EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
by and between
Premier Laser Systems, Inc.
and
Ophthalmic Imaging Systems
dated as of
February 25, 1998
TABLE OF CONTENTS
PAGE
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ARTICLE I THE OFFER ............................................. 2
SECTION 1.1 The Offer ............................................. 2
SECTION 1.2 Ophthalmic Actions .................................... 4
ARTICLE 11 AMENDMENT TO RIGHTS PLAN; CLOSING OF THE PRIVATE
ACQUISITION ........................................... 5
SECTION 2.1 Amendment to Rights Plan; Closing of the Private
Acquisition ........................................... 5
ARTICLE III [NOT USED] ............................................ 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OPHTHALMIC .......... 6
SECTION 4.1 Organization and Qualification; No Subsidiaries ....... 6
SECTION 4.2 Capitalization ........................................ 6
SECTION 4.3 Authority Relative to this Agreement .................. 7
SECTION 4.4 No Violation .......................................... 8
SECTION 4.5 SEC Reports and Financial Statements .................. 8
SECTION 4.6 Compliance with Applicable Laws and Permits;
Regulatory Matters .................................... 9
SECTION 4.7 Change of Control ..................................... 9
SECTION 4.8 Litigation ............................................ 10
SECTION 4.9 Information ........................................... 10
SECTION 4.10 Employee Benefit Plans ................................ 10
SECTION 4.11 Taxes ................................................. 12
SECTION 4.12 Intellectual Property ................................. 13
SECTION 4.13 Contracts ............................................. 13
SECTION 4.14 Voting Requirements ................................... 13
SECTION 4.15 Absence of Certain Changes ............................ 13
SECTION 4.16 Rights Agreement ...................................... 14
SECTION 4.17 Brokers ............................................... 15
SECTION 4.18 Opinion of Investment Banker .......................... 15
ARTICLE V REPRESENTATIONS AND WARRANTIES ........................ 15
SECTION 5.1 Organization and Qualification ........................ 15
SECTION 5.2 Authority Relative to this Agreement .................. 15
SECTION 5.3 No Violation .......................................... 16
SECTION 5.4 Information .......................................... 16
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PAGE
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SECTION 5.5 Funds; Reservation of Shares ......................... 16
SECTION 5.6 Intention to Propose a Merger ........................ 17
SECTION 5.7 Ownership of Shares .................................. 17
SECTION 5.8 SEC Reports and Financial Statements ................. 17
SECTION 5.9 Absence of Certain Changes ........................... 18
SECTION 5.10 Capitalization ....................................... 18
ARTICLE VI COVENANTS ............................................ 18
SECTION 6.1 Conduct of Business of Ophthalmic .................... 18
SECTION 6.2 Covenants of Premier ................................. 20
SECTION 6.3 Access to Information; Confidentiality ............... 20
SECTION 6.4 Efforts .............................................. 21
SECTION 6.5 Public Announcements ................................. 22
SECTION 6.6 Employee Benefit Arrangements; Warrants .............. 22
SECTION 6.7 Notification of Certain Matters ...................... 24
SECTION 6.8 Rights Agreement ..................................... 24
SECTION 6.9 State Takeover Laws .................................. 24
SECTION 6.10 No Solicitation ...................................... 25
SECTION 6.11 Indemnification ...................................... 26
SECTION 6.12 Conditions ........................................... 28
ARTICLE VII CONDITIONS TO CONSUMMATE THE TRANSACTIONS
HEREUNDER ............................................ 28
SECTION 7.1 Conditions ........................................... 28
SECTION 7.2 Conditions to Obligations of Premier ................. 28
SECTION 7.3 Conditions of Premier to Close the Offer ............. 28
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER ...................... 29
SECTION 8.1 Termination .......................................... 29
SECTION 8.2 Effect of Termination ................................ 30
SECTION 8.3 Fees and Expenses .................................... 30
SECTION 8.4 Amendment ............................................ 30
SECTION 8.5 Extension; Waiver .................................... 31
ARTICLE IX MISCELLANEOUS ........................................ 31
SECTION 9.1 Non-Survival of Representations and Warranties ....... 31
SECTION 9.2 General Release of Ophthalmic Executive Officers
and Directors ........................................ 31
SECTION 9.3 Entire Agreement; Assignment ......................... 31
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PAGE
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SECTION 9.4 Validity ........................................... 32
SECTION 9.5 Notices ............................................ 32
SECTION 9.6 Governing Law ...................................... 33
SECTION 9.7 Descriptive Headings ............................... 33
SECTION 9.8 Counterparts ....................................... 33
SECTION 9.9 Parties in Interest ................................ 33
SECTION 9.10 Certain Definitions ................................ 33
SECTION 9.11 Specific Performance ............................... 34
SECTION 9.12 Fiduciary Duty ..................................... 34
SECTION 9.13 Obligation of Premier .............................. 34
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), is dated as of February
25, 1998, by and between Premier Laser Systems, Inc., a California corporation
("Premier"), and Ophthalmic Imaging Systems, a California corporation
("Ophthamic").
WHEREAS, the respective Boards of Directors of Premier and Ophthalmic
have approved the acquisition of up to all the outstanding shares of common
stock of Ophthalmic by Premier on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, pursuant to this Agreement Premier has agreed to commence an
exchange offer (the "Offer") to exchange for each outstanding share of
Ophthalmic's common stock, no par value (the "Common Stock") (including the
associated preferred share purchase rights (the "Rights") issued pursuant to the
Rights Agreement dated as of December 31, 1997, between Ophthalmic and American
Securities Transfer, Inc., as Rights Agent (the "Rights Agreement"), which
Rights together with the Common Stock are hereinafter referred to as the
"Shares"): (a) $1.75 net in cash (the "Cash Consideration"), (b) that number of
shares of Premier Class A Common Stock, no par value (the "Premier Common
Stock") equal to the Exchange Ratio (as defined herein) (the "Stock
Consideration"), (c) one Premier Class C Warrant (a "Class C Warrant"), and (d)
one Premier Class D Warrant (a "Class D Warrant", and together with a Class C
Warrant, the "Warrants" or the "Warrant Consideration") (the Cash Consideration,
the Stock Consideration and the Warrant Consideration together constitute the
"Offer Consideration");
WHEREAS, the Board of Directors of Ophthalmic (the "Ophthalmic Board")
has, in light of and subject to the terms and conditions set forth herein, (i)
determined that the Offer Consideration and the Offer, and the transactions
contemplated hereby, are fair to and in the best interest of Ophthalmic and its
stockholders; and (ii) resolved to approve and adopt this Agreement and the
transactions contemplated hereby and to recommend acceptance of the Offer to
Ophthalmic's stockholders;
WHEREAS, the respective Boards of Directors of Premier and Ophthalmic
contemplate that upon completion of the Offer, the parties may pursue a merger
providing all stockholders of Ophthalmic remaining after consummation of the
Offer an economic benefit similar to the Offer Consideration;
WHEREAS, Premier and Ophthalmic desire to make certain representations,
warranties, covenants and agreements in connection with the Offer, and also to
prescribe various conditions to the Offer; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Premier and certain stockholders of Ophthalmic will enter into
certain Purchase Agreements providing for
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the acquisition of Shares by Premier from the holders named therein in exchange
for the same consideration as being exchanged pursuant to the Offer (the
"Private Acquisition");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, intending to be legally bound hereby,
Premier and Ophthalmic agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 of this Agreement and none of the events set forth
in Annex I hereto (the "Exchange Offer Conditions") shall have occurred and be
existing, as promptly as practicable, but in no event later than the fifth
business day from the date of this Agreement, Premier shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder (the "Exchange
Act")), a tender offer for any and all Shares in exchange for the Offer
Consideration and shall use reasonable best efforts to consummate the Offer. The
obligation of Premier to accept for exchange and to exchange the Offer
Consideration for any Shares tendered pursuant thereto will be subject only to
the satisfaction of the conditions set forth in Annex I hereto. This Offer shall
be made by means of a Prospectus/Offer to Exchange (the "Offer to Purchase")
containing the terms set forth in this Agreement and the conditions set forth in
Annex 1. Notwithstanding anything to the contrary in clause (iii) of Annex I
hereto, Premier shall be required to make a reasonable determination that any of
the events set forth in paragraphs (a) through (h) of Annex I shall have
occurred in order to refuse payment of the Offer Consideration for the tendered
Shares or to terminate the Offer in connection with any purported failure to
meet a condition specified in such paragraphs (a) through (h) of Annex I.
(b) The Offer Consideration shall consist of: (x) the Cash
Consideration, (y) the Stock Consideration, and (z) the Warrant Consideration.
The Stock Consideration is equal to that number of shares of Premier Common
Stock equal to the Exchange Ratio. "Exchange Ratio" means the quotient (rounded
to the nearest 1/100,000) determined by dividing $0.25 by closing sales prices
for Premier Common Stock as reported on The Nasdaq Stock Market, Inc. ("NASDAQ")
as published in THE WALL STREET JOURNAL or, if not published therein, in another
authoritative source) for either (i) the fifteen (15) consecutive trading days
(each, a "Trading Day") ending five Trading Days immediately preceding the
Expiration Date (as defined below) or (ii) the thirty (30) consecutive Trading
Days ending twenty (20) Trading Days prior to the Expiration Date, whichever
yields the fewer number of shares of Premier Common Stock (the "Premier Average
Price"). The Class C Warrants and the Class D Warrants shall be substantively in
the forms attached as Exhibits A and B hereto, respectively.
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(c) Without the prior written consent of Ophthalmic, Premier shall not
decrease the Offer Consideration or change the form of consideration payable in
the Offer, decrease the number of Shares sought to be purchased in the Offer,
impose additional conditions to the Offer or amend any other term in of the
Offer in any manner adverse to the holders of Common Stock. The Offer shall
remain open until the date that is 20 business days (as such term is defined in
Rule 14d-1(c)(6) under the Exchange Act) after the commencement of the Offer
(the "Expiration Date"), unless Premier shall have extended the period of time
for which the Offer is open pursuant to, and in accordance with, the two
succeeding sentences or as may be required by applicable law, in which event the
term "Expiration Date" shall mean the latest time and date as the Offer, as so
extended, may expire. Subject to the terms of the Offer and this Agreement and
the satisfaction of all the Exchange Offer Conditions as of any Expiration Date,
Premier shall accept for exchange and exchange the Offer Consideration for all
Shares validly tendered and not withdrawn pursuant to the Offer as promptly as
practicable after such Expiration Date; provided that, if on any scheduled
Expiration Date of the Offer all of the Exchange Offer Conditions shall not have
been satisfied or waived, unless this Agreement has been terminated pursuant to
Section 8.1 hereof, the Offer may, but need not, be extended from time to time
without the consent of Ophthalmic for such period of time as is reasonably
expected by Premier to be necessary to satisfy the unsatisfied conditions;
provided further that the Offer may be extended by Premier without the consent
of Ophthalmic for any period required by any rule, regulation, interpretation or
position of the SEC or the staff thereof applicable to the Offer.
(d) Concurrently with the commencement of the Offer, Premier shall file
with the Securities and Exchange Commission ("SEC") a Tender Offer Statement on
Schedule 14D-1 in accordance with the Exchange Act with respect to the Offer
(together with all amendments, supplements, and exhibits thereto, including the
Offer to Purchase, the "Schedule 14D-1") and a Registration Statement on Form
S-4 (the "Form S-4") in accordance with the Securities Act of 1933, as amended
(the "Securities Act") to register the Premier Common Stock and the Warrants to
be issued in connection with the Offer (together with all amendments,
supplements, and exhibits thereto, including the Prospectus in the form of the
Offer to Purchase, the "Registration Statement"). The Schedule 14D-1 and the
Registration Statement are referred to collectively herein as the "Offer
Documents". Ophthalmic and its counsel shall be given a reasonable opportunity
to review and comment and on the Offer Documents and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of Ophthalmic. Premier agrees to provide Ophthalmic and its counsel
in writing with any covenants Premier and its counsel may receive from the SEC
or its staff with respect to the Offer Documents promptly after receipt of such
comments and shall provide Ophthalmic and its counsel with reasonable
opportunity to review and comment on the response of Premier to such comments.
Premier represents that the Offer Documents will comply in all material respects
with the provisions of applicable federal and state securities laws, and, on the
date filed with the SEC and on the date first published, sent or given to
Ophthalmic's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is
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made by Premier with respect to information supplied by Ophthalmic in writing
for inclusion in the Offer Documents. Ophthalmic shall provide Premier with such
information as Premier may reasonably request in connection with the preparation
of the Offer Documents. Each of Premier and Ophthalmic agrees promptly to
correct any information provided by it for use in the Offer Documents if and to
the extent that it shall have become incomplete, false or misleading in any
material respect and Premier further agrees to take all steps necessary to cause
the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to stockholders of Ophthalmic, in each case, as and to the extent
required by applicable federal and state securities laws.
(e) Notwithstanding any other provision of this Agreement, each holder
of Shares tendered for exchange pursuant to this Offer who would otherwise have
been entitled to receive a fraction of a share of Premier Common Stock (after
taking into account all shares tendered by such holder) shall receive, in lieu
thereof, cash in an amount equal to, the fractional part of the Premier Common
Stock multiplied by the "market price" of one share of Premier Common Stock,
payable as part of the Offer Consideration. The "market price" of one share of
Premier Common Stock shall be the closing price of such common stock as reported
on NASDAQ (as published in THE WALL STREET JOURNAL or, if not published therein,
any other authoritative source) on the last Trading Date preceding the
Expiration Date.
SECTION 1.2 OPHTHALMIC ACTIONS.
(a) Ophthalmic hereby approves and consents to the Offer and
represents, that the Ophthalmic Board, at a meeting duly called and held, has
(i) determined by unanimous vote of its directors that each of the transactions
contemplated hereby, is fair to and in the best interests of Ophthalmic and its
stockholders, (ii) approved the Offer and adopted this Agreement in accordance
with the California General Corporation Law ("CGCL") and pursuant to Article Six
of the Restated Articles of Incorporation of Ophthalmic, and (iii) resolved to
recommend that the stockholders of Ophthalmic accept the Offer and tender their
Shares thereunder to Premier, provided, however, that such recommendation and
approval may be withdrawn, modified or amended only in accordance with Section
6.10 of this Agreement. Ophthalmic further represents that, prior to the
execution hereof, ▇▇▇▇▇ & Company (the "Investment Banker"), has delivered to
the Ophthalmic Board its written opinion that as of the date thereof, the
financial terms of the Offer are fair, from a financial point of view to the
holders of shares of Common Stock (other than Premier and its affiliates).
Ophthalmic hereby consents to the inclusion in the Offer Documents of the
recommendations of the Ophthalmic Board described in this Section 1.2(a).
(b) Ophthalmic shall file with the SEC, as promptly as possible after
the filing by Premier of the Schedule 14D-1, a Solicitation/Recommendation
Statement on Schedule 14D-9 in accordance with the Exchange Act (together with
all amendments, supplements, and exhibits thereto, the "Schedule 14D-9"), which
shall contain the recommendation referred to in Section 1.2(a)(iii) of this
Agreement; provided that subject to Section 6.10 of this Agreement, such
recommendation may be withdrawn, modified, or amended. Premier and its counsel
shall be given reasonable opportunity
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to review and comment on the Schedule 14D-9 prior to its filing with the SEC.
Ophthalmic agrees to provide Premier and its counsel in writing with any
comments Ophthalmic or its counsel may receive from the SEC or its staff with
respect to the Schedule 14D-9 promptly after receipt of such comments.
Ophthalmic represents that the Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal and state securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to Ophthalmic's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Ophthalmic with respect to information supplied by
Premier in writing for inclusion in the Schedule 14D-9. Each of Ophthalmic and
Premier agree promptly to correct any information provided by either of them for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading, and Ophthalmic further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of Shares, in each case, as and to the extent
required by applicable federal and state securities laws.
(c) In connection with the Offer, Ophthalmic shall furnish or cause to
be furnished to Premier with mailing labels, security position listings, any
available non-objecting beneficial owner lists and any available listing or
computer list containing the names and addresses of the record holders of the
Common Stock as of the most recent practicable date and shall furnish Premier
with such additional available information (including, but not limited to,
updated lists of holders of Common Stock and their addresses, mailing labels and
lists of security positions and non-objecting beneficial owner lists) and such
other assistance as Premier or its agents may reasonably request in
communicating the Offer to Ophthalmic's record and beneficial stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the transactions contemplated hereby, Premier and its affiliates,
associates, agents and advisors, shall keep such information confidential and
use the information contained in any such labels, listings and files only in
connection with the Offer and, if this Agreement shall be terminated, shall
deliver to Ophthalmic all copies of, and extracts and summaries from, such
information then in their possession.
ARTICLE II
AMENDMENT TO RIGHTS PLAN; CLOSING OF THE PRIVATE ACQUISITION
SECTION 2.1 AMENDMENT TO RIGHTS PLAN - CLOSING OF THE PRIVATE ACQUISITION.
Provided that this Agreement is not earlier terminated, the Ophthalmic Board
shall amend the Rights Plan in accordance with Section 4.16 simultaneously with
the closing of the Private Acquisition.
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ARTICLE III
[NOT USED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OPHTHALMIC
Ophthalmic represents and warrants to Premier as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION: NO SUBSIDIARIES. Ophthalmic is a
corporation duly organized, validly existing and in good standing under the laws
of the state of California and is in good standing as a foreign corporation in
each jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification, except where failure to be
in good standing or to so qualify would not have a Material Adverse Effect on
Ophthalmic. Except as set forth in Section 4.1 of the Ophthalmic Disclosure
Schedule, Ophthalmic has the requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
have such power, or authority and governmental approvals would not, individually
or in the aggregate, have a Material Adverse Effect. The term "Material Adverse
Effect on Ophthalmic," as used in this Agreement, means any change in or effect
on the business, financial condition or results of operations of Ophthalmic that
would have, individually or in the aggregate, a material adverse impact on
Ophthalmic. Ophthalmic has heretofore made available to Premier a complete and
correct copy of its Restated Articles of Incorporation (including all
Certificates of Determination) and By-Laws, each as amended to the date hereof.
Such Restated Articles of Incorporation, By-Laws and equivalent organizational
documents are in full force and effect. Except as set forth in Section 4.1 or
the Ophthalmic Disclosure Schedule, Ophthalmic is not in violation of any
provision of its Restated Articles of Incorporation, By-Laws, or equivalent
organizational documents. Ophthalmic does not have any subsidiaries.
SECTION 4.2 CAPITALIZATION. The authorized capital stock of Ophthalmic consists
of 20,000,000 of shares of Common Stock and 20,000,000 shares of preferred stock
("Preferred Stock"), of which 100,000 shares are designated Series A Junior
Participating Preferred Stock, no par value ("Junior Preferred Stock"). As of
the close of business on February 25, 1998, 3,905,428 shares of Common Stock
were issued and outstanding, and no shares of Common Stock were held in
treasury. Ophthalmic has no shares of Preferred Stock issued and outstanding. As
of the date hereof, except for (i) 1,514,742 Common Stock reserved for issuance
pursuant to outstanding options granted by Ophthalmic ("Ophthalmic Options"),
(ii) 250,000 shares of Common Stock reserved for issuance pursuant to
outstanding warrants ("Ophthalmic Warrants") and (iii) 100,000 shares of Junior
Preferred Stock reserved for issuance upon exercise of the Rights, there are not
now, and at the Expiration Date there will not be, any existing options,
warrants, calls, subscriptions, or other rights,
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or other agreements or commitments, obligating Ophthalmic to issue, transfer or
sell any shares of capital stock of Ophthalmic or bonds, debentures, notes or
other indebtedness having general voting rights (or convertible into securities
having such rights) of, or other equity interest in, Ophthalmic or securities
convertible into or exchangeable for such shares or equity interest or
obligating Ophthalmic to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment other
than as set forth in Section 6.1 of the Ophthalmic Disclosure Schedule. Since
February 12, 1998, Ophthalmic has not issued any shares of its capital stock,
except pursuant to Ophthalmic Options and Ophthalmic Warrants outstanding on
such date. All issued and outstanding shares of Common Stock are and all shares
of Common Stock which may be issued pursuant to the exercise of outstanding
Ophthalmic Options and Ophthalmic Warrants will be, when issued in accordance
with the respective terms thereof, duly authorized and validly issued, fully
paid and nonassessable, and such issuance will not violate any preemptive rights
under law or otherwise. Except as contemplated by the Offer contemplated by this
Agreement and pursuant to the Private Acquisition, there are no outstanding
contractual obligations of Ophthalmic to repurchase, redeem or otherwise acquire
any shares of Common Stock or the capital stock of Ophthalmic.
SECTION 4.3 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) Ophthalmic has the requisite corporate power and authority to
execute and deliver this Agreement and, to the extent required by applicable law
or Ophthalmic's Restated Articles of Incorporation, subject to the approval and
adoption of any Proposed Merger by the stockholders of Ophthalmic, if required,
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Ophthalmic and the consummation by Ophthalmic of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Ophthalmic, subject, in the case of
the Proposed Merger, to any necessary approval thereof by the stockholders of
Ophthalmic. This Agreement has been duly and, validly executed and delivered by
Ophthalmic, and, assuming this Agreement constitutes a valid and binding
obligation of Premier, this Agreement constitutes a valid and binding agreement
of Ophthalmic, enforceable against Ophthalmic in accordance with its terms
(except in all cases as such enforceability may be limited to applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditor's rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of any court before which any proceeding may be brought).
(b) Except as set forth in this Section 4.3 of the Ophthalmic
Disclosure Schedule, other than in connection with, or in compliance with, the
provisions of the CGCL with respect to the actions contemplated hereby, the
federal securities laws, the securities laws of the various states, the rules of
NASDAQ, and other than notices to or filings with the Internal Revenue Service
or the Pension Benefit Guaranty Corporation with respect to employee benefit
plans, or under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), no authorization, consent or approval of, or filing
with, any Governmental Entity (as hereinafter defined) is necessary
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for the consummation by Ophthalmic of the transactions contemplated by this
Agreement other than authorizations, consents and approvals the failure to
obtain, or filings the failure to make, which would not, individually in the
aggregate, have a Material Adverse Effect on Ophthalmic. As used in this
Agreement, the term "Governmental Entity" means any government or subdivision
thereof, domestic, foreign or supranational or any administrative, governmental
or regulatory authority, agency, commission, tribunal or body, domestic, foreign
or supranational.
SECTION 4.4 NO VIOLATION. Neither the execution or delivery of this Agreement by
Ophthalmic nor the consummation by Ophthalmic of the transactions contemplated
hereby will (i) constitute a breach or violation of any provision of the
Restated Articles of Incorporation or By-Laws of Ophthalmic, (ii) except as set
forth in Section 4.4 of the Ophthalmic Disclosure Schedule, constitute a breach,
violation or default (or any event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of any lien or
encumbrance upon any material property or asset of Ophthalmic under, any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument to which Ophthalmic, or by which it or any of its properties or
assets, are bound, or (iii) subject to the receipt of the requisite consents,
approvals, or authorizations of, or filings with Governmental Entities under
federal securities laws, applicable corporate and securities laws, the rules of
NASDAQ and the Boston Stock Exchange, and laws relating to employee benefit
plans, conflict with or violate any order, judgment or decree, or to the
knowledge of Ophthalmic, any statute, ordinance, rule or regulation applicable
to Ophthalmic, or by which it or any of its properties or assets may be bound or
affected, other than, in the case of the foregoing clauses (ii) or (iii),
conflicts, breaches, violations, defaults, terminations, accelerations or
creation of liens and encumbrances which, individually or in the aggregate,
would not have a Material Adverse Effect on Ophthalmic.
SECTION 4.5 SEC REPORTS AND FINANCIAL STATEMENTS. Ophthalmic has filed with the
SEC, and has made available to Premier, copies of all forms, reports and
documents ("Ophthalmic SEC Reports") required to be filed by it since September
1, 1994 under the Securities Act or the Exchange Act. None of such Ophthalmic
SEC Reports (as of their respective filing dates) 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 (except any statement
or omission therein which as been corrected or otherwise disclosed or updated in
a subsequent Ophthalmic SEC Report). The audited and unaudited consolidated
financial statements of Ophthalmic included in any Ophthalmic SEC Report on Form
10-QSB or Form 10-KSB have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as otherwise stated
in such financial statements, including the related notes or, in the case of
unaudited statements, as permitted by Form 10-QSB of the SEC rules), comply as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto and fairly
present the financial position of Ophthalmic as of the dates thereof and the
results of its operations and changes in financial position for the periods then
ended, subject, in the case of the unaudited financial
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statements, to year-end audit adjustments, and except for the absence of certain
footnote information in the unaudited statements. Except as set forth in
Section 4.5 of the Ophthalmic Disclosure Schedule, Ophthalmic does not have any
liabilities or obligations of any nature (whether absolute, accrued, contingent,
unmatured, unaccrued, unliquidated, unasserted, conditional or otherwise),
except for liabilities or obligations (i) reflected or reserved against on the
balance sheet as at November 30, 1997 (including the notes thereto and the other
disclosure made in Ophthalmic's Form 10-QSB for the quarter ended November 30,
1997) included in the Ophthalmic SEC Reports, or (ii) incurred in the ordinary
course of business consistent with past practice since such date.
SECTION 4.6 COMPLIANCE WITH APPLICABLE LAWS AND PERMITS; REGULATORY MATTERS.
Except as set forth in Section 4.6 of the Ophthalmic Disclosure Schedule, to the
knowledge of Ophthalmic, it has in effect and holds all permits, licenses,
orders, authorizations, registrations, approvals and other analogous
instruments, and Ophthalmic has made all filings and registrations and the like
necessary or required by law to conduct its business as presently conducted,
other than such permits, licenses, orders, authorizations, registrations,
approvals, and other instruments, the absence of which do not have a Material
Adverse Effect on Ophthalmic. Ophthalmic has not received any written
governmental notices within two years of the date hereof of any violation by
Ophthalmic of any such laws, rules, regulations or orders. Except as set forth
in Section 4.6 of the Ophthalmic Disclosure Schedule or where the failure to
comply would not have a Material Adverse Effect, to the knowledge of Ophthalmic,
Ophthalmic is not in default or noncompliance under any (a) permits, consents,
or similar instruments, and (b) the business and local and county laws,
ordinances, regulations, judgments, orders, decrees or rules of any court,
arbitrator or governmental, regulatory or administrative agency or entity, other
than such default or noncompliance which is not reasonably likely to have a
Material Adverse Effect on Ophthalmic. Without limiting the generality of the
foregoing, except as set forth in Section 4.6 of the Ophthalmic Disclosure
Schedule, all of the products presently marketed by Ophthalmic have been
approved or cleared to market pursuant to valid and subsisting Premarket
Approval or Section 501(k) Clearances issued by the United States Food and Drug
Administration ("FDA"). Ophthalmic has never conducted any clinical trials which
have required Investigational Device Exemptions ("IDE's"). No written
notification has been furnished to Ophthalmic of any medical complications
arising in connection with or resulting from clinical trials conducted by
Ophthalmic either directly or under its direction, or from the use of its
products following FDA approval or clearance. Ophthalmic has not received any
written complaint nor has ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, during the past six months, been
made aware of any oral complaint made with respect to such procedures and no
Medical Device Reports have been filed by Ophthalmic or have been required to be
filed. Except as set forth in Section 4.6 of the Ophthalmic Disclosure Schedule,
the design, manufacture and distribution of all of Ophthalmic products, to the
extent required, has been conducted, and shall continue through the Expiration
Date to be conducted, substantially in accordance with "good manufacturing
practices" as required by the FDA.
SECTION 4.7 CHANGE OF CONTROL. Except as provided by the terms of any Ophthalmic
Warrant, any Ophthalmic stock option plan, or any Ophthalmic Options, or as set
forth on Section 4.7 of the Ophthalmic Disclosure Schedule, the transactions
contemplated by this Agreement will not
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constitute a "change of control" under, require the consent from or the giving
of notice to a third party pursuant to, permit a third party to terminate or
accelerate vesting or repurchase rights, or create any other detriment under the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
license, lease, contract, agreement or other instrument or obligation to which
Ophthalmic is a party or by which it or any of its properties or assets may be
bound, except where the adverse consequences resulting from such change of
control or where the failure to obtain such consents or provide such notices
would not, individually or in the aggregate, have a Material Adverse Effect on
Ophthalmic.
SECTION 4.8 LITIGATION. Except as disclosed in an SEC Report or in Section 4.8
of the Ophthalmic Disclosure Schedule, or otherwise fully covered by insurance,
there is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of Ophthalmic, threatened, against Ophthalmic, individually or in the
aggregate, which would have a Material Adverse Effect on Ophthalmic or would
reasonably be expected to prevent or materially delay the consummation of the
transactions contemplated by this Agreement. Except as disclosed in the
Ophthalmic SEC Reports filed prior to the date of this Agreement Ophthalmic is
not subject to any outstanding order, writ, injunction or decree which,
individually or in the aggregate, would have a Material Adverse Effect on
Ophthalmic or would reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated hereby.
SECTION 4.9 INFORMATION. None of the written information supplied by Ophthalmic
(other than projections of future financial performance) expressly for inclusion
or incorporation by reference in the Offer Documents, will, at the time filed
with the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. Notwithstanding the foregoing, no representation is made
by Ophthalmic with respect to (i) any forward-looking information which may have
been supplied by Ophthalmic, whether or not included by Premier in any Offer
Document or (ii) statements made in any of the foregoing documents based upon
information supplied by Premier.
SECTION 4.10 EMPLOYEE BENEFIT PLANS.
(a) Section 4.10(a)/(b) of the Ophthalmic Disclosure Schedule includes
a complete list of all material employee benefit plans and programs providing
benefits to any employee or former employee of Ophthalmic sponsored or
maintained by Ophthalmic or to which Ophthalmic contributes or is obligated to
contribute ("Plans") and all written employment, severance, consulting and other
compensation contracts between Ophthalmic and any current or former director,
officer, or employee thereof ("Employment Contracts"). Ophthalmic is not party
to any oral Employment Contracts that are not terminable at will. Without
limiting the generality of the foregoing, the term "Plans" includes all employee
welfare benefit plans within the meaning of Section 3(l) of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA"), and all employee pension benefit plans within the meaning
of Section 3(2) of ERISA.
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(b) With respect to each Plan, Ophthalmic has made available to Premier
(to the extent requested) a true, correct and complete copy of: (i) all plan
documents, benefit schedules, trust agreements, and insurance contracts and
other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series)
and accompanying schedule, if any; (iii) the current summary plan description,
if any; (iv) the most recent annual financial report, if any; (v) the most
recent actuarial report, if any; (vi) the most recent determination letter from
the United States Internal Revenue Service (the "IRS"), if any; and (vii) each
Employment Contract.
(c) Except a set forth in Section 4.10(d) of the Ophthalmic Disclosure
Schedule, all Plans are in compliance, in all material respects with all
applicable provisions of ERISA, the Code and all laws and regulations
applicable to the Plans. With respect to each Plan that is intended to be a
"qualified plan" within the meaning of Section 401 (a) of the Code ("Qualified
Plans"), the IRS has issued a favorable determination letter.
(d) Except a set forth in Section 4.10(d) of the Ophthalmic Disclosure
Schedule, all contributions required to be made by Ophthalmic to any Plan under
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, have been timely made or paid in full or, to the extent not
required to be made or paid, have been fully reflected in the financial
statements of Ophthalmic included in the Ophthalmic SEC Reports to the extent
required under generally accepted accounting principles.
(e) No Plan is subject to Title IV or Section 302 of ERISA or Section
412 or 4971 of the Code. Without limiting the generality of the foregoing, no
Plan is a "multi-employer plan" within the meaning of Section 4001(a)(3) of
ERISA (a "Multi-Employer Plan") or a plan that has two or more contributing
sponsors at least two of whom are not under common control, within the meaning
of Section 4063 of ERISA and which is subject to Title IV of ERISA (a "Multiple
Employer Plan").
(f) There does not now exist, nor do any circumstances exist that would
reasonably be expected to result in, any liability under (i) Title IV of ERISA,
(ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the
continuation coverage requirements of Section 601 et seq. of ERISA and Section
4980B of the Code, or (v) corresponding or similar provisions of foreign laws or
regulations, other than a liability that arises solely out of, or relate solely
to, the Plans, that would be a liability of Ophthalmic or any of its
subsidiaries following the Expiration. Without limiting the generality of the
foregoing, (i) neither of Ophthalmic nor any ERISA Affiliate of Ophthalmic has
engaged in any transaction described in Section 4069 or Section 4204 or 4212 of
ERISA, (ii) no liability under Title IV or a violation of Section 302 of ERISA
has been incurred by Ophthalmic that has not been satisfied in full, and
Ophthalmic is not aware of any condition that exists that presents a material
risk to Ophthalmic of incurring any such liability, other than liability for
premiums due to the Pension Benefit Guaranty Corporation (which premiums have
been paid when due) and for contributions due to a pension plan (which
contributions have been paid through the end of 1997), and (iii) no Plan or any
trust established thereunder has incurred any "accumulated
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funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year
of each Plan ended prior to the Expiration Date. An "ERISA Affiliate" means any
entity, trade or business that is a member of a group described in Section
414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that
includes Ophthalmic or any of its subsidiaries, or that is a member of the same
"controlled group" as Ophthalmic or any of its subsidiaries, pursuant to Section
4001(a)(14) of ERISA.
(g) To the knowledge of Ophthalmic, there are no pending, threatened or
anticipated claims by or on behalf of any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
SECTION 4.11 TAXES.
(a) Except a set forth in Section 4.1 1 of the Ophthalmic Disclosure
Schedule, Ophthalmic has (i) timely filed all income Tax Returns (as hereinafter
defined), and all other material Tax Returns required to be filed by or with
respect to it, or requests for extensions have been filed, granted, and have not
expired, for the periods ending on or after December 31, 1996, and on or before
the date of the most recent fiscal year and immediately preceding the date
hereof, and to the knowledge of Ophthalmic all such Tax Returns are true,
correct and complete in all material respects, and (ii) to the knowledge of
Ophthalmic, all Taxes (as hereinafter defined) shown as due and payable on such
Tax Returns have been paid, and (iii) made adequate provision in Ophthalmic's
financial statements for payment of all Taxes anticipated to be payable in
respect of all taxable periods or portions thereof ending on or before the date
hereof, except where the failures to so file or pay or make adequate provision
would not, individually or in the aggregate, have a Material Adverse Effect on
Ophthalmic. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Tax Return of Ophthalmic.
Ophthalmic (i) has not been a member of a group filing consolidated returns for
federal income tax purposes, or (ii) is not a party to a Tax sharing or Tax
indemnity agreement or any other agreement of a similar nature that remains in
effect. There is no audit examination, deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing by
Ophthalmic which would, individually or in the aggregate, have a Material
Adverse Effect on Ophthalmic. There are no Tax liens upon any of the assets or
property of Ophthalmic, except liens for current Taxes not yet due and payable.
As soon as practicable after the public announcement of the execution of this
Agreement, Ophthalmic will provide Premier with written schedules with respect
to income taxes of (i) the taxable years of Ophthalmic as to which the statutes
of limitations with respect to Taxes have not expired and (ii) with respect to
such taxable years, those years for which examinations have been completed,
those years for which examinations are presently being conducted, those years
for which examinations have not been initiated and those years for which
required Tax Returns have not yet been filed.
(b) For purposes of this Agreement, the term "Taxes" means all taxes,
levies or other assessments, including, without limitation, income, gross
receipts, excise, property, sales, license,
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payroll, withholding and franchise taxes, imposed by the United States or any
state or local government or subdivision or agency thereof, including any
interest, penalties or additions thereto. For purposes of this Agreement, the
term "Tax Return" means any report, return or other information or document
required to be supplied to a taxing authority in connection with Taxes.
SECTION 4.12 INTELLECTUAL PROPERTY.
(a) (i) Ophthalmic owns, has the right to acquire or is licensed or
otherwise has the right to use (in each case, free and clear of any liens or
encumbrances of any kind), all Intellectual Property (as defined below) used in
or necessary for the conduct of its business as currently conducted, (ii) no
claims are pending or, to the knowledge of Ophthalmic, threatened, that
Ophthalmic is infringing on or otherwise violating the rights of any person with
regard to any Intellectual Property, and (iii) to the knowledge of Ophthalmic,
no person is infringing on or otherwise violating any right of Ophthalmic with
respect to any Intellectual Property owned by and/or licensed to Ophthalmic.
(b) For purposes of this Agreement, "Intellectual Property" shall mean
material patents, copyrights, trademarks (registered or unregistered), service
marks, brand names, trade dress, trade names, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing; and trade secrets and rights in any
jurisdiction to limit the use or disclosure thereof by any person.
SECTION 4.13 CONTRACTS. Each material note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
Ophthalmic is a party or by which it or any of its properties or assets may be
bound (the "Material Contracts") is in full force and effect, except where
failure to be in full force and effect would not have a Material Adverse Effect
on Ophthalmic, and there are no defaults by Ophthalmic or, to Ophthalmic's
knowledge, any other party thereto, thereunder, except those defaults that would
not have a Material Adverse Effect on Ophthalmic.
SECTION 4.14 VOTING REQUIREMENTS. No vote of the holders of the class or series
of Ophthalmic's capital stock is necessary in connection with this Agreement,
except as may be required in connection with the approval of the Proposed
Merger.
SECTION 4.15 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Ophthalmic
SEC Reports filed prior to the date of this Agreement or in Section 4.15 of the
Ophthalmic Disclosure Schedule, there has not been, since August 31, 1997, any
event that has had or that is reasonably expected to have a Material Adverse
Effect on Ophthalmic. Except as disclosed in the Ophthalmic SEC Reports filed
prior to the date of this Agreement or in Section 4.15 of the Ophthalmic
Disclosure Schedule, since August 31, 1997, Ophthalmic has conducted its
business only in the ordinary course of business consistent with past practices
and there has not been, directly or indirectly:
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(i) any exchange or grant by Ophthalmic or any increase in
compensation to any director or executive officer of Ophthalmic or, except in
the ordinary course of business and consistent with past practice or as required
under employment agreements in effect as of or prior to the date of this
Agreement, of any employee of Ophthalmic;
(ii) any grant by Ophthalmic to any such director, executive officer
or employee of any increase in severance or termination pay, except as required
under employment, severance or termination agreements or plans in effect as of
the date of this Agreement;
(iii) except as contemplated by this Agreement, any entry by Ophthalmic
into any employment, severance or termination agreement with any such director
or executive officer, or, except in the ordinary course of business consistent
with past practice, employee;
(iv) except in the ordinary course of business and consistent with
past practice or as required under employment agreements in effect as of or
prior to the date of this Agreement, any material adoption or material increase
in exchanges to or benefits under any profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement or other employee benefit
plan for or with any employees of Ophthalmic.
(v) any change in accounting methods, principles or practices by
Ophthalmic materially affecting its assets, liabilities or business, except
insofar as may have been required by change in generally accepted accounting
principles; or
(vi) any agreement to do any of the things described in the preceding
clauses (i) through (v).
SECTION 4.16 RIGHTS AGREEMENT. The Ophthalmic Board has duly authorized
and Ophthalmic will execute an amendment (the "Rights Agreement Amendment") to
the Rights Agreement (without redeeming the Rights) which will permit the
execution or delivery of this Agreement, the making of the Offer, the
acquisition of Shares pursuant to the Offer and the consummation of the Proposed
Merger without (i) causing any Rights issued pursuant to the Rights Agreement to
become exercisable or to separate from the stock certificates to which they are
attached, (ii) causing Premier or any of its Affiliates to be an Acquiring
Person (as each such term is defined in the Rights Agreement), or (iii)
triggering other provisions of the Rights Agreement, including giving rise to a
Distribution Date (as such term is defined in the Rights Agreement), and the
Rights Agreement Amendment shall be in full force and effect from and after the
date hereof until such time as, after being advised by its outside counsel with
respect to fiduciary obligations, the Board of Directors of Ophthalmic
determines in good faith by a majority vote that it is necessary to terminate or
revise such amendment or the Rights Agreement in the exercise of its fiduciary
obligations under applicable law.
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SECTION 4.17 BROKERS. Except for the engagement of the Investment Banker, none
of Ophthalmic, or any of its officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated by this
Agreement.
SECTION 4.18 OPINION OF INVESTMENT BANKER. Ophthalmic has received the written
opinion of the Investment Banker to the effect that, as of the date such
opinion, the financial terms of the Offer are fair, from a financial point of
view to the holders of shares of Common Stock (other than Premier and its
affiliates).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PREMIER
Premier represents and warrants to Ophthalmic as follows:
SECTION 5.1 ORGANIZATION AND QUALIFICATION. Premier is a corporation duly
organized, validly existing and in good standing under the laws of its state or
jurisdiction of incorporation and is in good standing as a foreign corporation
in each other jurisdiction where the properties owned, leased or operated, or
the business conducted, by it require such qualification and where failure to be
in good standing or to so qualify would have a Material Adverse Effect on
Premier. Premier has the requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
have such power, or authority and governmental approvals would not, individually
or in the aggregate, have a Material Adverse Effect. The term "Material Adverse
Effect on Premier", as used in this Agreement means any change in or effect on
the business, financial condition or results of operations of Premier or any of
its subsidiaries that would, individually or in the aggregate, be materially
adverse to Premier and its subsidiaries taken as a whole. Premier has heretofore
made available to Ophthalmic a complete and correct copy of its Articles of
Incorporation (including all Certificates of Determination) and By-Laws, each as
amended to the date hereof. Such Articles of Incorporation, By-Laws and
equivalent organizational documents are in full force and effect. Premier is not
in violation of any provision of its Articles of Incorporation, By-Laws, or
equivalent organizational documents.
SECTION 5.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) Premier has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Premier and no other corporate proceedings on the part of
Premier is necessary to authorize this Agreement or to consummate the
transactions so
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contemplated. This Agreement has been duly and validly executed and delivered by
Premier and, assuming this Agreement constitutes a valid and binding obligation
of Ophthalmic, this Agreement constitutes a valid and binding agreement Premier,
enforceable against Premier in accordance with its terms.
(b) Other than in connection with, or in compliance with, the
provisions of the CGCL with respect to the transactions contemplated hereby, the
Exchange Act, the securities laws of the various states, no authorization,
consent or approval of, or filing with, any Governmental Entity is necessary for
the consummation by Premier of the transactions contemplated by this Agreement
other than authorizations, consents and approvals the failure to obtain, or
filings the failure to make, which would not, in the aggregate, have a Material
Adverse Effect on Premier.
SECTION 5.3 NO VIOLATION. Neither the execution or delivery of this Agreement by
Premier nor the consummation by Premier of the transactions contemplated hereby
will (i) constitute a breach or violation of any provision of the Articles of
Incorporation or By-Laws of Premier, (ii) constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in the creation of any lien or encumbrance
upon any of the material property or asset of Premier or any of its subsidiaries
under, any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument to which Premier or any of its subsidiaries is a
party or by which they or any of their respective properties or assets are
bound, or (iii) subject to the receipt of the requisite consents, approvals, or
authorizations of, or filings with Governmental Entities under federal
securities laws, applicable corporate and securities laws, the rules of NASDAQ
and laws relating to employee benefit plans, conflict with or violate any order,
judgment or decree, or to the knowledge of Premier, any statute, ordinance, rule
or regulation applicable to Premier, or by which it or any of its properties or
assets may be bound or affected, other than, in the case of the foregoing
clauses (ii) or (iii), conflicts, breaches, violations, defaults, terminations,
accelerations or creation of liens and encumbrances which, individually or in
the aggregate, would not have a Material Adverse Effect on Premier.
SECTION 5.4 INFORMATION. None of the information supplied by Premier in writing
(other than projections of future financial performance) specifically for
inclusion or incorporation by reference in (i) the Schedule 14D-9, or (ii) the
Other Filings will, at the respective times filed with the SEC or other
Governmental Entity contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, no representation is
made by Premier with respect to statements made in any of the foregoing
documents based upon information supplied in writing by Ophthalmic.
SECTION 5.5 FUNDS: RESERVATION OF SHARES. Premier has on the date hereof and
will have at the time of acceptance for exchange and exchange of Shares
pursuant to the Offer and at the Expiration Date, the funds necessary and will
have reserved for issuance the Premier Common Stock, the
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Stock issuable upon exercise of the Warrants and the Warrants to
consummate the Offer and the transactions contemplated thereby on a timely basis
in accordance with this Agreement which Premier Common Stock and Warrants when
issued, will be duly authorized and validly issued, fully paid and
nonassessable, and such issuance will not violate any preemptive rights under
law or otherwise.
SECTION 5.6 INTENTION TO PROPOSE A MERGER. As of the date hereof, Premier
presently intends to, at a reasonable time following its acceptance for exchange
and exchange for shares pursuant to the Offer, propose a merger with Premier
providing holders of shares of Common Stock at such time an economic benefit
similar to that of the Offer Consideration (the "Proposed Merger").
SECTION 5.7 OWNERSHIP OF SHARES. Except as disclosed on the latest Schedule 13D
as filed by Premier with the SEC prior to the date of this Agreement with
respect to the Common Stock, none of Premier or its Subsidiaries or affiliates
owns (beneficially or otherwise) any shares of Common Stock. From the date of
this Agreement through the Expiration Date, except for those Private
Acquisitions entered into concurrently herewith, none of Premier or its
Subsidiaries or affiliates shall purchase or otherwise acquire beneficial
ownership of any additional shares of Common Stock.
SECTION 5.8 SEC REPORTS AND FINANCIAL STATEMENTS. Premier has filed and has made
available to Ophthalmic all forms, reports and documents ("Premier SEC Reports")
required to be filed by it with the SEC since April 1, 1994. None of such
Premier SEC Reports (as of their respective filing dates) 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 (except any
statement or omission therein which as been corrected or otherwise disclosed or
updated in a subsequent Premier SEC Report). The audited and unaudited
consolidated financial statements of Premier included in any Premier SEC Report
on Form 10-Q or Form 10-K have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as
otherwise stated in such financial statements, including the related notes or,
in the case of unaudited statements, as permitted by Form 10-Q of the SEC
rules), comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto and fairly present the financial position of Premier as of the dates
thereof and the results of its operations and changes in financial position for
the periods then ended, subject, in the case of the unaudited financial
statements, to year end audit adjustments, and except for the absence of certain
footnote information in the unaudited statements. Premier does not have any
liabilities or obligations of any nature (whether absolute, accrued, contingent,
unmatured, unaccrued, unliquidated, unasserted, conditional or otherwise),
except for liabilities or obligations (i) reflected or reserved against on the
balance sheet as at December 31, 1997 (including the notes thereto and the other
disclosure made in Ophthalmic's Form 10-Q for the quarter ended December 31,
1997) included in the Premier SEC Reports, or (ii) incurred in the ordinary
course of business consistent with past practice since such date, in each case
of clauses (i) and (ii) which, individually or in the aggregate, would not have
a Material Adverse Effect on Premier.
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SECTION 5.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Premier SEC
Reports filed prior to the date of this Agreement and made available to
Ophthalmic, there has not been since March 31, 1997 any event that has had or
that is reasonably expected to have a Material Adverse Effect on Premier.
SECTION 5.10 CAPITALIZATION. The Premier Common Stock and Warrants (i) when
issued upon exchange for the Shares in accordance with the Offer and (ii) in the
case of Premier Common Stock if and when issued pursuant to the Warrants in
accordance with the respective terms thereof, will be duly authorized, validly
issued, fully paid, nonassessable and such issuances will not violate any
preemptive rights under applicable laws, Premier's Articles of Incorporation or
By-Laws, material contract or agreement or otherwise.
ARTICLE VI
COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS OF OPHTHALMIC. Except as contemplated by this
Agreement or as expressly agreed to in writing by Premier, during the period
from the date of this Agreement to the earliest of (a) August 30, 1998, (b) the
termination of this Agreement, or (c) the closing of the Proposed Merger,
Ophthalmic will conduct its operations according to its ordinary and usual
course of business and consistent with past practice and will use its reasonable
efforts, to preserve intact the business organization of Ophthalmic, to keep
available the services of its and their present officers and key employees, and
to preserve the good will of those having business relationships with it.
Without limiting the generality of the foregoing, and except as (y) otherwise
expressly provided in this Agreement, or (z) required by law, prior to the
earlier of the Expiration Date or the termination of this Agreement, Ophthalmic
will not, without the prior written consent of Premier (which consent shall not
be unreasonably withheld):
(i) except with respect to annual bonuses made in the ordinary course
of business consistent with past practice, adopt or amend in any material
respect any bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, pension, retirement, employment or other
employee benefit agreement, trust, plan or other arrangement for the benefit or
welfare of any director, officer or employee of Ophthalmic or increase in any
manner the compensation or fringe benefits of any director, officer or employee
of Ophthalmic or pay any benefit not required by any existing agreement or place
any assets in any trust for the benefit of any director, officer or employee of
Ophthalmic (in each case, except with respect to employees, non-executive
officers and directors in the ordinary course of business consistent with past
practice);
(ii) incur any material indebtedness for borrowed money (other than
under existing lines of credit or under that certain factoring arrangement with
Imperial Bank dated as November 18, 1997) or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of Ophthalmic, guarantee any debt securities
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of another person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another person or enter into any arrangement
having the economic effect of any of the foregoing, or make any loans or
advances outside the ordinary course of business to, or capital contributions
to, or investments in, any other person.
(iii) expend funds for capital expenditures (as determined under
generally accepted accounting principles) in excess of $100,000 per fiscal
quarter;
(iv) sell, lease, license, mortgage or otherwise encumber or subject
to any lien or otherwise dispose of any of its properties or assets other than
immaterial properties or assets (or immaterial portions of properties or
assets), except (i) in the ordinary course of business consistent with past
practice or (ii) pursuant to contracts or agreements in force as of the date of
this Agreement;
(v) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (z) purchase, redeem or otherwise acquire any shares of
capital stock of Ophthalmic or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(vi) except pursuant to the exercise of outstanding Ophthalmic
Options or Ophthalmic Warrants, or as disclosed in Section 6.1 of the Ophthalmic
Disclosure Schedule, authorize for issuance, issue, deliver, sell 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),
pledge or otherwise encumber any shares of its capital stock or the capital
stock of any of its subsidiaries, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities or any other securities or
equity equivalents (including without limitation stock appreciation rights);
(vii) except as contemplated by this Agreement, amend its Restated
Articles of Incorporation By-Laws or equivalent organizational documents;
(viii) make or agree to make any acquisition of assets which is
material to Ophthalmic except for purchases of inventory, supplies and material
in the ordinary course of business;
(ix) settle, pay or compromise any claims, individually or in the
aggregate in an amount in excess of $100,000 (other than repayment of
Ophthalmic's indebtedness to Imperial Bank), other than in consultation and
cooperation with Premier, and, with respect to any such settlement, with the
prior written consent of Premier, which consent shall not be unreasonably
withheld;
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(x) make any material Tax election or settle or compromise any
material Tax liability (whether with respect to amount or timing); or
(xi) except in the ordinary course of business, modify, amend or
terminate any material contract or waive or release or assign any material
rights or claims.
SECTION 6.2 COVENANTS OF PREMIER. From the date of this Agreement until the
earliest of (a) August 30, 1998, (b) the termination of this Agreement, and (c)
the closing of the Proposed Merger, Premier covenants and agrees that it shall
(x) continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment, to enhance the long-term value of
the Premier Common Stock and the business prospects of Premier and its
Subsidiaries, and (y) take no action which would (i) materially adversely affect
the ability of any party to this Agreement to obtain any consents, approvals, or
authorizations required for the transactions contemplated hereby without
imposition of a condition or restriction of any materially adverse conditions or
restrictions, or (ii) materially adversely affect the ability of any party to
perform its covenants and agreements under this Agreement; provided, that the
foregoing shall not prevent Premier from discontinuing or disposing of any of
its properties, assets, or business if such action is, in the judgment of
Premier, desirable in the conduct of the business of Premier and its
Subsidiaries.
SECTION 6.3 ACCESS TO INFORMATION; CONFIDENTIALITY. From the date hereof until
the earlier of the Expiration Date or the termination of this Agreement, upon
reasonable notice and subject to applicable laws, Premier and Ophthalmic shall
afford each other, and each other's accountants, counsel, and other
representatives, during normal business hours during the period of time prior to
the Expiration Date, reasonable access to all of its properties, books,
contracts, commitments, and records and, during such period, each of Premier and
Ophthalmic shall furnish promptly to the other (a) a copy of each report,
schedule, and other document filed or received by it during such period pursuant
to the requirements of federal and state securities laws, (b) a copy of all
filings made with any Governmental Entities in connection with the transactions
contemplated by this Agreement and all written communications received from such
Governmental Entities related thereto, and (c) all other information concerning
its business, properties, and personnel as such other party may reasonably
request. Each party hereto shall, and shall cause its advisors and
representatives to (x) conduct its investigation in such a manner that will not
unreasonably interfere with the normal operations, customers or employee
relations of the other and shall be in accordance with procedures established by
the parties having due regard for the foregoing, and (y) refrain from using for
any purposes other than as set forth in this Agreement and shall treat as
confidential all such information obtained by each hereunder or in connection
herewith and not otherwise known to them prior to the Expiration Date. Except as
otherwise agreed to in writing by Ophthalmic, until the Expiration Date, Premier
and its Subsidiaries and affiliates will be bound by, and all information
received with respect to Ophthalmic pursuant to this Section 6.3 shall be
subject to that certain confidentiality agreement entered into with Premier on
February 12, 1998 (the "Ophthalmic Confidentiality Agreement"). Except as
otherwise agreed to in writing by Premier, until the Expiration Date, Ophthalmic
will be bound by, and all information received with respect to Premier pursuant
to this Section 6.3 shall be
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subject to that certain Confidentiality Agreement entered into with Ophthalmic
on February 20, 1998 (the "Premier Confidentiality Agreement").
SECTION 6.4 EFFORTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement, including (i) obtaining all
necessary opinions, waivers, consents and approvals and effect all necessary
registrations and filings and (ii) defending any lawsuit or other legal
proceedings challenging this Agreement or the Offer. In case at any time after
the Expiration Date any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors of each party
to this Agreement shall take all such necessary action. Without limiting the
foregoing, each of Ophthalmic and Premier shall make all necessary filings with
Governmental Entities as promptly as practicable in order to facilitate prompt
consummation of the transactions contemplated by the Offer and this Agreement.
In addition, each of Premier and Ophthalmic will use its reasonable best efforts
(including, without limitation, exchange of any required fees) and will
cooperate fully with each other to (i) comply as promptly as practicable with
all governmental requirements applicable to the transactions contemplated by the
Offer and this Agreement, including the making of all filings necessary or
proper under applicable laws and regulations to consummate and make effective
the transactions contemplated by the Offer and this Agreement, including, but
not limited to, cooperation in the preparation and filing of the Offer
Documents, the Schedule 14D-9 and any actions or filings related thereto, and
any amendments to any thereof, and (ii) obtain promptly all consents, waivers,
approvals, authorizations or permits of, or registrations or filings with or
notifications to (any of the foregoing being a "Consent"), any Governmental
Entity necessary for the consummation of the transactions contemplated by the
Offer and this Agreement. Premier and Ophthalmic shall furnish to each other
such necessary information and reasonable assistance as Premier or Ophthalmic
may reasonably request in connection with the foregoing. In addition, if at any
time prior to the Expiration Date any event or circumstance relating to either
Ophthalmic or Premier or any of their respective subsidiaries, should be
discovered by Ophthalmic or Premier, as the case may be, and which should be set
forth in an amendment to the Offer Documents or Schedule 14D-9, the discovering
party will promptly inform the other party of such event or circumstance.
(b) Without limiting Section 6.4(a), Premier and Ophthalmic shall each
(i) take any and all steps necessary to avoid or eliminate each and every
impediment under any antitrust, competition, or trade regulation law that may be
asserted by any Governmental Entity with respect to the Offer so as to enable
consummation thereof to occur as soon as reasonably possible, including without
limitation, proposing, negotiating, committing to and effecting, by consent
decree, hold separate order, or otherwise, the sale, divestiture or disposition
of such assets or businesses of Premier or Ophthalmic as may be required in
order to avoid the entry of, or to effect the dissolution of, any injunction,
temporary restraining order or other order in any suit or proceeding, which
would
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otherwise have the effect of preventing or delaying consummation of the Offer or
the Proposed Merger, and (ii) use its reasonable best efforts to avoid the entry
of, or to have vacated or terminated, any decree, order, or judgment that would
restrain, prevent or delay the consummation of the Offer, including without
limitation defending through litigation on the merits any claim asserted in any
court by any party. Each party hereto shall promptly notify the other parties of
any written communication to that party from any Governmental Entity and permit
the other parties to review in advance any proposed communication to any
Governmental Entity. Premier and Ophthalmic shall not (and shall cause their
respective affiliates and representatives not to) agree to participate in any
meeting with any Governmental Entity in respect of any filings, investigation or
other inquiry unless it consults with the other party in advance and, to the
extent permitted by such Governmental Entity, gives the other party the
opportunity to attend and participate thereat. Each of the parties hereto will
coordinate and cooperate fully with the other parties hereto in exchanging such
information and providing such assistance as such other parties may reasonably
request in connection with the foregoing.
SECTION 6.5 PUBLIC ANNOUNCEMENTS. From the date of this Agreement, until the
Expiration Date or the termination of this Agreement, each of Ophthalmic and
Premier agree to consult promptly with each other prior to issuing any press
release or otherwise making any public statement with respect to the Offer, the
Proposed Merger and the other transactions contemplated hereby, agree to provide
to the other party for review a copy of any such press release or statement, and
shall not issue any such press release or make any such public statement prior
to such consultation and review, unless required by applicable law or any
listing agreement with a securities exchange.
SECTION 6.6 EMPLOYEE BENEFIT ARRANGEMENTS; WARRANTS. (a) Each of Ophthalmic and
Premier agrees that it will take all corporate action to amend or adopt new
stock options and/or stock incentive plans and warrants to provide for the
issuance of Premier Common Stock rather than Common Stock issuable upon exercise
of such plan or plans or warrants, effective as of the Expiration Date as set
forth below.
(i) VESTED OPTIONS. The value of outstanding, unexercised,
vested Ophthalmic Options of a holder (the "Vested Options") shall be
equal to the product of (x) $2.18 multiplied by (y) the number of
shares of Common Stock issuable upon exercise thereof (the "Aggregate
Ophthalmic Option Value"). On the Expiration Date, each Vested Option
of a holder shall be exchanged for Premier options (the "Premier
Options") issuable for that number of shares of Premier Common Stock
(the "Vested Exchange Rate") equal to (xx) the Aggregate Ophthalmic
Option Value of a holder divided by (yy) the Premier Average Price.
The exercise price per share of Premier Common Stock issuable to a
holder upon exercise of the Premier Options (the "Vested Exercise
Price") shall be equal to (xxx) the aggregate exercise price for all
Vested Options exchanged by such holder divided by (yyy) the number of
shares of Premier Common Stock issuable to such holder upon exercise
of the Premier Options exchanged therefor. Ophthalmic Options granted
under Ophthalmic's 1997 Stock Option Plan shall vest on the Expiration
Date and shall be Vested Options.
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(ii) UNVESTED OPTIONS. Unless earlier terminated, each
outstanding, unexercised, invested Ophthalmic Option shall vest (a
"Subsequently Vesting Option") on the earlier of (aa) its scheduled
vesting date and (bb) with respect to any Ophthalmic employee who is
employed by Ophthalmic, Premier or any of their affiliates six (6)
months after the Expiration Date, six (6) months following the
Expiration Date (the "Measurement Date"). On the Measurement Date, the
Subsequently Vesting Option of a holder shall be exchanged for Premier
Options issuable for that number of shares of Premier Common Stock
equal to (xx) the Aggregate Ophthalmic Option Value of a holder
attributable to such Subsequently Vesting Options divided. by (yy) the
Premier Average Price calculated using the Measurement Date in lieu of
the Expiration Date. The exercise price per share of Premier Common
Stock issuable to a holder upon exercise of such Subsequently Vesting
Options shall be equal to (xxx) the aggregate exercise price for all
Subsequently Vesting Options of such holder that vested on such
Measurement Date divided by (yyy) the number of shares of Premier
Common Stock issuable upon exercise of the Premier Options exchanged
therefor. Ophthalmic Options not granted under Ophthalmic's 1997 Stock
Option Plan shall vest as provided in this Section 6.1 (a)(ii).
(iii) EXCHANGE AND PRICING ELECTION. Notwithstanding anything to
the contrary contained in Section 6.6(a)(ii), each holder of
Ophthalmic Options not granted under Ophthalmic's 1997 Stock Option
Plan may elect, by providing written notice to Ophthalmic prior to the
Expiration Date, to have such holder's Ophthalmic Options exchanged,
when vested as provided in Section 6.6(a)(ii), for Premier Options at
the Vested Exchange Rate for an exercise price equal to the Vested
Exercise Price.
(iv) TERMINATION OF EMPLOYMENT. For a period of six (6) months
following the Expiration Date, Ophthalmic Options issued to officers
or employees of Ophthalmic, which have not earlier vested as provided
herein, shall vest on the date of termination of such officer or
employee "without cause" by Ophthalmic or Premier, as determined in
the reasonable discretion of Ophthalmic, in which case such Ophthalmic
Options shall be exchanged in accordance with Section 6.6(a)(ii) (with
the date of such termination being the Measurement Date), or Section
6.6(a)(i) if a valid election is made by such officer or employee
pursuant to Section 6.6(a)(iii).
(b) Following the Expiration Date, Premier shall provide or cause its
Subsidiaries to provide generally to officers and employees of Ophthalmic
employee benefits, including without limitation, pension benefits, health and
welfare benefits, life insurance and vacation, and severance arrangements, on
terms and conditions which when taken as a whole are no less favorable than
those currently provided by Premier and its Subsidiaries to their similarly
situated officers and employees. Premier does not currently provide its officers
and employees with pension benefits or severance plans. For purposes of
participation and vesting under any employee benefit plan of Ophthalmic and its
Subsidiaries, the service of the employees of Ophthalmic prior to the Expiration
Date shall be treated as service with the Premier or its subsidiaries
participating in such employee benefit plans.
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Premier shall, and shall cause its Subsidiaries to, honor in accordance with
their terms, all Employment Contracts, and all provisions for vested benefits or
other vested amounts earned or accrued through the Expiration Date under the
Plans.
(c) For a period of ninety (90) days following the Expiration Date,
Premier shall provide or cause its Subsidiaries to provide generally to officers
and employees of Ophthalmic severance benefits equal to one week's pay for each
full year of service to Ophthalmic to each such officer or employee that is
terminated without cause by Premier or its Subsidiary. The phrase "without
cause" shall not apply to those officers and employees that are terminated
because they do not elect to work for Premier or its Subsidiaries.
SECTION 6.7 NOTIFICATION OF CERTAIN MATTERS. Premier and Ophthalmic shall
promptly notify each other orally and in writing of (i) the occurrence or
non-occurence of any fact or event which would be reasonably likely (A) to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Expiration Date or (B) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied in any material respect and (ii)
any failure of Ophthalmic or Premier, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of Ophthalmic and Premier shall give prompt notice
to the other of any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement.
SECTION 6.8 RIGHTS AGREEMENT. Ophthalmic covenants and agrees that, unless the
Board of Directors of Ophthalmic determines in good faith by a majority vote
that taking such action is necessary in the exercise of its fiduciary
obligations under applicable law, it will not (i) redeem the Rights, (ii) amend
the Rights Agreement except as provided in Section 4.16, or (iii) take any
action which would allow any Person (as defined in the Rights Agreement) other
than Premier to acquire beneficial ownership of 20% or more of the Common Stock
without causing a Distribution Date (as such term is defined in the Rights
Agreement) to occur.
SECTION 6.9 STATE TAKEOVER LAWS. Ophthalmic covenants and agrees that, unless
the Board of Directors of Ophthalmic determines in good faith by a majority vote
that taking such action is proscribed in the exercise of its fiduciary
obligations under applicable law, it shall, upon the request of Premier, take
all reasonable steps to assist in any challenge by Premier to the validity or
applicability to the transactions contemplated by this Agreement, including the
Offer and the Proposed Merger, of any state takeover law.
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SECTION 6.10 NO SOLICITATION.
(a) Ophthalmic represents and warrants to, and covenants and agrees
with, Premier that Ophthalmic does not have any agreement, arrangement or
understanding with any potential third party acquiror that, directly or
indirectly, would be violated, or require any exchanges, by reason of the
execution, delivery and/or consummation of this Agreement. Ophthalmic shall, and
it shall cause its officers, directors, employees, investment bankers, attorneys
and other agents and representatives to, immediately cease any existing
discussions or negotiations with any person other than Premier (a "Third Party")
heretofore conducted with respect to any Acquisition Transaction (as hereinafter
defined). Ophthalmic shall not, and it shall prohibit its officers, directors,
employees, investment bankers, attorneys and other agents and representatives
from taking any action to, directly or indirectly, (w) solicit, initiate,
continue, facilitate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries, proposals or offers from any Third Party
with respect to any acquisition or purchase of a material portion of the assets
(other than in the ordinary course of business) or business of, or any
significant equity interest in (including by way of a tender offer), or any
merger, consolidation or business combination with, or any recapitalization or
restructuring, or any similar transaction involving, Ophthalmic (the foregoing
being referred to collectively as an "Acquisition Transaction"), or (x)
negotiate, explore or otherwise communicate in any way with any Third Party with
respect to any Acquisition Transaction, (y) enter into, approve or recommend any
agreement, arrangement or understanding requiring Ophthalmic to abandon,
terminate or fail to recommend that its stockholders accept the Offer or any
other transaction contemplated hereby, or (z) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Premier, the approval or
recommendation by the Ophthalmic Board of the Offer, or this Agreement;
provided, however, that nothing herein shall prevent the Ophthalmic Board from
taking, and disclosing to Ophthalmic's shareholders, a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with respect to any
tender offer. Ophthalmic will promptly notify Premier of the receipt of any
proposal relating to an Acquisition Transaction. Notwithstanding anything to the
contrary in the foregoing, Ophthalmic may, in response to an unsolicited written
proposal with respect to an Acquisition Transaction involving an Acquisition
Transaction from a Third Party (i) furnish or disclose non-public information to
such Third Party and (ii) negotiate, explore or otherwise communicate with such
Third Party, in each case only if (a) after being advised (x) by its outside
counsel with respect to its fiduciary obligations and (y) with respect to the
financial terms of any such proposed Acquisition Transaction, the Board of
Directors of Ophthalmic determines in good faith by a majority vote that taking
such action is necessary in the exercise of its fiduciary obligations under
applicable law (the proposal with respect to an Acquisition Transaction meeting
the requirements of this clause (a), a "Superior Proposal") and (b) prior to
furnishing or disclosing any non-public information to, or entering into
discussions or negotiations with, such Third Party, Ophthalmic receives from
such Third Party an executed confidentiality agreement (which Ophthalmic is
hereby expressly permitted to negotiate with such party) with terms no less
favorable in the aggregate to Ophthalmic than those contained in the Ophthalmic
Confidentiality Agreement, but which confidentiality agreement shall not provide
for any exclusive right to negotiate with Ophthalmic or any exchanges by
Ophthalmic and need not contain any
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"standstill" or similar provisions. In addition, the Ophthalmic Board may
approve or recommend (and, in connection therewith withdraw or modify its
approval or recommendation of the Offer or this Agreement) a Superior Proposal
and may terminate this Agreement solely to enter into a definitive agreement
with respect to a Superior Proposal provided, however, that Ophthalmic shall
not, and shall cause its affiliates not to, enter into a definitive agreement
with respect to a Superior Proposal unless Ophthalmic concurrently terminates
this Agreement in accordance with the terms hereof and pays any Termination Fee
required under Section 8.3(b).
(b) Ophthalmic shall promptly (but in any event within one business day
of Ophthalmic becoming aware of same) advise Premier of the receipt by
Ophthalmic, any of its subsidiaries or any of Ophthalmic's bankers, attorneys or
other agents or representatives of any written inquiries or proposals relating
to an Acquisition Transaction and any actions taken pursuant to Section 6.9(a),
and shall promptly (but in any event within one business day of Ophthalmic
becoming aware of same) provide Premier with a copy of any such written inquiry
or proposal. Ophthalmic shall keep Premier reasonably informed of the status and
content of and material developments (including the calling of meetings of the
Ophthalmic Board to take action with respect to such Acquisition Transaction)
with respect to any discussions regarding any Acquisition Transaction with a
Third Party. Ophthalmic agrees that it will not enter into any agreement with
respect to a Superior Proposal unless and until Premier has been given notice of
the identity of the parties making such Superior Proposal, the material terms
thereof and material developments referred to in the preceding sentence at least
two business days prior to the entering into such agreement.
SECTION 6.11 INDEMNIFICATION.
(a) Premier shall, and in the event of a Proposed Merger, shall cause
the surviving corporation of the Proposed Merger (and its successors and
assigns) to, indemnify, defend, and hold harmless the present directors,
officers, employees, and agents of Ophthalmic (each, an "Indemnified Party')
after the Expiration Date against all costs, fees, or expenses (including
reasonable attorneys' fees) judgments, fines, penalties, losses, damages,
liabilities, and amounts paid in settlement in connection with any claim,
action, suit, proceeding, or investigation, whether civil, administrative, or
investigative, arising out of actions or omissions occurring at or prior to the
Expiration Date (including the transactions contemplated by this Agreement),
unless such actions or omissions constitute fraud or willful misconduct, to the
full extent permitted under California law and by Ophthalmic's Restated Articles
of Incorporation and By-Laws as in the effect as of the date hereof, including
any provisions relating to advances of expenses incurred in the defense of any
action, suit, or proceeding for a period of five years after the date hereof. If
indemnification is sought hereunder, the Indemnified Party shall notify Premier
of the commencement of the litigation, proceeding, or other action, or any overt
threat with respect to any of the foregoing; provided, however, that the failure
to provide such notification shall not relieve Premier from its indemnification
obligations hereunder or otherwise to such Indemnified Party unless and only to
the extent that such failure shall materially and adversely affect the ability
of Premier to defend such litigation, proceeding, or other action. Following
such notification, Premier may elect to assume the defense of such litigation,
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proceeding, or other action (and the costs related thereto) and, upon such
defense of such election, Premier shall not be liable for any legal costs
subsequently incurred by such Indemnified Party (other than the costs of
investigation or the production of documents or witnesses) unless (i) Premier
fails to provide legal counsel reasonably satisfactory to such Indemnified Party
in a timely mariner, or (ii) such Indemnified Party shall have reasonably
concluded that (A) the representation of such Indemnified Party by legal counsel
selected by Premier would be inappropriate due to actual or potential conflicts
of interest or (B) there may be a legal defense available to such Indemnified
Party that are different from or additional to those available to the Premier or
any other Indemnified Party represented by such legal counsel. Nothing set forth
herein shall preclude any Indemnified Party from retaining its own counsel at
its own expense. Premier shall, and shall cause the surviving corporation of any
Proposed Merger and all other relevant Premier Subsidiaries to apply such rights
of indemnification in good faith and to the fullest extent permitted by
applicable law.
(b) Incident to any information furnished or disclosed by Premier or
any Premier Subsidiary in connection with the Offer Documents and the Schedule
14D-9, and subject to applicable law, Premier shall indemnify, defend, and hold
harmless Indemnified Parties against all costs, fees, or expenses (including
reasonable attorneys' fees), judgments, fines, penalties, losses, damages,
liabilities, and amounts paid in settlement in connection with any claim,
action, suit, proceeding, or investigation, whether civil, administrative, or
investigative, arising out of or under the securities laws or any state blue sky
or securities laws based in whole or in part on (i) any untrue statement or
alleged untrue statement of a material fact contained in such documents
including any amendment or supplement to such document, (ii) any omission or
alleged omission to state in such documents a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any violation of Premier or any Premier Subsidiary of the securities laws
or any state blue sky or securities laws in connection with such documents;
provided, however, that neither Premier or any Premier Subsidiary will be liable
in any such case to the extent that any such claim, action, suit, or
investigation is based on any untrue statement or alleged untrue statement or
omission or alleged omission made in such Offer Document or Schedule 14D-9 or
any amendment or supplement thereto in reliance upon and in conformity with
information furnished in writing to Premier or any Premier Subsidiary by
Ophthalmic or any Indemnified Party specifically for use therein.
(c) If Premier or the surviving corporation in any Proposed Merger or
any of its successors or assigns shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any person, corporation or entity, then in each case,
proper provision shall be made so that the successors and assigns of Premier
shall assume the obligations set forth in this Section 6.11.
(d) For five years from the Expiration Date, Premier shall use its best
efforts to maintain in effect, if available, directors' and officers' insurance
liability in an amount equal to $2,000,000,
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covering those persons who are currently covered by the directors' and officers'
liability insurance policy maintained by Ophthalmic.
(e) The provisions of this Section 6.11 are intended to be for the
benefit of and shall be enforceable by, each Indemnified Party, his or her heirs
and representatives, and shall survive the consummation of the Offer and be
binding on all successors and assigns of Premier and the surviving corporation
of any Proposed Merger.
SECTION 6.12 CONDITIONS. Prior to consummating the exchange pursuant to the
Offer, Premier shall use its best efforts to (a) cause the Premier Common Stock
and the Premier Common Stock issuable upon exercise of the Warrants to be listed
on NASDAQ, (b) cause the Form S-4 to have been declared effective by the
Commission, and (c) deposit the Offer Consideration with the Exchange Agent.
ARTICLE VII
CONDITIONS TO CONSUMMATE THE TRANSACTIONS HEREUNDER
SECTION 7.1 CONDITIONS. The respective obligations of each of Premier and
Ophthalmic to consummate the transactions contemplated hereby are subject to the
satisfaction, at or before the time each action is to be taken, of the condition
that no statute, rule, regulation, executive order, decree or injunction shall
have been enacted, entered, promulgated or enforced by any court of competent
jurisdiction or other Governmental Entity which prohibits the consummation of
the Offer or any other transactions contemplated hereunder provided, however,
that Ophthalmic and Premier shall use their reasonable best efforts to have any
such order, decree, or injunction vacated.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF PREMIER. In the event the Offer shall
not have been terminated, the obligations of Premier to make the Offer and to
consummate the exchange pursuant to the Offer shall be further subject to the
following conditions:
(a) PERFORMANCE OF OBLIGATIONS OF OPHTHALMIC. Ophthalmic shall have
performed the obligations required to be performed by it under Section 4.16.
(b) PRIVATE ACQUISITION. The Private Acquisition shall have been
consummated.
SECTION 7.3 CONDITIONS OF PREMIER TO CLOSE THE OFFER. Prior to consummating the
exchange pursuant to the Offer, Premier shall have (a) caused the Premier Common
Stock, the Premier Common Stock issuable upon exercise of the Warrants and the
Warrants to be listed on NASDAQ, (b) caused the Form S-4 to have been declared
effective by the Commission, and (c) deposited the Offer Consideration with the
Exchange Agent.
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ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 TERMINATION. This Agreement shall be terminated if the Offer shall
not have been consummated by August 21, 1998, if each party has used its best
efforts to consummate the transaction, and may be terminated:
(a) by the mutual written consent of Premier and Ophthalmic, by action
of their respective Boards of Directors;
(b) by Ophthalmic, if Ophthalmic is not in material breach of any of
its representations contained in this Agreement and if (i) Premier fails to
commence the Offer as provided in Section 1.1, or (ii) at any time following the
Expiration Date, as it may be extended pursuant to Section 1.1 (c), Premier
shall not have accepted for exchange and exchanged the Offer Consideration for
all Shares tendered pursuant to the Offer in accordance with the terms hereof
and thereof, or (iii) if Premier should withdraw, abandon, or terminate the
Offer without purchasing all Shares validly tendered pursuant to the Offer;
provided that all conditions to the Offer shall have been satisfied or waived in
accordance with the terms hereof;
(c) by either Premier or Ophthalmic, if any court of competent
jurisdiction in the United States or other United States Governmental Entity has
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Offer and such order, decree, ruling or
other action shall have become final and nonappealable; provided, however, that
the party seeking to terminate this Agreement shall have used its reasonable
best efforts to remove or lift such order, decree, ruling or other action;
(d) by Ophthalmic if, prior to the acceptance for exchange of Common
Stock pursuant to the Offer, (i) there shall have occurred, on the part of
Premier, a material breach of any presentation or warranty, covenant or
agreement contained in this Agreement which is not curable or (ii) Ophthalmic
(A) to the extent permitted by Section 6.10, enters into a definitive agreement
with respect to a Superior Proposal and (B) concurrently pays any Termination
Fee required under Section 8.3(b); or
(e) by Premier, prior to the exchange for Common Stock pursuant to the
Offer, if the Ophthalmic Board shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to Premier its approval or
recommendation of the Offer or, this Agreement shall have approved or
recommended Superior Proposal, or shall have resolved to effect any of the
foregoing.
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SECTION 8.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith become void
and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the provisions in Sections 8.2,
8.3, 9.2, 9.3, 9.5, 9.6, 9.10 and 9.11, and the last sentence in Section 6.3,
which shall survive any such termination. Nothing contained in this Section 8.2
shall relieve any party from liability for any breach of this Agreement.
SECTION 8.3 FEES AND EXPENSES.
(a) Except as otherwise specifically provided herein, all costs and
expenses incurred in connection with the Offer, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(b) In the event that this Agreement is terminated as a result of a
material breach by Ophthalmic, then Ophthalmic shall promptly pay to Premier in
lieu of any other right to damages, a termination fee of $500,000. Thereafter,
Ophthalmic shall promptly pay to Premier an additional $250,000 (collectively,
the "Termination Fee") if Ophthalmic enters into a definitive agreement with
respect to a Superior Proposal within six (6) months of the date of termination.
For purposes of this Section 8.3, a "material breach by Ophthalmic" shall
include any action by Ophthalmic, its officers, directors, employees, investment
bankers, attorneys and other agents and representatives (i) to redeem the
Rights, (ii) to amend, terminate or waive rights under the Rights Agreement
(other than the Rights Agreement Amendment), (iii) to solicit, initiate,
continue, facilitate or encourage (including by way of furnishing or disclosing
non-public information) any Acquisition Transaction, (iv) to negotiate, explore
or otherwise communicate in any way with any Third Party with respect to any
Acquisition Transaction, (v) enter into, approve or recommend any agreement,
arrangement or understanding requiring Ophthalmic to abandon, terminate or fail
to recommend that its stockholders accept the Offer or any other transaction
contemplated hereby, or (vi) withdraw or modify (including by Amendment of the
Schedule 14D-9), or propose publicly to withdraw or modify, in a manner adverse
to Premier, the approval or recommendation by the Ophthalmic Board of the Offer
or this Agreement.
(c) In the event that this Agreement is terminated as a result of a
material breach by Premier, then Premier shall promptly pay to Ophthalmic in
lieu of any other right to damages, a termination fee of $500,000. For purposes
of this Section 8.3, a "material breach by Premier" shall include any action by
Premier to withdraw the Offer unless (i) following good faith efforts by
Premier, all of the conditions set forth in Annex I have not been satisfied, or
(ii) a material breach by Ophthalmic has occurred.
SECTION 8.4 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of all the parties.
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SECTION 8.5 EXTENSION: WAIVER. Subject to Section 1.3(c), at any time Premier
and Ophthalmic may (i) extend the time for the performance of any of the
obligations or other acts of the other, (ii) waive any inaccuracies in the
representations and warranties contained herein of the other or in any document,
certificate or writing delivered pursuant hereto by the other, or (iii) waive
compliance by the other with any of the agreements or conditions. Any agreement
on the part of any party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made in this Agreement shall not survive beyond the Expiration
Date. Notwithstanding the foregoing, the agreements set forth in Sections 6.5,
8.3(a), 9.1 and 9.2 shall, and if the Offer closes, Sections 5.4, 5.5 and 6.6,
shall, survive indefinitely. If the Offer closes, Section 6.11 shall survive
until the expiration of the applicable statute of limitations period. The
agreements set forth in Section 9.3 shall survive as provided therein.
SECTION 9.2 GENERAL RELEASE OF OPHTHALMIC EXECUTIVE OFFICERS AND DIRECTORS.
(a) Premier and Ophthalmic hereby release the present officers and
directors of Ophthalmic (each, a "Releasee"), of and from all actions, causes of
action, suits, demands and all other claims whatsoever which Premier and/or
Ophthalmic ever had, now has, or which Premier or Ophthalmic hereafter can,
shall or may have against any Releasee in connection with such Releasee's role
as officer or director of Ophthalmic, arising out of actions or omissions
occurring on or prior to the date of this Agreement, unless such actions or
omissions constitute self-dealing, fraud or willful misconduct.
(b) Premier and Ophthalmic hereby waive any rights they may have under
Section 1542 of the California Civil Code, which reads:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
SECTION 9.3 ENTIRE AGREEMENT: ASSIGNMENT.
(a) This Agreement (including the documents and the instruments
referred to herein) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof, except for the
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Ophthalmic Confidentiality Agreement, the Premier Confidentiality Agreement and
provisions of that certain standstill agreement entered into by and between
Premier and Ophthalmic in February 1998 (the "Standstill Agreement"), which
continue in effect. The Termination Date (as provided in the Standstill
Agreement) is hereby extended to that date which ends two (2) months following
the earlier of (i) the termination of this Agreement and (ii) the Expiration
Date if Premier shall not have accepted for exchange and exchanged the Offer
Consideration for all Shares tendered pursuant to the Offer in accordance with
terms hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party (except that Premier may assign its rights, interest and obligations to
any affiliate or direct or indirect subsidiary of Premier without the consent of
Ophthalmic provided that no such assignment shall relieve Premier of any
liability for any breach by such assignee). Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION 9.4 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
SECTION 9.5 NOTICES. All notices, requests, clause, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or telecopier to the
respective parties as follows:
If to Premier:
Premier Laser Systems, Inc.
▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Ophthalmic:
Ophthalmic Imaging Systems
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:President
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Attorneys at Law
One Harbour Place
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:▇▇▇▇▇▇▇ ▇. Demnon, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
SECTION 9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
SECTION 9.7 DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
SECTION 9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 9.9 PARTIES IN INTEREST. This Agreement, except for Sections 6.6, 6.11
and 9.2, shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to confer
upon any other person any rights or remedies of any nature whatsoever under or
by reason of this Agreement.
SECTION 9.lO CERTAIN DEFINITIONS. As used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean any
other person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes
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of this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that person, whether
through the ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "Subsidiary" or "subsidiaries" means, with respect to
Premier or any other person, any corporation, partnership, joint venture or
other legal entity of which Premier, or such other person, as the case may be
(either alone or through or together with any other subsidiary), owns, directly
or indirectly, stock or other equity interests the holders of which are
generally entitled to more than 50% of the vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
SECTION 9.11 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity, except for termination fees and
expenses.
SECTION 9.12 FIDUCIARY DUTY. Notwithstanding anything to the contrary in this
Agreement, no provision of this Agreement shall be construed to prevent the
exercise by any director of Ophthalmic (or the actions of Ophthalmic thereon) of
his or her fiduciary duty as contemplated to be exercised under Section 6.10 of
this Agreement.
SECTION 9.13 OBLIGATION OF PREMIER. Whenever this Agreement requires Premier to
take any action, such requirement shall be deemed to include an undertaking by
Premier to cause the Premier Subsidiaries to take such action.
[Signature page follows]
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[SIGNATURE PAGE - STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its respective officer thereunto duly authorized, all as of the
day and year first above written.
PREMIER LASER SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D.,
Chief Executive Officer
OPHTHALMIC IMAGING SYSTEMS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CEO
ANNEX I
CONDITIONS TO THE OFFER. Notwithstanding any other provisions of the Offer,
Premier shall not be required to accept for exchange or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act, exchange for any tendered Shares and may
terminate or amend the Offer, if (i) the Rights have not been redeemed or
invalidated or are otherwise inapplicable to the Offer, (ii) Premier does not
receive all applicable governmental and Nasdaq authorizations, consents, orders
and appraisals, including the continued effectiveness of its Form S-4 filed in
connection with the transactions contemplated by the Agreement, (iii) at any
prior to the time of acceptance for exchange or exchange for any Shares, any of
the following events shall occur:
(a) there shall have been instituted or be pending any action or
proceeding before any court or governmental, administrative or
regulatory authority or agency, domestic or foreign (each, a
"Governmental Entity"), or by any other person, domestic or foreign,
before any court or Governmental Entity, (i) challenging or seeking to,
or which is reasonably likely to, make illegal, materially delay or
otherwise directly or indirectly restrain or prohibit or seeking to, or
which is reasonably likely to, impose voting, procedural, price or
other requirements, in addition to those required by federal securities
laws and the CGCL (each as in effect on the date of the
Prospectus/Offer to Exchange is filed with the SEC in connection with
the Offer), in connection with the making of the Offer, the acceptance
for exchange of, or exchange for, any Shares by Premier or any other
affiliate of Premier or other business combination with Ophthalmic, or
seeking to obtain material damages in connection therewith; (ii)
seeking to prohibit or limit materially the ownership or operation by
Ophthalmic, Premier or any of their subsidiaries of all or any material
portion of the business or assets of Ophthalmic, Premier or any of
their subsidiaries, or to compel Ophthalmic, Premier or any of their
subsidiaries to dispose of or hold separate all or any material portion
of the business or assets of Ophthalmic, Premier or any of their
subsidiaries; (iii) seeking to impose or confirm limitations on the
ability of Premier or any other affiliate of Premier to exercise
effectively full rights of ownership of any Shares (including the
Rights associated with Shares), including, without limitation, the
right to vote any Shares acquired by Premier pursuant to the Offer or
otherwise on all matters properly presented to Ophthalmic's
shareholders; (iv) seeking to require divestiture by Premier or any
other affiliate of Premier of any Shares; (v) seeking any material
diminution in the benefits expected to be derived by Premier, or any
other affiliate of Premier as a result of the transactions contemplated
by the Offer or any other similar business combination with Ophthalmic;
(vi) otherwise directly or indirectly relating to the Offer or which
otherwise, in the reasonable judgment of Premier and Ophthalmic, might
materially adversely affect Ophthalmic or Premier, or any other
affiliate of Premier; or (vii) which otherwise, in the reasonable
judgment of Premier and Ophthalmic, is reasonably likely to materially
adversely affect the business, operations (including, without
limitation, results of operations), properties (including, without
limitation, intangible
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properties), condition (financial or otherwise), assets or liabilities
(including, without limitation, contingent liabilities) or prospects of
either Ophthalmic or Premier;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Premier, Ophthalmic or any subsidiary or affiliate of
Premier or (ii) the Offer or other business combination by Premier or
any affiliate of Premier with Ophthalmic, by any legislative body,
court, government or governmental, administrative or regulatory
authority or agency, domestic or foreign, which, in the sole judgment
of Premier, is reasonably likely to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (vii) of
paragraph (a) above;
(c) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on Nasdaq, the New York
Stock Exchange (NYSE) or any other securities exchange, (ii) any
decline, measured from the close of business on February 25, 1998, in
the Standard & Poor's 500 Index by an amount in excess of 20%, (iii)
any material adverse change in United States currency exchange rates or
a suspension of, or limitation on, currency exchange markets, (iv) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (v) any limitation (whether or
not mandatory) by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, on, or other event
that, in the sole judgment of Premier, might affect the extension of
credit by banks or other lending institutions, (vi) a commencement of a
war or armed hostilities or other national or international calamity
directly or indirectly involving the United States or (vii) in the case
of any of the foregoing existing on February 25, 1998, a material
acceleration or worsening thereof;
(d) Ophthalmic shall have, directly or indirectly, (i) split, combined
or otherwise changed, or authorized or proposed a split, combination or
other change of, the Shares or its capitalization, (ii) issued or
sold, or authorized or proposed the issuance, distribution or sale of,
additional Shares (other than the issuance of Shares under options and
warrants outstanding prior to the date of this Offer to Exchange, in
accordance with the terms of such options as such terms have been
publicly disclosed prior to the date of this Offer to Exchange), shares
of any other class of capital stock, other voting securities or any
securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, (iii)
declared or paid, or proposed to declare or pay, any dividend or other
distribution, whether payable in cash, securities or other property, on
or with respect to any shares of capital stock of Ophthalmic, (iv)
altered or proposed to alter any material term of any outstanding
security (including the Rights) other than to amend the Rights
Agreement to make the Rights inapplicable to Premier, (v) authorized,
recommended, proposed or entered into an agreement, agreement in
principle or arrangement or understanding with respect to any merger,
consolidation, liquidation, dissolution, business combination,
acquisition of assets, disposition of assets, release or relinquishment
of any material
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contractual or other right of Ophthalmic or any comparable event not in
the ordinary course of business, (vi) authorized, recommended, proposed
or entered into, or announced its intention to authorize, recommend,
propose or enter into, any agreement, arrangement or understanding with
any person or group that in the sole judgment of Premier could
adversely affect either the value of Ophthalmic or any of its
subsidiaries, joint ventures or partnerships or the value of the Shares
to Premier or any affiliate of Premier, (vii) entered into or amended
any employment, change in control, severance, executive compensation or
similar agreement, arrangement or plan with or for the benefit of any
of its employees, consultants or directors, or made grants or awards
thereunder, other than in the ordinary course of business or entered
into any agreements, arrangements or plans so as to provide for
increased or accelerated benefits to any such persons, (viii) except as
may be required by law, taken any action to terminate or amend any
employee benefit plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended) of Ophthalmic or
any of its subsidiaries, or Premier shall have become aware of any such
action that was not disclosed in publicly available filings prior to
the date of this Offer to Exchange, or (ix) except as contemplated by
this Agreement amended or authorized or proposed any amendment to
Ophthalmic's Restated Articles of Incorporation or Bylaws, or Premier
shall have become aware that Ophthalmic shall have proposed or adopted
any such amendment that was not disclosed in publicly available filings
prior to the date of the Prospectus/Offer to Exchange;
(e) any person or group shall have entered into a definitive agreement
or an agreement in principle or made a proposal with respect to a
tender offer or exchange offer or a merger, consolidation or other
business combination with Ophthalmic;
(f) any approval, permit, authorization or consent of any governmental
authority or agency needed for the Offer shall not have been obtained
on terms satisfactory to Premier or Premier shall have been notified by
Ophthalmic that such terms are not satisfactory to Ophthalmic;
(g) the Agreement shall have been terminated in accordance with its
terms; or
(h) Ophthalmic's Board of Directors shall have publicly withdrawn or
modified in any manner adverse to Premier its recommendation that
shareholders accept the Offer.
The foregoing conditions (including those set forth in clauses (i) and (ii) of
the initial paragraph) are for the benefit of Premier and may be asserted by
Premier regardless of the circumstances giving rise to any such conditions and,
consent may be waived by Premier, in whole or in part, at any time and from time
to time, in their reasonable discretion, in each case, subject to the terms of
the Agreement. The failure by Premier at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
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The capitalized terms used in this Annex I shall have the meanings set forth in
the Agreement to which it is annexed.
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