<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1997
REGISTRATION NO. 333-27421
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OCULAR SCIENCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3851 94-2985696
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
475 ECCLES AVENUE
SOUTH SAN FRANCISCO, CALIFORNIA 94080
(415) 583-1400
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
GREGORY E. LICHTWARDT
CHIEF FINANCIAL OFFICER
OCULAR SCIENCES, INC.
475 ECCLES AVENUE
SOUTH SAN FRANCISCO, CALIFORNIA 94080
(415) 583-1400
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
LAIRD H. SIMONS III, ESQ. JAY K. HACHIGIAN, ESQ.
BARRY J. KRAMER, ESQ. BENNETT L. YEE, ESQ.
DAVID K. MICHAELS, ESQ. OLUFUNMILAYO B. AREWA, ESQ.
TRICIA L. EMMERMAN, ESQ. JONATHAN J. NOBLE, ESQ.
FENWICK & WEST LLP GUNDERSON DETTMER STOUGH
TWO PALO ALTO SQUARE VILLENEUVE FRANKLIN & HACHIGIAN, LLP
PALO ALTO, CALIFORNIA 94306 155 CONSTITUTION DRIVE
(415) 494-0600 MENLO PARK, CA 94025
(415) 321-2400
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
<TABLE>
<S> <C>
SEC Registration Fee............................................... $24,394
NASD Filing Fee.................................................... 8,550
Nasdaq National Market Application Fee............................. *
Printing........................................................... *
Legal Fees and Expenses............................................ *
Accounting Fees and Expenses....................................... *
Director and Officer Liability Insurance........................... *
Blue Sky Fees and Expenses......................................... *
Custodial Fees..................................................... *
Transfer Agent and Registrar Fees.................................. *
Miscellaneous...................................................... *
-------
Total.................................................... $ *
=======
</TABLE>
- ---------------
* To be filed by amendment
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law Code authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Article VI of the Registrant's Bylaws provides for mandatory
indemnifications of its directors and officers and permissible indemnifications
of employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. In addition, the Registrant has entered into Indemnity
Agreements with its officers and directors. Reference is also made to Section 9
of the Underwriting Agreement, which provides for the indemnification of
officers, directors and controlling persons of the Registrant against certain
liabilities.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between the Registrant and its directors and executive officers,
may be sufficiently broad to permit indemnification of the Registrant's
directors and executive officers for liabilities arising under the Securities
Act.
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Registrant's Board of Directors, has applied for, and expects to obtain,
directors' and officers' liability insurance with a per claim and annual
aggregate coverage limit of $ .
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
DOCUMENT EXHIBIT NUMBER
--------------------------------------------------------------- --------------
<S> <C>
Underwriting Agreement (draft dated May , 1997).............. 1.01
Registrant's Bylaws............................................ 3.04
Form of Indemnity Agreement.................................... 10.06
</TABLE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following table sets forth information regarding all securities sold by
the Registrant since May 1, 1994.
II-1
<PAGE> 3
<TABLE>
<CAPTION>
NUMBER AGGREGATE FORM OF
CLASS OF PURCHASERS DATE OF SALE TITLE OF SECURITIES OF SHARES PURCHASE PRICE CONSIDERATION
- -------------------------------- ------------ ------------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Exercise of options by 31 05/94-
optionees....................... 04/30/97 Common Stock 404,178 $ 273,837.79 Cash
Edgar J. Cummins, William R.
Grant(2), Daniel J. Kunst and
Terence M. Fruth................ 11/30/94 Common Stock 13,464 39,550.50 Services as
director
Allergan, Inc., Galen Partners,
L.P., .......................... 12/14/94 and
Galen Partners International
L.P. ........................... 12/22/94 Common Stock 1,089,147 3,630.49 Cash
Edgar J. Cummins, William R.
Grant(2), Daniel J. Kunst,
Terence M. Fruth and Richard M.
Haugen(3)....................... 01/10/96 Common Stock 2,783 27,996.98 Services as
director
</TABLE>
- ---------------
(2) Stock certificate issued to Galen Associates.
(3) Stock certificate issued to Richard M. Haugen and Mary J. Haugen as trustees
of the Haugen Family Trust.
All sales of Common Stock made pursuant to the exercise of stock options
granted under the Registrant's stock option plan and issuances to directors and
independent contractors were made pursuant to the exemption from the
registration requirements of the Securities Act afforded by Rule 701 promulgated
under the Securities Act.
All other sales were made in reliance on Section 4(2) of the Securities Act
and/or Regulation D promulgated under the Securities Act. These sales were made
without general solicitation or advertising. Each purchaser was a sophisticated
investor with access to all relevant information necessary to evaluate the
investment who represented to the Registrant that the shares were being acquired
for investment.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ ----------------------------------------------------------------------------------
<C> <C> <S>
1.01 -- Underwriting Agreement.*
2.01 -- Form of Agreement and Plan of Merger by and between O.S.I. Corporation, a
California corporation, and Registrant.+
3.01 -- Registrant's Certificate of Incorporation.+
3.02 -- Registrant's Certificate of Designation of Preferred Stock.+
3.03 -- Form of Registrant's Restated Certificate of Incorporation to be effective upon
the closing of this offering.+
3.04 -- Registrant's Bylaws.+
4.01 -- Registration Rights Agreement dated as of October 30, 1992 by and among the
Registrant and the other parties listed on the signature pages thereto.+
4.02 -- Amendment to Registration Rights Agreement and Shareholders' Agreement dated as of
February 27, 1997 by and among the Registrant and the other parties listed on the
signature pages thereto.+
5.01 -- Opinion of Fenwick & West LLP regarding legality of the securities being issued.*
10.01 -- Registrant's 1989 Stock Option Plan adopted July 21, 1989, as amended November 30,
1994.+
10.02 -- Registrant's 1992 Officers and Directors Stock Option Plan adopted September 30,
1992.+
10.03 -- Registrant's 1997 Equity Incentive Plan.+
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ ----------------------------------------------------------------------------------
<C> <C> <S>
10.04 -- Registrant's 1997 Directors Stock Option Plan.+
10.05 -- Registrant's 1997 Employee Stock Purchase Plan.+
10.06 -- Form of Indemnity Agreement to be entered into by Registrant with each of its
directors and executive officers.+
10.07 -- Junior Subordinated Promissory Note dated October 30, 1996, issued by O.S.I.
Corporation to John Fruth, as amended.
10.08 -- Settlement Agreement and Release dated as of February 27, 1997 between Aspect
Vision Care Ltd., New Focus Health Care Ltd., Geoffrey Galley, Anthony Galley,
Barrie Bevis, Albert Morland, Ivor Atkinson, Wilfred Booker, Ocular Sciences Ltd.,
O.S.I. Corporation and John Fruth.#
10.09 -- Amendment to Settlement Agreement and Release dated as of February 27, 1997
between the parties to the Settlement Agreement and Contact Lens Technologies Ltd.
10.10 -- Patent License Agreement dated February 27, 1997 by and between Ocular Sciences
Ltd. and certain persons referred to therein as the Patent Owners.+
10.11 -- Employment Agreement dated March 27, 1996 by between John Lilley and O.S.I.
Corporation.+
10.12 -- Lease for 475 - 479 Eccles Avenue dated May 18, 1995, between Stanley D. McDonald,
Norman H. Scherdt, Herbert A. West and McDonald Ltd. as "Landlord" and O.S.I.
Corporation as "Tenant."+
10.13 -- Lease for Santa Isabel, Puerto Rico Kingdom dated September 14, 1984, between The
Puerto Rico Industrial Development Company as "Landlord" and O.S.I. Puerto Rico
Corporation as "Tenant," as amended.+
10.14 -- Counterpart Underlease of Distribution Depot dated November 30, 1995 among Boots
the Chemist Limited as "Landlord," Ocular Sciences Limited as "Tenant" and O.S.I.
Corporation as "Guarantor."+
11.01 -- Statement regarding computation of pro forma and supplementary pro forma net
income per share.+
21.01 -- List of Subsidiaries.+
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02 -- Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants.*
24.01 -- Power of Attorney (included on Page II-5 of this Registration Statement).
27.01 -- Financial Data Schedule.+
</TABLE>
- ---------------
+ Previously filed.
* To be supplied by amendment.
# Confidential treatment has been requested with respect to certain portions of
this exhibit.
II-3
<PAGE> 5
(b) The following financial statement schedule is filed herewith:
Schedule II -- Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
ADDITIONS
-----------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END
OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1996
Allowance for sales returns and 1,930 193 -- (672)(1) 1,451
doubtful accounts
receivable....................
Provision for excess and obsolete 2,341 983 -- (1,082)(2) 2,242
inventory.....................
YEAR ENDED DECEMBER 31, 1995
Allowance for sales returns and 2,011 468 -- (548)(1) 1,930
doubtful accounts
receivable....................
Provision for excess and obsolete 4,554 575 -- (2,798)(2) 2,341
inventory.....................
YEAR ENDED DECEMBER 31, 1994
Allowance for sales returns and 1,465 950 -- (404)(1) 2,011
doubtful accounts
receivable....................
Provision for excess and obsolete 11,892 256 -- (7,594)(2) 4,554
inventory.....................
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Discontinued and expired inventory.
Other financial statement schedules are omitted because the information
called for is not required or is shown either in the Consolidated Financial
Statements or the Notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of South San Francisco, State of California, on the
fourth day of June, 1997.
OCULAR SCIENCES, INC.
By: /s/ GREGORY E. LICHTWARDT
------------------------------------
Gregory E. Lichtwardt
Vice President, Finance and
Chief Financial Officer
In accordance with the requirements of the Securities Act, this Amendment
was signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- --------------------------------------------- --------------------------------- -------------
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
* President and Chief Executive June 4, 1997
- --------------------------------------------- Officer and Chairman of the Board
John D. Fruth of Directors
PRINCIPAL FINANCIAL AND
PRINCIPAL ACCOUNTING OFFICER:
/s/ GREGORY E. LICHTWARDT Vice President, Finance and Chief June 4, 1997
- --------------------------------------------- Financial Officer
Gregory E. Lichtwardt
DIRECTORS:
* Director June 4, 1997
- ---------------------------------------------
Edgar J. Cummins
* Director June 4, 1997
- ---------------------------------------------
Terence M. Fruth
* Director June 4, 1997
- ---------------------------------------------
William R. Grant
* Director June 4, 1997
- ---------------------------------------------
Daniel J. Kunst
* Director June 4, 1997
- ---------------------------------------------
Francis R. Tunney, Jr.
*By: /s/ GREGORY E. LICHTWARDT
- ---------------------------------------------
Gregory E. Lichtwardt
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE PAGE
- ------ -------------------------------------------------------------------------- -----
<C> <C> <S> <C>
1.01 -- Underwriting Agreement*...................................................
2.01 -- Form of Agreement and Plan of Merger by and between O.S.I. Corporation, a
California corporation, and Registrant+...................................
3.01 -- Registrant's Certificate of Incorporation+................................
3.02 -- Registrant's Certificate of Designation of Preferred Stock+...............
3.03 -- Form of Registrant's Restated Certificate of Incorporation to be effective
upon the closing of this offering+........................................
3.04 -- Registrant's Bylaws+......................................................
4.01 -- Registration Rights Agreement dated as of October 30, 1992 by and among
the Registrant and the other parties listed on the signature pages
thereto+..................................................................
4.02 -- Amendment to Registration Rights Agreement and Shareholders' Agreement
dated as of February 27, 1997 by and among the Registrant and the other
parties listed on the signature pages thereto+............................
5.01 -- Opinion of Fenwick & West LLP regarding legality of the securities being
issued*...................................................................
10.01 -- Registrant's 1989 Stock Option Plan adopted July 21, 1989, as amended
November 30, 1994+........................................................
10.02 -- Registrant's 1992 Officers and Directors Stock Option Plan adopted
September 30, 1992+.......................................................
10.03 -- Registrant's 1997 Equity Incentive Plan+..................................
10.04 -- Registrant's 1997 Directors Stock Option Plan+............................
10.05 -- Registrant's 1997 Employee Stock Purchase Plan+...........................
10.06 -- Form of Indemnity Agreement to be entered into by Registrant with each of
its directors and executive officers+.....................................
10.07 -- Junior Subordinated Promissory Note dated October 30, 1996, issued by
O.S.I. Corporation to John Fruth, as amended..............................
10.08 -- Settlement Agreement and Release dated as of February 27, 1997 between
Aspect Vision Care Ltd., New Focus Health Care Ltd., Geoffrey Galley,
Anthony Galley, Barrie Bevis, Albert Morland, Ivor Atkinson, Wilfred
Booker, Ocular Sciences Ltd., O.S.I. Corporation and John Fruth#..........
10.09 -- Amendment to Settlement Agreement and Release dated as of February 27,
1997 between the parties to the Settlement Agreement and Contact Lens
Technologies Ltd..........................................................
10.10 -- Patent License Agreement dated February 27, 1997 by and between Ocular
Sciences Ltd. and certain persons referred to therein as the Patent
Owners+...................................................................
10.11 -- Employment Agreement dated March 27, 1996 by between John Lilley and
O.S.I. Corporation+.......................................................
10.12 -- Lease for 475 - 479 Eccles Avenue dated May 18, 1995, between Stanley D.
McDonald, Norman H. Scherdt, Herbert A. West and McDonald Ltd. as
"Landlord" and O.S.I. Corporation as "Tenant"+............................
10.13 -- Lease for Santa Isabel, Puerto Rico Kingdom dated September 14, 1984,
between The Puerto Rico Industrial Development Company as "Landlord" and
O.S.I. Puerto Rico Corporation as "Tenant," as amended+...................
10.14 -- Counterpart Underlease of Distribution Depot dated November 30, 1995 among
Boots the Chemist Limited as "Landlord," Ocular Sciences Limited as
"Tenant" and O.S.I. Corporation as "Guarantor"+...........................
11.01 -- Statement regarding computation of pro forma and supplementary pro forma
net income per share+.....................................................
21.01 -- List of Subsidiaries+.....................................................
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01)*.................
23.02 -- Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants*..............................................................
24.01 -- Power of Attorney (included on Page II-5 of this Registration
Statement)................................................................
27.01 -- Financial Data Schedule+..................................................
</TABLE>
- ---------------
+ Previously filed.
* To be supplied by amendment.
# Confidential treatment has been requested with respect to certain portions of
this exhibit.
<PAGE> 1
EXHIBIT 10.07
THIS NOTE IS SUBJECT TO THE PROVISIONS OF A SUBORDINATION AGREEMENT
DATED AS OF OCTOBER 30, 1996 BY AND BETWEEN THE HOLDER AND COMERICA
BANK-CALIFORNIA.
The securities represented by this Promissory Note has not been registered under
the Securities Act of 1933, as amended (the "Act"). These securities have been
acquired for investment and not with a view to distribution, and may not be
sold, transferred or hypothecated in the absence of an effective registration
statement for such securities under the Act, as amended, or an opinion of
counsel delivered to Buyer that registration is not required under the Act. IT
IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
JUNIOR SUBORDINATED PROMISSORY NOTE
$2,894,649 Irvine, California
June 1, 1997
FOR VALUE RECEIVED, O.S.I. Corporation, a California corporation (the
"Company"), hereby unconditionally promises to pay to the order of John D. Fruth
(the "Holder") the principal sum of $2,894,649.
The Company further promises to pay interest, at the times and in the
manner herein provided, on the principal balance outstanding from time to time
at a rate per annum equal from time to time to the Prime Rate plus 3.00%. The
"Prime Rate" shall be the variable rate of interest most recently published in
The Wall Street Journal as the "prime rate." The rate of interest hereon shall
be adjusted on each day on which the Prime Rate changes.
This Junior Subordinated Promissory Note is issued in exchange for, and
in cancellation of, the Junior Subordinated Promissory Note dated November 1,
1996 of the Company previously issued to Holder, a copy of which is attached
hereto as Exhibit A (the "Old Note"). By his acceptance of this Junior
Subordinated Promissory Note, Holder acknowledges that the Old Note is hereby
deemed canceled and that he will deliver any original of the Old Note that he
may possess to the Company for notation of such cancellation.
The unpaid principal amount and all accrued and unpaid interest on this
Junior Subordinated Promissory Note (the "Note") shall be due and payable on the
earlier of (a) November 1, 1997 and (b) the consummation by the Company of a
public offering of its Common Stock in which the Company shall receive net
proceeds of at least $37,000,000.
Notwithstanding the foregoing, the Company shall, at the option of Mr.
John D. Fruth (which option shall be exercised in writing), so long as Mr. Fruth
is the Holder of this Note, credit to the principal amount hereof at any time
outstanding an amount equal to the option exercise price of stock options held
and exercised by Mr. Fruth in payment of such option exercise price, and the
principal amount hereof thereby shall be reduced by such amount.
<PAGE> 2
Interest accrued on the principal amount hereof outstanding from time
to time and then unpaid shall be paid in cash quarterly in arrears on February
1, May 1, August 1 and November 1 in each year (each, an "Interest Payment
Date"), commencing August 1, 1997, or, if any such date is not a business day,
on the next succeeding business day; provided, however, that interest shall not
be paid in cash on any Interest Payment Date (i) at a rate in excess of 12.50%
per annum, and (ii) if any Event of Default (as defined in such agreement) under
the Credit Agreement (as defined below) has occurred and is continuing (or would
have existed on the last day of the fiscal quarter last ended prior to such
Interest Payment Date, giving pro forma effect to such payment of interest as
though it had been made on such day). Interest accrued but not paid in cash on
any Interest Payment Date shall not itself bear interest (unless the Holder
exercised its option to include such interest in the principal amount hereof, as
provided below) and shall be paid in cash on the next subsequent Interest
Payment Date on which the conditions specified in clauses (i) and (ii) of the
preceding sentence are satisfied; provided that, at the option of the Holder
exercised at any time by written notice to the Company and Comerica
Bank-California, such deferred interest shall be included in the unpaid
principal amount hereof, shall bear interest in accordance with the terms
applicable to the principal hereof and shall be paid at the time and in the
manner that the principal amount hereof is required to be paid.
This Note is subject to the following terms and conditions:
1. Payments. Principal and interest shall be payable to the Holder at
the offices of the Company in lawful money of the United States of America in
immediately available funds. The Company shall record in its internal records
the amount of principal and interest due and payable from time to time
hereunder, including the amount of interest accrued and not paid in cash and
included in the principal amount hereof pursuant to the terms hereof, each
payment thereof and the resulting unpaid balance.
2. No Prepayment. This Note shall not be prepaid, in whole or in part,
prior to the stated maturity date hereof.
3. Subordination.
(a) Notes Subordinated to Senior Debt. The indebtedness
represented by this Note is hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt; but the Note,
the indebtedness represented hereby and the payment of the principal of,
premium, if any, on and interest on the Notes in all respects shall rank equally
with, or prior to, all existing and future unsecured Indebtedness of the Company
that is not Senior Debt.
(b) Payment Over of Proceeds Upon Dissolution, etc. In the
event of (i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (ii) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors
or any other marshaling of assets and liabilities of the Company, then and in
any such event the holders of Senior Debt shall be
2
<PAGE> 3
entitled to receive payment in full in cash of all amounts due or to become due
on or in respect of all Senior Debt, including, without limitation, interest
accrued after, or that would have accrued but for, the commencement of any
bankruptcy case or proceeding with respect to the Company, before the Holder is
entitled to receive any payment on account of principal of, premium, if any, or
interest on this Note, and to that end the holders of Senior Debt shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of this Note, which may be payable or deliverable in
respect of this Note in any such case, proceeding, dissolution, liquidation or
other winding up or event. As used herein, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated
in right of payment to all Senior Debt which may at the time be outstanding to
substantially the same extent as, or to a great extent than, this Note.
In the event that, notwithstanding the foregoing provisions of
this Section 3(b), the Holder shall have received in any such case or proceeding
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of this
Note, before all Senior Debt is paid in full in cash, then and in such event
such payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other person making payment or distribution of assets of the Company for
application to the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay all Senior Debt in full in cash, after giving effect to any
concurrent payment or distribution to the holders of Senior Debt.
(c) No Payment Under Certain Circumstances. In the event that
the Holder receives notice from the Company or from any holder of Senior Debt
that there has occurred and is continuing (i) any default in the payment of
principal of (or premium, if any) or interest on any Senior Debt or (ii) any
other default with respect to any Senior Debt, then no payment shall be made by
the Company, or received by the Holder, on account of principal of or interest
on this Note unless and until such event described in clause (i) or (ii) above
shall have been cured or waived or shall have ceased to exist. If the Holder of
this Note receives any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to the
payment of this Note, before all Senior Debt is paid in full in cash, other than
payments and distributions permitted under this Section 3, then and in such
event such payment or distribution shall be paid over or delivered forthwith to
the holders of Senior Debt, pro rata, for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full in cash.
(d) Subrogation to Rights of Holders of Senior Debt. Subject
to the payment in full in cash of all Senior Debt, the Holder shall be
subrogated (equally and ratably with the
3
<PAGE> 4
holders of all Indebtedness of the Company which by its express terms in
subordinated to the Senior Debt of the Company to the same extent this Note is
subordinated and is entitled to like rights of subrogation) to the rights of the
holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of and
interest on this Note shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holder would be entitled except for the
provisions of this Section 3, and no payments over pursuant to the provisions of
this Section 3 to the holders of Senior Debt by the Holder, shall, as among the
Company, its creditors other than holders of Senior Debt and the Holder, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
(e) Provisions Solely to Define Relative Rights. The
provisions of this Section 3 are for, and are intended solely for, the purpose
of defining the relative rights of the Holder, on the one hand, and the holders
of Senior Debt, on the other hand. Nothing contained in this Section 3 is
intended to or shall (a) impair, as among the Company and its creditors other
than holders of Senior Debt and the Holder, the obligation of the Company, which
is absolute and unconditional, to pay to the Holder the principal of and
interest on this Note as and when the same shall become due and payable, all in
accordance with the terms hereof; or (b) affect the relative rights against the
Company of the Holder and creditors of the Company other than the holders of
Senior Debt; or (c) prevent the Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 3 of the holders of Senior Debt (i) in any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 3(b), to receive, pursuant to and in accordance
with such Section, cash, property and securities otherwise payable or
deliverable to the Holder, or (ii) under the conditions specified in Section
3(c), to prevent any payment prohibiting by such Section.
(f) No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants hereof, regardless of any knowledge thereof any
such holder may have or be otherwise charged with. The provisions of this
Section 3 are intended to be for the benefit of, and shall be enforceable
directly by, the holder or holders of any Senior Debt. Without in any way
limiting the generality of the foregoing paragraph, the holders of Senior Debt
may at any time and from time to time, without the consent of or notice to the
Holder, without incurring responsibility to the Holder and without impairing or
releasing the subordination provided in this Section 3 or the obligations
hereunder of the Holder to the holders of Senior Debt, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Debt, or otherwise amend or supplement
in any manner Senior Debt or any instrument evidencing the same or any agreement
under which Senior Debt is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Debt; (iii) release any person liable in any manner for the collection of Senior
Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other Person.
4
<PAGE> 5
(g) Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Section 3, the Holder shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Holder, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other fact pertinent
thereto or to this Section 3.
For purposes of this Note, "Senior Debt" means any and all obligations
of the Company under and pursuant to the Credit Agreement dated as of October
30, 1996 between the Company and Comerica Bank - California, as the same may be
amended or restated from time to time (the "Credit Agreement").
h. Other Agreements. Notwithstanding anything to the contrary
herein, the provisions of this Note shall not be construed to limit the rights
of any holder of Senior Debt as provided for under any agreement between such
holder and the Holder.
4. Governing Law. This Promissory Note shall be governed by and
construed in accordance with the laws of the State of New York.
Executed at Palo Alto, California, as of the 1st day of June, 1997.
O.S.I. CORPORATION
By: ____________________
Title:
5
<PAGE> 1
EXHIBIT 10.08
SETTLEMENT AGREEMENT AND RELEASE
This Agreement is entered into as of February 27, 1997 by and between the
parties set forth below.
The parties hereto are Aspect Vision Care Ltd. ("AVCL"), New Focus Health
Care Ltd. ("NFHC"), Geoffrey Harrison Galley ("GHG"), Anthony David Galley
("ADG"), Barrie Bevis ("BB"), Albert Henry Morland ("AHM"), Ivor Atkinson
("I.A.") and Wilfred Trevor Brooker ("WTB"), which parties are sometimes
referred to herein as the "Defendants" and Ocular Sciences Ltd., which was
formerly known as Precision Lens Laboratories Ltd. ("OSL"), O.S.I. Corporation
("OSI") and John David Fruth ("JDF"), which parties are sometimes referred to
herein as the "Plaintiffs".
RECITALS
A. Various of the parties hereto are parties to those certain actions in
the High Court of Justice in England known as CH 1995 P 106 and CH 1995 GP 1116
and in the United States District Court for the Northern District of California
under Docket Number C95-0054-VRW(CMP) (together the "Actions").
B. The parties hereto wish to completely settle the Actions, and all
other disputes between them, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Definitions.
1.01 The "Patent Owners" shall mean GHG, ADG, BB, AHM, and IA.
1.02 The "Purchase and Supply Agreement" shall mean that certain
Purchase and Supply Agreement between OSL and AVCL dated 30th September 1992.
1.03 The "Patent License Agreement" shall mean that certain Patent
License Agreement between the Patent Owners and OSL dated 30th September 1992.
1.04 The "Exchange Agreement" shall mean that certain Exchange
Agreement between the Patent Owners, JDF and OSI dated 30th September 1992.
1.05 The "Patent Side Letter" shall mean that certain side letter
between the Patent Owners and JDF dated 30th September 1992.
1.06 The "GH Galley Consulting Agreement" shall mean that certain
Consulting Agreement between GHG and OSL dated 30th September 1992.
1.07 The "Morland Consulting Agreement" shall mean that certain
Consulting Agreement between AHM and OSL dated 30th September 1992.
1.08 The "AD Galley Employment Agreement" shall mean that certain
Employment Agreement between ADG and OSL dated November 1992.
<PAGE> 2
1.09 The "AD Galley Confidentiality and Invention Assignment
Agreement" shall mean that certain Employee Invention Assignment and
Confidentiality Agreement between AD Galley and OSL effective March 1, 1988.
1.10 The "1992 Agreements" shall mean all the agreements set forth in
Sections 1.02 through 1.09 above.
2. Termination of Rights and Obligations under the 1992 Agreements,
License.
2.01 Termination. The parties hereto shall have no further rights or
obligations under the 1992 Agreements, except as set forth in Section 2.02
below.
2.02 Exceptions.
(a) Confidentiality: License. The parties hereto acknowledge
that Section 8 of the Exchange Agreement, Section 11 of the Purchase and Supply
Agreement, Section 4 of the GH Galley and Morland Consulting Agreements and the
AD Galley Confidentiality and Invention Assignment Agreement contain
confidentiality obligations of some or all of the parties hereto. These
provisions are to remain in full force and effect; provided, however, that OSL
hereby grants to AVCL and each of the Patent Owners a perpetual, royalty free
license to use any confidential and/or proprietary OSL information that was in
their possession, or which had been in their possession, as of 19th May 1994,
the date of commencement of the first Action. AVCL and the Patent Owners shall
treat any information licensed hereunder (the "Licensed Information") in the
same manner as they treat their own confidential and/or proprietary information,
and will not disclose the same to third parties except for appropriate business
purposes, and only if such third party agrees in writing to maintain the
confidentiality of such information. The provisions of this Section 2.02 are
subject to the provisions of Section 13 hereof.
(b) OSL Rights to AG Work Product. The parties further
acknowledge that OSL has the right to use, disclose, copy and commercialize as
it sees fit any work product or information generated by ADG in his capacity as
an employee of OSL, whether or not inventive, including, without limitation, any
software programs written by AG.
3. Termination of Actions and Release.
3.01 Termination. Upon execution of this Agreement by each of the
parties hereto, all actions and proceedings between the parties are to be
terminated and dismissed with prejudice (or in such manner in the Actions before
the High Court of Justice in England as will give similar effect). Each party
shall instruct its attorneys to promptly take such actions as may be required or
appropriate to effectuate such dismissals with prejudice, including, without
limitation, filing of stipulations of dismissal in the form of Exhibits A-1,
A-2 and A-3, hereto within one business day. No orders or motions for costs or
damages will be sought or accepted by any party hereto against the other. All
interlocutory orders and judgments (draft or otherwise) will be of no further
force or effect.
2
<PAGE> 3
3.02 Release.
(a) Defendants' Release. Each of the Defendants, on behalf of itself
or himself, and on behalf of its or his respective agents, officers, directors,
employees, affiliates, predecessors and attorneys, and any persons or entities
acting by, through, under, or in concert with any of them, hereby releases and
forever discharges each of the Plaintiffs, and their respective agents,
officers, directors, employees (including, without limitation, Carmen Lester),
affiliates, predecessors and attorneys, and any persons acting by, through,
under, or in concert with any of them, of and from any and all manner of action,
actions or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, claims, demands, losses, damages,
costs, or expenses, whether or not now known, claimed or suspected, fixed or
contingent, which any of the Defendants now has, owns or holds, or at any time
heretofore had, owned or held or ever claimed to have had, owned or held or may
hereafter have, own or hold, based upon or arising from any matter, cause, fact,
thing, act or omission whatsoever occurring or existing at any time to and
including the date hereof, including, without limitation, the matters set forth
or which could have been set forth in the Actions, and matters arising from or
relating to the Defendants' capacity as shareholders of OSI, including, without
limitation, rights in derivative actions, provided, that this Release does not
release and discharge the Plaintiffs from their respective obligations,
agreements, acknowledgments, representations and warranties under this Agreement
or the exhibits hereto.
(b) Plaintiffs' Release. Each of the Plaintiffs, on behalf of itself
and himself, and on behalf of its and his respective agents, officers,
directors, employees, affiliates, predecessors and attorneys, and any persons or
entities acting by, through, under, or in concert with any of them, hereby
releases and forever discharges the Defendants, and their respective agents,
officers, directors, employees, affiliates, predecessors and attorneys, and any
persons acting by, through, under, or in concert with any of them, of and from
any and all manner of action, actions or causes of action, in law or in equity,
suits, debts, liens, contracts, agreements, promises, liabilities, claims,
demands, losses, damages, costs, or expenses, whether or not now known, claimed
or suspected, fixed or contingent, which any of the Plaintiffs now has, owns or
holds, or at any time heretofore had, owned or held or ever claimed to have had,
owned or held or may hereafter have, own or hold, based upon or arising from any
matter, cause, fact, thing, act or omission whatsoever occurring or existing at
any time to and including the date hereof, including, without limitation, the
matters set forth or which could have been set forth in the Actions, and matters
arising from or relating to the Defendants' capacity as shareholders of OSI,
including, without limitation, rights in derivative actions, provided, that this
Release does not release and discharge the Defendants from their respective
obligations, agreements, acknowledgments, representations and warranties under
this Agreement or the exhibits hereto.
(c) Waiver. Notwithstanding the choice of law provisions set forth
below, each of the parties understands and acknowledges that he or it is
familiar with California Civil Code Section 1542, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
3
<PAGE> 4
Each party expressly waives and relinquishes any rights it may have under Civil
Code Section 1542 or any other statute or common law principle with a similar
effect as to the releases set forth above. In connection with such release, each
of the parties acknowledges that he or it is aware that his or its attorneys or
agents may hereafter discover claims or facts in addition to or different from
those which he or it now knows or believes to exist, but that it is his or its
intention to hereby fully, finally and forever to settle and release all of the
disputes and differences, known or unknown, suspected or unsuspected, which now
exist, may exist, or heretofore have existed between the parties to this
Agreement, except as otherwise expressly provided herein. In furtherance of this
intention, the releases herein given shall be and remain in effect as full and
complete releases notwithstanding the discovery or existence of any such
additional or different claim of fact.
3.03 Covenant Not to Sue or Instigate Action. The Defendants and
Plaintiffs each further agree not to institute, authorize, instigate or assist
in the institution of any administrative, legal or governmental proceeding
against the other, or the other's agents, officers, directors, employees,
affiliates, predecessors and attorneys, arising from or related to the matters
released above or any other matters arising on or before the date hereof, except
and only to the extent required by law, and hereby represent and warrant that
except for the Actions, as of the date hereof they have not so instituted,
authorized, instigated or assisted in any such proceedings.
3.04 Irrevocable. The provisions of this Section 3 are irrevocable and
will not be affected by the breach or default of any other provision of this
Agreement; provided, however, that nothing herein shall limit any other rights
or remedies a party hereto may have on account of a breach or default of this
Agreement.
3.05 No Admission of Liability. Nothing herein shall be construed as
an admission of liability by any party hereto, and the parties hereto
acknowledge that this Agreement is being entered into by the parties to avoid
the time and expense of further litigation.
3.06 Exception. Nothing herein shall limit the parties future rights
and obligations under that certain Registration Rights Agreement dated October
30, 1992 and that certain Shareholders Agreement also dated October 30, 1992,
which agreements shall remain in full force and effect.
4. Payments to Defendants.
4.01 Immediate Payment. Upon execution of this Agreement by each of
the parties hereto, OSL shall pay to the Defendants the sum of $3,333,333. Any
amounts due under this Section 4.01, and any amounts due under Section 4.02
below, may be paid by OSL to GHG on behalf of all Defendants.
4.02 Deferred Payment. OSL shall also pay to the Defendants the
additional amount of $6,666.667. Such payment shall be made upon the earlier of
(i) the first anniversary hereof, (ii) the initial public offering of the Common
Stock of OSI or (iii) upon the acquisition of OSI in which the shareholders of
OSI prior to the transaction own less than a majority of the surviving
corporation. At the sole discretion of OSL, payment of up to $5 million of the
total may be made in Common Stock of OSI having an agreed upon value of $20 per
share, such that the number of shares issued in lieu of a cash payment of $5
million would be 250,000 shares. In the event that the Common Stock of OSI is
subject to any subdivision or amalgamation prior to
4
<PAGE> 5
the issuance of such shares to the Defendants, then the number of shares issued
shall be increased or diminished so that the total value of the shares issued
equates to $5 million (or the applicable percentage thereof to be paid in stock)
based on the agreed upon value of $20 per presently existing share.
4.03 OSI Guaranty. Payment of the amounts due under Sections 4.01 and
4.02 above, whether in cash or shares, is hereby unconditionally guaranteed by
OSI; provided, however, that this guaranty shall be subordinated to any
obligations of OSI to its lender, and the Defendants agree to enter into any
subordination agreement reasonably requested by such lender to effect the
foregoing. If OSL fails to make any payment due or issue any shares due within
three days after such is due, such obligation shall immediately become the
obligation of OSI. The transfer of the obligation to OSI shall not however
limit the Defendants' rights to take any action at law to secure such
outstanding payment from OSL as well as OSI unless and until such outstanding
obligation is paid in full. If the payment or shares due are not paid within 30
days of written notice of default by the Defendants to OSI, then the right to
make partial payment in shares shall terminate and all outstanding sums shall be
due in cash. Overdue amounts shall bear interest at the rate of prime plus 2%.
4.04 Disclosure/Investment Representations. Each Defendant hereby
represents and warrants to OSI and OSL as follows:
(a) Such Defendant has had access to all information regarding
OSI, and its business, assets, liabilities and financial condition that such
Defendant reasonably considers important in agreeing to the $20 per share
valuation set forth above, and such Defendant has had ample opportunity to ask
questions of OSI's representatives concerning such matters. Without limiting the
foregoing, the Defendants agree to keep confidential any OSI financial
information provided to them pursuant to this Section 4.04(a), and to use such
information only for the purpose of valuing OSI shares.
(b) By reason of such Defendant's business or financial
experience, such Defendant is capable of evaluating the merits and risks of this
decision and has the ability to protect his or its own interests in this
transaction. Each Defendant expressly acknowledges that he or it is very
knowledgeable about the contact lens business. Such Defendant is making his or
its investment decision in this regard based solely on the Defendant's own
analysis of OSI, and such decision is not based on any representation, warranty
or statement made by OSI, OSL or any of its officers or directors.
(c) The Defendant understands and acknowledges that, in reliance
upon the representations and warranties made by the Defendants herein, any
shares issued to him or it will not be registered with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the
"Act"), or qualified under the California Corporate Securities Law of 1968, as
amended (the "Law"), but instead will be issued under an exemption or exemptions
from the registration and qualification requirements of such Act and Law, which
impose certain restrictions on the Defendants' ability to transfer the
certificates. Specifically, the Defendants understand that any shares issued to
them will not be transferable unless registered under the Act and qualified
under the Law, or unless an exemption from such registration or qualification is
available. The Defendants acknowledge that they will be acquiring any shares
issued to them pursuant to this Agreement for their own account for investment
purposes and not with a view to, or for sale in connection with, a distribution
of such shares within the meaning of
5
<PAGE> 6
the Act. The Defendants agree to execute an appropriate investment
representation letter at the time that any shares are issued to them pursuant to
this Agreement, and understand that any such shares will be appropriately
legended to reflect the restrictions set forth herein.
4.05 Mechanics of Payment. To the extent that cash is to be paid
hereunder, payment shall be made to the Defendants in pounds sterling, at the
spot dollar/sterling exchange rate published in the London Financial Times on
the date of payment. Payment in cash shall be made to such accounts, by wire
transfer or certified cheque drawn on a U.K. clearing bank, as OSL shall be
instructed in writing by GHG. Payment in stock shall be made by stock
certificates in such names as OSL shall be instructed in writing by GHG. The
Plaintiffs shall have no obligation or responsibility for the division of any
proceeds among the Defendants, and may rely entirely on instructions from GHG.
4.06 No Setoff/Other Matters. With respect to payment hereunder,
time is of the essence in this Agreement and all due payments and/or issuance of
stock certificates in lieu of cash shall be made within three working days of
the due date. Payment shall be due notwithstanding any dispute of any nature
between the parties hereto whether related to this Agreement or any other
matter. OSL expressly accepts that it shall have no right to setoff in relation
to the payment to be made hereunder nor any cause whatsoever to withhold such
payment. Notwithstanding the foregoing, nothing herein shall limit any other
remedies OSL may have in the event of breach of this Agreement or otherwise.
4.07 Taxes. The amounts set forth for payment to the Defendants
herein are pre-tax amounts. It is understood that the amounts actually to be
paid to the Defendants shall be net of any taxes to be withheld on account of
such payment. The parties agree that there will be 25% withholding on any
amounts paid by OSL hereunder, based on current law. The Defendants shall
provide OSL with any information reasonably requested by OSL to assist it to
determine the appropriate withholding amount. OSL shall provide the Defendants
with appropriate certification of any payments made to any taxing authority in
respect of such payments.
4.08 Other Amounts. For the avoidance of doubt, the parties
hereby confirm that no further amounts are owed (i) by AVCL to OSL under the
Purchase and Supply Agreement or (ii) by OSL to the Patent Owners under the
Patent License Agreement. OSL shall be entitled to the return of the
approximately 768,000 pounds sterling held in escrow at Royal Bank of Scotland.
4.09 Voting Trust. The parties acknowledge that, pursuant to
Section 8 hereof, the Patent Owners, OSI and Francis R. Tunney, Jr. are entering
into a Voting Trust Agreement. It is agreed that any shares issued pursuant to
Section 4.02 hereof shall be subject to such Voting Trust Agreement and that the
parties hereto will take any actions reasonably requested by OSI to implement
the foregoing.
5. Additional Payment to AVCL.
5.01 Payment. OSL will pay to AVCL a commission of [ ]* in respect of
each and every lens which is a "Covered Product," as defined in Section 5.02
below, and which is sold by OSI or OSL, or their agents, during the three-year
period commencing 1 January 1997, to any branch or franchise retail outlet of
[ ]* operating in the United Kingdom. Such payment shall be made in respect of
each quarterly period commencing on 1 January 1997 within 60 days of the end
of each quarterly period, and shall be accompanied by a statement certified
by the
6
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the Commission.
<PAGE> 7
Financial Director of OSL listing the number of Covered Products sold to
[ ]* in the United Kingdom in the quarterly period. OSL shall keep its
records regarding such information for at least three years after the end of the
relevant period. AVCL shall have the right, once per calendar year, upon 30 days
prior written notice to OSL and OSI, to review OSL's and OSI's books and records
regarding sales to [ ]* to verify the information provided to AVCL. Such
audit shall be at the expense of AVCL; provided, however, that if as a result of
such audit it is determined that the amounts owed to AVCL in any given quarter
were understated by more than 5%, then the cost of such audit shall be borne by
OSL. Upon the conclusion of any audit OSL shall pay to AVCL any amount underpaid
to AVCL, and AVCL shall pay to OSL any amount overpaid to AVCL. AVCL shall
maintain any information disclosed to them in confidence and shall not use such
information for any purpose other than verifying the amounts owed to them
hereunder.
5.02 Covered Products. A "Covered Product" is any contact lens having,
or labelled or otherwise claimed in writing to have, the characteristics listed
on Exhibit B. A contact lens will not be considered a Covered Product if one or
more of the parameters of such contact lens is outside the variance listed below
relative to the parameters of Covered Products listed on Exhibit B.
Lens Diameter [ ]* mm
Lens Base Curve [ ]* mm
Lens Centre Thickness [ ]* mm of nominal
thickness [ ]* power, and
normally incremented
thickness throughout power
range.
Lens Water Content [ ]*
A Covered Product that is manufactured from a material that incorporates an
ultra-violet inhibitor shall continue to be a Covered Product. Inclusion or
exclusion of a light handling tint will not affect whether a lens was considered
a Covered Product. If another company acquires OSI or OSL, or OSI or OSL
acquires another company, then the designs and brands of such other company will
not be considered Covered Products; provided, however, that if such company
sells OSI or OSL designs or brands, then such OSI or OSL designs or brands will
be considered Covered Products to the extent that they are within the designated
parameters.
6. Stock Ownership. Upon the signing hereof, OSI will deliver to the
Trustee under that certain Voting Trust Agreement (as defined in Section 8
below), for the benefit of the Patent Owners, share certificates for the shares
of OSI Common Stock to which the Patent Owners are entitled on account of OSI's
previous stock split. Separate certificates will be issued for the benefit of
each of the Patent Owners in the amounts set forth below:
Patent Owner Number of Shares
------------ ----------------
GHG 459,654
ADG 206,580
7
* Confidential treatment has been requested from the Securities and Exchange
Commision. Omitted portions have been filed separately with the Commission.
<PAGE> 8
BB 32,400
AHM 32,400
IBA 16,200
7. Registration Rights and Related Matters. Upon the signing hereof, OSI,
the Patent Owners and other shareholders of OSI will enter into an Amendment to
Registration Rights Agreement and Shareholder Agreement in the form attached
hereto as Exhibit C to provide certain priority registration rights to the
Patent Owners.
8. Voting Trust Agreement. Upon the signing hereof, the Patent Owners,
OSI and Francis R. Tunney, Jr., will enter into a Voting Trust Agreement in the
form attached hereto as Exhibit D. In connection therewith, the Patent Owners
will deliver to the Trustee all certificates held by them for shares of OSI
stock.
9. Patent License Agreement. Upon the signing hereof, the Patent Owners
and OSL will enter into a Patent License Agreement in the form attached hereto
as Exhibit E.
10. Return of Documentation and Media. Within 60 days of the signing
hereof, the parties will return to each other or destroy all documentation and
other media which belongs to the other parties hereto, including, without
limitation, documentation and other media discovered or otherwise obtained or
provided pursuant to the Actions, and each party warrants to the other that
within such 60 day period it will have returned or destroyed all documentation
and media of the other party in its possession and will not have taken or
retained any copies of such materials for future use. Notwithstanding the
foregoing, it is understood that AVCL may retain a copy of the documentation and
media to the extent that it is part of the Licensed Information. For the
avoidance of doubt, all documentation and media relating primarily to the
private affairs of ADG or the business of AVCL, and not materially related to
OSL's or OSI's business, which were removed from ADG's office at OSL Nursling
following termination of ADG's employment on 19th April 1994, shall be returned
to the respective owners. As to any documentation or media held by legal counsel
to the parties hereto, such may be returned by them, destroyed or retained by
them, provided that if they elect to retain such information they must agree in
writing to maintain the confidentiality of such information and not use such
information for any purpose (other than in connection with an arbitration of
this Agreement) or disclose such information to any person, including their
clients. For the avoidance of doubt, and notwithstanding any other provision
hereof, the Defendants and Plaintiffs each acknowledge that they do not have the
right to use and are not using information that was obtained from the other
after May 19, 1994, whether pursuant to the Actions or otherwise, except that
nothing herein limits the provisions of the Patent License Agreement.
11. Nondisparagement. The Plaintiffs hereby agree to not take any actions
to disparage the Defendants, and the Defendants hereby agree not to take any
actions to disparage the Plaintiffs, from and after the date hereof. AVCL, NFHC,
OSL and OSI shall instruct their respective employees, distributors and agents
to also not engage in any such disparagement. The foregoing shall not prevent
the parties hereto from competing with each other in good faith and in a
commercially reasonable manner.
12. Press Releases. OSI and AVCL may each issue a press release in the
forms attached hereto as Exhibits F-1 and F-2, respectively, within 15 days of
the signing of this Agreement. Except for such press releases, no party hereto
shall make any comment regarding
8
<PAGE> 9
this settlement or the dispute or legal proceedings between them. Following the
earlier of (i) the conclusion of such 15-day period or (ii) the issuance of the
press releases, no further comments will be made by any party concerning the
settlement or the disputes or legal proceedings between them, and any inquiry
for further particulars shall be met with a reference to the above-mentioned
press releases with no further comment. Nothing herein limits the ability of the
parties to make necessary disclosures to professional advisors, potential
investors or acquirors and government regulatory agencies. Notwithstanding the
above, either party shall have the right to refute in detail any
misrepresentations of the outcome of the Actions which are made by either party
or its agents or distributors to customers or business associates of the other
party. Such refutation may be made to the customer or associate to whom the
misrepresentation has been made and/or to the person making the
misrepresentation. The parties reserve the right to take action against any
third party which continues to make such misrepresentations.
13. Confidentiality.
13.01 Terms of Agreement. The parties hereto will keep the terms of
this Agreement confidential and will not disclose the same to any other persons
except for disclosures made in confidence to professional advisors, potential
investors or acquirors, and government regulatory agencies. Notwithstanding the
foregoing, each of the parties shall have the right to correct any material
misrepresentation of this Agreement made by the other party, or the other
party's agents or distributors, to customers or business associates of the first
party. Such correction may be communicated to the party making the
misrepresentation and the third party to whom such misrepresentation is made.
The parties reserve the right to take action against a third party which
continues to misrepresent the terms of this Agreement.
13.02 Covered Products Confidentiality. Notwithstanding any other
provision hereof, including, without limitation, Section 2.02, the parties
hereto agree to keep confidential and not to release to others information
concerning the detail design, formulation and curing conditions of lenses that
are Covered Products, except that nothing herein shall limit the ability of OSI
and AVCL to disclose information to a company that has acquired them. The
Defendants and their successors will not assist any third party, directly or
indirectly, whether or not such party is licensed under the Licensed Patents, to
reproduce any of the Covered Products, and hereby represent to the Plaintiffs
that they have not previously done so, with the exception that the Defendants
have previously assisted [ ]* in the manufacture of its own [ ]* lens, which
is a Covered Product. Nothing herein shall preclude either party from
manufacturing and selling Covered Products or from publishing or otherwise
disseminating information relating to such Covered Product to the extent
normally undertaken by contact lens manufacturers and/or historically practiced
by OSI or AVCL in connection with the marketing of lenses.
13.03 Covered Product Claims. The parties hereto shall not make any
claim that any Covered Product that they sell is the identical product or that
they are manufactured using the exact same technology as a product sold by the
other party. Nothing herein shall prevent the parties from disclosing
information relating to such Covered Products to the extent normally undertaken
by contact lens manufacturers and/or historically practiced by OSI or AVCL in
connection with the marketing of lenses.
14. Governing Law, Arbitration. All disputes arising from or related
to this Agreement, shall be resolved by binding arbitration. If the arbitration
is initiated by the Plaintiffs, then the arbitration shall be held in London,
England, shall be conducted by one or
9
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the Commission.
<PAGE> 10
more Queens Counsellors nominated by the London Common Law and Commercial Bar
Association, shall be governed by the law of England and Wales and shall be
conducted pursuant to the Rules of the London Court of International
Arbitration. If the arbitration is initiated by the Defendants, then the
arbitration shall be held in San Francisco, California, USA pursuant to the
Commercial Rules of Arbitration of the American Arbitration Association and
shall be governed by the laws of California. Any such arbitration shall be
conducted in a confidential manner. Notwithstanding the foregoing, the
Defendants may bring suit through normal legal channels in England and
California solely to enforce the Plaintiff's obligations under Sections 4.02 and
4.03 hereof. Such suit may not make any claims other than non-payment under
Section 4.02 and/or 4.03 hereof.
15. Severability. If any provision of this Agreement is found invalid or
unenforceable, that provision will be enforced to the maximum extent permissible
by law, and the other provisions of this Agreement will remain in full force and
effect.
16. Entire Agreement. This Agreement, together with the Exhibits hereto,
constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof, and supersedes in its entirety all prior and
contemporaneous agreements, understandings, negotiations and discussions between
the parties, whether oral or written, with respect to the subject matter hereof,
including, without limitation, that certain Heads of Settlement dated December
4, 1996. No supplement, modification or amendment to this Agreement will be
binding as to a given party unless executed in writing by such party; provided,
however, that GHG is authorized to agree to and execute supplements,
modifications and amendments on behalf of all Defendants other than AVCL.
17. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.
18. Notices. Any notice required or permitted to be given hereunder, shall
be given in writing, by delivery in person or by recognized express courier
addressed to the parties at their address set forth below their signatures, or
to such other place or places as any of the parties may have designated for that
purpose by written notice given in the manner provided herein to the other
parties hereto.
19. Further Assurances. The parties hereto will take any actions
reasonably requested by another party hereto to implement this Agreement.
20. Binding Effect. This Agreement is binding on, and shall inure to the
benefit of, the assigns, successors and heirs of the parties hereto. The parties
expressly acknowledge that this agreement may be assigned to an acquiror in
connection with an acquisition of OSI or AVCL.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the day and year first written above.
Aspect Vision Care Ltd. /s/ ALBERT HENRY MORLAND
-------------------------------
By: /s/ A.D. GALLEY Albert Henry Morland
------------------------------
Its: Director Address: 7 Bitterne Place,
----------------------------- Newport, Isle of Wight
Address: Unit 2, Northbridge Road
Berkhamstead, Hertfordshire /s/ IVOR ATKINSON
HP4 1EH England -------------------------------
Ivor Atkinson
New Focus Health Care Ltd. Address: 90 Queens Drive,
By: /s/ A.D. GALLEY Surbiton, Surrey, KT5 8PP
------------------------------ England
Its: Director
----------------------------- /s/ WILFRED TREVOR BROOKER
Address: Unit 2, Northbridge Road -------------------------------
Berkhamstead, Hertfordshire Wilfred Trevor Brooker
HP4 1EH England
Address: Grimbles Barn, Buckland Village
/s/ GEOFFREY HARRISON GALLEY Aston Clinton, Buckinghamshire
- ------------------------------- HP22 5HY England
Geoffrey Harrison Galley
Address: Red Lodge, The Close, Ocular Sciences Ltd.
Totteridge, London N20 8PJ By: /s/ JOHN D. FRUTH
England -----------------------------
Its: Director
/s/ ANTHONY DAVID GALLEY ----------------------------
- ------------------------------- Address: Reliant Close, Chandlers Ford,
Anthony David Galley Eastleigh, Hampshire S053 4ND
England
Address: Beacon Wey, The Hangers,
Bishops Waltham,
Hants S032 1FZ O.S.I. Corporation
England By: /s/ JOHN D. FRUTH
-----------------------------
/s/ BARRIE BEVIS Its: President
- ------------------------------- ----------------------------
Barrie Bevis Address: 475 Eccles Avenue
So. San Francisco, CA 94080
Address: 53, Wilderness Heights, USA
West End, Southampton S03 3PS
England
/s/ JOHN D. FRUTH
-------------------------------
John David Fruth
Address: c/o OSI Corporation
475 Eccles Avenue
So. San Francisco, CA 94080
USA
(Settlement Agreement and Release]
11
<PAGE> 12
List of Exhibits
A-1 Stipulation of Dismissal of U.S. Action
A-2 Stipulation of Dismissal of U.K. Action
A-3 Stipulation of Dismissal of U.K. Action
B Covered Products
C Amendment to Registration Rights Agreement and Shareholder Agreement
D Voting Trust Agreement
E Patent License Agreement
F-1 OSI Press Release
F-2 AVCL Press Release
12
<PAGE> 13
EXHIBIT A-1
STIPULATION OF DISMISSAL OF U.S. ACTION
<PAGE> 14
Terence M. Fruth Filed February 28, 1997
Thomas E. Jamison RICHARD W. WIEKING
FRUTH & ANTHONY, P.A. Clerk, U.S. District Court
3750 IDS Center Northern District of California
80 S. Eighth Street
Minneapolis, MN 55402
Telephone: 612-349-6969
Timothy K. Roake, SBN 99539
FENWICK & WEST LLP
Two Palo Alto Square
Palo Alto, CA 94306
Telephone: 415-494-0600
Attorneys for Plaintiff, O.S.I.
Corporation, d/b/a Ocular
Sciences/American Hydron, Inc.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
No. C95-0054 VRW (CMP)
STIPULATION RE DISMISSAL WITH PREJUDICE AND ORDER
O.S.I. Corporation, d/b/a
Ocular Sciences/American Hydron
Plaintiff,
v.
Geoffrey H. Galley, Anthony D. Galley, Albert H. Morland,
Ivor Atkinson and Barrie Bevis,
Defendants.
The parties hereto, by and through their respective counsel, pursuant
to Federal Rules of Civil Procedure, Rule 41(a)(1), and pursuant to a
Settlement Agreement And Release dated as of February 27, 1997, hereby
stipulate that this matter may now be, and should be, dismissed with prejudice.
STIPULATION RE DISMISSAL WITH PREJ. & [PROPOSED] ORDER
CASE NO. C95-0054-VRW
<PAGE> 15
The parties further stipulate that each party hereby waives any right
to reimbursement of any costs or fees in this action.
Dated: February 28, 1997 FRUTH & ANTHONY, P.A.
and
FENWICK & WEST LLP
By /s/ TIMOTHY K. ROAKE
-----------------------------------
Timothy K. Roake
Attorneys for Plaintiff O.S.I.
Corporation, d/b/a Ocular
Sciences/American Hydron, Inc.
Dated: February 27, 1997 BROWNE & WOODS
By /s/ ROBERT B. BROADBELT
-----------------------------------
Robert B. Broadbelt, Esq.
Attorneys for Defendants
Geoffrey H. Galley and
Anthony D. Galley
ORDER
IT IS SO ORDERED.
Dated: February __, 1997. By [SIG]
-----------------------------------
UNITED STATES DISTRICT JUDGE
STIPULATION RE DISMISSAL WITH PREJ. & [PROPOSED] ORDER
CASE NO. C95-0054-VRW
<PAGE> 16
EXHIBIT A-2
STIPULATION OF DISMISSAL OF U.K. ACTION
<PAGE> 17
Exhibit A-2
IN THE HIGH COURT OF JUSTICE CH 1995 P No 106
CHANCERY DIVISION
PATENTS COURT
BETWEEN:
(1) OCULAR SCIENCES LIMITED
(formerly Precision Lens Laboratories Limited)
(2) OSI CORPORATION
(A Corporation incorporated under the
laws of State of California)
Plaintiffs
- and -
(1) ASPECT VISION CARE LIMITED
(2) NEW FOCUS HEALTH CARE LIMITED
(3) ANTHONY DAVID GALLEY
(4) GEOFFREY HARRISON GALLEY
(5) ALBERT HENRY MORLAND
(6) IVOR ATKINSON
(7) BARRIE BEVIS
(8) W TREVOR BROOKER
Defendants
---------------------
CONSENT ORDER
---------------------
UPON THE Plaintiffs and Defendants by the respective solicitors agreeing in
writing to this Order by the countersigning thereof,
BY CONSENT IT IS ORDERED THAT
1. These proceedings, including without limitation all claims and
counterclaims, be dismissed; and
2. There be no order as to costs.
/s/ BRISTOWS COOKE & CARPMAEL /s/ BOND PEARCE
- ----------------------------- ---------------
Bristows Cooke & Carpmael Bond Pearce
(Solicitors for the Plaintiffs) (Solicitors for the Defendants)
Dated this 27th day of Feb. 1997
<PAGE> 18
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
CH 1995 P No 106
BETWEEN:
(1) OCULAR SCIENCES LIMITED
(formerly Precision Lens Laboratories Limited)
(2) OSI CORPORATION
(A Corporation incorporated under the
laws of the State of California)
Plaintiffs
- and -
(1) ASPECT VISION CARE LIMITED
(2) NEW FOCUS HEALTH CARE LIMITED
(3) ANTHONY DAVID GALLEY
(4) GEOFFREY HARRISON GALLEY
(5) ALBERT HENRY MORLAND
(6) IVOR ATKINSON
(7) BARRIE BEVIS
(8) W TREVOR BROOKER
Defendants
---------------------
ORDER
---------------------
Messrs Bristows Cooke & Carpmael
10 Lincoln's Inn Fields
London
WC2A 3BP
Solicitors for the Plaintiffs
Tel: 0171 400 8000
Fax: 0171 400 8050
Ref: 277/C
- 2 -
<PAGE> 19
EXHIBIT A-3
STIPULATION OF U.K. ACTION
<PAGE> 20
Exhibit A-3
IN THE HIGH COURT OF JUSTICE CH 1995 G No 1116
CHANCERY DIVISION
PATENTS COURT
BETWEEN:
(1) GEOFFREY HARRISON GALLEY
(2) ANTHONY DAVID GALLEY
(3) ALBERT HENRY MORLAND
(4) BARRIE BEVIS
(5) IVOR ATKINSON
Plaintiffs
- and -
OCULAR SCIENCES LIMITED
Defendant
---------------------
CONSENT ORDER
---------------------
UPON THE Plaintiffs and Defendant by the respective solicitors agreeing in
writing to this Order by the countersigning thereof,
BY CONSENT IT IS ORDERED THAT
1. These proceedings, including without limitation all claims and
counterclaims, be dismissed; and
2. There be no order as to costs.
/s/ BOND PEARCE /s/ BRISTOWS COOKE & CARPMAEL
- --------------- -----------------------------
Bond Pearce Bristows Cooke & Carpmael
(Solicitors for the Plaintiffs) (Solicitors for the Defendant)
Dated this 27th day of Feb. 1997
<PAGE> 21
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
CH 1995 G No 1116
BETWEEN:
(1) GEOFFREY HARRISON GALLEY
(2) ANTHONY DAVID GALLEY
(3) ALBERT HENRY MORLAND
(4) BARRIE BEVIS
(5) IVOR ATKINSON
Plaintiffs
- and -
OCULAR SCIENCES LIMITED
Defendant
---------------------
CONSENT ORDER
---------------------
Messrs Bristows Cooke & Carpmael
10 Lincoln's Inn Fields
London
WC2A 3HP
Solicitors for the Defendant
Tel: 0171 400 8000
Fax: 0171 400 8050
Ref: 277/C
- 2 -
<PAGE> 22
CONFIDENTIAL VERSION
EXHIBIT B
COVERED PRODUCTS
1. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
Nominal Center Thickness: [ ]*
2. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
[ ]*
Nominal Center Thickness: [ ]*
3. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
Nominal Center Thickness: [ ]*
4. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
Nominal Center Thickness: [ ]*
5. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
Nominal Center Thickness: [ ]*
<PAGE> 23
6. [ ]*
Material: [ ]*
Water Content: [ ]*
Fittings: [ ]*
Powers: [ ]*
Nominal Center Thickness: [ ]*
All of the above specified lenses being of a design having [ ]*.
* Confidential treatment has been requested from the Securities and
Exchange Commission. Omitted portions have been filed separately with the
Commission.
<PAGE> 24
EXHIBIT C
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT AND SHAREHOLDER AGREEMENT
Filed as Exhibit 4.02 to the Registrant's Registration Statement on Form S-1
filed May 19, 1997 (Registration No. 333-27421).
<PAGE> 25
EXHIBIT D
VOTING TRUST AGREEMENT
<PAGE> 26
EXHIBIT D
VOTING TRUST AGREEMENT
This Voting Trust Agreement (the "Agreement") is entered into and
effective as of February 27, 1997, by and among Geoffrey H. Galley, Anthony D.
Galley, Barrie Bevis, Albert H. Morland and Ivor Atkinson (collectively, the
"Shareholders"), Francis R. Tunney, Jr. as Trustee (Mr. Tunney, or any successor
Trustee appointed in accordance herewith, is referred to as the "Trustee"), and
O.S.I. Corporation, a California corporation (the "Company").
RECITALS
A. The Shareholders are current shareholders of the Company and, in
the aggregate, hold 996,312 shares of the Company's Common Stock.
B. Pursuant to a Settlement Agreement and Release dated as of the
date hereof by and among the Shareholders, the Company and certain other
parties, the Shareholders have agreed to place all of their shares of the
Company's voting stock in a voting trust to be voted as set forth herein.
In consideration of the mutual covenants herein contained, the
Shareholders, the Trustee and the Company agree as follows:
1. Purpose of Voting Trust. The purpose of this Voting Trust is to
ensure that, during the term of this Agreement, all votes, actions and consents
to be taken with respect to all shares of voting stock of the Company now owned,
or to be owned in the future, by the Shareholders shall be taken by the Trustee
on behalf of the Shareholders.
2. Transfer of Voting Stock to Trustee. Each of the Shareholders
shall, upon execution of this Agreement, duly endorse or cause to be endorsed in
blank the certificate or certificates representing all shares of the Company's
voting stock now owned (whether of record or beneficially) by such Shareholder,
and will deliver the same to the Trustee. Each Shareholder further agrees that,
during the term of this Agreement, such Shareholder will likewise immediately
endorse and deliver to the Trustee any and all certificates for additional
shares of the Company's voting stock that such Shareholder may hereafter
acquire. Shares of the Company's stock which the Shareholders are required to
deliver to the Trustee under this Section 2 shall be hereinafter collectively
referred to as the "Shares". Promptly upon receipt of such certificates, the
Trustee shall cause such Shares to be transferred in the name of the Trustee or
a nominee name designated by the Trustee on the Company's books and records, and
shall file a duplicate copy of this Agreement with the Secretary of the Company.
The failure by any Shareholder to deliver certificates for Shares to the Trustee
shall not affect or impair the trust created hereby or the rights of the Trustee
under this Agreement.
<PAGE> 27
3. Voting Trust Certificates.
(a) Issuance. Pursuant to Section 25102(f) of the California
Corporations Code and in reliance on the representations of each Shareholder in
Section 7 of this Agreement, the Trustee shall issue and deliver to each
Shareholder a Voting Trust Certificate (a "Certificate") representing the Shares
deposited with and held by the Trustee for the benefit of such Shareholder under
this Agreement. Such Certificates shall be in the form of Exhibit "A" hereto and
shall be signed by the Trustee.
(b) Certificate Book. The Trustee shall keep correct books
of account of all his business and transactions in his capacity as Trustee; and
shall also keep a book to be known as the Certificate Book, containing the names
of all persons who are Shareholders, showing their mailing addresses, the number
and type of Shares represented by the Certificates held by them and the date on
which they became the owner thereof.
(c) Legend. The Certificates shall be legended with all
legends with which the underlying Shares were required to be legended, together
with substantially the following legend:
THE SHARES REPRESENTED BY THIS VOTING TRUST CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING TRUST
AGREEMENT DATED FEBRUARY __, 1997, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL OFFICE OF O.S.I. CORPORATION, AND THESE
SHARES MAY NOT BE SOLD, PLEDGED, GIFTED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF SUCH VOTING TRUST AGREEMENT.
(d) Lost Certificates. If a Certificate shall be lost,
stolen, mutilated or destroyed, the Trustee, in his discretion, may issue a
duplicate of such Certificate upon receipt of evidence of such loss satisfactory
to him and an indemnity agreement satisfactory to him, and upon receipt of the
existing Certificate, if mutilated. The Trustee may also require the holder of
such Certificate to pay fees and expenses as may be applicable to the reissuance
of a duplicate Certificate.
(e) Registered Owner. The Trustee may treat the registered
holder of each Certificate as the absolute owner thereof for all purposes
whatsoever, and accordingly shall not be required to recognize any legal,
equitable or other claim or interest in such Certificate on the part of any
other person, whether or not it or they shall have express or other notice
thereof.
(f) Transfer Procedures. A Certificate shall be transferable
on the books of the Trustee by the registered holder thereof, only to the extent
that the underlying Shares were transferable by the applicable Shareholder, in
person or by attorney-in-fact, and upon surrender of such Certificate duly
endorsed for assignment or accompanied by a duly executed instrument of
assignment, and upon payment of any transfer taxes or other charges in
connection with the transfer. All permitted transfers of Certificates shall be
recorded in the Certificate Book and any permitted transfer made of any
Certificate shall vest in the transferee all rights of the transferor,
2
<PAGE> 28
and shall subject the transferee to the same limitations as those imposed on the
transferor by the terms of the Certificate and this Agreement. Upon any such
permitted transfer, the Trustee shall deliver a Certificate to such transferee
representing the number of Shares represented by the Certificate so transferred.
Each permitted transferee of a Certificate shall be deemed to be a Shareholder
under this Agreement. If a transfer is to be made of less than all of the Shares
represented by a Certificate, the Trustee shall reissue to the transferor a
Certificate with respect to the Shares being retained by transferor.
(g) Securities Laws Compliance and Compliance with Other
Agreements. Neither the Shares nor the Certificates have been registered under
the Securities Act of 1933, as amended (the "Act") or registered or qualified
for resale under any applicable state law regulating securities. The
Certificates may not be offered, sold, transferred or hypothecated in the
absence of registration or the availability of an exemption from registration
under the Act and any applicable state law regulating securities. Each
Shareholder agrees not to sell, transfer, pledge or hypothecate such Certificate
unless the Trustee shall be reasonably satisfied that such sale or other
disposition does not violate the provisions of any agreement to which the
Shareholder is a party and unless either: (i) the transfer of the Certificate is
registered under the Act pursuant to a current and effective registration
statement at the time of such sale, transfer, pledge or hypothecation and is
registered or qualified under any applicable state law regulating securities; or
(ii) the Trustee has been furnished an opinion of counsel satisfactory in form
and substance to the Trustee that the Certificate may be so transferred or
disposed of without such registration or qualification. Each holder of
Certificate agrees that the Trustee may refuse to transfer any Certificate
except as aforesaid.
4. Acceptance of Trust. The Trustee, by executing this Agreement,
and each successor Trustee upon being appointed as such, accepts the voting
trust created hereby and agrees to carry out the terms and provisions hereof.
5. Trustees Rights, Powers, Duties and Expenses.
(a) Voting Rights. During the term of this Agreement, and
except as otherwise provided herein, the Trustee shall possess and shall be
entitled to exercise, with respect to the Shares, in person, or by his agent,
attorney-in-fact, or proxies, all voting rights and powers of absolute owners
and holders of such Shares, specifically including the right to vote, assent or
consent with respect thereto, and to take part in and consent to any corporate
or shareholder action of any kind whatsoever, whether by a vote at a meeting of
shareholders or by written consent, and to receive stock distributions with
respect to said Shares as provided in subsection 5(e) herein. In all such votes
the Trustee will vote the Shares in the same manner and same percentage as
Allergan, Inc., or any successor corporation ("Allergan") and Galen Partners,
L.P. and Galen Partners International, L.P., or any successor entity ("Galen")
vote their shares of the voting stock of the Company, in the aggregate. For
example, if Allergan and Galen, when taken together, vote 80% of their shares
for an issue and 20% against, then the Shares shall also be voted 80% for and
20% against. Notwithstanding anything to the contrary herein, the Trustee will
not vote the Shares in favor of any action that would materially and adversely
affect the rights of the Shareholders in a different manner than the other
Common Stock shareholders of the Company, as determined by the Trustee.
3
<PAGE> 29
(b) Scope of Voting Rights. The right of the Trustee to
vote, assent or consent with respect to the Shares shall include, without
limitation, the right to vote at any election of directors, to vote on any
proposal to amend the articles of incorporation and/or by-laws of the Company,
to vote in favor of, or in opposition to, approval of any merger, consolidation,
dissolution, liquidation or reorganization of the Company and on any other
action of any character whatsoever which may be presented at any meeting or
require the consent of shareholders of the Company.
(c) No Right to Sell Shares. The Trustee shall have no
authority to sell, pledge, hypothecate, or otherwise dispose of any of the
Shares deposited pursuant to this Agreement.
(d) Permitted Activities. The Trustee and any firm,
corporation, trust, or association of which Trustee may be a trustee, owner,
member, shareholder, director, officer, agent, or employee may contract with or
may become financially interested in any matter or transaction to which the
Company or any subsidiary or controlled or affiliated corporation may be a party
or in which it may be concerned, as fully and freely as though such Trustee were
not a trustee hereunder. The Trustee may act as a director and/or officer of the
Company or of any subsidiary or controlled or affiliated corporation of the
Company, and may vote the Shares held hereunder in favor of his election as
such. The Shareholders acknowledge that the Trustee is currently a director of
the Company and the general counsel of Allergan, Inc., a major shareholder of
the Company.
(e) Notices, Dividends and Distributions.
(i) Notices. The Trustee shall forward to each
Shareholder copies of all notices, reports, statements and other communications
received from the Company with respect to the Shares.
(ii) Non-Stock Distributions. Each Shareholder shall
be entitled to receive payments equal to the amount of cash dividends, if any,
collected or received by the Trustee upon the number of Shares in respect of
which such Shareholder is the registered holder of a Certificate, less the
deductions provided for in subsection 5(e)(vi) below. Such payments shall be
made, as soon as practicable after the receipt of such dividends, to the
Certificate holders registered as such at the close of business on the record
date determined by the Company for such dividend. In his discretion, the Trustee
may arrange with the Company for the direct payment by the Company of dividends
to the registered Certificate holders.
(iii) Stock Distributions. If the Trustee shall
receive, as a dividend or other distribution upon any Shares held by him under
this Agreement, any additional shares of the Company's stock having voting power
(as that term is defined in the California General Corporation Law), or
convertible into or exchangeable for securities having such voting power, the
Trustee shall hold the same subject to this Agreement in proportion to the
Shareholders' respective interests as shown on the books of the Trustee. The
Trustees shall issue Certificates with respect of such shares or other
securities to the Shareholders as their interests may appear.
4
<PAGE> 30
(iv) Dissolution of the Company. Notwithstanding
anything to the contrary herein, in the event that upon dissolution or total or
partial liquidation of the Company, whether voluntary or involuntary, the
Trustee shall receive the moneys, securities, rights or property to which the
holders of the Shares deposited hereunder are entitled, then the Trustee shall
distribute the same among the Shareholders in accordance with the terms of the
Company's Articles of Incorporation in proportion to the Shareholders'
respective interests as shown by the books of the Trustee, less the deductions
provided for in subsection 5(e)(vi) below, or the Trustee may in his discretion
deposit such moneys, securities, rights or property with any bank or trust
company with authority and instructions to distribute the same as above
provided, and upon such deposit all further obligations or liabilities of the
Trustee in respect of such moneys, securities, rights or property so deposited
shall cease.
(v) Other Distributions. If the Trustee shall
receive or collect any moneys or property through a distribution by the Company
to its shareholders not covered by subsections 5(e)(ii), (iii) or (iv) hereof,
then the Trustee shall distribute the same to the Shareholders in proportion to
their respective interests as shown on the books of the Trustee, less the
deductions provided for in subsection 5(e)(vi) below.
(vi) Withholdings. There shall be deducted and
withheld from every distribution under this Agreement any taxes, assessments,
and other amounts that may be required by law to be deducted or withheld.
(f) Use of Discretion; Limited Liability.
(i) In voting, or otherwise acting hereunder with
respect to the Shares deposited hereunder, the Trustee shall be entitled to
exercise his own absolute discretion and judgment subject to the conditions
imposed by subsection 5(a) hereof; and neither the Trustee nor any of his agents
shall incur any responsibility or liability by reason of any error of law or
anything done or suffered or omitted, except for individual willful misconduct
or gross negligence. Neither the Trustee nor any of his agents shall be required
to give any bond or other security for the discharge of duties.
(ii) Under no circumstances will the Trustee be
obligated to notify, confer with or seek the advice, consent, counsel, approval,
confirmation or ratification of the Shareholders with regard to any matter which
does or may be submitted to the shareholders of the Company for their approval.
The Trustee will not be liable to the Shareholders for any vote cast by the
Trustee in accordance with the terms of this Agreement.
(g) Expenses of Trustee. The Trustee may employ counsel, and
provide for such other assistance as may be convenient, in the performance of
his functions. The Company shall indemnify the Trustee against all expenses,
claims and liabilities incurred by him in connection with or arising out of this
Agreement for the discharge of his duties hereunder to the full extent permitted
by law. The Company shall, at the request of the Trustee, advance funds to pay
expenses incurred for legal or other assistance provided to the Trustee or for
legal fees or other expenses incurred by the Trustee in the defense of any
action, claim or proceeding arising as aforesaid.
5
<PAGE> 31
(h) Construction of Agreement. The Trustee is authorized and
empowered to construe this Agreement, and his reasonable construction made in
good faith shall be conclusive and binding upon the Shareholders and upon all
parties hereto. The Trustee may consult with legal counsel, which may but need
not be counsel to the Company, and any action under this Agreement taken or
permitted in good faith by him in accordance with the opinion of such counsel
shall be conclusive upon the Shareholders and upon all parties hereto, and the
Trustee shall be fully protected and be subject to no liability with respect to
such action.
6. Rights of Shareholders. The Shareholders shall have rights in
the Certificates and in the Shares deposited in trust by such Shareholders
subject to the terms and provisions of this Agreement. Any heir, assignee or
transferee or person entitled to an interest in the rights of the Shareholders
to the Voting Trust Certificates or the Shares deposited by such Shareholders in
trust hereunder shall be subject to and bound by the provisions of this
Agreement.
7. Representations of Shareholders. Each Shareholder hereby
represents and warrants to the Trustee and the Company that:
(a) such Shareholder is acquiring the Certificate(s) for
such Shareholder's own account for investment purposes only and not with a view
to, or for sale in connection with, a distribution of the Certificate(s) within
the meaning of the Act;
(b) such Shareholder has had access to all information
regarding the Company and its present and prospective business, assets,
liabilities and financial condition that such Shareholder reasonably considers
important in making the decision to acquire the Certificate(s), and the
Shareholder has had ample opportunity to ask questions of the Company's
representatives concerning such matters and this acquisition;
(c) By reason of such Shareholder's business or financial
experience or the business or financial experience of such Shareholder's
professional advisors who are unaffiliated with and who are not compensated by
the Company or the Trustee, such Shareholder is capable of evaluating the merits
and risks of this investment and has the ability to protect such Shareholder's
own interests in this transaction; and
(d) such Shareholder understands and acknowledges that, in
reliance upon the representations and warranties made by such Shareholder
herein, the Certificate(s) are not being registered with the Securities and
Exchange Commission ("SEC") under the Act or being qualified under the
California Corporate Securities Law of 1968, as amended (the "Law"), but instead
are being issued under an exemption or exemptions from the registration and
qualification requirements of the Act and the Law which impose certain
restrictions on such Shareholder's ability to transfer the Certificate(s).
8. Successor Trustee. The Company and the Shareholders holding
Certificates representing a majority in interest in the Shares may at any time
jointly remove the Trustee from office and appoint a successor Trustee. The
Trustee may at any time resign by delivering to the Company his resignation in
writing, to be effective in accordance with its terms. Except as otherwise
provided herein, if the Trustee shall resign, or in the event of the death or
incapacity to
6
<PAGE> 32
act of a Trustee, then a successor will be appointed jointly by the Company and
the Shareholders holding Certificates representing a majority in interest in the
Shares. If a successor Trustee has not been appointed within 30 days of the
resignation, removal or death of the current Trustee, then the successor Trustee
shall be William Grant.
9. Reorganization of Company. In case the Company is merged into or
consolidated with another corporation, then in connection with such transfer the
term "Company" for all purposes of this Agreement shall be taken to include such
successor corporation, and the Trustee shall receive and hold under this
Agreement the stock of such successor corporation received on account of the
ownership, as Trustee hereunder, of the stock held hereunder prior to such
merger or consolidation. Certificates issued and outstanding under this
Agreement at the time of such merger or consolidation may remain outstanding, or
the Trustee may, in his discretion, substitute for such Certificates new
Certificates in appropriate form, and the term "Shares" as used herein shall be
taken to include any stock which may be received by the Trustee in lieu of all
or any part of the Shares. Nothing herein shall limit the applicability of
Section 10(b)(ii) regarding the termination of this Agreement in the event of a
merger or consolidation meeting certain requirements.
10. Term and Termination.
(a) Irrevocable During Term. The voting trust created by
this Agreement is hereby expressly declared to be irrevocable during its term,
and may not be terminated except as provided in subsection 10(b) below.
(b) Term. The term of this Agreement shall commence on the
date of this Agreement and shall terminate upon the first to occur of any of the
following events:
(i) the second anniversary of the date hereof;
(ii) the effective date of a merger or consolidation
of the Company with or into any other corporation or a sale of all or
substantially all of the Company's assets, where the Company's shareholders
prior to such transaction do not retain stock representing a majority of the
voting power of the surviving corporation of such transaction;
(iii) the date on which a registration statement
relating to the Company's initial public offering of its Common Stock is
declared effective by the Securities and Exchange Commission; or
(iv) the voluntary or involuntary dissolution of the
Company.
(c) Post-Termination Procedures. As soon as practicable
after the termination of this Agreement, the Trustee shall deliver to each
Shareholder share certificates or securities representing the number of Shares
or other securities in respect of which Certificates registered in the name of
such Shareholder were issued, upon the surrender of such Certificate properly
endorsed and upon payment of a sum sufficient to cover any tax or governmental
charge applicable to the transfer or delivery of such Certificates. If any such
Shareholder cannot be located or fails or refuses to surrender Certificates in
exchange for shares or other securities as
7
<PAGE> 33
provided for above, the Trustee may, in his discretion, deliver said Shares or
other securities to the Company or to any bank or trust company in California
for the benefit of the person or persons entitled thereto. Upon any such
delivery, the Trustee will be fully acquitted and discharged from all
responsibility or liability with respect to said shares or other securities.
11. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (i) on
the date of service if delivered personally or (ii) on the date of deposit for
delivery with a commercial express courier service, in each case addressed as
follows: if to registered holders of Certificates, at the address for each such
holder set forth on his Certificate; if to the Trustee at the address specified
below its signature on this Agreement; if to the Company, at 475 Eccles Avenue,
South San Francisco, CA 94080; or such different address as may be specified to
the other parties by notice given as provided herein.
12. Filing, Inspection Rights. A duplicate of this Agreement and of
each amendment hereto shall be kept on file with the Secretary of the Company
and shall be open to inspection by any holder of a Certificate or any
shareholder of the Company on the same terms as the record of shareholders of
the Company is open to inspection.
13. Amendment. Except as otherwise provided, any term of this Voting
Trust may be amended and the observance of any term of this Voting Trust may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the consent of the Company, the Trustee and
Shareholders holding Certificates representing a majority in interest in the
Shares.
14. Successors and Assigns. Except as expressly set forth to the
contrary in this Agreement, this Agreement shall be binding upon and inure to
the benefit of the successors, assigns, heirs, administrators, executors and
legal representatives of the parties hereto; provided, however, that the
transfer of any interest in this Agreement shall be subject to the transferee's
consent to be bound by all provisions of this Agreement.
15. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one instrument.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, excluding that body of
law relating to conflict of laws.
17. Severability. If at any time any provision of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void, or
unenforceable in any respect, then such provision shall be enforced only to the
extent to which it shall be valid and enforceable, and any such invalidity or
unenforceability shall not affect any other provisions of this agreement. If any
unenforceable provision of this Agreement may be modified so as to be
enforceable under applicable law, then such provision shall be deemed to have
been modified so as to be enforceable to the fullest extent permitted by law.
8
<PAGE> 34
18. Captions. The captions to Sections of this Agreement have been
inserted for identification and reference purposes and shall not by themselves
determine the construction or interpretation of this Agreement.
19. Entire Agreement. This Agreement represents the entire agreement
of the parties with respect to the subject matter hereof, and supersedes any
prior agreement or understandings, whether written or oral, regarding such
subject matter.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]
9
<PAGE> 35
IN WITNESS WHEREOF, the Company, the Trustee and the Shareholders have
executed this Voting Trust Agreement as of the date first written above.
TRUSTEE: THE COMPANY:
/s/ Francis R. Tunney, Jr. By: /s/ John Fruth
- ------------------------------- -------------------------------
Francis R. Tunney, Jr.
c/o Allergan, Inc. Name: John Fruth
2525 DuPont Drive -----------------------------
Irvine, CA 92612 Title: President
----------------------------
Address: 475 Eccles Avenue
South San Francisco, California 94080
SHAREHOLDERS: U.S.A.
The undersigned hereby agrees to serve as
/s/ Geoffrey H. Galley the successor Trustee, as contemplated by
- ------------------------------- Section 8, if necessary
Geoffrey H. Galley
Address: Red Lodge, The Close, /s/ William Grant
Totteridge, London N20 8PJ ----------------------------------
England William Grant
/s/ Anthony D. Galley Address: 200 E. 66th St. #2007
- ------------------------------- New York, NY 10021
Anthony D. Galley
Address: Beacon Wey, The Hangers
Bishops Waltham, Hants S032 1FZ
England
/s/ Barrie Bevis
- -------------------------------
Barrie Bevis
Address: 53, Wilderness Heights,
West End, Southampton S03 3PS
England
/s/ Albert H. Morland
- -------------------------------
Albert H. Morland
Address: 7 Bitterne Place,
Newport, Isle of Wight
/s/ Ivor Atkinson
- -------------------------------
Ivor Atkinson
Address: 90 Queens Drive,
Surbiton, Surrey, KT5 8PP
England
[VOTING TRUST AGREEMENT]
10
<PAGE> 36
EXHIBIT A TO VOTING TRUST AGREEMENT
VOTING TRUST CERTIFICATE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH THE TERMS AND
CONDITIONS SET FORTH IN A SHAREHOLDERS' AGREEMENT, DATED
OCTOBER 30, 1992, AS AMENDED FEBRUARY __, 1997, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF O.S.I. CORPORATION (THE
"COMPANY") AND WHICH WILL BE FURNISHED BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE. NO
TRANSFER OF SUCH SECURITIES WILL BE ALLOWED UNLESS ACCOMPANIED
BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."
THE SHARES REPRESENTED BY THIS VOTING TRUST CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING TRUST
AGREEMENT DATED FEBRUARY __, 1997, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL OFFICE OF THE COMPANY, AND THESE SHARES MAY
NOT BE SOLD, PLEDGED, GIFTED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS
OF SUCH VOTING TRUST AGREEMENT.
Certificate No. __________
This certifies that the undersigned Trustee has received from
__________________, of [address], __________ share certificates representing
___________ shares of the common stock of O.S.I. Corporation, a California
corporation (the "Company"), and that such shares are held and are to be held by
the Trustee subject to the terms and conditions of a Voting Trust Agreement
dated February __, 1997 by and among various shareholders of the Company, the
Company and
<PAGE> 37
the undersigned Trustee (the "Voting Trust Agreement"), a copy of which is on
file with the Secretary of the Company. During the term of the Voting Trust
Agreement, the Trustee, or his successor, shall possess and be entitled to the
exclusive right to vote such shares upon the terms and conditions stated in the
Voting Trust Agreement. The terms and conditions of the Voting Trust Agreement
are incorporated herein by reference.
During the term of the Voting Trust Agreement, the holder of this
certificate shall be entitled to all dividends and distributions and all other
benefits attributable to the share certificates transferred to the Trustee,
subject to the terms and conditions of the Voting Trust Agreement.
Subject to the terms and conditions of the Voting Trust Agreement, this
Voting Trust Certificate is transferable on the books of the Trustee only by the
registered holder hereof upon the surrender hereof, properly endorsed by the
registered holder, to the Trustee. The holder of this Voting Trust Certificate,
by the acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement.
Upon termination of the Voting Trust Agreement, and subject to its terms
and conditions, the Trustee will deliver to the holder of this Voting Trust
Certificate share certificates representing the number of shares designated
above, on surrender to the Trustee of this Voting Trust Certificate, properly
endorsed by the holder, together with payment of a sum sufficient to cover any
expenses relating to transfer and delivery of said share certificates.
Dated:
-------------------------------
TRUSTEE
-----------------------------------
Francis R. Tunney, Jr.
2
<PAGE> 38
EXHIBIT E
PATENT LICENSE AGREEMENT
Filed as Exhibit 10.10 to the Registrant's Registration Statement on Form S-1
filed May 19, 1997 (Registration No. 333-27421).
<PAGE> 39
EXHIBIT F-1
OCULAR SCIENCES LTD AND ASPECT VISION CARE LTD. AGREE TO SETTLE
LEGAL DISPUTES
OCULAR SCIENCES LTD AND ASPECT VISION CARE LTD., HAVE AGREED
TO ENTER INTO A GLOBAL SETTLEMENT TERMINATING ALL DISPUTES
BETWEEN THEM.
BOTH OSL AND ASPECT CONTINUE TO HOLD LICENSES TO MAKE, USE
AND SELL CONTACT LENSES WORLDWIDE UNDER PATENTS HELD BY GH
GALLEY AND OTHER INDIVIDUALS COLLECTIVELY KNOWN AS THE
PATENT OWNERS.
THE PARTIES HAVE AGREED TO CONCENTRATE ON THE FURTHER GROWTH
AND DEVELOPMENT OF THEIR RESPECTIVE BUSINESSES IN THE
WORLDWIDE CONTACT LENS MARKET, AND TO MAKE NO FURTHER
COMMENT IN RELATION TO THEIR PREVIOUS DISPUTE.
<PAGE> 40
EXHIBIT F-2
ASPECT VISION CARE WINS IN HIGH COURT
JUDGMENT WAS GIVEN BY JUSTICE LADDIE ON 11TH NOVEMBER IN
ASPECT VISION CARE'S LONG RUNNING SUIT WITH OCULAR SCIENCES
LTD AND OSI CORPORATION.
AFTER 30 MONTHS OF LITIGATION AND EIGHT WEEKS OF HEARINGS IN
THE HIGH COURT THE JUDGE RULED THAT OSL BREACHED ITS SUPPLY
CONTRACT WITH AVCL.
THE TWO COMPANIES HAVE NOW AGREED TO SETTLE THE MATTER UPON
PAYMENT BY OCULAR SCIENCES OF CERTAIN UNDISCLOSED AMOUNTS TO
AVCL AND OTHERS.
BOTH AVCL AND OSI CONTINUE TO HOLD LICENSES TO MAKE USE AND
SELL CONTACT LENSES WORLD-WIDE UNDER PATENTS HELD BY G H
GALLEY AND OTHER INDIVIDUALS COLLECTIVELY KNOWN AS "THE
PATENT OWNERS" WHICH WERE FOUND BY THE COURT TO BE VALID.
SINCE OSL CEASED TO SUPPLY ASPECT WITH PRODUCT IN MAY 1994,
ASPECT HAS DEVELOPED ITS OWN MANUFACTURING PLANT AND NOW
MANUFACTURES LENSES USING ITS OWN STATE OF THE ART
MANUFACTURING TECHNOLOGY WHICH HAS BEEN SEPARATELY
DEVELOPED.
BOTH PARTIES NOW INTEND TO TERMINATE ALL DISPUTES BETWEEN
THEM AND CONCENTRATE ON THE FURTHER GROWTH AND DEVELOPMENT
OF THEIR RESPECTIVE BUSINESSES IN THE WORLD-WIDE CONTACT
LENS MARKET.
<PAGE> 1
EXHIBIT 10.09
AMENDMENT TO
SETTLEMENT AGREEMENT AND RELEASE
This Amendment is entered into as of February 27, 1997 as an amendment
to that certain Settlement Agreement and Release dated of even date herewith
(the "Settlement Agreement") by and between the signatories to the Settlement
Agreement and Contact Lens Technologies Ltd ("CLT").
R E C I T A L S
A. Concurrent herewith the parties to the Settlement Agreement are
entering into the Settlement Agreement.
B. The parties hereto desire to amend the Settlement Agreement to (i)
set forth the handling of certain value-added tax matters and (ii) include CLT
as a party for certain purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Value-Added Tax. The following language is hereby added to the end
of Section 4.07 of the Settlement Agreement:
"All payments made by OSL shall include value-added tax
at the applicable rate which is currently 17.5%, on the gross
sum payable. For the avoidance of doubt, the value-added tax
payable on the first payment of $3,333,333 shall be $583,333,
and such $583,333 shall be paid in addition to the $3,333,333.
The value-added tax shall be payable only upon delivery to OSL
of a proper value-added tax invoice addressed to OSL.
Additionally, the Defendants shall provide to OSL value-added
tax credit notes in respect of the value-added tax invoices
submitted to OSL in January 1995."
2. Applicability of Release to CLT. The parties hereby agree that all
references to the "Defendants" in Section 3 of the Settlement Agreement shall be
deemed to include CLT.
3. Applicability of Certain Other Provisions to CLT. The parties
further agree that all references to the "Defendants" in Sections 10 and 11 of
the Settlement Agreement shall be deemed to include CLT. Further, CLT agrees to
be bound by the provisions of Section 13 of the Settlement Agreement on the same
terms as the Defendants.
<PAGE> 2
4. Miscellaneous. All other provisions of the Settlement Agreement
shall remain in full force and effect.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first written above.
Contact Lens Technologies Ltd
<TABLE>
<S> <C>
By: /s/ Anthony David Galley
-------------------------------
Its: Director
Address: Unit 2, Northbridge Road
Berkhamstead, Hertfordshire
HP4 1EH England
Aspect Vision Care Ltd. /s/ Geoffrey Harrison Galley
-----------------------------------
For Albert Henry Morland
By: /s/ Anthony David Galley
---------------------------------
Its: Director Address: 7 Bitterne Place,
Newport, Isle of Wight
Address: Unit 2, Northridge Road
Berkhamstead, Hertfordshire
HP4 1EH England /s/ Geoffrey Harrison Galley
-----------------------------------
For Ivor Atkinson
Address: 90 Queens Drive,
New Focus Health Care Ltd. Surbiton, Surrey, KT5 8PP
England
By: /s/ Anthony David Galley
----------------------------------
Its: Director
Address: Unit 2, Northbridge Road /s/ Geoffrey Harrison Galley
Berkhamstead, Hertfordshire -----------------------------------
HP4 1EH England For Wilfred Trevor Brooker
Address: Grimbles Barn, Buckland Village
Aston Clinton, Buckinghamshire HP22 5HY England
/s/ Geoffrey Harrison Galley Ocular Sciences Ltd.
- ------------------------------------
Geoffrey Harrison Galley
By: /s/ John David Fruth
-----------------------------
Address: Red Lodge, The Close, Its: Director
Totteridge, London N20 8PJ
England
Address: Reliant Close, Chandlers Ford,
Eastleigh, Hampshire S053 4ND
England
/s/ Anthony David Galley
- ------------------------------------
Anthony David Galley
Address: Beacon Wey, The Hangers, O.S.I. Corporation
Bishops Waltham, Hants S032 1FZ
England By: /s/ John David Fruth
------------------------------
Its: President
/s/ Geoffrey Harrison Galley Address: 475 Eccles Avenue
- ------------------------------------ So. San Francisco, California 94080
For Barrie Bevis USA
Address: 53, Wilderness Heights,
West End, Southampton S03 3PS
England
/s/ John David Fruth
---------------------------------------
John David Fruth
Address: c/o OSI Corporation
475 Eccles Avenue
So. San Francisco, California 94080
USA
</TABLE>
3
