EXHIBIT 10.39
STOCK PLEDGE AGREEMENT
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This STOCK PLEDGE AGREEMENT (hereinafter "Agreement") is made and
entered into this 4th day of September, 1998, by and between Xxxx Xxxxxxx, an
individual ("Pledgor") and Staar Surgical Company, a Delaware corporation
("Pledgee") with reference to the following facts:
RECITALS
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WHEREAS, Pledgor has executed in favor of Pledgee a promissory note (the
"Note"), a copy of which is attached hereto as Exhibit "1" and is incorporated
herein by this reference, for the sum of five hundred eleven thousand five
hundred and sixty three dollars ($511,563); and
WHEREAS, Pledgor desires to pledge to Pledgee the interest of Pledgor in
certain common stock, which is included on Exhibit "2", attached hereto and
incorporated herein by this reference, pursuant to the terms of this Agreement,
for the purpose of securing payment of the Note.
THEREFORE, in consideration of mutual covenants and promises contained herein,
and for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, 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) Original Pledge. As collateral security for the payment and/or
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performance of all of Pledgor's presently existing or hereinafter arising
obligations and liabilities to Pledgee under the Note, Pledgor hereby pledges,
grants and assigns to Pledgee a continuing security interest in the following:
(i) Ninety two thousand five hundred (92,500) shares of the Common
Stock of Staar Surgical Company (the "Stock"); and
(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) This security is the only security pledged by the Pledgor for the
note and therefore in case of default by Pledgor, is the sole remedy of
Pledgee against Pledgor.
(c) Delivery of Stock Power to Pledgee. Pledgor shall deliver to
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Pledgee, concurrently with the execution of this Agreement, the Stock along with
an Assignment of
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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 Pledgee in accordance with the terms of this
Agreement.
(d) Pledgee's Acceptance of Collateral and Appointment as Pledgor's
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Attorney-In-Fact. Pledgee hereby agrees to accept the Collateral and agrees to
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and dispose of the Collateral in accordance with and subject only to the terms
of this Agreement. Pledgor hereby irrevocably appoints Pledgee as Pledgor's
attorney-in-fact to arrange for the transfer of the Collateral and to do and
perform all actions that are necessary or appropriate in order to effect the
terms of this Agreement.
(e) Release of Collateral. Pledgee shall release the Collateral from
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this Agreement and return the Collateral to Pledgor upon satisfaction in full of
Pledgor's obligations under the Note; provided, however, that, pursuant to
paragraph 4 of the Note if, for a period of thirty (30) consecutive days, the
fair market value of the Collateral equals or exceeds 150% of all sums unpaid
under the Note, Pledgor shall release to Plegee such portion of the Collateral
the value of which exceeds the amount of all sums unpaid under the Note.
2. Matters Pertaining to the Collateral.
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(a) Voting and Consensual Rights. Pledgor shall retain the right to
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vote the Stock and to exercise any other rights pertaining to the Stock,
provided, however, so long as Pledgor is in "Default" as defined in Paragraph 3
of this Agreement, Pledgee shall vote the Stock and exercise any rights
pertaining to the Stock.
(b) Rights to Dividends and Distributions. So long as Pledgor is not
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in Default and except as expressly limited below, Pledgor shall be entitled to
receive and retain any proceeds distributed on account of the Stock.
Notwithstanding the foregoing, Pledgee, rather than Pledgor, shall be entitled
to collect and receive all of the following types of proceeds, which shall be
added to and shall become a part of the Collateral:
(i) all proceeds paid or payable other than in cash, and all
instruments and other property distributed in respect of, or in exchange for,
the Stock;
(ii) all proceeds 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
(iii) all proceeds distributed in redemption of, or in exchange
for, the Stock.
To the extent the foregoing proceeds exceed the amount of Pledgor's obligations
and liabilities under the Note and/or this Agreement, Pledgor shall be entitled
to receive these excess proceeds.
In the event and for so long as Pledgor is in Default, Pledgee shall be paid
any
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proceeds with respect to the Stock; provided, however, Pledgee 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 and held by
Pledgee under the terms of this Agreement in the same manner as the Stock.
3. Default and Remedy on Default.
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At the option of Pledgee, upon the happening of any of the following events of
default ("Default"), Pledgee shall have all of the rights and remedies set forth
therein:
(a) Default Under Note. If an event of default, as set forth in
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paragraph 9 of the Note, occurs and is not cured 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.
4. Pledgor's Representations, Warranties and Covenants.
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Pledgor represents, warrants and covenants to Pledgee as follows:
(a) Upon delivery to Pledgee as contemplated hereby, the Collateral
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, restrictions, arrangements, commitments or
obligations, written or oral, created by Pledgor, affecting the legal or
beneficial ownership of the Collateral.
(b) From and after the date hereof, Pledgor shall not make any
agreements restricting in any manner the transferability of the Collateral or
otherwise affecting the Collateral;
(c) Pledgor shall, at Pledgor's expense, take any steps necessary to
preserve Pledgee's rights in the Collateral against any claims of third parties;
and
(d) Pledgor has 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 Pledgee shall not have
any 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.
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5. 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 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 Pledgee for any costs and expenses
incurred by Pledgee in connection with any breach or default of Pledgor under
this Agreement, including collection efforts, whether or not suit is commenced
or judgement is entered. Furthermore, should any party institute or should the
parties otherwise become a party to any action or proceeding to enforce or
interpret this Agreement, the prevailing party in any such action or proceeding
shall be entitled to receive from the non-prevailing party all costs and
expenses of prosecuting or defending the action or proceeding. 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 Delaware.
(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 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 waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof. 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 shall
nevertheless not be affected thereby
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and shall continue in full force and effect to the fullest extent provided by
law. This Agreement is to be read, construed and applied together with the Note,
which, taken together, set forth the complete understanding and agreement of the
parties with respect to the matters referred to herein and therein.
(d) Pledgor may not delegate its 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.
(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.
(f) All notices, demands, requests, consents, approvals or other
communications ("Notices") given hereunder shall be as provided in the Note.
WHEREFORE, the parties hereto have executed this Agreement as of the date
first set forth above.
Pledgor:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Pledgee:
STAAR SURGICAL COMPANY
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
/s/ Xxxx X. Xxxx
By:_________________________
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EXHIBIT "1"
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PROMISSORY NOTE
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EXHIBIT "2"
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LIST OF SHARES
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CERTIFICATE NUMBER OF SHARES
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#_____________ 92,500
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EXHIBIT "3"
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ASSIGNMENT OF CORPORATE SHARES
(Without Certificate)
FOR VALUE RECEIVED, the undersigned hereby assigns to Staar Surgical
Company, a Delaware corporation, as Pledgee under that certain Stock Pledge
Agreement entered into on September 4, 1998 by and between Xxxx Xxxxxxx and
Staar Surgical Company, ninety two thousand and five hundred (92,500) shares of
the common stock of Staar Surgical Company, represented by certificate number
SS___________ standing in the undersigned's name on the books of said
corporation, and does 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: September, 4, 1998
/s/ Xxxx X. Xxxxxxx
______________________________
Xxxx Xxxxxxx
WITNESS:
/s/ Xxxxxxx Xxxxxx
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