserSight's Common Stock which have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
Unless and until otherwise permitted by this Agreement, each certificate of
LaserSight Common Stock issued pursuant to this Agreement shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"These shares have not been registered under the Securities Act
of 1933 and may not be offered for sale, sold, pledged or
otherwise disposed of except pursuant to an effective
registration statement under such Act or pursuant to an exemption
from the registration requirements of such Act. Further, any such
offer, sale, pledge or transfer is subject to the conditions
specified in an Agreement and Plan of Merger dated as of July 15,
1997 ("Agreement") delivered in connection with the issuance of
such shares by LaserSight Incorporated, a copy of which Agreement
will be furnished to the holder hereof upon request and without
charge."
2.8 Fractional Shares. No fraction of a share of LaserSight Common
Stock will be issued; therefore, when calculating the number of shares to be
issued pursuant to this Agreement LaserSight shall round to the nearest whole
number, with .500 and greater being rounded up to the next whole number, and
anything less than .500 being rounded down to the next whole number.
SECTION 3. CLOSING.
3.1. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on July 15, 1997 if the conditions
set forth in Section 6 have been satisfied, or as soon thereafter as such
conditions have either been satisfied or waived by the party benefiting from
such conditions, at the offices of Sonnenschein, Nath & Rosenthal, One
Metropolitan Square, Suite 3000, St. Louis, Missouri or at such other place as
the parties shall agree, and shall be effective as of the Effective Time (the
"Closing Date"). At the Closing:
(a) The Company shall deliver to LaserSight the following:
(i) all certificates representing the Closing Shares; and
(ii) all other previously undelivered documents required to be
delivered by the Company to LaserSight at or prior to the
Closing pursuant to the terms of this Agreement.
(b) LaserSight shall deliver or cause to be delivered to the Company
or the Shareholders the following:
(i) a copy of the letter sent via facsimile on the Closing
Date to LaserSight's transfer agent instructing that the
Closing Shares be issued and delivered to Kremer at the
address set forth in Section 9.6 hereof (the "Transfer
Agent Letter"); and
(ii) all other previously undelivered documents required to be
delivered by LaserSight to the Company or the Shareholders
at or prior to the Closing pursuant to the terms of this
Agreement.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
COMPANY.
The Company and the Shareholders hereby jointly and severally
represent and warrant to LaserSight as of the Closing Date as follows. In
connection with the following representations and warranties, to the extent any
representation or warranty is made "to the best of the Company's knowledge" such
phrase shall mean the actual knowledge of Kremer.
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in subsistence under the laws of the state of
Pennsylvania and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted. The Company
is duly qualified to do business in each jurisdiction in which the character or
location of the properties owned or leased by the Company or the nature of the
business conducted by the Company makes such qualification necessary, except
where the failure to so qualify would not have a material adverse effect upon
the Company.
4.2 Capitalization of the Company. The authorized capital stock of the
Company consists of 1,000 shares of common stock, no par value, of which 100
shares are issued and outstanding and owned of record and beneficially by the
Shareholders. All of the Company Common Stock has been duly authorized and
validly issued, and is fully paid and non-assessable. There are no outstanding
options, warrants, agreements, conversion rights, preemptive rights, or other
rights to subscribe for, purchase or otherwise acquire any of the Company Common
Stock. The Shareholders have, and will have at the Closing, valid and legal
title to all of the Company Common Stock, and shall deliver the Company Common
Stock to LaserSight at the Closing, free and clear of any liens, claims,
charges, security interests or other legal or equitable encumbrances,
limitations or restrictions of any kind or nature whatsoever.
4.3 Subsidiaries and Equity Investments. The Company does not have any
subsidiaries, nor does the Company have any, direct or indirect, investment
interest in any entity, nor does the Company have, or pursuant to any agreement
have the right to acquire at any time by any means, directly or indirectly, an
equity interest or investment in any corporation, partnership, joint venture or
other entity.
4.4 Authorization. The Company has full corporate power and authority
to execute and deliver this Agreement and all other agreements contemplated
hereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and all other agreements
contemplated hereunder by the Company, the performance by the Company of its
obligations hereunder and thereunder, and the consummation by the Company of the
transactions contemplated hereby and thereby, have been duly authorized by the
unanimous vote of both the Company's Board of Directors and the Company's
shareholders. No other action on the part of the Company is necessary to
authorize the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby. This Agreement and all other agreements
contemplated hereby have been duly and validly executed and delivered by the
Company and, assuming this Agreement and the agreements contemplated hereby
constitute valid and binding obligations of LaserSight, will constitute a valid
and binding obligation of the Company enforceable against the Company in
accordance with each agreement's terms, except to the extent that such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
4.5 No Violation. Neither the execution, delivery nor the performance
by the Company of this Agreement and all other agreements contemplated hereunder
violates or will violate any provision of any material law, of any order,
judgment or decree of any court or other governmental or regulatory authority,
or of the charter documents of the Company, nor violates or will result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any contract, lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party or by
which it is bound or to which any of its properties or assets is subject, nor
will result in the creation or imposition of any lien, charge or encumbrance of
any kind whatsoever upon any of the properties or assets of the Company.
4.6 Consents and Approvals. Other than filing the Articles of Merger
with the Secretary of State of Pennsylvania, no consent, waiver, authorization,
or approval of any governmental or regulatory authority, domestic or foreign, or
of any other person, firm or corporation, and no declaration to or filing or
registration with any such governmental or regulatory authority, is required in
connection with the execution and delivery of this Agreement by the Company or
the performance by the Company of its obligations hereunder.
4.7 Litigation. Except as set forth on Schedule 4.7, there are no
claims, actions, suits, proceedings, disputes or investigations pending or, to
the best of the Company's knowledge, threatened before any federal, state or
local court or governmental or regulatory authority, domestic or foreign, or
before any arbitrator of any nature, brought by or against the Company
involving, affecting or relating to any assets, properties or operations of the
Company or the transactions contemplated by this Agreement. Except as set forth
on Schedule 4.7, neither the Company nor any of its assets or properties is
subject to any order, writ, judgment, award, injunction or decree of any
federal, state or local court or governmental or regulatory authority or
arbitrator, which affects the assets, properties, operations, prospects, net
income or financial condition or which would interfere with the transactions
contemplated by this Agreement.
4.8 Financial Statements. The Shareholders and the Company have
heretofore furnished to LaserSight copies of the unaudited internal financial
statements (the "Balance Sheet") of the Company as of July 14, 1997 (the
"Balance Sheet Date"), copies of which are attached hereto as Schedule 4.8 (such
financial statements being hereinafter referred to as the "Financial
Statements"). The Financial Statements (a) present fairly the financial position
and results of operations of the Company as of such dates, and (b) are complete
and correct in all material respects and in accordance with the books of account
and records of the Company. Adequate records exist and are on the Company's
premises or otherwise available which support and document the information
reflected in the Financial Statements. As of the Balance Sheet Date, and as of
the Closing Date, the Company shall have no liabilities which should be
reflected on the Financial Statements in accordance with generally accepted
accounting principles, other than, (i) liabilities, whether contingent or
otherwise, specifically described in this Agreement or on any Schedule to this
Agreement, or (ii) liabilities related to those claims to which the Company or
Kremer have no knowledge.
4.9 Tax Matters. All tax and information returns required to have been
filed by the Company with the United States of America, all state and local
government authorities and all foreign jurisdictions have been duly filed and
each such return in all material respects reflects the income, franchise,
property, sales, use, value-added, withholding, excise, capital or other tax
liabilities and all other information required to be reported thereon. The
Company has paid all income, franchise, business, property, sales, use,
value-added, withholding, payroll, excise, capital and other taxes shown to be
due and payable on said returns, and all penalties, assessments or deficiencies
of every nature and description. The income tax returns of the Company have not
been audited by any federal, state or local tax authority or agency. No consent
extending any statute of limitations applicable to the Company has been filed by
the Shareholders or the Company with respect to any tax liability for any year.
4.10 Absence of Undisclosed Liabilities. The Company has no
outstanding claims, liabilities or indebtedness, contingent or otherwise, except
as set forth in the Financial Statements, other than liabilities incurred
subsequent to the Balance Sheet Date in the ordinary course of business not
involving borrowings by the Company, possible contingent liabilities as
specifically described in this Agreement or on any Schedule to this Agreement,
liabilities related to claims to which the Company or any of the Shareholders
have no knowledge and liabilities for professional fees incurred in connection
with this transaction as contemplated in this Agreement, which, other than
contingent liabilities as specifically described in this Agreement or on any
Schedule to this Agreement and claims of which the Company or any of the
Shareholders have no knowledge, will be paid by the Company at or prior to the
Closing. Except as shown in the Financial Statements, the Company is not
directly or indirectly liable upon or with respect to (by discount, repurchase
agreements or otherwise), or obligated in any other way to provide funds in
respect of, or to guarantee or assume, any debt, obligation or dividend of any
person, except endorsements in the ordinary course of business in connection
with the deposit of items for collection.
4.11 Interests in Real and Personal Property. The Company does not own
any real property. The Company is not a party to or bound by any lease or other
similar agreement related to real or personal property.
4.12 Assets. The Company has good, valid and legal title to all of its
personal properties and assets (tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statements,
in each case subject to no encumbrance, lien, charge or other restriction of any
kind or character; provided, however, a partnership known as Pillar Point
Partners, has claimed that the Kremer Laser (and the know-how related thereto)
infringes upon its patent. As a result of the Merger, LaserSight will have good,
valid and legal title to and, subject to the claims of Pillar Point Partners
described in the prior sentence and potential infringement claims of other
persons or parties, will have unconditional rights of ownership in (i) the PMA,
(ii) all know-how and confidential technical information related to the PMA,
including, all books, records, files, plans, specifications and other
information related to the PMA or utilized in developing the PMA, and (iii) all
know-how and confidential technical information related to the Kremer Laser,
including all books, records, files, plans, specifications and other information
related to the Kremer Laser (collectively, the "PMA Assets"). The Company and
Kremer represent and warrant that other than the assets of the Company to be
distributed immediately prior to the Merger pursuant to the terms of this
Agreement, the PMA Assets constitute all know-how, books, records, files, plans,
specifications and other information developed by or utilized by the Company,
Kremer or any third party in connection with the development of the Kremer Laser
and the preparation of the PMA.
4.13 Third-Party Rights. The Company has not granted any license,
right or option in or to any of its assets.
4.14 Intangible Assets. Set forth in Schedule 4.14 hereto is a true
and correct list of all United States and foreign trademarks, service marks,
trade names, patents and copyrights (either registered, applied for, or common
law) owned by, registered in the name of, licensed to, or used in the business
of the Company (the "Intangible Assets"). To the best of the Company's
knowledge, except as set forth in Schedule 4.14, there is no restriction
affecting the Company's use of any of the Intangible Assets, and no license has
been granted with respect thereto. Except as set forth in Schedule 4.14, the
Company has not received notice and is not aware of any challenge to the
Company's use of the Intangible Assets. Except as set forth in Schedule 4.14,
each of the Intangible Assets is not involved in any pending or, to the best of
the Company's knowledge, threatened administrative or judicial proceeding, and,
to the best of the Company's knowledge, does not conflict with any rights of any
other person, firm or corporation.
4.15 Contracts. Set forth in Schedule 4.15 hereto is a list of all
written contracts, agreements, documents and other instruments to which the
Company is a party and which in the aggregate provide for the expenditure of at
least $2,500 (the "Material Contracts"). To the Company's actual knowledge, each
Material Contract is valid, binding and enforceable against the parties thereto
in accordance with its terms, and in full force and effect on the date hereof,
except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally. The Company has
performed all material obligations required to be performed by it to date under,
and is not in default in respect of, any Material Contract, and no event has
occurred which, with due notice or lapse of time or both, would constitute such
a default. To the Company's knowledge, no other party to any Material Contract
is in default in respect thereof, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a default. True and
complete originals or copies of all of the Material Contracts have been
delivered to Parent by the Company. The Company has no Material Contracts
related, directly or indirectly, to the operation of its business or its assets
which is not in writing.
4.16 Employee Plans and Contracts. The Company does not have any
employee benefit plans, as defined by Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
4.17 Insurance. Set forth in Schedule 4.17 hereto is a true and
complete list of all insurance policies in force with respect to the assets,
properties or operations of the Company (including, without limitation,
professional liability insurance maintained by or on behalf of any of the
Shareholders). True and complete copies of all such insurance policies have been
furnished to LaserSight. Such policies are in full force and effect.
4.18 PMA. Attached hereto as Exhibit A is a full, complete and
accurate copy of the PMA and there have not been any changes or amendments
thereto which have not been provided to LaserSight in writing. The Company has
made available to LaserSight all material correspondence, notices and other
communications that the Company has received from the FDA in connection with the
PMA and will deliver such items to LaserSight at the Closing. The PMA has been
accepted for filing by the FDA.
4.19 Accuracy of Information. None of the representations, warranties
or statements made by the Company and contained in this Agreement, in the
exhibits hereto, or in any other agreement, instrument or document executed or
delivered by or on behalf of the Company in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make any of such
representations, warranties or statements not misleading.
4.20 Agreements, Judgments and Decrees. Neither the Company nor any
Shareholder is subject to any agreement, judgment or decree which could
materially and adversely affect such party's ability to satisfy its obligations
hereunder.
4.21 Purchase for Investment; Restricted Securities. Each of the
Shareholders will acquire the LaserSight Common Stock for their own account for
investment purposes and, except for the registration contemplated by Section
6.4, not with a present view toward any resale or distribution thereof.
Certificates representing the acquired LaserSight Common Stock shall bear the
restrictive legend set forth in Section 2.7 hereof indicating the absence of
registration under the Securities Act and imposing all applicable transfer
restrictions thereon. Each Shareholder acknowledges that (i) LaserSight Common
Stock has not been registered under the Securities Act, (ii) LaserSight Common
Stock cannot be sold, assigned, pledged or otherwise transferred unless
registered or qualified under the Securities Act and any applicable state
securities laws or unless an exemption from such registration and qualification
is available, as established by an opinion of counsel which is accepted by
LaserSight in its sole discretion, (iii) except as set forth in Section 6.4,
LaserSight is not required to cause any of LaserSight Common Stock to be
registered or qualified under the Securities Act or any applicable state
securities laws, and (iv) each of Company and Kremer is prepared to bear the
economic risk of an investment in LaserSight Common Stock for an indefinite
period of time.
4.22 LaserSight Common Stock.
(a) Each Shareholder acknowledges the receipt of (i) LaserSight's
Proxy Statement dated May 21, 1997 (filed May 19, 1997), (ii) LaserSight's
Annual Report on Form 10-K for the year ended December 31, 1996, (iii)
LaserSight's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
(iv) LaserSight's Current Reports on Form 8-K filed on February 25, March 18,
March 27, April 8, April 25 and July 1, 1997, (v) Form 8-A/A (Amendment No. 2)
filed April 26, 1996 describing LaserSight's Common Stock, and (vi) such other
publicly available information relating to LaserSight as was requested by
Company or Kremer (collectively, the "SEC Filings").
(b) Each Shareholder acknowledges that representatives of LaserSight
have responded to all questions of such parties relating to the SEC Filings.
(c) Each Shareholder has relied upon consultations with his or her
legal, financial and other advisers with respect to this transaction, and the
nature of the investment together with the additional information concerning
LaserSight set forth in the SEC Filings.
(d) Each Shareholder has completed, dated and executed an Seller's
Certificate (the "Certificate") substantially in the form attached hereto as
Exhibit B, and the information and representations contained in the Certificate
are true and accurate as of the Closing Date.
(e) The representations and warranties contained in this Section 4.22
shall survive the execution and delivery of this Agreement and the issuance by
LaserSight of the LaserSight Common Stock.
4.23 Tax Compliance. As a result of the Merger, the Company will
transfer to Newco at least (i) 90% of the fair market value of the Company's net
assets held by it immediately prior to the Merger, and (ii) 70% of the fair
market value of the Company's gross assets held by it immediately prior to the
Merger.
Except as otherwise specifically set forth in Section 4, all of the
Company's assets are being transferred (by operation of law pursuant to merger)
in "AS IS" CONDITION, "WITH ALL FAULTS," INCLUDING BUT NOT LIMITED TO PATENT AND
LATENT DEFECTS. EXCEPT AS PROVIDED IN SECTION 4, NO WARRANTIES, EXPRESS OR
IMPLIED, ARE MADE BY THE COMPANY OR THE SHAREHOLDERS, AND LASERSIGHT AND NEWCO
WAIVE ALL SUCH WARRANTIES INCLUDING WITHOUT LIMITATION THOSE REGARDING USE OF
ASSETS AND WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Notwithstanding anything to the contrary, no representation or
warranty is made by the Company or the Shareholders that (i) the Kremer Laser
and related know-how does not infringe upon any other person's or entity's
patents(s) or trademark(s), (ii) Panel Approval or FDA Approval will be
obtained, and/or (iii) if FDA Approval is obtained, that it will be for any
specified indication.
Notwithstanding anything to the contrary, Lasersight and Newco (i) are
assuming all risks of infringement claims by others which relate to the period
after the Closing Date, (ii) are relying on their own due diligence regarding
such risk of infringement claims, (iii) acknowledge that the Kremer Laser is
presently being used under an investigational device exemption from the FDA and
may never be approved for commercial use, and (iv) acknowledge that they have no
recourse against the Company or the Shareholders due to the lack of the
effectiveness of the Kremer Laser and the know-how upon which it is based.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF LASERSIGHT.
LaserSight and Newco, jointly and severally, hereby represent and
warrant to the Company and the Shareholders and covenant and agree, as of the
Closing Date, as follows:
5.1 Corporate Organization. Each of LaserSight and Newco is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with all requisite power and authority
(corporate and other) to own its properties and assets and to conduct its
business as now conducted.
5.2 Corporate Authority. As of the Closing Date, each of LaserSight
and Newco will have the corporate power to enter into this Agreement and all
agreements contemplated hereunder and to carry out its respective obligations
hereunder and thereunder. As of the Closing Date, the execution and delivery of
this Agreement and all agreements contemplated hereunder and the performance of
LaserSight's and Newco's obligations hereunder and thereunder, will have been
duly authorized by the Board of Directors of LaserSight and the Board of
Directors and shareholder of Newco, and no other corporate proceedings on the
part of LaserSight or Newco will be necessary to authorize such execution,
delivery and performance. This Agreement and all agreements contemplated
hereunder have been duly executed by LaserSight and Newco and, as of the Closing
Date, will constitute valid and legally binding obligations of LaserSight and
Newco, enforceable against LaserSight and Newco in accordance with the terms
hereof and thereof, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
5.3 No Violation. Neither the execution, delivery nor the performance
by LaserSight or Newco of this Agreement and all agreements contemplated
hereunder violates or will violate any provision of law, of any order, judgment
or decree of any court or other governmental or regulatory authority, or of the
charter documents or by-laws of LaserSight or Newco, nor violates or will result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any contract, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which LaserSight or Newco is
a party or by which it is bound or to which any of its properties or assets is
subject, nor will result in the creation or imposition of any lien, charge or
encumbrance of any kind whatsoever upon any of the properties or assets of
LaserSight or Newco.
5.4 Consents and Approvals. Other than requirements of federal and
state securities laws, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any third party or any public or
governmental body or authority is necessary for the consummation by LaserSight
or Newco of the transactions contemplated by this Agreement.
5.5 Litigation. Except for matters expressly disclosed to the Company
in a writing addressed to the Company on or prior to the Closing Date or as set
forth on Schedule 5.5, there are no material claims, actions, suits,
proceedings, disputes or investigations pending or, to the best of LaserSight's
or Newco's knowledge, threatened before any federal, state or local court or
governmental or regulatory authority, domestic or foreign, or before any
arbitrator of any nature, brought by or against LaserSight or Newco. Except for
matters expressly disclosed to the Company in a writing addressed to the Company
on or prior to the Closing Date or as set forth on Schedule 5.5, neither
LaserSight or Newco nor any of their assets or properties is subject to any
order, writ, judgment, award, injunction or decree of any federal, state or
local court or governmental or regulatory authority or arbitrator. As of the
date of this Agreement LaserSight is not subject to an FDA investigation.
5.6 Capitalization. As of May 31, 1997, the authorized capital stock
of LaserSight consisted of (i) 20,000,000 shares of LaserSight Common Stock of
which 9,423,907 shares were issued and outstanding and 170,200 shares were held
in treasury, and (ii) 10,000,000 shares of preferred stock, par value $.001, of
which none are issued and outstanding. No material change in such capitalization
has occurred between May 31, 1997 and the date hereof. The authorized capital
stock of Newco consists of 100 shares of common stock, $.001 par value, of which
100 shares are issued and outstanding. All of the Newco common stock has been
duly authorized and validly issued, and is fully paid and non-assessable. There
are no outstanding options, warrants, agreements, conversion rights, preemptive
rights, or other rights to subscribe for, purchase or otherwise acquire any of
Newco's common stock. The shares of LaserSight Common Stock to be issued
pursuant to this Agreement will be duly authorized, validly issued, fully paid
and nonassessable.
5.7 LaserSight's Experience. LaserSight has sold over 175 excimer
lasers worldwide. As of the date hereof, LaserSight employs or contracts with an
individual who has been involved in the FDA's pre-market approval process in
connection with certain products and devices. As of the date hereof, LaserSight
currently has received certification under ISO 9002 in connection with its
manufacturing and quality assurance activities.
5.8 Accuracy of Information. None of the representations, warranties
or statements made by LaserSight or Newco and contained in the SEC filings, in
this Agreement, in the exhibits hereto or in any other agreement, instrument or
document executed or delivered by or on behalf of LaserSight or Newco in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or statements
not misleading.
Except as set forth in this Section 5, LaserSight does not make any
representation or warranty to the Company.
SECTION 6. CONDITIONS AND ADDITIONAL AGREEMENTS.
6.1 Consulting Agreement. LaserSight and Kremer will enter into a
Consulting Agreement in the form of Exhibit C (the "Consulting Agreement")
pursuant to which Kremer will agree to provide certain consulting services to
LaserSight and LaserSight will agree to pay Kremer $50,000.00 upon execution
thereof and certain commissions in connection with the sale of lasers. Also,
Kremer will be granted the option to purchase 25,000 shares of LaserSight Common
Stock.
6.2 Defaults and Interest. If LaserSight defaults on its obligation to
make any of the payments to the Shareholders as described in Section 2.2(a),
(c), or (d) and such default is not cured within five days, interest shall
accrue on the unpaid balance of any such payment at a rate which is equal to the
prime rate printed in the Wall Street Journal as of the date of such default,
plus 4% per annum, provided, however, in no event shall the interest rate
hereunder exceed the maximum rate permitted by law, until such time as the
applicable amount is paid in full.
6.3 Restrictive Covenant. LaserSight acknowledges that Kremer intends
to own and operate facilities, which may be standalone facilities or located
adjacent to a physician's practice, the sole purpose of which will be the
utilization of an excimer laser to treat myopia, hyperopia, astigmatism and such
other conditions the FDA has approved an excimer laser to treat (each such
facility a "Center"). LaserSight agrees that, if the Closing occurs, during the
five year period immediately following the date of the FDA Approval neither
LaserSight nor any of its subsidiaries will own a Center within a 100 mile
radius of any Center which is then Operated by Kremer (as defined herein). For
purposes hereof, "Operated by Kremer" shall mean that Kremer or a Kremer
Affiliate (as defined in the Patent Purchase Agreement (as defined herein)) owns
and operates a Center.
Nothing contained in this Section 6.3 will in any way restrict the
ability of LaserSight or its subsidiaries to (i) provide an excimer laser on a
mobile platform to be utilized by physicians and optometrists, (ii) manufacture,
market, distribute, sell or lease excimer lasers, or (iii) provide access to
excimer lasers through the sale, lease, assessment of a per procedure fee or
other similar arrangement. In addition, if LaserSight owns a Center and Kremer
or a Kremer Affiliate subsequently establish a Center within a 100 mile radius
of such Center, LaserSight's ownership of such a Center will not violate the
terms of this Section 6.3. Upon request, Kremer agrees to promptly provide
LaserSight with a list of the location of all Centers which are then Operated by
Kremer.
If pursuant to Section 2.2(b) the Shareholders are obligated to
deliver the Unwind Shares to LaserSight and LaserSight is obligated to transfer
the PMA Assets to Kremer, then LaserSight shall not be bound by the restrictions
contained in this Section 6.3, provided that LaserSight will be bound by the
restrictions contained in this Section 6.3 if the Shareholders have delivered
the Unwind Shares to LaserSight, but LaserSight has not delivered the PMA Assets
to Kremer.
6.4 Registration.
(a) Demand Registration Rights. Upon LaserSight's receipt of a written
request executed by all of the Shareholders stating that all of the Shareholders
desire to sell all or a portion of the LaserSight Common Stock then held by the
Shareholders (the "Demand Registration Request"), LaserSight shall, subject to
the limitations of this Section 6.4, (i) promptly file with the Securities and
Exchange Commission ("SEC") a registration statement in compliance with the
Securities Act on Form S-3, if available, or such other appropriate registration
form promulgated by the SEC as shall be selected by LaserSight if Form S-3 is
unavailable registering at least the number of shares of LaserSight Common Stock
requested to be registered in the Demand Registration Request, provided that in
no event will LaserSight be required to register more than the total number of
Patent Closing Shares (as defined in the Patent Purchase Agreement) and Closing
Shares (the "Demand Registration Statement"), and (ii) use all commercially
reasonable efforts to cause the Demand Registration Statement to become
effective under the Securities Act as soon as reasonably possible after the
filing thereof and remain effective for 150 days or such shorter period as may
be required if all such LaserSight Common Stock covered by the Demand
Registration Statement is sold prior to the expiration of such 150-day period.
LaserSight shall only be obligated to effect one such registration
pursuant to this Section 6.4(a) and LaserSight shall not be obligated to effect
such registration after the first anniversary of the Closing Date (provided that
a registration effective on or before such anniversary date shall remain
effective for the full 150-day period (or such shorter period as is provided for
in this Section 6.4(a)).
(b) Closing Shares Piggy-Back Registration Rights. If during the
period commencing on the Closing Date and concluding on the first anniversary of
the Closing Date LaserSight proposes or is required to file with the SEC a
registration statement under the Securities Act relating to any shares of
LaserSight Common Stock (other than a registration statement on Form S-8 or Form
S-4 or any successor forms thereto, or any registration form that does not
permit the inclusion therein of the Closing Shares) (the "Closing Shares
Piggy-Back Registration Statement"), LaserSight will each such time give prompt
written notice of its intention to do so to all Shareholders. Upon the written
request of all Shareholders received by LaserSight within 10 days after the
delivery or mailing of such notice from LaserSight (the "Closing Shares
Piggy-Back Registration Request"), subject to the limitation of this Section
6.4, LaserSight will use all commercially reasonable efforts to register at
least the number of shares of LaserSight Common Stock then outstanding which are
not then the subject of another registration statement and which are requested
to be registered in the Closing Shares Piggy-Back Registration Request, provided
that in no event will LaserSight, on behalf of the Shareholders, be required to
include in such registration more than the total number of Patent Purchase
Shares and Closing Shares (the "Closing Requested Shares"). The Shareholders'
right pursuant to this Section 6.4(b) to receive notice and participate in a
Closing Shares Piggy-Back Registration Statement shall cease on the day after
the first anniversary of the Closing Date.
(c) Hyperopia Shares Piggy-Back Registration Rights. If during the
period commencing on the date the Hyperopia Shares are issued and concluding on
the first anniversary of such date LaserSight proposes to file with the SEC
pursuant to an underwritten offering a registration statement under the
Securities Act relating to any shares of LaserSight Common Stock (other than a
registration statement on Form S-8 or Form S-4 or any successor forms thereto,
or any registration form that does not permit the inclusion therein of the
Closing Shares) (the "Hyperopia Shares Piggy-Back Registration Statement"),
LaserSight will each such time give prompt written notice of its intention to do
so to all Shareholders. Upon the written request of all Shareholders received by
LaserSight within 10 days after the delivery or mailing of such notice from
LaserSight (the "Hyperopia Shares Piggy-Back Registration Request"), subject to
the limitation of this Section 6.4, LaserSight will use all commercially
reasonable efforts to register at least the number of shares of LaserSight
Common Stock then outstanding which are not then the subject of another
registration statement and which are requested to be registered in the Hyperopia
Shares Piggy-Back Registration Request, provided that in no event will
LaserSight, on behalf of the Shareholders, be required to include in such
registration more than the total number of Hyperopia Shares (the "Hyperopia
Requested Shares"). The Shareholders' right pursuant to this Section 6.4(c) to
receive notice and participate in a Hyperopia Shares Registration Statement
shall cease on the day after the first anniversary of the date the Hyperopia
Shares are issued.
(d) Limitations. The foregoing notwithstanding, in the event of an
underwritten offering pursuant to Section 6.4(b) or an offering pursuant to
Section 6.4(c), if the managing underwriter of such offering shall advise
LaserSight that, in its opinion, the distribution of a specified portion of the
securities requested to be included in the Closing Shares Piggy-Back
Registration Statement or Hyperopia Shares Piggy-Back Registration Statement, as
applicable, would materially adversely affect the distribution of such
securities by increasing the aggregate amount of the offering in excess of the
maximum amount of securities which such managing underwriter believes can
reasonably be sold in the contemplated distribution, then LaserSight may
(subject to the limitations set forth below) exclude all Closing Requested
Shares or Hyperopia Requested Shares, as applicable, from, or limit the number
of Closing Requested Shares or Hyperopia Requested Shares, as applicable, to be
included in, the Closing Shares Piggy-Back Registration Statement or Hyperopia
Shares Piggy-Back Registration Statement, as applicable. In such event,
LaserSight shall so advise the Shareholders, and the number of Closing Requested
Shares or Hyperopia Requested Shares, as applicable, and other shares ("Other
Shares") to be included in the Closing Shares Piggy-Back Registration Statement
or Hyperopia Shares Piggy-Back Registration Statement, as applicable, by other
persons or entities that are then stockholders of LaserSight ("Other Holders"),
after providing for all shares that LaserSight proposes to offer and sell for
its own account, shall be allocated among the Shareholders and Other Holders pro
rata on the basis of (i) the number of Closing Requested Shares or Hyperopia
Requested Shares, as applicable, then held by the Shareholders and (ii) the
number of Other Shares.
LaserSight shall be entitled to suspend the right of the Shareholders
to sell any Closing Shares pursuant to a Demand Registration Statement, a
Closing Shares Piggy-Back Registration Statement or a Hyperopia Shares
Piggy-Back Registration Statement if the LaserSight Board of Directors ("Board")
determines reasonably and in good faith that such sales pursuant to a Demand
Registration Statement, a Closing Shares Piggy-Back Registration Statement or a
Hyperopia Shares Piggy-Back Registration Statement, as applicable, would
materially impede, delay or interfere with any material financing, offer or sale
of securities by LaserSight, acquisition, corporate reorganization or other
significant transaction involving LaserSight or any of its subsidiaries, which
material financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration by
LaserSight at the time of such suspension described above; provided, however,
that LaserSight shall not be entitled to more than one such suspension and the
suspension shall not be longer than four weeks duration. If LaserSight shall so
suspend the Shareholder's right to sell, the Shareholders shall receive an
extension of the registration period equal to the number of days of the
suspension.
(e) Execution of Agreements. If a Demand Registration Statement or
Closing Shares Piggy-Back Registration Statement relates to an underwritten
public offering, LaserSight shall so advise the Shareholders. In such event or
in the event a Hyperopia Shares Piggy-Back Registration Statement is filed, the
right of any Shareholder to registration shall be conditioned upon such
Shareholder's execution of the underwriting agreement agreed to among LaserSight
and the managing underwriters selected by LaserSight for such underwritten
offering.
(f) Notice. LaserSight will promptly advise Kremer as to the initial
filing of a Demand Registration Statement, a Closing Shares Piggy-Back
Registration Statement, or a Hyperopia Shares Piggy-Back Registration Statement
and as to the effectiveness thereof. LaserSight will promptly furnish such
number of prospectuses, and any amendments thereof or supplements thereto, as
Kremer from time to time may reasonably request.
(g) Information. Each of the Shareholders shall from time to time
promptly supply to LaserSight in writing any information relating to any
holdings of LaserSight Common Stock by the Shareholders, and their intended plan
of distribution, all as LaserSight may reasonably request in order for
LaserSight to comply with the rules of the SEC applicable to the Demand
Registration Statement, Closing Shares Piggy-Back Registration Statement and
Hyperopia Shares Piggy-Back Registration Statement. In addition, each of the
Shareholders agrees to furnish promptly to LaserSight all information required
to be disclosed in order to make the information previously furnished to
LaserSight by the Shareholders not materially misleading.
(h) Expenses. All expenses incurred in connection with a Demand
Registration Statement, a Closing Shares Piggy-Back Registration Statement and a
Hyperopia Shares Piggy-Back Registration Statement, including without limitation
all filing fees, duplication expenses, fees and expenses of legal counsel for
LaserSight, and the fees and expenses of LaserSight's independent accountants,
shall be paid by LaserSight, except that the Shareholders shall pay any and all
brokers' or underwriters' fees, commissions and discounts and any fees and
expenses of their legal counsel, if any.
6.5 FDA Approval. LaserSight agrees to take the following actions in
connection with seeking the FDA Approval:
(i) LaserSight shall assign its personnel, who have the
appropriate training and experience, to diligently pursue
approval of the PMA application. If LaserSight, in its
reasonable judgment, deems it necessary, LaserSight shall
retain consultants, e.g., statisticians and clinicians,
with the qualifications and experience LaserSight
reasonably deems is needed to seek PMA approval;
(ii) LaserSight shall assign its personnel, who have the
appropriate training and experience, to establish and
implement manufacturing procedures that comply with the
FDA's good manufacturing practice regulations ("GMP").
Unless determined unnecessary by LaserSight, LaserSight
shall have one or more independent auditors inspect its
facility prior to the FDA's pre-approval inspection to
help ensure that the facility will pass the FDA
inspection. LaserSight shall use its best efforts to
ensure that its written description of its manufacturing
operations submitted as a PMA amendment or supplement
complies with the FDA's requirements;
(iii) LaserSight shall prepare for presentation of the PMA to
the FDA's advisory panel to the same extent as would a
reasonably prudent person under the same circumstances.
This preparation shall include, but shall not be limited
to, at least one comprehensive session in which the
presenters practice their presentations and are asked
questions by individuals playing the role of panel
members. As part of its panel preparation, LaserSight
shall obtain copies of transcripts or videotapes of recent
panel reviews of other ophthalmic lasers and use this
information to help guide the presenters in anticipating
possible questions and issues. LaserSight will ensure that
the presenters are adequately trained, and that the
materials presented to the panel, e.g., slides and
overheads, are accurate and professional;
(iv) LaserSight shall regularly interact with the FDA staff
throughout the process in an attempt to determine what
questions the FDA has with respect to the PMA. LaserSight
shall promptly and fully respond to questions raised by
the FDA, whether in writing or oral. LaserSight shall
attempt to learn what questions the FDA intends to ask the
panel, and shall use this information in preparing for the
panel meeting. Whenever it would assist the PMA approval
process, LaserSight shall meet with agency officials.
LaserSight shall adequately prepare for such meetings,
e.g., bring appropriate experts, hold practice meetings,
develop handouts and overheads, etc.;
(v) LaserSight shall use all reasonable efforts to ascertain
whether the current clinical data will be sufficient to
support the PMA approval in light of the new ownership of
the PMA. If LaserSight determines that additional clinical
data are or may be needed, LaserSight will promptly submit
an investigational device exemption and initiate the
required studies. Any studies that are conducted will be
properly monitored, appropriate clinical investigators
will be selected, subjects will provide informed consent,
and studies will not begin until institutional review
board approval has been obtained;
(vi) If the panel recommends approval of the PMA with
conditions, LaserSight shall promptly take whatever
measures it deems are appropriate to satisfy the
conditions set by the panel, unless LaserSight can
promptly persuade FDA that compliance with the conditions
is unnecessary;
(vii) LaserSight shall work with the FDA to expeditiously agree
upon final labeling for the laser, the summary of safety
and effectiveness, and any other final documentation that
is needed to obtain approval;
(viii) LaserSight shall comply with the FDA's requirements with
respect to the promotion and marketing of an unapproved
device. LaserSight shall establish internal procedures to
ensure that the device is properly promoted;
(ix) LaserSight shall provide Kremer with periodic reports
regarding LaserSight's actions in connection with
obtaining the FDA Approval; and
(x) LaserSight will treat the PMA Assets and the materials
developed by LaserSight in connection with seeking the FDA
Approval in the same manner LaserSight treats its other
confidential, proprietary information, provided that
nothing contained in this Section 6.5(x) shall in any way
restrict LaserSight's actions or disclosures in connection
with obtaining the FDA Approval.
6.6 Insurance. After the FDA Approval, LaserSight, at its sole cost
and expense, shall name the Shareholders as additional insureds under its
product liability insurance policy which relates to products manufactured by
LaserSight.
6.7 Distributions. Immediately prior to the Closing, the Company may
distribute to any or all of its Shareholders the Company's lasers which are
described on Schedule 6.7 and the related investigational device exemption which
has been granted by the FDA. After the Closing Date Kremer agrees to supply
LaserSight with information which is not included in the PMA Assets, but is
necessary to respond to inquiries of the FDA regarding the PMA.
6.8 LaserSight's Conditions to Close. The Closing and all obligations
of LaserSight pursuant to this Agreement shall be conditioned upon the
following:
(a) all representations and warranties contained in Section 4 shall be
true in all material respects as of the Closing Date;
(b) there shall not have been any material adverse change in the
business or assets of the Company (either individually or in the aggregate) from
the date of LaserSight's execution of this Agreement through the Closing Date if
the date of execution of this Agreement and the Closing Date are not one and the
same;
(c) the Company shall have performed all of its obligations under this
Agreement required to be performed as of the Closing Date;
(d) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement;
(e) the Company shall have delivered to LaserSight an opinion of Blank
Rome Comisky & McCauley, dated as of the Closing Date, in form and substance
reasonably satisfactory to LaserSight;
(f) LaserSight shall have received an executed original of the
Consulting Agreement;
(g) LaserSight shall have received an executed original of the Patent
Purchase Agreement and all documents contemplated thereby in a form mutually
agreeable to Kremer and LaserSight pursuant to which LaserSight acquires all
right, title and interest in and to United States patent number 5,586,980 (the
"Patent Purchase Agreement");
(h) LaserSight shall have received an executed original of the
Certificate from each of the Shareholders;
(i) Foothill Capital Corporation shall have taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; and
(j) The Board, or the appropriate committee thereof, shall have taken
all necessary action to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby.
In the event that any of the foregoing conditions is not satisfied, then
LaserSight may, at its option, terminate this Agreement in which event, so long
as it is not otherwise in breach of this Agreement, LaserSight shall be relieved
of all obligations hereunder and this Agreement shall be deemed null, void and
of no force or effect.
6.9 LaserSight's Deliveries. At or prior to the Closing, LaserSight
shall deliver to the Company and the Shareholders, as applicable:
(a) the Transfer Agent Letter;
(b) all such documents and instruments the Company and its counsel may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement;
(c) an executed original of the Consulting Agreement;
(d) an executed original of the Patent Purchase Agreement;
(e) a certificate from an officer of LaserSight certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of LaserSight and all amendments thereto as in effect on the
Closing Date; (ii) a true, correct and complete copy of the Bylaws of Company
and all amendments thereto as in effect on the Closing Date; (iii) a true,
correct and complete copy of the resolutions approved and adopted by the Board,
or committee thereof, authorizing the transactions contemplated by this
Agreement; (iv) Good Standing Certificate from the Delaware Secretary of State;
(v) that the attached copy of the Transfer Agent Letter was sent via facsimile
and overnight delivery to LaserSight's transfer agent; and
(f) a certificate from an officer of Newco certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of and all amendments thereto as in effect on the Closing Date;
(ii) a true, correct and complete copy of the Bylaws of Company and all
amendments thereto as in effect on the Closing Date; (iii) a true, correct and
complete copy of the resolutions approved and adopted by the Board of Directors
of Newco, or committee thereof, authorizing the transactions contemplated by
this Agreement; and (iv) Good Standing Certificate from the Delaware Secretary
of State.
6.10 Company's Conditions To Close. The Closing and all obligations of
the Company and the Shareholders pursuant to this Agreement shall be conditioned
upon the following:
(a) all representations and warranties contained in Section 5 shall be
true as of the Closing Date;
(b) LaserSight shall have performed all of its obligations under this
Agreement required to be performed as of the Closing Date;
(c) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement;
(d) Kremer shall have received an executed original of the Patent
Purchase Agreement; and
(e) LaserSight shall have delivered to the Company and the
Shareholders an opinion of Sonnenschein Nath & Rosenthal, dated as of the
Closing Date, in form and substance reasonably satisfactory to the Company and
the Shareholders.
In the event the Company believes that any of the foregoing conditions is not
satisfied, then the Company may, at its option, terminate this Agreement in
which event the Company, so long as it is not otherwise in breach of this
Agreement, shall be relieved of all obligations hereunder and this Agreement
shall be deemed null, void and of no force or effect.
6.11 Company's Deliveries. At or prior to the Closing, the Company
shall deliver to LaserSight the following documents:
(a) all such documents and instruments LaserSight and its counsel may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement;
(b) an executed original of the Consulting Agreement;
(c) an executed original of the Patent Purchase Agreement;
(d) A certificate from an officer of Company certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of Company and all amendments thereto as in effect on the Closing
Date; (ii) a true, correct and complete copy of the Bylaws of Company and all
amendments thereto as in effect on the Closing Date; (iii) a true, correct and
complete copy of the resolutions approved and adopted by the Shareholders
authorizing the transactions contemplated by this Agreement; and (iv) Good
Standing Certificate from the Pennsylvania Secretary of State; and
(e) An executed original of the Certificate from each of the
Shareholders.
6.12 Copies of Certain Assets. LaserSight acknowledges that the
Shareholders will retain one copy of certain of the PMA Assets solely for
purposes of satisfying requirements of the FDA, the Shareholders agree (i) not
to utilize such copies for any reason other than to satisfy an inquiry by the
FDA or as otherwise specifically provided in this Agreement or in the Consulting
Agreement, (ii) not to disclose such copies or the contents of such copies to
any party other than the FDA after requested to do so by the FDA, and (iii)
agrees to notify LaserSight immediately if the FDA requests that any of the
Shareholders supply information related to the PMA Assets or the copies thereof
retained by any of the Shareholders.
6.13 Agreement with Third Parties. If (i) LaserSight negotiates an
agreement with Pillar Point Partners or agrees to settle litigation with Pillar
Point Partners which agreement or settlement relates to a claim that a laser
manufactured by or for LaserSight which is modeled after the Kremer Laser
infringes the rights or properties of Pillar Point Partners, and (ii) the terms
of such agreement or settlement provide for LaserSight and/or the purchasers of
lasers manufactured by or for LaserSight to pay a fee to Pillar Point Partners
in connection with the use of a laser manufactured by or for LaserSight which is
modeled after the Kremer Laser, including, without limitation, a per procedure
fee (collectively, the "Fee"), then LaserSight agrees that it will not charge
Kremer or any Kremer Affiliate any amount in addition to the Fee. If such
agreement or settlement provides for a portion of the Fee to be rebated to
LaserSight then such rebated amount will either not be charged to Kremer or will
be repaid by LaserSight to Kremer or a Kremer Affiliate, as applicable. In the
event the Termination Date occurs, LaserSight's obligations under this Section
6.13 shall be modified to provide that if LaserSight's general practice is to
charge an amount in excess of the Fee then (i) LaserSight will not charge Kremer
or any Kremer Affiliate more than LaserSight's customary charge associated with
a similar laser, and (ii) LaserSight will rebate to Kremer or a Kremer
Affiliate, as applicable, 50% of any amount it charges to Kremer or a Kremer
Affiliate, as applicable, in excess of the Fee.
SECTION 7. TERMINATION AND ABANDONMENT.
7.1 Methods of Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) By the mutual written consent of the Company and LaserSight;
(b) By LaserSight, if all of the conditions set forth in Section 6.8
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date;
(c) By the Company, if all of the conditions set forth in Section 6.10
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date; or
(d) By the Company or LaserSight at any time after August 31, 1997.
If this Agreement is terminated pursuant to this Section 7.1, it shall become
null and void and of no further force or effect, except as provided in Section
7.2
7.2 Procedure Upon Termination. In the event of termination and
abandonment of this Agreement by the Company or LaserSight pursuant to Section
7.1 hereof, written notice thereof shall forthwith be given to the other party
or parties as provided herein and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
the Company or LaserSight, and the Company and LaserSight shall each return to
the other party any documents or copies thereof in possession of such party
furnished by such other party in connection with the transactions contemplated
by this Agreement. If this Agreement is terminated as provided herein, no party
to this Agreement shall have any liability or further obligation to any other
party to this Agreement with respect to this Agreement or the transactions
contemplated hereby except as provided in this Section 7.2; provided, however,
that no termination of this Agreement pursuant to the provisions of this Section
7 shall relieve any party of liability for a breach of any provision of this
Agreement occurring prior to such termination.
SECTION 8. INDEMNIFICATION.
8.1 Indemnification.
(a) From and after the Closing Date and subject to the other
provisions of this Section 8, the Company and each of the Shareholders, jointly
and severally, agree, to indemnify and hold LaserSight and LaserSight's
affiliates, officers, directors and agents harmless from damages, losses or
expenses suffered or paid, directly or indirectly, as a result of any and all
claims, demands, suits, causes of action, proceedings, judgments and
liabilities, including reasonable counsel fees and other expenses incurred in
litigation or otherwise, assessed, incurred or sustained (collectively
"LaserSight Loss") by or against any of them with respect to or arising out of
(i) the failure of any representation or warranty made by the Company in this
Agreement or in any Schedule delivered pursuant hereto to be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date, (ii) the breach by or nonperformance of the Company or any of the
Shareholders of any covenants or agreements contained in this Agreement, (iii)
claims of third parties that the Company's operation of the assets described on
Schedule 6.7 prior to the Closing Date and Kremer's or his successor's operation
of the assets described on Schedule 6.7 prior to the date of the FDA Approval
(or in the event the Termination Date occurs, prior to the Termination Date)
infringes on the rights or properties of such third party, and (iv) claims of
third parties that such party was injured as a result of the Company's or
Kremer's actions prior to the Closing Date. The indemnification covenant
contained in this Section will not require the Company or the Shareholders to
indemnify in connection with consequential damages sustained by the parties
eligible for indemnification hereunder.
(b) From and after the Closing Date and subject to the other
provisions of this Section 8, LaserSight agrees to indemnify and hold the
Company, the Company's affiliates, officers, directors, agents, the Shareholders
and Kremer Affiliates harmless from damages, losses or expenses suffered or
paid, directly or indirectly, as a result of any and all claims, demands, suits,
causes of action, proceedings, judgments and liabilities, including reasonable
counsel fees and other expenses incurred in litigation or otherwise, assessed,
incurred or sustained (collectively "Company Loss") by or against any of them
with respect to or arising out of (i) the failure of any representation or
warranty made by LaserSight in this Agreement or in any Schedule delivered
pursuant hereto to be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date, (ii) the breach by or
nonperformance of LaserSight of any covenants or agreements contained in this
Agreement, (iii) claims of third parties that any laser manufactured by or for
LaserSight whether or not based upon the Kremer Laser and its related know-how
infringes on the rights or properties of such third party, (iv) claims of third
parties that the operation of the assets described on Schedule 6.7 after the
date of the FDA Approval (or in the event the Termination Date occurs, after the
Termination Date) infringe on the rights or properties of a third party,
provided that, such indemnification shall cease upon the first to occur of (A)
the consummation of an agreement or settlement between LaserSight and Pillar
Point Partners as contemplated by Section 6.13 so long as LaserSight fulfills
its obligations to Kremer or the Kremer Affiliates, as applicable, pursuant to
such Section 6.13, (B) LaserSight's (X) notice to Kremer that it has been unable
to negotiate an acceptable resolution of the claim that it is manufacturing or
intends to manufacture a laser based on the Kremer Laser which infringes on the
rights or properties of a third party, (Y) notice to Kremer that it has elected
not to manufacture such laser, and (Z) LaserSight's delivery to Kremer or a
Kremer Affiliate of two excimer lasers, at no cost, which are substantially
similar in functionality to the assets described on Schedule 6.7 (the
"Replacement Lasers"), or (C) final judgment which is adverse to LaserSight is
entered in a suit claiming that a laser manufactured by LaserSight based on the
Kremer Laser infringes on the rights or properties of a third party, (v) claims
of third parties that the operation of the Replacement Lasers infringe on the
rights or properties of a third party, and (vi) claims of third parties that any
laser manufactured by or for LaserSight, whether or not based upon the Kremer
Laser and its related know-how, injures such third parties. The indemnification
covenant contained in this Section will not require LaserSight to indemnify in
connection with (i) consequential damages sustained by the parties eligible for
indemnification hereunder, and (ii) the obligation to pay the Fee. In addition,
LaserSight will only be required to indemnify Kremer Affiliates pursuant to this
Section in connection with Sections 8.1(b)(iii), 8.1(b)(iv), 8.1(b)(v),
8.1(b)(vi) and obligations pursuant to 8.1(b)(ii) which relate to Sections of
this Agreement pursuant to which LaserSight expressly owes an obligation to a
Kremer Affiliate, including, Sections 6.3 and 6.13).
(c) If any action or proceeding be commenced, or if any claim, demand
or assessment be asserted, in respect of which a party indemnified hereunder
(the "Indemnified Party") proposes to hold any one or more of the indemnifying
party or parties (the "Indemnifying Party") liable under the provisions of this
Agreement, the Indemnifying Party shall have no liability therefor unless (i)
the Indemnifying Party shall receive written notice of such claim, demand or
assessment ("Claims Notice") within 30 days after the Indemnified Party acquires
knowledge thereof, and (ii) the Indemnifying Party shall have received copies of
all information and documents relating thereto within twenty (20) days after the
Indemnified Party's receipt thereof. If any one or more of the Indemnifying
Party or Parties shall, at its or his option, elect to contest or defend any
such action, proceeding, claim, demand or assessment, such Indemnifying Party
shall be entitled, at its or his sole cost and expense, to contest or defend the
same with counsel of its or his own choosing, and the Indemnified Party and
their respective successors or assigns shall not admit any liability with
respect thereto or settle, compromise, pay or discharge the same without the
prior written consent of the Indemnifying Party so long as any Indemnifying
Party is contesting or defending the same in good faith, and the Indemnified
Party (and their respective successors and assigns) shall cooperate with the
Indemnifying Party in the contest or defense thereof and shall accept any
settlement thereof recommended by a majority in interest of the Indemnifying
Party so long as the amount of such settlement is paid by the Indemnifying
Party. If the Indemnified Party fails to notify the Indemnifying Party of a
claim in accordance with the terms of this Section 8.1(c), and the Indemnifying
Party is thereby prejudiced by such failure of notice in its defense of the
claim, the Indemnifying Party's obligation to indemnify hereunder shall be
extinguished with respect to such claim to the extent that the Indemnifying
Party has been prejudiced by the failure to give such notice.
(d) LaserSight shall not be entitled to indemnification for any claim
until the aggregate amount of claims hereunder exceeds $40,000.00 (the
"Threshold Amount"), and then LaserSight may only recover the amount in excess
of the Threshold Amount, provided that LaserSight will be entitled to be
indemnified hereunder for all LaserSight Loss arising as a result of a breach of
Sections 4.8, 4.10 or 4.23 without regard to limitations of the Threshold
Amount. Prior to seeking indemnification hereunder the parties must first
utilize proceeds available from relevant insurance policies of the Indemnified
Party.
(e) Notwithstanding anything to the contrary contained in this
Agreement, neither the Company nor any of the Shareholders shall be liable under
the indemnification provisions of this Section hereof or otherwise have any
liability for any misrepresentation or breach of warranty or covenant under this
Agreement or otherwise have any liability in connection with the transactions
contemplated by this Agreement to the extent that:
(i) the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which
such liability would be based is disclosed in any of the
contracts and documents referred to in this Agreement, in
the Schedules attached hereto or in any other contracts,
documents, records or other instruments made available to
LaserSight or Newco hereunder or which is disclosed in a
written notice furnished to LaserSight or Newco prior to
the Closing; provided, however, that any such
misrepresentation or breach of warranty or covenant so
disclosed to LaserSight or Newco after the execution and
delivery of this Agreement and prior to the Closing shall
not affect the right of LaserSight or Newco to elect not
to close the transactions contemplated by this Agreement
as provided in Section 7 hereof (it being understood and
agreed that if, despite such right of LaserSight and Newco
to elect not to close by reason of the misrepresentation
or breach so disclosed, LaserSight and Newco nevertheless
elect to close, thereby waiving such misrepresentation or
breach, LaserSight and Newco shall thereafter have no
claim against any of the Shareholders by reason of any
such disclosed misrepresentation or breach of warranty or
covenant); or
(ii) such liability is based upon a claim, assessment or
deficiency for federal, state and/or local income or
franchise taxes which arise from adjustments which have
the effect only of shifting income, credits and/or
deductions from one fiscal period to another; or
(iii) such liability is offset by a credit in accordance with
the provisions of subsection 8.1(j) below.
(f) Notwithstanding anything to the contrary contained in this
Agreement, LaserSight shall not be liable under the indemnification provisions
of this Section hereof or otherwise have any liability for any misrepresentation
or breach of warranty or covenant under this Agreement or otherwise have any
liability in connection with the transactions contemplated by this Agreement to
the extent that the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which such liability would be
based is disclosed in this Agreement, in the Schedules attached hereto, in any
of the SEC Filings, or which is disclosed in a written notice furnished to the
Company or any of the Shareholders prior to the Closing; provided, however, that
any such misrepresentation or breach of warranty or covenant so disclosed to the
Company or any of the Shareholders after the execution and delivery of this
Agreement and prior to the Closing shall not affect the right of the Company to
elect not to close the transactions contemplated by this Agreement as provided
in Section 7 hereof (it being understood and agreed that if, despite such right
of the Company to elect not to close by reason of the misrepresentation or
breach so disclosed, the Company and the Shareholders nevertheless elect to
close, thereby waiving such misrepresentation or breach, the Company and the
Shareholders shall thereafter have no claim against LaserSight or Newco by
reason of any such disclosed misrepresentation or breach of warranty or
covenant).
(g) All representations and warranties contained in Sections 4.1, 4.2,
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.14, 4.15, 4.16, 4.17, 4.19,
4.20, 4.21, 4.22 and 4.23 shall expire on the first anniversary of the Closing
Date, and the indemnities set forth in Sections 8.1(a)(i) and (ii) (except for
indemnities pursuant to Section 8.1(a)(ii) which relate to Sections 2.2(b), 2.5,
6.4(g), 6.4(h) or 6.12) and all representations and warranties contained in
Sections 4.12, 4.13, 4.18 and 4.23 shall expire on the Termination Date, and
after such dates the Shareholders shall have no liability under the
indemnification provisions of Section 8 hereof with respect to such Sections or,
except pursuant to Section 8.1(o), otherwise have any liability under this
Agreement or otherwise in connection with the transactions contemplated by this
Agreement unless (i) with respect to other than third party claims, LaserSight
gives written notice to the Shareholders of LaserSight's claim for any such
liability, setting forth in reasonable detail the specific facts and
circumstances pertaining thereto, on or before the first anniversary of the
Closing Date or the Termination Date, as applicable, and (ii) with respect to
other than third party claims, if LaserSight does not satisfy such claim within
30 days after the giving of such notice, LaserSight commences a legal action or
proceeding against the Shareholders with respect to such claim within 45 days
after the giving of such notice. With respect to third party claims for which a
Claims Notice has been sent, no indemnification or other liability shall be due
or owing under Section 8 with respect to any LaserSight Loss to the extent it
(i) is a potential claim or cause of action which LaserSight believes may be
asserted rather than a LaserSight Loss, claim, cause of action liability which
has, in fact, been asserted, or (ii) is a LaserSight Loss, claim cause of action
or liability with respect to which LaserSight has taken action to accelerate the
time period in which such matter is asserted, wherein a material purpose of such
action was to facilitate a claim prior to the expiration of the survival period
set forth in this subsection (g) of Section 8 so that LaserSight could make an
indemnification claim prior to the expiration of such period.
(h) All representations and warranties contained in Sections 5.1 and
5.2 shall expire on the first anniversary of the Closing Date, and the
indemnities set forth in Section 8.1(b)(i) hereof and all representations and
warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7 and 5.8 shall expire on
the fourth anniversary of the Closing Date, and after such dates LaserSight
shall have no liability under the indemnification provisions of Section 8 hereof
with respect to such Sections or otherwise have any liability under this
Agreement or, except pursuant to Section 8.1(n), otherwise in connection with
the transactions contemplated by this Agreement unless (i) with respect to other
than third party claims, the Shareholders give written notice to LaserSight of
the Shareholders' claim for any such liability, setting forth in reasonable
detail the specific facts and circumstances pertaining thereto, on or before the
first anniversary of the Closing Date or the fourth anniversary of the Closing
Date, as applicable, and (ii) with respect to other than third party claims, if
the Shareholders, or any Shareholder, does not satisfy such claim within 30 days
after the giving of such notice, the Shareholders commence a legal action or
proceeding against LaserSight with respect to such claim within 45 days after
the giving of such notice. With respect to third party claims for which a Claims
Notice has been sent, no indemnification or other liability shall be due or
owing under Section 8 with respect to any Company Loss to the extent it (i) is a
potential claim or cause of action which the Shareholders believe may be
asserted rather than a Company Loss, claim, cause of action liability which has,
in fact, been asserted, or (ii) is a Company Loss, claim cause of action or
liability with respect to which the Shareholders, or any Shareholder, has taken
action to accelerate the time period in which such matter is asserted, wherein a
material purpose of such action was to facilitate a claim prior to the
expiration of the survival period set forth in this subsection (h) of Section 8
so that the Shareholders could make an indemnification claim prior to the
expiration of such period.
(i) It is specifically understood and agreed that, except as provided
in the last sentence of Section 8.1(k), in the event a misrepresentation or
breach of warranty, covenant or agreement is discovered by a party hereto after
the Closing, the remedy of such party shall be limited to indemnification as set
forth in Section 8 hereof (as limited by the provisions set forth therein or
elsewhere in this Agreement), which shall be such party's sole and exclusive
remedy, and such party shall not be entitled to a rescission of this Agreement.
(j) In the event that, notwithstanding the limitations contained in
this Section 8 or elsewhere in this Agreement, any of the Shareholders becomes
liable to LaserSight and/or Newco under the provisions of this Agreement or
otherwise, the Shareholders shall be entitled to a credit or offset against any
such liability of an amount equal to the value of any net tax benefit realized
(by reason of a tax deduction, basis reduction, shifting of income, credits
and/or deductions or otherwise) by LaserSight or Newco in connection with the
loss or damage suffered by LaserSight or Newco which forms the basis of the
Shareholders' liability hereunder. Such net tax benefit shall be calculated by
LaserSight's independent certified public accountant utilizing, to the extent
possible, generally accepted accounting principles.
(k) Notwithstanding anything to the contrary contained in this
Agreement, in the event that, notwithstanding the limitations contained in this
Section 8 or elsewhere in this Agreement, the Shareholders become liable to
LaserSight and/or Newco pursuant to this Section 8 as a result of a
misrepresentation or breach of a warranty, in no event shall the aggregate
amount of such liability of the Shareholders (including all costs, expenses and
attorneys' fees paid or incurred by the Shareholders in connection therewith or
the curing of any and all misrepresentations or breaches of warranties under
this Agreement) exceed the number which results from multiplying 65% times the
total dollar amount received by the Shareholders pursuant to this Agreement. The
total dollar amount received by the Shareholders pursuant to this Agreement
shall be the sum of (i) all amounts paid to the Company or Shareholders in
immediately available funds, and (ii) the dollar amount utilized to calculate
the number of shares of LaserSight Common Stock actually issued pursuant to this
Agreement, provided that until such time as the Shareholders are not required to
pay liquidated damages pursuant to Section 2.2(b), only 36.3637% of the Closing
Shares will be deemed to have been actually issued pursuant to this Agreement,
provided further, once the Shareholders are no longer required to pay liquidated
damages pursuant to Section 2.2(b), all of the Closing Shares will be deemed to
have been actually issued pursuant to this Agreement and will be utilized to
determine the Shareholders' indemnification obligations hereunder, whenever such
obligations arose, including, without limitation, indemnification obligations
which may have previously been limited due to less than all of the Closing
Shares being deemed to have been issued pursuant to this Agreement. Nothing
contained herein shall limit LaserSight's or Newco's rights and remedies
associated with a breach or nonperformance by the Shareholders or any
Shareholder of an agreement or covenant contained in Sections 2.2(b), 2.5,
6.4(g), 6.4(h), 6.12, indemnities pursuant to Section 8.1(a)(ii) which relate to
Sections 2.2(b), 2.5, 6.4(g), 6.4(h) or 6.12, or indemnities pursuant to Section
8.1(a)(iv).
(l) Notwithstanding anything to the contrary contained in this
Agreement or in the Articles of Merger, there shall be excluded from the assets
acquired as a result of the merger, any debt, liability or obligation of, or
claim the Company has or may have against, any past or present shareholder,
director or officer of the Company.
(m) Notwithstanding anything to the contrary contained in Section 7 or
elsewhere in this Agreement, LaserSight and Newco shall not, except as otherwise
expressly provided in subsection (e)(i) of this Section 8, have the right to
elect not to close the transactions contemplated by this Agreement by reason of
any misrepresentation or breach of warranty or covenant contained in this
Agreement or otherwise if (i) the Shareholders shall have no liability therefor
to LaserSight (or Newco) by reason of the provisions contained in this Section 8
or elsewhere in this Agreement, or (ii) the Shareholders undertake, at their
sole cost and expense (but subject to the limitations and other provisions
contained in this Section 8 or elsewhere in this Agreement), to promptly cure
such misrepresentation or breach (and/or defend, settle, compromise and/or
discharge any third party claim which forms the basis thereof) prior to the
Closing. The Threshold Amount shall not be considered when determining whether
the Shareholders have liability pursuant to subsection (i) of this Section
8.1(m) and determining the limitations on liability referred to in subsection
(ii) of this Section 8.1(m).
(n) Notwithstanding anything to the contrary contained in this
Agreement LaserSight's obligations pursuant to Sections 8.1(b)(ii)-(vi) shall
survive the termination of this Agreement.
(o) Notwithstanding anything to the contrary contained in this
Agreement the Shareholders' obligations pursuant to Section 8.1(a)(ii) which
relate to Sections 2.2(b), 2.5, 6.4(g), 6.4(h) or 6.12 and obligations pursuant
to Sections 8.1(a)(iii)-(iv) shall survive the termination of this Agreement.
(p) The parties agree that there will be no ability to offset amounts
owed to a party pursuant to this Section 8 against amounts such party is
required to pay pursuant to the terms of this Agreement, the Consulting
Agreement, the Patent Purchase Agreement and other agreements executed in
connection with the Closing.
SECTION 9. GENERAL PROVISIONS.
9.1 Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
(except covenants and agreements which are expressly required to be performed
and are performed in full on or prior to the Closing Date) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement, provided that the representations and warranties contained herein
shall only survive until the times described in Sections 8.1(g) and 8.1(h), as
applicable.
9.2 Publicity. So long as this Agreement shall be in effect, none of
the Company, the Shareholders nor LaserSight shall issue or cause the
publication of any press release or other announcement with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other party, which consent shall not be withheld where such release or
announcement is required by applicable law.
9.3 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors and
assigns; provided, however, that no party shall assign or delegate this
Agreement or any of the rights or obligations created hereunder without the
prior written consent of the other parties. Notwithstanding the foregoing,
LaserSight shall have the unrestricted right to assign this Agreement and all or
any part of its rights hereunder and to delegate all or any part of its
obligations hereunder to any affiliate of LaserSight, but in such event
LaserSight shall remain fully liable as primary obligor for the performance of
all of such obligations in the manner prescribed in this Agreement. Nothing in
this Agreement shall confer upon any person, firm or corporation not a party to
this Agreement, or the legal representatives of such person, firm or
corporation, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement.
9.4 Brokers and Finders. Each of parties represents and warrants to
the other that he or it has not engaged any broker, finder or investment banker
in connection with the transactions contemplated by this Agreement. Each of
LaserSight and the Company agrees to indemnify and hold harmless the other
against any brokerage fee, commission, finder's fee, or financial advisory fee
due to any person, firm or corporation acting on his or its behalf in connection
with the transactions contemplated by this Agreement.
9.5 Expenses. Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
9.6 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be effective for all purposes if hand delivered to the
party designated below, sent via overnight delivery utilizing a nationally
recognized overnight delivery service or placed in the United States mail,
postage prepaid, addressed to the addresses set forth below, or to such other
address and persons as shall be designated from time to time by any party hereto
in a written notice to the other in the manner provided for in this paragraph.
The notice shall be deemed to have been given upon deposit in the United States
mail, postage prepaid, or at the time of delivery if hand delivered. A party
receiving notice which does not comply with the technical requirements for
notice under this paragraph may elect to waive any deficiencies and treat the
notice as having been properly given.
1. if to the Company or the Shareholders, to:
Photomed, Inc.
200 Mall Boulevard
King of Prussia, Pennsylvania 19406
with a copy to:
Blank Rome Comisky & McCauley
Four Penn Center Plaza
Philadelphia, Pennsylvania 19103
Attn: Steven Dubow, Esq.
or, from and after
September 1, 1997:
Blank Rome Comisky & McCauley
One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Steven Dubow, Esq.
2. if to LaserSight, to:
LaserSight Incorporated
12161 Lackland Road
St. Louis, Missouri 63146
Attn: Chief Executive Officer
with a copy to:
Sonnenschein Nath & Rosenthal
One Metropolitan Square
Suite 3000
St. Louis, Missouri 63102
Attn: Alan Bornstein, Esq.
9.7 Entire Agreement. This Agreement, together with the exhibits
hereto and the agreements contemplated hereby, represents the entire agreement
and understanding of the parties with reference to the transactions set forth
herein and no representations or warranties have been made in connection with
this Agreement other than those expressly set forth herein or in the exhibits,
certificates and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Agreement and all prior drafts of this Agreement, all
of which are merged into this Agreement.
9.8 Waivers and Amendments. Each of LaserSight, the Company and the
Shareholders, may by written notice to the other (a) extend the time for the
performance of any of the obligations or other actions of the other; (b) waive
any inaccuracies in the representations or warranties of the other contained in
this Agreement; (c) waive compliance with any of the covenants of the other
contained in this Agreement; (d) waive performance of any of the obligations of
the other created under this Agreement; or (e) waive fulfillment of any of the
conditions to his own obligations under this Agreement. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
hereto.
9.9 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof.
9.10 Article and Section Headings. The Article and Section headings
contained in this Agreement are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.
9.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
9.12 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Pennsylvania, without regard to such
state's conflict of law provisions.
9.13 LaserSight Venue. LaserSight hereby irrevocably and
unconditionally consents and submits to the jurisdiction of Pennsylvania courts
in connection with all actions, suits or proceedings filed by the Shareholders
relating LaserSight's misrepresentation or breach of the terms of this
Agreement. LaserSight irrevocably waives any objection it may have to the venue
of any such action, suit or proceeding brought in such courts or the convenience
of the forum and LaserSight irrevocably waives the right to proceed in any other
jurisdiction. Final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and the
amount of any indebtedness or liability of LaserSight therein described.
LaserSight agrees that services of process in any action or proceeding hereunder
may be made upon LaserSight by certified mail, return receipt requested to the
address for notice set forth in Section 9.6.
9.14 Shareholders Venue. Each of the Shareholders hereby irrevocably
and unconditionally consents and submits to the jurisdiction of a court chosen
by LaserSight from time to time which has legal jurisdiction as a matter of law,
without reference to this Section 9.14, over any actions, suits or proceedings
filed by LaserSight relating to any Shareholder's misrepresentation or breach of
the terms of this Agreement, provided that in no event will a Shareholder be
required to consent to the jurisdiction of a court which as a matter of law has
legal jurisdiction other than the courts of Delaware, Missouri or Pennsylvania,
provided further that if it is determined that none of the courts of Delaware,
Missouri or Pennsylvania has jurisdiction, each Shareholder will consent to the
jurisdiction of the courts of the state in which such Shareholder is then
domiciled. Each of the Shareholders irrevocably waive any objection they may
have to the venue of any such action, suit or proceeding brought in such courts
or the convenience of the forum if venue exists as a matter of law or as a
result of such Shareholder being domiciled in such jurisdiction and each
Shareholder irrevocably waives the right to proceed in any other jurisdiction.
Final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment, a certified or
true copy of which shall be conclusive evidence of the fact and the amount of
any indebtedness or liability of the Shareholders therein described. Each of the
Shareholders agrees that services of process in any action or proceeding
hereunder may be made upon such Shareholder by certified mail, return receipt
requested to the address for notice set forth in Section 9.6.
9.15 Third Party Beneficiary. Each Kremer Affiliate shall be a third
party beneficiary of this Agreement solely in connection with those Sections of
this Agreement pursuant to which LaserSight expressly owes an obligation to such
Kremer Affiliate.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date and year first above written.
Company: LaserSight:
PHOTOMED, INC. LASERSIGHT INCORPORATED
By: /s/ Frederic B. Kremer, M.D. By: /s/ Michael R. Farris
---------------------------- -------------------------
Its: Michael R. Farris
---------------------------- President/Chief Executive Officer
Newco:
PHOTOMED ACQUISITION, INC.
By: /s/ Michael R. Farris
-------------------------
Michael R. Farris
President
Kremer: ASK:
/s/ Frederic B. Kremer, M.D. /s/ Robert Satalof
- ---------------------------- -------------------------
Frederic B. Kremer, M.D. Robert Satalof, Trustee for Alan Stewart
Kremer, u/t/d December 27, 1991
LK: MAK:
/s/ Linda Kremer /s/ Robert Satalof
- ---------------------------- -------------------------
Linda Kremer, M.D. Robert Satalof, Trustee for Mark Adam
Kremer, u/t/d December 27, 1991
