-----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, Cpfb3I0ovGG/TwtMuc9sRvqA+D51OXDgZqqL9VcMWz6vqTWG7UpRliNABnImPSRF THxOpW1mfUqATmyEE9FK9Q== 0001017386-01-500116.txt : 20020412 0001017386-01-500116.hdr.sgml : 20020412 ACCESSION NUMBER: 0001017386-01-500116 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 33 FILED AS OF DATE: 20011128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LASIK AMERICA INC CENTRAL INDEX KEY: 0001157814 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-68942 FILM NUMBER: 1800913 BUSINESS ADDRESS: STREET 1: 6646 INDIAN SCHOOL ROAD NE CITY: ALBUQUERQUE STATE: NM ZIP: 87110 BUSINESS PHONE: 5058372020 SB-2/A 1 file001.txt REGISTRATION STATEMENT AMENDMENT NO. 4 As filed with the U.S. Securities and Exchange Commission on November 28, 2001 REGISTRATION NO. 333-68942 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT 4 to FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ LASIK AMERICA, INC. (Name of Small Business Issuer in its charter) NEVADA 8741 88-0490720 ---------------------------- ----------------- ---------------- (State or other jurisdiction (Primary Standard (I.R.S. Employer of Industrial Classification Identification incorporation or organization) Code Number) Number) ------------------------------- 6646 INDIAN SCHOOL ROAD, N.E. ALBUQUERQUE, NEW MEXICO 87110 505-837-2020 (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES) -------------------------------------------------- HOWARD P. SILVERMAN, CHIEF EXECUTIVE OFFICER LASIK AMERICA, INC. 6646 INDIAN SCHOOL ROAD, N.E. ALBUQUERQUE, NEW MEXICO 87110 505-837-2020 (Name, Address, And Telephone Number Of Agent For Service) ------------------------------------------------------------------ COPIES TO: GREGORY BARTKO, ESQ. CHRISTOPHER DIETERICH, ESQ. Law Office of Gregory Bartko Law Offices of Dieterich & Associates 3475 Lenox Road, Suite 400 11300 W. Olympic Boulevard, Suite 800 Atlanta, Georgia 30326 Los Angeles, California 90064 (404) 238-0550 (telephone) (310) 312-6888 (telephone) (404) 238-0551 (facsimile) (310) 312-6680 (facsimile) ------------------------ i APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this registration statement becomes effective. If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /__________________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /__________________ If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /__________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box: / /__________________ ------------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE PROPOSED PROPOSED MAXIMUM MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING SECURITIES TO BE REGISTERED BE REGISTERED(5) PER SHARE(1) PRICE(1) FEE - ------------------------------ ------------- -------------- ------------- ----- Units, comprised of one share of common stock, par value $.001 per share and one redeemable common stock purchase warrant, each warrant to purchase one share of common stock (2).......................... 550,000 $6.10 $3,335,000 $833.75 Common stock, $.001 par value per share, included as a part of the units offered (3)..... 550,000 --- ---- --- Redeemable common stock purchase warrants included as a part of the units offered (4).................. 550,000 --- ---- --- Common stock underlying redeemable warrants included in the units (6)............. 550,000 $7.20 $3,960,000 $990.00 ii ---------- --------- Total.................. --- --- $7,295,000 $1,823.75 ========== ========= (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 of the Securities Act. (2) Includes 125,000 units beneficially owned by Howard P. Silverman, selling shareholder, that are registered for resale in this registration statement. (3) Includes 125,000 shares of common stock beneficially owned by Howard P. Silverman, selling shareholder, that are registered for resale in this registration statement. (4) Includes 125,000 redeemable common stock purchase warrants beneficially owned by Howard P. Silverman, selling shareholder, that are registered for resale in this registration statement. (5) Pursuant to Rule 416, we are registering additional securities as may become issuable pursuant to the anti-dilution provisions of the redeemable warrants. (6) Includes 125,000 shares of common stock underlying the 125,000 redeemable common stock purchase warrants offered for resale by Howard P. Silverman, the selling shareholder. iii SUBJECT TO COMPLETION, DATED NOVEMBER ___, 2001 LASIK AMERICA, INC. 550,000 UNITS This is an initial public offering by us of 425,000 units of LASIK America, Inc. and 125,000 units on behalf of the selling shareholder. Each unit consist of one share of common stock and one redeemable common stock purchase warrant, with each warrant exercisable to purchase one share of common stock. This prospectus also covers the offer of shares of our common stock issuable upon the exercise of the common stock purchase warrants offered by us and the selling shareholder. Proceeds from the units sold on behalf of the selling shareholder will not be received by us, rather all proceeds from those units will be received by the selling shareholder, who is our chief executive officer. Before this offering, there has been no public market for any of our securities. The initial public offering price is $6.10 per unit, which consists of $6.00 per share of common stock and $.10 per warrant. The common stock and the warrants will trade as separate securities upon the termination of this offering, which will occur on January 31, 2002 or 60 days thereafter if the offering is extended by the representative of the underwriters. Please see the risk factors beginning on page 6 to read about factors you should consider before buying any of our securities. Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Delivery of the securities offered by this prospectus will be made from time to time commencing on the date of this prospectus until the offering terminates. The underwriters are offering the units on a best efforts basis, and there is no minimum number of units that must be sold as a condition of the offering. The underwriters may offer the units for sale to the public commencing at the date of this prospectus. All funds received from subscribers of the units will be deposited into an escrow account with Wells Fargo Bank, N.A., Los Angeles, California. The information contained in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. WEST AMERICA SECURITIES CORP. Prospectus dated November , 2001 Table of contents Page No. -------- Prospectus summary.......................................... 3 Risk factors................................................ 6 Cautionary note regarding forward-looking statements........ 12 Use of proceeds............................................. 13 Dividend policy............................................. 14 Capitalization.............................................. 14 Dilution.................................................... 15 Selected financial data..................................... 16 Management's discussion and analysis of financial condition and results of operations................................. 18 Business.................................................... 22 Management.................................................. 34 Certain transactions........................................ 39 Principal stockholders and the selling shareholder.......... 39 Description of securities................................... 41 Shares eligible for future sale............................. 44 Underwriting................................................ 45 Plan of distribution for selling shareholder................ 50 Legal matters............................................... 52 Experts..................................................... 52 Index to financial statements............................... F-1 2 Prospectus summary This summary highlights information contained elsewhere in this prospectus. Investors should read the entire prospectus carefully, including the financial statements which are a part of this prospectus. Our business LASIK America, Inc. provides laser vision correction procedures to individuals at our center in Albuquerque, New Mexico. Our ophthalmologist and those with which we are affiliated, provide these services using state-of-the-art excimer laser technology. Corporate background On March 21, 2001, we formed our company as a Nevada corporation. Our executive office is located at 6646 Indian School Road, N.E., Albuquerque, New Mexico and our telephone number is (505) 837-2020. Since our inception to July 31, 2001, we have incurred a net loss of $(12,508,837). Accordingly, our auditors have indicated in their opinion that there is substantial doubt about our ability to continue as a going concern should we not be able to raise capital through the offer and sale of the units pursuant to this prospectus. The offering The offering does not include any minimum number of units that must be sold for net proceeds to be received by us from the sale of the units. All funds received from subscribers for the units will be deposited into a non-interest bearing escrow account from which net proceeds from the sale of units will be delivered to us once we accept a subscription for the units. Funds from subscriptions not accepted will be returned to the subscriber without interest or other deductions. Accordingly, purchasers of units may hold units sold in the offering without any liquid market for their common stock and warrants and even though we may not receive sufficient net proceeds from this offering to execute our business plan and expand our operations. Terms of the offering Securities that we are offering.............. 425,000 units, each unit consisting of one share of common stock and one common stock purchase warrant, each warrant exercisable to purchase one share of common stock at an exercise price of $7.20 per share; Securities offered on behalf of the selling shareholder.................... 125,000 units offered for resale; Common stock outstanding before this offering................................... 2,082,043 shares; 3 Common stock to be outstanding after this offering.............................. 2,507,043 shares; Redeemable common stock purchase warrants outstanding before this offering........... 125,000 warrants; Redeemable common stock purchase warrants to be outstanding after this offering...... 550,000 redeemable common stock purchase warrants included as a part of the units offered by this prospectus; Use of proceeds.............................. Laser and refractive equipment; office build-out expenditures; expenses associated with one new center; advertising; accounts payable; working capital and general corporate purposes, which includes offering expenses, salaries, cost of additional personnel, support and management systems, capital costs for computers and related equipment. Proposed Over-the-Counter Electronic Bulletin Board symbols Common stock ........................... "LASK" Redeemable warrants..................... "LASK W" Unless stated otherwise, all information in this prospectus assumes: o an initial public offering price of $6.10 per unit; and o the exercise of 42,500 representative's warrants and the issuance of the securities underlying the warrants. Summary financial data The following table summarizes the financial data of our business. This information is qualified by reference to, and should be read together with, the historical financial data for the period March 21, 2001 (inception) through July 31, 2001 and should be read in conjunction with our audited financial statements included elsewhere in this prospectus. The historical financial data as of July 31, 2001 is derived from and should be read in conjunction with our audited financial statements included elsewhere in this prospectus. The data presented below should also be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and accompanying notes appearing elsewhere in this prospectus. 4 March 21, 2001 (inception) through July 31, 2001 --------------------------- Statement of operations data: Revenues................................... $ 184,040 Cost of revenues(exclusive of depreciation included in operating costs and expenses below)............... 79,353 Operating costs and expenses (including non-cash compensation of $12,351,387)... 12,609,640 ------------ Loss from operations....................... (12,504,953) Interest expense........................... (3,884) ------------ Net loss.................................. $(12,508,837) ============ Basic and diluted net loss per share....... $(6.01) ============ Shares used in computing basic and diluted net loss per share....................... 2,082,043 ============ The following table includes a summary of our balance sheet at July 31, 2001: Balance sheet data: July 31, 2001 actual ----------- Cash and cash equivalents................ $ 19 Total working capital (deficit).......... (178,032) Total assets............................. 229,712 Current portion of long term liabilities....................... 110,263 Long term debt........................... 105,820 Total liabilities........................ 293,791 Total shareholders' (deficit)............ (64,079) 5 Risk factors The purchase of our securities involves a high degree of risk. Accordingly, each prospective purchaser, before placing an order for any units, should carefully read this prospectus in its entirety and should consider the following risks and speculative features inherent in and affecting this offering and our business, as well as general investment risks. An investment in our securities should be made only by persons who can afford an investment involving such risks and is suitable only for persons able to sustain the loss of their entire investment. We began providing our services in May 2001 and have a very brief and limited operating history upon which you may evaluate our business and prospects. Since we started providing our services in May 2001, we have a limited operating history. As a result, we have a limited basis upon which you may evaluate our business and prospects. Our prospects must be considered in light of the risks, expenses, delays, problems and difficulties experienced by us in establishing our business and operations, such as financing our start-up costs, forming alliances with ophthalmologists and optometrists and establishing our patient flow. We have incurred net losses since commencing our business and expect losses from operations in the future. We have not achieved profitability and expect to continue to incur operating losses for the foreseeable future. For the period from the commencement of our operations (March 21, 2001) until July 31, 2001, our net loss was $12,508,837 and our accumulated deficit at that same date was $12,508,837. We expect to continue to incur operating and capital expenditures and, as a result, we expect net losses in the future. We will need to generate significant revenues to achieve and maintain profitability, and if we do not, we anticipate that we will require approximately $1,000,000 in additional capital in order to effectuate our business plan, expand by establishing one additional laser vision center and meet our operational expenses. Without additional capital, our plan to establish one additional laser vision center will be deferred. Our auditors have issued their audit report with an emphasis of matter in their opinion that indicates that our financial statements have been prepared with the assumption that we will continue as a going concern. Our auditors have issued a report that accompanies our financial statements for the period ended July 31, 2001. A paragraph in their report discloses that our financial statements have been prepared assuming we would continue in business as a going concern, and that due to our limited capital resources and a large working capital deficit, our auditors have raised a substantial doubt about our ability to continue as a going concern. Since there is no minimum number of units that must be sold in this offering, purchasers of the units may be investing in a company that will not receive adequate investment capital in this offering. There is no minimum number of units that must be sold in this offering before we receive net proceeds from the sale of any units. As a result, purchasers of the units may own our common stock and warrants even though we may not receive sufficient investment capital from this offering to continue our operations. We also may not be able to raise other investment capital in the future in order to continue our business and operations. 6 If we do not sell a sufficient number of units in this public offering, alternate funding will be needed and we will have to modify our business operations accordingly. Without the receipt of the net proceeds from the sale of the maximum number of units we are offering, we will not be able to continue operations and implement of business plan as anticipated. If appropriate financing is not obtained by us through our public offering, we intend to modify our operations accordingly. If we raise additional capital through the sale of equity, including preferred stock, or convertible debt securities, our stockholders may experience dilution. If adequate capital was otherwise not available to us on acceptable terms, we will be unable to fund our expansion, develop or enhance our services or respond to competitive pressures. Other than through the offer and sale of the units in our public offering, we currently do not have a credit facility or any other commitments for additional financing. We cannot be certain that additional financing will be available when and to the extent required if we do not sell sufficient units in this public offering. If adequate funds are not available on acceptable terms, we may be unable to fund our expansion, develop or enhance our services or respond to competitive pressures. Our management will have broad discretion to allocate the offering proceeds and you will likely have no voice as to how our management will use these net proceeds. Since no minimum number of units must be purchased as a condition of this public offering, we can make no prediction on the amount of net proceeds, if any, that will be available at the conclusion of the offering. Our management will have broad discretion to allocate the proceeds of this offering, including proceeds currently specifically allocated as described in this prospectus, and any other cash resources to such uses as they determine to be in our best interests. The amounts actually allocated to each expense category and the source of the cash so allocated, may vary significantly, depending on a number of factors, including how many units are purchased in this public offering, the amount of future revenue growth, the amount of cash generated or used by our operations and the success of our marketing efforts for our laser vision correction procedures. A significant amount of the net proceeds of this offering may be used to benefit our management and other insiders. We intend to allocate the net proceeds from this offering for working capital and general corporate purposes and for the payment of outstanding accounts payable. Substantial amounts of our working capital will be applied towards the payment of salaries and related costs of our management personnel. Accordingly, substantial amounts of the net proceeds we receive from this offering may ultimately be used to benefit our officers, consultants or other insiders. Since the laser refractive surgery market is relatively new, we do not know if our services will generate wide spread market acceptance. The commercial market for laser refractive surgery in the United States is relatively new and we do not know if these procedures will generate widespread market acceptance. Several factors may contribute to refractive surgery not achieving broad market acceptance, which include: o cost of the procedure; 7 o effectiveness of conventional eye correction technologies including eye glasses and contact lenses; o general resistance to surgery; o availability of other surgical techniques; o the short history of laser refractive surgery in the United States; o side effects; and o any resistance by third-party payers to reimburse clients for elective laser vision correction. Potential side effects and negative long-term results of laser refractive surgery could damage the demand for our services. There are concerns about the safety and efficacy of the performance of laser refractive surgery. These concerns include: o the predictability and stability of results; o complications and side effects including: o post-operative pain; o corneal haze during healing; o glare/halos; o decrease in contrast sensitivity; o temporary increases in intraocular pressure in reaction to post-procedure medication; o modest fluctuations in astigmatism and modest decreases in best corrected vision; o loss of fixation during the procedure; o unintended over-or under-corrections; instability, reversion or regression of effect; and o corneal scars, corneal ulcers, and corneal healing disorders. The occurrence of any of these or any other complications may damage the demand for the services we offer. The technologies we use in our laser vision correction procedures are subject to rapid technological change and could cause us to make significant capital investment in new equipment. Our market is characterized by rapid technological changes. Newer technologies, techniques or products for the treatment of refractive vision disorders, could be developed with better performance than the excimer lasers that we currently use. The availability of new and better ophthalmic laser technologies or other surgical or non-surgical 8 methods for correcting refractive vision disorders could require us to make significant investments in technology, render our current technology obsolete and have a significant negative impact on our business and results of operations. We may not compete effectively with other eye care services companies that have more resources and experience than we do. Many of our competitors have substantially greater financial, technical, managerial, marketing, and other resources than we do may compete more effectively than we can. We compete with Laser Vision Centers, Inc., LCA Vision, Aris Vision, NovaMed Eyecare Management, LLC, TLC The Laser Center, Inc., Clear Vision Laser Centers, Inc., and other entities, including other refractive laser center companies, hospitals, individual ophthalmologists and optometrists, other surgery and laser centers, eye care clinics and providers of retail optical products in offering our services and products. Our surgical procedures compete with other surgical and non-surgical treatments for refractive disorders, including eyeglasses, contact lenses, other types of refractive surgery, such as radial keratotomy, and technologies currently under development. If our competitors offer laser vision correction or other refractive surgery services at lower prices than we do, we may have to lower the prices we charge, which will adversely affect our results of operations. The demand for our laser refractive surgery procedures may be adversely affected by health care reform initiatives. The continuing effort of government regulators of health care services to contain or reduce the costs of health care may reduce our revenues and profitability by increasing our regulatory burden or increasing our administrative costs associated with delivering services to our customers. We cannot predict the effect that health care reforms may have on our business, and it is possible that any reforms will hurt our business. Significant decreases in excimer laser prices could harm our business by making it more attractive for eye surgeons to buy their own lasers and force us to lower our prices. significant reduction in the price of excimer lasers could reduce the demand for our services by making it economically more attractive for eye surgeons to buy excimer lasers for themselves instead of utilizing our centers. Also, excimer laser price decreases could force us to reduce our fees in response to this reduction in demand or as a means to remain competitive with other laser providers. We are dependent upon a limited number of suppliers for our laser surgery equipment and we don't have a contingency plan for alternative suppliers, so if any of these suppliers were unable or unwilling to meet our needs, we may not be able to equip our center with the appropriate technology. We are dependent on a small number of manufacturers for our supply of ophthalmic lasers. To our knowledge, five companies, Bausch & Lomb, Nidek, Summit Technologies, Inc., Autonomous Technologies Corporation and VISX, Inc. have been approved by the United States Food and Drug Administration for commercial sale of excimer lasers in the U. S. If any of these manufactures were for any reason to discontinue commercial sale of ophthalmic lasers, or be unwilling or unable to meet our needs, we may not be able to equip our centers with the appropriate technology. We may be forced to alter the way we market our services and the manner in which we enter into relationships with our equipment providers, service 9 providers, ophthalmologists, optometrists, and other health care providers as a result of government regulations. We are subject to extensive federal, state, local and foreign laws, rules and regulations, including: o restrictions on the approval, distribution, and use of medical devices; o anti-kickback statutes; o fee-splitting laws; o corporate practice of medicine and optometric restrictions; o self-referral laws; o anti-fraud provisions; o facility license requirements and certificates of need; o conflict of interest regulations; and o sales and use taxes Many of these laws and regulations are ambiguous, and courts and regulatory authorities have provided little clarification. Moreover, state and local laws vary from jurisdiction to jurisdiction. As a result, we may not always be able to accurately interpret applicable law, and some of our activities could be challenged. Failure to comply with applicable FDA requirements could subject us, and the ophthalmologist who uses our center to enforcement actions, including product seizure, recalls, withdrawal of approvals and civil and criminal penalties. Further, failure to comply with regulatory requirements, or any adverse regulatory action could result in limitations or prohibitions on our use of excimer lasers. See "Business--Government regulation." Our management will control approximately 44.5% of our common stock after this offering and their interests may be different from and conflict with yours and as a result, you may have no effective voice in our management, including the election of directors and the approval of significant corporate transactions. Following this offering, our executive officers and directors will beneficially own or control a total of approximately 44.5% of our outstanding common stock, assuming no exercise of the redeemable common stock purchase warrants. Accordingly, if our management acts together, they have the power to control the election of all of our directors and the approval of significant corporate transactions for which the approval of our stockholders is required. If you purchase our securities, you may have no effective voice in our management. Substantial dilution of ownership to shareholders will occur as a result of the sale of the units in this public offering, and such dilution may negatively impact the market price of our securities if and when such a market develops. We are offering for sale approximately 20.4% of the number of shares of common stock we have outstanding before the offering, and 40.8% of the number 10 of shares of common stock outstanding before the offering if all of the common stock purchase warrants that are a part of the units, were to be exercised. Accordingly, there will be substantial ownership dilution to our shareholders as a result of the sale of the units, and such dilution may negatively affect the market price of our securities if they are approved for price quotations on the over-the-counter electronic bulletin board maintained by the NASD. Providing laser surgery procedures and related eye care services on our clients could subject us to malpractice, product liability, and other claims which could exceed our insurance coverage or force us to obtain casualty insurance which may not be available at commercially reasonable rates. Providing our services to our clients subjects us to the potential that significant physical injury will occur to clients at our centers and the resulting risk of malpractice, product liability and other claims. Our insurance may not be adequate to satisfy claims or protect us or our affiliated providers against these claims. Furthermore, our insurance coverage may not continue to be available at acceptable costs and terms. We are not licensed to practice medicine or optometry, so in order for us to deliver our eye care services, we are dependent, in part, upon our relationships with our member-physicians and optometrists and our ability to enter into affiliations with licensed medical and optometric professionals. Since we do not practice medicine or optometry, our activities are limited to establishing centers at which ophthalmologists and other eye care professionals that we employ, and others with whom we've established affiliations, render eye care services. Accordingly, our success depends upon our ability to attract talented physicians that we desire to employ and our ability to develop relationships with affiliated physicians and to enter into agreements with health care providers, including institutions, independent physicians and optometrists, to render surgical and other professional services at centers owned or managed by us. There can be no assurance that we will be able to enter into these agreements with health care providers on satisfactory terms, if at all. Our inability to enter into these affiliations would likely limit our revenues, our services, and our ability to expand our operations. We finance the purchases of our laser surgery equipment which increases our leverage and finance costs and if we do not satisfy our debt payments when due, we may be forced to forfeit our equipment. We finance the purchases of our excimer laser equipment. The use of leverage to finance our equipment increases our risk of loss as opposed to if we borrowed a smaller portion or none of the purchase price of this equipment. Our risk is increased because we must satisfy these obligations on specific dates, regardless of our revenues. If we do not meet our debt service payments when due, we may be forced to forfeit the equipment securing the debt. We need the continued availability of the expertise and strategic planning of our chief executive officer, Howard P. Silverman and other key personnel experienced in the laser refractive surgery industry. We believe that the efforts and industry knowledge of our senior management, key employees and contractors, particularly that of our chief executive officer, Howard P. Silverman, in the laser refractive surgery industry, are essential to our operations and growth. Dr. Silverman is responsible for our strategic planning, 11 and the loss of his services would have an adverse affect on our long-term operations. We have not, at this date, entered into any employment agreement with Dr. Silverman, nor have we obtained key man life insurance on Dr. Silverman's life. If we do not succeed in retaining or motivating our current personnel or in hiring additional qualified employees, our business will be materially adversely affected. In addition, competition for personnel in our industry, including the doctors who perform our services, is intense and there can be no assurance that we will be able to attract and retain the necessary personnel. Although we intend to seek approval for price quotation of the common stock and common stock purchase warrants on the over-the-counter electronic bulletin board maintained by the NASD, securities quoted over-the-counter are often thinly traded, highly volatile in price and not regularly followed by securities analysts. Even if our securities are approved for price quotations on the over-the-counter electronic bulletin board maintained by the NASD, such approval does not mean that our securities will be actively followed or traded, or that an adequate market for our securities will develop or if developed, be maintained, as such securities are usually thinly traded and subject to price volatility. Our inability to list our securities on a national securities exchange may impair our ability to develop a public market for our securities. We have not made an application to list the units, our common stock, or the redeemable common stock purchase warrants on any national securities exchange. Our inability to list our securities on a national securities exchange may impair our ability to develop a liquid and orderly market in our securities after this offering is completed. Further, the prices and volume of trading in our securities may be adversely affected since our securities will not be listed on a national securities exchange. Our underwriter lacks experience as an underwriter of securities in public offerings, and this lack of experience may impair our ability to develop a public market for our common stock. The representative of the underwriters has not conducted, managed or co-managed public underwritings of securities except only in a limited number of situations involving the public offering of securities. This lack of experience may impair our ability to develop or maintain a public market for our securities. The representative of our underwriters may not be able to act as a market maker in our securities at the conclusion of this public offering, and we are not certain whether any of the underwriters will make a market in our securities. We don't know if our underwriters or the representative of the underwriters will be able to act as a market maker or that any broker-dealer will become a market maker in our securities. If there are no market makers for our securities, or if only a few market makers choose to act as such for our securities, then the market price of our common stock and the redeemable common stock purchase warrants could be adversely affected. 12 Cautionary note regarding forward looking statements This prospectus contains forward-looking statements. These forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, and projections about our industry, our beliefs and assumptions. Words including "may," "could," "would," "will," "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks and uncertainties are described in "Risk Factors" and elsewhere in this prospectus. We caution you not to place undue reliance on these forward-looking statements, which reflect our management's view only as of the date of this prospectus. We are not obligated to update these statements or publicly release the result of any revisions to them to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. Use of proceeds We estimate that we will receive net proceeds of approximately $2,256,750 from our sale of the 425,000 units offered by this prospectus, assuming an initial public offering price of $6.10 per unit. These amounts are after deducting estimated underwriting discounts and commissions, and after fees and expenses of approximately $335,750, payable by us. None of the proceeds of sale of the 125,000 units offered by the selling shareholder will be received by us. However, since there is no minimum number of units that must be sold in this offering, we can give no assurance that any of the units will be sold or that we will receive the proceeds from the sale of the maximum number of units offered. The following table reflects the use of the net proceeds from the sale of the units offered assuming we sell 100%, 75%, 50% and 25% of the units offered. Using these four assumptions we intend to use the net proceeds from the units offered, as follows:

If we do not receive all of the net proceeds described above, we will prioritize and allocate net proceeds received, first to accounts payable and 13 offering expenses, working capital and general corporate purposes, to laser and refractive equipment, advertising and lastly to office build-out expenditures and the expenses of opening a planned new laser vision correction center. We anticipate that, through this offering or otherwise, we will require a minimum of $610,000 in available financing over the next 12 months in order to maintain our business and current operations during that time. Proceeds allocated to advertising will include the costs of newspaper, radio, television, and other media spots designed to increase public awareness of our laser vision correction surgery procedures and the benefits of the procedures for our customers. Expenses of opening one additional new center in a location to be determined, office build-out expenditures and laser and refractive equipment relate to build out expenses in our Albuquerque center, consisting primarily of construction costs for up-fitting additional office and patient facilities, and possibly the cost of mobile excimer laser equipment. A small portion of our net proceeds will be utilized for expansion of internal corporate operations, which include expanding our computer network, equipment for our corporate office facilities, software, and our Web site development costs. The remaining net proceeds, or approximately 26.4% of the net proceeds, will be utilized as working capital for general corporate purposes. These purposes include salaries, additional personnel, expansion costs of our operations, support and management systems, as well as capital expenses for computers and related equipment. The proposed allocation of the net proceeds represents our management's best estimate of the allocation of the net proceeds of the offering, based upon the current status of our operations, our current plans and current economic conditions. Our management may re-allocate the net proceeds among the categories listed above. We also may, when the opportunity arises, acquire or invest in complementary businesses, products or technologies. However, we have no present understandings, commitments or agreements with respect to any acquisition or investment. Pending application of the net proceeds in the manner described above, we intend to invest the net proceeds in short-term, interest bearing investment grade securities. Dividend policy We have never declared or paid any cash or stock dividends on our capital stock. We intend to reinvest earnings, if any, to fund the development and expansion of our business and, as a result, we do not anticipate paying cash dividends on our common stock in the foreseeable future. The declaration of dividends will be at the discretion of our board of directors and will depend upon our earnings, capital requirements, financial position, general economic conditions, and other pertinent factors. Capitalization 14 The following table sets forth our actual capitalization as of July 31, 2001: The following table should be read in conjunction with our financial statements, related notes and other financial information included elsewhere in this prospectus. July 31, 2001 ------------------ Actual ----------- Current portion of long term liabilities. $ 110,263 =========== Long term debt........................... $ 105,820 =========== Stockholders' (deficit): Preferred stock, $.001 par value; 100,000 authorized, no shares issued.. $ 0 ----------- Common stock, $.001 par value; 25,000,000 shares authorized; 2,082,043 to be issued, .............. 2,082 Additional paid in capital............. 12,510,176 Deferred compensation.................. (67,500) Accumulated deficit.................... (12,508,837) ----------- Total stockholders' (deficit)........ (64,079) ----------- Total capitalization................. $ 152,004 =========== The preceding table does not include the exercise of: o the redeemable common stock purchase warrants; and o 42,500 representative's warrants. Dilution As of July 31, 2001, our net tangible book value, or deficit, was $(64,079), or $(0.03) per share of common stock. Net tangible book value, or deficit, per share represents the amount of our total tangible assets less total liabilities divided by the number of shares of common stock outstanding. There is no minimum number of units that must be sold in this offering. The following information has been prepared assuming that we realize the estimated proceeds from the sale of the maximum number of units being offered by us. We can give no assurance that any of the units will be sold or that we will receive the proceeds from the sale of the maximum number of units offered. After giving effect to the sale of the 425,000 units offered by this prospectus and after deducting the underwriting discounts and estimated offering expenses, net tangible book value at July 31, 2001, would have been $2,192,671, or approximately $0.87 per share of our common stock. This represents an immediate increase in net tangible book value of $0.90 per share of common stock 15 to our existing stockholders and an immediate dilution in net tangible book value of $(5.13) per share of common stock, or approximately 85.4%, to new investors. The following table illustrates this per share dilution: Assumed initial public offering price....................... $ 6.00 Net tangible book value(deficit) prior to the offering.................................................. (0.03) Increase in net tangible book value per share attributable to this offering.......................................... 0.90 As adjusted, net tangible book value per share after the offering........................................ 0.87 Dilution of net tangible book value per share to new investors................................................... $(5.13) ====== The following table summarizes, as of July 31, 2001, on an as adjusted basis, the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by existing stockholders and investors in this offering, and after giving effect to the sale of the 425,000 units offered by this prospectus, assuming an initial offering price of $6.10 per unit. The calculations are based upon total consideration given by new investors and existing stockholders before any deduction of underwriting discounts, offering expenses payable by us, and does not include the purchase of or any exercise of the redeemable common stock purchase warrants offered by this prospectus. Shares purchased Total consideration Average -------------------- --------------------- price per Number Percent Amount Percent share --------- -------- ---------- -------- ---------- Existing stockholders....... 2,082,043 83% $ 73,371 2.80% $0.04 New investors........ 425,000 17% 2,550,000 97.20% $6.00 --------- ---- ---------- ------- Total............ 2,507,043 100% $2,623,371 100% ========= ==== ========== ======= Selected financial data The following selected financial data should be read in conjunction with our audited financial statements for the period March 21, 2001 (inception) through July 31, 2001 included elsewhere in the prospectus and Management's Discussion and Analysis of Financial Condition and Results of Operations. The historical selected financial data as of July 31, 2001 and for the period March 21, 2001 (inception) through July 31, 2001 are derived from and should be read in conjunction with our audited financial statements included elsewhere in the prospectus. The results of operations for the period March 21, 2001 (inception) through July 31, 2001 are not necessarily indicative of results to be expected for the current fiscal year. 16 March 21, 2001 (inception) through July 31, 2001 -------------------------- Statement of operations data: Revenues...................................$ 184,040 Operating costs and expenses: Cost of revenues (exclusive of depreciation shown separately below)... 79,353 General and administrative (including non- cash compensation of $12,351,387)...... 12,594,756 Depreciation............................. 14,884 ---------- Total operating costs and expenses..... 12,609,640 ---------- Loss from operations....................... (12,504,953) Interest expense........................... (3,884) ---------- Net loss...................................$(12,508,837) ========== Basic and diluted net loss per share....... $(6.01) ========== Shares used in computing basic and diluted net loss per share....................... 2,082,043 ========== The following table includes a summary of our balance sheet at July 31, 2001: Balance sheet data: July 31, 2001 ----------- Actual ----------- Cash and cash equivalents................ $ 19 Total working capital (deficit).......... (178,032) Total assets............................. 229,712 Current portion of long term liabilities....................... 110,263 Long term debt........................... 105,820 Total liabilities........................ 293,791 Total shareholders' (deficit)............ (64,079) 17 Management's discussion and analysis of financial condition and Results of operations The following management's discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and accompanying notes and the other financial information included elsewhere in this prospectus. Overview We are a medical services company that focuses on delivering laser vision correction surgical procedures to consumers. Our affiliated and employed doctors provide medical care to our clients and we provide the necessary equipment, technical staff, administrative services and the excimer laser, needed for the delivery of laser eye surgery to our clients. We do not practice medicine, rather our affiliated and employed doctors deliver medical care and treatment to eye surgery patients. We were incorporated on March 21, 2001 as LASIK America, Inc. In October 1995 and in March 1996, the United States Food and Drug Administration approved the use of excimer lasers manufactured by Summit Technology, Inc. and VISX, Inc., to treat low to moderate nearsightedness. In May 2001, we opened our first excimer laser center in Albuquerque, New Mexico. Our plan of expansion includes opening at least one additional laser vision center in Las Vegas, Nevada. Our doctors perform laser vision correction surgery procedures in our New Mexico center office. We provide our ophthalmologist and optometrist with state-of-the-art equipment and facilities as well as support services necessary to perform vision correction procedures. At present we have one affiliated ophthalmologist, one employed ophthalmologist and one employed optometrist in our center. Our affiliated doctor uses our center to perform laser vision correction surgery on his own patients. In that case, our affiliated doctor relies on us only to provide our state-of-the art laser vision surgery center, equipment and facilities for surgical procedures performed on his own patients. In contrast, our employed doctor performs surgery on clients of our center, which includes delivery of pre and post-operative care. We generate our revenue on the number of surgical procedures we conduct in our center. Currently we receive $440.00 per eye on procedures performed by our affiliated doctor, which is paid to us by our affiliated doctor, and $995.00 per eye on procedures performed by our employed doctor. Although we have no written agreements with our affiliated or employed doctors, we have agreed to compensate our employed ophthalmologist at the rate of $200,000 per year and our employed optometrist at the rate of $105,000 per year. To date, the supply of our excimer laser and related equipment has come through agreements that we have entered into with DVI Financial, Inc., Bausch & Lomb, Inc., and a patent licenses with VISX, Incorporated. In the event that we would not be able to obtain additional excimer lasers and related equipment from these providers, we believe that other satisfactory sources of supply are available now that the FDA has approved additional manufacturers of excimer lasers. 18 Our plan of operation We believe that our New Mexico center now in operation can sustain its current operations on current revenue and what we believe will be increased usage of our center by new clients generated from our advertising and marketing efforts, as well as general client awareness of the laser vision correction procedure. At current levels, we are generating a net loss from operations, but we anticipate beginning to generate a net profit at the end of our first full year of operations. With current revenues, we have experienced a continuing increase in the number of surgical procedures performed in our center primarily, by dedicating three of our employees to new client development and advertising locally through the placement of kiosks in local shopping malls where high pedestrian traffic exists. Our plan of expansion includes opening a second laser vision correction center in Las Vegas, Nevada. We will require the proceeds from this offering in order to purchase the needed excimer laser, related medical equipment and working capital necessary for the build out and corporate expenses associated with opening a second center. If we open a second center, we expect that we will need to hire staff and technical expertise to operate any new center, and that the additional cost to us in doing so will come primarily from the proceeds of this offering. If we do not sell a sufficient number of units in this offering, our plan is to maintain the current operational level in our New Mexico center and to develop marketing and sales efforts designed to increase our patient flow. Our New Mexico center has the capacity to perform approximately 100 eye surgery procedures each week and at present, we are performing approximately 20 eye surgeries each week. We currently generate on average approximately $73,000 per month in gross revenue and believe that we will require approximately $1,200,000 in gross revenue during the next 12 months to maintain our existing operations. We believe that our cash requirements during the next 12 months will be satisfied through an increase in the number of clients and eye surgery procedures, expected from our advertising and marketing efforts. The following table sets forth, for the period March 21, 2001 (inception) through July 31, 2001, operating information expressed as a percentage of revenue. The results of operations data for the period March 21, 2001 (inception) through July 31, 2001 is not necessarily indicative of the results to be expected for future periods. March 21, 2001 (inception) through July 31, 2001 ------------- Net revenues........................... 100.0% Cost of revenues (exclusive of depreciation shown separately below. 43.1% General and administrative expense..... 6,843.5% Depreciation expense................... 8.1% Total operating expenses............... 6,851.6% Loss from Operations................... 6,794.7% Interest Expense....................... 2.1% Net (loss)............................. (6,796.8)% 19 Results of operations Revenues We derive our revenues directly from the number of laser vision surgical procedures performed at our center. Procedures performed by our affiliated doctor generate revenue to us from the physician, who collects a fee from the patient. Procedures performed by our employed doctor generate revenue directly to us from the patient. Revenues from inception at March 21, 2001 to July 31, 2001 totaled $184,040. Total revenue is predicated on the number of procedures of laser vision correction we performed during the period. Due to the fact that our operations in performing laser vision correction surgery did not begin until May 2001, the number of procedures performed during the period from inception to July 31, 2001, we believe to be below what we anticipate will be performed during subsequent periods. Cost of revenues Cost of revenues, exclusive of depreciation, consists of doctor fees, royalty fees and medical supplies. The total cost of revenue from inception to July 31, 2001 was $79,353. As a percentage of revenue, cost of revenue, exclusive of depreciation, equaled 43.1% of total revenue during the period. Royalty fees are payable to the licensor of the excimer laser we use for surgical procedures and is currently $110.00 per eye. General and administrative expenses General and administrative expenses consist primarily of compensation expense related to common stock to be issued, salaries, wages and related costs for general corporate functions. General and administrative expenses from inception to July 31, 2001 totaled $12,594,756. As a percentage of revenue, general and administrative expenses equaled 6,843% of total revenue. We believe that this current percentage is high during this period as a result of the non-cash compensation expense related to common stock to be issued and our accounting, legal and other fees for professional services incurred during our formation and start-up process. Compensation expense of $12,351,387 related to common stock to be issued is the result of applying the anticipated initial public offering price of $6.00 per share to the shares issued upon our formation and common stock sold in a small private placement since our inception on March 21, 2001. Depreciation Depreciation expense amounted to $14,884 from the depreciation of capital items acquired for use in our operations. Interest expense Interest expense of $3,884 results from our financing costs of some of our capital equipment. Net loss Our net loss for the period March 21, 2001 (inception) through July 31, 20 2001 was $12,508,837. This net loss is almost exclusively due to the $12,351,387 recognized as compensation expense related to common stock for shares issued to employees and sold to individuals since our inception and prior to the anticipated sale of the units in this offering. We believe that after our first full year of operations, we will be performing a sufficient number of laser vision surgical procedures to generate a net profit. Accordingly, without the costs associated with our expansion plans, we do not anticipate generating a net loss from operations after our first full year. Liquidity and capital resources Since our inception, we have financed our operations through revenues and capital raised through the sale of our common stock. As of July 31, 2001 we had a cash balance of $19. In order to effectuate our business plan as structured we will need to raise significant capital from external sources. In addition, we intend on raising capital internally through the increase in the number of procedures we perform. We currently do not have a credit facility or any commitments for additional financing. If we are unable to obtain adequate financing from internal or external sources we may be unable to fully implement our business plan and may be forced to modify our operations. Cash flows used in operating activities was $54,778 for the period March 21, 2001 (inception) through July 31, 2001. Net cash used in investing activities was $14,341 during the same period. Net cash flows provided by financing activities of $69,138 results from the sale of our common stock in conjunction with our formation. Recently issued accounting standards We believe that recently issued financial standards will not have a significant impact on our results of operations, financial position, or cash flows. 21 Business Overview LASIK America, Inc. provides laser vision correction procedures to individuals, at our New Mexico Center Office in Albuquerque, New Mexico. Our ophthalmologist, and those with which we are affiliated, provide these services using state-of-the-art excimer laser technology. We opened our first LASIK America center in Albuquerque, New Mexico in May 2001. Corporate background We were incorporated in Nevada on March 21, 2001 as LASIK America, Inc., and since that time have been providing laser vision correction services using the VISX, Incorporated excimer laser. Our strategy We are a provider of laser vision correction procedures in New Mexico. In order to expand and grow our business, we hope to implement the following strategies: o Expand our geographic presence by opening additional centers, with the first expansion center targeted for Las Vegas, Nevada; o Equip our centers with state-of-the-art medical technologies; o Recruit, employ and affiliate talented ophthalmologists and optometrists and to capitalize on these doctors' relationships within their local communities; and o Increase our marketing and sales efforts to further penetrate our target markets. Our industry The laser vision correction industry has experienced dramatic growth during the past five years. Since 1995, approximately 2.25 million Americans have had refractive surgery, including more than 1.5 million who have had LASIK surgery. The American Society of Cataract and Refractive Surgery has forecasted that in 2001, approximately 1.8 million LASIK procedures, or 900,000 patients will have LASIK eye surgery. The growth trend in LASIK surgical procedures during the last five years has been dramatic, with approximately 170,000 procedures occurring in 1997, 440,000 in 1998, 870,000 in 1999 and 1,500,000 procedures in 2000. Total sales for the laser vision correction industry have been over $1.0 billion since approval of the excimer laser in the U.S. in October 1995. We believe that we can take advantage of this growing market through the opening of our New Mexico Center Office, and plan to selectively expand our ability to provide laser vision corrective surgery to new clients by expanding 22 our services to other selected geographic markets. Currently, all of our revenues are generated in our New Mexico center by delivering laser vision correction surgical procedures to clients primarily in the Albuquerque metropolitan area. Our revenue is based upon the number of laser vision correction procedures done at our center and is dependent on whether the procedure is completed by one of our affiliated doctors or our employed doctor. We believe that as laser vision surgery becomes more accepted to the patient population and our advertising and marketing effort takes effect, more clients will have laser vision surgery at our center, and in turn, we expect our revenues to increase. Common refractive vision disorders Refractive vision disorders typically result from improper curvature of the cornea relative to the size and shape of the eye. If the curvature of the cornea is not precisely correct, it cannot properly focus the light passing through it onto the retina. The result is a blurred image. The three most common refractive vision disorders are: o Myopia, also known as nearsightedness--images focus in front of the retina, resulting in a blurred perception of distant objects; o Hyperopia, also known as farsightedness--images focus behind the retina, resulting in a blurred perception of near objects; o Astigmatism--images do not focus on any point due to the varying curvature of the eye along different axes. Corrective laser vision procedures Currently, eyeglasses and contact lenses are the most common and traditional means of correcting common vision disorders. Vision correction is achieved through the use of corrective lenses over the eye. Laser vision correction procedures are designed to reshape the outer layers of the eye to correct refractive vision disorders. Changing the curvature of the cornea with an excimer laser, eliminates or reduces the need for corrective lenses. We use the excimer laser in our centers which is approved to treat nearsightedness within parameters of the optical power of the human eye, and is approved to treat farsightedness and astigmatism within other parameters that measure the optical power of the eye. There are currently two outpatient procedures that we offer at our LASIK-America centers that use the excimer laser to correct common refractive vision disorders. One is laser in-situ keratomileusis, commonly known as LASIK and the other is photorefractive keratectomy, commonly known as PRK. Prior to either LASIK or PRK, an assessment is made of the correction required to program the excimer laser. Using a specially developed algorithm, the software of the excimer laser then calculates the optimal number of pulses needed to achieve the intended correction. The patient reclines in a chair, eyes focused on a fixed target, while the doctor positions the patient's cornea for the procedure. An eyelid holder is inserted to prevent blinking and topical anesthetic eye drops are applied. The excimer laser emits energy in a series of pulses, with each pulse lasting only several billionths of a second. High-energy ultraviolet light 23 produced by the excimer laser creates a non-thermal process known as ablation, which removes tissue and reshapes the cornea without damaging adjacent tissue. The amount of tissue removed depends upon the amount of corneal reshaping required to correct the vision disorder. The typical procedure takes 15 to 30 minutes from set-up to completion, while the excimer laser is generally used for less than 40 seconds. The front surface of the eye is flattened when corrected for nearsightedness and steepened when corrected for farsightedness. In effect, the change made in the middle or periphery of the cornea is translated to the front surface of cornea and results in vision correction. Following the procedure, a series of patient follow-up visits are scheduled in our center, with an ophthalmologist or optometrist, to monitor the corneal healing process, to verify that there are no complications and to test the amount of correction achieved by the laser vision correction procedure. LASIK. LASIK was approved for commercial use in the U.S. in 1999. Currently, the majority of laser vision correction procedures are LASIK, since it is believed that LASIK generally allows for: o More precise correction than PRK for higher levels of nearsightedness and farsightedness, with or without astigmatism; o Greater predictability of results; o Shorter patient recovery times and less discomfort; and o Decreased possibility of corneal regression. In the LASIK procedure, a small flap of the cornea is raised by use of a microkeratome, a tiny surgical blade with rapid oscillations. The laser is then applied to the surface of the cornea under the flap and the flap is put back in place. Generally, no bandage contact lens is required and the patient experiences minimal discomfort. Generally, LASIK has the advantage of a quicker recovery as compared to PRK. With LASIK, our experience has been that most clients see well enough to drive a car the next day and heal completely within one to three months. LASIK generally allows a doctor to treat both eyes in one visit. PRK. In PRK procedures, the doctor removes the thin layer of cells covering the outer surface of the cornea, by applying the excimer laser pulses directly to the surface of the cornea. Following the PRK procedure, a contact lens bandage is placed on the eye to protect it. The patient typically experiences discomfort for up to 24 hours and blurred vision for up to 72 hours until the epithelium, the outer surface of the cornea, heals. To alleviate discomfort and promote corneal healing, a doctor will typically prescribe topical pharmaceuticals. Although a patient usually experiences improvement in clarity of vision within a few days following the procedure, it usually takes one to three months for the full benefit of the PRK procedure to be realized. Clients usually have one eye treated per visit. 24 Our laser vision correction center We operate one laser vision correction center in Albuquerque, New Mexico and operate it through affiliated and employed doctors. Our center is supported by our fully credentialed ophthalmologist and optometrist who perform pre-procedure evaluations, laser vision correction procedures, and post-procedure follow-ups. Depending on the success of this offering, we plan to expand our services by opening a second laser vision correction center in Las Vegas, Nevada. We strive to meet the needs of our clients as well as our ophthalmologist and optometrist. We recruit our doctors in several ways. Generally, we first identify and meet with doctors within the community to demonstrate our technical and marketing capabilities. We provide our ophthalmologist and optometrist with: o STATE-OF-THE-ART EQUIPMENT AND FACILITIES. We provide our doctors with the facilities, equipment, support services and state-of-the-art laser technologies necessary to perform vision correction procedures. Our doctors focus on treating clients without the burden of meeting the financial, management, administrative, maintenance and regulatory requirements associated with establishing and operating a laser vision correction center. Our center has a fully-equipped laser procedure room, three ophthalmic examination rooms. A post-operative room, a vision screening room, a sales and business office and a patient waiting area. We are equipped with a VISX Star laser. We also have corneal topography instruments, ophthalmic examination equipment, a computer system, and standard office equipment. o A TRAINED TECHNICIAN AND SUPPORT STAFF. Staffing includes technicians who assist the doctors during the laser vision correction procedure. They also provide support services such as sterilization of surgical instruments. The excimer laser manufacturer and the microkeratome supplier, certify our technicians. The center also has a medical support director who supports our doctors, and assists in developing laser vision correction programs; We provide our clients with: o ACCESS TO A HIGHLY CREDENTIALED OPHTHALMOLOGIST AND OPTOMETRIST. Our ophthalmologist has completed extensive FDA-mandated training and has met our qualification criteria. Our center is designed to create a client friendly environment and reduce any anxiety associated with laser vision correction procedures. We believe our center has an aesthetically pleasing and comfortable waiting area and our center staff is focused on addressing the needs of each client; 25 o EDUCATIONAL CONSULTATIONS AND MATERIALS. The education process begins with our initial contact with the patient. Potential clients receive a free consultation focused on educating the patient on vision correction procedures, how the procedure corrects a specific refractive vision disorder and the results the patient should expect after the procedure. Clients are given written materials and can view a video of the procedure or witness an actual procedure during their initial visit. We believe that an educated patient has realistic expectations and should be more satisfied with procedure results; o REGULARLY SCHEDULED POST-PROCEDURE FOLLOW-UPS. We strive towards 100% patient satisfaction. We schedule post-procedure follow-ups with clients to monitor procedure results. In those instances when the desired correction is not achieved, the patient receives a follow up LASIK re-treatment procedure at no cost to the patient; o AFFORDABLE FINANCING ALTERNATIVES. Laser vision correction procedures are elective and generally not reimbursable by third-party payers. We offer clients several financing alternatives and in some circumstances promotional discounts. We have multiple payment plans offered by an unaffiliated finance company. We also provide information regarding installment plans, insurance coverage and payment through employer-flexible benefit plans. In the majority of the procedures financed, we bear no credit risk. Our intellectual property rights and licenses In order to provide laser vision corrective surgical procedures to our clients, we do so by acquiring an excimer laser and related medical equipment and establishing a facility for the delivery of the surgical procedures. By sales agreement entered into on May 3, 2001 between Dr. Silverman, our chief executive officer, and a third-party supplier, Dr. Silverman purchased medical equipment required to perform laser vision corrective surgery, for a total of $64,000. The purchase price of the equipment is payable under the terms of a promissory note executed by Dr. Silverman providing for 18 monthly payments of $3,423.26 commencing June 1, 2001. The repayment of this amount is collateralized by a first priority lien on the equipment in favor of the seller. Dr. Silverman also entered into a loan and security agreement with DVI Financial, Inc. for the purpose of assuming the balance due on the purchase of the excimer laser used in our facility, whereby Dr. Silverman agreed to pay a total of $185,596 in 30 monthly installments of $6,186.55 commencing June 2001 and continuing until the total principal and interest is paid. The repayment of this amount is collateralized by a first priority lien on the excimer laser in favor of DVI Financial, Inc. 26 Our ability to use the excimer laser to perform laser vision correction procedures in our center is derived from a sales and license agreement that governs the intellectual property rights covering the excimer laser technology. Under that agreement, wee are able to purchase "key cards" from the manufacturer of the excimer laser for each surgical procedure using the laser and also to license from the manufacturer all necessary intellectual property rights associated with the laser and related equipment so long as we are in conformity with the terms of each license agreement and so long as we pay the royalty fee included as a part of each license agreement. The key cards and license fee we pay to the manufacturer for each surgical procedure is currently $110.00 per eye. The intellectual property rights we license from the manufacturer of the excimer laser is protected by one or more patents. Our sales and marketing strategy We are developing and implementing direct marketing campaigns. We believe many of our competitors focus all of their resources on building affiliations with eye care providers, and rely on doctor relationships to produce their clients. Although our relationships with doctors is a key component of our overall strategy, we focus much of our resources directly on the consumer and attempt to create our own client relationships. Our "integrated marketing protocol," a consumer oriented marketing program for our services, was developed to focus our LASIK America staff on existing and prospective clients. Our laser vision correction surgical procedures currently cost approximately $1,990.00 for both eyes. LASIK America-employed doctors deliver our services and are paid a fixed salary with no additional fees. Our LASIK America-affiliated ophthalmologist pays us a facility fee for each eye he performs surgery on at our center, which fee is currently set at $440.00 per eye. They collect the entire fee from each client. Competition The market for laser vision correction surgery is subject to intense competition. We compete with other entities, including refractive laser center companies, hospitals, individual doctors, other surgery and laser centers and manufacturers of laser equipment in offering such services and access to related equipment. In addition, the laser vision correction procedures provided at our centers compete with more traditional non-surgical treatments for refractive conditions including eyeglasses and contact lenses. Eye care professionals interested in deploying excimer laser technology have formed commercial enterprises in order to support the capital requirements for acquiring the lasers and other necessary equipment. The industry today remains highly fragmented, with most procedures performed by independent physician groups. There are also several national laser vision correction companies. In addition, there are several eye care companies that feature access to laser vision correction and other refractive surgery services as an increasingly important component of their ophthalmic practice development activities. 27 Our laser vision correction centers compete on the basis of quality of patient care, reputation and price. Our principal corporate competitors in the market for laser vision correction and other refractive surgery include: o TLC The Laser Center, Inc.; o Laser Vision Centers, Inc.; o ClearVision Laser Centers, Ltd.; o LCA-Vision Inc.; o NovaMed EyeCare, Inc.; and o ARIS Vision, Inc. The bases for competition in this market are: o systems; o pricing; o strength of delivery network; o strength of operational systems; o the degree of cost efficiencies and surgeries; o marketing strength; o information technology systems; o managed care expertise; o patient access; and o quality assessment programs. Many of our current and potential competitors have significantly greater financial and human resources than we currently have, and as a result, we may be at a competitive disadvantage to these current and potential competitors even though we believe that we can successfully compete on the basis of our marketing efforts, quality of patient care, our reputation and the price of our services. Suppliers of conventional vision correction, which includes eyeglasses and contact lenses, such as optometric chains, may also compete with us either by marketing alternatives to laser vision correction or other refractive surgery procedures or by purchasing excimer lasers and offering refractive surgery to their customers. Government regulation As a participant in the health care industry, our operations and the operations of our affiliated ophthalmologist and optometrist are subject to extensive and increasing regulation by governmental entities at the Federal, 28 state and local levels. Many of these laws and regulations are subject to varying interpretations. We believe courts and regulatory authorities have generally provided little clarification. Moreover, state and local laws and interpretations vary from jurisdiction to jurisdiction. As a result, we may not always be able to accurately predict interpretations of applicable law. As a result, some of our activities, or the activities of our affiliated providers, could be challenged. Although New Mexico and many other states do not permit the corporate practice of medicine, we do not engage in the practice of medicine in New Mexico as our affiliated and employed doctors actually deliver the medical service required to perform laser vision corrective surgery. The regulatory environment in which we and our affiliated providers operate, may change significantly in the future. In response to new or revised laws, regulations or interpretations, we could be required to: o revise the structure of our legal arrangements or the structure of our fees; o incur substantial legal fees, fines or other costs; or o curtail our business activities, reducing the potential profit to us of some of our legal arrangements. Any of these outcomes may have a material adverse effect on our business, financial condition and results of operations. The following is a summary of some of the health care regulatory issues affecting us, our affiliated eye care providers and our respective operations. Federal Law ANTI-KICKBACK STATUTE. The U.S. Federal anti-kickback statute prohibits the knowing and willful solicitation, receipt, offer or payment of any direct or indirect remuneration in return for the referral of clients or the ordering or purchasing of items or services payable under Medicare, Medicaid or other federal health care programs. Violations of this statute may result in criminal penalties, including imprisonment or criminal fines of up to $25,000 per violation, civil penalties of up to $50,000 per violation, and exclusion from federal programs including Medicare or Medicaid. SELF-REFERRAL LAW. Subject to limited exceptions, the Federal self-referral law, known as the "Stark Law," prohibits physicians and optometrists from referring their Medicare or Medicaid patients for the provision of "designated health services" to any entity with which they or their immediate family members have a financial relationship. "Financial relationships" include both compensation and ownership relationships. "Designated health services" include clinical laboratory services, radiology and ultrasound services, durable medical equipment and supplies, and prosthetics, orthotics and prosthetic devices, as well as seven other categories of services. We do not provide "designated health services." Our affiliated providers, however, do provide limited categories of designated health services, specifically, ultrasound services, such as A-scans and B-scans, and prosthetic devices, such as eyeglasses and contact lenses furnished to patients following cataract surgery. 29 Violating the Stark Law may result in denial of payment for the designated health services performed. This may also result in: o civil fines of up to $15,000 for each service provided in connection with a prohibited referral, o a fine of up to $100,000 for participation in a circumvention scheme, and o exclusion from the Medicare, Medicaid and other Federal health care programs. The Stark Law is a strict liability statute. Any referral made where a financial relationship exists that fails to meet an exception constitutes a violation of the law. To the extent that our affiliated professional entities provide designated health services to Medicare and Medicaid beneficiaries, or make or receive Medicare or Medicaid referrals for such services, the Stark Law could be implicated. State law ANTI-KICKBACK LAWS. In addition to the Federal anti-kickback law, a number of states have enacted laws, which prohibit the payment for referrals and other types of anti-kickback arrangements. These state laws typically apply to all clients regardless of their source of payment. SELF-REFERRAL LAWS. In addition to the Federal Stark Law, a number of states have enacted laws that require disclosure of or prohibit referrals by health care providers to entities in which the providers have an investment interest or compensation relationship. In some states, those restrictions apply regardless of the patient's source of payment. CORPORATE PRACTICE OF MEDICINE LAWS. A number of states have enacted laws that prohibit the corporate practice of medicine. Those laws are designed to prevent interference in the medical decision-making process by anyone who is not a licensed physician. Many states have similar restrictions in connection with the practice of optometry. Application of the corporate practice of medicine prohibition varies from state-to-state. While some states may allow a corporation to exercise significant management responsibilities over the day-to-day operation of a physician or optometric practice, other states may restrict or prohibit various activities. FEE-SPLITTING LAWS. The laws of some states prohibit providers from dividing with anyone, other than providers who are part of the same group practice, any fee, commission, rebate or other form of compensation for any services not actually and personally rendered. Penalties for violating these fee-splitting statutes or regulations may include revocation, suspension or probation of a provider's license, or other disciplinary action. If we expand into a state with different or more restrictive laws, we may need to amend or restrict some of our operations in order to ensure compliance with applicable state laws, rules and regulations. 30 FACILITY LICENSURE AND CERTIFICATE OF NEED. We may be required to obtain licenses from the state departments of health in states where we open or acquire eye surgery and laser centers. Some states require a Certificate of Need, or CON, prior to the construction or modification of an ambulatory surgery center, such as our eye surgery and laser centers, or the purchase of medical equipment in excess of an amount set by the state. Excimer laser regulation Medical devices, such as the excimer lasers used in our eye surgery and laser centers, are subject to regulation by the U.S. Food and Drug Administration. Medical devices may not be marketed for commercial sale in the U.S. until the FDA grants pre-market approval for the device. The FDA has not approved the use of an excimer laser to treat both eyes on the same day, called a bilateral treatment. The FDA has stated that it considers the use of the excimer laser for bilateral treatment to be a practice of medicine decision, which the FDA is not authorized to regulate. Physicians, including our affiliated physicians, widely perform bilateral treatment as an exercise of professional judgment in connection with the practice of medicine. Failure to comply with applicable FDA requirements could subject us, our affiliated providers or laser manufacturers to enforcement action, product seizures, recalls, withdrawal of approvals and civil and criminal penalties. Failure to comply with regulatory requirements, or any adverse regulatory action, could result in a limitation on or prohibition of our use of the excimer laser. The marketing and promotion of laser vision correction surgical procedures in the U.S. is regulated by the FDA and the Federal Trade Commission. The FDA and FTC have released a joint communique on the requirements for marketing these procedures in compliance with the laws administered by both agencies. The FTC staff also issued more detailed staff guidance on the marketing and promotion of these procedures and has been monitoring marketing activities in this area through a non-public inquiry to identify areas that may require further FTC attention. Although the FDA does not regulate surgeons' use of excimer lasers, the FDA actively enforces regulations prohibiting the marketing of products for non-indicated uses and conducts periodic inspections of manufacturers to determine compliance with good manufacturing practice regulations. We believe that we conduct our operations in compliance with these laws and regulations. Insurance We believe that the insurance coverage for our business is generally in accordance with industry standards, including adequate coverage for potential premises liability and malpractice insurance for our employed doctors. We believe our insurance coverage is adequate in light of our business and the risks to which we are subject. We intend to obtain officers' and directors' liability insurance coverage prior to the completion of this offering. 31 Employees As of November 27, 2001, we had 10 full-time and part-time employees. Of our total number of employees, seven are full-time and three are part-time. Of this total, six employees function as medical or technical employees, two work in sales functions and two are administrative. We have no collective bargaining agreements covering any of our employees, and our management believes that relations with our employees is good. In addition to our employees, we have an affiliate relationship with a local ophthalmologist who provides medical services to our clients. As of November 27, 2001, we had one active member-affiliate for our New Mexico Center. Our facilities We lease our principal executive office and our medical facilities in Albuquerque, New Mexico under a three-month temporary lease arrangement. This temporary facility consists of a total of approximately 2,310 square feet, which we lease currently at $782.00 per month. We also have made arrangements for a permanent leased facility for our center, which is located adjacent to our temporary facility. Our proposed permanent facility consists of a 4,018 square feet office area that is the subject of a proposed initial lease term of three years expiring May 31, 2004, with two three-year renewal options. Although we have not yet fully executed the lease agreement covering our proposed permanent facility, we intend to have these arrangements in place in the near term. Base rent for our permanent facility will be $10.50 per square foot, increasing to $11.50 per square foot in the third year. This results in proposed monthly rental for our permanent facility of approximately $3,516 during the initial term of the lease. Our permanent facility will be adequate for our needs during at least the initial term. Legal proceedings We are not involved in any pending, or to our knowledge threatened, legal proceedings. Where you can find additional information about us We have filed with the Securities and Exchange Commission a registration statement on Form SB-2 under the Securities Act with respect to the securities offered by this prospectus. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration statement and the accompanying exhibits and schedules. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement and the accompanying exhibits and schedules. Statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are not necessarily complete and are qualified in their 32 entirety by reference to the exhibits for a complete statement of their terms and conditions. The registration statement, including all amendments, exhibits and schedules, may be inspected without charge at the offices of the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street NW, Washington, D.C. 20549 and the Commission's regional office located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material may be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street NW, Washington, DC. 20549. The public may obtain information on the operations of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a Web site (http://www.sec.gov) through which the registration statement and other information can be retrieved. We have applied for quotation privileges for our common stock and common stock purchase warrants on the over-the-counter electronic bulletin board maintained by the NASD. Upon effectiveness of the registration statement, we will be subject to the reporting and other requirements of the Securities Exchange Act and intend to furnish our stockholders annual reports containing financial statements audited by our independent accountants and to make available quarterly reports containing unaudited financial statements for each of the first three quarters of each fiscal year. 33 Management Directors and officers Our executive officers, directors, and key employees and their ages as of November 27, 2001, are as follows. NAME AGE POSITION - --------------- ----- ------------------------------------- Dr. Howard P. Silverman...... 60 Chairman of the Board, Chief Executive Officer, Treasurer and Director Robert S. Helmer............. 46 Chief Operating Officer and Director Stuart S. Greenberg.......... 69 Director Steven D. De Vicenzi ........ 58 Director Dr. Howard P. Silverman is our founding shareholder, and has been our chief executive officer, chairman of the board, treasurer and a director, since our inception. He has been involved in various companies developing products and methods of delivery from the ophthalmic industry. Such companies include Precision Contract Lens Labs, Inc., Diversified Health Industries, Inc., Hydro Optics, Inc., Staar Surgical Company and Vision Science, Inc. From 1991 until the date we were incorporated, Dr. Silverman has been actively involved in a private consulting business designed to address the capital and corporate structural needs of companies in the ophthalmic and vision correction industries. In addition, from 1994 to 1997, Dr. Silverman served as an investment banking professional at Rickel & Associates, in New York, New York. Robert S. Helmer has been our chief operating officer in our Albuquerque, New Mexico center since we began operations in May, 2001. Prior to joining us in that capacity, Mr. Helmer served as the clinical support manager from October, 1998 to April, 2001, for TrueVision International, Inc., another company that performed eye vision corrective surgical procedures in Albuquerque, New Mexico. Mr. Helmer is a graduate physician and surgical assistant with 25 years of medical experience in emergency medicine, laser medicine, dermatology, cosmetic surgery and hair transplant surgery. From May 1998 until October, 1998, Mr. Helmer was a director and the president of the International College of Skin-Care Specialists. From October 1991 to October 1995, Mr. Helmer was a surgical assistant with Qualified Emergency Specialists, Inc., in Cincinnati, Ohio, and from February 1991 to December 1991 was a surgical assistant and electrologist for Dermatology Associates of Atlanta, Georgia. Mr. Helmer has been a certified ophthalmic laser technician since September 1998 and a certified microkeratome technician since June 1999. Mr. Helmer received his associate of applied science degrees as a physician's assistant and surgical assistant in 1974 from the Cincinnati Technical College. He is a member of the American Academy of Physicians Assistants. Stuart S. Greenberg became one of our directors in May, 2001. Mr. Greenberg has worked with a number of leading investment banking and securities firms for over 35 years, having entered the field in 1960 with Merrill Lynch. 34 From March 2001 to the present, Mr. Greenberg has served as the managing director of the investment banking division of West America Securities Corp., located in Westlake Village, California. From March 1999 to February 2001, Mr. Greenberg was the managing director of R.H. Investment Corp., an investment banking firm located in Los Angeles, California. From March 1992 to April 1996, he served in the capacities of chairman of the board and the chief executive officer of Baraban Securities. During a portion of that same time frame, Mr. Greenberg also functioned as the chairman of the board and chief executive officer of M.A. Investment Corp. out of Los Angeles, California. Mr. Greenberg has experience as branch manager, regional sales manager, as well as national sales manager during his tenure in the securities and brokerage industry. He received his bachelors degree from the City College of New York and a banking certification from the American Banking Institute of Banking in New York, New York. Steven Lee De Vincenzi became one of our directors in May, 2001. From March 2000 to the present time, Mr. De Vincenzi has served as a senior vice president of sales and marketing with Medpay, WebCVO and HealthCap. There, he is responsible for sales, marketing and business development for three pre-public offering companies that provide internet services to medical solution companies. From October 1992 to February 2000, Mr. De Vincenzi served as the president and chief operating officer of Interlink Rehab Services of California. In that position, Mr. De Vincenzi was responsible for all operations, business development and marketing for his company, which contracted for therapy services to 35 nursing facilities and outpatient clinics. Between May, 1991 and October, 1992, Mr. De Vincenzi was the vice president--western region for Monroe Systems for Business. There he had full profit and loss responsibility for sales, service and the administration of 40 branch offices in 13 Western states. Mr. De Vincenzi received his bachelor of science degree in marketing and his masters in business administration in marketing and finance from California State University in Long Beach, California. Directors' compensation Our chief executive officer and chief operating officer were sold/granted, respectively, shares of our common stock in conjunction with certain activities associated with our formation and operations. These individuals did not receive such compensation for their activities as our directors, rather they received shares and other securities as employee compensation. Our non-employee directors receive reimbursement for their out-of-pocket expenses for attendance at each meeting of the board of directors or any committee of the board of directors. We anticipate that our directors will meet at least twice each year. No directors' fees are paid to our non-employee directors. Board composition Our board of directors consists of at least three members who each serve as directors for one-year terms. Terms for each of our directors expire at the annual meeting next ensuing. There are no family relationships among any of 35 our directors, officers or key employees. Each director holds office until their successor is duly elected and qualified. Vacancies in the office of any director may be filled by a majority vote of the directors then in office. Both of our outside directors will serve as members of both committees. Our president and chief executive officer is appointed by our board of directors, and all of our other executive officers are appointed by the president and chief executive officer. We have agreed that for five years from the completion of this offering, the representative of the underwriters may designate one person for election to our board of directors. If this election is not exercised, the representative may designate one person to attend all meetings of our board of directors. If the representative chooses to designate a person to attend our directors' meetings, we have agreed to reimburse that person for out-of-pocket expenses in connection with their attendance. Committees of the board Upon completion of this offering, the board of directors will establish an audit and compensation committee. The committee will: o recommend to the entire board of directors the independent public accountants to be engaged by us, o review the plan and scope of our annual audit, o review our internal controls and financial management policies with our independent public accountants; o review all related party transactions; o will determine the compensation and benefits to be paid to our officers and directors; o will recommend the adoption of a stock option plan; o will approve the grant of options under any stock option plan that we may adopt; and o will establish and review general policies relating to compensation and benefits of our employees. Executive compensation The following table sets forth the total compensation paid to our chief executive officer, Howard P. Silverman and our chief operating officer, Robert S. Helmer, from our inception on March 21, 2001 to July 31, 2001, the end of our most current fiscal year. We have no employment agreements with any executive officer, although we have agreed with Dr. Silverman, that his annual cash compensation, including any bonus, will be $150,000 per year, commencing at the conclusion of our public offering. 36 Summary compensation table Annual Compensation Other compensation ------------ ------------------- Salary($) Bonus($) Other annual All other 2001 2001 compensation compensation ---- ---- ------------ ------------ Name and position - ----------------- Howard P. Silverman, chief executive officer.......... -0- -0- -0- $6,531,490 Robert S. Helmer, chief Operating officer.......... $19,152 -0- -0- $900,000 The aggregate compensation paid or delivered to all persons who served in the capacity of a director or executive officer during the period from inception (March 21, 2001) to July 31, 2001, 4 persons, was $7,470,642. Of this total, $19,152 was paid as salary and the balance was delivered to the officers and directors as a group, in the form of 1,240,000 shares of our common stock, valued at the proposed public offering price of our shares of common stock in this offering and services contributed by the chief executive officer. These contributed services are valued at $20,000 during the period. The amounts listed under all other compensation in the above table represent non-cash compensation delivered to two officers shown in the table, based upon the number of shares of our common stock granted to each officer valued at the proposed public offering price of $6.00 per share. Since the end of our fiscal year on July 31, 2001, specifically August 24, 2001, we granted to Dr. Silverman, 125,000 redeemable common stock purchase warrants entitling him to purchase 125,000 shares of our common stock exercisable at $7.20 per share. These warrants were partial consideration granted by our Board of Directors during August 2001 for agreements entered into on our behalf and for ongoing services provided by Dr. Silverman. See certain transactions. Option grants from inception to the fiscal year ended July 31, 2001 Number of Percent of total options Securities Granted to --------------------------- Underlying options employees in Exercise Expiration Granted fiscal year Price ($/sh) Date ------- ----------- ------------ ------- 2001 2001 ---- ---- Name and position - ----------------- Howard P. Silverman, chief executive officer..... -0- -0- - -------------------------------- Through the date of this prospectus, we have not issued any options to purchase our securities. 37 Aggregated option exercises from inception to the fiscal year ended July 31, 2001 Number of Securities Value of Shares underlying unexercised Acquired on Value unexercised in-the-money Exercise realized options options ------- ----------- ------------ ------- 2001 2001 ---- ---- Name and position - ----------------- Howard P. Silverman, chief executive officer..... -0- -0- -0- -0- Limitation of liability and indemnification of directors and officers Our articles of incorporation and our by-laws contain provisions that eliminate the personal liability of our directors to us or our stockholders for monetary damages for breach of their fiduciary duty as a director to the fullest extent permitted by the Nevada General Corporation Law, except for liability for: o any breach of their duty of loyalty to us or our stockholders; o acts or omissions not in good faith or which involve intentional misconduct; o misconduct or a knowing violation of law; o unlawful payments of dividends or unlawful stock repurchases or redemptions; o any act or omission occurring prior to our incorporation; and o any transaction from which the director derived an improper personal benefit. Our articles of incorporation and by-laws also contain provisions that require us to indemnify our directors and permits us to indemnify our incorporators, directors and officers to the fullest extent permitted by Nevada law, including circumstances where indemnification would be discretionary. Insofar as indemnification for liabilities arising under the securities Act may be permitted to directors, officers, and persons controlling us in connection with the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act, and is unenforceable. 38 Certain transactions As partial consideration for certain agreements entered into by Howard P. Silverman since our inception on March 21, 2001 and for ongoing services provided, on August 24, 2001, we granted to Dr. Silverman 125,000 redeemable common stock purchase warrants entitling him to purchase 125,000 shares of our common stock at $7.20 per share. We valued these warrants at $.10 per warrant, based on the value of identical warrants being offered as a part of this registration statement, for a total of $12,500 worth of compensation for Dr. Silverman's services during our formation and start-up phase. These warrants are exercisable commencing six months from the effective date of this registration statement and have a five year term from the date of issuance. As further consideration for the services rendered to us by Dr. Silverman, we have agreed to register the 125,000 redeemable common stock purchase warrants and the 125,000 shares of our common stock underlying those warrants, for resale, on the first registration statement we file with the United States Securities and Exchange Commission pursuant to Section 5 of the Securities Act of 1933. Dr. Silverman's 125,000 redeemable common stock purchase warrants and the 125,000 underlying shares of our common stock, are being registered for resale pursuant to this registration statement, of which this prospectus forms a part. Dr. Silverman, entered into a sales agreement on our behalf on May 3, 2001 for the purchase of medical equipment we use in performing laser vision corrective surgery. Dr. Silverman agreed to pay $64,000 for the equipment to a third-party supplier, TrueVision Medical Associates, Inc., with $57,000 of that amount being financed over a period of 18 months. The balance of the purchase price of the equipment is payable under the terms of a promissory note executed by Dr. Silverman providing for 18 monthly payments of $3,423.26 commencing June 1, 2001. The repayment of this amount is collateralized by a first priority lien on the equipment in favor of the seller. Dr. Silverman also entered into a loan and security agreement with DVI Financial, Inc. for the purpose of assuming the balance due on the purchase of the excimer laser used in our facility. Dr. Silverman agreed to pay a total of $185,596 in 30 monthly installments of $6,186.55, commencing June 2001 and continuing until the total principal and interest is paid. The payment of this amount is collateralized by a first priority lien on the excimer laser in favor of DVI Financial, Inc. Principal and selling stockholders The following table sets forth information regarding the beneficial ownership of our common stock as of November 27, 2001 and as adjusted to reflect the sales of the units offered hereby. The information in this table provides the beneficial ownership for: o each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock; o each of our directors and executive officers; 39 o our executive officers and directors as a group; and o the selling shareholder. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Except as indicated, we believe each person possesses sole voting and investment power with respect to all of the shares of common stock owned by such person, subject to community property laws where applicable. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The number of shares beneficially owned by a person and the percentage ownership of that person includes shares of our common stock issuable upon exercise of warrants held by that person, but not those held by any other persons, that are currently exercisable or exercisable within 60 days from the date of this prospectus. Shares of our common stock registered for resale under this prospectus will constitute approximately 21.9% of our issued and outstanding common stock after giving effect to the common stock registered for resale hereunder. NUMBER OF SHARES PERCENT BENEFICIALLY OWNED NAMES AND ADDRESS BENEFICIALLY BEFORE NUMBER OF SHARES AFTER OF BENEFICIAL OWNER OWNED OFFERING(2) OFFERED OFFERING(2) - ------------------------ ------------- ------------ ---------- ------------- Howard P. Silverman(3) 1,090,000(1) 52.4% 125,000(1) 38.5% Robert S. Helmer(3) 150,000 7.2% -0- 6.0% Stuart S. Greenberg(3) -0- -0- -0- -0- Steven D. De Vicenzi(3) -0- -0- -0- -0- All directors and executive officers as a group (4 persons).... 1,240,000 59.6% 125,000 44.5% - ------------------------ (1) Excludes 125,000 redeemable common stock purchase warrants for the purchase of 125,000 shares of common stock held by Howard P. Silverman, which are being offered for resale as units along with 125,000 shares of common stock held by Dr. Silverman as a selling shareholder. Such warrants are not exercisable until six months after the date of this prospectus. (2) Based on an aggregate of 2,082,043 shares of common stock issued and 40 outstanding as of November 27, 2001. The percentages after the offering are based on 2,507,043 shares of common stock outstanding after the offering. (3) Unless otherwise noted, the address of these beneficial owners is 6646 Indian School Road, N.E., Albuquerque, New Mexico 87110. Description of securities General Our authorized capital stock consists of (a) 25,000,000 shares of common stock, $.001 par value per share and (b) 100,000 shares of preferred stock, $.001 par value per share, the rights and preferences of which may be established from time to time by our board of directors. As of November 27, 2001, there were 2,082,043 shares of our common stock issued and outstanding, and no shares of our preferred stock outstanding. At that date, we had 19 shareholders of record. The description of our securities are summaries and do not contain all the information that may be important to you. For more complete information, you should read our certificate of incorporation and all amendments that are all filed as exhibits to the registration statement of which this prospectus forms a part. Common stock Holders of our common stock are entitled to one vote for each share on all matters submitted to a vote of stockholders and there are no cumulative voting rights. Accordingly, holders of a majority of the shares of our common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors out of funds legally available, subject to any preferential dividend rights of any outstanding shares of preferred stock. Upon the liquidation, dissolution or winding up of us, holders of our common stock are entitled to share in our assets remaining after the payment of all liabilities and liquidation preferences on any outstanding shares of preferred stock. Holders of our common stock have no: o preemptive, o subscription, o redemption or o conversion rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. 41 Preferred stock Our board of directors has the authority, without stockholder approval, to issue up to an aggregate of 100,000 shares of preferred stock, in one or more series. The board may fix the rights, preferences, privileges and restrictions of the shares of each series, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, and to fix the number of shares constituting any series and the designations of these series. These shares may have rights senior to our common stock. The issuance of preferred stock may have the effect of delaying or preventing a change of control of us. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of our common stock or could adversely affect the rights and powers, including voting rights, of the holders of our common stock. We have no present plans to issue any shares of preferred stock. Redeemable common stock purchase warrants Generally. Each warrant entitles the registered holder to purchase, at any time commencing six months after the date of this prospectus until 60 months after the date of this prospectus, one share of common stock at a price equal to $7.20. As of November 27, 2001, we have issued 125,000 redeemable common stock purchase warrants, all of which were issued on August 24, 2001 to our chief executive officer, Howard P. Silverman. Dr. Silverman's redeemable common stock purchase warrants are not exercisable until the date when the warrants we intend to issue to the public as registered under this prospectus become exercisable. Redemption provisions. Commencing six months after the date of this prospectus, we may redeem the warrants, in whole but not in part, at $.10 per warrant on 30 days' prior written notice. The warrants may only be redeemed if the average closing sale price of our common stock as reported on the over-the-counter electronic bulletin board equals or exceeds $9.00 for any 20 consecutive trading days. Since we have the right to redeem the warrants under these circumstances, this may impact a decision as to if and when to exercise the warrants. If we decide to redeem the warrants, holders will lose their rights to purchase the underlying shares of common stock unless the warrant is exercised before we redeem them. The holder of any warrant may exercise the warrant by surrendering the certificate representing the warrant to the warrant agent, with the subscription form properly completed and executed, together with payment of the exercise price. No fractional shares will be issued upon the exercise of the warrants. The exercise price of the warrants bears no relationship to any objective criteria of value and should in no event be regarded as an indication of any future market price of the securities offered in this offering. Adjustments. The exercise price of the warrants and the number of shares of common stock that may be issued upon the exercise of the warrants will be adjusted upon the occurrence of specific events, including stock dividends, stock splits, combinations or reclassifications of the common stock. Additionally, an adjustment would be made in the case of a reclassification or 42 exchange of common stock, consolidation or merger of us with or into another corporation, other than a consolidation or merger in which we are the surviving corporation, or sale of all or substantially all of our assets, in order to enable warrant holders to acquire the kind and number of shares of stock or other securities or property receivable in such event by a holder of the number of the number of shares of common stock that might otherwise have been purchased upon the exercise of the warrant. Transfer, exchange and exercise. The warrants are in registered form and may be presented to the warrant agent for transfer, exchange or exercise at any time on or prior to their expiration date, at which time they will be void and have no value. The warrants may not be exercised until six months after the date of this prospectus. If a market for the warrants develops, the holder may sell the warrants instead of exercising them. There can be no assurance, however, that a market for the warrants will develop or, if developed, will continue. The redeemable common stock purchase warrants included in the units offered by this prospectus are not exercisable unless, at the time of exercise, we have a current prospectus covering the shares of common stock issuable upon exercise of the warrants, and the shares have been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the exercising holder of the warrants. Although we have agreed to use our best efforts to keep a registration statement covering the shares of common stock issuable upon the exercise of the warrants effective for the term of the warrants, if we fail to do so for any reason, the warrants may be deprived of value. The common stock and warrants included in the units offered by this prospectus are detachable and separately transferable immediately following completion of maximum amount of this offering. Purchasers may buy warrants in the aftermarket or may move to jurisdictions in which the shares underlying the warrants are not so registered or qualified during the period that the warrants are exercisable. In that event, we would be unable to issue shares to those holders desiring to exercise their warrants, and these holders would have no choice but to attempt to sell the warrants in a jurisdiction where a sale is permissible or allow the warrants to expire unexercised. The representative's warrants We have agreed to issue to the representative and/or its designees, at the closing of this offering common stock purchase warrants equal to 10% of the number of units sold in this offering by the underwriters, or a maximum of 42,500 representative's warrants. These representative's warrants will be issued to the representative for $.01 per warrant, for a total of up to $42.50. The representative's warrants are five year warrants exercisable to purchase an aggregate of up to 42,500 units, each unit consisting of one share of common stock and one redeemable common stock purchase warrant. The representative's warrants are exercisable at any time during a period of four years commencing at the beginning of the second year after their issuance at an exercise price of $10.065 per unit. The units issuable upon exercise of the representative's 43 warrants are identical to those offered to the public. The representative's warrants contain anti-dilution provisions providing for adjustment of the number of securities issuable upon the exercise of the warrants under specific circumstances, including stock dividends, stock splits, mergers, acquisitions and recapitalizations. The holders of the representative's warrants will have no voting, dividend or other stockholder rights solely for being a holder of the warrants. For a period of five years after the completion of our initial public offering, the holders of the representative's warrants and/or the shares of common stock underlying the representative's warrants have piggyback registration rights covering the underlying shares and warrants, at our expense, except as to fees and expenses of the holders' counsel and selling commissions applicable to those units. In addition, for a five year period from the completion of our initial public offering, upon demand by the holders of at least a majority of the representative's warrants or of the underlying securities, the holders of the representative's warrants and of the underlying securities, have a right to demand a one time registration of the securities underlying the representative's warrants. The cost of these registrations are at our expense, except as to fees and expenses of the holders' counsel and selling commissions applicable to the warrants and the underlying securities. Transfer agent and registrar We intend to make application to appoint Corporate Stock Transfer, 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209 as our transfer agent, warrant agent, and registrar. The telephone and facsimile numbers for our proposed stock transfer agent are 303-282-4800 and 303-282-5800, respectively. Shares eligible for future sale Prior to this offering, there has been no public market for any of our securities and there can be no assurance that a significant public market for any of our securities will be developed or sustained after this offering. Sales of substantial amounts of our common stock in the public market after this offering, or the possibility of those sales occurring could adversely affect the prevailing market price for our securities and our ability to raise equity capital in the future. Upon completion of this offering, there will be 2,507,043 shares of our common stock outstanding. Including the 125,000 units offered on behalf of the selling shareholder, there will be 550,000 shares of common stock and 550,000 redeemable common stock purchase warrants being offered by this prospectus that will be freely tradable without restriction under the Securities Act, unless purchased by an affiliate of ours, as that term is defined under the rules and regulations of the Securities Act, which will be subject to the resale limitations of Rule 144 under the Securities Act. The remaining 1,957,043 shares of our common stock are considered "restricted securities" as defined in Rule 144. These shares were issued in private transactions and have not been registered under the Securities Act and may not be sold unless registered under the Securities Act or sold under an exemption from registration, such as the exemption provided by Rule 144. 44 In general, under Rule 144, beginning 90 days after the completion of this offering, a person, or persons whose shares are aggregated, who has beneficially owned restricted shares for at least one year, including the holding period of any prior owner who is not an affiliate of ours, would be entitled to sell within any three-month period, a number of shares that does not exceed the greater of: o one percent, or approximately 25,071 shares following this offering, of the number of shares of our common stock then outstanding; or o the average weekly trading volume of our common stock during the four calendar weeks preceding the sale. Sales under Rule 144 are also subject to manner of sale provisions, notice requirements and to the availability of current public information about us. Under Rule 144(k), a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who has beneficially owned the shares for at least two years, including the holding period of any prior owner who is not an affiliate of ours, would be entitled to sell those shares under Rule 144(k) without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. We and all of our existing stockholders, except 125,000 shares of our common stock and 125,000 redeemable common stock purchase warrants that are included in this prospectus and are being registered on behalf of the selling shareholder, our executive officers and directors, have agreed that, for a period of 12 months from the completion of this offering, we and they will not, without the prior written consent of the representative of the underwriters: o offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. Underwriting Subject to the terms and conditions of the underwriting agreement, the form of which is filed as an exhibit to the registration statement filed with the Commission of which this prospectus is a part, the underwriters named below, have agreed through West America Securities Corp. as the representative of the underwriters, to place as our agents, on a best efforts basis, the aggregate number of units set forth opposite their respective names. The underwriters, through the representative, have also agreed to offer to the public for resale on a best efforts basis, 125,000 units on behalf of the selling shareholder. No units offered for resale on behalf of the selling shareholder will be placed with investors until all 425,000 units offered directly by us are first placed by the underwriters. We will not receive any proceeds from the resale of our common stock by the selling shareholder. 45 UNDERWRITERS NUMBER OF UNITS - ------------ --------------- West America Securities Corp................................ 425,000 West America Securities Corp., for the selling shareholder............................... 125,000 ------- Total............................................... 550,000 ======= The underwriting agreement provides that the obligations of the several underwriters under that agreement depend on various conditions, including; o the absence of any material adverse change in our business; o the absence of any event that has materially disrupted or in the representative's opinion will in the immediate future materially adversely disrupt the financial markets; o the absence of our default under any of our agreements or contracts; o the continued truth of the statements made in this prospectus; o the absence of any event that in the representative's opinion that would make it inadvisable to proceed with this offering, and o the receipt of certificates, opinions and letters from us, our counsel and our independent public accountants. This section contains the material conditions upon which the underwriting agreement depends, although we direct you to the underwriting agreement, the form of which is filed in an exhibit to the registration statement, of which this prospectus forms a part for a complete list of the conditions of the underwriters' obligations. The underwriters are committed only to use their best efforts to place the units for sale to the public. In the event of a default by any of the underwriters, the best efforts undertaking of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated. The representative of the underwriters, who is acting as the managing placement agent for the offer and sale of the units, has been in business as a broker-dealer since 1993, primarily acting as an underwriter for the best efforts placement of equity securities and as a market maker for over-the-counter securities. The representative also has on-line trading capabilities and an investment banking division. The underwriters will offer the units to the public, on a best efforts basis, at the public offering price set forth on the cover page of this prospectus. There is no minimum number of units that must be sold as a condition of the offering, although any purchaser of the units must subscribe to at least 100 units as a condition of acceptance of a subscription. The underwriters may offer the units for sale to the public, commencing at the date of this prospectus and continuing to January 31, 2002. The offering may be extended for an additional 60 days at the sole discretion of the underwriters. All funds received from subscribers of the units will be deposited into an escrow account with Wells Fargo Bank, N.A., Los Angeles, California. 46 To purchase units in this offering, a prospective investor must complete and sign a subscription agreement in the form attached to this prospectus as Exhibit A, and any other documents that we or the representative may require and deliver the documents, together with payment in an amount equal to the full purchase price of the units being purchased, to the representative. Checks for the purchase price should be made payable to "LASIK America, Inc. Escrow Account" or to "Howard P. Silverman Escrow Account" with respect to subscriptions accepted by the selling shareholder. Each subscription payment must be transmitted to the bank escrow agent by 12:00 noon on the business day next following its receipt by an underwriter. We will determine, in our sole discretion, to accept or reject subscriptions within five days following their receipt. Funds of an investor whose subscription is rejected will be promptly returned directly to such person by the escrow agent, without interest or deduction, pursuant to the terms of the escrow agreement. No subscription may be withdrawn, revoked or terminated by the purchaser after acceptance of the subscription. We also reserve the right to refuse to sell any units to any person at any time. The underwriters may allow some dealers concessions of not more than $.71 per unit. The underwriters also may allow, and those dealers may re-allow, a concession of not more than $.64 per unit to some other dealers. The public offering price, concessions, and re-allowances may be changed after the completion of this offering. The representative of the underwriters has agreed to use its best efforts to place for resale to the public the 125,000 units offered by this prospectus on behalf of the selling shareholder. The terms of underwriting on behalf of the selling shareholder are the same as the terms of the underwriting on our behalf, except that the selling shareholder is responsible only for the payment of all expenses of the sale of the 125,000 units offered for resale, such as all discounts and commissions. applicable to the 125,000 units offered for resale by this prospectus. We have agreed to pay all expenses of registration that are allocable to the units being offered for resale by the selling shareholder, which we estimate to be no more than $5,000. We have agreed to indemnify the underwriters and their controlling persons against some liabilities, as more fully set forth in the underwriting agreement, including liabilities under the Securities Act, and to contribute to payments the underwriters and their controlling persons may be required to make. We have also agreed to pay to the representative, a non-accountable expense allowance equal to three percent of the gross proceeds of this offering. All expenses of the offering, such as fees of registration, filing fees, printing, blue sky fees, transfer agent and registrar fees, and fees payable to our auditors, have been estimated in the amount of approximately $108,000. We have also agreed to pay all expenses in connection with qualifying the securities under the laws of those states that the representative may designate, including fees and expenses of counsel retained for these purposes by the representative, and the costs and expenses in connection with qualifying the offering with the National Association of Securities Dealers, Inc. The representative of the underwriters has informed us that the underwriters do not expect sales of the units offered by this prospectus to be made to discretionary accounts to exceed five percent of the total number of units offered. 47 We, and all of our existing stockholders, except the 125,000 units being offered for resale in this prospectus by the selling shareholder, our executive officers and directors, have agreed that, for a period of 12 months from the completion of this offering, we and they will not, without the prior written consent of the representative of the underwriters: o offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. We have agreed to issue and sell to the representative of the underwriters and/or its designees, for nominal consideration, up to 42,500 five-year warrants to purchase in the aggregate, up to 42,500 units. The representative's warrants are exercisable on a cashless basis for a period of four years commencing one-year after the date of issuance at a price equal to $10.065 per unit. The representative's warrants contain anti-dilution provisions providing for adjustments of the exercise price and the number of shares issuable upon exercise, upon the occurrence of specific events, including stock dividends, stock splits, and recapitalizations. The representative's warrants contain demand and piggyback registration rights relating to the shares of common stock issuable upon exercise of these warrants. For the life of the representative's warrants, the representative will have the opportunity to profit from a rise in the market price of our shares of common stock. The representative's warrants are restricted from sale, transfer, assignment or hypothecation for the one year period from the date of this prospectus, except to officers or partners of the underwriters and members of the selling group and/or their officers or partners. We have agreed that for five years from the completion of this offering, the representative may designate one person for election to our board of directors. We have already elected Stuart S. Greenberg, a board member affiliated with the representative to our board of directors, and we intend to continue to designate this same director as the representative's nominee after the completion of this public offering. In the event that the representative elects not to continue to exercise this right, then it may designate one person to attend all meetings of our board of directors. We have agreed to reimburse the representative's designee for all out-of-pocket expenses incurred in connection with the designee's attendance at meetings of our board of directors. As a result of our agreements with the representative of the underwriters, the representative will continue to have influence over us following the completion of this offering. Prior to this offering, there has been no public market for any of our securities. The initial public offering price of the units offered by this prospectus and the terms of redeemable common stock purchase warrants will be determined by negotiations between the representative and us. Among the factors considered in determining the price include: 48 o prevailing market conditions, o the history of and the prospects for the industry in which we compete, o an assessment of our management, o our prospects, and o our capital structure. The offering price does not necessarily bear any relationship to our assets, results of operations or net worth. There can be no assurance that an active trading market will develop for any of the securities offered by this prospectus, or that such securities will trade in the public market at or above the initial public offering price. Stabilization Until the distribution of the units offered by this prospectus is completed, rules of the Securities and Exchange Commission may limit the ability of the underwriters to bid for and to purchase units. As an exception to these rules, the underwriters may engage in transactions that stabilize the price of the units. The underwriters may engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934. o Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum; o Syndicate covering transactions involve purchases of the common stock and warrants in the open market after the distribution has been completed in order to cover syndicate short positions; o Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Short sales involve the sale by the underwriters of a greater number of shares or warrants than they have in their own account. In determining the source of shares or warrants to close out the short position, the underwriter will consider, among other things, the price of shares or warrants available for purchase in the open market as compared with the price at which they may purchase shares through the offering. Naked short sales are sales in excess of the underwriter's ability to cover the short position. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares or warrants in the open market after pricing that could adversely affect investors who purchase in this offering. Naked short positions taken by our underwriters in this offering may be covered by either acquiring our common stock and warrants in the open market, or by purchasing units from us or the selling shareholder at the public offering price. 49 In general, the purchase of a security to stabilize or to reduce a short position could cause the price of the security to be higher than it might be otherwise. These transactions may be effected on the over-the-counter electronic bulletin board. Neither we nor the underwriters can predict the direction or magnitude of any effect that the transactions described above may have on the price of the common stock or the warrants. In addition, neither we nor the underwriters can represent that the underwriters will engage in these types of transactions or that these types of transactions, once commenced, will not be discontinued without notice. Plan of distribution for selling shareholder We will not receive any proceeds from the resale of the 125,000 units offered for resale by the selling shareholder. The selling shareholder will be offering for resale up to 125,000 units. The representative has agreed to be named as statutory underwriters within the meaning of the Securities Act of 1933 in connection with the resales of these units and they will be acting as an underwriter in their resales of the units under this prospectus. The selling shareholder has, prior to any sales, agreed not to effect any offers or sales of our securities in any manner other than as specified in this prospectus and has agreed not to purchase or induce others to purchase any of our securities in violation of any applicable state and federal securities laws, rules, and regulations and the rules and regulations governing the over-the-counter electronic bulletin board maintained by the NASD. We have agreed with the selling shareholder that we will prepare and file this registration statement and such amendments and supplements to the registration statement and the prospectus as may be necessary in accordance with the Securities Act of 1933 and the rules and regulations promulgated thereunder to keep it effective until the date as of which the selling shareholder has sold all of the 125,000 units offered by this prospectus. The selling shareholder is bearing no expenses associated with our registration of the units offered by this prospectus. The selling shareholder is subject to the applicable provisions of the Exchange Act of 1934, including without limitations, Rule 10b-5 thereunder. Under applicable rules and regulations under the Exchange Act, any person engaged in a distribution of our securities stock may not simultaneously engage in market making activities with respect to such securities for a period beginning when such person becomes a distribution participant and ending upon such person's completion of participation in a distribution, including stabilization activities in our securities to effect covering transactions, to impose penalty bids, or to effect passive market making bids. In connection with the transactions in our common stock, we also will be subject to applicable provisions of the Exchange Act and the rules and regulations promulgated thereunder, including, without limitations, the rule set forth above. These restrictions may affect the marketability of the shares of our common stock and the redeemable common stock purchase warrants owned by the selling shareholder. 50 The selling shareholder has advised us that, prior to the date of this prospectus, he has entered into a form of placement agreement that delineates the facts material to the resale of his 125,000 units through the best efforts to be undertaken by the representative. The form of placement agreement, which has been attached as an exhibit to this registration statement, includes terms and provisions which are similar to the terms and provisions of the underwriting agreement made by the representative with respect to the 425,000 units offered by us to the public through this prospectus. Specifically, no non-accountable expense allowance is payable to the representative on the sale of the units offered by the selling shareholder, nor will the representative receive any representative's warrants upon the sale of any of the units offered on behalf of the selling shareholder. The units have not been registered for resale by the selling shareholder under the securities laws of any state as of the date of this prospectus. Brokers or dealers effecting transactions in these securities should confirm the registration thereof under the securities laws of the states in which transactions occur or the existence of any exemption from registration. We expect that the selling shareholder will resell his units covered by this prospectus through the representative acting as placement agent on his behalf, at an expected public offering price of $6.10 per unit, which consists of $6.00 per share of common stock and $.10 per redeemable common stock purchase warrant. We further expect that the units offered for resale by the selling shareholder will be placed for sale by the representative to the public only at such time as the 425,000 units offered by us have been placed to the public. The selling shareholder may effect the resale of his units by selling the securities to or through broker-dealers, and such broker-dealers may receive compensation in the form of concessions or commissions from the selling shareholder. To the extent that such broker-dealers receive concessions or commissions from the selling shareholder, they will be on the same terms of sale as the 425,000 units offered on our behalf, except as to the non-accountable expense allowance and the receipt of any representative's warrants from the sale of the selling shareholder's units. The selling shareholder and any broker-dealers that participate with the selling shareholder in the distribution of units may be deemed to be underwriters and commissions received by them and any profit on the resale of securities positioned by them might be deemed to be underwriting discounts and commissions under the Securities Act. There can be no assurance that the selling shareholder will sell any or all of the units being registered for resale under this prospectus. The selling shareholder will pay selling expenses associated with the sale of the 125,000 units offered, such as commissions or discounts payable to the underwriters for the sale or placement of the units. We are paying, on behalf of the selling shareholder, and without any reimbursement to us, all expenses of registration for resale of the 125,000 units being offered by the selling shareholder, including all expenses of our legal counsel and all expenses we may pay to qualify the common stock and warrants for registration in states where the units are offered or sold. 51 Legal matters The validity of the units, the shares of common stock and the redeemable common stock purchase warrants being offered by this prospectus will be passed upon for us by Gregory Bartko, Esq., of the Law Offices of Gregory Bartko, Atlanta, Georgia, our legal counsel. Experts Our financial statements as of July 31, 2001 included in this prospectus have been so included in reliance on the report of Pannell Kerr Forster, Certified Public Accountants, A Professional Corporation, San Diego, California, independent auditors, given on the authority of such firm as experts in auditing and accounting. 52 EXHIBIT "A" UNIT SUBSCRIPTION AND PURCHASE AGREEMENT [To purchase any of the units, you must be a resident of a state where the sale of units is permitted under the state's securities laws.] To: LASIK America, Inc. 6646 Indian School Road, N.E. Albuquerque, New Mexico 87110 Phone: (505) 837-2020 Fax: (505) 837-9111 Enclosed is payment for _____ units (minimum 100 units),at $6.10 per unit, totaling $________. Make check payable to "LASIK America, Inc. Escrow Account." Signature(s)______________________________________ Date___________________ Register the units in the following name(s) and amount(s): Name(s)_________________________________________ Number of units _________ As (check one): Individual _______ Joint Tenants _____ Trust ____ IRA ____ Tenants in Common ____ Corporation _______ Keogh ___ Other_____ For the person(s) who will be registered owner(s): Mailing Address:____________________________________________________________ City, State & Zip Code: ____________________________________________________ Business Phone: (_____)___________________ Home Phone: (_____)____________ Social Security or Taxpayer ID Number: _____________________________________ (Please attach any special mailing instructions other than shown above) NO UNIT PURCHASE AGREEMENT IS EFFECTIVE UNTIL ACCEPTANCE. (You will be mailed a signed copy of this Agreement to retain for your records.) Subscription accepted by LASIK America, Inc. - ------------------------------- -------------- Howard P. Silverman, President Date and Chief Executive Officer 53 VIRGINIA SUBSCRIBERS Virginia subscribers must meet the following suitability requirement: I certify that I am (initial blank)________ a person who (a) has an annual income of $60,000 and a net worth of at least $60,000 or (b) has a net worth of at least $225,000 (in each case excluding home, home furnishings, and personal automobiles) and that I am not investing more than 10% of my readily marketable assets in this offering. CALIFORNIA SUBSCRIBERS California subscribers must meet the following suitability requirement: I certify that I am (initial blank)________ (1) be an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933; or (2) a person who (a) has an income of $65,000 and a net worth of $250,000 or (b) has a net worth of $500,000 (in each case excluding home, home furnishings, and personal automobiles; or (3) a bank, savings and loan association, trust company registered under the Investment Company Act of 1940, pension or profit-sharing trust, corporation, or other entity which together with the corporation's or other entity's affiliates, have net worth on a consolidated basis according to the most recent regularly prepared financial statement (which shall have been reviewed but not necessarily audited, by outside accountants of not less than $14,000,000 and subsidiaries of the foregoing; or (4) a person (other than a person formed for the sole purpose of purchasing the units offered hereby) who is purchasing at least $1,000,000 in aggregate amount of the units. 54 LASIK AMERICA, INC. TABLE OF CONTENTS ----------------- INDEPENDENT AUDITOR'S REPORT F-2 FINANCIAL STATEMENTS Balance Sheet F-3 Statement of Operations F-4 Statement of Shareholders' Deficit F-5 Statement of Cash Flows F-6 - F-7 NOTES TO FINANCIAL STATEMENTS F-8 - F-14 F-1 INDEPENDENT AUDITOR'S REPORT To the Shareholders Lasik America, Inc. Albuquerque, New Mexico We have audited the balance sheet of Lasik America, Inc. (the "Company") as of July 31, 2001, and the related statements of operations, shareholders' deficit and cash flows for the period March 21, 2001 (inception) through July 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lasik America, Inc. at July 31, 2001, and the results of its operations and its cash flows for the period March 21, 2001 (inception) through July 31, 2001, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited capital resources and a working capital deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. San Diego, California PANNELL KERR FORSTER August 13, 2001 (except for Note 8 Certified Public Accountants as to which the date is August 24, 2001) A Professional Corporation F-2 LASIK AMERICA, INC. BALANCE SHEET July 31, 2001 ASSETS ------ Current assets: Cash $ 19 Accounts receivable 2,370 Other current assets 7,550 ----------------- Total current assets 9,939 ----------------- Property and equipment, net 219,773 ----------------- Total assets $ 229,712 ================= LIABILITIES AND SHAREHOLDERS' DEFICIT ------------------------------------- Current liabilities: Accounts payable $ 51,537 Patient deposits 11,105 Sales tax payable 12,554 Other liabilities 2,512 Current portion of long-term debt 110,263 ----------------- Total current liabilities 187,971 ----------------- Long-term debt 105,820 ----------------- Total liabilities 293,791 ----------------- Commitments (Note 4) Shareholders' deficit: Preferred stock, $.001 par value, 100,000 shares authorized; no shares issued and outstanding - Common stock, $.001 par value, 25,000,000 shares authorized; 2,082,043 to be issued 2,082 Additional paid-in capital 12,510,176 Deferred compensation (67,500) Accumulated deficit (12,508,837) ----------------- Total shareholders' deficit (64,079) ----------------- Total liabilities and shareholders' deficit $ 229,712 ================= The accompanying footnotes are an integral part of the financial statements. F-3 LASIK AMERICA, INC. STATEMENT OF OPERATIONS For the period March 21,2001 (Inception) through July 31, 2001 Revenues: Patient Fees (net of discounts of $28,549) $ 147,230 Facility Fees 36,810 ------------------ Total revenues 184,040 Costs and expenses: Cost of revenues (exclusive of depreciation shown separately below) 79,353 General and administrative (including non-cash compensation of $12,351,387) 12,594,756 Depreciation 14,884 ------------------ Total costs and expenses 12,688,993 ------------------ Loss from operations (12,504,953) Other expense: Interest expense 3,884 ------------------ Net loss $ (12,508,837) ================== Basic and diluted net loss per share $ (6.01) ================== Shares used to compute basic and diluted net loss per share 2,082,043 ================== The accompanying footnotes are an integral part of the financial statements. F-4 LASIK AMERICA, INC. STATEMENT OF SHAREHOLDERS' DEFICIT For the period March 21, 2001 (Inception) through July 31, 2001

The accompanying footnotes are an integral part of the financial statements. F-5 LASIK AMERICA, INC. STATEMENT OF CASH FLOWS For the period March 21, 2001 (Inception) through July 31, 2001 Cash flows from operating activities: Net loss $ (12,508,837) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 14,884 Contributed services of executive officer 20,000 Compensation expense related to common stock 12,328,887 Amortization of deferred compensation 22,500 Changes in operating assets and liabilities: Increase in accounts receivable (2,370) Increase in other current assets (7,550) Increase in accounts payable 51,537 Increase in patient deposits 11,105 Increase in sales tax payable and other liabilities 15,066 -------------- Net cash flows used in operating activities (54,778) -------------- Cash flows from investing activities: Purchase of property and equipment (14,341) -------------- Net cash flows used in investing activities (14,341) -------------- Cash flows from financing activities: Proceeds from issuance of common stock 73,371 Repayments on long-term debt (4,233) -------------- Net cash flows provided by financing activities 69,138 -------------- Net increase in cash 19 Cash at beginning of period - -------------- Cash at end of period $ 19 ============== The accompanying footnotes are an integral part of the financial statements. F-6 LASIK AMERICA, INC. STATEMENT OF CASH FLOWS (Continued) For the period March 21, 2001 (Inception) through July 31, 2001 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 1,654 ================= Income taxes $ - ================= Supplemental disclosure of noncash investing and financing activities: Equipment obtained through issuance of long-term debt $ 220,316 ================= Deferred compensation for shares to employee $ 90,000 ================= The accompanying footnotes are an integral part of the financial statements. F-7 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - --------------------------------------------------------- Organization and Business ------------------------- Lasik America, Inc. (the "Company") was incorporated in the state of Nevada on March 21, 2001. The Company operates an ophthalmic laser vision correction center in Albuquerque, New Mexico. Fiscal Year ----------- The Company's year-end for financial reporting purposes is July 31. Financial Instruments --------------------- The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, sales tax payable and patient deposits approximate fair value due to the immediate short-term maturity of these financial instruments. The fair value of the Company's long-term debt approximates the carrying amount based on the current rates offered to the Company for debt of the same remaining maturities with similar collateral requirements. Property and Equipment ---------------------- Property and equipment are recorded at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the depreciable assets which range from three to five years. Deferred Compensation --------------------- Deferred compensation represents the unamortized value of common stock granted to an employee. The deferred compensation recorded in the accompanying balance sheet is being amortized over the service period (one year) required for the employee to vest in the stock grant. Revenue Recognition ------------------- Revenues are generated by the vision correction procedures performed at the Company's laser center. Follow-up corrective procedures for customer satisfaction, consisting of retreatment, are performed when necessary. Facility fees are derived from the use of the Company's equipment by affiliate doctors who pay the Company a standard fee per procedure. The Company recognizes revenues when the vision correction procedures are performed. Discounts are negotiated during the evaluation process and are recorded at the time revenues are recognized and the service is performed. F-8 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) - --------------------------------------------------------- Concentration Risk ------------------ The Company's revenues are generated by the vision correction procedures performed at its laser center in Albuquerque, New Mexico. If the demand for this procedure decreased or if the Company's ability to continue to provide this service was impaired, the Company's revenue source would be severely impacted. The Company is dependent on a small number of manufacturers for the supply of its excimer laser and related equipment. If any of these manufacturers were unable to continue to provide this equipment, the Company's revenue generating ability would be severely impacted. Earnings Per Share ------------------ In 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings per share for entities with publicly held common stock. SFAS No. 128 supercedes the provisions of APB No. 15, and requires the presentation of basic earnings per share and diluted earnings per share. The Company has adopted the provisions of SFAS No. 128 effective March 21, 2001. Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reported periods. Diluted net income (loss) per share reflects the potential dilution that could occur if stock warrants and other commitments to issue common stock were exercised. During the period March 21, 2001 (Inception) through July 31, 2001, the Company had no outstanding warrants to purchase common shares and no warrants were included in the weighted average share computation. Due to the fact the initial common shares were issued at a price lower than the anticipated initial public offering price of $6.00 per share, the initial common shares have been treated as if they had been outstanding during the entire period March 21, 2001 (inception) through July 31, 2001. The Company is presenting its basic and diluted net loss per share as a single line on the statement of operations. Income Taxes ------------ The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. F-9 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) - --------------------------------------------------------- Management's Plans for Future Operations and Financing ------------------------------------------------------ The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. At present, the Company's working capital plus limited capital resources will not be sufficient to meet the Company's objectives as structured. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company estimates it will need additional capital to achieve its operations as planned. The Company currently generates on average approximately $73,000 per month in gross revenue and believes that it will require approximately $1,200,000 in gross revenue during the next 12 months to maintain existing operations. The Company believes that its cash requirements during the next 12 months will be satisfied through an increase in the number of clients and eye surgery procedures expected from advertising and marketing efforts. The Company plans to seek up to approximately $2,600,000 in equity financing via a Form SB-2 offering pursuant to the Securities Act of 1933. In the event financing is not obtained, the Company will adjust its corporate infrastructure to reflect current operations. Use of Estimates ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - PROPERTY AND EQUIPMENT - ------------------------------- Property and equipment consist of the following as of July 31, 2001: Medical equipment $ 224,161 Office equipment, furniture and fixtures 10,496 ----------------- 234,657 Less accumulated depreciation (14,884) ----------------- Net property and equipment $ 219,773 ================= F-10 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 3 - LONG-TERM DEBT - ----------------------- Long-term debt consists of the following as of July 31, 2001: The Company's CEO has entered into a loan agreement for the acquisition of the excimer laser used in the operations of the Company. By oral agreement, the Company is acquiring the laser from the CEO under terms which mirror the original loan agreement. This loan bears interest at 10% per annum with interest and principal payable in monthly installments of approximately $6,200. The note is secured by a first security interest in the excimer laser and related equipment. The note is due in November 2003. $ 159,083 Unsecured note payable bearing interest at 10% per annum with interest and principal payable in monthly installments of approximately $3,400. The note is due in November 2002. Payments due to the holder of this note have been assigned to the Internal Revenue Service. (See Note 7). 57,000 -------------- 216,083 Less: Current portion (110,263) -------------- $ 105,820 ============== Aggregate maturities of long-term obligations at July 31 are as follows: Year ending Amount -------------- -------------- 2002 $ 110,263 2003 81,573 2004 24,247 -------------- $ 216,083 ============== NOTE 4 - COMMITMENTS - -------------------- The Company leases its facility on a month to month basis pending the completion of the new office facility. The monthly rent is $782. The Company has entered into a one year maintenance agreement for the laser with monthly payments of $4,375. The Company also leases certain surgical equipment with expiration dates through November 2001. Approximate minimum future obligations under these leases and the maintenance agreement as of July 31, 2002 are $53,875. Rent expense for the facility was $3,255 for the period March 21, 2001 (inception) through July 31, 2001. F-11 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 5 - SHAREHOLDERS' EQUITY - ----------------------------- During March 2001, the Company sold 1,090,000 shares of common stock to the Company's CEO. As of July 31, 2001 these shares had not been issued. Proceeds from this transaction amounted to $8,510. Management has valued these shares at $6.00 per share based on the proximity of the anticipated initial public offering. As a result of this, the Company has taken a charge of $6,531,490 relating to this transaction which has been accounted for in the accompanying statement of operations as general and administrative expenses. During March 2001, the Company sold 775,000 shares of common stock to individuals, considered to related parties to the CEO, in conjunction with the formation of the Company. As of July 31, 2001 these shares had not been issued. Proceeds from this transaction amounted to $775. Management has valued these shares at $6.00 per share based on the proximity of the anticipated initial public offering. As a result of this, the Company has taken a charge of $4,649,225 relating to this transaction which has been accounted for in the accompanying statement of operations as general and administrative expenses. During April 2001, the Company granted 185,000 shares of common stock to employees. As of July 31, 2001 these shares had not been issued. Management has valued these shares at $6.00 per share based on the proximity of the anticipated initial public offering. One employee's stock award vests over a one year period. Accordingly, this amount is being amortized over the vesting period. As a result of these stock grants, the Company has taken a charge of $1,042,500, net of deferred compensation, which has been accounted for in the accompanying statement of operations as general and administrative expenses. During April, May and June 2001, the Company sold 32,043 shares of common stock to individuals considered to be related parties to the CEO. As of July 31, 2001 these shares had not been issued. Proceeds from these transactions amount to $64,086. Management has valued these shares at $6.00 per share based on the proximity of the anticipated initial public offering. As a result of this, the Company has taken a charge of $128,172 relating to this transaction which has been accounted for in the accompanying statement of operations as general and administrative expenses. For the period from March 21, 2001 (inception) through July 31, 2001, the CEO contributed services with a fair value of $20,000, at no cost. This amount is included in additional paid in capital and in general and administrative expenses for the period from March 21, 2001 (inception) through July 31, 2001. F-12 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 6 - INCOME TAXES - --------------------- Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes. The tax effect of temporary differences consisted of the following as of July 31, 2001: Deferred tax assets: Net operating loss carryforwards $ 102,600 ---------------- Gross deferred tax assets 102,600 Less valuation allowance (102,600) ---------------- Deferred tax liabilities - ---------------- $ - ================ Realization of deferred tax assets is dependant upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. The valuation allowance increased by $102,600 during the period March 21, 2001 (inception) through July 31, 2001. As of July 31, 2001, the Company has net operating loss carryforwards for both federal and state income tax purposes. Federal net operating loss carryforwards totaling approximately $258,000 expire in 2021; state net operating loss carryforwards totaling approximately $258,000 expire in 2006. A reconciliation of the effective tax rates with the federal statutory rate is as follows for the period March 21, 2001 (inception) through July 31, 2001: Income tax benefit at 35% statutory rate $ (90,200) State income taxes, net (12,400) Change in valuation allowance 102,600 ----------------- $ - ================= NOTE 7 - RELATED PARTY TRANSACTION - ---------------------------------- During April 2001, the Company acquired certain medical and office equipment from a related entity via the execution of a promissory note by the CEO to the related entity. The Company orally agreed to acquire the equipment from the CEO under the same terms. F-13 LASIK AMERICA, INC. NOTES TO FINANCIAL STATEMENTS For the period March 21, 2001 (Inception) through July 31, 2001 NOTE 7 - RELATED PARTY TRANSACTION (Continued) - ---------------------------------- This promissory note has been assigned by the related entity to the Internal Revenue Service. (See Note 3). NOTE 8 - SUBSEQUENT EVENT - -------------------------- During August 2001, the Company granted 125,000 warrants to purchase shares of the Company's common stock to the CEO at an exercise price of 120% of the initial public offering price of the common stock. These 125,000 warrants are being offered for resale as part of the 125,000 units being offered for resale by the selling shareholder. The warrants expire sixty months from the effective date of the Registration Statement filed on Form SB-2 by the Company and are exercisable at 120% of the initial offering price per share of the Common Stock. The warrants are redeemable by the Company commencing six months after the effective date of the offering at $0.10 per warrant, provided the average closing bid price for the Company's common stock equals or exceeds one hundred fifty percent of the initial public offering price per share for any twenty consecutive trading days. These warrants have been valued at $0.10 per share based on the price of similar warrants included in the units offered in the Form SB-2 offering. F-14 ================================================================================ Table of contents Page -------- Prospectus Summary.................... 3 Risk Factors.......................... 6 Cautionary Note Regarding Forward- Looking Statements.................. 12 Use Of Proceeds....................... 13 Dividend Policy....................... 14 Capitalization........................ 14 Dilution.............................. 15 Selected Financial Data............... 16 Management's Discussion And Analysis Of Financial Condition And Results Of Operations....................... 18 Business.............................. 22 Management............................ 34 Certain Transactions.................. 39 Principal and Selling Shareholder..... 39 Description Of Securities............. 41 Shares Eligible For Future Sale....... 44 Underwriting.......................... 45 Plan of Distribution for Selling Shareholder......................... 50 Legal Matters......................... 52 Experts............................... 52 Index To Financial Statements......... F-1 UNTIL , 2001, 25 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS THAT BUY, SELL OR TRADE THE UNITS, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAYBE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. LASIK AMERICA, INC. 550,000 UNITS CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEEMABLE COMMON STOCK PURCHASE WARRANT. --------------------- PROSPECTUS --------------------- WEST AMERICA SECURITIES CORP. NOVEMBER , 2001 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 78.751 of the Nevada Business Corporation Act provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent of the company. The Nevada Business Corporation Act provides that Section 78.751 is not exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. The Company's Articles of Incorporation dated March 21, 2001, provides for indemnification by the Registrant of its directors, officers and employees to the fullest extent permitted by the Nevada General Corporation Law. Section 78.751 of the Nevada Business Corporation Act permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transaction from which the director derived an improper personal benefit. The Registrant's Certificate of Incorporation eliminates the personal liability of directors to the furthest extent permissible under the Nevada Business Corporation Act. Reference is also made to the underwriting agreements filed as Exhibits 1.1 and 1.2 to the Registration Statement for information concerning the underwriters' obligation to indemnify the Registrant and its officers and directors as well as the selling shareholder, in certain circumstances, and our obligation and the obligation of the selling shareholder to indemnify the underwriters. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant and the selling shareholder have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses to be incurred in connection with this offering are as follows: SEC Registration Fee........................................ $ 2,078 NASD Filing Fee............................................. $ 917 Accounting Fees and Expenses*............................... $ 25,000 Printing and Engraving*..................................... $ 20,000 Legal Fees and Expenses*.................................... $ 30,000 II-1 Blue Sky Fees and Expenses*................................. $ 7,500 Transfer Agent and Registrar Fees*.......................... $ 10,000 Miscellaneous Expenses*..................................... $ 12,500 -------- Total*................................................ $107,995 ======== ------------------------ * Estimated. ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES. During the last three years, the Registrant has sold and issued the following unregistered securities in transactions which were exempt from registration under the Securities Act of 1933, pursuant to Section 4(2) of the Securities Act, as they were transactions not involving a public offering: In a private placement to accredited investors made by us shortly after our incorporation in March 2001, which was exempt from registration under the Securities Act pursuant to the statutory exemption from registration provided by Section 4(2) of the Securities Act and pursuant to Rule 506 of Regulation D promulgated thereunder, the Registrant offered and sold 1,865,000 shares of our common stock at par value, which is $.001 per share. During this same time, 185,000 additional shares of our common stock were issued to employees in lieu of cash compensation for their services rendered during the start-up of our operations. Of these total number of shares, 1,090,000 shares were issued to our founder, Howard P. Silverman, and were issued to him as part of our formation. These shares were priced in the aggregate at $8,510. In addition, 775,000 of the total number of shares were issued to several persons that were friends, previous business contacts and others that have had a long standing business relationship with our founder, Dr. Silverman. The aggregate purchase price for these shares was $775.00. With respect to the issuance of the 775,000 shares to persons previously known to our chief executive officer, we believe that all such purchasers had a long standing relationship with our management, had all material information available to them from which an informed investment decision could be made, and that these shares qualify as exempt from registration under Section 4(2) of the Securities Act of 1933. Pursuant to a warrant agreement we entered into with Howard P. Silverman, our chief executive officer, on August 24, 2001, we granted a redeemable common stock purchase warrant to Dr. Silverman entitling him to purchase 125,000 shares of our common stock at an exercise price of $7.20 per share as a part of his compensation for services rendered to us. Dr. Silverman's warrant is outstanding, has not been exercised, and is being registered for resale with his 125,000 units offered for sale by this registration statement and the prospectus which forms a part thereof. Our grant of the redeemable common stock purchase warrant to Dr. Silverman was a transaction exempt from registration pursuant to Section 4(2) of the Securities Act. Dr. Silverman had full access to our business plans, financial statements and financial projections. Dr. Silverman also had access to any other corporate information he requested when he received his warrant. II-2 In a private placement to five accredited investors made by us in April and May 2001, which was exempt from registration under the Securities Act pursuant to Rule 506 of Regulation D promulgated thereunder, the Registrant offered and sold 32,043 shares of our common stock at a price of $2.00 per share, for total gross aggregate offering proceeds of $64,086. We believe the issuance of these shares qualify as exempt from registration under the Securities Act of 1933 due to the fact that the purchasers had a preexisting relationship with our chief executive officer, had available to them all material information from which an informed investment decision could be made, and had the requisite investment intent when acquiring the shares of common stock. ITEM 27. EXHIBITS. a. The following Exhibits are filed as a part of this Registration Statement pursuant to Item 601 of Regulation S-B: EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - --------------- ----------------------------------------------------- 1.0 Form of Underwriting Agreement For The Registrant 1.1 Form of Underwriting Agreement For Selling Shareholder 1.2 Form of Representative's Warrant Agreement, including Form of Representative's Warrant 1.3 Form of Public Warrant Agreement 3.1 Articles of Incorporation of Registrant 3.2 By-laws of the Registrant 4.0 Specimen of Common Stock Certificate 4.1 Specimen of Common Stock Purchase Warrant 4.2 Specimen of Unit Certificate 5.0 Opinion of Gregory Bartko, Esq. 10.0 Warrant Agreement Dated August 24, 2001 Between the Registrant and Howard P. Silverman 10.1 Equipment Purchase Agreement Dated May 3, 2001 Between Howard P. Silverman and TrueVision Medical Associates, Inc. 10.2 Bill of Sale Dated May 3, 2001 Between TrueVision Medical Associates, Inc. 10.3 Promissory Note Dated May 3, 2001 by Howard P. Silverman and TrueVision Medical Associates, Inc. II-3 10.4 Security Agreement Dated May 3, 2001 Between Howard P. Silverman and TrueVision Medical Associates, Inc. 10.5 Sales Agreement Dated May 10, 2001 Between VISX, Incorporated and the Registrant 10.6 VISX, Incorporated Patent License to the Registrant, Dated May 11, 2001 10.7 Equipment Lease Agreement Dated May 23, 2001 Between Bausch & Lomb and the Registrant 10.8 Unconditional Guarantee of Dr. Howard P. Silverman to DVI Financial Services, Inc. dated March 17, 2001 10.9 Loan and Collateral Schedule No. 002 dated March 17, 1998 between Dr. Howard P. Silverman and DVI Financial Services, Inc. 10.10 Landlord's Waiver dated May 15, 2001 among Landlord, Dr. Howard P. Silverman and DVI Financial Services, Inc. 10.11 Form of Escrow Agreement Between LASIK America, Inc. and Wells Fargo Bank, N.A. 10.12 Form of Escrow Agreement Between the Selling Shareholder, Howard P. Silverman and Wells Fargo Bank, N.A. 23.0 Consent of Gregory Bartko, Esq. (included in opinion filed as Exhibit 5.0) 23.1 Consent of Pannell Kerr Forster, Certified Public Accountants, A Professional Corporation, San Diego, California, independent auditors 24.0 Power of Attorney (included in Part II of the Registration Statement under the caption "Signatures") ------------------------ * To be filed by amendment ITEM 28. UNDERTAKINGS. (a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the undersigned Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned Registrant of expenses incurred or paid by a director, officer or controlling person of the undersigned Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the undersigned Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court II-4 of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (b) The undersigned Registrant in all instances will provide to the Underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. (c) The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the undersigned Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of the registration statement as of the time it was declared effective; and (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (d) The undersigned Registrant hereby undertakes that it will: (1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) Include any additional or changed material information on the plan of distribution; (2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. II-5 (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this amended registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Albuquerque, New Mexico, on the 27th day of November, 2001. LASIK AMERICA, INC. By: ---------------------------------------- Howard P. Silverman, president and chief executive officer NAME CAPACITY DATE - ------------------------------- ------------------------ ------------------- - ------------------------------- Chairman, president, November 27, 2001 Howard P. Silverman chief executive officer, chief financial officer and director * - ------------------------------- Chief Operating Officer November 27, 2001 Robert S. Helmer and Director - ------------------------------- Principal Howard P. Silverman accounting officer November 27, 2001 * - ------------------------------- Director November 27, 2001 Stuart S. Greenberg * - ------------------------------- Director November 27, 2001 Steven L. De Vicenzi * Howard P. Silverman As Power of Attorney II-6 LIST OF EXHIBITS EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - --------------------- ------------------------------------------------------- 1.0 Form of Underwriting Agreement For The Registrant 1.1 Form of Underwriting Agreement For Selling Shareholder 1.2 Form of Representative's Warrant Agreement, including Form of Representative's Warrant 1.3 Form of Public Warrant Agreement 3.1 Articles of Incorporation of Registrant 3.2 By-laws of the Registrant 4.0 Specimen of Common Stock Certificate 4.1 Specimen of Common Stock Purchase Warrant 4.2 Specimen of Unit Certificate 5.0 Opinion of Gregory Bartko, Esq. 10.0 Warrant Agreement Dated August 24, 2001 Between the Registrant and Howard P. Silverman 10.1 Equipment Purchase Agreement Dated May 3, 2001 Between Howard P. Silverman and TrueVision Medical Associates, Inc. 10.2 Bill of Sale Dated May 3, 2001 Between TrueVision Medical Associates, Inc. 10.3 Promissory Note Dated May 3, 2001 by Howard P. Silverman and TrueVision Medical Associates, Inc. 10.4 Security Agreement Dated May 3, 2001 Between Howard P. Silverman and TrueVision Medical Associates, Inc. 10.5 Sales Agreement Dated May 10, 2001 Between VISX, Incorporated and the Registrant 10.6 VISX, Incorporated Patent License to the Registrant, Dated May 11, 2001 10.7 Equipment Lease Agreement Dated May 23, 2001 Between Bausch & Lomb and the Registrant II-7 10.8 Unconditional Guarantee of Dr. Howard P. Silverman to Financial Services, Inc. dated March 17, 2001 10.9 Loan and Collateral Schedule No. 002 dated March 17, 1998 Between Dr. Howard P. Silverman and DVI Financial Services, Inc. 10.10 Landlord's Waiver dated May 15, 2001 among Landlord, Dr. Howard P. Silverman and DVI Financial Services, Inc. 10.11 Form of Escrow Agreement Between LASIK America, Inc. and Wells Fargo Bank, N.A. 10.12 Form of Escrow Agreement Between the Selling Shareholder, Howard P. Silverman and Wells Fargo Bank, N.A. 23.0 Consent of Gregory Bartko, Esq. (included in opinion filed as Exhibit 5.0) 23.1 Consent of Pannell Kerr Forster, Certified Public Accountants, A Professional Corporation, San Diego, California, independent auditors 24.0 Power of Attorney (included in Part II of the Registration Statement under the caption "Signatures") - -------------------------- * To be filed by amendment II-8 EX-1.0 3 file002.txt FORM OF UNDERWRITING AGREEMENT FOR THE REGISTRANT Exhibit 1.0 ----------- 425,000 UNITS, EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEEMABLE COMMON STOCK PURCHASE WARRANT LASIK AMERICA, INC. UNDERWRITING AGREEMENT Westlake Village, CA. ___________, 2001 West America Securities Corp. As Representative of the Several Underwriters listed on Schedule A hereto 4510 East Thousand Oaks Blvd. Suite 100 Westlake Village, CA 91362 Ladies and Gentlemen: LASIK America, Inc., a Nevada corporation (the "Company") confirms its agreement with West America Securities Corp. ("West America") and each of the several underwriters named in Schedule A hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 11) for whom West America is acting as representative (in such capacity, West America shall hereinafter be referred to as "you" or the "Representative"), with respect to the offer and sale by the Company and the placement, on a best efforts basis, by the Underwriters, acting severally and not jointly as placement agents, of the respective number of units ("Units") set forth in Schedule A hereto, each Unit consisting of one (1) share of the Company's Common Stock, $0.001 par value ("Common Stock") and one (1) redeemable common stock purchase warrant (the "Redeemable Warrants"). Each Redeemable Warrant is exercisable for one share of Common Stock. The Common Stock and Redeemable Warrants comprising the Units will be separately tradable after the effective date of this offering and are hereinafter referred to as the "Firm Securities." Each Redeemable Warrant is exercisable commencing on [____________], 2002 [twelve months after the date of the Prospectus] until [______________], 2007 [five years after the date of the Prospectus], unless previously redeemed by the Company, at an initial exercise price of $7.20 per share [120% of the initial public offering price of the Common Stock]. The Redeemable Warrants may be redeemed by the Company, in whole but not in part, at a redemption price of $.10 per warrant at any time commencing [__________], 2002 [six months after the date of the Prospectus] on thirty (30) days' prior written notice, provided that the average closing sale price of the Common Stock as reported on the Over-The-Counter Electronic Bulletin Board market equals or 1.0 - 1 exceeds $9.00 [150% of the IPO price of the Common Stock] per share, for any twenty (20) days prior to the date of the notice of redemption, all in accordance with the terms and conditions of the Warrant Agreement (herein defined). The shares of Common Stock issuable upon exercise of the Redeemable Warrants are hereinafter referred to as the "Warrant Securities." The Company also proposes to issue and sell warrants to the Representative (the "Representative's Warrants") pursuant to the Representative's Warrant Agreement (the "Representative's Warrant Agreement") for the purchase of up to an additional 42,500 Shares of Common Stock and/or 42,500 Redeemable Warrants, or ten percent (10%) of the number of Units placed by the Underwriters, whichever is greater. The redeemable Common Stock purchase warrants issuable upon exercise of the Representative's Warrants are hereinafter sometimes referred to herein as the "Representative's Redeemable Warrants." The Representative's Redeemable Warrants are identical to the Redeemable Warrants. The shares of Common Stock issuable upon exercise of the Representative's Warrants and the shares of Common Stock issuable upon exercise of the Representative's Redeemable Warrants and the Representative's Redeemable Warrants are sometimes collectively referred to herein as the "Representative's Securities." The Firm Securities, the Representative's Warrants, the Representative's Redeemable Warrants, the Representative's Securities (collectively, hereinafter referred to as the "Securities") are more fully described in the Registration Statement and the Prospectus referred to below. All funds received from subscribers of the Units will be deposited in a segregated account at __________ ("Bank"), _____________, California, pursuant to an escrow agreement among you, the Company and the Bank ("Escrow Agreement"). The Company will determine, in its sole discretion, to accept or reject subscriptions for Units within five days following receipt hereof. Funds of an investor whose subscription is rejected will be promptly returned directly to such person by the Bank, without interest thereon or deduction therefrom, pursuant to the terms of the Escrow Agreement. The offering of the Units to the public by the Underwriters shall continue from the Effective Date of the Registration Statement until 90 days after the Effective Date, at which time the offer and sale of Units shall be terminated, unless the offering period is extended, in the discretion of the Representative, for an additional period of 60 days. All investor funds received into the Escrow Account may be immediately transferred to the Company after acceptance of the subscription agreement applicable to such funds. The Company reserves the right to refuse to sell Units to any person at any time. 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (a) The Company represents and warrants to, and agrees with, the Representative as of the date hereof, and as of the Closing Date (hereinafter defined) as follows: (i) The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") a registration statement, and an amendment or amendments thereto, on Form SB-2 (No. 333-68942), including any related preliminary prospectus 1.0 - 2 ("Preliminary Prospectus"), for the registration of the Firm Securities under the Securities Act of 1933, as amended (the "Act"), which registration statement and amendment or amendments have been prepared by the Company in conformity with the requirements of the Act, and the rules and regulations (the "Regulations") of the Commission under the Act. The Company will not file any other amendment to said registration statement which the Representative shall have objected to in writing after having been furnished with a copy thereof. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement becomes effective (including the prospectus, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein (including, but not limited to those documents or information incorporated by reference therein) and all information deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule 430(A) of the Regulations), is hereinafter called the "Registration Statement", and the form of prospectus in the form first filed with the Commission pursuant to Rule 424(b) of the Regulations, is hereinafter called the "Prospectus." For purposes hereof, "Rules and Regulations" mean the rules and regulations adopted by the Commission under either the Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable. (ii) Neither the Commission nor any state regulatory authority has issued any order preventing or suspending the use of any Preliminary Prospectus, the Registration Statement or the Prospectus or any part of any thereof and no proceedings for a stop order suspending the effectiveness of the Registration Statement or any of the Company's securities have been instituted or are pending or to the Company's knowledge, threatened. Each of the Preliminary Prospectus, Registration Statement and Prospectus at the time of filing thereof conformed with the requirements of the Act and the Rules and Regulations, and none of the Preliminary Prospectus, Registration Statement or Prospectus at the time of filing thereof contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein and necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that this representation and warranty does not apply to statements made in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by or on behalf of the Underwriters expressly for use in such Preliminary Prospectus, Registration Statement or Prospectus. The Company has filed all reports, forms or other documents required to be filed under the Act or the Exchange Act and the respective Rules and Regulations thereunder, and all such reports, forms or other documents, when so filed or as subsequently amended, complied in all material respects with the Act and the Exchange Act and the respective rules and regulations thereunder. (iii) When the Registration Statement becomes effective and at all times subsequent thereto up to the Closing Date, if 1.0 - 3 any, and during such longer period as the Prospectus may be required to be delivered in connection with sales by the Underwriters or a dealer, the Registration Statement and the Prospectus will contain all statements which are required to be stated therein in accordance with the Act and the Rules and Regulations, and will conform to the requirements of the Act and the Rules and Regulations; neither the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, provided, however, that this representation and warranty does not apply to statements made or statements omitted in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriters expressly for use in the Preliminary Prospectus, Registration Statement or Prospectus or any amendment thereof or supplement thereto. (iv) The Company has been duly organized and is validly existing as corporation in good standing under the laws of the state of its incorporation. The Company is duly qualified and licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing. Any and all of the Company shares have been validly issued, are fully paid and non-assessable, were not issued in violation of any preemptive rights, and except as set forth in the Prospectus, are owned free and clear of any liens, charges, claims, encumbrances, pledges, security interests, defects or other restrictions or equities of any kind whatsoever. The Company has all requisite corporate power and authority, and has obtained any and all necessary authorizations, approvals, orders, licenses, certificates, franchises and permits of and from all governmental or regulatory officials and bodies (including, without limitation, those having jurisdiction over environmental or similar matters), to own or lease its properties and conduct its business as described in the Prospectus; the Company is and has been doing business in compliance with all such authorizations, approvals, orders, licenses, certificates, franchises and permits and all federal, state and local laws, rules and regulations; and the Company has not received any notice of proceedings relating to the revocation or modification of any such authorization, approval, order, license, certificate, franchise, or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, position, prospects, value, operation, properties, business or results of operations of the Company. The disclosures in the Registration Statement concerning the effects of federal, state and local laws, rules and regulations on the Company's business as currently conducted and as contemplated are correct in all material respects 1.0 - 4 and do not omit to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading. (v) The Company has a duly authorized, issued and outstanding capitalization as set forth in the Prospectus, under "Capitalization" and "Description of Securities" and will have the adjusted capitalization set forth therein on the Closing Date and the Option Closing Date, if any, based upon the assumptions set forth therein, and the Company is not a party to or bound by any instrument, agreement or other arrangement providing for it to issue any capital stock, rights, warrants, options or other securities, except for this Agreement, the Representative's Warrant Agreement and the Warrant Agreement (as defined in Section 1(a)(xxxiii) of this Agreement) and as described in the Prospectus. The Securities and all other securities issued or issuable by the Company conform or, when issued and paid for, will conform, in all respects to all statements with respect thereto contained in the Registration Statement and the Prospectus. All issued and outstanding securities of the Company have been duly authorized and validly issued and are fully paid and non-assessable and the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The Securities to be sold by the Company hereunder and pursuant to the Representative's Warrant Agreement and the Warrant Agreement are not and will not be subject to any preemptive or other similar rights of any stockholder, have been duly authorized and, when issued, paid for and delivered in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and will conform to the description thereof contained in the Prospectus; the holders thereof will not be subject to any liability solely as such holders; all corporate action required to be taken for the authorization, issue and sale of the Securities has been duly and validly taken; and the certificates representing the Securities will be in due and proper form. Upon the issuance and delivery pursuant to the terms hereof and the Representative's Warrant Agreement of the Securities to be sold by the Company hereunder, the Underwriters will acquire good and marketable title to such Securities free and clear of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever asserted against the Company or any affiliate of the Company. (vi) The financial statements of the Company, together with the related notes and schedules thereto, included in the Registration Statement, each Preliminary Prospectus and the Prospectus fairly present the financial position, income, changes in cash flow, changes in stockholders' equity, and the results of operations of the Company and the Subsidiaries at the respective dates and for the respective periods to which they apply and the 1.0 - 5 pro forma and the as-adjusted financial information included in the Registration Statement and Prospectus presents fairly on a basis consistent with that of the audited financial statements included therein, what the Company's pro forma and as-adjusted capitalization would have been for the respective periods and as of the respective dates to which they apply after giving effect to the adjustments described therein. Such financial statements have been prepared in conformity with generally accepted accounting principles and the Rules and Regulations, consistently applied throughout the periods involved. There has been no adverse change or development involving a material prospective change in the condition, financial or otherwise, or in the earnings, position, prospects, stockholders' equity, value, operation, properties, business, or results of operations of the Company, whether or not arising in the ordinary course of business, since the date of the financial statements included in the Registration Statement and the Prospectus and the outstanding debt, the property, both tangible and intangible, and the business of the Company conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus. Financial information set forth in the Prospectus under the headings "Prospectus Summary," "Selected Consolidated Financial Data," "Capitalization," "Dilution" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," fairly presents, on the basis stated in the Prospectus, the information set forth therein, have been derived from or compiled on a basis consistent with that of the audited financial statements included in the Prospectus. (vii) The Company (i) has paid all federal, state, local, and foreign taxes for which it is liable, including, but not limited to, withholding taxes and amounts payable under Chapters 21 through 24 of the Internal Revenue Code of 1986, as amended (the "Code"), and has furnished all information returns it is required to furnish pursuant to the Code, (ii) has established adequate reserves for such taxes which are not due and payable, and (iii) does not have any tax deficiency or claims outstanding, proposed or assessed against it. (viii) No transfer tax, stamp duty or other similar tax is payable by or on behalf of the Underwriters in connection with (i) the issuance by the Company of the Securities, (ii) the purchase by the Underwriters of the Firm Securities from the Company, and the purchase by the Representative of the Representative's Warrants from the Company, (iii) the consummation by the Company of any of its obligations under this Agreement or the Representative's Warrant Agreement, or (iv) resales of the Firm Securities in connection with the distribution contemplated hereby. (ix) The Company maintains insurance policies, including, but not limited to, general liability and property insurance, which insures the Company against such losses and risks generally 1.0 - 6 insured against by comparable businesses. The Company (A) has not failed to give notice or present any insurance claim with respect to any matter, including but not limited to the Company's business, property or employees, under the insurance policy or surety bond in a due and timely manner, (B) does not have any disputes or claims against any underwriter of such insurance policies or surety bonds or has not failed to pay any premiums due and payable thereunder, or (C) has not failed to comply with all conditions contained in such insurance policies and surety bonds. There are no facts or circumstances under any such insurance policy or surety bond which would relieve any insurer of its obligation to satisfy in full any valid claim of the Company. (x) There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding (including, without limitation, those having jurisdiction over environmental or similar matters), domestic or foreign, pending or threatened against (or circumstances that may give rise to the same), or involving the properties or business of, the Company which (i)questions the validity of the capital stock of the Company, this Agreement, the Representative's Warrant Agreement or the Warrant Agreement or of any action taken or to be taken by the Company pursuant to or in connection with this Agreement, the Representative's Warrant Agreement or the Warrant Agreement, (ii) is required to be disclosed in the Registration Statement which is not so disclosed (and such proceedings as are summarized in the Registration Statement are accurately summarized in all material respects), or (iii) might materially and adversely affect the condition, financial or otherwise, or the earnings, position, prospects, stockholders' equity, value, operation, properties, business or results of operations of the Company taken as a whole. (xi) The Company has full legal right, power and authority to authorize, issue, deliver and sell the Securities, enter into this Agreement, the Representative's Warrant Agreement and the Warrant Agreement and to consummate the transactions provided for in such agreements; and this Agreement, the Representative's Warrant Agreement and the Warrant Agreement have each been duly and properly authorized, executed and delivered by the Company. Each of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting creditors' rights generally, (ii) as enforceability of any indemnification or contribution provisions may be limited under applicable laws or the public policies underlying such laws and (iii) that the remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any 1.0 - 7 proceedings may be brought. None of the Company's issue and sale of the Securities, execution or delivery of this Agreement, the Representative's Warrant Agreement or the Warrant Agreement, its performance hereunder and thereunder, its consummation of the transactions contemplated herein and therein, or the conduct of its business as described in the Registration Statement and the Prospectus, and any amendments or supplements thereto, conflicts with or will conflict with or results or will result in any breach or violation of any of the terms or provisions of, or constitutes or will constitute a default under, or result in the creation or imposition of any lien, charge, claim,encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever upon, any property or assets (tangible or intangible) of the Company pursuant to the terms of, (i) the certificate of incorporation or by-laws of the Company, (ii) any license, contract, indenture, mortgage, lease, deed of trust, voting trust agreement, stockholders agreement,note, loan or credit agreement or other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is a party or by which it is or may be bound or to which any of its properties or assets (tangible or intangible) is or may be subject, or any indebtedness, or (iii) any statute, judgment, decree, order, rule or regulation applicable to the Company of any arbitrator, court,regulatory body or administrative agency or other governmental agency or body (including, without limitation, those having jurisdiction over environmental or similar matters), domestic or foreign, having jurisdiction over the Company or any of its activities or properties. (xii) No consent, approval, authorization or order of, and no filing with, any arbitrator, court, regulatory body, administrative agency, government agency or other body, domestic or foreign, is required for the issuance of the Securities pursuant to the Prospectus and the Registration Statement, this Agreement, the Representative's Warrant Agreement and the Public Warrant Agreement, the performance of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement and the transactions contemplated hereby and thereby, including without limitation, any waiver of any preemptive, first refusal or other rights that any entity or person may have for the issue and/or sale of any of the Securities, except such as have been or may be obtained under the Act or may be required under state securities or Blue Sky laws and the rules of the National Association of Securities Dealers, Inc. (the "NASD") in connection with the Underwriters' purchase and distribution of the Securities and the Representative's Warrants to be sold by the Company hereunder. (xiii) All executed agreements, contracts or other documents or copies of executed agreements, contracts or other documents filed as exhibits to the Registration Statement to which 1.0 - 8 the Company is a party or by which it may be bound or to which any of its assets, properties or business may be subject have been duly and validly authorized, executed and delivered by the Company or the Subsidiaries, and constitute the legal, valid and binding agreements of the Company enforceable against each of them in accordance with their respective terms. The descriptions in the Registration Statement of agreements, contracts and other documents are accurate in all material respects and fairly present the information required to be shown with respect thereto by Form SB-2, and there are not agreements, contracts or other documents which are required by the Act to be described in the Registration Statement or filed as exhibits to the Registration Statement which are not described or filed as required, and the exhibits which have been filed are in all material respects complete and correct copies of the documents of which they purport to be copies. (xiv) Subsequent to the respective dates as of which information is set forth in the Registration Statement and the Prospectus, and except as may otherwise be indicated or contemplated herein or therein, the Company has not(i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, (ii) entered into any transaction other than in the ordinary course of business, or (iii) declared or paid any dividend or made any other distribution on or in respect of its capital stock of any class, and there has not been any change in the capital stock, or any material change in the debt (long or short term) or liabilities or material adverse change in or affecting the condition, financial or otherwise, earnings, prospects, stockholders' equity, value, operations, properties, business or results of operations of the Company. (xv) No default exists in the due performance and observance of any term, covenant or condition of any license, contract, indenture, mortgage, installment sale agreement, lease, deed of trust, voting trust agreement, stockholders agreement, partnership agreement, note, loan or credit agreement, purchase order, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which the property or assets (tangible or intangible) of the Company is subject or affected. (xvi) The Company has generally enjoyed a satisfactory employer-employee relationship with its employees and is in compliance with all federal, state, local, and foreign laws and regulations respecting employment and employment practices, terms and conditions of employment and wages and hours. There are no pending investigations involving the Company by the U.S. Department of Labor, or any other governmental agency responsible for the enforcement of such federal, state, local, or foreign laws and regulations. There is no unfair labor practice charge or complaint of the Company pending before the National Labor Relations Board or any strike, picketing, boycott, dispute, slowdown or stoppage pending or threatened against or involving 1.0 - 9 the Company or any predecessor entity, and none has ever occurred. No representation question exists respecting the employees of the Company and no collective bargaining agreement or modification thereof is currently being negotiated by the Company. No grievance or arbitration proceeding is pending under any expired or existing collective bargaining agreements of the Company. No labor dispute with the employees of the Company exists, or is imminent. (xvii) The Company does not now maintain, sponsor or contribute to any program or arrangement that is an "employee pension benefit plan," an "employee welfare benefit plan," or a "multiemployer plan" as such terms are defined in Sections 3(2), 3(1) and 3(37), respectively, of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") ("ERISA Plans"). The Company does not maintain or contribute, now or at any time previously, to a defined benefit plan, as defined in Section 3(35) of ERISA. No ERISA Plan (or any trust created thereunder) has engaged in a "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975 of the Code, which could subject the Company to any tax penalty on prohibited transactions and which has not adequately been corrected. Any ERISA Plan is in compliance with all reporting, disclosure and other requirements of the Code and ERISA as they relate to any such ERISA Plan. Determination letters have been received from the Internal Revenue Service with respect to each ERISA Plan which is intended to comply with Code Section 401(a), stating that such ERISA Plan and the attendant trust are qualified thereunder. The Company has never completely or partially withdrawn from a "multiemployer plan." (xviii) Neither the Company, nor any of its employees, directors, stockholders, partners, or affiliates (within the meaning of the Rules and Regulations) of any of the foregoing has taken or will take, directly or indirectly, any action designed to or which has constituted or which might be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or otherwise. (xix) None of the patents, patent applications, trademarks, service marks, service names, trade names and copyrights and none of the licenses and rights to the foregoing presently owned or held by the Company, are in dispute or are in any conflict with the right of any other person or entity. The Company (i) owns or has the right to use, free and clear of all liens, charges, claims, encumbrances, pledges, security interests, defects or other restrictions or equities of any kind whatsoever, all patents, patent applications, trademarks, service marks, service names, trade names and copyrights, technology and licenses and rights with respect to the foregoing, used in the conduct of its business as now conducted or proposed to be conducted without infringing upon or otherwise acting adversely to the right or claimed right of any person, corporation or other entity under or 1.0 - 10 with respect to any of the foregoing and (ii) is not obligated or under any liability whatsoever to make any payment by way of royalties, fees or otherwise to any owner or licensee of, or other claimant to, any patent, patent application, trademark, service mark, service names, trade name, copyright, know-how, technology or other intangible asset, with respect to the use thereof or in connection with the conduct of its business or otherwise. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental or other proceeding, domestic or foreign, pending or threatened (or circumstances that may give rise to the same) against the Company which challenges the exclusive rights of the Company and the Subsidiaries with respect to any trademarks, trade names, service marks, service names, copyrights, patents, patent applications or licenses or rights to the foregoing used in the conduct of its business, or which challenge the right of the Company and the Subsidiaries to use any technology presently used or contemplated to be used in the conduct of its business. (xx) The Company owns and has the unrestricted right to use all trade secrets, know-how (including all other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), inventions, technology, designs, processes, works of authorship, computer programs and technical data and information (collectively herein "intellectual property") that are material to the development, manufacture, operation and sale of all products and services sold or proposed to be sold by any of the Company, free and clear of and without violating any right, lien, or claim of others, including without limitation, former employers of its employees; provided, however, that the possibility exists that other persons or entities. (xxi) The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property stated in the Prospectus, to be owned or leased by it free and clear of all liens, charges, claims, encumbrances, pledges, security interests, defects, or other restrictions or equities of any kind whatsoever, other than those referred to in the Prospectus and liens for taxes not yet due and payable. (xxii) Pannel Kerr Forster, Certified Public Accountants, A Professional Corporation ("Pannel Kerr Forster"), whose report is filed with the Commission as a part of the Registration Statement, are independent certified public accountants as required by the Act and the Rules and Regulations. (xxiii) The Company has caused to be duly executed legally binding and enforceable agreements ("Lock-Up Agreement") pursuant to which all of the officers and directors of the Company, holders of Common Stock and holders of securities exchangeable or exercisable for or convertible into shares of Common Stock have agreed (i) not to, directly or indirectly, offer, sell, grant any option for the sale of, assign, transfer, pledge, hypothecate, 1.0 - 11 distribute or otherwise encumber or dispose of any shares of Common Stock or securities convertible into, exercisable or exchangeable for or evidencing any right to purchase or subscribe for any shares of Common Stock (either pursuant to Rule 144 of the Rules and Regulations or otherwise) or dispose of any beneficial interest therein for a period of not less than twelve (12) months following the effective date of the Registration Statement without the prior written consent of the Representative and the Company, and, (ii) for a period extending twelve (12) months following the effective date of the Registration Statement, that all sales of such securities issued by the Company shall be made through the Underwriter in accordance with its customary brokerage policies. In addition, the Company shall not sell or offer for sale any of its securities for a period of twelve (12) months from the effective date of the Registration Statement without the consent of the Representative except pursuant to options and warrants issued on the effective date of the Registration Statement. The Company will cause the Transfer Agent, as defined below, to mark an appropriate legend on the face of stock certificates representing all of such securities and to place "stop transfer" orders on the Company's stock ledgers. (xxiv) There are no claims, payments, issuances, arrangements or understandings, whether oral or written, for services in the nature of a finder's or origination fee with respect to the sale of the Securities hereunder or any other arrangements, agreements, understandings, payments or issuance with respect to the Company, or any of its or their respective officers, directors, stockholders, partners, employees or affiliates that may affect the Underwriters' compensation, as determined by the NASD. (xxv) The Common Stock and the Redeemable Warrants have been approved for quotation on the Over-the-Counter Electronic Bulletin Board maintained by the NASD. (xxvi) Neither the Company, nor any of its directors, officers, employees, agents, or any other persons acting on behalf of the Company, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency (domestic or foreign) or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist any of the Company in connection with any actual or proposed transaction) which (a) might subject the Company, or any other such person to any damage or penalty in any civil, criminal or governmental litigation or proceeding (domestic or foreign), (b) if not given in the past, might have had a materially adverse effect on the assets, business or operations of any of the Company, or (c) if not continued in the future, might adversely 1.0 - 12 affect the assets, business, operations or prospects of the Company. The Company's internal accounting controls are sufficient to cause the Company to comply with the Foreign Corrupt Practices Act of 1977, as amended. (xxvii) The Company confirms as of the date hereof that it is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of Doing Business with Cuba, and the Company further agrees that if it or any affiliate commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba after the date the Registration Statement becomes or has become effective with the Commission or with the Florida Department of Banking and Finance (the "Department"), whichever date is later, or if the information reported or incorporated by reference in the Prospectus, if any, concerning the Company's, or any affiliate's, business with Cuba or with any person of affiliate located in Cuba changes in any material way, the Company will provide the Department notice of such business or change, as appropriate, in a form acceptable to the Department. (xxviii) Except as set forth in the Prospectus, no officer, director or stockholder of any of the Company, or any "affiliate" or "associate" (as these terms are defined in Rule 405 promulgated under the Rules and Regulations) of any of the foregoing persons or entities has, either directly or indirectly, (i) an interest in any person or entity which (A) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by the Company, or (B) purchases from or sells or furnishes to the Company any goods or services, or (ii) a beneficial interest in any contract or agreement to which the Company is a party or by which it may be bound or affected. Except as set forth in the Prospectus under "Certain Transactions," there are no existing agreements, arrangements, understandings or transactions, or proposed agreements, arrangements, understandings or transactions, between or among the Company, and any officer, director, or Principal Stockholder (as such term is defined in the Prospectus) of the Company, or any partner, affiliate or associate of any of the foregoing persons or entities. (xxix) Any certificate signed by any officer of the Company, and delivered to the Representative or to Underwriters' Counsel (as defined herein) shall be deemed a representation and warranty by the Company to the Representative as to the matters covered thereby. (xxx) The minute book of the Company has been made available to the Representative and contain a complete summary of all meetings and actions of the directors, stockholders, audit committee, compensation committee and any other committee of the Board of Directors of the Company, since the time of its incorporation, and reflects all transactions referred to in such minutes accurately in all material respects. 1.0 - 13 (xxxi) Except and to the extent described in the Prospectus, no holders of any securities of the Company or of any options, warrants or other convertible or exchangeable securities of the Company have the right to include any securities issued by the Company in the Registration Statement or any registration statement to be filed by the Company or to require the Company to file a registration statement under the Act and no person or entity holds any anti-dilution rights with respect to any securities of the Company. (xxxii) The Company has entered into a warrant agreement, substantially in the form filed as Exhibit 1.3 to the Registration Statement (the "Warrant Agreement"), with Corporate Stock Transfer, in form and substance satisfactory to the Underwriter, with respect to the Redeemable Warrants and providing for the payment of warrant solicitation fees. The Warrant Agreement has been duly and validly authorized by the Company and, assuming due execution by the parties thereto other than the Company, constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and the application of equitable principles in any action, legal or equitable, and except as obligations to indemnify or contribute to losses may be limited by applicable law). (xxxiii) The Company is not, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus under the caption "Use of Proceeds" will not be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). (xxxiv) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparations of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorizations; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES AND REPRESENTATIVE'S WARRANTS. (a) On the basis of the covenants, representations, and warranties herein contained and subject to the terms and conditions herein set forth: 1.0 - 14 (i) The Company hereby engages you as its exclusive agent to solicit subscriptions for the Units in accordance with the terms of the Registration Statement, the Prospectus and this Agreement, and you agree to use your best efforts to procure such subscriptions. You may, however, discharge your responsibilities under this Agreement by acting as the Representative of several placement agents and by forming a group of securities dealers acting as additional placement agents, including you, to procure subscribers for the Units. Any agreement between you and a securities dealer pursuant to which such securities dealer becomes an Underwriter shall require such dealer to represent and warrant that it will conduct the Offering and sale of the Units in the manner set forth herein. The allocation of Units among you and the Underwriters shall be made by you. (ii) Subject to the terms and condition set forth herein, in consideration of your execution of this Agreement and performance of your obligations hereunder, the Company agrees that, at each Closing (as defined herein), you shall receive (i) selling commissions in an amount equal to 10% of the aggregate purchase price of the Units sold by you (or any Underwriter and (ii) a non-accountable expense allowance equal to 3% of the aggregate purchase price of the Units sold by you (or any Underwriter). The aggregate commissions and expense allowance payable in connection with the sale of Units will be disbursed to you, as provided herein and in Escrow Agreement; thereupon, you shall pay to each of the other Underwriters, if any, in such amount (which shall not exceed commissions and expense allowance in the amounts of 10% and 3%, respectively, of the aggregate purchase price of the Units placed by such Underwriter), at such times and upon such terms and conditions as shall have been agreed upon between you and such Underwriter, that portion of the aggregate commissions to which such Underwriter is entitled. (c) As additional consideration for the Representative's services rendered pursuant to this Agreement, on the final Closing Date ( as hereinafter defined), the Company will sell to you or your designees, at a price of $0.001 per warrant ("Warrant Price"), common stock purchase warrants ("Underwriter's Warrants") to purchase Units, under the following terms and conditions: (i) The aggregate number of Units subject to Underwriter's Warrants will be equal to 10% of the Units sold by you (or any Underwriter) pursuant to this Agreement. (ii) The Underwriter's Warrants may not be sold, hypothecated, exercised, assigned or transferred for a period of one year after the initial effective date of the Registration Statement, except to partners or officers of the Underwriters (including the Representative). (iii) Underwriter's Warrants shall be exercisable during the 4-year period commencing on the first anniversary of the final Closing Date ("Warrant Exercise Term"), at any time and from 1.0 - 15 time to time, in whole or in part, during the said Warrant Exercise Term, and shall grant to the holder the right to purchase one Unit for each Underwriter's Warrant at a price per Unit exercise price equal to 165% of the initial public offering price of the Units. (iv) The Underwriter's Warrants shall contain such other terms and conditions as are satisfactory, in form and substance to you Underwriter's Counsel, including without limitation, adjustment and exercise provisions. (d) Each subscriber for the Units must (i) complete and execute a subscription agreement (in the form included as an Exhibit to the Registration Statement ("Subscription Agreement") and any other documents which may be required by the Representative or the Company in connection with such subscription (collectively, "Subscription Documents") and (ii) tender payment in full for the Units subscribed for ("Subscription Payment"); checks representing Subscription Payments should be made payable to "LASIK America, Inc. Escrow Account"; the Representative shall deliver Subscription Payments received by you to the Escrow Agent, at Wells Fargo Bank, N.A., Los Angeles, California, by 12:00, noon, on the business day following such receipt by the Representative, together with a schedule setting forth the amount of each such Subscription Payment and the name, mailing address and state of residence of the subscriber. Concurrently with the delivery of each Subscription Payment to the Escrow Agent, the Representative shall forward to the Company executed originals of all related Subscription Documents, retaining copies of all such Subscription Documents for your records. (e) Within five (5) days following receipt by it of executed Subscription Documents, the Company shall determine to accept or reject each subscription and shall notify the Representative and the Escrow Agent orally (to be confirmed in writing). If the Company elects to reject a subscription, the related Subscription Payment shall, upon receipt by the Escrow Agent of oral notice (to be confirmed in writing) from the Company of such rejection, promptly be returned directly to the rejected subscriber by the Escrow Agent, without interest thereon or deduction therefrom. (f) Subject to the terms hereof and of the Escrow Agreement, the first disbursement of subscription proceeds (including disbursement of amounts due to the Representative hereunder) shall take place not less than two (2) business days following the date upon which cleared funds representing the first $100,000 in Subscription Payments have been received by the Escrow Agent under the terms of the Escrow Agreement; such initial disbursement is referred to herein as the "Initial Closing," and the date thereof is referred to as the "Initial Closing Date." Following the Initial Closing, subscription proceeds shall be disbursed from time to time as agreed among the Representative, the Company and the Escrow Agent; each such further disbursement of subscription proceeds is referred to herein as an "Additional Closing," and the date thereof 1.0 - 16 as an "Additional Closing Date." The Initial Closing and Additional Closings are sometimes referred to herein as a "Closing" or "Closings"; and the Initial Closing Date and Additional Closing Dates are sometimes referred to herein as a "Closing Date" or "Closing Dates." (g) Each Closing shall take place at the offices of the Escrow Agent, in Los Angeles, California, or, at the Representative's option, at such other place as may be agreed upon in writing with the Company. After the final Closing Date, the Representative will not be considered to have any continuing or future duty or obligation of any kind to the Company. 3. PUBLIC OFFERING OF THE UNITS. As soon after the Registration Statement becomes effective as the Representative deems advisable, the Underwriters shall make a public offering of the Firm Securities as the Representative may determine (other than to residents of or in any jurisdiction in which qualification of the Units is required and has not become effective) at the price and upon the other terms set forth in the Prospectus. The Representative may from time to time increase or decrease the public offering price after distribution of the Units has been completed to such extent as the Representative, in its discretion deems advisable. The Underwriters may enter into one of more agreements as the Underwriters, in each of their sole discretion, deem advisable with one or more broker-dealers who shall act as dealers in connection with such public offering. 4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and agrees with each of the Underwriters as follows: (a) The Company shall use its best efforts to cause the Registration Statement and any amendments thereto to become effective as promptly as practicable and will not at any time, whether before or after the effective date of the Registration Statement, file any amendment to the Registration Statement or supplement to the Prospectus or file any document under the Act or Exchange Act before termination of the offering of the Units by the Underwriters of which the Representative shall not previously have been advised and furnished with a copy, or to which the Representative shall have objected or which is not in compliance with the Act, the Exchange Act or the Rules and Regulations. (b) As soon as the Company is advised or obtains knowledge thereof, the Company will advise the Representative and confirm the notice in writing, (i) when the Registration Statement, as amended, becomes effective, if the provisions of Rule 430A promulgated under the Act will be relied upon, when the Prospectus has been filed in accordance with said Rule 430A and when any post-effective amendment to the Registration Statement becomes effective, (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding, suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto, or the institution of proceedings for that purpose, (iii) of the issuance by the Commission or by any state securities commission of any proceedings for the suspension of the qualification of any of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose, (iv) of the receipt of any comments from the Commission; and (v) 1.0 - 17 of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information. If the Commission or any state securities regulatory authority shall enter a stop order or suspend such qualification at any time, the Company will make every effort to obtain promptly the lifting of such order. (c) The Company shall file the Prospectus (in form and substance satisfactory to the Representative) or transmit the Prospectus by a means reasonably calculated to result in filing with the Commission pursuant to Rule 424(b)(1) (or, if applicable and if consented to by the Representative, pursuant to Rule 424(b)(4)) not later than the Commission's close of business on the earlier of (i) the second business day following the execution and delivery of this Agreement and (ii) the fifteenth business day after the effective date of the Registration Statement. (d) The Company will give the Representative notice of its intention to file or prepare any amendment to the Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use by the Representative in connection with the offering of the Securities which differs from the corresponding prospectus on file at the Commission at the time the Registration Statement becomes effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the Rules and Regulations), and will furnish the Representative with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such prospectus to which the Representative "Underwriters' Counsel"), shall object. (e) The Company shall endeavor in good faith, in cooperation with the Representative, at or prior to the time the Registration Statement becomes effective, to qualify the Securities for offering and sale under the securities laws of such jurisdictions as the Representative may designate to permit the continuance of sales and dealings therein for as long as may be necessary to complete the distribution, and shall make such applications, file such documents and furnish such information as may be required for such purpose; provided, however, the Company shall not be required to qualify as a foreign corporation or file a general or limited consent to service of process in any such jurisdiction. In each jurisdiction where such qualification shall be effected, the Company will, unless the Representative agrees that such action is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or reports at such times as are or may reasonably be required by the laws of such jurisdiction to continue such qualification. (f) During the time when a prospectus is required to be delivered under the Act, the Company shall use all reasonable efforts to comply with all requirements imposed upon it by the Act and the Exchange Act, as now and hereafter amended and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Prospectus, or any amendments or supplements thereto. If at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or Underwriters' Counsel, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact 1.0 - 18 required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Company will notify the Representative promptly and prepare and file with the Commission an appropriate amendment or supplement in accordance with Section 10 of the Act, each such amendment or supplement to be satisfactory to Underwriters' Counsel, and the Company will furnish to the Representative copies of such amendment or supplement as soon as available and in such quantities as the Representative may request. (g) As soon as practicable, but in any event not later than 45 days after the end of the 12-month period beginning on the day after the end of the fiscal quarter of the Company during which the effective date of the Registration Statement occurs (90 days in the event that the end of such fiscal quarter is the end of the Company's fiscal year), the Company shall make generally available to its security holders, in the manner specified in Rule 158(b) of the Rules and Regulations, and to the Representative, an earnings statement which will be in the detail required by, and will otherwise comply with, the provisions of Section 11(a) of the Act and Rule 158(a) of the Rules and Regulations, which statement need not be audited unless required by the Act, covering a period of at least twelve (12) consecutive months after the effective date of the Registration Statement. (h) During a period of seven (7) years after the date hereof, the Company will furnish to its stockholders, as soon as practicable, annual reports (including financial statements audited by independent public accountants) and unaudited quarterly reports of earnings, and will deliver to the Representative: (i) concurrently with furnishing such quarterly reports to its stockholders, statements of income of the Company for each quarter in the form furnished to the Company's stockholders and certified by the Company's principal financial or accounting officer; (ii) concurrently with furnishing such annual reports to its stockholders, a balance sheet of the Company as at the end of the preceding fiscal year, together with statements of operations, stockholders' equity, and cash flows of the Company for such fiscal year, accompanied by a copy of the certificate thereon of independent certified public accountants; (iii) as soon as they are available, copies of all reports (financial or other) mailed to stockholders; (iv) as soon as they are available, copies of all reports and financial statements furnished to or filed with the Commission, the NASD or any securities exchange; (v) every press release and every material news item or article of interest to the financial community in respect of the Company, or its affairs which was released or prepared by or on behalf of the Company; and 1.0 - 19 (vi) any additional information of a public nature concerning the Company, or its businesses which the Representative may request. (vii) During such seven-year period, if the Company has an active subsidiary, the foregoing financial statements will be on a consolidated basis to the extent that the accounts of the Company and its subsidiary(ies) are consolidated, and will be accompanied by similar financial statements for any significant subsidiary which is not so consolidated. (i) The Company will maintain a Transfer Agent and Warrant Agent ("Transfer Agent") and, if necessary under the jurisdiction of incorporation of the Company, a Registrar (which may be the same entity as the Transfer Agent) for its Common Stock and Redeemable Warrants. (j) The Company will furnish to the Representative or on Representative's order, without charge, at such place as the Representative may designate, copies of each Preliminary Prospectus, the Registration Statement and any pre-effective or post-effective amendments thereto (two of which copies will be signed and will include all financial statements and exhibits), the Prospectus, and all amendments and supplements thereto, including any prospectus prepared after the effective date of the Registration Statement, in each case as soon as available and in such quantities as the Representative may request. (k) On or before the effective date of the Registration Statement, the Company shall provide the Underwriter with originally-executed copies of duly executed, legally binding and enforceable Lock-Up Agreements which are in form and substance satisfactory to the Underwriter. On or before the Closing Date, the Company shall deliver instructions to its transfer agent authorizing such transfer agent to place appropriate legends on the certificates representing the securities of the Company subject to the Lock-Up Agreements and to place appropriate stop transfer orders on the Company's ledgers. (l) The Company agrees that, for a period of twelve (12) months commencing on the effective date of the Registration Statement, and except as contemplated by this Agreement, it and its future Subsidiaries will not, without the prior written consent of the Underwriter issue, sell, contract or offer to sell, grant an option for the purchase or sale of, assign, transfer, pledge, distribute or otherwise dispose of, directly or indirectly, any shares of Common Stock or any option, right or warrant with respect to any shares of Common Stock or any type of capital stock having voting or dividend rights on a parity with or superior to the Common Stock, except pursuant to stock options or warrants issued on the date hereof, for cash at less than the greater of the initial public offering price of shares of Common Stock or the then market value of such shares. (m) Neither the Company, nor any of its or their officers, directors, stockholders, nor any of their respective affiliates (within the meaning of the Rules and Regulations) will take, directly or indirectly, any action designed to, or which might in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company. 1.0 - 20 (n) The Company shall apply the net proceeds from the sale of the Securities in the manner, and subject to the conditions, set forth under "Use of Proceeds" in the Prospectus. Except as described in the Prospectus, no portion of the net proceeds will be used, directly or indirectly, to acquire any securities issued by the Company. (o) The Company shall timely file all such reports, forms or other documents as may be required from time to time, under the Act, the Exchange Act, and the Rules and Regulations, and all such reports, forms and documents filed will comply as to form and substance with the applicable requirements under the Act, the Exchange Act, and the Rules and Regulations. (p) The Company shall furnish to the Representative as early as practicable prior to each of the date hereof, the Closing Date, but no later than two (2) full business days prior thereto, a copy of the latest available unaudited interim financial statements of the Company (which in no event shall be as of a date more than thirty (30) days prior to the date of the Registration Statement) which have been read by the Company's independent public accountants, as stated in its letter to be furnished pursuant to Section 6(j) hereof. (q) The Company shall cause the Common Stock and the Redeemable Warrants to be quoted on the Over-the-Counter Electronic Bulletin Board, use its best efforts to maintain the listing of the Units, if the securities underlying the Units are not separately tradable, the Common Stock and the Redeemable Warrants to the extent outstanding. (r) For a period of five (5) years from the Closing Date, the Company shall furnish to the Representative at the Representative's request and at the Company's sole expense, (i) daily consolidated transfer sheets relating to the Units, the Common Stock and the Redeemable Warrants (ii) the list of holders of all of the Company's securities and (iii) a Blue Sky "Trading Survey" for secondary sales of the Company's securities prepared by counsel to the Company. (s) As soon as practicable, but in no event more than thirty (30) days from the effective date of the Registration Statement, the Company agrees to take all necessary and appropriate actions to be included in Standard and Poor's Corporation Descriptions and Moody's OTC Manual and to continue such inclusion for a period of not less than seven (7) years. (t) Until the completion of the distribution of the Firm Securities, the Company shall not without the prior written consent of the Representative and Underwriters' Counsel, issue, directly or indirectly, any press release or other communication or hold any press conference with respect to the Company or its activities or the offering contemplated hereby, other than trade releases issued in the ordinary course of the Company's business consistent with past practices with respect to the Company's operations. (u) Commencing one year from the date hereof, to pay the Underwriter a warrant solicitation fee equal to five percent (5%) of the exercise price of the Redeemable Warrants, payable on the date of the exercise thereof on terms provided in the Public Warrant Agreement. The Company will not solicit the exercise of the Redeemable Warrants through any solicitation agent other than the Underwriter. The Underwriter will not be entitled to any warrant 1.0 - 21 solicitation fee unless the Underwriter provides bona fide services in connection with any warrant solicitation and the investor designates, in writing, that the Underwriter is entitled to such fee. (v) For a period equal to the lesser of (i) three (3) years from the date hereof, and (ii) the sale to the public of the Representative's Securities, the Company will not take any action or actions which may prevent or disqualify the Company's use of Form SB-2 or Form S-1 (or other appropriate form) for the registration under the Act of the Representative's Securities. (w) For a period of five (5) years after the effective date of the Registration Statement, the Representative shall have the right to designate for election one (1) individual to the Company's Board of Directors (the "Board"). Such person shall be mutually acceptable to the Company and the Representative. In the event the Representative elects not to exercise such right, then it may designate one (1) individual to attend meetings of the Company's Board. The Company shall notify the Representative of each meeting of the Board and the Company shall send to such individual all notices and other correspondence and communications sent by the Company to members of the Board. Such individual shall be reimbursed for all out-of-pocket expenses incurred in connection with his attendance of meetings of the Board. (x) For a period of twenty-four (24) months after the effective date of the Registration Statement, the Company shall not restate, amend or alter any term of any written employment, consulting or similar agreement entered into between the Company and any officer, director or key employee as of the effective date of the Registration Statement in a manner which is more favorable to such officer, director or key employee, without the prior written consent of the Representative. (y) For a period of three (3) years after the effective date of the Registration Statement, the Company, any subsidiaries and any affiliates hereby grant a thirty-day (30) right of first refusal for any sale of securities to be made by the Company, any affiliates and any subsidiaries. (aa) The Company will use its best efforts to maintain the effectiveness of the Registration Statement for a period of five years after the date hereof. 5. PAYMENT OF EXPENSES. (a) The Company hereby agrees to pay on the Closing Date, all expenses and fees (other than fees of Underwriters' Counsel, except as provided in (iv) below) incident to the performance of the obligations of the Company under this Agreement, the Representative's Warrant Agreement and the Warrant Agreement, including, without limitation, (i) the fees and expenses of accountants and counsel for the Company, (ii) all costs and expenses incurred in connection with the preparation, duplication, printing, (including mailing and handling charges) filing, delivery and mailing (including the payment of postage, overnight delivery or courier charges with respect thereto) of the Registration Statement and the Prospectus and any amendments and supplements thereto and the printing, mailing (including the payment of postage with respect thereto) and delivery of this Agreement, the Representative's Warrant agreement, 1.0 - 22 the Warrant Agreement, agreements with selected dealers, and related documents, including the cost of all copies thereof and of the Preliminary Prospectuses and of the Prospectus and any amendments thereof or supplements thereto supplied to the Underwriters and such dealers as the Underwriters may request, in quantities as hereinabove stated, (iii) the printing, engraving, issuance and delivery of the Securities including, but not limited to, (x) the purchase by the Underwriters of the Firm Securities and the Option Securities and the purchase by the Representative of the Representative's Warrants from the Company, (y) the consummation by the Company of any of its obligations under this Agreement and the Representative's Warrant Agreement, and (z) resale of the Firm Securities and the Option Securities by the Underwriters in connection with the distribution contemplated hereby, (iv) the qualification of the Securities under state or foreign securities or "Blue Sky" laws and determination of the status of such securities under legal investment laws, including the costs of printing and mailing the "Preliminary Blue Sky Memorandum," the "Supplemental Blue Sky Memorandum" and "Legal Investments Survey," if any, and disbursements and fees of counsel in connection therewith, (v) advertising costs and expenses, including but not limited to costs and expenses in connection with the "road show", information meetings and presentations, bound volumes and prospectus memorabilia and "tomb-stone" advertisement expenses, (vi) costs and expenses in connection with due diligence investigations, including but not limited to the fees of any independent counsel or consultant retained, (vii) fees and expenses of the transfer agent and registrar, (viii) applications for assignments of a rating of the Securities by qualified rating agencies, (ix) the fees payable to the Commission and the NASD, and (x) the fees and expenses incurred in connection with the quotation of the Securities on the Over-the-Counter Electronic Bulletin Board and any other exchange. (b) If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 6 or Section 11, (i) the Company shall reimburse and indemnify the Representative for all of its actual out-of-pocket expenses, including the fees and disbursements of Underwriters' Counsel, less any amounts already paid pursuant to Section 5(c) hereof. (c) The Company further agrees that, in addition to the expenses payable pursuant to subsection (a) of this Section 5, it will pay to the Representative on the Closing Date by certified or bank cashier's check or, at the election of the Representative, by deduction from the proceeds of the offering contemplated herein a non-accountable expense allowance equal to three percent (3%) of the gross proceeds received by the Company from the sale of the Firm Securities. 6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters hereunder shall be subject to the continuing accuracy of the representations and warranties of the Company herein as of the date hereof and as of the Closing Date with respect to the Company as if it had been made on and as of the Closing Date; the accuracy on and as of the Closing Date, if any, of the statements of the officers of the Company made pursuant to the provisions hereof; and the performance by the Company on and as of the Closing Date, of its covenants and obligations hereunder and to the following further conditions: (a) The Registration Statement shall have become effective not later than 12:00 Noon, New York time, on the date of this Agreement or such 1.0 - 23 later date and time as shall be consented to in writing by the Representative, and, at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of Underwriters' Counsel. If the Company has elected to rely upon Rule 430A of the Rules and Regulations, the price of the Shares and any price-related information previously omitted from the effective Registration Statement pursuant to such Rule 430A shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the Rules and Regulations within the prescribed time period, and prior to Closing Date the Company shall have provided evidence satisfactory to the Representative of such timely filing, or a post-effective amendment providing such information shall have been promptly filed and declared effective in accordance with the requirements of Rule 430A of the Rules and Regulations. (b) The Representative shall not have advised the Company that the Registration Statement, or any amendment thereto, contains an untrue statement of fact which, in the Representative's opinion, is material, or omits to state a fact which, in the Representative's opinion, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the Prospectus, or any supplement thereto, contains an untrue statement of fact which, in the Representative's opinion, is material, or omits to state a fact which, in the Representative's opinion, is material and is required to be stated therein or is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (c) On or prior to the Closing Date, the Representative shall have received from Underwriters' Counsel, such opinion or opinions with respect to the organization of the Company, the validity of the Securities, the Representative's Warrants, the Registration Statement, the Prospectus and other related matters as the Representative may request and Underwriters' Counsel shall have received such papers and information as they request to enable them to pass upon such matters. (d) At Closing Date, the Underwriter shall have received the favorable opinion of Gregory Bartko, Esq., counsel to the Company, dated the Closing Date, addressed to the Underwriters and in form and substance satisfactory to Underwriters' Counsel, to the effect that: (i) the Company (A) has been duly organized and is a validly existing corporation in good standing under the laws of its jurisdiction of incorporation, (B) is duly qualified and licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing, and (C) has all requisite power and authority (corporate and other) and has obtained any and all necessary authorizations, approvals, orders, licenses, certificates, franchises and permits of and from all governmental or regulatory officials and bodies (including, without limitation, those having jurisdiction over environmental or similar matters), to own or lease its properties and conduct its business as described in the Prospectus; each of the Company and the Subsidiaries is and has 1.0 - 24 been doing business in compliance in with all such authorizations, approvals, orders, licenses, certificates and permits obtained by it from governmental or regulatory officials and agencies and all federal, state, local and foreign laws, rules and regulations to which it is subject; and, none of the Company nor the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such authorization, approval, order, license, certificate, franchise or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, prospects, stockholders' equity, value, operations, properties, business or results of operations of the Company and the Subsidiaries taken as a whole. The disclosure in the Registration Statement concerning the effects of federal, state, local and foreign laws, rules and regulations on each of the Company's and the Subsidiaries businesses as currently conducted and as contemplated is correct in all respects and does not omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (ii) all of the outstanding shares of the Company's common stock have been validly issued, are fully paid and non-assessable, were not issued in violation of any preemptive rights, and except as set forth in the Prospectus, are owned free and clear of any liens, charges, claims, encumbrances, pledges, security interests, defects or other restrictions or equities of any kind whatsoever; (iii) except as described in the Prospectus, the Company does not own an interest in any other corporation, partnership, joint venture, trust or other business entity; (iv) the Company has a duly authorized, issued and outstanding capitalization as set forth in the Prospectus, and any amendment or supplement thereto, under "Capitalization" and "Description of Securities" and except as set forth in the Prospectus, the Company is not a party to or bound by any instrument, agreement or other arrangement providing for it to issue any capital stock, rights, warrants, options or other securities, except for this Agreement, the Representative's Warrant Agreement and the Warrant Agreement and as described in the Prospectus. The Securities and all other securities issued or issuable by the Company conform, or when issued and paid for, will conform, in all respects to the descriptions thereof contained in the Registration Statement and the Prospectus. All issued and outstanding securities of the Company have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of 1.0 - 25 any security of the Company or any similar contractual right granted by the Company. The Securities to be sold by the Company hereunder and under the Representative's Warrant Agreement and the Warrant Agreement are not and will not be subject to any preemptive or other similar rights of any stockholder, have been duly authorized and, when issued, paid for and delivered in accordance with the terms hereof and thereof, will be validly issued, fully paid and non-assessable and conform to the descriptions thereof contained in the Prospectus; the holders thereof will not be subject to any liability solely as such holders; all corporate action required to be taken for the authorization, issue and sale of the Securities has been duly and validly taken; and the certificates representing the Securities are in due and proper form. The Redeemable Warrants and Representative's Warrants constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof and payment therefore, the number and type of securities of the Company called for thereby. Upon the issuance and delivery pursuant to this Agreement, the Representative's Warrant Agreement and the Warrant Agreement of the Securities to be sold by the Company hereunder and thereunder, the Underwriters will acquire good and marketable title to such Securities, free and clear of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever. No transfer tax is payable by or on behalf of the Underwriters in connection with (A) the issuance by the Company of the Securities, (B) the purchase by the Underwriters of the Securities from the Company, (C) the consummation by the Company of any of its obligations under this Agreement, the Representative's Warrant Agreement or the Warrant Agreement, or (D) resales of the Securities in connection with the distribution contemplated hereby; (v) the Registration Statement is effective under the Act, and, if applicable, filing of all pricing information has been timely made in the appropriate form under Rule 430A, and no stop order suspending the use of the Preliminary Prospectus, the Registration Statement or the Prospectus or any part of any thereof or suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending, threatened or contemplated under the Act; (vi) each of the Preliminary Prospectus, the Registration Statement, and the Prospectus and any amendments or supplements thereto (other than the financial statements and schedules and other financial and statistical data included therein, as to which no opinion need be rendered) comply as to form in all material respects with the requirements of the Act and the Rules and Regulations; (vii) (A) there are no agreements, contracts or other documents required by the Act to be described in the Registration Statement (or required to be filed under the Exchange Act if upon such filing they would be incorporated, in whole or in part, by 1.0 - 26 reference therein) and the Prospectus and filed as exhibits to the Registration Statement other than those described in the Registration Statement and the Prospectus and filed as exhibits thereto, and the exhibits which have been filed are correct copies of the documents of which they purport to be copies; (B) the descriptions in the Registration Statement and the Prospectus and any supplement or amendment thereto of agreements, contracts and other documents to which the Company is a party or by which it is bound are accurate and fairly represent the information required to be shown by Form SB-2; (C) there is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding (including, without limitation, those pertaining to environmental or similar matters), domestic or foreign, pending or threatened against (or circumstances that may give rise to the same) or involving the properties or business of, any of the Company which (I) is required to be disclosed in the Registration Statement which is not so disclosed (and such proceedings as are summarized in the Registration Statement are accurately summarized in all respects), or (II) questions the validity of the capital stock of the Company or of this Agreement, the Representative's Warrant Agreement or the Warrant Agreement or of any action taken or to be taken by the Company pursuant to or in connection with any of the foregoing; (D) no statute or regulation or legal or governmental proceeding required to be described in the Prospectus is not described as required; and (E) there is no action, suit or proceeding pending or threatened against or affecting any of the Company or the Subsidiaries before any court, arbitrator or governmental body, agency or official (or any basis thereof known to such counsel) in which there is a reasonable possibility of a decision which may result in a material adverse change in the condition, financial or otherwise, or the earnings, prospects, stockholders' equity, value, operation, properties, business or results of operations of any of the Company or the Subsidiaries, which could adversely affect the present or prospective ability of the Company to perform its obligations under this Agreement, the Representative's Warrant Agreement or the Warrant Agreement or which in any manner draws into question the validity or enforceability of this Agreement, the Representative's Warrant Agreement or the Warrant Agreement; (viii) the Company has full legal right, power and authority to enter into each of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement and to consummate the transactions provided for herein and therein; and each of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement has been duly authorized, executed and delivered by the Company. Each of the Representative's Warrant Agreement and the Warrant Agreement certain provisions of this Agreement assuming due authorization, execution and delivery by each other party thereto, constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, 1.0 - 27 insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and the application of equitable principles in any action, legal or equitable, and except as obligations to indemnify or contribute to losses may be limited by applicable law). None of the Company's execution or delivery of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement, its performance hereunder and thereunder, its consummation of the transactions contemplated herein and therein, or the conduct of its business as described in the Registration Statement and the Prospectus and any amendments or supplements thereto, conflicts with or will conflict with or results or will result in any breach or violation of any of the terms or provisions of, or constitutes or will constitute a default under, or result in the creation or imposition of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever upon, any property or assets (tangible or intangible) of the Company or the Subsidiaries pursuant to the terms of (A) the certificate of incorporation or bylaws of the Company, (B) any license, contract, indenture, mortgage, lease, deed of trust, voting trust agreement, stockholders' agreement, note, loan or credit agreement or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which any of the Company or the Subsidiaries is a party or by which it is or may be bound or to which its properties or assets (tangible or intangible) are or may be subject, (C) any statute applicable to any of the Company or Subsidiaries or (D) any judgment, decree, order, rule or regulation applicable to the Company of any arbitrator, court, regulatory body or administrative agency or other governmental agency or body (including, without limitation, those having jurisdiction over environmental or similar matters), domestic or foreign, having jurisdiction over any of the Company or the Subsidiaries or any of their activities or properties; (ix) no consent, approval, authorization or order of, and no filing with, any arbitrator, court, regulatory body, administrative agency, government agency or other body, domestic or foreign (other than such as may be required under "blue sky" laws and the rules of the NASD, as to which no opinion need be rendered), is required in connection with the issuance of the Securities pursuant to the Prospectus, the Registration Statement, this Agreement, the Representative's Warrant Agreement and the Warrant Agreement, or the performance of this Agreement, the Representative's Warrant Agreement and the Warrant Agreement and the transactions contemplated hereby and thereby; (x) the properties and business of each of the Company conform to the description thereof contained in the Registration Statement and the Prospectus; and each of the Company and the Subsidiaries has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal 1.0 - 28 property stated in the Prospectus to be owned or leased by it, in each case free and clear of all liens, charges, claims, encumbrances, pledges, security interests, defects or other restrictions or equities of any kind whatsoever, other than those referred to in the Prospectus and liens for taxes not yet due and payable; (xi) the Company is not in breach of, or in default under, any term or provision of any license, contract, indenture, mortgage, lease, deed of trust, voting trust agreement, stockholders' agreement, note, loan or credit agreement or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which any of the Company is a party or by which it is or may be bound or to which its property or assets (tangible or intangible) are or may be subject; and the Company is not in violation of any term or provision of (A) its certificate of incorporation or by-laws, (B) any authorization, approval, order, license, certificate, franchise or permit of any governmental or regulatory official or body, or (C) any judgment, decree, order, statute, rule or regulation to which it is subject; (xii) the Common Stock and the Redeemable Warrants have been accepted for quotation on the Over-the-Counter Electronic Bulletin Board maintained by the NASD; (xiii) the statements in the Prospectus under "Prospectus Summary," "Risk Factors," "Business," "Management," "Principal Stockholders," "Certain Transactions," "Shares Eligible For Future Sale," and "Description of Securities" have been reviewed by such counsel, and insofar as they refer to statements of law, descriptions of statutes, licenses, rules or regulations or legal conclusions, are correct in all material respects; (xiv) the persons listed under the caption "Principal Stockholders" in the Prospectus are the respective "beneficial owners" (as such phrase is defined in Rule 13d-3 under the Exchange Act) of the securities set forth opposite their respective names thereunder as and to the extent set forth therein; (xv) The Company owns or possesses, free and clear of all liens or encumbrances and right thereto or therein by third parties, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, tradenames, patents, patent applications and licenses necessary to conduct its business (including without limitation any such licenses or rights described in the Prospectus as being owned or possessed by the Company) and there is no claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications and licenses used in the conduct of the Company's businesses (including, without 1.0 - 29 limitation, any such licenses or rights described in the Prospectus as being owned or possessed by any of the Company); (xvi) neither the Company, nor any of its directors, officers, stockholders, employees, agents or any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or any official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject any of the Company or any such person to any damage or penalty in any civil, criminal or governmental litigation or proceeding (domestic or foreign), (B) if not given in the past, might have had material and adverse effect on the condition, financial or otherwise, or the earnings, prospects, stockholders' equity, value, operations, properties, business or results of operations of the Company taken as a whole, or (C) if not continued in the future, might materially and adversely affect the condition, financial or otherwise, or the earnings, prospects, stockholders' equity, value, operations, properties, business or results of operations of the Company taken as a whole; (xvii) there are no claims, payments, issuances, arrangements or understandings, whether oral or written, for services in the nature of a finder's or origination fee with respect to the sale of the Securities hereunder or financial consulting arrangement or any other arrangements, agreements, understandings, payments or issuances that may affect the Underwriters' compensation, as determined by the NASD; (xviii) the minute books of the Company contain a complete summary of all meetings and actions of the directors and stockholders of each of the Company since the time of its incorporation and reflect all transactions referred to in such minutes accurately in all material respects; (xix) no person, corporation, trust, partnership, association or other entity has the right to include and/or register any securities of the Company in the Registration Statement, require the Company to file any registration statement or, if filed, to include any security in such registration statement; (xx) assuming due authorization, execution and delivery by the parties thereto, the Lock-Up Agreements are legal, valid and binding obligations of the parties thereto, enforceable against such parties and any subsequent holder of the securities subject thereto in accordance with their terms; 1.0 - 30 (xxi) except as described in the Prospectus, the Company does not (A) maintain, sponsor or contribute to any ERISA Plans, (B) maintain or contribute, now or at any time previously, to a defined benefit plan, as defined in Section 3(35) of ERISA, and (C) has never completely or partially withdrawn from a "multiemployer plan"; and (xxii) neither the Company nor or any of its affiliates shall be subject to the requirements of or shall be deemed an "Investment Company," pursuant to and as defined under, respectively, the Investment Company Act. Such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company and representatives of the independent public accountants for the Company at which conferences such counsel made inquiries of such officers, representatives and accountants and discussed the contents of the Preliminary Prospectus, the Registration Statement, the Prospectus, and related matters were discussed and, although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Preliminary Prospectus, the Registration Statement and Prospectus, on the basis of the foregoing, no facts have come to the attention of such counsel which lead them to believe that either the Registration Statement or any amendment thereto, at the time such Registration Statement or amendment became effective or the Preliminary Prospectus or Prospectus or amendment or supplement thereto as of the date of such opinion contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading (it being understood that such counsel need express no opinion with respect to the financial statements and schedules and other financial and statistical data included in the Preliminary Prospectus, the Registration Statement or Prospectus), or any supplements or amendments thereto. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991), or any comparable State bar accord. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance satisfactory to Underwriters' Counsel) of other counsel acceptable to Underwriters' Counsel, familiar with the applicable laws; (B) as to matters of fact, to the extent they deem proper, on certificates and written statements of responsible officers of each of the Company and the Subsidiaries, and certificates or other written statements of officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company and the Subsidiaries, provided that copies of any such statements or certificates shall be delivered to Underwriters' Counsel if requested. The opinion shall also state that the Underwriters' Counsel is entitled to rely thereon. The opinion of such 1.0 - 31 counsel for the Company and the Subsidiaries shall state that the opinion of any such other counsel is in form satisfactory to such counsel and that the Underwriters and they are justified in relying thereon. (e) On or prior to the Closing Date, Underwriters' Counsel shall have been furnished such documents, certificates and opinions as they may reasonably require for the purpose of enabling them to review or pass upon the matters referred to in subsection (c) of this Section 6, or in order to evidence the accuracy, completeness or satisfaction of any of the representations, warranties or conditions of the Company, or herein contained. (f) Prior to the Closing Date, (i) there shall have been no material adverse change or development involving a prospective adverse change in the condition, financial or otherwise, or the earnings, stockholders' equity, value, operations, properties, prospects, business or results of operations of the Company, whether or not in the ordinary course of business, from the latest dates as of which such matters are set forth in the Registration Statement and the Prospectus; (ii) there shall have been no transaction, not in the ordinary course of business, entered into by the Company from the latest date as of which the financial condition of the Company is set forth in the Registration Statement and the Prospectus; (iii) the Company shall be in default under any provision of any instrument relating to any outstanding indebtedness; (iv) none of the Company nor the Subsidiaries shall have issued any securities (other than the Securities) or declared or paid any dividend or made any distribution in respect of its capital stock of any class and there shall not have been any change in the capital stock, debt (long or short term) or liabilities or obligations of the Company (contingent or otherwise) from the latest dates as of which such matters are set forth in the Registration Statement and the Prospectus; (v) no material amount of the assets of the Company shall have been pledged or mortgaged, except as set forth in the Registration Statement and the Prospectus; (vi) no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental or other proceeding, domestic or foreign, shall be pending or threatened (or circumstances giving rise to same) against the Company affecting any of its properties or business before or by any court or federal, state or foreign commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially and adversely affect the condition, financial or otherwise, or the earnings, stockholders' equity, value, operations, properties, business or results of operations of the any of the Company or the Subsidiaries, except as set forth in the Registration Statement and Prospectus; and (vii) no stop order shall have been issued under the Act with respect to the Registration Statement and no proceedings therefore shall have been initiated, threatened or contemplated by the Commission. (g) At the Closing Date, if any, the Underwriters shall have received a certificate of the Company signed by the principal executive officer and by the chief financial or chief accounting officer of the Company, dated the Closing Date, to the effect that each of such persons has carefully examined the Registration Statement, the Prospectus and this Agreement, and that: (i) The representations and warranties of the Company in this Agreement are true and correct, as if made on and as of the Closing Date, and the Company has complied with all agreements and covenants and satisfied all conditions contained in this Agreement on its part to be performed or satisfied at or prior to the Closing Date; 1.0 - 32 (ii) No stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued, and no proceedings for that purpose have been instituted or are pending or, to the best of each of such person's knowledge, after due inquiry are contemplated or threatened under the Act; (iii) The Registration Statement and the Prospectus and, if any, each amendment and each supplement thereto, contain all statements and information required to be included therein, and none of the Registration Statement, the Prospectus nor any amendment or supplement thereto includes 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 and neither the Preliminary Prospectus or any supplement thereto included any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (iv) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (a) the Company has not incurred up to and including the Closing Date, other than in the ordinary course of its business, any material liabilities or obligations, direct or contingent; (b) the Company has not paid or declared any dividends or other distributions on its capital stock; (c) the Company has not entered into any transactions not in the ordinary course of business; (d) there has not been any change in the capital stock of any of the Company or any material change in the debt (long or short-term) of any of the Company; (e) the Company has not sustained any material loss or damage to its property or assets, whether or not insured; (g) there is no litigation which is pending or threatened (or circumstances giving rise to same) against the Company, or any affiliated party of any of the foregoing which is required to be set forth in an amended or supplemented Prospectus which has not been set forth; and (h) there has occurred no event required to be set forth in an amended or supplemented Prospectus which has not been set forth. References to the Registration Statement and the Prospectus in this subsection (g) are to such documents as amended and supplemented at the date of such certificate. (h) By the Closing Date, the Underwriters will have received clearance from the NASD as to the amount of compensation allowable or payable to the Underwriters, as described in the Registration Statement. (i) At the time this Agreement is executed, the Underwriters shall have received a letter, dated such date, addressed to the Underwriters in form and substance satisfactory (including the non-material nature of the changes or decreases, if any, referred to in clause (iii) below) in all respects to the Underwriters and Underwriters' Counsel, from Pannel Kerr Forster, Certified Public Accountants, A Professional Corporation; 1.0 - 33 (i) confirming that they are independent certified public accountants with respect to the Company and the Subsidiaries within the meaning of the Act and the applicable Rules and Regulations; (ii) stating that it is their opinion that the financial statements and supporting schedules of the Company included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and the Rules and Regulations thereunder and that the Underwriters may rely upon the opinion of Pannel Kerr Forster, Certified Public Accountants, A Professional Corporation, with respect to such financial statements and supporting schedules included in the Registration Statement; (iii) stating that, on the basis of a limited review which included a reading of the latest available unaudited interim financial statements of the Company, a reading of the latest available minutes of the stockholders and board of directors and the various committees of the boards of directors each the Company, consultations with officers and other employees each of the Company responsible for financial and accounting matters and other specified procedures and inquiries, nothing has come to their attention which would lead them to believe that (A) the pro forma and as-adjusted financial information contained in the Registration Statement and Prospectus does not comply as to form in all material respects with the applicable accounting requirements of the Act and the Rules and Regulations or is not fairly presented in conformity with generally accepted accounting principles applied on a basis consistent with that of the audited financial statements of the Company or the unaudited pro forma or as-adjusted financial information included in the Registration Statement, (B) the unaudited financial statements and supporting schedules of the Company and the Subsidiaries included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Act and the Rules and Regulations or are not fairly presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements of the Company included in the Registration Statement, or (C) at a specified date not more than five (5) days prior to the effective date of the Registration Statement, there has been any change in the capital stock of the Company, any change in the long-term debt of the Company, or any decrease in the stockholders' equity of the Company or any decrease in the net current assets or net assets of the Company as compared with amounts shown in the July 31, 2001 balance sheets included in the Registration Statement, other than as set forth in or contemplated by the Registration Statement, or, if there was any change or decrease, setting forth the amount of such change or decrease, and (D) during the period from July 31, 2001 to a specified date not more than five (5) days prior to the effective date of the Registration Statement, there was any decrease in net revenues or net earnings of the Company or increase in net 1.0 - 34 earnings per common share of the Company, other than as set forth in or contemplated by the Registration Statement, or, if there was any such decrease, setting forth the amount of such decrease; (iv) setting forth, at a date not later than five (5) days prior to the effective date of the Registration Statement, the amount of liabilities of the Company (including a break-down of commercial paper and notes payable to banks); (v) stating that they have compared specific dollar amounts, numbers of shares, percentages of revenues and earnings, statements and other financial information pertaining to the Company set forth in the Prospectus in each case to the extent that such amounts, numbers, percentages, statements and information may be derived from the general accounting records, including work sheets, of the Company and excluding any questions requiring an interpretation by legal counsel, with the results obtained from the application of specified readings, inquiries and other appropriate procedures (which procedures do not constitute an examination in accordance with generally accepted auditing standards) set forth in the letter and found them to be in agreement; and (vi) statements as to such other matters incident to the transaction contemplated hereby as the Underwriters may request. (j) At the Closing Date, the Underwriters shall have received from Pannel Kerr Forster, Certified Public Accountants, A Professional Corporation, a letter, dated as of the Closing Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to SUBSECTION (j) of this Section hereof except that the specified date referred to shall be a date not more than five days prior to the Closing Date or the Option Closing Date, as the case may be, and, if the Company has elected to rely on Rule 430A of the Rules and Regulations, to the further effect that they have carried out procedures as specified in clause (v) of SUBSECTION (j) of this Section with respect to certain amounts, percentages and financial information as specified by the Underwriters and deemed to be a part of the Registration Statement pursuant to Rule 430A(b) and have found such amounts, percentages and financial information to be in agreement with the records specified in such clause (v). (k) The Company shall have delivered to the Representative a letter from Pannel Kerr Forster addressed to the Company stating that they have not during the immediately preceding two year period brought to the attention of the Company's management any "weakness" as defined in Statement of Auditing Standards No. 60 "Communication of Internal Control Structure Related Matters Noted in an Audit," in any of the Company's internal controls. (l) On the Closing Date, there shall be duly tendered to the Representative the appropriate number of Securities. (m) No order suspending the sale of the Securities in any jurisdiction designated by the Representative pursuant to subsection (e) of Section 4 hereof shall have been issued on the Closing Date, and no proceedings for that purpose shall have been instituted or shall be contemplated. 1.0 - 35 (n) On or before the Closing Date, the Company shall have executed and delivered to the Representative, (i) the Representative's Warrant Agreement substantially in the form filed as Exhibit 1.2 to the Registration Statement in final form and substance satisfactory to the Representative, and (ii) the Representative's Warrants in such denominations and to such designees as shall have been provided to the Company. (o) On or before the Closing Date, the Common Stock and the Redeemable Warrants shall have been duly approved for quotation on the Over-the-Counter Electronic Bulletin Board maintained by the NASD, subject to official notice of issuance. (p) On or before the Closing Date, there shall have been delivered to the Representative all of the Lock-up Agreements, in form and substance satisfactory to Representative's Counsel. (q) On or before the effective date of the Registration Statement, the Company and Corporate Stock Transfer, as the Warrant agent, shall have executed and delivered to the Underwriter the Warrant Agreement, substantially in the form filed as Exhibit 1.3 to the Registration Statement. (r) At least two (2) full business days prior to the date hereof, the Closing Date, the Company shall have delivered to the Underwriter the unaudited interim financial statements required to be so delivered pursuant to SECTION 4(p) of this Agreement. If any condition to the Representative's obligations hereunder to be fulfilled prior to or at the Closing Date, is not so fulfilled, the Representative may terminate this Agreement or, if the Representative so elects, it may waive any such conditions which have not been fulfilled or extend the time for their fulfillment. 7. INDEMNIFICATION. (a) The Company, agrees to indemnify and hold harmless each of the Underwriters (for purposes of this Section 7, "Underwriters" shall include the officers, directors, partners, employees, agents and counsel of the Underwriters, including specifically each person who may be substituted for an Underwriter as provided in Section 11 hereof), and each person, if any, who controls the Underwriter ("controlling person") within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, from and against any and all losses, claims, damages, expenses or liabilities, joint or several (and actions, proceedings, investigations, inquiries, and suits in respect thereof), whatsoever (including but not limited to any and all costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against such action, proceeding, investigation, inquiry or suit, commenced or threatened, or any claim whatsoever), as such are incurred, to which the Underwriter or such controlling person may become subject under the Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon (A) any untrue statement or alleged untrue statement of a material fact contained (i) in any Preliminary Prospectus, the Registration Statement or the Prospectus (as from time to time amended and supplemented); (ii) in any post-effective amendment or amendments or any new registration statement and prospectus in which is included securities of the Company issued or issuable upon exercise of the Securities; or (iii) in any 1.0 - 36 application or other document or written communication (in this Section 7 collectively called "application") executed by the Company or based upon written information furnished by the Company filed, delivered or used in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Over-the-Counter Electronic Bulletin Board maintained by the NASD or any other securities exchange, (B) the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of the Prospectus, in the light of the circumstances under which they were made), or (C) any breach of any representation, warranty, covenant or agreement of the Company contained herein or in any certificate by or on behalf of the Company or any of its officers delivered pursuant hereto unless, in the case of clause (A) or (B) above, such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to any Underwriter by or on behalf of such Underwriters expressly for use in any Preliminary Prospectus, the Registration Statement or any Prospectus, or any amendment thereof or supplement thereto, or in any application, as the case may be. The indemnity agreement in this subsection (a) shall be in addition to any liability which the Company may have at common law or otherwise. (b) Each of the Underwriters agrees severally, but not jointly, to indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the Registration Statement, and each other person, if any, who controls the Company within the meaning of the Act, to the same extent as the foregoing indemnity from the Company to the Underwriter but only with respect to statements or omissions, if any, made in any Preliminary Prospectus, the Registration Statement or Prospectus or any amendment thereof or supplement thereto or in any application made in reliance upon, and in strict conformity with, written information furnished to the Company with respect to any Underwriter by such Underwriter expressly for use in such Preliminary Prospectus, the Registration Statement or Prospectus or any amendment thereof or supplement thereto or in any such application, provided that such written information or omissions only pertain to disclosures in the Preliminary Prospectus, the Registration Statement or Prospectus directly relating to the transactions effected by the Underwriters in connection with this Offering. The Company acknowledges that the statements with respect to the public offering of the Securities set forth under the heading "Underwriting" and the stabilization legend in the Prospectus have been furnished by the Underwriter expressly for use therein and constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in the Prospectus. The indemnity agreement in this subsection (b) shall be in addition to any liability which the Underwriters may have at common law or otherwise. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, suit or proceeding, such indemnified party shall, if a claim in respect thereof is to be made against one or more indemnifying parties under this Section 7, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure to so notify an indemnifying party shall not relieve it from any 1.0 - 37 liability which it may have under this Section 7 except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it may have otherwise). In case any such action, investigation, inquiry, suit or proceeding is brought against any indemnified party, and it notifies an indemnifying party or parties of the commencement thereof, the indemnifying party or parties will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of such action at the expense of the indemnifying party, (ii) the indemnifying parties shall not have employed counsel reasonably satisfactory to such indemnified party to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action, investigation, inquiry, suit or proceeding on behalf of the indemnified party or parties), in any of which events such fees and expenses of one additional counsel shall be borne by the indemnifying parties. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action, investigation, inquiry, suit or proceeding or separate but similar or related actions, investigations, inquiries, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances. Anything in this Section 7 to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld. An indemnifying party will not, without the prior written consent of the indemnified parties, settle compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, investigation, inquiry, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party form all liability arising out of such claim, action, suit or proceeding and (ii) doe snot include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) In order to provide for just and equitable contribution in any case in which (i) an indemnified party makes claim for indemnification pursuant to this Section 7, but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that the express provisions of this Section 7 provide for indemnification in such case, or (ii) contribution under the Act may be required on the part of any indemnified party, then each indemnifying party shall contribute to the amount 1.0 - 38 paid as a result of such losses, claims, damages, expenses or liabilities (or actions, investigations, inquiries, suits or proceedings in respect thereof) (A) in such proportion as is appropriate to reflect the relative benefits received by each of the contributing parties, on the one hand, and the party to be indemnified on the other hand, from the offering of the Securities or (B) if the allocation provided by clause (A) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each of the contributing parties, on the one hand, and the party to be indemnified on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. In any case where the Company is the contributing party and the Underwriters are the indemnified party, the relative benefits received by the Company on the one hand, and the Underwriters, on the other, shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities (before deducting expenses) bear to the total underwriting discounts received by the Underwriters hereunder, in each case as set forth in the table on the Cover Page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, or by the Underwriters, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions, investigations, inquiries, suits or proceedings in respect thereof) referred to above in this subdivision (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, claim, investigation, inquiry, suit or proceeding. Notwithstanding the provisions of this subdivision (d) the Underwriters shall not be required to contribute any amount in excess of the underwriting discount applicable to the Securities purchased by the Underwriters hereunder. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls the Company within the meaning of the Act, each officer of the Company who has signed the Registration Statement, and each director of the Company shall have the same rights to contribution as the Company, subject in each case to this subparagraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit, inquiry, investigation or proceeding against such party in respect to which a claim for contribution may be made against another party or parties under this subparagraph (d), notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have hereunder or otherwise than under this subparagraph (d), or to the extent that such party or parties were not adversely affected by such omission. The contribution agreement set forth above shall be in addition to any liabilities which any indemnifying party may have at common law or otherwise. 8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement or contained in certificates of officers of the Company submitted pursuant hereto, 1.0 - 39 shall be deemed to be representations, warranties and agreements at the Closing Date, and such representations, warranties and agreements of the Company and the indemnity agreements contained in Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter, the Company, any controlling person of any Underwriter or the Company, and shall survive termination of this Agreement or the issuance and delivery of the Securities to the Underwriters. 9. EFFECTIVE DATE. (a) This Agreement shall become effective at 10:00 a.m., New York City time, on the next full business day following the date hereof, or at such earlier time after the Registration Statement becomes effective as the Representative, in its discretion, shall release the Securities for sale to the public; provided, however, that the provisions of Sections 5, 7 and 10 of this Agreement shall at all times be effective. For purposes of this Section 9, the Securities to be purchased hereunder shall be deemed to have been so released upon the earlier of dispatch by the Representative of telegrams to securities dealers releasing such shares for offering or the release by the Representative for publication of the first newspaper advertisement which is subsequently published relating to the Securities. 10. TERMINATION. (a) Subject to subsection (b) of this Section 10, the Representative shall have the right to terminate this Agreement, after the date hereof, (i) if any domestic or international event or act or occurrence has materially disrupted, or in the Representative's opinion will in the immediate future materially adversely disrupt the financial markets; or (ii) any material adverse change in the financial markets shall have occurred; or (iii) if trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Boston Stock Exchange, the Chicago Board of Trade, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Commission or any other government authority having jurisdiction; or (iv) if trading of any of the securities of the Company shall have been suspended, or any of the securities of the Company shall have been delisted, on any exchange or in any over-the-counter market; or (v) if the United States shall have become involved in a war or major hostilities, or if there shall have been an escalation in an existing war or major hostilities or a national emergency shall have been declared in the United States; or (vi) if a banking moratorium has been declared by a state or federal authority; or (vii) if a moratorium in foreign exchange trading has been declared; or (viii) if the Company shall have sustained a loss material or substantial to the Company by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative's opinion, make it inadvisable to proceed with the delivery of the Securities; or (viii) if there shall have occurred any outbreak or escalation of hostilities or any calamity or crisis or there shall have been such a material adverse change in the conditions or prospects of the Company, or such material adverse change in the general market, political or economic conditions, in the United States or elsewhere as in the Representative's judgment would make it inadvisable to proceed with the offering, sale and/or delivery of the Securities. 1.0 - 40 (b) If this Agreement is terminated by the Representative in accordance with the provisions of Section 10(a) the Company shall promptly reimburse and indemnify the Representative for all of its actual out-of-pocket expenses, including the fees and disbursements of counsel for the Underwriters (less amounts previously paid pursuant to Section 5(c) above). Notwithstanding any contrary provision contained in this Agreement, if this Agreement shall not be carried out within the time specified herein, or any extension thereof granted to the Representative, by reason of any failure on the part of the Company to perform any undertaking or satisfy any condition of this Agreement by it to be performed or satisfied (including, without limitation, pursuant to Section 6 or Section 12) then, the Company shall promptly reimburse and indemnify the Underwriter for all of their actual out-of-pocket expenses, including the fees and disbursements of counsel for the Underwriter (less amounts previously paid pursuant to Section 5(c) above). In addition, the Company shall remain liable for all Blue Sky counsel fees and expenses and filing fees. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement (including, without limitation, pursuant to Sections 6, 10 and 12 hereof), and whether or not this Agreement is otherwise carried out, the provisions of Section 5 and Section 7 shall not be in any way affected by such election or termination or failure to carry out the terms of this Agreement or any part hereof. 11. DEFAULT BY THE COMPANY. If the Company shall fail at the Closing Date, to sell and deliver the number of Securities which it is obligated to sell hereunder on such date, then this Agreement shall terminate without any liability on the part of any non-defaulting party other than pursuant to Section 5, Section 7 and Section 10 hereof. No action taken pursuant to this Section shall relieve the Company from liability, if any, in respect of such default. 12. NOTICES. All notices and communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be directed to the Underwriter at West America Corp., 4510 East Thousand Oaks Blvd. Suite 100 Westlake Village, CA 91362, Attention: Stuart Greenberg, with a copy to Underwriter's Counsel, Attention: Chris Dieterich, Esq. Notices to the Company shall be directed to the Company at 6646 Indian School Road, N.E., Albuquerque, New Mexico 87110, Attention: Howard P. Silverman, Chief Executive Officer, with a copy to Gregory Bartko, Esq., 3475 Lenox Road, Suite 400, Atlanta, Georgia 30326, Attention: Gregory Bartko, Esq. 13. PARTIES. This Agreement shall inure solely to the benefit of and shall be binding upon, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 7 hereof, and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. No purchaser of Securities from the Underwriters shall be deemed to be a successor by reason merely of such purchase. 14. CONSTRUCTION. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada without giving effect to the choice of law or conflict of laws principles. 1.0 - 41 15. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which taken together shall be deemed to be one and the same instrument. 16. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Representative's Warrant Agreement constitute the entire agreement of the parties hereto and supersede all prior written or oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may not be amended except in a writing, signed by the Representative and the Company. If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us. Very truly yours, LASIK AMERICA, INC. By: ________________________________ Name: Howard P. Silverman Title: Chief Executive Officer Confirmed and accepted as of the date first above written. WEST AMERICA SECURITIES CORP. By:___________________________________ Name: Title: 1.0 - 42 SCHEDULE A ---------- Underwriter Number of Units - ----------- --------------- West America & Company, Inc. TOTAL 425,000 1.0 - 43 EX-1.1 4 file003.txt FORM OF UNDERWRITING AGRMT: SELLING SHAREHOLDER Exhibit 1.1 ----------- PLACEMENT AGENT AGREEMENT THIS AGREEMENT ("Agreement") is made as of the ___ day of November, 2001, by and between Howard P. Silverman, a principal shareholder and the chief executive officer of LASIK America, Inc., a Nevada corporation ("Selling Shareholder" and "Company," respectively), and West America Securities Corp., with its principal office location at 4510 East Thousand Oaks Boulevard, Suite 100, Westlake Village, CA 91362 ("Placement Agent"). RECITALS: WHEREAS, the Selling Shareholder proposes to offer and sell 125,000 shares of his Common Stock and 125,000 Redeemable Common Stock Purchase Warrants previously issued to him by the Company, (together the "Units"), on the same terms and conditions as the Placement Agent proposes to offer Units to the public pursuant to a public offering of Units to be consummated on behalf of the Company; and WHEREAS, the Placement Agent has offered to act as a selling and placement agent on behalf of the Selling Shareholder in the offer and sale of 125,000 Units to the public, on a "best efforts" basis, with respect to sales of the Units (as defined below), and the Selling Shareholder desires to secure the services of the Placement Agent on the terms and conditions hereinafter set forth. TERMS: NOW, THEREFORE, in consideration of the premises and the mutual promises, conditions and covenants herein contained, the parties hereto do hereby agree as follows: 1. ENGAGEMENT OF PLACEMENT AGENT. The Selling Shareholder, on the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, hereby appoints the Placement Agent as its exclusive Placement Agent for this offering, to sell, on a "best efforts basis," a maximum of 125,000 Units at a public offering price of $6.10 per Unit, each Unit consisting of one share of the Company's Common Stock and one Common Stock Purchase Warrant ("Warrants"), each Warrant entitling the holder to purchase one share of the Company's Common Stock at $7.20 per share, resulting in a maximum amount of gross proceeds to the Selling Shareholder of $762,500 ("Gross Maximum Proceeds"). The Placement Agent, on the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, accepts such appointment and agrees to use its best efforts to solicit purchasers for the Units. This appointment shall be irrevocable for the period commencing on the date of this Agreement and ending on the earlier of (i) the date that the maximum number of Units are sold by the Selling Shareholder; or 120 days from the date that the Company's SB-2 Registration Statement, bearing Registration No. 333-68942 (the "Registration Statement"), becomes effective upon order of the U.S. Securities and Exchange Commission (the "Offering Period"). 1.1 - 1 2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER. In order to induce the Placement Agent to enter into this Agreement, the Selling Shareholder hereby represents and warrants to and agrees with the Placement Agent as follows: 2.1 Registration of the Units. The Company (with the assistance of the Placement Agent and Selling Shareholder) has prepared the Registration Statement covering the registration for resale of the Units in conformity with the requirements of the Securities Act of 1933 ("Act") and the rules and regulations ("Rules and Regulations") of the Commission promulgated thereunder. As used in this Agreement, the term "Registration Statement" refers to and means the prospectus and the exhibits that are part of the Registration Statement and all amendments and supplements thereto. 2.2 Delivery of Prospectus. The Company and the Selling Shareholder shall deliver to the Placement Agent, without charge, as many copies of the Prospectus as the Placement Agent may reasonably require for the purposes contemplated by this Agreement. The Company and the Selling Shareholder authorizes the Placement Agent, in connection with the offering of the Units, to use the Prospectus as from time to time amended or supplemented in connection with the offering and sale of the Units in accordance with the applicable provisions of the Act. 2.3 Accuracy of Registration Statement. The Registration Statement and the Prospectus forming a part thereof, at the time of delivery to prospective purchasers of the Units, conformed in all material respects with the requirements, to the extent applicable, of the Act and the applicable Rules and Regulations and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. On the Closing Date(s) (as hereinafter defined), the Prospectus will contain all statements that are required to be stated therein in accordance with the Act and the Rules and Regulations for the purposes of the proposed offering of the Units, and all statements of material fact contained in the Prospectus will be true and correct, and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 2.4 Duty to Amend. If during such period of time as in the reasonable opinion of the Placement Agent, or its counsel, the Prospectus relating to the offer and sale of the Units is required to be delivered under the Act, any event occurs or any event known to the Company or Selling Shareholder relating to or affecting the Company or the Selling Shareholder shall occur as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time after the date hereof to amend or supplement the Prospectus to comply with the Act or the applicable Rules and Regulations, the Company and the Selling Shareholder shall forthwith notify the Placement Agent thereof and shall prepare such further amendment or 1.1 - 2 supplement to the Prospectus as may be required and shall furnish and deliver to the Placement Agent, all at the cost of the Selling Shareholder, a reasonable number of copies of the amendment or supplement, which will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the Prospectus, not misleading in the light of the circumstances when delivered to a purchaser or prospective purchaser, and which will comply in all respects with the requirements (to the extent applicable) of the Act and the applicable Rules Regulations. 2.5 Corporation Condition. To the best of the Selling Shareholder's knowledge, the Company's condition is as described in its Prospectus, except for continuing losses and changes in the ordinary course of business and normal year-end adjustments that are not in the aggregate materially adverse to the Company. The Prospectus, taken as a whole, presents fairly the business and financial position of the Company as of the Closing Date(s). 2.6 No Material Adverse Change. Except as may be reflected in or contemplated by the Prospectus, subsequent to the dates as of which information is given in the Prospectus, and prior to the Closing Date(s), taken as a whole, to the best of the Selling Shareholder's knowledge, there has not been any material adverse change in the condition, financial or otherwise, or in the results of operations of the Company or in its business. 2.7 No Defaults. Except as disclosed in the Prospectus or in writing to the Placement Agent, to the best of the Selling Shareholder's knowledge, the Company is not in default in any material respect in the performance of any obligation, agreement or condition contained in any material debenture, note or other evidence of indebtedness or any material indenture or loan agreement of the Company. The execution and delivery of this Agreement, and the consummation of the transactions herein contemplated, and compliance with the terms of this Agreement will not conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, the Certificate of Incorporation or Bylaws of the Company (in any respect that is material to the Company), any material note, indenture, mortgage, deed of trust, or other agreement or instrument to which the Company is a party or by which the Company or any property of the Company is bound, or to the Company's knowledge, any existing law, order, rule, regulation, writ, injunction or decree of any government, governmental instrumentality, agency or body, arbitration tribunal or court, domestic or foreign, having jurisdiction over the Company or any property of the Company. The consent, approval, authorization or order of any court or governmental instrumentality, agency or body is not required for the consummation of the transactions herein contemplated except such as may be required under the Act or under the Blue Sky or securities laws of any state or jurisdiction. 2.8 Incorporation and Standing. To the best of the Selling Shareholder's knowledge, the Company is, and at the Closing Date will be, duly formed and validly existing in good standing as a corporation under the laws of the State of Nevada and with full power and authority (corporate and other) to own its properties and conduct its business, present and proposed, as described in the Prospectus; the Selling Shareholder has full power and authority to enter into and to perform this Agreement, and to the best of the Selling Shareholder's 1.1 - 3 knowledge, the Company is duly qualified and in good standing as a foreign entity in each jurisdiction in which the failure to so qualify would have a material adverse effect on the Company or its properties. 2.9 Legality of Issued and Outstanding Units. Prior to the Closing Date, the Common Stock and Warrants comprising the Units and to be offered and sold hereunder, have been duly and validly authorized and issued, and, except as to the Warrants, are fully paid and non-assessable, and conform in all material respects to the statements with regard thereto contained in the Prospectus. 2.10 Legality of Units. The Units when offered and sold and delivered in accordance with the Prospectus, will constitute legal, valid and binding obligations of the Company, enforceable in accordance with the terms thereof, and shall be duly and validly issued and outstanding, and except as to the Warrants, shall be fully paid and non-assessable. The Common Stock into which the Warrants are exercisable, when issued upon exercise, shall be duly and validly issued and outstanding, fully paid and non-assessable. 2.11 Litigation. To the best of the Selling Shareholder's knowledge, except as set forth in the Prospectus, there is now, and at the Closing Date there will be, no action, suit or proceeding before any court or governmental agency, authority or body pending or, to the best of the Selling Shareholder's knowledge, threatened, which might result in judgments against the Company not adequately covered by insurance or which collectively might result in any material adverse change in the condition (financial or otherwise) or business of the Company or which would materially adversely affect the properties or assets of the Company. 2.12 Finders. The Selling Shareholder does not know of any outstanding claims for services in the nature of a finder's fee or origination fees with respect to the sale of the Units hereunder for which the Placement Agent may be responsible, and the Selling Shareholder will indemnify the Placement Agent from any liability for such fees (including the payment of attorney's fees incurred by Placement Agent due to any claim by any such finder or originator) by any party who, in the reasonable opinion of Placement Agent's counsel, has a legitimate claim for such compensation from the Selling Shareholder and for which person the Placement Agent is not legally responsible. In the event of such claim, Placement Agent shall properly notify the Selling Shareholder thereof and the Selling Shareholder, at his option and in his sole cost and expense, take over the defense of such a claim with counsel of his choice, reasonably satisfactory to Placement Agent. Placement Agent shall not settle any such claims or litigation arising hereunder without the prior written consent of the Selling Shareholder, which shall not be unreasonably withheld. 2.13 Tax Returns. To the best of the Selling Shareholder's knowledge, the Company has filed all federal and state and local tax returns which are required to be filed, and has paid all material taxes shown on such returns and on all assessments received by it to the extent such taxes have become due (except for taxes the amount of which the Company is contesting in good faith). To the best of the Selling Shareholder's knowledge, all taxes with respect to which the Company is obligated have been paid, or adequate accruals have been set up to cover any such unpaid taxes. 1.1 - 4 2.14 Authority. The execution and delivery by the Selling Shareholder of this Agreement have been duly authorized by all necessary action, and this Agreement is the valid, binding and legally enforceable obligation of the Selling Shareholder except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws, by principles governing enforcement of equitable remedies and, with respect to indemnification against liabilities under the Act, matters of public policy. 2.15 Actions by the Selling Shareholder. The Selling Shareholder will not take any action that will impair the effectiveness of the transactions contemplated by this Agreement. 3. ISSUE, SALE AND DELIVERY OF THE SECURITIES. 3.1 Deliveries of Securities. Certificates for the Common Stock, Warrants and Units, (issued in such denominations and in such names as subscriptions for same are accepted by the Selling Shareholder), shall be delivered by the Selling Shareholder to the Company's duly appointed stock transfer agent, Corporate Stock Transfer, in the same manner as the Units are issued directly by the Company to purchasers of Units in the Company's initial public offering of the Units. 3.2 Escrow of Funds. Pursuant to a separate form of escrow agreement ("Escrow Agreement") to be entered into by and among the Company, the Selling Shareholder and the "Bank" selected to act as escrow agent ("Escrow Agent") in the offering and sale of the Units, all subscriber funds received from purchasers of the Units shall be first deposited into such Escrow Account set up on behalf of the parties to the Escrow Agreement. Pursuant to the Escrow Agreement, the Placement Agent shall place all funds for purchase of the Units with respect to any purchase into the Escrow Account, and funds received into the Escrow Account shall thereafter be transferred to the Selling Shareholder only after acceptance of any subscription agreement tendered by a prospective purchaser of the Units. With respect to the acceptance by the Selling Shareholder of any subscription agreement for the purchase of Units placed by Placement Agent, certificates for the Units, Common Stock and Warrants shall be delivered to any and all purchasers in accordance with the Rules and Regulations. 3.3 Closing Date(s). The initial Closing shall take place at the offices of Placement Agent as and when subscription agreements from purchasers of the Units are duly accepted by the Selling Shareholder. Any subsequent Closings shall take place at the offices of the Placement Agent on each date that the Placement Agent and the Selling Shareholder shall determine by mutual agreement from time to time. The initial Closing Date and any subsequent Closing Dates shall be referred to herein as the "Closing Date." 3.4 Placement Agent's Compensation. The Selling Shareholder shall pay the Placement Agent the amounts pursuant to this Section 3.4, which shall be the full amount payable to the Placement Agent for its services, as fees and expenses, in connection with the placement of the Units. Based upon the total aggregate amount of the Units sold by the Placement Agent on behalf of the Selling Shareholder, the Placement Agent shall be paid a cash placement fee 1.1 - 5 ("Cash Placement Fee") equal to ten percent (10%) of the purchase price of any and all Units placed up to the aggregate purchase price of $762,500 of Units placed, which shall equal a Cash Placement Fee not to exceed $76,250 for the maximum number of Units to be offered and sold on behalf of the Selling Shareholder. 3.5 Payment of Fees. The Escrow Agent shall be instructed to pay all Cash Placement Fees directly to the Placement Agent from the proceeds of the sale of the Units, simultaneous with the transfer of proceeds to the Selling Shareholder. 4. OFFERING OF THE SECURITIES ON BEHALF OF THE SELLING SHAREHOLDER. 4.1 In offering the Units for sale, the Placement Agent shall offer them solely as a Placement Agent for the Selling Shareholder, and such offers and sales shall be made upon the terms and subject to the conditions set forth in the Prospectus. The Placement Agent shall commence making such offers and sales as a Placement Agent for the Selling Shareholder only at such time and date that the Company has accepted subscriptions for 425,000 of the Units offered and sold on the Company's behalf by the Placement Agent. No Units may be offered by or sold by the Selling Shareholder until the sale of all 425,000 Units by the Company through solicitations made by the Placement Agent, is concluded. 4.2 The Placement Agent will only make offers to sell the Units, or solicit offers to subscribe for any Units, in accordance with the Prospectus and this Agreement. 5. COVENANTS OF THE SELLING SHAREHOLDER. The Selling Shareholder covenants and agrees with the Placement Agent that: 5.1 After the date hereof, the Selling Shareholder will not at any time, cause to have prepared and distributed any amendment or supplement to the Prospectus, of which amendment or supplement the Placement Agent shall not previously have been advised and the Placement Agent and its counsel furnished with a copy within a reasonable time period prior to the proposed adoption thereof, or to which the Placement Agent shall have reasonably objected in writing on the ground that it is not in compliance with the Act or the Rules and Regulations (if applicable). 5.2 The Selling Shareholder and/or the Company, will pay, whether or not the transactions contemplated hereunder are consummated or this Agreement is prevented from becoming effective or is terminated, all costs and expenses incident to the performance of his obligations under this Agreement, including all expenses incident to the authorization of the Units and their issue and delivery to the Placement Agent, any original issue taxes in connection therewith, all transfer taxes, if any, incident to the sale and transfer of the Units, the fees and expenses of the Company's counsel (except as provided below) and accountants, the cost of reproduction and furnishing to the Placement Agent copies of the documents as herein provided; provided, however, that the Selling Shareholder shall not be responsible for the direct payment of fees and costs 1.1 - 6 incurred by the Placement Agent, including attorney's fees of or any costs incurred by the Placement Agent's counsel. 5.3 As a condition precedent to the Closing Date(s), the Selling Shareholder will deliver to the Placement Agent a true and correct copy of all documents requested by Placement Agent included in Placement Agent's due diligence request, including but not limited to the Certificate of Incorporation of the Company, and all amendments and certificates of designation of preferences of preferred stock, certified by the Secretary of State of the State of Nevada. 5.4 Prior to the Closing Date(s), the Selling Shareholder will cooperate with the Placement Agent in such investigation as it may make or cause to be made of all of the representations made by the Selling Shareholder in this Agreement or the Prospectus, in connection with the offering of the Units. The Selling Shareholder will make available in connection therewith such information in his possession as the Placement Agent may reasonably request and will make available to the Placement Agent such persons as the Placement Agent shall deem reasonably necessary and appropriate in order to verify or substantiate any such information so supplied. 5.5 The Selling Shareholder shall be responsible for making any and all filings required by the state securities regulatory agencies and Blue Sky authorities and filings required by the laws of any and all jurisdictions in which the Units are offered and sold. 6. INDEMNIFICATION. 6.1 The Selling Shareholder agrees to indemnify and hold harmless the Placement Agent, each person who controls the Placement Agent within the meaning of Section 15 of the Securities Act of 1934 and the Placement Agent's employees, accountants, attorneys and Placement Agents (the "Placement Agent's Indemnitees") against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act or any other statute or at common law and for any reasonable legal or other expenses (including the costs of any investigation and preparation) incurred by them in connection with any litigation, whether or not resulting in any liability, but only insofar as such losses, claims, damages, liabilities and litigation arise out of or are based upon (i) the Selling Shareholder's breach of this Agreement, or (ii) any untrue statement of material fact contained in the Prospectus or any amendment or supplement thereto or any application or other document filed in any state or jurisdiction in order to qualify the Units, the Common Stock or the Warrants under the Blue Sky or securities laws thereof, or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein, under the circumstances under which they were made, not misleading, all as of the date of the Prospectus or of such amendment as the case may be, or (iii) any breach of any representation, warranty or covenant made by the Selling Shareholder in this Agreement, provided, however, that the indemnity agreement contained in this Section 6.1 shall not apply to amounts paid in settlement of any such litigation, if such settlements are made without the consent of the Selling Shareholder (but no such settlement may be made without the Selling Shareholder's prior written consent, which consent shall not 1.1 - 7 be unreasonably withheld), nor shall it apply to the Placement Agent's Indemnitees in respect to any such losses, claims, damages or liabilities arising out of or based upon any such untrue statement or alleged untrue statement or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished in writing to the Selling Shareholder by the Placement Agent specifically for use in connection with the preparation of the Prospectus or any such amendment or supplement thereto or any application or other document filed in any state or jurisdiction in order to qualify the Common Stock and Warrants under the Blue Sky or securities law thereof. This indemnify agreement is in addition to any other liability which the Selling Shareholder may otherwise have to the Placement Agent's Indemnitees. The Placement Agent's Indemnitees agree, within ten (10) days after the receipt by them of written notice of the commencement of any action against them in respect to which indemnify may be sought from the Selling Shareholder under this Section 6.1, to notify the Selling Shareholder in writing of the commencement of such action; provided, however, that the failure of the Placement Agent's Indemnitees to notify the Selling Shareholder of any such action shall not relieve the Selling Shareholder from any liability which it may have to the Placement Agent's Indemnitees on account of the indemnity agreement contained in this Section 6.1, except with respect to any failure which irreparably prejudices the Selling Shareholder or causes an event of adjudication materially adverse to the Selling Shareholder. The Selling Shareholder shall not be relieved from any other liability which he may have to the Placement Agent's Indemnitees, and if the Placement Agent's Indemnitees shall notify the Selling Shareholder of the commencement thereof, the Selling Shareholder shall be entitled to participate in (and, to the extent that the Selling Shareholder shall wish, to direct) the defense thereof at his own expense, but such defense shall be conducted by counsel of recognized standing and reasonably satisfactory to the Placement Agent's Indemnitees, defendant or defendants, in such litigation. The Selling Shareholder agrees to notify the Placement Agent's Indemnitees promptly of the commencement of any litigation or proceedings against the Selling Shareholder of which the Selling Shareholder may be advised in connection with the issue and sale of any of the Units and to furnish to the Placement Agent's Indemnitees, at their request, copies of all pleadings therein and to permit the Placement Agent's Indemnitees to be observers therein and apprise the Placement Agent's Indemnitees of all developments therein, all at the Selling Shareholder's expense. 6.2 With the exception provided below as to limitations of indemnity, the Placement Agent agrees, in the same manner and to the same extent as set forth in Section 6.1 above, to indemnify and hold harmless the Selling Shareholder, and his accountants and attorneys (the "Seller's Indemnitees") with respect to (i) any statement in or omission from the Prospectus or any amendment or supplement thereto or any application or other document filed by the Selling Shareholder in any state or jurisdiction in order for the Selling Shareholder to qualify, the Common Stock and Warrants under the Blue Sky or securities laws thereof, or any information furnished pursuant to Section 2.4 hereof, if such statement or omission was made in reliance upon information furnished in writing to the Selling Shareholder by the Placement Agent in a document executed by Placement Agent on its behalf specifically for use in connection with the preparation thereof or supplement thereto, or (ii) any untrue statement of a 1.1 - 8 material fact made by the Placement Agent not based on statements in the Prospectus or authorized in writing by the Selling Shareholder, or with respect to any misleading statement made by the Placement Agent resulting from the omission of material facts which misleading statement is not based upon the Prospectus, and any documents filed with public or governmental authorities or agencies, and any public press releases or information furnished in writing by the Selling Shareholder or, (iii) any breach of any representation, warranty or covenant made by the Placement Agent in this Agreement. The Placement Agent shall not be liable for amounts paid in settlement of any such litigation if such settlement was effected without its consent. In case of the commencement of any action in respect of which indemnity may be sought from the Placement Agent, the Seller's Indemnitees shall have the same obligation to have notice as set forth in Section 6.1 above, subject to the same loss of indemnity in the event such notice is not given, and the Placement Agent shall have the same night to participate in (and, to the extent that it shall wish, to direct) the defense of such action at its own expense, but such defense shall be conducted by counsel of recognized standing reasonably satisfactory to the Selling Shareholder. The Placement Agent agrees to notify the Seller's Indemnitees, at their request, and to provide copies of all pleadings therein and to permit the Seller's Indemnitees to be observers therein and appraise them of all the developments therein, all at the Placement Agent's expense. As to damages, Selling Shareholder recognizes that since he is receiving the net proceeds of the monies generated by this placement, that indemnity, if any, to be paid by the Placement Agent to the Selling Shareholder shall be strictly limited to the Placement Agent's Cash Fee, inclusive of attorney fees and costs of arbitration and/or court proceedings. 7. LIQUIDATION DAMAGES. Selling Shareholder and Placement Agent both acknowledge that it would be extremely impractical and difficult to ascertain the actual damages to be suffered by the Selling Shareholder if Placement Agent is found by an arbitrator or a court of competent jurisdiction to have breached any of the representations, warranties and covenants contained in Section 9 of this Agreement. Accordingly, should a breach of the representations of Section _____ be proven and Placement Agent found liable for said breach, Selling Shareholder and Placement Agent hereby agree that the damages shall be limited to an amount equal to the Cash Placement Fee received by Placement Agent pursuant to Section 3.4 of this Agreement plus the return to the Selling Shareholder of the Placement Agent Units received by Placement Agent pursuant to Section 3.4 of this Agreement (or, to the extent that the Placement Agent Units have already been sold by Placement Agent, the value, as defined below, of the Placement Agent Units), inclusive of all attorney's fees and cost of court. For purposes hereof, the value of the Placement Agent Common Stock shall be deemed to equal the lesser of (i) the aggregate share price of any Placement Agent Common Stock issued to Placement Agent or (ii) the market value of such Placement Agent Common Stock on the date that such shares were sold by Placement Agent, and in either case, the Placement Agent may return such Placement Agent Common Stock to the Selling Shareholder in lieu of any payment, as to the value of such Placement Agent Common Stock, for damages pursuant to this section. For purposes hereof, the value of each Warrant issued to Placement Agent which has been exercised by Placement Agent shall be the difference of (i) the market value of 1.1 - 9 the Common Stock received upon such exercise on the date that such shares were sold by Placement Agent, minus (ii) the Exercise Price of such Warrant. This provision is not to be construed as a penalty, but as full liquidated damages under Nevada law. 8. EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective the date which is the later of: (i) 12:00 noon, New York, New York time, on the date hereof or (ii) 12:00 noon, New York, New York time on the date of effectiveness of the Company's Registration Statement as ordered by the Commission. The Placement Agent agrees to notify the Selling Shareholder immediately after the Placement Agent shall have taken any action wherein this Agreement shall have become effective. 10. CONDITIONS OF THE PLACEMENT AGENT'S OBLIGATIONS. The Placement Agent's obligations to act as Placement Agent of the Units offered by the Selling Shareholder hereunder and to find purchasers for the Units shall be subject to the accuracy, as of the Closing Date, of the representations and warranties on the part of the Selling Shareholder herein contained, to the fulfillment of or compliance by the Selling Shareholder with all covenants and conditions hereof, and to the following additional conditions: 10.1 Counsel to the Placement Agent shall not have objected in writing or shall not have failed to give his consent to the Prospectus (which objection or failure to give consent shall not have been done unreasonably). 10.2 The Placement Agent shall not have disclosed to the Selling Shareholder that the Prospectus, or any amendment thereof or supplement thereto, contains an untrue statement of fact, which, in the opinion of counsel to the Placement Agent, is material, or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein, or is necessary to make the statements therein, under the circumstances in which they were made, not misleading. 10.3 Between the date hereof and the Closing Date, the Company shall not have sustained any loss on account of fire, explosion, flood, accident, calamity or any other cause of such character as would materially adversely affect its business or property considered as an entire entity, whether or not such loss is covered by insurance. 10.4 Except as set forth in the Prospectus, during the time period between the date hereof and the initial Closing Date, there shall be no litigation instituted or threatened against the Company, and there shall be no proceeding instituted or threatened against the Company before or by any federal or state commission, regulatory body or administrative agency or other governmental body, domestic or foreign, wherein an unfavorable ruling, decision or finding would materially adversely effect the business, franchises, license, permits, operations or financial condition or income of the Company considered as an entity. 1.1 - 10 10.5 Except as contemplated herein or as set forth in the Prospectus, during the period subsequent to the most recent financial statements contained in the Prospectus, if any, and prior to the initial Closing Date, the Company (i) shall have conducted its business in all material respects in the usual and ordinary manner as the same is being conducted as of the date hereof and (ii) except in the ordinary course of business, the Company shall not have incurred any liabilities or obligations (direct or contingent) or disposed of any assets, or entered into any material transaction or suffered or experienced any substantially adverse change in its condition, financial or otherwise. At the Closing Date, the equity account of the Company shall be substantially the same as reflected in the most recent balance sheet contained in the Prospectus and without considering the proceeds from the sale of the Units other than as may be set forth in the Prospectus. 10.6 The authorization of the Units, Common Stock and Warrants for transfer by the Selling Shareholder and all proceedings and other legal matters hereto and to this Agreement shall be reasonably satisfactory in all material respects matters to the Placement Agent or counsel to the Placement Agent, who shall have furnished the Placement Agent on the Closing Date with such favorable opinion with respect to the sufficiency of all corporate proceedings and other legal matters relating to this Agreement as the Placement Agent may reasonably require, and the Selling Shareholder shall have furnished such counsel such documents as he may have requested to enable him to pass upon the matters referred to in this subparagraph. 10.7 The Selling Shareholder shall have furnished to the Commission as an Exhibit to the Registration Statement, with a true and correct copy to the Placement Agent, an opinion of counsel, dated the effective date of the Registration Statement, addressed to the Placement Agent, from counsel to the Selling Shareholder, as required by the Act, in substantially the form attached to the Registration Statement as an Exhibit. 10.8 The Selling Shareholder shall have furnished to the Placement Agent a due diligence certificate signed by the Selling Shareholder, dated as of the Effective Date of the Registration Statement, to the effect that: (i) the representations and warranties of the Selling Shareholder in this Agreement are true and correct in all material respects at and as of the Closing Date (other than representations and warranties which by their terms are specifically limited to a date other than the Closing Date), and the Selling Shareholder has complied with all the agreements and has satisfied all the conditions on his part to be performed or satisfied at or prior to the Closing Date; (ii) the Selling Shareholder has carefully examined the Prospectus, and any amendments and supplements thereto, and, to the best of his knowledge, all statements contained in the Prospectus, and any amendments and supplements thereto, are true and correct, and neither the Prospectus, nor any amendment or supplement thereto, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein under the circumstances in which they were made not misleading, and since the date hereof, there has occurred no event required to 1.1 - 11 be set forth in an amended or supplemented Prospectus, which has not been set forth; except as set forth in the Prospectus, since the respective dates as of which the periods for which the information is given in the Prospectus and prior to the date of such certificate, (a) there has not been any material adverse change, financial and otherwise, in the affairs of condition of the Company, and (b) except as disclosed in the Prospectus, the Company has not incurred any material liabilities, direct or contingent or entered into any material transactions, otherwise than in the ordinary course of business; and (iii) the Selling Shareholder has provided true and correct copies of all documents in his possession or which he could obtain that were requested by Placement Agent pursuant to any due diligence inquiry. 11. TERMINATION. 11.1 This Agreement may be terminated by the Placement Agent by notice to the Selling Shareholder in the event that the Selling Shareholder shall have failed or been unable to comply with any of the material terms, conditions or provisions of this Agreement on the part of the Selling Shareholder to be performed, complied with fulfilled within the respective times, if any, herein provided for, unless compliance therewith or performance or satisfaction thereof shall have been expressly waived by the Placement Agent in writing. However, if any material breach by the Selling Shareholder can be cured within ten (10) business days, Placement Agent shall provide the Selling Shareholder such reasonable period to cure. 11.2 This Agreement may be terminated by the Selling Shareholder by notice to the Placement Agent in the event that the Placement Agent shall have materially failed or been materially unable to comply with any of the terms, conditions or provisions of this Agreement on the part of the Placement Agent to be performed, complied with or fulfilled within the respective times, if any, herein provided for, unless compliance therewith or performance or satisfaction thereof shall have been expressly waived by the Selling Shareholder in writing. However, if any material breach by Placement Agent can be cured within ten (10) business days, the Selling Shareholder shall provide Placement Agent such ten (10) business days to cure. 11.3 This Agreement may be terminated by the Placement Agent by notice to the Selling Shareholder at any time, if, in the reasonable, good faith judgment of the Placement Agent, payment for and delivery of the Units is rendered impracticable or inadvisable because: (i) additional material governmental restrictions not in force and effect on the date hereof shall have been imposed upon trading in securities generally, (ii) a war or other national calamity shall have occurred, or (iii) the condition of the market (either generally or with reference to the sale of the Units to be offered hereby) or the condition of any matter affecting the Selling Shareholder or the Company or any other circumstance is such that it would be undesirable, impracticable or inadvisable, in the judgment of the Placement Agent, to proceed with this Agreement or with the offering of the Units. 11.4 Any termination of this Agreement pursuant to this Section 11 shall be without liability of any character (including, but not limited to, loss of 1.1 - 12 anticipated profits or consequential damages) on the part of any party thereto, except that the Selling Shareholder shall remain obligated to pay the costs and expenses provided to be paid by him specified in Section 3; and the Selling Shareholder and the Placement Agent shall be obligated to pay, respectively, all losses, claims, damages or liabilities, joint or several, under Section 6.1 in the case of the Selling Shareholder and Section 6.2 in the case of the Placement Agent. 12. PLACEMENT AGENT'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The Placement Agent represents and warrants to and agrees with the Selling Shareholder that: 12.1 The Placement Agent is a corporation duly organized and existing under the laws of the state of Colorado. The Placement Agent is a licensed NASD broker-dealer, and a member of SIPC. 12.2 There is not now pending or threatened or to the Placement Agent's knowledge, contemplated against the Placement Agent any action or proceeding of which the Placement Agent has been advised, either in any court of competent jurisdiction, before the Commission or before any state securities commission or the NASD, concerning the Placement Agent's activities which would impair the ability of the Placement Agent to conduct the offering of the Units as contemplated by this Agreement. 12.3 In the event any action or proceeding of the type referred to Section 12.2 above shall in be instituted or threatened against the Placement Agent at any time prior to the Closing Date or, in the event there shall be filed by or against the Placement Agent in any court, pursuant to any federal, state, local or municipal statute, a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of its assets or if the Placement Agent makes an assignment for the benefit of creditors, the Selling Shareholder shall have the right, on three (3) days' written notice to the Placement Agent, to terminate this Agreement without any liability to the Placement Agent of any kind, except for the payment of all expenses provided herein. 12.4 Placement Agent understands and acknowledges that prior to the offer for resale to the public of the Units, the Units, the Common Stock and Warrants are being registered for resale with the Commission pursuant to the Act. Accordingly, in conducting its activities under this Agreement. (a) Placement Agent will not offer or sell any Units or other securities offered by the Selling Shareholder, except in conformity with the Prospectus. (b) Placement Agent will not solicit or accept the subscription of any Units of any person unless immediately before accepting such subscription Placement Agent has reasonable grounds to believe and does believe that (i) such person is suitable for investing in the Units, and (ii) all representations made and information furnished by such person, to the best knowledge of the Placement Agent, are true and correct in all material respects. 1.1 - 13 (c) Placement Agent will not solicit any purchasers of any Units or other securities unless the Prospectus is furnished to such prospective purchaser in accordance with the prospectus delivery requirements of the Act. (d) Upon notice from the Company or the Selling Shareholder that the Prospectus is required to be amended or supplemented, Placement Agent will immediately cease use of the Prospectus until Placement Agent has received such amendment or supplement and thereafter will make use of the Prospectus only as so amended or supplemented, and Placement Agent will deliver a copy of such amendment or supplement to each prospective purchaser to whom a copy of the Prospectus had previously been delivered (and who has not returned such copy). (e) Placement Agent will use its best efforts to conduct the offering and placement of the Units on behalf of the Selling Shareholder. (g) Placement Agent will notify the Selling Shareholder in writing promptly when any event shall have occurred during the offering period as a result of which any representation or warranty of the Placement Agent herein would not be true. 12.5 Neither the Placement Agent nor any of its affiliates or controlling persons will take any action that will impair the effectiveness of the transactions contemplated by this Agreement. 12.6 All corporate actions by Placement Agent required for the execution, delivery and performance of this Agreement have been taken. The execution and delivery of this Agreement by the Placement Agent, the observance and performance thereof, and the consummation of the transactions contemplated herein or in the Prospectus do not and will not constitute a material breach of, or a material default under, any instrument or agreement by which the Placement Agent is bound, and does not and will not, to the best of the Placement Agent's knowledge, contravene any existing law, decree or order applicable to it. This Agreement constitutes a valid and binding agreement of Placement Agent, enforceable in accordance with its terms. 12.7 Placement Agent understands that the Selling Shareholder is relying upon Placement Agent's representations and warranties in connection with the offering and the sale of the Units and the underlying securities contemplated by this Agreement. 12.8 Placement Agent's representations and warranties under this Section 12 shall be true and correct as of the Closing, and shall survive the Closing indefinitely. 13. NOTICES. Except as otherwise expressly provided in this Agreement: 13.1 Whenever notice is required by the provisions of this Agreement to be given to the Selling Shareholder, such notice shall be in writing, addressed to the Selling Shareholder, at: 1.1 - 14 If to Selling Shareholder: Attn: Howard P. Silverman --------------------------- --------------------------- --------------------------- With a Copy to: Attn: Gregory Bartko, Esq. Law Office Of Gregory Bartko 3475 Lenox Road Suite 400 Atlanta, GA 30326 13.2 Whenever notice is required by the provisions of this Agreement to be given to the Placement Agent, such notice shall be given in writing, addressed to the Placement Agent, at: If to the Placement Agent: Attn: Stuart Greenberg West America Securities Corp. 4510 East Thousand Oaks Blvd. Suite 100 Westlake Village, CA 91362 With a Copy to: Attn: ----------------------- ------------------------------ ------------------------------ ------------------------------ 14. MISCELLANEOUS. 14.1 Benefit. This Agreement is made solely for the benefit of the Placement Agent and the Selling Shareholder, their respective officers and directors and any controlling person referred to in Section 15 of the Securities Act of 1934 and their respective successors and assigns, and no other person may acquire or have any night under or by virtue of this Agreement, including, without limitation, the holders of any Units or the securities underlying the Units. The term "successor" or the term "successors and assigns" as used in this Agreement shall not include any purchasers, as such, of any of the Units. 14.2 Survival. The respective indemnities, agreements, representations, warranties, covenants and other statements of the Selling Shareholder and the Placement Agent, or the officers, directors or controlling persons of the Placement Agent as set forth in or made pursuant to this Agreement and the indemnity agreements of the Selling Shareholder and the Placement Agent shall survive and remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Company, Selling Shareholder, or the Placement Agent or any officer, director or controlling person of the Company or of the Placement Agent; (ii) delivery of or payment for the Units; or (iii) the Closing Date(s), and any successor of the Selling Shareholder or the Placement Agent or any controlling person, officer or director thereof, as the case may be, shall be entitled to the benefits hereof. 1.1 - 15 14.3 Governing Law, Jurisdiction and Arbitration. The validity, interpretation and construction of this Agreement and of each party hereof will be governed by the laws of the State of Nevada. Any controversy or claim arising out of or related to this Agreement or the breach thereof, shall be settled by binding arbitration in Carson City, Nevada in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association located nearest to Carson City, Nevada ("AAA"). A proceeding shall be commenced upon written demand by the Selling Shareholder or the Placement Agent to the other. The arbitrator(s) shall enter a judgment by default against any party which fails or refuses to appear in any properly noticed arbitration proceeding. The proceeding shall be conducted by one (1) arbitrator, unless the amount alleged to be in dispute exceeds two hundred fifty thousand dollars ($250,000), in which case three (3) arbitrators shall preside. The arbitrator(s) will be chosen by the parties from a list provided by the AAA, and if they are unable to agree within ten (10) days, the AAA shall select the arbitrator(s). The arbitrators must be experts in securities law and financial transactions. The arbitrators shall assess costs and expenses of the arbitration, including all attorneys' and experts' fees, as the arbitrators believe is appropriate in light of the merits of parties' respective positions in the issues in dispute. The award of the arbitrator(s) shall be final and binding upon the parties and may be enforced in any court having jurisdiction. 14.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be deemed an original and all of which together will constitute one and the same instrument. 14.5 Confidential Information. All confidential financial or business information (except publicly available or freely usable material otherwise obtained from another source) respecting either party will be used solely by the other party in connection with the within transactions, be revealed only to employees or contractors of such other party who are necessary to the conduct of such transactions, and be otherwise held in strict confidence. 14.6 Finders. The Selling Shareholder represents that he is not obligated to pay any compensation or other fees, costs or related expenditures in cash or securities in excess of $5,000 to any underwriter, broker, placement agent, finder or other representative other than Placement Agent. Selling Shareholder agrees to indemnify the Placement Agent with respect to any other claim for a fee in connection with the offering of the Units. Placement Agent agrees to indemnify the Selling Shareholder with respect to any claim for a finder's fee that arises because of Placement Agent's agreement to pay a fee to the person or entity making such claim. 16.8 Recitals. The recitals to this Agreement are a material part hereof, and each recital is incorporated into this Agreement by reference and made a part of this Agreement. 1.1 - 16 IN WITNESS WHEREOF, the parties hereto have duly caused this Placement Agent Agreement to be executed as of the day and year first above written. SELLING SHAREHOLDER By: ------------------------------- Howard P. Silverman PLACEMENT AGENT WEST AMERICA SECURITIES CORP By: ------------------------------- 1.1 - 17 EX-1.2 5 file004.txt FORM OF REPRESENTATIVE'S WARRANT AGREEMENT EXHIBIT 1.2 - -------------------------------------------------------------------------------- LASIK AMERICA, INC. AND WEST AMERICA SECURITIES CORP. REPRESENTATIVE'S WARRANT AGREEMENT DATED AS OF , 2001 - -------------------------------------------------------------------------------- 1.2 - 1 REPRESENTATIVE'S WARRANT AGREEMENT dated as of _________, 2001 between LASIK AMERICA, INC., a Nevada corporation (the "Company"), and WEST AMERICA SECURITIES CORP. ("West America") (West America is hereinafter referred to variously as the "Holder" or "Holders" or the "Representative"). W I T N E S S E T H: WHEREAS, the Company proposes to issue to the Representative or its designee(s) warrants ("Warrants") to purchase up to an aggregate of 42,500 shares of Common Stock of the Company ("Common Stock") and/or up to an aggregate of 42,500 redeemable Common Stock purchase warrants, each to purchase one additional share of Common Stock ("Redeemable Warrants")); and WHEREAS, the Representative has agreed pursuant to the underwriting agreement (the "Underwriting Agreement") dated as of the date hereof between the Company and the several Underwriters listed therein to act as the Representative in connection with the Company's proposed public offering of 425,000 Units at a public offering price of $6.10 per Unit, each Unit consisting of one (1) share of the Company's Common Stock and one (1) Redeemable Warrant (the "Public Offering"); and WHEREAS, the Warrants to be issued pursuant to this Agreement will be issued on the Closing Date (as such term is defined in the Underwriting Agreement) by the Company to the Representative in consideration for, and as part of the Representative's compensation in connection with, the Representative acting as the Representative pursuant to the Underwriting Agreement; NOW, THEREFORE, in consideration of the premises, the payment by the Representative to the Company of an aggregate ten dollars ($10.00), the agreements herein set forth and other good and valuable consideration, hereby acknowledged, the parties hereto agree as follows: 1. GRANT. The Representative (or its designees) is hereby granted the right to purchase, at any time from _____________, 2002 [twelve months after date of this Agreement], until 5:30 P.M., New York time, on ___________, 2007 [five years after date of this Agreement], up to an aggregate of 42,500 shares of Common Stock and/or up to an aggregate of 42,500 Redeemable Warrants at an initial exercise price (subject to adjustment in Section 8 hereof) of $10.065 per Unit, subject to the terms and conditions of this Agreement. Each Redeemable Warrant is exercisable to purchase one additional share of Common Stock at an initial exercise price of $9.90, commencing on the date of issuance (the "Initial Exercise Date") and ending, at 5:00 p.m. New York time on ________ (the "Redeemable Warrant Expiration Date"), at which time the Redeemable Warrants shall expire. Except as set forth herein, the Units are in all respects identical to the Units being purchased by the Underwriters for resale to the public pursuant to the terms and provisions of the Underwriting Agreement. 2. WARRANT CERTIFICATES. The warrant certificates (the "Warrant Certificates") delivered and to be delivered pursuant to this Agreement shall be in the form set forth in Exhibit A, attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions, and other variations as required or permitted by this Agreement. 1.2 - 2 3. EXERCISE OF WARRANT. 3.1 METHOD OF EXERCISE. The Warrants initially are exercisable at an aggregate initial exercise price (subject to adjustment as provided in SECTION 8 hereof) per share of Common Stock and per Redeemable Warrant as set forth in SECTION 6 hereof payable by certified or official bank check in New York Clearing House funds, subject to adjustment as provided in SECTION 8 hereof. Upon surrender of a Warrant Certificate with the annexed Form of Election to Purchase duly executed, together with payment of the Exercise Price (as hereinafter defined) for the shares of Common Stock and/or Redeemable Warrants so purchased at the Company's principal executive offices (presently located at 6466 Indian School Road, N.E., Albuquerque, New Mexico 87110) the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased and a certificate or certificates for the Redeemable Warrants so purchased. The purchase rights represented by each Warrant Certificate are exercisable at the option of the Holder thereof, in whole or in part (but not as to fractional shares of the Common Stock and Redeemable Warrants underlying the Warrants). In the event the Company redeems all of the outstanding Redeemable Warrants, the Redeemable Warrants underlying the Warrants may only be exercised if such exercise is simultaneous with the exercise of the Warrants. Warrants may be exercised to purchase all or part of the shares of Common Stock and/or Redeemable Warrants represented thereby. In the case of the purchase of less than all the shares of Common Stock and/or Redeemable Warrants purchasable under any Warrant Certificate, the Company shall cancel said Warrant Certificate upon the surrender thereof and shall execute and deliver a new Warrant Certificate of like tenor for the balance of the shares of Common Stock and/or Redeemable Warrants purchasable thereunder. 3.2 EXERCISE BY SURRENDER OF WARRANT. In addition to the method of payment set forth in SECTION 3.1 and in lieu of any cash payment required thereunder, the Holder(s) of the Warrants shall have the right at any time and from time to time to exercise the Warrants in full or in part by surrendering the Warrant Certificate in the manner specified in SECTION 3.1 hereof. The number of shares of Common Stock to be issued pursuant to this SECTION 3.2 shall be equal to the difference between (a) the number of shares of Common Stock in respect of which the Warrants are exercised and (b) a fraction, the numerator of which shall be the number of shares of Common Stock in respect of which the Warrants are exercised multiplied by the Exercise Price and the denominator of which shall be the Market Price (as defined in SECTION 3.3 hereof) of the Common stock. The number of Redeemable Warrants to be issued pursuant to this SECTION 3.2 shall be equal to the difference between (a) the number of Redeemable Warrants in respect of which the Warrants are exercised and (b) a fraction, the numerator of which shall be the number of Redeemable Warrants in respect of which the Warrants are exercised multiplied by the Exercise Price and the denominator of which shall be the Market Price (as defined in SECTION 3.3 hereof) of the Redeemable Warrants. Solely for the purposes of this Section 3.2, Market Price shall be calculated either (i) on the date on which the form of election attached hereto is deemed to have been sent to the Company pursuant to Section 14 hereof ("Notice Date") or (ii) as the average of the Market Price for each of the five trading days immediately preceding the Notice Date, whichever of (i) or (ii) results in a greater Market Price. 1.2 - 3 3.3 DEFINITION OF MARKET PRICE. (a) As used herein, the phrase "Market Price of the Common Stock" or the Redeemable Warrants, respectively, at any date shall be deemed to be the last reported sale price, or, in case no such reported sale takes place on such day, the average of the last reported sale prices for the last three (3) trading days, in either case as officially reported by the principal securities exchange on which the Common Stock or the Redeemable Warrants, as the case may be, are listed or admitted to trading on the Over-the-Counter Electronic Bulletin Board maintained by the NASD (the "Bulletin Board"), or, if the Common Stock or the Redeemable Warrants, as the case may be, are listed or admitted to trading on any national securities exchange or quoted by the National Association of Securities Dealers Automated Quotation System ("Nasdaq"), the average closing bid price as furnished by the National Association of Securities Dealers, Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no longer reporting such information. (b) If the Market Price of the Common Stock cannot be determined pursuant to Section 3.3(a) above, the Market Price of the Common Stock shall be determined in good faith (using customary valuation methods) by resolution of the members of the Board of Directors of the Company, based on the best information available to it. (c) If the Market Price of the Redeemable Warrants cannot be determined pursuant to Section 3.3(a) above, the Market Price of a Redeemable Warrant shall equal the difference between the Market Price of the Common Stock and the Exercise Price of the Redeemable Warrant. 4. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants, the issuance of certificates for shares of Common Stock and Redeemable Warrants or other securities, properties or rights underlying such Warrants, and upon the exercise of the Redeemable Warrants, the issuance of certificates for shares of Common Stock or other securities, properties or rights underlying such Redeemable Warrants shall be made forthwith (and in any event such issuance shall be made within five (5) business days thereafter) without charge to the Holder thereof including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificates shall (subject to the provisions of Sections 5 and 7 hereof) be issued in the name of, or in such names as may be directed by, the Holder thereof. The Warrant Certificates and the certificates representing the shares of Common Stock and the Redeemable Warrants underlying the Warrants and the shares of Common Stock underlying each Redeemable Warrant or other securities, property or rights shall be executed on behalf of the Company by the manual or facsimile signature of the then present Chairman or Vice Chairman of the Board of Directors or President or Vice President of the Company under its corporate seal reproduced thereon, attested to by the manual or facsimile signature of the then present Secretary or Assistant Secretary or Treasurer or Assistant Treasurer of the Company. Warrant Certificates shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer. 5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant Certificate, by its acceptance thereof, covenants and agrees that the 1.2 - 4 Warrants are being acquired as an investment and not with a view to the distribution thereof; that the Warrants may not be sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or in part, for a period of one (1) year from the date hereof, except to officers or partners of the Representative. 6. EXERCISE PRICE. 6.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided in Section 8 hereof, the initial exercise price of each Warrant shall be $10.065 per Unit, which is $9.90 per share of Common Stock and $.165 per Redeemable Warrant. The adjusted exercise price shall be the price which shall result from time to time from any and all adjustments of the initial exercise price in accordance with the provisions of Section 8 hereof. 6.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context. 7. REGISTRATION RIGHTS. 7.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Warrants, the shares of Common Stock and the Redeemable Warrants underlying the Warrants and the shares of Common Stock issuable upon exercise of the Redeemable Warrants underlying the Warrants and the other securities issuable upon exercise of the Warrants (collectively, the "Warrant Securities") have not been registered under the Securities Act of 1933, as amended (the "Act"), but shall be subject to the piggyback and demand registration rights provided for in Section 7.2 and 7.3 hereof. All the representations and warranties of the Company contained in the Underwriting Agreement relating to the Registration Statement, the Preliminary Prospectus and Prospectus (as such terms are defined in the Underwriting Agreement) and made as of the dates provided therein, are hereby incorporated by reference. Certificates representing the shares of Common Stock and the Redeemable Warrants underlying the Warrants, and upon exercise, in whole or in part of the Redeemable Warrants, certificates representing the shares of Common Stock underlying the Redeemable Warrants and the other securities issuable upon exercise of the Warrants shall bear the following legend: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended ("Act"), and may not be offered, sold, pledged, hypothecated, assigned or transferred except pursuant to (i) an effective registration statement under the Act, (ii) to the extent applicable, Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) an opinion of counsel, if such opinion shall be reasonably satisfactory to counsel to the 1.2 - 5 issuer, that an exemption from registration under such Act is available." 7.2 PIGGYBACK REGISTRATION. If, at any time commencing after the effective date of the public offering hereof and expiring five (5) years thereafter, the Company proposes to register any of its securities under the Act (other than pursuant to Form S-8, S-4 or a comparable registration statement) the Company will give written notice by registered mail, at least thirty (30) days prior to the filing of each such registration statement, to the Representative and to all other Holders of the Warrants and/or the Warrant Securities of its intention to do so. If the Representative or other Holders of the Warrants and/or Warrant Securities notifies the Company within twenty (20) days after receipt of any such notice of its or their desire to include any such securities in such proposed registration statement, the Company shall afford the Representative and such Holders of the Warrants and/or Warrant Securities the opportunity to have any such Warrant Securities registered under such registration statement. Notwithstanding the provisions of this Section 7.2, the Company shall have the right at any time after it shall have given written notice pursuant to this Section 7.2 (irrespective of whether a written request for inclusion of any such securities shall have been made) to elect not to file any such proposed registration statement, or to withdraw the same after the filing but prior to the effective date thereof. 7.3 DEMAND REGISTRATION. (a) At any time commencing after the effective date of the public offering hereof and expiring five (5) years thereafter, the Holders of the Warrants and/or Warrant Securities representing a "Majority" (as hereinafter defined) of such securities (assuming the exercise of all of the Warrants and the Redeemable Warrants underlying the Warrants) shall have the right (which right is in addition to the registration rights under Section 7.2 hereof), exercisable by written notice to the Company, to have the Company prepare and file with the Securities and Exchange Commission (the "Commission"), on one occasion, a registration statement and such other documents, including a prospectus, as may be necessary in the opinion of both counsel for the Company and counsel for the Representative and Holders, in order to comply with the provisions of the Act, so as to permit a public offering and sale of their respective Warrant Securities for nine (9) consecutive months by such Holders and any other Holders of the Warrants and/or Warrant Securities who notify the Company within ten (10) days after receiving notice from the Company of such request. (b) The Company covenants and agrees to give written notice of any registration request under this Section 7.3 by any Holder or Holders to all other registered Holders of the Warrants and the Warrant Securities within ten (10) days from the date of the receipt of any such registration request. (c) Notwithstanding anything to the contrary contained herein, if the Company shall not have filed a registration statement for the Warrant Securities within the time period specified in Section 7.4(a) hereof pursuant to the written notice specified in Section 7.3(a) of a Majority of the Holders of the Warrants and/or Warrant Securities, the Company shall have the option, upon 1.2 - 6 the written notice of election of a Majority of the Holders of the Warrants and/or Warrant Securities to repurchase (i) any and all Warrant Securities at the higher of the Market Price per share of Common Stock on (x) the date of the notice sent pursuant to Section 7.3(a) or (y) the expiration of the period specified in Section 7.4(a) and (ii) any and all Warrants at such Market Price less the Exercise Price of such Warrant. Such repurchase shall be in immediately available funds and shall close within two (2) days after the later of (i) the expiration of the period specified in Section 7.4(a) or (ii) the delivery of the written notice of election specified in this Section 7.3(c). (d) In addition to the registration rights under Section 7.2 and subsection (a) of this Section 7.3, at any time commencing after the date hereof and expiring five (5) years thereafter, any Holder of Warrants and/or Warrant Securities shall have the right, exercisable by written request to the Company, to have the Company prepare and file, on one occasion, with the Commission a registration statement so as to permit a public offering and sale for nine (9) consecutive months by any such Holder of its Warrant Securities provided, however, that the provisions of Section 7.4(b) hereof shall not apply to any such registration request and registration and all costs incident thereto shall be at the expense of the Holder or Holders making such request. 7.4 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In connection with any registration under Section 7.2 or 7.3 hereof, the Company covenants and agrees as follows: (a) The Company shall use its best efforts to file a registration statement within thirty (30) days of receipt of any demand therefore, shall use its best efforts to have any registration statement declared effective at the earliest possible time, and shall furnish each Holder desiring to sell Warrant Securities such number of prospectuses as shall reasonably be requested. (b) The Company shall pay all costs (excluding fees and expenses of Holder(s)' counsel and any underwriting or selling commissions), fees and expenses in connection with all registration statements filed pursuant to Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's legal and accounting fees, printing expenses, blue sky fees and expenses. The Holder(s) will pay all costs, fees and expenses in connection with any registration statement filed pursuant to Section 7.3(d). If the Company shall fail to comply with the provisions of Section 7.4(a), the Company shall, in addition to any other equitable or other relief available to the Holder(s), be liable for any or all incidental or special damages sustained by the Holder(s) requesting registration of their Warrant Securities, excluding consequential damages. (c) The Company will take all necessary action which may be required in qualifying or registering the Warrant Securities included in a registration statement for offering and sale under the securities or blue sky laws of such states as reasonably are requested by the Holder(s), provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. 1.2 - 7 (d) The Company shall indemnify the Holder(s) of the Warrant Securities to be sold pursuant to any registration statement and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage, expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 7 of the Underwriting Agreement. The Company further agree(s) that upon demand by an indemnified person, at any time or from time to time, it will promptly reimburse such indemnified person for any loss, claim, damage, liability, cost or expense actually and reasonably paid by the indemnified person as to which the Company has indemnified such person pursuant hereto. Notwithstanding the foregoing provisions of this Section 7.4(d) any such payment or reimbursement by the Company of fees, expenses or disbursements incurred by an indemnified person in any proceeding in which a final judgment by a court of competent jurisdiction (after all appeals or the expiration of time to appeal) is entered against the Company or such indemnified person as a direct result of the Holder(s) or such person's gross negligence or willful misfeasance will be promptly repaid to the Company. (e) The Holder(s) of the Warrant Securities to be sold pursuant to a registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 7 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company. The Holder(s) further agree(s) that upon demand by an indemnified person, at any time or from time to time, they will promptly reimburse such indemnified person for any loss, claim, damage, liability, cost or expense actually and reasonably paid by the indemnified person as to which the Holder(s) have indemnified such person pursuant hereto. Notwithstanding the foregoing provisions of this Section 7.4(e) any such payment or reimbursement by the Holder(s) of fees, expenses or disbursements incurred by an indemnified person in any proceeding in which a final judgment by a court of competent jurisdiction (after all appeals or the expiration of time to appeal) is entered against the Company or such indemnified person as a direct result of the Company or such person's gross negligence or willful misfeasance will be promptly repaid to the Holder(s). (f) Nothing contained in this Agreement shall be construed as requiring the Holder(s) to exercise their Warrants prior to the initial filing of any registration statement or the effectiveness thereof. (g) The Company shall not permit the inclusion of any securities other than the Warrant Securities to be included in any registration 1.2 - 8 statement filed pursuant to Section 7.3 hereof, or permit any other registration statement to be or remain effective during the effectiveness of a registration statement filed pursuant to Section 7.3 hereof, without the prior written consent of the Holders of the Warrants and Warrant Securities representing a Majority of such securities (assuming the exercise of all of the Warrants and the Redeemable Warrants underlying the Warrants). (h) The Company shall furnish to each Holder participating in the offering and to each underwriter, if any, a signed counterpart, addressed to such Holder or underwriter, of (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under the underwriting agreement), and (ii) a "cold comfort" letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent public accountants who have issued a report on the Company's financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities. (i) The Company shall as soon as practicable after the effective date of the registration statement, and in any event within 15 months thereafter, make "generally available to its security holders" (within the meaning of Rule 158 under the Act) an earnings statement (which need not be audited) complying with Section 11(a) of the Act and covering a period of at least 12 consecutive months beginning after the effective date of the registration statement. (j) The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of the NASD. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times and as often as any such Holder or underwriter shall reasonably request. (k) The Company shall enter into an underwriting agreement with the managing underwriter selected for such underwriting by Holders holding a Majority of the Warrant Securities requested to be included in such underwriting, which may be the Representative. Such agreement shall be satisfactory in form and substance to the Company, each Holder and such managing underwriter, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of 1.2 - 9 that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Warrant Securities and may, at their option, require that any or all of the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders and their intended methods of distribution. (l) In addition to the Warrant Securities, upon the written request therefore by any Holder(s), the Company shall include in the registration statement any other securities of the Company held by such Holder(s) as of the date of filing of such registration statement, including without limitation, restricted shares of Common Stock, options, warrants or any other securities convertible into shares of Common Stock. (m) For purposes of this Agreement, the term "Majority" in reference to the Holders of Warrants or Warrant Securities shall mean in excess of fifty percent (50%) of the then outstanding Warrants or Warrant Securities that (i) are not held by the Company, an affiliate, officer, creditor, employee or agent thereof or any of their respective affiliates, members of their family, persons acting as nominees or in conjunction therewith and (ii) have not been resold to the public pursuant to a registration statement filed with the Commission under the Act. 8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. 8.1 SUBDIVISION AND COMBINATION. In case the Company shall at any time subdivide or combine the outstanding shares of Common Stock, the Exercise Price shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination. 8.2 STOCK DIVIDENDS AND DISTRIBUTIONS. In case the Company shall pay dividend in, or make a distribution of, shares of Common Stock or of the Company's capital stock convertible into Common Stock, the Exercise Price shall forthwith be proportionately decreased. An adjustment made pursuant to this Section 8.2 shall be made as of the record date for the subject stock dividend or distribution. 8.3 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 8, the number of Warrant Securities issuable upon the exercise at the adjusted Exercise Price of each Warrant shall be adjusted to the nearest whole number by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Securities issuable upon exercise of the Warrants immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. 8.4 DEFINITION OF COMMON STOCK. For the purpose of this Agreement, the term "Common Stock" shall mean (i) the class of stock designated as Common Stock in the Certificate of Incorporation of the Company as may be amended or restated as of the date hereof, or (ii) any other class of stock resulting from successive changes or reclassifications of such Common Stock consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. 1.2 - 10 8.5 MERGER OR CONSOLIDATION OR SALE. (a) In case of any consolidation of the Company with, or merger of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger which does not result in any reclassification or change of the outstanding Common Stock), the corporation formed by such consolidation or merger shall execute and deliver to the Holder a supplemental warrant agreement providing that the holder of each Warrant then outstanding or to be outstanding shall have the right thereafter (until the expiration of such Warrant) to receive, upon exercise of such Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock of the Company for which such Warrant might have been exercised immediately prior to such consolidation, merger, sale or transfer. Such supplemental warrant agreement shall provide for adjustments which shall be identical to the adjustments provided in this Section 8. The above provision of this subsection shall similarly apply to successive consolidations or mergers. (b) In the event of (i) the sale by the Company of all or substantially all of its assets, or (ii) the engagement by the Company or any of its affiliates in a "Rule 13e-3 transaction" as defined in paragraph (a)(3) of Rule 13e-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, or (iii) a distribution to the Company's stockholders of any cash, assets, property, rights, evidences of indebtedness, securities or any other thing of value, or any combination thereof, the Holders of the unexercised Warrants shall receive notice of such sale, transaction or distribution twenty (20) days prior to the date of such sale or the record date for such transaction or distribution, as applicable, and, if they exercise such Warrants prior to such date, they shall be entitled, in addition to the shares of Common Stock issuable upon the exercise thereof, to receive such property, cash, assets, rights, evidence of indebtedness, securities or any other thing of value, or any combination thereof, on the payment date of such sale, transaction or distribution. 8.6 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than ten cents (10 cents) per Warrant Security, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least ten cents (10 cents) per Warrant Security. 8.7 ADJUSTMENT OF REDEEMABLE WARRANTS' EXERCISE PRICE. With respect to any of the Redeemable Warrants whether or not the Redeemable Warrants have been exercised (or are exercisable) and whether or not the Redeemable Warrants are issued and outstanding, the Redeemable Warrant exercise price and the number of shares of Common Stock underlying such Redeemable Warrants shall be automatically adjusted in accordance with Section 8 of the Warrant Agreement between the Company and Corporate Stock Transfer dated ____________, 2001 (the "Redeemable Warrant Agreement"), upon the occurrence of any of the events described therein. Thereafter, the underlying Redeemable Warrants shall be exercisable at such adjusted Redeemable Warrant exercise price for such adjusted number of underlying shares of Common Stock or other securities, properties or rights. 1.2 - 11 9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant Certificate is exchangeable without expense, upon the surrender thereof by the registered Holder at the principal executive office of the Company, for a new Warrant Certificate of like tenor and date representing in the aggregate the right to purchase the same number of Units in such denominations as shall be designated by the Holder thereof at the time of such surrender. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrants, if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor, in lieu thereof. 10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required to issue certificates representing fractions of shares of Common Stock or Redeemable Warrants upon the exercise of the Warrants, or fractions of shares of Common Stock upon the exercise of the Redeemable Warrants underlying the Warrants, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of shares of Common Stock or Redeemable Warrants, as the case may be, or other securities, properties or rights. 11. RESERVATION AND LISTING OF SECURITIES. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon the exercise of the Warrants and the Redeemable Warrants, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Warrants and payment of the Exercise Price therefore, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any stockholder. The Company further covenants and agrees that upon exercise of the Redeemable Warrants underlying the Warrants and payment of the respective Redeemable Warrant exercise price therefore, all shares of Common Stock and other securities issuable upon such exercises shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any stockholder. As long as the Warrants shall be outstanding, the Company shall use its best efforts to cause all shares of Common Stock issuable upon the exercise of the Warrants and the Redeemable Warrants and all Redeemable Warrants underlying the Warrants to be listed (subject to official notice of issuance) on all securities exchanges on which the Common Stock or the Redeemable Warrants issued to the public in connection herewith may then be listed and/or quoted on the Bulletin Board. 12. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement shall be construed as conferring upon the Holders the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of stockholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the expiration of the Warrants and their exercise, any of the following events shall occur: 1.2 - 12 (a) the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or (b) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefore; or (c) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed; then, in any one or more of said events, the Company shall give written notice of such event at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to give such notice or any defect therein shall not affect the validity of any action taken in connection with the declaration or payment of any such dividend, or the issuance of any convertible or exchangeable securities, or subscription rights, options or warrants, or any proposed dissolution, liquidation, winding up or sale. 13. REDEEMABLE WARRANTS. The form of the certificate representing Redeemable Warrants (and the form of election to purchase shares of Common Stock upon the exercise of Redeemable Warrants and the form of assignment printed on the reverse thereof) shall be substantially as set forth in Exhibit "A" to the Redeemable Warrant Agreement. Each Redeemable Warrant issuable upon exercise of the Warrants shall evidence the right to initially purchase one fully paid and non-assessable share of Common Stock at an initial purchase price of $9.60 per share commencing on the Initial Exercise Date and ending at 5:00 p.m. New York time on the Redeemable Warrant Expiration Date at which time the Redeemable Warrants shall expire. The exercise price of the Redeemable Warrants and the number of shares of Common Stock issuable upon the exercise of the Redeemable Warrants are subject to adjustment, whether or not the Warrants have been exercised and the Redeemable Warrants have been issued, in the manner and upon the occurrence of the events set forth in Section 8 of the Redeemable Warrant Agreement, which is hereby incorporated herein by reference and made a part hereof as if set forth in its entirety herein. Subject to the provisions of this Agreement and upon issuance of the Redeemable Warrants underlying the Warrants, each registered holder of such Redeemable Warrants shall have the right to purchase from the Company (and the Company shall issue to such registered holders) up to the number of fully paid and non-assessable shares of Common Stock (subject to adjustment as provided herein and in the Redeemable Warrant Agreement), free and clear of all preemptive rights of stockholders, provided that such registered holder complies with the terms governing exercise 1.2 - 13 of the Redeemable Warrants set forth in the Redeemable Warrant Agreement, and pays the applicable exercise price, determined in accordance with the terms of the Redeemable Warrant Agreement. Upon exercise of the Redeemable Warrants, the Company shall forthwith issue to the registered holder of any such Redeemable Warrant in his name or in such name as may be directed by him, certificates for the number of shares of Common Stock so purchased. Except as otherwise provided herein, the Redeemable Warrants underlying the Warrants shall be governed in all respects by the terms of the Redeemable Warrant Agreement. The Redeemable Warrants shall be transferable in the manner provided in the Redeemable Warrant Agreement, and upon any such transfer, a new Redeemable Warrant Certificate shall be issued promptly to the transferee. The Company covenants to, and agrees with, the Holder(s) that without the prior written consent of the Holder(s), the Redeemable Warrant Agreement will not be modified, amended, cancelled, altered or superseded, and that the Company will send to each Holder, irrespective of whether or not the Warrants have been exercised, any and all notices required by the Redeemable Warrant Agreement to be sent to holders of Redeemable Warrants. 14. NOTICES. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered, or mailed by registered or certified mail, return receipt requested: (a) If to the registered Holder of the Warrants, to the address of such Holder as shown on the books of the Company; or (b) If to the Company, to the address set forth in Section 3 hereof or to such other address as the Company may designate by notice to the Holders. 15. SUPPLEMENTS AND AMENDMENTS. The Company and the Representative may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates (other than the Representative) in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any provisions herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Representative may deem necessary or desirable and which the Company and the Representative deem shall not adversely affect the interests of the Holders of Warrant Certificates. 16. SUCCESSORS. All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company, the Holders and their respective successors and assigns hereunder. 17. TERMINATION. This Agreement shall terminate at the close of business on ___________ [5 years from date of this Agreement]. Notwithstanding the foregoing, the indemnification provisions of Section 7 shall survive such termination until the close of business on ____________ [10 years from the date of this Agreement]. 18. GOVERNING LAW, SUBMISSION TO JURISDICTION. This Agreement and each Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Nevada and for all purposes shall be construed in accordance with the laws of said State without giving effect to the rules of said State governing the conflicts of laws. 1.2 - 14 The Company, the Representative and the Holders hereby agree that any action, proceeding or claim against it arising out of, or relating in any way to, this Agreement shall be brought and enforced in the courts of the State of New York or of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company, the Representative and the Holders hereby irrevocably waive any objection to such exclusive jurisdiction or inconvenient forum. Any such process or summons to be served upon any of the Company, the Representative and the Holders (at the option of the party bringing such action, proceeding or claim) may be served by transmitting a copy thereof, by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address as set forth in Section 14 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the party so served in any action, proceeding or claim. The Company, the Representative and the Holders agree that the prevailing party(ies) in any such action or proceeding shall be entitled to recover from the other party(ies) all of its/their reasonable legal costs and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefore. 19. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the Underwriting Agreement to the extent portions thereof are referred to herein) and the Redeemable Warrant Agreement contain the entire understanding between the parties hereto with respect to the subject matter hereof and may not be modified or amended except by a writing duly signed by the party against whom enforcement of the modification or amendment is sought. 20. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement. 21. CAPTIONS. The caption headings of the Sections of this Agreement are for convenience of reference only and are not intended, nor should they be construed as, a part of this Agreement and shall be given no substantive effect. 22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the Representative and any other registered Holder(s) of the Warrant Certificates or Warrant Securities any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Representative and any other Holder(s) of the Warrant Certificates or Warrant Securities. 23. COUNTERPARTS. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall to either constitute but one and the same instrument. 1.2 - 15 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. LASIK AMERICA, INC. By: --------------------------------- Name: Howard P. Silverman Title: Chief Executive Officer WEST AMERICA SECURITIES CORP By: --------------------------------- Name: Title: 1.2 - 16 EXHIBIT A [FORM OF WARRANT CERTIFICATE] THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE. THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN. EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK TIME, ________, 2007 No. W- ____ Warrants WARRANT CERTIFICATE This Warrant Certificate certifies that __________, or registered assigns, is the registered holder of __________ Warrants to purchase initially, at any time from ____________, 2002 [one year from the effective date of the Registration Statement] until 5:00 p.m. New York time on ____________, 2007 [five years from the effective date of the Registration Statement] ("Expiration Date"), up to 42,500, fully-paid and non-assessable shares of common stock ("Common Stock") of LASIK AMERICA, INC., a Nevada corporation (the "Company"), and/or up to 42,500 redeemable warrants ("Redeemable Warrants") (each Redeemable Warrant entitling the holder to purchase one fully-paid and non-assessable share of Common Stock), at the initial exercise price, subject to adjustment in certain events (the "Exercise Price"), of $9.90 per share of Common Stock and $.165 per Redeemable Warrant upon surrender of this Warrant Certificate and payment of the Exercise Price at an office or agency of the Company, or by surrender of this Warrant Certificate in lieu of cash payment, but subject to the conditions set forth herein and in the warrant agreement dated as of _________________, 2001 between the Company and West America Securities Corp. (the "Warrant Agreement"). Payment of the Exercise Price shall be made by certified or official bank check in New York Clearing House funds payable to the order of the Company or by surrender of this Warrant Certificate. No Warrant may be exercised after 5:00 p.m., New York time, on the Expiration Date, at which time all Warrants evidenced hereby, unless exercised prior thereto, hereby shall thereafter be void. The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the 1.2 - 17 Company and the holders (the words "holders" or "holder" meaning the registered holders or registered holder) of the Warrants. The Warrant Agreement provides that upon the occurrence of certain events the Exercise Price and the type and/or number of the Company's securities issuable thereupon may, subject to certain conditions, be adjusted. In such event, the Company will, at the request of the holder, issue a new Warrant Certificate evidencing the adjustment in the Exercise Price and the number and/or type of securities issuable upon the exercise of the Warrants; provided, however, that the failure of the Company to issue such new Warrant Certificates shall not in any way change, alter, or otherwise impair, the rights of the holder as set forth in the Warrant Agreement. Upon due presentment for registration of transfer of this Warrant Certificate at an office or agency of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided herein and in the Warrant Agreement, without any charge except for any tax or other governmental charge imposed in connection with such transfer. Upon the exercise of less than all of the Warrants evidenced by this Certificate, the Company shall forthwith issue to the holder hereof a new Warrant Certificate representing such Warrant. The Company may deem and treat the registered holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary. All terms used in this Warrant Certificate which are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement. IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its corporate seal. Dated as of ___________, 2001 LASIK AMERICA, INC. By: ----------------------------- Name: Howard P. Silverman Title: Chief Executive Officer 1.2 - 18 [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1] The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase _____________ Units and herewith tenders in payment for such securities a certified or official bank check payable in New York Clearing House Funds to the order of LASIK AMERICA, INC. in the amount of $__________, all in accordance with the terms of Section 3.1 of the Representative's Warrant Agreement dated as of ___________, 2001 between LASIK AMERICA, INC. and WEST AMERICA SECURITIES CORP. The undersigned requests that certificates for such securities be registered in the name of _______________ whose address is __________________________ and that such certificates be delivered to ______________________________ whose address is - ----------------------------. Dated: Signature ---------------------------------- (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate.) -------------------------------------------- (Insert Social Security or Other Identifying Number of Holder) 1.2 - 19 [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2] The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase ____________ Units all in accordance with the terms of Section 3.2 of the Representative's Warrant Agreement dated as of ______________, 2001 between LASIK AMERICA, INC. and WEST AMERICA SECURITIES CORP. The undersigned requests that certificates for such securities be registered in the name of __________________ whose address is _______________________ and that such certificates be delivered to _____________________ whose address is ____________________________________. Dated: Signature ---------------------------------- (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate.) -------------------------------------------- (Insert Social Security or Other Identifying Number of Holder) 1.2 - 20 [FORM OF ASSIGNMENT] (To be executed by the registered holder if such holder desires to transfer the Warrant Certificate.) FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers unto - -------------------------------------------------------------------------------- (Please print name and address of transferee) this Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ________________ Attorney, to transfer the within Warrant Certificate on the books of the within-named Company, with full power of substitution. Dated:_______________ Signature ---------------------------------- (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate.) -------------------------------------------- (Insert Social Security or Other Identifying Number of Holder) 1.2 - 21 EX-1.3 6 file005.txt FORM OF PUBLIC WARRANT AGREEMENT Exhibit 1.3 ----------- - ------------------------------------------------------------------------ LASIK AMERICA, INC. AND CORPORATE STOCK TRANSFER ------------ WARRANT AGREEMENT DATED AS OF ___________, 2001 - ------------------------------------------------------------------------ 1 AGREEMENT, dated this _____ day of ________, 2001, by and between LASIK AMERICA, INC., a Nevada corporation (the "Company") and CORPORATE STOCK TRANSFER, as Warrant Agent (the "Warrant Agent"). W I T N E S S E T H: WHEREAS, in connection with (i) the offering to the public of 550,000 Units, which include, in the aggregate, (i) 550,000 shares of Common Stock (as defined in Section 1) and 550,000 redeemable common stock purchase warrants (the "Warrants"), each warrant entitling the holder thereof to purchase one additional share of Common Stock, and (ii) the sale to West America Securities Corp. ("WAS") the representative of the several underwriters (the "Representative"), of warrants (the "Representative's Warrants") to purchase up to 42,500 shares of Common Stock and/or 42,500 Warrants, the Company will issue up to 592,500 Warrants (subject to increase as provided in the Representative's Warrant Agreement); and WHEREAS, the Company desires to provide for the issuance of certificates representing the Warrants; and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange and redemption of the Warrants, the issuance of certificates representing the Warrants, the exercise of the Warrants and the rights of the holders thereof. NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth and for the purpose of defining the terms and provisions of the Warrants and the certificates representing the Warrants and the respective rights and obligations thereunder of the Company, the holders of certificates representing the Warrants and the Warrant Agent, the parties hereto agree as follows: SECTION 1. DEFINITIONS. As used herein, the following terms shall have the following meanings, unless the context shall otherwise require: (a) "Act" shall mean the Securities Act of 1933, as amended. (b) "Amex" shall mean the American Stock Exchange. (c) "Common Stock" shall mean the authorized stock of the Company of any class, whether now or hereafter authorized, which has the right to participate in the voting and in the distribution of earnings and assets of the Company without limit as to amount or percentage. (d) "Commission" shall mean the Securities and Exchange Commission. (e) "Corporate Office" shall mean the office of the Warrant Agent (or its successor) at which at any particular time its business in Denver, Colorado, shall be administered, which office is located on the date hereof at 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209. (f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 2 (g) "Exercise Date" shall mean, subject to the provisions of Section 5(b) hereof, as to any Warrant, the date on which the Warrant Agent shall have received both (i) the Warrant Certificate representing such Warrant, with the exercise form thereon duly executed by the Registered Holder thereof or his attorney duly authorized in writing, and (ii) payment in cash or by official bank or certified check made payable to the Warrant Agent for the account of the Company, of the amount in lawful money of the United States of America equal to the applicable Purchase Price (as hereinafter defined) in good funds. (h) "Initial Public Offering Price" shall mean $6.00 per Share of Common Stock. (i) "Initial Warrant Exercise Date" shall mean _________, 2002. [six months from the date of issuance] (j) "Initial Warrant Redemption Date" shall mean __________, 2002. [six months from the date of issuance] (k) "NASD" shall mean the National Association of Securities Dealers, Inc. (l) "Nasdaq" shall mean the Nasdaq Stock Market. (m) "Purchase Price" shall mean, subject to modification and adjustment as provided in Section 8, $7.20 and further subject to the Company's right, in its sole discretion, to decrease the Purchase Price for a period of not less than 30 days on not less than 30 days' prior written notice to the Registered Holders. (n) "Redemption Date" shall mean the date (which may not occur before the Initial Warrant Redemption Date) fixed for the redemption of the Warrants in accordance with the terms hereof. (o) "Redemption Price" shall mean the price at which the Company may, at its option, redeem the Warrants, in accordance with the terms hereof, which price shall be $0.10 per Warrant, subject to adjustment from time to time pursuant to the provisions of Section 9 hereof. (p) "Registered Holder" shall mean the person in whose name any certificate representing the Warrants shall be registered on the books maintained by the Warrant Agent pursuant to Section 6. (q) "Transfer Agent" shall mean Corporate Stock Transfer, or its authorized successor. (r) "Underwriting Agreement" shall mean the underwriting agreement dated __________, 2001 between the Company and the several underwriters listed therein relating to the purchase for resale to the public of the Common Stock and the Warrants. (s) "Representative's Warrant Agreement" shall mean the agreement dated as of ___________, 2001 between the Company and the Representative relating to and governing the terms and provisions of the Representative's Warrants. 3 (t) "Warrant Certificate" shall mean a certificate representing each of the Warrants substantially in the form annexed hereto as Exhibit A. (u) "Warrant Expiration Date" shall mean, unless the Warrants are redeemed as provided in Section 9 hereof prior to such date, 5:30 p.m. (New York time), on ___________, 2005 [five years after date of Prospectus], or the Redemption Date as defined herein, whichever date is earlier; PROVIDED that if such date shall in the State of New York be a holiday or a day on which banks are authorized to close, then 5:30 p.m. (New York time) on the next following day which, in the State of New York, is not a holiday or a day on which banks are authorized to close. Upon five business days' prior written notice to the Registered Holders, the Company shall have the right to extend the Warrant Expiration Date. SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES. (a) Each Warrant shall initially entitle the Registered Holder of the Warrant Certificate representing such Warrant to purchase at the Purchase Price therefore from the Initial Warrant Exercise Date until the Warrant Expiration Date one share of Common Stock upon the exercise thereof in accordance with the terms hereof, subject to modification and adjustment as provided in Section 8. (b) Upon execution of this Agreement, Warrant Certificates representing the number of Warrants sold pursuant to the Underwriting Agreement (subject to modification and adjustment as provided in Section 8) shall be executed by the Company and delivered to the Warrant Agent. (c) Upon exercise of the Representative's Warrants as provided therein, Warrant Certificates representing all or a portion of 550,000 Warrants to purchase up to an aggregate of 550,000 shares of Common Stock (subject to modification and adjustment as provided in Section 8 hereof and in the Representative's Warrant Agreement), shall be countersigned, issued and delivered by the Warrant Agent upon written order of the Company signed by its Chairman of the Board, Chief Executive Officer, President or a Vice President and by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary. (d) From time to time, up to the Warrant Expiration Date or the Redemption Date, whichever date is earlier, the Warrant Agent shall countersign and deliver Warrant Certificates in required denominations of one or whole number multiples thereof to the person entitled thereto in connection with any transfer or exchange permitted under this Agreement. Except as provided herein, no Warrant Certificates shall be issued except (i) Warrant Certificates initially issued hereunder and those issued on or after the Initial Warrant Exercise Date, upon the exercise of fewer than all Warrants held by the exercising Registered Holder, (ii) Warrant Certificates issued upon any transfer or exchange of Warrants, (iii) Warrant Certificates issued in replacement of lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7, (iv) Warrant Certificates issued pursuant to the Representative's Warrant Agreement, and (v) at the option of the Company, Warrant Certificates in such form as may be approved by its Board of Directors, to reflect any adjustment or change in the Purchase Price, the number of shares of Common Stock purchasable upon exercise of the Warrants or the Redemption Price therefore made pursuant to Section 8 hereof. 4 SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES. (a) The Warrant Certificates shall be substantially in the form annexed hereto as Exhibit A (the provisions of which are hereby incorporated herein) and may have such letters, numbers or other marks of identification or designation and such legends, summaries or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be dated the date of issuance thereof (whether upon initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates) and issued in registered form. Warrants shall be numbered serially with the letter W on the Warrants. (b) Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President or any Vice President and by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary, by manual signatures or by facsimile signatures printed thereon, and shall have imprinted thereon a facsimile of the Company's seal. Warrant Certificates shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before the date of issuance of the Warrant Certificates or before countersignature by the Warrant Agent and issue and delivery thereof, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company. After countersignature by the Warrant Agent, Warrant Certificates shall be delivered by the Warrant Agent to the Registered Holder promptly and without further action by the Company, except as otherwise provided by Section 4(a) hereof. SECTION 4. EXERCISE. (a) Warrants in denominations of one or whole number multiples thereof may be exercised by the Registered Holder thereof commencing at any time on or after the Initial Warrant Exercise Date, but not after the Warrant Expiration Date, upon the terms and subject to the conditions set forth herein and in the applicable Warrant Certificate. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date and the person entitled to receive the securities deliverable upon such exercise shall be treated for all purposes as the holder, upon exercise thereof, as of the close of business on the Exercise Date. If Warrants in denominations other than whole number multiples thereof shall be exercised at one time by the same Registered Holder, the number of full shares of Common Stock which shall be issuable upon exercise thereof shall be computed on the basis of the aggregate number of full shares of Common Stock issuable upon such exercise. As soon as practicable on or after the Exercise Date and in any event within five business days after such date, if one or more Warrants have been exercised, the Warrant Agent on behalf of the Company shall cause to be issued to the person or persons entitled to receive the same a Common Stock certificate or certificates for the shares of Common Stock deliverable upon such exercise, and the Warrant Agent 5 shall deliver the same to the person or persons entitled thereto. Upon the exercise of any one or more Warrants, the Warrant Agent shall promptly notify the Company in writing of such fact and of the number of securities delivered upon such exercise and, subject to subsection (b) below, shall cause all payments of an amount in cash or by check made payable to the order of the Company, equal to the Purchase Price, to be deposited promptly in the Company's bank account. (b) The Company shall not be required to issue fractional shares on the exercise of Warrants. Warrants may only be exercised in such multiples as are required to permit the issuance by the Company of one or more whole shares. If one or more Warrants shall be presented for exercise in full at the same time by the same Registered Holder, the number of whole shares which shall be issuable upon such exercise thereof shall be computed on the basis of the aggregate number of shares purchasable on exercise of the Warrants so presented. If any fraction of a share would, except for the provisions provided herein, be issuable on the exercise of any Warrant (or specified portion thereof), the Company shall pay an amount in cash equal to such fraction multiplied by the then current market value of a share of Common Stock, determined as follows: (1) If the Common Stock is listed, or admitted to unlisted trading privileges on a national securities exchange, or is traded on Nasdaq, the current market value of a share of Common Stock shall be the closing sale price of the Common Stock at the end of the regular trading session on the last business day prior to the date of exercise of the Warrants on whichever of such exchanges or Nasdaq had the highest average daily trading volume for the Common Stock on such day; or (2) If the Common Stock is not listed or admitted to unlisted trading privileges on any national securities exchange, or listed, quoted or reported for trading on Nasdaq, but is traded in the over-the-counter market, the current market value of a share of Common Stock shall be the average of the last reported bid and asked prices of the Common Stock reported by the National Quotation Bureau, Inc. on the last business day prior to the date of exercise of the Warrants; or (3) If the Common Stock is not listed, admitted to unlisted trading privileges on any national securities exchange, or listed, quoted or reported for trading on Nasdaq, and bid and asked prices of the Common Stock are not reported by the National Quotation Bureau, Inc., the current market value of a share of Common Stock shall be an amount, not less than the book value thereof as of the end of the most recently completed fiscal quarter of the Company ending prior to the date of exercise, determined by the members of the Board of Directors of the Company exercising good faith and using customary valuation methods. SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC. (a) The Company covenants that it will at all times reserve and keep available out of its authorized Common Stock, solely for the purpose of issue upon exercise of Warrants, such number of shares of Common Stock as shall then be issuable upon the exercise of all outstanding Warrants. The Company covenants that all shares of Common Stock which shall be issuable upon exercise 6 of the Warrants shall, at the time of delivery thereof, be duly and validly issued and fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, and that upon issuance such shares shall be listed on each securities exchange, if any, on which the other shares of outstanding Common Stock of the Company are then listed. (b) The Company covenants that if any securities to be reserved for the purpose of exercise of Warrants hereunder require registration with, or approval of, any governmental authority under any federal securities law before such securities may be validly issued or delivered upon such exercise, then the Company will file a registration statement under the federal securities laws or a post-effective amendment, use its best efforts to cause the same to become effective and to keep such registration statement current while any of the Warrants are outstanding and deliver a prospectus which complies with Section 10(a)(3) of the Act, to the Registered Holder exercising the Warrant (except, if in the opinion of counsel to the Company, such registration is not required under the federal securities law or if the Company receives a letter from the staff of the Commission stating that it would not take any enforcement action if such registration is not effected). The Company will use its best efforts to obtain appropriate approvals or registrations under state "blue sky" securities laws with respect to any such securities. However, Warrants may not be exercised by, or shares of Common Stock issued to, any Registered Holder in any state in which such exercise would be unlawful. (c) The Company shall pay all documentary, stamp or similar taxes and other governmental charges that may be imposed with respect to the issuance of Warrants, or the issuance or delivery of any shares of Common Stock upon exercise of the Warrants; provided, however, that if shares of Common Stock are to be delivered in a name other than the name of the Registered Holder of the Warrant Certificate representing any Warrant being exercised, then no such delivery shall be made unless the person requesting the same has paid to the Warrant Agent the amount of transfer taxes or charges incident thereto, if any. (d) The Warrant Agent is hereby irrevocably authorized as the Transfer Agent to requisition from time to time certificates representing shares of Common Stock or other securities required upon exercise of the Warrants, and the Company will comply with all such requisitions. SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER. (a) Warrant Certificates may be exchanged for other Warrant Certificates representing an equal aggregate number of Warrants of the same class or may be transferred in whole or in part. Warrant Certificates to be exchanged shall be surrendered to the Warrant Agent at its Corporate Office, and, upon satisfaction of the terms and provisions hereof, the Company shall execute and the Warrant Agent shall countersign, issue and deliver in exchange therefore the Warrant Certificate or Certificates which the Registered Holder making the exchange shall be entitled to receive. (b) The Warrant Agent shall keep, at its office, books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and the transfer thereof in accordance with customary 7 practice. Upon due presentment for registration of transfer of any Warrant Certificate at such office, the Company shall execute and the Warrant Agent shall issue and deliver to the transferee or transferees a new Warrant Certificate or Certificates representing an equal aggregate number of Warrants of the same class. (c) With respect to all Warrant Certificates presented for registration of transfer, or for exchange or exercise, the subscription or exercise form, as the case may be, on the reverse thereof shall be duly endorsed or be accompanied by a written instrument or instruments of transfer and subscription, in form satisfactory to the Company and the Warrant Agent, duly executed by the Registered Holder thereof or his attorney-in-fact duly authorized in writing. (d) A service charge may be imposed by the Warrant Agent for any exchange or registration of transfer of Warrant Certificates. In addition, the Company may require payment by such Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. (e) All Warrant Certificates surrendered for exercise or for exchange in case of mutilated Warrant Certificates shall be promptly canceled by the Warrant Agent and thereafter retained by the Warrant Agent until termination of this Agreement. (f) Prior to due presentment for registration of transfer thereof, the Company and the Warrant Agent may deem and treat the Registered Holder of any Warrant Certificate as the absolute owner thereof and of each Warrant represented thereby (notwithstanding any notations of ownership or writing thereon made by anyone other than a duly authorized officer of the Company or the Warrant Agent) for all purposes and shall not be affected by any notice to the contrary. SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the Warrant Agent of evidence satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and (in the case of loss, theft or destruction) of indemnity satisfactory to them, and (in case of mutilation) upon surrender and cancellation thereof, the Company shall execute and the Warrant Agent shall (in the absence of notice to the Company and/or the Warrant Agent that a new Warrant Certificate has been acquired by a bona fide purchaser) countersign and deliver to the Registered Holder in lieu thereof a new Warrant Certificate of like tenor representing an equal aggregate number of Warrants. Applicants for a substitute Warrant Certificate shall also comply with such other reasonable regulations and pay such other reasonable charges as the Warrant Agent may prescribe. SECTION 8. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF COMMON STOCK DELIVERABLE. (a) Except as hereinafter provided, in the event the Company shall, issue or sell any shares of Common Stock for a consideration per share less than the Initial Public Offering Price of the shares of Common Stock or issue any shares of Common Stock as a stock dividend to the holders of Common Stock, or subdivide or combine the outstanding shares of Common Stock into a greater or lesser number of shares (any such issuance, subdivision or combination being 8 herein called a "Change of Shares"), then, and thereafter upon each further Change of Shares, the Purchase Price for the Warrants (whether or not the same shall be issued and outstanding) in effect immediately prior to such Change of Shares shall be changed to a price (including any applicable fraction of a cent to the nearest cent) determined by dividing (i) the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Change of Shares, multiplied by the Purchase Price in effect immediately prior to such Change of Shares and (b) the consideration, if any, received by the Company upon such sale, issuance, subdivision or combination, by (ii) the total number of shares of Common Stock outstanding immediately after such Change of Shares; PROVIDED, HOWEVER, that in no event shall the Purchase Price be adjusted pursuant to this computation to an amount in excess of the Purchase Price in effect immediately prior to such computation, except in the case of a combination of outstanding shares of Common Stock. For the purposes of any adjustment to be made in accordance with this Section 8(a), the following provisions shall be applicable: (A) In case of the issuance or sale of shares of Common Stock (or of other securities deemed hereunder to involve the issuance or sale of shares of Common Stock) for a consideration part or all of which shall be cash, the amount of the cash portion of the consideration therefore deemed to have been received by the Company shall be (i) the subscription price, if shares of Common Stock are offered by the Company for subscription, or (ii) the public Offering price (before deducting therefrom any compensation paid or discount allowed in the sale, underwriting or purchase thereof by underwriters or dealers or others performing similar services, or any expenses incurred in connection therewith), if such securities are sold to underwriters or dealers for public offering without a subscription offering, or (iii) the gross amount of cash actually received by the Company for such securities, in any other case. (B) In case of the issuance or sale (otherwise than as a dividend or other distribution on any stock of the Company, and otherwise than on the exercise of options, rights or warrants or the conversion or exchange of convertible or exchangeable securities) of shares of Common Stock (or of other securities deemed hereunder to involve the issuance or sale of shares of Common Stock) for a consideration part or all of which shall be other than cash, the amount of the consideration therefore other than cash deemed to have been received by the Company shall be the value of such consideration as determined in good faith by the Board of Directors of the Company, using customary valuation methods and on the basis of prevailing market values for similar property or services. (C) Shares of Common Stock issuable by way of dividend or other distribution on any stock of the Company shall be deemed to have been issued immediately after the opening of business on the day following the record date for the determination of shareholders entitled to receive such dividend or other distribution and shall be deemed to have been issued without consideration. (D) The reclassification of securities of the Company other than shares of Common Stock into securities including shares of Common Stock 9 shall be deemed to involve the issuance of such shares of Common Stock for a consideration other than cash immediately prior to the close of business on the date fixed for the determination of security holders entitled to receive such shares, and the value of the consideration allocable to such shares of Common Stock shall be determined as provided in subsection (B) of this Section 8(a). (E) The number of shares of Common Stock at any one time outstanding shall be deemed to include the aggregate maximum number of shares issuable (subject to readjustment upon the actual issuance thereof) upon the exercise of options, rights or warrants and upon the conversion or exchange of convertible or exchangeable securities. (b) Upon each adjustment of the Purchase Price pursuant to this Section 8, the number of shares of Common Stock purchasable upon the exercise of each Warrant shall be the number derived by multiplying the number of shares of Common Stock purchasable immediately prior to such adjustment by the Purchase Price in effect prior to such adjustment and dividing the product so obtained by the applicable adjusted Purchase Price. (c) In case the Company shall at any time after the date hereof issue options, rights or warrants to subscribe for shares of Common Stock, or issue any securities convertible into or exchangeable for shares of Common Stock, for a consideration per share (determined as provided in Sections 8(a) and 8(b) and as provided below) less than the Initial Public Offering Price of the Common Stock, or without consideration (including the issuance of any such securities by way of dividend or other distribution), the Purchase Price for the Warrants (whether or not the same shall be issued and outstanding) in effect immediately prior to the issuance of such options, rights or warrants, or such convertible or exchangeable securities, as the case may be, shall be reduced to a price determined by making the computation in accordance with the provisions of Sections 8(a) and 8(b) hereof, PROVIDED that: (A) The aggregate maximum number of shares of Common Stock, as the case may be, issuable or that may become issuable under such options, rights or warrants (assuming exercise in full even if not then currently exercisable or currently exercisable in full) shall be deemed to be issued and outstanding at the time such options, rights or warrants were issued, for a consideration equal to the minimum purchase price per share provided for in such options, rights or warrants at the time of issuance, plus the consideration, if any, received by the Company for such options, rights or warrants; PROVIDED, HOWEVER, that upon the expiration or other termination of such options, rights or warrants, if any thereof shall not have been exercised, the number of shares of Common Stock deemed to be issued and outstanding pursuant to this subsection (A) (and for the purposes of subsection (E) of Section 8(a) hereof) shall be reduced by the number of shares as to which options, warrants and/or rights shall have expired, and such number of shares shall no longer be deemed to be issued and outstanding, and the Purchase Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares actually issued plus the shares remaining issuable upon the exercise of those options, rights or warrants as to which the exercise rights shall not have expired or terminated unexercised. (B) The aggregate maximum number of shares of Common Stock issuable or that may become issuable upon conversion or exchange of any 10 convertible or exchangeable securities (assuming conversion or exchange in full even if not then currently convertible or exchangeable in full) shall be deemed to be issued and outstanding at the time of issuance of such securities, for a consideration equal to the consideration received by the Company for such securities, plus the minimum consideration, if any, receivable by the Company upon the conversion or exchange thereof; PROVIDED, HOWEVER, that upon the termination of the right to convert or exchange such convertible or exchangeable securities (whether by reason of redemption or otherwise), the number of shares of Common Stock deemed to be issued and outstanding pursuant to this subsection (B) (and for the purposes of subsection (E) of Section 8(a) hereof) shall be reduced by the number of shares as to which the conversion or exchange rights shall have expired or terminated unexercised, and such number of shares shall no longer be deemed to be issued and outstanding, and the Purchase Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares actually issued plus the shares remaining issuable upon conversion or exchange of those convertible or exchangeable securities as to which the conversion or exchange rights shall not have expired or terminated unexercised. (C) If any change shall occur in the price per share provided for in any of the options, rights or warrants referred to in subsection (A) of this Section 8(c), or in the price per share or ratio at which the securities referred to in subsection (B) of this Section 8(c) are convertible or exchangeable, such options, rights or warrants or conversion or exchange rights, as the case may be, to the extent not theretofore exercised, shall be deemed to have expired or terminated on the date when such price change became effective in respect of shares not theretofore issued pursuant to the exercise or conversion or exchange thereof, and the Company shall be deemed to have issued upon such date new options, rights or warrants or convertible or exchangeable securities. (d) In case of any reclassification or change of outstanding shares of Common Stock issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value or as a result of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than (1) a merger with a subsidiary of the Company in which merger the Company is the continuing corporation or (2) any consolidation or merger of the Company with or into another corporation which, in either instance, does not result in any reclassification or change of the then outstanding shares of Common Stock or other capital stock issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value or as a result of subdivision or combination)) or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, then, as a condition of such reclassification, change, consolidation, merger, sale or conveyance, the Company, or such successor or purchasing corporation, as the case may be, shall make lawful and adequate provision whereby the Registered Holder of each Warrant then outstanding shall have the right thereafter to receive on exercise of such Warrant the kind and amount of securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of securities issuable upon exercise of such Warrant immediately prior to such reclassification, change, consolidation, merger, sale or conveyance and shall forthwith file at the Corporate Office of the Warrant Agent 11 a statement signed by its Chief Executive Officer, President or a Vice President and by its Treasurer or an Assistant Treasurer or its Secretary or an assistant Secretary evidencing such provision. Such provisions shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in Sections 8(a), (b) and (c). The above provisions of this Section 8(d) shall similarly apply to successive reclassifications and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. (e) Irrespective of any adjustments or changes in the Purchase Price or the number of shares of Common Stock purchasable upon exercise of the Warrants, the Warrant Certificates theretofore and thereafter issued shall, unless the Company shall exercise its option to issue new Warrant Certificates pursuant to Section 2(e) hereof, continue to express the Purchase Price per share and the number of shares purchasable thereunder as the Purchase Price per share and the number of shares purchasable thereunder were expressed in the Warrant Certificates when the same were originally issued. (f) After each adjustment of the Purchase Price pursuant to this Section 8, the Company will promptly prepare a certificate signed by the Chairman, Chief Executive Officer or President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the Company setting forth: (i) the Purchase Price as so adjusted, (ii) the number of shares of Common Stock purchasable upon exercise of each Warrant, after such adjustment, and (iii) a brief statement of the facts accounting for such adjustment. The Company will promptly file such certificate with the Warrant Agent and cause a brief summary thereof to be sent by ordinary first class mail to each Registered Holder at his last address as it shall appear on the registry books of the Warrant Agent. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity thereof except as to the holder to whom the Company failed to mail such notice, or except as to the holder whose notice was defective. The affidavit of an officer of the Warrant Agent or the Secretary or an Assistant Secretary of the Company that such notice has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (g) No adjustment of the Purchase Price shall be made as a result of or in connection with (A) the issuance or sale of shares of Common Stock pursuant to options, warrants, stock purchase agreements and convertible or exchangeable securities outstanding or in effect on the date hereof and on the terms described in the final prospectus relating to the public offering contemplated by the Underwriting Agreement; (B) stock options to be granted under the Company's 1998 Incentive Stock Option Plan or any other stock option plan which has been approved by the Company's stockholders to employees, consultants and directors; or (C) the issuance or sale of shares of Common Stock if the amount of said adjustment shall be less than $.10, PROVIDED, HOWEVER, that in such case, any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment that shall amount, together with any adjustment so carried forward, to at least $.10. In addition, Registered Holders shall not be entitled to cash dividends paid by the Company prior to the exercise of any Warrant or Warrants held by them. 12 SECTION 9. REDEMPTION. (a) Commencing on the Initial Warrant Redemption Date, the Company may, on 30 days' prior written notice, redeem all the Warrants at ten cents ($.10) per Warrant, PROVIDED, HOWEVER, that before any such call for redemption of Warrants can take place, the average closing bid price for the Common Stock as reported by Nasdaq, if the Common Stock is then traded on Nasdaq, (or the average closing sale price, if the Common Stock is then traded on Amex) shall have equaled or exceeded $9.00 per share for any twenty (20) trading days prior to the date on which the notice contemplated by (b) and (c) below is given (subject to adjustment in the event of any stock splits or other similar events as provided in Section 8 hereof). (b) In case the Company shall exercise its right to redeem all of the Warrants, it shall give or cause to be given notice to the Registered Holders of the Warrants, by mailing to such Registered Holders a notice of redemption, first class, postage prepaid, at their last address as shall appear on the records of the Warrant Agent. Any notice mailed in the manner provided herein shall be conclusively presumed to have been duly given whether or not the Registered Holder receives such notice. Not less than four (4) trading days prior to the mailing to the Registered Holders of the Warrants of the notice of redemption, the Company shall deliver or cause to be delivered to WAS a similar notice telephonically and confirmed in writing together with a list of the Registered Holders (including their respective addresses and number of Warrants beneficially owned) to whom such notice of redemption has been or will be given. (c) The notice of redemption shall specify (i) the redemption price, (ii) the Redemption Date, which shall in no event be less than thirty (30) days after the date of mailing of such notice, (iii) the place where the Warrant Certificate shall be delivered and the redemption price shall be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:30 p.m. (New York time) on the business day immediately preceding the date fixed for redemption. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption except as to a holder (a) to whom notice was not mailed or (b) whose notice was defective. An affidavit of the Warrant Agent or the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (d) Any right to exercise a Warrant shall terminate at 5:30 p.m. (New York time) on the business day immediately preceding the Redemption Date. The redemption price payable to the Registered Holders shall be mailed to such persons at their addresses of record. SECTION 10. CONCERNING THE WARRANT AGENT. (a) The Warrant Agent acts hereunder as agent and in a ministerial capacity for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not, by issuing and delivering Warrant Certificates or by any other act hereunder, be deemed to make any representations as to the validity or value or authorization of the Warrant Certificates or the Warrants represented thereby or of any securities or other property delivered upon exercise of any Warrant or whether any stock issued upon exercise of any Warrant is fully paid and nonassessable. 13 (b) The Warrant Agent shall not at any time be under any duty or responsibility to any holder of Warrant Certificates to make or cause to be made any adjustment of the Purchase Price or the Redemption Price provided in this Agreement, or to determine whether any fact exists which may require any such adjustments, or with respect to the nature or extent of any such adjustments, when made, or with respect to the method employed in making the same. It shall not (i) be liable for any recital or statement of fact contained herein or for any action taken, suffered or omitted by it in reliance on any Warrant Certificate or other document or instrument believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, (ii) be responsible for any failure on the part of the Company to comply with any of its covenants and obligations contained in this Agreement or in any Warrant Certificate, or (iii) be liable for any act or omission in connection with this Agreement except for its own negligence, bad faith or willful misconduct. (c) The Warrant Agent may at any time consult with counsel satisfactory to it (who may be counsel for the Company or for WAS) and shall incur no liability or responsibility for any action taken, suffered or omitted by it in good faith in accordance with the opinion or advice of such counsel. (d) Any notice, statement, instruction, request, direction, order or demand of the Company shall be sufficiently evidenced by an instrument signed by the Chairman of the Board of Directors, Chief Executive Officer, President or any Vice President (unless other evidence in respect thereof is herein specifically prescribed). The Warrant Agent shall not be liable for any action taken, suffered or omitted by it in accordance with such notice, statement, instruction, request, direction, order or demand reasonably believed by it to be genuine. (e) The Company agrees to pay the Warrant Agent reasonable compensation for its services hereunder and to reimburse it for its reasonable expenses hereunder; the Company further agrees to indemnify the Warrant Agent and save it harmless from and against any and all losses, expenses and liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the execution of its duties and powers hereunder EXCEPT losses, expenses and liabilities arising as a result of the Warrant Agent's negligence, bad faith or willful misconduct. (f) The Warrant Agent may resign its duties and be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Warrant Agent's own gross negligence or willful misconduct), after giving 30 days' prior written notice to the Company. At least 15 days prior to the date such resignation is to become effective, the Warrant Agent shall cause a copy of such notice of resignation to be mailed to the Registered Holder of each Warrant Certificate at the Company's expense. Upon such resignation, or any inability of the Warrant Agent to act as such hereunder, the Company shall appoint in writing a new warrant agent. If the Company shall fail to make such appointment within a period of 15 days after it has been notified in writing of such resignation by the resigning Warrant Agent, then the Registered Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the 14 appointment of a new warrant agent. Any new warrant agent, whether appointed by the Company or by such a court, shall be a bank or trust company having a capital and surplus, as shown by its last published report to its stockholders, of not less than $10,000,000 or a stock transfer company. After acceptance in writing of such appointment by the new warrant agent is received by the Company, such new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the Warrant Agent, without any further assurance, conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of the Company and shall be legally and validly executed and delivered by the resigning Warrant Agent. Not later than the effective date of any such appointment the Company shall file notice thereof with the resigning Warrant Agent and shall forthwith cause a copy of such notice to be mailed to the Registered Holder of each Warrant Certificate. (g) Any corporation into which the Warrant Agent or any new warrant agent may be converted or merged, any corporation resulting from any consolidation to which the Warrant Agent or any new warrant agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any new warrant agent shall be a successor warrant agent under this Agreement without any further act, provided that such corporation is eligible for appointment as successor to the Warrant Agent under the provisions of the preceding paragraph. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed to the Company and to the Registered Holders of each Warrant Certificate. (h) The Warrant Agent, its subsidiaries and affiliates, and any of its or their officers or directors, may buy and hold or sell Warrants or other securities of the Company and otherwise deal with the Company in the same manner and to the same extent and with like effect as though it were not Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. (i) The Warrant Agent shall retain for a period of two years from the date of exercise any Warrant Certificate received by it upon such exercise. SECTION 11. MODIFICATION OF AGREEMENT. The Warrant Agent and the Company may by supplemental agreement make any changes or corrections in this Agreement (i) that they shall deem appropriate to cure any ambiguity or to correct any defective or inconsistent provision or manifest mistake or error herein contained; or (ii) that they may deem necessary or desirable and which shall not adversely affect the interests of the holders of Warrant Certificates; PROVIDED, HOWEVER, that no change in the number or nature of the securities purchasable upon the exercise of any Warrant, or to increase the Purchase Price therefore or to accelerate the Warrant Expiration Date, shall be made without the consent in writing of the Registered Holders representing not less than 66-2/3% of the Warrants then outstanding, other than such changes as are presently specifically prescribed by this Agreement as originally executed. In addition, this Agreement may not be modified, amended or supplemented without the prior written consent of the Representative, other than to cure any ambiguity or to correct any provision which is inconsistent with any other provision of this Agreement or to make any such change that is necessary or desirable and which shall not adversely affect the interests of the Representatives and except as may be required by law. 15 SECTION 12. NOTICES. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered or mailed first-class registered or certified mail, postage prepaid, as follows: if to the Registered Holder of a Warrant Certificate, at the address of such holder as shown on the registry books maintained by the Warrant Agent; if to the Company at 6646 Indian School Road, N.E., Albuquerque, New Mexico 87110, Attn: Howard P. Silverman, or at such other address as may have been furnished to the Warrant Agent in writing by the Company; and if to the Warrant Agent, at its Corporate Office. Copies of any notice delivered pursuant to this Agreement shall also be delivered to the Representatives c/o West America Securities Corp., 4510 East Thousand Oaks Boulevard, Suite 100, Westlake Village, CA 91362, Attention: General Counsel, or at such other address as may have been furnished to the Company and the Warrant Agent in writing. SECTION 13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without giving effect to conflicts of laws. SECTION 14. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the Company, the Warrant Agent and their respective successors and assigns and the holders from time to time of Warrant Certificates or any of them. Nothing in this Agreement is intended or shall be construed to confer upon any other person any right, remedy or claim, in equity or at law, or to impose upon any other person any duty, liability or obligation. SECTION 15. TERMINATION. This Agreement shall terminate at the close of business on the Expiration Date of all of the Warrants or such earlier date upon which all Warrants have been exercised or redeemed, except that the Warrant Agent shall account to the Company for cash held by it and the provisions of Section 10 hereof shall survive such termination. SECTION 16. COUNTERPARTS. This Agreement may be executed in several counterparts, which taken together shall constitute a single document. 16 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. [SEAL] LASIK AMERICA, INC. By: ----------------------------- Name: Howard P. Silverman Title: Chief Executive Off. Attest: By: ------------------------------ Name: Title: CORPORATE STOCK TRANSFER As Warrant Agent By: ---------------------------- Name: Title: 17 EXHIBIT A No. W___ VOID AFTER _______, 2005 ______________ WARRANTS REDEEMABLE WARRANT CERTIFICATE TO PURCHASE ONE SHARE OF COMMON STOCK LASIK AMERICA, INC. CUSIP_____ THIS CERTIFIES THAT, FOR VALUE RECEIVED ______________ or registered assigns (the "Registered Holder") is the owner of the number of Redeemable Warrants (the "Warrants") specified above. Each Warrant initially entitles the Registered Holder to purchase, subject to the terms and conditions set forth in this Certificate and the Warrant Agreement (as hereinafter defined), one fully paid and nonassessable share of Common Stock of LASIK America, Inc., a Nevada corporation (the "Company"), at any time between _____________, 2002 (the "Initial Warrant Exercise Date"), and the Expiration Date (as hereinafter defined) upon the presentation and surrender of this Warrant Certificate with the Subscription Form on the reverse hereof duly executed, at the corporate office of Corporate Stock Transfer, as Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of $9.00 subject to adjustment (the "Purchase Price"), in lawful money of the United States of America in cash or by check made payable to the Warrant Agent for the account of the Company. This Warrant Certificate and each Warrant represented hereby are issued pursuant to and are subject in all respects to the terms and conditions set forth in the Warrant Agreement (the "Warrant Agreement"), dated ________, 2002, between the Company and the Warrant Agent. In the event of certain contingencies provided for in the Warrant Agreement, the Purchase Price and the number of shares of Common Stock subject to purchase upon the exercise of each Warrant represented hereby are subject to modification or adjustment. Each Warrant represented hereby is exercisable at the option of the Registered Holder, but no fractional interests will be issued. In the case of the exercise of less than all the Warrants represented hereby, the Company shall cancel this Warrant Certificate upon the surrender hereof and shall execute and deliver a new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant Agent shall countersign, for the balance of such Warrants. The term "Expiration Date" shall mean 5:30 p.m. (New York time) on the date which is forty-eight (48) months after the Initial Warrant Exercise Date. If each such date shall in the State of New York be a holiday or a day on which the banks are authorized to close, then the expiration Date shall mean 5:30 p.m. (New York time) on the next following day which in the State of New York is not a holiday or a day on which banks are authorized to close. The Company shall not be obligated to deliver any securities pursuant to the exercise of this Warrant unless a registration statement under the Securities Act of 1933, as amended (the "Act"), with respect to such 18 securities is effective or an exemption thereunder is available. The Company has covenanted and agreed that it will file a registration statement under the Federal securities laws, use its best efforts to cause the same to become effective, use its best efforts to keep such registration statement current, if required under the Act, while any of the Warrants are outstanding, and deliver a prospectus which complies with Section 10(a)(3) of the Act to the Registered Holder exercising this Warrant. This Warrant shall not be exercisable by a Registered Holder in any state where such exercise would be unlawful. This Warrant Certificate is exchangeable, upon the surrender hereof by the Registered Holder at the corporate office of the Warrant Agent, for a new Warrant Certificate or Warrant Certificates of like tenor representing an equal aggregate number of Warrants, each of such new Warrant Certificates to represent such number of Warrants as shall be designated by such Registered Holder at the time of such surrender. Upon due presentment and payment of any tax or other charge imposed in connection therewith or incident thereto, for registration of transfer of this Warrant Certificate at such office, a new Warrant Certificate or Warrant Certificates representing an equal aggregate number of Warrants will be issued to the transferee in exchange therefore, subject to the limitations provided in the Warrant Agreement. Prior to the exercise of any Warrant represented hereby, the Registered Holder shall not be entitled to any rights of a stockholder of the Company, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided in the Warrant Agreement. Subject to the provisions of the Warrant Agreement, this Warrant may be redeemed at the option of the Company, at a redemption price of $0.10 per Warrant, at any time commencing after ________, 2002, provided that the average closing sale price for the Common Stock as reported by Amex (or the closing bid price, if the Common Stock is then traded on Nasdaq), shall have equaled or exceeded $16.00 per share for any twenty (20) trading days within a period of thirty (30) consecutive trading days ending on the fifth trading day prior to the Notice of Redemption, as defined below (subject to adjustment in the event of any stock splits or other similar events). Notice of redemption (the "Notice of Redemption") shall be given not later than the thirtieth day before the date fixed for redemption, all as provided in the Warrant Agreement. On and after the date fixed for redemption, the Registered Holder shall have no rights with respect to the Warrants except to receive the $.10 per Warrant upon surrender of this Warrant Certificate. Prior to due presentment for registration of transfer hereof, the Company and the Warrant Agent may deem and treat the Registered Holder as the absolute owner hereof and of each Warrant represented hereby (notwithstanding any notations of ownership or writing hereon made by anyone other than a duly authorized officer of the Company or the Warrant Agent) for all purposes and shall not be affected by any notice to the contrary, except as provided in the Warrant Agreement. This Warrant Certificate shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflicts of laws. 19 This Warrant Certificate is not valid unless countersigned by the Warrant Agent. IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed, manually or in facsimile by two of its officers thereunto duly authorized and a facsimile of its corporate seal to be imprinted hereon. Dated: LASIK AMERICA, INC. [SEAL] By: ---------------------------- Name: Title: COUNTERSIGNED: CORPORATE STOCK TRANSFER as Warrant Agent By: ----------------------------------------------- Authorized Officer 20 SUBSCRIPTION FORM To Be Executed by the Registered Holder in Order to Exercise Warrants The undersigned Registered Holder hereby irrevocably elects to exercise Warrants represented by this Warrant Certificate, and to purchase the securities issuable upon the exercise of such Warrants, and requests that certificates for such securities shall be issued in the name of PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER -------------------------------- -------------------------------- -------------------------------- (please print or type name and address) and be delivered to -------------------------------- -------------------------------- -------------------------------- (please print or type name and address) and if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below. Dated: X -------------------- -------------------- -------------------- -------------------- Address -------------------- Social Security or Taxpayer Identification Number ------------------- Signature Guaranteed 21 ASSIGNMENT To Be Executed by the Registered Holder in Order to Assign Warrants FOR VALUE RECEIVED,_______________________, hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER ------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------ (please print or type name and address) ___________________ of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints _____________________ Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises. Dated: X -------------------------- -------------------- Signature Guaranteed THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE AME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, ITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE UARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS ND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE UARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. 22 EX-3.1 7 file006.txt ARTICLES OF INCORPORATION Exhibit 3.1 ----------- Articles of Incorporation FILED # C7147-01 ------------------------- -------- of MAR 2 1 2001 -- LASIK AMERICA INC. IN THE OFFICE OF ------------------ DEAN HELLER SECRETARY OF STATE FIRST. The name of the corporation is: ------ LASIK AMERICA, INC. SECOND. Its principle office in the State of Nevada is located at 251 ------- Jeanell Dr. Suite 3, Carson City, NV 89703, although this Corporation may maintain an office, or offices, in such other place within or without the state of Nevada as may from time to time be designated by the Board of Directors, or by the by-laws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of Directors and Stockholders, outside the State of Nevada as well as within the State of Nevada. THIRD. The objects for which this Corporation is formed are: To ------ engage in any lawful activity, including, but not limited to the following: (A) Shall have such rights, privileges and powers as may be conferred upon corporations by any existing law. (B) May at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized. (C) Shall have power to have succession by its corporate name for the period limited in its certificate or articles of incorporation, and when no period is limited, perpetually, or until dissolved and its affairs wound up according to law. (D) Shall have power to sue and be sued in any court of law or equity. (E) Shall have power to make contracts. (F) Shall have power to hold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same devise or bequest in the State of Nevada, or any other state, territory or country. (G) Shall have power to appoint such officers and agents as the affairs of the corporation shall require, and to allow them suitable compensation. (H) Shall have power to make by-laws not inconsistent with the constitution of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders. 1 (I) Shall have power to wind up and dissolve itself, or be wound up or dissolved. (J) Shall have power to adopt and use a common seal or stamp by the corporation on any corporate documents is not necessary. The corporation may use a seal or stamp, if it desires, but such non-use shall not in any way affect the legality of the document. (K) Shall have power to borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable upon the happening of a specified event or events, whether secured by mortgage, pledge, or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object. (L) Shall have power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock, or any bonds, securities or evidences of the indebtedness created by, any other corporation or corporations of the State of Nevada, or any other state or government, and while owners of such stock, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any. (M) Shall have power to purchase, hold, sell and transfer shares of its own capital stock, and use therefore its capital, capital surplus, surplus, or other property or fund. (N) Shall have power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in the State of Nevada, and in any of the states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries. (O) Shall have power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its certificate or articles of incorporation, or any amendment thereof, or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, or any amendment thereof. (P) Shall have the power to make donations for the public welfare or for charitable, scientific or educational purposes. (Q) Shall have the power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities. FOURTH. That the voting common stock authorized that may be issued by ------- the corporation is TWENTY FIVE MILLION (25,000,000) shares with a nominal or par value of .001 and ONE HUNDRED THOUSAND (100,000) shares of preferred stock with a par value of .001 and no other class of stock shall be authorized. Said shares with a nominal or par value may be issued by the corporation from time to time for such considerations as may be fixed from time to time by the Board of Directors. FIFTH. The governing body of the corporation shall be known as ------ directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the By-Laws of this Corporation, providing that the number of directors shall be reduced to no less than one (1). The name and post office address of the first board of Directors shall be one (1) in number and listed as follows: 2 NAME POST OFFICE ADDRESS Sara A. Zaro 251 Jeanell Dr. Suite 3 Carson City, NV 89703 SIXTH. The capital stock, after the amount of the subscription price, ------ or par value, has been paid in, shall not be subject to assessment to pay the debts of the corporation. SEVENTH. The name and post office address of the incorporator(s) ------- signing the Articles of Incorporation is as follows: NAME ADDRESS Sara A. Zaro 251 Jeanell Dr. Suite 3 Carson City, Nevada 89703 EIGHTH. The resident agent for this corporation shall be: ------ CORPORATE ADVISORY SERVICE, INC. The address of said agent, and, the principle or statutory address of this corporation in the State of Nevada is. 251 Jeanell Dr. Suite 3, Carson City, Nevada 89703 NINTH. The corporation is to have perpetual existence. ------ TENTH. In furtherance and not in limitation of the powers conferred by ------ statute, the Board of Directors is expressly authorized: Subject to the By-Laws, if any, adopted by the stockholders, to make, alter or amend the By-Laws of the Corporation. To fix the amount to be reserved as working capital over and above its capital stock paid in; to authorize and cause to be executed, mortgages and liens upon the real and personal property of this corporation. By resolution passed by a majority of the whole Board, to consist of one (1) or more committees, each committee to consist of one or more directors of the corporation, which, to the extent provided in the resolution, or in the By-Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee, or committees, shall have such name, or names, as may be stated in the By-Laws of the Corporation, or as may be determined from time to time by resolution adopted by the Board of Directors. When and as authorized by the affirmative vote of the Stockholders holding stock entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for the purpose, or when authorized by written consent of the holders of at least a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such 3 terms and conditions as its Board of Directors deems expedient and for the best interests of the Corporation. ELEVENTH. No shareholder shall be entitled as a matter of right to --------- subscribe for, or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as is in its discretion it shall deem advisable. TWELFTH. No director or officer of the Corporation shall be personally -------- liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act of omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification. THIRTEENTH. This Corporation reserves the right to amend, alter, ----------- change, in any manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon Stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the Incorporator Herein before named for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein are true, and accordingly have hereunto set my hand this 21st day of March, 2001. /s/ Sara Zaro --------------- Sara A. Zaro Corporate Advisory Service, Inc. does hereby accept as Resident Agent for the previously named Corporation. Corporate Advisory Service, Inc. /s/ Sara Zaro 3/21/01 - --------------------------------- ----------------- By Sara A. Zaro, Vice President Date 4 EX-3.2 8 file007.txt BY-LAWS Exhibit 3.2 ----------- LASIK AMERICA, INC. ------------------- By-Laws ------- ARTICLE I MEETINGS OF STOCKHOLDERS - --------------------------------------- 1. Stockholders meetings shall be held in the office of the Corporation, at Carson City, NV, or at such other place or places as the directors shall from time to time determine. 2. The annual meeting of the Stockholders of this Corporation shall be held at 11 A.M., on the 21st day of March of each year beginning in 2002, at which time there shall be elected by the Stockholders of the Corporation a Board of Directors for the ensuing year, and the Stockholders shall transact such other business as shall properly come before them. 3. A notice setting out the time and place of such annual meeting shall be mailed postage prepaid to each of the Stockholders of record, at his address and as the same appears on the stock book of the company, or if no such address appears, at his last known place of business, at least ten (10) days prior to the annual meeting. 4. If a quorum is not present at the annual meeting, the Stockholders present, in person or by proxy, may adjourn to such future time as shall be agreed upon by them, and notice of such adjournment shall be mailed, postage prepaid, to each Stockholder of record at least ten (10) days before such date to which the meeting was adjourned; but if a quorum is present, they may adjourn from day to day as they see fit, and no notice of such adjournment need be given. 5. Special meetings of the Stockholders may be called at any time by the President; by all of the Directors provided there are no more than three, or if more than three, by any three Directors; or by the holder of a majority share of the capital stock of the Corporation. The Secretary shall send a notice of such called meeting to each Stockholder of record at least ten (10) days before such meeting, and such notice shall state the time and place of the meeting, and the object thereof. No business shall be transacted at a special meeting except as stated in the notice to the Stockholders, unless by unanimous consent of all the Stockholders present, either in person or by proxy, all such stock being represented at the meeting. 6. A majority of the stock issued and outstanding, either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the Stockholders. 1 7. Each Stockholder shall be entitled to one vote for each share of stock in his own name on the books of the company, whether represented in person or by proxy. 8. All proxies shall be in writing and signed. 9. The following order of business shall be observed at all of the Stockholders so far as is practicable: a. Call the roll; b. Reading, correcting, and approving of the minutes of the previous meeting; c. Reports of Officers; d. Reports of Committees; e. Election of Directors; f. Unfinished business; and g. New business. ARTICLE II STOCK - -------------------- 1. Certificates of stock shall be in a form adopted by the Board of Directors and shall be signed by the President and Secretary of the Corporation. 2. All certificates shall be consecutively numbered; the name of the person owning the shares represented thereby, with the number of shares and the date of issue shall be entered on the company's books. 3. All certificates of stock transferred by endorsement thereon shall be surrendered by cancellation and new certificates issued to the purchaser or assignee. ARTICLE III DIRECTORS - ------------------------ 1. A Board of Directors, consisting of at least one (1) person shall be chosen annually by the Stockholders at their meeting to manage the affairs of the company. The Directors' term of office shall be one year, and Directors may be re-elected for successive annual terms. 2. Vacancies on the Board of Directors by reason of death, resignation or other causes shall be filled by the remaining Director or Directors choosing a Director or Directors to fill the unexpired term. 3. Regular meetings of the Board of Directors shall be held at 1 P.M., on the 21st day of March of each year beginning in 2002 at the office of the company at Carson City, NV, or at such other time or place as the Board of Directors shall by resolution appoint; special meetings may be called by the President or any Director giving ten (10) days notice to each Director. Special meetings may also be called by execution of the appropriate waiver of notice and call when executed by a majority of the Directors of the company. A majority of the Directors shall constitute a quorum. 2 4. The Directors have the general management and control of the business and affairs of the company and shall exercise all the powers that may be exercised or performed by the Corporation, under the statutes, the Articles of Incorporation, and the By-Laws. Such management will be by equal vote of each member of the Board of Directors with each board member having an equal vote. 5. A resolution, in writing, signed by all or a majority of the members of the Board of Directors, shall constitute action by the Board of Directors to effect therein expressed, with the same force and effect as though such resolution has been passed at a duly convened meeting; and it shall be the duty of the Secretary to record every such resolution in the Minute Book of the Corporation under its proper date. ARTICLE IV OFFICERS - ----------------------- 1. The officers of this company shall consist of: a President, one or more Vice President(s), Secretary, Treasurer, Resident Agent, and such other officers as shall, from time to time, be elected or appointed by the Board of Directors. 2. The PRESIDENT shall preside at all meetings of the Directors and the Stockholders and shall have general charge and control over the affairs of the Corporation subject to the Board of Directors. He shall sign or countersign all certificates, contracts and other instruments of the Corporation as authorized by the Board of Directors and shall perform all such other duties as are incident to his office or are required by him by the Board of Directors. 3. The VICE PRESIDENT shall exercise the functions of the President during the absence or disability of the President and shall have such powers and such duties as may be assigned to him from time to time by the Board of Directors. 4. The SECRETARY shall issue notices for all meetings as required by the By-Laws, shall keep a record of the minutes of the proceedings of the meetings of the Stockholders and Directors, shall have charge of the corporate books, and shall make such reports and perform such other duties as are incident to his office, or properly required of him by the Board of Directors. He shall be responsible that the corporation complies with Section 78.105 of the Nevada Corporation laws and supplies to the Nevada Resident Agent or Registered Office in Nevada, and maintain, any and all amendments or changes to the By-Laws of the Corporation. In compliance with Section 78.105, he will also supply to the Nevada Resident Agent or registered Office in Nevada, and maintain, a current statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete Post Office address, including street and number, if any, where such stock ledger or duplicate stock ledger specified in the section is kept. 5. The TREASURER shall have the custody of all monies and securities of the Corporation and shall keep regular books of account. He shall disburse the funds of the Corporation in payment of the just demands against the Corporation, or as may be ordered by the Board of Directors, making proper vouchers for such disbursements and shall render to the Board of Directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He shall perform all duties incident to his office or which are properly required of him by the Board of Directors. 3 6. The RESIDENT AGENT shall be in charge of the Corporation's registered office in the State of Nevada, upon whom process against the Corporation may be served and shall perform all duties required of him by statute. 7. The salaries of all offices shall be fixed by the Board of Directors and may be changed from time to time by a majority vote of the board. 8. Each such officer shall serve for a term of one (1) year or until their successors are chosen and qualified. Officers may be re-elected or appointed for successive annual terms. 9. The Board of Directors may appoint such other officers and agents, as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS - ------------------------------------------------------ 1. The Corporation shall indemnify any and all of its Directors and Officers, and its former Directors and Officers, or any person who may have served at the Corporations request as a Director or Officer of another Corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been Director(s) or Officer(s) of the Corporation, or of such other Corporation, except, in relation to matters as to which any such director or officer or former Director or Officer or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under By-Law, agreement, vote of Stockholders or otherwise. ARTICLE VI AMENDMENTS - --------------------------- 1. Any of these By-Laws may be amended by a majority vote of the Stockholders at any meeting or at any special meeting called for that purpose. 2. The Board of Directors may amend the By-Laws or adopt additional By-Laws, but shall not alter or repeal any By-Law adopted by the Stockholders of the company. ******************************************************************************** CERTIFIED TO BE THE BY-LAWS OF: LASIK AMERICA, INC. BY: /s/ ---------------------------------- Secretary 4 EX-4.0 9 file008.txt SPECIMEN OF COMMON STOCK CERTIFICATE Exhibit 4.0 ----------- Specimen of Common Stock Certificate 1 EX-4.0 10 lasik_common.pdf SPECIMEN OF COMMON STOCK CERTIFICATE - FRONT begin 644 lasik_common.pdf M)5!$1BTQ+C(@#0HEXN//TPT*(`T*,30@,"!O8FH-"CP\#0HO3&5N9W1H(#$U M(#`@4@T*+T9I;'1E]D6TZ4E:6,)->3MU\0('E( M2DDZC6>B`P+$AS^"X/OYF?:RDX8)KQB;7YYQ%OYV']G9NRO.+*P]G9WSCDL- MGP_`8O-7]N;B]FXR'T]G-Q\FX\N?_\7FG\\$]YTS[-QU)BAB[ZY$L=VD_9WR M6B_L/ET-)E=C:=OVSN!N"TXF_9Y7CR6\"ZN&6> M2]Y')WA7^<"9"=%);CA%@/!ME>D),=G-1A_&DSD;32[9=/SA9@;K4_)"*%1[ MP@O>26?+R+[_(X;36':N^&DS>JFR&<))VCD"#V^G-W^.+UG(RVA^-QT3O,+- M$/BH3;*>+"%M7%06S*Y'T_$,=X[G9X*%OU`/0G*FO0H[>P'N2!$^=TOV=/8> MY+0*((:[Z&1129`IHPQBO)G<_??]>)JT\R#\"KK9O\-_GUG<-?W`2F3NF>:V M$P#P'$FA.N68@!\?J!YK&$P*,I%D#^S,6M_986D-*\YTWJ4%Z]&+J"Y1$0L5 MT)+B/0B0@K0B.Z%85"=[B^HB7"2#@F147`(%T>BX$+R)NNB3@'!KX3?LN\<4 M&([;(`Y2A#1$&O@S%A)Q+C""\",%%IR1/9;S^DH/7?UOY2G MD&#(;`BD$Y3=3F@?<_HGBH5#<\Y3B9^#5BW]C[06UDJ-!92M/3^&H#T4M6]Y9ZSI_IYS^<@:IW##,QXX_*2SEYQ9 MDTQ-13'CL#:UUQV=.(O]JJ4-U?>PX6@A[RB4/_T4@7T7#I]$S9AB:&4S5AP2 MXPP%-#1O=$1UB5PG4GN>,0UA-@MY@W&6W)"Y%K/ M**E4;-`S5F6F_U8;3V',Y9D"7=9G%C)=+6.ZDUT(TP_WGVQ[T-]K.U1[W^\Z M_)]U'`L!_7'#Z3&=PHMT_:0%'VX,Z.$6&G>OJ95#8P\$D,+ETYA.X]+$!$ M]6%E6I#>=EE9(D2^?>**<^GR20L\W!=)E255"C17J*C)Z0L$2Y? 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Exhibit 5.0 ----------- Law Office of Gregory Bartko 3475 Lenox Road Suite 400 Atlanta, Georgia 30326 ================================================================================ Phone 404-238-0550 Fax 404-238-0551 Email gbartko@mindspring.com November __, 2001 LASIK America, Inc. Board of Directors 6646 Indian School Road, N.E. Albuquerque, New Mexico 87110 Dear Gentlemen, I refer to the Registration Statement on Form SB-2 (Registration No. 333-68942), as amended (the "Registration Statement") filed by LASIK America, Inc., a Nevada corporation (the "Company"), with the United States Securities and Exchange Commission under the Securities Act of 1933, relating to the offer by the Company of 425,000 units, and an offer for resale by a certain selling shareholder of an additional 125,000 units, each unit consisting of one share of common stock, $.001 par value per share and a redeemable common stock purchase warrant to purchase one share of common stock (the "Units," "Common Stock," and "Warrants," respectively). As counsel to the Company, and as securities counsel for the selling shareholder, I have examined such corporate records, documents and questions of law as I have deemed necessary or appropriate for the purposes of this opinion. In such examinations, I have assumed the genuiness of signatures and the conformity to the originals of the documents supplied to me as copies. As to various questions of fact material to this opinion, I have relied upon statements and certificates of officers and representatives of the Company. Upon the basis of such examination, I am of the opinion that: (i) the 425,000 shares of Common Stock offered by the Company as a part of the Units, when sold in accordance with the terms agreed upon in the Underwriting Agreement filed as Exhibit 1.0 to the Registration Statement, have been validly authorized, will be legally issued, fully paid, and non-assessable; (ii) the 125,000 shares of Common Stock offered for resale by the selling shareholder as a part of his 125,000 Units, when sold in accordance with the terms agreed upon in the Placement Agent Agreement filed as Exhibit 1.1 to the Registration Statement, have been validly authorized, are legally issued, fully paid, and non-assessable; LASIK America, Inc. Board of Directors November __, 2001 Page 2 (iii) the 425,000 redeemable common stock purchase warrants offered by the Company as a part of the Units, when sold in accordance with the terms agreed upon in the Underwriting Agreement filed as Exhibit 1.0 to the Registration Statement, have been validly authorized, will be legally issued, fully paid, non-assessable, and upon issuance, will constitute the legal, binding obligation of the Company; (iv) the 125,000 redeemable common stock purchase warrants offered for resale by the selling shareholder as a part of his 125,000 Units, when sold in accordance with the terms agreed upon in the Placement Agent Agreement filed as Exhibit 1.1 to the Registration Statement, have been validly authorized, are legally issued, fully paid, non-assessable, and constitute the legal, binding obligation of the Company; (v) the 425,000 shares of Common Stock to be issued at the time of exercise of the 425,000 redeemable common stock purchase warrants offered by the Company as a part of the Units, when sold in accordance with the terms agreed upon in the Underwriting Agreement filed as Exhibit 1.0 to the Registration Statement, will have been validly authorized, and when the exercise price of the Warrants is fully paid, such shares will be legally issued, fully paid, and non-assessable. (vi) the 125,000 shares of Common Stock to be issued at the time of exercise of the 125,000 redeemable common stock purchase warrants offered for resale by the selling shareholder as a part of his Units, when sold in accordance with the terms agreed upon in the Placement Agent's Agreement filed as Exhibit 1.1 to the Registration Statement, will have been validly authorized, and when the exercise price of the Warrants is fully paid, such shares will be legally issued, fully paid, and non-assessable. I hereby consent to the filing of this opinion as Exhibit 5.0 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus contained therein. This consent is not to be construed as an admission that I am a person whose consent is required to be filed with the Registration Statement under the provisions of the Securities Act of 1933. Sincerely, Gregory Bartko, Esq. GAB/nmn Cc: Howard P. Silverman, CEO Chris Dieterich, Esq. EX-10.0 22 file012.txt WARRANT AGREEMENT Exhibit 10.0 ------------ WARRANT AGREEMENT WARRANT AGREEMENT, dated as of August 24, 2001, between LASIK America, Inc., a Nevada corporation (the "Company"), and Dr. Howard P. Silverman, the Chief Executive Officer and President of the Company ("Silverman"). W I T N E S S E T H: 1. Issue. The Company shall issue to Silverman a certificate (the "Warrant Certificate") dated as of the date hereof providing Silverman, and any subsequent assignee or transferee of Silverman, with the right to purchase, at any time, commencing six months after the date that the Company's registration statement filed on Form SB-2 with the U.S. Securities and Exchange Commission becomes effective ("Effective Date"), until 5:30 p.m., New York time, five (5) years from the Effective Date, 125,000 shares of Common Shares of the Company (the "Warrant Shares") (subject to adjustment as provided in Section 10 hereof), at an exercise price (subject to adjustment as provided in Section 10 hereof) of $7.20 per Common Share. 2. Warrant Certificate. The Warrant Certificate to be delivered pursuant to this Agreement shall be in the form set forth as an Exhibit, attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement. 3. Exercisability of Warrants. The Warrants shall be exercisable at any time commencing six months after the Effective Date, until 5:30 p.m., New York time, five (5) years after the Effective Date. 4. Procedure for Exercise of Warrants. 4.1 Cash Exercise. The Warrants are exercisable at an aggregate initial exercise price per Common Share set forth in Section 8 hereof payable by certified check or official bank check in New York Clearing House funds. Upon surrender of a Warrant Certificate with the annexed Form of Election to Purchase duly executed, together with payment of the Exercise Price (as hereinafter defined) for the Warrant Shares purchased, at the Company's principal offices in Albuquerque, New Mexico (presently located at 6646 Indian School Road, N.E., Albuquerque, New Mexico), Silverman shall be entitled to receive a certificate for the Warrant Shares so purchased. The purchase rights represented by the Warrant Certificate are exercisable at the option of Silverman, in whole or in part (but not as to fractional Common Shares underlying the Warrants). In the case of the purchase of less than all the Warrant Shares purchasable under the Warrant Certificate, the Company shall cancel said Warrant Certificate upon the surrender thereof and shall execute and deliver a new Warrant Certificate of like tenor for the balance of the Warrant Shares purchasable thereunder. 1 4.2 Cashless Exercise. In addition to the exercise of all or a portion of the Warrants by the payment of the Exercise Price in cash or check as set forth in Section 4.1 above, and in lieu of any such payment, Silverman has the right to exercise the Warrants, in full or in part, by surrendering the Warrant Certificate with the annexed Form of Election to Purchase duly executed, in exchange for the number of Common Shares equal to the product of (x) the number of Common Shares as to which the Warrants are being exercised multiplied by (y) a fraction, the numerator of which is the Current Market Price of the Common Shares (as defined below) less the Exercise Price then in effect and the denominator of which is the Current Market Price. 4.3 Current Market Price. The term "Current Market Price" shall mean (i) if the Shares are traded in the over-the-counter market or on the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), the average per Share closing bid prices on the 20 consecutive trading days immediately preceding the date of exercise, as reported by NASDAQ or an equivalent generally accepted reporting service, or (ii) if the Shares are traded on a national securities exchange, the average for the 20 consecutive trading days immediately preceding the exercise date of the daily per Share closing prices on the principal stock exchange on which the Shares are listed, as the case may be. The closing price referred to in clause (ii) above shall be the last reported sales price or, if no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case on the national securities exchange on which the Shares are then listed. 5. Issuance of Certificate. Upon the exercise of the Warrants, the issuance of a certificate for Warrant Shares (or Other Securities) shall be made forthwith (and in any event within five (5) business days thereafter) without charge to Silverman including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificate shall (subject to the provisions of Sections 6 and 9 hereof) be issued in the name of, or in such names as may be directed by Silverman; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of Silverman and the Company shall not be required to issue or deliver such certificate unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Warrant Certificate and the certificate representing the Warrant Shares (or Other Securities) shall be executed on behalf of the Company by the manual or facsimile signature of the then present Chairman or Vice Chairman of the Board of Directors or President or any Vice President of the Company under its corporate seal reproduced thereon, attested to by the manual or facsimile signature of the then present Secretary or any Assistant Secretary of the Company. The Warrant Certificate shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer. 6. Transfer of Warrants. Silverman, by his acceptance hereof, covenants and agrees that the Warrants are being acquired as an investment and not with a view to the distribution thereof. The Warrants may be sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or in part, without restriction, subject to compliance with applicable securities laws. 2 7. Redemption of Warrant. 7.1 Commencing on the date which is six months after the Effective Date, Redemption Date, the Company may, on 30 days' prior written notice, redeem all the Warrants at ten cents ($.10) per Warrant, PROVIDED, HOWEVER, that before any such call for redemption of Warrants can take place, the average closing bid price for the Common Stock as reported by the Over-the-Counter Electronic Bulletin Board maintained by the NASD, if the Common Stock is not then traded on any national securities exchange shall have equaled or exceeded $9.00 per share for any twenty (20) trading days prior to the date on which the notice contemplated by (b) and (c) below is given (subject to adjustment in the event of any stock splits or other similar events as provided in Section 9 hereof). 7.2 In case the Company shall exercise its right to redeem all of the Warrants, it shall give or cause to be given notice to the Registered Holders of the Warrants, by mailing to such Registered Holders a notice of redemption, first class, postage prepaid, at their last address as shall appear on the records of the Warrant Agent. Any notice mailed in the manner provided here shall be conclusively presumed to have been duly given whether or not the Registered Holder receives such notice. Not less than four (4) trading days prior to the mailing to the Registered Holders of the Warrants of the notice of redemption, the Company shall deliver or cause to be delivered to the representative of the underwriters, a similar notice telephonically and confirmed in writing together with a list of the Registered Holders (including their respective addresses and number of Warrants beneficially owned) to whom such notice of redemption has been or will be given. 7.3 The notice of redemption shall specify (i) the redemption price, (ii) the Redemption Date, which shall in no event be less than thirty (30) days after the date of mailing of such notice, (iii) the place where the Warrant Certificate shall be delivered and the redemption price shall be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:30 p.m. (New York time) on the business day immediately preceding the date fixed for redemption. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption except as to a holder (a) to whom notice was not mailed or (b) whose notice was defective. An affidavit of the Warrant Agent or the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. 7.4 Any right to exercise a Warrant shall terminate at 5:30 p.m. (New York time) on the business day immediately preceding the Redemption Date. The redemption price payable to the Registered Holders shall be mailed to such persons at their addresses of record. 8. Exercise Price. 8.1 Initial and Adjusted Exercise Price. Except as otherwise provided in Section 9 hereof, the initial exercise price of each 3 Warrant shall be the price set forth in Section 1 hereof per Warrant Share issued hereunder. The adjusted exercise price shall be the price which shall result from time to time from any and all adjustments of the initial exercise price in accordance with the provisions of Section 9 hereof. 8.2 Exercise Price. The term "Exercise Price" herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context. 9. Registration Under the Securities Act of 1933. As of the date hereof, the Warrants, the Warrant Shares and any of the other securities issuable upon exercise of the Warrants have not been registered under the Securities Act of 1933, as amended (the "Act"). Upon exercise, in whole or in part, of the Warrants, a certificate representing the Warrant Shares underlying the Warrants, and any of the other securities issuable upon exercise of the Warrants (collectively, the "Warrant Securities") shall bear the following legend unless such Warrant Shares previously have been registered under the Act in accordance with the terms hereof: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE. 10. Adjustments to Exercise Price and Number of Securities. The Exercise Price and, in some cases, the number of Warrant Shares purchasable upon the exercise of the Warrants, shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 10. 10.1 Subdivision or Combination of Common Shares and Common Share Dividend. In case the Company shall at any time subdivide its outstanding Common Shares into a greater number of Common Shares or declare a dividend upon its Common Shares payable solely in Common Shares, the Exercise Price in effect immediately prior to such subdivision or declaration shall be proportionately reduced, and the number of Warrant Shares issuable upon exercise of the Warrants shall be proportionately increased. Conversely, in case the outstanding Common Shares of the Company shall be combined into a smaller number of Common Shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased, and the number of Warrant Shares issuable upon exercise of the Warrants shall be proportionately reduced. 10.2 Notice of Adjustment. Promptly after adjustment of the Exercise Price or any increase or decrease in the number of Warrant Shares purchasable upon the exercise of this Warrant, the Company shall give written notice thereof, by first class mail, postage prepaid, addressed to Silverman of this Warrant at the address shown on the books of the Company. The notice shall be signed by the Company's chief financial officer and shall state (i) the effective date of the adjustment and the Exercise Price resulting from such adjustment and 4 (ii) the increase or decrease, if any, in the number of Common Shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 10.3 Other Notices. If at any time: (a) the Company shall declare any cash dividend upon its Common Shares; (b) the Company shall declare any dividend upon its Common Shares payable in securities (other than a dividend payable solely in Common Shares) or make any special dividend or other distribution to Silverman of its Common Shares; (c) there shall be any consolidation or merger of the Company with another corporation, or a sale of all or substantially all of the Company's assets to another corporation; or (d) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; then, in any one or more of said cases, the Company shall give, by certified or registered mail, postage prepaid, addressed to Silverman of this Warrant at the address of Silverman as shown on the books of the Company, (i) at least 15 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 dissolution, liquidation or winding-up; (ii) at least 10 days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger or sale, and (iii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, at least 15 days' written notice of the date when the same shall take place. Any notice given in accordance with clause (i) above shall also specify, in the case of any such dividend, distribution or option rights, the date on which shall be entitled thereto. Any notice given in accordance with clause (iii) above shall also specify the date on which Silverman shall be entitled to exchange his Common Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be. If Silverman does not exercise this Warrant prior to the occurrence of an event described above, except as provided in Sections 10.1 and 10.5, then Silverman shall not be entitled to receive the benefits accruing to existing holders of the Common Shares in such event. 10.4 Changes in Common Shares. In case at any time the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, sale of all or substantially all of the Company's assets or recapitalization of the Common Shares) in which the previously outstanding Common Shares shall be changed into or exchanged for different securities of the Company or common stock or other securities of another corporation or interests in a non-corporate entity or other property (including cash) or any combination of any of the foregoing (each such transaction being herein called the "Transaction" and the date of consummation of the Transaction being herein called the "Consummation Date"), then, as a condition of the consummation of the Transaction, lawful and adequate provisions shall be made so that Silverman, upon the exercise hereof at any time on or 5 after the Consummation Date, shall be entitled to receive, and this Warrant shall thereafter represent the right to receive, in lieu of the Common Shares issuable upon such exercise prior to the Consummation Date, the highest amount of securities or other property to which Silverman would actually have been entitled upon the consummation of the Transaction if Silverman had exercised such Warrant immediately prior thereto. The provisions of this Section 10.5 shall similarly apply to successive Transactions. 11. Exchange and Replacement of Warrant Certificate. The Warrant Certificate is exchangeable without expense, upon the surrender thereof by Silverman at the principal executive office of the Company, for a new Warrant Certificate of like tenor and date representing in the aggregate the right to purchase the same number of Warrant Shares in such denominations as shall be designated by Silverman thereof at the time of such surrender. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of the Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrants, if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor, in lieu thereof. 12. Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Common Shares upon the exercise of the Warrants, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of Common Shares or Other Securities. 13. Reservation of Securities. The Company shall at all times reserve and keep available out of its authorized Common Shares, solely for the purpose of issuance upon the exercise of the Warrants, such number of Common Shares or Other Securities as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Warrants and payment of the Exercise Price therefore, all Common Shares or Other Securities issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any holder of Common Shares. 14. Notices to Warrant Holder. Nothing contained in this Agreement shall be construed as conferring upon the holder by virtue of his holding the Warrant the right to vote or to consent or to receive notice as a holder of Common Shares in respect of any meetings of such holders for the election of directors or any other matter, or as having any rights whatsoever as such a shareholder of the Company. 15. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made and sent when delivered, or mailed by registered or certified mail, return receipt requested: (a) If to Silverman, to the address of Silverman as shown on the books of the Company; or (b) If to the Company, to the address set forth in Section 4 hereof or to such other address as the Company may designate by notice to the Silverman. 6 16. Supplements and Amendments. The Company and Silverman may from time to time supplement or amend this Agreement in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any provisions herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and Silverman may deem necessary or desirable. 17. Successors. All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company, Silverman and their respective successors and assigns hereunder. 18. Termination. This Agreement shall terminate at the close of business on the tenth anniversary of the issuance of the Warrants. 19. Governing Law. This Agreement and the Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Nevada and for all purposes shall be construed in accordance with the laws of the State of Nevada without giving effect to the rules of the State of Nevada governing the conflicts of laws. 20. Entire Agreement; Modification. This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof and may not be modified or amended except by a writing duly signed by the party against whom enforcement of the modification or amendment is sought. 21. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement. 22. Captions. The caption headings of the Sections of this Agreement are for convenience of reference only and are not intended, nor should they be construed as, a part of this Agreement and shall be given no substantive effect. 23. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and Silverman any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and Silverman. 24. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. 7 IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be duly executed, as of the day and year first above written. LASIK AMERICA, INC. By:_______________________________ Robert Helmer, Chief Operating Officer ACCEPTED AND AGREED TO: HOLDER - ----------------------------------------- Name: Address: Social Security/Tax I.D. No.: Howard P. Silverman 8 [FORM OF WARRANT CERTIFICATE] THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE. EXERCISABLE FROM THE EFFECTIVE DATE UNTIL 5:30 P.M., NEW YORK TIME, FIVE YEARS (5) AFTER THE EFFECTIVE DATE. WARRANT CERTIFICATE This Warrant Certificate certifies that or his/her registered assigns ("Holder"), is the registered Holder of 125,000 Warrants to purchase initially at any time commencing six months after the Effective Date, until 5:30 p.m. New York time, five (5) years after the Effective Date ("Expiration Date"), up to 125,000 fully-paid and non-assessable shares of common stock, par value $.001 per share ("Common Shares") of LASIK AMERICA, INC., a Nevada corporation (the "Company"), at an initial exercise price, subject to adjustment in certain events (the "Exercise Price"), equal to $7.20 per Common Share, upon surrender of this Warrant Certificate and payment of the initial exercise price at an office or agency of the Company, but subject to the conditions set forth herein and in the Warrant Agreement dated as of the date hereof between the Company and Silverman (the "Warrant Agreement"). Payment of the Exercise Price shall be made by certified check or official bank check in New York Clearing House funds payable to the order of the Company, unless exercise is made pursuant to Section 4.2 of the Warrant Agreement. No Warrant may be exercised after 5:30 p.m., New York time, on the Expiration Date, at which time all Warrants evidenced hereby, unless exercised prior thereto, shall thereafter be void. The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued pursuant to a certain Warrant Agreement, which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Company and the Holder (the word "Holder" meaning the registered Holder) of the Warrants. The Warrant Agreement provides that upon the occurrence of certain events, the Exercise Price and the type and/or number of the Company's securities issuable thereupon may, subject to certain conditions, be adjusted. In such event, the Company will, at the request of the Holder, issue a new Warrant Certificate evidencing the adjustment in the Exercise Price and the number and/or type of securities issuable upon the exercise of the Warrants; provided, however, that the failure of the Company to issue such new Warrant Certificate shall not in any way change, alter, or otherwise impair, the rights of the Holder as set forth in the Warrant Agreement. Upon due presentment for registration of transfer of this Warrant Certificate at an office or agency of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided 9 herein and in the Warrant Agreement, without any charge except for any tax or other governmental charge imposed in connection with such transfer. Upon the exercise of less than all of the Warrants evidenced by this Certificate, the Company shall forthwith issue to the Holder hereof a new Warrant Certificate representing such number of unexercised Warrants. The Company may deem and treat the registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the Holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary. All terms used in this Warrant Certificate which are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement. IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed. Dated as of August 24, 2001. LASIK AMERICA, INC. - ------------------------------------ By: Robert S. Helmer Chief Operating Officer 10 [FORM OF ELECTION TO PURCHASE] The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase _______ Common Shares and herewith tenders in payment for such securities a certified check or official bank check payable in New York Clearing House Funds to the order of LASIK AMERICA, INC. in the amount of $_____, all in accordance with the terms of Section 4 of the Warrant Agreement dated as of ____________, 2001, between LASIK AMERICA, INC. and the undersigned (or its assignor). The undersigned requests that a certificate for such securities be registered in the name of __________ whose address is __________ and that such Certificate be delivered to whose address is _________. Dated: Signature _________________________________ (Signature must conform in all respects to name of Holder as specified on the face of the Warrant Certificate.) (Insert Social Security or Other Identifying Number of Holder) [FORM OF ASSIGNMENT] (To be executed by the registered Holder if such Holder desires to transfer the Warrant Certificate.) FOR VALUE RECEIVED ________________ hereby sells, assigns and transfers unto (Please print name and address of transferee) this Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the within Warrant Certificate on the books of the within-named Company, with full power of substitution. Dated: ________________ Signature:________________________ SSN:__________________________ (Signature must conform in all respects to name of Holder as specified on the face of the Warrant Certificate.) (Insert Social Security or Other Identifying Number of Assignee) 11 EX-10.1 23 file013.txt EQUIPMENT PURCHASE AGREEMENT Exhibit 10.1 ------------ EQUIPMENT PURCHASE AGREEMENT This agreement is entered into this 3rd day of May, 2001 by and between --- ---- TrueVision Medical Associates, Inc., ("TVMA") Seller, and Dr. Howard Silverman ("Silverman") Purchaser. In consideration of the mutual covenants and promises contained herein the parties hereby agree as follows: 1. Sale of assets: - -------------------- Upon the terms and conditions hereinafter set forth, and in consideration of the payment of the purchase price, the Seller agrees to sell to Buyer all the assets described on the attached Exhibit A, herein referred to as the "Equipment". 2. The purchase price: - ------------------------ The purchase price shall be $64,000.00. The purchase price shall be paid in the following manner: A down payment of $7,000.00 in cash has been made [initialed and crossed out text: towards past due liabilities on the underlying obligation owed on the Equipment]. The balance of $57,000.00 will be payable in equal monthly installments over 18 months commencing June 1, 2001. The unpaid balance will accrue interest at the rate of 10%. A copy of the promissory note evidencing the indebtedness is attached hereto as Exhibit B. 3. Operational and maintenance expense: - ----------------------------------------- Buyer agrees to assume all operational and maintenance expense involved with the equipment being purchased. 4. Seller's Indemnity: - ------------------------ Seller agrees to indemnify, and hold harmless Buyer in respect to any and 1 all claims, losses, damages, liabilities, and expenses, (including without limitation, settlement costs, and any legal, accounting, and any other expenses for investigating or defending any actions or a threatened action) reasonably incurred by Buyer in connection with any liabilities or claims made against Buyer because of any act or failure to act of Seller, rising prior to the purchase of the assets.(7) [circled] 5. Security documents: - ------------------------ The parties shall execute a security agreement, bill of sale, financing statement and any associated UCC documents, and other documents reasonably necessary to consummate the intention of this agreement and security of this agreement to insure prompt payment of the deferred portion of the purchase price. 6. Seller's Warranty: - ----------------------- Seller represents and warrants that as of the date hereof: a. Seller has the authority to sell the assets described in Exhibit A. b. Those assets are free and clear of all security interests. 7. Buyer's Warranty: - ---------------------- Buyer Expressly Warrants And Covenants That: a. Buyer will use the Collateral for business purposes and will keep the Collateral in Albuquerque, New Mexico, except as provided for in paragraphs C and D below. b. Buyer will not permit any of the Collateral to be removed from the above mentioned location outside the ordinary course of business without the prior written consent of Seller. c. Buyer will immediately advise Seller in writing of any change in any of Buyer's places of business, or the opening of any new place of business. 2 d. Buyer will at Buyer's own expense forthwith insure the Collateral in a reliable insurance company against loss or damage by fire and extended coverage for an amount equal to its approximate value, and keep the same so insured continuously until the full amount of said indebtedness is paid, with loss payable to Seller as Seller's interest may appear, and that Buyer will deliver said policies of insurance or copies of them or furnish proof of such insurance to Seller, and in case of loss, the Buyer shall have to right to apply the insurance proceeds to replace the Collateral which at all times will be large enough in value to fully and adequately secure the amount owed Seller. In the event the Buyer elects not to replace the Collateral, Seller shall retain from the insurance money an amount equal to the total balance of said indebtedness remaining unpaid, whether according to the tenor and effect of any promissory note or notes evidencing such indebtedness the same is due or not. Should the Buyer fail or refuse to forthwith effect such insurance and deliver the policies or furnish proof of such insurance as aforesaid, or fail to deep the Collateral so insured continuously until the full amount of said indebtedness is paid, Seller may at Seller's option effect such insurance and the amount so paid for such insurance with interest at the rate of ten percent (10%) per annum from the date of payment until repaid shall be added to said indebtedness, and the same shall be secured by the security agreement. e. Buyer will keep the Collateral in good condition and repair, reasonable wear and tear excepted, and will permit Seller and his/her agents to inspect the Collateral at any reasonable time. 8. Default: - ------------- Buyer shall be in default upon breaking of any covenant mentioned hereinabove, and further, upon the happening of any of the following events or conditions: 3 1. Default in the payment or performance of any obligation, covenant or liability contained or referred to herein or in any note evidencing the same; 2. Any warranty, representation or statement made or furnished to Seller by or on behalf of Buyer proves to have been false in any material respect; 3. Loss, theft, damage, destruction, or sale of any of the Collateral without replacement, or the encumbering or making of any levy, seizure, or attachment thereon; 4. Dissolution, termination of existence, insolvency, business failure, appointment of a receive of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding, under any bankruptcy or insolvency lows by or against Buyer or any guarantor or surety for Buyer. Upon such default, or at any time thereafter, Seller shall give Buyer written notice setting forth the default and demanding a cure within ten (10) days after the notice is mailed. If the Buyer shall fail to cure the alleged default within the fifteen day period following notice, Seller may declare all obligations secured hereby immediately due and payable and shall have the remedies of a seller under the New Mexico Uniform Commercial Code. Buyer will upon demand make the Collateral available to Seller at the place and time designated by Seller which is reasonably convenient to both parties. Expenses of retaking, holding, preparing for sale, selling or the like shall include Seller's reasonable attorney's fees and legal expenses. Buyer waives the posting of bond in any replevin action against the equipment as a result of default. No waiver by Seller of any default shall operate as a waiver of any other default or of the same default on a future occasion. 9. Miscellaneous: - ------------------- a. The parties agree to execute any further documents and do all other acts necessary or appropriate to complete this transaction. b. All notices under this Agreement shall be in writing and shall be delivered by personal service, or by certified or registered mail, postage prepaid, return receipt requested as follows: 4 SELLER TrueVision Medical Associates, Inc. P. O. Box 4834 San Diego, CA 92164 BUYER Mr. Howard Silverman 6646 Indian School Rd NE Albuquerque, NM 87110 All notices and other communications shall be deemed to be given at the expiration of three days after the date of mailing. The address of a party to which notices or other communications shall be mailed may be changed from time to time by giving written notice to the other parties. c. No amendment, supplement, modification or waiver of this agreement shall be binding unless executed in writing by the party to be bound thereby. d. This agreement shall be binding upon and inure to the benefit of the successors and assignees of the parties hereto. No other person shall have any right, benefit or obligation hereunder. e. This agreement shall be governed by and construed and enforced in accordance with the laws of New Mexico. f. In any court action involving this transaction, the losing party shall pay the prevailing party's reasonable attorney's fees and costs. IN WITNESS WHEREOF, each of the parties has executed this agreement as of the day and year first above written. "BUYER" /s/ Howard Silverman -------------------------- Howard Silverman "SELLER" TrueVision Medical Associates, Inc. /s/ John Homan -------------------------- By John Homan, President 5 |---------------------| |/seal/ OFFICIAL SEAL | | RACHEL FIERRO | | NOTARY PUBLIC | | STATE OF NEW MEXICO| |My Commission Expires| | 3-23-2003 | | --------- | |---------------------| STATE OF New Mexico ) -----------) SS. COUNTY OF Bernalillo ) ------------- 6 The foregoing instrument was acknowledged before me this ------- day of May, 2001, by Dr. Howard Silverman. ---------------------------- Notary Public My Commission Expires: - ------------------------ STATE OF NEW MEXICO ) ) SS. COUNTY OF Bernalillo ) ---------- The foregoing instrument was acknowledged before me this 3rd day --- of May, 2001, by John Homan, President of TrueVision Medical Associates, inc., a New Mexico corporation, on behalf of said corporation. /s/ -------------------- Notary Public |---------------------| |/seal/ OFFICIAL SEAL | | Thomas G. Rice | | NOTARY PUBLIC | | STATE OF NEW MEXICO| |My Commission Expires| | 10/26/02 | | --------- | |---------------------| My Commission Expires: 10/26/02 - ------------------------ 7 BILL OF SALE The undersigned, TrueVision Medical Associates, Inc., hereinafter designated as "Seller", for consideration received, does hereby grant, bargain and sell unto Dr. Howard Silverman, hereinafter designated as "Buyer", the following assets of Seller. The assets as set forth on the Assets List attached hereto And incorporated herein by reference as Exhibit 1. Buyer shall have all rights and title to the aforementioned personal property in Buyer and Buyer's executors, administrators, and assigns. Seller is the lawful owner of the aforementioned personal property and the personal property is free from all liens and encumbrances except as previously disclosed to Buyer in the Purchase Agreement. Seller has good title to sell the aforementioned personal property and will warrant and defend the title against the lawful claims and demands of all persons. Seller further warrants that all tangible personal property being transferred is in working order. SELLER GIVES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. IN WITNESS WHEREOF, the seller has executed this Bill of Sale this 3rd --- Day of May 2001. SELLER: TVMA, INC. /s/ John Homan ------------------------- By John Homan, President 8 ACKNOWLEDGEMENT STATE OF NEW MEXICO ) ) SS. COUNTY OF Bernalillo ) The foregoing instrument was acknowledged before me this 3rd day --- of May, 2001, by John Homan, President of TrueVision Medical Associates, inc., a New Mexico corporation, on behalf of said corporation. -------------------- Notary Public |---------------------| |/seal/ OFFICIAL SEAL | | Thomas G. Rice | | NOTARY PUBLIC | | STATE OF NEW MEXICO| |My Commission Expires| | 10/26/02 | | --------- | |---------------------| My Commission Expires: 10/26/02 - ------------------------ 9 EX-10.3 24 file014.txt PROMISSORY NOTE Exhibit 10.3 ------------ PROMISSORY NOTE $57,000.00 Albuquerque, May 3 , 2001 New Mexico ----- For value received, the undersigned (hereafter Maker"), promises to pay to the order of TrueVision Medical Associates, Inc. (hereinafter "Holder"), at P. O. Box 4834, San Diego, CA 92164, (or to such other person, entity or address as Holder advises Maker in writing), the sum of Fifty-seven Thousand Dollars and no/100ths ($57,000.00), at ten percent (10%) interest per annum in the following manner until the entire balance hereof, with the interest thereon, has been fully paid: a. $3,423.26 on June 1, 2001; and b. $3,423.26 on the 1st day of each and every month thereafter until this Note is paid in full. The said monthly installments of $3,423.26 shall include interest on said principal amount and/or on the unpaid balance thereof at the rate of ten percent (10%) per annum, and when said installments are paid, they shall be apportioned between interest and principal, and applied first to the payment of all interest due at date of payment, and the balance applied on the principle amount. If any installment is not received within ten [initialed and crossed out text: (10)] (15) days of the due date, Maker agrees to pay as a late fee, an additional five percent(5%)of the monthly installment per month for each 1 installment which is late, and Holder may mail to Maker at, 6646 Indian School Rd. NE, Albuquerque, NM 87110 (or such other address as Maker advises Holder in writing), certified mail, return receipt requested, written notice that the payment has not been received, and Maker will have ten (10) days from the mailing of the notice to cure that default. If the default is not cured within a ten (10) day period, the whole of the principle sum then remaining unpaid, together with late fees and interest which shall continue to accrue at the same rate after default, shall forthwith become due and payable without further notice or demand, at the option of the Holder of this note. Maker further agrees after default of this obligation, the time of making the payment of the same may be extended without prejudice to the Holder and without releasing any maker hereof. Maker agrees to pay, in addition to all other sums due hereunder, all costs and expenses of collection of this note and/or enforcing same, including a reasonable attorney's fee, should this note be placed in the hands of an attorney for collection and/or enforcement, or is collected or enforced through bankruptcy, probate, or other judicial proceedings. Maker reserves the right without penalty to prepay all or a portion of the principal of this not at any time. MAKER: /s/ Dr. Howard Silverman - -------------------------- Dr. Howard Silverman 2 ASSIGNMENT OF PROMISSORY NOTE For and in consideration of the sum of $10.00 and other good and valuable consideration, TrueVision Medical Associates, Inc, (assignor) does hereby sell, assign, transfer and set over to the United States of America, Internal Revenue Service, (assignee) and unto its successors, all of its right, title, claim or interest of the assignor in and to that certain promissory note executed by Howard Silverman on May 3rd, 2001 for and in behalf of the assignor. The Promissory Note has a face amount of $57,000.00 and is due and payable in monthly installment over 18 months with monthly payments of $3,423.26. A copy of the note is attached hereto. The undersigned parties hereby agree that all future payments should be made by assignee to the Internal Revenue Service on behalf of any employee payroll trust fund liability owed by assignor to the Internal Revenue Service for the 2nd, 3rd, and 4th quarters of 2000. Assignor agrees that all payments made by Silverman may be made directly to the United States of America Internal Revenue Service. Assignor will advise Silverman of the address to which all payments are to be made to comply with this assignment. /s/ Howard Silverman -------------------------- Howard Silverman /s/ John Homan --------------------------- By John Homan, President TrueVision Medical Associates, Inc. 3 ACCEPTANCE OF ASSIGNMENT The United States of America, Internal Revenue Service, agrees to accept the payments under this assignment and to credit said payments to the employee payroll trust fund liability of TrueVision Medical Associates, Inc., FIN # 88-0434187 for the 2nd, 3rd, and 4th quarters of 2000. ------------------------- Internal Revenue Service 4 EX-10.4 25 file015.txt SECURITY AGREEMENT Exhibit 10.4 ------------ SECURITY AGREEMENT MAY 3, 2001 ----------- DATE Howard Silverman - ------------------------------------------------------------------------------- NAME A resident(s) of 6646 Indian School Rd. NE ------------------------------------------------------------- NO. AND STREET Albuquerque NM 87110 - ------------------------------------------------------------------------------- CITY COUNTY STATE (Hereinafter called "DEBTOR"), for consideration grants to TrueVision Medical Associates, Inc. - -------------------------------------------------------------------------------- NAME P.O. Box 4834 - -------------------------------------------------------------------------------- NO. AND STREET San Diego CA 92164 - -------------------------------------------------------------------------------- CITY COUNTY STATE (Hereinafter called "SECURED PARTY") a security interest in the following property and any and all additions, accessions and substitutions thereto or therefore (hereinafter called the "COLLATERAL"): See attached Exhibit A If marked here,[ ] Debtor grants a security interest in all similar property owned by Debtor during the time the Obligations are outstanding, although such property may be acquired after the date hereof; provided, however, that no security interest shall attach to consumer goods other than accessions unless the Debtor acquires rights in them within ten (10) days after the Secured Party gives value. To secure payment of the indebtedness evidenced by A Certain promissory note --- of even date herewith, payable to the Secured Party, or order, as follows: - -------- 1 1. $3,423.26 payable in June 1, 2001 2. 3,423.26 on 1st of each and every month unti8l Promissory Note of $57,000.00 is paid in full. Together with such additional sums as may hereafter be advanced to the Debtor or expended by the Secured Party or its assigns on behalf of the Debtor or his assigns for any purpose whatsoever and evidenced by notes, drafts, open account, or otherwise, with interest thereon at rates to be fixed at the time of advancing or expending such additional sums; provided, however that the making of any such advances or expenditures shall be optional with Secured Party, or its assigns; and this security agreement shall secure the payment of any and all extensions or renewals and successive extensions or renewals of said note or notes, and of any indebtedness at any time owing to Secured Party, or its assigns, and shall further secure the payment of any and all indebtedness owing by Debtor to Secured Party, and for all of which this security agreement shall stand as continuing security until paid (all of such indebtedness being referred to as the "Obligations"); and the Debtor agrees that the Secured Party, its successors or assigns, may apply any payments made on the Obligations secured hereby, at its option, on any of the notes or other indebtedness secured hereby. DEBTOR EXPRESSLY WARRANTS AND COVENANTS: 1. That except for the security interest granted hereby Debtor is, or to the extent that this agreement states that the Collateral is to be acquired after the date hereof, will be, the owner of the Collateral free from any adverse lien, security interest or encumbrance; and that Debtor will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein. 2. That is marked here , the Collateral is used or bought primarily for personal, family or household purposes; that if marked here , the Collateral is used or bought primarily for use in farming operations; that if marked here the Collateral is being acquired with the proceeds of the note or notes, which Secured Party may disburse direct to the Seller of the collateral. 3. That Debtor's count of residence is as stated above, and the Collateral will be kept at 1700 Louisiane Blvd. NE Albuquerque Bernalillo New Mexico - -------------------------------------------------------------------------------- NO. STREET CITY COUNTY STATE 4. That if any of the Collateral is crops growing or to be grown, goods which are or are to become fixtures, timber to be cut or minerals or the like (including oil and gas) or accounts financed at the wellhead or minehead of the well or mine, a description of the real estate is as follows: And the name of the record owner of the real estate is ------------------------- - -------------------------------------------------------------------------------- And that if the Collateral is attached to real estate or if the Collateral includes crops growing or to be grown, goods which are or are to become 2 fixtures, timber to be cut or minerals or the like (including oil and gas) or accounts financed at the wellhead or minehead or the well or mine, Debtor will, on demand or Secured Party, furnish Secured Party with a disclaimer or disclaimers or a subordination agreement signed by all persons having an interest in the real estate, disclaiming or subordinating any interest in the Collateral which is prior to Secured Party's interest. 5. That no financing statement covering the Collateral or any proceeds thereof is on file in any public office and that at the request of Secured Party, Debtor will join with Secured Party in executing one or more financing statements pursuant to the New Mexico Uniform Commercial Code in form satisfactory to Secured Party and will pay the cost of filing such financing statement, this security agreement and any continuation or termination statement, in all public offices wherever filing is deemed by Secured Party to be necessary or desirable. A carbon, photographic or other reproduction of a Security Agreement or a Financing Statement is sufficient as a Financing Statement. 6. Not to sell, transfer or dispose of the Collateral, nor take the same or attempt to take the same from the county where dept as above stated, without prior consent of the Secured Party. 7. To pay all taxes and assessments of every nature which may be levied or assessed against the Collateral. 8. Not to permit or allow any adverse lien, security interest or encumbrance whatsoever upon the Collateral, and not to permit the same to be attached or replevined. 9. That the Collateral is in good condition, and that he will. At his own expense, keep the same in good condition and from time to time, forthwith, replace and repair all such parts of the collateral as may be broken, worn out, or damaged without allowing any lien to be created upon the Collateral on account of such replacement or repairs, and that the Secured Party may examine and inspect the Collateral at any time, wherever located. 10.At its option, Secured Party may discharge taxes, liens or security interests or other encumbrances at any time levied or placed on the collateral and may pay for the repair of any damage or injury and may pay for the maintenance and preservation of the Collateral. Debtor agrees to reimburse Secured Party on demand for any payment made or expense incurred by Secured Party pursuant to the foregoing authorization. Until such reimbursement, the amount of any such payment, with interest at the rate of 10% annum from date of payment until reimbursement, shall be added to the indebtedness owed by Debtor and shall be secured by this security agreement. 11.That he will at his own expense forthwith insure the Collateral in a reliable insurance company against loss or damage by fire and Extended coverage For an amount equal to the aggregate sum of said indebtedness, and keep the same so insured continuously until the full amount of said indebtedness is paid, with loss payable to Secured Party as its interest may appear, and that he will on demand deliver said policies of insurance or furnish proof of such insurance to 3 the Secured Party, and in case of loss, the Secured Party shall retain from the insurance money an amount equal to the total balance of said indebtedness the same is due or not. Should the Debtor fail or forthwith effect such insurance and deliver the policies or furnish proof of such insurance as aforesaid, or fail to keep the Collateral so insured continuously until the full amount to said indebtedness is paid, the Secured Party may at its option effect such insurance and the amount so paid for such insurance with interest at the rate of 10% per annum form date of payment until repaid shall be added to said indebtedness, and the same shall be secured by this security agreement. 12. That in the event this security agreement is placed in the hands of any attorney for enforcement, said Debtor will pay the reasonable attorney's fees of Secured Party, but in no event less than then per cent (10%) of the total amount due or unpaid and said Debtor will pay said Secured Party any and all costs and expenses incurred in recovering possession of the Collateral and incurred in enforcing this security agreement, and the same shall be secured by this security agreement. 13. That he will not use the Collateral in violation of any applicable statuses, regulations or ordinances, and that if the Collateral includes one or more motor vehicles he will not rent the Collateral nor allow the Collateral to be used in rental service, or in any speed or endurance contest. 14. That if the Collateral includes one or more motor vehicles he will not use or cause or permit the Collateral to be used for the transportation of liquor, wines or any other beverage for personal or commercial use, prohibited by any Federal or State statute to be transported. UNTIL DEFAULT debtor may have possession of the Collateral and use it in any lawful manner not inconsistent with this agreement and not inconsistent with this agreement and not inconsistent with any policy of insurance thereon, and upon default Secured Party shall have the immediate right to the possession of the Collateral. DEBTOR SHALL BE IN DEFAULT under this agreement upon the happening of any of the following events or conditions: (a) default in the payment or performance of any obligation, covenant or liability contained or referred to herein or in any note evidencing the same; (b) any warranty, representation or statement made or furnished to Secured Party or on behalf of Debtor proves to be false in any material respect when made or furnished; (c) any event which results in the acceleration of the maturity of the indebtedness of Debtor to others under any indenture, agreement or undertaking; (d) loss, theft, damage, destruction, sale or encumbrance to or of any of the Collateral, or the making of any levy, seizure or attachment thereof or thereon; 4 (e) death, dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of nay proceeding under any bankruptcy or insolvency laws by or against Debtor or any guarantor or surety for Debtor. UPON SUCH DEFAULT and at any time thereafter, or if it deems itself insecure, Secured Party may declare all Obligations secured hereby immediately due and payable and shall have the remedies of a secured party under the New Mexico Uniform Commercial Code. Secured Party may require Debtor to assemble the Collateral and deliver or make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of Debtor shown at the beginning of this agreement at least five days before the time of the sale or disposition. Expenses of retaking, holding, preparing for sale, selling or the like shall include Second Party's reasonable attorney's fees and legal expenses. No waiver by Secured Party of any default shall operate as a waiver of any other default or of the same default on a future occasion. The taking of this security agreement shall not waive or impair any other security said Secured Party may have or hereafter acquire for the payment of the above indebtedness, nor shall the taking of any such additional security waive or impair this security agreement; but said Secured Party may resort to any security it may have in the order it may deem proper, and notwithstanding any collateral security, Secured Party shall retain its rights of setoff against the Debtor. All rights of Secured Party hereunder shall inure to the benefit of its successors and assigns; and all promises and duties of Debtor shall bind his heirs, executors or administrators or his or its successors or assigns. If there be more than one Debtor, their liabilities hereunder shall be joint and several. This agreement shall become effective when it is signed by Debtor. Secured Party: Debtor: /s/ /s/ Howard Silverman - -------------------------------------- -------------------------------- True Vision Medical Associates, Inc. Howard Silverman - -------------------------------------- -------------------------------- - -------------------------------------- -------------------------------- Note: Notarized acknowledgments are not required by New Mexico Statutes for UCC financing statements and security agreements (New Mexico Statutes Annotated, w/1985 Cumulative Supplements, Sec. 14-8-4). 5 Item Qty Manufacturer Model Number Serial Lot Number Name Number Pachymeter 1 Sonomed Micropach 200p P2-0699-0449 Topographer 1 Zeis-Humphreys Ae992 992-2332 Autoclave 1 SCICAN Statum 2000 2109I6730 Autoclave 1 SCICAN Statum 2000 208887A Autoclave 1 Ritter Speedclave 678L Autoclave 1 Fisher 750 D59983577 Plum Sled-base chairs 4 Hayworth C500-1213 MKB122018 Plum Sled-base chairs 2 Hayworth C500-1213 MKB122292 Plum Sled-base chairs 3 Hayworth Chair 1 Marco 1280 99H0101 Stand 1 Marco 1290 99G0207 Phoropter 1 Marco Reichert 11635 17255-4 Slit Lamp 1 Marco Ultra Slitlamp 99HJ0123 G2 Projector 1 Marco 25839 Chair 1 Marco 1280 99H0102 Stand 1 Marco 1290 999G0208 Phoropter 1 Reichert 11635 17255-4 Slit Lamp 1 Marco 25836 Projector 1 Marco 25836 Side Chair 1 Reliance 4246 43109902110 Side Chair 1 Reliance 4246 43109902121 Side Chair 1 Reliance 4246 4310990216 Assorted Refractive Surgical Instruments 2 Black Leather/Wood Recliner Chairs 2 Black Leather/Wood Ottomans 3 Wood Office Desks 1 Wood Credenza 1 Toshiba Phone Systems & 9 Handsets Computer Network: 1 Server & 3 Complete Work Stations ACT Database CompuLink Software ALL PATIENT FILES

EXHIBIT A To Security agreement dated May 3, 2001 By and between Howard Silverman, Debtor and TrueVision Medical Associates, Inc., Secured Party /s/ Howard Silverman - --------------------------- Howard Silverman /s/ John C. Homan - --------------------------- John C. Homan, President TrueVision Medical Associates, Inc., EX-10.5 26 file016.txt VISX SALES AGREEMENT Exhibit 10.5 ------------ V I S X 3400 Central Expressway WE MAKE THINGS CLEAR Santa Clara, CA 95051-0703 sales agreement Tel: (408) 733-2020 FAX: (408) 773-7055 BILL TO: Lasik America, Inc. SHIP TO: Lasik America, Inc. "Buyer" 6644 Indian School Rd. NE 6644 Indian School Rd. NE Albuquerque, NM 87110 Albuquerque, NM 87110 Telephone No. 505-837-2020 Telephone No. 505-837-2020 Contact: Robert Helmer Contact: Robert Helmer - ---------|--------|----------------------|--------------|----------------------- DATE |SHIP VIA| F.O.B. | PAYMENT TERMS|ESTIMATED DELIVERY DATE - ---------|--------|----------------------|--|-----------|----------------------- | |Destination - Charge Back| Net 30 | - ---------|--------|-------------------------|----|------|------|---------------- QUANTITY |ITEM NO.| PRODUCT DESCRIPTION "PRODUCT"| UNIT COST | EXTENDED COST - ---------|--------|------------------------------|-------------|---------------- | | VISX VisionKey(R)Cards | $10.00 | All taxes| | S/N 3095 |(plus | Shipping,| | | applicable | and | | | licensefee) | Insurance| | | Subtotal:| are the | | |Less Deposit:| Buyer's | | | Tax:| respons- | | |Shipping/Ins:| ibility | | | TOTAL:| - ---------|--------|------------------------------|-------------|---------------- SALES TAX STATUS: Goods are being purchased for resale: Yes X No (check one). ---- --- If yes, resale certificate # Applied for 5/10/01 (please attach copy as required). ------------------------- Purchaser of goods being purchased is exempt from sales tax: Yes No (check one). --- --- If yes, please state basis and provide exemption certificate as appropriate. - -------------------------------------------------------------------------------- CAUTION: THE VISX STAR EXCIMER LASER SYSTEM (T M) (THE "SYSTEM) MAY ONLY BE USED IN THE UNITED STATES BY EYE CARE PRACTIONERS WHO HAVE BEEN TRAINED IN THE SYSTEM'S CALIBRATION AND OPERATION AND WHO HAVE EXPERIENCE IN THE SURGICAL MANAGEMENT AND TREATMENT OF THE CORNEA. THE SYSTEM MAY ONLY BE USED IN THE UNITED STATES FOR PERFORMING INDICATIONS APPROVED BY THE UNITED STATES FOOD AND DRUG ADMINISTRATON, AS DESCRIBED IN THE VISX OPERATOR'S MANUALS. USE OF THE SYSTEM FOR ANY OTHER PROCEDURE IS INVESTIGATIONAL. USE OF THE SYSTEM IS PROHIBITED IN THE ABSENCE OF A VALID VISX PATENT LICENSE. 1 VISX RESERVES THE RIGHT TO REJECT ALL ORDERS PRIOR TO SHIPMENT IN ITS SOLE DEISCRETION. THE SALE OF THE PRODUCTS IS GOVERNED BY THIS SALES AGREEMENT WITH THE ATTACHED TERMS AND CONDITIONS. NO TERM OR CONDITION CONTAINED IN THE BUYER'S PURCHASE ORDER (OTHER THAN SHIPPING DESTINATION) SHALL APPLY AND VISX HEREBY OBJECTS TO ANY SUCH TERM OR CONDITION. ACCEPTED: AGREED: VISX, INCORPORATED BUYER I am authorized to sign this Sales Agreement on Buyer's behalf. /s/ Robert S. Helmer - ---------------------------------- ------------------------------------ By: Print Name: Robert S. Helmer Title: Print Title: Chief Operating Officer Date: Print Date: 5/10/01 Terms and Conditions attached TERMS AND CONDITIONS OF SALE FOR VISX PRODUCTS Purchase. Subject to these Terms and conditions. Buyer agrees to purchase and - ---------- VISX agrees to sell the Products described on the front page of these Terms and Conditions, provided that VISX retains title to the VisionKey card data and all copyrights, trade secret rights and other intellectual property rights. All sales, use, and other taxes and charges that VISX may be required to pay or collect with respect to the Products covered by this Agreement shall be charged to the Buyer. Restrictions. Use of the VISX Excimer Laser System (T M) (the "System) and the - -------------- Vision Key cards is subject to Buyer's agreement to the terms of the separate VISX Patent License (the "License Agreement"). The License Agreement must be executed by Buyer prior to installation of the System. Sale of the Products alone shall in no way be construed as an implied license to perform procedures using the System, nor does sale of Products convey any license, expressly or by implication, to manufacture, duplicate or otherwise copy or reproduce any of the Products. Buyer man not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder. Buyer is prohibited from tampering with or attempting to reverse engineer the VisionKey card or any device or software installed on the System for the purpose of monitoring the number of Licensed Procedures performed. MODIFYING OR ALTERING THE SYSTEM, THE SOFTWARE IN THE SYSTEM, THE VISIONKEY CARD OR THE CARD READING MECHANISM IN ANY WAY CONSTITUTES WILLFUL INFRINGEMENT OF VISX'S INTELLECTUALPROPERTY AND MAY ENDANGER PATIENT SAFETY AND COSMETIC ACT AND COULD SUBJECT THE BUYER AND/OR THE AUTHORIZED USERS TO ACTION BY THE FDA RESUTING IN SEIZURE, INJUNCTION, CIVIL PENALTIES, AND/OR CRIMINAL PROSECUTION. Security Interest. Buyer hereby grants to VISX a security interest in all of its - ------------------- right and interest, now or in the future,in and to the System and all additions, accessions, and upgrades to the System to secure performance of the Buyer's obligations under the License Agreement, including the obligation to pay the fees associated with performance of Licensed Procedures. Buyer agrees to execute 2 any documents as reasonably requested by VISX to perfect and enforce its rights. Buyer understands that if it breaches any obligation in the License Agreement, VISX will be entitled to disable or take possession of the System without notice. Downpayment and Cancellation. If Buyer cancels delivery prior to shipment of the - ------------------------------ Products, any downpayment paid by Buyer shall be non-refundable. Delivery. VISX shall use reasonable efforts to deliver the Products on the date - ---------- specified on the front of these Terms and Conditions. Risk of loss of or damage to the Products shall pass to Buyer upon delivery to the Buyer's location set forth under "Ship To" on the front page of these Terms and Conditions. Buyer shall obtain and maintain at its own expense insurance against loss of or damage to the System, and public liability and property damage insurance, for the period beginning on the date of delivery to Buyer's location and ending on the date full payment for the System is made. VISX reserves title to all Products until full payment has been received, except that title to VisionKey card data remains in VISX. Shipping, delivery and installation dates are approximate and are based upon prompt receipt of all necessary information. VISX will not be liable for failure to ship products in connection with governmental order, strikes, floods, fires, earthquakes, and other causes reasonably beyond VISX's control, including inability to obtain labor or materials or other production delays, in which case VISX may postpone delivery, shipment, or installation at its option without liability. Installation and Acceptance. VISX will install the System at Buyer's facility - ----------------------------- and shall complete the items required by VISX's standard installation checklist. Upon successful completion of the items on the installation checklist. Buyer will sign the delivery and acceptance form acknowledging acceptance of the System. Buyer's Remedies. In the event of a breach by VISX of any of the terms, - ------------------ provisions, or warranties under this contract, or a violation of any representation made in this Agreement. VISX's sole and exclusive liability and Buyer's sole and exclusive remedy shall be limited at VISX's option to either (a) repair or replacement of any goods which are the subject of any such breach, default or violation, or (b) refund of the purchase price of such goods. EXCEPT AS SET FORTH IN THE ATTACHED "TERMS OF WARRANTY OF VISX EXCIMER LASER SYSTEM," ALL WARRANTIES OF ANY NATURE, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED AND DISCLAIMED. Training. VISX will provide Buyer with initial system operator and physician - ---------- training as specified by the Food and Drug Administration, not to exceed five (5) physicians per System; training for additional system operators and physicians will be provided at VISX's standard charges. VISX will notify Buyer of any further training that may be required in the future to comply with FDA requirements of VISX licensing policies. 3 Governing Law. This Agreement shall be governed by and construed under the laws - --------------- of the State of California without regard to conflict of law principles. Buyer consents to the jurisdiction of the federal and state courts in California and agrees that venue shall lie exclusively in Santa Clara County, California. Arbitration. Any controversy or claim arising out of or relating to this Sales - ------------- Agreement, or the beach thereof, shall be finally settled by binding arbitration in Santa Clara County, California under the Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with such Rules; provided, however, that neither party shall be precluded from seeking injunctive relief in a court of law. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Entire Agreement; No Modification. This writing together with the License - ----------------------------------- Agreement is intended by VISX and Buyer as a final expression of their agreement and as a complete and exclusive statement of the terms of their agreement. No course of Prior dealings between the parties and no usage of the trade shall be relevant to supplement or explain any term used in this Agreement. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the party to be charged. Limitation Period. No suit or legal proceeding arising under the terms, - -------------------- conditions, and warranty provisions of this Sales Agreement shall in any case be maintainable against VISX unless commenced or made against VISX within one year after the expiration of the applicable warranty period, and the lapse of such period shall be a complete bar to any recovery in any such suit or proceeding. Severability of Terms. If any term or condition (or part thereof) contained - ----------------------- herein is held to be invalid, the remaining terms and conditions of this Sales Agreement shall not be affected thereby. TERMS OF WARRANTY OF VISX EXCIMER LASER SYSTEM Product Warranty. VISX warrants that, subject to the limitation and disclaimer - ------------------ below, the System and VisionKey cards will be free from defects in materials and workmanship for a period of one year from the date of initial installation of the System when properly installed, maintained, and used for its intended purpose. During the warranty period VISX will, at its option, either repair or replace any equipment that does not conform with the foregoing warranty or refund the purchase price. Warranty Repair. Before returning any Product to VISX Buyer shall first obtain - ----------------- return material authorization from the VISX Service Department. The Returned Material Authorization Number issued by VISX must be noted on the outside of the shipping container. VISX DISCLAIMS ALL LIABILITY WITH RESPECT TO DATA CONTAINED IN ANY PRODUCT RETURNED FOR REPAIR. 4 Limitations. This warranty applies only to the end user who is the original - ------------- purchaser of the Product, and only so long as the Product is used in the country to which it was originally shipped by VISX. This warranty will not apply to any Product that has been subjected to improper operation, unauthorized repair or modification of hardware or software, or operation outside of the environmental specifications of the Product. This warranty is null and void if the user attempts to service or repair the Products (other than performing the maintenance described in the operator and technical manuals), or if service is performed by persons who are neither trained nor certified by VISX. TAMPERING WITH THE VISIONKEY CARD OR THE SYSTEM'S CARD READER INSTALLED IN THE SYSTEM WILL AUTOMATICALLY VOID THIS WARRANTY. Disclaimer. EXCEPT AS SET FORTH HEREIN, ALL WARRANTIES OF ANY NATURE, EXPRESSOR - ------------ IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY EXCLUDED AND DISCLAIMED. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. VISX DOES NOT WARRANT THAT THE OPERATION OF THE PRODUCTS WILL BE UNINTERRUPTED OR ERROR FREE. Service Contract. VISX offers repair and maintenance services beyond the - ------------------- warranty period under a separate service contract. Any out-of-warranty repair services provided to Buyer without a service contract shall be paid for by Buyer at VISX's standard charges. Limitation of Liability. VISX WILL NOT BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, - ------------------------- INDIRECT OR SPECIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOSS OF REVENUE, LOSS OF DATA, LOSS OF BUSINESS OR BUSINESS OPPORTUNITY OR OTHER FINANCIAL LOSS ARISING OUT OF OR IN CONNECITON WITH THE SALE, INSTALLATION, PERFORMANCE, FAILURE, USE OR INTERRUPTED USE OF ITS PORDUCTS, OR THE UNAUTHORIZED USE OF THE PRODUCTS. VISX'S LIABILITY FOR ANY LOSS OR DAMAGE ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR ITS PERFORMANCE OR BREACH, OR IN CONNECTION WITH THE PRODUCTS FURNISHED HEREUNDER, WILL IN NO CASE EXCEED THE PRICE OF THE SPECIFIC PRODUCT WHICH GIVES RISE TO THE CLAIM. 5 EX-10.6 27 file017.txt PATENT LICENSE Exhibit 10.6 ------------ Visx (logo) PATENT LICENSE -------------- This Patent License (this "License") is entered into by and between VISX, Incorporated ("VISX") and the Licensee listed below in connection with the use of the VISX STAR S2(TM) Excimer Laser System Serial Number C3095 _ (the "System") and is effective as of the date of the later of the parties signatures set out below. - ------------------------------------------------|------------------------------- The Licensee is: | The Authorized Users are: Lasik America, Inc. | Stuart Cooper, M.D. 6644 Indian School Rd. NE | Alfred Lovato Jr., M.D. Albuquerque, NM 87110 | Donald E. Rodgers, M.D. | Stephen Graham, M.D. System shall initially be installed at ("Site") | The License Fee is $100.00 per | Licensed Procedure - ------------------------------------------------|------------------------------- A. WHO MAY USE THE SYSTEM? ----------------------- Authorized Users. Licensee and the individuals designated above (the "Authorized - ------------------ Users") are the only persons permitted to use the System. Licensee shall permit only eye care practitioners who have experience in the surgical management and treatment of the cornea and who are legally qualified, properly licensed and fully trained and certified by VISX (or its designees) to perform Licensed Procedures (as defined below) on the System. Licensee will provide VISX at least 10 days prior written notice of any change in the designated Authorized Users. Licensee represents, warrants and covenants that it is and its Authorized Users are, and will remain for so long as Licensee is using the System, fully licensed and legally qualified and certified by VISX to perform the specific Licensed Procedure to be performed, and that Licensee and its Authorized Users shall remain trained in the proper techniques for performing that Licensed Procedure in the most effective and safe manner. Licensee shall notify VISX promptly of any exception to the foregoing representation, warranty and covenant. B. INTELLECTUAL PROPERTY RIGHTS ---------------------------- 1. Patents. The System, the VisionKey (R) card, and certain related ------- disposables, and their use, are covered by several United States patents for which VISX has the authority to provide this License. A list of these patents is set forth in Schedule A (the "Patents"). The Patents cover 1 apparatus and methods for performing ophthalmic laser surgery. Use of the System to perform any procedure covered by the Patents is prohibited unless such use is authorized by a valid VISX Patent License. The sale, lease or other transfer of the System by VISX or any other person or entity does not in any way grant a license under any Patent to use the System to perform any procedures. Such license may only be granted by the delivery to VISX of a fully-executed VISX Patent License. 2. Ownership of Intellectual Property Rights. VISX owns all right, title, and ------------------------------------------ interest in the VisionKey cards, and in all of VISX's patents, trademarks, trade names, inventions, copyrights, know-how, and trade secrets relating to the design, use, manufacture, operation or service of the System and relating to performance of Licensed Procedures. The use by Licensee of any of these intellectual property rights is permitted only for the purposes authorized in this License and only in connection with use of the System, and upon termination of this License for any reason such authorization shall cease. Licensee recognizes that performance of the Licensed Procedures without payment of the License Fee constitutes infringement of VISX's intellectual property rights. C. GRANT ----- 1. License Grant. Subject to Licensee's compliance with the terms of this -------------- License. VISX continuations, continuations-in-part, divisional patents, reexaminations, renewals, hereby grants to Licensee the right and license under the Patents (including any extensions and reissues of such Patents) to perform, and permit Authorized Users to perform, any ultraviolet laser corneal surgery procedure using the System and related disposables, which performance or use is covered by at least one claim of a Patent (a "Licensed Procedure") at the Site. Upon breach by Licensee of any of its obligations contained in this License, the license granted hereby shall be revoked and VISX shall have the right, without notice or demand, to disable or take possession of the System. This License is limited to the performance of Licensed Procedures using the System. 2. Consideration. In consideration for the license granted under the Patents ------------- pursuant to Section C.1, Licensee shall pay the License Fee listed on the front page of this License each time the System is used to perform a Licensed Procedure, except that the License Fee shall be $-0- each time the System is used to perform a phototherapeutic keratectomy (PTK). For convenience of the parties, payment of the License Fee is due upon shipment of each VisionKey card and payable on the terms set forth in the Sales or Lease Agreement. The License Fee does not include the cost of the card. 3. Tampering. Licensee is prohibited from tampering with or attempting to --------- reverse engineer the VisionKey card or any device or software installed on the System for the purpose of monitoring the number of Licensed Procedures performed. MODIFYING OR ALTERING THE SYSTEM, THE VISIONKEY CARD OR THE CARD READING MECHANISM IN ANY WAY CONSTITUTES WILLFUL INFRINGEMENT OF THE INTELLECTUAL PROPERTY LICENSED UNDER THIS LICENSE AND MAY ENDANGER PATIENT 2 SAFETY. ANY SUCH MIDIFICATIONOR ALTERATION WILL RENDER THE SYSTEM ADULTERATED UNDER THE FEDERAL FOOD, DRUG AND COSMETIC ACT AND COULD SUBJECT THE LICENSEE AND/OR THE AUTHORIZED USERS TO ACTION BY THE FDA RESULTING IN SEIZURE, INJUNCTION, CIVIL PENALTIES, AND/OR CRIMINAL PROSECUTION. 4. Term and Termination. This License will continue until the expiration of --------------------- the last of the Patents to expire and Licensee's obligation to pay the License Fee shall terminate for a given procedure on the expiration of the last of the Patents containing one or more claims which cover use of the System or performance of such procedure. This License may be terminated at any time by VISX if (a) Licensee fails to make any payment due under this License within 30 days of the due date, (b) Licensee has tampered in any way with the VisionKey card or the card reading mechanism, the software installed in the System, or any other part of the System, or (c) Licensee fails to cure any other breach of this License within 30 days after VISX provides written notice of such breach to Licensee. Upon any early termination, Licensee and all Authorized Users shall cease all use of the System. Licensee understands that the security interest in the system granted to VISX in the Sales or Lease secures performance of Licensee's obligations under this License. The respective rights and obligations of VISX and Licensee under the provisions of Sections C.3, C.4, D.2, E.1, E.2, and E.4 shall survive any termination of this License. D. LOCATION AND CONDITION OF THE SYSTEM ------------------------------------ 1. Initial Installation Site. The System shall initially be installed at the ------------------------- Site designated on the first page of this License. 2. Relocation and Transfer. Licensee shall not move the System from the Site ------------------------ unless it provides at least 30 days prior written notice of the new site to VISX. Licensee man not sell or otherwise transfer the System unless the proposed transferee has entered into the then current form of VISX Patent License for the System, at which time this License shall terminate and Licensee's rights under this License shall expire. Licensee may not transfer or sublicense any of its rights or obligations under this License without VISX's prior written consent, except as may be implicit in its granting the Authorized Users the privilege to use the System pursuant to this License. 3. Use and Maintenance. Licensee and the Authorized Users shall use the System ------------------- only in accordance with the procedures and other requirements set forth in the user's manuals or other documentation accompanying the System or otherwise provided to Licensee by VISX. Licensee shall cause the System to be properly maintained in accordance with VISX's service recommendations and shall ensure that all Licensed Procedures performed using the System are performed in a safe and effective manner. Licensee shall not be obligated by this License to retain VISX or any of its affiliates to perform maintenance on the System. 3 4. Access to System. Licensee shall allow VISX, at VISX's sole expense, from ---------------- time to time to install or to attach to the System, and to modify, adjust and read, a memory, recording or other device and/or software (including telephone connections of the devices with VISX) which measures the number and types of Licensed Procedures performed with the System. Licensee shall not permit anyone other than an authorized VISX representative to alter or remove any such devices or software. In addition, Licensee shall permit VISX, its affiliates and authorized representatives to inspect the System and/or Licensee's records at least once per month during reasonable business hours and upon at least 48 hours prior notice for the purpose of obtaining the information measured by any device or software installed on the System and to monitor Licensee's compliance with the terms of this License. E. LIABILITY, IMMUNITY, AND COMPLIANCE WITH LAWS --------------------------------------------- 1. Disclaimer of Liability. VISX SHALL NOT BE LIABLE FOR INCIDENTAL, ------------------------- CONSEQUENTIAL, INDIRECT OR SPEICAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO DAMAGTES FOR LOSS OF REVENUE, LOSS OF DATA, LOSS OF BUSINESS OR BUSINESS OPPORTUNITY OR OTHER FINANCIAL LOSS ARISING OUT OF OR IN CONNECITON WITH THE SALE, INSTALLATION, PERFOMANCE, FAILURE, USE OR INTERRUPTED USE OF ITS PRODUCTS, OR THE UNAUTHORIZED USE OF THE PRODUCTS. VISX'S LIABILITY FOR ANY LOSS OR DAMAGE ARISING OUT OF OR RESULTING FROM THIS LICENSE OR ITS PERFORMANCE OR BREACH, OR IN CONNECTION WITH THE PRODUCTS FURNISHED PURSUANT TO THIS LICENSE, WILL IN NO CASE EXCEED THE PRICE OF THE SPECIFIC PRODUCT WHICH GIVES RISE TO THE CLAIM. 2. Required Insurance. Licensee shall maintain general liability insurance ------------------- covering use of the System. Such insurance shall name VISX as an additional insured and shall be in minimum amounts of $1,000,000 per occurrence, $5,000,000 annual aggregate. Licensee shall obtain from each Authorized User proof of professional liability insurance in minimum amounts of $1,000,000 per occurrence, $3,000,000 annual aggregate. 3. Immunity and Indemnification. So long as the Licensee and its Authorized ----------------------------- Users comply in full with this License Agreement. VISX hereby grants immunity to the Licensee and the Authorized Users from any infringement or other legal action under the Patents arising from Licensee's use of the System to perform Licensed Procedures. VISX makes no representation or warranty regarding the scope or validity of any of the Patents. VISX agrees to indemnify Licensee and its Authorized Users against liability actually and reasonably incurred arising from a third party claim that the possession or use of the System in accordance with VISX's instructions for us constitutes an infringement of any United States patent or other intellectual property right of such third party. This indemnification is subject to the following conditions: (a) Licensee must notify VISX immediately upon receipt of notice of any such claim, (b) Licensee must 4 keep VISX fully informed of any developments in connection with any such claim, (c) Licensee shall cooperate fully with VISX in the defense of any such claim, and (d) VISX shall have the right to undertake the defense, compromise or settlement of any such claim on Licensee's behalf, subject to Licensee's approval which approval shall not unreasonably be withheld. No implied licenses are created by this provision. 4. Compliance with Laws. Licensee shall comply with, and shall cause each --------------------- Authorized User to comply with, all laws, rules and regulations of any governmental authority applicable to use of the System, including without limitation the federal Food, Drug and Cosmetic Act and any labeling requirements of the United States Food and Drug Administration Licensee shall permit VISX to affix to the System additional notices that VISX reasonably deems necessary. Licensee shall not remove or tamper with any notices or labels affixed to the System. F. GENERAL PROVISIONS ------------------ This License between VISX And Licensee is binding on their respective successors and permitted assigns and legal representatives. This License is subject to and interpreted under the laws of the State of California (without regard to principle of conflict of laws) and cannot be amended, nor can any term be waived, except in a writing signed by both parties. Any controversy or claim arising out of or relating to this License, or the breach thereof, shall be settle by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof, provided however, that neither party shall be precluded from seeking injunctive relief in a court of law. No waiver or modification in any one instance shall be a waiver or modification in any other. No third party rights will be created by the execution or performance of this License. This License together with the Sales or Lease Agreement, as applicable, contains the entire understanding between VISX and Licensee with respect to its subject matter and supersedes all other agreements, discussions, and understandings with respect to the subject matter. Notices under this License shall be sent by overnight courier to the principal offices of the subject party. If any provision (or part of any provision) of this License, or the enforcement thereof, is held to be illegal, invalid, or unenforceable, then the parties shall renegotiate this License promptly and in good faith so as to place each of the parties, to the fullest extent legally possible, in substantially the same economic position as each of them would have been if such illegality, invalidity, or unenforceability had not occurred. Section and subsection headings in this License are included for convenience of reference only and shall not constitute part of this License for any other purpose or be given any substantive effect. This License may be executed in one or more counterparts all of which together shall constitute one original document. VISX, INCORPORATED LICENSEE Signature: Signature: /s/ Robert Helmer ---------------------------- ------------------------ Name: Name: Robert Helmer -------------------------------- ----------------------------- Title: Title: Chief Operating Officer -------------------------------- --------------------------- Date: Date: 5/11/01 -------------------------------- ----------------------------- 5 SCHEDULE A ---------- United States Patents Patent Name U.S. Patent No. - ------------- --------------- VISX Patents - -------------- Method for Ophthalmological Surgery 4,665,913 Method and Apparatus for Analysis and Correction 4,669,466 Abnormal Refractive Errors of the Eye Apparatus for Ophthalmological Surgery 4,718,418 Apparatus for Analysis and Correction of Abnormal Refractive 4,721,379 Errors of the Eye Apparatus for Performing Ophthalmic Laser Surgery 4,729,372 Method for Performing Ophthalmological Surgery 4,732,148 Method of Laser-Sculpture of the Optically Used Portion of 4,773,414 The Cornea Method of Laser-Sculpture of the Optically Used Portion of 4,798,204 The Cornea Ultraviolet Radiometer 4,885,471 Topography Measuring Apparatus 4,902,123 Method and Apparatus for Performing A Keratomileusis or the 4,903,695 Like Operation (includes LASIK) Eye Restraining Device 4,905,711 Sculpture Apparatus for Correcting Curvature of Cornea 4,911,711 Beam Intensity Profilometer 4,916,319 Topography Measuring Apparatus 4,993,826 Topography Measuring Apparatus 4,998,819 Gas Purging, Eye Fixation Hand Piece 5,009,660 Topography Measuring Apparatus 5,106,183 Laser Surgery Method (Includes LASIK) 5,108,388 Photorefractive Keratectomy 5,163,934 Method and Apparatus for Ophthalmologic Surgery 5,188,831 Method and Apparatus for Ophthalmologic Surgery 5,207,668 Apparatus for Performing Ophthalmologic Surgery 5,219,343 Method and Apparatus for Laser Sculpture of the Cornea 5,219,344 Apparatus for Perfoming Ophthalmological Surgery 5,312,320 Rectilinear Photokeratoscope 5,339,121 Ophthalmic Method for Laser Surgery of the Cornea 5,507,741 In Situ Astigmatism Axis Alignment 5,549,597 Method and System for Laser Treatment of Refractive Error 5,556,395 Using an Offset Image of a Rotatable Mask Method and Apparatus for Temporal and Spatial Beam Integration 5,646,791 Laser Surgery Apparatus and Method 5,711,762 Laser Surgery Apparatus and Method 5,735,843 Method and Apparatus for Temporal and Spatial Beam Integration 5,912,775 IBM Patent - ------------ Far Ultraviolet Surgical and Dental Procedures 4,784,135 6 Summit Patents - ---------------- Laser Reprofiling Systems and Methods 4,856,513 Surface Erosion Using Lasers 4,941,093 Surgical Apparatus for Modifying the Curvature of the Eye Cornea 4,973,330 Surface Shaping Using Laser 4,994,058 LaserReprofiling system Employing an Erodable Mask 5,019,074 Optical System for Use in a Surgical Apparatus 5,147,352 Laser Reprofiling System Employing a Photodecomposable Mask 5,432,801 Laser Corneal Surgery 5,423,801 7 EX-10.7 28 file018.txt EQUIPMENT LEASE Exhibit 10.7 ------------ --------------------------------------------------- 555 West Arrow Highway 909-624-2020 Claremont, CA 91711 USA 909-338-2020 --------------------------------------------------- BAUSCH BAUSCH AND LOMB, INC. & LOMB RENT TO OWN PROGRAM - -------------------------------------------------------------------------------- Customer: Lasik America, Inc. Account Number: 146820 Address: 6644 Indian School Road NE City, State Zip: Albuquerque, NM 87110 Customer is a /s/Corporation (corporation, partnership, sole proprietor) -------------- - -------------------------------------------------------------------------------- This Agreement is entered into by BAUSCH AND LOMB, a New York corporation, with offices at 555 West Arrow Highway, Claremont California, 91711 (hereafter referred to as "B&L"), and the Customer listed above (hereafter referred to as "Customer"). Description of Program Under the program, Customer leases the Equipment for a term of six (6) months or longer. At the end of the lease, Customer has the option to purchase the B&L equipment set forth in III.2. A portion of the rental paid by Customer will then be credited toward Customer's payment of the Purchase Price, subject to the limits set forth in III.4. SCHEDULE "A" EQUIPMENT* - -------------------------------------------------------------------------------- QTY. PRODUCTS PRICES 1 Hansatome (R) Microkeratome Unit $40,000.00 VALUE OF EQUIPMENT INCLUDED HEREIN $40,000.00 - -------------------------------------------------------------------------------- 507-0028 Accuglide Blades $65.00 each - -------------------------------------------------------------------------------- *All references to Equipment in this Agreement refer to the Equipment as described in Schedule "A" above. - -------------------------------------------------------------------------------- I. Duties of Customer 1. Subject to the terms and conditions of this Agreement, Customer agrees to lease the Equipment from B&L for a period of six (6) months., commencing upon ---- --- installation of the Equipment (the "Term"). 2. Customer agrees to pay $1,800 per month to B&L as rental for the Equipment (the "Rental"), payable at the above address, in arrears, on or before the fifteenth (15th) day of the month following each month of the Term. 1 3. Customer agrees to pay any applicable state and local taxes on the leasing or purchase of the Equipment, and any shipping/return shipping charges. Tax exempt accounts will not be charged taxes. 4. Customer agrees to return the Equipment, at Customer's expense, at the end of the Term in good condition and repair, ordinary wear and tear excepted. 5. Customer authorizes and appoints B&L, and its agents, as Customer's attorney in fact, to execute and file, without Customer's involvement, any necessary UCC-1 Financing Statements and continuation statements, acknowledging that the Equipment listed in Schedule "A" is subject to a lease agreement between B&L and Customer, in order to protect the lessor interest of B&L in the Equipment. 6. Customer agrees that, for the period of this Agreement set forth above, Customer shall purchase all of its requirements for single-use disposable blades for use with the Hansatome (R) Microkeratome from B&L. Customer shall order Accuglide Blades at the price set forth in Schedule A. Accuglide (R) Blades shall be ordered by Customer and sold by B&L, and the purchase price therefor, in accordance with and subject to B&L's then current terms and conditions of sale. II. Duties of B&L 1. B&L agrees to perform initial start-up and installation of the Equipment. 2. B&L shall provide maintenance and repair service to the Equipment at its expense during the Term of this Agreement. III. Release of Obligation/Termination of Program 1. This program may be terminated at any time after six (6) months by either party upon ninety (90) days prior written notice, given in accordance with IV.8. 2. Upon termination of the Agreement or the end of the Term, Customer shall have the following options: (i) Purchase the B&L equipment for the purchase price stated in Schedule A; or (ii) return the Equipment to B&L ; or (iii)continue leasing the Equipment on a month-to-month basis, until terminated by either party upon ninety (90) days prior written notice. 3. Customer shall notify B&L no later than ninety (90) days prior to the end of the Term which option Customer plans to exercise. 4. In the event that Customer shall elect the option to purchase the equipment pursuant to Schedule A, B&L agrees to credit fifty percent (50%) of all Rentals paid toward Customer's payment of the Purchase Price. B&L shall promptly notify Customer by invoice of the balance due on the Purchase Price after applying the Credit, and Customer shall pay the invoice within thirty (30) days of its exercise of the option to purchase. 2 5. In the event that Customer shall fail to notify B&L of its election pursuant to III.3, the Agreement will continue on a month-to-month basis until terminated by either party upon ninety (90) days prior written notice. 6. In the event that Customer becomes a "debtor" in any proceeding under the federal Bankruptcy Act or any state insolvency law, or makes an assignment for the benefit of creditors, or is adjudicated bankrupt or insolvent, or admits in writing Customer's inability to pay its debts as they mature, this leases shall immediately terminate and the Equipment shall be returned to B&L. B&L shall have all of the rights and remedies of a secured creditor which are permitted or provided for under the Uniform Commercial Code, without the need of specifically enumerating them in this Agreement, including, but not necessarily limited to, the right to seize the Equipment without breach of peace. IV. General Terms 1. This Agreement is not assignable by Customer to a third party without the prior written consent of B&L. B&L may assign this Agreement to an affiliate or successor upon written notice to Customer. 2. Title to the Equipment shall remain with B&L throughout the term of this Agreement and Customer agrees to execute any documents requested by B&L to evidence same. 3. This Agreement is not binding upon B&L until accepted and executed on behalf of B&L at its office in Claremont, California. 4. This Agreement shall be construed in accordance with and governed by New York law. 5. This Agreement states the entire agreement of the parties with respect to the subject matter hereof, and all oral agreements, understandings and representations have been incorporated. 6. The prevailing party in any litigation brought under this Agreement shall be entitled to recover, as part of its judgment against the other, its reasonable attorneys' fees, costs and expenses. 7. Risk of loss to the Equipment is on Customer, and any such loss, damage or destruction will not have the effect of discharging any obligation of Customer under this Agreement. 8. Any notice hereunder will be in writing and will be effective when received at the address set forth above or, if sent by first class mail to such address, four (4) business days after deposit in the U.S. mails with postage prepaid. Either party, by notice, may change its address for receiving notices hereunder. 9. It is agreed that the terms, conditions and discounts granted in this Agreement are to remain confidential. They are not to be revealed to outside physicians, hospitals, ambulatory surgery centers, groups, vendors, or other outside resources unless required by law. 3 10. No failure or delay at any time by B&L to exercise any right hereunder, or to enforce any particular provision hereof, will be construed or operate as a waiver of its right to insist upon the strict performance of, or the enforcement of its rights with respect to, such provisions(s) or any other provisions(s) hereof at any time. Agreed to and accepted by authorized representatives of both parties as of the dates set forth below: B&L CUSTOMER: BAUSCH AND LOMB Lasik America, Inc. Signature: Signature: /s/ Howard Silverman --------------------------- -------------------------- Print Name: Ron Esola Print Name: Howard Silverman --------------------------- ------------------------- Title: Director, Commercial Operations Title: CEO -------------------------------- ------------------------------- Date: Date: 5/23/01 -------------------------------- ----------------------------- Telepnone: 800-521-2020 extension 1454 Telephone: 505-837-2020 ---------------------------- ------------------------ - -------------------------------------------------------------------------------- This Agreement offer valid through: May 31, 2001 - -------------------------------------------------------------------------------- 4 EX-10.8 29 file019.txt GUARANTEE OF DR. HOWARD P. SILVERMAN Exhibit 10.8 ------------ UNCONDITIONAL CONTINUING GUARANTY --------------------------------- (Security Agreement) ------------------- Unconditional Continuing Guaranty (the "Guaranty") dated as of March 17, 1998, -------------- by Dr. Howard Silverman (herein called the "Guarantor"), in favor of DVI -------------------- Financial Services Inc. (the "Secured party"). On a Joint and Several basis. WITNESSETH: Recitals: - --------- A. Truevision Laser Center of Albuquerque, Inc. a New Mexico Corporation -------------------------------------------- ---------- ("Debtor"), desires to enter into a Loan and Security Agreement dated as of March 17, 1998, Loan and Security Agreement Number 0001786 (the -------------- "Security Agreement") pursuant to which it would finance certain collateral from the Secured Party. To induce Secured Party to enter into the Security Agreement, Guarantor has agreed to enter into the following guarantee. B. All terms used herein and not otherwise defined shall have the respective meanings set forth or referred to in the Agreement. Accordingly, the Guarantor, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agrees as follows: SECTION 1 GUARANTY -------- 1.1 Obligations. The Guarantor hereby guarantees to the Secured Party that the ----------- Debtor will pay when due, by acceleration or otherwise, all amounts from time to time payable by the Debtor under the Security Agreement and promptly and fully perform or comply with each of the Debtor's other agreements and obligations contained in the Security Agreement to be performed or complied with, all in accordance with the terms thereof including all of the obligations arising under each and every Loan and Collateral Schedule entered into in connection therewith, and together with all other obligations of Debtor to Secured Party arising under each and every other Security Agreement, loan and collateral schedule, equipment lease, equipment schedule, note, instruments, agreement, or otherwise between Debtor and Secured party (the obligations of the Debtor so guaranteed being herein called the "Guaranteed Obligations"), and agrees that if the Debtor for any reason whatsoever shall fail to pay or 10.8 - 1 perform when due, by acceleration or otherwise, any of the Guaranteed Obligations, the Guarantor will pay or cause to be performed the same forthwith. Guarantor's liability under this Guaranty for any defaulted Guaranteed Obligations shall not exceed the sum of $105,000.00; however, it is agreed that said $105,000.00 limitation shall not apply to interest costs and attorneys' fees No payments received by the Secured Party, from any source, shall reduce Guarantor's liability under this Guaranty until: (a) Secured Party has declared Debtor in default under the Agreement or (b) Guarantor has informed Secured Party in writing that Debtor is in default under the Agreement and that Guarantor is tendering payment under this Guaranty. 1.2 Binding Effect. The Guarantor agrees that its obligations hereunder -------------- are absolute and unconditional, and shall be binding upon the Guarantor and its successors and assigns, and are irrevocable without regard to the genuineness, validity, legality or enforceability of the Security Agreement or the lack of power or authority of the Debtor to enter into the Security Agreement or any substitution, release or exchange of any other guaranty of or any security for any of the Guaranteed Obligations or any other circumstances (other than payment or performance) which might otherwise constitute a legal or equitable discharge of a surety or guarantor and shall not be subject to any right of set-off or counterclaim and are in no way conditioned upon any attempt to enforce performance or compliance by the Debtor or any other event or contingency. The Guarantor agrees that it shall not be necessary, as a condition to enforce this Guaranty, that suit be first instituted against Debtor or that any rights or remedies against Debtor be first exhausted. It being understood and agreed that the liability of the Guarantor hereunder shall be primary, direct, and in all respects unconditional. The Guarantor agrees that, if at any time all or any part of any payment previously applied by the Secured Party to any of the Guaranteed Obligations must be returned by the Secured Party for any reason, whether by court order, administrative order, or settlement, the Guarantor remains liable for the full amount returned as if such amount had never been received by the Secured Party, notwithstanding any termination of this Guaranty or the cancellation of the Security Agreement or any other agreement evidencing the Guaranteed Obligations of the Debtor. Secured Party may, at Secured Party's election, foreclose on any security held by Secured Party be one or more judicial or non-judicial sales, whether or not every aspect f such sales are commercially reasonable or exercise any other right or remedy Secured Party may have against Debtor, or any security, without affecting or impairing in any way the liability of Guarantor. Guarantor waives any defense arising out of any such election by Secured Party, even though such election operates to impair or extinguish any right of reimbursement, subrogation or other right or remedy of Secured Party against Debtor or any security. In the absence of agreeing to the waivers contained in the subsection 1.2, Guarantor may have the right of subrogation or reimbursement against Debtor. For example, if Secured Party elects to foreclose, by non-judicial sale, any deeds of trust securing any indebtedness of Debtor to Secured Party, causing Guarantor to lose any such rights or create defenses to enforcement of this Guaranty, Guarantor gives up any such potential defenses by agreeing to these waivers. 10.8 - 2 The Guarantor hereby acknowledges that some or all of the Guaranteed Obligations of Debtor to Secured Party may be secured by personal property. Guarantor hereby expressly waives any defenses or benefits available to Guarantor as a result of the exercise by Secured Party of non-judicial or judicial remedies against any Debtor or any Debtor's personal property, including, without limitation, those arising under Sections 580d and 726 of the California Code of Civil Procedures and/or any similar law in any other jurisdiction, and further expressly waives any defenses or benefits arising out of Debtor or against such personal property. This Guaranty remains fully enforceable irrespective of any defenses which the Debtor may assert under the Security Agreement, including but not limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction, and usury. 1.3 Liability of Guarantor. Without limiting the generality of the ----------------------- foregoing, it is agreed that the occurrence of any one or more of the following shall not affect the liability of the Guarantor hereunder: a. new agreements or obligations of Debtor with or to Secured Party; amendments, extensions, modification, renewals or waivers of default as to any existing or future agreements or obligations of Debtor or third parties 3with or to Secured party or extensions of credit by Secured Party to Debtor; b. adjustments, compromises or releases of any obligations to Debtor, Guarantor or other parties, or exchanges, releases of sales of any security of Debtor, Guarantor or other parties; c. fictitiousness, incorrectness, invalidity or unenforceability, for any reason, of any instrument or writing, or acts of commission or omission by Secured Party or Debtor; d. compositions, extensions, moratoria or other relief granted to Debtor pursuant to any statute presently in force or hereafter enacted; e. interruptions in the business relations between Secured Party and Debtor; f. any other guaranty of the Guaranteed Obligations or any security therefore may be released or exchanged in whole or in part or otherwise dealt with. The Guarantor hereby expressly waives acceptance, diligence, presentment, demand of payment, protest and all notices whatsoever (whether of acceptance, maturity, nonpayment, extension of time, acceptance of security, composition or agreement arrived at as to the amount or terms of the Guaranteed Obligations or otherwise) and any requirement to proceed against the Debtor or any security for, or any other guarantor of, any of the Guaranteed Obligations, or exercise any other right or remedy against the Debtor or any other person. The failure of any person to sign this or a similar guaranty shall not affect the liability hereunder of the Guarantor. 10.8 - 3 g. Guarantor hereby expressly waives (1) surrender, release, exchange, substitution, dealing with or taking any additional collateral, (2) abstaining from taking advantage of or realizing upon any security interest or other guaranty, and (3) any impairment of collateral including, but not limited to, failure to perfect a security interest in the collateral; or h. Without in any limiting the foregoing, the Guarantor hereby waives any other act or omission of the Secured Party (except acts or omissions in bad faith) which changes the scope of the Guarantor's risk. 1.4 Subrogation Rights. Guarantor hereby waives any right of ------------------- subrogation, contribution, indemnity, reimbursement, recourse to assets of Debtor, and any other suretyship rights and claims, whether direct, indirect, liquidated or contingent, which Guarantor has or may have as against Debtor with respect to the Guaranteed Obligations. Guarantor agrees that in light of the immediately foregoing waivers, the execution of this Guaranty shall not be deemed to make Guarantor a "creditor" of Debtor, and that for purposes of Sections 547 and 550 of the Bankruptcy Code, Guarantor shall not be deemed a "creditor" of Debtor. 1.5 Financial Information. The Guarantor will furnish the Secured Party --------------------- during the term of the Security Agreement with its annual audited financial statements promptly after they become available and in any event within 120 days after the end of its fiscal year and with such other financial information and reports, including reports filed with Federal or state regulatory agencies, as the Secured Party may reasonably request. The Guarantor warrants to the Secured Party that the Guarantor has adequate means to obtain from the Debtor on a continuing basis information concerning the financial condition of the Debtor and that the Guarantor is not relying on the Secured Party to provide such information either now or in the future. SECTION 2 LIQUIDATION AND CHANGE IN STRUCTURE ----------------------------------- 2.1 Liquidation and Reorganization. Unless the Guarantor is an ------------------------------- individual, the Guarantor shall not, during the Security Agreement Term, unless the Secured Party shall otherwise consent in writing, wind up, dissolve or otherwise terminate its corporate existence, or consolidate with or merge with or into, or sell, lease or otherwise transfer all or substantially all of its assets to, any entity unless: a. the entity formed by a consolidation or with or into which the Guarantor is merged or the entity that acquires all or substantially all of the assets of the Guarantor, as the case may be, shall be a corporation organized and existing under the laws of the United States of America or any state thereof; and 10.8 - 4 b. such entity shall expressly assume the obligations of the Guarantor under this Guaranty in a written instrument duly authorized, executed and delivered to the Secured Party; and c. such entity shall have, immediately after the consolidation, merger, transfer or lease, a net worth not less than the new worth of the Guarantor, and a debt to net worth ration not greater than that of the Guarantor, in each case in accordance with generally accepted accounting principles and measured with respect to the Guarantor immediately before the consolidation merger, transfer or lease; and d. immediately after the consolidation, merger, transfer or lease, no Default or Event of Default shall have occurred and be continuing; and e. the Guarantor shall notify the Secured Party in writing at least ten (10) calendar days before the consolidation, merger, transfer or lease. 2.2 Change in Structure. This Guaranty shall be effective regardless of -------------------- the subsequent reorganization, merger or consolidation of the Debtor or any other change in its composition, nature, personnel or location. SECTION 3 MISCELLANEOUS ------------- 3.1 No Waiver. No failure on the part of the Secured Party to exercise, --------- no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other further exercise of any other right or remedy. This Guaranty may not be amended or modified except by written agreement of the Guarantor and the Secured Party. 3.2 Entire Agreement. This writing is intended by the parties as a final ----------------- expression of this Guaraanty and is also intended as a complete and exclusive statement of the terms of the Guaranty. No course of dealing, course of performance or trade usage, and no parol evidence of any nature, shall be used to supplement or modify any terms. Nor are there any conditions to the full effectiveness of this Guaranty. 3.3 Notices. All notices required under the terms and provisions hereof -------- shall be in writing or be tested or otherwise authenticated telex, telegram or cable and shall be deemed to have been duly given or made when deposited in the United States mail, with proper postage for first-class mail prepaid, transmitted by telex or delivered to the telegraph office (a) if to the Guarantor, addressed to 445 G Street, San Diego, CA 92101 Attention: Dr. --------------------------------- --- Silverman (b) if to the Secured Party, addressed to DVI Financial Services Inc. - --------- 500 Hyde Park, Doylestown, Pennsylvania 18901. 10.8 - 5 3.4 GOVERNING LAW. THIS GUARANTY WILL BE GOVERNED BY AND CONSTRUED IN -------------- ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES. GUARANTOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OT THE GUARANTEED OBLIGATIONS OR THE CONDUCT OF THE RELATIONSHIP BETWEEN SECURED PARTY AND THE GUARANTOR OR SECURED PARTY AND THE DEBTOR. 3.5 Submission to Jurisdiction. (a) Guarantor hereby irrevocably submits --------------------------- in the Eastern District of Pennsylvania or any Commonwealth of Pennsylvania court, over any action or proceeding arising out of or relating to this Guaranty. Guarantor hereby agrees that service of copies of summons and complaints and any other process which may be served in any action or proceeding arising hereunder may be made by mailing or delivering a copy of such process by Registered or Certified mail, postage prepaid, to Guarantor at its address set forth at the beginning of this agreement. (b) Nothing in the Paragraph 3.5 shall affect the right of Secured Party to serve legal process in any other manner permitted by law or affect the right of Secured Party to bring any action or proceeding against Guarantor or any of its properties in the courts of other jurisdictions to the extent permitted by law. 3.6 Severability. If any term of this Guaranty and any other application ------------- thereof shall be invalid or unenforceable, the remainder of the Guaranty and any other application of such terms shall not be affected thereby. 3.7 Successor and Assigns. Guarantor shall not assign this Guaranty ---------------------- without the prior written consent of Secured Party. This Guaranty shall be binding upon the successors and assigns of the Guarantor. Secured Party may, without notice to Guarantor, assign this Guaranty in whole or in part. As used herein, the term "Secured Party" includes the Secured Part and any successor or assignee of the Secured Party. 3.8 Attorney's Fees. Guarantor shall pay to Secured Party, on demand, ---------------- all costs and expenses incurred by Secured Party in connection with the enforcement of this Guaranty including, without limitation, attorney's fees. IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered as to the date first set forth herein. ATTEST/WITNESS "GUARANTOR" - ------------------------- Howard Silverman, M.D. /s/Howard P. Silverman - ------------------------- By: /s/ Signature of Guarantor (Print Name) --------------------------- (Signature of Guarantor) State of New York ) County of Kings/New York )ss. On April 7, 1998, before me, the undersigned, a notary public ------------- 10.8 - 6 in and for said State, personally appeared Howard Silverman, ---------------- known to me (or proved to me on the basis of satisfactory evidence) to be person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal DANNY CHIN Signature/s/ Danny Chin (SEAL) Notary Public, State of New York --------------- No. 4988776 NOTARY PUBLIC Qualified in Kings County Commission Expires November 18, 1999 DVI:5010-1 (9/88)(7/91)(01/93)(08/94)(5/96) PAY PROCEEDS LETTER ------------------- Truevision Laser Center of Albuquerque, Inc. 445 G Street San Diego, CA 92101 DVI Financial Services Inc. 500 Hyde Park Doylestown, PA 18901 Gentlemen: In accordance with the terms and provisions of a Loan and Security Agreement and Loan and Collateral Schedule No. 001 ("Schedule") dated March 17, 1998, between --- -------------- DVI Financial Services Inc. ("DVI") as Secured Party and the undersigned as Debtor, covering the following equipment: VISX EXCIMER LASER , TOGETHER WITH ALL PARTS, ACCESSORIES, ATTACHEMENTS, ACCESSIONS, ADDITIONS, REPLACEMENTS, AND SUBSTITUTIONS THERETO AND THEREFOR, the undersigned hereby authorizes DVI to disburse the proceeds of $350,000.00 of said Schedule in the ----------- following manner: 1. 330,000.00 to TVLC Finance, Inc. 20,000.00 VISX, Inc. Please indicate your agreement with the foregoing by signing in the space provided below. Very truly yours, Truevision Laser Center of Albuquerque, Inc. - -------------------------------------------- (Debtor) 10.8 - 7 BY: /s/ President -------------------- TITLE: President ----------------- AGREED AND ACCEPTED BY: DVI Financial Services Inc. BY: /s/ Joseph Malott -------------------- TITLE: Joseph F. Malott ------------------ Director Credit/Documentation Recproceeds ltr. 10.8 - 8 EX-10.9 30 file020.txt LOAN AND COLLATERAL SCHEDULE NO. 002 Exhibit 10.9 ------------ LOAN AND COLLATERAL SCHEDULE NO.002 ----------------------------------- Reference No. 0001786 THIS LOAN AND COLLATERAL SCHEDULE ("Schedule") is executed pursuant to that certain Loan and Security Agreement (the "Agreement") dated as of March 17, 1998, between DVI Financial Services Inc. ("Secured Party") and Howard Silverman, as assignee of True Vision Laser Center of Albuquerque, Inc. ("Debtor"). 1. Incorporation by Reference. --------------------------- The Agreement is fully incorporated herein by reference. All capitalized terms not otherwise defined herein shall have the meanings set forth therefore in Agreement. 2. Description of Collateral. -------------------------- In consideration of the terms and conditions of the Agreement, and of this Schedule, Secured Party has concurrently herewith made a cash Advance to Debtor on the security of the Collateral described on Exhibit "A" attached hereto and made a part hereof, together with all parts, accessories, attachments, accessions, additions, replacements, and substitutions thereto and therefore. 3. Amount of Advance. ------------------ The total amount of the Advance pursuant to this Schedule is $163,616.00. 4. Term. ------ The Term for the Monthly Loan Repayments of the advance made pursuant to this Schedule shall commence on the date set forth below in Section 5, and unless earlier terminated as provided for in the Agreement shall continue for a period of 30 months. 5. Monthly Loan Repayments. ----------------------- As Monthly Loan Repayments of the Advance made under this Schedule, Debtor agrees to pay Secured Party the sum of $185,596.00, payable, in successive monthly installments of: 30 payments of $6,186.55 beginning on June ____,2001 And continuing on the same day of each month thereafter until paid in full. In the event there is an increase in the thirty-one (31) month Treasury Note rate from the rate quoted in the proposal/commitment letter to the rate in effect on the date this Schedule funds, then Secured Party reserves the right to increase the Monthly Loan Repayment amount by the same rate of increase. Monthly Loan Repayments will be made to Secured Party as follows: 10.9 - 1 DVI Financial Services Inc. 2500 York Road Jamison, PA 18929 S:\SHARED\DOCUMENT\DS NAVARRO\Dr. Howard Silverman\Loan & Collateral Schedule.dot 251-488-5000 251-488-5408 (fax) 6. Duty To Pay Absolute -------------------- Until the Debtors obligation to make Monthly Loan Repayments has been terminated as provided for herein, it shall be absolute, unconditional, and without deduction, offset, or abatement for any reason ,and shall continue in full force and effect regardless of Debtor's ability to use any item of Collateral for any reason. 7. Collateral Location, ------------------- The Collateral shall be located at 6646 Indian School Road ----------------------- (Street) Albuquerque Bernalillo NM 87110 ------------------------------------------------------------------------------- (City) (County) (State) (Zip) 8. No Novation. ----------- This Schedule is given in replacement for but not in replacement of the Certain Loan and Collateral Schedule No. 001 dated March 17, 1998 (the "Prior Schedule"). Nothing contained herein shall be deemed to constitute a novation, satisfaction, termination or release of Debtor' DATED: May______, 2001 DEBTOR: SECURED PARTY: DVI FINANCIAL SERVICES INC. __________________________ By:_________________________________ HOWARD SILVERMAN ___________________________________ (Print Name) Its:_________________________________ (Title) Address: Address: 2618 South Beverly Drive 2500 York Road Los Angeles, CA 90034 Jamison, PA 18929 215-488-5000 215-488-5408 (fax) Revised 11/99 S:\SHARED\DOCUMENT\DS NAVARRO\Dr. Howard Silverman\Loan & Collateral Schedule.dot 10.9 - 2 EX-10.10 31 file021.txt LANDLORD'S WAIVER DATED MAY 15, 2001 Exhibit 10.10 ------------- LANDLORD'S WAIVER Contract No. 1786 (C)2001, DVI, Inc., All Rights Reserved THIS LANDLORD'S WAIVER (this "waiver") is entered into effective as of May________,2001, by and among [LANDLORD] ("landlord"), HOWARD SILVERMAN ("Obligor") and DVI FINANCIAL SERVICE INC. ("DVI") BACKGROUND A. Obligor, as tenant, and landlord have entered into a lease ("l\lease") for the real estate located at 6646 Indian School Road, Albuquerque, NM 87110, as more described on schedule A attached hereto ("Leased premises"). B. DVI is or will be the owner of and/or has or will have security interest in and lien on the personal property (as defined below). NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and affirmed, and intending to be legally bound hereby, the parties agree as follows: 1. Waiver of rights. Landlord hereby waives, releases and relinquishes to DVI all right, title, interest, claim and lien that landlord has, or may in the future have, in, to against the personal property located at any time on the leased promises as specifically described on schedule B attached hereto, as the same may be amended by DVI, from time to time, by written notice to landlord, to the extent personal property is now owned or hereafter acquired by DVI and leased to obligor or now owned or hereafter acquired by obligor and pledge To DVI as collateral security for obligations of obligor to DVI(collectively, "Personal Property"). Personal Property will not be subject to levy, sale, distress or distraint for rent or to any claim, lien or demand of any kind by landlord. 2. Entry to Leased Premises. Landlord and obligor authorize DVI and its attorneys, agents and employees to enter on the leased premises, upon responsible notice (provided that no notice will be required if all or any part of the Personal Property is subject imminent harm or loss) and, at any responsible time, to inspect, preserve, maintain, take possession of, remove or dispose of the personal property ("Permitted Activities"); provided, however, that DVI agrees or its attorneys, agents or employees on the leased premises. DVI further agrees to indemnify and hold harmless Landlord from against any loss or claim of any third party directly resulting from any of the Permitted Activities engaged in by DVI or it attorneys, agents or employees on the Leased Premises. 3. Not Fixtures. Landlord agrees that the Personal Property (except the extent such Personal Property consists of ordinary building materials (such as dry wall or carpeting) fully integrated into the lease Premises) is and will not be deemed a fixtures or part of the leased Premises, but will at all times be considered personal property. Except as provided in section 4 hereof or with Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 1 of 5 DVI's express written consent, landlord will take no steps to remove the Personal Property from the lease premises. 4. Used of Leased Premises. If obligor has vacated the leased premises, voluntarily, the lease is terminated or Landlord has accelerated all amounts due under the lease, Landlord may upon written notice to DVI ("Landlord Notice") request that DVI remove the personal property from the Leased Premises. Unless DVI elects to abandon the personal property, DVI will pay to the landlord the regular monthly, non-accelerated rental payments due under the lease (not including any past-due, additional or bonus rental) prorated for the number of dats DVI keeps the Personal Property on the leased premises commencing on that day that is ten (10) days after DVI's receipt of the Landlord Notice. In any event, unless DVI elects to abandon the Personal Property, DVI will remove the Personal Property, from the leases Premises within one hundred twenty (120) days after DVI's receipt of the Landlord Notice unless such removal is stayed, enjoined or prevented by causes outside DVI's control, in which case the one hundred twenty (120) days will commence on the date DVI obtains relief from such stay or injunction or such causes are eliminated. Nothing herein or elsewhere will be deemed to prevent or limit DVI, at its option, from abandoning any part of the Personal Property; provided, however, that DVI must give Landlord written notice of abandonment in order to be relieved of any obligation hereunder to pay rent to Landlord. If DVI elects to abandon the Personal Property or fails to timely pay the rental due from DVI hereunder, Landlord may, using commercially reasonable methods, undertake to remove the Personal Property from the Leased Premises. 5. Landlord's Representations. Landlord represents and warrants to DVI that: (a) the Lease is in full force and effect and has not been amended, modified or renewed, (b) to the Landlord's knowledge, Obligor is not in default of any of its obligations under the Lease and (c) all rent and other payments, if any, due under the Lease have been paid by Obligor. Landlord understands and agrees that DVI is relying on the agreements, representations and warranties contained in this Waiver in extending, continuing or maintaining certain credit facilities to Obligor. 6. Notices. All notices, requests and other communications made or given in connection with this Waiver will be in writing and will be deemed to be received (a) upon personal delivery to the individual or division or department to whose attention notices to a party are to be addressed by private carrier , (b) three (3) business days after being sent by registered or certified mail, in all cases, with charges prepaid, addressed to landlord or to Obligor at heir respective addresses set forth on the Signature Page hereto or to DVI as follows: TO DVI: With Copy To: DVI Financial Services Inc DVI Financial Services Inc 2500 York Road 2500 York Road Jamison, PA 18929 Jamison, PA 18929 Attention: Chief Credit Officer Attention: Legal Department Telephone: 215-488-5000 Telephone: 215-488-5000 Facsimile: 215-488-5408 Facsimile: 215-488-5415 E-Mail: DVI@dvi-inc.com E-Mail: DVI@dvi-inc.com Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 2 of 5 Any party may change such address by sending notice of the change to other parties: such change of address is effective only upon actual receipt of such notice by the other parties. 7. Governing Law. This Waiver will be governed by the laws of the state in which the Leased Premises are located. 8. Contract Number. The inclusion of a Contract Number herein is not intended to, and should not be interpreted to, limit in anyway the enforceability of this Waiver solely to the Personal Property described in that Contract. 9. Binding Effect. This waiver is binding upon and will inure to the benefit of the heirs, successors and assigns of the parties hereto. (THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK) Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 3 of 5 Contract No. 1409 LANDLORD'S WAIVER - SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have executed this Waiver effective as of the date first above written. STATE OF : [LANDLORD] ----------------------- : SS COUNTY OF---------------------- -------------------------- On , 20 , before ------------- ------ me, the undersigned, personally appeared Address: [LANDLORD'S MAILING ADDRESS] --------------------------, who acknowledged himself to be ------------------------------------- of Contact person: - --------------, &----------------, --------------------- and that he as such Telephone: ---------------, -------------------------- being authorized to do so, executed Facsimile: the foregoing instrument for the -------------------------- purposes therein contained. IN E-Mail: WITNESS WHEREOF, I hereunto set my ----------------------------- and official seal. - ---------------------------------- Notary Public My Commission Expires: COMMONWEALTH OF PENNSYLVANIA DVI FINANCIAL SERVICES INC. COUNTY OF BUCKS : SS On , 20 , before By: ------------- ----- ---------------------------- me, the undersigned, personally Name: appeared , -------------------------- who acknowledged himself to be Title: of DVI ------------------------- - ----------------------, Financial Services Inc., a Delaware Corporation, and that he as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. - ------------------------------------- Notary Public My Commission Expires: Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 4 of 5 STATE OF : HOWARD SILVERMAN ----------------------- : SS COUNTY OF---------------------- -------------------------- On , 20 , before ------------- ------ me, the undersigned, personally appeared Address: 2618 South Beverly Drive --------------------------, Los Angeles, CA 90034 who acknowledged himself to be ------------------------------------- of Contact person: - --------------, &----------------, --------------------- and that he as such Telephone: ---------------, -------------------------- being authorized to do so, executed Facsimile: the foregoing instrument for the -------------------------- purposes therein contained. IN E-Mail: WITNESS WHEREOF, I hereunto set my ----------------------------- and official seal. - ---------------------------------- Notary Public My Commission Expires: Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 5 of 5 Contract No. 1409 LEGAL DESCRIPTION OF LEASED PREMISES [See Attached] SCHEDULE A TO LANDLORD'S WAIVER Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 6 of 5 Contract No. 1409 DESCRIPTION OF PERSONAL PROPERTY [COLLATERAL DESCRIPTION] SCHEDULE B TO LANDLORD'S WAIVER Form 33 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/15/2001 3:15 PM Revised 3/6/01 Page 7 of 5 ATTACHMENT TO UCC-1 FINANCING STATEMENT (Specific Equipment) (C)2001, DVI, Inc, All Rights Reserved Contract No. 1786-002 DEBTOR: SECURED PARTY: HOWARD SILVERMAN DVI FINANCIAL SERVICES INC. 2618 South Beverly Drive 2500 York Road Los Angeles , CA 90034 Jamison, Pennsylvania 18929 Debtor hereby grants to and for the benefits of Secured Party and it's Affiliates, as collateral security for the DVI Indebtedness, a security interest in, and lien on, all right title and interest of Debtor in and to the following equipment, together with all parts and accessories and additions incorporated therein, attached thereto and used in connection therewith, all replacements and substitutions therefore and all income, proceeds and products thereof. Serial No. Manufacture Year/Model Description Software Level - ---------- ------------ ---------- ------------ -------------- S/N VISX 1998 EXIMER LASER Debtor acknowledges and agrees that this Attachment and the grant of the security interest and lien combined herein are subject to the terms and conditions of that certain Master Loan and Security Agreement dated March 17, 1998, by and between Debtor and Secured Party. All undefined capitalized terms used herein have the meanings set forth in such Master Security Agreement. Form 40 S:\SHARED DOCUMENT\DS MAVARRO\Dr. Howard Silverman\Silverman LLW.Doc 05/5/2001 2:54 PM Revised 3/8/01 EX-10.11 32 file022.txt ESCROW AGREEMENT FOR LASIK AMERICA, INC. ESCROW AGREEMENT FOR LASIK AMERICA, INC. ------------------- THIS ESCROW AGREEMENT is made and entered into as of the ____ November, 2001, by and between LASIK America, Inc., a Nevada corporation ("CUSTOMER") and Wells Fargo Bank, National Association, (the "Escrow Agent"). WHEREAS, CUSTOMER intends to publicly offer up to 425,000 units of the CUSTOMER's registered securities (the "Units"), with each Unit consisting of one share of Common Stock, $.001 par value per share and one Common Stock Purchase Warrant entitling the warrant holder to purchase one additional share of Common Stock (collectively referred to as the "Securities"), for which each subscriber will pay the public offering price of $6.10 for each Unit; and WHEREAS, it has been determined that the proceeds to be received from the offering should be placed in escrow until such time as all conditions of the offering are satisfied and until the CUSTOMER formally accepts the written subscriptions tendered by purchasers of the Units; WHEREAS, the Escrow Agent is willing to accept appointment as Escrow Agent for only the expressed duties outlined herein. NOW, THEREFORE, in consideration of the premises and agreements set forth herein, the parties hereto agree as follows: 1. Proceeds to be Escrowed. All funds received by CUSTOMER, or ----------------------- any selling agent acting on behalf of the CUSTOMER, in payment for the Securities will be delivered to the Escrow Agent within three (3) business days following the day upon which such proceeds are received by CUSTOMER and shall be retained in escrow by the Escrow Agent and invested as stated below. During the term of this Agreement, CUSTOMER shall cause all checks received by and made payable to it in payment for such Securities to be endorsed in favor of the CUSTOMER Corporation Escrow Account. In the event that any checks deposited in the escrow accounts prove uncollectable after the funds represented thereby have been released by the Escrow Agent to CUSTOMER, then CUSTOMER shall promptly reimburse the Escrow Agent for any and all cost incurred for such, upon request, and the Escrow Agent shall deliver the returned checks to CUSTOMER. 1 2. Identity of Subscribers. CUSTOMER shall furnish to the Escrow ----------------------- Agent with each delivery of funds, as provided in paragraph 1 hereof, a list of the persons who have paid money for the purchase of Securities showing the name, address, amount of Securities subscribed for and the amount of money paid. All proceeds so deposited shall remain the property of the subscriber and shall not be subject to any liens or charges by CUSTOMER, or the Escrow Agent, or judgments or creditors' claims against CUSTOMER, until released to CUSTOMER as hereinafter provided. 3. Disbursement of Funds. From time to time, and at the end of --------------------- the third business day following the Termination Date (as defined in paragraph 4 hereof), the Escrow Agent shall notify CUSTOMER of the amount of the funds received hereunder. As payments are obtained for the Securities from subscribers at any time prior to the Termination Date, then the Escrow Agent shall pay out the escrowed funds and all earnings thereon when and as directed by CUSTOMER, less all offsets permitted by that certain Underwriting Agreement entered into by and between the CUSTOMER and West America Securities Corp. ("Underwriting Agreement"), the contents of which are hereby incorporated by reference and made expressly conditional on the disbursement of funds pursuant to this Agreement. If any funds deposited to the Escrow Account by any subscriber are not accepted by the CUSTOMER within three business days after the deposit into the escrow account, the Escrow Agent shall, within a reasonable time following the Termination Date, but in no event more than ten (10) business days days after the Termination Date, refund to each rejected subscriber at the address appearing on the list of subscribers, or at such other address as shall be furnished to the Escrow Agent by the subscriber in writing, all sums paid by the subscriber pursuant to his subscription agreement for Securities, without any offsets or debits and without accrual of interest earned on such funds in the escrow account, and shall then notify CUSTOMER in writing of such refunds. 4. Term of Escrow. The "Termination Date" shall be January 31, -------------- 2002 or the date the Escrow Agent received written notice from CUSTOMER that it is abandoning the sale of the Securities, subject to Section 3. In accordance with the terms of the Underwriting Agreement, CUSTOMER may extend the termination date 60 days upon written notice to the Escrow Agent. In all events this escrow shall terminate upon the one year anniversary from the date of this agreement. 5. Duty and Liability of the Escrow Agent. The sole duty of the -------------------------------------- Escrow Agent, other than as herein specified, shall be to receive said funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall be under no duty to determine whether CUSTOMER is complying with requirements of this Agreement in tendering to the Escrow Agent said proceeds of the sale of the Securities. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or 2 other document, and its sole responsibility shall be to act only as expressly set forth in this Agreement. The Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. The Escrow Agent may consult counsel in respect of any question arising under this Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel. 6. Escrow Agent's Fee. The Escrow Agent shall be entitled to ------------------ compensation for its services as stated in the fee schedule attached hereto as Exhibit A, which compensation shall be paid by CUSTOMER. The fee agreed upon for the services rendered hereunder is intended as full compensation for the Escrow Agent's services as contemplated by this Agreement; provided, however, that in the event that the conditions for the disbursement of funds under this Agreement are not fulfilled, or the Escrow Agent renders any material service not contemplated in this Agreement, or there is any assignment of interest in the subject matter of this Agreement, or any material modification hereof, or if any material controversy arises hereunder, or the Escrow Agent is made a party to any litigation pertaining to this Agreement, or the subject matter hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney's fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from CUSTOMER. 7. Investment of Proceeds. All funds held by the Escrow Agent ---------------------- pursuant to this Agreement shall constitute trust property for the purposes for which they are held. The Escrow Agent shall invest all funds received from subscribers in the Wells Fargo Funds ____ , a money market mutual fund. 8. Tax Reporting The parties hereto agree that, for tax ------------- reporting purposes, all interest or other taxable income earned from the investment of the Escrow Funds in any tax year shall be taxable to the CUSTOMER. CUSTOMER shall, within 30 days after the date hereof, provide the Escrow Agent with certified tax identification numbers by furnishing appropriate forms W-9 or W-8 and other forms and documents that the Escrow Agent may reasonably request. The parties understand that if such tax reporting documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, to withhold a portion of any interest or other income earned on the investment of monies or other property held by the Escrow Agent pursuant to this Agreement. To the extent that the Escrow Agent becomes liable for the payment of any taxes in respect of income derived from the investment of funds held or payments made hereunder, the Escrow Agent shall satisfy such liability to the extent possible from the Escrow Funds. The parties agree to indemnify and hold the Escrow Agent harmless from and against any taxes, additions for late payment, interest, penalties and other expenses that may be assessed against the Escrow Agent on or with respect to any payment or other activities under this Agreement unless any such tax, addition for late payment, interest, penalties and other expenses shall arise out of or be caused by the actions of, or failure to act by, the Escrow Agent. 3 9. Issuance of Certificates. Until the terms of this Agreement ------------------------ with respect to the Securities have been met and the funds hereunder received from subscriptions for Securities have been released to CUSTOMER, CUSTOMER may not issue any certificates or other evidence of Securities, except subscription agreements. 10. Notices. All notices, requests, demands, and other ------- communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows: If to CUSTOMER: LASIK America, Inc. 6646 Indian School Road, N.E. Albuquerque, NM 87110 Attn: Dr. Howard P. Silverman, CEO Fax # 505-837-9111 If to Escrow Agent: Wells Fargo Bank, N.A. Corporate Trust Department Attn: Kimberly Vann 707 Wilshire Blvd., 17th Floor Los Angeles, CA 90017 Fax 213-614-3355 Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above. 11. Indemnification of Escrow Agent: CUSTOMER hereby indemnifies ------------------------------- and holds harmless the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless such action, claim or proceeding is the result of the willful misconduct of the Escrow Agent. The Escrow Agent may consult counsel in respect 4 of any question arising under the Impoundment Agreement and the Escrow Agent shall not be liable for any acting taken or omitted in good faith upon advice of such counsel. 12. Successors and Assigns. Except as otherwise provided in this ---------------------- Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent to the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. 13. Governing Law; Jurisdiction. This Agreement shall be --------------------------- construed, performed, and enforced in accordance with, and governed by, the internal laws of the State of Minnesota, without giving effect to the principles of conflicts of laws thereof. Each party hereby consents to the personal jurisdiction and venue of any United States District Court for the District of Minnesota located in Hennepin County, Minnesota. 14. Severability. In the event that any part of this Agreement ------------ is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect. 15. Amendments; Waivers. This Agreement may be amended or ------------------- modified, and any of the terms, covenants, representations, warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement. 16. Entire Agreement. This Agreement contains the entire ---------------- understanding among the parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow. 17. Section Headings. The section headings in this Agreement ---------------- are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 18. Counterparts. This agreement may be executed in ------------ counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. 5 19. Time of Essence. Time is of the essence of this Agreement. --------------- 20. Resignation. Escrow Agent may resign upon 30 days advance written notice to CUSTOMER. If a successor escrow agent is not appointed within the 30-day period following such notice, Escrow Agent may petition any court of competent jurisdiction to name a successor escrow agent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first set forth above. LASIK America, Inc. By: ---------------------------------------------------- President and Chief Executive Officer WELLS FARGO BANK, NATIONAL ASSOCIATION By: ---------------------------------------------------- Authorized Officer (Title) 6 EX-10.12 33 file023.txt ESCROW AGREEMENT FOR HOWARD SILVEMAN ESCROW AGREEMENT FOR HOWARD P. SILVERMAN ------------------- THIS ESCROW AGREEMENT is made and entered into as of the ____ November, 2001, by and between Howard P. Silverman, and individual selling shareholder ("CUSTOMER"), of LASIK America, Inc., a Nevada corporation, and Wells Fargo Bank, National Association, (the "Escrow Agent"). WHEREAS, CUSTOMER intends to publicly offer by resale, up to 125,000 units of the CUSTOMER's securities (the "Units"), with each Unit consisting of one share of Common Stock, $.001 par value per share and one Common Stock Purchase Warrant entitling the warrant holder to purchase one additional share of Common Stock (collectively referred to as the "Securities"), for which each subscriber will pay the public offering price of $6.10 for each Unit; and WHEREAS, it has been determined that the proceeds to be received from the offering should be placed in escrow until such time as all conditions of the offering are satisfied and until the CUSTOMER formally accepts the written subscriptions tendered by purchasers of the Units; WHEREAS, the Escrow Agent is willing to accept appointment as Escrow Agent for only the expressed duties outlined herein. NOW, THEREFORE, in consideration of the premises and agreements set forth herein, the parties hereto agree as follows: 1. Proceeds to be Escrowed. All funds received by CUSTOMER, or ------------------------ any selling agent acting on behalf of the CUSTOMER, in payment for the Securities will be delivered to the Escrow Agent within three (3) business days following the day upon which such proceeds are received by CUSTOMER and shall be retained in escrow by the Escrow Agent and invested as stated below. During the term of this Agreement, CUSTOMER shall cause all checks received by and made payable to it in payment for such Securities to be endorsed in favor of the CUSTOMER Escrow Account. In the event that any checks deposited in the escrow accounts prove uncollectable after the funds represented thereby have been released by the Escrow Agent to CUSTOMER, then CUSTOMER shall promptly reimburse the Escrow Agent for any and all cost incurred for such, upon request, and the Escrow Agent shall deliver the returned checks to CUSTOMER. 2. Identity of Subscribers. CUSTOMER shall furnish to the Escrow ------------------------ Agent with each delivery of funds, as provided in paragraph 1 hereof, a list of the persons who have paid money for the purchase of Securities showing the name, address, amount of Securities subscribed for and the amount of money paid. All proceeds so deposited shall remain the property of the subscriber and shall not be subject to any liens or charges by CUSTOMER, or the Escrow Agent, or judgments or creditors' claims against CUSTOMER, until released to CUSTOMER as hereinafter provided. 1 3. Disbursement of Funds. From time to time, and at the end of ---------------------- the third business day following the Termination Date (as defined in paragraph 4 hereof), the Escrow Agent shall notify CUSTOMER of the amount of the funds received hereunder. As payments are obtained for the Securities from subscribers at any time prior to the Termination Date, then the Escrow Agent shall pay out the escrowed funds and all earnings thereon when and as directed by CUSTOMER, less all offsets permitted by that certain Underwriting Agreement entered into by and between the CUSTOMER and West America Securities Corp. ("Underwriting Agreement"), the contents of which are hereby incorporated by reference and made expressly conditional on the disbursement of funds pursuant to this Agreement. If any funds deposited to the Escrow Account by any subscriber are not accepted by the CUSTOMER within three business days after the deposit into the escrow account, the Escrow Agent shall, within a reasonable time following the Termination Date, but in no event more than ten (10) business days days after the Termination Date, refund to each rejected subscriber at the address appearing on the list of subscribers, or at such other address as shall be furnished to the Escrow Agent by the subscriber in writing, all sums paid by the subscriber pursuant to his subscription agreement for Securities, without any offsets or debits and without accrual of interest earned on such funds in the escrow account, and shall then notify CUSTOMER in writing of such refunds. 4. Term of Escrow. The "Termination Date" shall be January 31, --------------- 2002 or the date the Escrow Agent received written notice from CUSTOMER that it is abandoning the sale of the Securities, subject to Section 3. In accordance with the terms of the Underwriting Agreement, CUSTOMER may extend the termination date 60 days upon written notice to the Escrow Agent. In all events this escrow shall terminate upon the one year anniversary from the date of this agreement. 5. Duty and Liability of the Escrow Agent. The sole duty of the --------------------------------------- Escrow Agent, other than as herein specified, shall be to receive said funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall be under no duty to determine whether CUSTOMER is complying with requirements of this Agreement in tendering to the Escrow Agent said proceeds of the sale of the Securities. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or other document, and its sole responsibility shall be to act only as expressly set forth in this Agreement. The Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. The Escrow Agent may consult counsel in respect of any question arising under this Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel. 2 6. Escrow Agent's Fee. The Escrow Agent shall be entitled to ------------------- compensation for its services as stated in the fee schedule attached hereto as Exhibit A, which compensation shall be paid by CUSTOMER. The fee agreed upon for the services rendered hereunder is intended as full compensation for the Escrow Agent's services as contemplated by this Agreement; provided, however, that in the event that the conditions for the disbursement of funds under this Agreement are not fulfilled, or the Escrow Agent renders any material service not contemplated in this Agreement, or there is any assignment of interest in the subject matter of this Agreement, or any material modification hereof, or if any material controversy arises hereunder, or the Escrow Agent is made a party to any litigation pertaining to this Agreement, or the subject matter hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney's fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from CUSTOMER. 7. Investment of Proceeds. All funds held by the Escrow Agent ----------------------- pursuant to this Agreement shall constitute trust property for the purposes for which they are held. The Escrow Agent shall invest all funds received from subscribers in the Wells Fargo Funds, a money market mutual fund. 8. Tax Reporting The parties hereto agree that, for tax ------------- reporting purposes, all interest or other taxable income earned from the investment of the Escrow Funds in any tax year shall be taxable to the CUSTOMER. CUSTOMER shall, within 30 days after the date hereof, provide the Escrow Agent with certified tax identification numbers by furnishing appropriate forms W-9 or W-8 and other forms and documents that the Escrow Agent may reasonably request. The parties understand that if such tax reporting documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, to withhold a portion of any interest or other income earned on the investment of monies or other property held by the Escrow Agent pursuant to this Agreement. To the extent that the Escrow Agent becomes liable for the payment of any taxes in respect of income derived from the investment of funds held or payments made hereunder, the Escrow Agent shall satisfy such liability to the extent possible from the Escrow Funds. The parties agree to indemnify and hold the Escrow Agent harmless from and against any taxes, additions for late payment, interest, penalties and other expenses that may be assessed against the Escrow Agent on or with respect to any payment or other activities under this Agreement unless any such tax, addition for late payment, interest, penalties and other expenses shall arise out of or be caused by the actions of, or failure to act by, the Escrow Agent. 9. Issuance of Certificates. Until the terms of this Agreement ------------------------- with respect to the Securities have been met and the funds hereunder received from subscriptions for Securities have been released to CUSTOMER, CUSTOMER may not transfer any certificates or other evidence of Securities, except subscription agreements. 3 10. Notices. All notices, requests, demands, and other -------- communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows: If to CUSTOMER: Howard P. Silverman 2618 South Beverly Drive Los Angeles, California 90034 Fax # 310-838-0224 If to Escrow Agent: Wells Fargo Bank, N.A. Corporate Trust Department Attn: Kimberly Vann 707 Wilshire Blvd., 17th Floor Los Angeles, CA 90017 Fax 213-614-3355 Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above. 11. Indemnification of Escrow Agent: CUSTOMER hereby indemnifies -------------------------------- and holds harmless the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless such action, claim or proceeding is the result of the willful misconduct of the Escrow Agent. The Escrow Agent may consult counsel in respect of any question arising under the Impoundment Agreement and the Escrow Agent shall not be liable for any acting taken or omitted in good faith upon advice of such counsel. 12. Successors and Assigns. Except as otherwise provided in this ----------------------- Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent to the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. 4 13. Governing Law; Jurisdiction. This Agreement shall be ---------------------------- construed, performed, and enforced in accordance with, and governed by, the internal laws of the State of Minnesota, without giving effect to the principles of conflicts of laws thereof. Each party hereby consents to the personal jurisdiction and venue of any United States District Court for the District of Minnesota located in Hennepin County, Minnesota. 14. Severability. In the event that any part of this Agreement ------------- is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect. 15. Amendments; Waivers. This Agreement may be amended or -------------------- modified, and any of the terms, covenants, representations, warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement. 16. Entire Agreement. This Agreement contains the entire ----------------- understanding among the parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow. 17. Section Headings. The section headings in this Agreement ----------------- are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 18. Counterparts. This agreement may be executed in ------------- counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. 19. Time of Essence. Time is of the essence of this Agreement. ---------------- 20. Resignation. Escrow Agent may resign upon 30 days advance ------------ written notice to CUSTOMER. If a successor escrow agent is not appointed within the 30-day period following such notice, Escrow Agent may petition any court of competent jurisdiction to name a successor escrow agent. 5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first set forth above. HOWARD P. SILVERMAN By: ---------------------------------------------------- Selling Shareholder (CUSTOMER) WELLS FARGO BANK, NATIONAL ASSOCIATION By: ---------------------------------------------------- Authorized Officer (Title) 6 EX-23.1 34 file024.txt CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT Exhibit 23.1 ------------ CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT We consent to the use in Amendment No. 4 to Form SB-2 of Lasik America, Inc. of our report dated August 13, 2001 (except for Note 8 as to which the date is August 24, 2001), relating to the financial statements of Lasik America, Inc., and to the reference to us under the heading "Experts" in such registration statement. San Diego, California PANNELL KERR FORSTER November 27, 2001 Certified Public Accountants A Professional Corporation -----END PRIVACY-ENHANCED MESSAGE-----