SECURITY AGREEMENT - STOCK PLEDGE
This SECURITY AGREEMENT - STOCK PLEDGE (this "Agreement"), dated as of
December 31, 1997, is entered into by and between PALOMAR MEDICAL TECHNOLOGIES,
INC., a Delaware corporation ("Pledgor" or "Borrower"), and COAST BUSINESS
CREDIT, a division of Southern Pacific Bank, a California corporation
("Pledgee"), with reference to the following facts:
RECITALS
A. Pledgor is contemporaneously herewith entering into that certain Secured
Promissory Note, dated as of even date (as the same may be amended, restated,
modified or supplemented from time to time in accordance with its terms, the
"Secured Note").
B. In order to induce Pledgee to enter into the Secured Note, Pledgor has
agreed to execute and deliver this Agreement to Pledgee, securing Pledgor's
obligations owing to Pledgee under the Secured Note with a pledge of Pledgor's
right, title and interest in and to sufficient unrestricted capital stock of
Pledgor, which shall be wholly owned by Pledgor at the time of the delivery of
the stock, such that seventy percent (70%) of the value of said stock shall at
all times be equal to or greater than the principal amount due and payable under
the Secured Note.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
(A) DEFINITIONS. All initially capitalized terms used but not defined
in this Agreement shall have the meanings assigned to such terms
in the Secured Note. In addition, the following terms, as used in
this Agreement, have the following meanings:
"BORROWER" has the meaning set forth in the introduction hereto.
"CODE" means the California Uniform Commercial Code as amended
and supplemented from time to time, and any successor statute;
PROVIDED, HOWEVER, with respect to any Collateral consisting of
"uncertified securities" (as defined in Division 8 of the Code),
"Code" shall mean the Uniform Commercial Code as adopted in the
States of incorporation of each Borrower, as amended and
supplemented from time to time, and any successor statue.
"COLLATERAL" means all of the following:
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(i) Upon execution and return of this Agreement, Coast shall
accept as the Collateral sufficient unrestricted marketable
securities in Pledgor such that seventy percent (70%) of the
market price of said securities shall be equal to or greater
than the principal amount due and owing under the Secured
Note. Pledgor shall use it best efforts to obtain the
authority to issue, and to issue sufficient unrestricted
marketable securities in Pledgor such that seventy percent
(70%) of the market price of the Pledgor marketable
securities shall be equal to or greater than the principal
amount due and owing under the Secured Note ("Pledgor
Shares"). If at any time that Coast is holding the Pledgor
Shares, and the market price decreases such that the
coverage ratio (Market Price of the Pledgor Shares, to the
outstanding principal balance under the Secured Note) is
eighty-five percent (85%) or greater, Pledgor shall provide
Coast, upon demand, with additional Pledgor Shares to reach
a 70% coverage ratio. Coast will release Pledgor Shares to
Pledgor upon collection of principal payments under the
Secured Note provided that the seventy percent (70%)
coverage ratio is maintained.
(ii) The proceeds of each of the foregoing, including any and all
dividends, cash, stock, instruments, and other property from
time to time received, receivable, or otherwise distributed
in respect of or in exchange for any of the Shares or
Options (the "Proceeds").
"SECURED NOTE" has the meaning set forth in Recital A hereto
"EVENT OF DEFAULT" has the meaning given to such term in Section
10.
"LOAN DOCUMENTS" means this Agreement, the Secured Promissory
Note and the other agreements, instruments and documents executed
in connection herewith and therewith.
"PLEDGEE" has the meaning set forth in the introduction hereto.
"PLEDGOR" has the meaning set forth in the introduction hereto.
"SECURED OBLIGATIONS" means Pledgor's obligations under the Loan
Documents and the obligations of Pledgor under this Agreement.
"SHARES" means all of the Pledgor Shares.
"33 ACT" means the Securities Act of 1933, as amended and
supplemented from time to time, and any successor statute, and
any and all rules promulgated in connection therewith.
(B) CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the
singular, references to the singular include the plural, and the
term "including" is not limiting. The words "hereof," "herein,"
"hereby," "hereunder" and other similar terms refer to this
Agreement as a whole and not to any particular provision of this
Agreement. Any reference herein to any document includes any and
all alterations, amendments, extensions, modifications, renewals,
or supplements thereto or thereof, as applicable. Neither this
agreement nor any uncertainty or ambiguity herein shall be
construed
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or resolved against Pledgee or Pledgor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has
been reviewed by Pledgor, Pledgee, and their respective counsel,
and shall be construed and interpreted according to all ordinary
meanings of the words used so as to fairly accomplish the purpose
and intentions of Pledgee and Pledgor.
2. PLEDGE. As security for the prompt and complete payment and performance
of the Secured Obligations, Pledgor hereby, except as otherwise provided for
herein, delivers, pledges, and grants to Pledgee a continuing security interest
in Pledgor's right, title, and interest in and to the Collateral. Sufficient
certificates or instruments representing or evidencing the Collateral shall be
delivered promptly to and held by Pledgee pursuant hereto and shall be in
suitable form for transfer or assignment in blank, all in form and substance
satisfactory to Pledgee. In the event that the securities that comprise the
Collateral are uncertified or in book entry form, then Pledgor shall take such
actions as may be required to register or enter, as the case may be, such
Collateral in the name of Pledgee, and otherwise take such actions as Pledgee
may require for Pledgee's security interest therein to be perfected in
accordance with Section 8313 and 8321 of the Code. In addition, Pledgor shall
provide Pledgee with an opinion of counsel satisfactory to Pledgee, to the
effect that Pledgee has a perfected security interest in the Collateral, that
the Collateral accurately states ownership and capital structure of Pledgor and
such other opinions as Pledgee may require, in form and substance satisfactory
to Pledgee.
3. FURTHER ASSURANCES. Pledgor agrees that it shall cooperate with Pledgee
and shall execute and deliver, or cause to be executed and delivered, to Pledgee
all stock powers, proxies, assignments, financing statements, instruments and
other documents, and shall take all further action, at the expense of Pledgor,
from time to time requested by Pledgee, in order to maintain a continuing,
first-priority, perfected security interest in the Collateral in favor of
Pledgee, and to enable Pledgee to exercise and enforce its rights and remedies
hereunder with respect to the Collateral, and Pledgor agrees that it shall
execute and deliver to Pledgee at Pledgee's request any further applications,
agreements, documents and instruments, and shall perform any and all acts deemed
necessary by Pledgee to carry into effect the terms, conditions, and provisions
of this Agreement and the transactions connected herewith. Should Pledgor fail
to execute or deliver any such applications, agreements, documents, financing
statements and instruments, or to perform any such acts, Pledgor acknowledges
that Pledgee may execute and deliver the same and perform such acts in the name
of Pledgor and on its behalf as its attorney-in-fact in accordance with Section
12 hereof.
4. PLEDGEE'S DUTIES. Pledgee shall not have any duties with respect to the
Collateral other than the duty to use reasonable care if the Collateral is in
its possession. In accordance with Section 9207 of the Code, Pledgee shall be
deemed to have used reasonable care if it observes substantially the same
standard of care with respect to the custody or protection of the Collateral as
it observes with respect to similar assets owned by Pledgee. Without limiting
the generality of the foregoing, Pledgee shall be under no obligation to take
any steps necessary to preserve rights in the Collateral against any other
parties, to sell the same if it threatens to decline in value, or to exercise
any rights represented thereby (including rights with respect to calls,
conversions, exchanges, maturities, or tenders); provided, however, that Pledgee
may, at its option, do so, and any and all expenses incurred in connection
therewith shall be for the account of Pledgor.
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5. VOTING RIGHTS; DIVIDENDS; ETC..
5.1 During the term of this Agreement, and as long as no Event of
Default is continuing:
(a) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Shares or any part
thereof; provided, however, no vote shall be cast or any
consent, waiver or ratification given or any action taken
which would violate or be inconsistent with the terms of
this Agreement, the Loan Documents or any other instrument
or agreement referred to therein or herein, or which could
have effect of impairing the value of the Collateral or any
part thereof or the position or interest of Pledgee therein.
(b) Pledgor shall be entitled to receive and retain any and all
dividends and distributions paid in respect of the Shares
not otherwise prohibited by the Loan Documents; provided,
HOWEVER, that any and all:
(i) dividends and distributions paid or payable other than
in cash in respect of, and any and all additional
Shares or instruments or other property received,
receivable, or otherwise distributed in respect of, or
in exchange for, any Shares;
(ii) dividends and distributions paid or payable in cash in
respect of any Shares in connection with a partial or
total liquidation or dissolution, merger, consolidation
of any of the Borrowers, or any exchange of stock,
conveyance of assets, or similar corporate
reorganization; and
(iii)cash paid with respect to, payable, or otherwise
distributed on redemption of, or in exchange for, any
Shares, shall be forthwith delivered to Pledgee to hold
as Collateral and shall, if received by Pledgor, be
received in trust for the benefit of Pledgee, be
segregated from the other property or funds of Pledgor,
and be forthwith delivered to Pledgee as Collateral in
the same form as so received (with any necessary
endorsement), and, if deemed appropriate by Pledgee,
Pledgor shall take such actions, including the actions
described in Section 2, as Pledgee may require.
5.2 If an Event of Default shall be continuing or any amounts shall
be due and payable (whether by acceleration, maturity, or
otherwise) under any of the Secured Obligations, all rights of
Pledgor to exercise the voting and other consensual rights that
it would otherwise be entitled to exercise pursuant to Section
5.1(a) and to receive the dividends and distributions that it
would be otherwise be authorized to receive and retain pursuant
to Section 5.1(b) shall, at Pledgee's option, cease, and all such
rights shall at Pledgee's option, thereupon become vested in
Pledgee, and Pledgee shall, at its option, thereupon have the
sole right to exercise such voting and other consensual rights
and to receive and hold as Collateral such dividends and interest
payments. Any payments received by Pledgor contrary to the
provisions of this section 5.2 shall be held in trust by Pledgor
for the benefit of Pledgee, shall be segregated from other funds
of Pledgor, and shall be promptly paid over to Pledgee, with any
necessary endorsement.
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6. REPRESENTATIONS, WARRANTIES, AND COVENANTS. Pledgor warrants,
represents, and covenants that:
6.1 Pledgor is and will continue to be a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Pledgor is and will continue
to be qualified and licensed to do business in all jurisdictions
in which any failure to do so wou1d have a Material Adverse
Effect. The execution, delivery and performance by Pledgor of
this Agreement, Secured Promissory Note and the other Loan
Documents (a) have been duly and validly authorized, (b) are
enforceable against Pledgor in accordance with their terms
(except as enforcement may be limited by equitable principles and
by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to creditors' rights generally), and (c) do not
violate Pledgor's articles or certificate of incorporation, or
Pledgor's by-laws, or any law or any material agreement or
instrument which is binding upon Pledgor or its property, and (d)
do not constitute grounds for acceleration of any material
indebtedness or obligation under any material agreement or
instrument which is binding upon Pledgor or its property.
6.2 EXCEPT WITH RESPECT TO APPLICABLE SECURITIES LAWS AND
REGULATIONS, ESTABLISHED BY THE SEC, THERE are no restrictions
upon the transfer of any of the Collateral to or by Pledgee and
Pledgor is the sole beneficial owner of the Collateral and has
the right to pledge and grant a security interest in or otherwise
transfer, SUBJECT TO APPLICABLE SECURITIES LAWS, such Collateral
free of any encumbrances or rights of third parties.
6.3 All of the Collateral is and shall remain free from all liens,
claims, encumbrances, and purchase-money or other security
interests except as created hereby. Pledgor shall not, without
Pledgee's prior written consent sell or otherwise dispose of any
of the Collateral.
6.4 The execution and delivery of this Agreement, and the delivery to
Pledgee of the Shares creates a valid, perfected, and
first-priority security interest in the Collateral in favor of
Pledgee, and all actions necessary or desirable to such
perfection have been duly taken.
6.5 No authorization or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required
either: (a) for the grant by Pledgor of the security interest
granted hereby or for the execution, delivery, or performance of
this Agreement by Pledgor, (b) for the perfection of or exercise
by Pledgee of its rights and remedies hereunder (except as may
have been taken by or at the direction of Pledgor or as maybe
required in connection with a disposition of the Collateral by
laws affecting the offering and sale of securities generally); or
(c) for the exercise by Pledgee of the voting or other rights
provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as maybe required
in connection with a disposition of the Collateral by laws
affecting the offering and sale of securities generally).
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6.6 All of the issued and outstanding shares of Common Stock pledged
pursuant to this Agreement are owned by Pledgor and shall at all
times during the term of the Loan Documents bear a restricted
legend confirming their pledged status hereunder.
6.7 Pledgor shall, upon execution hereof, commence its best efforts
to obtain the authority to issue and to issue the necessary
number of unrestricted shares in Pledgor as required under this
Agreement.
6.8 At the time of delivery to Pledgee, all of the outstanding Shares
shall have been duly and validly issued and will be fully paid
and non-assessable.
6.9 Pledgor has made its own arrangements for keeping informed of
changes or potential changes affecting the Collateral (including,
but not limited to, rights to convert, rights to subscribe,
payment of dividends, reorganization or other exchanges, tender
offers, and voting rights), and Pledgor agrees that Pledgee shall
not have any responsibility or liability for informing Pledgor or
any such changes or for taking any action or omitting to take any
such action with respect thereto.
7. SHARE ADJUSTMENTS. In the event that during the term of this Agreement
any reclassification, readjustment, or other change is declared or
made in the capital structure of Pledgor, all new substituted and
additional shares, options, or other securities issued or issuable to
Pledgor by reason of any such change or exercise shall be delivered to
or held by Pledgee under the terms of this Agreement in the same
manner as the Collateral originally Pledged hereunder.
8. OPTIONS. In the event that during the term of this Agreement Options
shall be issued or exercised in connection with the Collateral, such
Options acquired by Pledgor shall be immediately assigned by Pledgor
to Pledgee and all new shares or other securities acquired by Pledgor
shall also be immediately assigned to Pledgee to be held under to the
same terms of this Agreement in the same manner as the Collateral
originally pledged hereunder.
9. CONSENT. Pledgor hereby consents that, from time to time, before or
after the occurrence or existence of any Event of Default with or
without notice to or assent from Pledgor, any other security at any
time held by or available to Pledgee for any of the Secured
Obligations or any other security at any time held by or available to
Pledgee of any other person, firm, or corporation secondarily or
otherwise liable for any of the Secured Obligations, may be exchanged
surrendered, or released and any of the Secured Obligations may be
changed, altered, renewed, extended, continued, surrendered,
compromised, waived, or released, in whole or in part, as Pledgee may
see fit. Pledgor shall remain bound under this Agreement not
withstanding any such change, surrender, release, alteration, renewal,
extension, continuance, compromise, waiver, or inaction, or extension
of further credit.
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10. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an event of default ("Event of Default") under this
Agreement;
10.1 The Occurrence of an Event of default under the Secured Note.
10.2 Pledgor shall breach, or be in default of, any of its agreements,
covenants and obligations under this Agreement or the Guaranty;
or;
10.3 Any representation or warranty made by Pledgor under this
Agreement or the Secured Note shall prove to have been untrue
when made.
11. REMEDIES UPON DEFAULT.
11.1 Upon the occurrence of an Event of Default, Pledgee shall have, in
addition to any other rights given by law or in this Agreement, in the
Loan Documents, or in any other agreement between Pledgee and Pledgor,
all of the rights and remedies with respect to the Collateral of a
secured Party under the code, and also shall have, without limitation
the following rights, which Pledgor hereby agrees to be commercially
reasonable.
(a) to receive an amounts payable in respect of the Collateral to
Pledgor under Section 5.1(b) hereof;
(b) to register all or any part of the Collateral on the books of
each of the Borrowers in Pledgee's name or the name of its
nominee or nominees;
(c) to vote all or part of the Shares (whether or not transferred
into the name of the Pledgee) in accordance with Section 5.2
hereof, and give all consents, waivers and ratifications in
respect of the Collateral and otherwise act with respect thereto
as though it were the outright owner thereof; PLEDGOR HEREBY
IRREVOCABLY CONSTITUTES AND APPOINTS PLEDGEE THE PROXY AND
ATTORNEY-IN-FACT OF PLEDGOR, COUPLED WITH AN INTEREST, WITH FULL
POWER OF SUBSTITUTION FOR ANY AND ALL OF SUCH PURPOSES; WHICH
PROXY AND POWER OF ATTORNEY SHALL CONTINUE IN FULL FORCE AND
EFFECT AND TERMINATE UPON THE EARLIER TO OCCUR OF (A) THE
INDEFEASIBLE PAYMENT IN FULL OF THE SECURED OBLIGATIONS, AND (B)
TEN (10) YEARS FROM THE DATE HEREOF.
(d) at any time or from time to time, to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or
any interest therein, at any public or private sale, without
demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by Pledgor),
for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for
such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; PROVIDED that at least five
(5) days notice of the time and place of any such sale shall be
given to Pledgor. Pledgee shall not be
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obligated to make any such sale of Collateral regardless of
whether any such notice of sale has therefore been given. Pledgor
hereby waives any other requirement of notice, demand, or
advertisement for sale, to the extent permitted by law. Pledgor
hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral,
before or after sale hereunder, and all rights, if any, of
marshaling the Collateral and any other security for the Secured
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, Pledgee may bid for and purchase all or any part
of the Collateral so sold free from any such right of equity or
redemption. Pledgee shall not be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so
doing nor shall Pledgee be under any obligation to take any
action whatsoever with regard thereto;
(e) to buy the Collateral in its own name, or in the name of a
designee or nominee. Pledgee shall have the right to execute any
document or form, in its name or in the name of the Pledgor, that
may be necessary or desirable in connection with such sale of the
Collateral.
(f) to sell all of or any part of the Collateral by a private
placement, restricting 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, Pledgee
may solicit offers to buy the Collateral, or any part of it for
cash, for a limited number of investors deemed by Pledgee, in its
reasonable judgment, to be responsible parties who might be
interested in purchasing the Collateral. If Pledgee shall solicit
such offers from not less than four (4) such investors, then the
acceptance by Pledgee of the highest offer obtained therefore
shall be deemed to be a commercially reasonable method of
disposition of such Collateral, even though the sales price
established and/or obtained may be substantially less than the
price that would be obtained pursuant to a public offering.
Notwithstanding the foregoing, should Pledgee determine that,
prior to any public offering of any securities contained in the
Collateral, such securities should be registered under the '33
Act and/or registered or qualified under any other federal or
state law, and that such registration and/or qualification is not
practical, Pledgor agrees that it will be commercially reasonable
if a private sale is arranged so as to avoid a public offering
even if offers are solicited from fewer than four (4) investors,
and even though at sales price established and/or obtained may be
substantially less than the price that would be obtained pursuant
to a public offering.
NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN THIS
PARAGRAPH 11, should the Event of Default be Pledgor's failure to
make a payment within ten (10) days of its due date, Coast will
be permitted to exercise it rights as described herein against
only that amount of the Collateral sufficient to satisfy the
amount of the past due payment plus all costs, fees and expenses
in connection with the exercise of said rights against the
Collateral. However, in the event Pledgor falls three (3) months
in arrears under the Secured Note, upon ten (10) days written
notice prior to the sale, Coast will be permitted to exercise it
rights as described herein against only that portion of the
Collateral sufficient to obtain any and all amounts due under the
Secured Note plus all costs, fees and expenses in connection with
the exercise of said rights against the Collateral.
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12. PLEDGEE AS PLEDGOR'S ATTORNEY-IN FACT. Pledgor hereby irrevocably
appoints Pledgee as its attorney-in-fact, coupled with an interest,
(i) to arrange for the register, at any time after the occurrence and
during the continuance of an Event of Default, of the Collateral on
the books of each of the Borrowers to the name of Pledgee or to the
name of Pledgee's nominee and (ii) to receive, endorse and collect all
instruments made payable to Pledgor of any dividend, distribution or
other payment on account of the Collateral, or any part thereof, and
to give full discharge for the same and to execute and file
governmental notifications and reporting forms. Pledgor further
authorizes Pledgee to perform any and all acts which Pledgee deems
necessary for the protection and preservation of the Collateral or of
the value of Pledgee's security interest therein, but not limited to
receiving income thereon as additional security hereunder, all at
Pledgor's expense, and Pledgor agrees to repay Pledgee promptly upon
demand any amounts expended hereunder by Pledgee, together with
interest thereon. Pledgor further grants to Pledgee a power of
attorney coupled with an interest to execute all agreements, forms,
applications, documents and instruments and to take all actions and to
do all things as could be executed, taken or done by Pledgor in
connection with the protection and preservation of the Collateral or
this Agreement. This power of attorney is irrevocable and authorizes
Pledgee to act for Pledgor in connection with the matters described
herein without notice to or demand upon Pledgor.
13. GENERAL PROVISIONS
13.1 CUMULATIVE REMEDIES: NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of Pledgee's rights and remedies is not
intended to be exclusive, and such rights and remedies are in
addition to and not by way of limitation of any other rights or
remedies that the Pledgee may have under the Secured Note, the
Loan Documents, the Code, or other applicable law. Pledgee shall
have the right, in its sole discretion, to determine which rights
and remedies are to be exercised and in which order. The exercise
of one right or remedy shall not preclude the exercise of any
others, all of which shall be cumulative.
13.2 NO IMPLIED WAIVERS. No act, failure, or delay by Pledgee shall
constitute a waiver of any of its rights and remedies. No single
or partial waiver by Pledgee of any provision of this Agreement,
or of a breach or default hereunder, or of any right or remedy
which the Pledgee may have, shall operate as a waiver of any
other provision, breach, default, right or remedy or of the same
provision, breach, default, right or remedy on a future occasion.
No waiver by Pledgee shall effect its rights to require strict
performance of this Agreement.
13.3 NOTICES. All notices or demands by any party hereto to the other
party and relating to this Agreement shall be sent in accordance
with the terms of Section 9.5 of the Secured Note as follows:
If to Pledgor: Palomar Medical Technologies, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Director of Finance
Facsimile No. (000) 000-0000
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With a copy to: Palomar Medical Technologies, Inc.
General Counsel
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
If to Pledgee: Coast Business Credit
00000 Xxxxxxxx Xxxx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Attn: Bay Xxxxxx
Facsimile No: (000) 000-0000
13.4 SEVERABILITY. Should any provision, clause or condition of this
Agreement be held by any court of competent jurisdiction to be
void or unenforceable, such defect shall not affect the remainder
of this Agreement.
13.5 INTEGRATION. This Agreement and such other agreements, documents
and instruments as may be executed in connection herewith shall
be construed as the entire and complete agreement between Pledgor
and Pledgee and shall supersede all prior negotiations, all of
which are merged and integrated herein.
13.6 AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended except in a writing executed by Pledgor and a
duly authorized officer of Pledgee.
13.7 TIME OF ESSENCE. Time is of the essence in the performance by
Pledgor of each and every obligation under this Agreement.
13.8 MUTUAL WAIVER OF JURY TRIAL. Pledgor and Pledgee each hereby
waive the right to trial by jury in any action or proceeding
based upon, arising out of, or in any way relating to, this
Agreement, or any conduct, acts omission of Pledgor or Pledgee
any of their directors, officers, employees, agents, attorneys or
any other persons affiliated with Pledgor or Pledgee.
13.9 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective
successors, assigns, heirs, beneficiaries and representatives of
the parties hereto; provided, however, that Pledgor may not
assign or transfer any of its rights under this Agreement without
the prior written consent of Pledgee, and any prohibited
assignment shall be void. No consent by Pledgee to any assignment
shall relieve Pledgor or any guarantor from its liability
hereunder.
13.10PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are used
herein for convenience only. Pledgor acknowledges that the same
may not describe completely the subject matter of the applicable
paragraph, and the same shall not be used in any manner to
construe, limit, define or interpret any term or provision
hereof. This Agreement has
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been fully reviewed and negotiated between the parties and no
uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Pledgor or Pledgee
under any rule of construction or otherwise.
13.11 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts
and transactions hereunder and all rights and obligations of
Pledgor and Pledgee SHALL be governed by and in accordance with
the laws of the State of California; PROVIDED, HOWEVER, the
respective rights of the parties hereto in the Collateral,
including voting, transfer and proxy rights, shall be governed by
the laws of the state of organization of each of the Companies,
respectively, to the extent such laws are applicable to such
rights. Any undefined term used in this Agreement that is defined
in the California Uniform Commercial Code shall have the meaning
therein assigned to that term. As a part of the consideration to
Pledgee to enter into the Secured Note, Pledgor (i) agrees that
all actions and proceedings relating directly or indirectly
hereto shall, at Pledgee's option, be litigated in courts located
within California, and that the exclusive venue therefor shall be
Los Angeles County; (ii) consent to the jurisdiction and venue of
any such court and consents to service of process in any such
action or proceeding by personal delivery or any other method
permitted by law; and (iii) waives any and all rights Pledgor may
have to object to the jurisdiction of any such court, or to
transfer or change the venue of any such action or proceeding.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
"PLEDGOR'
PALOMAR MEDICAL TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
By: Xxxxx X. Xxxxxxx
Title: CEO and President
"PLEDGEE"
COAST BUSINESS CREDIT, a division of
SOUTHERN PACIFIC BANK, a California
corporation
/s/ Xxxxxx Xxxxxxxx
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By: Xxxxxx Xxxxxxxx
Title: Vice President