SECURITIES PURCHASE AGREEMENT
DATED AS OF JULY 13, 2000
BY AND AMONG
OPHTHALMIC IMAGING SYSTEMS,
PREMIER LASER SYSTEMS, INC.,
AND
MEDIVISION MEDICAL IMAGING LTD.
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of July 13, 2000 (this
"AGREEMENT"), is entered into by and among Ophthalmic Imaging Systems, a
California corporation ("OIS"), Premier Laser Systems, Inc., a California
corporation ("PREMIER") and MediVision Medical Imaging Ltd., an Israeli
corporation ("MEDIVISION").
WITNESSETH:
WHEREAS, Premier owns, beneficially and of record, 2,131,758 shares of
OIS common stock (the "PREMIER COMMON") and 150 shares of OIS Series B Preferred
Stock (the "PREMIER SERIES B PREFERRED"), and Premier is a party to that certain
Agreement, dated as of October 21, 1999 (the "SERIES B PURCHASE AGREEMENT"), by
and between OIS and Premier, whereby Premier has the right to purchase
additional shares of Series B Preferred Stock upon the exercise of outstanding
OIS options held by OIS employees and directors;
WHEREAS, pursuant to that certain Manufacturing Agreement, dated March
7, 1999, by and between OIS and Premier (the "MANUFACTURING AGREEMENT"), Premier
owns certain inventory of OIS products and materials (the "PREMIER INVENTORY")
used in the manufacture of certain OIS products;
WHEREAS, Premier has asserted that OIS owes certain amounts to Premier
including, but not limited to, a promissory note in the principal amount of five
hundred thousand dollars ($500,000), dated April 30, 1998, plus accrued and
unpaid interest thereon and additional advances in the approximate amount of
$1,608,000 (the "PREMIER NOTE," and the Premier Note and the additional amounts
owed to Premier are referred to herein as the "PREMIER Debt");
WHEREAS, OIS has asserted that it has certain defenses and offsets to
the Premier Debt, which Premier disputes;
WHEREAS, OIS and Premier have made claims against each other relating
to the Manufacturing Agreement and certain other aspects of the relationship
between them;
WHEREAS, in connection with the transactions contemplated hereby, OIS
and Premier wish to resolve all disputes and terminate all existing agreements
between the companies;
WHEREAS, Premier wishes to sell to MediVision, and MediVision wishes to
purchase from Premier, the Premier Debt, the Premier Common and the Premier
Series B Preferred;
WHEREAS, Premier wishes to sell and OIS wishes to purchase the Premier
Inventory, on the terms and conditions set forth herein;
WHEREAS, MediVision wishes to provide $1,500,000 of working capital
financing to OIS, which obligations shall be convertible, at MediVision's
option, into shares of OIS common stock (the "OIS COMMON") pursuant to a Working
Capital Funding Agreement, dated as of July 13, 2000, between OIS and MediVision
(the "FUNDING Agreement");
WHEREAS, MediVision is willing to loan OIS up to two hundred and sixty
thousand dollars ($260,000) (the "LOAN"), pursuant to a Loan and Security
Agreement between OIS and MediVision (the "SECURITY AGREEMENT"), to allow OIS to
purchase certain inventory, including the Premier Inventory, which Loan will be
secured by the inventory so purchased and the proceeds thereof, as collateral;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, promises and covenants set forth herein, the parties hereto agree as
follows:
ARTICLE I
DEFINED TERMS
1.1. DEFINITIONS. The following terms, when used in this Agreement,
have the following meanings, unless the context otherwise indicates:
"AFFILIATE" has the meaning ascribed to it in Rule 12b-2 under the
Exchange Act.
"COMMISSION DOCUMENTS" means all reports, schedules, forms, statements
and other documents required to be filed with the Securities and Exchange
Commission pursuant to the reporting requirements of the Exchange Act, including
material filed pursuant to Section 13(a) or 15(d) of the Exchange Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor federal law then in force.
"GOVERNMENTAL BODY" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state, county or local, domestic or foreign.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, encumbrance, encroachment, lien (statutory or
otherwise), claim, option, reservation, priority, preferential arrangement,
easement, encumbrance or interest of any kind.
"MATERIAL ADVERSE EFFECT" means any effect on the business, results of
operations, prospects, properties, assets or financial condition of the entity
in question that is material and adverse to such entity.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, governmental entity or any other
entity.
"PREMIER ASSETS" means the Premier Debt, the Premier Common, the
Premier Series B Preferred and the Premier Inventory.
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"REGISTRATION RIGHTS AGREEMENT" means a registration rights agreement
to be entered into between MediVision and OIS in the form annexed hereto as
Exhibit B with respect to the registration of the capital stock of OIS to be
acquired by MediVision pursuant to this Agreement and the Funding Agreement, as
described therein.
"REGULATION" means (1) any applicable law, rule, regulation, ordinance,
judgment, decree, ruling, order, award, injunction, recommendation or other
official action of any Governmental Body, and (2) any official change in the
interpretation or administration of any of the foregoing by the Governmental
Body or by any other Governmental Body or other person responsible for the
interpretation or administration of any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal law then in force.
"TRANSACTION DOCUMENTS" means this Agreement, the Funding Agreement,
the Registration Rights Agreement and the Security Agreement.
"TRANSACTIONS" means, collectively, the transactions undertaken
pursuant to, or otherwise contemplated by, the Transaction Documents.
1.2 ADDITIONAL DEFINITIONS. Additional defined terms are found in the
body of this Agreement. In addition, the masculine form of words includes the
feminine and the neuter and vice versa, and, unless the context otherwise
requires, the singular form of words includes the plural and vice versa. The
words "herein," "hereof," "hereunder," and other words of similar import, when
used in this Agreement, refer to this Agreement as a whole, and not to any
particular section or subsection.
ARTICLE II
PURCHASE AND SALE TERMS; CLOSING
2.1 PURCHASE AND SALE OF THE PREMIER DEBT, PREMIER SHARES AND PREMIER
INVENTORY.
(a) PURCHASE AND SALE OF PREMIER DEBT. Subject to the terms
and conditions of this Agreement, at the Closing (as defined below), Premier
shall sell, assign, transfer, convey and deliver to MediVision, and MediVision
shall purchase, acquire and accept from Premier, all right, title and interest
in and to the Premier Debt, free and clear of any and all Liens. Prior to the
Closing, and as a condition thereto, Premier and OIS shall amend the terms of
the Premier Debt to provide that, subject to, and effective as of, the Closing,
all amounts due and payable with respect to the Premier Debt shall automatically
be converted into OIS Common at a conversion price per share of $0.55, which
amendment (the "PREMIER DEBT AMENDMENT") shall be in form and substance
reasonably satisfactory to MediVision.
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(b) PURCHASE AND SALE OF PREMIER SHARES. Subject to the terms
and conditions of this Agreement, at the Closing, Premier shall sell, assign,
transfer, convey and deliver to MediVision, and MediVision shall purchase,
acquire and accept from Premier, all right, title and interest in and to the
Premier Common and the Premier Series B Preferred (collectively, the "PREMIER
SHARES"), free and clear of any and all Liens, other than restrictions imposed
by federal or state securities laws. Pursuant to the Certificate of
Determination of Preferences of Series B Preferred Stock of OIS, the Premier
Series B Preferred shall automatically convert into shares of OIS common stock
upon transfer by Premier.
(c) PURCHASE AND SALE OF PREMIER INVENTORY. Subject to the
terms and conditions of this Agreement, at the Closing, Premier shall sell,
assign, transfer, convey and deliver to OIS and OIS shall purchase, acquire and
accept from Premier (with the funding for such purchase to be provided by
MediVision), all right, title and interest in and to the Premier Inventory, free
and clear of all Liens, determined to be in useable and in good condition after
a physical inventory conducted jointly by OIS and Premier, for an aggregate
purchase price of up to six hundred and twenty five thousand dollars ($625,000),
as determined in accordance with Section 2.3.
(d) PAYMENT; DELIVERIES. At the Closing, Premier shall deliver
to MediVision the following: (i) the original Premier Note and evidence of
transfer of the balance of the Premier Debt, with the Note endorsed in favor of
MediVision in form and substance reasonably satisfactory to MediVision and its
counsel, together with the Premier Debt Amendment, duly executed and delivered
by OIS and Premier; (ii) the stock certificate or certificates representing the
Premier Common Stock and the stock certificate or certificates representing the
Premier Series B Preferred, together with stock powers duly executed by Premier
and in form and substance suitable for transfer of the Premier Shares to
MediVision; (iii) a certificate, dated as of the Closing Date and duly executed
by an executive officer of Premier, certifying that each of the representations
and warranties of Premier set forth in Article III hereof are true, correct and
complete as of the date hereof and as of the Closing Date, and that Premier has
performed and satisfied all covenants, agreements and obligations required
hereunder to be performed and satisfied by it on or prior to the Closing Date;
and (iv) the written consent, if required, of Premier's lenders to the transfer
of the Premier Debt, Premier Shares and/or the Premier Inventory. The aggregate
purchase price for the Premier Debt, the Premier Shares and the Premier
Inventory (with $625,000 (subject to adjustment) of such purchase price
allocated to the Premier Inventory in accordance with Section 2.3) shall consist
of the following (1) two million, two hundred thousand dollars ($2,200,000),
assuming no adjustment to the value of the Premier Inventory, paid by wire
transfer on the Closing Date to an account designated in writing by Premier and
(2) registered and freely transferable ordinary shares of MediVision valued at
$1,000,000 in the aggregate (the "MEDIVISION SHARES") delivered to Premier on
the Closing Date, which valuation shall be based on the average closing price of
such MediVision Shares on the Brussels EURO.N.M. for the five (5) trading days
immediately preceding the date of Bankruptcy Court Approval (hereinafter
defined). The delivery of the MediVision Shares shall be conditioned on
Premier's undertaking not to effect any sales of such shares for a period of six
weeks following Bankruptcy Court Approval, with weekly sales thereafter not to
exceed an aggregate of 20% of the number of MediVision Shares originally
delivered to Premier. MediVision shall have the option to repurchase the
MediVision Shares from Premier at any time after the Closing for $1,000,000 in
cash, less any gross proceeds realized by Premier from its prior sales of such
MediVision Shares, in accordance with the provisions of the Put and Call
Agreement, to be entered into by Premier and MediVision at the Closing, in the
form of EXHIBIT B annexed hereto (the "PUT AND CALL AGREEMENT"). To the extent
that Premier fails to realize $1,000,000 of gross proceeds within eleven weeks
of the Closing, MediVision shall, upon Premier's request, pay to Premier the
difference in cash, in accordance with the terms of the Put and Call Agreement.
At the Closing, Premier shall deliver the Premier Inventory to OIS and the
Premier Debt and the Premier Shares to MediVision.
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(e) CLOSING. The consummation of the purchase and sale of the
Premier Debt, the Premier Shares and the Premier Inventory (the "CLOSING"),
shall take place on the first business day following satisfaction of the
conditions in Article VII and approval of the transactions contemplated herein
by the U.S. Bankruptcy Court (the "BANKRUPTCY COURT") having jurisdiction over
Premier's proceeding under Chapter 11 of the U.S. Bankruptcy Code (such approval
referred to herein as the "BANKRUPTCY COURT APPROVAL"), at the principal
business office of Premier or at such other place or date thereafter as Premier,
OIS and MediVision may agree in writing.
2.2 TERMINATION OF CERTAIN AGREEMENTS. Upon the Closing, the Series B
Purchase Agreement and the Manufacturing Agreement shall terminate, and shall be
of no further force or effect.
2.3 INVENTORY ADJUSTMENTS. The purchase price of the Premier Inventory
will be reduced, on a dollar for dollar basis, if and to the extent that, the
value of Premier Inventory is less than $625,000. Such value shall be based upon
a physical inventory conducted by representatives of Premier and OIS jointly, as
soon as possible, after execution of this Agreement and will identify quantities
and types of materials on hand. The value of the Premier Inventory, other than
finished goods, shall then be determined by the application of historical or
current cost, whichever is lower, of the raw materials or material components of
work in process so identified. The value of any finished goods shall be based on
the contract price for those products under the Manufacturing Agreement. Any
purchases of raw materials, work in progress or finished goods from Premier
Inventory by OIS before the Closing shall similarly cause a reduction in the
value of Premier Inventory by the amount of the purchase.
2.4 MUTUAL RELEASE. At the Closing, OIS and Premier shall execute and
deliver the mutual release referred to in Section 7.1(e).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREMIER
Premier hereby represents and warrants to MediVision and OIS as
follows:
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3.1 POWER AND CAPACITY; AUTHORIZATION. Premier is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Subject to the requirements of the Bankruptcy Code, Premier has full
corporate power and authority to conduct its business as presently conducted by
it and to own, lease or operate its assets and properties as presently owned,
leased and operated by it and 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 Board of Directors of Premier, and no
other corporate proceedings by Premier are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. Subject to Bankruptcy
Court Approval (as hereinafter defined), this Agreement has been duly and
validly executed and delivered by Premier, and, assuming this Agreement
constitutes a legal, valid and binding obligation of each of the other parties
hereto, constitutes a legal, 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).
3.2 NO CONFLICTS. Subject to Bankruptcy Court Approval, 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 applicable to or by which Premier or any of its assets
or properties is bound, or (c) conflict with or result in a breach of or default
(or any event which, with the giving of notice or lapse of time or both, would
constitute a breach or default) under any mortgage, lien, lease, license,
permit, agreement, contract or instrument to which Premier is a party or by
which its assets or properties 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.
3.3 OWNERSHIP OF SECURITIES. Premier is the record and beneficial owner
of the Premier Common and Premier Series B Preferred and the holder of all
legal, equitable and beneficial right, title and interest in and to the Premier
Debt, free and clear of any and all Liens, except for, in the case of the
Premier Shares, restrictions imposed by federal or state securities laws.
Premier has not sold, assigned, transferred or conveyed, or attempted or
purported to sell, assign, transfer or convey, to any Person any portion of the
Premier Shares or any right, title or interest therein or in or to the Premier
Debt.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MEDIVISION
MediVision hereby represents and warrants to Premier and OIS as
follows:
4.1 POWER AND CAPACITY; AUTHORIZATION. MediVision is a corporation duly
organized, validly existing and in good standing under the laws of Israel.
MediVision has full corporate power and authority to conduct its business as
presently conducted by it and to own, lease or operate its assets and properties
as presently owned, leased and operated by it and 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 MediVision's board
of directors or other governing body and no other corporate proceedings by
MediVision are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by MediVision and, assuming this Agreement constitutes a
legal, valid and binding obligation of each of the other parties hereto,
constitutes a legal, valid and binding agreement of MediVision, enforceable
against MediVision 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).
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4.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by MediVision will not (a) constitute a breach or violation of any
provisions of MediVision's articles of incorporation or bylaws or comparable
charter documents, (b) result in a violation of any law, rule, ordinance,
regulation, order, judgment or decree applicable to or by which MediVision or
any of its assets or properties is bound, or (c) conflict with or result in a
breach of or default (or any event which, with the giving of notice or lapse of
time or both, would constitute a breach or default) under any mortgage, lien,
lease, license, permit, agreement, contract or instrument to which MediVision is
a party or by which MediVision or any of its assets or properties is bound,
which conflict, breach or default would have a material adverse effect on the
ability of MediVision to perform its obligations under this Agreement.
4.3 INVESTIGATION AND ECONOMIC RISK. MediVision acknowledges that it
has had an opportunity to discuss the business, affairs, financial condition,
results of operations and current prospects of OIS with the officers, directors
and employees of OIS and to conduct reasonable diligence efforts. MediVision
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.
4.4 PURCHASE FOR OWN ACCOUNT. The Premier Shares, the Premier Debt and
the OIS Shares are being acquired by MediVision 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.
4.5 EXEMPT FROM REGISTRATION AND RESTRICTED SECURITIES. MediVision
understands that the Premier Shares and the Premier Debt will not be registered
under the Securities Act, on the grounds that the sales provided for in this
Agreement are exempt from registration under the Securities Act, and that the
reliance of Premier and OIS on such exemption is predicated in part on
MediVision's representations set forth in this Agreement. MediVision understands
that the Premier Shares and the Premier Debt being purchased hereunder are
restricted securities within the meaning of Rule 144 under the Securities Act
and that they 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 Premier Shares and 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. Each
certificate representing the Premier Shares may be endorsed with any legends
required by any state blue sky laws and/or the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE
"RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE
ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT, (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION, THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO
SAID SALE, OFFER OR DISTRIBUTION.
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4.6 ACCREDITED INVESTOR. MediVision is an "accredited investor" as such
term is defined in Regulation D promulgated under the Securities Act.
4.7 ISSUANCE OF MEDIVISION SHARES. At the time of the delivery thereof
to Premier, the MediVision Shares shall have been duly authorized by all
necessary corporate action and, when paid for and issued in accordance with the
terms hereof, the MediVision Shares shall be validly issued and outstanding,
fully paid and nonassessable.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OIS
OIS hereby represents and warrants to MediVision and Premier as
follows:
5.1 POWER AND CAPACITY; AUTHORIZATION. OIS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. OIS has full corporate power and authority to conduct its business
as presently conducted by it and to own, lease or operate its assets and
properties as presently owned, leased and operated by it and 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
Board of Directors of OIS, and no other corporate proceedings by OIS are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by OIS, and, assuming this Agreement constitutes a legal, valid and
binding obligation of each of the other parties hereto, constitutes a legal,
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).
5.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by OIS will not (a) constitute a breach or violation of any provisions
of Articles of Incorporation or Bylaws of OIS, (b) result in a violation of any
law, rule, ordinance, regulation, order, judgment or decree applicable to or by
which any of them or any of their respective assets or properties is bound, or
(c) conflict with or result in a breach of or default (or any event which, with
the giving of notice or lapse of time or both, would constitute a breach or
default) under any mortgage, lien, lease, license, permit, agreement, contract
or instrument to which any of them is a party or by which any of them or any of
their respective assets or properties is bound, which conflict, breach or
default would have a material adverse effect on the ability of OIS to perform
its respective obligations under this Agreement.
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5.3 CAPITALIZATION. The authorized capital stock of OIS, on the date
hereof, consists of 20,000,000 shares of common stock, of which 4,305,428 shares
are issued and outstanding, 100,000 shares of Series A Preferred Stock, of which
none is outstanding, and 2,000 shares of Series B Preferred Stock, of which 150
shares are outstanding. The rights, preferences and privileges of such shares
are as set forth in the Articles of Incorporation, as amended, and certain
Certificates of Designations thereto. All issued and outstanding shares of the
Company's capital stock (i) have been duly authorized and validly issued, (ii)
are fully paid and nonassessable, and (iii) were issued in compliance with all
applicable state and federal laws concerning the registration and qualification
of the issuance of securities. OIS has reserved an aggregate of 1,544,345 shares
of its common stock for issuance upon exercise of currently outstanding options
granted to employees, consultants and others. Except as set forth on SCHEDULE
3.3, there are no other outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
shareholder agreements, or agreements of any kind for the purchase or
acquisition from OIS of any OIS securities, other than as set forth in the
Series B Purchase Agreement between OIS and Premier.
5.4 ISSUANCE OF STOCK. The Premier Shares to be purchased under this
Agreement have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof, the Premier Shares shall
be validly issued and outstanding, fully paid and nonassessable.
5.5 COMMISSION DOCUMENTS; FINANCIAL STATEMENTS. The common stock of OIS
is registered pursuant to Section 12(b) or 12(g) of the Securities and Exchange
Act of 1934, as amended (the "EXCHANGE ACT"). As of their respective dates, the
Form 10-K for the year ended August 31, 1999 and the Forms 10-Q for the fiscal
quarters ended November 30, 1999 and February 29, 2000 (the "FINANCIAL
STATEMENTS") and all other Commission Documents filed by OIS with the Commission
after December 31, 1998 complied in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the
rules and regulations of the Securities and Exchange Commission (the
"COMMISSION") promulgated thereunder and other federal, state and local laws,
rules and regulations applicable to such documents, and, as of their respective
dates, neither the Form 10-K nor the Forms 10-Q referred to above contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Financial Statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed) and fairly present in
all material respects the financial position of OIS as of the dates thereof and
the results of operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments).
5.6 SUBSIDIARIES. OIS has no subsidiaries, either partially or wholly
owned.
5.7 NO UNDISCLOSED LIABILITIES. Except as disclosed in the Financial
Statements or on SCHEDULE 3.7 hereto, to its knowledge, OIS has not incurred
since February 29, 2000 any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) that would have a Material Adverse Effect.
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5.8 INDEBTEDNESS. SCHEDULE 3.8 hereto sets forth as of the date hereof
all outstanding secured and unsecured Indebtedness of OIS, or for which OIS has
commitments, other than the Premier Debt. For the purposes of this Agreement,
"INDEBTEDNESS" shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $10,000 (other than trade accounts payable incurred in the ordinary
course of business, including, but not limited to, legal fees), (b) all
guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the balance sheet of OIS (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $5,000 due under leases required to be
capitalized in accordance with GAAP. Except as disclosed in SCHEDULE 3.8, OIS is
not in default with respect to any Indebtedness other than Premier Debt.
5.9 CERTAIN FEES. No brokers, finders or financial advisory fees or
commissions will be payable by OIS with respect to the transactions contemplated
by this Agreement.
5.10 DISCLOSURE. Neither this Agreement nor the Schedules hereto nor
any of the Commission Documents furnished to MediVision by or on behalf of OIS
in connection with the transactions contemplated by this Agreement contain any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements made herein or therein, in the light of the
circumstances under and at the time at which they were made herein or therein,
not misleading.
5.11 EMPLOYEES. OIS does not have any collective bargaining
arrangements or agreements covering any of its employees, except as set forth on
SCHEDULE 3.11 hereto.
5.12 TITLE TO ASSETS. Except as set forth on SCHEDULE 3.12, OIS has
good and marketable title to all of its real and personal property having a
value in excess of $1,000, free and clear of any Liens, except for those
indicated on SCHEDULE 3.12 hereto.
5.13 ACTIONS PENDING. Except as set forth on SCHEDULE 3.13, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
OIS, threatened against OIS which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. Except as disclosed in the Commission Documents filed by OIS,
there is no action, suit, claim, investigation or proceeding pending or, to the
knowledge of OIS, threatened, against or involving OIS, its properties or
assets. Except as disclosed in the Commission Documents filed by OIS, there are
no outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or Governmental Body against OIS which could result in a Material
Adverse Effect.
5.14 COMPLIANCE WITH LAW. Except as set forth on SCHEDULE 3.14 hereto,
the business of OIS has been and is presently being conducted in accordance with
all applicable federal, state and local governmental laws, rules, regulations
and ordinances, domestic and foreign, except where the conduct of the business
of OIS in violation of any of such laws, rules, regulations and ordinances could
not reasonably result in a Material Adverse Effect.
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5.15 TAXES. Except as set forth on SCHEDULE 3.15 hereto, OIS has
accurately prepared and filed all federal, state and other tax returns required
by law, domestic and foreign, to be filed by it, has paid or made provisions for
the payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been and are reflected in the financial statements of
OIS for all current taxes and other charges to which OIS is subject and which
are not currently due and payable. Except as disclosed on SCHEDULE 3.15 hereto,
none of the federal income tax returns of OIS for the years subsequent to fiscal
year 1996 have been audited by the Internal Revenue Service or other domestic or
foreign governmental tax agency. Except as disclosed in Commission Filings, OIS
has no knowledge of any additional assessments, adjustments or contingent tax
liability (whether federal or state) pending or threatened against OIS for any
period that would have a Material Adverse Effect, nor of any basis for any such
assessment, adjustment or contingency.
5.16 INTELLECTUAL PROPERTY. Except as set forth on SCHEDULE 3.16, in
the conduct of its business as now conducted, OIS owns or possesses all patents,
know how, licenses and authorizations from third parties that are necessary for
OIS to conduct its business ("Intellectual Property"), free and clear of all
liens, charges or encumbrances. OIS has not received a notice of a claim of
infringement relating to the Intellectual Property and does not know of any
reasonable basis for a claim that such an infringement or violation exists.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
6.1 COVENANTS OF OIS.
(a) NO SHOP PROVISION. Commencing on the effective date
hereof, OIS and its officers, directors, employees and other agents will not,
until the earlier of (i) October 12, 2000 or (ii) termination of this Agreement,
directly or indirectly, take any action to solicit or initiate an offer or
proposal for a merger or other business combination involving OIS or the
acquisition of a material portion of the assets of OIS outside the ordinary
course of business of OIS or the sale and purchase of any voting securities of
OIS in a single transaction or series of related transactions (each a "TAKEOVER
PROPOSAL"). Notwithstanding the foregoing, if OIS (or any of its agents)
receives an unsolicited, bona fide Takeover Proposal from a person or entity
unaffiliated with OIS, then, to the extent that the Board of Directors of OIS
believes in good faith that such Takeover Proposal could, if consummated, result
in a transaction materially more favorable to the shareholders or creditors of
OIS than the transactions contemplated by this Agreement and, after consultation
with and upon the written advice of its counsel, the Board of Directors of OIS
concludes that the failure to act on such Takeover Proposal could cause a breach
of its fiduciary duties (a "SUPERIOR PROPOSAL"), the Board of Directors of OIS
may furnish information to the party making the Superior Proposal and engage in
negotiations with such party, provided, however, that such information may only
be provided pursuant to a written confidentiality agreement reasonably
satisfactory to OIS. OIS will promptly notify MediVision after receipt of any
Takeover Proposal and keep MediVision fully informed of the status and details
of any such negotiations regarding a Takeover Proposal.
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(b) OIS BREAK-UP FEE.
(i) In the event that OIS enters into an agreement with
respect to a Superior Proposal and this Agreement is terminated as a
result thereof, OIS shall, or shall cause the party making the Superior
Proposal to, pay to MediVision a break-up fee of one hundred fifty
thousand dollars ($150,000), which shall be due and payable immediately
upon the earlier of the execution of such agreement or the termination
of this Agreement.
(ii) In the event that this Agreement is terminated by
MediVision pursuant to Section 8.1(b) due to a failure by OIS to
perform any of its obligations hereunder or the material breach by OIS
of any of its representations or warranties hereunder, OIS shall pay to
MediVision a break-up fee of one hundred fifty thousand dollars
($150,000), which shall be due and payable within five (5) business
days of such termination.
(iii) In the event that this Agreement is terminated pursuant
to Section 8.1(d) due to the Bankruptcy Court's approval of an Overbid
(as defined in Section 6.3(b)) by any person or entity other than
MediVision or any of its Affiliates, then OIS shall pay to MediVision a
break-up fee of one hundred ten thousand dollars ($110,000), which
shall be due and payable upon Bankruptcy Court approval of the Overbid:
(c) MAINTENANCE OF EXISTENCE. OIS shall preserve and maintain
its corporate existence and good standing in the jurisdiction of its
incorporation and qualify and remain qualified as a foreign corporation in each
jurisdiction in which qualification is required either (1) to own, lease,
license or use its properties now owned, leased, licensed or used and proposed
to be owned, leased, licensed or used or (2) to carry on its business as now
conducted or proposed to be conducted, except where the failure to effect or
obtain such qualification, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(d) COMPLIANCE WITH REGULATIONS. OIS shall comply in all
respects with all Regulations of any Governmental Body if a failure to comply
with any such Regulations, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(e) CONDUCT OF BUSINESS. During the period from the date
hereof through the Closing, OIS shall not, except as MediVision may otherwise
consent to in writing:
(i) amend its articles of incorporation or bylaws;
(ii) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any stock of any class or any other securities;
(iii) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) to any
stockholder or otherwise in respect of its capital stock or redeem or
otherwise acquire any of its securities, or make any payments or
distributions to shareholders or to any Person to which OIS has any
liability (other than trade accounts payable), or make any payments to
any officer or director of OIS, except compensation or payments to
consultants consistent with past practice.
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(iv) (1) incur or assume any indebtedness in excess of $5,000
in the aggregate other than the $260,000 Loan contemplated by the
Security Agreement and trade payables (including, but not limited to,
legal fees); (2) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for any
obligations of any other Person in excess of $5,000 in the aggregate;
or (3) make any loans, advances or capital contributions to, or
investments in, any other Person (other than loans or advances to
employees in the ordinary course of business in accordance with past
practices) in excess of $3,000 in the aggregate;
(v) enter into, adopt or amend any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreements, trusts, plans, funds or other arrangements of or for the
benefit or welfare of any employee, or increase in any manner the
compensation or fringe benefits of any employee or pay any benefit not
required by any existing plan and arrangement (including, without
limitation, the granting of stock options, stock appreciation rights,
shares of restricted stock or performance units);
(vi) except to the extent required by applicable law, change
any accounting principle or method or make any election for purposes of
foreign, federal, state or local income taxes;
(vii) acquire, sell, lease, transfer or dispose of any
material property or assets except in the ordinary course of business;
(viii) take or suffer any action that would result in the
creation, or consent to the imposition, of any lien on any of the
properties or assets of OIS;
(ix) make or incur any capital expenditure, lease or
commitment for additions to property, plant, equipment or other capital
assets in excess of $10,000 in the aggregate; or
(x) enter into any agreement to do, or take, or agree in
writing or otherwise to take or consent to, any of the foregoing
actions.
(f) NOTIFICATION OF BREACH. OIS agrees to promptly notify in
writing the other parties hereto of any events, facts or occurrences which would
constitute or result in a breach of any representation or warranty made by OIS
contained in this Agreement or a breach of any covenant, agreement or obligation
of OIS under this Agreement; PROVIDED, HOWEVER, that no such disclosure shall be
deemed to cure or relieve any such breach or default.
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6.2 COVENANTS OF MEDIVISION. MediVision agrees to promptly notify in
writing the other parties hereto of any events, facts or occurrences which would
constitute or result in a breach of any representation or warranty made by
MediVision contained in this Agreement or a breach of any covenant, agreement or
obligation of MediVision under this Agreement; PROVIDED, HOWEVER, that no such
disclosure shall be deemed to cure or relieve any such breach or default.
6.3 COVENANTS OF PREMIER.
(a) TERMINATION OF PRIOR AGREEMENTS; ASSIGNMENT. Premier
acknowledges and agrees that, effective at the Closing, the Manufacturing
Agreement and the Purchase Agreement shall terminate and its rights with respect
to the Premier Debt shall be assigned to MediVision.
(b) OVERBID PROCEDURE. Upon execution of this Agreement by the
parties hereto, Premier shall prepare and file a motion with the Bankruptcy
Court seeking nunc pro tunc approval of this Agreement and the Transactions by
and among the parties hereto, pursuant to the following terms and conditions
relating to the submission of bids ("OVERBIDS") for the Premier Assets to be
sold hereunder:
(i) Only persons or entities that comply with the following
procedures will be deemed qualified bidders ("QUALIFIED BIDDERS") at
the hearing on the motion for approval of the sale of the Premier
Assets contemplated herein (the "SALE HEARING"). Only Qualified Bidders
will be entitled to submit Overbids at the Sale Hearing. MediVision
shall be deemed a Qualified Bidder at the Sale Hearing.
(ii) All Qualified Bidders must prequalify at least five (5)
days before the Sale Hearing. In order to prequalify, any person or
entity intending to submit an Overbid must provide to Premier
sufficient evidence of the person or entity's ability to complete the
transaction, satisfactory to Premier, including evidence of the person
or entity's ability to pay cash not less than the minimum initial
Overbid set forth herein.
(iii) Any initial Overbid must have a minimum value of
$3,400,000 (the "INITIAL OVERBID") subject to adjustment with respect
to the Premier Inventory on the same terms and conditions as those set
forth in this Agreement. Any Initial Overbid must be for the purchase
of the Premier Assets on substantially the same terms as set forth in
this Agreement and must be closed within the timeframe required by this
Agreement.
(iv) If a qualified Initial Overbid is received, bidding will
continue at the Sale Hearing in increments of not less than $25,000 in
value.
(v) All Overbids must be for all, and not less than all, of
the Premier Assets and must provide to OIS additional value of not less
than $110,000 in excess of the consideration to be received by OIS
pursuant to the transactions contemplated by this Agreement and the
Funding Agreement.
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(c) BREAK-UP FEE. If a sale of any or all of the Premier
Assets is consummated with a party other than MediVision or any of its
Affiliates, Premier shall, at the closing of the transaction, pay to MediVision
a break-up fee equal to the greater of (i) one hundred ninety thousand dollars
($190,000) and (ii) five percent (5%) of the final value of the Overbid, as
reasonable compensation for the benefit realized by Premier as well as lost
opportunity costs, commitment of time and personnel to the transaction process
and the out-of-pocket expenses of MediVision in connection with this
transaction, including legal fees and costs, fees and costs in connection with
an audit of the Premier Assets, costs relating to MediVision's due diligence
investigation and additional fees and costs relating to legal and regulatory
reviews.
(d) NOTIFICATION OF BREACH. Premier agrees to promptly notify
in writing the other parties hereto of any events, facts or occurrences which
would constitute or result in a breach of any representation or warranty made by
Premier contained in this Agreement or a breach of any covenant, agreement or
obligation of Premier under this Agreement; PROVIDED, HOWEVER, that no such
disclosure shall be deemed to cure or relieve any such breach or default.
6.4 PUBLIC ANNOUNCEMENTS; CONFIDENTIALITY. On and prior to the
termination of this Agreement, OIS, Premier and MediVision shall advise and
confer with one another prior to the issuance of any reports, statements or
releases concerning this Agreement, the terms hereof and the Transactions,
except as may be required by the securities laws of the relevant jurisdiction.
Nothing contained in this Section 6.4 shall prevent any party at any time from
furnishing any information to any Governmental Body or pursuant to the
requirements of any applicable law; PROVIDED, HOWEVER, that the disclosing party
shall not make any such disclosure without first notifying the other parties and
allowing the other parties a reasonable opportunity to seek relief from (or
protective order with respect to) the obligation to make such disclosure, such
as a request for confidential treatment.
6.5 FURTHER ASSURANCES. Subject to the terms and conditions provided
herein, including Premier's obligations to pursue Overbids and the rights of OIS
to pursue one or more Superior Proposals, MediVision, Premier and OIS agree to
use all commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, as promptly as practicable, all things
necessary, proper or advisable under applicable laws and regulations or
otherwise to consummate and make effective the Transactions contemplated by this
Agreement and the other Transaction Documents.
ARTICLE VII
CLOSING CONDITIONS
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective obligation of
each party to consummate the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Closing of each of the following
conditions:
(a) BANKRUPTCY COURT APPROVAL. The Bankruptcy Court
administering Premier's reorganization under Chapter 11 of the U.S. Bankruptcy
Code (Case No. SA00-12031RA) has approved this Agreement and the Transactions
contemplated hereby.
(b) NO INJUNCTIONS, RESTRAINTS OR LITIGATION. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing consummation of the transactions contemplated hereby is in effect.
There is no pending or threatened, claim, action, suit or other legal,
administrative, investigative or arbitration proceeding in which it is sought to
restrain, enjoin or prohibit the consummation of the transactions contemplated
hereby or to obtain damages or other monetary or equitable relief in connection
therewith.
15
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each of the other parties hereto contained in this Agreement are
true, accurate and complete in all material respects as of the Closing Date.
(d) PERFORMANCE OF AGREEMENT. The other parties hereto have
performed and satisfied in all material respects each of the covenants,
agreements and obligations required to be performed and satisfied by them under
this Agreement on or prior to the Closing Date.
(e) MUTUAL RELEASE. OIS and Premier shall have entered into a
mutual release which shall provide complete waivers and releases of all claims
against one another, plus covenants by both parties that they will not assert
any claims against the other (subject to a single exception for the claim of OIS
against Premier for the Termination Fee provided in the Stock Purchase Agreement
by and between such parties dated as of February 25, 1998).
(f) FUNDING AGREEMENT. The transactions contemplated by the
Funding Agreement shall be consummated contemporaneously with the Closing.
(g) RIGHTS AGREEMENT. OIS shall have amended the Rights
Agreement, dated as of December 31, 1997, as amended from time to time, by and
between OIS and American Securities Transfer, Inc. (the "RIGHTS AGREEMENT"), to
provide that (i) none of the transactions contemplated by this Agreement will
trigger a Distribution Date and (ii) MediVision will not be deemed an Acquiring
Person thereunder, as those terms are defined in the Rights Agreement.
(h) PUT AND CALL AGREEMENT. MediVision and Premier shall have
entered into the Put and Call Agreement.
(i) REGISTRATION RIGHTS AGREEMENT. MediVision and OIS shall
have entered into a Registration Rights Agreement substantially in the form of
EXHIBIT B annexed hereto.
7.2 CONDITION TO MEDIVISION'S OBLIGATION. The obligation of MediVision
to consummate the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of the following condition:
(a) NO MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, there shall not have occurred a Material Adverse Effect with respect
to OIS.
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ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time:
(a) by mutual written consent of Premier, MediVision and OIS;
(b) by any party if the Closing has not occurred by October
12, 2000, and this Agreement has not previously been terminated; PROVIDED,
HOWEVER, that the failure to consummate the Closing by such date is not a result
of either the failure by the party so electing to terminate this Agreement to
perform any of its obligations hereunder or the breach by the party so electing
of its representations and warranties;
(c) by MediVision or OIS if OIS enters into an agreement
constituting a Superior Proposal;
(d) by any party hereto if the Bankruptcy Court approves an
Overbid by any person or entity other than MediVision or any of its Affiliates;
(e) by MediVision if Bankruptcy Court Approval is not obtained
by the close of business on August 11, 2000; and
(f) by any party hereto in the event any court or governmental
agency of competent jurisdiction has issued an order, decree or ruling or taken
any other action restricting, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, decree, ruling or other action
shall have become final and unappealable.
8.2 EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated pursuant to this Article VIII, all further obligations of the parties
under this Agreement other than the obligations set forth in Sections 6.1(b) and
6.3(c) and shall terminate, and there shall be no liability of any party to
another party except for a party's breach of any of its obligations,
representations or warranties under this Agreement prior to the termination of
this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California (without giving effect
to conflicts of law principles thereof).
9.2 REMEDIES CUMULATIVE. Except as may otherwise be provided herein,
the remedies provided herein shall be cumulative and shall not preclude
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.
9.3 BROKERAGE. Each party hereto will indemnify and hold harmless the
other parties against and in respect of any claim for brokerage or other
commission relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
17
9.4 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
9.5 NOTICES. Notices required under this Agreement shall be deemed to
have been adequately given if delivered in person or sent to the recipient at
its address (or facsimile number, as the case may be) set forth on the signature
page hereto or such other address as such party may from time to time designate
in writing by certified mail (return receipt requested), facsimile or overnight
courier in the manner provided in this Section 9.5.
9.6 AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by each of the parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of a warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of a warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No failure or delay by a party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
9.7 SURVIVAL. All representations and warranties made by the parties
contained in this Agreement and the respective covenants, agreements and
obligations of the parties under this Agreement shall survive the execution and
delivery of this Agreement for a period of three years following the Closing.
9.8 ENTIRE UNDERSTANDING. This Agreement and the agreements to be
executed in connection herewith at the Closing, express the entire understanding
of the parties and supersede all prior and contemporaneous agreements and
undertakings of the parties with respect to the subject matter hereof and
thereof.
9.9 EXPENSES. Each party will pay all of its own expenses, including
attorney's fees, incurred in connection with the negotiation of this Agreement,
the performance of its obligations hereunder and the consummation of the
transactions contemplated by this Agreement.
9.10 COUNTERPARTS. This Agreement may be executed in counterparts and
the signatures delivered by telecopy in the manner provided in Section 9.5, each
of which shall be deemed to be an original but which taken together shall
constitute one agreement with the same effect as of the signatures were upon the
same instrument and delivered in person.
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9.11 ASSIGNMENT; NO THIRD-PARTY BENEFICIARIES.
(a) Except as otherwise expressly provided herein, this
Agreement and the rights hereunder shall not be assignable or transferable by
any party without the prior written consent of all the other parties hereto,
provided that, if such assignment or transfer is consented to, such assignee or
transferee expressly assumes in writing all of the such party's obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
(b) This Agreement is for the sole benefit of the parties
hereto and their respective successors and permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the parties hereto and such successors and permitted assigns, any legal or
equitable rights hereunder.
9.12 INTERPRETATION. This Agreement, including any exhibits, addenda,
schedules and amendments, has been negotiated at arm's length and between
persons sophisticated and knowledgeable in the matters dealt with in this
Agreement. Each party has been represented by experienced and knowledgeable
legal counsel. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived.
9.13 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(The rest of this page is intentionally left blank.)
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
OPHTHALMIC IMAGING SYSTEMS
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
PREMIER LASER SYSTEMS, INC.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Address: ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page to Securities Purchase Agreement]
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MEDIVISION MEDICAL IMAGING LTD.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Address: ▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ Israel
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page to Securities Purchase Agreement]
21
EXHIBIT A
---------
PUT AND CALL AGREEMENT
PUT AND CALL AGREEMENT
----------------------
This PUT AND CALL AGREEMENT, dated as of August ___, 2000 (this
"AGREEMENT"), is entered into by and between Premier Laser Systems, Inc., a
California corporation ("PREMIER"), and MediVision Medical Imaging Ltd., an
Israeli corporation ("MEDIVISION").
WITNESSETH:
WHEREAS, Premier, MediVision and Ophthalmic Imaging Systems, a
California corporation, are parties to that certain Securities Purchase
Agreement dated as of July 13, 2000 (the "PURCHASE AGREEMENT") pursuant to which
MediVision is acquiring from Premier, on the date hereof, the Premier Debt, the
Premier Shares and the Premier Inventory (as such terms are defined in the
Purchase Agreement; all capitalized terms not defined in this Agreement shall
have the meanings ascribed to them in the Purchase Agreement);
WHEREAS, under the terms of the Purchase Agreement, part of the
purchase price for the Premier Debt, the Premier Shares and the Premier
Inventory is to be paid by MediVision to Premier in the form of the MediVision
Shares; and
WHEREAS, the Purchase Agreement contemplates the creation of a put
option in favor of Premier with regard to the MediVision Shares and the creation
of a call option in favor of MediVision with regard to the MediVision Shares,
all in accordance with and subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, promises and covenants set forth herein, the parties hereto agree as
follows:
ARTICLE I
PUT OPTION
1.1. SALE OF MEDIVISION SHARES; PUT OPTION. At any time during the five
(5) week period commencing on September 22, 2000 and terminating at 5:00 p.m.
New York City time on October 27, 2000 (the "SALE PERIOD"), Premier may sell all
or any portion of the MediVision Shares to one or more unaffiliated third party
in bona fide arm's-length market transactions on the Brussels EURO.N.M., subject
to the restrictions on sale set forth in Section 1.2 below. In the event Premier
fails to realize One Million Dollars ($1,000,000.00) of gross proceeds from the
sale of MediVision Shares during the Sale Period, MediVision shall, on a
mutually acceptable date which is no later than five (5) business days after
Premier's written demand therefor after the expiration of the Sale Period (the
"PUT OPTION CLOSING DATE"), which demand, signed and verified by an authorized
officer of Premier, shall describe in reasonable detail any gross proceeds
realized upon such sale, pay to Premier, in cash, an amount equal to the excess
of (a) One Million Dollars ($1,000,000.00) over (b) the gross sale price of the
MediVision Shares realized by Premier (the "PUT PRICE"). The foregoing shall be
subject to reasonable verification by MediVision. Nothing contained in this
Agreement shall obligate Premier to sell any MediVision Shares during the Sale
Period. In furtherance of and not in limitation of the foregoing, in the event
that Premier does not sell any MediVision Shares during the Sale Period,
MediVision shall, within five (5) business days after Premier's written demand
therefor after the expiration of Sale Period, pay to Premier One Million Dollars
($1,000,000.00) in cash (the foregoing rights of Premier described in this
Section 1.1 shall be referred to collectively as the "PUT OPTION"). On the Put
Option Closing Date, in consideration for MediVision's payment of the Put Price
to Premier, Premier shall deliver to MediVision all unsold MediVision Shares
duly endorsed in blank or accompanied by stock powers duly executed in blank and
bearing all necessary stock transfer stamps affixed thereto, sufficient to
transfer the MediVision Shares to MediVision on the books of MediVision.
1.2. RESTRICTIONS OF SALE OF MEDIVISION SHARES. Premier shall hold
solely for its own account and shall not sell, transfer, assign, deliver, pledge
or any manner dispose of any of the MediVision Shares for a period of six (6)
weeks from the date hereof; weekly sales thereafter are not to exceed an
aggregate of twenty percent (20%) of the number of MediVision Shares delivered
to Premier pursuant to the Purchase Agreement.
1.3. DELIVERY OF SHARES. If MediVision shall not have delivered to
Premier registered and freely transferable MediVision Shares by September 22,
2000, MediVision shall, within five (5) business days after Premier's written
demand therefor, pay to Premier One Million Dollars ($1,000,000) in cash (the
"MediVision Share Payment").
1.4. LETTER OF CREDIT. MediVision shall deliver to Premier a Letter of
Credit in the amount of up to $1,000,000 securing the obligations of MediVision
to Premier with regard to the Put Option or the MediVision Share Payment, as the
case may be, substantially in the form attached hereto as EXHIBIT A, upon the
payment by Premier of up to $10,000 of expenses and bank fees relating to the
issuance thereof.
ARTICLE II
CALL OPTION
2.1. CALL OPTION. At any time from the date hereof, MediVision may
elect to repurchase any unsold MediVision Shares (the "UNSOLD SHARES") from
Premier for an amount equal to (a) One Million Dollars ($1,000,000.00) in cash,
less (b) any gross proceeds realized by Premier from its prior sales of the
MediVision Shares (the "CALL PRICE"), as reasonably verified by MediVision (the
"CALL OPTION"). Such Call Option shall be exercised by written notice delivered
by MediVision to Premier (the "CALL OPTION NOTICE"). In the event MediVision
exercises the Call Option, the closing of the transaction shall occur no later
than ten (10) days after Premier's receipt of the Call Option Notice, whereupon
MediVision shall deliver the Call Price to Premier and Premier shall deliver the
Unsold Shares to MediVision duly endorsed in blank or accompanied by stock
powers duly executed in blank and bearing all necessary stock transfer stamps
affixed thereto, sufficient to transfer the MediVision Shares to MediVision on
the books of MediVision.
2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MEDIVISION
MediVision hereby represents and warrants to Premier as follows:
3.1. POWER AND CAPACITY; AUTHORIZATION. MediVision is a corporation
duly organized, validly existing and in good standing under the laws of Israel.
MediVision has full corporate power and authority to conduct its business as
presently conducted by it and to own, lease or operate its assets and properties
as presently owned, leased and operated by it and 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 MediVision's board
of directors or other governing body and no other corporate proceedings by
MediVision are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by MediVision and, assuming this Agreement constitutes a
legal, valid and binding obligation of each of the other party hereto,
constitutes a legal, valid and binding agreement of MediVision, enforceable
against MediVision 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 MediVision will not (a) constitute a breach or violation of any
provisions of MediVision's articles of incorporation or bylaws or comparable
charter documents, (b) result in a violation of any law, rule, ordinance,
regulation, order, judgment or decree applicable to or by which MediVision or
any of its assets or properties is bound, or (c) conflict with or result in a
breach of or default (or any event which, with the giving of notice or lapse of
time or both, would constitute a breach or default) under any mortgage, lien,
lease, license, permit, agreement, contract or instrument to which MediVision is
a party or by which MediVision or any of its assets or properties is bound,
which conflict, breach or default would have a material adverse effect on the
ability of MediVision to perform its obligations under this Agreement.
3.3. CAPITALIZATION. The authorized capital stock of MediVision, on the
date hereof, consists of 10,000,000 shares of common stock, of which 5,420,000
shares are issued and outstanding. The rights, preferences and privileges of
such shares are as set forth in its Articles of Incorporation, as amended.
3.4. ISSUANCE OF STOCK. The MediVision Shares have been duly authorized
by all necessary corporate action and, when paid for or issued in accordance
with the terms hereof and the Purchase Agreement, the MediVision Shares shall be
validly issued and outstanding, fully paid and nonassessable.
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3.5. FILED DOCUMENTS; FINANCIAL STATEMENTS. The MediVision Shares shall
be duly registered for public sale pursuant to the securities laws of Belgium
(the "BELGIAN LAWS"). As of their respective dates, all filings required to be
made by MediVision under the Belgian Laws to register the MediVision Shares and
all additional filings required to be made by MediVision under the Belgian Laws
with respect to the MediVision Shares shall comply in all material respects with
the requirements of the Belgian Laws.
ARTICLE IV
COVENANTS OF PREMIER
4.1. COMPLIANCE WITH SECURITIES LAWS. Premier shall comply with all
applicable Belgian Laws in connection with the acquisition of the MediVision
Shares, including but not limited to, the delivery of such instruments,
undertakings and documents as shall be necessary or customary to effect the
delivery of the MediVision Shares by MediVision to Premier.
ARTICLE V
MISCELLANEOUS
5.1. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California (without giving effect
to conflicts of law principles thereof).
5.2. REMEDIES CUMULATIVE. Except as may otherwise be provided herein,
the remedies provided herein shall be cumulative and shall not preclude
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.
5.3. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
5.4. NOTICES. Notices required under this Agreement shall be deemed to
have been adequately given if delivered in person or sent to the recipient at
its address (or facsimile number, as the case may be) set forth on the signature
page hereto or such other address as such party may from time to time designate
in writing by certified mail (return receipt requested), facsimile or overnight
courier in the manner provided in the Purchase Agreement.
5.5. AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by each of the parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
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(b) No waiver by a party of any default, misrepresentation or
breach of a warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of a warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No failure or delay by a party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
5.6. SURVIVAL. All representations and warranties made by the parties
contained in this Agreement and the respective covenants, agreements and
obligations of the parties under this Agreement shall survive until the closing
of the Put Option or the Call Option, whichever is the first to occur.
5.7. ENTIRE UNDERSTANDING. This Agreement and the agreements to be
executed in connection herewith at the Closing of the Purchase Agreement,
express the entire understanding of the parties and supersede all prior and
contemporaneous agreements and undertakings of the parties with respect to the
subject matter hereof and thereof.
5.8. EXPENSES. Each party will pay all of its own expenses, including
attorney's fees, incurred in connection with the negotiation of this Agreement,
the performance of its obligations hereunder and the consummation of the
transactions contemplated by this Agreement.
5.9. COUNTERPARTS. This Agreement may be executed in counterparts and
the signatures delivered by telecopy on the manner provided in Section 5.4, each
of which shall be deemed to be an original but which taken together shall
constitute one agreement with the same effect as of the signatures were upon the
same instrument and delivered in person.
5.10. ASSIGNMENT; NO THIRD-PARTY BENEFICIARIES.
(a) Except as otherwise expressly provided herein, this
Agreement and the rights hereunder shall not be assignable or transferable by
either party without the prior written consent of all the other party hereto.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
(b) This Agreement is for the sole benefit of the parties
hereto and their respective successors and permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the parties hereto and such successors and permitted assigns, any legal or
equitable rights hereunder.
5.11. INTERPRETATION. This Agreement, including any exhibits, addenda,
schedules and amendments, has been negotiated at arm's length and between
persons sophisticated and knowledgeable in the matters dealt with in this
Agreement. Each party has been represented by experienced and knowledgeable
legal counsel. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived.
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5.12. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)
6
IN WITNESS WHEREOF, the parties hereto have executed this Put and Sale
Agreement as of the date first above written.
PREMIER LASER SYSTEMS, INC.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Address: ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
MEDIVISION MEDICAL IMAGING LTD.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Address: ▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ Israel
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
7
EXHIBIT B
---------
REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
---------
TO SECURITIES
PURCHASE AGREEMENT
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT, dated as of _____ ___, 2000 (this
"AGREEMENT"), among OPHTHALMIC IMAGING SYSTEMS, INC. a corporation organized and
existing under the laws of the state of California (the "COMPANY"), and
MEDIVISION MEDICAL IMAGING LTD., a corporation organized and existing under the
laws of Israel (the "INVESTOR").
Pursuant to the Working Capital Funding Agreement, dated as of July 12,
2000, between the Investor and the Company (the "FUNDINg AGREEMENT"), the
Investor has the right to convert loans made by the Investor to the Company into
shares of common stock of the Company, as more particularly described on
Schedule __ annexed hereto (the "CONVERSION SHARES").
Pursuant to the Securities Purchase Agreement, dated as of July 12,
2000 (the "SECURITIES PURCHASE AGREEMENT"), among the Investor, the Company and
Premier Laser Systems, Inc. ("PREMIER"), the Investor has acquired the shares of
common stock of the Company, as more particularly described on Schedule __
annexed hereto (the "PREMIER SHARES").
In order to induce the Investor to enter into the Funding Agreement and
the Securities Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.
In consideration of the foregoing and the covenants and agreements
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. DEFINITIONS.
As used herein, unless the context otherwise requires or
unless otherwise defined, the following terms have the following respective
meanings:
"AFFILIATE": The meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement).
"AGREEMENT": As defined in the first paragraph hereof.
"BLUE SKY FILING": As defined in Section 2.7.
"COMMISSION": The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK": The Conversion Shares and the Premier Shares,
collectively, such term to include any stock into which such Common Stock shall
have been changed or any stock resulting from any reclassification of such
Common Stock, and all other stock of any class or classes (however designated)
of the Company the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference.
"COMPANY": As defined in the first paragraph hereof.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as
amended.
"INDEMNITEES": As defined in Section 2.7.
"INVESTOR": As defined in the first paragraph hereof.
"INVESTOR AFFILIATE": As defined in Section 7.
"LOSS": As defined in Section 2.7.
"PERSON": A corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
"FUNDING AGREEMENT": As defined in the second paragraph
hereof.
"REGISTRABLE SECURITIES": Any (i) shares of Common Stock; and
(ii) shares of Common Stock issued or issuable with respect to any such Common
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement; (b) such securities shall
have been sold pursuant to Rule 144 (or any successor provision) under the
Securities Act or are eligible for sale under Rule 144 (k) (or any successor
provision); (c) such securities shall have been otherwise transferred to a
person who is not an Investor Affiliate of the Investor; or (d) such securities
shall have ceased to be outstanding.
2
"REGISTRATION EXPENSES": All expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all fees and expenses of listing the
Registrable Securities being registered on any securities exchange, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "comfort"
letters required by or incidental to such performance and compliance, all
expenses incurred by the Investor for its own counsel but excluding any and all
selling expenses relating to the Registrable Securities including underwriting
discounts, non-accountable expenses allowances and commissions, if any;
"SECURITIES ACT": The Securities Act of 1933, as amended.
"SECURITIES PURCHASE AGREEMENT": As defined in the third
paragraph hereof.
2. REGISTRATION UNDER SECURITIES ACT.
2.1 DEMAND REGISTRATION.
(a) REQUEST. At any time beginning 180 days after the date
hereof, two times only (but only one time if the Company effects the
registration of the Registrable Securities on Form S-3 or any successor form
that permits a "shelf" registration), upon the written request of holders of at
least 25% of the Registrable Securities, that the Company, effect the
registration under the Securities Act of all or part of the Registrable
Securities, the Company shall promptly give written notice of such request to
all registered holders of Registrable Securities, and thereupon the Company
shall use its best commercially reasonable efforts to effect the registration
under the Securities Act of the Registrable Securities that the Company has been
so requested to register by all such holders for disposition in accordance with
the intended method of disposition stated in such request. Promptly after
receipt of such request, the Company shall give notice thereof to all other
securityholders of the Company, if any, that are entitled to participate in such
registration. The Company shall file the registration statement requested
pursuant to this subsection (a) not later than 30 days following such request,
subject to Section 2.6, and shall use its best commercially reasonable efforts
to have such registration statement declared effective as soon as possible after
the filing thereof.
(b) UNDERWRITING. If the Registration Statement is for an
underwritten offering for Common Stock of the Company, the right of the Investor
to include all or a portion of the Registrable Securities in a registration
pursuant to this Section 2 shall be conditioned upon the Investor's
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. If the Investor
proposes to distribute the Registrable Securities through such underwriting, it
shall enter into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting. Notwithstanding
any other provision of this Agreement, if the managing underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the Company and the Investor shall determine the number
of shares each party shall include in such underwriting. If the Investor
disapproves of the terms of any such underwriting, the Investor may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered not later than 10 days prior to the date the Registration Statement is
filed with the Commission. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration.
3
(c) REGISTRATION STATEMENT FORM. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company and as shall be reasonably acceptable to
holders of a majority of the Registrable Securities proposed to be sold and (ii)
as shall permit the disposition of such Registrable Securities in accordance
with the intended method or methods of disposition.
(d) EXPENSES. The Company shall pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2.1.
(e) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected and shall
not be considered the demand registration which may be requested pursuant to
subsection (a) of this Section 2.1 unless (A) a registration statement with
respect thereto has become effective, (B) such registration statement has
remained effective for the later to occur of the following: (i) two years from
the effective date of the registration statement or (ii) the date such
registered securities cease to be Registrable Securities and (C) such
registration statement has not become subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason or such registration statement has become effective within
30 days thereafter.
2.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at
any time proposes to register any of its securities under the Securities Act by
registration on Forms ▇-▇, ▇-▇ or S-3 or any successor or similar form(s),
whether or not for sale for its own account, it shall give prompt written notice
to all holders of Registrable Securities of its intention to do so and of such
holders' rights under this Section 2.2. Upon the written request of any such
holder specifying the Registrable Securities intended to be disposed of by such
holder, made within 15 days after the receipt of any such notice, which request
shall specify the Registrable Securities intended to be disposed of by such
holder, the Company shall use its best commercially reasonable efforts to
include in the registration under the Securities Act all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition of such Registrable Securities to
be so registered. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
Section 2.1, nor shall it be deemed to have been effected pursuant to Section
2.1. The Company shall pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2.
The Company shall have the right to withdraw or cancel any registration under
this Section 2.2 in its sole discretion at any time, PROVIDED, HOWEVER, that the
Investor shall retain all registration rights pursuant to this Section 2.2.
4
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. In a registration
pursuant to this Section 2.2 involving an underwritten offering, whether or not
for sale for the account of the Company, if the managing underwriter of such
underwritten offering shall inform the Company by letter of its belief that the
number of securities requested by stockholders to be included in such
registration would substantially interfere with its ability to effect such
offering in accordance with the intended method thereof (such letter to state
the basis of such belief and the approximate number of such securities that may
be distributed without such effect), then the Company may, upon written notice
to all holders of such securities, reduce the number of Registrable Securities
requested to be included in such registration (if and to the extent stated by
such managing underwriter to be necessary to eliminate such effect) and, if such
reduction is not sufficient to eliminate such effect, then reduce pro rata (if
and to the extent stated by such managing underwriter to be necessary to
eliminate such effect) the number of Registrable Securities requested to be
registered by the holders of the Registrable Securities, on the one hand, and
the holders of other securities of the Company (whether issued before or after
the date hereof), on the other hand, in proportion (as nearly as practicable) to
the amount of Registrable Securities owned by the holders thereof participating
in such registration, on the one hand, and the amount of other securities of the
Company owned by the holders thereof participating in such registration, on the
other hand, so that the aggregate number of securities included in such
registration shall be equal to the number of shares stated in such managing
underwriter's letter; PROVIDED, HOWEVER, that to the extent the Company has
granted "piggyback" registration rights to other holders of its securities prior
to the date hereof and such registration rights do not permit the Company to
comply with this provision, in the reasonable opinion of the Company's counsel,
to the extent such holders request registration of their securities, the Company
will use its best commercially reasonable efforts to achieve as close a result
as is possible to that intended by this Section 2.2(b) without breaching such
other agreements. The number of securities to be included in such registration
by the holders of Registrable Securities shall be apportioned among all holders
thereof participating in the registration in proportion (as nearly as
practicable) to the amount of Registrable Securities owned by each holder
thereof or as they may otherwise agree. The number of securities to be included
in such registration by the holders of other securities of the Company shall be
apportioned among all holders thereof participating in the registration in
proportion (as nearly as practicable) to the amount of other securities owned by
each holder thereof or as they may otherwise agree.
2.3 REGISTRATION PROCEDURES. In connection with the Company's
obligations pursuant to Sections 2.1 and 2.2, the Company and where applicable,
the Investor, will as expeditiously as possible:
(a) in the case of a registration pursuant to Section 2.1,
prepare and file with the Commission a registration statement or registration
statements on any appropriate form under the Securities Act and use its best
efforts to cause such registration statement to become effective and to remain
continuously effective for so long as the selling holders of the Registrable
Securities shall request (but in no event longer than the period set forth in
2.1(e)(B);
5
(b) in the case of a registration pursuant to Section 2.1,
prepare and file with the Commission such amendments and post-effective
amendments to a registration statement as may be necessary to keep such
registration statement effective for the applicable period; cause the related
prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to the Securities Act, PROVIDED that prior to
filing any such amendments or supplements or any documents that would be
incorporated by reference in such registration statement (filed pursuant to
Section 2.1 or 2.2 hereof), the Company shall furnish to the Investor, its
counsel and the underwriters, if any, copies of all such documents proposed to
be filed (other than documents filed under the Exchange Act), and the Company
shall consider all reasonable requests by the Investor or the underwriters for
modifications of any such amendments, supplements or documents incorporated by
reference; and the Company and the Investor will comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement (including Regulation M and any similar
successor regulations) during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus;
(c) notify the selling holders of Registrable Securities, and
the managing underwriters, if any, as promptly as practicable, and (if requested
by any such Person) confirm such advice in writing, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when it has
become effective, (ii) of any request by the Commission for amendments or
supplements to a registration statement or related prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a registration statement or the initiation of
any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company made as contemplated by subsection (k) below cease to
be true and correct, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation of any proceeding for
such purpose, (vi) of the happening of any event that requires the making of any
changes in a registration statement or related prospectus so that such documents
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (vii) of the Company's reasonable determination that
a post-effective amendment to a registration statement would be appropriate;
(d) in the case of a registration pursuant to Section 2.1,
make every reasonable effort to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction, as soon as practicable;
6
(e) in the case of a registration pursuant to Section 2.1, if
requested in a timely manner by the managing underwriters, as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriters and the holders of Registrable
Securities being sold in connection with an underwritten offering agree should
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of the offering of the Registrable Securities to be sold in such offering;
make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
supplement or make amendments to any registration statement with respect to
information relating to any holder or the terms of the sale or offering of the
Registrable Securities if requested in a timely manner in writing by any holder
of Registrable Securities covered by such registration statement or any
underwriter of such Registrable Securities;
(f) furnish to the lead managing underwriter and each holder
of Registrable Securities selling Registrable Securities thereunder, without
charge, at least one signed copy of the registration statement or statements and
any post-effective amendment thereto, and to each other selling holder of
Registrable Securities, at least one conformed copy thereof, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(g) deliver to each holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request;
(h) in the case of a registration pursuant to Section 2.1,
prior to any public offering of Registrable Securities, use its best
commercially reasonable efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any selling holder or underwriter reasonably requests
in writing, keep each such registration or qualification effective during the
period such registration statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
registration statement; PROVIDED that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(i) in the case of a registration pursuant to Section 2.1,
cooperate with the selling holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends unless required by applicable law; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters may request at least two business days prior to the
closing of any sale of Registrable Securities to the underwriters; PROVIDED that
the Company receive such request in writing not less than 10 days prior to such
closing;
7
(j) in the case of a registration pursuant to Section 2.1,
upon the occurrence of any event contemplated by clause (c)(vi) above, prepare a
supplement or post-effective amendment to the applicable registration statement
or related prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the selling
holders of the Registrable Securities, such prospectus will not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;
(k) in the case of a registration pursuant to Section 2.1,
enter into such agreements (including an underwriting agreement) and take all
such other reasonable actions in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in connection
therewith, when an underwriting agreement is entered into and when the
registration is an underwritten registration, (i) make such representations and
warranties to the underwriters with respect to the registration statement,
prospectus and documents incorporated by reference, if any, in form, substance
and scope as are customarily made by issuers in similar offerings; (ii) obtain
opinions of counsel to the Company (which may be the general counsel) addressed
to the underwriters and updates thereof in the form, scope and substance as are
customary in similar offerings; (iii) enter into an underwriting agreement in
form, scope and substance as is customary in underwritten offerings; (iv)
furnish a signed counterpart, addressed to such underwriters, of a "comfort"
letter, dated the effective date of such registration statement (and dated the
date of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial statements
included in such registration statement, covering the matters with respect to
such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities, (v) if an underwriting agreement is
entered into, the same shall set forth in full the indemnification provisions
and procedures of Section 2.7 with respect to all parties to be indemnified
pursuant to such section, with such other indemnification provisions as are
customary and acceptable to the underwriters, the holders of a majority of the
Registrable Securities proposed to be sold and the Company; and (vi) the Company
shall deliver such documents and certificates as may reasonably be requested by
the managing underwriters, if any, to evidence compliance with this paragraph
(k) and with any customary conditions contained in the underwriting agreement.
The above shall be done at each closing under such underwriting or as and to the
extent required thereunder;
(l) otherwise use its best commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission and make
generally available to its security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act no later than 90 days after
the end of any 12-month period (i) beginning with the first day of the Company's
first fiscal quarter next succeeding each sale of Registrable Securities after
the effective date of a registration statement and (ii) beginning with the first
day of the Company's first fiscal quarter next succeeding any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm or best efforts
underwriting offering, which statements shall cover such 12-month periods;
8
(m) use its best commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange, if any, on
which securities of the class then being registered are listed; and
(n) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
The Company may require each holder of Registrable Securities
as to which any registration is being effected to promptly furnish to the
Company such information regarding such holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing in order to comply with the Securities Act. Each holder of
Registrable Securities as to which any registration is being effected agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such holder to the Company or of the
happening of any event as a result of which any prospectus relating to such
registration contains an untrue statement of a material fact regarding such
holder or the distribution of such Registrable Securities or omits to state any
material fact regarding such holder or the distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and to promptly furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain, with respect to such holder or the
distribution of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 2.3(c)(ii), (iii), (v), (vi) or (vii), such holder will
forthwith discontinue disposition of such Registrable Securities covered by such
registration statement or prospectus until such holder's receipt of the copies
of the supplemented or amended prospectus relating to such registration
statement or prospectus, or until it is advised in writing by the Company that
the use of the applicable prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated by reference in
such Prospectus, and, if so directed by the Company, such holder will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such holder's possession, of the prospectus covering the
Registrable Securities at the time of receipt of such notice.
9
2.4 UNDERWRITTEN OFFERINGS. In the case of any underwritten offering
requested pursuant to Section 2.1, the holders of a majority of the Registrable
Securities proposed to be sold shall select the investment banking firm or
firms, which shall be reasonably satisfactory to the Company. The Company shall
enter into an underwriting agreement which shall contain, customary
representations and warranties and shall be reasonably satisfactory in form and
substance to the holders of a majority of the Registrable Securities proposed to
be sold.
If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by Section 2.2 and such
securities are to be distributed by or through one or more underwriters, the
Company shall select the investment banking firm or firms in its sole discretion
and the holders of Registrable Securities to be distributed therein shall be
parties to the underwriting agreement between the Company and the underwriters.
2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company shall give the selling holders of
Registrable Securities, their underwriters, and their respective counsel and
accountants, a reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto (other than
documents filed under the Exchange Act and incorporated by reference therein),
and shall give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.6 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION Covenants. The obligations of the Company under Section 2.1 to use
its best commercially reasonable efforts to cause the Registrable Securities to
be registered under the Securities Act are subject to each of the following
limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone the filing or
effectiveness of any registration statement otherwise required to be prepared
and filed by it pursuant to Section 2.1 for a reasonable period of time (but not
exceeding 60 days) if the Company determines, in its reasonable judgment, that
such registration and offering, or such offers and sales, would interfere with
any financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates or would require the
Company to disclose material non-public information. The Company shall promptly
give the requesting holders of Registrable Securities written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a registration statement, the requesting holders of
Registrable Securities shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days (or within
the period of postponement if such period is less than 30 days) after receipt of
the notice of postponement in the event of such withdrawal, such request shall
not be deemed a request for registration pursuant to Section 2.1 hereof.
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(b) No holder of Registrable Securities may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
2.7 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of Registrable Securities, the Company shall indemnify, defend and
hold harmless the holder of any Registrable Securities that are covered by such
registration statement, each other Person who participates as an underwriter in
the offering or sale of such securities and each person who controls any such
holder or underwriter within the meaning of the Securities Act, and each of the
respective partners, officers, directors, employees and agents of the foregoing
in their respective capacities as such (the "INDEMNITEES"), to the full extent
lawful, from and against any and all actions, suits, claims, proceedings, costs,
damages, judgments, amounts paid in settlement and expenses (including, without
limitation, reasonable attorneys' fees and disbursements), whether joint or
several (collectively, a "LOSS"), to which any such Indemnitee may become
subject under the Securities Act or any other statute or common law, insofar as
any such Loss may arise out of or be based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, or
in any filing made in connection with the qualification of the offering under
blue sky or other securities laws of jurisdictions in which the Registrable
Securities are offered ("BLUE SKY FILING"), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or (ii) any violation by the
Company of any federal, state or common law, rule or regulation applicable to
the Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will defend each
Indemnitee in connection with investigating or defending such Loss and provide
each Indemnitee with counsel reasonably acceptable to such Indemnitee or, if the
Company fails to defend each Indemnitee on a timely basis, as set forth in
Section 2.7(c), reimburse each Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending such Loss;
PROVIDED, HOWEVER, that such indemnification covenant shall not (i) apply to any
Loss arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Indemnitee specifically stating
that it is for use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any Blue Sky Filing or
(ii) inure to the benefit of any underwriter or person controlling such
underwriter to the extent that any such Loss arises out of such Indemnitee's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus.
11
Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnitee and shall
survive the transfer of such securities by any Indemnitee. In no event shall any
indemnity paid by the Company to any indemnified party pursuant to this Section
2.7(a) or otherwise exceed the net proceeds received by the Investor in such
offering.
(b) INDEMNIFICATION BY THE HOLDERS OF REGISTRABLE SECURITIES.
As a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.1 or 2.2, the Company shall have received
an undertaking satisfactory to it from each prospective seller of such
Registrable Securities to indemnify, defend and hold harmless (in the same
manner and to the same extent as set forth in subsection (a) of this Section
2.7) the Company, each other person who participates as an underwriter in the
offering or sale of such securities and each person who controls any such holder
or underwriter within the meaning of the Securities Act, and each of their
respective partners, officers, directors, employees and agents, and each other
person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any untrue statement or alleged untrue statement in, or
omission or alleged omission from, such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein or any Blue
Sky Filing, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer of such
securities by such seller. In no event shall any indemnity paid by any seller to
the Company pursuant to this Section 2.7(b) or otherwise exceed the net proceeds
received by such seller in such offering.
(c) INDEMNIFICATION PROCEDURE. Any party entitled to
indemnification under this Section 2.7 (the "INDEMNIFIED PARTY") will give
prompt written notice (the "NOTICE") to the other party (the "INDEMNIFYING
PARTY") of any matters giving rise to a claim for indemnification; PROVIDED,
that the failure of indemnified party to indemnification hereunder to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under this Section 2.7 except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is asserted against the indemnified party in respect of
which indemnification is sought hereunder, the indemnifying party shall be
entitled to participate in and to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. In the event that the
indemnifying party advises the indemnified party that it will contest such a
claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of the Notice to notify, in writing, the indemnified party of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense of any such claim, proceeding or action, the indemnified party's
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
12
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice. The indemnifying party
shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent. Notwithstanding anything in this
Section 2.7 to the contrary, the indemnifying party shall not, without the
indemnified party's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim. The
indemnification required by this Section 2.7 for an action or claim brought by a
third party shall be made by periodic payments of the amount thereof during the
course of investigation or defense, as and when bills are received for expenses
related to the legal defense or investigation, so long as the indemnified party
irrevocably agrees to refund such moneys if it is ultimately determined by a
court of competent jurisdiction that such party was not entitled to
indemnification. The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar rights of the indemnified party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may be subject pursuant to the law.
2.8 REGISTRATION EXPENSES. All Registration Expenses, shall be borne by
the Company whether or not any registration statement becomes effective. The
Company shall, in any event, pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange and the fees and expenses of any Person,
including special experts, retained by the Company.
3. AMENDMENTS AND WAIVERS. This Agreement may be amended with the consent of
the Company and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the holders of a majority of the amount of Registrable Securities then
outstanding. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 3, whether
or not such securities shall have been marked to indicate such consent.
4. REGISTRATION RIGHTS. The Company covenants that it will not grant any
right of registration under the Securities Act relating to any of its shares of
capital stock or other securities to any Person other than pursuant to this
Agreement unless the rights so granted to such other Person, except as provided
herein, do not limit or restrict the Investor's rights hereunder.
13
5. NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, such
beneficial owner may, at its election and upon notice to the Company, be treated
as the holder of such securities for purposes of any request or other action by
any holder or holders of securities pursuant to this Agreement or any
determination of any number or percentage of shares of securities held by any
holder or holders of securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.
6. NOTICES. Any notice or demand that is required or provided to be given
under this Agreement shall be deemed to have been sufficiently given and
received for all purposes when delivered by hand, facsimile transmission or
courier, or five days after being sent by certified or registered mail, postage
and charges prepaid, return receipt requested, to the following addresses:
If to the Company: Ophthalmic Imaging Systems, Inc.
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investor: Medivision Medical Imaging Ltd.
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ Israel
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
14
If to any other holder of Registrable Securities, at such address set
forth in the Company's records, or with respect to any party hereto, at any
other address designated in writing in accordance with the provisions of this
Section 6.
7. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
assigns. The rights or any portion thereof of the Investor herein may not be
assigned by the Investor without the written consent of the Company except that
such rights may be assigned by the Investor at its sole discretion (and
thereupon by such assignee) without the consent of the Company to an Investor
Affiliate (as defined below); PROVIDED, HOWEVER, that (A) the Company is given
prior written notice by the assignor stating the name and address of the
permitted assignee and identifying the Registrable Securities with respect to
which such rights are being assigned, and (B) such assignee agrees in writing to
be bound by the terms of this Agreement. For purposes of this Section 7, an
"INVESTOR AFFILIATE" is any Person controlled by or under common control with
the Investor.
8. DESCRIPTIVE HEADINGS. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
9. GOVERNING LAW. The validity and interpretation of this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without giving effect to the principles of conflicts of law
thereof.
10. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
[END OF PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
OPHTHALMIC IMAGING SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
MEDIVISION MEDICAL IMAGING LTD.
By:
------------------------------------
Name:
Title:
[SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT]
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