AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets (the "Agreement") is
made and entered into as of July 23, 1998, by and between XXXXXXXX SYSTEMS
DIVISION OF XXXX ZEISS, INC., a New York corporation ("Xxxxxxxx"), and PARADIGM
MEDICAL INDUSTRIES, INC., a Delaware corporation ("Paradigm").
RECITALS
X. Xxxxxxxx is in the business of designing, developing, manufacturing
and selling ophthalmic diagnostic equipment.
B. On or about May 11, 1998, Xxxxxxxx retained Xxxx Xxxxx as a
broker/consultant in connection with the sale of Xxxxxxxx'x
discontinued ultrasonic product line. Pursuant to said retainer, Xxxx
Xxxxx identified Paradigm as an interested party.
C. Paradigm is a high-tech ophthalmic equipment company whose stock is
publicly traded on the NASDAQ Small Cap market.
D. Paradigm desires to acquire from Xxxxxxxx and Xxxxxxxx desires to
sell to Paradigm, on the terms and subject to the conditions of this
Agreement, certain assets used in the manufacturing and production of
Xxxxxxxx'x ultrasonic microprocessor based line of ophthalmic
diagnostic instruments.
E. On or about June 16, 1998, Paradigm and Xxxxxxxx signed a
non-binding Letter of Intent designed to cover the transactions which
are specifically set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties
agree as follows:
SECTION I
PURCHASE OF ASSETS
1. 1. Purchase of Assets. Subject to the terms and conditions
set forth in this Agreement and except as specifically
excluded herein, Xxxxxxxx agrees to sell, transfer, assign and
deliver to Paradigm, and Paradigm agrees to acquire from
Xxxxxxxx, certain assets of Xxxxxxxx that are used in the
manufacture and marketing of Xxxxxxxx'x ultrasonic
microprocessor based line of ophthalmic diagnostic instruments
commonly known as:
a) Xxxxxxxx Ultrasonic Biometer Model 820*
b) Xxxxxxxx A/B Scan System Model 837*
c) Xxxxxxxx Ultrasound Pachymeter Model 855*
d) Xxxxxxxx Ultrasound Biomicroscope Model 840*
* including all accessories, packaging and end-user
collateral materials (manuals, etc.) for each of
the product lines.
Subject to the dollar limitations set forth in Section 6.13 and subject to the
quantity limitations set forth in Section 1.2, the assets to be purchased and
sold under this Agreement ("Assets") are specifically described in Exhibit "A"
which is attached hereto and by its reference incorporated herein. It is
understood and agreed that specifically excluded from the Assets to be purchased
and sold under this Agreement are any and all tools and "jigs" which may have
been used to manufacture the line of products described in a) through d), above.
It is specifically understood by Paradigm that the product line represented in
Section 1. 1.a) through d), above, has not been manufactured or sold by Xxxxxxxx
since approximately May, 1997. The parties agree that the Assets which are the
subject of this Agreement are purchased and sold "as is".
1.2. Limitation on Assets to be Acquired. Insofar as Xxxxxxxx
is reserving the right to provide sales of parts/components
and the right to provide service to its installed base of
customers, it is agreed that with regard to any single part or
component used in the manufacture or assembly of the Model 820
Biometer, the Model 837 A/B Scan System, and the Model 855
Pachymeter, Xxxxxxxx shall have the right to retain no less
than one-half (1/2) of its inventory of each of the parts or
component*. as of the date of Closing. With regard to the
Model 840 Biomicroscope, the Assets shall include only
sufficient parts/components to build two (2) complete units.
1.3. Right to Manufacture. It is understood and agreed that
with purchase of the assets set forth on Exhibit A, Paradigm
shall have the right to design, manufacture, market and sell
ultrasonic ophthalmic diagnostic instruments using the Assets
herein acquired.
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SECTION 2
PURCHASE PRICE
2. 1. Purchase Price. The purchase price for the Assets to be
transferred under this Agreement shall be Five Hundred
Thousand Dollars ($500,000.00).
2.2. Purchase Price to be Paid by Issuance of Common Stock.
Paradigm is a stock company whose common stock is publicly
traded on the NASDAQ Small Cap market. Subject to the
conditions set forth herein, Xxxxxxxx hereby agrees to accept
One Hundred Five Thousand Two Hundred Sixty Three (105,263)
shares of Paradigm's common stock as payment in full for the
Assets to be transferred from Xxxxxxxx to Paradigm under this
Agreement. With reference to the aforementioned Letter of
Intent of June 16, 1998, the parties hereby agree that the
number of shares is determined by the price of the Paradigm
common stock as of close of the market on June 16, 1998, which
price is $4.75 per share.
2.3. Issuance and Registration of Stock. The issuance of
shares of common stock to cover the payment of the purchase
price as called for herein shall concur with execution of this
Agreement. Immediately after execution of this Agreement and
issuance of such shares of stock, Paradigm shall properly
register the stock by preparing and filing all necessary
documents with the Securities Exchange Commission (SEC) and
any other State or Federal regulatory agency for which such
filing/registration is required. The stock issued by Paradigm
concurrent with execution of this Agreement shall bear a
legend indicating that such shares of stock may not be traded
until registration has been made and approved by the SEC
and/or such other regulatory agency as may be required.
Paradigm shall be solely responsible for payment of all fees
and costs connected with the preparation and filing of such
registration(s).
2.4. Condition to Transfer. It is understood and agreed that
transfer of title from Xxxxxxxx to Paradigm to the Assets set
forth on Exhibit A and transfer of the right to design,
manufacture, market or sell products utilizing or based on
such assets, shall be contingent upon:
a) the proper registration and/or approvals being
issued by the SEC and/or any other regulatory
agency from which registration and/or approval is
required; and
b) payment in full of the purchase price, from the
sale of the Paradigm shares of stock, in cash,
received by Xxxxxxxx, as set forth in Section
2.5.4. and/or 2.5.5, below. To provide for the
possibility of Xxxxxxxx having to reacquire
possession of the Assets due to failure of the
conditions set forth herein, Paradigm hereby agrees
that until they have received notice from Xxxxxxxx
(in writing), that the
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conditions set forth in Sections 2.5.4 and/or 2.5.5
have been satisfied, the Assets will be held by
Paradigm at a single location, namely their
principal place of business located at 1 000 Xxxx
0000 Xxxxx, Xxxxx X, Xxxx Xxxx Xxxx, Xxxx. Paradigm
further agrees that in the event Xxxxxxxx has to
reacquire possession of the Assets due to the
failure of the conditions set forth herein,
Xxxxxxxx shall acquire right, title and all
interest in any and all instruments, whether fully
or partially assembled, which contain parts or
components of the Assets which are the subject of
this Agreement. Xxxxxxxx shall file UCC I with the
appropriate agency in the state of Utah to perfect
the security interest reserved under this Section.
2.5. Payment of Purchase Price. The purchase price shall be
paid as follows:
2.5. 1. To Xxxx Xxxxx. Paradigm shall issue and
deliver to Xxxx Xxxxx, or his designee ("Xxxxx"),
Twenty-Six Thousand Three Hundred Sixteen (26,316)
shares of Paradigm's common stock. By signing this
Agreement, Xxxxx agrees to accept said shares of
Paradigm common stock as full compensation for his
services to Xxxxxxxx as a broker/consultant under
the aforementioned Letter Agreement made by and
between Xxxxx and Xxxxxxxx as of May 11, 1998.
Xxxxx further acknowledges that except as set forth
herein, he is entitled to no other compensation
either from Xxxxxxxx or Paradigm in connection with
the transaction called for in this Agreement.
2.5.2. To Xxxxxxxx. Paradigm shall issue and
deliver to Xxxxxxxx, or its designee, Seventy Eight
Thousand Nine Hundred Forty Seven (78,947) shares
of Paradigm's common stock.
2.5.3. Limitation on Sale. It is understood that
Xxxxxxxx and Xxxxx shall have the right to sell
their respective shares of Paradigm common stock on
the open market at any time subsequent to the
proper registration of such stock as called for
under Section 2.3. Xxxxxxxx and Xxxxx hereby agree
that each will limit their respective daily stock
sales to Five Thousand (5,000) shares or less for
each trading day the NASDAQ is open for business.
2.5.4. Guaranty of Net Proceeds. Paradigm hereby
guarantees that Xxxxxxxx shall receive total net
proceeds (after payment of stock brokers' fees
and/or commissions and payment of any sales or
transfer taxes connected with sale of shares) of at
least Three Hundred Seventy Five Thousand Dollars
($375,000) from the sale of the stock it receives
as consideration under this Agreement. In the event
that the sale of all Seventy Eight Thousand Nine
Hundred Forty Seven (78,947) shares of Paradigm
common stock issued to Xxxxxxxx yields less than
Three Hundred Seventy Five Thousand Dollars
($375,000) net to Xxxxxxxx, Paradigm agrees to
issue, at no cost to Xxxxxxxx, such additional
registered shares of Paradigm common stock as is
necessary to increase Xxxxxxxx'x net proceeds to
Three Hundred Seventy Five Thousand Dollars
($375,000).
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2.5.5. Excess Proceeds. In consideration of
Xxxxxxxx'x acceptance of shares of stock in lieu of
cash, the parties agree that Xxxxxxxx may retain
the proceeds from the sale of the aforementioned
shares of stock which may be in excess of Three
Hundred Seventy Five Thousand Dollars ($375,000).
SECTION 3
ALLOCATION OF PURCHASE PRICE
AND PAYMENT OF TAXES
3. 1. Allocation of Purchase Price. The parties agree that the
Purchase Price shall be allocated among the product lines as
follows:
a) Xxxxxxxx Ultrasonic Biometer Model 820 $100,000
b) Xxxxxxxx A/B Scan System Model 837 $100,000
c) Xxxxxxxx Ultrasound Pachymeter Model 855 $100,000
d) Xxxxxxxx Ultrasound Biomicroscope Model 840 $200,000
Total $500,000
3.2. Taxes. Paradigm shall be solely responsible for payment
of sales and use taxes, if applicable, arising out of the
transfer of the Assets. Paradigm shall not be responsible for
any business, inventory, income, employee-related withholding,
or any similar tax arising out of ownership or use of the
Assets incurred by Xxxxxxxx for any period prior to the
Closing Date.
SECTION 4
ASSIGNMENT OF LICENSES AND REGULATORY APPROVALS
4. 1. License Agreements. Attached hereto as Exhibit B is a
list of the individuals and organizations to whom Xxxxxxxx
paid royalties under license agreements prior to the time it
discontinued manufacturing and selling the product line which
is the subject of this Agreement. Such royalties were paid for
technology or formulas which were acquired or utilized in
connection with the manufacture and sale of one or more of the
models in the line of products. Xxxxxxxx makes no
representation and provides no warranty that Paradigm will be
able to use the technology or formulas which are the subject
of said license agreements on any products which Paradigm may
manufacture and sell utilizing the Assets purchased under this
Agreement. Paradigm shall be solely
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responsible for obtaining any consents from licensors that may
be desired or required in connection with Paradigm's use of
proprietary information from such licensors. Xxxxxxxx hereby
authorizes and consents to the release of information directly
from such licensors to Paradigm. It is further understood that
Paradigm shall have the right to enter into new license
agreements with any of the listed licensors for use of
technology or formulas in connection with Paradigm's
manufacture of products utilizing the Assets acquired herein.
4. 1. 1. License Agreement with Sunnybrook. As to
that certain License Agreement of September 27,
1990, entered into by and between Xxxxxxxx and
Sunnybrook Health Science Center, a copy of which
is attached hereto as Exhibit F, Xxxxxxxx hereby
assigns to Paradigm any right Xxxxxxxx may have
acquired under said License Agreement to
manufacture the Ultrasound Biomicroscope Model 840.
Paradigm hereby agrees to indemnify and hold
harmless Xxxxxxxx from any royalties, claims, or
liabilities of any kind arising out of Paradigm's
manufacture and sale of an ultrasound biomicroscope
based on the technology deployed in the Model 840.
4.2. Regulatory Approvals. To the extend allowed by the
relevant regulatory agency and the regulations pertaining
thereto, Xxxxxxxx hereby assigns and transfers to Paradigm all
of its right, title and interest to the following regulatory
approvals:
a) any and all XX Xxxxx in Europe applicable to the
products set forth in Section 1. I a) through d);
and
b) any and all 5 1 OK FDA approvals in the United
States applicable to the products set forth in
Section 1. I a) through d).
c) Paradigm shall bear sole responsibility for
applying to any relevant regulatory agency and for
following the pertinent regulations for the
effective transfer of the Marks and approvals set
forth in Section 4.2.a) and b), above.
SECTION 5
USE OF XXXXXXXX NAME AND TRADEMARKS
5. 1. No Right To Use of Xxxxxxxx Name. Except as is
specifically excepted in this Section, nothing in this
Agreement shall be construed so as to give Paradigm any right
or license to use the Xxxxxxxx name in connection with any
future development, manufacture, marketing, promotion,
distribution or sale of products utilizing the Assets acquired
herein. The Xxxxxxxx name shall be removed from the exterior
of any products produced by Paradigm. Any existing inventory
purchased from
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Xxxxxxxx may be used on the interior of the products without
the removal of the Xxxxxxxx name. Any news or press release to
be disseminated by Paradigm which contains the Xxxxxxxx name
shall be approved by Xxxxxxxx prior to its dissemination to
the public. It is understood that Paradigm will be required to
disclose in a public record in connection with its 10K / 10Q
filings with the SEC, the fact that Paradigm has acquired from
Xxxxxxxx the technology and the right to manufacture
instruments which is the subject of this Agreement. Paradigm
is hereby authorized to utilize the Xxxxxxxx name in the
ordinary course of reporting transactions as a public company
to the various regulatory agencies. Paradigm shall not, in any
form, communicate that they have purchased Xxxxxxxx'x
ultrasound business, but rather communicate only that they
have purchased the right to manufacture instruments utilizing
the Assets purchased from Xxxxxxxx. Any use of the Xxxxxxxx
name other as set forth in this Section is strictly prohibited
unless authorized in writing by Xxxxxxxx.
5.2. Trademarks. Paradigm shall have no right to use any
trademarks, symbols or logos of Xxxxxxxx in connection with
its manufacture and sale of products utilizing the
assets/technology acquired under this Agreement.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX
6. Representations and Warranties of Xxxxxxxx. Xxxxxxxx
represents and warrants as of the Closing Date that:
6. 1. Organization and Standing. Xxxxxxxx is a division of
Xxxx Zeiss, Inc., a corporation duly organized and validly
existing under the laws of the State of New York and is in
good standing as a domestic corporation under the laws of said
State. Xxxxxxxx has all the requisite power and authority to
own and further, has the power and authority to validly sell,
transfer and assign all of the Assets to Paradigm.
6.2. Authorization. The execution and delivery of this
Agreement and the consummation of this transaction by Xxxxxxxx
has been duly authorized, and no further authorization is
necessary on the part of Xxxxxxxx or Xxxx Zeiss, Inc.
6.3. Title To Assets. Xxxxxxxx has good and marketable title
to the Assets. Except as may arise out of the license
agreements with individuals/organizations set forth in Section
4, all of the Assets are free and clear of mortgages, liens,
pledges, charges, encumbrances, claims, conditions, or
restrictions.
6.4. Compliance With Law. Xxxxxxxx is, to the best of its
knowledge, in compliance in all material respects with all
foreign, federal, state and local laws and regulations as they
apply to the ownership of the Assets. To the best of its
knowledge, there are no pending or threatened claims or audits
by any foreign, federal, state or local
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government authority with respect to the Assets or with
respect to Xxxxxxxx'x (presently discontinued) ultrasonic
business.
6.5. Employees. Xxxxxxxx represents that none of its employees
have or will have any written or oral contracts of employment
that will be binding upon Paradigm as of the Closing Date.
6.6. Litigation. There is no legal, administrative,
governmental, arbitration or other action, proceeding or
investigation, pending or, to be best knowledge of Xxxxxxxx,
threatened against or involving Xxxxxxxx which questions or
challenges the validity of this Agreement or the Assets which
are the subject of this Agreement.
6.7. Tax Matters. Xxxxxxxx has filed all tax returns required
to be filed by law and all taxes that relate to the Assets
being sold herein have been paid. As it relates to the Assets,
there are no tax liabilities, interest or penalties due.
6.8. Financial Records. With respect to the "Ultrasound
Product Line P&L" which has previously been provided to
Paradigm and is attached hereto as Exhibit C, the Total
Revenue figures set forth accurately reflect revenues from
sales and service; all other figures pertaining to cost of
goods sold, variances, and expenses are "reasonable management
estimates" related to the line of products being sold herein.
Such financial information has been prepared on a consistent
basis and fairly presents the matters set forth therein.
6.9. Liabilities. Except as may arise under relevant license
agreements with individuals/organizations, as set forth in
Section 4, there are no liabilities of any nature, known or
unknown, accrued or unaccrued, nor will there be any
liabilities accruing in the future, relating to the Assets
that might impose transferee liability against Paradigm.
6.10. Trade Names, Trademarks, Trade secrets and copyrights.
To the best of Xxxxxxxx'x knowledge Xxxxxxxx has not
infringed, and is not now infringing, on any trade name,
trademark, service xxxx, copyright or trade secret belonging
to any other person, firm or corporation. Except as set forth
herein, Xxxxxxxx is not a party to any license, agreement or
arrangement, whether as licensor, licensee, franchisor,
franchisee or otherwise, with respect to any trademarks,
service marks, trade secrets, trade names or applications or
any copyrights relating to the Assets. Xxxxxxxx owns or holds
adequate licenses or other rights to use all proprietary
information in connection with the Assets.
6.11. Brokerage Fees. Aside from the communications and the
assistance they may have received from Xxxx Xxxxx, Xxxxxxxx
has not engaged or otherwise involved any broker, finder or
similar intermediary in the negotiation of this Agreement or
in the transactions contemplated hereby.
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6.12. Full Disclosure. None of the representations and
warranties made by Xxxxxxxx contained in this Agreement and no
statement contained in any of the exhibits and schedules to
this Agreement will contain any untrue statement of a material
fact, or omit to state a material fact.
6.13. Value/Sufficiency of Components. Xxxxxxxx hereby
represents and warrants that included in the Assets, as
related to the product line price allocations (as set forth in
Section 3), for the Ultrasonic Biometer Model 820 line, for
the A/B Scan System Model 837 line, and for the Ultrasonic
Pachymeter Model 855 line, that included in the price for the
three combined product lines, will be $ 1 00,000 worth of
parts and components, valued at Xxxxxxxx'x cost. Xxxxxxxx
further represents and warrants that with regard to the
Ultrasound Biomicroscope Model 840 product line, the Assets,
as related to the product line price allocation (as set forth
in Section 3), will be parts and components sufficient to
build two complete units. In the event Xxxxxxxx has in its
inventory as of the Closing, insufficient parts or components
to build two complete Model 840 units, Xxxxxxxx shall as soon
as is practicable, acquire at its cost such missing
parts/components, provided such missing parts/components can
still be reasonably obtained from existing vendors or
suppliers.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF PARADIGM
7. Representations and Warranties of Paradigm. Paradigm represents and
warrants as of the Closing Date that:
7.1. Good Standing. Paradigm is a corporation duly organized,
existing and in good standing under the laws of the State of
Delaware.
7.2. Authorization. The execution, delivery and performance by
Paradigm of this Agreement and all other instruments to be
executed and delivered by Paradigm in connection with the
transactions contemplated under this Agreement are within the
power of Paradigm, have been duly authorized by all necessary
action of the Board of Directors of Paradigm, and no further
approval or ratification is necessary.
7.3. No Consent Required. Except as set forth herein, no other
consent, approval or authorization of, or declaration, filing
or registration with, any federal, state or local governmental
or regulatory authority is required to be made or obtained by
Paradigm in connection with the execution, delivery or
performance of this Agreement and the consummation of the
transactions contemplated in this Agreement.
7.4. Absence of Restrictions. Paradigm is not subject to any
provision of any agreement, order, judgment or decree which
prohibits the execution or delivery of this Agreement by
Buyer, or which would prevent or impair the consummation of
the transactions contemplated under this Agreement.
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7.5. Brokerage Fees. Aside from the communications and the
assistance they may have received from Xxxx Xxxxx, Paradigm
has not engaged or otherwise involved any broker, finder or
similar intermediary in the negotiation of this Agreement or
in the transactions contemplated hereby.
SECTION 8
CLOSING
8. 1. Time and Place. The transfer of Assets by Xxxxxxxx to
Paradigm (the "Closing") shall take place at the Xxxxxxxx
facility located at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx,
at 10:00 a.m. on -, 1998, or at such other time and place as
the parties may agree in writing (the "Closing Date").
8.2. Obligations of Xxxxxxxx At Closing. At the Closing
Xxxxxxxx shall deliver, or cause to be delivered, to Paradigm:
8.2. 1. A xxxx of sale (the form of which is
attached hereto as Exhibit D evidencing the
transfer of the Assets. Xxxxxxxx, at any time
before or after the Closing Date, will execute,
acknowledge and deliver any further documents and
instruments of transfer, reasonably requested by
Paradigm and will take any other action consistent
with the terms of this Agreement that may
reasonably be requested by Paradigm for the purpose
of assigning, transferring, conveying and
confirming to Paradigm any and all property to be
conveyed and transferred under this Agreement.
8.3. Obligations of Paradigm at Closing. At the Closing,
Paradigm shall deliver, or cause to be delivered:
8.3. 1. Seventy Eight Thousand Nine Hundred Forty
Seven (78,947) shares of Paradigm common stock
issued to Xxxxxxxx, as called for under Section
2.5.2.
8.3.2. Twenty Six Thousand Three Hundred Sixteen
(26,316) shares of paradigm common stock issued to
Xxxx Xxxxx, as called for under Section 2.5. 1.
SECTION 9
OBLIGATIONS OF PARTIES AFTER CLOSING
9. 1. Indemnification By Xxxxxxxx. Xxxxxxxx agrees to
indemnify and hold Paradigm harmless from and against any and
all known or unknown liabilities, claims, demands, losses and
expenses, of any kind or nature (including, without
limitation, interest, penalties and reasonable attorneys' fees
incidental thereto) related to, 10 resulting from or in any
way arising out of the ownership of the Assets or sale of the
line of products set forth in Section 1. I that accrued or
occurred prior to the Closing Date.
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9.2. Indemnification By Paradigm. Paradigm agrees to indemnify
and hold Xxxxxxxx harmless from and against any and all known
or unknown liabilities, claims, demands and expenses, of any
kind or nature (including, without limitation, interest,
penalties and reasonable attorneys' fees incidental thereto)
related to, resulting from or in any way arising out of (i)
the ownership of the Assets that accrued or occurred on or
after the Closing Date, or, (ii) the design, development,
manufacture, marketing, and/or sale of any product or products
by Paradigm utilizing the Assets and/or technology acquired
under this Agreement.
9.3. Competition by Xxxxxxxx. In consideration for the payment
of the purchase price by Paradigm at the Closing Date,
Xxxxxxxx agrees that Xxxxxxxx will not at any time within the
next sixty (60) month period following the Closing Date,
directly or indirectly, engage in or have any interest in any
person, firm, corporation or business that engages in the
design, production and/or sale of ultrasonic products
utilizing technology which is substantially identical to the
technology utilized by the products identified in Section 1.
1, in the United States or internationally; provided, however,
no provision of this Section, or of this Agreement, shall be
construed so as to prevent Xxxxxxxx from reentering the
ultrasound market or from engaging in the design, development,
manufacture, marketing, distribution and/or sale of any line
of ultrasonic products in the field of
ophthalmology/optometry, or any other medical, industrial or
commercial field, so long as such products are not utilizing
technology which is substantially identical to the technology
utilized by the products set forth in Section 1. 1. This right
applies regardless of whether Xxxxxxxx'x reentry into such
field results in the manufacture, distribution and/or sale of
products which compete in the marketplace with ultrasound
products manufactured and sold by Paradigm.
9.3. 1. Trade-Ins. Notwithstanding the provisions
set forth in Section 9.3., above, Xxxxxxxx shall
have the right for a period of three (3) years
following the Closing Date, to take trade-ins and
to resell such trade-ins as pre-owned equipment, of
any and all models of ultrasound instruments set
forth in Section 1. 1. Paradigm shall have the
right, the same as would any other customer, to
purchase pre-owned instruments from Xxxxxxxx.
9.4. Consultation. For a period of ninety (90) days following
the Closing Date, Xxxxxxxx shall make available, at any time
during regular work hours upon reasonable verbal notice, those
of its employees with knowledge of the ultrasound products to
provide consultation to Paradigm, its officers and employees,
in the design, production, or construction of any jigs which
are not being transferred as part of this sale but are clearly
necessary to the manufacturing and production process. Such
consultation shall not exceed one hundred twenty (120)
man-hours over the ninety (90) day period.
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Consultation of up to one hundred twenty (120) man-hours shall
be provided by Xxxxxxxx at no additional cost to Paradigm,
provided, however, Paradigm shall be responsible for payment
of any travel and travel-related expense incurred by Xxxxxxxx
personnel in providing such services. Any consultation
Paradigm may require beyond the one hundred twenty man-hours,
may be provided by separate agreement of the parties at a
compensation rate to be negotiated.
9.5. Use of International Distributors. Xxxxxxxx hereby agrees
that Paradigm may utilize and enter into contracts with, any
third party international distributor which previously
distributed the Xxxxxxxx ultrasound product line prior to
Xxxxxxxx'x discontinuance thereof, for the purpose of
distributing internationally any ultrasound products Paradigm
may manufacture using the Assets acquired under this
Agreement. It is understood, however, this provision shall not
be construed so as to give Paradigm the right to utilize or
contract with Xxxx Zeiss Affiliates for purposes of such
international distribution. A list of such non-Zeiss
international distributors is attached hereto as Exhibit X.
Xxxxxxxx agrees to prepare a letter on its letterhead
announcing to such international distributors the sale of the
Assets and further agrees to waive any potential conflicts of
interest which may be included in existing distribution
agreements such that said international distributors shall be
allowed to distribute products manufactured by Paradigm.
Nothing in this Section or this Agreement shall be construed
so as to prevent Xxxxxxxx from utilizing and contracting with
any international distributor, including distributors which
had previously distributed the Xxxxxxxx line of products which
are the subject of this Agreement, from distributing any
future line of ultrasound products.
SECTION 10
SERVICE
10. 1. Installed Base. Xxxxxxxx hereby reserves for its own
account the right to provide sales of parts and components and
the overall right to provide service to the installed base of
customers who purchased ultrasound instruments from Xxxxxxxx
prior to its discontinuance of the product lines which are the
subject of this Agreement.
10.2. Service on Paradigm Products. Paradigm shall have the
right to determine who shall provide service to the line of
products it intends to manufacture and sell from the
Assets/technology acquired under this Agreement. In the event
Paradigm wants to offer "Xxxxxxxx Service Agreements" to
customers that purchase Paradigm ultrasound products, Paradigm
and Xxxxxxxx will negotiate a separate agreement under which
such service may be provided, but neither party shall be
obligated to enter into any such agreement.
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SECTION I I
MISCELLANEOUS
11. 1. Expenses. Each party shall pay all of its own costs and
expenses, including attorney's fees, incurred in connection or
to be incurred by it in negotiating and preparing this
Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
11.2. Subject. Headings of the paragraphs and subparagraphs of
this Agreement are included for convenience only and shall not
affect the construction or interpretation of any of its
provisions.
11.3. Entire Agreement: Modification and Waiver. This
Agreement constitutes the entire agreement between the parties
pertaining to the subject matter contained herein and
supersedes all prior and contemporaneous agreements,
representations and understandings of the parties. No
supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by the parties. No
waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed
in writing by the party making the waiver.
11.4. Parties in Interests. Nothing in this Agreement whether
expressed or implied, is intended to convey any rights or
remedies under or by reason of this Agreement on any persons
other than the parties to it and their respective successors
and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third
person to any party to this Agreement, nor shall any provision
give any third persons any right of subrogation or action over
or against any party to this Agreement.
11.5. Binding on Successors. This Agreement shall be binding
on and shall inure to the benefit of the parties to it and
their respective heirs, legal representatives, successors and
assigns.
11.6. Dispute Resolution.
1 1.6. 1. Arbitration of Disputes. Any dispute or
claim in law or equity arising out of this
Agreement or any transaction resulting from this
Agreement shall be decided by neutral binding
arbitration, held in Alameda County, California, in
accordance with the rules of the American
Arbitration Association, and not by court action
except as provided by California law for judicial
review of arbitration proceedings. Judgment upon
the award rendered by the Arbitrator(s) may be
entered in any court
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having jurisdiction thereof. The parties shall have
the right to discovery in accordance with Code of
Civil Procedure Section 1283.05 in connection with
any arbitration proceeding held hereunder. The
filing of a judicial action for an order of
attachment, an injunction, or other provisional
remedies, shall not constitute a waiver of the
right to arbitrate under this provision.
11.6.2. Recovery of Arbitration/Litigation Costs.
If any legal action or any arbitration or other
proceeding is brought for the enforcement of this
Agreement or because of an alleged dispute, breach,
default or misrepresentation in connection with any
of the provisions of this Agreement, the successful
or prevailing party or parties shall be entitled to
recover reasonable attorney's fees and other costs
and expenses (including costs and expenses related
to retaining experts and consultants) incurred in
any such action or proceeding, in addition to any
other relief to which it or they may be entitled.
11.7. Survival. All representations, warranties, covenants and
agreements of the parties contained in this Agreement or in
any instrument, certificate, opinion or other writing provided
for in it shall survive any investigation made by any party
hereto and the Closing of the transactions contemplated
hereby.
11. 8. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service
if served personally or sent by facsimile transmission on the
party to whom notice is to be given or on the third business
day after the postmark if mailed to the party to whom notice
is to be given, by first-class mail, registered or certified,
postage prepaid and properly addressed as follows:
If to Xxxxxxxx: Xxxxxxxx Systems, a division of
Xxxx Zeiss, Inc.
0000 Xxxxxxxx Xxxxx Xxxxxx, XX 00000
Attn.: Xx. Xxxxxxx Xxxxxxx
Phone:(000) 000-0000 x4l8l
Fax: (000) 000-0000
If to Paradigm: Paradigm Medical Industries, Inc.
0000 Xxxx 0000 Xxxxx, Xxxxx X
Xxxx Xxxx Xxxx, Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If notice is given by facsimile transmission a duplicate copy
of the notice shall promptly be given by personal delivery,
first-class or certified mail, or overnight delivery. Any
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party may change its address for purposes of this section by
giving the other party written notice of the new address in
the manner set forth above.
11.9. Independent Contractor. The relationship between
Paradigm and Xxxxxxxx is that of independent contractors, and
not of principal-agent, partner or joint venturer. Paradigm is
not the legal representative of Xxxxxxxx, nor is Xxxxxxxx the
legal representative of Paradigm. Neither Paradigm nor
Xxxxxxxx has the right or authority to assume or undertake any
obligation or make any representation on behalf of the other,
and neither shall hold itself out as having such right or
authority.
11.10. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of
California as applied to contracts that are executed and
performed entirely in California. Neither party shall be
considered the draftsman of this Agreement and no provision
shall be construed either for or against Xxxxxxxx or Paradigm,
but this Agreement shall be interpreted in accordance with the
general terms of the language in an effort to reach an
equitable result.
11. 11. Severability. If any of the provisions of this
Agreement are held invalid or unenforceable by any court of
competent jurisdiction, it is the intent of the parties that
all other provisions of this Agreement be construed to remain
fully valid, enforceable and binding on the parties.
11. 12. Necessary Acts. The parties shall at their own cost
and expense execute and deliver such further documents and
instruments and shall take such other actions as may be
reasonably required or appropriate to evidence or carry out
the intent and purposes of this Agreement.
11. 13. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11. 14. Facsimile Signature. The parties agree that this
Agreement, will be considered signed when the signature of a
party is delivered by facsimile transmission. Such facsimile
signature shall be treated in all respects as having the same
effect as an original signature.
15
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the day and year first above written.
Xxxxxxxx: XXXXXXXX SYSTEMS, a division
of Xxxx Zeiss, Inc., a New
York corporation
By: Xxxxxx Xxxx, President
Paradigm: PARADIGM MEDICAL INDUSTRIES, INC.
a Delaware corporation
By: Xxxxxx X. Xxxxxx, President
and CEO
I hereby agree to be bound by the terms and conditions set forth in
Sections 2.5.1 and 2.5.3 of this Agreement.
Xxxx Xxxxx, Individually
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