Exhibit 10
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT and Plan of Reorganization ("Agreement") is dated as of
the 17th day of August, 2000, by and among TRIMEDYNE, INC., a Nevada corporation
whose office address is 2801 Barranca Road, Irvine, California (herein referred
to as "Trimedyne"), and Mobile Surgical Technologies, Inc., a Texas corporation
whose principal office address is 3831 Royal Lane, Dallas, Texas 75229 (herein
referred to as "MST"), and STEPHEN A. ANDERSON AND WILLIAM J. SCHUBERT, JR.,
whose addresses are shown on the signature page hereto and who are herein
jointly referred to as the "Stockholders".
RECITALS
A. Trimedyne desires to acquire from the Stockholders one hundred
percent (100%) of the shares of common stock (the "Shares") of MST in exchange
for Trimedyne common stock in the amount and upon the terms and conditions set
forth herein, and
B. The parties hereto desire to set forth certain representations,
warranties and covenants made by each other as an inducement to the exchange.
NOW, THEREFORE, in consideration of the promises and of the mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
SECTION 1
EXCHANGE OF STOCK
1.1 Exchange. Subject to the terms and conditions herein and at the
closing provided for in Section 1.5 below (the "Closing"), the Stockholders
shall endorse, assign, transfer and deliver to Trimedyne all of their shares of
MST stock, representing all the issued and outstanding shares of MST stock. The
transfer of the Shares to Trimedyne shall transfer to Trimedyne full ownership
of all of the personal, real and intellectual property known as the business of
MST (the "Business"), subject to existing liens thereon. On the same date,
Trimedyne shall issue and deliver to the Stockholders the number of common
voting shares of the capital stock of Trimedyne as determined in accordance with
Section 1.3 below. Such stock shall be divided between and registered to the two
Stockholders in the percentages set forth following their respective names on
the signature page hereto.
1.2 Registration of Stock. Prior to the Closing Date, Trimedyne will
register under the Securities Act of 1933 and amendments thereto, at its own
expense, the shares of common voting stock to be delivered at the closing.
1.3 Exchange Price. Provided the Closing (as that term is defined in
paragraph 1.5 below) occurs on or prior to January 15, 2001, the aggregate
market price of the Trimedyne stock to be exchanged will be One Million US
Dollars ($1,000,000). In the event, however, that the Closing is delayed past
January 15, 2001, then the aggregate market price of the Trimedyne stock shall
be $1,000,000 plus the sum of all principal paid on equipment purchase and lease
obligations of MST during the period from January 15, 2001 to the date of
Closing. The number of shares of Trimedyne's Common Stock that shall be issued
to the Stockholders shall be determined by dividing the total exchange price
(that is One Million Dollars, and in the event Closing is delayed, then plus the
principal payment reductions described above) by the average closing price of
Buyer's Common Stock on the Nasdaq National Market System during the five (5)
trading days prior to the Closing Date of this transaction. In the event,
however, that the average closing price so determined is less than $2.00 per
share, for purposes of this exchange, the shares shall be valued at $2.00 per
share and the exchange shall be effected accordingly unless the Stockholders, in
their sole discretion and option, then elect and notify Trimedyne in writing
that they will not accept the Trimedyne stock by reason of such lower market
price. In such event, this Agreement and Plan of Reorganization shall be
thereupon terminated and become null and void.
1.4 Liabilities and Obligations Assumed. Trimedyne shall assume any and
all liabilities of MST which are a specific obligation of the Business, whether
fixed, contingent or unliquidated, as part of the exchange consideration.
Without limiting the foregoing, Trimedyne does not assume and shall not be
obligated to pay or satisfy any obligation, debt or liability, contingent or
otherwise, of MST, arising out of fraud, misrepresentation, illegal acts,
malpractice or malfeasance occurring at any time from the inception of MST's
business up to and including the time of Closing, or which is not a specific
obligation of the Business.
1.5 Closing and Delay. The closing of the stock exchange provided for
herein (the "Closing") shall take place on the effective date of the
registration statement covering the Trimedyne Stock to be issued to the
Stockholders, but not later than January 15, 2001 if the conditions set forth in
Sections 4 and 5 have been satisfied, or as soon thereafter as such conditions
have either been satisfied or waived by the party benefiting from such
conditions (the "Closing Date"). The Closing shall be at the offices of
Trimedyne or at such other place as the parties shall agree and shall be
effective as of 12:01 a.m. on the Closing Date.
If Closing does not occur, for any reason, on or prior to January 15,
2001, the Exchange Price (as defined in paragraph 1.3 above) shall thereupon
increase in the amount of $50,000. Further, if Closing has not occurred on or
prior to the 15th day of each third (3rd) month thereafter, the Exchange Price
shall further increase each quarter by Fifty Thousand Dollars ($50,000) more
than the preceding payment (that is $100,000 on April 15, 2001, $150,000 on July
15, 2001, and so on). Provided the price of Trimedyne stock as determined in
accordance with the provisions in paragraph 1.3 above is at closing not less
than $2.00 per share, additional shares shall then be issued equivalent in value
to the applicable price increase. In the event, however, the Trimedyne stock
price, determined as above provided, is less than $2.00 per share and the
Stockholders have nevertheless elected to accept the Trimedyne stock and
complete this exchange transaction, then, in such event, all applicable price
increases accrued in accordance with this paragraph 1.5 shall instead be paid in
cash at Closing. Such amounts paid to the Stockholders shall be divided and made
to them in the percentages set forth following their respective names on the
signature page hereto.
SECTION 2
MST REPRESENTATIONS, WARRANTIES AND COVENANTS
MST and the Stockholders represent and warrant to Trimedyne as of the
date hereof and as of the Closing Date as follows (all representations and
warranties being joint and several):
2.1 Good Standing. MST is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas duly
authorized, qualified and licensed under all applicable laws and regulations to
conduct its business in the places and in the manner now conducted.
2.2 Corporate Authority. MST and the Stockholders have the right,
power, legal capacity and authority to enter into and perform their respective
obligations under this Agreement, and this Agreement constitutes the valid and
legally binding obligations of MST and the Stockholders and is enforceable
against these parties in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies. This Agreement has been duly and validly approved by the
directors of MST. Effective as of the Closing Date, all of the Directors of MST
shall resign unless otherwise requested by Trimedyne in writing and the
Directors have agreed to continue to serve in such capacity.
2.3 Consents and Approvals. No consent, waiver, authorization, or
approval of any governmental or regulatory authority, domestic or foreign, or of
any other person, firm or corporation, and no declaration to or filing or
registration with any such governmental or regulatory authority, is required in
connection with the execution and performance of this Agreement by MST.
2.4 Authorized/Outstanding Capital Stock. The authorized capital stock
of MST consists of 10,000 shares of common stock, no par value. A total of 1,000
shares of MST Stock is issued and outstanding as of the date of this Agreement
and there will be no further stock issued and outstanding as of the Closing
Date. All outstanding stock is held of record and owned by the Stockholders. No
equity securities of MST shall be issued and outstanding at the time of the
Closing other than the Shares. All issued and outstanding shares of MST have
been duly authorized and validly issued, are fully paid and nonassessable, are
not subject to any lien, encumbrance and/or right of rescission, and have been
issued in compliance with all applicable laws. There is no liability for
dividends accrued and unpaid by MST.
2.5 Litigation. There are no claims, actions, suits, proceedings,
disputes or investigations pending or, to MST's knowledge, threatened before any
federal, state or local court or governmental or regulatory authority, domestic
or foreign, or before any arbitrator of any nature, brought by or against MST or
the Stockholders involving, affecting or relating to the Business or the
transactions contemplated by this Agreement. Neither MST, the Stockholders, nor
the Business is subject to any order, writ, judgment, award, injunction or
decree of any federal, state or local court or governmental or regulatory
authority or arbitrator.
2.6 Title. As of the Closing, the Stockholders will be the sole owners
of all right, title and interest in and to the Shares, and no other parties have
any rights or interests, directly or indirectly, in the shares or the assets of
MST or the Business, except those disclosed to and accepted by Trimedyne. As of
the Closing Date, the Stockholders will have the legal right to transfer the
Shares as set forth in this Agreement, and they and MST will have not executed
any agreement which is in conflict with the terms of this Agreement.
2.7 Accounts Payable. MST shall, at Closing Date, be current (ie. not
past due) in monthly payments on its accounts payable and its account with
Trimedyne shall be paid in full.
2.8 Agreements, Judgments and Decrees. MST represents and warrants that
it is not subject to any agreement, judgment or decree which could materially
and adversely affect its ability to satisfy its obligations hereunder.
2.9 Subsidiaries. MST has no subsidiary and holds no other interest in
any other business enterprise.
2.10 Financial Statements. MST has delivered to Trimedyne copies of its
financial statements as follows: a) Balance Sheet and Profit and Loss Statement
for the calendar year ending December 31, 1999; and b) interim financial
statements for the periods ending March 31 and June 30, 2000. When available, if
prior to the Closing Date, MST shall deliver to Trimedyne financial statements
for the quarter ending September 30, 2000 and all subsequent quarters through
the Closing Date.
The Financial Statements a) are in accordance with the books and
records of MST and b) fairly and accurately represent the financial condition of
MST at the respective dates specified therein, and the results of operations for
the respective periods in conformity with GAAP applied on a consistent basis.
2.11 Absence of Certain Changes. Following the reporting dates
mentioned in the preceding paragraph, MST has carried on its business in the
ordinary course substantially in accordance with the procedures and practices in
effect on the cited dates. Since the December 31, 1999 date there has not been a
material adverse change in the MST business, financial condition or results of
operation.
2.12 Employees. MST is not subject to a collective bargaining agreement
with respect to its employees and is not subject to any current labor dispute.
2.13 Corporate Documents. MST has provided to the Buyer complete and
correct copies of all following described documents: (a) copies of MST's Charter
Documents as currently in effect; (b) copies of its minute books containing
records of all proceedings, consents, actions and meetings of MST's Board of
Directors and Shareholders; (c) copies of its stock ledger, journal and other
records reflecting all stock issuances and transfers and all stock option grants
and agreements; (d) copies of all material agreements, and all amendments
thereto; and (e) all permits, orders and consents issued by any regulatory
agency with respect to MST or any securities of MST , and all applications for
such permits, orders and consents.
2.14 Bank Accounts. MST will provide Trimedyne a list of the names and
locations of all banks, trust companies, savings and loan associations, and
other financial institutions at which MST maintains accounts of any nature and
the names of all persons authorized to draw thereon or make withdrawals
therefrom.
2.15 Product Liability. MST does not have any liability (and, to the
knowledge of Stockholders, there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim or demand
against it giving rise to any liability) arising out of any injury to
individuals or property.
2.16 Taxes. All federal, state, local or foreign, sales, withholding,
payroll and employment taxes, fees, assessment or charges, including any
interest, penalty or addition thereto ("Taxes") owed by MST to the date hereof
have been paid and such Taxes accruing prior to Closing will be currently paid
by MST in the regular course of business.
2.17 Guarantees. MST is not a guarantor or otherwise liable for any
liability or obligation (including indebtedness) of any other entity or person.
2.18 No Brokers, no finders. No agent, broker, finder or investment or
commercial banker, or other Person or firms engaged by or acting on behalf of
MST in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to receive any broker's or finder's or similar fees or other
commissions from Trimedyne as a result of this Agreement or such transactions.
2.19 Confidential Information. MST recognizes and acknowledges that it
has and will have access to certain confidential information of Trimedyne, such
as lists of customers, costs and expenses, and methods of operation that are
valuable, special and unique assets of Trimedyne's business. MST agrees that it
will not disclose such confidential information to any other persons, firm or
corporation, association other entity for any purpose or reason whatsoever. In
the event of a breach or threatened breach by MST of the provisions in this
paragraph, Trimedyne shall be entitled to an injunction restraining MST from
disclosing, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Trimedyne from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
SECTION 3
TRIMEDYNE REPRESENTATIONS AND WARRANTIES
Trimedyne hereby represents and warrants to MST and its Stockholders
and covenants and agrees, as of the Closing Date, as follows:
3.1 Corporate Organization. It is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Nevada,
with the corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. It is duly qualified and
licensed to carry on its business as it is now being conducted, and is qualified
to conduct business in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified that would not, individually
or in the aggregate, have, or would not reasonably be expected to have, a
Material Adverse Effect (as defined below). It is not in violation of any of the
provisions of its Articles of Incorporation or its Bylaws governing document. As
used in this Agreement, the term "Material Adverse Effect" means any change,
effect, event or condition that (i) has a material adverse effect on the assets,
business or financial condition of Trimedyne and its subsidiaries, taken as a
whole, or (ii) would prevent or materially delay its ability to consummate the
transactions contemplated hereby.
3.2 Corporate Authority. Trimedyne has the requisite corporate power
and authority to execute and deliver, and to perform its obligations under this
Agreement and Plan of Reorganization. The execution and delivery by Trimedyne of
this Agreement and the transactions contemplated hereby and thereby have been
duly and validly authorized by its Board of Directors and no other corporate
proceedings on its part are necessary to authorize this Agreement or other
transactions contemplated hereby and thereby. This Agreement has been duly and
validly executed and delivered by Trimedyne and execution and delivery hereof is
a valid and binding obligation of Trimedyne, enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors rights generally or by general
equitable principles. The shares of Common Stock to be issued by Trimedyne
pursuant to the Agreement: (i) have been duly authorized, and will be validly
issued, fully paid and nonassessable and will not be subject to preemptive
rights, (ii) will be registered under the Securities Act, and registered or
exempt from registration under applicable United States "Blue Sky" laws, (iii)
will be listed on the Nasdaq National Market and (iv) will be issued free and
clear of any liens.
3.3 No Violation. Neither the execution, delivery nor the performance
by Trimedyne of this Agreement and all agreements contemplated hereunder
violates or will violate any provision of law, of any order, judgment or decree
of any court or other governmental or regulatory authority, or of the charter
documents or by-laws of Trimedyne, nor violates or will result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject, nor will result in the
creation or imposition of any lien, charge or encumbrance of any kind whatsoever
upon any of its properties or assets.
3.4 Consents and Approvals. Other than requirements of federal and
state securities laws, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any third party or any public or
governmental body or authority is necessary for the consummation by Trimedyne of
the transactions contemplated by this Agreement.
3.5 No Brokers, no finders. No agent, broker, finder or investment or
commercial banker, or other Person or firms engaged by or acting on behalf of
Trimedyne or its Affiliates in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated by this
Agreement, is or will be entitled to receive any broker's or finder's or similar
fees or other commissions from MST as a result of this Agreement or such
transactions.
3.6 Confidential Information. Trimedyne recognizes and acknowledges
that it has and will have access to certain confidential information of MST,
such as lists of customers, costs and expenses, and methods of operation that
are valuable, special and unique assets of MST's business. Trimedyne agrees that
it will not disclose such confidential information to any other persons, firm or
corporation, association other entity for any purpose or reason whatsoever. In
the event of a breach or threatened breach by Trimedyne of the provisions in
this paragraph, MST shall be entitled to an injunction restraining Trimedyne
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting MST from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
SECTION 4
CONDITIONS TO STOCKHOLDERS AND MST'S OBLIGATION TO CLOSE
4.1 Conditions to Closing . The Stockholders' obligation hereunder to
exchange their Shares to Trimedyne at the Closing is subject to the
satisfaction, as of the Closing Date, of each of the following conditions,
provided that these conditions are for Stockholders' sole benefit and may be
waived by them in their sole discretion:
(a) Trimedyne shall have delivered to Stockholders shares of Trimedyne
Common Stock that are registered, the registration statement covering
the stock being declared "effective" by the SEC. The amount of stock
to be issued to Seller shall have a total value as specified in
paragraph 1.3 above, determined upon dividing the total exchange price
by the average closing price of Trimedyne's Common Stock on the Nasdaq
National Market System during the five (5) trading days preceding the
Closing Date. Each of the shares of said stock will be duly authorized
and validly issued, fully paid and nonassessable and issued in
conformity with applicable laws. There will be no preemptive rights in
respect of any of said stock.
(b) The representations and warranties of Trimedyne shall be true and
correct as of the date when made and as of the Closing as though made
at that time (except for representations and warranties that speak as
of a specific date), and Trimedyne shall have performed, satisfied and
complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or
complied with by it at or prior to the Closing. MST and the
Stockholders shall have received a certificate, executed by the Chief
Executive Officer and/or Secretary of Trimedyne, and dated as of the
Closing Date to the foregoing effect.
(c) The Stockholders shall have received from counsel to Trimedyne an
opinion dated as of the Closing Date, in form and substance
satisfactory to the Stockholders, that the shares of Trimedyne stock
issued and delivered pursuant to this Agreement are duly authorized
and will be, when so issued, (a) validly issued and outstanding, (b)
fully paid and nonassessable, and (c) registered under the Securities
Act of 1933, as amended, and freely tradable.
(d) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or
any self-regulatory organization having authority over the matters
contemplated hereby which restricts or prohibits the consummation of
any of the transactions contemplated by this Agreement.
SECTION 5
CONDITIONS TO TRIMEDYNE'S OBLIGATION TO CLOSE
5.1 The obligation of Trimedyne hereunder to issue its stock in
exchange on the Closing Date is subject to the satisfaction of each of the
following conditions, provided that these conditions are for its sole benefit
and may be waived by Trimedyne in writing at any time in its sole discretion:
(a) The representations and warranties of MST shall be true and
correct as of the date when made and as of the Closing as though
made at that time and MST shall have performed, satisfied and
complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed,
satisfied or complied with at or prior to the Closing. Trimedyne
shall have received a certificate, executed by the President of
MST and dated as of the Closing Date to the foregoing effect.
(b) Trimedyne shall be satisfied with its business, legal,
accounting, financial due diligence on MST prior to September 15,
2000. If notice to the contrary is not delivered to MST within
three (3) days thereafter, then satisfaction shall be determined
conclusive.
(c) Trimedyne shall have received from counsel of the
Stockholders an opinion dated as of the Closing Date, in form and
substance satisfactory to Trimedyne, that MST is a corporation
duly incorporated, validly existing and in good standing under
the laws of the State of Texas, with the corporate power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted. It is duly qualified and
licensed to carry on its business as it is now being conducted,
and is qualified to conduct business in each jurisdiction where
the character of its properties owned or leased or the nature of
its activities makes such qualification necessary, except for
failures to be so qualified that would not, individually or in
the aggregate, have, or would not reasonably be expected to have,
a Material Adverse Effect. The shares of MST stock issued and
delivered pursuant to this Agreement are duly authorized and will
be, when so issued, (a) validly issued and outstanding, and (b)
fully paid and nonassessable.
(d) The Stockholders shall have delivered to Trimedyne's counsel
all of MST's Shares, duly endorsed in blank or with duly executed
stock powers, or a duly executed Affidavit and Indemnity
Agreement for Lost Certificates, in form satisfactory to
Trimedyne's counsel.
SECTION 6
INDEMNIFICATION
6.1 Stockholders' Indemnification. The Stockholders hereby agrees to
indemnify and hold harmless Trimedyne, and any person or entity controlling,
controlled by or under common control with Trimedyne, from and against any and
all claims, damages, liabilities, losses and expenses (including reasonable
attorneys' fees) resulting from or arising out of (i) any breach by MST of any
covenant, representation, warranty or obligation of MST contained in this
Agreement or any agreement executed in connection with this Agreement, (ii) any
liability or obligation for any injury to person or property arising from or
relating to the use or misuse of MST equipment prior to the Closing Date.
6.2 Trimedyne's Indemnification. Trimedyne hereby agrees to indemnify
and hold harmless the Stockholders from and against any and all claims, damages,
liabilities, losses and expenses (including reasonable attorneys' fees)
resulting from or arising out of any breach by Trimedyne of any covenant,
representation, warranty or obligation of Trimedyne contained in this Agreement.
6.3 Notice of Claim. The party to be indemnified hereunder (the
"Indemnified Party") shall notify in writing (such notification shall be
referred to herein as a "Claims Notice") the indemnifying party (the
"Indemnifying Party") within (i) 60 days after a claim is presented to the
Indemnified Party or the Indemnified Party becomes aware of substantial facts
that would reasonably appear to the Indemnified Party to be likely to give rise
to a claim for indemnity hereunder, or (ii) five (5) days if the Indemnified
Party receives formal notice of the filing of a suit, petition or claim or the
scheduling of a hearing related to a matter which may give rise to claim for
indemnity hereunder. Each Claims Notice shall, if feasible, contain a reasonable
estimate by the Indemnified Party of the losses, costs, liabilities and expenses
(including, but not limited to, costs and expenses of litigation and attorneys'
fees) which the Indemnified Party may incur. If Trimedyne is the Indemnified
Party and delivers a Claims Notice to the Stockholders, and the Stock of
Trimedyne described in Section 1.3 has not yet been issued, Trimedyne shall have
the right to escrow an amount of its Stock equal to the amount claimed in the
Claims Notice. The Stock shall be released from escrow and either delivered to
the Stockholders or retained by Trimedyne depending on the final resolution of
such situation. Such escrow shall be established with a bank or title company
acceptable to Buyer and Seller, with neither party unreasonably withholding
their consent.
The Indemnifying Party shall have the right to defend a claim and
control the defense, settlement and prosecution of any litigation; provided,
however, in order to have the right to defend a claim and control the defense,
settlement and prosecution of any litigation, the Indemnifying Party (i) must
expressly acknowledge the assumption by it of all liabilities related to such
litigation, including without limitation, the cost of such defense, settlement
and prosecution of such litigation, and (ii) unless the Indemnified Party
consents otherwise in writing, may only compromise or settle such litigation
solely for money damages for which the Indemnifying Party shall be fully liable.
If the Indemnifying Party fails to defend such claim, the Indemnified Party will
(upon further notice to the Indemnifying Party) have the right to undertake the
defense, compromise or settlement of such claim on behalf and for the account
and risk of the Indemnifying Party. The Indemnifying Party will make available
to the Indemnified Party or its representatives, at the Indemnifying Party's
expense, all records and other materials in the Indemnifying Party's possession
and all employees or agents of the Indemnifying Party required by the
Indemnified Party for the Indemnified Party's use in contesting any such claim,
and the Indemnified Party and its representatives agree that they will not use
the Indemnifying Party's making available to them of any such material, or its
agreement to do so, as a basis for asserting a waiver by the Indemnifying Party
of any statutory or common law privilege the Indemnifying Party might have in
any other proceedings, whether related or unrelated to the matter giving rise to
the claim. If the Indemnified Party fails to notify the Indemnifying Party of a
claim in accordance with the terms of this Section 6.3, and the Indemnifying
Party is thereby materially prejudiced by such failure of notice in its defense
of the claim, the Indemnifying Party's obligation to indemnify hereunder shall
be extinguished with respect to such claim to the extent that the Indemnifying
Party has been prejudiced by the failure to give such notice. The amount of
losses for which indemnification is provided under this Agreement shall be net
of any amounts recovered by the Indemnified Party under insurance policies or
from unaffiliated third parties with respect to such losses.
SECTION 7
ARBITRATION OF DISPUTES
8.1 Arbitration of Disputes. Any controversy or claim arising out of or
relating to this contract or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The place
of the arbitration shall be Orange County, California. Each party shall bear its
own costs and expenses including legal fees and an equal share of the
arbitrator's and administrative fees of arbitration.
NOTICE: BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH THEREOF
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO APPEAL. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO HIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THE ARBITRATION PROVISION
IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OR RELATING TO THIS AGREEMENT OR THE BREACH THEREOF TO NEUTRAL
ARBITRATION.
Trimedyne: _______ William J. Schubert: _______
MST: _______ Stephen A. Anderson: _______
SECTION 8
GENERAL PROVISIONS
8.1 Tax-Free Exchange. The transaction agreed upon herein is intended
to qualify as a tax-free exchange under Section 368(a)(1)(B) of the Internal
Revenue Code.
8.2 Publicity. None of the parties hereto or anyone on behalf of any
party shall issue or allow the release of any information, public statements or
press releases regarding this transaction during the ninety (90) days preceding
the Closing (either January 15, 2001 or any delayed closing date), except as may
be required by law.
8.3 Counterparts. This Agreement may be executed in two or more
counterparts, including facsimile transmission, all of which counterparts shall
be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party. In
the event any signature page is delivered by facsimile transmission, the party
using such means of delivery shall promptly cause additional originally executed
signature pages to be delivered to the other party.
8.4 Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.5 Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
8.6 Entire Agreement; Amendments. This Agreement and the Schedules
hereto, which are incorporated herein by this reference, and the instruments
referenced herein contain the entire understanding of the parties and supercede
all prior and/or contemporaneous agreements or understandings with respect to
the matters covered herein and therein and, except as specifically set forth
herein or therein, neither Trimedyne, MST or the Stockholders make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
all parties.
8.7 Notice. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by nationally-recognized
overnight courier or by facsimile-machine confirmed telecopy, and shall be
deemed delivered at the time and date of receipt (which shall include telephone
line facsimile transmission). Each party shall provide prompt notice to the
other party of any change in address. The addresses for such communications
shall be:
If to Trimedyne:
Trimedyne, Inc.
2801 Barranca Road
Irvine, CA 92619-7001
Telecopy: (949)559-1330
Attention: President
with a copy to:
Heller, Horowitz & Feit, P.C.
292 Madison Ave.
New York, NY 10017
Telecopy: (212)696-9459
Attention: Richard F. Horowitz
If to MST and/or the Sotckholders:
To the addresses shown on the signature page hereof.
With a copy to:
R. Russel Rager, P.C.
6400 Uptown Blvd., NE, Suite 550E
Albuquerque, NM 87110
8.8 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors, executors, personal
representatives and heirs. None of the parties shall assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
other, which consent may not be unreasonably withheld.
8.9 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
8.10 Survival. All representations and warranties in this Agreement
shall survive the execution and delivery of this Agreement and the Closing. All
agreements contained herein shall survive the Closing until, by their respective
terms, they are no longer operative.
8.11 Further Assurances. Prior to and after the Closing, MST agrees to
cooperate with any reasonable inquiry Trimedyne may have in connection with the
Business. MST shall make available such personnel and books and records as
Trimedyne may reasonably request in connection with any such inquiry. MST shall
waive and quitclaim to Trimedyne any and all claim of any nature whatsoever that
MST may now have or may later have in connection with the Business.
Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
EXECUTED in duplicate counterparts as of the date first above written.
TRIMEDYNE, INC. MOBILE SURGICAL TECHNOLOGIES, INC.
By:________________________________ By: _____________________________________
Name:______________________________ William J. Schubert, Jr., President
Title:_____________________________ 3831 Royal Lane
Dallas, TX 75229
___________________________________ _________________________________________
William J. Schubert, Jr., -51% Stephen A. Anderson - 49%
3831 Royal Lane 3905 Centerpoint Rd.
Dallas, TX 75229 San Marcos, TX 78666
Signature Page to Agreement and Plan of Reorganization