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EXHIBIT 10.12
VISTA LASER CENTERS OF THE PACIFIC, INC.
000 XXXXXX XXXXXX
XXXXXXXXXX, XXXXXXXXXX 00000
May 9, 1996
J. Xxxxxx Xxxxxxx, President
Xxxxxxx & Xxxx Eye Care, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Agreement In Principle
Dear Xx. Xxxxxxx:
Reference is made to the past discussions between yourself representing
Xxxxxxx & Xxxx Eye Care, Inc. ("G&R") and myself representing Vista Laser
Centers Of The Pacific, Inc. ("Pacific").
This letter agreement when executed by all parties, will constitute a
binding agreement in principal for: (i) the acquisition by Pacific from G&R of a
VISX Star excimer laser (the "Laser"); (ii) the sublease from G&R of medical
office space by Pacific; (iii) the purchase by Pacific of certain tenant
improvements to the Center; (iv) the purchase by Pacific of certain office
furniture and inventory; and (v) reimbursement of certain employee costs.
The parties hereto acknowledge and agree that more definitive agreements
need to be prepared setting forth with greater specificity all of the terms,
covenants, representations and conditions of this agreement with respect to the
transactions described herein. These agreements include, without limitation, an
asset purchase agreement, a real estate sublease and an equipment lease
assignment and sublease. The parties agree to complete these agreements in an
expeditious manner following the execution of this agreement and in no event
more later than 30 days after the closing of the IPO.
1. ACQUISITION OF LASER. Pacific shall acquire and G&R shall sell all
rights, title and interest in the Laser, which are subject to an equipment loan
(the "Loan") from a local bank (the "Bank"), by Pacific paying to G&R the sum of
$52,500 (the "Laser Payment") and assuming the Loan obligations. The Laser
Payment shall be paid to G&R within 2 days of the execution of this agreement.
The assumption of the Loan shall commence on June 1, 1996 and after that date
Pacific shall bear all of the responsibilities, obligations and liabilities
stated in or arising under the Loan. The parties hereto understand that the
consent of the Bank to Pacific's assumption of the Loan will be required and
they agree to use their reasonable best efforts to persuade the Bank to permit
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MAY 28, 1996
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the assumption of the Loan by Pacific. Pacific may also re- structure or
re-finance the Loan with the Bank's consent.
2. OFFICE SUBLEASE. Effective June 1, 1996 Pacific shall enter into a
sublease (the "Sublease") with an affiliate of G&R for approximately 620 square
feet of office space presently leased by G&R at 000 Xxxxxx Xxxxxx in Sacramento,
California (the "Center"), and this sublease shall provide for Pacific to pay
the landlord thereof the following monthly rent: $1.83 per square foot for full
service and all costs included. It is the parties' understanding that such a
sublease does not require the landlord's consent, but if such consent is
required, the parties shall use their reasonable best efforts to obtain that
consent as soon as possible.
3. CENTER IMPROVEMENTS. Pacific shall reimburse G&R for any and all costs
and expenses (approximately $37,000) incurred in remodeling or improving the
Center (the "Center") and thereby acquire G&R's interest in such lease
improvements. Pacific shall make such reimbursement to G&R upon the later of the
execution of this agreement or two days after verifiable invoices of such
expenses are provided to Pacific by G&R.
4. OTHER ASSETS PURCHASED. Pacific shall reimburse G&R for any and all
expenses (approximately $9,000) incurred in purchasing or remodeling of
furniture placed in the Center by G&R or previously ordered for delivery to the
Center (the "Furniture") and thereby acquire the Furniture from G&R. Pacific
shall reimburse G&R for all of its costs incurred in preparing and producing
various marketing material and advertising programs, including a Web site "WWW.
Nearsighted. Com" (for $3,000) and the telephone number "0-000-000-0000" (for
$5,000) and thereby acquire G&R's rights to these assets. Pacific shall make
such reimbursement to G&R for the Furniture and the marketing assets upon the
later of the execution of this agreement or two days after verifiable invoices
of such expenses are provided to Pacific by G&R.
5. INVENTORY. Pacific shall purchase from G&R all of the "Pillar Point"
laser cards and laser related medical supplies owned by G&R and located at the
Center on June 1, 1996 at G&R's costs therefor and thereby acquire such assets
from G&R. Pacific shall make such payment to G&R for these inventoried assets
two days after verifiable invoices of such asset costs are provided to Pacific
by G&R.
6. EMPLOYEES. Effective June 1, 1996, Pacific shall reimburse G&R for its
cost of providing such employees as deemed necessary by Pacific to operate the
Center for such hours as requested by Pacific. G&R costs shall include such
items as taxes, workmen's compensation insurance, health insurance and vacation
pay. G&R shall submit a detailed invoice to Pacific monthly for
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such employee costs and Pacific shall pay such invoice within five (5) days of
receipt and verification. G&R shall be responsible for the payment of all wages
to the employees, and all payroll taxes, workmen's compensation insurance and
any other employee related expenses to all applicable federal, state and local
governmental agencies.
7. ADVERTISING AND PATIENT LEADS. The Center will be serviced by G&R and
doctors affiliated with G&R in G&R's sole discretion. Pacific shall be
responsible for all costs and expenses of advertising for the medical services
to be rendered by G&R at the Center after June 1, 1996 and so long as this
agreement is in effect. All "leads" on potential patients in the Sacramento and
Stockton, California areas (the "Laser Vision Area") resulting from such Pacific
advertising will be forwarded to G&R on an exclusive basis for distribution
among the doctors servicing the Center.
8. INDEMNITY. G&R agrees to indemnify, protect, defend and hold Pacific
harmless from all claims, expenses, costs and liabilities, including without
limitation attorney fees, arising from any of G&R's activities prior to the
execution of this agreement. Pacific agrees to indemnify, protect, defend and
hold G&R harmless from all claims, expenses, costs and liabilities, including
without limitation attorney fees, arising from Pacific's activities prior to the
execution of this agreement.
9. ACCESS AND CONFIDENTIAL INFORMATION. Each party to this agreement will
have the right to inspect all of the books and records of the other party prior
to the completion of the transactions described herein. Each party to this
agreement agrees to keep all of the proprietary information provided to that
party by the other party hereto confidential and further agrees to not use such
information for its own or any other person's benefit or disclose such
information to third parties without the consent of the party supplying the
information, unless such party holding the confidential information is legally
required to disclose such information. Unless otherwise agreed upon by the
parties hereto, each of the parties hereto agrees to maintain the
confidentiality of the terms of the transactions contemplated by this agreement.
10. TERMINATION. This agreement will terminate upon the earlier to occur of
(a) the mutual written agreement of the parties hereto; (b) upon notice by a
party hereto of a breach by the other party of any obligation set forth in this
agreement; or (c) if the transactions described above are not closed by December
31, 1996, unless the parties agree to extend such date. Within 30 days after the
termination of this agreement, G&R shall pay to Pacific all sums paid to it by
Pacific pursuant to paragraphs 1, 2, 3, and 4 above, at which time Pacific shall
return to G&R all of the assets
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acquired pursuant to those paragraphs. G&R shall also purchase all inventoried
and ordered medical supplies and "Pillar Point" laser cards owned by Pacific on
December 31, 1996. G&R shall assume and become responsible for the Loan and
Sublease described in Paragraphs 1 and 2 above, respectively. In the event the
Loan and the Sublease are not assumable by G&R at that time, it shall pay to
Pacific the sums due under said Loan and Sublease 7 days before such sums are
due.
11. NEGOTIATIONS WITH OTHERS. During the term of this agreement G&R will
not negotiate with any other party to sell, lease or sublease its assets
described herein and Pacific will not negotiate with any other party to acquire,
lease or operate another excimer laser in the Laser Vision Area.
12. COMPLETE AGREEMENT. This letter agreement is the complete agreement as
of the date hereof among the parties with respect to the subject matter
described herein and reasonably related thereto and supersedes all prior
discussions, arrangements, understandings and agreements. This agreement may
only be changed, amended or modified by a written agreement executed by both
parties hereto.
Please indicate your agreement with the foregoing by signing this letter
agreement below and returning a signed copy to me as soon as possible. Once
signed by you this agreement will be deemed to be in effect and will bind both
parties. Once this agreement has been executed by you, both parties shall
commence to prepare the definitive documents discussed herein.
Very truly yours,
VISTA LASER CENTERS OF THE PACIFIC
By:____________________________________
Xxxxx X. Xxxxx III, President
Agreed To and Accepted.
XXXXXXX AND XXXX EYE CARE, INC
Date:_____________, 1996
By:____________________________________
J. Xxxxxx Xxxxxxx, President
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ADDENDUM
This addendum (the "Addendum") is dated effective as of June 1, 1996,
by and between Vista Laser Centers Of The Pacific, Inc. ("Vista") and Xxxxxxx
and Xxxx Eye Care, Inc. ("G&R").
WHEREAS, the parties hereto executed that certain letter agreement
dated May 9, 1996, concerning the purchase of certain assets by Vista from G&R
(the "Agreement").
NOW THEREFORE, the parties hereto amend the Agreement as follows:
1. Because Vista was unable to commence its advertising programs until
late June 1996, Vista shall not commence the sublease of the 620 square feet of
space at 000 Xxxxxx Xxxxxx in Sacramento, California until July 1, 1996, and G&R
shall pay no fees to Vista for using Vista's laser for vision correction
procedures during the month of June 1996.
2. The remainder of the terms of the Agreement shall remain unchanged.
VISTA LASER CENTERS OF
THE PACIFIC, INC.
By:_______________________________
Xxxxx X. Xxxxx III, President
XXXXXXX AND XXXX EYE CARE,INC.
By:________________________________
J. Xxxxxx Xxxxxxx, President
