EXHIBIT 10.36
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SETTLEMENT AGREEMENT
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This Settlement Agreement ("Settlement Agreement") is made and entered into
effective as of December 17, 1996, by and among LaserSight Incorporated, a
Delaware corporation ("LSI"), Public Company Publishing, Inc., a Florida
corporation ("PCP"), and Xxxxxx X. Xxxxxx ("Xxxxxx").
WHEREAS, on May 9, 1996, PCP filed suit against LSI in the Circuit Court of
the Ninth Judicial District in Orange County, Florida, captioned Public Company
Publishing, Inc. v. LaserSight Incorporated, Case No. CI96-3409;
WHEREAS, on May 23, 1996, LSI removed such action to the United States
District Court for the Middle District of Florida, Orlando Division, Case No.
96-546-CV-ORL-19 (the "Lawsuit");
WHEREAS, LSI is presently engaged in negotiations with the former
shareholders and/or the former option holders (collectively the "Former LSC
Holders") of Lasersight Centers Incorporated, a Delaware corporation ("LSC"), to
amend that certain Agreement for Purchase and Sale of Stock dated December 3,
1992 among LSI, LSC and the Former LSC Holders, as amended and restated on
January 15, 1993 and as further amended as of April 5, 1993 and as of July 10,
1995, pursuant to which Agreement additional shares of the common stock, $.001
par value, of LSI ("LSI Stock") may, subject to certain conditions, be issued to
the Former LSC Holders (such amendment is referred to herein as the "LSC
Transaction");
WHEREAS, Xxxxxx may receive from LSI certain shares of LSI stock in his
capacity as one of Former LSC Holders pursuant to the LSC Transaction (such
shares are referred to herein as the "Earnout Shares");
WHEREAS, LSI, PCP, and Xxxxxx desire to resolve matters between them as
specifically set forth below:
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
LSI, PCP, and Xxxxxx agree as follows:
1. Immediately following execution of this Settlement Agreement by LSI,
PCP, and Xxxxxx, LSI and PCP will sign a Stipulation of Dismissal With Prejudice
of the Lawsuit pursuant to Fed. R. Civ. P. 41(a)(1), including all counts
thereof, which Stipulation PCP shall immediately file with the United States
District Court for the Middle District of Florida, Orlando Division.
2. LSI shall pay to Xxxxxx the sum of One Hundred Thousand Dollars
($100,000.00) in two equal installments of Fifty Thousand Dollars ($50,000.00).
LSI will deliver to Xxxxxx the first installment within three (3) days following
PCP's and Xxxxxx'x dismissal of the Lawsuit with prejudice pursuant to paragraph
1 hereof. LSI will pay Xxxxxx the second installment on or before March 1, 1997.
3. In the event the LSC Transaction is closed on or before March 1, 1997,
Xxxxxx may receive from or on account of one or more Former LSC Holders 75,000
shares of LSI Stock in connection with such closing. In the event the LSC
Transaction is not closed and 75,000 shares of LSI Stock are not delivered to
Xxxxxx by one or more Former LSC Holders on or before March 1, 1997, LSI will
deliver 75,000 shares of LSI Stock to Xxxxxx on March 2, 1997. Such 75,000
shares of LSI Stock, whether delivered by one or more Former LSC Holders or by
LSI, are referred to herein as the "Settlement Shares".
4. At the first regularly-scheduled meeting of the LSI Board of Directors
("the Board") following the execution and delivery of this Settlement Agreement
by all parties, the Board will consider a proposal to be submitted by LSI's
President to increase the number of Settlement Shares as defined in paragraph 3
above from 75,000 shares to 87,500 shares (the "Proposal"). Such obligation to
submit the Proposal shall not require the President to support or vote for the
Proposal. Should the Board, in its discretion, approve the Proposal, the number
of Settlement Shares as defined herein will be increased from 75,000 shares to
87,500 shares. Should the Board, in its discretion, not approve the Proposal,
the number of Settlement Shares as defined herein will remain at 75,000. All
provisions of this Settlement Agreement will remain in full force and effect
notwithstanding Board approval or disapproval of the Proposal.
5. In the event Xxxxxx receives Settlement Shares or Earnout Shares, the
following provisions shall apply:
a. LSI will file with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 ("Securities Act") a registration statement
("Registration Statement") relating to any Settlement Shares and Earnout
Shares, and use its best efforts to cause the Registration Statement (i) to
be declared effective by the SEC on or before June 1, 1997, and (ii) and to
remain effective for a period of ninety (90) days.
b. LSI shall be in default of this Settlement Agreement if any Registration
Statement required to be filed pursuant to paragraph 5(a) above has not
been declared effective by the SEC on or before June 1, 1997, unless the
failure of the Registration Statement to be declared effective is solely
due to a legal impediment beyond the control of LSI. The parties agree that
Xxxxxx will suffer damages in the event of such a default and that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, LSI agrees in the event of such a default, that LSI will (i)
deliver to Xxxxxx an additional 3,750 shares of LSI Stock ("Additional
Shares"), (ii) cause the Additional Shares to be included in the
Registration Statement (to the extent permitted by the rules of the SEC
then in effect), and (iii) use its best efforts to cause the Registration
Statement to be declared effective as soon after June 1, 1997 as possible.
Xxxxxx may pursue any remedy for damages he may have as a result of such a
default by LSI. LSI shall be entitled to a credit or a set-off from Xxxxxx
in connection with such remedy for the value of any Additional Shares
issued (based on the closing price of LSI stock on the date of issuance of
the Settlement Shares).
c. LSI will promptly advise Xxxxxx as to the initial filing of the
Registration Statement and as to the effectiveness thereof. LSI will
promptly furnish such number of prospectuses, and any amendments thereof or
supplements thereto, as Xxxxxx from time to time may reasonably request.
x. Xxxxxx shall from time to time promptly supply to LSI in writing any
information relating any holdings of LSI Stock by Xxxxxx, and their
intended plan of distribution, all as LSI may reasonably request in order
for LSI to comply with the rules of the SEC applicable to the Registration
Statement. In addition, Xxxxxx agrees to furnish promptly to LSI all
information required to be disclosed in order to make the information
previously furnished to LSI by Xxxxxx not materially misleading.
e. LSI shall be entitled to suspend the right of Xxxxxx to sell any
Settlement Shares, Earnout Shares and, if applicable, Additional Shares
pursuant to the Registration Statement if the Board determines reasonably
and in good faith that such sales pursuant to the Registration Statement
would materially impede, delay or interfere with any material financing,
offer or sale of securities by LSI, acquisition, corporate reorganization
or other significant transaction involving LSI 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 LSI at the time of such suspension described above;
provided, however, that LSI shall not be entitled to more than one such
suspension and the suspension shall not be longer than six (6) weeks
duration. If LSI shall so suspend Xxxxxx'x right to sell, (i) LSI shall, as
promptly as possible, deliver a certificate signed by the Chief Executive
Officer or President of LSI to Xxxxxx as to such determination, (ii) Xxxxxx
shall receive an extension of the registration period equal to the number
of days of the suspension, and (iii) if such suspension of the right to
sell shall commence on or continue after June 1, 1997, LSI shall before the
later to occur of ten (10) business days after the date of such suspension
or June 10, 1997, deliver to Xxxxxx a number of shares of LSI Stock equal
to 3,750 minus the number of Additional Shares previously delivered or due
to be delivered pursuant to paragraph 5(b) above.
f. All expenses incurred in connection with the Registration Statement,
including without limitation all filing fees, duplication expenses, fees
and expenses of legal counsel for LSI, and the fees and expenses of LSI's
independent accountants, shall be paid by LSI, except that Xxxxxx shall pay
any and all brokers' or underwriters' fees, commissions and discounts and
any fees and expenses of his legal counsel, if any.
g. LSI agrees that all registration rights that may be accorded to the
Former LSC Holders pursuant to the LSC Transaction will be transferred to
Xxxxxx in connection with any transfer to Xxxxxx of shares of LSI Stock
that may be issued to the Former LSC Holders pursuant to the LSC
Transaction. Any such transfer shall be in compliance with all applicable
federal and state securities laws.
6. x. Xxxxxx will acquire any Earnout Shares, Settlement Shares and, if
applicable, Additional Shares (i) for his own account and not for any other
person, and (ii) for investment purposes only (except for sale pursuant to
the Registration Statement) and not with a view to, or in connection with,
any sale, assignment, pledge or other transfer in violation of applicable
federal or state securities laws.
x. Xxxxxx acknowledges that any Earnout Shares, Settlement Shares and, if
applicable, Additional Shares cannot be sold, assigned, pledged or
otherwise transferred unless registered under the Securities Act and any
applicable state securities laws or unless an exemption from such
registration is available, as established by an opinion of his counsel
satisfactory to LSI.
c. PCP and Xxxxxx have received a copy of each of the following documents
of LSI (without exhibits):
(i) 1995 Annual Report to Stockholders,
(ii) Proxy Statement dated Xxxxx 00, 0000,
(xxx) Quarterly Reports (Form 10-Q) for the quarters ended March 31,
June 30 and September 30, 1996,
(iv) Current Reports (Form 8-K) dated April 15, May 3, July 8, July 9,
July 18, September 6, and September 16, 1996, and
(v) Form 8-A/A dated April 25, 1996 describing the Common Stock.
PCP and Xxxxxx have also received any such other publicly-available information
relating to LSI as they may have requested.
d. Each of PCP and Xxxxxx is either (i) an "accredited investor" (as
such term is defined in Rule 501(a) of Regulation D of the SEC under the
Securities Act) or (ii) believes that he or it has such knowledge and
experience in financial and business matters to be capable of evaluating
the merits and risks of the receipt of any Earnout Shares, Settlement
Shares and, if applicable, Additional Shares.
e. PCP and Xxxxxx acknowledge that, unless and until any Earnout
Shares, Settlement Shares and, if applicable, the Additional Shares become
freely transferable pursuant to an exemption from, or a registration under,
all applicable federal and state securities laws, each certificate for
Settlement Shares and, if applicable, Additional Shares shall bear a
restrictive 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.
7. PCP, its related and affiliated entities, and its and their
shareholders, members, directors, officers, employees, agents, and assigns, and
all parties acting by, through, under or in concert with any of them
(collectively the "PCP Releasors"), hereby relieve, release, and forever
discharge LSI and its affiliates, subsidiaries, officers, directors, agents,
attorneys, employees, predecessors, successors and assigns, and each and all of
them (collectively the "LSI Releasees") from any and all manner of actions,
causes of action, suits, debts, covenants, contracts, controversies, agreements,
promises, damages, judgements, claims for contribution, indemnity or
subrogation, whether known or unknown, discovered or undiscovered, which any PCP
Releasor ever had, now has, shall or may have in the future have against any or
all LSI Releasees, for, upon or by reason of any matter, contract, claim,
demand, cause, happening or thing whatsoever, up to the date of this Settlement
Agreement, including without limitation, all claims and causes of action which
were or might have been asserted in the Lawsuit.
8. Xxxxxx, for himself, for Xxxxxx & Xxxxx, P.A., and for Xxxxxx'x agents,
attorneys, legal representatives, heirs, assigns, administrators, personal
representatives, and executors (collectively the "Xxxxxx Releasors"), hereby
relieves, releases, and forever discharges LSI Releasees from any and all manner
of actions, causes of action, suits, debts, covenants, contracts, controversies,
agreements, promises, damages, judgements, claims for contribution, indemnity or
subrogation, whether known or unknown, discovered or undiscovered, which any
Xxxxxx Releasor ever had, now has, or shall or may in the future have against
any or all LSI Releasees, for, upon or by reason of any matter, contract, claim,
demand, cause, happening or thing whatsoever, up to the date of this Settlement
Agreement, including without limitation, all claims and causes of action which
were or might have been asserted in the Lawsuit.
9. Each of PCP and Xxxxxx hereby acknowledge and agree that LSI, in
promising to make the payments and perform the other aforesaid acts, does so in
compromise and full settlement and release of disputed claims by PCP and Xxxxxx,
and any other potential claims by PCP Releasors or Xxxxxx Releasors as set forth
in paragraphs 7 and 8 hereof, not admitting any liability on account thereof,
and that said payments and acts by LSI are not to be deemed or considered as an
admission of liability.
10. LSI and its subsidiaries hereby relieve, release, and forever discharge
PCP and its affiliates, subsidiaries, officers, directors, agents, attorneys,
employees, predecessors, successors and assigns, and each and all of them
(collectively the "PCP Releasees") from any and all actions, causes of action,
suits, debts, covenants, contracts, controversies, agreements, promises,
damages, judgements, claims for contribution, indemnity or subrogation, whether
discovered or undiscovered, which LSI ever had, now has, or which LSI shall or
may in the future have, against any PCP Releasee for, upon or by reason of any
matter, contract, claim, demand, cause, happening or thing whatsoever, up to the
date of this Settlement Agreement, including without limitation, all claims and
causes of action which were or might have been asserted in the Lawsuit.
11. LSI and its subsidiaries hereby relieve, release, and forever discharge
Xxxxxx and Xxxxxx & Xxxxx, including Xxxxxx & Dolans' agents, employees,
predecessors, successors, and assigns, and each and all of them ("Xxxxxx
Releasees") from any and all actions, causes of action, suits, debts, covenants,
contracts, controversies, agreements, promises, damages, judgements, claims for
contribution, indemnity or subrogation, whether discovered or undiscovered,
which LSI ever had, now has, or which LSI shall or may in the future have,
against any Xxxxxx Releasee for, upon or by reason of any matter, contract,
claim, demand, cause, happening or thing whatsoever, up to the date of this
Settlement Agreement, including without limitation, all claims and causes of
action which were or might have been asserted in the Lawsuit.
12. LSI warrants and represents that any Settlement Shares and, if
applicable, Additional Shares, that may be required to be delivered by LSI to
Xxxxxx under this Settlement Agreement will be fully paid and non-assessable.
13. This Settlement Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and may not be amended or
modified in any respect except by written instrument executed by all of the
parties hereto. Each party acknowledges that it is entering into this Settlement
Agreement after conducting its own independent investigation and upon the advice
of its counsel and that it is relying upon such investigation and advice and not
upon any representation by any other party hereto other than those
representations specifically set forth herein. This Settlement Agreement shall
not be construed more stringently against any party regardless of who may have
served as the draftsman thereof.
14. Each of the parties hereto represents and warrants that he or it has
the authority and corporate power to enter into this Settlement Agreement and
such other instruments and documents in connection with this Settlement
Agreement and the transactions contemplated hereby and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Settlement Agreement and any documents entered into in connection with this
Settlement Agreement and the performance of each party's obligations hereunder
and thereunder have been duly authorized pursuant to and in accordance with the
laws governing each party, and no other proceedings on the part of either party
are necessary to authorize such execution, delivery and performance. This
Settlement Agreement has been duly executed by each party and is the valid and
legally binding obligation of each party, enforceable against each party in
accordance with its terms.
15. To the best of each party's knowledge, the execution, delivery and
performance by each party of this Settlement Agreement and the transactions
contemplated hereby, do not and will not (i) conflict with or result in any
violation of or constitute a breach or default under any term of the charter
documents or bylaws of any party, of any agreement, license, permit or other
instrument to which either party is a party or by which either party is bound or
to which the business is subject, or any order, judgment or decree of any court
or governmental authority to which the same are bound or subject; (ii) cause
either party to violate any law; or (iii) require the consent, waiver,
authorization or approval of any governmental authority or of any other person,
entity or organization, provided, however, that LSI's obligations to cause the
Registration Statement to be declared effective is subject to the approval of
the SEC.
16. In the event it becomes necessary for either party to take or respond
to any action, in law, equity or otherwise, to enforce the terms of this
Settlement Agreement, the venue for such proceeding will be in the United States
District Court for the Middle District of Florida, Orlando Division, unless the
requirements for federal jurisdiction are not satisfied, in which case the venue
for proceeding will be in the Circuit Court of the Ninth Judicial District of
Orange County, Florida. All parties consent to personal jurisdiction in the
State of Florida in connection with any such suit, and consent to service of
process outside Florida in connection therewith. The prevailing party in any
such proceeding shall be entitled, in addition to any other relief awarded by
the Court or other tribunal, to its reasonable costs and expenses, including
attorney's fees, actually incurred in any such action.
17. This Settlement Agreement may be executed in any number of
counterparts, and when each Party has executed and delivered at least one such
counterpart to the every other Party, each counterpart shall be deemed an
original and all counterparts taken together shall constitute one and the same
Settlement Agreement that shall be binding as to all the Parties. This
Settlement Agreement shall not be effective until it has been executed by all
parties.
18. This Settlement Agreement is being entered into in, and shall be
construed and enforced under the laws of, the State of Florida.
19. This Settlement Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
20. All notices, requests, demands and other communications hereunder shall
be in writing and shall be delivered in person or sent by registered or
certified mail, postage prepaid or by facsimile to the following addresses for
LSI, PCP, and Xxxxxx:
If to LSI: LaserSight Incorporated
00000 Xxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Xxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy No.: (000) 000-0000
If to PCP and/or Xxxxxx: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxx, P.A.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx, Xxxxxxx & Ruta P.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No: (000) 000-0000
Any party may change its address for receiving notice by a notice given pursuant
to this section.
IN WITNESS WHEREOF, the parties hereto have caused this Settlement
Agreement to be executed on the day and year indicated below their respective
names.
PUBLIC COMPANY PUBLISHING, INC. LASERSIGHT INCORPORATED
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
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Title: President Title: President
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Date: 12/17/96 Date: 12/17/96
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XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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Date: 12/17/96
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