STOCK PLEDGE AGREEMENT
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THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
December 30, 1997, is entered into between Lasersight Incorporated, a Delaware
corporation ("Pledgor"), and Foothill Capital Corporation, a California
corporation ("Secured Party"), with reference to the following:
WHEREAS, Pledgor, MEC Health Care, Inc., a Maryland corporation
("MEC"), LSI Acquisition, Inc., a New Jersey corporation ("LSI"), Lasersight
Technologies, Inc., a Delaware corporation, Lasersight Centers Incorporated, a
Delaware corporation, and MRF, Inc., a Missouri corporation ("MRF")
(collectively "Borrower") and Secured Party have entered into that certain Loan
and Security Agreement dated as of March 31, 1997, as amended by that certain
Consent and Amendment Number One to Loan and Security Agreement, dated as of
July 28, 1997, by that certain Consent and Amendment number Two to Loan and
Security Agreement, dated as of August 29, 1997, by that certain Consent and
Amendment Number Three to Loan and Security Agreement, dated as of September 10,
1997, and by that certain Consent and Amendment Number Four to Loan and Security
Agreement, of even date herewith (as amended, the "Loan Agreement");
WHEREAS, Pledgor has entered into that certain Stock Purchase
Agreement dated as of December 1, 1997 (the "Stock Purchase Agreement") whereby
Pledgor has sold all of the issued and outstanding common stock held by Pledgor
in MEC and LSI to Vision Twenty-One, Inc., a Florida corporation ("Vision");
WHEREAS, Borrower has requested that Foothill consent to the sale
by Pledgor of all of the issued and outstanding capital stock of MEC and LSI to
Vision for a total purchase price of $13,000,000, payable $6,500,000 in cash at
closing to occur on the date hereof, and the balance of $6,500,000 (subject to
adjustment as described in the Stock Purchase Agreement) to be paid between the
date hereof and May 29, 1998 through Pledgor's disposition, on a periodic basis,
pursuant to the terms of the certain Stock Distribution Agreement between
Pledgor and Vision dated as of December 30, 1997 (the "Distribution Agreement"),
of shares of Vision's common stock received from Vision at the closing (the
"Vision Pledged Shares") as more fully described on Schedule A attached hereto,
(subject to $1,000,000 of the Vision Pledged Shares (the "Escrow Shares") being
retained by Vision subject to an Escrow Agreement between Pledgor and Vision
dated as of December 30, 1997 (the "Escrow Agreement") to effect certain stock
purchase consideration adjustments set forth in Section 2.5 of the Stock
Purchase Agreement) and, in the event that Pledgor has not received $6,500,000
through the disposition of the Vision Pledged Shares on or before May 29, 1998
(subject to adjustment as described in the Stock Purchase Agreement), Vision
will pay the amount of any such shortfall on such date to Pledgor in cash; that
Foothill further agrees to a waiver of compliance by Borrower with the Financial
Covenants as set forth in the Loan Agreement until June 15, 1998; that the Loan
Agreement be amended to delete MEC and LSI as borrowers thereunder and that all
other Loan Documents, including, but not limited to, the Stock Pledge Agreement,
the Copyright Security Agreement, the Patent Security Agreement, the Trademark
Security Agreement, and the Suretyship Agreement, in each case between the
Borrower and Foothill and dated as of March 31, 1997, be simultaneously amended
to delete MEC and LSI as parties thereto; and that Foothill further agree to
release its lien of the capital stock and assets of each of MEC and LSI and to
amend all filed financing statements to delete MEC and LSI as debtors (the
foregoing hereinafter referred to as the "Transaction").
WHEREAS, as a condition precedent to Foothill's consent to the
Transaction, Foothill requires that the Borrower, out of the initial cash
proceeds received by it from the Transaction, reduce the amount outstanding
under the Term Loan as of the date hereof by $2,000,000, with the balance of the
Term Loan to be repaid on or before June 15, 1998, out of the proceeds received
from Pledgor's disposition of the Vision Pledged Shares after Pledgor has
received $2,500,000 of such proceeds; that the Borrower, also out of the initial
cash proceeds from the Transaction, repay all Revolving Advances outstanding as
of the date hereof; and that the Loan Agreement be amended to change the Maximum
Revolver Amount from $4,000,000 to $2,000,000, with all Revolving Advances being
fully repaid and the Loan Agreement terminated as of June 15, 1998.
WHEREAS, to induce Secured Party to consent to the Transaction,
Pledgor desires to pledge, grant, transfer, and assign to Secured Party a
security interest in the Collateral (as hereinafter defined) to secure the
Secured Obligations (as hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, representations, and warranties set forth herein and for other good
and valuable consideration, the parties hereto agree as follows:
1. Definitions and Construction.
(A) Definitions. All initially capitalized terms used herein
and not otherwise defined herein shall have the meaning ascribed thereto in the
Loan Agreement. As used in this Agreement:
"Agreement" shall mean this Stock Pledge Agreement.
"Borrower" shall have the meaning set forth in the
recitals to this Agreement.
"Chief Executive Office" shall mean where Pledgor is
deemed located pursuant to ss.9-103(3)(d) of the Code.
"Code" means the California Uniform Commercial Code.
"Collateral" shall mean the Vision Pledged Shares,
including, but not limited to, the Escrow Shares, the Future Rights, and the
Proceeds, collectively.
"Future Rights" shall mean: (a) all shares of stock (other
than Vision Pledged Shares) of Borrower, and all securities convertible or
exchangeable into, and all warrants, options, or other rights to purchase,
shares of stock of Borrower; and (b) the certificates or instruments
representing such additional shares, convertible or exchangeable securities,
warrants, and other rights and all dividends, cash, options, warrants, rights,
instruments, and other property or proceeds from time to time received,
receivable, or otherwise distributed in respect of or in exchange for any or all
of such shares.
"Holder" and "Holders" shall have the meaning set forth in
Section 3 of this Agreement.
"Lien" shall mean any lien, mortgage, pledge, assignment
(including any assignment of rights to receive payments of money), security
interest, charge, or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, or any
agreement to give any security interest).
"Loan Agreement" shall have the meaning ascribed thereto
in the recitals to this Agreement.
"Loan Documents" means the Loan Agreement, the
Disbursement Letter, the Lockbox Agreements, the Guaranty, the Stock Pledge
Agreement, the Copyright Security Agreement, the Patent Security Agreement, the
Trademark Security Agreement, the Warrant, the Suretyship Agreement, the IBM
Consent, any note or notes executed by a Borrower and payable to Foothill, and
any other agreement entered into, now or in the future, in connection with the
Loan Agreement.
"Pledgor" shall have the meaning set forth in the preamble
to this Agreement.
"Proceeds" shall mean all proceeds (including proceeds of
proceeds) of the Vision Pledged Shares and Future Rights including all: (a)
rights, benefits, distributions, premiums, profits, dividends, interest, cash,
instruments, documents of title, accounts, contract rights, inventory,
equipment, general intangibles, deposit accounts, chattel paper, and other
property from time to time received, receivable, or otherwise distributed in
respect of or in exchange for, or as a replacement of or a substitution for, any
of the Vision Pledged Shares, Future Rights, or proceeds thereof (including any
cash, stock, or other securities or instruments issued after any
recapitalization, readjustment, reclassification, merger or consolidation with
respect to Borrower and any claims against financial intermediaries under
ss.8-313(2) of the Code or otherwise); (b) "proceeds," as such term is used in
ss.9-306 of the Code; (c) proceeds of any insurance, indemnity, warranty, or
guaranty (including guaranties of delivery) payable from time to time with
respect to any of the Vision Pledged Shares, Future Rights, or proceeds thereof;
(d) payments (in any form whatsoever) made or due and payable to Pledgor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Vision Pledged Shares, Future
Rights, or proceeds thereof; and (e) other amounts from time to time paid or
payable under or in connection with any of the Vision Pledged Shares, Future
Rights, or proceeds thereof.
"Revolving Advances" shall mean advances made by Secured
Party to Borrower pursuant to Section 2.1 of the Loan Agreement.
"Secured Obligations" shall mean all liabilities,
obligations, or undertakings owing by Borrower to Secured Party of any kind or
description arising out of or outstanding under, advanced or issued pursuant to,
or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which Borrower
is required to pay pursuant to any of the foregoing, by law, or otherwise.
"Secured Party" shall have the meaning set forth in the
preamble to this Agreement, together with its successors or assigns.
"Securities Act" shall have the meaning set forth in
Section 9(c) of this Agreement.
"Stock Purchase Agreement" shall have the meaning set
forth in the recitals of this Agreement.
"Term Loan" shall mean the term loan by Secured Party to
Borrower pursuant to Section 2.3 of the Loan Agreement.
"Transaction" shall have the meaning set forth in the
recitals to this Agreement.
"Vision Pledged Shares" shall mean all of the shares
described in the recitals to this Agreement including, but not limited to, the
Escrow Shares.
"Vision Stock Distribution Agreement" shall mean that
certain Stock Distribution Agreement dated as of December 30, 1997 entered into
between Pledgor and Vision.
(B) Construction.
(I) Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, the part includes the whole, the term "including"
is not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms in this Agreement refer
to this Agreement as a whole and not exclusively to any particular provision of
this Agreement. Article, section, subsection, exhibit, and schedule references
are to this Agreement unless otherwise specified. All of the exhibits or
schedules attached to this Agreement shall be deemed incorporated herein by
reference. Any reference to any of the following documents includes any and all
alterations, amendments, restatements, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable: this Agreement, the Loan
Agreement, or any of the other Loan Documents.
(II) Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Secured Party or
Pledgor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by both of the parties and their respective
counsel and shall be construed and interpreted according to the ordinary meaning
of the words used so as to fairly accomplish the purposes and intentions of the
parties hereto.
(III) In the event of any direct conflict between the
express terms and provisions of this Agreement and of the Loan Agreement, the
terms and provisions of the Loan Agreement shall control.
2. Pledge. As security for the prompt payment and performance of
the Secured Obligations in full by Borrower when due, whether at stated
maturity, by acceleration or otherwise (including amounts that would become due
but for the operation of the provisions of the Bankruptcy Code), Pledgor hereby
pledges, grants, transfers, and assigns to Secured Party a security interest in
all of Pledgor's right, title, and interest in and to the Collateral subject in
all respects to the Vision Stock Distribution Agreement.
3. Delivery and Registration of Collateral.
(A) Upon receipt by Pledgor, all certificates or instruments
representing or evidencing the Collateral shall be promptly delivered by Pledgor
to Secured Party or Secured Party's designee pursuant hereto at a location
designated by Secured Party and shall be held by or on behalf of Secured Party
pursuant hereto, and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Secured Party.
(B) After the occurrence and during the continuance of an
Event of Default, Secured Party shall have the right, at any time in its
discretion and without notice to Pledgor, to transfer to or to register on the
books of Borrower (or of any other Person maintaining records with respect to
the Collateral) in the name of Secured Party or any of its nominees any or all
of the Collateral. In addition, Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger denominations.
(C) If, at any time and from time to time, any Collateral
(including any certificate or instrument representing or evidencing any
Collateral) is in the possession of a Person other than Secured Party or Pledgor
(a "Holder"), then Pledgor shall immediately, at Secured Party's option, either
cause such Collateral to be delivered into Secured Party's possession, or
execute and deliver to such Holder a written notification/instruction, and take
all other steps necessary to perfect the security interest of Secured Party in
such Collateral, including obtaining from such Holder a written acknowledgement
that such Holder holds such Collateral for Secured Party, all pursuant to
ss.ss.8-313 and 8-321 of the Code or other applicable law governing the
perfection of Secured Party's security interest in the Collateral in the
possession of such Holder. Each such notification/instruction and
acknowledgement shall be in form and substance satisfactory to Secured Party.
(D) Any and all Collateral (including dividends, interest, and
other cash distributions) at any time received or held by Pledgor shall be so
received or held in trust for Secured Party, shall be segregated from other
funds and property of Pledgor and shall be forthwith delivered to Secured Party
in the same form as so received or held, with any necessary endorsements;
provided that cash dividends or distributions received by Pledgor, if and to the
extent they are not prohibited by the Loan Agreement, may be retained by Pledgor
in accordance with Section 4 and used in the ordinary course of Pledgor's
business.
(E) If at any time and from time to time any Collateral
consists of an uncertificated security or a security in book entry form, then
Pledgor shall immediately cause such Collateral to be registered or entered, as
the case may be, in the name of Secured Party, or otherwise cause Secured
Party's security interest thereon to be perfected in accordance with applicable
law.
4. Voting Rights and Dividends.
(A) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Loan Documents and shall be
entitled to receive and retain any cash dividends or distributions paid in
respect of the Collateral.
(B) Upon the occurrence and during the continuance of an Event
of Default, all rights of Pledgor to exercise the voting and other consensual
rights or receive and retain cash dividends or distributions that it would
otherwise be entitled to exercise or receive and retain, as applicable pursuant
to Section 4(a), shall cease, and all such rights shall thereupon become vested
in Secured Party, who shall thereupon have the sole right to exercise such
voting or other consensual rights and to receive and retain such cash dividends
and distributions. Pledgor shall execute and deliver (or cause to be executed
and delivered) to Secured Party all such proxies and other instruments as
Secured Party may reasonably request for the purpose of enabling Secured Party
to exercise the voting and other rights which it is entitled to exercise and to
receive the dividends and distributions that it is entitled to receive and
retain pursuant to the preceding sentence.
5. Representations and Warranties. Pledgor represents, warrants,
and covenants as follows:
(A) Pledgor has taken all steps it deems necessary or
appropriate to be informed on a continuing basis of changes or potential changes
affecting the Collateral (including rights of conversion and exchange, rights to
subscribe, payment of dividends, reorganizations or recapitalization, tender
offers and voting rights), and Pledgor agrees that Secured Party 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;
(B) All information herein or hereafter supplied to Secured
Party by or on behalf of Pledgor in writing with respect to the Collateral is,
or in the case of information hereafter supplied will be, accurate and complete
in all material respects;
(C) Pledgor is and will be the sole legal and beneficial owner
of the Collateral (including the Vision Pledged Shares and all other Collateral
acquired by Pledgor after the date hereof) free and clear of any adverse claim,
Lien, or other right, title, or interest of any party; provided, however,
Secured Party acknowledges and agrees that the Escrow Shares are subject to
adjustment as described in the Stock Purchase Agreement;
(D) This Agreement, and the delivery to Secured Party of the
Vision Pledged Shares representing Collateral (or the delivery to all Holders of
the Vision Pledged Shares representing Collateral of the
notification/instruction referred to in Section 3 of this Agreement), creates a
valid, perfected, and first priority security interest in one hundred percent
(100%) of the Vision Pledged Shares, not including the Escrow Shares, in favor
of Secured Party securing payment of the Secured Obligations, and all actions
necessary to achieve such perfection have been duly taken;
(E) Schedule A to this Agreement is true and correct and
complete in all material respects; without limiting the generality of the
foregoing: (i) all the Vision Pledged Shares are in certificated form, and,
except to the extent registered in the name of Secured Party or its nominee
pursuant to the provisions of this Agreement, are registered in the name of
Pledgor; and (ii) as of the date hereof the Vision Pledged Shares constitute at
least the percentage of all the fully diluted issued and outstanding shares of
stock of Vision as set forth in Schedule A to this Agreement;
(F) There are no presently existing Future Rights or Proceeds
owned by Pledgor;
(G) To the best of Pledgor's knowledge, the Vision Pledged
Shares have been duly authorized and validly issued and are fully paid and
nonassessable; and
(H) Neither the pledge of the Collateral pursuant to this
Agreement nor the extensions of credit represented by the Secured Obligations
violates Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
6. Further Assurances.
(A) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or reasonably
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Pledgor will: (i) at the request of Secured Party, xxxx conspicuously each of
its records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or reasonably desirable, or as
Secured Party may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby; (iii) allow inspection of
the Collateral by Secured Party or Persons designated by Secured Party; and (iv)
appear in and defend any action or proceeding that may affect Pledgor's title to
or Secured Party's security interest in the Collateral.
(B) Pledgor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Pledgor where
permitted by law. A carbon, photographic, or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(C) Pledgor will furnish to Secured Party, upon the request of
Secured Party: (i) a certificate executed by an authorized officer of Pledgor,
and dated as of the date of delivery to Secured Party, itemizing in such detail
as Secured Party may request, the Collateral which, as of the date of such
certificate, has been delivered to Secured Party by Pledgor pursuant to the
provisions of this Agreement; and (ii) such statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Secured Party may request.
7. Covenants of Pledgor. Pledgor shall:
(A) Perform each and every covenant in the Loan Documents and
agreements with Vision applicable to Pledgor;
(B) At all times keep at least one complete set of its records
concerning substantially all of the Collateral at its Chief Executive Office as
set forth in Schedule B hereto, and not change the location of its Chief
Executive Office or such records without giving Secured Party at least thirty
(30) days prior written notice thereof; and
(C) Upon receipt by Pledgor of any material notice, report, or
other communication from Vision or any Holder relating to all or any part of the
Collateral, deliver such notice, report or other communication to Secured Party
as soon as possible, but in no event later than five (5) days following the
receipt thereof by Pledgor.
8. Secured Party as Pledgor's Attorney-in-Fact.
(A) Pledgor hereby irrevocably appoints Secured Party as
Pledgor's attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor, Secured Party or otherwise, from time to
time at Secured Party's discretion, to take any action and to execute any
instrument that Secured Party may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, including: (i) after the occurrence
and during the continuance of an Event of Default, to receive, endorse, and
collect all instruments made payable to Pledgor representing any dividend,
interest payment or other distribution in respect of the Collateral or any part
thereof to the extent permitted hereunder and to give full discharge for the
same and to execute and file governmental notifications and reporting forms;
(ii) to issue any notifications/instructions Secured Party deems necessary
pursuant to Section 3 of this Agreement; or (iii) to arrange for the transfer of
the Collateral on the books of Borrower or any other Person to the name of
Secured Party or to the name of Secured Party's nominee.
(B) In addition to the designation of Secured Party as
Pledgor's attorney-in-fact in subsection (a), Pledgor hereby irrevocably
appoints Secured Party as Pledgor's agent and attorney-in-fact to make, execute
and deliver any and all documents and writings which may be necessary or
appropriate for approval of, or be required by, any regulatory authority located
in any city, county, state or country where Pledgor or any other Borrower engage
in business, in order to transfer or to more effectively transfer any of the
Vision Pledged Shares or otherwise enforce Secured Party's rights hereunder.
9. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default and subject to the terms and conditions of
the Vision Stock Distribution Agreement:
(A) Secured Party may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code (irrespective of whether the Code applies to the affected items of
Collateral), and Secured Party may also without notice (except as specified
below) sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Collateral. To the maximum extent permitted by
applicable law, Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply all or any part of
the Secured Obligations as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay, or appraisal that it now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. Pledgor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) calendar days notice to Pledgor of the time and place of any public sale or
the time after which a private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. To the maximum extent permitted
by law, Pledgor hereby waives any claims against Secured Party arising because
the price at which any Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree.
(B) Pledgor hereby agrees that any sale or other disposition
of the Collateral conducted in conformity with reasonable commercial practices
of banks, insurance companies, or other financial institutions in the City of
Los Angeles, California in disposing of property similar to the Collateral shall
be deemed to be commercially reasonable.
(C) Pledgor hereby acknowledges that the sale by Secured Party
of any Collateral pursuant to the terms hereof in compliance with the Securities
Act of 1933 as now in effect or as hereafter amended, or any similar statute
hereafter adopted with similar purpose or effect (the "Securities Act"), as well
as applicable "Blue Sky" or other state securities laws may require strict
limitations as to the manner in which Secured Party or any subsequent transferee
of the Collateral may dispose thereof. Pledgor acknowledges and agrees that in
order to protect Secured Party's interest it may be necessary to sell the
Collateral at a price less than the maximum price attainable if a sale were
delayed or were made in another manner, such as a public offering under the
Securities Act. Pledgor has no objection to sale in such a manner and agrees
that Secured Party shall have no obligation to obtain the maximum possible price
for the Collateral. Without limiting the generality of the foregoing, Pledgor
agrees that, upon the occurrence and during the continuation of an Event of
Default, Secured Party may, subject to applicable law, from time to time attempt
to sell all or any part of the Collateral by a private placement, restricting
the bidders and prospective purchasers to those who will represent and agree
that they are purchasing for investment only and not for distribution. In so
doing, Secured Party may solicit offers to buy the Collateral or any part
thereof for cash, from a limited number of investors deemed by Secured Party, in
its reasonable judgment, to be institutional investors or other responsible
parties who might be interested in purchasing the Collateral. If Secured Party
shall solicit such offers, then the acceptance by Secured Party of one of the
offers shall be deemed to be a commercially reasonable method of disposition of
the Collateral.
(D) If Secured Party shall determine to exercise its right to
sell all or any portion of the Collateral pursuant to this Section, Pledgor
agrees that, upon request of Secured Party, Pledgor will, at the expense of
Secured Party, if so requested:
(I) use its reasonable efforts to execute and deliver,
and request that Vision and the directors and officers thereof execute and
deliver, all such instruments and documents, and to do or cause to be done all
such other acts and things, as may be necessary or, in the opinion of Secured
Party, advisable to register such Collateral under the provisions of the
Securities Act, and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectuses which, in the opinion of Secured Party,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(II) use its reasonable efforts to qualify the
Collateral under the state securities laws or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested by
Secured Party;
(III) request that Vision make available to their
respective security holders, as soon as practicable, an earnings statement which
will satisfy the provisions of Section 11(a) of the Securities Act;
(IV) execute and deliver, or cause the officers and
directors of Vision to execute and deliver, to any person, entity or
governmental authority as Secured Party may choose, any and all documents and
writings which, in Secured Party's reasonable judgment, may be necessary or
appropriate for approval, or be required by, any regulatory authority located in
any city, county, state or country where Pledgor or Vision engage in business,
in order to transfer or to more effectively transfer the Vision Pledged Shares
or otherwise enforce Secured Party's rights hereunder; and
(V) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Pledgor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(E) PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED
BY LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE
TIME SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN
THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS
OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW
EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a)
OF THIS SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
10. Application of Proceeds. After the occurrence and during the
continuance of an Event of Default, any cash held by Secured Party as Collateral
and all cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
pursuant to the exercise by Secured Party of its remedies as a secured creditor
as provided in Section 9 shall be applied from time to time by Secured Party as
provided in the Loan Agreement.
11. Duties of Secured Party. The powers conferred on Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose on it any duty to exercise such powers. Except as provided in Section
9-207 of the Code, Secured Party shall have no duty with respect to the
Collateral or any responsibility for taking any necessary steps to preserve
rights against any Persons with respect to any Collateral.
12. Choice of Law and Venue. THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY
OTHER COURT IN WHICH SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH
OF PLEDGOR AND SECURED PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION.
13. Amendments; Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
Secured Party to exercise, and no delay in exercising any right under this
Agreement, any other Loan Document, or otherwise with respect to any of the
Secured Obligations, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement, any other Loan Document, or
otherwise with respect to any of the Secured Obligations preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided for in this Agreement or otherwise with respect to any of the Secured
Obligations are cumulative and not exclusive of any remedies provided by law.
14. Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and shall be delivered in the manner set forth in the Loan Agreement.
15. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall: (i) remain in full
force and effect until the indefeasible payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
full and final termination of any commitment to extend any financial
accommodations under the Loan Agreement; (ii) be binding upon Pledgor and its
successors and assigns; and (iii) inure to the benefit of Secured Party and its
successors, transferees, and assigns. Upon the indefeasible payment in full of
the Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Loan Agreement, the security interests
granted herein shall automatically terminate and all rights to the Collateral
shall revert to Pledgor. Upon any such termination, Secured Party will, at
Pledgor's expense, execute and deliver to Pledgor such documents as Pledgor
shall reasonably request to evidence such termination. Such documents shall be
prepared by Pledgor and shall be in form and substance reasonably satisfactory
to Secured Party.
16. Security Interest Absolute. To the maximum extent permitted
by law, all rights of Secured Party, all security interests hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(A) any lack of validity or enforceability of any of the
Secured Obligations or any other agreement or instrument relating thereto,
including any of the Loan Documents;
(B) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents, or any other agreement or instrument relating thereto;
(C) any exchange, release, or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations; or
(D) any other circumstances that might otherwise constitute a
defense available to, or a discharge of, Pledgor.
To the maximum extent permitted by law, Pledgor hereby waives any right to
require Secured Party to: (A) proceed against or exhaust any security held from
Pledgor; or (B) pursue any other remedy in Secured Party's power whatsoever.
17. Headings. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
18. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.
20. Waiver of Marshaling. Each of Pledgor and Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Collateral: (i) Secured Party is under no obligation to marshal any
Collateral; (ii) may, in its absolute discretion, realize upon the Collateral in
any order and in any manner it so elects; and (iii) may, in its absolute
discretion, apply the proceeds of any or all of the Collateral to the Secured
Obligations in any order and in any manner it so elects. Pledgor and Secured
Party waive any right to require the marshaling of any of the Collateral.
21. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. PLEDGOR AND SECURED PARTY REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
22. Vision Stock Distribution Agreement. Notwithstanding anything
herein to the contrary, Pledgor may direct Secured Party in writing to sell all
or a portion of the Collateral in accordance with the terms of the Distribution
Agreement specifying the time, place and manner of any such sale and the price
per share for which any of the Collateral is to be sold or otherwise disposed
of. Upon receipt of such direction, Secured Party will sell or cause to be sold
that portion of the Collateral in the manner as directed by Pledgor. The first
$2,500,000 of proceeds from the Collateral received by Secured Party will be
applied as and when collected to the then outstanding Revolving Advances. All
proceeds received after the receipt of the initial $2,500,000 in proceeds shall
be applied by Secured Party as and when collected in repayment of the then
outstanding balance under the Term Loan until the Term Loan is fully repaid. All
proceeds received in excess of the amount necessary to fully repay the Term Loan
will be applied as and when collected to the then outstanding Revolving
Advances.
23. The Escrow Shares. Any Escrow Shares released to Pledgor by
Vision pursuant to the terms of the Escrow Agreement, after the determination of
any stock purchase consideration adjustment pursuant to Section 2.5 of the Stock
Purchase Agreement, shall be immediately delivered or caused to be delivered by
Pledgor to Secured Party subject to this Agreement and Pledgor shall immediately
deliver to Secured Party sufficient stock powers endorsed in black to cover such
released Escrow Shares.
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their officers thereunto duly
authorized as of the date first written above.
FOOTHILL CAPITAL CORPORATION, LASERSIGHT INCORPORATED
a California corporation a Delaware corporation
By /s/ Xxxx Xxxx By /s/ Xxxxxxx X. Xxxxxx
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Title: E.V.P. Title:
