AGREEMENT
This Agreement (this "Agreement") is made as of October 21,
1999 (the "Effective Date"), by and among Ophthalmic Imaging Systems, a
California corporation ("OIS" or the "Company"), Premier Laser Systems, Inc., a
California corporation ("Premier"), and Xxxx Xxxxxxxx, Xxxxxx Xxxxxx and Xxxxxxx
Xxxxxx (the "Outside Directors").
RECITALS
WHEREAS, the Company, Premier and Ophthalmic Acquisition Corporation, a
California corporation and a subsidiary of Premier ("Premier Sub"), and their
respective boards of directors, are negotiating an Agreement and Plan of
Reorganization (the "Merger Agreement"), whereby, upon requisite shareholder and
board approval, OIS will be merged with and into Premier Sub (the "Merger"),
with OIS becoming the surviving corporation and each share of OIS common stock
converting into shares of Premier Class A common stock at the exchange ratio set
forth in the Merger Agreement;
WHEREAS, to provide the Company with needed working capital in excess
of $55,000, each of the Outside Directors recently exercised options to purchase
50,000 shares of OIS common stock with an exercise price of $0.375 per share
(the "Stock Options");
WHEREAS, Premier has held more than 51% of the outstanding common stock
of OIS and therefore a majority vote;
WHEREAS, OIS owes certain amounts to Premier including, but not
necessarily limited to, interest owed, expenses for services provided and a note
in the amount of $500,000 (all such debt collectively referred to herein as the
Company's "Debt Owed"); and
WHEREAS, the Company desires to sell to Premier and Premier wishes to
purchase from Company, in exchange for canceling part of the Company's Debt
Owed, that amount of Company's Series B Preferred Stock necessary to preserve
Premier's majority vote taking into account the exercise by the Outside
Directors of their Stock Options, and without triggering the preferred share
purchase rights under the Rights Agreement dated December 31, 1997, as amended,
between OIS and American Securities Transfer, Inc. (the "Rights Agreement");
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, covenants and conditions hereinafter set forth, the parties
hereto agree as follows:
ARTICLE 1
REPRESENTATIONS OF THE COMPANY
The Company represents, warrants and agrees as follows:
1.1 POWER AND CAPACITY; AUTHORIZATION. OIS is a corporation duly
organized, validly existing and in good standing under the laws of those
jurisdictions where failure to be in good standing or to so qualify would have a
material adverse effect on OIS. OIS has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Company's Board of Directors and no other corporate
proceedings by OIS are necessary to authorize this Agreement or to consummate
the transactions so contemplated. This Agreement has been duly and validly
executed and delivered by OIS and, assuming this Agreement constitutes a valid
and binding obligation of Premier, constitutes a valid and binding agreement of
OIS, enforceable against OIS in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights, and, with respect to
the remedy of specific performance, equitable doctrines applicable thereto).
1.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by OIS will not (a) constitute a breach or violation of any provisions
of the Company's Articles of Incorporation or Bylaws, (b) result in a violation
of any law, rule, ordinance, regulation, order, judgment or decree by which OIS
is bound, or (c) conflict with or result in a material breach of or default
under any mortgage, lien, lease, license, permit, agreement, contract or
instrument to which OIS is a party or by which OIS is bound, which conflict,
breach or default would have a material adverse effect on the ability of OIS to
perform its obligations under this Agreement.
1.3 PREFERRED STOCK. The Company has a total of 20,000,000 authorized
shares of Preferred Stock, $0.01 par value per share, 2,000 of which are
designated Series B Preferred Stock and none of which are issued and
outstanding. The Company has reserved 2,000 shares of Common Stock for possible
issuance upon the conversion of the shares of Series B Preferred to be issued
hereunder (the "Conversion Shares"). The Series B Preferred, when issued, sold
and delivered in accordance with the terms of this Agreement, will be duly and
validly issued, fully paid and non-assessable. The Conversion Shares have been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the Certificate of Determination, will be duly and validly issued,
fully paid and non-assessable.
1.4 CERTIFICATE OF DETERMINATION. The Company has duly adopted a
Certificate of Determination of Preferences of Series B Preferred Stock of
Ophthalmic Imaging Systems in such form as is attached hereto as Exhibit A (the
"Certificate of Determination") and has obtained all necessary approvals from
its Board of Directors and shareholders, if necessary, and has duly filed the
Certificate of Determination with the California Secretary of State.
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1.5 RIGHTS AGREEMENT. The Company has taken and will continue to take
all necessary action to ensure that none of the transactions contemplated by
this Agreement will cause (i) Premier or any of its affiliates to become an
Acquiring Person (as defined in the Rights Agreement) for purposes of the Rights
Agreement, or (ii) otherwise affect in any way the Rights under the Rights
Agreement, including by causing such Rights to separate from the underlying
shares or by giving such holders the right to acquire securities of any party
hereto or by triggering provisions of the Rights Agreement that may give rise to
a Distribution Date (as such term is defined in the Rights Agreement).
ARTICLE 2
REPRESENTATIONS OF PREMIER
Premier represents, warrants and agrees as follows:
2.1 POWER AND CAPACITY; AUTHORIZATION. Premier is a corporation duly
organized, validly existing and in good standing under the laws those
jurisdictions where failure to be in good standing or to so qualify would have a
material adverse effect on Premier. Premier has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by Premier's Board of Directors and no other corporate
proceedings by Premier are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Premier and, assuming this Agreement
constitutes a valid and binding obligation of OIS, constitutes a valid and
binding agreement of Premier, enforceable against Premier in accordance with its
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting creditors'
rights, and, with respect to the remedy of specific performance, equitable
doctrines applicable thereto).
2.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by Premier will not (a) constitute a breach or violation of any
provisions of Premier's Articles of Incorporation or Bylaws, (b) result in a
violation of any law, rule, ordinance, regulation, order, judgment or decree by
which Premier is bound, or (c) conflict with or result in a material breach of
or default under any mortgage, lien, lease, license, permit, agreement, contract
or instrument to which Premier is a party or by which Premier is bound, which
conflict, breach or default would have a material adverse effect on the ability
of Premier to perform its obligations under this Agreement.
2.3 INVESTIGATION AND ECONOMIC RISK. Premier acknowledges that it has
had an opportunity to discuss the business, affairs and current prospects of the
Company with the Company's officers. Premier acknowledges that it is able to
fend for itself in the transactions contemplated by this Agreement and has the
ability to bear the economic risks of its investment pursuant to this Agreement.
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2.4 PURCHASE FOR OWN ACCOUNT. The Series B Preferred and the Conversion
Shares are being acquired by Premier for its own account, not as a nominee or
agent, and not with a view to or in connection with the sale or distribution of
any part thereof.
2.5 EXEMPT FROM REGISTRATION AND RESTRICTED SECURITIES. Premier
understands that the Series B Preferred and the Conversion Shares will not be
registered under the 1933 Act, on the ground that the sale provided for in this
Agreement is exempt from registration under the Act, and that the reliance of
the Company on such exemption is predicated in part on Premier's representations
set forth in this Agreement. Premier understands that the Series B Preferred and
the Conversion Shares being purchased hereunder are restricted securities within
the meaning of Rule 144 under the 1933 Act and that the Series B Preferred and
the Conversion Shares are not registered and must be held indefinitely unless
they are subsequently registered or an exemption from such registration is
available. It is further understood that each certificate representing (a) the
Series B Preferred, (b) the Conversion Shares, and (c) any other securities
issued in respect of the any of the foregoing upon any stock split, stock
dividend, recapitalization, merger, or similar event shall be stamped or
otherwise imprinted with an appropriate restrictive legend.
ARTICLE 3
REPRESENTATIONS OF THE OUTSIDE DIRECTORS
3.1 POWER AND CAPACITY; AUTHORIZATION. Each of the Outside Directors
has the necessary power and authority to execute and deliver this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been executed and delivered by each of
the Outside Directors and constitutes a legal and binding agreement enforceable
against each of them in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights, and, with respect to
the remedy of specific performance, equitable doctrines applicable thereto).
3.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Outside Directors will not (a) result in a violation of any
law, rule, ordinance, regulation, order, judgment or decree by which any Outside
Director is bound or (b) conflict with or result in a material breach of or
default under any mortgage, lien, lease, license, permit, agreement, contract or
instrument to which any Outside Director is a party or by which any Outside
Director is bound, which conflict, breach or default would have a material
adverse effect on any Outside Director's ability to perform his obligations
under this Agreement.
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ARTICLE 4
EXERCISE OF STOCK OPTIONS
4.1 ACCELERATION OF VESTING. The Company further represents that the
Board of Directors of OIS has amended Section 5.3 of the 1997 Plan to allow for
vesting of the Stock Options within less than one year from the options' Grant
Date, as that term is defined in the 1997 Plan. In addition, the Board of
Directors of OIS and/or the Compensation Committee of OIS, as appropriate, has
amended the vesting schedules contained in those certain OIS Nonqualified Stock
Option Agreements covering the Stock Options held by the Outside Directors to
allow for the exercise by the Outside Directors of the Stock Options held by
each of them.
4.2 EXERCISE AND PAYMENT. Each of the Outside Directors further
represents that each has exercised, in whole, his rights under the 1997 Plan to
purchase 50,000 shares of Company common stock for $0.375 per share (the
"Exercise Price"), by delivering to the Company a duly exercised "Request To
Exercise Form," as required by the 1997 Plan, as well as full payment, in cash
or check, in the amount of at least eighteen thousand, seven hundred and fifty
dollars and no cents ($18,750.00).
4.3 STOCK ISSUANCE. As soon as practicable after the Effective Date,
OIS shall issue to each exercising Outside Director a stock certificate
representing 50,000 shares of Company common stock ("Exercised Stock"). All
Exercised Stock shall be subject to repurchase, as set forth in Section 6.1 of
this Agreement, and shall bear appropriate restrictive legends.
ARTICLE 5
PURCHASE OF STOCK
5.1 PURCHASE OF STOCK. Subject to the terms and conditions set forth in
this Agreement, the Company agrees to sell, assign, transfer and deliver to
Premier, and Premier agrees to purchase from the Company one-hundred and fifty
(150) validly issued, fully paid and nonassessable shares of the Company's
Series B Preferred Stock (the "Purchased Stock"), and such purchase shall be
deemed effective upon the exercise of the Stock Options by the Outside Directors
subject to the filing of the Certificate of Determination. The Purchased Stock
shall be subject to repurchase, as set forth in Section 6.2 of this Agreement,
and shall bear appropriate restrictive legends.
5.2 PRICE AND CONSIDERATION. In full consideration for the purchase by
Premier of the Purchased Stock, Premier shall cancel that amount of the Debt
Owed then held by Premier in the amount of twenty-five dollars ($25.00) per
share of Series B Preferred Stock purchased by Premier as Purchased Stock (the
"Purchase Price"). Premier shall deliver to OIS written evidence, in a form
acceptable to OIS, showing the cancellation of the aforementioned indebtedness
under the terms of this Agreement.
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5.3 STOCK CERTIFICATES. As soon as practicable after the Effective
Date, OIS will deliver to Premier a certificate representing the Series B
Preferred Stock purchased by Premier, which certificate shall bear appropriate
restrictive legends.
5.4 BEST EFFORTS AND FURTHER ASSURANCES. Each of the parties to this
Agreement shall use its best efforts to effectuate the transactions contemplates
hereby and to fulfill and cause to be fulfilled the terms and conditions set
forth under this Agreement. Each party hereto, at the reasonable request of
another party hereto, shall execute and deliver such other instruments and do
and perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of this Agreement and the transactions
contemplated hereby.
ARTICLE 6
REPURCHASE RIGHTS
6.1 REPURCHASE OF EXERCISED STOCK. If at any time after the Effective
Date, but before May 9, 2000, an Outside Director ceases to be a director of
OIS, then OIS shall have the option to repurchase, in whole or in part, that
Outside Director's Exercised Stock then outstanding, if any, at the original
option Exercise Price; provided, however, that this right to repurchase
Exercised Stock shall lapse over the same period of time as the options
exercised by the Outside Directors would have vested prior to acceleration of
vesting pursuant to this Agreement. The Company's right to repurchase the
Exercised Stock, in whole or in part, shall terminate on the effective date of
the Merger. In the event the Company wishes to exercise its repurchase rights
under this Section 6.1, it shall give to that Outside Director at least 30 days
prior written notice of its intention to repurchase Exercised Stock, describing
the amount of Exercised Stock being repurchased. After that 30 day notice
period, Company shall pay the Outside Director an amount, in cash, equal to the
number of shares of Exercised Stock being repurchased multiplied by the original
option Exercise Price. The payment provided in this Section 6.1 shall be deemed
to have been paid in full satisfaction of all rights pertaining to the
repurchased Exercised Stock, and no dividends or other distributions with
respect to the repurchased Exercised Stock will be paid to the holder of any
unsurrendered stock certificates representing the repurchased Exercised Stock
for any distribution with a record date after the Outside Director received the
repurchase price in full as provided by this Section 6.1. Promptly upon receipt
of payment in full for the repurchased Exercised Stock, that Outside Director
shall surrender to the Company for cancellation the stock certificate or
certificates formerly representing the repurchased Exercised Stock then held by
him. As soon as practicable after the Company receives the stock certificate or
certificates representing the repurchased Exercised Stock, OIS will deliver to
that Outside Director a certificate representing those shares of common stock
not repurchased and still held by that Outside Director, if any.
6.2 REPURCHASE OF PURCHASED STOCK. If OIS repurchases any Exercised
Stock pursuant to Section 6.1 hereof, OIS shall have the option to repurchase
the Purchased Stock issued in respect of the Exercised Stock, in whole or in
part, at a price per share equal to the original Purchase Price. In the event
the Company wishes to exercise its repurchase rights under this Section 6.2, it
shall give to Premier at least 30 days prior written notice of its intention to
repurchase Purchased Stock, describing the amount of Purchased Stock being
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repurchased. After that 30 day notice period, Company shall pay Premier an
amount, in cash or debt, at Company's sole discretion, equal to the number of
shares of Purchased Stock being repurchased multiplied by the original Purchase
Price. The payment provided in this Section 6.2 shall be deemed to have been
paid in full satisfaction of all rights pertaining to the repurchased Purchased
Stock, and no dividends or other distributions with respect to the repurchased
Purchased Stock will be paid to the holder of any unsurrendered stock
certificates representing the repurchased Purchased Stock for any distribution
with a record date after Premier received the repurchase price in full as
provided by this Section 6.2. Promptly upon receipt of payment in full for the
repurchased Purchased Stock, Premier shall surrender to the Company for
cancellation the stock certificate or certificates formerly representing the
repurchased Purchased Stock then held by it. As soon as practicable after the
Company receives the stock certificate or certificates representing the
repurchased Purchased Stock, OIS will deliver to Premier a certificate
representing those shares of Series B Preferred Stock not repurchased and still
held by Premier, if any.
ARTICLE 7
MISCELLANEOUS
7.1 EXPENSES. Each party to this Agreement shall pay his or its own
costs and expenses (including all legal fees) relating to this Agreement, the
negotiations leading up to this Agreement and the transactions contemplated by
this Agreement.
7.2 AMENDMENT. This Agreement shall not be amended except by a writing
duly executed by each party to this Agreement.
7.3 ENTIRE AGREEMENT. This Agreement, including the exhibits and other
documents delivered pursuant to this Agreement, contain all of the terms and
conditions agreed upon by the parties relating to the subject matter of this
Agreement and supersede all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting the subject matter hereof.
7.4 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
7.5 HEADINGS. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the parties to this
Agreement.
7.6 MUTUAL CONTRIBUTION. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that that
party drafted the provision or caused it to be drafted.
7.7 NOTICES. All notices, requests, demands and other communications
made in connection with this Agreement shall be in writing and shall be deemed
to have been duly given on the date of delivery, if delivered to the persons
identified below, including delivery by facsimile, provided sender receives
telephonic or electronic confirmation of delivery, or three days after mailing
if mailed by certified or registered mail, postage prepaid, return receipt
requested, addressed as follows:
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If to the Company:
Ophthalmic Imaging Systems
000 Xxxxxxx Xxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Premier:
Premier Laser Systems, Inc.
0 Xxxxxx
Xxxxxx, XX 00000
Attention: President and Chief Executive Officer
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to any Outside Director:
(c/o) Ophthalmic Imaging Systems
000 Xxxxxxx Xxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Such persons and addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section.
7.8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of OIS, Premier and the Outside Directors
contained in this Agreement shall survive the execution, delivery and
performance of this Agreement for a period of one year from the Closing.
7.9 WAIVER. Waiver of any term or condition of this Agreement by any
party shall not be construed as a waiver of any subsequent breach or failure of
the same term or condition, or a waiver of any other term or condition of this
Agreement.
7.10 BINDING EFFECT; ASSIGNMENT. The parties agree that this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns. No party to this Agreement may assign or
delegate, by operation of law or otherwise, all or any portion of its rights,
obligations or liabilities under this Agreement without the prior written
consent of all other parties to this Agreement, which they may withhold in their
absolute discretion.
7.11 FINDER'S FEES. Each party (a) represents and warrants to the other
party hereto that it has retained no finder or broker in connection with the
transactions contemplated by this Agreement, and (b) hereby agrees to indemnify
and to hold harmless the other parties hereto from and against any liability for
any commission or compensation in the nature of a finder's fee of any broker or
other person or firm (and the costs and expenses of defending against such
liability or asserted liability) for which the indemnifying party or any of its
employees or representatives are responsible.
7.12 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall
confer any rights upon any person or entity which is not a party or an assignee
of a party to this Agreement.
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7.13 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument. All counterparts shall be deemed an original of this
Agreement.
[The signature pages follow.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OPHTHALMIC IMAGING SYSTEMS:
By /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Xxxxxx Xxxxxxxxx, President
PREMIER LASER SYSTEMS, INC.:
By /s/ Xxxxxxx Xxxxxx, Ph.D.
----------------------------------
Xxxxxxx Xxxxxx, Ph.D., President
and CEO
OUTSIDE DIRECTORS:
By /s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx
By /s/ Xxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxx
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx
[Stock Purchase Agreement Signature Page]
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