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Title: |
Agreement and Plan of Reorganization |
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Entities: |
Paradigm Medical Industries Inc.; Paradigm Medical Industries Inc.; Luce, Forward, Hamilton & Scripps |
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Date: |
2000 |
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Size: |
Preview shows 19KB of 155KB total |
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Price: |
$42 |
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ID: |
#866642 |
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<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>AGREEMENT AND PLAN OF REORGANIZATION
<TEXT>
AGREEMENT AND PLAN OF REORGANIZATION
by and among
PARADIGM MEDICAL INDUSTRIES, INC.,
PARADIGM SUBSIDIARY, INC.
and
VISMED, INC., d/b/a DICON
May 16, 2000
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.....................................................1
1.1 Certain Terms Defined................................................1
ARTICLE 2 AGREEMENT TO MERGE, ETC.........................................5
2.1 Agreement to Merge...................................................5
2.2 Conversion of Dicon Common into Paradigm Common......................5
2.3 Delivery of Certificates for Paradigm Common and Surrender
of Certificates for Dicon Common.....................................7
2.4 The Closing...........................................................7
2.5 Dissenting Shareholders...............................................8
2.7 Covenants, Agreements, Etc. as Conditions.............................9
2.8 Effectiveness of Merger...............................................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF DICON.........................9
3.1 Subsidiaries, Joint Ventures, Etc....................................9
3.2 Organization and Qualification, Etc..................................9
3.3 Articles of Incorporation and Bylaws................................10
3.4 Capital Stock.......................................................10
3.5 Officers and Directors; Financial Institution Accounts, Etc.........10
3.6 Litigation..........................................................11
3.7 Minute Books, Etc...................................................11
3.8 Authorization of Agreement..........................................11
3.9 No Conflict with Other Interests....................................12
3.10 Tax Returns.........................................................12
3.11 Software Programs, Patents, Trademarks, Service marks, and
Copyrights..........................................................13
3.12 Compliance with Law.................................................13
3.13 Employee Benefit Plans..............................................14
3.14 Labor...............................................................14
3.15 State Admissions...................................................15
3.16 Financial Statements................................................15
3.17 Absence of Contracts, Agreements, and Plans.........................15
3.18 No Adverse Change..................................................15
3.19 Casualties..........................................................16
3.20 Limitations on Dicon................................................16
3.21 Accounts, Notes, and Advances Receivable............................18
3.22 No Undisclosed Liabilities or Agreements............................18
3.23 Disclosure..........................................................19
3.24 Title to Properties; Liens; Conditions of Properties................19
3.25 No Liability for Finders' or Financial Advisory Fees................20
3.26 Environmental Matters...............................................20
3.27 Information Set Forth in Any Schedule...............................21
<PAGE>
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARADIGM.....................21
4.1 Organization and Qualification, Etc.................................21
4.2 Authority...........................................................21
4.3 Valid and Binding Obligations.......................................21
4.4 No Violation of Charter, Etc........................................22
4.5 Litigation..........................................................22
4.6 Authorization of Agreement..........................................22
4.7 No Conflict with Other Interests....................................22
4.8 Software Programs, Patents, Trademarks, Servicemarks and Copyrights.23
4.9 Financial Statements................................................23
4.10 Title to Properties; Liens; Conditions of Properties................24
4.11 Licenses and Permits................................................25
4.12 Capital Stock.......................................................25
4.13 Compliance with Law.................................................25
4.14 No Adverse Change...................................................25
4.15 No Undisclosed Liabilities or Agreements............................26
4.16 Disclosure..........................................................26
4.17 SEC Documents.......................................................26
4.18 Subsidiary..........................................................26
ARTICLE 5 CONDUCT OF THE BUSINESS OF DICON PENDING THE MERGER.................27
5.1 Conduct Business in Ordinary Course.................................27
5.2 No Change in Articles or Bylaws.....................................27
5.3 No Change in Capitalization.........................................27
5.4 No Dividends........................................................27
5.5 No Change in Compensation...........................................27
5.6 No Contract Not in Ordinary Course..................................27
5.7 No Changes in Personnel or Financial Institutions...................28
5.8 Maintenance of Property.............................................28
5.9 Insurance...........................................................28
5.10 Business Intact.....................................................28
5.11 No Capital Contributions............................................28
5.12 Representations and Warranties......................................28
5.13 Necessary Action....................................................28
5.14 Best Efforts to Satisfy Conditions..................................29
5.15 Inconsistent Activities.............................................29
5.16 Approval by Dicon...................................................29
5.17 Access to Properties, Files, Etc....................................29
5.18 Correspondence with Regulators......................................30
5.19 Hart-Scott-Rodino Filing............................................30
ARTICLE 6 CONDUCT OF THE BUSINESS OF PARADIGM PENDING THE MERGER..............30
6.1 Conduct Business in Ordinary Course................................30
6.2 No Change in Charter or Bylaws.....................................30
6.3 Maintenance of Property............................................31
<PAGE>
6.4 Insurance..........................................................31
6.5 Business Intact....................................................31
6.6 Necessary Action...................................................31
6.7 Best Efforts to Satisfy Conditions.................................31
6.8 Access to Properties, Files, Etc...................................31
6.9 Correspondence with Regulators.....................................32
6.10 Hart-Scott-Rodino Filing...........................................32
6.11 Director and Officer Liability.....................................32
ARTICLE 7 APPROVALS NEEDED FOR MERGER.....................................33
7.1 Hart-Scott-Rodino Antitrust Improvements Act of 1976...............33
ARTICLE 8 CONDITIONS......................................................33
8.1 Conditions Precedent to Obligations of Paradigm....................33
8.2 Conditions Precedent to Obligations of Dicon.......................37
ARTICLE 9 ACCESS TO INFORMATION...........................................40
9.1 Pre-Closing Access by Dicon........................................40
9.2 Access to Accountant's Records by Dicon............................40
9.3 Post-Merger Access by Dicon........................................40
9.4 Pre-Closing Access by Paradigm.....................................41
9.5 Access to Accountant's Records by Paradigm.........................41
ARTICLE 10 INDEMNIFICATION.................................................41
10.1 Indemnification by Dicon............................................41
10.2 Indemnification by Paradigm.........................................41
10.3 Survival of Obligation to Indemnify.................................42
10.4 Notice and Procedure................................................42
10.5 Third Party Claims..................................................43
10.6 Limitation on Indemnification Obligations...........................43
10.7 Indemnification as Exclusive Remedy.................................44
10.8 No Consequential Damages............................................44
ARTICLE 11 MISCELLANEOUS...................................................44
11.1 Termination; Expenses...............................................44
11.2 Rights of Third Parties.............................................45
11.3 Survival of Representations and Warranties; Indemnities.............45
11.4 Prior Agreements; Modifications.....................................45
11.5 Captions and Table of Contents......................................45
11.6 Governing Law.......................................................45
11.7 Counterparts........................................................46
11.8 Severability........................................................46
11.9 Notices.............................................................46
11.10 Waiver..............................................................47
11.11 Definition of Dicon's Knowledge.....................................47
<PAGE>
11.12 Definition of Paradigm's Knowledge..................................47
11.13 Attorney's Fees.....................................................47
11.14 Consent to Jurisdiction.............................................47
11.15 Cross References....................................................48
<PAGE>
SCHEDULES
---------
(with page number where first mentioned in text)
Schedule 3.5 Dicon Officers, Directors, Employees, Financial
Institution Accounts, Safety Deposit Boxes,
Powers of Attorney, and Shareholders.........................10
Schedule 3.6 Dicon Litigation...........................................11
Schedule 3.10A Dicon Tax Returns..........................................12
Schedule 3.10B Taxes Not Reflected on Dicon's Balance Sheet...............13
Schedule 3.11 Dicon Patents, Trademarks, Servicemarks, and Copyright.....13
Schedule 3.13 Dicon Employee Benefit Plans; Employment Contracts.........14
Schedule 3.15 States Where Dicon Admitted or Qualified...................15
Schedule 3.16 Dicon Financial Statements.................................15
Schedule 3.17 Dicon Contracts, Agreements, and Plans.....................15
Schedule 3.20 Certain Occurrences Since December 31, 1996................16
Schedule 3.24A Dicon Real Estate Owned and Leased.........................19
Schedule 3.24B Dicon Fixed Assets.........................................19
Schedule 4.5 Paradigm Litigation........................................22
Schedule 4.8 Paradigm Patents, Trademarks, Servicemarks, and Copyrights.23
Schedule 4.9 Paradigm Financial Statements..............................23
Schedule 4.10A Paradigm Real Estate Owned and Leased......................24
Schedule 4. 10B Paradigm Fixed Assets......................................24
Schedule 11.11 List of Dicon Individuals for "Knowledge" Purposes.........47
Schedule 11.12 List of Paradigm Individuals for "Knowledge" Purposes......47
<PAGE>
ANNEXES
-------
Annex I Agreement of Merger
Annex 11 Escrow Agreement
Annex III Indemnification Agreement
Annex IV Registration Rights Agreement
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") dated as of May 16,
2000, is entered into by and among Paradigm Medical Industries, Inc., a Delaware
corporation ("Paradigm" or the "Buyer"), Paradigm Subsidiary, Inc., a Utah
corporation and wholly owned subsidiary of Paradigm ("Subsidiary") and Vismed,
Inc., d/b/a Dicon, a California corporation ("Dicon") (Paradigm, Subsidiary, and
Dicon collectively, the "Parties").
WITNESSETH:
WHEREAS, the Parties desire upon the terms and subject to the conditions
herein set forth to enter into an agreement and plan of merger providing for the
merger of Subsidiary with and into Dicon which merger, if consummated, would
result in (i) Dicon becoming a wholly-owned subsidiary of Paradigm and (ii) the
shareholders of Dicon becoming entitled to receive shares of common stock of
Paradigm; and
WHEREAS, the Parties desire to enter into such an agreement and plan of
merger, and each of the Parties is prepared to make the representations,
warranties, and agreements set forth below.
NOW, THEREFORE, in order to consummate the transactions set forth above and
in consideration of the mutual covenants, agreements, representations, and
warranties herein contained, the Parties, intending to be legally bound, agree
as follows:
ARTICLE
1
DEFINITIONS
1.1 Certain Terms Defined. The terms defined in this Section 1. 1 shall for all
purposes of this Agreement have the meanings herein specified, unless the
context expressly or by necessary implication otherwise requires:
(a) "Agreement" shall mean this Agreement by and among Paradigm, Dicon
and Subsidiary as originally executed and delivered or, if amended or
supplemented, as so amended or supplemented;
(b) "Buyer" shall mean Paradigm.
(c) "Closing" shall have the meaning specified in Section 2.4;
(d) "Closing Date" shall have the meaning specified in Section 2.4;
<PAGE>
(e) "Deposit Amount" shall mean the amount specified in Section2.2(b);
(f) "Dicon" shall have the meaning specified in the first paragraph of
this Agreement;
(g) "Dicon Balance Sheet" shall have the meaning specified in Section
3.16;
(h) "Dicon Capital Stock" shall mean all of the outstanding shares of
the Dicon Common and all of the outstanding Options;
(i) "Dicon Common" shall mean the shares of Common Stock, par value
$.001 per share, of Dicon, and any reference to a share thereof shall
include a fractional share thereof on a proportionate basis;
(j) "Dicon December 31, 1999, Financial Statements" shall have the
meaning specified in Section 3.16;
(k) "Dicon Financial Statements" shall have the meaning specified in
Section 3.16;
(l) "Dicon Fixed Assets" shall have the meaning specified in clause
(a) of Section 3.24;
(m) "Disbursing Agent" shall mean the law firm of Mackey Price &
Williams;
(n) "Effective Time of the Merger" shall mean the date for the
effectiveness of the Merger as specified in the Articles of Merger filed
with the Secretary of State of the State of California and the Articles of
Merger filed with the Division of Corporations and Commercial Code of the
State of Utah or if no date is specified therein, the later of the time (i)
at which Articles of Merger are filed with the Office of the Division of
Corporations and Commercial Code of the State of Utah and (ii) at which
Articles of Merger are filed with the Secretary of State of the State of
California;
(o) "Employee Benefit Plans" shall have the meaning specified in
Section 3.13;
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