SECURITY AGREEMENT
Exhibit
10.73
THIS SECURITY AGREEMENT (the
“Agreement”)
is made as of April 13, 2009 by and among STAAR Surgical Company, a
Delaware corporation (the “Company”),
and the secured party hereto and its respective endorsees, transferees and
assigns (the “Secured
Party”).
WHEREAS, in connection with
the execution and delivery of that certain Amended and Restated Senior Secured
Promissory Note dated April 13, 2009 (the “Senior Secured
Note”) made by the Company in favor of the Secured Party, the Company
agreed to execute and deliver this Agreement.
NOW, THEREFORE, in
consideration of the agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Certain
Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but
not otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as “general intangibles” and “proceeds”) shall have the respective
meanings given such terms in Article 9 of the UCC. All capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Senior Secured Note.
a. “Collateral”
means the collateral in which the Secured Party is granted a security interest
by this Agreement and which shall include the following, whether presently owned
or existing or hereafter acquired or coming into existence, and all additions
and accessions thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith:
i. All
goods, including, without limitation, all machinery, equipment, computers, motor
vehicles, trucks, tanks, boats, ships, appliances, furniture, special and
general tools, fixtures, test and quality control devices and other equipment of
every kind and nature and wherever situated, together with all documents of
title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the
foregoing and all other items, owned by the Company and used in connection with
the Company’s businesses and all improvements thereto; and
ii. All
inventory of the Company; and
iii. All
of the Company’s contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights,
employee non-compete, non-disclosure and assignment of rights agreements,
leases, franchises, customer lists, quality control procedures, grants and
rights, goodwill, deposit accounts, and income tax refunds; and
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iv. All
receivables of the Company including, without limitation, all insurance
proceeds, and rights to refunds or indemnification whatsoever owing, together
with all instruments, all documents of title representing any of the foregoing,
all rights in any merchandising, goods, equipment, motor vehicles and trucks
which any of the same may represent, and all right, title, security and
guaranties with respect to each receivable, including any right of stoppage in
transit; and
v. All
of the Company’s Intellectual Property; and
vi. All
of Company’s equity interest in its Subsidiaries (as defined in the Senior
Secured Note) and certificates evidencing such equity interest, and any shares
of stock (including, without limitation, a distribution in connection with any
reclassification, increase or reduction of capital or in connection with any
reorganization), or any option or right to acquire shares of stock, in
substitution of, or in exchange for, any of such equity interest, or any stock
dividend or split with respect to such equity interest, and any distributions,
whether dividend or liquidating or otherwise, of any cash or property with
respect to such equity interest; and
vii. All
of the Company’s documents, instruments and chattel paper, files, records, books
of account, business papers, computer programs and the products and proceeds of
all of the foregoing Collateral set forth in paragraphs (i) through (vi),
inclusive, above.
Notwithstanding
the foregoing, except for the Key Collateral, “Collateral” shall exclude any of
the Company’s right, title and interest in property to the extent that, under applicable law or the terms or provisions of a written agreement,
document or instrument by which the Company is bound as of the date hereof, the Company is expressly
prohibited from granting a security interest therein or such law or agreement, document or instrument provides for
the involuntary forfeiture of the property in the event a security interest is
granted therein without the consent of the appropriate governmental
authority or contract counterparty, or at all.
b. “Copyrights”
shall mean all of the following in which the Company now holds or hereafter
acquires any interest (i) all copyrights, whether registered or unregistered,
held pursuant to the laws of the United States, any State thereof or any other
country; (ii) registrations, applications and recordings in the United States
Copyright Office or in any similar office or agency of the United States, any
State thereof or any other country; (iii) any continuations, renewals or
extensions thereof; (iv) any registrations to be issued in any pending
applications; (v) prior versions of works covered by copyright and all works
based upon, derived from or incorporating such works; (vi) income, royalties,
damages, claims and payments now and hereafter due and/or payable with respect
to copyrights, including, without limitation, damages, claims and recoveries for
past, present or future infringement; (vii) rights to xxx for past, present and
future infringements of any copyright; (viii) any rights in any material which
is copyrightable or which is protected by common law, United States copyright
laws or similar laws, or any law of any State, and (ix) any other rights
corresponding to any of the foregoing rights throughout the
world.
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c. “Copyright
License” shall mean any agreement, written or oral, in which the Company
now holds or hereafter acquires any interest, granting any right in or to any
Copyright or Copyright registration (whether the Company is the licensee or the
licensor thereunder) including, without limitation, licenses pursuant to which
the Company has obtained the exclusive right to use a copyright owned by a third
party.
d. “Intellectual
Property” shall mean, collectively, the Software Intellectual Property,
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets.
e. “Key
Collateral” shall mean all of the Company’s equity interest in the
Subsidiaries identified on Schedule A, attached hereto,
and those certain Patents that the Company has represented to the Secured Party
are key to the business of the Company.
f. “Obligations”
means all of the Company’s obligations under this Agreement and the Senior
Secured Note, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later decreased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from the Secured Party as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented, converted, extended
or modified from time to time.
g. “Patents”
shall mean all of the following in which the Company now holds or hereafter
acquires any interest: (i) all patents of the United States or any other
country, all registrations and recordings thereof and all applications for
patents of the United States or any other country, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country; (ii) all reissues, divisions,
continuations, renewals, continuations in part or extensions thereof; (iii) all
patents to issue in any such applications; (iv) income, royalties, damages,
claims and payments now and hereafter due and/or payable with respect to
patents, including, without limitation, damages, claims and recoveries for past,
present or future infringement; and (v) rights to xxx for past, present and
future infringements of any patent.
h. “Patent
License” shall mean any agreement, whether written or oral, in which the
Company now holds or hereafter acquires any interest, granting any right with
respect to any Patent (whether the Company is the licensee or the licensor
thereunder).
i. “Software
Intellectual Property” shall mean (i) all software programs (including,
without limitation, all source code, object code and all related applications
and data files), whether now owned, upgraded, enhanced, licensed or leased or
hereafter acquired by the Company; (ii) all computers and electronic data
processing hardware and firmware associated therewith; (iii) all documentation
(including, without limitation, flow charts, logic diagrams, manuals, guides and
specifications) with respect to such software, hardware and firmware described
in the preceding subclauses (i) and (ii); and (iv) all rights with respect to
all of the foregoing, including, without limitation, any and all upgrades,
modifications, copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and substitutions, replacements,
additions, or model conversions of any of the foregoing.
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j. “Trademarks”
shall mean any of the following in which the Company now holds or hereafter
acquires any interest: (i) any trademarks, tradenames, corporate names, company
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, now existing
or hereafter adopted or acquired, all registrations and recordings thereof and
any applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country (collectively, the “Marks”);
(ii) any reissues, extensions or renewals thereof, (iii) the goodwill of the
business symbolized by or associated with the Marks, (iv) income, royalties,
damages, claims and payments now and hereafter due and/or payable with respect
to the Marks, including, without limitation, damages, claims and recoveries for
past, present or future infringement and (v) rights to xxx for past, present and
future infringements of the Marks.
k. “Trademark
License” shall mean any agreement, written or oral, in which the Company
now holds or hereafter acquires any interest, granting any right in and to any
Trademark or Trademark registration (whether the Company is the licensee or the
licensor thereunder).
l. “Trade
Secrets” shall mean common law and statutory trade secrets and all other
confidential or proprietary or useful information and all know-how obtained by
or used in or contemplated at any time for use in the business of the Company
(all of the foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been reduced to a writing
or other tangible form, including, without limitation, all documents and things
embodying, incorporating or referring in any way to such Trade Secret, all Trade
Secret Licenses, and including, without limitation, the right to xxx for and to
enjoin and to collect damages for the actual or threatened misappropriation of
any Trade Secret and for the breach or enforcement of any such Trade Secret
license.
m. “UCC” means
the Uniform Commercial Code, as the same may, from time to time, be in effect in
the State of New York; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Secured Party’s security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection of
priority and for purposes of definitions related to such
provisions.
2. Grant of
Security Interest. As a further inducement for the Secured
Party to accept the Senior Secured Note and to secure the complete and timely
payment, performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing senior security
interest in, a continuing lien upon, all of the Company’s right, title and
interest of whatsoever kind and nature in and to the Collateral (the “Security
Interest”).
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3. Representations,
Warranties, Covenants and Agreements of the Company. Except as
set forth on Schedule B
attached hereto, the Company represents and warrants to, and covenants and
agrees with, the Secured Party as follows:
a. The
Company has the requisite corporate power and authority to enter into this
Agreement and otherwise carry out its obligations thereunder. The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the
Company. This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor’s rights
generally.
b. The
Company represents and warrants that it has no place of business or offices
where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where the
Collateral is stored or located.
c. The
Company is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Company in the ordinary course of business), free and clear of
any liens, security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Collateral. There is not on file in any governmental or regulatory
authority, agency or recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the foregoing (other than
those that have been filed in favor of the Secured Party pursuant to this
Agreement) covering or affecting any of the Collateral.
d. No
part of the Collateral or rights in connection therewith has been judged, by any
governmental body with proper jurisdiction, to be invalid or
unenforceable. No written claim has been received alleging the
Company’s use of any Collateral violates the rights of any third party. There
has been no adverse decision to the Company’s claim of ownership rights in or
exclusive rights to use the Collateral in any jurisdiction or to the Company’s
right to keep and maintain such Collateral in full force and effect, and there
is no proceeding involving said rights pending or threatened before any court,
judicial body, administrative or regulatory agency, arbitrator or other
governmental authority.
e. The
Company shall at all times maintain its books of account and records relating to
the Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule
B attached hereto and may not relocate such books of account and records
or tangible Collateral unless it delivers to the Secured Party at least thirty
(30) days prior to such relocation (i) written notice of such relocation and the
new location thereof (which must be within the United States) and
(ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Party valid,
perfected and continuing first priority liens in the Collateral, except as
otherwise permitted hereby.
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f. This
Agreement creates in favor of the Secured Party a valid security interest in the
Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
first priority security interest in such Collateral and, to the extent that it
can be perfected through such filings, the Intellectual
Property. Except for the filing of financing statements on Form-1
under the UCC with the jurisdiction indicated on Schedule B, attached hereto,
no authorization or approval of or filing with or notice to any governmental
authority or regulatory body is required either (i) for the grant by the Company
of, or the effectiveness of, the Security Interest granted hereby or for the
execution, delivery and performance of this Agreement by the Company or (ii) for
the perfection of its rights and remedies hereunder.
g. On
or after the date hereof, the Secured Party shall be authorized to file or cause
to be filed one or more executed UCC financing statements on Form-1 with respect
to the Security Interest with the appropriate jurisdictions. Upon
request of the Secured Party, the Company shall execute and deliver any and all
agreements, instruments, documents, and papers as the Secured Party may
reasonably request to evidence the Secured Party’ security interest in the
Intellectual Property and the goodwill and general intangibles of the Company
relating thereto or represented thereby.
h. The
execution, delivery and performance of this Agreement does not conflict with or
cause a material breach or default, or an event that with or without the passage
of time or notice, shall constitute a material breach or default, under any
agreement to which the Company is a party or by which the Company is
bound. No consent (including, without limitation, from stockholders
or creditors of the Company) is required for the Company to enter into and
perform its obligations hereunder.
i. The
Company shall at all times safeguard, protect and maintain the Collateral for
the account of the Secured Party until this Agreement and the Security Interest
hereunder shall terminate pursuant to Section 11. Without limiting the
generality of the foregoing, the Company shall pay all governmental fees and
taxes necessary to maintain the Collateral and the Security Interest
hereunder.
The
Company will not transfer, sell or otherwise dispose of any of the Key
Collateral without the prior written consent of the Secured Party.
j. The
Company shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Party promptly, in sufficient detail, of any substantial change in the
Collateral other than in the ordinary course of business, and of the occurrence
of any event which would have a material adverse effect on the value of the
Collateral or on the Secured Party’ security interest therein.
k. The
Company shall promptly execute and deliver to the Secured Party such further
assignments, security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further action as the
Secured Party may from time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce the Security Interest.
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l. The
Company shall permit the Secured Party and its representatives and agents to
inspect the Collateral during normal business hours upon reasonable advance
notice and to make copies of records pertaining to the Collateral as may be
reasonably requested by the Secured Party from time to time.
m. The
Company will take commercially reasonable steps to diligently pursue and seek to
preserve, enforce and collect any rights, claims, causes of action and accounts
receivable in respect of the Collateral.
n. The
Company shall promptly notify the Secured Party in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by the
Company that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Party hereunder.
o. All
information supplied to the Secured Party by or on behalf of the Company with
respect to the Collateral is accurate and complete in all material respects as
of the date hereof, and all information supplied after the date hereof to the
Secured Party shall be accurate in all material respects.
p. With
respect to any of the Company’s Intellectual Property:
i. such
Intellectual Property is subsisting and the rights in connection with such
Intellectual Property have not been adjudged invalid or unenforceable, in whole
or in part;
ii. the
rights in connection with such Intellectual Property are valid and
enforceable;
iii. no
claim has been made that the Company’s use of such Intellectual Property
infringes on the asserted rights of any third party;
iv. the
Company is the exclusive owner of the entire and unencumbered right, title and
interest in and to the Key Collateral; and
v. the
Company has performed and will continue to perform all acts and has paid all
required fees and taxes to maintain its rights with respect to each and every
item of Intellectual Property in full force and effect throughout the United
States, as applicable.
q. Except
with respect to any Patent, Trademark or Copyright that the Company shall
determine, on a commercially reasonable basis, is not of sufficient economic
value to the Company (which determination may not be made with respect to any
Key Collateral), or except as agreed in advance by the Secured Party, the
Company shall:
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i. maintain
each Trademark and Copyright in full force free from any claim of abandonment
for non-use, maintain as in the past the quality of products and services
offered under such Trademark or Copyright; employ such Trademark or Copyright
with the appropriate notice of registration; not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Trademark or Copyright
unless the Secured Party shall obtain a perfected security interest in such xxxx
pursuant to this Agreement; and not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any Trademark or
Copyright may become invalidated;
ii.
not do any act, or omit to do any act, whereby any Patent may become
abandoned; and
iii. notify
the Secured Party immediately if it knows, or has reason to know, that any
application or registration relating to any Patent, Trademark or Copyright may
become abandoned, or of any material adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in the United
States) regarding its ownership of any Patent, Trademark or Copyright or its
right to register the same or to keep and maintain the same.
r. Whenever
the Company, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office or the
United States Copyright Office or acquire rights to any new Patent, Trademark or
Copyright whether or not registered, report such filing to the Secured Party
within five (5) business days after the last day of the fiscal quarter in which
such filing occurs.
s. The
Company shall take all commercially reasonable steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office or the United States Copyright Office, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents, Trademarks and Copyrights, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
t. In
the event that any Patent, Trademark or Copyright included in the Intellectual
Property is infringed, misappropriated or diluted by a third party, the Company
shall promptly notify the Secured Party after it learns thereof and shall,
unless it shall determine that such Patent, Trademark or Copyright is not of
sufficient economic value to it, which determination it shall promptly report to
the Secured Party: promptly xxx for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution, or take such other actions
as it shall reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright. If the Company lacks the financial
resources to comply with this Section 3(t), the Company shall so notify the
Secured Party and shall cooperate fully with any enforcement action undertaken
by the Secured Party on behalf of the Company.
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u. None
of such Patents, Trademarks, Copyrights and Trade Secrets is the subject of any
licensing or franchise agreement as of the date of this Agreement. No
holding, decision or judgment has been rendered by any governmental authority
which would limit, cancel or question the validity of any License, Patent,
Trademark, Copyright and Trade Secrets. No action or proceeding is
pending (i) seeking to limit, cancel or question the validity of any License,
Patent, Trademark, Copyright or Trade Secret, or (ii) which, if adversely
determined, would have a material adverse effect on the value of any License,
Patent, Trademark, Copyright or Trade Secret. The Company has used
and will continue to use for the duration of this Agreement, proper statutory
notice in connection with its use of the Patents, Trademarks and Copyrights and
consistent standards of quality in products leased or sold under the Patents,
Trademarks and Copyrights.
4. Defaults. The
following events shall be “Events of
Default”:
a. The
occurrence of an Event of Default as defined in the Senior Secured
Note;
b. If
any representation or warranty of the Company in this Agreement proves to have
been incorrect in any material respect when made; and
c. The
failure by the Company to observe or perform any of its obligations hereunder
for ten (10) business days after receipt by the Company of notice of such
failure from the Secured Party.
5. Rights
and Remedies Upon Default. After the occurrence and during the
continuance of any Event of Default, the Secured Party shall have the right to
exercise all of the remedies conferred to the Secured Party hereunder and under
the Senior Secured Note, and the Secured Party shall have all the rights and
remedies of a secured party under the UCC and/or any other applicable law
(including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then subject). Without limitation, the Secured Party
shall have the following rights and powers:
a. to
have a third party custodian take possession of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same so
long as the same can be accomplished without breach of the peace and otherwise
in compliance with applicable law, and the Company shall assemble the Collateral
and make it available to the Secured Party for the benefit of the Secured Party
at places which the Secured Party shall reasonably select, whether at the
Company’s premises or elsewhere, and make available to the Secured Party,
without rent, all of the Company’s respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the
Collateral in saleable or disposable form; and
b. to
operate the business of the Company using the Collateral and shall have the
right to assign, sell, lease or otherwise dispose of and deliver all or any part
of the Collateral, at public or private sale or otherwise, either with or
without special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such place
or places, and upon such terms and conditions as are commercially
reasonable. Upon each such sale, lease, assignment or other transfer
of Collateral, the Secured Party may, unless prohibited by applicable law,
purchase all or any part of the Collateral being sold, free from and discharged
of all trusts, claims, right of redemption and equities of the Company, which
are hereby waived and released.
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6. Applications
of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys’ fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale,
license or other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party are legally entitled,
then the Company will be liable for the deficiency, together with interest
thereon, plus interest at the Default Rate as set forth in the Senior Secured
Note, and the reasonable fees of any attorneys employed by the Secured Party to
collect such deficiency. To the extent permitted by applicable law,
the Company waives all claims, damages and demands against the Secured Party
arising out of the repossession, removal, retention or sale of the
Collateral.
7. Costs and
Expenses. The Company agrees
to pay all out-of-pocket fees, costs and expenses incurred in connection with
any filing required hereunder, including without limitation, any financing
statements, continuation statements, partial releases and/or termination
statements related thereto or any expenses of any searches reasonably required
by the Secured Party. The Company shall also pay all other claims and
charges which would reasonably be expected to prejudice, imperil or otherwise
affect the Collateral or the Security Interest therein. Upon the
occurrence and continuance of an Event of Default, the Company shall upon
demand, pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party incurs in connection with (a) the
enforcement of this Agreement, (b) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral, or (c)
the exercise or enforcement of any of the rights of the Secured Party under the
Senior Secured Note, including, without limitation, costs of
collection. Until so paid, any fees payable hereunder shall be added
to the principal amount of the Senior Secured Note and shall bear interest as
set forth in the Senior Secured Note.
8. Indemnification. The
Company agrees to indemnify and hold harmless the Secured Party and its
respective directors, officers, managers, partners, members, shareholders,
affiliates, agents, successors and assigns (an “Indemnified Party”), from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by such Indemnified Party as a result of any inaccuracy
in or breach of the representations, warranties or covenants made by the Company
herein.
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9. Responsibility
for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Senior Secured Note shall in no way be affected
or diminished by reason of the loss, destruction, damage or theft of any of the
Collateral or its unavailability for any reason.
10. Security
Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
regardless of: (a) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Senior
Secured Note or any other agreement entered into in connection with the
foregoing; (b) any exchange, release or nonperfection of any of the
Collateral, or any release or amendment or waiver of or consent to departure
from any other collateral for, or any guaranty, or any other security, for all
or any of the Obligations; or (c) any action by the Secured Party to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral. The
Company expressly waives presentment, protest and notice of
protest. In the event that at any time any transfer of any Collateral
or any payment received by the Secured Party hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other than the
Secured Party, then, in any such event, the Company’s obligations hereunder
shall survive cancellation of this Agreement, and shall not be discharged or
satisfied by any prior payment thereof and/or cancellation of this Agreement,
but shall remain a valid and binding obligation enforceable in accordance with
the terms and provisions hereof. The Company waives all right to
require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy.
11. Term of
Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Senior Secured Note have
been indefeasibly made in full and all other Obligations have been indefeasibly
paid.
12. Power of
Attorney; Further Assurances.
a. The
Company authorizes the Secured Party, and does hereby make, constitute and
appoint it, and its respective officers, agents, successors or assigns with full
power of substitution, as the Company’s true and lawful attorney-in-fact, with
power, in its own name or in the name of the Company, to, after the occurrence
and during the continuance of an Event of Default, (i) endorse any notes,
checks, drafts, money orders, or other instruments of payment (including,
without limitation, payments payable under or in respect of any policy of
insurance) in respect of the Collateral that may come into possession of the
Secured Party; (ii) to sign and endorse any UCC financing statement or any
invoice, freight or express xxxx, xxxx of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications and notices in connection
with accounts, and other documents relating to the Collateral; (iii) to pay
or discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and xxx for monies due in respect of
the Collateral; and (v) generally, to do, at the option of the Secured
Party, and at the Company’s expense, at any time, or from time to time, all acts
and things which the Secured Party deems necessary to protect, preserve and
realize upon the Collateral and the Security Interest granted therein in order
to effect the intent of this Agreement and the Senior Secured Note, all as fully
and effectually as the Company might or could do; and the Company hereby
ratifies all that said attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and shall
be irrevocable for the term of this Agreement and thereafter as long as any of
the Obligations shall be outstanding.
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b. On
a continuing basis, the Company will cooperate in good faith with the Secured
Party to make, execute, acknowledge, deliver, file and record, as the case may
be, in the proper filing and recording places in any applicable jurisdiction,
all such instruments, and take all such action as may reasonably be deemed
necessary or advisable, or as reasonably requested by the Secured Party, to
perfect the Security Interest granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to the
Secured Party the grant or perfection of a security interest in all the
Collateral.
13. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given (i) if delivered by hand, (ii) upon receipt of proof
of sending thereof if sent by facsimile, (iii) upon receipt if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day, or (iv) if mailed by first-class registered or certified
mail, return receipt requested, postage prepaid, four days after posting in the
U.S. mails, in each case if delivered to the following addresses:
(A) if to the Company, to the address set forth immediately below the
Company’s name on the signature pages hereto; and (B) if to the Investor, to the
address set forth immediately below the Investor’s name on the signature pages
hereto. Each party shall provide notice to all of the other parties
of any change in address.
14. Other
Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party’ rights and
remedies hereunder.
15. Miscellaneous.
a. No
course of dealing between the Company and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, any
right, power or privilege hereunder or under the Senior Secured Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
b. All
of the rights and remedies of the Secured Party with respect to the Collateral,
whether established hereby or by the Senior Secured Note or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.
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c. This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto, including the prior
Agreement. Any term of this Agreement may be terminated or amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
written consent of the Company and the holder of the Senior Secured
Note. Any termination, amendment or waiver effected in accordance
with this paragraph shall be binding upon each future holder of the Senior
Secured Note, its successors and assigns, and the Company.
d. In
the event that any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.
e. No
waiver of any breach or default or any right under this Agreement shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
or right, whether of the same or similar nature or otherwise.
f. This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.
g. Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
h. The
validity and interpretation of this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New
York. Each of the parties hereto hereby consents to the exclusive
jurisdiction and venue of the Courts of the State of New York, located in the
City and County of New York and the United States District Court, Southern
District, for the State of New York with respect to any matter relating to this
Agreement and performance of the parties’ obligations hereunder, the documents
and instruments executed and delivered concurrently herewith or pursuant hereto
and performance of the parties’ obligations thereunder and each of the parties
hereto hereby consents to the personal jurisdiction of such courts and shall
subject itself to such personal jurisdiction. Any action, suit or
proceeding relating to such matters shall be commenced, pursued, defended and
resolved only in such courts and any appropriate appellate court having
jurisdiction to hear an appeal from any judgment entered in such
courts. The parties irrevocably waive the defense of an inconvenient
forum to the maintenance of such suit or proceeding. Service of
process in any action, suit or proceeding relating to such matters may be made
and served within or outside the State of New York by registered or certified
mail to the parties and their representatives at their respective addresses
specified in Section 13 hereof, provided that a reasonable time, not less than
thirty (30) days, is allowed for response. Service of process may
also be made in such other manner as may be permissible under the applicable
court rules.
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i. Each
party hereto hereby agrees to waive its respective rights to a jury trial of any
claim or cause of action based upon or arising out of this
Agreement. The scope of this waiver is intended to be all
encompassing of any disputes that may be filed in any court and that relate to
the subject mater of this Agreement, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is
a material inducement for each party to enter into a business relationship, that
each party has relied on this waiver in entering into this Agreement and that
each party will continue to rely on this waiver in their related future
dealings. Each party further warrants and represents that it has
reviewed this waiver with its legal counsel, and that such party has knowingly
and voluntarily waives its rights to a jury trial following such
consultation. This waiver is irrevocable, meaning that,
notwithstanding anything herein to the contrary, it may not be modified either
orally or in writing, and this waiver shall apply to any subsequent amendments,
renewals and supplements or modifications to this agreement. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
16. Counterparts. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
17. Facsimile
Signature. In the event that any signature is delivered by
facsimile transmission, PDF, electronic signature or other similar electronic
means, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such signature page were an original thereof.
[remainder of page intentionally left
blank]
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IN WITNESS WHEREOF, the
parties hereto have caused this Security Agreement to be duly executed on the
day and year first above written.
COMPANY:
STAAR
SURGICAL COMPANY
|
By:
|
/s/ Xxxxxxx Xxxxxxx
|
|
Name:
|
Xxxxxxx
Xxxxxxx
|
|
Title:
|
Vice
President and Chief Financial
Officer
|
|
Notices:
|
STAAR
Surgical Company
|
0000
Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxxx Xxxxxxx, Esq.
General
Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
copies to (which shall not constitute notice):
Xxxxxxxx
& Xxxxxxxx LLP
000 Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxxx X. Xxxxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
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ADDITIONAL
SIGNATURE PAGE TO SECURITY AGREEMENT
SECURED
PARTY:
BROADWOOD
PARTNERS, L.P.
|
By:
|
/s/Xxxx
X. Xxxxxxxx
|
|
Name:
|
Xxxx
X. Xxxxxxxx
|
|
Title:
|
President of Broadwood Capital, Inc., the General Partner
|
|
Notices:
|
Broadwood
Partners, L.P.,
|
c/o
Broadwood Capital, Inc.
000 Xxxxx
Xxxxxx, 0xx Xxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
copies to (which shall not constitute notice):
Xxxxxx
& Jaclin LLP
000 Xxxxx
0 Xxxxx, 0xx Xxxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Telephone:
(000) 000 0000
Facsimile:
(000) 000 0000
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Schedules
and exhibits have been omitted, and will be provided to the Commission upon
request.
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