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EXHIBIT 10.13
VISTA LASER CENTERS OF THE PACIFIC, INC.
000 XXXXXX XXXXXX
XXXXXXXXXX, XXXXXXXXXX 00000
May 30, 1996
Xxxx X. Xxxxxxx, President
RK and Laser Eye Institute of California
0000 Xxxxxxx Xxxxx Xxxx., Xxxxxx 000
Xxxxx Xxxxx, XX 00000
Re: Agreement In Principle
Dear Xx. Xxxxxxx:
Reference is made to the past discussions between yourself representing RK
and Laser Eye Institute of California ("RKLE") and Eye Laser Associates, LLC
("ELA"), and myself representing Vista Laser Centers Of The Pacific, Inc.
("Pacific").
This letter agreement when executed by all parties, will constitute a
binding agreement in principal for: (i) the acquisition by Pacific from ELA of a
VISX Star excimer laser (the "Laser"); (ii) the sublease from RKLE of medical
office space by Pacific; (iii) the purchase by Pacific from RKLE of certain
tenant improvements to the Center; (iv) the purchase by Pacific from RKLE of
certain legal documents and research; and (v) reimbursement of certain employee
costs to RKLE.
The parties hereto acknowledge and agree that more definitive agreements
need to be prepared setting forth with greater specificity all of the terms,
covenants, representations and conditions of this agreement with respect to the
transactions described herein. These agreements include, without limitation, an
asset purchase agreement, a real estate sublease and an equipment lease
assignment and sublease. The parties agree to complete these agreements in an
expeditious manner following the execution of this agreement and in no event
more later than 30 days after the closing of Pacific's initial public offering
for not less than $3.0 Million in net offering proceeds (the "IPO").
1. ACQUISITION OF LASER.
(a) Pacific shall acquire and ELA shall sell all rights, title and interest
in the Laser, which are subject to an equipment
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lease (the "Lease") with Hillside Financial International, LLC ("Hillside"), by
Pacific paying to ELA the sum of $52,500 (the "Laser Payment") and assuming the
Lease. The Laser Payment shall be paid to ELA within 2 days of the execution of
this agreement. The assumption of the Lease shall commence on June 1, 1996 and
after that date Pacific shall bear all of the responsibilities, obligations and
liabilities stated in or arising under the Lease. The parties hereto understand
that the consent of Hillside to Pacific's assumption of the Lease will be
required and they agree to use their reasonable best efforts to persuade
Hillside to permit the assumption of the Lease by Pacific. Pacific shall also
use its best efforts to persuade Hillside to release RKLE from its guaranty of
and the User Agreement under the Lease. Pacific may also restructure or
re-finance the Lease with Hillside's consent.
(b) In the event Hillside does not release RKLE from its guaranty of and
the User Agreement under the Lease and Pacific fails to make a payment required
under the Lease or breaches any other provision of the Lease, upon notice
thereof by Hillside to RKLE, RKLE shall be entitled to elect any of the
following with respect to any and all monies due to Pacific pursuant to its
services agreement for laser vision correction services provided by Pacific: (i)
to pay such sums directly to Hillside to reduce the amount owed under the Lease;
or (ii) to deposit such sums in an attorney's trust account or other reasonable
escrow account for future delivery to Hillside to reduce the amount owed under
the Lease or to Pacific upon its full payment of amounts due to Hillside.
(c) In the event Hillside does not release RKLE from its guaranty of and
the User Agreement under the Lease and Hillside gives Xx. Xxxxxxx notice of
default under the Lease and demands payment therefor under the terms of the
guaranty, RKLE shall be entitled to: (i) terminate this agreement and all other
relationships with Pacific with no payment to Pacific, notwithstanding paragraph
9 hereof; (ii) obtain ownership and possession of the Laser, including without
limitation any and all improvements thereof at no cost, and assume the remaining
payments and all other remaining obligations under the Lease; and (iii)
terminate the Sublease (defined below) with Pacific.
2. OFFICE SUBLEASE. Effective June 1, 1996 Pacific shall enter into a
sublease (the "Sublease") with RKLE for approximately 4,000 square feet of
office space presently leased by RKLE on Winchester Boulevard in San Jose,
California (the "Center"), and this sublease shall provide for Pacific to pay
the landlord thereof the following monthly rent: $1.25 per square foot plus the
square footage allocation of the landlord's "triple net" (taxes, insurance and
utilities) and all other costs and assessments applicable to
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RKLE. It is the parties' understanding that such a sublease does not require the
landlord's consent, but if such consent is required, the parties shall use their
reasonable best efforts to obtain that consent as soon as possible.
In the event that RKLE (or Xx. Xxxx X. Xxxxxxx, individually) shall acquire
full right title and interest in the land and building in which the Center is
located, Pacific agrees that the sublease may be terminated by said new landlord
and, within 30 days of such termination, Pacific shall execute a lease with said
new landlord at then fair market rates, but not less than the rental and charges
under the Sublease.
3. CENTER IMPROVEMENTS. Pacific shall reimburse RKLE (or Xx. Xxxxxxx
individually) or pay the supplier or contractor directly for any and all costs
and expenses incurred in remodeling or improving the Center (the "Center") and
thereby acquire RKLE's interest in such lease improvements. Pacific shall make
such reimbursement to RKLE upon the later of the execution of this agreement or
two days after verifiable invoices of such expenses are provided to Pacific by
RKLE or the supplier or contractor thereof.
4. OTHER ASSETS PURCHASED. At the request of RKLE, Pacific shall reimburse
RKLE for all of the costs of preparing certain legal documents relating to a
contemplated relationship between RKLE and a group of optometrists (the
"Documents") presently estimated not to exceed $20,000 and thereby acquire the
Documents from RKLE; provided, however, that all copies of such documents and
all legal research previously delivered to RKLE and the optometrists are
delivered to Pacific. Pacific shall also pay to RKLE the sum of $8,000 and RKLE
shall grant to Pacific the right to make modifications to the infomercial
licensed to RKLE by Xxxx XxXxxxx Productions (the "Infomercial") and broadcast
the new Pacific infomercial in the licensed territory. Pacific shall make such
reimbursement to RKLE for the Documents and the payment for the Infomercial
modification rights upon the later of the execution of this agreement or two
days after verifiable invoices of expenses are provided to Pacific by RKLE.
5. EMPLOYEES. Effective June 1, 1996, Pacific shall reimburse RKLE for its
cost of providing such employees as deemed necessary by Pacific to operate the
Center for such hours as requested by Pacific. RKLE costs shall include such
items as taxes, workmen's compensation insurance, health insurance and vacation
pay. RKLE shall submit a detailed invoice to Pacific monthly for such employee
costs and Pacific shall pay such invoice within five (5) days of receipt and
verification. RKLE shall be responsible for
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the payment of all wages to the employees, and all payroll taxes, workmen's
compensation insurance and any other employee related expenses to all applicable
federal, state and local governmental agencies.
6. ADVERTISING AND PATIENT LEADS. Pacific shall be responsible for all
costs and expenses of advertising for the medical services to be rendered by
RKLE at the Center after June 1, 1996 and so long as this agreement is in
effect. Pacific shall expend a minimum of $1,000,000 in the 12 month period
commencing with July 1, 1996 on advertising and marketing in the northern
California market, including Santa Xxxxx and San Mateo counties, the PRK and
other advanced laser correction services available at its centers . All "leads"
on potential patients residing or working in Santa Xxxxx County, California and
in San Mateo County, California south of Xxxxxx City (the "Laser Vision Area")
resulting from such Pacific advertising and marketing will be forwarded to RKLE
on an exclusive basis. RKLE shall retain the right to broadcast its own Xxxx
XxXxxxx informercial at its own expense, but only in broadcasts targeted for the
Laser Vision Area hereinabove described.
7. INDEMNITY. RKLE agrees to indemnify, protect, defend and hold Pacific
harmless from all claims, expenses, costs and liabilities, including without
limitation attorney fees, arising from any of RKLE's activities prior to the
execution of this agreement. Pacific agrees to indemnify, protect, defend and
hold RKLE harmless from all claims, expenses, costs and liabilities, including
without limitation attorney fees, arising from Pacific's activities prior to the
execution of this agreement.
8. CONFIDENTIAL INFORMATION. Each party to this agreement agrees to keep
all of the proprietary information provided to that party by the other party
hereto confidential and further agrees to not use such information for its own
or any other person's benefit or disclose such information to third parties
without the consent of the party supplying the information, unless such party
holding the confidential information is legally required to disclose such
information. Unless otherwise agreed upon by the parties hereto, each of the
parties hereto agrees to maintain the confidentiality of the terms of the
transactions contemplated by this agreement.
9. DIRECTORSHIP OF PACIFIC. During the term of this agreement and after the
closing of the IPO, upon the request of Xx. Xxxxxxx Pacific shall nominate him
as one of its nominees for election to Pacific's Board of Directors and Pacific
shall vote all of the shares for which it (or any of its officers or Directors)
is named a proxy of a shareholder, including the 500,000 shares of Pacific
Series B Preferred Stock owned by Vista Technologies Inc.
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(the "Proxy Shares"), in favor of Xx. Xxxxxxx'x election as a Director of
Pacific. Further, Pacific shall vote all of the Proxy Shares against the removal
of Xx. Xxxxxxx as a Director, in the event such action is proposed for a vote of
Pacific's shareholders.
10. TERMINATION. This agreement will terminate upon the earlier to occur of
(a) the mutual written agreement of the parties hereto; (b) upon notice by a
party hereto of a breach by the other party of any obligation set forth in this
agreement; or (c) if the IPO is not closed by December 31, 1996, unless the
parties agree to extend such date. Within 30 days after the termination of this
agreement, RKLE shall pay to Pacific all sums paid to it (or Xx. Xxxxxxx
individually) by Pacific pursuant to paragraphs 3 and 4 above (but not
paragraphs 1 and 2), at which time Pacific shall return to RKLE all of the
assets acquired pursuant to those paragraphs and RKLE shall assume and become
solely responsible for the Lease and Sublease described in Paragraphs 1 and 2
above, respectively. In the event the Lease and the Sublease are not assumable
by RKLE at that time, it shall pay to Pacific the sums due under said Lease and
Sublease 7 days before such sums are due.
11. NEGOTIATIONS WITH OTHERS. During the term of this agreement ELA and
RKLE will not negotiate with any other party to sell, lease or sublease their
respective assets described herein and Pacific will not negotiate with any other
party to acquire, lease or operate another excimer laser in the Laser Vision
Area.
12. COMPLIANCE WITH CALIFORNIA LAW. All of the terms of this agreement and
all of the other presently contemplated relationships of Pacific to RKLE and to
Xx. Xxxxxxx shall be in compliance with acceptable California law or this
agreement shall be null and void. Pacific shall reasonably demonstrate such
compliance with California law to RKLE before the closing of the IPO.
13. COMPLETE AGREEMENT. This letter agreement is the complete agreement as
of the date hereof among the parties with respect to the subject matter
described herein and reasonably related thereto and supersedes all prior
discussions, arrangements, understandings and agreements. This agreement may
only be changed, amended or modified by a written agreement executed by both
parties hereto.
[Signature Page Follows]
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Please indicate your agreement with the foregoing by signing this letter
agreement below and returning a signed copy to me as soon as possible. Once
signed by you this agreement will be deemed to be in effect and will bind both
parties. Once this agreement has been executed by you, both parties shall
commence to prepare the definitive documents discussed herein.
Very truly yours,
VISTA LASER CENTERS OF THE PACIFIC
By:____________________________________
Xxxxx X. Xxxxx III, President
Agreed To and Accepted.
Date:_____________, 0000
XX XXX XXXXX XXX XXXXXXXXX XX XXXXXXXXXX
By:____________________________________
Xxxx X. Xxxxxxx, President
EYE LASER ASSOCIATES, LLC
By:____________________________________
Xxxx X. Xxxxxxx, Managing Member
