-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R2O9jOS7Z5M7AafWFQ2gNRZnFI0hp2VlPwvafJ2DjMANLTmvVsfPcjWIrsq0YvkV QYZEk3XnZj7FEAjJRMXXaQ== 0001017062-98-000444.txt : 19980304 0001017062-98-000444.hdr.sgml : 19980304 ACCESSION NUMBER: 0001017062-98-000444 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19980303 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: OPHTHALMIC IMAGING SYSTEMS INC CENTRAL INDEX KEY: 0000885317 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 943035367 STATE OF INCORPORATION: CA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-43000 FILM NUMBER: 98556814 BUSINESS ADDRESS: STREET 1: 221 LATHROP WAY STE 1 CITY: SACRAMENTO STATE: CA ZIP: 95815 BUSINESS PHONE: 9166462020 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER LASER SYSTEMS INC CENTRAL INDEX KEY: 0000878543 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 330476284 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 3 MORGAN CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 7148590656 MAIL ADDRESS: STREET 1: 3 MORGAN CITY: IRVINE STATE: CA ZIP: 92677 SC 13D/A 1 SC 13D/A RE OPHTHALMIC IMAGING SYSTEMS INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 4) OPHTHALMIC IMAGING SYSTEMS (Name of Issuer) COMMON STOCK, NO PAR VALUE (Title of Class of Securities) 683737 (CUSIP Number) Premier Laser Systems, Inc. Attn: Colette Cozean 3 Morgan Avenue Irvine, CA 92718 with a copy to: Peter J. Tennyson, Esq. William J. Simpson, Esq. Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17th Floor Costa Mesa, California 92626 (714) 668-6200 (Name, address and telephone number of person authorized to receive notices and communications) February 25, 1998 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. ------------------------------ * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Page 1 of 7 Pages) (Continued on following pages) CUSIP No. 683737 13D Page 2 of 7 Pages 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON PREMIER LASER SYSTEMS, INC. 33-0472684 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a[_] b[X] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 6. CITIZENSHIP OR PLACE OF ORGANIZATION CALIFORNIA NUMBER OF 7. SOLE VOTING POWER SHARES BENEFICIALLY 2,131,758 OWNED BY EACH 8. SHARED VOTING POWER REPORTING PERSON 0 WITH 9. SOLE DISPOSITIVE POWER 2,131,758 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,131,758 CUSIP No. 683737 13D Page 3 of 7 Pages 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] N/A 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 51.3%, BASED ON 4,155,428 SHARES OF COMMON STOCK REPORTED AS OUTSTANDING AS OF FEBRUARY 26, 1998. 14. TYPE OF PERSON REPORTING CO *SEE INSTRUCTIONS BEFORE FILLING OUT OPHTHALMIC IMAGING SYSTEMS Common Stock SCHEDULE 13D This Amendment No. 4 (the "Amendment") amends and supplements the Schedule 13D originally filed with the Securities and Exchange Commission (the "Commission") on December 29, 1997 (the "Original Schedule 13D"), as previously amended by the Amendment No. 1 to the Original Schedule 13D filed with the Commission on January 5, 1998 by the Amendment No. 2 to the Original Schedule 13D filed with the Commission on January 20, 1998, and by Amendment No. 3 filed with the Commission on February 12, 1998 with respect to the purchase by Premier Laser Systems, Inc. ("Premier") of shares of common stock, no par value per share (the "Shares") of OPHTHALMIC IMAGING SYSTEMS, a California corporation ("OIS") (as amended, the "Schedule 13D"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Schedule 13D. Item 4. Purpose of Transaction. The response set forth in Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following: After extensive negotiations concerning Premier's potential acquisition of OIS, Premier entered into an agreement with OIS, wherein, among other things, Premier agreed to make an offer to all OIS shareholders with a view to acquiring OIS and OIS agreed to recommend Premier's offer and not to solicit any acquisition proposals competing with Premier's proposal. A copy of this Stock Purchase Agreement (the "Agreement") is attached hereto as Exhibit 99.6 and is hereby incorporated by reference. Under the Agreement, Premier is committed to offering each OIS shareholder, in exchange for each OIS share, $1.75 per share in cash, $0.25 in value (measured by a formula in the Agreement) of Premier common stock, one Class C Warrant and one Class D Warrant (collectively, the "Warrants"), each exercisable for fractional shares of Premier Common Stock having a value (at the measurement dates) of $0.25, but with the exercisability of such warrants dependent on a achievement of certain sales targets for OIS products. Premier's investment and financial advisor placed a value of $2.18 per share of OIS (the "Offer Value") on this combination of cash and securities. A fuller description of these targets and the terms of the Warrants is contained in each of Exhibits 99.7 and 99.8. Simultaneously with signing the Agreement, Premier entered into individual purchase agreements ("Purchase Agreement" or "Purchase Agreements") with Mark S. Blumenkranz, M.D. and Recia Blumenkranz, M.D. (collectively, the "Blumenkranzes"); Stanley Chang, M.D. ("Chang") and J.B. Oxford & Company ("JBO") providing for these parties to sell to Premier 421,052, 50,000 and 259,308 shares, respectively, of OIS common stock. Additionally, JBO sold to Premier, pursuant to the terms of the Purchase Agreement, warrants (the "JBO Warrants") to purchase 250,000 shares of OIS common stock. Premier exercised the JBO Warrants on February 26, 1998. The above sales and the exercise of the JBO Warrants have resulted in Premier's owning 2,131,758 shares, or approximately 51.3% of the OIS shares. The sales, which occurred on February 26, 1998, together with the exercise of the JBO Warrant, resulted in an aggregate consideration of $2,137,184.80, using the Offer Value. The Purchase Agreements with the Blumenkranzes (Mark Blumenkranz -1- being an OIS director) and JBO provide for rescission if Premier fails to make, or withdraws, the offer to all stockholders provided for in the Agreement. To permit the offer contemplated by the Agreement and the sales to Premier accomplished by the three individual agreements, OIS' board of directors, after considering the terms of the Agreement and an opinion as to the fairness of Premier's offer to the OIS shareholders, rendered by OIS' independent financial advisors, modified OIS' previously adopted rights plan. The Purchase Agreements with the Blumenkranzes, Chang and JBO are attached as Exhibits 99.9, 99.10 and 99.11 and are incorporated herein by reference. Each of the Purchase Agreements involved the granting of Warrants in substantially the forms of Exhibits 99.7 and 99.8. Registration rights were granted pursuant to Registration Rights Agreements with the Blumenkranzes, Chang and JBO. These documents are in substantially the same form, a copy of one of these agreements is filed as Exhibit 99.12. Item 5. Interest in Securities of the Issuer. The response to this item is amended and supplemented by adding the following information: Premier has acquired 421,052 shares from Mark Blumenkranz, M.D. and Recia Blumenkranz, 50,000 shares from Stanley Chang, M.D. and 509,308 shares (inclusive of the 250,000 shares to be issued pursuant to a warrant exercised on February 26, 1998) purchased from J.B. Oxford & Company for a combination of cash and securities valued by Premier at $2.18 per OIS share, or a total of $2,137,184.80. Premier thus has sole voting and dispositive power with respect to 2,131,758 OIS shares, or 51.3% of the 4,155,428 shares outstanding as of February 26, 1998. Premier intends to commence an offer for all OIS shares it does not own as soon as practicable after the effectiveness of its registration statement concerning the securities to be issued after a registration statement being filed with respect to the non-cash consideration becomes effective and to accept for exchange all shares validly tendered in response to such offer. Such offer will be made only by a Prospectus/Offer to Exchange conforming to the Securities Act of 1933 and any applicable state securities laws, and to the Securities Exchange Act of 1934, after the above-described effective date. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. This item as previously filed is amended and supplemented by incorporating herein the additions to Item 4 made by this Amendment No. 4. Item 7. Material to be Filed as Exhibits. The response set forth in Item 7 of the Schedule 13D is hereby amended and supplemented as follows: Exhibit 99.6 Stock Purchase Agreement dated February 25, 1998 between Premier and OIS. Exhibit 99.7 Form of Class C Warrant. -2- Exhibit 99.8 Form of Class D Warrant. Exhibit 99.9 Purchase Agreement dated February 25, 1998 between Premier and Mark S. Blumenkranz, M.D. and Recia Blumenkranz, M.D. Exhibit 99.10 Purchase Agreement dated February 25, 1998 between Premier and Stanley Chang, M.D. Exhibit 99.11 Purchase Agreement dated February 25, 1998 between Premier and J.B. Oxford & Company. Exhibit 99.12 Registration Rights Agreement dated February 25, 1998 between Premier and J.B. Oxford & Company (similar agreements in force with other sellers). Exhibit 99.13 Press Release Dated February 26, 1998 Exhibit 99.14 Press Release Dated February 27, 1998 -3- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 27, 1998 PREMIER LASER SYSTEMS, INC. By: /s/ Michael L. Hiebert ---------------------------------- Name: Michael L. Hiebert Title: Chief Financial Officer -4- EX-99.6 2 STOCK PURCHASE AGRMT WITH OIS DATED 2/25/98 EXHIBIT 99.6 STOCK PURCHASE AGREEMENT by and between Premier Laser Systems, Inc. and Ophthalmic Imaging Systems dated as of February 25, 1998 TABLE OF CONTENTS -----------------
Page ---- ARTICLE I THE OFFER................................................. 2 SECTION 1.1 The Offer................................................. 2 SECTION 1.2 Ophthalmic Actions........................................ 4 ARTICLE II 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 ---- 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 ---- 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
-iii- 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 ("Ophthalmic"). 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 -1- 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 I. 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. -2- (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 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 comments 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 -3- 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, Cowen & 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 -4- 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. -5- 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, -6- 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 transactions 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 Hart-Scott-Rodino 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 -7- 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 -8- 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 510(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 Steven Verdooner, 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 -9- 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(1) 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. -10- (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 -11- 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 as set forth in Section 4.11 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, -12- 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: -13- (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. -14- 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 -15- 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 -16- Premier Common 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. -17- 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 pre- emptive 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 -18- 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; -19- (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 -20- 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 -21- 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. -22- (ii) Unvested Options. Unless earlier terminated, each ---------------- outstanding, unexercised, unvested 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. -23- 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- occurrence 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. -24- 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 -25- "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, -26- 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 manner, 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, -27- 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. -28- 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 representation 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. -29- 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. -30- 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 -31- 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, claims, 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. 3 Morgan Irvine, California 92718 Attention: President and Chief Executive Officer Facsimile Number: (714) 952-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive 17th Floor Costa Mesa, California 92626 Attn: William J. Simpson, Esq. Facsimile Number: (714) 979-1921 -32- If to Ophthalmic: Ophthalmic Imaging Systems 221 Lathrop Way, Suite I Sacramento, California 95815 Attn: President Facsimile Number: (916) 646-0207 with a copy to: Carlton Fields, Attorneys at Law One Harbour Place 777 S. Harbour Island Boulevard Tampa, Florida 33602-5799 Attention: Richard A. Denmon, Esq. Facsimile Number: (813) 229-4133 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 9.10 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 -33- 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] -34- [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/ Colette Cozean ---------------------------------------- Colette Cozean, Ph.D., Chief Executive Officer OPHTHALMIC IMAGING SYSTEMS By: /s/ Steven Verdooner ---------------------------------------- Name: Steven Verdooner -------------------------------------- Title: Chief Executive Officer ------------------------------------- -35- 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 -36- 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 -37- 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. -38- The capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed. -39- EXHIBIT "A" FORM OF CLASS C WARRANT EXHIBIT "B" FORM OF CLASS D WARRANT EX-99.7 3 FORM OF CLASS C WARRANT EXHIBIT 99.7 CLASS C WARRANT TO PURCHASE COMMON STOCK NO PAR VALUE OF PREMIER LASER SYSTEMS, INC. __ Warrants (Partial Shares)/1// __________, 1998 This certifies that _________________________________________ ("Holder"), for value received, is entitled, subject to the other terms set forth below, to purchase from Premier Laser Systems, Inc., a California corporation (the "Company"), having a place of business at 3 Morgan, Irvine, California 92618, at any time from the Notice Date defined below until 5:00 P.M. (California time) on the ninetieth day following the Notice Date (the "Expiration Date"), unless earlier terminated pursuant to the provisions of Section 2.4 hereof, at which time this Warrant shall expire and become void, a fraction of a share, of the Company's Common Stock, no par value (the "Common Stock") in an amount determined pursuant to Section 2 below. The purchase or exercise price per share (the "Exercise Price") shall be one cent ($0.01) regardless of the number of Warrants which must be exercised to obtain a Warrant Share (as defined below). The number and character of the securities purchasable upon exercise of this Warrant are subject to adjustment as provided in Section 3.3 hereof. This Warrant is subject to the following terms and conditions: 1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. 1.1 DURATION OF EXERCISE OF WARRANT. This Warrant is exercisable at the option of Holder at any time from the Notice Date until 5:00 P.M. (California time) on the Expiration Date for all or a portion of the shares of Common Stock that may be purchased hereunder. This Warrant shall be exercised upon surrender to the Company of this Warrant properly endorsed with a completed and executed Subscription Agreement in the form attached hereto as Exhibit A, and upon payment in cash or cashier's check of the aggregate Exercise Price for the number of shares of Common Stock for which this Warrant is being exercised (the "Warrant Shares"). The Company agrees that any Warrant Shares purchased under this Warrant shall be deemed to be issued to Holder as the record /1// (Does not represent ___ shares - See Paragraph 2 for computation.) -1- owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares. Certificates for the Warrant Shares so purchased, together with any other securities or property to which Holder is entitled upon such exercise, shall be delivered to Holder by the Company or its transfer agent at the Company's expense as soon as practicable after the rights represented by this Warrant have been exercised. Each stock certificate so delivered shall be in such denominations of Common Stock as may be reasonably requested by Holder and shall be registered in the name of Holder or such other name as shall be designated by Holder. If, upon exercise of this Warrant, fewer than all of the shares issuable upon exercise of this Warrant are purchased, one or more new warrants substantially in the form of, and on the terms contained in, this Warrant will be issued for the remaining number of shares not exercised. 1.2 SECURITIES TO BE FULLY PAID; RESERVATION OF WARRANT SHARES. The Company covenants and agrees that all Warrants and Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and such issuance will not violate any pre-emptive rights under applicable law, the Premier Articles of Incorporation or By-laws, contracts, or agreement, or otherwise. The Company covenants that it will at all times from the date hereof reserve and keep available a sufficient number of shares of its authorized but unissued Common Stock (or other securities) solely for issuance and delivery to Holder upon exercise of this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrants and Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. 2. NOTICE OF EXERCISABILITY AND DETERMINATION OF NUMBER OF WARRANT SHARES. 2.1 CONDITION TO EXERCISE. This Warrant shall not become exercisable unless the Net Sales of Qualified Products (both as defined herein) for the twelve (12) month period ended August 31, 1998 (the "Determination Date") equal or exceed Seven Million Dollars ($7,000,000). "Net Sales" shall mean net sales of Qualified Products as determined by generally accepted accounting principles, as consistently applied by Ophthalmic Imaging Systems ("OIS"). "Qualified Products" shall mean products sold by and in connection with the current core business of OIS including: (i) products related to or arising out of such current core products; (ii) products under development as of the date hereof; and (iii) those same products if sold by any successor owner of OIS' operations. As soon as practicable after the Determination Date, the Company shall determine the Net Sales of Qualified Products for the twelve (12) month period ended on the Determination Date and shall mail to the holder of the Warrant, and shall publish in a newspaper of national circulation a notice (the "Exercise Notice") stating whether this condition to exercisability has been met. The date of such mailing and publication is the "Notice Date." -2- 2.2 SHARES ISSUABLE. To determine the number of Warrant Shares for which the Warrant may be exercised, the Company shall determine the average Closing Price (as defined below) of the Common Stock for the (i) fifteen (15) consecutive trading days immediately preceding the Determination Date and (ii) the thirty (30) consecutive trading days ending fifteen (15) trading days prior to the Determination Date, and shall calculate the number of shares of the Common Stock, or fraction thereof, which could be purchased at the greater of such two average Closing Prices for a purchase price of twenty-five cents ($0.25). The result of this calculation shall be the "Share Factor." The Share Factor shall be multiplied by the number of Warrants stated on the first page of this Warrant to determine the number of whole shares for which this Warrant may be exercised. Fractional shares resulting from aggregate exercises shall be rounded to the nearest whole share. 2.3 NOTICE. The Exercise Notice sent to the Holder shall state the number of Warrant Shares for which the Warrant has become exercisable. 2.4 EXERCISE. If the Exercise Notice states that the condition stated in Section 2.1 has not been satisfied, then the Notice Date shall become the Expiration Date, this Warrant shall expire effective as of the Notice Date and the Holder shall have no further rights hereunder. If the Exercise Notice states the condition has been met, this Warrant shall thereafter be exercisable for the number of whole shares determined as provided in Section 2.2 and specified in the applicable Exercise Notice. 2.5 CLOSING PRICE. For purposes of any computation pursuant to this Section 2, the term "Closing Price" for any day shall mean the last reported sale price, regular way, of the Common Stock, or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices, regular way, for such day, in either case on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or if it is not listed or admitted to trading on any national securities exchange, but is traded on Nasdaq, the closing sale price of the Common Stock or, in case no sale is reported, the average of the closing bid and asked quotations for the Common Stock on Nasdaq, or any comparable system. 3. CERTAIN NOTICES. 3.1 NOTICE OF CERTAIN EVENTS. If at any time after the Determination Date and before the Expiration Date: 3.1.1 the Company shall declare any cash dividend upon its Common Stock; -3- 3.1.2 the Company shall declare any dividend upon its Common Stock payable in stock (other than a dividend payable solely in shares of Common Stock) or make any special dividend or other distribution to the holders of its Common Stock; 3.1.3 the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; 3.1.4 there shall be any capital reorganization or reclassification of the capital stock of the Company; or consolidation or merger of the Company with, or sale or leases, exchanges or other conveyances (other than pledges, mortgages and liens related to loans) of substantially all of its assets to, another corporation; 3.1.5 there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; or 3.1.6 any purchase, retirement, or redemption by the Company of its Common Stock; then, in any one or more of said cases, the Company shall give to the registered holder of this Warrant, by the means specified in Section 7 herein, (i) at least twenty (20) days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and (ii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up, at least twenty (20) days' prior written notice of the date when the same shall take place; provided, however, that the Company shall not be required to send any notice pursuant to this Section 3.1 if the Company determines the condition in Section 2.1 has not been met. Any notice given in accordance with the foregoing clause (i) shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto. Any notice given in accordance with the foregoing clause (ii) shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up, conversion or public offering, as the case may be. If Holder does not exercise this Warrant prior to the occurrence of an event described above, Holder shall not be entitled to receive the benefits accruing to then existing holders of Common Stock. 3.2 NOTICE OF ADJUSTMENT. Upon the happening of an event requiring an adjustment of the amount or the kind of securities or property purchasable hereunder, the Company shall forthwith give notice to the Holder which indicates the event requiring -4- the adjustment, the adjusted number of Warrant Shares that may be acquired or the amount or kind of any such securities or property so purchasable upon exercise of this Warrant, as the case may be, and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. The Company's independent public accountant shall determine the method for calculating the adjustment and shall prepare a certificate setting forth such calculations, the reason for the methodology chosen, and the facts upon which such calculation is based. Such certificate shall accompany the notice to be provided to the Holder pursuant to this Section 3.2. 3.3 ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF WARRANT SHARES. The number and kind of securities that may be acquired upon the exercise of this Warrant shall be subject to adjustment following the Determination Date and prior to the earlier of the exercise of, or the Expiration Date of this Warrant, upon the happening of any of the following events: (a) DIVIDENDS, SUBDIVISIONS, COMBINATIONS, OR CONSOLIDATIONS OF COMMON STOCK. (i) In the event the Company shall declare, pay, or make any dividend upon its outstanding Common Stock payable in Common Stock or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Share Factor shall be adjusted so that the number of Warrant Shares that may thereafter be purchased upon the exercise of the rights represented hereby shall be increased in proportion to the increase in the number of outstanding shares of Common Stock through such dividend or subdivision. In case the Company shall at any time combine the outstanding shares of its Common Stock into a smaller number of shares of Common Stock, the Share Factor shall be adjusted so that number of Warrant Shares that may thereafter be acquired upon the exercise of the rights represented hereby shall be decreased in proportion to the decrease through such combination. In each case, the Exercise Price will not be adjusted. (ii) If the Company declares, pays or makes any dividend or other distribution upon its outstanding Common Stock payable in securities or other property (excluding cash dividends and dividends payable in Common Stock, but including, without limitation, shares of any other class of the Company's stock or stock or other securities convertible into or exchangeable for shares of Common Stock or any other class of the Company's stock or other interests in the Company or its assets ("Convertible Securities")), a proportionate part of those securities or that other property shall be set aside by the Company and delivered to the Holder in the event that the Holder exercises this Warrant. The securities and other property then deliverable to the Holder upon the exercise of this Warrant shall be in the same ratio to the total securities and property set aside for the Holder as the number of Warrant Shares with respect to which -5- this Warrant is then exercised as to the total number of Warrant Shares that may be acquired pursuant to this Warrant at the time the securities or property were set aside for the Holder. (iii) If the Company shall declare a dividend payable in money on its outstanding Common Stock and at substantially the same time shall offer to its shareholders a right to purchase new shares of Common Stock from the proceeds of such dividend or for an amount substantially equal to the dividend, all shares of Common Stock so issued shall, for purposes of this Warrant, be deemed to have been issued as a stock dividend subject to the adjustments set forth in Section 3.3 (a)(i). (iv) If the Company shall declare a dividend payable in money on its outstanding Common Stock and at substantially the same time shall offer to its shareholders a right to purchase new shares of a class of stock (other than Common Stock), Convertible Securities, or other interests from the proceeds of such dividend or for an amount substantially equal to the dividend, all shares of stock, Convertible Securities, or other interests so issued or transferred shall, for purposes of this Warrant, be deemed to have been issued as a dividend or other distribution subject to Section 3.3(a)(ii). (v) If the Company shall declare a dividend payable in cash on its outstanding Common Stock, such dividend shall be deemed to have been issued as a dividend or other distribution subject to Section 3.3(a)(i). (b) EFFECT OF RECLASSIFICATION, REORGANIZATION, CONSOLIDATION, MERGER, OR SALE OF ASSETS. (i) Upon the occurrence of any of the following events, the Company shall cause an effective provision to be made so that the Holder shall have the right thereafter, by the exercise of this Warrant, to acquire for the Exercise Price described in this Warrant the kind and amount of shares of stock and other securities, property and interests as would be issued or payable with respect to or in exchange for the number of Warrant Shares that are then purchasable pursuant to this Warrant as if such Warrant Shares had been issued to the Holder immediately prior to such event: (A) reclassification, capital reorganization, or other change of outstanding Common Stock (other than a change as a result of an issuance of Common Stock under Subsection 3.3(a)), (B) consolidation or merger of the Company with or into another corporation or entity (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification, capital reorganization or other change of the outstanding shares of Common Stock or the Warrant Shares issuable upon exercise of this Warrant), or (C) spin-off of assets, a subsidiary or any affiliated entity, or the sale, lease, conveyance (other than pledges, mortgages and liens related to loans) or exchange of a significant portion of the Company's assets taken as a whole, in a transaction pursuant -6- to which the Company's shareholders of record are to receive securities or other interests in a successor entity. Any such provision made by the Company for adjustments with respect to this Warrant shall be as nearly equivalent to the adjustments otherwise provided for in this Warrant as is reasonably practicable. The foregoing provisions of this Section 3.3(b)(i) shall similarly apply to successive reclassifications, capital reorganizations and similar changes of shares of Common Stock and to successive consolidations, mergers, spin-offs, sales, leases or exchanges. (ii) If any sale or exchange of all, or substantially all, of the Company's assets or business or any dissolution, liquidation or winding up of the Company (a "Termination of Business") shall be proposed, the Company shall deliver written notice to the Holder of this Warrant in accordance with Section 3.2 hereof as a condition precedent to the consummation of that Termination of Business. If the result of the Termination of Business is that shareholders of the Company are to receive securities or other interests of a successor entity, the provisions of Section 3.3(b)(i) above shall apply. However, if the result of the Termination of Business is that shareholders of the Company are to receive money or property other than securities or other interests in a successor entity, the Holder of this Warrant shall be entitled to exercise this Warrant and, with respect to any Warrant Shares purchasable pursuant to this Warrant so acquired, shall be entitled to all of the rights of the other shareholders of Common Stock with respect to any distribution by the Company in connection with the Termination of Business. In the event no successor entity is involved and Section 3.3(b)(i) does not apply, all acquisition rights under this Warrant shall terminate at the close of business on the date as of which shareholders of record of the Common Stock shall be entitled to participate in a distribution of the assets of the Company in connection with the Termination of Business; provided, that, in no event shall -------- ---- that date be less than 20 days after delivery to the Holder of this Warrant of the written notice described above and in Section 3.2 hereof. If the termination of acquisition rights under this Warrant is to occur as a result of the event at issue, a statement to that effect shall be included in that written notice. (c) OBLIGATION OF SUCCESSORS OR TRANSFEREES. The Company shall not effect any consolidation, merger, or sale or conveyance of assets within the meaning of Section 3.3(b)(i)(B)-(C) unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed or delivered to the Holder pursuant to Section 8 herein, the obligation to deliver to the Holder such shares of stock, securities, or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. In no event shall the securities received pursuant to this Section be registerable or transferable other than pursuant and subject to the terms of this Warrant. -7- (d) APPLICATION OF THIS SECTION. The provisions of this Section 3.3 shall apply to successive events that may occur from time to time but shall only apply to a particular event if it occurs prior to the expiration of this Warrant either by its terms or by its exercise in full. (e) DEFINITION OF COMMON STOCK. Unless the context requires otherwise, whenever reference is made in this Section 3.3 to the issue or sale of shares of Common Stock, the term "Common Stock" shall mean (i) the no par value Class A Common Stock of the Company, (ii) any other class of stock ranking on a parity with, and having substantially similar rights and privileges as the Company's no par value Class A Common Stock, and (iii) any Convertible Security convertible into either (i) or (ii). However, subject to the provisions of Section 3.3(b)(i) above, Common Stock issuable upon the exercise of this Warrant shall include only shares of Common Stock designed as no par value Class A Common Stock of the Company as of the date of this Warrant. (f) COMPANY-HELD STOCK. For purposes of Sections 3.3(a) above, shares of Common Stock owned or held at any relevant time by, or for the account of, the Company in its treasury or otherwise, shall not be deemed to be outstanding for purposes of the calculation and adjustments described therein. 4. ISSUE TAX. The issuance of certificates for Warrant Shares upon the exercise of the Warrant shall be made without charge to Holder of any issue tax or other governmental charges in respect thereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then holder of the Warrant being exercised. 5. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in this Warrant shall be construed as conferring upon Holder the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company, until, and only to the extent that, this Warrant shall have been exercised. Except as provided in Section 3.1 in the event of a dividend on the Common Stock payable in shares of Common Stock, no dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the Warrant Shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised. The Company covenants, however, that until the Termination Date, for so long as this Warrant remains at least partially unexercised, it will furnish the Holder with copies of all reports and communications furnished to the stockholders of the Company. No provisions hereof, in the absence of affirmative action by Holder to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of -8- Holder shall give rise to any liability of Holder for the Exercise Price or as a stockholder of the Company whether such liability is asserted by the Company or by its creditors. 6. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 7. NOTICES. Any notice required or permitted under this Warrant shall be in writing and either delivered personally, telegraphed or telecopied or sent by certified or registered mail, postage prepaid, and shall be deemed to be given, dated and received when so delivered personally, telegraphed or telecopied or, if mailed, five (5) business days after the date of mailing to the following address or facsimile number, or to such other address or addresses as such person may subsequently designate by notice given hereunder. If to the Company: Premier Laser Systems, Inc. Attention: Secretary 3 Morgan Irvine, California 92618 Facsimile: 714 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP Attention: Peter J. Tennyson, Esq. 695 Town Center Drive, 17th Floor Costa Mesa, California 92626-1924 Facsimile: 714 979-1921 If to Holder: As Holder's address appears on a register of Warrants maintained by the Company's transfer agent. 8. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 9. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in -9- accordance with, and the rights of the parties shall be governed by, the laws of the State of California. 10. EXCHANGE, ASSIGNMENT, COMBINATION AND REPLACEMENT OF WARRANTS. (a) This Warrant is exchangeable, without expense other than as provided in this Section 10, at the option of the Holder upon the reasonable request, presentation and surrender hereof to the Company for other Warrants of different denominations entitling the Holder thereof to acquire in the aggregate the same number of Warrant Shares that may be acquired hereunder. (b) All of the covenant and provisions of this Warrant by or for the benefit of the Holder shall be binding upon and shall inure to the benefit of, its successors and permitted assigns hereunder. This Warrant and all rights hereunder are transferrable and may be sold, transferred, assigned, or hypothecated upon surrender of this Warrant to the Company, together with a duly executed assignment in the form attached hereto as Exhibit B (the "Assignment Form"), whereupon the Company shall, without charge, execute and deliver a new Warrant containing the same terms and conditions of this Warrant in the name of the assignee as named in the Assignment Form, and this Warrant shall be canceled at that time. This Warrant, if properly assigned, may be exercised by a new Holder without first having the new Warrant issued. (c) This Warrant may be delivered or combined with other Warrants that carry the same rights upon the reasonable request, presentation and surrender of this Warrant at the office of the Company, together with a written notice signed by the Holder, specifying the names and denominations in which new Warrants are to be issued. (d) The Company will execute and deliver to the Holder a new Warrant of like tenor and date upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant; provided, that (i) in the case of loss, theft, or destruction, the Company receives a reasonably satisfactory indemnity or bond, or (ii) in the case of mutilation, the Holder shall provide and surrender this Warrant to the Company for cancellation. (e) Any new Warrant executed and delivered by the Company in substitution or replacement of this Warrant shall constitute a contractual obligation of the Company regardless of whether this Warrant was lost, stolen, destroyed or mutilated, and shall be enforceable by any Holder thereof. (f) The Holder shall pay all transfer and excise taxes applicable to any issuance of new Warrants under this Section 10. -10- 11. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, round such fractional shares to the nearest whole share. 12. BEST EFFORTS. The Company covenants that it will not, by amendment of its Articles of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, reissue or sale of securities, or any other voluntary action, avoid or seek to avoid the observation or performance for any term of this Warrant, but will at all times in good faith assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the Holder against dilution or other impairment. 13. FURTHER ASSURANCES. The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue, duly authorized fully paid and nonassessable Warrants and Common Stock and other securities issuable upon exercise of this Warrant from time to time and not in violation of any pre-emptive rights. (Signature page follows.) -11- IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer effective as of ___________, 1998. PREMIER LASER SYSTEMS, INC. By: ________________________________________ Colette Cozean, Ph.D. Chief Executive Officer -12- EXHIBIT A PREMIER LASER SYSTEMS, INC. COMMON STOCK WARRANT FORM OF SUBSCRIPTION AGREEMENT (TO BE SIGNED AND DELIVERED UPON EXERCISE OF WARRANT) PREMIER LASER SYSTEMS, INC. 3 Morgan Irvine, California 92618 Attention: Secretary The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, _______________ shares of Common Stock (the "Stock") of Premier Laser Systems, Inc. (the "Company") and herewith makes payment of __________________________ Dollars ($________) therefor and requests that the certificates for such shares be issued in the name of, and delivered to, ______________, whose address is ____________________________________. A copy of the Exercise Notice (as defined in the Warrant) evidencing that the Warrant is exercisable for at least the number of shares covered by this agreement is attached. The address set forth below is the true and correct address of the undersigned. _____________________________________________ (Name) _____________________________________________ (Adress) _____________________________________________ _____________________________________________ A-1 If said number of shares shall not be all the shares exercisable or purchasable under the within Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of the Warrants. DATED:________________________ __________________________________________________ Name of holder must conform in all respects to name of holder as specified on the face of the Warrant or with the name of the assignee appearing on the assignment form attached hereto.) __________________________________________________ (signature) _________________________________________________ (print name) __________________________________________________ (print title) A-1 EXHIBIT B ASSIGNMENT FORM FOR VALUE RECEIVED, the receipt and adequacy of which are each hereby confirmed, the undersigned,_____________________, hereby sells, assigns and transfers unto___________________ all of the undersigned's right, title and interest in and to an aggregate of __________ (___) warrants to purchase shares of the Common Stock of Premier Laser Systems, Inc. (the "Corporation) standing in the name of the undersigned on the books of the Corporation and evidenced by that certain Class C Warrant, dated ________ __, ___ (the "Warrant"), and does hereby irrevocable constitute and appoint __________________ as attorney-in-fact to effect the reissue of the Warrant as necessary and the transfer of said Warrant on the books of the Corporation with full power of substitution upon presentation to the Corporation of this Assignment Form together with the Warrant. Dated: ____________ __, ___ Signature: ___________________________ Printed Name: ___________________________ B-1 EX-99.8 4 FORM OF CLASS D WARRANT EXHIBIT 99.8 CLASS D WARRANT TO PURCHASE COMMON STOCK NO PAR VALUE OF PREMIER LASER SYSTEMS, INC. __ Warrants (Partial Shares)/1/ __________, 1998 This certifies that _________________________________________ ("Holder"), for value received, is entitled, subject to the other terms set forth below, to purchase from Premier Laser Systems, Inc., a California corporation (the "Company"), having a place of business at 3 Morgan, Irvine, California 92618, at any time from the Notice Date defined below until 5:00 P.M. (California time) on the ninetieth day following the Notice Date (the "Expiration Date"), unless earlier terminated pursuant to the provisions of Section 2.4 hereof, at which time this Warrant shall expire and become void, a fraction of a share, of the Company's Common Stock, no par value (the "Common Stock") in an amount determined pursuant to Section 2 below. The purchase or exercise price per share (the "Exercise Price") shall be one cent ($0.01) regardless of the number of Warrants which must be exercised to obtain a Warrant Share (as defined below). The number and character of the securities purchasable upon exercise of this Warrant are subject to adjustment as provided in Section 3.3 hereof. This Warrant is subject to the following terms and conditions: 1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. 1.1 DURATION OF EXERCISE OF WARRANT. This Warrant is exercisable at the option of Holder at any time from the Notice Date until 5:00 P.M. (California time) on the Expiration Date for all or a portion of the shares of Common Stock that may be purchased hereunder. This Warrant shall be exercised upon surrender to the Company of this Warrant properly endorsed with a completed and executed Subscription Agreement in the form attached hereto as Exhibit A, and upon payment in cash or cashier's check of the aggregate Exercise Price for the number of shares of Common Stock for which this Warrant is being exercised (the "Warrant Shares"). The Company agrees that any Warrant Shares purchased under this Warrant shall be deemed to be issued to Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall ___________________________ /1/ (Does not represent ___ shares - See Paragraph 2 for computation.) -1- have been surrendered and payment made for such shares. Certificates for the Warrant Shares so purchased, together with any other securities or property to which Holder is entitled upon such exercise, shall be delivered to Holder by the Company or its transfer agent at the Company's expense as soon as practicable after the rights represented by this Warrant have been exercised. Each stock certificate so delivered shall be in such denominations of Common Stock as may be reasonably requested by Holder and shall be registered in the name of Holder or such other name as shall be designated by Holder. If, upon exercise of this Warrant, fewer than all of the shares issuable upon exercise of this Warrant are purchased, one or more new warrants substantially in the form of, and on the terms contained in, this Warrant will be issued for the remaining number of shares not exercised. 1.2 SECURITIES TO BE FULLY PAID; RESERVATION OF WARRANT SHARES. The Company covenants and agrees that all Warrants and Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and such issuance will not violate any pre-emptive rights under applicable law, the Premier Articles of Incorporation or By-laws, contracts, or agreement, or otherwise. The Company covenants that it will at all times from the date hereof reserve and keep available a sufficient number of shares of its authorized but unissued Common Stock (or other securities) solely for issuance and delivery to Holder upon exercise of this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrants and Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. 2. NOTICE OF EXERCISABILITY AND DETERMINATION OF NUMBER OF WARRANT SHARES. 2.1 CONDITION TO EXERCISE. This Warrant shall not become exercisable unless the Net Sales of Qualified Products (both as defined herein) for the twelve (12) month period ended December 31, 1999 (the "Determination Date") equal or exceed Eleven Million Six Hundred Dollars ($11,600,000). Except as set forth below, "Net Sales" shall mean net sales of Qualified Products as determined by generally accepted accounting principles, as consistently applied by Ophthalmic Imaging Systems ("OIS"). "Qualified Products" shall mean products sold by and in connection with the current core business of OIS including: (i) products related to or arising out of such current core products; (ii) products under development as of the date hereof; and (iii) those same products if sold by any successor owner of OIS' operations. For the purposes of this Class D Warrant only, firm purchase orders or purchase agreements from purchasers seeking shipment of goods by December 31, 1999, and which are accompanied by at least a 10% deposit, shall be deemed to be December 1999 sales. As soon as practicable after the Determination Date, the Company shall determine the Net Sales of Qualified Products for the twelve (12) month -2- period ended on the Determination Date and shall mail to the holder of the Warrant, and shall publish in a newspaper of national circulation a notice (the "Exercise Notice") stating whether this condition to exercisability has been met. The date of such mailing and publication is the "Notice Date." 2.2 SHARES ISSUABLE. To determine the number of Warrant Shares for which the Warrant may be exercised, the Company shall determine the average Closing Price (as defined below) of the Common Stock for the (i) fifteen (15) consecutive trading days immediately preceding the Determination Date and (ii) the thirty (30) consecutive trading days ending fifteen (15) trading days prior to the Determination Date, and shall calculate the number of shares of the Common Stock, or fraction thereof, which could be purchased at the greater of such two average Closing Prices for a purchase price of twenty-five cents ($0.25). The result of this calculation shall be the "Share Factor." The Share Factor shall be multiplied by the number of Warrants stated on the first page of this Warrant to determine the number of whole shares for which this Warrant may be exercised. Fractional shares resulting from aggregate exercises shall be rounded to the nearest whole share. 2.3 NOTICE. The Exercise Notice sent to the Holder shall state the number of Warrant Shares for which the Warrant has become exercisable. 2.4 EXERCISE. If the Exercise Notice states that the condition stated in Section 2.1 has not been satisfied, then the Notice Date shall become the Expiration Date, this Warrant shall expire effective as of the Notice Date and the Holder shall have no further rights hereunder. If the Exercise Notice states the condition has been met, this Warrant shall thereafter be exercisable for the number of whole shares determined as provided in Section 2.2 and specified in the applicable Exercise Notice. 2.5 CLOSING PRICE. For purposes of any computation pursuant to this Section 2, the term "Closing Price" for any day shall mean the last reported sale price, regular way, of the Common Stock, or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices, regular way, for such day, in either case on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or if it is not listed or admitted to trading on any national securities exchange, but is traded on Nasdaq, the closing sale price of the Common Stock or, in case no sale is reported, the average of the closing bid and asked quotations for the Common Stock on Nasdaq, or any comparable system. -3- 3. CERTAIN NOTICES. 3.1 NOTICE OF CERTAIN EVENTS. If at any time after the Determination Date and before the Expiration Date: 3.1.1 the Company shall declare any cash dividend upon its Common Stock; 3.1.2 the Company shall declare any dividend upon its Common Stock payable in stock (other than a dividend payable solely in shares of Common Stock) or make any special dividend or other distribution to the holders of its Common Stock; 3.1.3 the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; 3.1.4 there shall be any capital reorganization or reclassification of the capital stock of the Company; or consolidation or merger of the Company with, or sale or leases, exchanges or other conveyances (other than pledges, mortgages and liens related to loans) of substantially all of its assets to, another corporation; 3.1.5 there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; or 3.1.6 any purchase, retirement, or redemption by the Company of its Common Stock; then, in any one or more of said cases, the Company shall give to the registered holder of this Warrant, by the means specified in Section 7 herein, (i) at least twenty (20) days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and (ii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up, at least twenty (20) days' prior written notice of the date when the same shall take place; provided, however, that the Company shall not be required to send any notice pursuant to this Section 3.1 if the Company determines the condition in Section 2.1 has not been met. Any notice given in accordance with the foregoing clause (i) shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto. Any notice given in accordance with the foregoing clause (ii) shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property -4- deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up, conversion or public offering, as the case may be. If Holder does not exercise this Warrant prior to the occurrence of an event described above, Holder shall not be entitled to receive the benefits accruing to then existing holders of Common Stock. 3.2 NOTICE OF ADJUSTMENT. Upon the happening of an event requiring an adjustment of the amount or the kind of securities or property purchasable hereunder, the Company shall forthwith give notice to the Holder which indicates the event requiring the adjustment, the adjusted number of Warrant Shares that may be acquired or the amount or kind of any such securities or property so purchasable upon exercise of this Warrant, as the case may be, and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. The Company's independent public accountant shall determine the method for calculating the adjustment and shall prepare a certificate setting forth such calculations, the reason for the methodology chosen, and the facts upon which such calculation is based. Such certificate shall accompany the notice to be provided to the Holder pursuant to this Section 3.2. 3.3 ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF WARRANT SHARES. The number and kind of securities that may be acquired upon the exercise of this Warrant shall be subject to adjustment following the Determination Date and prior to the earlier of the exercise of, or the Expiration Date of this Warrant, upon the happening of any of the following events: (a) DIVIDENDS, SUBDIVISIONS, COMBINATIONS, OR CONSOLIDATIONS OF COMMON STOCK. (i) In the event the Company shall declare, pay, or make any dividend upon its outstanding Common Stock payable in Common Stock or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Share Factor shall be adjusted so that the number of Warrant Shares that may thereafter be purchased upon the exercise of the rights represented hereby shall be increased in proportion to the increase in the number of outstanding shares of Common Stock through such dividend or subdivision. In case the Company shall at any time combine the outstanding shares of its Common Stock into a smaller number of shares of Common Stock, the Share Factor shall be adjusted so that number of Warrant Shares that may thereafter be acquired upon the exercise of the rights represented hereby shall be decreased in proportion to the decrease through such combination. In each case, the Exercise Price will not be adjusted. -5- (ii) If the Company declares, pays or makes any dividend or other distribution upon its outstanding Common Stock payable in securities or other property (excluding cash dividends and dividends payable in Common Stock, but including, without limitation, shares of any other class of the Company's stock or stock or other securities convertible into or exchangeable for shares of Common Stock or any other class of the Company's stock or other interests in the Company or its assets ("Convertible Securities")), a proportionate part of those securities or that other property shall be set aside by the Company and delivered to the Holder in the event that the Holder exercises this Warrant. The securities and other property then deliverable to the Holder upon the exercise of this Warrant shall be in the same ratio to the total securities and property set aside for the Holder as the number of Warrant Shares with respect to which this Warrant is then exercised as to the total number of Warrant Shares that may be acquired pursuant to this Warrant at the time the securities or property were set aside for the Holder. (iii) If the Company shall declare a dividend payable in money on its outstanding Common Stock and at substantially the same time shall offer to its shareholders a right to purchase new shares of Common Stock from the proceeds of such dividend or for an amount substantially equal to the dividend, all shares of Common Stock so issued shall, for purposes of this Warrant, be deemed to have been issued as a stock dividend subject to the adjustments set forth in Section 3.3 (a)(i). (iv) If the Company shall declare a dividend payable in money on its outstanding Common Stock and at substantially the same time shall offer to its shareholders a right to purchase new shares of a class of stock (other than Common Stock), Convertible Securities, or other interests from the proceeds of such dividend or for an amount substantially equal to the dividend, all shares of stock, Convertible Securities, or other interests so issued or transferred shall, for purposes of this Warrant, be deemed to have been issued as a dividend or other distribution subject to Section 3.3(a)(ii). (v) If the Company shall declare a dividend payable in cash on its outstanding Common Stock, such dividend shall be deemed to have been issued as a dividend or other distribution subject to Section 3.3(a)(i). (b) EFFECT OF RECLASSIFICATION, REORGANIZATION, CONSOLIDATION, MERGER, OR SALE OF ASSETS. (i) Upon the occurrence of any of the following events, the Company shall cause an effective provision to be made so that the Holder shall have the right thereafter, by the exercise of this Warrant, to acquire for the Exercise Price described in this Warrant the kind and amount of shares of stock and other securities, -6- property and interests as would be issued or payable with respect to or in exchange for the number of Warrant Shares that are then purchasable pursuant to this Warrant as if such Warrant Shares had been issued to the Holder immediately prior to such event: (A) reclassification, capital reorganization, or other change of outstanding Common Stock (other than a change as a result of an issuance of Common Stock under Subsection 3.3(a)), (B) consolidation or merger of the Company with or into another corporation or entity (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification, capital reorganization or other change of the outstanding shares of Common Stock or the Warrant Shares issuable upon exercise of this Warrant), or (C) spin-off of assets, a subsidiary or any affiliated entity, or the sale, lease, conveyance (other than pledges, mortgages and liens related to loans) or exchange of a significant portion of the Company's assets taken as a whole, in a transaction pursuant to which the Company's shareholders of record are to receive securities or other interests in a successor entity. Any such provision made by the Company for adjustments with respect to this Warrant shall be as nearly equivalent to the adjustments otherwise provided for in this Warrant as is reasonably practicable. The foregoing provisions of this Section 3.3(b)(i) shall similarly apply to successive reclassifications, capital reorganizations and similar changes of shares of Common Stock and to successive consolidations, mergers, spin-offs, sales, leases or exchanges. (ii) If any sale or exchange of all, or substantially all, of the Company's assets or business or any dissolution, liquidation or winding up of the Company (a "Termination of Business") shall be proposed, the Company shall deliver written notice to the Holder of this Warrant in accordance with Section 3.2 hereof as a condition precedent to the consummation of that Termination of Business. If the result of the Termination of Business is that shareholders of the Company are to receive securities or other interests of a successor entity, the provisions of Section 3.3(b)(i) above shall apply. However, if the result of the Termination of Business is that shareholders of the Company are to receive money or property other than securities or other interests in a successor entity, the Holder of this Warrant shall be entitled to exercise this Warrant and, with respect to any Warrant Shares purchasable pursuant to this Warrant so acquired, shall be entitled to all of the rights of the other shareholders of Common Stock with respect to any distribution by the Company in connection with the Termination of Business. In the event no successor entity is involved and Section 3.3(b)(i) does not apply, all acquisition rights under this Warrant shall terminate at the close of business on the date as of which shareholders of record of the Common Stock shall be entitled to participate in a distribution of the assets of the Company in connection with the Termination of Business; provided, that, in no event shall -------- ---- that date be less than 20 days after delivery to the Holder of this Warrant of the written notice described above and in Section 3.2 hereof. If the termination of acquisition rights under this Warrant is to occur as a result of the event at issue, a statement to that effect shall be included in that written notice. -7- (c) OBLIGATION OF SUCCESSORS OR TRANSFEREES. The Company shall not effect any consolidation, merger, or sale or conveyance of assets within the meaning of Section 3.3(b)(i)(B)-(C) unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed or delivered to the Holder pursuant to Section 8 herein, the obligation to deliver to the Holder such shares of stock, securities, or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. In no event shall the securities received pursuant to this Section be registerable or transferable other than pursuant and subject to the terms of this Warrant. (d) APPLICATION OF THIS SECTION. The provisions of this Section 3.3 shall apply to successive events that may occur from time to time but shall only apply to a particular event if it occurs prior to the expiration of this Warrant either by its terms or by its exercise in full. (e) DEFINITION OF COMMON STOCK. Unless the context requires otherwise, whenever reference is made in this Section 3.3 to the issue or sale of shares of Common Stock, the term "Common Stock" shall mean (i) the no par value Class A Common Stock of the Company, (ii) any other class of stock ranking on a parity with, and having substantially similar rights and privileges as the Company's no par value Class A Common Stock, and (iii) any Convertible Security convertible into either (i) or (ii). However, subject to the provisions of Section 3.3(b)(i) above, Common Stock issuable upon the exercise of this Warrant shall include only shares of Common Stock designed as no par value Class A Common Stock of the Company as of the date of this Warrant. (f) COMPANY-HELD STOCK. For purposes of Sections 3.3(a) above, shares of Common Stock owned or held at any relevant time by, or for the account of, the Company in its treasury or otherwise, shall not be deemed to be outstanding for purposes of the calculation and adjustments described therein. 4. ISSUE TAX. The issuance of certificates for Warrant Shares upon the exercise of the Warrant shall be made without charge to Holder of any issue tax or other governmental charges in respect thereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then holder of the Warrant being exercised. 5. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in this Warrant shall be construed as conferring upon Holder the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders -8- for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company, until, and only to the extent that, this Warrant shall have been exercised. Except as provided in Section 3.1 in the event of a dividend on the Common Stock payable in shares of Common Stock, no dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the Warrant Shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised. The Company covenants, however, that until the Termination Date, for so long as this Warrant remains at least partially unexercised, it will furnish the Holder with copies of all reports and communications furnished to the stockholders of the Company. No provisions hereof, in the absence of affirmative action by Holder to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of Holder shall give rise to any liability of Holder for the Exercise Price or as a stockholder of the Company whether such liability is asserted by the Company or by its creditors. 6. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 7. NOTICES. Any notice required or permitted under this Warrant shall be in writing and either delivered personally, telegraphed or telecopied or sent by certified or registered mail, postage prepaid, and shall be deemed to be given, dated and received when so delivered personally, telegraphed or telecopied or, if mailed, five (5) business days after the date of mailing to the following address or facsimile number, or to such other address or addresses as such person may subsequently designate by notice given hereunder. If to the Company: Premier Laser Systems, Inc. Attention: Secretary 3 Morgan Irvine, California 92618 Facsimile: 714 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP Attention: Peter J. Tennyson, Esq. 695 Town Center Drive, 17th Floor Costa Mesa, California 92626-1924 Facsimile: 714 979-1921 If to Holder: As Holder's address appears on a register of Warrants maintained by the Company's transfer agent. -9- 8. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 9. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of California. 10. EXCHANGE, ASSIGNMENT, COMBINATION AND REPLACEMENT OF WARRANTS. (a) This Warrant is exchangeable, without expense other than as provided in this Section 10, at the option of the Holder upon the reasonable request, presentation and surrender hereof to the Company for other Warrants of different denominations entitling the Holder thereof to acquire in the aggregate the same number of Warrant Shares that may be acquired hereunder. (b) All of the covenant and provisions of this Warrant by or for the benefit of the Holder shall be binding upon and shall inure to the benefit of, its successors and permitted assigns hereunder. This Warrant and all rights hereunder are transferrable and may be sold, transferred, assigned, or hypothecated upon surrender of this Warrant to the Company, together with a duly executed assignment in the form attached hereto as Exhibit B (the "Assignment Form"), whereupon the Company shall, without charge, execute and deliver a new Warrant containing the same terms and conditions of this Warrant in the name of the assignee as named in the Assignment Form, and this Warrant shall be canceled at that time. This Warrant, if properly assigned, may be exercised by a new Holder without first having the new Warrant issued. (c) This Warrant may be delivered or combined with other Warrants that carry the same rights upon the reasonable request, presentation and surrender of this Warrant at the office of the Company, together with a written notice signed by the Holder, specifying the names and denominations in which new Warrants are to be issued. (d) The Company will execute and deliver to the Holder a new Warrant of like tenor and date upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant; provided, that (i) in the case of loss, theft, or destruction, the Company receives a reasonably satisfactory indemnity or -10- bond, or (ii) in the case of mutilation, the Holder shall provide and surrender this Warrant to the Company for cancellation. (e) Any new Warrant executed and delivered by the Company in substitution or replacement of this Warrant shall constitute a contractual obligation of the Company regardless of whether this Warrant was lost, stolen, destroyed or mutilated, and shall be enforceable by any Holder thereof. (f) The Holder shall pay all transfer and excise taxes applicable to any issuance of new Warrants under this Section 10. 11. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, round such fractional shares to the nearest whole share. 12. BEST EFFORTS. The Company covenants that it will not, by amendment of its Articles of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, reissue or sale of securities, or any other voluntary action, avoid or seek to avoid the observation or performance for any term of this Warrant, but will at all times in good faith assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the Holder against dilution or other impairment. 13. FURTHER ASSURANCES. The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue, duly authorized fully paid and nonassessable Warrants and Common Stock and other securities issuable upon exercise of this Warrant from time to time and not in violation of any pre-emptive rights. (SIGNATURE PAGE follows.) -11- IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer effective as of __________, 1998. PREMIER LASER SYSTEMS, INC. By: ___________________________ Colette Cozean, Ph.D. Chief Executive Officer -12- EXHIBIT A PREMIER LASER SYSTEMS, INC. COMMON STOCK WARRANT FORM OF SUBSCRIPTION AGREEMENT (TO BE SIGNED AND DELIVERED UPON EXERCISE OF WARRANT) PREMIER LASER SYSTEMS, INC. 3 Morgan Irvine, California 92618 Attention: Secretary The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, _______________ shares of Common Stock (the "Stock") of Premier Laser Systems, Inc. (the "Company") and herewith makes payment of __________________________ Dollars ($________) therefor and requests that the certificates for such shares be issued in the name of, and delivered to, ______________, whose address is ____________________________________. A copy of the Exercise Notice (as defined in the Warrant) evidencing that the Warrant is exercisable for at least the number of shares covered by this agreement is attached. The address set forth below is the true and correct address of the undersigned. _________________________________ (Name) _________________________________ (Address) _________________________________ ________________________________ A-1 If said number of shares shall not be all the shares exercisable or purchasable under the within Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of the Warrants. DATED:________________________ _____________________________________ (Name of holder must conform in all respects to name of holder as specified on the face of the Warrant or with the name of the assignee appearing on the assignment form attached hereto.) ___________________________________ (signature) ___________________________________ (print name) ___________________________________ (print title) A-2 EXHIBIT B ASSIGNMENT FORM FOR VALUE RECEIVED, the receipt and adequacy of which are each hereby confirmed, the undersigned,_____________________, hereby sells, assigns and transfers unto___________________ all of the undersigned's right, title and interest in and to an aggregate of __________ (___) warrants to purchase shares of the Common Stock of Premier Laser Systems, Inc. (the "Corporation) standing in the name of the undersigned on the books of the Corporation and evidenced by that certain Class D Warrant, dated ________ __, ___ (the "Warrant"), and does hereby irrevocable constitute and appoint __________________ as attorney-in-fact to effect the reissue of the Warrant as necessary and the transfer of said Warrant on the books of the Corporation with full power of substitution upon presentation to the Corporation of this Assignment Form together with the Warrant. Dated: ____________ __, ___ Signature: ___________________________ Printed Name: ___________________________ B-1 EX-99.9 5 PURCHASE AGRMT WITH MARK BLUMENKRANZ EXHIBIT 99.9 _______________________ PURCHASE AGREEMENT DATED AS OF FEBRUARY 25, 1998 BY AND BETWEEN PREMIER LASER SYSTEMS, INC. AND SELLER _______________________ TABLE OF CONTENTS -----------------
Page ---- ARTICLE I DEFINITIONS............................................... 2 1.1 Defined Terms................................................ 2 ARTICLE II PURCHASE AND SALE OF SHARES............................... 4 2.1 Purchase and Sale of Shares.................................. 4 2.2 Purchase Consideration....................................... 5 2.3 Closing...................................................... 5 2.4 Purchase Consideration Adjustment............................ 6 2.5 Rescission of Tender Offer................................... 6 ARTICLE III REPRESENTATIONS AND WARRANTIES............................ 7 3.1 Representations and Warranties of Premier.................... 7 3.2 Representations and Warranties of Seller..................... 9 ARTICLE IV COVENANTS................................................. 12 4.1 Covenants of the Seller...................................... 12 4.2 Covenants of Premier......................................... 13 4.3 Reasonable Best Efforts...................................... 14 ARTICLE V CONDITIONS TO CLOSING..................................... 14 5.1 Conditions to Obligation of Premier.......................... 14 5.2 Conditions to Obligations of the Seller...................... 15 ARTICLE VI INDEMNIFICATION........................................... 15 6.1 Indemnification by Premier................................... 15 6.2 Losses Net of Insurance, etc................................. 16 6.3 Termination of Indemnification............................... 16 6.4 Procedures Relating to Indemnification Under Article VI...... 16 6.5 Arbitration.................................................. 18 ARTICLE VII GENERAL PROVISIONS........................................ 19 7.1 Termination, Abandonment or Rescission of Purchase Agreement. 19 7.2 Counterparts................................................. 20 7.3 Notices...................................................... 21 7.4 Governing Law................................................ 22 7.5 Interpretation............................................... 22 7.6 Successors and Assigns....................................... 22
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Page ---- 7.7 Entire Agreement; No Oral Waiver; Construction.............. 22 7.8 Severability................................................ 23 7.9 No Third-party Rights....................................... 23 7.10 Remedies.................................................... 23 7.11 Further Assurances.......................................... 23 7.12 Survival of Representations................................. 23 7.13 No Restrictions on Directors................................ 24
-ii- This Purchase Agreement ("Purchase Agreement") is made and entered into as of February 25, 1998, by and between Premier Laser Systems, Inc., a California corporation ("Premier") and Mark S. Blumenkranz, M.D. and Recia Blumenkranz (collectively, the "Seller"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Seller owns in the aggregate, and on the Closing Date (as defined herein) the Seller will own, of record and beneficially, 421,052 shares of Ophthalmic Imaging Systems, a California corporation (the "Company") 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, as amended (the "Rights Agreement"), between Company and American Securities Transfer, Inc. (the "Rights Agent") (the Rights together with the Common Stock constitute the "Shares"); WHEREAS, the Seller holds certain officer or director positions with the Company that require fiduciary duties with respect to the Company; WHEREAS, Premier is currently attempting to purchase additional shares of the Company Common Stock under separate purchase agreements (the "Other Agreements"), between Premier and a number of sellers who hold no defined fiduciary responsibilities to the Company; WHEREAS, as a condition and an inducement to the Seller to enter into this Purchase Agreement, Premier has agreed to commence a tender offer (the "Tender Offer") for the remainder of the Company Common Stock following the completion of the transactions related to this Purchase Agreement and the Other Agreements and if such Tender Offer is subsequently withdrawn, abandoned, or terminated by Premier without Premier having purchased all Shares validly tendered thereunder, such Shares will be re-exchanged to Sellers by Premier for the consideration paid pursuant hereto by Premier; WHEREAS, concurrent with the execution of this Purchase Agreement, and as a condition hereto and thereto, the Company and Premier will enter into a Stock Purchase Agreement (the "Acquisition Agreement") of even date herewith setting forth the terms and conditions of such Tender Offer and the acquisition by Premier of any such Company Common Stock; WHEREAS, the parties want to insure that the Seller receives compensation for his shares of Company Common Stock tendered under this Purchase Agreement at a rate equal to that which is to be paid under the Tender Offer; WHEREAS, the Stock Consideration (as herein defined) could appreciate or decline in value between the Closing Date and the date the Tender Offer closes; WHEREAS, in order to insure Seller receives the same per share compensation relative to the parties who tender shares under the Tender Offer, the number of shares of Premier Common Stock (as herein defined) issued to Seller may need to be retroactively readjusted at the Tender Offer's closing; WHEREAS, the Seller desires to sell, and Premier wishes to purchase, the Shares upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS ----------- 1.1 Defined Terms. Terms not otherwise defined herein shall have the ------------- following meanings: "Acquisition Agreement" means the Stock Purchase Agreement by and between --------------------- Premier and Company of even date herewith, as amended, supplemented or otherwise modified from time to time in accordance with its terms. "Affiliate" means, when used with respect to another Person, any Person who --------- is, whether directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such Person. "Beneficially Own" has the meaning given such term in Rule 13d-3 under the ---------------- Exchange Act, as in effect on the date hereof. As used herein, the phrases "beneficial ownership" and "beneficial owner" have correlative meanings. "Business Combination" means (i) any merger, reorganization, share exchange -------------------- consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company, (ii) any purchase or sale of all or any significant portion of the assets of the Company, (iii) any issuance or other sale by the Company of any shares of Company Common Stock or (iv) any issuance or other sale by the Company of securities representing 20% or more of beneficial ownership of the Company or any of its Subsidiaries (as defined herein). -2- "Business Day" means any day that is not a Saturday, Sunday or other day on ------------ which banks are required or authorized by law to be closed in California. "Closing Date" means the earlier of (i) the second Business Day following ------------ the date hereof and (ii) such other date and time as the parties shall otherwise mutually agree. "Dollars" and "$" mean lawful currency of the United States of America. ------- - "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Governmental Authority" means any foreign, federal, state or local ---------------------- government or any court, administrative agency or commission or other governmental agency or authority, whether domestic or foreign. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit ---- arrangement, encumbrance, lien (statutory ore other), charge or security interest; or any preference, priority or other arrangement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "material adverse effect" with respect to any Person means a material ----------------------- adverse effect (i) on the financial condition, business, liabilities, properties, assets or results of operations of such Person and its subsidiaries, taken as a whole, or (ii) on the ability of such Person to perform its obligations under or to consummate the transactions contemplated by this Purchase Agreement. "Person" means an individual, partnership, limited liability company, ------ corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Purchase Agreement" means this Purchase Agreement, as amended, ------------------ supplemented or otherwise modified from time to time in accordance with its terms. "Registration Rights Agreement" means the Registration Rights Agreement in ----------------------------- the form of Exhibit "A" to be executed by and between Premier and the Seller on the Closing Date. "Restrictions" means, when used with respect to any specified security, any ------------ stockholders or other trust agreement, option, warrant, escrow, proxy, buy-sell agreement, power of attorney or other contract, agreement or arrangement which (i) grants to any Person the right to sell or otherwise dispose of or vote such specified security or any interest therein -3- or (ii) restricts the transfer of, or the exercise of any rights or the enjoyment of any benefits by reason of, the ownership of such specified security. "Stock Component" means the quotient (rounded to the nearest 1/100,000) --------------- determined by dividing $0.25 by the average closing sales price for Premier Common Stock (as hereinafter defined) as reported on The Nasdaq Stock Market, Inc. ("NASDAQ") as published in The Wall Street Journal or, if not published therein, an another authoritative source, for either (i) fifteen (15) consecutive trading days (each, a "Trading Day") immediately preceding the Closing Date or (ii) the thirty (30) consecutive Trading Days ending fifteen (15) Trading Days prior to the Closing Date, whichever yields the lowest number of shares of Premier Common Stock. Notwithstanding any other provision of this Purchase Agreement, if Seller would have otherwise have been entitled to receive a fraction of a share of Premier Common Stock (after taking into account all shares tendered by Seller) he, she or it 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 Purchase 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 Day preceding the Closing Date. "Subsidiary" of any Person means another Person, an amount of the voting ---------- securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person. "Transactions" means the transactions described in Section 2.3(b). ------------ ARTICLE II PURCHASE AND SALE OF SHARES --------------------------- 2.1 Purchase and Sale of Shares. Upon the terms and subject to the --------------------------- conditions of this Purchase Agreement, Premier agrees to purchase from the Seller, and the Seller agrees to sell to Premier, the Shares free and clear of any Lien or Restriction created by the Seller (other than any Lien or Restriction imposed pursuant to the terms of this Purchase Agreement) or otherwise binding upon any such Shares in exchange for the Purchase Consideration (as defined in Section 2.2 of Purchase Agreement), as may be adjusted pursuant to Section 2.4 hereof. -4- 2.2 Purchase Consideration. Premier shall pay to Seller in respect ---------------------- of each share of Company Common Stock sold and purchased hereunder (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 Stock Component (the "Stock Consideration"); (c) one Premier Class C Warrant (the "Class C Warrant"); and (d) one Premier Class D Warrant (the "Class D Warrant" together with the Class C Warrant, the "Warrant Consideration") (the Cash Consideration, the Stock Consideration and the Warrant Consideration together constitute the "Purchase Consideration"). 2.3 Closing. ------- (a) Unless this Purchase Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Section 7.1(a) and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing (the "Closing") of the transactions contemplated ------- by Section 2.1 will take place on the earlier of (i) the second Business Day following the date hereof and (ii) such other date, time and place as the parties shall otherwise mutually agree (in either event, the date of the Closing being referred to herein as the "Closing Date"). ------------ (b) At the Closing, the following actions (collectively, the "Transactions") shall occur: - ------------- (i) Premier shall pay or cause to be paid the aggregate Cash Consideration to or for the account of the Seller by wire transfer to such bank account (the "Designated Bank Account") as the Seller shall designate in writing prior to the Closing Date; (ii) At the effective time of the Closing, Premier shall issue shares of Premier Common Stock constituting the Stock Consideration to the Seller as directed by the Seller in writing prior to the Closing Date; (iii) At the effective time of the Closing, Premier shall issue the warrants constituting the Warrant Consideration (in the form attached hereto as Exhibits "B" and "C") to the Seller as directed by the Seller in writing prior to the Closing Date; (iv) The parties shall execute and deliver, the Registration Rights Agreement; (v) The Seller shall deliver or cause to be delivered to Premier or its designee such documents as Premier may reasonably request, including certificates for all Shares to evidence the transfer to Premier of good and marketable title in and -5- to all of the Shares owned by the Seller free and clear of any Lien or Restriction on such Shares (other than any Lien or Restriction imposed pursuant to the terms of this Purchase Agreement) or the applicable federal or state securities laws, and (vi) Each party shall take such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article V. 2.4 Purchase Consideration Adjustment. In order to insure that --------------------------------- Seller receives the same per share Purchase Consideration as that to be paid under the Tender Offer, Seller hereby agrees to allow Premier to retroactively readjust the amount of Purchase Consideration previously paid or granted to Seller if, at the Expiration Date (as that term is defined and used within the Acquisition Agreement) the Cash Consideration, the Stock Consideration or the Warrant Consideration that Seller would have received under the Tender Offer differs from that initially paid or granted to Seller under this Purchase Agreement. If such Warrant Consideration amounts are disparate, Premier shall either grant Seller the right to purchase additional shares of Premier Common Stock (the "Additional Warrant Shares") or cancel Seller's existing documentation evidencing the Warrant Consideration and reissue new documentation evidencing the reduced number of shares Seller is eligible to purchase. Similarly, if the Stock Consideration amounts are found to be disparate, Premier shall either issue Seller additional shares of Premier Common Stock (the "Additional Stock Payment Shares") or cancel Seller's existing shares and reissue a certificate evidencing fewer shares to the effect that Seller shall ultimately receive the same per share Stock Compensation as would have been provided under the Tender Offer. If the amounts of Cash Consideration are disparate and in Seller's favor, Premier shall pay Seller the additional cash. If such difference is in Premier's favor, Seller shall remit the difference in cash to Premier. The readjustment and exchange of Cash Consideration shall be completed to the effect that Seller receives the same per share Cash Consideration as he or she would have under the Tender Offer. 2.5 Rescission of Tender Offer. If (i) Premier withdraws, abandons, -------------------------- or terminates the Tender Offer without Premier purchasing all Shares validly tendered, (ii) the Tender Offer expires without Premier purchasing all Shares validly tendered, or (iii) the Acquisition Agreement is terminated pursuant to Section 7.1(b) hereof, then at the election of either Premier or Seller: (a) this Purchase Agreement shall be rescinded; (b) Seller shall return the Purchase Consideration to Premier; (c) the certificates representing the shares of Stock Consideration and the documentation evidencing the Warrant Consideration shall be canceled; and (d) Premier shall return the certificates evidencing the shares of Company Common Stock to the Seller. The Stock Consideration and Warrant Consideration issued to Seller and the Shares purchased by Premier shall be legended to reflect the possibility of such recission. -6- ARTICLE III REPRESENTATIONS AND WARRANTIES ------------------------------ 3.1 Representations and Warranties of Premier. Premier represents ----------------------------------------- and warrants to the Seller as of the date hereof and as of the Closing Date as follows: (a) Organization, Standing and Corporate Power. Premier is duly ------------------------------------------ organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority to carry on its business as now being conducted. Premier is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) could not reasonably be expected to have a material adverse effect with respect to Premier. (b) Corporate Authorization. The execution, delivery and performance ----------------------- by Premier of this Purchase Agreement and the consummation by Premier of the transactions contemplated hereby have been duly authorized by all necessary corporate action, including by resolution of the Board of Directors of Premier. This Purchase Agreement has been duly executed and delivered by Premier and constitutes a valid and binding agreement of Premier, enforceable against Premier in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding or equity or at law). (c) No Conflict. Other than the filing of a Form 4 and an amendment ----------- to Premier's report on Schedule 13D under the Exchange Act, and no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement or the Registration Rights Agreement by Premier and the consummation by Premier of the transactions contemplated hereby and thereby, except for such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on Premier, and its Subsidiaries, taken as a whole, or to prevent or materially delay the consummation of the transactions contemplated hereby and thereby. Neither the execution and delivery of this Purchase Agreement or the Registration Rights Agreement by Premier nor the consummation by Premier of the transactions contemplated hereby or thereby, nor compliance by Premier with any of the provisions hereof or thereof (i) conflicts with or results in any breach of the Articles of Incorporation or bylaws of Premier, (ii) contravenes, conflicts with or would constitute a violation of any provision of any law, regulation, judgment, injunction, order or -7- decree binding upon Premier, or (iii) constitutes a default under or gives rise to any right of termination, cancellation or acceleration of any right or obligation of Premier or any of its Subsidiaries or to a loss of any benefit to which Premier or any of its Subsidiaries is entitled under any provision of any agreement, contract or other instrument binding on Premier or any of its Subsidiaries or any license, franchise, permit or other similar authorization held by Premier or any of its Subsidiaries, except, in the case of clauses (ii) and (iii), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have a material adverse effect on Premier or any of its Subsidiaries taken as a whole. (d) No Required Vote. No vote of the holders of any class of the ---------------- outstanding capital stock of Premier is necessary to approve this Purchase Agreement or the Transactions. (e) Reservation of Premier Common Stock. The Premier Common Stock and ----------------------------------- Warrant Consideration to be issued to Seller as Purchase Consideration pursuant to this Purchase Agreement and any Premier Common Stock purchasable upon exercise of such Warrant Consideration, have been reserved solely for issuance and delivery to Seller, and when issued, will be duly and validly issued, fully paid and nonassessable, and such issuances will not violate any pre-emptive rights under applicable law, Premier's Articles of Incorporation or bylaw, contract or agreement, or otherwise. (f) Limitations on Transferability. Premier acknowledges that the ------------------------------ Shares are being acquired from an Affiliate of the Company without registration under the Securities Act or the securities laws of any other applicable jurisdiction, and that such Shares are being sold to Premier pursuant to an exemption thereto. Premier is acquiring the Shares solely for its own account, for investment purposes only, and not with an intent or view to their distribution within the meaning of Section 2(11) of the Securities Act. Premier understands that such Shares may not be freely transferable without registration under the Securities Act or the securities laws of any other applicable jurisdiction unless subsequently registered or an exemption therefrom is available. Premier also acknowledges that the transferability of the Shares is limited by the terms of this Purchase Agreement. (g) Legend. In furtherance of the agreements contained in Section ------ 3.1(f) and in keeping with the possibility that Tender Offer might not be consummated, Premier agrees that the certificate or certificates representing the Shares Beneficially Owned by Premier following the Closing shall bear, until the consummation of the Tender Offer is effected, the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND ARE SUBJECT TO POSSIBLE -8- EXCHANGE UNDER THAT CERTAIN PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT") OF EVEN DATE HEREWITH BETWEEN PREMIER LASER SYSTEMS, INC. AND THE HOLDER. The Company will exchange certificates without the foregoing legend upon the request of Premier at such time as the restrictions imposed by this Purchase Agreement are no longer applicable. 3.2 Representations and Warranties of Seller. The Seller represents ---------------------------------------- and warrants to Premier as of the date hereof and as of the Closing Date as follows: (a) Organization, Standing and Power of the Seller. The Seller has ---------------------------------------------- the requisite power and authority and legal capacity to enter into and perform all of its obligations under this Purchase Agreement, to consummate the Transactions (including transferring the Shares to Premier). Neither the execution and delivery of this Purchase Agreement by the Seller nor the consummation by the Seller of the Transactions nor compliance by the Seller with the provisions hereof conflicts with or results in a breach of any agreement, other than such agreements, the conflict with or breach of which, individually or in the aggregate, could not reasonably be expected to prevent or materially delay the consummation of the Transactions. (b) Enforceability. This Purchase Agreement has been duly and validly -------------- authorized, executed and delivered by the Seller and constitutes the Seller's valid and binding agreement, enforceable against the Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding at equity or at law). (c) Title to Shares. At the Closing the Seller will be the direct and --------------- record owner of the Shares. Other than options to purchase 105,000 shares of Company Common Stock, the Seller does not own or have the right to acquire, whether presently exercisable or at any time in the future, any shares of Company Common Stock or any securities convertible into or exercisable or exchangeable for Shares including, but not limited to, any options held by Seller. No person has the right to acquire, and the Seller is not a party to any contract, understanding, commitment, arrangement or other agreement to sell, transfer or otherwise dispose of, any shares of Company Common Stock owned by or issuable to the Seller. At the Closing, the Seller will have good and valid title to the Shares, free and clear of any Liens or Restrictions and they will have the full legal right, power and authority to assign, transfer and deliver such shares to Premier pursuant hereto. On the Closing Date, the -9- Seller will have the sole voting power, and sole power of disposition, with respect to all of such Shares and there will be no restrictions on the Seller's ability to transfer such Shares. (d) No Conflict. Except for the filing of a Form 4 with the ----------- Securities and Exchange Commission, Nasdaq, the Boston Stock Exchange, and the Company, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement by the Seller and the consummation by the Seller of the transactions contemplated hereby, other than such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Seller, if any, taken as a whole, or to prevent or materially delay the consummation of the Transactions. (e) Investment Intention. The Seller is acquiring the Stock -------------------- Consideration and the Warrant Consideration for its own account as principal for investment and not with a view to resale or distribution or with any present intention of distributing or selling the same. The Seller is fully aware that the Stock Consideration and the Warrant Consideration have not been registered under the Securities Act or under any applicable state securities laws, and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and all such laws. The Seller is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act. The Seller is able to bear the economic risk of the investment in the Stock Consideration and the Warrant Consideration and has such knowledge and experience in financial and business matters, and knowledge of the business of Premier, as to be capable of evaluating the merits and risks of a prospective investment. (f) Limitations on Transferability. Seller acknowledges that it may ------------------------------ not transfer any of the Stock Consideration or the Warrant Consideration received by it pursuant hereto unless and until the same are registered under the Securities Act and any applicable state securities laws, or unless an exemption from such registration is available. Seller acknowledges that transferability of the Stock Consideration and Warrant Consideration also is limited by the terms of this Purchase Agreement. (g) Legend. In furtherance of the agreements contained in Sections ------ 3.2(e) and (f), the Seller agrees that the certificate or certificates representing: (i) the Stock Consideration Beneficially Owned by Seller shall bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE -10- SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND ARE SUBJECT TO POSSIBLE CANCELLATION UNDER THAT CERTAIN PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT") OF EVEN DATE HEREWITH BETWEEN PREMIER LASER SYSTEMS, INC. AND THE HOLDER. (ii) the Warrant Consideration Beneficially Owned by Seller shall bear the following legend: THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND ARE SUBJECT TO POSSIBLE CANCELLATION UNDER THAT CERTAIN PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT") OF EVEN DATE HEREWITH BETWEEN PREMIER LASER SYSTEMS, INC. AND HOLDER. -11- Premier will exchange certificates without the foregoing legend upon the request of Seller at such time as (i) the restrictions imposed by this Purchase Agreement are no longer applicable; and (ii) the holder thereof may sell such shares or warrants without registration of such sale under the Securities Act, as evidenced (if requested by Premier) by an opinion of counsel to such holder. (h) No Broker. No investment banker, broker, finder, consultant or --------- intermediary is entitled to be paid any investment banking, brokerage, finder's or similar fee or commission by any Seller in connection with this Purchase Agreement or the Transactions for which the Seller or Premier would be liable following the Closing. ARTICLE IV COVENANTS --------- 4.1 Covenants of the Seller. ----------------------- (a) Binding Obligations. Notwithstanding, and without in any way ------------------- limiting, any other provision of this Purchase Agreement, the Seller acknowledges that, subject to the satisfaction (or waiver by it) of the conditions set forth in Section 5.2, its obligation to consummate the Transactions, including the sale to Premier of the Shares, is absolute and unconditional and shall not terminate except in accordance with Section 7.1, irrespective of, without limitation, any receipt of the Company of any proposal for a Business Combination or any resolution by the Board of Directors of the Company to approve a Business Combination or otherwise. (b) Return of Purchase Consideration. If (i) Premier withdraws, -------------------------------- abandons, or terminates the Tender Offer without Premier purchasing all Shares validly tendered, (ii) the Tender Offer expires without Premier purchasing all Shares validly tendered, or (iii) this Purchase Agreement is terminated pursuant to Section 7.1 hereof, then this Purchase Agreement shall be rescinded and Seller agrees to return the Purchase Consideration to Premier. (c) Exchange of Stock Consideration or Warrant Consideration. In the -------------------------------------------------------- event the Stock Consideration or Warrant Consideration must be adjusted as described in Section 2.4, Seller hereby agrees to return to Premier, within five (5) business days after notice, the certificate(s) reflecting the shares of Premier Common Stock and/or the documentation related to the Warrant Consideration for reissuance. -12- 4.2 Covenants of Premier. -------------------- (a) Restriction on Transfer of Shares. Following the Closing and --------------------------------- until the consummation of the transactions contemplated under the Tender Offer, Premier shall not, directly or indirectly, without prior written consent of the Seller and except pursuant to or as expressly contemplated hereby, offer for sale, sell (including short sales), transfer, tender, pledge, encumber, assign or otherwise dispose of (including by gift), or enter into any contract, option, or other arrangement or understanding (including any profit-sharing agreement) with respect to or consent to the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of the Shares, or commit or agree to take any of the foregoing actions. (b) Registration Rights Agreement. Premier shall cause the parties to ----------------------------- enter into that certain Registration Rights Agreement in the form of Exhibit "A." (c) Purchases of Company Common Stock Prior to the Closing. Premier ------------------------------------------------------ agrees to use its best efforts to purchase or otherwise acquire, concurrently with or prior to the Closing, such number of shares of Company Common Stock, in negotiated transactions or otherwise, as is necessary so that the Premier's percentage of beneficial ownership of the Company Common Stock, shall at the Closing constitute at least 50.1%. (d) Tender Offer. Following the Closing, Premier agrees to use its ------------ best efforts to effect a tender offer (the "Tender Offer") for the purchase of the then remaining outstanding shares of Company Common Stock. (e) Return of Certificates. If Premier shall fail to commence the ---------------------- Tender Offer within five (5) days of the execution and delivery of this Purchase Agreement or if (i) Premier withdraws, abandons, or terminates the Tender Offer without Premier purchasing all Shares validly tendered, (ii) the Tender Offer expires without Premier purchasing all Shares validly tendered, or (iii) the Acquisition Agreement is terminated pursuant to Section 7.1(b) hereof, then at the election of Premier or Seller this Purchase Agreement shall be rescinded and upon Seller's return of the Purchase Consideration to Premier, Premier shall promptly return the certificate(s) evidencing Seller's Shares. (f) Execution of Acquisition Agreement. Premier concurrently ---------------------------------- herewith, shall execute and deliver the Acquisition Agreement and the Other Agreements, and shall use its best efforts to satisfy the terms and conditions of, to perform the obligations to be performed by it under, and the consummation of the transactions contemplated by, the Acquisition Agreement. -13- 4.3 Reasonable Best Efforts. Subject to the terms and conditions of ----------------------- this Purchase Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Purchase Agreement, except as may be required by the Seller in performing his or her fiduciary duties as an officer or director of the Company. ARTICLE V CONDITIONS TO CLOSING --------------------- 5.1 Conditions to Obligation of Premier. The obligation of Premier ----------------------------------- to consummate the purchase of the Shares is further subject to the satisfaction (or waiver by Premier) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of the Seller set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date). Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. (b) Performance of Obligations of the Seller. The Seller shall have ---------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by them under this Purchase Agreement at or prior to the Closing Date, and Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. (c) No Injunction. No preliminary or permanent injunction or order ------------- that would prohibit or restrain the consummation of the transactions contemplated hereunder shall be in effect and no Governmental Authority or other Person shall have commenced or threatened to commence an action or proceeding seeking to enjoin the consummation of such transactions or to impose liability on the parties hereto in connection therewith. (d) Acquisition Agreement. Premier and the Company shall have --------------------- executed and delivered, contemporaneously with this Purchase Agreement, the Acquisition Agreement -14- by and between Premier and the Company, dated February 25, 1998, and Company shall not be in breach or default of its obligations and agreements thereunder. 5.2 Conditions to Obligations of the Seller. The obligations of the --------------------------------------- Seller to effect the Transactions are further subject to the satisfaction (or waiver by the Seller) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of Premier set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date), and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (b) Performance of Obligations of Premier. Premier shall have ------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by it under this Purchase Agreement at or prior to the Closing Date, and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (c) Registration Rights Agreement. The parties shall have entered ----------------------------- into that certain Registration Rights Agreement in the form of Exhibit "A." (d) Acquisition Agreement. Premier and the Company shall have --------------------- executed and delivered, contemporaneously with this Purchase Agreement, the Acquisition Agreement by and between Premier and the Company, dated February 25, 1998, and Premier shall not be in breach or default of its obligations and agreements thereunder. ARTICLE VI INDEMNIFICATION --------------- 6.1 Indemnification by Premier. From and after the date of this -------------------------- Purchase Agreement, whether or not the Transactions are consummated, Premier shall indemnify the Seller and its respective Affiliates, directors, officers, employees, partners, stockholders, agents and representatives (including attorneys and accountants) (collectively, the "Representatives") against and hold them harmless from any loss, liability, claim, damage or expense (including reasonable legal fees and expenses ("Loss") suffered or incurred by any such indemnified party arising from or relating to any lawsuit by any governmental body -15- or any present or former stockholder of the Company naming any of the parties entitled to indemnification hereunder (each an "indemnified party") and seeking to enjoin or otherwise prevent, prohibit or impede the consummation of the Transactions or otherwise challenging the Transactions. 6.2 Losses Net of Insurance, etc. The amount of any Loss for which ----------------------------- indemnification is provided under this Article VI shall be net of any amounts actually recovered by the indemnified party under insurance policies (net of the cost of obtaining such recovery). If Seller is entitled to indemnification under insurance policies, it shall, at the request of Premier, use its reasonable best efforts to obtain such indemnification under such insurance policies before seeking indemnification from Premier, and any expenses incurred in connection therewith shall be advanced by the party obligated to provide such indemnification (the "indemnifying party"). It is understood that the indemnification obligation of Premier is secondary and supplemental to any indemnification under any insurance policy maintained for the benefit of the indemnified party. The indemnify party shall not be relieved of its obligation to advance fees and expenses to the indemnified party in accordance with Section 6.4 (or to indemnify any indemnified person under this Article VI) by reason of any claim under any insurance policy, but shall be entitled to receive, and the indemnified party does hereby assign to the indemnifying party the right to receive, direct payment of any recovery under any such claim. 6.3 Termination of Indemnification. The obligations to indemnify and ------------------------------ hold harmless a party hereto shall not terminate, except that the obligations of Premier pursuant to Section 6.1 terminate upon a termination by either party pursuant to Section 7.1(a), but only with respect to actions or omissions from and after the time of such termination. 6.4 Procedures Relating to Indemnification Under Article VI. ------------------------------------------------------- (a) An indemnified party entitled to any indemnification in respect of, arising out of or involving a claim or demand made by any Person against the indemnify party (a "Third Party Claim") shall notify the indemnifying party in writing, and in reasonable detail of the Third Party Claim within 10 Business Days after receipt by such indemnified party of written notice of the Third Party Claim; provided; however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually and materially prejudiced as a result of such failure (it being understood that the indemnifying party shall not be liable for any expenses incurred during the period in which the indemnified party failed to give notice). (b) If a Third Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses -16- and unconditionally acknowledges its obligations to indemnify the indemnified party with respect to such Third Party Claim, to assume the defense thereof with counsel selected by the indemnifying party and not reasonably objected to by the indemnified party. Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnified party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the indemnifying party (except that, for any period following receipt of notice of any Third Party Claim during which the indemnifying party has failed to assume the defense of such claim, the indemnifying party shall pay such fees and expenses as in incurred), it being understood that the indemnifying party shall control such defense; provided, that the indemnifying party shall not take any action in the conduct of such defense that would materially adversely affect the indemnified party without the consent of the indemnified party. The indemnified party shall also have the right to employ no more than one separate counsel for all indemnified party (and no more than one local counsel in any jurisdiction where it is reasonably necessary) not reasonably objected to by the indemnifying party, at the expense of the indemnifying party, but only if: (i) the use of counsel chosen by the indemnifying party to represent the indemnified party or parties would present such counsel with a conflict of interest, (ii) the actual or potential defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or are in addition to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall in writing authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. (c) If the indemnifying party elects to assume the defense of any Third Party Claim, all of the indemnified parties, shall cooperate with the indemnifying party in the defense or prosecution thereof. Such cooperation shall include (upon the indemnifying party's reasonable request) the provision to the indemnifying party of existing records and information which are reasonably relevant to such Third Party Claim, and making themselves (in the case of individuals) and using reasonable best efforts to make their employees and their Representatives, if any, available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and to attend depositions, give testimony or otherwise appear at any trial or hearing to the extent reasonably requested by the indemnifying party. Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnifying party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnified party's prior written consent, which consent shall not be unreasonably withheld. If the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third -17- Party Claim which the indemnifying party may recommend and which by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim, which releases the indemnified party completely in connection with such Third Party Claim, and which would not otherwise adversely affect the indemnified party. (d) Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Third Party Claim (but shall be liable for the reasonable fees and expenses of counsel incurred by the indemnified party in defending such Third Party Claim, which fees and expenses the indemnifying party shall pay as incurred in advance of the final disposition of such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party which the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages; provided, however, that the foregoing shall not apply to any Third Party Claim prior to the Closing seeking to enjoin or otherwise prevent, prohibit or impede the consummation of the Transactions, which Third Party Claim prior to the Closing shall be defended jointly by the indemnifying party and the indemnified party, it being understood and agreed that (i) only one counsel (plus only one local counsel in any jurisdiction where it is reasonably necessary) shall be permitted for all of the indemnified party and (ii) if the parties cannot in good faith agree on a particular matter, such dispute shall be resolved in good faith by the indemnifying party, with a good faith effort to balance the interests of both the indemnified parties and the indemnifying party. If such equitable relief or other relief portion of the Third Party Claim can be so separate from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to the money damages. In the event that the indemnifying party is not permitted to assume the defense of any Third Party Claim pursuant to this Section 6.4(d), the indemnified party shall not agree to any settlement, compromise or discharge of such Third Party Claim which by its terms obligates the indemnifying party without the prior written consent of the indemnifying party. (e) In the event that the indemnified party is entitled to obtain counsel at the indemnifying party's expense in accordance with Section 6.4(b) or Section 6.4(d), indemnifying party shall reimburse the indemnified party for the reasonable fees, costs and expenses of such counsel upon presentation of invoices detailing with reasonable specificity the nature of the services provided and the basis of the fees, costs and expenses incurred. 6.5 Arbitration. In the event that any parties are unable to resolve ----------- any dispute related to or arising under the Transactions contemplated hereunder, the exclusive method for resolving such dispute shall be binding, nonappealable arbitration in Irvine, California initiated by a party by a written notice to the other party demanding arbitration and specifying the claim to be arbitrated. Such arbitration shall be conducted pursuant to the Expedited Procedures of the Commercial Arbitration Rule (the "Rules") of the American -18- Arbitration Association ("AAA), with the following modifications. The party initiating the arbitration (the "Claimant") shall appoint its arbitrator in its request for arbitration (the "Request"). The other party (the "Respondent") shall appoint its arbitrator within 15 Business Days of receipt of the Request and shall notify the Claimant of such appointment in writing. If the Respondent fails to appoint an arbitrator within such 15 Business Day period, the arbitrator named in the Request shall decide the controversy or claim as a sole arbitrator. Otherwise, the two arbitrators appointed by the parties shall appoint a third arbitrator within 15 Business Days after the Respondent has notified Claimant of the appointment of the Respondent's arbitrator. When the third arbitrator has accepted the appointment, the two party-appointed arbitrators shall promptly notify the parties of such appointment. If the two arbitrators appointed by the parties fail or are unable to so appoint a third arbitrator, then the appointment of the third arbitrator shall be made by the AAA, which shall promptly notify the parties of the appointment. The third arbitrator shall act as chairperson of the panel. Upon appointment of the third arbitrator, the arbitrators shall proceed to commence and conduct all proceedings promptly and in accordance with the Rules. The arbitral award shall be in writing and shall be final and binding on the parties to the arbitration. The arbitrator shall be instructed to award costs, including reasonable attorneys' fees and disbursements, which shall be paid by the party against whom the award is entered. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties or their assets, without review of the merits of the award. ARTICLE VII GENERAL PROVISIONS ------------------ 7.1 Termination, Abandonment or Rescission of Purchase Agreement. ------------------------------------------------------------ (a) This Purchase Agreement may be terminated and the purchase and sale of the Shares abandoned at any time prior to the Closing: (i) by mutual consent of Premier and the Seller in writing; (ii) by either Premier or the Seller if the Closing shall not have occurred prior to February 27, 1998 (other than due to the failure of the party seeking to terminate this Purchase Agreement to perform its obligations under this Purchase Agreement required to be performed at or prior to such date); (iii) by Premier or Seller, if any Governmental Authority within the United States or any country or other jurisdiction in which Premier, directly or -19- indirectly, has material assets or operations shall have issued an order, decree or taken any other action permanently enjoining, restraining or otherwise prohibiting the Transactions, and such order, decree, ruling or other action shall have become final and nonappealable; or (iv) by Premier, if after the date of this Purchase Agreement the Company issues (A) any shares of Company Common Stock (other than upon the conversion, exercise or exchange of securities outstanding on the date of this Purchase Agreement that are convertible into or exercisable or exchangeable for shares of Company Common Stock) or (B) any securities convertible into or exercisable or exchangeable for shares of Company Common Stock which result in the percentage of Company Common Stock beneficially held by the Seller, together with the percentage of Company Common Stock beneficially held by Premier falling below 50.1% of the ownership of all Company Common Stock (assuming the conversion, exercise or exchange of all securities referred to in clause (B)). (b) This Purchase Agreement and the purchase and sale of the Shares thereunder, at the election of either Premier or Seller, shall be rescinded following the Closing in the event that: (i) Premier withdraws, abandons, or terminates the Tender Offer without Premier purchasing all Shares validly tendered; (ii) the Tender Offer expires without Premier purchasing all Shares validly tendered; or (iii) in the event the Acquisition Agreement is terminated. (c) In the event of termination of this Purchase Agreement by either Premier or the Seller as provided in Section 7.1(a), this Purchase Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Premier or the Seller, other than Section 2.5, Article VI and Article VII. Nothing contained in this Section shall relieve any party for any willful breach of the representations, warranties, covenants or agreements set forth in this Purchase Agreement. 7.2 Counterparts. This Purchase Agreement may be executed in one or ------------ more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other parties. -20- 7.3 Notices. All notices, requests, demands or other communications ------- provided herein shall be made in writing and shall be deemed to have been duly given if delivered as follows: If to Premier: Premier Laser Systems, Inc. 3 Morgan Irvine, California 92618 Attn: Secretary Fax: (714) 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17/th/ Floor Costa Mesa, California 92626-1924 Attn: Peter J. Tennyson, Esq. Fax: (714) 979-1921 If to Seller: Mark S. Blumenkranz, M.D. 20 Larguita Lane Portola Valley, California 94028 Fax: (650) 851-8796 with a copy to: Quinn, Emanuel, Urquhart, Oliver & Hedges 865 S. Figueroa Street, 10/th/ Floor Los Angeles, California 90017 Attention: Steve G. Madison Fax: (213) 624-0643 or to such other address as any party shall have specified by notice in writing to the other parties. All such notices, requests, demands and communications shall be deemed to have been received on (i) the date of delivery if sent by messenger, (ii) on the Business Day following the Business Day on which delivered to a recognized courier service if sent by overnight courier or (iii) on the date received, if sent by fax. -21- 7.4 Governing Law. This Purchase Agreement shall be governed by and ------------- construed in accordance with the laws of the State of California as applied to contracts entered into and to be performed in California and without regard to the application of principles of conflict of laws. 7.5 Interpretation. When a reference is made in this Purchase -------------- Agreement to an Article or Section, such reference shall be to an Article or Section of this Purchase Agreement unless otherwise indicated. The table of contents and headings contained in this Purchase Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Purchase Agreement. Whenever the words "include," "includes" or "including" are used in this Purchase Agreement, they shall be deemed to be followed by the words "without limitation." 7.6 Successors and Assigns. Except as otherwise expressly provided ---------------------- in this Purchase Agreement, neither this Purchase Agreement nor any of the rights, interests or obligations under this Purchase Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, except that Premier, prior to or after the consummation of the transactions contemplated by Sections 2.1 and 2.2, may assign, in its sole discretion, any or all of its rights, interests and obligations under this Purchase Agreement to any wholly owned Subsidiary of Premier. However, no such assignment shall relieve Premier of any of its obligations under this Purchase Agreement. Subject to the preceding sentence, this Purchase Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors, assigns and heirs. 7.7 Entire Agreement; No Oral Waiver; Construction. This Purchase ---------------------------------------------- Agreement and the agreements, certificates and other documents contemplated hereby and thereby, including the Acquisition Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties in connection therewith. No covenant or condition or representation not expressed in this Purchase Agreement shall affect or be effective to interpret, change or restrict this Purchase Agreement. No prior drafts of this Purchase Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action, suit or other proceeding involving this Purchase Agreement or the transactions contemplated hereby. This Purchase Agreement may not be amended, changed or terminated orally, nor shall any amendment, change, termination or attempted waiver of any of the provisions of this Purchase Agreement be binding on any party unless in writing signed by the parties hereto. No modification, waiver, termination, rescission, discharge or cancellation of this Purchase Agreement and no waiver of any provision of or default under this Purchase Agreement shall affect the right of -22- any party thereafter to enforce any other provision or to exercise any right or remedy in the event of any other default, whether or not similar. 7.8 Severability. If any provision of this Purchase Agreement (or ------------ any portion thereof) shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Purchase Agreement (and portions thereof) shall not be affected and shall remain in full force and effect. 7.9 No Third-party Rights. Nothing in this Purchase Agreement, --------------------- expressed or implied, shall or is intended to confer upon any Person other than the parties hereto or their respective successors or assigns, any rights or remedies of any nature or kind whatsoever under or by reason of this Purchase Agreement. 7.10 Remedies. Each of the parties hereto acknowledges and agrees -------- that (i) the provisions of this Purchase Agreement are reasonable and necessary to protect the proper and legitimate interests of the other parties hereto, and (ii) the other parties hereto would be irreparably damaged in the event any of the provisions of this Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Purchase Agreement by the other parties hereto without the necessity of proving irreparable injury or actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof and thereof, which rights shall be cumulative and in addition to any other remedy to which the parties hereto may be entitled hereunder or at law or equity. 7.11 Further Assurances. From time to time, at the reasonable request ------------------ of any other party hereto and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Purchase Agreement. 7.12 Survival of Representations. --------------------------- (a) All representations and warranties contained herein or made pursuant hereto shall survive the Closing. The expiration of any representation and warranty shall not affect any claim for indemnification made prior to the date of such expiration. (b) The representations and warranties made by any party in this Purchase Agreement or in any agreement, certificate, schedule or exhibit delivered in connection with this Purchase Agreement may be fully and completely relied upon by each other party unless the party seeking to avoid such representation or warranty can demonstrate that the -23- investigation made by or on behalf of such other party actually revealed or disclosed the inaccuracy in question. 7.1 No Restrictions on Directors. Notwithstanding anything to the ---------------------------- contrary in this Purchase Agreement, it is understood and agreed that no provision of this Purchase Agreement and the Registration Rights Agreement and the transactions contemplated hereby and thereby shall in any way limit or restrict the actions of any Person to the extent such Person is acting in such Person's capacity as a director on the Board of Directors of Premier or the Company, and nothing in this Purchase Agreement or the Registration Rights Agreement is intended to, or shall be deemed to, restrict the exercise of fiduciary duties by any such Person in such capacity. [Signature Pages Follow] -24- [SIGNATURE PAGE FOR PURCHASE AGREEMENT] IN WITNESS WHEREOF, the parties have executed, delivered and entered into this Purchase Agreement as of the day and year first above written. "Premier" PREMIER LASER SYSTEMS, INC. By:/s/ Colette Cozean --------------------------- Name:_________________________ Title:________________________ "Seller" /s/ Mark S. Blumenkranz ------------------------------ Name: Mark S. Blumenkranz, M.D. /s/ Recia Blumenkranz ------------------------------ Name: Recia Blumenkranz, M.D. -25- EXHIBIT "A" REGISTRATION RIGHTS AGREEMENT EXHIBIT "B" FORM OF CLASS C WARRANT EXHIBIT "C" FORM OF CLASS D WARRANT EX-99.10 6 PURCHASE AGRMT WITH STANLEY CHANG EXHIBIT 99.10 ________________________ PURCHASE AGREEMENT DATED AS OF FEBRUARY 25, 1998 BY AND BETWEEN PREMIER LASER SYSTEMS, INC. AND STANLEY CHANG, M.D. ________________________ TABLE OF CONTENTS -----------------
Page ---- ARTICLE I DEFINITIONS................................................. 1 1.1 Defined Terms.................................................. 1 ARTICLE II PURCHASE AND SALE OF SHARES................................. 4 2.1 Purchase and Sale of Shares.................................... 4 2.2 Purchase Consideration......................................... 4 2.3 Closing Date................................................... 4 ARTICLE III REPRESENTATIONS AND WARRANTIES.............................. 5 3.1 Representations and Warranties of Premier...................... 5 3.2 Representations and Warranties of Seller....................... 7 ARTICLE IV COVENANTS................................................... 10 4.1 Covenant of the Seller......................................... 10 4.2 Covenants of Premier........................................... 10 4.3 Reasonable Best Efforts........................................ 10 ARTICLE V CONDITIONS TO CLOSING....................................... 11 5.1 Conditions to Obligation of Premier............................ 11 5.2 Conditions to Obligations of the Seller........................ 11 ARTICLE VI INDEMNIFICATION............................................. 12 6.1 Indemnification by Premier..................................... 12 6.2 Losses Net of Insurance, etc................................... 12 6.3 Termination of Indemnification................................. 13 6.4 Procedures Relating to Indemnification Under Article VI........ 13 6.5 Arbitration.................................................... 15 ARTICLE VII GENERAL PROVISIONS.......................................... 16 7.1 Termination of Purchase Agreement.............................. 16 7.2 Counterparts................................................... 17 7.3 Notices........................................................ 17 7.4 Governing Law.................................................. 18 7.5 Interpretation................................................. 18 7.6 Successors and Assigns......................................... 18 7.7 Entire Agreement; No Oral Waiver; Construction................. 19
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Page ---- 7.8 Severability.................................................. 19 7.9 No Third-party Rights......................................... 19 7.10 Remedies...................................................... 19 7.11 Further Assurances............................................ 20 7.12 Survival of Representations................................... 20 7.13 No Restrictions on Directors.................................. 20
-ii- This Purchase Agreement ("Purchase Agreement") is made and entered into as of February 25, 1998, by and between Premier Laser Systems, Inc., a California corporation ("Premier") and Stanley Chang, M.D. (the "Seller"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Seller owns in the aggregate, and on the Closing Date (as defined herein) the Seller will own, of record and beneficially, 50,000 shares of Ophthalmic Imaging Systems, Inc., a California corporation (the "Company") 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, as amended (the "Rights Agreement"), between Company and American Securities Transfer, Inc. (the "Rights Agent") (the Rights together with the Common Stock constitute the "Shares"); WHEREAS, the Seller desires to sell, and Premier wishes to purchase, the Shares upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS ----------- 1.1 Defined Terms. Terms not otherwise defined herein shall have the ------------- following meanings: "Acquisition Agreement" means the Stock Purchase Agreement by and between --------------------- Premier and Company of even date herewith, as amended, supplemented or otherwise modified from time to time in accordance with its terms. "Affiliate" means, when used with respect to another Person, any Person who --------- is, whether directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such Person. "Beneficially Own" has the meaning given such term in Rule 13d-3 under the ---------------- Exchange Act, as in effect on the date hereof. As used herein, the phrases "beneficial ownership" and "beneficial owner" have correlative meanings. "Business Combination" means (i) any merger, reorganization, share exchange -------------------- consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company, (ii) any purchase or sale of all or any significant portion of the assets of the Company, (iii) any issuance or other sale by the Company of any shares of Company Common Stock or (iv) any issuance or other sale by the Company of securities representing 20% or more of beneficial ownership of the Company or any of its Subsidiaries (as defined herein). "Business Day" means any day that is not a Saturday, Sunday or other day on ------------ which banks are required or authorized by law to be closed in California. "Closing Date" means the earlier of (i) the second Business Day following ------------ satisfaction or waiver of the conditions set forth in Article V and (ii) such other date and time as the parties shall otherwise mutually agree. "Dollars" and "$" mean lawful currency of the United States of America. ------- - "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Governmental Authority" means any foreign, federal, state or local ---------------------- government or any court, administrative agency or commission or other governmental agency or authority, whether domestic or foreign. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit ---- arrangement, encumbrance, lien (statutory ore other), charge or security interest; or any preference, priority or other arrangement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "Material Adverse Effect" with respect to any Person means a material ----------------------- adverse effect (i) on the financial condition, business, liabilities, properties, assets or results of operations of such Person and its subsidiaries, taken as a whole, or (ii) on the ability of such Person to perform its obligations under or to consummate the transactions contemplated by this Purchase Agreement. "Person" means an individual, partnership, limited liability company, ------ corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Purchase Agreement" means this Purchase Agreement, as amended, ------------------ supplemented or otherwise modified from time to time in accordance with its terms. -2- "Registration Rights Agreement" means the Registration Rights Agreement in ----------------------------- the form of Exhibit "A" to be executed by and between Premier and the Seller on the Closing Date. "Restrictions" means, when used with respect to any specified security, any ------------ stockholders or other trust agreement, option, warrant, escrow, proxy, buy-sell agreement, power of attorney or other contract, agreement or arrangement which (i) grants to any Person the right to sell or otherwise dispose of or vote such specified security or any interest therein or (ii) restricts the transfer of, or the exercise of any rights or the enjoyment of any benefits by reason of, the ownership of such specified security. "Stock Component" means the quotient (rounded to the nearest 1/100,000) --------------- determined by dividing $0.25 by the average closing sales price for Premier Common Stock (as hereinafter defined) as reported on The Nasdaq Stock Market, Inc. ("NASDAQ") as published in The Wall Street Journal or, if not published therein, an another authoritative source, for either (i) fifteen (15) consecutive trading days (each, a "Trading Day") immediately preceding the Closing Date or (ii) the thirty (30) consecutive Trading Days ending fifteen (15) Trading Days prior to the Closing Date, whichever yields the lowest number of shares of Premier Common Stock. Notwithstanding any other provision of this Purchase Agreement, if Seller would have otherwise have been entitled to receive a fraction of a share of Premier Common Stock (after taking into account all shares tendered by Seller) he, she or it 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 Purchase 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 Day preceding the Closing Date. "Subsidiary" of any Person means another Person, an amount of the voting ---------- securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person. "Transactions" means the transactions described in Section 2.3(b). ------------ -3- ARTICLE II PURCHASE AND SALE OF SHARES --------------------------- 2.1 Purchase and Sale of Shares. Upon the terms and subject to the --------------------------- conditions of this Purchase Agreement, Premier agrees to purchase from the Seller, and the Seller agrees to sell to Premier, the Shares free and clear of any Lien or Restriction created by the Seller (other than any Lien or Restriction imposed pursuant to the terms of this Purchase Agreement) or otherwise binding upon any such Shares for the Purchase Consideration (as defined in Section 2.2 of Purchase Agreement). 2.2 Purchase Consideration. Premier shall pay to Seller in respect ---------------------- of each share of Company Common Stock sold and purchased hereunder (a) $1.75 net in cash (the "Cash Consideration"); (b) that number of Premier Class A Common Stock, no par value (the "Premier Common Stock"), equal to the Stock Component (the "Stock Consideration"); (c) one Premier Class C Warrant (the "Class C Warrant"), and (d) one Premier Class D Warrant (the "Class D Warrant" together with the Class C Warrant, the "Warrants") (the Cash Consideration, the Stock Consideration and the Warrants together constitute the "Purchase Consideration"). 2.3 Closing Date. ------------ (a) Unless this Purchase Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Section 7.1(a) and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing (the "Closing") of the transactions contemplated ------- by Section 2.1 will take place on the earlier of (i) the second Business Day following satisfaction or waiver of the conditions set forth in Article V and (ii) such other date and time as the parties shall otherwise mutually agree (in either event, the date of Closing being referred to herein as the "Closing Date"). (b) At the Closing, the following actions (collectively, the "Transactions") shall occur: (i) Premier shall pay or cause to be paid the aggregate Cash Consideration to or for the account of the Seller by wire transfer to such bank account (the "Designated Bank Account") as the Seller shall designate in writing prior to the Closing Date; (ii) At the effective time of the Closing, Premier shall issue shares of Premier Common Stock to the Seller as directed by the Seller in writing prior to the Closing Date; -4- (iii) At the effective time of the Closing, Premier shall issue the Warrants (in the form attached hereto as Exhibits "B" and "C") to the Seller as directed by the Seller in writing prior to the Closing Date; (iv) The parties shall execute and deliver, the Registration Rights Agreement; (v) The Seller shall deliver or cause to be delivered to Premier or its designee such documents as Premier may reasonably request, including certificates for all Shares to evidence the transfer to Premier of good and marketable title in and to all of the Shares owned by the Seller free and clear of any Lien or Restriction on such Shares (other than any Lien or Restriction imposed pursuant to the terms of this Purchase Agreement) or the applicable federal or state securities laws, and (vi) Each party shall take such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article V. ARTICLE III REPRESENTATIONS AND WARRANTIES ------------------------------ 3.1 Representations and Warranties of Premier. Premier represents ----------------------------------------- and warrants to the Seller as of the date hereof and as of the Closing Date as follows: (a) Organization, Standing and Corporate Power. Premier is duly ------------------------------------------ organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority to carry on its business as now being conducted. Premier is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) could not reasonably be expected to have a material adverse effect with respect to Premier. (b) Corporate Authorization. The execution, delivery and performance by Premier of this Purchase Agreement and the consummation by Premier of the transactions contemplated hereby have been duly authorized by all necessary corporate action, including by resolution of the Board of Directors of Premier. This Purchase Agreement has been duly executed and delivered by Premier and constitutes a valid and binding agreement of Premier, enforceable against Premier in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting -5- creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding or equity or at law). (c) No Conflict. Other than the filing of a Form 4 and an amendment ----------- to Premier's report on Schedule 13D under the Exchange Act, and no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement or the Registration Rights Agreement by Premier and the consummation by Premier of the transactions contemplated hereby and thereby, except for such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on Premier, and its Subsidiaries, taken as a whole, or to prevent or materially delay the consummation of the transactions contemplated hereby and thereby. Neither the execution and delivery of this Purchase Agreement or the Registration Rights Agreement by Premier nor the consummation by Premier of the transactions contemplated hereby or thereby, nor compliance by Premier with any of the provisions hereof or thereof (i) conflicts with or results in any breach of the Articles of Incorporation or bylaws of Premier, (ii) contravenes, conflicts with or would constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon Premier, or (iii) constitutes a default under or gives rise to any right of termination, cancellation or acceleration of any right or obligation of Premier or any of its Subsidiaries or to a loss of any benefit to which Premier or any of its Subsidiaries is entitled under any provision of any agreement, contract or other instrument binding on Premier or any of its Subsidiaries or any license, franchise, permit or other similar authorization held by Premier or any of its Subsidiaries, except, in the case of clauses (ii) and (iii), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have a material adverse effect on Premier or any of its Subsidiaries taken as a whole. (d) No Required Vote. No vote of the holders of any class of the ---------------- outstanding capital stock of Premier is necessary to approve this Purchase Agreement or the Transactions. (e) Reservation of Premier Common Stock. The Premier Common Stock and ----------------------------------- Warrants to be issued to Seller as Purchase Consideration pursuant to this Purchase Agreement, and any Premier Common Stock purchasable upon exercise of such Warrants, have been reserved solely for issuance and delivery to Seller, and when issued, will be duly and validly issued, fully paid and nonassessable, and such issuances will not violate any pre-emptive rights under applicable law, Premier's Articles of Incorporation or bylaw, contract or agreement, or otherwise. -6- 3.2 Representations and Warranties of Seller. The Seller represents ---------------------------------------- and warrants to Premier as of the date hereof and as of the Closing Date as follows: (a) Organization, Standing and Power of the Seller. The Seller has ---------------------------------------------- the requisite power and authority and legal capacity to enter into and perform all of its obligations under this Purchase Agreement, to consummate the Transactions (including transferring the Shares to Premier). Neither the execution and delivery of this Purchase Agreement by the Seller nor the consummation by the Seller of the Transactions nor compliance by the Seller with the provisions hereof conflicts with or results in a breach of any agreement, other than such agreements, the conflict with or breach of which, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Seller, if any, taken as a whole, or to prevent or materially delay the consummation of the Transactions. (b) Enforceability. This Purchase Agreement has been duly and validly -------------- authorized, executed and delivered by the Seller and constitutes the Seller's valid and binding agreement, enforceable against the Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding at equity or at law). (c) Title to Shares. At the Closing the Seller will be the direct and --------------- record owner of the Shares. Other than options to purchase 20,000 shares of Company Common Stock, the Seller does not own or have the right to acquire, whether presently exercisable or at any time in the future, any shares of Company Common Stock or any securities convertible into or exercisable or exchangeable for Shares including, but not limited to, any options held by Seller. No person has the right to acquire, and the Seller is not a party to any contract, understanding, commitment, arrangement or other agreement to sell, transfer or otherwise dispose of, any shares of Company Common Stock owned by or issuable to the Seller. At the Closing, the Seller will have good and valid title to the Shares, free and clear of any Liens or Restrictions and they will have the full legal right, power and authority to assign, transfer and deliver such shares to Premier pursuant hereto. On and after the Closing Date, the Seller will have the sole voting power, and sole power of disposition, with respect to all of such Shares and there will be no restrictions on the Seller's ability to transfer such Shares. (d) No Conflict. Except for the filing of a Form 4 with the ----------- Securities and Exchange Commission, Nasdaq, the Boston Stock Exchange, and the Company, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement by the Seller and the consummation -7- by the Seller of the transactions contemplated hereby, other than such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Seller, if any, taken as a whole, or to prevent or materially delay the consummation of the Transactions. (e) Investment Intention. The Seller is acquiring the Premier Common -------------------- Stock and the Warrants for its own account as principal for investment and not with a view to resale or distribution or with any present intention of distributing or selling the same. The Seller is fully aware that the Premier Common Stock and the Warrants have not been registered under the Securities Act or under any applicable state securities laws, and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and all such laws. The Seller is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act. The Seller is able to bear the economic risk of the investment in the Premier Common Stock and the Warrants and has such knowledge and experience in financial and business matters, and knowledge of the business of Premier, as to be capable of evaluating the merits and risks of a prospective investment. (f) Limitations on Transferability. Seller acknowledges that it may ------------------------------ not transfer any of the Premier Common Stock or the Warrants received by it pursuant hereto unless and until the same are registered under the Securities Act and any applicable state securities laws, or unless an exemption from such registration is available. Seller acknowledges that transferability of the Premier Common Stock and Warrants also is limited by the terms of this Purchase Agreement. (g) Legend. In furtherance of the agreements contained in Sections ------ 3.2(e) and (f), the Seller agrees that the certificate or certificates representing: (i) the Premier Common Stock beneficially owned by Seller shall bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS -8- OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. (ii) the Warrants beneficially owned by Seller shall bear the following legend: THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. Premier will exchange certificates without the foregoing legend upon the request of Seller at such time as (i) the restrictions imposed by this Purchase Agreement are no longer applicable; and (ii) the holder thereof may sell such shares or warrants without registration of such sale under the Securities Act, as evidenced (if requested by Premier) by an opinion of counsel to such holder. (h) No Broker. No investment banker, broker, finder, consultant or --------- intermediary is entitled to be paid any investment banking, brokerage, finder's or similar fee or commission by any Seller in connection with this Purchase Agreement or the Transactions for which the Seller or Premier would be liable following the Closing. -9- ARTICLE IV COVENANTS --------- 4.1 Covenant of the Seller. ---------------------- (a) Binding Obligations. Notwithstanding, and without in any way ------------------- limiting, any other provision of this Purchase Agreement, the Seller acknowledges that, subject to the satisfaction (or waiver by it) of the conditions set forth in Section 5.2, its obligation to consummate the Transactions, including the sale to Premier of the Shares, is absolute and unconditional and shall not terminate except in accordance with Section 7.1, irrespective of, without limitation, any receipt of the Company of any proposal for a Business Combination or any resolution by the Board of Directors of the Company to approve a Business Combination or otherwise. 4.2 Covenants of Premier. -------------------- (a) Registration Rights Agreement. Premier shall cause the parties to ----------------------------- enter into that certain Registration Rights Agreement in the form of Exhibit "A." (b) Purchases of Company Common Stock Prior to the Closing. Premier ------------------------------------------------------ agrees to use its best efforts to purchase or otherwise acquire, concurrently with or prior to the Closing, such number of shares of Company Common Stock, in negotiated transactions or otherwise, as is necessary so that the Premier's percentage of beneficial ownership of the Company Common Stock, shall at the Closing constitute at least 50.1%. (c) Tender Offer. Following the Closing, Premier agrees to use its ------------ best efforts to effect a tender offer (the "Tender Offer") for the purchase of the then remaining outstanding shares of Company Common Stock. 4.3 Reasonable Best Efforts. ----------------------- (a) Subject to the terms and conditions of this Purchase Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Purchase Agreement. (b) Each party hereby agrees, while this Purchase Agreement is in effect, and except as contemplated hereby, not to intentionally and knowingly take any action with the intention and knowledge that such action would make any of its representations or warranties contained herein untrue or incorrect in any material respect to have the effect of -10- preventing or disabling it from performing any of its obligations under this Purchase Agreement. ARTICLE V CONDITIONS TO CLOSING --------------------- 5.1 Conditions to Obligation of Premier. The obligation of Premier ----------------------------------- to consummate the purchase of the Shares is further subject to the satisfaction (or waiver by Premier) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of the Seller set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date). Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. (b) Performance of Obligations of the Seller. The Seller shall have ---------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by them under this Purchase Agreement at or prior to the Closing Date, and Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. (c) No Injunction. No preliminary or permanent injunction or order ------------- that would prohibit or restrain the consummation of the transactions contemplated hereunder shall be in effect and no Governmental Authority or other Person shall have commenced or threatened to commence an action or proceeding seeking to enjoin the consummation of such transactions or to impose liability on the parties hereto in connection therewith. 5.2 Conditions to Obligations of the Seller. The obligations of the --------------------------------------- Seller to effect the Transactions are further subject to the satisfaction (or waiver by the Seller) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of Premier set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made -11- on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date), and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (b) Performance of Obligations of Premier. Premier shall have ------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by it under this Purchase Agreement at or prior to the Closing Date, and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (c) Registration Rights Agreement. The parties shall have entered ----------------------------- into that certain Registration Rights Agreement in the form of Exhibit "A." ARTICLE VI INDEMNIFICATION --------------- 6.1 Indemnification by Premier. From and after the date of this -------------------------- Purchase Agreement, whether or not the Transactions are consummated, Premier shall indemnify the Seller and its respective Affiliates, directors, officers, employees, partners, stockholders, agents and representatives (including attorneys and accountants) (collectively, the "Representatives") against and hold them harmless from any loss, liability, claim, damage or expense (including reasonable legal fees and expenses ("Loss") suffered or incurred by any such indemnified party arising from or relating to any lawsuit by any governmental body or any present or former stockholder of the Company naming any of the parties entitled to indemnification hereunder (each an "indemnified party") and seeking to enjoin or otherwise prevent, prohibit or impede the consummation of the Transactions or otherwise challenging the Transactions. 6.2 Losses Net of Insurance, etc. The amount of any Loss for which ----------------------------- indemnification is provided under this Article VI shall be net of any amounts actually recovered by the indemnified party under insurance policies (net of the cost of obtaining such recovery). If Seller is entitled to indemnification under insurance policies, it shall, at the request of Premier, use its reasonable best efforts to obtain such indemnification under such insurance policies before seeking indemnification from Premier, and any expenses incurred in connection therewith shall be advanced by the party obligated to provide such indemnification (the "indemnifying party"). It is understood that the indemnification obligation of Premier is secondary and supplemental to any indemnification under any insurance policy maintained for the benefit of the indemnified party. The indemnify party shall not be relieved of its obligation to advance fees and expenses to the indemnified party -12- in accordance with Section 6.4 (or to indemnify any indemnified person under this Article VI) by reason of any claim under any insurance policy, but shall be entitled to receive, and the indemnified party does hereby assign to the indemnifying party the right to receive, direct payment of any recovery under any such claim. 6.3 Termination of Indemnification. The obligations to indemnify and ------------------------------ hold harmless a party hereto shall not terminate, except that the obligations of Premier pursuant to Section 6.1 terminate upon a termination by either party pursuant to Section 7.1(a), but only with respect to actions or omissions from and after the time of such termination. 6.4 Procedures Relating to Indemnification Under Article VI. ------------------------------------------------------- (a) An indemnified party entitled to any indemnification in respect of, arising out of or involving a claim or demand made by any Person against the indemnify party (a "Third Party Claim") shall notify the indemnifying party in writing, and in reasonable detail of the Third Party Claim within 10 Business Days after receipt by such indemnified party of written notice of the Third Party Claim; provided; however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually and materially prejudiced as a result of such failure (it being understood that the indemnifying party shall not be liable for any expenses incurred during the period in which the indemnified party failed to give notice). (b) If a Third Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses and unconditionally acknowledges its obligations to indemnify the indemnified party with respect to such Third Party Claim, to assume the defense thereof with counsel selected by the indemnifying party and not reasonably objected to by the indemnified party. Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnified party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the indemnifying party (except that, for any period following receipt of notice of any Third Party Claim during which the indemnifying party has failed to assume the defense of such claim, the indemnifying party shall pay such fees and expenses as in incurred), it being understood that the indemnifying party shall control such defense; provided, that the indemnifying party shall not take any action in the conduct of such defense that would materially adversely affect the indemnified party without the consent of the indemnified party. The indemnified party shall also have the right to employ no more than one separate counsel for all indemnified party (and no more than one local counsel in any jurisdiction where it is reasonably necessary) not reasonably objected to by the indemnifying party, at the expense of the indemnifying party, but only if: (i) the use of counsel chosen by the indemnifying party to represent the indemnified party -13- or parties would present such counsel with a conflict of interest, (ii) the actual or potential defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or are in addition to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall in writing authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. (c) If the indemnifying party elects to assume the defense of any Third Party Claim, all of the indemnified parties, shall cooperate with the indemnifying party in the defense or prosecution thereof. Such cooperation shall include (upon the indemnifying party's reasonable request) the provision to the indemnifying party of existing records and information which are reasonably relevant to such Third Party Claim, and making themselves (in the case of individuals) and using reasonable best efforts to make their employees and their Representatives, if any, available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and to attend depositions, give testimony or otherwise appear at any trial or hearing to the extent reasonably requested by the indemnifying party. Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnifying party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnified party's prior written consent, which consent shall not be unreasonably withheld. If the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third Party Claim which the indemnifying party may recommend and which by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim, which releases the indemnified party completely in connection with such Third Party Claim, and which would not otherwise adversely affect the indemnified party. (d) Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Third Party Claim (but shall be liable for the reasonable fees and expenses of counsel incurred by the indemnified party in defending such Third Party Claim, which fees and expenses the indemnifying party shall pay as incurred in advance of the final disposition of such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party which the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages; provided, however, that the foregoing shall not apply to any Third Party Claim prior to the Closing seeking to enjoin or otherwise prevent, prohibit or impede the consummation of the Transactions, which Third Party Claim prior to the Closing shall be defended jointly by the -14- indemnifying party and the indemnified party, it being understood and agreed that (i) only one counsel (plus only one local counsel in any jurisdiction where it is reasonably necessary) shall be permitted for all of the indemnified party and (ii) if the parties cannot in good faith agree on a particular matter, such dispute shall be resolved in good faith by the indemnifying party, with a good faith effort to balance the interests of both the indemnified parties and the indemnifying party. If such equitable relief or other relief portion of the Third Party Claim can be so separate from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to the money damages. In the event that the indemnifying party is not permitted to assume the defense of any Third Party Claim pursuant to this Section 6.4(d), the indemnified party shall not agree to any settlement, compromise or discharge of such Third Party Claim which by its terms obligates the indemnifying party without the prior written consent of the indemnifying party. (e) In the event that the indemnified party is entitled to obtain counsel at the indemnifying party's expense in accordance with Section 6.4(b) or Section 6.4(d), indemnifying party shall reimburse the indemnified party for the reasonable fees, costs and expenses of such counsel upon presentation of invoices detailing with reasonable specificity the nature of the services provided and the basis of the fees, costs and expenses incurred. 6.5 Arbitration. In the event that any parties are unable to resolve ----------- any dispute related to or arising under the Transactions contemplated hereunder, the exclusive method for resolving such dispute shall be binding, nonappealable arbitration in Irvine, California initiated by a party by a written notice to the other party demanding arbitration and specifying the claim to be arbitrated. Such arbitration shall be conducted pursuant to the Expedited Procedures of the Commercial Arbitration Rule (the "Rules") of the American Arbitration Association ("AAA), with the following modifications. The party initiating the arbitration (the "Claimant") shall appoint its arbitrator in its request for arbitration (the "Request"). The other party (the "Respondent") shall appoint its arbitrator within 15 Business Days of receipt of the Request and shall notify the Claimant of such appointment in writing. If the Respondent fails to appoint an arbitrator within such 15 Business Day period, the arbitrator named in the Request shall decide the controversy or claim as a sole arbitrator. Otherwise, the two arbitrators appointed by the parties shall appoint a third arbitrator within 15 Business Days after the Respondent has notified Claimant of the appointment of the Respondent's arbitrator. When the third arbitrator has accepted the appointment, the two party-appointed arbitrators shall promptly notify the parties of such appointment. If the two arbitrators appointed by the parties fail or are unable to so appoint a third arbitrator, then the appointment of the third arbitrator shall be made by the AAA, which shall promptly notify the parties of the appointment. The third arbitrator shall act as chairperson of the panel. Upon appointment of the third arbitrator, the arbitrators shall proceed to commence and conduct all proceedings promptly and in accordance with the Rules. The arbitral award shall be in writing and shall be final and binding on the parties to -15- the arbitration. The arbitrator shall be instructed to award costs, including reasonable attorneys' fees and disbursements, which shall be paid by the party against whom the award is entered. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties or their assets, without review of the merits of the award. ARTICLE VII GENERAL PROVISIONS ------------------ 7.1 Termination of Purchase Agreement. --------------------------------- (a) This Purchase Agreement may be terminated and the purchase and sale of the Shares abandoned at any time prior to the Closing: (i) by mutual consent of Premier and the Seller in writing; (ii) by either Premier or the Seller if the Closing shall not have occurred prior to February 27, 1998 (other than due to the failure of the party seeking to terminate this Purchase Agreement to perform its obligations under this Purchase Agreement required to be performed at or prior to such date); (iii) by Premier or Seller, if any Governmental Authority within the United States or any country or other jurisdiction in which Premier, directly or indirectly, has material assets or operations shall have issued an order, decree or taken any other action permanently enjoining, restraining or otherwise prohibiting the Transactions, and such order, decree, ruling or other action shall have become final and nonappealable; or (iv) by Premier, if after the date of this Purchase Agreement the Company issues (A) any shares of Company Common Stock (other than upon the conversion, exercise or exchange of securities outstanding on the date of this Purchase Agreement that are convertible into or exercisable or exchangeable for shares of Company Common Stock) or (B) any securities convertible into or exercisable or exchangeable for shares of Company Common Stock which result in the percentage of Company Common Stock beneficially held by the Seller, together with the percentage of Company Common Stock beneficially held by Premier falling below 50.1% of the ownership of all Company Common Stock (assuming the conversion, exercise or exchange of all securities referred to in clause (B)). -16- (b) In the event of termination of this Purchase Agreement by either Premier or the Seller as provided in Section 7.1(a), this Purchase Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Premier or the Seller, other than this Article VII. Nothing contained in this Section shall relieve any party for any willful breach of the representations, warranties, covenants or agreements set forth in this Purchase Agreement. 7.2 Counterparts. This Purchase Agreement may be executed in one or ------------ more counterparts, including electronically transmitted counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other parties. 7.3 Notices. All notices, requests, demands or other communications ------- provided herein shall be made in writing and shall be deemed to have been duly given if delivered as follows: If to Premier: Premier Laser Systems, Inc. 3 Morgan Irvine, California 92618 Attn: Secretary Fax: (714) 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17/th/ Floor Costa Mesa, California 92626-1924 Attn: Peter J. Tennyson, Esq. Fax: (714) 979-1921 If to Seller: Stanley Chang, M.D. 79 Greenacres Avenue Scarsdale, New York 10582 Fax: (212) 305-5962 -17- with a copy to: Quinn, Emanuel, Urquhart, Oliver & Hedges 865 S. Figueroa Street, 10/th/ Floor Los Angeles, California 90017 Attention: Steve G. Madison Fax: (213) 624-0643 or to such other address as any party shall have specified by notice in writing to the other parties. All such notices, requests, demands and communications shall be deemed to have been received on (i) the date of delivery if sent by messenger, (ii) on the Business Day following the Business Day on which delivered to a recognized courier service if sent by overnight courier or (iii) on the date received, if sent by fax. 7.4 Governing Law. This Purchase Agreement shall be governed by and ------------- construed in accordance with the laws of the State of California as applied to contracts entered into and to be performed in California and without regard to the application of principles of conflict of laws. 7.5 Interpretation. When a reference is made in this Purchase -------------- Agreement to an Article or Section, such reference shall be to an Article or Section of this Purchase Agreement unless otherwise indicated. The table of contents and headings contained in this Purchase Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Purchase Agreement. Whenever the words "include," "includes" or "including" are used in this Purchase Agreement, they shall be deemed to be followed by the words "without limitation." 7.6 Successors and Assigns. Except as otherwise expressly provided ---------------------- in this Purchase Agreement, neither this Purchase Agreement nor any of the rights, interests or obligations under this Purchase Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, except that Premier, prior to or after the consummation of the transactions contemplated by Sections 2.1 and 2.2, may assign, in its sole discretion, any or all of its rights, interests and obligations under this Purchase Agreement to any wholly owned Subsidiary of Premier. However, no such assignment shall relieve Premier of any of its obligations under this Purchase Agreement. Subject to the preceding sentence, this Purchase Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors, assigns and heirs. -18- 7.7 Entire Agreement; No Oral Waiver; Construction. This Purchase ---------------------------------------------- Agreement and the agreements, certificates and other documents contemplated hereby and thereby, including the Acquisition Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties in connection therewith. No covenant or condition or representation not expressed in this Purchase Agreement shall affect or be effective to interpret, change or restrict this Purchase Agreement. No prior drafts of this Purchase Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action, suit or other proceeding involving this Purchase Agreement or the transactions contemplated hereby. This Purchase Agreement may not be amended, changed or terminated orally, nor shall any amendment, change, termination or attempted waiver of any of the provisions of this Purchase Agreement be binding on any party unless in writing signed by the parties hereto. No modification, waiver, termination, rescission, discharge or cancellation of this Purchase Agreement and no waiver of any provision of or default under this Purchase Agreement shall affect the right of any party thereafter to enforce any other provision or to exercise any right or remedy in the event of any other default, whether or not similar. 7.8 Severability. If any provision of this Purchase Agreement (or ------------ any portion thereof) shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Purchase Agreement (and portions thereof) shall not be affected and shall remain in full force and effect. 7.9 No Third-party Rights. Nothing in this Purchase Agreement, --------------------- expressed or implied, shall or is intended to confer upon any Person other than the parties hereto or their respective successors or assigns, any rights or remedies of any nature or kind whatsoever under or by reason of this Purchase Agreement. 7.10 Remedies. Each of the parties hereto acknowledges and agrees -------- that (i) the provisions of this Purchase Agreement are reasonable and necessary to protect the proper and legitimate interests of the other parties hereto, and (ii) the other parties hereto would be irreparably damaged in the event any of the provisions of this Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Purchase Agreement by the other parties hereto without the necessity of proving irreparable injury or actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof and thereof, which rights shall be cumulative and in addition to any other remedy to which the parties hereto may be entitled hereunder or at law or equity. -19- 7.11 Further Assurances. From time to time, at the reasonable request ------------------ of any other party hereto and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Purchase Agreement. 7.12 Survival of Representations. --------------------------- (a) All representations and warranties contained herein or made pursuant hereto shall survive the Closing. The expiration of any representation and warranty shall not affect any claim for indemnification made prior to the date of such expiration. (b) The representations and warranties made by any party in this Purchase Agreement or in any agreement, certificate, schedule or exhibit delivered in connection with this Purchase Agreement may be fully and completely relied upon by each other party unless the party seeking to avoid such representation or warranty can demonstrate that the investigation made by or on behalf of such other party actually revealed or disclosed the inaccuracy in question. 7.13 No Restrictions on Directors. Notwithstanding anything to the ---------------------------- contrary in this Purchase Agreement, it is understood and agreed that no provision of this Purchase Agreement and the Registration Rights Agreement and the transactions contemplated hereby and thereby shall in any way limit or restrict the actions of any Person to the extent such Person is acting in such Person's capacity as a director on the Board of Directors of Premier, and nothing in this Purchase Agreement or the Registration Rights Agreement is intended to, or shall be deemed to, restrict the exercise of fiduciary duties by any such Person in such capacity. [Signature Page Follows] -20- [SIGNATURE PAGE FOR PURCHASE AGREEMENT] IN WITNESS WHEREOF, the parties have executed, delivered and entered into this Purchase Agreement as of the day and year first above written. "Premier" PREMIER LASER SYSTEMS, INC. By:/s/ Colette Cozean --------------------------- Name:_________________________ Title:________________________ "Seller" /s/ Stanley Clag ------------------------------ Name:_________________________ -21- EXHIBIT "A" REGISTRATION RIGHTS AGREEMENT EXHIBIT "B" FORM OF CLASS C WARRANT EXHIBIT "C" FORM OF CLASS D WARRANT EX-99.11 7 PURCHASE AGRMT WITH J.B. OXFORD & COMPANY EXHIBIT 99.11 _______________________ PURCHASE AGREEMENT DATED AS OF FEBRUARY 25, 1998 BY AND BETWEEN PREMIER LASER SYSTEMS, INC. AND JB OXFORD & COMPANY _______________________ TABLE OF CONTENTS -----------------
Page ---- ARTICLE I DEFINITIONS................................................ 2 ----------- 1.1 Defined Terms.............................................. 2 ------------- ARTICLE II PURCHASE AND SALE OF SECURITIES............................ 4 ------------------------------- 2.1 Purchase and Sale of Securities............................ 4 ------------------------------- 2.2 Purchase Consideration..................................... 5 ---------------------- 2.3 Closing.................................................... 5 ------- 2.4 Purchase Consideration Adjustment.......................... 6 --------------------------------- ARTICLE III REPRESENTATIONS AND WARRANTIES............................. 7 ------------------------------ 3.1 Representations and Warranties of Premier.................. 7 ----------------------------------------- 3.2 Representations and Warranties of Seller................... 9 ---------------------------------------- ARTICLE IV COVENANTS.................................................. 12 --------- 4.1 Covenants of the Seller.................................... 12 ----------------------- 4.2 Covenants of Premier....................................... 12 -------------------- 4.3 Reasonable Best Efforts.................................... 13 ----------------------- ARTICLE V CONDITIONS TO CLOSING...................................... 13 --------------------- 5.1 Conditions to Obligation of Premier........................ 13 ----------------------------------- 5.2 Conditions to Obligations of the Seller.................... 14 --------------------------------------- ARTICLE VI INDEMNIFICATION; ARBITRATION............................... 15 ---------------------------- 6.1 Indemnification Procedures................................. 15 -------------------------- 6.2 Arbitration................................................ 15 ----------- ARTICLE VII GENERAL PROVISIONS......................................... 16 ------------------ 7.1 Termination of Purchase Agreement.......................... 16 --------------------------------- 7.2 Counterparts............................................... 17 ------------ 7.3 Notices.................................................... 17 ------- 7.4 Governing Law.............................................. 18 ------------- 7.5 Interpretation............................................. 19 -------------- 7.6 Successors and Assigns..................................... 19 ---------------------- 7.7 Entire Agreement; No Oral Waiver; Construction............. 19 ---------------------------------------------- 7.8 Severability............................................... 20 ------------
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Page ---- 7.9 No Third-party Rights...................................... 20 --------------------- 7.10 Remedies................................................... 20 -------- 7.11 Further Assurances......................................... 20 ------------------ 7.12 Survival of Representations................................ 20 ---------------------------
-ii- This Purchase Agreement together with any addenda thereto (the "Purchase Agreement"), is made and entered into as of February 25, 1998, by and between Premier Laser Systems, Inc., a California corporation ("Premier") and JB Oxford & Company, a Utah corporation (the "Seller"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Seller owns in the aggregate, and on the Closing Date (as defined herein) the Seller will own, of record 259,308 shares of Ophthalmic Imaging Systems, a California corporation (the "Company") 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, as amended (the "Rights Agreement"), between Company and American Securities Transfer, Inc. (the "Rights Agent") (the Rights together with the Common Stock constitute the "Shares"); WHEREAS, the Seller entered into a Warrant Agreement, dated November 21, 1995 (the "Warrant Agreement"), with the Company, under which Seller was granted and owns, and on the Closing Date will own, of record a warrant, in the form attached hereto as Exhibit "D" (the "Warrant"), to purchase 250,000 shares of Company Common Stock (the Warrant together with the Shares constitute the "Securities"); WHEREAS, Premier is currently attempting to purchase additional shares of the Company Common Stock under separate purchase agreements (the "Other Agreements"), between Premier and a number of other sellers; WHEREAS, as a condition and an inducement to the Seller to enter into this Purchase Agreement, Premier has agreed to commence a tender offer (the "Tender Offer") for the remainder of the Company Common Stock following the completion of the transactions related to this Purchase Agreement and the Other Agreements, such Tender Offer to be at a tender price equal to or greater to the purchase price per Share payable pursuant to this Purchase Agreement; WHEREAS, concurrent with the execution of this Purchase Agreement, and as a condition hereto and thereto, the Company and Premier will enter into a Stock Purchase Agreement (the "Acquisition Agreement") of even date herewith setting forth the terms and conditions of such Tender Offer and the acquisition by Premier of any such Company Common Stock; WHEREAS, the parties want to insure that the Seller receives compensation for its shares of Company Common Stock tendered under this Purchase Agreement at a rate equal to that which is to be paid under the Tender Offer; WHEREAS, the Stock Consideration (as herein defined) could appreciate or decline in value between the Closing Date and the date the Tender Offer closes; WHEREAS, in order to insure Seller receives the same per share compensation relative to the parties who tender shares under the Tender Offer, the Purchase Consideration (as herein defined) issued to Seller may need to be retroactively readjusted at the Tender Offer's closing; WHEREAS, the Seller desires to sell, and Premier wishes to purchase, the Securities upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS ----------- 1.1 Defined Terms. Terms not otherwise defined herein shall have the ------------- following meanings: "Affiliate" means, when used with respect to another Person, any Person who --------- is, whether directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such Person. "Beneficially Own" has the meaning given such term in Rule 13d-3 under the ---------------- Exchange Act, as in effect on the date hereof. As used herein, the phrases "beneficial ownership" and "beneficial owner" have correlative meanings. "Business Combination" means (i) any merger, reorganization, share exchange -------------------- consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company, (ii) any purchase or sale of all or any significant portion of the assets of the Company, (iii) any issuance or other sale by the Company of any shares of Company Common Stock or (iv) any issuance or other sale by the Company of securities representing 20% or more of beneficial ownership of the Company or any of its Subsidiaries (as defined herein). "Business Day" means any day that is not a Saturday, Sunday or other day on ------------ which banks are required or authorized by law to be closed in California. -2- "Dollars" and "$" mean lawful currency of the United States of America. ------- - "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Governmental Authority" means any foreign, federal, state or local ---------------------- government or any court, administrative agency or commission or other governmental agency or authority, whether domestic or foreign. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit ---- arrangement, encumbrance, lien (statutory ore other), charge or security interest; or any preference, priority or other arrangement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "material adverse effect" with respect to any Person means a material ----------------------- adverse effect (i) on the financial condition, business, liabilities, properties, assets or results of operations of such Person and its subsidiaries, taken as a whole, or (ii) on the ability of such Person to perform its obligations under or to consummate the transactions contemplated by this Purchase Agreement. "Person" means an individual, partnership, limited liability company, ------ corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Purchase Agreement" means this Purchase Agreement, as amended, ------------------ supplemented or otherwise modified from time to time in accordance with its terms. "Registration Rights Agreement" means the Registration Rights Agreement in ----------------------------- the form of Exhibit "A" to be executed by and between Premier and the Seller on the Closing Date. "Restrictions" means, when used with respect to any specified security, any ------------ stockholders or other trust agreement, option, warrant, escrow, proxy, buy-sell agreement, power of attorney or other contract, agreement or arrangement which (i) grants to any Person the right to sell or otherwise dispose of or vote such specified security or any interest therein or (ii) restricts the transfer of, or the exercise of any rights or the enjoyment of any benefits by reason of, the ownership of such specified security. "Stock Component" means the quotient (rounded to the nearest 1/100,000) --------------- determined by dividing $0.25 by the average closing sales price for Premier Common Stock (as hereinafter defined) as reported on The Nasdaq Stock Market, Inc. ("NASDAQ") as -3- published in The Wall Street Journal or, if not published therein, an another authoritative source, for either (i) fifteen (15) consecutive trading days (each, a "Trading Day") immediately preceding the Closing Date or (ii) the thirty (30) consecutive Trading Days ending fifteen (15) Trading Days prior to the Closing Date, whichever yields the lowest number of shares of Premier Common Stock. Notwithstanding any other provision of this Purchase Agreement, if Seller would have otherwise have been entitled to receive a fraction of a share of Premier Common Stock (after taking into account all shares tendered by Seller) he, she or it 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 Purchase 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 Day preceding the Closing Date. "Subsidiary" of any Person means another Person, an amount of the voting ---------- securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person. "Transactions" means the transactions described in Section 2.3(b). ------------ ARTICLE II PURCHASE AND SALE OF SECURITIES ------------------------------- 2.1 Purchase and Sale of Securities. Upon the terms and subject to ------------------------------- the conditions of this Purchase Agreement, Premier agrees to purchase from the Seller, and the Seller agrees to sell to Premier, the Securities free and clear of any Lien or Restriction created by the Seller or otherwise binding upon any such Securities in exchange for the Purchase Consideration (as defined in Section 2.2 of Purchase Agreement), as may be adjusted pursuant to Section 2.4 hereof. 2.2 Purchase Consideration. ---------------------- (a) Purchase Consideration for the Shares. Premier shall pay to ------------------------------------- Seller in respect of each share of Company Common Stock sold and purchased hereunder (a) $1.75 net in cash (the "Share Cash Consideration"); (b) that number of shares of Premier Class A Common Stock, no par value (the "Premier Common Stock") equal to the Stock Component (the "Share Stock Consideration"); (c) one Premier Class C Warrant (the "Class -4- C Warrant"); and (d) one Premier Class D Warrant (the "Class D Warrant" together with the Class C Warrant issued under this Section 2.2(a) constitute the "Warrant Consideration for Shares"). (b) Purchase Consideration for the Warrant. Premier shall pay -------------------------------------- to Seller in respect of each share of Common Stock eligible for purchase under the Warrant (a) $0.80 net in cash (the "Warrant Cash Consideration"); (b) that number of shares of Premier Common Stock equal to the Stock Component (the "Warrant Stock Consideration"); (c) one Class C Warrant; and (d) one Class D Warrant (the Class D Warrant together with the Class C Warrant issued under this Section 2.2(b) constitute the "Warrant Consideration for Warrant") (the Share Cash Consideration together with the Warrant Cash Consideration shall constitute the "Cash Consideration") (the Share Stock Consideration together with the Warrant Stock Consideration shall constitute the "Stock Consideration") (the Warrant Consideration for Shares together with the Warrant Consideration for Warrant shall constitute the "Warrant Consideration") (the Cash Consideration, Stock Consideration and Warrant Consideration together shall constitute the "Purchase Consideration"). 2.3 Closing. ------- (a) Unless this Purchase Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Section 7.1(a) and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing (the "Closing") of the transactions contemplated ------- by Section 2.1 will take place on the earlier of (i) the second Business Day following the date hereof and (ii) such other date, time and place as the parties shall otherwise mutually agree (in either event, the date of the Closing being referred to herein as the "Closing Date"). ------------ (b) At the Closing, the following actions (collectively, the "Transactions") shall occur: - ------------- (i) Premier shall pay or cause to be paid the aggregate Cash Consideration to or for the account of the Seller by wire transfer to such bank account (the "Designated Bank Account") as the Seller shall designate in writing prior to the Closing Date; (ii) At the effective time of the Closing, Premier shall issue shares of Premier Common Stock constituting the Stock Consideration to the Seller as directed by the Seller in writing prior to the Closing Date; -5- (iii) At the effective time of the Closing, Premier shall issue the warrants constituting the Warrant Consideration (in the form attached hereto as Exhibits "B" and "C") to the Seller as directed by the Seller in writing prior to the Closing Date; (iv) The parties shall execute and deliver, the Registration Rights Agreement; (v) The Seller shall deliver or cause to be delivered to Premier or its designee such documents as Premier may reasonably request, including certificates for all Securities to evidence the transfer to Premier of good and marketable title in and to all of the Securities owned by the Seller free and clear of any Lien or Restriction on such Securities (other than any Lien or Restriction imposed pursuant to the terms of this Purchase Agreement or the Warrant Agreement) or the applicable federal or state securities laws, and (vi) Each party shall take such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article V. 2.4 Purchase Consideration Adjustment. In order to insure that --------------------------------- Seller receives the same per share Purchase Consideration as that to be paid under the Tender Offer, Seller hereby agrees to allow Premier to retroactively readjust the amount of Purchase Consideration previously paid or granted to Seller if, at the Expiration Date (as that term is defined and used within the Acquisition Agreement) the Cash Consideration, the Stock Consideration or the Warrant Consideration that Seller would have received under the Tender Offer differs from that initially paid or granted to Seller under this Purchase Agreement. If such Warrant Consideration amounts are disparate, Premier shall either grant Seller the right to purchase additional shares of Premier Common Stock (the "Additional Warrant Shares") or cancel Seller's existing documentation evidencing the Warrant Consideration and reissue new documentation evidencing the reduced number of shares Seller is eligible to purchase. Similarly, if the Stock Consideration amounts are found to be disparate, Premier shall either issue Seller additional shares of Premier Common Stock (the "Additional Stock Payment Shares") or cancel Seller's existing shares and reissue a certificate evidencing fewer shares to the effect that Seller shall ultimately receive the same per share Stock Compensation as would have been provided under the Tender Offer. If the amounts of Cash Consideration are disparate and in Seller's favor, Premier shall pay Seller the additional cash. If such difference is in Premier's favor, Seller shall remit the difference in cash to Premier. The readjustment and exchange of Cash Consideration shall be completed to the effect that Seller receives the same per share Cash Consideration as he, she or it would have under the Tender Offer. -6- ARTICLE III REPRESENTATIONS AND WARRANTIES ------------------------------ 3.1 Representations and Warranties of Premier. Premier represents ----------------------------------------- and warrants to the Seller as of the date hereof and as of the Closing Date as follows: (a) Organization, Standing and Corporate Power. Premier is duly ------------------------------------------ organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority to carry on its business as now being conducted. Premier is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) could not reasonably be expected to have a material adverse effect with respect to Premier. (b) Corporate Authorization. The execution, delivery and performance ----------------------- by Premier of this Purchase Agreement and the consummation by Premier of the transactions contemplated hereby have been duly authorized by all necessary corporate action, including by resolution of the Board of Directors of Premier. Premier has the requisite corporate power, authority and legal capacity to enter into and perform all of its obligations under this Purchase Agreement and to consummate the Transactions hereunder. This Purchase Agreement has been duly executed and delivered by Premier and constitutes a valid and binding agreement of Premier, enforceable against Premier in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding or equity or at law). (c) No Conflict. Other than the filing of a Form 4 and an amendment ----------- to Premier's report on Schedule 13D under the Exchange Act, and no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement or the Registration Rights Agreement by Premier and the consummation by Premier of the transactions contemplated hereby and thereby, except for such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on Premier, and its Subsidiaries, taken as a whole, or to prevent or materially delay the consummation of the transactions contemplated hereby and thereby. Neither the execution and delivery of this Purchase Agreement or the Registration Rights Agreement by Premier nor the consummation by Premier of the transactions contemplated hereby or thereby, nor compliance by Premier with any of the provisions hereof or thereof (i) conflicts with or results in any breach of the -7- Articles of Incorporation or bylaws of Premier, (ii) contravenes, conflicts with or would constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon Premier, or (iii) constitutes a default under or gives rise to any right of termination, cancellation or acceleration of any right or obligation of Premier or any of its Subsidiaries or to a loss of any benefit to which Premier or any of its Subsidiaries is entitled under any provision of any agreement, contract or other instrument binding on Premier or any of its Subsidiaries or any license, franchise, permit or other similar authorization held by Premier or any of its Subsidiaries, except, in the case of clauses (ii) and (iii), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have a material adverse effect on Premier or any of its Subsidiaries taken as a whole. (d) No Required Vote. No vote of the holders of any class of the ---------------- outstanding capital stock of Premier is necessary to approve this Purchase Agreement or the Transactions. (e) Reservation of Premier Common Stock. The Premier Common Stock and ----------------------------------- Warrant Consideration to be issued to Seller as Purchase Consideration pursuant to this Purchase Agreement and any Premier Common Stock purchasable upon exercise of such Warrant Consideration, have been reserved solely for issuance and delivery to Seller, and when issued, will be duly and validly issued, fully paid and nonassessable, and such issuances will not violate any pre-emptive rights under applicable law, Premier's Articles of Incorporation or bylaw, contract or agreement, or otherwise. (f) Limitations on Transferability. Premier acknowledges that the ------------------------------ Securities are being acquired from an Affiliate of the Company without registration under the Securities Act or the securities laws of any other applicable jurisdiction, and that such Securities are being sold to Premier pursuant to an exemption thereto. Premier is acquiring the Securities solely for its own account, for investment purposes only, and not with an intent or view to their distribution within the meaning of Section 2(11) of the Securities Act. Premier understands that such Securities may not be freely transferable without registration under the Securities Act or the securities laws of any other applicable jurisdiction unless subsequently registered or an exemption therefrom is available. (g) No Broker. No investment banker, broker, finder, consultant or --------- intermediary is entitled to be paid any investment banking, brokerage, finder's or similar fee or commission by Seller in connection with this Purchase Agreement or the Transactions for which Premier would be liable following the Closing. 3.2 Representations and Warranties of Seller. The Seller represents ---------------------------------------- and warrants to Premier as of the date hereof and as of the Closing Date as follows: -8- (a) Organization, Standing and Corporate Power of the Seller. The -------------------------------------------------------- Seller has the requisite corporate power and authority and legal capacity to enter into and perform all of its obligations under this Purchase Agreement, to consummate the Transactions (including transferring the Securities to Premier) and to comply with Sections 4.1(a), 4.1(b) and 4.1(c)). Neither the execution and delivery of this Purchase Agreement by the Seller nor the consummation by the Seller of the Transactions nor compliance by the Seller with the provisions hereof conflicts with or results in a breach of any agreement entered into by the Seller, other than such agreements, the conflict with or breach of which, individually or in the aggregate, could not reasonably be expected to prevent or materially delay the consummation of the Transactions. (b) Corporate Authorization. The execution, delivery and performance ----------------------- by Seller of this Purchase Agreement and the consummation by Seller of the transactions contemplated hereby have been duly authorized by all necessary corporate action, including by resolution of the Board of Directors of Seller. This Purchase Agreement has been duly executed and delivered by Seller and constitutes a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding or equity or at law). (c) Title to Securities. At the Closing the Seller will be the direct ------------------- and record owner of the Securities. Except as set forth in the immediately preceding sentence or on Schedule 3.2(c), the Seller does not own or have the right to acquire, whether presently exercisable or at any time in the future, any shares of Company Common Stock or any securities convertible into or exercisable or exchangeable for Securities including, but not limited to, any options held by Seller. No person has the right to acquire, and the Seller is not a party to any contract, understanding, commitment, arrangement or other agreement to sell, transfer or otherwise dispose of, any shares of Company Common Stock owned by or issuable to the Seller. At the Closing, the Seller will have good and valid title to the Securities, free and clear of any Liens or Restrictions and it will have the full legal right, power and authority to assign, transfer and deliver such Securities to Premier pursuant hereto. At the Closing, the Seller will have the sole voting power, and sole power of disposition, with respect to all of such Securities and there will be no restrictions on the Seller's ability to transfer such Securities. (d) No Conflict. Except for the filing of a Form 4 with the ----------- Securities and Exchange Commission, Nasdaq, the Boston Stock Exchange, and the Company, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary for the execution of this Purchase Agreement by the Seller and the consummation -9- by the Seller of the transactions contemplated hereby, other than such filings the failure of which to be made, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Seller, if any, taken as a whole, or to prevent or materially delay the consummation of the Transactions. (e) Investment Intention. The Seller is acquiring the Stock -------------------- Consideration and the Warrant Consideration for its own account as principal for investment and not with a view to resale or distribution or with any present intention of distributing or selling the same. The Seller is fully aware that the Stock Consideration and the Warrant Consideration have not been registered under the Securities Act or under any applicable state securities laws, and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and all such laws. The Seller is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act. The Seller is able to bear the economic risk of the investment in the Stock Consideration and the Warrant Consideration and has such knowledge and experience in financial and business matters, and knowledge of the business of Premier, as to be capable of evaluating the merits and risks of a prospective investment. (f) Limitations on Transferability. Seller acknowledges that it may ------------------------------ not transfer any of the Stock Consideration or the Warrant Consideration received by it pursuant hereto unless and until the same are registered under the Securities Act and any applicable state securities laws, or unless an exemption from such registration is available. Seller acknowledges that transferability of the Stock Consideration and Warrant Consideration also is limited by the terms of this Purchase Agreement. (g) Legend. In furtherance of the agreements contained in Sections ------ 3.2(e) and (f), the Seller agrees that the certificate or certificates representing: (i) the Stock Consideration beneficially owned by Seller shall bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS -10- OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND ARE SUBJECT TO POSSIBLE CANCELLATION UNDER THAT CERTAIN PURCHASE AGREEMENT OF EVEN DATE HEREWITH BETWEEN PREMIER LASER SYSTEMS, INC. AND THE HOLDER. (ii) the Warrant Consideration beneficially owned by Seller shall bear the following legend: THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (II) THE SALE IS MADE PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, AND EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS OR (III) AN OPINION IS OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO PREMIER LASER SYSTEMS, INC. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND ARE SUBJECT TO POSSIBLE CANCELLATION UNDER THAT CERTAIN PURCHASE AGREEMENT OF EVEN DATE HEREWITH BETWEEN PREMIER LASER SYSTEMS, INC. AND HOLDER. Premier will exchange certificates without the foregoing legend upon the request of Seller at such time as (i) the restrictions imposed by this Purchase Agreement are no longer applicable; and (ii) the holder thereof may sell such shares or warrants without registration of such sale under the Securities Act, as evidenced (if requested by Premier) by an opinion of counsel to such holder. (h) No Broker. No investment banker, broker, finder, consultant or --------- intermediary is entitled to be paid any investment banking, brokerage, finder's or similar fee or -11- commission by Premier in connection with this Purchase Agreement or the Transactions for which the Seller would be liable following the Closing. ARTICLE IV COVENANTS --------- 4.1 Covenants of the Seller. ----------------------- (a) Binding Obligations. Notwithstanding, and without in any way ------------------- limiting, any other provision of this Purchase Agreement, the Seller acknowledges that, subject to the satisfaction (or waiver by it) of the conditions set forth in Section 5.2, its obligation to consummate the Transactions, including the sale to Premier of the Securities, is absolute and unconditional and shall not terminate except in accordance with Section 7.1, irrespective of, without limitation, any receipt of the Company of any proposal for a Business Combination or any resolution by the Board of Directors of the Company to approve a Business Combination or otherwise. (b) Exchange of Stock Consideration or Warrant Consideration. In the -------------------------------------------------------- event the Stock Consideration or Warrant Consideration must be adjusted as described in Section 2.4, Seller hereby agrees to return to Premier, within five (5) business days after notice, the certificate(s) reflecting the shares of Premier Common Stock and/or the documentation related to the Warrant Consideration for reissuance. (c) Consent to Transfer of Warrant. Seller shall use its best efforts ------------------------------ to cause the Company to execute the Consent to Transfer of Warrant in the form attached hereto as Exhibit "E." 4.2 Covenants of Premier. -------------------- (a) Registration Rights Agreement. Premier shall cause the parties to ----------------------------- enter into that certain Registration Rights Agreement in the form of Exhibit "A." (b) Purchases of Company Common Stock Prior to the Closing. Premier ------------------------------------------------------ agrees to use its best efforts to purchase or otherwise acquire, concurrently with or prior to the Closing, such number of shares of Company Common Stock, in negotiated transactions or otherwise, as is necessary so that the Premier's percentage of beneficial ownership of the Company Common Stock, shall at the Closing constitute at least 50.1%. -12- (c) Tender Offer. Following the Closing, Premier agrees to use its ------------ best efforts to effect a tender offer (the "Tender Offer") for the purchase of the then remaining outstanding shares of Company Common Stock. (d) Execution of Acquisition Agreement. Premier concurrently ---------------------------------- herewith, shall execute and deliver the Acquisition Agreement and the Other Agreements, and shall use its best efforts to satisfy the terms and conditions of, to perform the obligations to be performed by it under, and the consummation of the transactions contemplated by, the Acquisition Agreement. 4.3 Reasonable Best Efforts. Subject to the terms and conditions of ----------------------- this Purchase Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Purchase Agreement. ARTICLE V CONDITIONS TO CLOSING --------------------- 5.1 Conditions to Obligation of Premier. The obligation of Premier ----------------------------------- to consummate the purchase of the Securities is further subject to the satisfaction (or waiver by Premier) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of the Seller set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date). Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. (b) Performance of Obligations of the Seller. The Seller shall have ---------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by them under this Purchase Agreement at or prior to the Closing Date, and Premier shall have received a certificate signed by the Seller to the effect set forth in this paragraph. -13- (c) No Injunction. No preliminary or permanent injunction or order ------------- that would prohibit or restrain the consummation of the transactions contemplated hereunder shall be in effect and no Governmental Authority or other Person shall have commenced or threatened to commence an action or proceeding seeking to enjoin the consummation of such transactions or to impose liability on the parties hereto in connection therewith. (d) Consent to Transfer of Warrant. Premier shall have received a ------------------------------ Consent to Transfer of Warrant in the form attached hereto as Exhibit "E" executed by the Company. (e) Acquisition Agreement. Premier and the Company shall have --------------------- executed and delivered, contemporaneously with this Purchase Agreement, the Acquisition Agreement by and between Premier and the Company, dated February 25, 1998, and Company shall not be in breach or default of its obligations and agreements thereunder. 5.2 Conditions to Obligations of the Seller. The obligations of the --------------------------------------- Seller to effect the Transactions are further subject to the satisfaction (or waiver by the Seller) of the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of Premier set forth in this Purchase Agreement qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects, in each case as of the date of this Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall have been true and correct in all material respects as of such date), and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (b) Performance of Obligations of Premier. Premier shall have ------------------------------------- performed in all material respects all of the covenants and obligations required to be performed by it under this Purchase Agreement at or prior to the Closing Date, and the Seller shall have received a certificate signed on behalf of Premier to the effect set forth in this paragraph. (c) Registration Rights Agreement. The parties shall have entered ----------------------------- into that certain Registration Rights Agreement in the form of Exhibit "A." (d) Acquisition Agreement. Premier and the Company shall have executed --------------------- and delivered, contemporaneously with this Purchase Agreement, the Acquisition Agreement by and between Premier and the Company, dated February 25, 1998, and Premier shall not be in breach or default of its obligations and agreements thereunder. -14- ARTICLE VI INDEMNIFICATION; ARBITRATION ---------------------------- 6.1 Indemnification Procedures. -------------------------- (a) Premier agrees to indemnify and hold harmless Seller and each person who controls Seller within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, from and against any and all losses, claims, damages, liabilities and judgments (including without limiting the generality of the foregoing the reasonable fees and expenses of counsel incurred in connection with any action, suit or governmental or regulatory proceeding) resulting from and Indemnifiable Matter. "Indemnifiable Matter" means a claim by or on behalf of a shareholder or former shareholder of the Company alleging, in substance, that Seller's entry into and performance of this Purchase Agreement breached a fiduciary or substantially similar obligation owed to such person (a "Fiduciary Duty Claim"); provided, however, (i) no matter shall constitute and Indemnifiable Matter - -------- ------- unless the Tender Offer is not completed (regardless of the reason therefor), and (ii) a claim shall not constitute an Indemnifiable Matter if it is accompanied by the assertion of other causes of action that do not constitute a Fiduciary Duty Claim (including without limiting the generality of the foregoing a claim founded on alleged misrepresentations or omissions or other misconduct by Seller in advising a brokerage client). (b) In case any action shall be brought against Seller or any person controlling Seller, as herein above provided, based upon an Indemnifiable Matter, Seller or such person shall promptly notify Premier in writing and Premier shall assume the defense thereof, including the employment of counsel selected by Seller or such controlling person and reasonably satisfactory to premier and payment of all fees and expenses. Premier shall not be liable for the settlement of any such action effected without the written consent of Premier, but if settled with the written consent of Premier, premier agrees to indemnify and hold harmless Seller and each such controlling person from and against any loss or liability by reason of such settlement. Premier shall not, without prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes and unconditional release of such indemnified party from all liability for claims that are the subject matter of such proceeding. 6.2 Arbitration. In the event that any parties are unable to resolve ----------- any dispute related to or arising under the Transactions contemplated hereunder, the exclusive method for resolving such dispute shall be binding, nonappealable arbitration in Irvine, -15- California initiated by a party by a written notice to the other party demanding arbitration and specifying the claim to be arbitrated. Such arbitration shall be conducted pursuant to the Expedited Procedures of the Commercial Arbitration Rule (the "Rules") of the American Arbitration Association ("AAA), with the following modifications. The party initiating the arbitration (the "Claimant") shall appoint its arbitrator in its request for arbitration (the "Request"). The other party (the "Respondent") shall appoint its arbitrator within 15 Business Days of receipt of the Request and shall notify the Claimant of such appointment in writing. If the Respondent fails to appoint an arbitrator within such 15 Business Day period, the arbitrator named in the Request shall decide the controversy or claim as a sole arbitrator. Otherwise, the two arbitrators appointed by the parties shall appoint a third arbitrator within 15 Business Days after the Respondent has notified Claimant of the appointment of the Respondent's arbitrator. When the third arbitrator has accepted the appointment, the two party-appointed arbitrators shall promptly notify the parties of such appointment. If the two arbitrators appointed by the parties fail or are unable to so appoint a third arbitrator, then the appointment of the third arbitrator shall be made by the AAA, which shall promptly notify the parties of the appointment. The third arbitrator shall act as chairperson of the panel. Upon appointment of the third arbitrator, the arbitrators shall proceed to commence and conduct all proceedings promptly and in accordance with the Rules. The arbitral award shall be in writing and shall be final and binding on the parties to the arbitration. The arbitrator shall be instructed to award costs, including reasonable attorneys' fees and disbursements, which shall be paid by the party against whom the award is entered. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties or their assets, without review of the merits of the award. ARTICLE VII GENERAL PROVISIONS ------------------ 7.1 Termination of Purchase Agreement. --------------------------------- (a) This Purchase Agreement may be terminated and the purchase and sale of the Securities abandoned at any time prior to the Closing: (i) by mutual consent of Premier and the Seller in writing; (ii) by either Premier or the Seller if the Closing shall not have occurred prior to February 27, 1998 (other than due to the failure of the party seeking to terminate this Purchase Agreement to perform its obligations under this Purchase Agreement required to be performed at or prior to such date); -16- (iii) by Premier or Seller, if any Governmental Authority within the United States or any country or other jurisdiction in which Premier, directly or indirectly, has material assets or operations shall have issued an order, decree or taken any other action permanently enjoining, restraining or otherwise prohibiting the Transactions, and such order, decree, ruling or other action shall have become final and nonappealable; or (iv) by Premier, if after the date of this Purchase Agreement the Company issues (A) any shares of Company Common Stock (other than upon the conversion, exercise or exchange of securities outstanding on the date of this Purchase Agreement that are convertible into or exercisable or exchangeable for shares of Company Common Stock) or (B) any securities convertible into or exercisable or exchangeable for shares of Company Common Stock which result in the percentage of Company Common Stock beneficially held by the Seller, together with the percentage of Company Common Stock beneficially held by Premier falling below 50.1% of the ownership of all Company Common Stock (assuming the conversion, exercise or exchange of all securities referred to in clause (B)). (b) In the event of termination of this Purchase Agreement by either Premier or the Seller as provided in Section 7.1(a), this Purchase Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Premier or the Seller, other than this Article VII. Nothing contained in this Section shall relieve any party for any material breach of the representations, warranties, covenants or agreements set forth in this Purchase Agreement. 7.2 Counterparts. This Purchase Agreement may be executed in one or ------------ more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other parties. 7.3 Notices. All notices, requests, demands or other communications ------- provided herein shall be made in writing and shall be deemed to have been duly given if delivered as follows: -17- If to Premier: Premier Laser Systems, Inc. 3 Morgan Irvine, California 92618 Attn: Secretary Fax: (714) 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17/th/ Floor Costa Mesa, California 92626-1924 Attn: Peter J. Tennyson, Esq. Fax: (714) 979-1921 If to Seller: JB Oxford & Company 9665 Wilshire Blvd., Ste. 300 Beverly Hills, California 90212 Attention: Scott Monson, Esq. Fax: (310) 385-2237 with a copy to: Irell & Manella LLP 333 So. Hope Street, Ste. 3300 Los Angeles, California 90071 Attention: Richard Wirthlin, Esq. Fax: (213) 229-0515 or to such other address as any party shall have specified by notice in writing to the other parties. All such notices, requests, demands and communications shall be deemed to have been received on (i) the date of delivery if sent by messenger, (ii) on the Business Day following the Business Day on which delivered to a recognized courier service if sent by overnight courier or (iii) on the date received, if sent by fax. 7.4 Governing Law. This Purchase Agreement shall be governed by and ------------- construed in accordance with the laws of the State of California as applied to contracts -18- entered into and to be performed in California and without regard to the application of principles of conflict of laws. 7.5 Interpretation. When a reference is made in this Purchase -------------- Agreement to an Article or Section, such reference shall be to an Article or Section of this Purchase Agreement unless otherwise indicated. The table of contents and headings contained in this Purchase Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Purchase Agreement. Whenever the words "include," "includes" or "including" are used in this Purchase Agreement, they shall be deemed to be followed by the words "without limitation." 7.6 Successors and Assigns. Except as otherwise expressly provided ---------------------- in this Purchase Agreement, neither this Purchase Agreement nor any of the rights, interests or obligations under this Purchase Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, except that Premier, prior to or after the consummation of the transactions contemplated by Sections 2.1 and 2.2, may assign, in its sole discretion, any or all of its rights, interests and obligations under this Purchase Agreement to any wholly owned Subsidiary of Premier. However, no such assignment shall relieve Premier of any of its obligations under this Purchase Agreement. Subject to the preceding sentence, this Purchase Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors, assigns and heirs. 7.7 Entire Agreement; No Oral Waiver; Construction. This Purchase ---------------------------------------------- Agreement, any addenda and the agreements, certificates and other documents contemplated hereby and thereby, including the Acquisition Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties in connection therewith. No covenant or condition or representation not expressed in this Purchase Agreement shall affect or be effective to interpret, change or restrict this Purchase Agreement. No prior drafts of this Purchase Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action, suit or other proceeding involving this Purchase Agreement or the transactions contemplated hereby. This Purchase Agreement may not be amended, changed or terminated orally, nor shall any amendment, change, termination or attempted waiver of any of the provisions of this Purchase Agreement be binding on any party unless in writing signed by the parties hereto. No modification, waiver, termination, rescission, discharge or cancellation of this Purchase Agreement and no waiver of any provision of or default under this Purchase Agreement shall affect the right of any party thereafter to enforce any other provision or to exercise any right or remedy in the event of any other default, whether or not similar. -19- 7.8 Severability. If any provision of this Purchase Agreement (or ------------ any portion thereof) shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Purchase Agreement (and portions thereof) shall not be affected and shall remain in full force and effect. 7.9 No Third-party Rights. Nothing in this Purchase Agreement, --------------------- expressed or implied, shall or is intended to confer upon any Person other than the parties hereto or their respective successors or assigns, any rights or remedies of any nature or kind whatsoever under or by reason of this Purchase Agreement. 7.10 Remedies. Each of the parties hereto acknowledges and agrees -------- that (i) the provisions of this Purchase Agreement are reasonable and necessary to protect the proper and legitimate interests of the other parties hereto, and (ii) the other parties hereto would be irreparably damaged in the event any of the provisions of this Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Purchase Agreement by the other parties hereto without the necessity of proving irreparable injury or actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof and thereof, which rights shall be cumulative and in addition to any other remedy to which the parties hereto may be entitled hereunder or at law or equity. 7.11 Further Assurances. From time to time, at the reasonable request ------------------ of any other party hereto and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Purchase Agreement. 7.12 Survival of Representations. --------------------------- (a) All representations and warranties contained herein or made pursuant hereto shall survive the Closing. The expiration of any representation and warranty shall not affect any claim for indemnification made prior to the date of such expiration. (b) The representations and warranties made by any party in this Purchase Agreement or in any agreement, certificate, schedule or exhibit delivered in connection with this Purchase Agreement may be fully and completely relied upon by each other party unless the party seeking to avoid such representation or warranty can demonstrate that the investigation made by or on behalf of such other party actually revealed or disclosed the inaccuracy in question. [SIGNATURE PAGE FOLLOWS] -20- [SIGNATURE PAGE FOR PURCHASE AGREEMENT] IN WITNESS WHEREOF, the parties have executed, delivered and entered into this Purchase Agreement as of the day and year first above written. "Premier" PREMIER LASER SYSTEMS, INC. By: /s/ Colette Cozean ------------------------- Name:________________________ Title:_______________________ "Seller" JB OXFORD & COMPANY By:__________________________ Name:________________________ Title: ______________________ -21- IN WITNESS WHEREOF, the parties have executed, delivered and entered into this Purchase Agreement as of the day and year first above written. "Premier" PREMIER LASER SYSTEMS, INC. By:__________________________ Name:________________________ Title:_______________________ "Seller" JB OXFORD & COMPANY ----------------------------- Name:/s/ Stephen Rubenstein ------------------------ PRESIDENT STEPHEN RUBENSTEIN EXHIBIT "A" REGISTRATION RIGHTS AGREEMENT EXHIBIT "B" FORM OF CLASS C WARRANT EXHIBIT "C" FORM OF CLASS D WARRANT EXHIBIT "D" FORM OF WARRANT -26- EXHIBIT "E" CONSENT TO TRANSFER OF WARRANT -27- EX-99.12 8 REGISTRATION RIGHTS AGRMT WITH J.B. OXFORD & COMPANY EXHIBIT 99.12 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of February 25, 1998, by and between Premier Laser Systems, Inc., a California corporation ("Premier" or the "Company") and JB Oxford & Company, a Utah corporation (the "Holder"). WHEREAS, the Holder acquired the Purchased Shares and may acquire the Contingent Shares (each as defined below), pursuant to the terms of a Purchase Agreement, dated as of February __, 1998 (the "Purchase Agreement"), and the Warrants (as defined below) issued in connection therewith, by and between the Company and Holder. WHEREAS, as an inducement to entering into the Purchase Agreement, and as a condition to the acquisition of the Purchased Shares and the potential future acquisition of the Contingent Shares by the Holder in connection therewith, the Company has agreed to provide certain registration rights to the Purchaser as set forth in this Agreement. NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants and agreements set forth in the Purchase Agreement and hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows: 1. CERTAIN DEFINITIONS. Capitalized terms used herein without ------------------- definition shall have the meaning given to such terms in the Purchase Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "Contingent Shares" shall mean the shares of the Premier Common Stock issued by the Company to the Holder pursuant to the terms of the Class C Warrant and the Class D Warrant. "Contingent Share Shelf Registration Statement" has the meaning set forth in Section 2(a)(ii)(B). "Expiration Date" has the meaning set forth within the Prospectus/Offer to Exchange that the Company intends to utilize to effect a tender offer (the "Tender Offer") to purchase those shares of Ophthalmic Imaging Systems ("OIS") common stock not already owned by the Company. "Form S-3" means the registration statement on Form S-3 promulgated under the Securities Act by the SEC for use in registering securities issued by certain publicly traded companies and any similar form subsequently prescribed by the SEC as the successor to Form S-3. "Person" shall mean an individual or a corporation, partnership, limited liability company, association or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Prospectus" shall mean any prospectus included in a Shelf Registration Statement (as defined herein), or a registration statement with respect to an underwritten offering in which the Purchaser participates, as contemplated by Section 5(b), including any resale prospectus and any preliminary prospectus, and any amendment or supplement thereto, and in each case including all material incorporated by reference therein. "Purchase" shall mean the Company's purchase of Holder's shares of OIS common stock under the Purchase Agreement. "Purchased Shares" shall mean the shares of Premier Common Stock issued by the Company to the Holder at the Closing of the transactions contemplated by the Purchase Agreement. "Purchased Share Shelf Registration Statement" has the meaning set forth in Section 3(a)(i). "Registration Expenses" shall mean any and all expenses incident to the performance of or compliance with this Agreement, including, without limitation: (i) all applicable registration and filing fees imposed by the SEC and such securities exchange or exchanges on which Common Shares are then listed or The Nasdaq Stock Market ("Nasdaq") (ii) all fees and expenses incurred in connection with compliance with state securities or "blue sky" laws (including reasonable fees and disbursements of counsel for the Company in connection with qualification of any of the Shares under any state securities or blue sky laws and the preparation of a blue sky memorandum) and compliance with the rules of the NASD; (iii) all expenses of any Persons in preparing or assisting in preparing, printing and distributing the Shelf Registration Statement, any Prospectus, certificates and other documents relating to the performance of and compliance with this Agreement; (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Shares on any securities exchange or exchanges pursuant to Section 4(j) hereof; (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the -2- Company, including the expenses relating to any special audits or "cold comfort" letters required by or incident to such performance and compliance; and (vi) the reasonable fees and disbursements of a single counsel for the Purchaser. Registration Expenses shall specifically exclude underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Shares by the Purchaser. "SEC" shall mean the Securities and Exchange Commission or any successor entity. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Shares" shall mean, collectively, the Purchased Shares and the Contingent Shares issued to the Holder pursuant to the Purchase Agreement or the Warrant and any equity securities issued or issuable directly or indirectly with respect to the Purchased Shares or the Contingent Shares issued to the Holder by way of replacement, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. "Shelf Registration Statements" shall mean, collectively, the Purchased Share Shelf Registration Statement, the Contingent Share Shelf Registration Statement and any other registration statement as filed by the Company pursuant to Section 3(a) of this Agreement. "Warrants" shall mean the Class C Warrant and Class D Warrant issued by the Company to Purchaser. 2. REGISTRABLE SECURITIES. ---------------------- (a) The securities entitled to the benefits of this Agreement are the Shares. (b) Any subsequent holder of the Shares shall be entitled to the benefits of this Agreement as a holder of any such Shares (a "Purchaser"). A Person is deemed to be a Purchaser whenever such Person owns Shares or has the right to acquire such Shares, whether or not such acquisition has actually been effected and disregarding any legal restrictions upon the exercise of such right. -3- 3. REGISTRATION UNDER THE SECURITIES ACT. ------------------------------------- (a) (i) Subject to Section 7(b) below, the Company shall prepare and promptly file a registration statement on Form S-3 or an amendment to an existing registration statement on Form S-3, either of which may include shares of the Premier Common Stock for resale by other Company shareholders (the "Purchased Share Shelf Registration Statement"), registering the Purchased Shares for resale by the Purchaser and shall use its reasonable best efforts to cause the Purchased Share Shelf Registration Statement to be declared effective by the SEC as soon as practicable following the Expiration Date. (ii) (A) The Company shall use its reasonable best efforts to cause each installment of Contingent Shares, if any, issued by the Company to the Purchaser pursuant to the terms of the Purchase Agreement and the Warrants to be registered pursuant to an effective registration statement under the Securities Act as soon as practicable after the exercise of the Warrants. (B) Notwithstanding the foregoing, if there is a Suspension Event (as defined in Section 7(b) below) occurring at the time of issuance of any Contingent Shares, in lieu of delivering to the Purchaser Contingent Shares registered under the Securities Act, the Company may give notice to the Purchaser of the Suspension Event and deliver to the Purchaser Contingent Shares issued without registration under the Securities Act and file as soon as practicable thereafter a registration statement on Form S-3 or an amendment to an existing registration statement on Form S-3, either of which may include shares of Premier Common Stock for resale by the Company stockholders (in each case, a "Contingent Share Shelf Registration Statement"), registering the Contingent Shares for resale by the Purchaser. The Company shall use its reasonable best efforts to cause each Contingent Share Shelf Registration Statement to be declared effective by the SEC as soon as practicable thereafter but in any event not later than 120 days after termination of the Suspension Event. (iii) The Company agrees to use its reasonable best efforts to keep the Purchased Share Shelf Registration Statement and any Contingent Share Shelf Registration Statement continuously effective (and to include a Prospectus at all times meeting the requirements of the Securities Act, including (S) 10(a)(3) thereof) for a period of one year from the date of effectiveness of such Shelf Registration Statement (such period is referred to as the "Shelf Period"). -4- (b) The Company shall pay all Registration Expenses in connection with a registration pursuant to this Agreement. 4. REGISTRATION PROCEDURES. In connection with the obligations of ----------------------- the Company under Section 3 hereof, the Company will use its best efforts to effect the registration and sale of the Shares in accordance with the intended method of distribution thereof, and pursuant thereto, the Company will, as expeditiously as possible: (a) prepare and file with the SEC, as soon as practicable within the time period set forth in Section 3 hereof, and use its reasonable best efforts to have declared effective by the SEC, the Shelf Registration Statements, which shall (i) be available for public resale of the Shares by the Purchaser, and (ii) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; provided, however, that before filing a Shelf Registration Statement or Prospectus, or any amendments, post-effective amendments, or supplements thereto, with the SEC, the Company will furnish to the Purchaser and its underwriters, if any, with copies of all such proposed documents to be filed, which documents will be subject to the reasonable review of the Purchaser and its underwriter, and the Company will not file any Registration Statement or Prospectus to which the Purchaser of the underwriter, if any, shall reasonably object; (b) furnish to each Purchaser, without change, at least one signed copy of the applicable Shelf Registration Statement and any post- effective amendments thereto, including financial statements and schedules whether included therein or incorporated by reference thereto no later than two days following its filing with the SEC, which, in any event will be no later than two business days prior to the effective date of such Shelf Registration Statement; (c) (i) to prepare and file with the SEC such amendments, supplements and post-effective amendments to the Shelf Registration Statements as may be necessary to keep each such Shelf Registration Statements continuously effective for the period set forth in Section 3(a)(iii) of this Agreement; (ii) cause any Prospectus to be amended or supplemented as required and to be filed as required by Rule 424 or any similar rule that may be adopted under the Securities Act; (iii) respond as promptly as practicable to any comments received from the SEC with respect to the Shelf Registration Statements or any amendments thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statements during the applicable period in accordance with the intended method or methods of -5- distribution by the Purchaser and as reasonably requested by a Purchaser or any underwriter of the Shares. (d) furnish to each Purchaser and any managing underwriter, upon request and without charge, as many copies of any Prospectus and any amendment or supplement thereto as such Person may reasonably request; (e) use its commercially reasonable efforts to register or qualify the Shares under all applicable state securities or blue sky laws of such jurisdictions in the United States and its territories and possessions as the Purchaser may reasonably request in writing and keep such registration or qualification effective during the period the Shelf Registration Statement is required to be kept effective under Section 3(a)(iii) hereof; provided, however, -------- ------- that in connection therewith, the Company shall not be required to (i) qualify as a foreign corporation to do business or to register as a broker or dealer in any such jurisdiction where it would not otherwise be required to qualify or register but for this Section 4(e), (ii) subject itself to taxation in any such jurisdiction with respect to such registration or qualification, or (iii) file a general consent to service of process in any such jurisdiction; (f) notify each Purchaser and any managing underwriter promptly and, if requested by the Purchaser, confirm in writing, (i) when the Shelf Registration Statements and any post-effective amendments thereto have become effective, (ii) when any amendment or supplement to a Prospectus has been filed with the SEC, except for an amendment via incorporation by reference of subsequent filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Shelf Registration Statements or any part thereof or the initiation of any proceedings for that purpose, (iv) if the Company receives any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation of any proceeding for such purpose, and (v) of the happening of any event during the periods that any of the Shelf Registration Statements are effective as a result of which (A) the Shelf Registration Statements contain any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (B) a Prospectus as then amended or supplemented contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; -6- (g) in the event of a stop order or suspension in the sale of the Shares, use all reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statements by the SEC or any state securities authority or otherwise prohibiting the offer and sale of the Shares as promptly as possible; (h) furnish to the Purchaser upon request and without charge, at least one conformed copy of the Shelf Registration Statements and any post- effective amendments thereto (including documents incorporated therein by reference or exhibits thereto, unless requested); (i) cooperate with the Purchaser and any underwriter to facilitate the timely preparation and delivery of certificates representing Shares to be sold and not bearing any restrictive legend and enable certificates for such Shares to be issued for such numbers of Shares and registered in such names as the Purchaser may reasonably request; (j) use its reasonable best efforts to cause all Shares to be listed on any securities exchange or inter-dealer quotation service on which the Shares are then listed, including on Nasdaq if the Shares are then so included; (k) use its reasonable best efforts to make available adequate current public information about the Company as contemplated by Rule 144(c) promulgated under the Securities Act; (l) use its best efforts to cause the Shares covered by a Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable Purchaser or any underwriter of the Shares to consummate the disposition; and (m) upon the occurrence of any event referenced in last sentence of Section 7(b)(ii) below, prepare and promptly file a supplement or post- effective amendment to the Shelf Registration Statement and the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Shares, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading under the circumstances in which they were made; provided, however, a period of suspension of the distribution of Shares under Section 7(a) hereof as a result of an occurrence of an event under the last sentence of Section 7(b)(ii) shall not exceed a period of thirty (30) days during any twelve (12) month period. -7- 5. CERTAIN AGREEMENTS OF THE PURCHASER. ----------------------------------- (a) The Purchaser agrees to furnish to the Company in writing such information regarding the Purchaser and its proposed distribution of Shares as the Company may from time to time reasonably request in connection with the preparation of the Shelf Registration Statements or any registration statement as contemplated by Section 5(b) of this Agreement or the registration or qualification of the Shares under state securities or blue sky laws, and report to the Company within ten (10) days after the end of each month all sales or other dispositions of Shares made by them during such month. (b) To the extent timely notified in writing by the Company or the managing underwriters, the Purchaser agrees, if requested by the Company in the case of a Company initiated non-underwritten offering or if requested by the managing underwriter or underwriters in an underwritten offering initiated by the Company or by a shareholder of the Company pursuant to demand registration rights, not to effect any public sale or distribution of any Shares (including a sale pursuant to Rule 144 under the Securities Act) during the ten (10) day period prior to, and during the forty-five (45) day period beginning on, the date of effectiveness of each Company initiated offering made pursuant to a registration statement, provided that the Purchaser shall be entitled to participate in an underwritten offering pro rata with all other holders of shares of Common Stock to be included in any such registration, if, in the reasonable opinion of the managing underwriter of any such underwritten registration such shares may be included in such registration without having an adverse effect on the marketability or the price of any shares of the Premier Common Stock proposed to be offered in such underwritten registration and the Purchaser agrees to enter into an underwriting agreement with such underwriters containing such representations and warranties by the Purchaser and such terms and provisions, including without limitation, provisions with respect to indemnification and contribution, as are customarily contained in underwriting agreements and deliver customary opinions of counsel and closing certificates. -8- 6. INDEMNIFICATION. --------------- (a) Indemnification by the Company. The Company agrees to ------------------------------ indemnify, to the fullest extent permitted by law, and hold harmless each Purchaser, its officers, directors, employees, partners, agents, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the rules and regulations promulgated thereunder) such Purchaser or acts on behalf of such Purchaser, and each other Person who participates as an underwriter in the offering or sale of the Shares as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to which such Person may become subject (A) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in Shelf Registration Statements or any registration statement as contemplated by Section 5(b) of this Agreement or any amendments thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (C) that arise out of or are based upon any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law, which violation or alleged violation arises out of the Shelf Registration Statements or Prospectuses or any registration statement as contemplated by Section 5(b) of this Agreement; (ii) against any loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or alleged untrue statement, any omission or alleged omission, if such settlement is effected with the written consent of the Company, which consent shall not be unreasonably withheld; and (iii) subject to the limitations set forth in Section 6(b), against any expense (including reasonable fees and disbursements of counsel) reasonably incurred in investigating, preparing or defending against any litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, or any claim whatsoever based upon any such untrue statement or -9- alleged untrue statement, omission or alleged omission that relates to the sale by the Purchaser under Shelf Registration Statements or any registration statement as contemplated by Section 5(b) of this Agreement, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, -------- however, that the indemnity provided pursuant to this Section 6(a)(i), (ii) and - ------- (iii) shall not apply to the Purchaser with respect to any loss, liability, claim, damage or expense that arises out of or is based upon (1) any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information furnished to the Company by the Purchaser for use in the Shelf Registration Statements or any other registration statement contemplated by this Agreement or any amendment thereto or a Prospectus or any amendment or supplement thereto, or (2) trades made by the Purchaser in violation of Section 7(a) below after receiving the notice from the Company required pursuant thereto. The indemnification provided under this Section 6(a) shall remain in full force and effect regardless of any investigation made by any Purchaser or underwriter, and no such investigation may be asserted in an attempt to mitigate any liabilities hereunder. (b) Indemnification by the Purchaser. The Purchaser agrees to -------------------------------- indemnify and hold harmless the Company and its directors and officers, including each director of the Company and each officer of the Company who signed any Shelf Registration Statement or any registration statement with respect to an underwritten offering in which the Purchaser participates, as contemplated by Section 5(b) of this Agreement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, to the same extent as the indemnity contained in Section 6(a) hereof, but only insofar as such loss, liability, claim, damage or expense arises out of or is based upon (i) any untrue statement or alleged untrue statement or omission or alleged omission made in the Shelf Registration Statements or any registration statement with respect to an underwritten offering in which the Purchaser participates, as contemplated by Section 5(b) of this Agreement or any amendment thereto or a Prospectus or any amendment or supplement thereto in reliance upon and in conformity with information prepared and furnished to the Company by the Purchaser for use therein or (ii) trades made by the Purchaser in violation of Section 7(a) below; provided. that, in the case of the Purchaser's obligation set forth in this Section 6(b) relating to Section 5(a)(ii) above, such settlement must be effected with the written consent of the Purchaser, which consent shall not be unreasonably withheld. (c) Conduct of Indemnification Proceedings. The indemnified -------------------------------------- party shall give reasonably prompt written notice to the indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the indemnifying party (i) shall not relieve it from any liability that it may have under the indemnity agreement provided in Section 6(a) or (b) above, unless and -10- to the extent it did not otherwise learn of such action and the lack of notice by the indemnified party materially prejudices the indemnifying party or results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided under Section 6(a) or (b) above. After receipt of such notice, the indemnifying party shall be entitled to participate in and, at its option, jointly with the indemnifying party so notified, to assume the defense of such action or proceeding at such indemnifying party's own expense with counsel chosen by such indemnifying party and approved by the indemnified party or parties, which approval shall not be unreasonably withheld; provided, however, -------- ------- that, if the defendants in any such action or proceeding include both the indemnified party and the indemnifying party and the indemnified party reasonably determines, upon advice of counsel, that a conflict of interest exists or that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party, then the indemnified party shall be entitled to counsel the reasonable fees and expenses of which shall be paid by the indemnifying party. If the indemnifying party does not assume the defense of any such action or proceeding, after having received the notice referred to in the first sentence of this paragraph, the indemnifying party will pay the reasonable fees and expenses of counsel for the indemnified party. In such event, however, the indemnifying party will not be liable for any settlement effected without the written consent of such indemnifying party, which consent shall not be unreasonably withheld. If the indemnifying party assumes the defense of any such action or proceeding in accordance with this paragraph, such indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with such action or proceeding except as set forth in the proviso in the second sentence of this Section 5(c). (d) The obligations of the Company and the Purchaser under this Section 5 shall survive the completion of any offering of the Shares pursuant to any Shelf Registration Statement. 7. SUSPENSION OF SHELF REGISTRATION REQUIREMENT. -------------------------------------------- (a) The Purchaser agrees that he, she or it will not effect any sales of Shares pursuant to any Shelf Registration Statement after he, she or it has received notice from the Company to suspend sales as a result of the occurrence or existence of any Suspension Event (as defined in Section 7(b) below) until such time as the Company provides notice to such holder that all Suspension Events have ceased to exist. All such information relating to a Suspension Event obtained by Purchaser shall be treated as confidential and shall not be used by the Purchaser for any purpose. The Company shall -11- notify the Purchaser promptly after any Suspension Event occurs or ceases to exist to the extent he or it continues to hold Shares and with respect to the cessation of a Suspension Event, to the extent he or it has been provided notice of a Suspension Event. In addition, the Purchaser agrees that he, she or it will not effect any sales of Shares pursuant to the Shelf Registration Statements after he or it has received notice from the Company to suspend sales because the Registration Statements, any Prospectus or any supplement thereto contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, until the Company notifies such holder that the misstatement or omission has been corrected. The Company shall not suspend the shelf registration requirements under this section for more than a period of thirty (30) days during any (12) month period. (b) Notwithstanding anything to the contrary set forth in this Agreement, the Company's obligation to file the Shelf Registration Statements and make any filings with any state securities authority, to use its reasonable best efforts to cause the Shelf Registration Statements or any state securities filings to become effective, or to amend or supplement the Shelf Registration Statement or any state securities filings shall be temporarily suspended in the event of and during a Suspension Event. A "Suspension Event" shall exist at such times (i) that the Company is not eligible to use Form S-3 for the registration contemplated by Section 3(a) hereof or (ii) as circumstances exist, that the Company's Board of Directors, in good faith and as evidenced by a resolution in accordance therewith, determines make it impractical or inadvisable for the Company to file, amend or supplement a Shelf Registration Statement or such filings or to cause the Shelf Registration Statements or such filings to become effective (such circumstances to include, without limitation, (A) the Company conducting an underwritten primary offering and being advised in writing, with such writing being made available to Purchaser upon reasonable request, by the underwriters that sale of Shares under the Shelf Registration Statements would have a material adverse effect on the Company's offering or (B) pending negotiations relating to, or consummation of, a transaction material to the Company or the occurrence of some other event (x) where any of the foregoing would require disclosure under applicable securities laws of material information in the Shelf Registration Statements (or any other document incorporated into a Shelf Registration Statement by reference) or such state securities filings and (y) as to which the Company has a bona fide business purpose for preserving confidentiality or which renders the Company unable to comply with SEC requirements. Suspension of the Company's obligations pursuant to this Section 7(b) shall continue only for so long as a Suspension Event or its effect is continuing, but in any event not to exceed 30 days. -12- 8. MISCELLANEOUS. ------------- (a) Amendments and Waivers. Except as specifically provided ---------------------- herein, the provisions of this Agreement, including the provisions of this sentence, may not be amended, modified, supplemented or waived, nor may consent to departures therefrom be given, without the written consent of the Company and each Purchaser specifically affected thereby. (b) Notices. Unless otherwise provided, all notices or other ------- communications required or permitted to be given to the parties hereto shall be in writing and shall be deemed to have been given if personally delivered, including personal delivery by facsimile, provided that the sender receives telephonic or electronic confirmation that the facsimile was received by the recipient and that such facsimile is followed the same day by mailing by certified or registered mail return receipt requested, first class postage prepaid (a "Mailing"), upon receipt of courier delivery or the third day following a Mailing, addressed as follows (or at such other address as the addressed party may have substituted by notice pursuant to this Section 8(b): (i) If to the Company: Premier Laser Systems, Inc. 3 Morgan Irvine, California 92618 Attn: Secretary Fax: (714) 951-7218 with a copy to: Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17/th/ Floor Costa Mesa, California 92626-1924 Attn: Peter J. Tennyson, Esq. Fax: (714) 979-1921 -13- (ii) If to Purchaser: JB Oxford & Company 9665 Wilshire Blvd., Ste. 300 Beverly Hills, California 90212 Attention: Scott Monson, Esq. Fax: (310) 385-2237 Fax: with a copy to: Irell & Manella LLP 333 So. Hope Street, Ste. 3300 Los Angeles, California 90071 Attention: Richard Wirthlin, Esq. Fax: (213) 229-0515 or to such other address as any party may have furnished in writing to the other parties in the manner provided above. (c) Successors and Assigns. This Agreement shall inure to the ---------------------- benefit of and be binding on the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Purchasers of the Shares; provided, however, the Company shall not assign its responsibilities hereunder without the express written consent of the Purchasers. (d) Counterparts. This Agreement may be executed in any number ------------ of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Any party may execute this Agreement by facsimile signature, and shall provide promptly to all other parties an originally executed Agreement. (e) Headings and Interpretation. The headings in this Agreement --------------------------- are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. In construing the meaning of this Agreement, no party hereto shall be deemed the drafter of this Agreement and this Agreement shall be construed according to its fair meaning and not strictly against any person as the drafter hereof. -14- (f) Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the laws of the State of California without giving effect to the conflicts of law provisions thereof. (g) Entire Agreement. This Agreement is intended by the parties ---------------- as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior oral and written agreements and understandings and all contemporaneous written agreements and understandings between the parties with respect to such subject matter. (h) No Inconsistent Agreements. The Company will not on or -------------------------- after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with the rights granted to Purchasers in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Purchasers hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any such agreements. (i) Remedies. All remedies under this Agreement, or by law or -------- otherwise afforded to any party hereto, shall be cumulative and not alternative. Any Person having rights under any provision of this Agreement will be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement. (j) Rule 144. with a view to making available certain -------- exemptions from the registration provisions of the Securities Act for the sale of Shares, the Company covenants that: (i) At all times that the Premier Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Company will use its best efforts to timely file the reports required to be filed by the Company under the Securities Act and the exchange Act (or, if the Company is not registered under Section 12(b) or 12(g) of the Exchange Act and is not otherwise required to file such reports under Sections 13 or 15(d) thereunder, it will, upon the request of any Purchaser, make publicly available such -15- other information required under Rule 144 of the Securities Act ("Rule 144") for so long as necessary to permit sales pursuant to Rule 144), and the Company will take such further action as any Purchaser may reasonably request to the extent required from time to time to enable such Purchaser to sell the Shares without registration under the Securities Act within the limitations of the exemptions provided by: (x) Rule 144, as such rule may be amended from time to time, and (y) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Purchaser, the Company will deliver to Purchaser a written statement as to whether it has complied with such requirements. (ii) So long as the Shares constitute "Restricted Securities" as that term is used in Rule 144, the Company will furnish each Purchaser a copy of the annual and quarterly reports of the Company and such other public reports as the Purchaser may reasonably request. (SIGNATURE PAGE Follows) -16- [SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. "PREMIER" PREMIER LASER SYSTEMS, INC. By: /s/ Colette Cozean --------------------------- Title:___________________________ "PURCHASER" _________________________________ Name:____________________________ -17- [SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. "PREMIER" PREMIER LASER SYSTEMS, INC. By: Title: "PURCHASER" JB OXFORD & COMPANY /s/ Scott G. Manson By: SCOTT G. MANSON Title:GENERAL COUNSEL, ASST. SECRETARY EX-99.13 9 PRESS RELEASE DATED FEB 26, 1998 EXHIBIT 99.13 Thursday February 26, 7:31 am Eastern Time Company Press Release Premier Laser Systems Acquires 51% of Ophthalmic Imaging Systems Stock Through Private Purchase Agrees to Commence Tender Offer IRVINE, Calif.--(BW HealthWire)--Feb. 26, 1998--Premier Laser Systems Inc. (Nasdaq NM:PLSIA - news) Thursday announced that it has acquired approximately 51% of the outstanding stock of Sacramento, Calif.-based Ophthalmic Imaging Systems (Nasdaq:OISI - news) through private purchases. Premier had previously purchased approximately 29.5% of the outstanding Ophthalmic Imaging's stock in the open market. As part of the acquisition, Premier has agreed with OIS that Premier will commence a tender offer within five business days to acquire the remaining outstanding shares of OIS. Pursuant to the tender offer, Premier intends to offer, in return for each share of OIS tendered, $1.75 in cash, $0.25 in Premier stock and two warrants, each of which permit the holder to acquire $0.25 worth of stock for a nominal purchase price if OIS meets certain future revenue goals. The terms of the proposed tender offer are identical to the terms of the private purchase Premier completed today. Premier's acquisition of certain OIS shares is subject to rescission in the event Premier does not acquire shares under its tender offer. The directors of OIS have unanimously approved the transaction and recommend that OIS shareholders accept Premier's offer to tender their shares. Premier Chairman, President and CEO Colette Cozean, Ph.D., said: ``We are truly pleased to have the opportunity to join forces with such an exceptional company and strong management team and that their Board of Directors has voiced unanimous agreement. ``We believe we will be able to rapidly improve OIS' performance through our international distribution channels for their products, manufacturing expertise, product synergies and economies of scale. We further believe that the strength of our balance sheet and position in the ophthalmic market combined with OIS' innovative technology and product line should provide excellent opportunities for the shareholders and employees of both companies.'' Cowen & Company, OIS' financial advisor, has delivered to the Board of Directors of OIS its opinion that as of the date of the opinion the terms of the offer are fair from a financial point of view to the holders of OIS common stock (other than Premier and its affiliates). Ophthalmic Imaging System's CEO, Steven Verdooner said: ``OIS is very pleased and excited about this opportunity. Premier's corporate strategy continues to demonstrate a strong commitment to the ophthalmic field through the acquisition of innovative, market-leading products. We believe that OIS will be an important part of Premier's continued growth and offers a new dimension to its ophthalmology business.'' The completion of the tender offer is subject to customary conditions, including registration with the Securities and Exchange Commission of the securities to be offered to the OIS shareholders. OIS is engaged in the business of designing, developing, manufacturing and marketing digital imaging systems and image enhancement and analysis software for use by practitioners in the ocular health field. Premier Laser Systems develops, manufactures and markets several lines of proprietary medical lasers, fiber optic delivery systems, corneal topography systems and associated products and services for a variety of dental, ophthalmic and surgical applications. The statements in this news release that relate to future events or performance, statements about growth, company performance, distribution channels, levels of sales and market size, future manufacturing capacity and efficiencies, future product shipment rates, future product introductions are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties related to the development of markets for and commercial acceptance of the company's products and services, the availability of components, competitors' product introductions, patent or other litigation, and other risks identified in the company's SEC filings. Actual results may differ from those described in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. EX-99.14 10 PRESS RELEASE DATED FEB 27, 1998 EXHIBIT 99.14 Friday, February 27, 1998 Company Press Release Premier Laser Systems Tender Offer For Ophthalmic Imaging Systems Stock to Commence Following Effectiveness of Registration Statement IRVINE, CA (February 27, 1998) . . . . . . . Premier Laser Systems, Inc. (Nasdaq NM: PLSIA) announced today that it has agreed with Sacramento-based Ophthalmic Imaging Systems (Nasdaq:OISI) that Premier's tender offer for OIS' stock will commence promptly following the effectiveness of Premier's related registration statement. Premier intends to file the registration next week in order to register common stock, and common stock underlying warrants, to be offered to OIS' shareholders. As previously announced, Premier intends to offer, in return for each share of OIS tendered, $1.75 in cash, $0.25 in Premier stock and two warrants, each of which permit the holder to acquire $0.25 worth of stock for a nominal purchase price if OIS meets certain future revenue goals. OIS is engaged in the business of designing, developing, manufacturing and marketing digital imaging systems and image enhancement and analysis software for use by practitioners in the ocular health field. Premier Laser Systems develops, manufactures and markets several lines of proprietary medical lasers, fiber optic delivery systems, corneal topography systems and associated products and services for a variety of dental, ophthalmic and surgical applications. -----END PRIVACY-ENHANCED MESSAGE-----