STAAR 1.1 EXHIBIT 10.9
STOCK PLEDGE/SECURITY AGREEMENT
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This STOCK PLEDGE/SECURITY AGREEMENT (hereinafter "Agreement") is made and
entered into this 28th day of February, 1991, by and between Xxxx X. Xxxx, a
married man ("Pledgor"), Xxxxxx & Associates, a California corporation
("Pledgeholder"), and Staar Surgical Company, a Delaware corporation ("Pledgee")
with reference to the following facts:
RECITALS
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WHEREAS, Pledgor has borrowed the sum of One Million Three Hundred One
Thousand Seven Hundred Forty Five Dollars ($1,301,745.00) from Pledgee pursuant
to the terms of a Promissory Note attached hereto as Exhibit "1" and
incorporated herein by this reference ("Note"), and
WHEREAS, Pledgor desires to pledge his interest in certain common stock,
pursuant to the terms of this Agreement, for the purpose of securing Pledgor's
indebtedness to Pledgee for the unpaid balance of the Note.
NOW, THEREFORE, in consideration of mutual covenants and promises contained
herein, and for valuable consideration, the receipt and sufficiency which are
hereby mutually acknowledged and confessed, the parties to this Agreement
(hereinafter collectively "parties" and individually "party") agree as follows:
AGREEMENT
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1. PLEDGE OF STOCK AND PROCEEDS.
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(a) Pledge. As collateral security for the payment and/or performance
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of all of Pledgor's presently existing or hereinafter arising obligations and
liabilities to Pledgee under the Note, Pledgor agrees to deliver, pledge and
grant to Pledgeholder, concurrently with the execution of this Agreement, a
continuing security interest in the following:
(i) the shares of common stock which are set forth on Exhibit
"2" to this Agreement ("Stock").
(ii) the proceeds of the Stock including, without limitation,
any and all dividends, cash, instruments and other property from time-to-time
received, receivable, or otherwise distributed in respect of or in exchange for
any of the Stock ("Proceeds"). The Stock and the Proceeds shall hereinafter be
collectively referred to as the "Collateral").
(b) Delivery of Stock to Pledgeholder. Pledgor agrees to deliver to
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Pledgeholder, upon execution of this Agreement, the certificate(s) representing
the Stock. Upon execution of this Agreement, Pledgor shall deliver to
Pledgeholder an Assignment of Corporate Shares in the form of Exhibit "3"
attached hereto and incorporated herein by this reference ("Stock Assignment"),
signed by Pledgor, in blank, such Stock Assignment to be used by Pledgeholder in
accordance with the terms of this Agreement.
(c) Notification of Payments Under Note. Pledgee agrees to notify
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Pledgeholder of all amounts collected in accordance with the terms and
conditions of the Note, including final satisfaction of the Note, at which time
Pledgee shall direct Pledgeholder to return the Collateral to Pledgor.
(c) Pledgeholder's Acceptance of Collateral and Appointment as
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Pledgor's Attorney-In-Fact. Pledgeholder hereby agrees to accept the Collateral
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and to hold and dispose of the Collateral in accordance with and subject only to
the terms of this Agreement and the legal and equitable rights of the parties to
it. Pledgor hereby irrevocably appoints Pledgeholder as Pledgor's attorney-in-
fact to arrange for the transfer of the Collateral and to do and perform all
other actions that are requisite and necessary to be lawfully done in order to
affect the terms of this Agreement.
(d) Release of Collateral. The Collateral shall be released from this
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Agreement and returned to Pledgor upon receipt by Pledgeholder of written notice
from Pledgee that all of Pledgor's obligations under the Note have been
satisfied in full.
2. MATTERS PERTAINING TO THE COLLATERAL.
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(a) Voting and Consensual Rights. Pledgor retains the right to vote
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the Stock and to exercise any other consensual rights pertaining to the Stock,
provided, however, so long as Pledgor is in "Default" as defined in Paragraph 3
of this Agreement, Pledgeholder shall vote the Stock and shall exercise any
consensual rights pertaining to the Stock as directed by Pledgee.
(b) Rights to Dividends and Distributions. Pledgor shall be entitled
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to receive and retain any dividends or other payments or distributions with
respect to the Stock made to or due Pledgor as a shareholder, provided, however,
that:
(i) any and all dividends and distributions paid or payable other
than in cash in respect of the Stock, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
the Stock; and/or
(ii) any and all dividends and distributions paid or payable with
respect to the Stock in connection with a partial or total liquidation or
dissolution of the issuing corporation or in connection with a reduction of
capital, capital surplus or paid-in surplus of the issuing corporation; and/or
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(iii) any or all dividends or distributions paid with respect to,
payable or otherwise distributed in redemption of, or in exchange for, the
Stock;
shall be delivered to Pledgeholder to be added to and become a part of the
Collateral. Further provided, however, to the extent the foregoing dividends
and distributions exceed the amount of Pledgor's obligations and liabilities
under the Note and/or this Agreement, Pledgor shall be entitled to receive these
excess dividends and distributions.
Notwithstanding the foregoing, in the event and for so long as Pledgor
is in Default, Pledgeholder shall be paid any dividends or other payments or
distributions with respect to the Stock to be added to and become part of the
Collateral; provided, however, to the extent any amounts are due and payable to
Pledgee (whether by acceleration, maturity or otherwise) Pledgeholder shall
apply such payments against the outstanding balance of the Note.
(c) Stock Adjustments. In the event that, during the term of this
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Agreement, any stock dividend, reclassification, readjustment, or other change
is declared or made in the capital structure of the issuing corporation, all new
substituted and additional shares or other securities issued with respect to the
Stock by reason of any such change shall be delivered to Pledgeholder and held
by Pledgeholder under the terms of this Agreement in the same manner as the
Stock.
(d) Subscription Rights or Warrants. In the event that, during the term
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of this Agreement, subscription warrants or any other rights or options shall be
issued in connection with the Stock, such warrants, rights, and options shall be
immediately assigned by Pledgeholder to Pledgor, and if exercised by Pledgor,
all new shares or other securities so acquired by Pledgor shall be considered as
part of the Stock and shall be immediately assigned to Pledgeholder to be held
under the terms of this Agreement in the same manner as the Stock.
3. Default.
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At the option of Pledgee, and without necessity of presentment for
payment, demand, protest, notice of protest or notice of dishonor or any other
notice except as specifically provided herein, Pledgeholder may exercise any
remedy under this Agreement upon the happening of any of the following events of
default ("Default"):
(a) Default Under The Note. If any act or event of "default" on the
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part of Pledgor occurs under the Note without cure as specifically provided
therein; or
(b) Default Under This Agreement. If Pledgor defaults in the due
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performance or observance of any representation or obligation under this
Agreement; provided, however, that if such obligation is monetary, Pledgor shall
be entitled to a grace period of ten (10) days following notice of such default
to cure said default, and further provided that if such obligation is
nonmonetary and is reasonably susceptible of being cured, Pledgor shall be
entitled to a grace
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period of thirty (30) days following written notice of default to cure said
default, and further provided that if such nonmonetary default is of such
character as to reasonably require more than thirty (30) days to cure, Pledgor
shall not be in default if Pledgor has diligently commenced to cure the default
within the thirty (30) day period and uses reasonable diligence thereafter in
curing the default. Notwithstanding the foregoing, if the event of default is
one under both Subparagraphs (a) and (b), the provisions of Subparagraph (a)
shall control in determining when and if the default is cured.
4. Remedies.
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Subject to Paragraph 3 of this Agreement, in the event Pledgor is in
Default without cure as hereinabove provided, Pledgee shall have the following
rights and remedies:
(a) Retention of Collateral by Pledgee. Choose to accept the
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Collateral (but only to the extent of unpaid obligations and liabilities under
the Note and/or this Agreement) after directing Pledgeholder to give notice of
such proposal to Pledgor and to any other person with a security interest in the
Collateral, as provided in Section 9505 of the California Commercial Code, and
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such acceptance shall fully discharge the obligation of Pledgor providing
neither Pledgor, nor any other person with a security interest in the
Collateral, objects in writing to such proposal within twenty-one (21) days from
receipt of such notice.
(b) Sale of Collateral. Choose to sell the Collateral at a public or
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private sale, in one or more sales or lots, at such price as Pledgeholder or
Pledgee may deem best, and for cash or on credit or for future delivery, without
assumption of any credit risk, and the purchaser of any or all of the Collateral
so sold shall thereafter hold the same absolutely free from any claim,
encumbrance or right of any kind whatsoever. Provided, however, Pledgee shall
first direct Pledgeholder to give any notice or notification to Pledgor as
required by Section 9504 of the California Commercial Code by mailing such
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notice, postage prepaid, to Pledgor's address as it appears within this
Agreement. Any other requirement of notice, demand or advertisement for sale
is, to the extent permitted by law, waived. Any sale hereunder may be conducted
by any auctioneer or any officer or agent of Pledgee. Any sale of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies or other financial institutions disposing of property
similar to the Collateral shall be deemed to be commercially reasonable. The
proceeds of any such sale shall be applied in the following order:
(i) Reasonable expenses of retaking, holding, preparing for sale,
selling, and the like and, to the extent provided for in this Agreement and
not prohibited by law, the reasonable attorneys' fees and legal expenses
incurred by Pledgeholder and/or Pledgee.
(ii) Satisfaction of the balance of unpaid principal and accrued
but unpaid interest and other amounts due under the Note.
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(iii) Satisfaction of any indebtedness secured by any
subordinate security interest in the Collateral if written notice and demand
therefore is received prior to distribution of the proceeds provided, however,
reasonable proof of such interest or interests is reasonably furnished to
Pledgeholder.
(c) Pledgee's Right to Purchase Collateral. Pledgeholder may, on behalf
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of Pledgee, buy the Collateral at a public sale or private sale described above
in Subparagraph (b) pursuant to the conditions specified in Section 9504(3) of
the California Commercial Code.
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(d) Pledgeholder's Right to Execute Documents. Pledgeholder shall have
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the right to execute any document or form, in its name or in the name of
Pledgor, which may be necessary or desirable in connection with the retention of
the Collateral as provided above in Subparagraph (a) or in the sale of the
Collateral as provided above in Subparagraph (b).
(e) Private Placement. In view of the fact that federal and state
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securities laws may impose certain restrictions on the method by which a sale of
the Collateral may be effected after an event of Default, and also upon the
persons or entities who may qualify or be eligible to purchase the Collateral,
Pledgor hereby agrees that upon the occurrence of an event of Default,
Pledgeholder, on behalf of Pledgee, may from time to time, if the Collateral is
not publicly traded on a nationally recognized stock exchange and/or is
considered a "restricted" security, attempt to sell all or any part of the
Collateral by a private placement, for cash, restricting the bidders and
prospective purchasers to a limited number who will represent and agree that
they are purchasing for investment for their own accounts only and not for
distribution, and who will otherwise meet state or federal securities law
requirements, including those pertaining to sales made pursuant to exemptions
from registration under the Securities Act of 1933 and/or registration or
qualification under other state or federal securities laws. The solicitation of
offers from four (4) or more investors, with the acceptance of the highest offer
therefrom by Pledgeholder, shall be deemed to be a commercially reasonable
method of disposition of the Collateral in this case.
5. No Impairment of Other Security.
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The execution and delivery of this Agreement shall in no manner
impair or affect any other security for the payment or performance of the Note
and no security taken hereafter as security for payment of any part or all of
the Note shall impair in any manner or affect this Agreement; all such present
and future additional security is to be considered as cumulative security. Any
future assignment or attempted assignment or transfer of the interest of Pledgor
in and to any of the Collateral shall not deprive Pledgeholder of the right to
sell or otherwise dispose of or utilize all of the Collateral as hereinabove
provided or necessitate the sale or disposition thereof.
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6. Pledgor's Representations, Warranties and Covenants.
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(a) Pledgor represents and warrants to Pledgee as follows: (i) the
Stock is validly authorized, fully paid and nonassessable; (ii) the Stock was
issued without violation of any statutory or contractual preemptive rights, or
any rights of first refusal or other agreements; (iii) the Stock was issued to
Pledgor in compliance with federal and applicable state securities laws; (iv)
upon delivery to Pledgeholder as contemplated hereby, the Stock will be free of
any security interests, liens, pledges or encumbrances created by Pledgor
(except for the security interest created hereby), or any claims of third
parties of any nature whatsoever, charges, escrows, options, rights of first
refusal, or other agreements, arrangements, commitments or obligations, written
or oral, created by Pledgor or any other restrictions created by Pledgor
affecting the rights and other incidents of record or beneficial ownership of
the Stock.
(b) Pledgor represents and covenants that the terms and provisions
of this Agreement shall prevail over any agreement that Pledgor may have made
restricting in any manner the transferability of the Stock. Pledgor shall not
make any agreements restricting in any manner the transferability of the
Collateral, or otherwise affecting the Collateral.
(c) Pledgor represents and covenants that upon occurrence of an
event of Default hereunder, any sale of the Collateral made pursuant to the
power of sale contained herein shall, at the option of Pledgeholder, terminate
any agreement restricting sale or transferability of the Collateral, and the
purchaser at any such sale shall take the Collateral free and clear of any such
agreement .
(d) Pledgor shall do, make, procure, execute and deliver, at no
expense to Pledgee, all acts, things, writings and assurances as Pledgee may at
any time request to protect, assure or enforce his interests, rights and
remedies created by, provided in or emanating from this Agreement and any other
agreement made in connection herewith.
(e) Pledgor shall, at Pledgor's expense, take any steps necessary
to preserve Pledgee's rights in the Collateral against any claims of third
parties (except claims arising from any act or failure of act of Pledgeholder).
(f) Pledgor has made his own arrangements for keeping informed of
changes or potential changes affecting the Collateral (including, without
limitation, rights to convert, rights to subscribe, payment of dividends,
reorganization or other exchanges, tender offers and voting rights), and Pledgor
hereby agrees that Pledgeholder and Pledgee shall have no responsibility or
liability for informing Pledgor of any such changes or potential changes or for
taking any action or omitting to take any action with respect thereto.
(g) This Agreement, and the delivery to Pledgeholder of the Stock
creates a valid, perfected, and first priority security interest in the
Collateral in favor of Pledgeholder on behalf of
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Pledgee, and all actions necessary or desirable to such perfection have been
duly taken.
7. Matters Pertaining to Pledgeholder.
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(a) Pledgeholder shall not be personally liable for any act it may
do or omit to do under the Agreement while acting in good faith and in the
exercise of its best judgment, and any act done or omitted by Pledgeholder
pursuant to the advice of Pledgeholder's attorney shall be conclusive evidence
of such good faith. Except as expressly provided herein, Pledgeholder is
expressly authorized and directed to disregard any and all notices or warnings
given by any of the parties, or by any other person or corporation, excepting
only orders or process of court, and is hereby expressly authorized to comply
with and obey any and all orders, judgments or decrees of any court. If
Pledgeholder obeys or complies with any such order, judgment or decree of any
court, it shall not be liable to any of the parties or any other person, firm or
corporation by reason of such compliance, notwithstanding that any such order,
judgment or decree be subsequently reversed, modified, annulled, set aside or
vacated, or found to have been entered without jurisdiction.
(b) The parties expressly agree Pledgeholder has the absolute right
at Pledgeholder's election, if Pledgeholder considers it appropriate, to file an
action in interpleader requiring the parties to answer and litigate their claims
and rights among themselves, and Pledgeholder is authorized to deposit with the
clerk of the court all documents and funds held by it pursuant to this
Agreement. In the event such action is filed, the parties jointly and severally
agree to pay all costs, expenses and reasonable attorneys' fees which
Pledgeholder incurs in such interpleader action. Upon filing of such action
Pledgeholder shall thereupon be fully released and discharged from all
obligations to further perform any duties or obligations otherwise imposed by
the terms of this Agreement.
(c) Pledgeholder shall not be bound in any way by any other
agreement between the parties as to which Pledgeholder is not a party, whether
or not Pledgeholder has knowledge thereof, nor by any notice of a claim or
demand with respect to this Agreement or the Collateral. Pledgeholder shall have
no duties or responsibilities except as expressly set forth in this Agreement.
Pledgeholder may rely conclusively on any certificate, statement, request,
waiver, receipt, agreement or other instrument which Pledgeholder believes to be
genuine and to have been signed and presented by an appropriate person or
persons.
(d) The retention and distribution of the Collateral in accordance
with the terms and provisions of this Agreement shall fully and completely
release Pledgeholder from any obligation or liability assumed by Pledgeholder
hereunder as to the Collateral.
(e) Pledgeholder, while in possession of the Collateral prior to or
following the occurrence of an event of Default, as hereinabove provided, and
while acting in accordance with the terms of this Agreement or applicable law,
is not responsible for any fluctuations in value or delays in disposing of the
Collateral.
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(f) Pledgeholder shall not be liable in any respect for verifying
the identity, authority or rights of the parties executing or delivering or
purporting to execute and/or deliver this Agreement or any documents or papers
deposited hereunder. Pledgeholder shall not be liable for the loss of any rights
under any statute of limitations with respect to this Agreement or any documents
deposited with Pledgeholder.
(g) Notwithstanding anything herein to the contrary, Pledgeholder
shall have no duty with respect to the Collateral other than the duty to use
reasonable care in the custody and preservation of the Collateral if it is in
Pledgeholder's possession. Pledgeholder shall be under no obligation to take any
steps necessary to preserve rights in the Collateral against any other parties,
to sell the Collateral if it threatens to decline in value, or to exercise any
rights represented thereby, including voting or consensual rights; provided,
however, Pledgeholder may, at Pledgeholder's option, do so, and any and all
expenses incurred in connection therewith shall be for the sole account of
Pledgor.
(h) Pledgor and Pledgee agree to and each does hereby indemnify,
defend (with counsel acceptable to Pledgeholder) and hold Pledgeholder harmless
against any and all losses, damages, claims and expenses, including reasonable
attorneys' fees, that may be incurred by Pledgeholder by reason of his
compliance with the terms of this Agreement. If, as a result of any disagreement
between the parties and/or adverse demands and claims being made by any or all
of them upon Pledgeholder, Pledgeholder shall become involved in litigation,
including any interpleader brought by Pledgeholder as provided in this
Agreement, Pledgor and Pledgee each agree that they shall be jointly and
severally liable to Pledgeholder on demand for all costs, expenses and
attorneys' fees that Pledgeholder shall incur and/or be compelled to pay by
reason of such litigation.
8. Replacement of Pledgeholder.
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In the event Pledgeholder is or becomes unwilling or unable to act
in such capacity for any reason, Pledgee shall appoint a successor. Pledgee (but
not Pledgor) shall have the right, after delivery of written notice signed by
Pledgee to Pledgeholder, to terminate Pledgeholder, and to name Pledgeholder's
successor.
9. Miscellaneous.
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(a) It is acknowledged by each party that such party either had
separate and independent advice of counsel or the opportunity to avail himself
or itself of same. This Agreement was prepared by each party in conjunction with
counseling from such party's respective attorney or the opportunity to obtain
such counseling. In light of these facts it is acknowledged that no party shall
be construed to be solely responsible for the drafting of this Agreement, and
therefore any ambiguity shall not be construed against any party as the alleged
draftsman of it. Each party shall
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pay all costs and expenses incurred or to be incurred by such party in
negotiating and preparing this Agreement and in performing and complying with
all representations, warranties, covenants, agreements and conditions contained
in this Agreement to be performed or complied with by such party, including
legal fees.
(b) Each party agrees, without further consideration, to cooperate and
diligently perform any further acts, deeds and things and to execute and deliver
any documents that may be reasonably necessary to consummate, evidence, confirm
and/or carry out the intent and provisions of this Agreement, all without undue
delay or expense. Pledgor shall reimburse Pledgeholder and/or Pledgee, upon
demand, for any costs and expenses incurred by Pledgeholder or Pledgee in
connection with any breach or default of Pledgor under this Agreement, including
collection efforts by Pledgee under this Agreement, whether or not suit is
commenced or judgement is entered. Such costs shall include legal fees and
costs incurred for collection efforts, negotiation of a settlement, enforcement
of rights, or other use. Furthermore, should any party institute or should the
parties otherwise become a party to any action or proceeding to enforce or
interpret this Agreement or any provision hereof, or for damages by reason of
any alleged breach of this Agreement or any provision hereof, or for a
declaration of rights in connection herewith, or for any other relief, including
equitable relief, in connection herewith, the prevailing party in any such
action or proceeding shall be entitled to receive from the nonprevailing party
as a cost of suit, and not as damages, all costs and expenses of prosecuting or
defending the action or proceeding, whichever the case may be, including,
without limitation, reasonable attorneys' and other professional fees incurred
by the prevailing party in connection with such action or proceeding. The term
"action or proceeding" shall mean and include actions, proceedings, suits,
arbitrations (if required or permitted under this Agreement or consented to by
the parties), appeals and other similar proceedings. The term "prevailing
party" shall mean the party who is determined to prevail by the Court after its
consideration of all damages and equities in the action or proceeding, whether
or not the action or proceeding proceeds to final judgment. This Agreement and
the rights of each party under this Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the laws of the State of
California applicable to agreements made and to be performed wholly within the
State of California, without regard to principals of conflicts of law.
Furthermore, in the event that litigation between the parties is necessary, such
litigation shall be filed in and heard solely before the state courts of
California with venue exclusively in Los Angeles County.
(c) The parties expressly acknowledge and agree that this Agreement :
(i) is the final, complete and exclusive statement of the parties' agreement
with respect to the subject matter hereof, (ii) supersedes any prior or
contemporaneous promises, assurances, guarantees, representations,
understandings, conduct, proposals, conditions, commitments, acts, course of
dealing, warranties, interpretations or terms of any kind, oral or written
(collectively "Prior Agreements"), and that any such Prior Agreements are of no
force or effect except as expressly set forth herein, and (iii) may not be
varied, supplemented or contradicted by evidence of such Prior Agreements or by
evidence of subsequent oral agreements. Any agreement hereafter made shall be
ineffective to modify, supplement or discharge the terms of this Agreement, in
whole or in part, unless such agreement is
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in writing and signed by the party against whom enforcement of the modification,
supplement or discharge is sought. By execution hereof, the parties specifically
disavow any desire or intention to create a "third party" beneficiary contract,
and specifically declare that no person or entity, save and except for the
parties and their permitted successors, and assigns, shall have any rights
hereunder nor any right of enforcement hereof. No breach of any agreement or
provision herein contained, or of any obligation under this Agreement, may be
waived, nor shall any extension of time for performance of any obligations or
acts be deemed an extension of time for performance of any other obligations or
acts contained herein, except by written instrument signed by the party to be
charged or as otherwise expressly authorized herein. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof, or a waiver or relinquishment of any
other agreement or provision or right or power herein contained herein. The
remedies of each party under this Agreement are cumulative and shall not exclude
any other remedies to which such party may be lawfully entitled. If any term or
provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be determined to be invalid, illegal or
unenforceable, then the remaining part of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid, illegal or unenforceable, which can be separated from the
invalid, illegal or unenforceable term(s) and provision(s), shall not be
affected thereby and shall continue in full force and effect to the fullest
extent provided by law, and the invalid, illegal or unenforceable term(s) and
provision(s) shall be construed as if they had never been incorporated into this
Agreement. It is expressly understood and agreed that time of performance is
strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and that the failure to timely perform any of
the terms, conditions, obligations or provisions hereof by any party shall
constitute a material breach of and a non-curable (but waivable) default under
this Agreement by the party so failing to perform.
(d) Pledgor may not delegate his duties under this Agreement, in whole
or in part, without the prior written consent of Pledgee, which consent may be
withheld in Pledgee's sole and arbitrary discretion. Notwithstanding the
preceding sentence, no such delegation shall release Pledgor from any liability
or obligation under this Agreement without the written consent of Pledgee, which
consent may be withheld in Pledgee's sole and arbitrary discretion. Subject to
the foregoing, all of the representations, warranties, covenants, conditions and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of each party and such party's respective heirs, executors,
administrators, legal representatives, successors and/or assigns, whichever the
case may be.
(e) The headings used in this Agreement are for convenience and
reference purposes only, and shall not be used in construing or interpreting the
scope or intent of this Agreement or any provision hereof. References to this
Agreement shall include all amendments or renewals thereof. As used in this
Agreement, each gender shall be deemed to include each other gender, including
neutral genders or genders appropriate for entities, if applicable, and the
singular shall be deemed to include the plural, and vice versa, as the context
requires.
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(f) All notices, demands, requests, consents, approvals or other
communications (for the purposes of this Paragraph hereinafter collectively
called "Notices"), required or permitted to be given hereunder, or which are
given with respect to this Agreement, shall be in writing, and shall be given by
personal delivery, telegraph or by express mail, Federal Express, DHL or other
similar form of nationally recognized airborne/overnight delivery service (which
forms of Notice shall be deemed to have been given upon delivery), or by telex
or facsimile transmission (which forms of Notice shall be deemed delivered upon
confirmed transmission), or by mailing in the United States mail by registered
or certified mail, return receipt requested, postage prepaid (which forms of
Notice shall be deemed to have been given upon the third (3rd) business day
following the date mailed). Notices shall be addressed to the appropriate
party(s) as set forth on the signature page of this Agreement, or to such other
address as the receiving party shall have specified most recently by like
Notice, with a copy to the other parties hereto. Any Notice given to the estate
of a party shall be sufficient if addressed to the party as provided in this
Subparagraph.
WHEREFORE, the parties hereto have executed this Agreement on the dates and
at the places written below.
Executed at Monrovia Pledgor:
California on February
28, 1991
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
x/x Xxxxx Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Executed at Monrovia, Pledgeholder:
California on February
28, 0000 XXXXXX & ASSOCIATES
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 00000
SIGNATURES CONTINUED ON NEXT PAGE
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Executed at Monrovia, Pledgee:
California on February STAAR SURGICAL COMPANY, a Delaware
28, 1991 Corporation
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Address: 0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
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EXHIBIT "1"
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PROMISSORY NOTE
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(SECURED BY STOCK PLEDGE/SECURITY AGREEMENT)
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$1,301,745.00 February 28, 0000
Xxxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby
acknowledged, Xxxx X. Xxxx, a married man (hereinafter "Maker"), hereby promises
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to pay to Staar Surgical Company, a Delaware corporation, or order (hereinafter
"Holder"), at the address hereinbelow designated on the signature page of this
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Note, or such other place as Holder may designate by written notice to Maker,
the principal sum hereinbelow described (hereinafter the "Principal Amount"),
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together with interest thereon, in the manner and at the times hereinbelow
provided and subject to the terms and conditions hereinbelow described.
1. Principal Amount.
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The Principal Amount means the sum of One Million Three Hundred One
Thousand Seven Hundred Forty Five and No/100 Dollars ($1,301,745.00).
2. Interest.
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Interest on the Principal Amount from time-to-time remaining unpaid
shall accrue from the date of this Note at the lesser of eight percent (8%) or
that fixed rate of interest (as of the date of this Note) which equals the
minimum applicable rate of simple interest (as of the date of this Note) which
will avoid the imputation of income to Maker. Interest shall be computed on the
basis of a three hundred sixty (360) day year and a thirty (30) day month.
3. Payment of Principal and Interest.
---------------------------------
Subject to Paragraph 7, the Principal Amount and accrued and unpaid
interest on the Principal Amount and all other indebtedness under this Note
shall be paid on February 28, 1994. Until such date, all interest on this Note
shall accrue.
4. Prepayments.
-----------
Maker shall have the right to prepay any portion of the Principal
Amount without prepayment penalty or premium or discount.
13
5. Manner of Payments/Crediting of Payments.
----------------------------------------
Payments of any amount required hereunder shall be made solely in
lawful money of the United States, without deduction or offset, and shall be
credited first against accrued but unpaid interest, if any, and thereafter
against the unpaid balance of the Principal Amount.
6. Security.
--------
The payment of this Note is secured by a Stock Pledge/Security
Agreement (hereinafter the "Security Agreement") executed by Maker in favor of
------------------
Holder of even date herewith with respect to certain common stock of Holder
owned by Maker. The Security Agreement contains provisions for acceleration of
the maturity of this Note on the occurrence of certain described events.
7. Acceleration Upon Default.
-------------------------
At the option of Holder, all or any part of the indebtedness of Maker
hereunder shall immediately become due and payable, irrespective of any agreed
maturity, upon the happening of any of the following events of default ("Event
-----
of Default"):
----------
(a) Upon the occurrence of any event of default described under the
Security Agreement;
(c) If any of the following events constituting default occurs,
provided, however, that if any such event of default is reasonably susceptible
of being cured, Maker shall be entitled to a grace period of thirty (30) days
following written notice of such event of default to cure it, and further
provided, that if such event of default is of such character as to reasonably
require more than thirty (30) days to cure, Maker has promptly commenced to cure
said events of default within the thirty (30) day period and uses reasonable
diligence thereafter in curing such events of default, the thirty (30) day
period shall be reasonably extended (but not to exceed one hundred twenty days
(120)):
(i) If Maker shall breach any non-monetary condition or
obligation imposed on Maker pursuant to the terms of this Note;
(ii) If Maker shall make an assignment for the benefit of
creditors;
(iii) If a custodian, trustee, receiver, or agent is appointed
or takes possession of substantially all of the property of Maker;
14
(iv) If Maker becomes insolvent as that terms is defined in
Section 101(26) of Title 11 of the United States Code;
(v) If Maker shall (A) file a petition with the Bankruptcy Court
under the Bankruptcy Code, or (B) otherwise file any petition or apply to
any tribunal for appointment of a custodian, trustee, receiver, or agent of
Maker, or commence any proceeding related to Maker under any bankruptcy or
reorganization statute, or under any arrangement, insolvency, readjustment
of debt, dissolution, or liquidation law of any jurisdiction, whether now
or hereafter in effect;
(vi) If any petition is filed against Maker under the Bankruptcy
Code and either (A) the Bankruptcy Code orders relief against Maker under
the chapter of Bankruptcy Code under which the petition was filed, or (B)
such petition is not dismissed by the Bankruptcy Court within thirty (30)
days of the date of filing;
(vii) If any petition or application of the type described in
Subparagraph (v)(A) above is filed against Maker, or any proceeding of the
type described in Subparagraphs (v)(A) or (v)(B) above is commenced, and
either (1) Maker, by any act, indicates his approval thereof, consent
thereto, or acquiescence therein, or (2) an order is entered appointing any
such custodian, trustee, receiver, or agent, adjudicating Maker bankrupt or
insolvent, or approving such petition or application in any such
proceeding, and any such order remains in effect for more than thirty (30)
days;
(viii) If any attachment, execution, or other writ is levied on
substantially all of the assets of Maker and remains in effect for more
than fifteen (15) days.
8. Collection Costs and Attorneys' Fees.
------------------------------------
(a) Maker agrees to pay Holder all costs and expenses, including
actual attorneys' fees, paid or incurred by Holder in connection with the
collection or enforcement of the Note or any instrument securing payment of this
Note, including defending the priority of such instrument or as a result of
foreclosure against, or conducting a trustee sale thereunder.
(b) In the event any party institutes or should the parties otherwise
become a party to any action or proceeding in connection with the enforcement or
interpretation or collection of this Note or any instrument securing payment of
this Note, or for damages by reason of any alleged breach of this Note or any
provision hereof or any alleged breach of any instrument securing payment of
this Note or any provision thereof, or for a declaration of rights in connection
with this Note or any instrument securing payment of this Note, or for any other
relief, including
15
equitable relief, in connection with this Note or any instrument securing
payment of this Note, the prevailing party in any such action or proceeding
shall be entitled to receive from the non-prevailing party all costs and
expenses including, without limitation, actual attorneys' and other fees
incurred by the prevailing party in connection with such action or proceeding.
9. Notice.
------
Any notice to Maker provided for in this Note shall be given by
personal delivery or by express mail, Federal Express, DHL or similar
airborne/overnight delivery service, or by mailing such notice by first class or
certified mail, return receipt requested, addressed to Maker at the address set
forth below where this Note is executed, or to such other address as Maker may
designate by written notice to Holder. Any notice to Holder shall be given by
personal delivery or by express mail, Federal Express, DHL or similar
airborne/overnight delivery service, or by mailing such notice by first class or
certified mail, return receipt requested, to Holder at the address set forth
below where this Note is executed, or at such other address as may have been
designated by written notice to Maker. Mailed notices shall be deemed delivered
and received three (3) days after deposit in accordance with this provision in
the United States mail.
10. Usury Compliance.
----------------
All agreements between Maker and Holder are expressly limited, so that in
no event or contingency whatsoever, whether by reason of the consideration given
with respect to this Note, the acceleration of maturity of the unpaid Principal
Amount and interest thereon, or otherwise, shall the amount paid or agreed to be
paid to Holder for the use, forbearance, or detention of the indebtedness which
is the subject of this Note exceed the highest lawful rate permissible under the
applicable usury laws. If, under any circumstances whatsoever, fulfillment of
any provision of this Note or any agreement securing payment of this Note or
executed in connection with this Note after timely performance of such provision
is due, shall involve transcending the limit of validity prescribed by law which
a court of competent jurisdiction deems applicable, then the obligations to be
fulfilled shall be reduced to the limit of such validity, and if, under any
circumstances whatsoever, Holder shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to the reduction of the unpaid Principal Amount and/or late
charges under this Note and not to the payment of interest, or, if such
excessive interest exceeds the unpaid balance of the Principal Amount and/or
late charges under this Note, such excess shall be refunded to Maker.
11. General.
-------
(a) No delay or omission on the part of Holder in exercising any
rights under this Note or under any instrument given to secure this Note, on
default by Maker, including, without limitation, Holder's right to accelerate,
nor reinstatement of this Note by Holder after such exercise, shall operate as a
waiver of Maker's right to exercise such right or of any other right under
16
this Note or the instruments given to secure this Note, for the same default or
any other default.
(b) Except for the provision of written notice hereinabove set forth,
Maker hereby waives presentment for payment, demand, protest, notice of protest
and notice of dishonor, and all other notices to which Maker might otherwise be
entitled, and further waives the right to require Holder to proceed against any
security for this Note before proceeding against Maker, and further waives all
defenses based on release of security or extension of time or other indulgence
given in respect to payment of this Note.
(c) Holder shall have the right to sell, assign, or otherwise
transfer, either in part or in its entirety, this Note, and any instrument
evidencing or securing the indebtedness of this Note (provided such instrument
is transferred as security for the portion of the Note which is conveyed),
without the consent of Maker. The assignment of this Note by Holder shall be
ineffective until actual notice of same is received by Maker. Maker shall have
no right to delegate its duties under this Note or any instrument securing this
Note without the written consent of Holder, which consent Holder shall not
unreasonably withhold, provided, however, no delegation of such duties or
obligations shall release Maker from any duty or obligation under this Note or
instrument securing payment of this Note.
(d) Subject to the foregoing Subparagraph (c), this Note and all of
the covenants, promises, and agreements contained in it shall be binding on and
inure to the benefit of the respective legal and personal representatives,
devises, heirs, successors, and assigns of Maker and Holder.
(e) This writing is intended by the parties to be an integrated and
final expression of this Note and also is intended to be a complete and
exclusive statement of the terms of that agreement. No course of prior dealing
between the parties, no usage of trade, and no parol or extrinsic evidence of
any nature shall be used to supplement, modify or vary any of the terms hereof.
There are no conditions to the full effectiveness of this Note except as
specifically provided herein.
(f) If any provision of this Note, or the application of it to any
party or circumstance, is held to be invalid, the remainder of this Note, and
the application of such provision to other parties or circumstances, shall not
be affected thereby, the provisions of this Note being severable in any such
instance.
(g) This Note shall be governed by, interpreted under and construed
and enforced in accordance with the laws of the State of California applicable
to contracts entered into in the State of California, by residents of the State
of California, and intended to be performed entirely within the State of
California. Any action to enforce payment of this Note shall be filed and heard
solely in the Municipal or Superior Court of Los Angeles County, California.
17
(h) Time is of the essence for each and every obligation under this
Note.
MAKER:
Exhibit Only--Do Not Sign
-------------------------
Xxxx X. Xxxx
MAKER'S ADDRESS:
Xx. Xxxx X. Xxxx
x/x Xxxxx Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
HOLDER'S ADDRESS:
Staar Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
DO NOT DESTROY THIS NOTE; WHEN PAID, THIS NOTE
MUST BE SURRENDERED TO MAKER FOR CANCELLATION
18
EXHIBIT "2"
PLEDGED STOCK
Corporation Name Certificate No. Number of Shares
1.
-------------------- -----------
2.
-------------------- -----------
3.
-------------------- -----------
19
EXHIBIT "3"
ASSIGNMENT OF CORPORATE SHARES
(Without Certificate)
FOR VALUE RECEIVED, the undersigned hereby assigns to Xxxxxx & Associates,
a California corporation, Pledgeholder, pursuant to that certain Stock
Pledge/Security Agreement, _____________________ shares of common stock of Staar
Surgical Company, a Delaware corporation, represented by certificate(s) number
__________________ standing in the undersigned's name on the books of said
corporation, and do hereby instruct and appoint the custodian of that
corporation's stock books to so transfer the said stock on the books of said
corporation.
Dated: February 28, 1991 EXHIBIT ONLY - DO NOT SIGN
--------------------------
Xxxx X. Xxxx
SIGNATURE GUARANTEE:
--------------------
20
