MUTUAL RELEASE AND SETTLEMENT AGREEMENT
RECITALS
WHEREAS, on September 23, 1996, Zevex, Inc. ("Zevex") and Paradigm
Medical Industries, Inc. ("Paradigm") (collectively, the "Parties") entered into
a Design, Engineering and Manufacturing Agreement ("Manufacturing Agreement");
WHEREAS, each Party agrees to terminate the Manufacturing Agreement by
mutua] agreement in accordance with Paragraph 10.3(a) of the Manufacturing
Agreement;
WHEREAS, each Party desires to settle all disputes between them and
completely release the other Party from any claim arising out or in any way
relating to the Manufacturing Agreement:
NOW THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, and for other good and valuable consideration, the sufficiency
of which are hereby acknowledged, the Parties agree as follows:
1. Incorporation of Recitals. The foregoing Recitals are incorporated
herein by reference as if fully set forth here.
2. Mutual Release.
A. Zevex. Zevex hereby fully and completely releases, remises,
acquits and forever discharges and agrees to hold harmless,
Paradigm, any affiliates thereof, and their respective
directors, officers, shareholders, employees, representatives
and agents, and any person or entity acting for or on their
behalf (collectively the "Paradigm Group") from and against
any and all judgments, claims, expenses, actions, causes of
action, suits, demands, damages and liabilities, and costs of
every kind or nature, whether judicial, administrative or
otherwise, in law or in equity, known or unknown, foreseen,
unforeseen or unforeseeable, which Zevex, any affiliates
thereof, and/or their respective directors, officers,
shareholders, employees, representatives and agents, and any
person or entity acting for or on their behalf (collectively,
the "Zevex Group") now has or may have, whether heretofore
asserted or not, arising from, out of, or in any way related
to, directly or indirectly, or based in whole or in part on
any facts or matters concerned with the Manufacturing
Agreement or the design, sale or rnatiufacture of the Photon
Laser Phaecoemulsification system, the Precisionist Thirty
Thousand, the Photon Laser Phaco or any other product, system
or part that either party designed, manufactured or sold
under the Manufacturing Agreement.
B. Paradigm. Paradigm hereby fully and completely releases,
remises, acquits and forever discharges, and agrees to hold
harrriless, the Zevex Group from and against any and all
judgments, claims, expenses, actions, causes of action,
suits, demands, damages and liabilities, and costs of every
kind and nature, whether judicial, administrative or
otherwise, in law or in equity, known or unknown, foreseen,
unforeseen or unforeseeable, which the Paradigm Group, or any
part thereof, now has or may have, whether heretofore
asserted or not, arising from, out of, or in any way related
to, directly or indirectly, or based in whole or in part on
any facts or matters concerned with the Manufacturing
Agreement or the design, sale or manufacture of the Photon
Laser Phaecoemulsification system, the Precisionist Thirty
Thousand, the Photon Laser Phaco or any other product, system
or part that either party designed, manufactured or sold
under the Manufacturing Agreement.
3. Consideration.
A. Zevex.
1. In consideration of this release, Paradigm hereby
issues to Zevex 300,000 shares of Paradigm's common
stock. The stock is issued in a private transaction
and the Parties acknowledge that such shares will be
"restricted securities". On or after August 1, 2000
Zevex will have the right to request that Paradigm
register for public sale with the SEC all Paradigm
shares that Zevex owns either on a short-form
registration statement, if such form is available,
or, if such form is not available, then on a
long-form registration statement. Within thirty (30)
days of the date this Agreement is signed by both
Parties, the Parties shall enter into an appropriate,
definitive registration rights agreement.
2. Paradigm will have an option to repurchase the
300,000 shares described above at $5.55 per share.
This option will expire on July 31, 2000.
3. Zevex hereby agrees to vote the shares as instructed
by Paradigm's Board of Directors.
B. Paradigm.
1. Within twenty (20) days of the date this Agreement is
signed by both Parties, Zevex will deliver to
Paradigm all
model Thirty Thousand and Photon systems inventories,
work in progress and compJeted systems and all
support documentation related thereto.
2. Notwithstanding the above, promptly after both
Parties have signed this Agreement, Zevex will
deliver to Paradigm the source code for the software,
as well as intellectual property related to the model
Thirty Thousand and Photon systems (with the
exception of the technology related to the Phaco
drive circuit).
4. Publicity. The Parties agree that they shall not issue any reports,
statements or releases pertaining to this Agreement; provided, however, that
either party may issue any press release or other announcement or make any
filing required to comply with its obligations under federal or state securities
laws or NASDAQ National Market rules. The Parties further agree that they will
keep the terms of this Agreement strictly confidential and will not reveal the
terms and conditions of the Agreement to any third party.
5. Confidentiality. Neither Party will release, publish, reveal or
disclose, directly or indirectly, any of the other Party's confidential or
proprietary information, unless: (1) the information is publicly known at the
time of its disclosure; (2) the information is lawfully received from a third
party not bound by a confidential relationship to the other Party; (3) is
published or made known to the public by the other Party; or (4) can be shown to
have been developed independently by the receiving Party without any reference
to information shared or developed pursuant to the Manufacturing Agreement.
6. Entire Agreement. This Agreement is the entire agreement between the
Parties and will supercede any other written or oral agreements or
understandings with respect to the subject matter herein.
7. Interpretation and Construction. This Agreement will be interpreted
and construed only by its contents and no presumption or standard of
construction in favor of any party will apply. The Settlement Agreement will be
interpreted by the laws of the State of Utah.
8. Attorney's Fees. In the event either Party hereto commences a legal
proceeding to enforce any of the terms of this Agreement, the prevailing Party
in such action shall have the right to recover reasonable attorneys' fees and
the costs from the other Party, to be fixed by the court in the same action.
9. Scope of the Agreement. The terms, covenants and conditions herein
contained shall be binding and inure to the benefit of the heirs, successors,
transferees and assigns of the Parties.
10. Counterparts. This Agreement may be executed in counterparts, and
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
11. Representations and Warranties. The individuals signing this
Agreement on behalf of each party hereby represent and warrant that they have
the power and authority to bind the entity for which they are signing.
Dated: Nov. 24,1999 Dated: Nov. 24, 1999
/s/ Xxxx Xxxxxxxxxxx /s/ Xxxxxx Xxxxxx
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Xxxx Xxxxxxxxxxx, President/CEO Xxxxxx Xxxxxx, President/CEO
Zevex, Inc. Paradigm Medical Industries, Inc.
