Exhibit 10.25
TERMINATION AND SETTLEMENT AGREEMENT
THIS TERMINATION AND SETTLEMENT AGREEMENT (this "Agreement") is made,
entered into and effective only as of the Effective Date (hereinafter defined),
by and among Refocus Group, Inc., a Delaware corporation, whose business and
mailing address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (hereinafter, "Refocus Group"), Refocus Ocular, Inc. (formerly known as
Presby Corp), a Delaware corporation and wholly-owned subsidiary of Refocus
Group, whose business and mailing address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter, "Refocus Ocular," and together with
Refocus Group, collectively, "Refocus"), and Verus Support Services Inc., a New
York corporation, whose business and mailing address is ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter, "Verus").
WITNESSETH:
WHEREAS, Refocus Group and Verus entered into that certain Contingent
Subscription Agreement, dated as of March 6, 2003, as amended by those certain
Letter Agreements dated June 11, 2003, August 28, 2003, January 6, 2004 and June
30, 2004 (collectively, the "Verus Contingent Subscription"), which provides
that Verus or its affiliates will subscribe for and purchase, or caused to be
subscribed for and purchased, a number of shares of Refocus Group common stock
and warrants to purchase Refocus Group common stock upon certain conditions;
WHEREAS, Refocus Ocular and Verus entered into that certain Letter
Agreement, dated as of March 6, 2003 (the "Advisory Agreement," and together
with the Verus Contingent Subscription, collectively, the "Verus Agreements"),
pursuant to which Verus and its affiliates agreed to be appointed as the
non-exclusive advisor for, and on behalf of, Refocus Ocular (as successor to
Presby Corp);
WHEREAS, despite the best efforts of the parties hereto, the results and
benefits anticipated from the Verus Agreements have not been realized and are
not expected to be realized;
WHEREAS, Refocus and Verus desire to provide for the orderly cancellation
and termination of each of the Verus Agreements; and
WHEREAS, concurrently with the execution of this Agreement, Refocus Group
and Verus International Group Ltd., a Cayman Islands corporation ("Verus
International"), have entered into that certain Loan Agreement (the "Loan
Agreement"), pursuant to which Verus International or its designees will make a
loan to Refocus Group. The execution and delivery of each of the Loan Agreement
and this Agreement is a condition to the effectiveness of the other.
NOW, THEREFORE, upon, and as consideration for, the execution of this
Agreement by the parties and the mutual covenants, promises and agreements
contained herein, and subject thereto, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. CANCELLATION OF VERUS AGREEMENTS. Each and every one of the Verus
Agreements is hereby cancelled, terminated and rendered null and void, effective
immediately only upon the Effective Date. The Verus Agreements include any and
all amendments and supplements to, and appendices, exhibits and schedules
attached to and/or included by reference in, any one or more of the Verus
Agreements. Notwithstanding the cancellation and termination of the Verus
Agreements and anything herein to the contrary notwithstanding, the provisions
1
of the section titled "Confidentiality and Proprietary Information" contained in
the Advisory Agreement shall survive and shall continue in full force and effect
following the execution and delivery of this Agreement. Notwithstanding anything
to the contrary herein, Refocus shall not be obligated to pay to Verus any
further service or other fees or charges previously accrued or hereafter
accruing under the Advisory Agreement at any time. The parties also hereby waive
any, and agree that there shall be no further, accounting or "truing up" of
accounts as provided in the Verus Agreements, and that each party hereby agrees
that Refocus owes no amounts to Verus and vice versa under or pursuant to the
Verus Agreements. Without limiting the generality of the foregoing, the parties
hereby waive: (i) all rights to payments evidenced by all outstanding and unpaid
invoices, whether generated by Refocus or Verus in connection with the Verus
Agreements; (ii) all rights of Verus to payments under Advisory Agreement; and
(iii) any and all rights of Refocus to payments of unpaid purchase price due by
Verus under the Verus Contingent Subscription. For purposes of this Agreement,
"Effective Date" shall mean the date on which, and if and only if, Refocus Group
consummates a financing aggregating at least $500,000 to Refocus Group, of which
Verus International or its designees fund, or cause to be funded, an aggregate
of $250,000 to Refocus Group, as contemplated in that certain Confidential
Private Offering Memorandum of Refocus Group, dated as of September 21, 2004.
2. BOARD REPRESENTATION. If, and only if, a financing that is in the form
of equity securities of Refocus Group is completed by Verus International, or
designees or agents introduced to Refocus Group by Verus International, on or
prior to December 31, 2004, and such financing results in gross proceeds to
Refocus Group in an aggregate amount of at least $2,000,000, excluding the
outstanding principal balance and interest due under the notes issued pursuant
to the Loan Agreement on the date of consummation of such financing, then Verus
International shall be entitled to designate one nominee to be elected or
appointed to the board of directors of Refocus Group; provided, however, such
nominee shall be reasonably acceptable to the majority of the members of the
board of directors of Refocus Group (as to whom, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is deemed to
be acceptable). Upon such designation, Refocus Group shall take, or cause to be
taken, all action within its power to cause such nominee to be elected or
appointed to the board of directors of Refocus Group, including recommending to
stockholders of Refocus Group that they vote for the election of such nominee to
the board of directors of Refocus Group. Notwithstanding anything in this
Agreement to the contrary, in no event shall a nominee designated by Verus
International, if such designation is allowed under the terms of this Agreement,
be entitled to serve as a director of Refocus Group after December 31, 2006.
Verus International hereby agrees that, as a condition to the nomination of any
person designated by Verus International under this paragraph 2, Verus
International shall cause such nominee to execute an acknowledgment and
resignation letter pursuant to which the nominee acknowledges the terms of this
paragraph and tenders his resignation from the Board of Directors effective
December 31, 2006. Refocus Group shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless, all of the directors of Refocus
Group, including the nominee designated by Verus International, against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages and liabilities incurred in connection with, and in
amounts paid in settlement of, any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative and
wherever asserted, brought or filed, arising out of or pertaining to any acts or
omissions, or alleged acts or omissions, by the directors of Refocus Group in
their respective capacities.
2
3. MUTUAL RELEASES. The parties hereby release and forever discharge each
other, including their respective officers, directors, principals, shareholders,
general partners, limited partners, attorneys, agents, associates, affiliates,
subsidiaries and employees, and all of their respective heirs, personal
representatives, executors, administrators, successors and assigns, from and
against any and all disputes, demands, claims, liabilities, damages, actions and
causes of action of any kind ("Claims"), which any party has had, now has or may
have, whether known or unknown at the date hereof, whether based on a theory of
tort, contract or any other legal theory, relating to or arising out of the
Verus Agreements and/or parties' efforts to implement those contracts; provided,
however, that this paragraph 3 shall not in any way prejudice, bar or affect the
assertion of any Claims, directly or indirectly, arising out of, relating to or
based upon the Loan Agreement or the transactions contemplated thereby. Each
party represents and warrants to each other that it is the owner of all claims
released herein and that such claims have not previously been assigned or
conveyed, in whole or in part. Each party shall indemnify, defend and hold
harmless the other from and against any and all loss, expense or liability from
claims and actions made by anyone claiming by, through or under such party
arising out of, based upon or relating to any or all of the claims released
hereunder. Each person who is a signatory hereto represents and warrants
personally that such person is authorized to sign this Agreement and bind the
party on whose behalf such person has signed this Agreement.
4. NONDISPARAGEMENT. In return for the mutual agreements of the parties
hereto, each of the parties to this Agreement hereby agrees that, unless
required by subpoena or other legal process, such party will not, directly or
indirectly, do, say, write, authorize or otherwise create or publish anything
that will in any way intentionally disparage the other or any past or present
employee, agent, officer or director or consultant or other business associates
of any party, and no party will make any statements to any person or entity
about the dispute between the parties or about any contentions or allegations
either party had against the other; provided, however, that this paragraph 4
shall not, and shall not be deemed to, prohibit a party from making factually
correct statements reasonably necessary to said party's conduct of business, in
dealing with its employees, clients, customers, business associates, agents,
brokers, officers, directors or attorneys and in order to comply with reporting
obligations under county, state or federal laws, rules and regulations,
including, without limitation, the federal securities laws and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
5. CONFIDENTIALITY. The parties hereby agree not to disclose or reveal or
in any way make known the terms and conditions of this Agreement or the
underlying alleged facts and circumstances and allegations giving rise to this
Agreement to anyone without the other party's prior written consent, except (i)
as required by law or legal process, (ii) as reasonably necessary in order to
comply with reporting obligations under county, state or federal laws, rules and
regulations, including, without limitation, the federal securities laws and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder, (iii) the parties' attorneys, accountants and/or professional
representatives, or (iv) either party's employees, agents, brokers, clients and
customers to the limited extent reasonably necessary to inform them of the
termination of the Verus Agreements. Without prejudice to the rights and
remedies otherwise available to any party hereto, the parties hereto hereby
agree that each party hereto shall be entitled to equitable relief by way of
injunction if any party or any of its representatives breach, or threaten to
breach, any of the provision of this paragraph 5.
6. UNDERSTANDING AND AGREEMENTS. The parties hereby acknowledge, agree and
understand that:
3
(a) NO REPRESENTATION. The parties to this Agreement have each made an
independent investigation of the facts, circumstances and law relative to the
other party's claims and liabilities, as well as their own claims and
liabilities that are the subject matter of this Agreement. Except as set forth
herein, none of the parties to this Agreement, nor anyone acting on behalf of
any party, has made a representation of fact, opinion or promise to any other
party to induce this compromise, and none of the parties are relying on any
statements, representations, opinions or promises made by any person or party
released or their agents, employees, representatives or attorneys.
(b) KNOWLEDGE OF THE PARTIES. Inasmuch as all of the injuries, damages and
losses (collectively, the "Damages"), if any, may not be fully known and hence
may be more numerous or more serious than is now understood or expected, the
parties hereto agree that this Agreement applies to all Damages resulting from
matters that could have been raised by the parties hereto, even though now
unanticipated, unexpected or unknown, as well as all Damages that have already
developed and that are now known and anticipated. The parties make this
compromise with full knowledge of the facts and possibilities of any other
litigation, commenced or that could be commenced, are represented by counsel,
and execute and deliver this Agreement being fully informed as to its terms,
content and effect.
(c) COMPLETE BAR. The full execution of this Agreement is a complete and
final bar to any and all claims, actions, causes of action, claims for relief,
liabilities, costs, expenses, fees, demands, lost profits, and other losses and
damages of whatever name or nature between the parties in any manner arising,
growing out of, connected with or in any manner involving, concerning or
relating to the matters covered by this Agreement, and this Agreement shall
forever and finally compromise, settle and terminate any and all disputes,
claims, including claims for loss, damage, lost profits, costs, expenses and
fees of whatever nature, known or unknown, in any manner arising, growing out
of, connected with or in any manner involving, concerning or relating to the
matters covered by this Agreement, but excluding claims related to duties and
obligations assumed or agreed to under this Agreement.
(d) AUTHORIZATION. Each party hereto hereby represents and warrants to the
other parties hereto that the execution, delivery and performance of this
Agreement, and the performance of the transactions contemplated herein, have
been duly authorized by all necessary actions on the part of such party,
including, without limitation, approval by its respective board of directors.
7. MISCELLANEOUS PROVISIONS.
(a) BINDING EFFECT. This Agreement and the releases contained herein are
intended to be final and binding among each of the parties hereto, and are to be
effective as full and final accord and satisfaction among them as to matters
released herein, and each party hereto expressly relies the finality of this
Agreement as a substantial, material factor inducing that party's execution of
this Agreement. This Agreement is, and shall be, binding upon the parties, their
respective agents, servants, employees, officers, directors, stockholders,
attorneys, insurers, trustees, heirs, legal representatives, predecessors,
successors, assigns, executors, administrators, parents, subsidiaries and
affiliates and shall inure to the benefit of their respective agents, servants,
employees, officers, directors, stockholders, attorneys, insurers, trustees,
heirs, legal representatives, predecessors, successors, assigns, executors,
administrators, parents, subsidiaries and affiliates, except as expressly
limited herein.
(b) ATTORNEY'S FEES AND COSTS. Notwithstanding the releases contained in
this Agreement, any party may bring an action to enforce this Agreement or may
interpose this Agreement by way of defense or counterclaim in any court of law.
If any legal action is brought by any of the parties to enforce, or related to,
4
this Agreement, it is expressly agreed that the prevailing party in such legal
action shall be entitled to recover from the other party or parties its
reasonable attorneys' fees and expenses in addition to any other relief that may
be awarded. For purposes of this paragraph, the prevailing party is the party in
whose favor final judgment is entered. In the event that declaratory or
injunctive relief alone is granted, the court may determine which party, if any,
is the prevailing party.
(c) COOPERATION OF PARTIES. The parties agree to act reasonably and in good
faith and to cooperate with each other for the purposes set forth herein, and to
promptly do such acts and sign such documents as may be necessary or convenient
to further effectuate the intent and purposes of this Agreement.
(d) NO ADMISSION. This Agreement and the settlement evidenced hereby are
made, and the payment or performance of any thing or exchange or any
consideration hereunder is given, in settlement and compromise of disputed
claims and is not intended, and shall not be construed as, an admission, by any
of the parties, of liability as to any of the claims or the matters covered by
this Agreement.
(e) ENTIRE AGREEMENT. It is hereby further understood and agreed that no
promises, representations, understandings and warranties have been made by the
parties hereto other than those that are expressly contained herein. This
Agreement constitutes the entire agreement among the parties regarding the
subject matter hereof and supersedes all prior and/or contemporaneous
negotiations, correspondence, understandings and agreements, whether oral or
written, among the parties.
(f) AMENDMENTS. This Agreement shall not be altered, amended, modified or
otherwise changed in any respect or particular whatsoever, except in writing
duly executed by all of the parties to this Agreement. Each of the parties
hereby acknowledges and agrees that they will make no claim at any time that
this Agreement has been orally altered or modified in any respect whatsoever.
(g) NO WAIVER. The failure of any party to this Agreement to enforce at any
time any one or more of the terms or conditions of this Agreement shall not be a
waiver of such terms or conditions or such party's right thereafter to enforce
each and every condition of this Agreement.
(h) RESPONSIBILITY FOR COSTS AND FEES. Each party to this Agreement is
responsible for the payment of his, hers or its own costs and attorneys' fees
incurred in connection with this Agreement, and all related matters.
(i) CAPTIONS OF HEADINGS. In this Agreement, the captions or headings and
subparagraphs are inserted for convenience, reference and identification
purposes only, and shall neither control, define, limit nor affect any provision
of this Agreement.
(j) SEVERABILITY. If any provision of this Agreement where the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be thereby affected.
(k) SURVIVAL OF REPRESENTATIONS. The respective representations,
warranties, obligations, covenants and agreements of the parties hereto
contained herein shall survive the execution and delivery of this Agreement.
5
(l) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the applicable law pertaining in the State of New York, other
than those conflict of law provisions that would defer to the substantive laws
of another jurisdiction. This governing law election has been made by the
parties in reliance (at least in part) on Section 5-1401 of the General
Obligations Law of the State of New York, as amended (as and to the extent
applicable), and other applicable law.
(m) INTERPRETATION. All singular references herein shall include the plural
and vice versa. Use of any gender shall include all genders. Use of a singular
possessive noun, noun, article, verb, adverb, adjective or other word shall
include the plural possessive noun, noun, article, verb, adverb, adjective or
other word, and vice versa. Whenever the words and symbol "and/or" are used in
this Agreement, it is intended that this Agreement be interpreted and the
sentence, phrase, clause or other part be considered in both their conjunctive
and disjunctive sense, and as having been written twice, once with the word
"and" inserted and once with the word "or" inserted in the place of said words
and symbol "and/or."
(n) NOTICES. Except as otherwise provided for herein, any notice or demand
that, by the provisions hereof, is required or that may be given to, or served
upon, any party shall be in writing and: if by telecopy, shall be deemed to have
been validly served, given or delivered when transmitted; if by personal
delivery or reputable overnight courier, shall be deemed to have been validly
served, given or delivered upon actual delivery; and, if mailed, shall be deemed
to have been validly served, given or delivered three (3) business days after
deposit in the United States mails, as registered or certified mail, with proper
postage prepaid and addressed to the party to be notified, as set forth below or
to such other address as shall hereafter be given in writing by similar notice:
If to Refocus Group: Refocus Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
If to Refocus Ocular: Refocus Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
If to Verus: Verus Support Services Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to Verus International: Verus International Group Ltd.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(o) COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
in any number of counterparts, each of which shall, for all purposes, be deemed
to be an original and all of which shall constitute but one and the same
Agreement. Further, the parties agree that when this Agreement is executed by
any party, a facsimile copy of that signature shall be deemed to be an original
signature for any and all purposes.
6
(p) RELIANCE ON LEGAL COUNSEL. The parties to this Agreement have been
advised to consult with an attorney prior to executing this Agreement and hereby
acknowledge that they have done so. The parties hereto further acknowledge and
represent that they have been given a reasonable period of time to consider and
execute this Agreement. The parties hereto further agree that this Agreement
will not be construed against any party.
SIGNATURE PAGE FOLLOWS
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
7th day of October 2004.
REFOCUS GROUP: Refocus Group, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Vice President & Chief Financial
Officer
REFOCUS OCULAR: Refocus Ocular, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Vice President & Chief Financial
Officer
VERUS: Verus Support Services Inc.,
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
VERUS INTERNATIONAL: Verus International Group Ltd.,
a Cayman Islands corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer