THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND WILL BE OFFERED AND SOLD BY THE COMPANY IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE
LAW BY VIRTUE OF THE COMPANY'S INTENDED COMPLIANCE WITH THE PROVISIONS OF
SECTION 4(2) AND/OR REGULATION S PROMULGATED UNDER THE ACT. THE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY ANY REGULATORY AUTHORITY. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK PURCHASE AGREEMENT
Ion Laser Technology, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx Xxxxx
President and Chief Executive Officer
Gentlemen:
In connection with the offer and proposed issuance of $5,000,000 in Common
Stock (the "Offering") by Ion Laser Technology, Inc., a Utah corporation ("ILT"
or the "Company"), in reliance on exemptions from the registration requirements
of the U.S. Securities Act of 1933, as amended (the "Act"), LCO Investments
Limited ("Purchaser") and the Company hereby agree as follows:
1. Purchase of Securities. Subject to the terms and conditions of this
----------------------
Agreement, Purchaser hereby agrees to acquire, and the Company agrees to issue
and sell, One Million Eight Hundred Sixty Thousand Four Hundred Sixty Five
(1,860,465) shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock"). The shares of Common Stock acquired by Purchaser hereunder
shall be referred to in this Agreement as the "Shares." The total purchase
price (the "Purchase Price") for the Shares shall be Five Million Dollars
($5,000,000), the Purchase Price per Share being the higher of the Company's
book value per share and the closing sale price per share of the Common Stock on
the date the Company's Board of Directors authorized this Agreement. The
Purchaser shall pay the Purchase Price in full at Closing, as hereinafter
defined, via wire transfer to an account of the Company identified by the
Purchaser and under the control of persons designated by or acceptable to the
Purchaser on or before the Closing Date, as that term is defined in Section 6 of
this Agreement. Wire instructions shall be provided prior to the Closing.
2. Amendment of Old Options. The Company hereby agrees to amend that
------------------------
certain Option to Purchase Shares of Common Stock dated May 8, 1997 issued to
LCO Investments Limited, relating to 400,000 shares of Common Stock, and that
certain Amended and Restated Option to Purchase Shares of Common Stock dated May
8, 1997 issued to LCO Investments, relating to 773,334 shares of Common Stock
(together, the "Old Options"), such that the purchase price of the shares
underlying the Old Options shall be changed from $9.00 per share to $4.50 per
share. The amendment to the Old Options shall be in the form set forth in
Exhibit "A" (the "Amendment to Option Agreements") and by this reference made a
part hereof.
3. Board Nominee Rights. The Company covenants and agrees that for so
--------------------
long as the Purchaser and its affiliates and permitted transferees collectively
are the beneficial owners of 5% or more of the issued and outstanding shares of
Common Stock of the Company, (i) the Purchaser shall have the right to nominate
two persons (each, a "Purchaser Director") for election to the Board of
Directors of the Company, (ii) the Purchaser shall have the exclusive right to
remove any Purchaser Director from the Board of Directors at any time by written
notice to the Board of Directors, and (iii) in the event of the death,
disability, legal incapacity, resignation or removal of a Purchaser Director,
the Purchaser shall have the exclusive right to designate a successor nominee
for election as a director of the Company (which successor, upon such election,
shall be a Purchaser Director). In determining the beneficial ownership of the
Purchaser and its affiliates and permitted transferees for purposes of this
Section, the shares of stock issuable upon any options granted by the Company to
the Purchaser, its affiliates or permitted transferees (including, without
limitation, the Old Options) shall be deemed to be issued and outstanding as
though such options had been exercised in full. The Company and the Purchaser
intend to have the Purchaser's rights under this Section supersede and not be
duplicative of its rights set forth in Section 7.3 of the Stock Purchase
Agreement, dated as of April 1, 1996, by and among the Company, the Purchaser,
Xxxxxxx X. Xxxxxxxx and Pinnacle Fund, L.P.
4. Delivery of Share Certificates and Amended Option Agreements. At the
------------------------------------------------------------
Closing, the Company shall deliver to Purchaser certificates representing the
Shares, which shall be fully paid and nonassessable upon issuance, and the
Amended Option Agreements.
5. Registration Rights and Exchange Filings. The Shares shall be subject
----------------------------------------
to certain registration rights, as provided in that certain Registration Rights
Agreement attached hereto as Exhibit "B" and by this reference made a part
hereof. (Such Registration Rights Agreement, together with this Agreement, and
the Amendment to Option Agreements, constitute the "Transaction Documents"). In
addition, ILT shall make appropriate filings under the rules of the American
Stock Exchange ("AMEX") in order that the Shares will be included in the
Company's listing with the AMEX.
6. Closing. Payment of the Purchase Price by the Purchaser and delivery
-------
of the Shares and the fully executed Amended Option Agreements by ILT shall be
deemed to be the completion of the transactions contemplated by this Agreement
("Closing"). Closing shall occur
2
concurrently with the execution of this Agreement, such later date as the Shares
shall have been listed with the AMEX, or such later date as the parties may
hereafter agree in writing (the "Closing Date").
7. Use and Disposition of Proceeds. The gross proceeds of this
-------------------------------
transaction will be Five Million Dollars ($5,000,000). The Company agrees to
use the proceeds as shall be determined or directed by its Board of Directors as
constituted from time to time following the Closing, or as shall be determined
or directed pursuant to authority delegated by such Board.
8. Representations and Warranties of Purchaser. To induce the Company's
-------------------------------------------
acceptance of this Agreement, Purchaser hereby represents and warrants to the
Company and its agents and attorneys as follows:
8.1 Investor Status. Purchaser is an "accredited investor" within
---------------
the meaning of Section 501(a) of Regulation D under the Act or is not a
"U.S. Person" as that term is defined under Rule 902(o)(1) of Regulation S
under the Act.
8.2 Liquidity. Purchaser presently has sufficient liquid assets to
---------
pay the Purchase Price. Purchaser has adequate means of providing for its
current needs and contingencies and has no need for liquidity in its
investment in the Company or for a source of income from the Company.
Purchaser is capable of bearing the economic risk and the burden of the
investment contemplated by this Agreement, including, but not limited to,
the possibility of the complete loss of the value of the Shares and the
limited transferability of the Shares, which may make the liquidation of
the Shares impossible in the near future.
8.3 Organization, Standing, Authorization. Purchaser is duly
-------------------------------------
organized, validly existing, and in good standing under the laws of the
Guernsey, Channel Islands and has the requisite power and authority to
enter into this Agreement, acquire the Shares, and execute and deliver any
documents or instruments in connection with this Agreement. The execution
and delivery of this Agreement, and all other documents and instruments
executed by Purchaser in connection with any of the transactions
contemplated by this Agreement, have been duly authorized by all required
action of Purchaser's members or managers. The person executing, on
Purchaser's behalf, this Agreement and any other documents or instruments
executed by Purchaser in connection with this Agreement is duly authorized
to do so.
8.4 Absence of Conflicts. Purchaser represents and warrants that the
--------------------
execution and delivery of this Agreement and any other document or
instrument executed in connection with this Agreement, and the consummation
of the transactions contemplated thereby, and compliance with the
requirements thereof, will not violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on
3
Purchaser, or the provision of any indenture, instrument or agreement to
which Purchaser is a party or is subject, or by which Purchaser or any of
their properties is bound, or conflict with or constitute a material
default thereunder, or result in the creation or imposition of any lien
pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by such Purchaser to any
third party, or require the approval of any third-party pursuant to any
material contract, agreement, instrument, relationship or legal obligation
to which Purchaser are subject or to which any of their properties,
operations or management may be subject.
9. Sole Party in Interest. Purchaser represents that it is the sole and
----------------------
true party in interest, and no other person or entity has or will have upon the
issuance of the Shares beneficial ownership interest in the Shares or any
portion thereof, whether direct or indirect (excluding any contractual right to
payments based on the value of such Shares), other than the equity holders or
beneficiaries of such Purchaser.
9.1 Investment Purpose. Purchaser represents that it is acquiring
------------------
the Shares for its own account and for investment purposes and not for the
account or benefit of any U.S. person or other person or entity or for or
with a view to resale or distribution.
9.2 Knowledge and Experience. Purchaser is experienced in evaluating
------------------------
and making speculative investments, and has the capacity to protect
Purchaser's interests in connection with the acquisition of the Shares.
Purchaser has such knowledge and experience in financial and business
matters in general, and investments in the laser industry in particular,
that Purchaser is capable of evaluating the merits and risks of Purchaser's
investment in the Company. Purchaser has been informed that an investment
in the Company is speculative and has concluded that Purchaser's proposed
investment is appropriate in light of its overall investment objectives and
financial situation.
9.3 Investment Advisors. No party has received or will receive any
-------------------
compensation or other remuneration for advising Purchaser with respect to
this investment other than legal counsel, and Purchaser represents that no
investment advisor or purchaser representative has been consulted or
retained in connection with Purchaser's decision to invest in the Company.
9.4 Disclosure, Access to Information. Purchaser confirms that it
---------------------------------
has received and thoroughly read and is familiar with and understands this
Agreement, and that all documents, records, books and other information
pertaining to Purchaser's investment in the Company requested by Purchaser
have been made available for inspection and copying and that there are no
additional materials or documents that have been requested by Purchaser
that have not been made available by the Company. Purchaser further
4
acknowledges that since August 1997, Xx. Xxxxxxx Xxxxxx, a director of the
Purchaser, has served as a member of the Board of Directors of the
Company. Purchaser further acknowledges that the Company is subject to the
periodic reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Purchaser has reviewed or received copies
of any such reports that have been requested by it. Without limiting the
generality of the foregoing, Purchaser acknowledges that it has received
and has reviewed copies of the following documents and materials, all of
which are incorporated herein by reference:
(1) Articles of Incorporation of the Company, as amended;
(2) Bylaws of the Company, as amended;
(3) Annual Report on Form 10-KSB for the fiscal years ended
March 31, 1996 and 1997;
(4) Quarterly Reports on Form 10-QSB for the quarters ended
June 30, September 30, and December 31, 1996 and 1997.
9.5 Exclusive Reliance on this Agreement. In making the decision to
------------------------------------
purchase the Shares, Purchaser has relied exclusively upon information
included in this Agreement or incorporated herein by reference pursuant to
Section 9.4, and not on any other representations, promises or information,
whether written or verbal, by any person. The Purchaser acknowledges that
the Company has realized and is continuing to realize net losses; that its
cash resources have declined significantly; that to date, the Company has
been unable to perform its obligations under its Distribution Agreement
("DMD Agreement") with Dental/Medical Diagnostics, Inc. ("DMD") in
accordance with the terms of the DMD Agreement, and is aware of the
termination provisions and other terms and conditions of the DMD Agreement.
9.6 Advice of Counsel. Purchaser understands the terms and
-----------------
conditions of this Agreement, has investigated all issues to Purchaser's
satisfaction, has consulted with such of Purchaser's own legal counsel or
other advisors as Purchaser deems necessary, and is not relying, and has
not relied on the Company for an explanation of the terms or conditions of
this Agreement or any document or instrument related to the transactions
contemplated thereby. Purchaser further acknowledges, understands and
agrees that, in arranging for the preparation of this Agreement and all
other documents and materials related thereto, the Company has not
attempted to procure, and has not procured, legal representation for
Purchaser.
9.7 Accuracy of Representations and Information. All representations
-------------------------------------------
made by Purchaser in this Agreement and all documents and instruments
related to this Agreement, and all information provided by Purchaser to the
Company concerning Purchaser and its financial position is correct and
complete in all material respects as of
5
the date hereof. If there is any material change in such information before
the actual issuance of the Shares, Purchaser immediately will provide such
information to the Company.
9.8 No Representations. None of the following have ever been
------------------
represented, guaranteed, or warranted to Purchaser by the Company or any of
its employees, agents, representatives or affiliates, or any broker or any
other person, expressly or by implication:
(1) The approximate or exact length of time that Purchaser will
be required to remain as owner of the Shares;
(2) The percentage of profit or amount of or type of considera
tion, profit or loss (including tax write-offs or other tax benefits)
to be realized, if any, as a result of an investment in the Shares; or
(3) The past performance or experience on the part of the
Company or any affiliate or their associates, agents or employees, or
of any other person as being indicative of future results of an
investment in the Shares.
9.9 Federal Tax Matters. Purchaser has reviewed and understands the
-------------------
federal income tax aspects of its purchase of the Shares, and has received
such advice in this regard as Purchaser deems necessary from qualified
sources such as attorneys, tax advisors or accountants, and is not relying
on any representative or employee of the Company for such advice.
9.10 No Brokers or Finders. Purchaser represents that no third person
---------------------
has in any way brought the parties together or been instrumental in the
negotiation, execution, or consummation of this Agreement or any
instrument, document or agreement related to this Agreement, or will
receive a fee or any compensation for doing so. Purchaser agrees to
indemnify the Company against any claim by any third person for any
commission, brokerage fee, finders fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based upon any
alleged agreement or understanding between such party and such third
person, whether expressed or implied, arising from the actions of such
party. The covenants set forth in this Section shall survive the Closing
Date and the consummation of the transactions contemplated by this
Agreement.
10. Certain Risk Factors. Purchaser has been informed about and fully
--------------------
understands that there are risks associated with an investment in the Company,
including those disclosed in documents incorporated herein by reference pursuant
to Section 9.4, and those enumerated in Section 9.5, of this Agreement.
6
11. Manner of Sale. At no time was Purchaser presented with or solicited
--------------
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.
12. Restricted Shares. Purchaser understands and acknowledges that the
-----------------
Shares have not been registered under the Act, or any state securities laws, and
that they will be issued in reliance upon certain exemptions from the
registration requirements of those laws, and thus cannot be resold unless they
are registered under the Act or unless the Company has first received an opinion
of competent securities counsel that registration is not required for such
resale. Purchaser agrees that it will not resell any Shares unless such resale
transaction is in accordance with Regulation S and/or Rule 144 under the Act,
pursuant to registration under the Act, or pursuant to an available exemption
from registration. With regard to the restrictions on resales of the Shares or
any security underlying or into which the Shares are or may be convertible,
Purchaser is aware (i) of the limitations and applicability of Securities and
Exchange Commission Rule 144, (ii) that the Company will issue stop transfer
orders to its stock transfer agent in the event of attempts to improperly
transfer any such securities; and (iii) that a restrictive legend will be placed
on certificates representing the Shares and any security underlying or into
which any of the Shares are or will be convertible, which legend will read
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO
A CLAIM OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION PROVISIONS OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND STATE SECURITIES
LAWS AND THEREFORE HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH THE PROVISIONS
OF REGULATION S OR, IF APPLICABLE, RULE 144 UNDER THE ACT, COMPLIANCE WITH
THE REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT OR APPLICABLE STATE
LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS. THE COMPANY WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO
RECOGNIZE ANY SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE COMPANY HAS FIRST
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
SECURITIES COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
13. Indemnification. The Company agrees to indemnify the Purchaser, its
---------------
officers, employees and agents, and hold them harmless from and against any and
all liability, damage,
7
cost or expense, including attorney's fees, incurred on account or arising out
of any inaccuracy or omission in or breach of the declarations, covenants,
agreements, representations, and warranties by the Company set forth or
incorporated by reference herein.
14. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to Purchaser as follows:
14.1 Organization, Standing, Etc. The Company is duly organized,
----------------------------
validly existing, and in good standing under the laws of the State of Utah,
and has the requisite power and authority to enter into and perform this
Agreement and to execute and perform under the documents, instruments and
agreements related to this Agreement.
14.2 Authorization. The execution and delivery of this Agreement and
-------------
the consummation of the transactions contemplated herein have been duly
authorized by all required action of the Company, including any necessary
approval by its Board of Directors or shareholders, and each of the
Transaction Documents and all instruments and agreements to be delivered in
connection therewith constitute its legal, valid and binding obligation,
enforceable against the Company in accordance with their respective terms,
subject to laws of general application relating to the rights of creditors
generally. The qualified directors of the Company have authorized this
Agreement and the consummation of the transactions contemplated hereby in
accordance with the provisions of Section 16-10a-852 of the Utah Business
Corporation Act.
14.3 Absence of Conflicts. Neither the execution and delivery of the
--------------------
Transactions Documents or any other agreement or instrument to be delivered
to the Purchaser in connection therewith, nor the consummation of the
transactions contemplated thereby, by the Company, shall (i) conflict with
or result in a breach of or constitute a violation or default under (A) any
provision of the Articles of Incorporation or By-laws, each as amended to
date, of the Company, or (B) the provision of any indenture, instrument or
agreement to which the Company is a party or by which it or any of its
properties is bound, or (C) any order, writ, judgment, award, injunction,
decree, law, statute, rule or regulation, license or permit applicable to
the Company; (ii) result in the creation or imposition of any lien pursuant
to the terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owned by the Company to any third party, or
(iii) require the approval of any third party pursuant to any material
contract, agreement, instrument, relationship or legal obligation to which
the Company is subject or to which it or any of its properties, operations
or management may be subject.
14.4 Capitalization. The authorized capital stock of the Company
--------------
consists of 50,000,000 shares of Common Stock par value $.001 per share.
As of May 1, 1998, 5,809,307 shares of Common Stock were issued and
outstanding, and no shares were held
8
in the Company's treasury. All of the outstanding shares of Common Stock
are, and the Shares will be when paid for and issued, duly authorized,
validly issued, fully paid and non-assessable and free of any preemptive
rights.
14.5 Financial Statements. The Company's annual reports on Form 10-
--------------------
KSB for the fiscal years ended March 31, 1996 and 1997 (the "10-K's"), and
its quarterly reports on Form 10-QSB for the periods ended June 30,
September 30, and December 31, 1996 and 1997 (the "10-Qs"), and all 8-K's
filed by the Company since March 31, 1996 (the "8-K's) and its 1996 and
1997 Annual Proxy Statements, copies of which have been filed with or
furnished to the Securities and Exchange Commission, were when filed or
furnished, accurate in all material respects and did not include any untrue
statement of material fact or omit to state any material fact necessary to
make the statements therein not misleading. The financial statements
included in the 10-K's and the 10-Qs present fairly the financial position
of the Company at such dates and the results of its operations and cash
flows for the periods then ended, in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered by such statements.
14.6 Litigation, Etc. Except as disclosed in the 10-K's and the 10-
----------------
Q's and 8-K's, there are no suits, actions or legal, administrative,
arbitration or other proceedings or governmental investigations or other
controversies pending, or to the knowledge of the Company threatened, or as
to which the Company has received any notice, claim or assertion, which
involve a potential cost or liability to the Company which would singly or
in the aggregate, materially or adversely affect the financial condition,
results of operations, business or prospects of the Company. The Company
is not in default with respect to any order, writ, injunction or decree of
any court or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign affecting or relating to it which is material to the financial
condition, results of operations or business of the Company.
14.7 Brokers and Finders. Neither the Company nor any person acting
-------------------
on behalf of the Company has employed any broker, agent or finder, or
incurred any liability for any brokerage fees, agents' commissions or
finders' fees, in connection with the transactions contemplated herein.
The Company agrees to indemnify Purchaser against any claim by any third
person for any commission, brokerage fee, finders fee, or other payment
with respect to this Agreement or the transactions contemplated hereby
based upon any alleged agreement or understanding between such party and
such third person, whether expressed or implied, arising from the actions
of such party. The covenants set forth in this Section shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement.
9
14.8 Regulatory Compliance. To the best knowledge of the Company, it
---------------------
has operated and is currently operating in compliance in all material
respects with all laws, rules, regulations, orders, decrees, licenses or
permits applicable to it or to its business. The Company has not received
any notice from the FDA or any other governmental agency or authority of
any noncompliance by the Company with any law, rule, regulation, order,
decree, license or permit applicable to it or its business or properties.
14.9 Articles of Incorporation and By-laws. The Company has delivered
-------------------------------------
to the Purchaser copies of its Articles of Incorporation and all amendments
thereto, which copies are complete and correct. The Company is not in
default under or in violation of any provisions of its Articles of
Incorporation. The Company's Articles of Incorporation have not been
amended since the date of certification thereof and no action has been
taken for the purpose of effecting any amendment thereto. The Company has
delivered to the Purchaser copies of its By-laws and all amendments
thereto, which copies are complete and correct. The Company is not in
default under or in violation of any provision of its By-laws.
14.10 Product Liability. Except as disclosed to Purchaser prior to
-----------------
Closing, the Company has not received any notice, claim or assertion
regarding an actual or alleged liability of the Company with respect to any
of its products.
14.11 OEM Relationships. Except as disclosed to Purchaser prior to
-----------------
Closing, the Company has not received any notice, claim or assertion from
or with respect to any OEM counterparty of the Company regarding intention
of such OEM party to either discontinue its relationship with the Company
or develop or market products in competition with the Company.
14.12 Patents and Proprietary Rights. The Company received FDA market
------------------------------
clearance for the argon laser in February 1996. The Company also received
formal notice of allowance for its initial patent application concerning
laser teeth whitening in April, 1997. The Company has no reason to believe
that any of its patents or proprietary rights infringes upon or otherwise
violates the patents or proprietary rights of any other party. Except as
disclosed to Purchaser prior to Closing, the Company has not received any
notice, claim or assertion that its patents or proprietary rights infringe
upon or otherwise violate the patents or proprietary rights of any other
party.
14.13 Unincorporated Documents or Materials. With respect to any
-------------------------------------
document or other materials received by the Purchaser from the Company or
its representatives which are incorporated herein by reference herein, (i)
the Company has no reason to believe any of such documents and materials or
any projections contained therein contain errors or misstatements or do not
adequately describe the transactions contemplated by this Agreement or the
status of the development of the Company's technology, and (ii) such
10
documents, materials and projections were prepared by the Company and its
management in good faith.
14.14 Information. To the best knowledge of the Company, the
-----------
information concerning the Company set forth in this Agreement is complete
and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they
were made, not misleading.
15. Nondisclosure. Except as required by applicable securities laws,
-------------
rules and regulations, prior to the Closing Date, no press release or other
announcement concerning the proposed transactions will be issued except by
mutual consent of the parties. This Agreement and all negotiations and
discussions between the parties in connection with this Agreement shall
be strictly confidential and will not be disclosed in any manner prior to the
Closing Date, except to employees and agents of the parties on a need-to-know
basis, as required by applicable law or regulations or as otherwise agreed by
the parties. After Closing, disclosure shall be at the sole discretion of the
Company.
16. Conditions to Closing. Closing of the transactions contemplated by
---------------------
this Agreement shall be contingent upon the satisfaction of the following
conditions precedent:
16.1 Approvals, Waivers, Etc. ILT shall have delivered to Purchaser
------------------------
evidence of all approvals, including waivers and consents, of its board of
directors, government or third-parties which may be required for the sale
of the Shares, in full force and effect as of the Closing Date.
16.2 Absence of Litigation. No litigation shall have been threatened
---------------------
or shall be pending challenging the purchase of the Shares contemplated by
this Agreement or which could have a material adverse effect on ILT.
16.3 No Bankruptcy. ILT shall not have filed for bankruptcy
-------------
protection, the appointment of a trustee or receiver, assignment for the
benefit of creditors, nor have taken any other action designed to protect
the Company, its property or assets from the rights of creditors; and no
other person shall have made any such filing or taken any such action in
respect of ILT.
16.4 No Breach of Agreements. Neither the execution and delivery of
-----------------------
the Transactions Documents or any other agreement or instrument to be
delivered to the Purchaser in connection therewith, nor the consummation of
the transactions contemplated thereby, by the Company, shall have
conflicted with or resulted in a breach of or constituted a violation or
default under (A) any provision of the Articles of Incorporation or By-
laws, each as amended to date, of the Company, or (B) the provision
11
of any indenture, instrument or agreement to which the Company is a party
or by which it or any of its properties is bound, or (C) any order, writ,
judgment, award, injunction, decree, law, statute, rule or regulation,
license or permit applicable to the Company.
16.5 AMEX Additional Listing Application. ILT shall have made all
-----------------------------------
appropriate filings under the rules of the American Stock Exchange and
shall have received notification from the AMEX that the Shares have been
approved for listing.
16.6 ILT Board Approval. The "qualified directors" of ILT (within the
------------------
meaning of Section 16-10a-850 of the Utah Business Corporation Act) shall
have authorized and approved the transactions contemplated by this
Agreement pursuant to the laws of the state of Utah.
16.7 Directors. Effective prior to or as of the Closing, the Company
---------
shall have accepted the resignations of Messrs. Xxxxxx X. Xxxxx, Xxxxx X.
Xxxx, and Xxxxxxx X. Xxxxxxxx as directors of the Company, and Xxxx
Xxxxxxxxxx and Xxxxx Xxxxxxx shall have been appointed directors of the
Company.
16.8 Appointment of Executive Committee. As of the Closing, the Board
----------------------------------
of Directors of ILT shall have appointed Xxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxxx and Xxxxx Xxxxxxx to constitute the whole Executive Committee of the
Board, having all the power and authority delegable to an executive
committee under the laws of the State of Utah.
16.9 No Shareholder Approval Required. Counsel to ILT shall be
--------------------------------
satisfied that no approval or authorization of the transactions
contemplated by this Agreement by the shareholders of ILT shall be required
under or pursuant to the laws of the state of Utah, or the rules and
regulations promulgated by the AMEX.
16.10 Opinions. The Company shall have delivered to the Purchaser an
--------
opinion of counsel to the Company that the Shares, when paid for and
issued, will be validly issued, fully paid and non-assessable, that the
Transaction Documents have been duly authorized and constitute legal and
binding obligations of the Company enforceable according to their terms,
and that no approval or authorization by the shareholders of ILT shall be
required under or pursuant to the laws of the state of Utah.
17. General Provisions.
------------------
17.1 Attorneys' Fees. In the event of a default in the performance of
---------------
this Agreement or any document or instrument executed in connection with
this Agreement, the defaulting party, in addition to all other obligations
of performance hereunder, shall pay reasonable attorneys' fees and costs
incurred by the non-defaulting party to enforce performance of this
Agreement.
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17.2 Choice of Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Utah, including choice of law
rules.
17.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when so signed shall be deemed to be an
original, and such counterparts together shall constitute one and the same
instrument.
17.4 Entire Agreement. This Agreement, and the Exhibits, Schedules
----------------
and other attachments referred to herein (all of which are incorporated in
this Agreement by reference) collectively set forth the entire agreement
between the parties as to the subject matter hereof, supersede any and all
prior or contemporaneous agreements or understandings of the parties
relating to the subject matter of this Agreement, and may not be amended
except by an instrument in writing signed by all of the parties to this
Agreement.
17.5 Expenses. The parties shall be responsible for and shall pay
--------
their own costs and expenses, including without limitation attorneys' fees
and accountants' fees and expenses, in connection with the conduct of the
due diligence inquiry, negotiation, execution and delivery of this
Agreement and the instruments, documents and agreements executed in
connection with this Agreement. Notwithstanding the foregoing, the Company
shall pay any stock transfer taxes payable in connection with the issue and
sale of the Shares to the Purchaser, and expenses which the Company is
obligated to pay under the Registration Rights Agreement with respect to
the Shares.
17.6 Headings. The headings of the sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
17.7 Notices. All notices or other communications provided for under
-------
this Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by overnight courier service, to the parties at their
respective addresses as indicated below or at such other address as the
parties may designate in writing:
(1) If to Purchaser:
LCO Investments Limited
Canada Court
Xxxxxx Xxxx, Xx. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx Xxxxxxx
With a copy to:
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Xxxxxxx Xxxx
Cap Advisers Limited
00 Xxxxxxxxxxx Xxxxx
Xxxxxx 0, Xxxxxxx
(Tel. 000-000-0-000-0000)
(Fax 000-000-0-000-0000)
Craigh Xxxxxxx
Xxxxxxxx & O'Neil, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
(Tel. 000-000-0000)
(Fax 000-000-0000)
Xxxxxx X. Xxxxx, Xx.
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
(Tel. 000-000-0000)
(Fax 000-000-0000)
(2) If to the Company:
Ion Laser Technology, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
DURHAM, EVANS, XXXXX & XXXXXXX, P.C.
Key Bank Tower, Suite 850
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
All notices and communications shall be effective as follows: When mailed,
upon three (3) business days after deposit in the mail (postage prepaid);
when telecopied, upon confirmed transmission of the telecopied notice; when
hand delivered, upon delivery; and
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when sent by overnight courier, the next business day after deposit of the
notice with the overnight courier.
17.8 Severability. Should any one or more of the provisions of this
------------
Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall
not be affected thereby.
17.9 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors, but shall not be
assignable by Purchaser without the prior written consent of the Company;
provided that Purchaser may assign its rights hereunder and in the
Registration Rights Agreement relating to the Shares to one or more
affiliates of Purchaser or to one or more charitable foundations in
circumstances where such assignees assume all obligations of Purchaser
thereunder and any such assignment does not violate the Securities Act of
1933, and provided further that Purchaser may sell or assign any or all of
the Shares in accordance with this Agreement and such Registration Rights
Agreement.
17.10 Survival of Representations, Warranties and Covenants Closing.
-------------------------------------------------------------
All warranties, representations, indemnities and agreements made in this
Agreement by a party hereto shall survive the date of this Agreement, the
Closing Date, the consummation of the transactions contemplated by this
Agreement, and the issuance by the Company of the Shares.
15
IN WITNESS WHEREOF, the party named below has caused this Agreement to be
executed, as of the date first above written.
LCO INVESTMENTS LIMITED
BY: /s/ Xxxxxxx Xxxxxx
----------------------
NAME: Xxxxxxx X. Xxxxxx
----------------------
TITLE: Chairman
----------------------
DATE: May 4, 1998
ACCEPTED AND AGREED:
ION LASER TECHNOLOGY, INC.
BY: /s/ Xxxxxx X. Xxxxx
----------------------
NAME: Xxxxxx X. Xxxxx
----------------------
TITLE: President & CEO
----------------------
DATE: May 4, 1998
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