EXHIBIT 2.(ii)
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AGREEMENT AND PLAN OF MERGER
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This AGREEMENT AND PLAN OF MERGER is made and entered into as of July
15, 1997 by and among LASERSIGHT INCORPORATED, a Delaware corporation
("LaserSight"), PHOTOMED ACQUISITION, INC., a Delaware corporation ("Newco"),
PHOTOMED, INC., a Pennsylvania corporation (the "Company"), XXXXXXXX X. XXXXXX,
M.D. ("Xxxxxx"), XXXXX XXXXXX ("LK"), XXXXXX XXXXXXX, Trustee for Xxxx Xxxxxxx
Xxxxxx, u/t/d December 27, 1991 ("ASK"), and XXXXXX XXXXXXX, Trustee for Xxxx
Xxxx Xxxxxx, u/t/d December 27, 1991 ("MAK" and collectively with Xxxxxx, XX and
ASK, the "Shareholders").
RECITALS
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A. The Company has developed a refractive laser which is utilized to
perform LASIK procedures (the "Xxxxxx Laser") and in connection therewith the
Company has submitted a request to the United States Food and Drug
Administration (the "FDA") for pre-market approval to manufacture the Xxxxxx
Laser (the "PMA").
B. LaserSight desires to acquire all of the issued and outstanding
shares of the Company's common stock, no par value per share ("Company Common
Stock") by means of a merger (the "Merger") of the Company with and into Newco
(with Newco being the surviving corporation), pursuant to which the Shareholders
shall receive shares of stock of LaserSight.
C. For federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
D. The Company and LaserSight each desires to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions thereto.
THEREFORE, the parties agree as follows:
SECTION 1. THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the provisions of the Pennsylvania Business Corporation
Law of 1988, as amended (the "PA Act"), and the Delaware General Corporation
Law, as amended (the "DE Act") the Company shall be merged with and into Newco
as soon as practicable after satisfaction or waiver of the conditions set forth
in Article VI. Following the Merger, the separate existence of the Company shall
cease, and Newco shall continue as the surviving corporation in the Merger (the
"Surviving Corporation"). The Company and Newco are sometimes herein
collectively referred to as the "Constituent Corporations".
1.2 Effect of the Merger. The Merger shall have the effects set forth
in the PA Act and the DE Act. From and after the Effective Time (as defined
below), the Surviving Corporation shall be a wholly-owned subsidiary of
LaserSight.
1.3 Articles of Incorporation of the Surviving Corporation. At the
Effective Time and without any further action on the part of the Constituent
Corporations, the Articles of Incorporation of Newco, as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation until duly amended or repealed as provided therein or as
otherwise provided by law.
1.4 Bylaws of the Surviving Corporation. At the Effective Time and
without any further action on the part of the Constituent Corporations, the
Bylaws of Newco, as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation until duly amended or repealed as
provided therein or as otherwise provided by law.
1.5 Board of Directors and Officers of the Surviving Corporation. At
the Effective Time and without any further action on the part of the Constituent
Corporations, the directors and the officers of Newco immediately prior to the
Effective Time shall be the directors and initial officers of the Surviving
Corporation, respectively, each of such directors and officers to hold office
until their respective successors are duly elected and qualified, or their
earlier death, resignation or removal.
1.6 Effective Time of the Merger. The Constituent Corporations will
cause (i) articles of merger related to the Merger of the Company into Newco
(the "Articles of Merger") and such other documents as are required by the PA
Act to be duly filed with the Pennsylvania Secretary of State, and (ii) a
certificate of merger related to the Merger of the Company into Newco (the
"Certificate of Merger") and such other documents as are required by the DE Act
to be duly filed with the Delaware Secretary of State, both prior to 4:00 p.m.
eastern time on the Closing Date (as hereinafter defined), provided that the
conditions set forth in Article VI have been satisfied or waived. The Merger
shall become effective upon the filing of the Articles of Merger and Certificate
of Merger and such other documents as are required by the PA Act and the DE Act
to be filed (the time of the later of such filings being the "Effective Time").
SECTION 2. CONVERSION OF COMPANY COMMON STOCK
2.1 Conversion of Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holders of the capital
stock of the Constituent Corporations:
(a) Cancellation of Treasury Stock. All shares of Company Common Stock
that are owned directly or indirectly by the Company ("Treasury Company Common
Stock"), shall be canceled, and no consideration shall be delivered in exchange
therefor.
(b) Conversion of the Company Common Stock. Subject to Section 2.8,
each issued and outstanding share of the Company Common Stock, other than
Treasury Company Common Stock, shall be converted into, or become exchangeable
for, the number of shares of validly issued, fully paid and nonassessable common
stock, $.001 par value, of LaserSight ("LaserSight Common Stock") equal to the
Company Conversion Ratio (as defined herein). For purposes of this Agreement,
"Company Conversion Ratio" means a fraction, the numerator of which is equal to
the number resulting from dividing (i) $2,750,000.00, by (ii) the average
closing price of a share of LaserSight Common Stock for the 10 day period
immediately preceding the Closing, and the denominator of which is equal to the
number of shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time. The total number of shares of LaserSight Common
Stock issued to the Shareholders pursuant to this Section 2.1(b) shall be
referred to herein as the "Closing Shares." The Closing Shares will be allocated
among the Shareholders based on their percentage ownership interest in the
Company immediately prior to the Effective Time.
2.2 Additional Consideration.
(a) FDA Approval. If (i) the FDA panel which has been assigned to
review the PMA recommends the PMA application substantially in the form attached
hereto as Exhibit A (the "Panel Approval") or as amended as contemplated by this
Agreement or in a form acceptable to LaserSight, and if the FDA approves the PMA
in such a form that would allow LaserSight or its designee to (A) commercially
manufacture a refractive laser modeled after the Xxxxxx Laser, or a modification
of a laser manufactured by LaserSight, which is approved to correct myopia, and
(B) commercially sell such laser within the United States without restrictions
which are materially greater than those restrictions imposed by the FDA as of
the date of this Agreement on excimer lasers which are currently sold within the
United States by Summit Technology, Inc. and Visx Incorporated (collectively,
the "FDA Approval"), or (ii) LaserSight receives the FDA Approval, whether or
not LaserSight has received Panel Approval, then within 10 business days after
receiving the FDA Approval LaserSight shall pay the Shareholders, based on their
respective ownership interests in Company immediately prior to the Effective
Time, the total amount of $1,750,000.00. Such amount will be paid via wire
transfer of immediately available funds to an account or accounts designated by
Xxxxxx as agent for himself and the other shareholders of the Company.
(b) Unwind. If FDA Approval, as contemplated by Section 2.2(a), is not
obtained prior to the date which is 12 months immediately after the Closing
Date, then LaserSight may extend the deadline for receiving FDA Approval to such
other date or dates thereafter that LaserSight may establish in its sole
discretion from time to time, provided that (i) in no event may LaserSight
extend such date if Panel Approval is not obtained on or prior to the date which
is 12 months immediately after the Closing Date, (ii) in no event may LaserSight
extend such date beyond the date which is nine months immediately after the date
of the Panel Approval, and (iii) in no event will LaserSight be able to extend
such date if LaserSight is then in material breach of its obligations pursuant
to Section 6.5. For purposes hereof, "Termination Date" shall mean either (i)
the date which is 12 months immediately after the Closing Date, or (ii) the
later date established by LaserSight pursuant to the preceding sentence. Upon
the Termination Date LaserSight will have no further obligation under this
Agreement (except for its obligation to transfer the PMA Assets (as defined
herein) pursuant to this Section 2.2(b) and except for those indemnification
obligations contained in Section 8 which are to survive the termination of this
Agreement), including, without limitation the obligation to make any payments to
Company or the Shareholders.
Within two business days after the Termination Date the Shareholders
agree to pay LaserSight liquidated damages in the amount of that number of
shares of LaserSight Common Stock which results from multiplying the total
number of the Closing Shares by 63.6363% (the "Unwind Shares"). This payment
does not represent a penalty but represents the parties' good faith estimate of
damages and costs which will be incurred by LaserSight as a result of the
failure to obtain the contemplated FDA Approval. Simultaneously with the
Shareholders' delivery of the Unwind Shares to LaserSight, LaserSight and/or its
transferee(s) shall transfer to Xxxxxx all of LaserSight's and/or its
transferee(s)' right, title and interest in the PMA Assets (as defined herein)
then in LaserSight's and/or its transferee(s)' possession, such transfer will be
made free and clear of any liens or other encumbrances and will be evidenced by
a xxxx of sale which will contain representations and warranties which are
customarily contained in asset transfer agreements. The parties agree to execute
such additional agreements and documents as may be reasonably requested by
LaserSight or the Shareholders, as applicable, in order to carry out the
requirements of this Section 2.2(b). If LaserSight transfers the PMA Assets to a
third party prior to the Termination Date (i) LaserSight will require such third
party to assume LaserSight's obligations under this Agreement (including,
without limitation, its obligation to require any transferee of any transferee
to assume LaserSight's obligations under this Agreement), (ii) LaserSight will
act as surety guaranteeing that such third party will satisfy LaserSight's
obligations under this Agreement (such surety to be in a form reasonably
satisfactory to the Shareholders), and (iii) the terms of such transfer will
provide that the Unwind Shares will be paid to the transferee of the PMA Assets.
(c) Hyperopia Approval. If (i) the FDA Approval is granted, and (ii) a
laser manufactured by LaserSight is subsequently approved by the FDA for general
commercial use for the treatment of hyperopia (the "FDA Hyperopia Approval"),
then within 30 days after the date of the FDA Hyperopia Approval LaserSight will
pay to the Shareholders that number of shares of LaserSight Common Stock which
results from dividing (A) $1,000,000.00, by (B) the average closing price of a
share of LaserSight Common Stock for the 10 day period immediately preceding the
date of the FDA Hyperopia Approval. The shares of LaserSight Common Stock issued
pursuant to this Section 2.2(c) shall be referred to herein as the "Hyperopia
Shares". The Hyperopia Shares will be allocated among the Shareholders based on
their percentage ownership interest in the Company immediately prior to the
Effective Time. Except for those indemnification obligations contained in
Section 8 which are to survive the termination of this Agreement, LaserSight
will have no obligation pursuant to this Section 2.2(c) if the FDA Hyperopia
Approval is obtained after the Termination Date.
(d) Scanning Laser Approval. If on or prior to April 1, 1998 (i) the
FDA Approval is granted, and (ii) as a result of or in connection with the FDA
Approval, the FDA grants final approval to the commercial sale within the United
States of LaserSight's refractive laser which is currently in clinical trials
(the "FDA Scanning Approval"), then LaserSight will pay the Shareholders
$1,000,000.00. If such approval is received after April 1, 1998 but prior to
January 1, 1999 then LaserSight shall pay the Shareholders $1,000,000.00 less
the number resulting from multiplying $3,663.00 by the number of days which have
elapsed since April 1, 1998. If such approval is granted after January 1, 1999
then there shall be no payment due pursuant to this Section 2.2(d). The amount
payable pursuant to this Section 2.2(d) shall be referred to as the "Scanning
Payment Amount." LaserSight shall use all reasonable efforts to obtain the FDA
Scanning Approval prior to April 1, 1998.
The Scanning Payment Amount shall be paid within 30 days after the
date the FDA Scanning Approval is obtained by wire transferring, in immediately
available funds, the Scanning Payment Amount to an account or accounts
designated by Xxxxxx as agent for the Shareholders. The Scanning Payment Amount
will be allocated among the Shareholders based on their percentage ownership
interest in the Company immediately prior to the Effective Time. Except for
those indemnification obligations contained in Section 8 which are to survive
the termination of this Agreement, LaserSight will have no obligation pursuant
to this Section 2.2(d) if the FDA Scanning Approval is obtained after the
Termination Date.
2.3 Limitation on the Number of Shares. Notwithstanding Section 2.2,
in no event will LaserSight be required to issue LaserSight Common Stock
pursuant to such Section in an amount which would (i) result in LaserSight's
violation of any applicable rule or regulation promulgated by the Securities and
Exchange Commission, the NASDAQ Stock Market or such other securities exchange
or national market system on which LaserSight Common Stock is then listed, or
(ii) affect LaserSight's ability to have LaserSight Common Stock listed or sold
on the NASDAQ Stock Market or such other securities exchange or national market
system on which LaserSight Common Stock is then listed. If the number of shares
of LaserSight Common Stock to be issued pursuant to Section 2.2 is limited by
this Section 2.3 then LaserSight shall issue the maximum number of shares of
LaserSight Common Stock which may be issued, subject to the limitations in this
Section 2.3, and shall pay the balance of any amounts owed in cash.
2.4 Status of Newco Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any capital stock of
Newco, each issued and outstanding share of common stock of Newco shall continue
unchanged and remain outstanding as a share of common stock of Newco.
2.5 Payment Exchange of Certificates. At Closing the Company shall
deliver to LaserSight the certificates representing all of the issued and
outstanding shares of capital stock of the Company, duly endorsed in blank for
transfer or accompanied by appropriate stock powers duly executed in blank. In
exchange for the delivery of such certificates, LaserSight shall deliver to the
Shareholders the consideration as described in Section 2.1. LaserSight shall
have no obligation to deliver the consideration described in Section 2.1 except
to the extent that Shareholders have caused certificates representing all of
Company Common Stock (or affidavits of lost certificate in form and substance
reasonably acceptable to LaserSight, if applicable) to be tendered to
LaserSight.
2.6 No Further Ownership Rights in Company. At and after the Effective
Time, each holder of shares of Company Common Stock immediately prior to the
Effective Time shall cease to have any rights as a stockholder of the Company,
except for the right to surrender such Shareholder's certificates in exchange
for receipt of the consideration described in Section 2.1, and after the
Effective Time, no transfer of shares of Company Common Stock which were
outstanding immediately prior to the Effective Time shall be made on the stock
transfer books of the Company.
2.7 Transfer of LaserSight Common Stock. All LaserSight Common Stock
issued and delivered pursuant to this Agreement will be authorized but
previously unissued shares of LaserSight's Common Stock which have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
Unless and until otherwise permitted by this Agreement, each certificate of
LaserSight Common Stock issued pursuant to this Agreement shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"These shares have not been registered under the Securities Act
of 1933 and may not be offered for sale, sold, pledged or
otherwise disposed of except pursuant to an effective
registration statement under such Act or pursuant to an exemption
from the registration requirements of such Act. Further, any such
offer, sale, pledge or transfer is subject to the conditions
specified in an Agreement and Plan of Merger dated as of July 15,
1997 ("Agreement") delivered in connection with the issuance of
such shares by LaserSight Incorporated, a copy of which Agreement
will be furnished to the holder hereof upon request and without
charge."
2.8 Fractional Shares. No fraction of a share of LaserSight Common
Stock will be issued; therefore, when calculating the number of shares to be
issued pursuant to this Agreement LaserSight shall round to the nearest whole
number, with .500 and greater being rounded up to the next whole number, and
anything less than .500 being rounded down to the next whole number.
SECTION 3. CLOSING.
3.1. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on July 15, 1997 if the conditions
set forth in Section 6 have been satisfied, or as soon thereafter as such
conditions have either been satisfied or waived by the party benefiting from
such conditions, at the offices of Sonnenschein, Nath & Xxxxxxxxx, Xxx
Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx or at such other place as
the parties shall agree, and shall be effective as of the Effective Time (the
"Closing Date"). At the Closing:
(a) The Company shall deliver to LaserSight the following:
(i) all certificates representing the Closing Shares; and
(ii) all other previously undelivered documents required to be
delivered by the Company to LaserSight at or prior to the
Closing pursuant to the terms of this Agreement.
(b) LaserSight shall deliver or cause to be delivered to the Company
or the Shareholders the following:
(i) a copy of the letter sent via facsimile on the Closing
Date to LaserSight's transfer agent instructing that the
Closing Shares be issued and delivered to Xxxxxx at the
address set forth in Section 9.6 hereof (the "Transfer
Agent Letter"); and
(ii) all other previously undelivered documents required to be
delivered by LaserSight to the Company or the Shareholders
at or prior to the Closing pursuant to the terms of this
Agreement.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
COMPANY.
The Company and the Shareholders hereby jointly and severally
represent and warrant to LaserSight as of the Closing Date as follows. In
connection with the following representations and warranties, to the extent any
representation or warranty is made "to the best of the Company's knowledge" such
phrase shall mean the actual knowledge of Xxxxxx.
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in subsistence under the laws of the state of
Pennsylvania and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted. The Company
is duly qualified to do business in each jurisdiction in which the character or
location of the properties owned or leased by the Company or the nature of the
business conducted by the Company makes such qualification necessary, except
where the failure to so qualify would not have a material adverse effect upon
the Company.
4.2 Capitalization of the Company. The authorized capital stock of the
Company consists of 1,000 shares of common stock, no par value, of which 100
shares are issued and outstanding and owned of record and beneficially by the
Shareholders. All of the Company Common Stock has been duly authorized and
validly issued, and is fully paid and non-assessable. There are no outstanding
options, warrants, agreements, conversion rights, preemptive rights, or other
rights to subscribe for, purchase or otherwise acquire any of the Company Common
Stock. The Shareholders have, and will have at the Closing, valid and legal
title to all of the Company Common Stock, and shall deliver the Company Common
Stock to LaserSight at the Closing, free and clear of any liens, claims,
charges, security interests or other legal or equitable encumbrances,
limitations or restrictions of any kind or nature whatsoever.
4.3 Subsidiaries and Equity Investments. The Company does not have any
subsidiaries, nor does the Company have any, direct or indirect, investment
interest in any entity, nor does the Company have, or pursuant to any agreement
have the right to acquire at any time by any means, directly or indirectly, an
equity interest or investment in any corporation, partnership, joint venture or
other entity.
4.4 Authorization. The Company has full corporate power and authority
to execute and deliver this Agreement and all other agreements contemplated
hereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and all other agreements
contemplated hereunder by the Company, the performance by the Company of its
obligations hereunder and thereunder, and the consummation by the Company of the
transactions contemplated hereby and thereby, have been duly authorized by the
unanimous vote of both the Company's Board of Directors and the Company's
shareholders. No other action on the part of the Company is necessary to
authorize the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby. This Agreement and all other agreements
contemplated hereby have been duly and validly executed and delivered by the
Company and, assuming this Agreement and the agreements contemplated hereby
constitute valid and binding obligations of LaserSight, will constitute a valid
and binding obligation of the Company enforceable against the Company in
accordance with each agreement's terms, except to the extent that such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
4.5 No Violation. Neither the execution, delivery nor the performance
by the Company of this Agreement and all other agreements contemplated hereunder
violates or will violate any provision of any material law, of any order,
judgment or decree of any court or other governmental or regulatory authority,
or of the charter documents of the Company, nor violates or will result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any contract, lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party or by
which it is bound or to which any of its properties or assets is subject, nor
will result in the creation or imposition of any lien, charge or encumbrance of
any kind whatsoever upon any of the properties or assets of the Company.
4.6 Consents and Approvals. Other than filing the Articles of Merger
with the Secretary of State of Pennsylvania, no consent, waiver, authorization,
or approval of any governmental or regulatory authority, domestic or foreign, or
of any other person, firm or corporation, and no declaration to or filing or
registration with any such governmental or regulatory authority, is required in
connection with the execution and delivery of this Agreement by the Company or
the performance by the Company of its obligations hereunder.
4.7 Litigation. Except as set forth on Schedule 4.7, there are no
claims, actions, suits, proceedings, disputes or investigations pending or, to
the best of the Company's knowledge, threatened before any federal, state or
local court or governmental or regulatory authority, domestic or foreign, or
before any arbitrator of any nature, brought by or against the Company
involving, affecting or relating to any assets, properties or operations of the
Company or the transactions contemplated by this Agreement. Except as set forth
on Schedule 4.7, neither the Company nor any of its assets or properties is
subject to any order, writ, judgment, award, injunction or decree of any
federal, state or local court or governmental or regulatory authority or
arbitrator, which affects the assets, properties, operations, prospects, net
income or financial condition or which would interfere with the transactions
contemplated by this Agreement.
4.8 Financial Statements. The Shareholders and the Company have
heretofore furnished to LaserSight copies of the unaudited internal financial
statements (the "Balance Sheet") of the Company as of July 14, 1997 (the
"Balance Sheet Date"), copies of which are attached hereto as Schedule 4.8 (such
financial statements being hereinafter referred to as the "Financial
Statements"). The Financial Statements (a) present fairly the financial position
and results of operations of the Company as of such dates, and (b) are complete
and correct in all material respects and in accordance with the books of account
and records of the Company. Adequate records exist and are on the Company's
premises or otherwise available which support and document the information
reflected in the Financial Statements. As of the Balance Sheet Date, and as of
the Closing Date, the Company shall have no liabilities which should be
reflected on the Financial Statements in accordance with generally accepted
accounting principles, other than, (i) liabilities, whether contingent or
otherwise, specifically described in this Agreement or on any Schedule to this
Agreement, or (ii) liabilities related to those claims to which the Company or
Xxxxxx have no knowledge.
4.9 Tax Matters. All tax and information returns required to have been
filed by the Company with the United States of America, all state and local
government authorities and all foreign jurisdictions have been duly filed and
each such return in all material respects reflects the income, franchise,
property, sales, use, value-added, withholding, excise, capital or other tax
liabilities and all other information required to be reported thereon. The
Company has paid all income, franchise, business, property, sales, use,
value-added, withholding, payroll, excise, capital and other taxes shown to be
due and payable on said returns, and all penalties, assessments or deficiencies
of every nature and description. The income tax returns of the Company have not
been audited by any federal, state or local tax authority or agency. No consent
extending any statute of limitations applicable to the Company has been filed by
the Shareholders or the Company with respect to any tax liability for any year.
4.10 Absence of Undisclosed Liabilities. The Company has no
outstanding claims, liabilities or indebtedness, contingent or otherwise, except
as set forth in the Financial Statements, other than liabilities incurred
subsequent to the Balance Sheet Date in the ordinary course of business not
involving borrowings by the Company, possible contingent liabilities as
specifically described in this Agreement or on any Schedule to this Agreement,
liabilities related to claims to which the Company or any of the Shareholders
have no knowledge and liabilities for professional fees incurred in connection
with this transaction as contemplated in this Agreement, which, other than
contingent liabilities as specifically described in this Agreement or on any
Schedule to this Agreement and claims of which the Company or any of the
Shareholders have no knowledge, will be paid by the Company at or prior to the
Closing. Except as shown in the Financial Statements, the Company is not
directly or indirectly liable upon or with respect to (by discount, repurchase
agreements or otherwise), or obligated in any other way to provide funds in
respect of, or to guarantee or assume, any debt, obligation or dividend of any
person, except endorsements in the ordinary course of business in connection
with the deposit of items for collection.
4.11 Interests in Real and Personal Property. The Company does not own
any real property. The Company is not a party to or bound by any lease or other
similar agreement related to real or personal property.
4.12 Assets. The Company has good, valid and legal title to all of its
personal properties and assets (tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statements,
in each case subject to no encumbrance, lien, charge or other restriction of any
kind or character; provided, however, a partnership known as Pillar Point
Partners, has claimed that the Xxxxxx Laser (and the know-how related thereto)
infringes upon its patent. As a result of the Merger, LaserSight will have good,
valid and legal title to and, subject to the claims of Pillar Point Partners
described in the prior sentence and potential infringement claims of other
persons or parties, will have unconditional rights of ownership in (i) the PMA,
(ii) all know-how and confidential technical information related to the PMA,
including, all books, records, files, plans, specifications and other
information related to the PMA or utilized in developing the PMA, and (iii) all
know-how and confidential technical information related to the Xxxxxx Laser,
including all books, records, files, plans, specifications and other information
related to the Xxxxxx Laser (collectively, the "PMA Assets"). The Company and
Xxxxxx represent and warrant that other than the assets of the Company to be
distributed immediately prior to the Merger pursuant to the terms of this
Agreement, the PMA Assets constitute all know-how, books, records, files, plans,
specifications and other information developed by or utilized by the Company,
Xxxxxx or any third party in connection with the development of the Xxxxxx Laser
and the preparation of the PMA.
4.13 Third-Party Rights. The Company has not granted any license,
right or option in or to any of its assets.
4.14 Intangible Assets. Set forth in Schedule 4.14 hereto is a true
and correct list of all United States and foreign trademarks, service marks,
trade names, patents and copyrights (either registered, applied for, or common
law) owned by, registered in the name of, licensed to, or used in the business
of the Company (the "Intangible Assets"). To the best of the Company's
knowledge, except as set forth in Schedule 4.14, there is no restriction
affecting the Company's use of any of the Intangible Assets, and no license has
been granted with respect thereto. Except as set forth in Schedule 4.14, the
Company has not received notice and is not aware of any challenge to the
Company's use of the Intangible Assets. Except as set forth in Schedule 4.14,
each of the Intangible Assets is not involved in any pending or, to the best of
the Company's knowledge, threatened administrative or judicial proceeding, and,
to the best of the Company's knowledge, does not conflict with any rights of any
other person, firm or corporation.
4.15 Contracts. Set forth in Schedule 4.15 hereto is a list of all
written contracts, agreements, documents and other instruments to which the
Company is a party and which in the aggregate provide for the expenditure of at
least $2,500 (the "Material Contracts"). To the Company's actual knowledge, each
Material Contract is valid, binding and enforceable against the parties thereto
in accordance with its terms, and in full force and effect on the date hereof,
except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally. The Company has
performed all material obligations required to be performed by it to date under,
and is not in default in respect of, any Material Contract, and no event has
occurred which, with due notice or lapse of time or both, would constitute such
a default. To the Company's knowledge, no other party to any Material Contract
is in default in respect thereof, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a default. True and
complete originals or copies of all of the Material Contracts have been
delivered to Parent by the Company. The Company has no Material Contracts
related, directly or indirectly, to the operation of its business or its assets
which is not in writing.
4.16 Employee Plans and Contracts. The Company does not have any
employee benefit plans, as defined by Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
4.17 Insurance. Set forth in Schedule 4.17 hereto is a true and
complete list of all insurance policies in force with respect to the assets,
properties or operations of the Company (including, without limitation,
professional liability insurance maintained by or on behalf of any of the
Shareholders). True and complete copies of all such insurance policies have been
furnished to LaserSight. Such policies are in full force and effect.
4.18 PMA. Attached hereto as Exhibit A is a full, complete and
accurate copy of the PMA and there have not been any changes or amendments
thereto which have not been provided to LaserSight in writing. The Company has
made available to LaserSight all material correspondence, notices and other
communications that the Company has received from the FDA in connection with the
PMA and will deliver such items to LaserSight at the Closing. The PMA has been
accepted for filing by the FDA.
4.19 Accuracy of Information. None of the representations, warranties
or statements made by the Company and contained in this Agreement, in the
exhibits hereto, or in any other agreement, instrument or document executed or
delivered by or on behalf of the Company in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make any of such
representations, warranties or statements not misleading.
4.20 Agreements, Judgments and Decrees. Neither the Company nor any
Shareholder is subject to any agreement, judgment or decree which could
materially and adversely affect such party's ability to satisfy its obligations
hereunder.
4.21 Purchase for Investment; Restricted Securities. Each of the
Shareholders will acquire the LaserSight Common Stock for their own account for
investment purposes and, except for the registration contemplated by Section
6.4, not with a present view toward any resale or distribution thereof.
Certificates representing the acquired LaserSight Common Stock shall bear the
restrictive legend set forth in Section 2.7 hereof indicating the absence of
registration under the Securities Act and imposing all applicable transfer
restrictions thereon. Each Shareholder acknowledges that (i) LaserSight Common
Stock has not been registered under the Securities Act, (ii) LaserSight Common
Stock cannot be sold, assigned, pledged or otherwise transferred unless
registered or qualified under the Securities Act and any applicable state
securities laws or unless an exemption from such registration and qualification
is available, as established by an opinion of counsel which is accepted by
LaserSight in its sole discretion, (iii) except as set forth in Section 6.4,
LaserSight is not required to cause any of LaserSight Common Stock to be
registered or qualified under the Securities Act or any applicable state
securities laws, and (iv) each of Company and Xxxxxx is prepared to bear the
economic risk of an investment in LaserSight Common Stock for an indefinite
period of time.
4.22 LaserSight Common Stock.
(a) Each Shareholder acknowledges the receipt of (i) LaserSight's
Proxy Statement dated May 21, 1997 (filed May 19, 1997), (ii) LaserSight's
Annual Report on Form 10-K for the year ended December 31, 1996, (iii)
LaserSight's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
(iv) LaserSight's Current Reports on Form 8-K filed on February 25, March 18,
March 27, April 8, April 25 and July 1, 1997, (v) Form 8-A/A (Amendment No. 2)
filed April 26, 1996 describing LaserSight's Common Stock, and (vi) such other
publicly available information relating to LaserSight as was requested by
Company or Xxxxxx (collectively, the "SEC Filings").
(b) Each Shareholder acknowledges that representatives of LaserSight
have responded to all questions of such parties relating to the SEC Filings.
(c) Each Shareholder has relied upon consultations with his or her
legal, financial and other advisers with respect to this transaction, and the
nature of the investment together with the additional information concerning
LaserSight set forth in the SEC Filings.
(d) Each Shareholder has completed, dated and executed an Seller's
Certificate (the "Certificate") substantially in the form attached hereto as
Exhibit B, and the information and representations contained in the Certificate
are true and accurate as of the Closing Date.
(e) The representations and warranties contained in this Section 4.22
shall survive the execution and delivery of this Agreement and the issuance by
LaserSight of the LaserSight Common Stock.
4.23 Tax Compliance. As a result of the Merger, the Company will
transfer to Newco at least (i) 90% of the fair market value of the Company's net
assets held by it immediately prior to the Merger, and (ii) 70% of the fair
market value of the Company's gross assets held by it immediately prior to the
Merger.
Except as otherwise specifically set forth in Section 4, all of the
Company's assets are being transferred (by operation of law pursuant to merger)
in "AS IS" CONDITION, "WITH ALL FAULTS," INCLUDING BUT NOT LIMITED TO PATENT AND
LATENT DEFECTS. EXCEPT AS PROVIDED IN SECTION 4, NO WARRANTIES, EXPRESS OR
IMPLIED, ARE MADE BY THE COMPANY OR THE SHAREHOLDERS, AND LASERSIGHT AND NEWCO
WAIVE ALL SUCH WARRANTIES INCLUDING WITHOUT LIMITATION THOSE REGARDING USE OF
ASSETS AND WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Notwithstanding anything to the contrary, no representation or
warranty is made by the Company or the Shareholders that (i) the Xxxxxx Laser
and related know-how does not infringe upon any other person's or entity's
patents(s) or trademark(s), (ii) Panel Approval or FDA Approval will be
obtained, and/or (iii) if FDA Approval is obtained, that it will be for any
specified indication.
Notwithstanding anything to the contrary, Lasersight and Newco (i) are
assuming all risks of infringement claims by others which relate to the period
after the Closing Date, (ii) are relying on their own due diligence regarding
such risk of infringement claims, (iii) acknowledge that the Xxxxxx Laser is
presently being used under an investigational device exemption from the FDA and
may never be approved for commercial use, and (iv) acknowledge that they have no
recourse against the Company or the Shareholders due to the lack of the
effectiveness of the Xxxxxx Laser and the know-how upon which it is based.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF LASERSIGHT.
LaserSight and Newco, jointly and severally, hereby represent and
warrant to the Company and the Shareholders and covenant and agree, as of the
Closing Date, as follows:
5.1 Corporate Organization. Each of LaserSight and Newco is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with all requisite power and authority
(corporate and other) to own its properties and assets and to conduct its
business as now conducted.
5.2 Corporate Authority. As of the Closing Date, each of LaserSight
and Newco will have the corporate power to enter into this Agreement and all
agreements contemplated hereunder and to carry out its respective obligations
hereunder and thereunder. As of the Closing Date, the execution and delivery of
this Agreement and all agreements contemplated hereunder and the performance of
LaserSight's and Newco's obligations hereunder and thereunder, will have been
duly authorized by the Board of Directors of LaserSight and the Board of
Directors and shareholder of Newco, and no other corporate proceedings on the
part of LaserSight or Newco will be necessary to authorize such execution,
delivery and performance. This Agreement and all agreements contemplated
hereunder have been duly executed by LaserSight and Newco and, as of the Closing
Date, will constitute valid and legally binding obligations of LaserSight and
Newco, enforceable against LaserSight and Newco in accordance with the terms
hereof and thereof, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
5.3 No Violation. Neither the execution, delivery nor the performance
by LaserSight or Newco of this Agreement and all agreements contemplated
hereunder violates or will violate any provision of law, of any order, judgment
or decree of any court or other governmental or regulatory authority, or of the
charter documents or by-laws of LaserSight or Newco, nor violates or will result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any contract, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which LaserSight or Newco is
a party or by which it is bound or to which any of its properties or assets is
subject, nor will result in the creation or imposition of any lien, charge or
encumbrance of any kind whatsoever upon any of the properties or assets of
LaserSight or Newco.
5.4 Consents and Approvals. Other than requirements of federal and
state securities laws, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any third party or any public or
governmental body or authority is necessary for the consummation by LaserSight
or Newco of the transactions contemplated by this Agreement.
5.5 Litigation. Except for matters expressly disclosed to the Company
in a writing addressed to the Company on or prior to the Closing Date or as set
forth on Schedule 5.5, there are no material claims, actions, suits,
proceedings, disputes or investigations pending or, to the best of LaserSight's
or Newco's knowledge, threatened before any federal, state or local court or
governmental or regulatory authority, domestic or foreign, or before any
arbitrator of any nature, brought by or against LaserSight or Newco. Except for
matters expressly disclosed to the Company in a writing addressed to the Company
on or prior to the Closing Date or as set forth on Schedule 5.5, neither
LaserSight or Newco nor any of their assets or properties is subject to any
order, writ, judgment, award, injunction or decree of any federal, state or
local court or governmental or regulatory authority or arbitrator. As of the
date of this Agreement LaserSight is not subject to an FDA investigation.
5.6 Capitalization. As of May 31, 1997, the authorized capital stock
of LaserSight consisted of (i) 20,000,000 shares of LaserSight Common Stock of
which 9,423,907 shares were issued and outstanding and 170,200 shares were held
in treasury, and (ii) 10,000,000 shares of preferred stock, par value $.001, of
which none are issued and outstanding. No material change in such capitalization
has occurred between May 31, 1997 and the date hereof. The authorized capital
stock of Newco consists of 100 shares of common stock, $.001 par value, of which
100 shares are issued and outstanding. All of the Newco common stock has been
duly authorized and validly issued, and is fully paid and non-assessable. There
are no outstanding options, warrants, agreements, conversion rights, preemptive
rights, or other rights to subscribe for, purchase or otherwise acquire any of
Newco's common stock. The shares of LaserSight Common Stock to be issued
pursuant to this Agreement will be duly authorized, validly issued, fully paid
and nonassessable.
5.7 LaserSight's Experience. LaserSight has sold over 175 excimer
lasers worldwide. As of the date hereof, LaserSight employs or contracts with an
individual who has been involved in the FDA's pre-market approval process in
connection with certain products and devices. As of the date hereof, LaserSight
currently has received certification under ISO 9002 in connection with its
manufacturing and quality assurance activities.
5.8 Accuracy of Information. None of the representations, warranties
or statements made by LaserSight or Newco and contained in the SEC filings, in
this Agreement, in the exhibits hereto or in any other agreement, instrument or
document executed or delivered by or on behalf of LaserSight or Newco in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or statements
not misleading.
Except as set forth in this Section 5, LaserSight does not make any
representation or warranty to the Company.
SECTION 6. CONDITIONS AND ADDITIONAL AGREEMENTS.
6.1 Consulting Agreement. LaserSight and Xxxxxx will enter into a
Consulting Agreement in the form of Exhibit C (the "Consulting Agreement")
pursuant to which Xxxxxx will agree to provide certain consulting services to
LaserSight and LaserSight will agree to pay Xxxxxx $50,000.00 upon execution
thereof and certain commissions in connection with the sale of lasers. Also,
Xxxxxx will be granted the option to purchase 25,000 shares of LaserSight Common
Stock.
6.2 Defaults and Interest. If LaserSight defaults on its obligation to
make any of the payments to the Shareholders as described in Section 2.2(a),
(c), or (d) and such default is not cured within five days, interest shall
accrue on the unpaid balance of any such payment at a rate which is equal to the
prime rate printed in the Wall Street Journal as of the date of such default,
plus 4% per annum, provided, however, in no event shall the interest rate
hereunder exceed the maximum rate permitted by law, until such time as the
applicable amount is paid in full.
6.3 Restrictive Covenant. LaserSight acknowledges that Xxxxxx intends
to own and operate facilities, which may be standalone facilities or located
adjacent to a physician's practice, the sole purpose of which will be the
utilization of an excimer laser to treat myopia, hyperopia, astigmatism and such
other conditions the FDA has approved an excimer laser to treat (each such
facility a "Center"). LaserSight agrees that, if the Closing occurs, during the
five year period immediately following the date of the FDA Approval neither
LaserSight nor any of its subsidiaries will own a Center within a 100 mile
radius of any Center which is then Operated by Xxxxxx (as defined herein). For
purposes hereof, "Operated by Xxxxxx" shall mean that Xxxxxx or a Xxxxxx
Affiliate (as defined in the Patent Purchase Agreement (as defined herein)) owns
and operates a Center.
Nothing contained in this Section 6.3 will in any way restrict the
ability of LaserSight or its subsidiaries to (i) provide an excimer laser on a
mobile platform to be utilized by physicians and optometrists, (ii) manufacture,
market, distribute, sell or lease excimer lasers, or (iii) provide access to
excimer lasers through the sale, lease, assessment of a per procedure fee or
other similar arrangement. In addition, if LaserSight owns a Center and Xxxxxx
or a Xxxxxx Affiliate subsequently establish a Center within a 100 mile radius
of such Center, LaserSight's ownership of such a Center will not violate the
terms of this Section 6.3. Upon request, Xxxxxx agrees to promptly provide
LaserSight with a list of the location of all Centers which are then Operated by
Xxxxxx.
If pursuant to Section 2.2(b) the Shareholders are obligated to
deliver the Unwind Shares to LaserSight and LaserSight is obligated to transfer
the PMA Assets to Xxxxxx, then LaserSight shall not be bound by the restrictions
contained in this Section 6.3, provided that LaserSight will be bound by the
restrictions contained in this Section 6.3 if the Shareholders have delivered
the Unwind Shares to LaserSight, but LaserSight has not delivered the PMA Assets
to Xxxxxx.
6.4 Registration.
(a) Demand Registration Rights. Upon LaserSight's receipt of a written
request executed by all of the Shareholders stating that all of the Shareholders
desire to sell all or a portion of the LaserSight Common Stock then held by the
Shareholders (the "Demand Registration Request"), LaserSight shall, subject to
the limitations of this Section 6.4, (i) promptly file with the Securities and
Exchange Commission ("SEC") a registration statement in compliance with the
Securities Act on Form S-3, if available, or such other appropriate registration
form promulgated by the SEC as shall be selected by LaserSight if Form S-3 is
unavailable registering at least the number of shares of LaserSight Common Stock
requested to be registered in the Demand Registration Request, provided that in
no event will LaserSight be required to register more than the total number of
Patent Closing Shares (as defined in the Patent Purchase Agreement) and Closing
Shares (the "Demand Registration Statement"), and (ii) use all commercially
reasonable efforts to cause the Demand Registration Statement to become
effective under the Securities Act as soon as reasonably possible after the
filing thereof and remain effective for 150 days or such shorter period as may
be required if all such LaserSight Common Stock covered by the Demand
Registration Statement is sold prior to the expiration of such 150-day period.
LaserSight shall only be obligated to effect one such registration
pursuant to this Section 6.4(a) and LaserSight shall not be obligated to effect
such registration after the first anniversary of the Closing Date (provided that
a registration effective on or before such anniversary date shall remain
effective for the full 150-day period (or such shorter period as is provided for
in this Section 6.4(a)).
(b) Closing Shares Piggy-Back Registration Rights. If during the
period commencing on the Closing Date and concluding on the first anniversary of
the Closing Date LaserSight proposes or is required to file with the SEC a
registration statement under the Securities Act relating to any shares of
LaserSight Common Stock (other than a registration statement on Form S-8 or Form
S-4 or any successor forms thereto, or any registration form that does not
permit the inclusion therein of the Closing Shares) (the "Closing Shares
Piggy-Back Registration Statement"), LaserSight will each such time give prompt
written notice of its intention to do so to all Shareholders. Upon the written
request of all Shareholders received by LaserSight within 10 days after the
delivery or mailing of such notice from LaserSight (the "Closing Shares
Piggy-Back Registration Request"), subject to the limitation of this Section
6.4, LaserSight will use all commercially reasonable efforts to register at
least the number of shares of LaserSight Common Stock then outstanding which are
not then the subject of another registration statement and which are requested
to be registered in the Closing Shares Piggy-Back Registration Request, provided
that in no event will LaserSight, on behalf of the Shareholders, be required to
include in such registration more than the total number of Patent Purchase
Shares and Closing Shares (the "Closing Requested Shares"). The Shareholders'
right pursuant to this Section 6.4(b) to receive notice and participate in a
Closing Shares Piggy-Back Registration Statement shall cease on the day after
the first anniversary of the Closing Date.
(c) Hyperopia Shares Piggy-Back Registration Rights. If during the
period commencing on the date the Hyperopia Shares are issued and concluding on
the first anniversary of such date LaserSight proposes to file with the SEC
pursuant to an underwritten offering a registration statement under the
Securities Act relating to any shares of LaserSight Common Stock (other than a
registration statement on Form S-8 or Form S-4 or any successor forms thereto,
or any registration form that does not permit the inclusion therein of the
Closing Shares) (the "Hyperopia Shares Piggy-Back Registration Statement"),
LaserSight will each such time give prompt written notice of its intention to do
so to all Shareholders. Upon the written request of all Shareholders received by
LaserSight within 10 days after the delivery or mailing of such notice from
LaserSight (the "Hyperopia Shares Piggy-Back Registration Request"), subject to
the limitation of this Section 6.4, LaserSight will use all commercially
reasonable efforts to register at least the number of shares of LaserSight
Common Stock then outstanding which are not then the subject of another
registration statement and which are requested to be registered in the Hyperopia
Shares Piggy-Back Registration Request, provided that in no event will
LaserSight, on behalf of the Shareholders, be required to include in such
registration more than the total number of Hyperopia Shares (the "Hyperopia
Requested Shares"). The Shareholders' right pursuant to this Section 6.4(c) to
receive notice and participate in a Hyperopia Shares Registration Statement
shall cease on the day after the first anniversary of the date the Hyperopia
Shares are issued.
(d) Limitations. The foregoing notwithstanding, in the event of an
underwritten offering pursuant to Section 6.4(b) or an offering pursuant to
Section 6.4(c), if the managing underwriter of such offering shall advise
LaserSight that, in its opinion, the distribution of a specified portion of the
securities requested to be included in the Closing Shares Piggy-Back
Registration Statement or Hyperopia Shares Piggy-Back Registration Statement, as
applicable, would materially adversely affect the distribution of such
securities by increasing the aggregate amount of the offering in excess of the
maximum amount of securities which such managing underwriter believes can
reasonably be sold in the contemplated distribution, then LaserSight may
(subject to the limitations set forth below) exclude all Closing Requested
Shares or Hyperopia Requested Shares, as applicable, from, or limit the number
of Closing Requested Shares or Hyperopia Requested Shares, as applicable, to be
included in, the Closing Shares Piggy-Back Registration Statement or Hyperopia
Shares Piggy-Back Registration Statement, as applicable. In such event,
LaserSight shall so advise the Shareholders, and the number of Closing Requested
Shares or Hyperopia Requested Shares, as applicable, and other shares ("Other
Shares") to be included in the Closing Shares Piggy-Back Registration Statement
or Hyperopia Shares Piggy-Back Registration Statement, as applicable, by other
persons or entities that are then stockholders of LaserSight ("Other Holders"),
after providing for all shares that LaserSight proposes to offer and sell for
its own account, shall be allocated among the Shareholders and Other Holders pro
rata on the basis of (i) the number of Closing Requested Shares or Hyperopia
Requested Shares, as applicable, then held by the Shareholders and (ii) the
number of Other Shares.
LaserSight shall be entitled to suspend the right of the Shareholders
to sell any Closing Shares pursuant to a Demand Registration Statement, a
Closing Shares Piggy-Back Registration Statement or a Hyperopia Shares
Piggy-Back Registration Statement if the LaserSight Board of Directors ("Board")
determines reasonably and in good faith that such sales pursuant to a Demand
Registration Statement, a Closing Shares Piggy-Back Registration Statement or a
Hyperopia Shares Piggy-Back Registration Statement, as applicable, would
materially impede, delay or interfere with any material financing, offer or sale
of securities by LaserSight, acquisition, corporate reorganization or other
significant transaction involving LaserSight or any of its subsidiaries, which
material financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration by
LaserSight at the time of such suspension described above; provided, however,
that LaserSight shall not be entitled to more than one such suspension and the
suspension shall not be longer than four weeks duration. If LaserSight shall so
suspend the Shareholder's right to sell, the Shareholders shall receive an
extension of the registration period equal to the number of days of the
suspension.
(e) Execution of Agreements. If a Demand Registration Statement or
Closing Shares Piggy-Back Registration Statement relates to an underwritten
public offering, LaserSight shall so advise the Shareholders. In such event or
in the event a Hyperopia Shares Piggy-Back Registration Statement is filed, the
right of any Shareholder to registration shall be conditioned upon such
Shareholder's execution of the underwriting agreement agreed to among LaserSight
and the managing underwriters selected by LaserSight for such underwritten
offering.
(f) Notice. LaserSight will promptly advise Xxxxxx as to the initial
filing of a Demand Registration Statement, a Closing Shares Piggy-Back
Registration Statement, or a Hyperopia Shares Piggy-Back Registration Statement
and as to the effectiveness thereof. LaserSight will promptly furnish such
number of prospectuses, and any amendments thereof or supplements thereto, as
Xxxxxx from time to time may reasonably request.
(g) Information. Each of the Shareholders shall from time to time
promptly supply to LaserSight in writing any information relating to any
holdings of LaserSight Common Stock by the Shareholders, and their intended plan
of distribution, all as LaserSight may reasonably request in order for
LaserSight to comply with the rules of the SEC applicable to the Demand
Registration Statement, Closing Shares Piggy-Back Registration Statement and
Hyperopia Shares Piggy-Back Registration Statement. In addition, each of the
Shareholders agrees to furnish promptly to LaserSight all information required
to be disclosed in order to make the information previously furnished to
LaserSight by the Shareholders not materially misleading.
(h) Expenses. All expenses incurred in connection with a Demand
Registration Statement, a Closing Shares Piggy-Back Registration Statement and a
Hyperopia Shares Piggy-Back Registration Statement, including without limitation
all filing fees, duplication expenses, fees and expenses of legal counsel for
LaserSight, and the fees and expenses of LaserSight's independent accountants,
shall be paid by LaserSight, except that the Shareholders shall pay any and all
brokers' or underwriters' fees, commissions and discounts and any fees and
expenses of their legal counsel, if any.
6.5 FDA Approval. LaserSight agrees to take the following actions in
connection with seeking the FDA Approval:
(i) LaserSight shall assign its personnel, who have the
appropriate training and experience, to diligently pursue
approval of the PMA application. If LaserSight, in its
reasonable judgment, deems it necessary, LaserSight shall
retain consultants, e.g., statisticians and clinicians,
with the qualifications and experience LaserSight
reasonably deems is needed to seek PMA approval;
(ii) LaserSight shall assign its personnel, who have the
appropriate training and experience, to establish and
implement manufacturing procedures that comply with the
FDA's good manufacturing practice regulations ("GMP").
Unless determined unnecessary by LaserSight, LaserSight
shall have one or more independent auditors inspect its
facility prior to the FDA's pre-approval inspection to
help ensure that the facility will pass the FDA
inspection. LaserSight shall use its best efforts to
ensure that its written description of its manufacturing
operations submitted as a PMA amendment or supplement
complies with the FDA's requirements;
(iii) LaserSight shall prepare for presentation of the PMA to
the FDA's advisory panel to the same extent as would a
reasonably prudent person under the same circumstances.
This preparation shall include, but shall not be limited
to, at least one comprehensive session in which the
presenters practice their presentations and are asked
questions by individuals playing the role of panel
members. As part of its panel preparation, LaserSight
shall obtain copies of transcripts or videotapes of recent
panel reviews of other ophthalmic lasers and use this
information to help guide the presenters in anticipating
possible questions and issues. LaserSight will ensure that
the presenters are adequately trained, and that the
materials presented to the panel, e.g., slides and
overheads, are accurate and professional;
(iv) LaserSight shall regularly interact with the FDA staff
throughout the process in an attempt to determine what
questions the FDA has with respect to the PMA. LaserSight
shall promptly and fully respond to questions raised by
the FDA, whether in writing or oral. LaserSight shall
attempt to learn what questions the FDA intends to ask the
panel, and shall use this information in preparing for the
panel meeting. Whenever it would assist the PMA approval
process, LaserSight shall meet with agency officials.
LaserSight shall adequately prepare for such meetings,
e.g., bring appropriate experts, hold practice meetings,
develop handouts and overheads, etc.;
(v) LaserSight shall use all reasonable efforts to ascertain
whether the current clinical data will be sufficient to
support the PMA approval in light of the new ownership of
the PMA. If LaserSight determines that additional clinical
data are or may be needed, LaserSight will promptly submit
an investigational device exemption and initiate the
required studies. Any studies that are conducted will be
properly monitored, appropriate clinical investigators
will be selected, subjects will provide informed consent,
and studies will not begin until institutional review
board approval has been obtained;
(vi) If the panel recommends approval of the PMA with
conditions, LaserSight shall promptly take whatever
measures it deems are appropriate to satisfy the
conditions set by the panel, unless LaserSight can
promptly persuade FDA that compliance with the conditions
is unnecessary;
(vii) LaserSight shall work with the FDA to expeditiously agree
upon final labeling for the laser, the summary of safety
and effectiveness, and any other final documentation that
is needed to obtain approval;
(viii) LaserSight shall comply with the FDA's requirements with
respect to the promotion and marketing of an unapproved
device. LaserSight shall establish internal procedures to
ensure that the device is properly promoted;
(ix) LaserSight shall provide Xxxxxx with periodic reports
regarding LaserSight's actions in connection with
obtaining the FDA Approval; and
(x) LaserSight will treat the PMA Assets and the materials
developed by LaserSight in connection with seeking the FDA
Approval in the same manner LaserSight treats its other
confidential, proprietary information, provided that
nothing contained in this Section 6.5(x) shall in any way
restrict LaserSight's actions or disclosures in connection
with obtaining the FDA Approval.
6.6 Insurance. After the FDA Approval, LaserSight, at its sole cost
and expense, shall name the Shareholders as additional insureds under its
product liability insurance policy which relates to products manufactured by
LaserSight.
6.7 Distributions. Immediately prior to the Closing, the Company may
distribute to any or all of its Shareholders the Company's lasers which are
described on Schedule 6.7 and the related investigational device exemption which
has been granted by the FDA. After the Closing Date Xxxxxx agrees to supply
LaserSight with information which is not included in the PMA Assets, but is
necessary to respond to inquiries of the FDA regarding the PMA.
6.8 LaserSight's Conditions to Close. The Closing and all obligations
of LaserSight pursuant to this Agreement shall be conditioned upon the
following:
(a) all representations and warranties contained in Section 4 shall be
true in all material respects as of the Closing Date;
(b) there shall not have been any material adverse change in the
business or assets of the Company (either individually or in the aggregate) from
the date of LaserSight's execution of this Agreement through the Closing Date if
the date of execution of this Agreement and the Closing Date are not one and the
same;
(c) the Company shall have performed all of its obligations under this
Agreement required to be performed as of the Closing Date;
(d) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement;
(e) the Company shall have delivered to LaserSight an opinion of Blank
Rome Xxxxxxx & XxXxxxxx, dated as of the Closing Date, in form and substance
reasonably satisfactory to LaserSight;
(f) LaserSight shall have received an executed original of the
Consulting Agreement;
(g) LaserSight shall have received an executed original of the Patent
Purchase Agreement and all documents contemplated thereby in a form mutually
agreeable to Xxxxxx and LaserSight pursuant to which LaserSight acquires all
right, title and interest in and to United States patent number 5,586,980 (the
"Patent Purchase Agreement");
(h) LaserSight shall have received an executed original of the
Certificate from each of the Shareholders;
(i) Foothill Capital Corporation shall have taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; and
(j) The Board, or the appropriate committee thereof, shall have taken
all necessary action to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby.
In the event that any of the foregoing conditions is not satisfied, then
LaserSight may, at its option, terminate this Agreement in which event, so long
as it is not otherwise in breach of this Agreement, LaserSight shall be relieved
of all obligations hereunder and this Agreement shall be deemed null, void and
of no force or effect.
6.9 LaserSight's Deliveries. At or prior to the Closing, LaserSight
shall deliver to the Company and the Shareholders, as applicable:
(a) the Transfer Agent Letter;
(b) all such documents and instruments the Company and its counsel may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement;
(c) an executed original of the Consulting Agreement;
(d) an executed original of the Patent Purchase Agreement;
(e) a certificate from an officer of LaserSight certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of LaserSight and all amendments thereto as in effect on the
Closing Date; (ii) a true, correct and complete copy of the Bylaws of Company
and all amendments thereto as in effect on the Closing Date; (iii) a true,
correct and complete copy of the resolutions approved and adopted by the Board,
or committee thereof, authorizing the transactions contemplated by this
Agreement; (iv) Good Standing Certificate from the Delaware Secretary of State;
(v) that the attached copy of the Transfer Agent Letter was sent via facsimile
and overnight delivery to LaserSight's transfer agent; and
(f) a certificate from an officer of Newco certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of and all amendments thereto as in effect on the Closing Date;
(ii) a true, correct and complete copy of the Bylaws of Company and all
amendments thereto as in effect on the Closing Date; (iii) a true, correct and
complete copy of the resolutions approved and adopted by the Board of Directors
of Newco, or committee thereof, authorizing the transactions contemplated by
this Agreement; and (iv) Good Standing Certificate from the Delaware Secretary
of State.
6.10 Company's Conditions To Close. The Closing and all obligations of
the Company and the Shareholders pursuant to this Agreement shall be conditioned
upon the following:
(a) all representations and warranties contained in Section 5 shall be
true as of the Closing Date;
(b) LaserSight shall have performed all of its obligations under this
Agreement required to be performed as of the Closing Date;
(c) no suit, action or other proceeding shall have been instituted to
restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement;
(d) Xxxxxx shall have received an executed original of the Patent
Purchase Agreement; and
(e) LaserSight shall have delivered to the Company and the
Shareholders an opinion of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, dated as of the
Closing Date, in form and substance reasonably satisfactory to the Company and
the Shareholders.
In the event the Company believes that any of the foregoing conditions is not
satisfied, then the Company may, at its option, terminate this Agreement in
which event the Company, so long as it is not otherwise in breach of this
Agreement, shall be relieved of all obligations hereunder and this Agreement
shall be deemed null, void and of no force or effect.
6.11 Company's Deliveries. At or prior to the Closing, the Company
shall deliver to LaserSight the following documents:
(a) all such documents and instruments LaserSight and its counsel may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement;
(b) an executed original of the Consulting Agreement;
(c) an executed original of the Patent Purchase Agreement;
(d) A certificate from an officer of Company certifying as of the
Closing Date: (i) a true, correct and complete copy of the Articles of
Incorporation of Company and all amendments thereto as in effect on the Closing
Date; (ii) a true, correct and complete copy of the Bylaws of Company and all
amendments thereto as in effect on the Closing Date; (iii) a true, correct and
complete copy of the resolutions approved and adopted by the Shareholders
authorizing the transactions contemplated by this Agreement; and (iv) Good
Standing Certificate from the Pennsylvania Secretary of State; and
(e) An executed original of the Certificate from each of the
Shareholders.
6.12 Copies of Certain Assets. LaserSight acknowledges that the
Shareholders will retain one copy of certain of the PMA Assets solely for
purposes of satisfying requirements of the FDA, the Shareholders agree (i) not
to utilize such copies for any reason other than to satisfy an inquiry by the
FDA or as otherwise specifically provided in this Agreement or in the Consulting
Agreement, (ii) not to disclose such copies or the contents of such copies to
any party other than the FDA after requested to do so by the FDA, and (iii)
agrees to notify LaserSight immediately if the FDA requests that any of the
Shareholders supply information related to the PMA Assets or the copies thereof
retained by any of the Shareholders.
6.13 Agreement with Third Parties. If (i) LaserSight negotiates an
agreement with Pillar Point Partners or agrees to settle litigation with Pillar
Point Partners which agreement or settlement relates to a claim that a laser
manufactured by or for LaserSight which is modeled after the Xxxxxx Laser
infringes the rights or properties of Pillar Point Partners, and (ii) the terms
of such agreement or settlement provide for LaserSight and/or the purchasers of
lasers manufactured by or for LaserSight to pay a fee to Pillar Point Partners
in connection with the use of a laser manufactured by or for LaserSight which is
modeled after the Xxxxxx Laser, including, without limitation, a per procedure
fee (collectively, the "Fee"), then LaserSight agrees that it will not charge
Xxxxxx or any Xxxxxx Affiliate any amount in addition to the Fee. If such
agreement or settlement provides for a portion of the Fee to be rebated to
LaserSight then such rebated amount will either not be charged to Xxxxxx or will
be repaid by LaserSight to Xxxxxx or a Xxxxxx Affiliate, as applicable. In the
event the Termination Date occurs, LaserSight's obligations under this Section
6.13 shall be modified to provide that if LaserSight's general practice is to
charge an amount in excess of the Fee then (i) LaserSight will not charge Xxxxxx
or any Xxxxxx Affiliate more than LaserSight's customary charge associated with
a similar laser, and (ii) LaserSight will rebate to Xxxxxx or a Xxxxxx
Affiliate, as applicable, 50% of any amount it charges to Xxxxxx or a Xxxxxx
Affiliate, as applicable, in excess of the Fee.
SECTION 7. TERMINATION AND ABANDONMENT.
7.1 Methods of Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) By the mutual written consent of the Company and LaserSight;
(b) By LaserSight, if all of the conditions set forth in Section 6.8
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date;
(c) By the Company, if all of the conditions set forth in Section 6.10
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date; or
(d) By the Company or LaserSight at any time after August 31, 1997.
If this Agreement is terminated pursuant to this Section 7.1, it shall become
null and void and of no further force or effect, except as provided in Section
7.2
7.2 Procedure Upon Termination. In the event of termination and
abandonment of this Agreement by the Company or LaserSight pursuant to Section
7.1 hereof, written notice thereof shall forthwith be given to the other party
or parties as provided herein and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
the Company or LaserSight, and the Company and LaserSight shall each return to
the other party any documents or copies thereof in possession of such party
furnished by such other party in connection with the transactions contemplated
by this Agreement. If this Agreement is terminated as provided herein, no party
to this Agreement shall have any liability or further obligation to any other
party to this Agreement with respect to this Agreement or the transactions
contemplated hereby except as provided in this Section 7.2; provided, however,
that no termination of this Agreement pursuant to the provisions of this Section
7 shall relieve any party of liability for a breach of any provision of this
Agreement occurring prior to such termination.
SECTION 8. INDEMNIFICATION.
8.1 Indemnification.
(a) From and after the Closing Date and subject to the other
provisions of this Section 8, the Company and each of the Shareholders, jointly
and severally, agree, to indemnify and hold LaserSight and LaserSight's
affiliates, officers, directors and agents harmless from damages, losses or
expenses suffered or paid, directly or indirectly, as a result of any and all
claims, demands, suits, causes of action, proceedings, judgments and
liabilities, including reasonable counsel fees and other expenses incurred in
litigation or otherwise, assessed, incurred or sustained (collectively
"LaserSight Loss") by or against any of them with respect to or arising out of
(i) the failure of any representation or warranty made by the Company in this
Agreement or in any Schedule delivered pursuant hereto to be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date, (ii) the breach by or nonperformance of the Company or any of the
Shareholders of any covenants or agreements contained in this Agreement, (iii)
claims of third parties that the Company's operation of the assets described on
Schedule 6.7 prior to the Closing Date and Xxxxxx'x or his successor's operation
of the assets described on Schedule 6.7 prior to the date of the FDA Approval
(or in the event the Termination Date occurs, prior to the Termination Date)
infringes on the rights or properties of such third party, and (iv) claims of
third parties that such party was injured as a result of the Company's or
Xxxxxx'x actions prior to the Closing Date. The indemnification covenant
contained in this Section will not require the Company or the Shareholders to
indemnify in connection with consequential damages sustained by the parties
eligible for indemnification hereunder.
(b) From and after the Closing Date and subject to the other
provisions of this Section 8, LaserSight agrees to indemnify and hold the
Company, the Company's affiliates, officers, directors, agents, the Shareholders
and Xxxxxx Affiliates harmless from damages, losses or expenses suffered or
paid, directly or indirectly, as a result of any and all claims, demands, suits,
causes of action, proceedings, judgments and liabilities, including reasonable
counsel fees and other expenses incurred in litigation or otherwise, assessed,
incurred or sustained (collectively "Company Loss") by or against any of them
with respect to or arising out of (i) the failure of any representation or
warranty made by LaserSight in this Agreement or in any Schedule delivered
pursuant hereto to be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date, (ii) the breach by or
nonperformance of LaserSight of any covenants or agreements contained in this
Agreement, (iii) claims of third parties that any laser manufactured by or for
LaserSight whether or not based upon the Xxxxxx Laser and its related know-how
infringes on the rights or properties of such third party, (iv) claims of third
parties that the operation of the assets described on Schedule 6.7 after the
date of the FDA Approval (or in the event the Termination Date occurs, after the
Termination Date) infringe on the rights or properties of a third party,
provided that, such indemnification shall cease upon the first to occur of (A)
the consummation of an agreement or settlement between LaserSight and Pillar
Point Partners as contemplated by Section 6.13 so long as LaserSight fulfills
its obligations to Xxxxxx or the Xxxxxx Affiliates, as applicable, pursuant to
such Section 6.13, (B) LaserSight's (X) notice to Xxxxxx that it has been unable
to negotiate an acceptable resolution of the claim that it is manufacturing or
intends to manufacture a laser based on the Xxxxxx Laser which infringes on the
rights or properties of a third party, (Y) notice to Xxxxxx that it has elected
not to manufacture such laser, and (Z) LaserSight's delivery to Xxxxxx or a
Xxxxxx Affiliate of two excimer lasers, at no cost, which are substantially
similar in functionality to the assets described on Schedule 6.7 (the
"Replacement Lasers"), or (C) final judgment which is adverse to LaserSight is
entered in a suit claiming that a laser manufactured by LaserSight based on the
Xxxxxx Laser infringes on the rights or properties of a third party, (v) claims
of third parties that the operation of the Replacement Lasers infringe on the
rights or properties of a third party, and (vi) claims of third parties that any
laser manufactured by or for LaserSight, whether or not based upon the Xxxxxx
Laser and its related know-how, injures such third parties. The indemnification
covenant contained in this Section will not require LaserSight to indemnify in
connection with (i) consequential damages sustained by the parties eligible for
indemnification hereunder, and (ii) the obligation to pay the Fee. In addition,
LaserSight will only be required to indemnify Xxxxxx Affiliates pursuant to this
Section in connection with Sections 8.1(b)(iii), 8.1(b)(iv), 8.1(b)(v),
8.1(b)(vi) and obligations pursuant to 8.1(b)(ii) which relate to Sections of
this Agreement pursuant to which LaserSight expressly owes an obligation to a
Xxxxxx Affiliate, including, Sections 6.3 and 6.13).
(c) If any action or proceeding be commenced, or if any claim, demand
or assessment be asserted, in respect of which a party indemnified hereunder
(the "Indemnified Party") proposes to hold any one or more of the indemnifying
party or parties (the "Indemnifying Party") liable under the provisions of this
Agreement, the Indemnifying Party shall have no liability therefor unless (i)
the Indemnifying Party shall receive written notice of such claim, demand or
assessment ("Claims Notice") within 30 days after the Indemnified Party acquires
knowledge thereof, and (ii) the Indemnifying Party shall have received copies of
all information and documents relating thereto within twenty (20) days after the
Indemnified Party's receipt thereof. If any one or more of the Indemnifying
Party or Parties shall, at its or his option, elect to contest or defend any
such action, proceeding, claim, demand or assessment, such Indemnifying Party
shall be entitled, at its or his sole cost and expense, to contest or defend the
same with counsel of its or his own choosing, and the Indemnified Party and
their respective successors or assigns shall not admit any liability with
respect thereto or settle, compromise, pay or discharge the same without the
prior written consent of the Indemnifying Party so long as any Indemnifying
Party is contesting or defending the same in good faith, and the Indemnified
Party (and their respective successors and assigns) shall cooperate with the
Indemnifying Party in the contest or defense thereof and shall accept any
settlement thereof recommended by a majority in interest of the Indemnifying
Party so long as the amount of such settlement is paid by the Indemnifying
Party. If the Indemnified Party fails to notify the Indemnifying Party of a
claim in accordance with the terms of this Section 8.1(c), and the Indemnifying
Party is thereby prejudiced by such failure of notice in its defense of the
claim, the Indemnifying Party's obligation to indemnify hereunder shall be
extinguished with respect to such claim to the extent that the Indemnifying
Party has been prejudiced by the failure to give such notice.
(d) LaserSight shall not be entitled to indemnification for any claim
until the aggregate amount of claims hereunder exceeds $40,000.00 (the
"Threshold Amount"), and then LaserSight may only recover the amount in excess
of the Threshold Amount, provided that LaserSight will be entitled to be
indemnified hereunder for all LaserSight Loss arising as a result of a breach of
Sections 4.8, 4.10 or 4.23 without regard to limitations of the Threshold
Amount. Prior to seeking indemnification hereunder the parties must first
utilize proceeds available from relevant insurance policies of the Indemnified
Party.
(e) Notwithstanding anything to the contrary contained in this
Agreement, neither the Company nor any of the Shareholders shall be liable under
the indemnification provisions of this Section hereof or otherwise have any
liability for any misrepresentation or breach of warranty or covenant under this
Agreement or otherwise have any liability in connection with the transactions
contemplated by this Agreement to the extent that:
(i) the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which
such liability would be based is disclosed in any of the
contracts and documents referred to in this Agreement, in
the Schedules attached hereto or in any other contracts,
documents, records or other instruments made available to
LaserSight or Newco hereunder or which is disclosed in a
written notice furnished to LaserSight or Newco prior to
the Closing; provided, however, that any such
misrepresentation or breach of warranty or covenant so
disclosed to LaserSight or Newco after the execution and
delivery of this Agreement and prior to the Closing shall
not affect the right of LaserSight or Newco to elect not
to close the transactions contemplated by this Agreement
as provided in Section 7 hereof (it being understood and
agreed that if, despite such right of LaserSight and Newco
to elect not to close by reason of the misrepresentation
or breach so disclosed, LaserSight and Newco nevertheless
elect to close, thereby waiving such misrepresentation or
breach, LaserSight and Newco shall thereafter have no
claim against any of the Shareholders by reason of any
such disclosed misrepresentation or breach of warranty or
covenant); or
(ii) such liability is based upon a claim, assessment or
deficiency for federal, state and/or local income or
franchise taxes which arise from adjustments which have
the effect only of shifting income, credits and/or
deductions from one fiscal period to another; or
(iii) such liability is offset by a credit in accordance with
the provisions of subsection 8.1(j) below.
(f) Notwithstanding anything to the contrary contained in this
Agreement, LaserSight shall not be liable under the indemnification provisions
of this Section hereof or otherwise have any liability for any misrepresentation
or breach of warranty or covenant under this Agreement or otherwise have any
liability in connection with the transactions contemplated by this Agreement to
the extent that the existence of such liability, the breach of warranty or
covenant or the falsity of the representation upon which such liability would be
based is disclosed in this Agreement, in the Schedules attached hereto, in any
of the SEC Filings, or which is disclosed in a written notice furnished to the
Company or any of the Shareholders prior to the Closing; provided, however, that
any such misrepresentation or breach of warranty or covenant so disclosed to the
Company or any of the Shareholders after the execution and delivery of this
Agreement and prior to the Closing shall not affect the right of the Company to
elect not to close the transactions contemplated by this Agreement as provided
in Section 7 hereof (it being understood and agreed that if, despite such right
of the Company to elect not to close by reason of the misrepresentation or
breach so disclosed, the Company and the Shareholders nevertheless elect to
close, thereby waiving such misrepresentation or breach, the Company and the
Shareholders shall thereafter have no claim against LaserSight or Newco by
reason of any such disclosed misrepresentation or breach of warranty or
covenant).
(g) All representations and warranties contained in Sections 4.1, 4.2,
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.14, 4.15, 4.16, 4.17, 4.19,
4.20, 4.21, 4.22 and 4.23 shall expire on the first anniversary of the Closing
Date, and the indemnities set forth in Sections 8.1(a)(i) and (ii) (except for
indemnities pursuant to Section 8.1(a)(ii) which relate to Sections 2.2(b), 2.5,
6.4(g), 6.4(h) or 6.12) and all representations and warranties contained in
Sections 4.12, 4.13, 4.18 and 4.23 shall expire on the Termination Date, and
after such dates the Shareholders shall have no liability under the
indemnification provisions of Section 8 hereof with respect to such Sections or,
except pursuant to Section 8.1(o), otherwise have any liability under this
Agreement or otherwise in connection with the transactions contemplated by this
Agreement unless (i) with respect to other than third party claims, LaserSight
gives written notice to the Shareholders of LaserSight's claim for any such
liability, setting forth in reasonable detail the specific facts and
circumstances pertaining thereto, on or before the first anniversary of the
Closing Date or the Termination Date, as applicable, and (ii) with respect to
other than third party claims, if LaserSight does not satisfy such claim within
30 days after the giving of such notice, LaserSight commences a legal action or
proceeding against the Shareholders with respect to such claim within 45 days
after the giving of such notice. With respect to third party claims for which a
Claims Notice has been sent, no indemnification or other liability shall be due
or owing under Section 8 with respect to any LaserSight Loss to the extent it
(i) is a potential claim or cause of action which LaserSight believes may be
asserted rather than a LaserSight Loss, claim, cause of action liability which
has, in fact, been asserted, or (ii) is a LaserSight Loss, claim cause of action
or liability with respect to which LaserSight has taken action to accelerate the
time period in which such matter is asserted, wherein a material purpose of such
action was to facilitate a claim prior to the expiration of the survival period
set forth in this subsection (g) of Section 8 so that LaserSight could make an
indemnification claim prior to the expiration of such period.
(h) All representations and warranties contained in Sections 5.1 and
5.2 shall expire on the first anniversary of the Closing Date, and the
indemnities set forth in Section 8.1(b)(i) hereof and all representations and
warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7 and 5.8 shall expire on
the fourth anniversary of the Closing Date, and after such dates LaserSight
shall have no liability under the indemnification provisions of Section 8 hereof
with respect to such Sections or otherwise have any liability under this
Agreement or, except pursuant to Section 8.1(n), otherwise in connection with
the transactions contemplated by this Agreement unless (i) with respect to other
than third party claims, the Shareholders give written notice to LaserSight of
the Shareholders' claim for any such liability, setting forth in reasonable
detail the specific facts and circumstances pertaining thereto, on or before the
first anniversary of the Closing Date or the fourth anniversary of the Closing
Date, as applicable, and (ii) with respect to other than third party claims, if
the Shareholders, or any Shareholder, does not satisfy such claim within 30 days
after the giving of such notice, the Shareholders commence a legal action or
proceeding against LaserSight with respect to such claim within 45 days after
the giving of such notice. With respect to third party claims for which a Claims
Notice has been sent, no indemnification or other liability shall be due or
owing under Section 8 with respect to any Company Loss to the extent it (i) is a
potential claim or cause of action which the Shareholders believe may be
asserted rather than a Company Loss, claim, cause of action liability which has,
in fact, been asserted, or (ii) is a Company Loss, claim cause of action or
liability with respect to which the Shareholders, or any Shareholder, has taken
action to accelerate the time period in which such matter is asserted, wherein a
material purpose of such action was to facilitate a claim prior to the
expiration of the survival period set forth in this subsection (h) of Section 8
so that the Shareholders could make an indemnification claim prior to the
expiration of such period.
(i) It is specifically understood and agreed that, except as provided
in the last sentence of Section 8.1(k), in the event a misrepresentation or
breach of warranty, covenant or agreement is discovered by a party hereto after
the Closing, the remedy of such party shall be limited to indemnification as set
forth in Section 8 hereof (as limited by the provisions set forth therein or
elsewhere in this Agreement), which shall be such party's sole and exclusive
remedy, and such party shall not be entitled to a rescission of this Agreement.
(j) In the event that, notwithstanding the limitations contained in
this Section 8 or elsewhere in this Agreement, any of the Shareholders becomes
liable to LaserSight and/or Newco under the provisions of this Agreement or
otherwise, the Shareholders shall be entitled to a credit or offset against any
such liability of an amount equal to the value of any net tax benefit realized
(by reason of a tax deduction, basis reduction, shifting of income, credits
and/or deductions or otherwise) by LaserSight or Newco in connection with the
loss or damage suffered by LaserSight or Newco which forms the basis of the
Shareholders' liability hereunder. Such net tax benefit shall be calculated by
LaserSight's independent certified public accountant utilizing, to the extent
possible, generally accepted accounting principles.
(k) Notwithstanding anything to the contrary contained in this
Agreement, in the event that, notwithstanding the limitations contained in this
Section 8 or elsewhere in this Agreement, the Shareholders become liable to
LaserSight and/or Newco pursuant to this Section 8 as a result of a
misrepresentation or breach of a warranty, in no event shall the aggregate
amount of such liability of the Shareholders (including all costs, expenses and
attorneys' fees paid or incurred by the Shareholders in connection therewith or
the curing of any and all misrepresentations or breaches of warranties under
this Agreement) exceed the number which results from multiplying 65% times the
total dollar amount received by the Shareholders pursuant to this Agreement. The
total dollar amount received by the Shareholders pursuant to this Agreement
shall be the sum of (i) all amounts paid to the Company or Shareholders in
immediately available funds, and (ii) the dollar amount utilized to calculate
the number of shares of LaserSight Common Stock actually issued pursuant to this
Agreement, provided that until such time as the Shareholders are not required to
pay liquidated damages pursuant to Section 2.2(b), only 36.3637% of the Closing
Shares will be deemed to have been actually issued pursuant to this Agreement,
provided further, once the Shareholders are no longer required to pay liquidated
damages pursuant to Section 2.2(b), all of the Closing Shares will be deemed to
have been actually issued pursuant to this Agreement and will be utilized to
determine the Shareholders' indemnification obligations hereunder, whenever such
obligations arose, including, without limitation, indemnification obligations
which may have previously been limited due to less than all of the Closing
Shares being deemed to have been issued pursuant to this Agreement. Nothing
contained herein shall limit LaserSight's or Newco's rights and remedies
associated with a breach or nonperformance by the Shareholders or any
Shareholder of an agreement or covenant contained in Sections 2.2(b), 2.5,
6.4(g), 6.4(h), 6.12, indemnities pursuant to Section 8.1(a)(ii) which relate to
Sections 2.2(b), 2.5, 6.4(g), 6.4(h) or 6.12, or indemnities pursuant to Section
8.1(a)(iv).
(l) Notwithstanding anything to the contrary contained in this
Agreement or in the Articles of Merger, there shall be excluded from the assets
acquired as a result of the merger, any debt, liability or obligation of, or
claim the Company has or may have against, any past or present shareholder,
director or officer of the Company.
(m) Notwithstanding anything to the contrary contained in Section 7 or
elsewhere in this Agreement, LaserSight and Newco shall not, except as otherwise
expressly provided in subsection (e)(i) of this Section 8, have the right to
elect not to close the transactions contemplated by this Agreement by reason of
any misrepresentation or breach of warranty or covenant contained in this
Agreement or otherwise if (i) the Shareholders shall have no liability therefor
to LaserSight (or Newco) by reason of the provisions contained in this Section 8
or elsewhere in this Agreement, or (ii) the Shareholders undertake, at their
sole cost and expense (but subject to the limitations and other provisions
contained in this Section 8 or elsewhere in this Agreement), to promptly cure
such misrepresentation or breach (and/or defend, settle, compromise and/or
discharge any third party claim which forms the basis thereof) prior to the
Closing. The Threshold Amount shall not be considered when determining whether
the Shareholders have liability pursuant to subsection (i) of this Section
8.1(m) and determining the limitations on liability referred to in subsection
(ii) of this Section 8.1(m).
(n) Notwithstanding anything to the contrary contained in this
Agreement LaserSight's obligations pursuant to Sections 8.1(b)(ii)-(vi) shall
survive the termination of this Agreement.
(o) Notwithstanding anything to the contrary contained in this
Agreement the Shareholders' obligations pursuant to Section 8.1(a)(ii) which
relate to Sections 2.2(b), 2.5, 6.4(g), 6.4(h) or 6.12 and obligations pursuant
to Sections 8.1(a)(iii)-(iv) shall survive the termination of this Agreement.
(p) The parties agree that there will be no ability to offset amounts
owed to a party pursuant to this Section 8 against amounts such party is
required to pay pursuant to the terms of this Agreement, the Consulting
Agreement, the Patent Purchase Agreement and other agreements executed in
connection with the Closing.
SECTION 9. GENERAL PROVISIONS.
9.1 Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
(except covenants and agreements which are expressly required to be performed
and are performed in full on or prior to the Closing Date) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement, provided that the representations and warranties contained herein
shall only survive until the times described in Sections 8.1(g) and 8.1(h), as
applicable.
9.2 Publicity. So long as this Agreement shall be in effect, none of
the Company, the Shareholders nor LaserSight shall issue or cause the
publication of any press release or other announcement with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other party, which consent shall not be withheld where such release or
announcement is required by applicable law.
9.3 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors and
assigns; provided, however, that no party shall assign or delegate this
Agreement or any of the rights or obligations created hereunder without the
prior written consent of the other parties. Notwithstanding the foregoing,
LaserSight shall have the unrestricted right to assign this Agreement and all or
any part of its rights hereunder and to delegate all or any part of its
obligations hereunder to any affiliate of LaserSight, but in such event
LaserSight shall remain fully liable as primary obligor for the performance of
all of such obligations in the manner prescribed in this Agreement. Nothing in
this Agreement shall confer upon any person, firm or corporation not a party to
this Agreement, or the legal representatives of such person, firm or
corporation, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement.
9.4 Brokers and Finders. Each of parties represents and warrants to
the other that he or it has not engaged any broker, finder or investment banker
in connection with the transactions contemplated by this Agreement. Each of
LaserSight and the Company agrees to indemnify and hold harmless the other
against any brokerage fee, commission, finder's fee, or financial advisory fee
due to any person, firm or corporation acting on his or its behalf in connection
with the transactions contemplated by this Agreement.
9.5 Expenses. Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
9.6 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be effective for all purposes if hand delivered to the
party designated below, sent via overnight delivery utilizing a nationally
recognized overnight delivery service or placed in the United States mail,
postage prepaid, addressed to the addresses set forth below, or to such other
address and persons as shall be designated from time to time by any party hereto
in a written notice to the other in the manner provided for in this paragraph.
The notice shall be deemed to have been given upon deposit in the United States
mail, postage prepaid, or at the time of delivery if hand delivered. A party
receiving notice which does not comply with the technical requirements for
notice under this paragraph may elect to waive any deficiencies and treat the
notice as having been properly given.
1. if to the Company or the Shareholders, to:
Photomed, Inc.
000 Xxxx Xxxxxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
with a copy to:
Blank Rome Xxxxxxx & XxXxxxxx
Four Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx, Esq.
or, from and after
September 1, 1997:
Blank Rome Comisky & XxXxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx, Esq.
2. if to LaserSight, to:
LaserSight Incorporated
00000 Xxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Xxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx, Esq.
9.7 Entire Agreement. This Agreement, together with the exhibits
hereto and the agreements contemplated hereby, represents the entire agreement
and understanding of the parties with reference to the transactions set forth
herein and no representations or warranties have been made in connection with
this Agreement other than those expressly set forth herein or in the exhibits,
certificates and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Agreement and all prior drafts of this Agreement, all
of which are merged into this Agreement.
9.8 Waivers and Amendments. Each of LaserSight, the Company and the
Shareholders, may by written notice to the other (a) extend the time for the
performance of any of the obligations or other actions of the other; (b) waive
any inaccuracies in the representations or warranties of the other contained in
this Agreement; (c) waive compliance with any of the covenants of the other
contained in this Agreement; (d) waive performance of any of the obligations of
the other created under this Agreement; or (e) waive fulfillment of any of the
conditions to his own obligations under this Agreement. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
hereto.
9.9 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof.
9.10 Article and Section Headings. The Article and Section headings
contained in this Agreement are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.
9.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
9.12 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Pennsylvania, without regard to such
state's conflict of law provisions.
9.13 LaserSight Venue. LaserSight hereby irrevocably and
unconditionally consents and submits to the jurisdiction of Pennsylvania courts
in connection with all actions, suits or proceedings filed by the Shareholders
relating LaserSight's misrepresentation or breach of the terms of this
Agreement. LaserSight irrevocably waives any objection it may have to the venue
of any such action, suit or proceeding brought in such courts or the convenience
of the forum and LaserSight irrevocably waives the right to proceed in any other
jurisdiction. Final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and the
amount of any indebtedness or liability of LaserSight therein described.
LaserSight agrees that services of process in any action or proceeding hereunder
may be made upon LaserSight by certified mail, return receipt requested to the
address for notice set forth in Section 9.6.
9.14 Shareholders Venue. Each of the Shareholders hereby irrevocably
and unconditionally consents and submits to the jurisdiction of a court chosen
by LaserSight from time to time which has legal jurisdiction as a matter of law,
without reference to this Section 9.14, over any actions, suits or proceedings
filed by LaserSight relating to any Shareholder's misrepresentation or breach of
the terms of this Agreement, provided that in no event will a Shareholder be
required to consent to the jurisdiction of a court which as a matter of law has
legal jurisdiction other than the courts of Delaware, Missouri or Pennsylvania,
provided further that if it is determined that none of the courts of Delaware,
Missouri or Pennsylvania has jurisdiction, each Shareholder will consent to the
jurisdiction of the courts of the state in which such Shareholder is then
domiciled. Each of the Shareholders irrevocably waive any objection they may
have to the venue of any such action, suit or proceeding brought in such courts
or the convenience of the forum if venue exists as a matter of law or as a
result of such Shareholder being domiciled in such jurisdiction and each
Shareholder irrevocably waives the right to proceed in any other jurisdiction.
Final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment, a certified or
true copy of which shall be conclusive evidence of the fact and the amount of
any indebtedness or liability of the Shareholders therein described. Each of the
Shareholders agrees that services of process in any action or proceeding
hereunder may be made upon such Shareholder by certified mail, return receipt
requested to the address for notice set forth in Section 9.6.
9.15 Third Party Beneficiary. Each Xxxxxx Affiliate shall be a third
party beneficiary of this Agreement solely in connection with those Sections of
this Agreement pursuant to which LaserSight expressly owes an obligation to such
Xxxxxx Affiliate.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date and year first above written.
Company: LaserSight:
PHOTOMED, INC. LASERSIGHT INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxx, M.D. By: /s/ Xxxxxxx X. Xxxxxx
---------------------------- -------------------------
Its: Xxxxxxx X. Xxxxxx
---------------------------- President/Chief Executive Officer
Newco:
PHOTOMED ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
President
Xxxxxx: ASK:
/s/ Xxxxxxxx X. Xxxxxx, M.D. /s/ Xxxxxx Xxxxxxx
---------------------------- -------------------------
Xxxxxxxx X. Xxxxxx, M.D. Xxxxxx Xxxxxxx, Trustee for Xxxx Xxxxxxx
Xxxxxx, u/t/d December 27, 1991
LK: MAK:
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
---------------------------- -------------------------
Xxxxx Xxxxxx, M.D. Xxxxxx Xxxxxxx, Trustee for Xxxx Xxxx
Xxxxxx, u/t/d December 27, 1991
