Exhibit 4(j)
LASER CORPORATION
COMMON STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of August 5, 1998, by and between
LASER CORPORATION, a Utah corporation (the "Company"), and REINHARDT THYZEL, an
individual resident of Switzerland (the "Investor").
The parties hereby agree as follows:
1. Purchase and Sale.
1.1 Sale and Issuance of Stock. Subject to the terms and conditions of
this Agreement, the Investor agrees to purchase at the Closing. and the Company
agrees to sell and issue to the investor at the Closing, against cash payment,
521,739 shares of Common Stock (the "Shares") of the Company at the purchase
price of $1.15 per share.
1.2 Closing. The purchase and sale of the shares being purchased by the.
Investor shall take place at such time and place as the Company and the Investor
mutually agree upon (which time and place are designated the "Closing).
Following the Closing, the Company shall deliver to the Investor, or his agent,
a certificate representing the number of Shares which Investor Is purchasing
against delivery to the Company by the Investor of cash or a certified bank
cashier's check or evidence of wire funds transfer satisfactory to the Company
in the full amount of the Purchase Price.
1.3 Use of Proceeds. The Company agrees to use the proceeds from the
sale of the Shares for the repayment of outstanding obligations, for the
reduction of trade debt and for working capital purposes.
2. Representations and Warranties of the Company.
Except its set forth in a written schedule attached to this Agreement, the
Company hereby represents and warrants to the Investor that:
2.1 Incorporation. The Company and each of the Subsidiaries (as defined
in paragraph 2.3) is a corporation duly organized and validly existing, is in
good standing under the laws of the state or other place of its incorporation,
has all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. and the Company and each of the
Subsidiaries is qualified as a f6mign corporation in each jurisdiction where the
failure so to qualify would have a material adverse effect on its business or
operations.
2.2 Capitalization. The authorized capital of the Company consists of
10,000,000 shares of Common Stock, of which at Closing not more than 865,799
shares will be issued and outstanding. Schedule 2.2 contains a complete listing
of sham of Common Stock reserved for issuance upon exercise of outstanding stock
options.
2.3 Subsidiaries. The Company does not presently control, directly or
indirectly. any corporation, association or business entity other than American
Laser Corporation. American Laser Medical Inc. and American Laser Software, Inc,
(referred to herein as the "Subsidiaries"). Each of the Subsidiaries is wholly
owned by the Company.
2.4 Authorization. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution. delivery and
performance of all obligations of the Company under this Agreement and for the
authorization, issuance and delivery of the Shares being sold hereunder has been
or shall be taken prior to the Closing, and this Agreement, when executed and
delivered, shall constitute a valid and legally binding obligation of the
Company. Issuance of the Shares is not subject to preemptive rights or other
preferential rights of any present or future: stockholders in the Company.
2.5 Validity of Securities. The Shares to be purchased and sold pursuant
to this Agreement, when issued, sold and delivered in accordance with its terms
for the consideration expressed herein, shall be duly and validly issued.
2.6 Consents. All consents, approvals, orders, authorizations or
registration, qualification, designation and declaration or filing with any
federal or state governmental authority, or any other third party, on the part
of the Company and the Subsidiaries required in connection with the consummation
of the transactions contemplated herein shall have been obtained prior to, and
be effective as of, the Closing or will be timely filed thereafter.
2.7 Compliance With Other Instruments. The Company and each of the
Subsidiaries is not in violation of any provisions of its respective Articles of
Incorporation, its Bylaws, any material mortgage, indenture, lease, agreement or
other instrument to which it is a party, or of any provision of any federal or
state judgment, writ, decree, order, statute, rule or governmental regulation
applicable to the Company or the Subsidiaries. The execution, delivery and
performance of this Agreement will not result in any such violation or be in
conflict or constitute a default under any such provision.
2.8 Litigation. There are no actions, proceedings or investigations
pending. or to the knowledge of the Company or the Subsidiaries threatened which
question the validity of this Agreement or which might result, either
individually or in the aggregate, in any material adverse change in the assets,
conditions, affairs or prospects of the Company and the Subsidiaries, nor, to
the knowledge of the Company and the Subsidiaries, has there occurred any event
or does there exist any condition which might properly be the basis therefor.
2.9 Patents. The Company and the Subsidiaries own or have a valid right
to use the patents, patent rights, licenses, trade secrets, trademarks,
trademark rights, trade names or trade name rights or franchises, copyrights,
inventions, and intellectual property rights being used to conduct their
businesses as now operated and as now proposed to be operated; and the conduct
of business as now operated and as now proposed to be operated does not and will
not conflict with valid patents, patent rights, licenses. trade secrets,
trademarks, trademark rights, trade names or trade name rights of franchises,
copyrights, inventions, and intellectual property rights of others. The Company
and the Subsidiaries have no obligation to compensate any person or entity for
the use of any such patents or rights and have granted to no person or entity
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any license of other rights to use In any manner any of the patents or rights of
the Company or the Subsidiaries, whether requiring the payment of royalties or
not.
2.10 Financial Statements. The Company has previously furnished true and
complete copies of statements of financial condition as of December 31, 1997,
and the related statements of operations and statements of changes in financial
position for the years/periods then ended, all certified by Xxxxxx & Co.,
independent accountants, and unaudited consolidated financial statements as of
March 31, 1998 and for the three months then ending.
The books of account of the Company and the Subsidiaries fully and
fairly reflect all of the transactions of such companies and are complete and
accurate. Neither the Company nor any of the Subsidiaries is subject. to any
undisclosed material liability not (i) reflected in its March 31, 1998 unaudited
financial statements, or (ii) reflected and specifically identified on a
schedule attached to this Agreement and so identified, or (iii) incurred in the
ordinary course of business since March 31, 1998. For purposes of this
Agreement, all financial statements of the Company shall be deemed to include
any notes to such financial statements.
2.11 Absence of Certain Changes. Since March 31, 1993, whether or not in
the ordinary course or business, there has not occurred or arisen (a) any
material adverse change in the financial condition, operations business or
prospects of the Company or We Subsidiaries considered as a whole or (b) any
event, condition or state of facts of any character which materially or
adversely affects, or may materially or adversely affect, the t1nancial
condition, operations, business or prospects of the Company and the Subsidiaries
considered as a whole.
2.12 Tax Return and Reports. All federal income tax and state franchise
tax returns and tax reports required to be filed by the Company and the
Subsidiaries have been filed with the appropriate governmental agencies in all
jurisdictions in which such returns or reports arc required to be filed. All
such returns and reports constitute complete and accurate representations, in
all material respects, of The tax liabilities of the company and the
Subsidiaries, AU federal income tax and state franchise and other taxes
(including interest and penalties) due from, the Company and the Subsidiaries
have been fully paid or adequately provided for on the books and financial
statements of the Company or the Subsidiaries. None of the federal Income tax
returns of the Company have been audited by the Internal Revenue Service. The
Company knows of no additional assessments or adjustments pending or threatened
for any period, not of any basis for any such assessment or adjustment. The
Company and the Subsidiaries and their affiliates have not entered into any
agreements with federal and state taxing authorities extending the statute of
limitations with respect to the assessment of federal and state taxes for any
period.
2.13 Agreements. Neither the Company nor any of the Subsidiaries has
breached, nor has any such entity received oral or written notice of any claim
or threatened claim that the Company or any of the Subsidiaries has breached,
any of the terms or conditions of any agreement, contract, lease, commitment or
understanding, whether oral or written, the breach or breaches of which singly
or in the aggregate could materially or adversely affect the financial
condition, operations, business or prospects of the Company and the Subsidiaries
considered as a whole.
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2.14 Pension Benefit Plan. The Company does not have or make
contributions to any pension, defined benefit or defined contribution plans
which are subject to the Federal Employee Retirement Income Security Act of
1974, as amended ("ERISA").
2.15 Registration Rights. Except as set forth in this Agreement, no
person or entity has demand or other rights to cause the Company to file any
registration statement under the Securities Act of 1933, as amended (the "Act"),
relating to any securities of the Company or any right to participate in any
such registration statement.
3. Representations and Warranties of the Investor.
The Investor represents and warrants to the Company as follows:
3.1 Authorization. When executed and delivered by such Investor, this
Agreement will constitute the valid and legally binding obligation of such
Investor.
3.2 Access to Information. The Investor has had access to all
information about the Seller that exists in the possession and control of the
Company, and has met with and questioned executive officers and directors of the
Company to his satisfaction. He has had a full opportunity to analyze and
understand the risks of an investment in the Company, including but not limited
to those set out in the attached disclosure schedule.
3.3 Risk of Loss. The Investor understands and accepts that an
investment in the Company has inherent and significant risks, including the risk
of possible loss of Investor's entire investment.
4. Securities Act of 1933.
4.1 Investment Representation.
(a) This Agreement is made with the Investor in reliance upon Investor's
representations to the Company, which the Investor hereby confirms, that the
Shares to be received will be acquired for investment for an indefinite period
for Investor's own account and not with a view to the sale or distribution of
any part thereof, and that he has no present intention of selling or otherwise
distributing the same, but subject, nevertheless, to any requirement of law that
the disposition of Investor's property shall at all times be within Investor's
control. By executing this Agreement, the Investor further represents that he
does not have any contract, undertaking, agreement or arrangement with any
person to sell or transfer to such person any of the Shares.
(b) The Investor understands that the Shares are not and may never be
registered under the Act on the ground that the sale provided for in this
Agreement and the issuance of securities is exempt pursuant to Section 4(2) of
the Act and Rule 506 of Regulation D thereunder, and that the Company's reliance
on such exemption is predicated on Investor's representations set forth herein.
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(c) The Investor agrees that in no event will he make a disposition of
any of the Shares, unless the Shares shall have been registered under the Act,
unless and until (i) ho shall have notified the Company with a statement of the
circumstances surrounding the proposed disposition and (ii) he shall have
furnished the Company with an opinion of counsel reasonably satisfactory to the
Company to the effect that (A) such disposition will not require registration of
such securities under the Act, and (B) that appropriate action necessary for
compliance with the Act has been taken.
(d) The Investor is an "accredited investor" as that term is defined in
Ru1e 501 promulgated under the Act. Nevertheless, the Investor has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of Investor's investment, has the ability to
bear the economic risks of Investor's investment and has been furnished with and
has had access to such information as would be made available in the form of a
registration statement together with such additional information as is necessary
to verify the accuracy of the information supplied and to have all questions
which have been asked by the Investor answered by the Company.
(e) The Investor understands that if a registration statement covering
the Shares under the Act is not in effect when he desires to sell any of the
Shares, he may be required to hold such Securities for an indeterminate period.
The Investor also acknowledges that any sale of the Shares which might be made
by him in reliance upon Rule 144 under the Act may be made by only in limited
amounts in accordance with the terms and conditions of that Rule.
4.2 Legends. All certificates for the Shares shall bear substantially
the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
BY THE ISSUEE FOR INVESTMENT PURPOSES. SAID SHARES MAY NOT BE SOLD OR
TRANSFERRED UNLESS (A) THEY HAVE BEEN REGISTERED UNDER SAID ACT, OR
(B) THE TRANSFER AGENT (OR THE COMPANY IF THEN ACTING AS ITS TRANSFER
AGENT) IS PRESENTED WITH EITHER A WRITTEN OPINION SATISFACTORY TO
COUNSEL FOR THE COMPANY OR A "NO-ACTION" OR INTERPRETIVE LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR
TRANSFER."
4.3 Rule 144. The Company covenants and agrees that: (i) at all times
while it is subject to the reporting requirements of Section 13 or 15(d) of the
Securities Fxchange Act of 1934 a will use its best efforts to comply with the
current public information requirements of Rule 144(c)(1) under the Act; and
(ii) it will furnish the Investor upon request with all information about the
Company required for the preparation and filing of Form 144.
4.4 Disclosures. On the Disclosure Schedule attached to this Agreement
is a listing of risk factors, material facts and financial information not
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contained in the financial statements or tax returns discussed in paragraph 2,
above, or not apparent from a reading of the same, prepared by the Company and
delivered to the Investor prior to Closing. Investor represents and warrants
that he has read and undersstood all of the disclosures in such Schedule and is
purchasing the Shares in full awareness of the same.
5. Registration Rights.
The Company covenants and agrees as follows:
5.1 Company Registration. Whenever the Company proposes to register any
of its Common Stock under the Act for a public offering for cash, whether as a
primary or secondary offering (or pursuant to registration rights granted to
holders of other securities of the Company), the Company shall, each such time,
give the Investor written notice of its intent to do so. Upon the written
request of Investor given within thirty (30) days after receipt of any such
notice, the Company shall use its best efforts to cause to be Included in such
registration all of the Shares which the Investor requested to be registered:
provided (i) at lust ten percent of the Shares hold by the Investor, but no more
than 100,000 shares, are included in each such request, (ii) the Investor agrees
to sell shams in the same manner and on the same terms and conditions as the
other Common Stock which the Company proposes to register, and (iii) if the
registration is to include Common Stock to be sold for the account of the
Company, the proposed managing underwriter does not advise the Company that in
its opinion the inclusion of the Investor's Shares is likely to affect adversely
the success of the offering by the Company or the price it would receive in
which case the rights of the Investor shall be as provided in subparagraph 5.9
hereof.
5.2 Obligations of the Company. Whenever required under subparagraph 5.1
to use its best efforts to effect the registration of any of the Shares or to
effect registration pursuant to subparagraph 5.9, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission (the
"SEC") a Registration Statement with respect to such shares and use its best
efforts to cause such Registration Statement to become and remain effective for
at least one hundred eighty (180) days.
(b) Prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith as
may be necessary to permit the disposition of all securities covered by such
Registration Statement.
(c) Furnish to the Investor such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Shares owned by them.
(d) Use its best efforts to register and qualify the securities covered
by such Registration Statement under such other securities or Blue Sky laws of
such jurisdictions (not exceeding ten unless otherwise agreed upon by the
Company) as shall be reasonably appropriate for the distribution of the
securities covered by the Registration Statement, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, and further provided that (anything herein to the
contrary notwithstanding with respect to the bearing of expenses) if any
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jurisdiction in which the securities shall be qualified shall require that
expenses incurred in connection with the qualification therein of the securities
be borne by selling shareholders, then such expenses shall be payable by selling
shareholders pro rata, to the extent required by such jurisdiction.
5.3 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this paragraph 5 that
the Investor shall furnish to the Company such information regarding it, the
Shares held by it, and the intended method of disposition thereof as the Company
shall reasonably request and as shall be required in connection with the action
to be taken by the Company.
5.4 Underwriting Requirements. In connection with any offering in an
underwriting of shares being issued by the Company, the Company shall not be
required under subparagraph 5.1 to include any of the Investor's Shares therein
unless he accepts and agrees to the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize the success
of the offering by the Company.
5.5 Delay of Registration. So long as the Company has given any notice
required by subparagraph 5.1 hereof, the Investor shall have no right to take
any action to restrain, enjoin or otherwise delay any registration as the result
of any controversy which might arise with respect to the interpretation or
implementation of this paragraph 5.
5.6 Indemnification. In the event any of the Shares are included in a
Registration Statement under this paragraph 5:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless Investor against any losses, claims, damages or liabilities, joint or
several, to which he may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities or actions in respect thereof arise
out of or are based upon any untrue or alleged untrue statement of any material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein, or allegedly necessary to make the statements therein
not misleading; and will reimburse the Investor for any legal or other expenses
reasonably incurred by him in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subparagraph 5.6(a) &boil not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without: the consent of the Company nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Investor.
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(b) To the extent permitted by law, the Investor will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed such registration statement, each person, if any, who controls the
Company within the meaning of the Act, and any underwriter for the Company
(within the meaning of the Act) against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, controlling
person, or underwriter may become subject, under the Act or otherwise, insofar
its such losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or allegedly necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by the Investor expressly for use in connection with such registration; and the
Investor will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there were material
misstatements or omissions.
(c) Promptly after receipt by an indemnified party under this
subparagraph 5.6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this subparagraph 5.6, notify the indemnifying party in writing of
the commencement thereof and the indemnifying party shall have the right to
participate in and to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to the ability
to defend such action, shall relieve such indemnifying party under this
subparagraph 5.6, but the omission so to notify the indemnifying party will not
relieve such party of any liability which such party may have to any indemnified
party otherwise other than under this subparagraph 5.6.
(d) If recovery is not available under the foregoing indemnification
provisions of this paragraph, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Act. In determining the
amount of contribution to which the respective parties are entitled, there shall
be considered the relative benefits received by each party from the offering of
the securities (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claims was asserted, the
opportunity to correct and prevent any statement of omission, and any other
equitable considerations appropriate under the circumstances; provided that in
no event will any Investor be required to contribute an amount in excess of the
original cost that Investor of Investor's Shares Included in that offering. The
Company and the Underwriters agree that it would not be equitable if the amount
of such contribution were determined by pro rata or per capital allocation.
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5.7 Reports under the Securities Exchange Act of 1934. With a view to
making available to the Investor the benefits of Rule 144 promulgated under the
Act, the Company agrees to use its best efforts (i) to file with the SEC in a
timely manner all reports and other documents required to be filed by an issuer
of securities registered under the Act or the Securities Exchange Act of 1934,
as amended, (ii) to maintain in effect the registration of Investor's Common
Stock under Section 12 of the Securities Exchange Act of 1934, as amended, and
(iii) so long as any Investor owns any of the Shares, to furnish in writing upon
such Investor's request the following information: (A) the Company's name,
address and telephone number, (B) the Company's Internal Revenue Service
identification number, (C) the Company's SEC file number, (D) the number of
shares of Common Stock outstanding as shown by the most recent report or
statement published by the Company, (E) the average weekly volume of trading in
such shares reported on all national securities exchanges during the four
calendar weeks preceding the date of receipt of request by the Investor, and (F)
whether the Company has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding twelve months,
With respect to a rule or regulation of the SEC (other than Rule 144) which may
at any time permit. an Investor to sell Common Stock to the public without
registration, the Company agrees to take such action as is reasonable to enable
utilization of such rule.
5.8 Limitations on Subsequent Registration Rights. From and after the
Closing, the Company will not, without the prior written consent of the
Investor, enter into any agreement with any holder or prospective holder of any
securities of the Company which allows such holder or prospective holder of any
securities of the Company to include such securities in any registration filed
under subparagraph 5.1 hereof, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of his securities will not
diminish the amount of Shares which are included.
5.9 Transfer of Registration Rights. Incident to the sales of Shares,
any transferee of Shares representing at least 50,000 shares of Common Stock
(which amount will be appropriately adjusted for stock splits and combinations)
will be entitled to registration rights under this paragraph 5 to the same
extent as Investor.
5.10 Registration and Blue Sky Fees. In connection with any registration
of Investor's Shares, Investor will pay or reimburse the Company for his pro
rata share of all registration and/or blue sky fees paid to securities
regulatory agencies.
6. Covenants.
Financial Statements. The Company promptly shall deliver to the Investor
annual and quarterly financial statements.
7. Miscellaneous.
7.1 Agreement is Entire Contract. Except as specifically referenced
herein, this Agreement constitutes the entire contract between the parties
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hereto concerning the subject matter hereof and no party shall be liable or
bound to the other in any manner by any warranties, representations or covenants
except as specifically set forth herein. Any previous agreement among the
parties related to the transactions described herein is superseded hereby. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided herein.
7.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Utah.
7.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.4 Title and Subtitles. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience and are not to be considered in construing
this Agreement.
7.5 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
addressed to a party at the following addresses:
If to the Company: If to the Investor:
Laser Corporation Reinhardt Thyzel
Attn: President Xxxxxxxxxx 0
0000 Xxxxx 0000 Xxxx 0000 Xxxxxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000 SWITZERLAND
or to another address as a party may designate by ten (10) days advance written
notice to the other party.
7.6 No Finder's Fees. Each party represents that it is not, and will not
be, obligated for any finder's fee or commission payable in cash in connection
with this transaction. The Investor hereby agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which any such Investor or any of the
Investor's employees or representatives is responsible.
The Company agrees to indemnify and hold harmless the Investor from any
liability for any commission and compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of Investor's officers, employees or
representatives is responsible.
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7.7 Survival of Warranties. The warranties and representations of the
Company contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing hereunder for one year
from the date hereof.
7.8 Amendment of Agreement. Except as expressly provided herein, any
provision of this Agreement may be amended or waived on behalf of all Investors
by a written instrument signed by the Company and by Investors holding at least
a majority of the aggregate of the shares of Common Stock issuable and issued
upon conversion of the Shares.
7.9 Election of Investor as Director of the Company. The Company agrees
that it shall cause its bylaws to be amended to expand the number of directors
to five (5) and will appoint the Investor or his nominee to fill the newly
created vacancy.
7.10 The purchase and sale of the Shares as set forth herein is
conditioned upon the approval of the Company's shareholders as is required under
the NASDAQ Market Place Rules.
In Witness Whereof, the undersigned have executed this Agreement as of the
day and year first written above.
LASER CORPORATION
/s/ B. Xxxxx Xxxxxxx
By:-----------------------
B. Xxxxx Xxxxxxx,
President
INVESTOR
/s/ Reinhardt Thyzel
--------------------------
Reinhardt Xxxxxx
00
XXXXXXXXXX XXXXXXXX
2.8 The NASD has commenced a proceeding to determine if the Company's
common stock should remain listed on the NASDAQ Small Cap market
system.
2.9 The Company is paying patent royalties to Patlex under a preexisting
arrangement disclosed to Investor.
2.12 The Company was audited by the Internal Revenue Service for the tax
years 1983, 1984 and 1985. These audits have been resolved.
2.14 The Company has a 401(K) profit sharing plan to which it has made no
contributions.
4.4 The following risk factors have been disclosed to and discussed with
Investor prior to the Investor signing the Stock Purchase Agreement:
(a) The laser and medical device markets are highly competitive. There
are numerous other manufacturers of lasers and laser medical devices
who have greater financial resources and market power than the Company.
There can be no assurance that the Company's current or future products
will gain market acceptance.
(b) The Company has experienced operating losses over the past two
years and during the first two quarters of the current year. Cost
containment and marketing efforts of management have not as yet been
able to turn the company back to profitability.
(c) A few customers account for a significant portion of the Company's
sales revenues. The loss of any one of these customers could have a
material effect on the Company's results.
(d) The Company's Common Stock is currently traded through the NASDAQ
SmallCap Market system. The NASD has recently enacted more stringent
requirements for listing of a company on the SmallCap Market system,
and the Company currently cannot meet one of the new requirements.
While the proceeds of Investor's purchase of the Shares should put the
Company in compliance with all of the NASD requirements for continued
listing on the SmallCap Market system, there can be no assurance that
the NASD will allow the Company's Common Stock to continue to be listed
on the SmallCap Market system nor that the Company will stay in
compliance with requirements for continued listing on the SmallCap
Market system. There is also the possibility that the NASD will enact
even stricter standards in the future that the Company will not be able
to meet.
(e) The Company needs new investment capital above and beyond the
proceeds from Investor's purchase of the Shares. There can be no
assurance that the Company will be able to raise the needed additional
capital timely, at reasonable cost, or at all.
12
(f) Certain of the Company's products are subject to government
regulation, including regulation by the Food & Drug Administration in
the United States, Although the Company believes it is in compliance
with all applicable regulatory requirements, there is no assurance that
changes in regulatory requirements or policies will not materially
adversely effect the Company.
(g) The NASD has advised the Company that it does not meet the public
float requirement for listing the Company's common stock on the NASDAQ
SmallCap Market system. A public float of $1,000,000 is required. The
Company has until October 28, 1998 to meet this requirement prior to
delisting.
459995/gel
13
