Exhibit 10.46
[LOGO XXXXX FARGO BANK]
San Xxxxxxx Valley Regional Commercial Banking Office
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
June 1, 1998
Staar Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Gentlemen:
This letter is to confirm that Xxxxx Fargo Bank, National Association
("Bank"), subject to all terms and conditions contained herein, has agreed to
make available to Staar Surgical Company ("Borrower") the following described
credit accommodations (each, a "Credit" and collectively, the "Credits"):
1. A revolving line of credit under which Bank will make advances to
Borrower from time to time up to and including June 1, 2001, not to exceed at
any time the maximum principal amount of Ten Million Dollars ($10,000,000.00)
("Line of Credit"), the proceeds of which shall be used to finance Xxxxxxxx's
working capital requirements.
2. A term loan in the original principal amount of Five Million Dollars
($5,000,000.00) ("Term Loan"), on which the outstanding principal balance as of
the date hereof is $4,125,160.09. Subject to the terms and conditions of this
letter, Bank hereby confirms that the Term Loan remains in full force and
effect.
3. A facility under which Xxxx will enter into foreign exchange contracts
for the account of Borrower from time to time up to and including June 1, 2001,
not to exceed at any time the maximum principal amount of One Million United
States Dollars (US$1,000,000.00) ("Foreign Exchange Facility").
I. CREDIT TERMS:
1. LINE OF CREDIT:
(a) Line of Credit Note. Borrower's obligation to repay advances under the
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Line of Credit shall be evidenced by a promissory note substantially in the form
of Exhibit A attached hereto ("Line of Credit Note"), all terms of which
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are incorporated herein by this reference.
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(b) Letter of Credit Subfeature. As a subfeature under the Line of Credit,
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Bank agrees from time to time during the term thereof to issue standby letters
of credit for the account of Borrower to support performance requirement (each,
a "Letter of Credit" and collectively, "Letters of Credit"); provided however,
that the form and substance of each Letter of Credit shall be subject to
approval by Bank, in its sole discretion; and provided further, that the
aggregate undrawn amount of all outstanding Letters of Credit shall not at any
time exceed Five Million Dollars ($5,000,000.00). Each Letter of Credit shall be
issued for a term not to exceed 365 days, as designated by Xxxxxxxx; provided
however, that no Letter of Credit shall have an expiration date subsequent to
the maturity date of the Line of Credit. The undrawn amount of all Letters of
Credit shall be reserved under the Line of Credit and shall not be available for
borrowings thereunder. Each Letter of Credit shall be subject to the additional
terms and conditions of the Letter of Credit Agreement and related documents, if
any, required by Bank in connection with the issuance thereof. Each draft paid
by Bank under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this letter applicable to such advances; provided however, that if
advances under the Line of Credit are not available, for any reason, at the time
any draft is paid by Bank, then Borrower shall immediately pay to Bank the full
amount of such draft, together with interest thereon from the date such amount
is paid by Bank to the date such amount is fully repaid by Borrower, at the rate
of interest applicable to advances under the Line of Credit. In such event
Xxxxxxxx agrees that Bank, in its sole discretion, may debit any demand deposit
account maintained by Borrower with Bank for the amount of any such draft.
(c) Borrowing and Repayment. Borrower may from time to time during the term
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of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.
2. TERM LOAN:
(a) Term Note. Bank has made a loan to Borrower in the original principal
---------
amount of Five Million Dollars ($5,000,000.00), on which the outstanding
principal balance as of the date hereof is $4,125,160.09. Xxxxxxxx's obligation
to repay the Term Loan is evidenced by a promissory note substantially in
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the form of Exhibit B attached hereto ("Term Note"), all terms of which are
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incorporated herein by this reference. Any reference in the Term Note to any
prior loan agreement between Bank and Borrower shall be deemed a reference to
this letter.
(b) Repayment. The principal amount of the Term Loan shall be repaid in
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accordance with the provisions of the Term Note.
(c) Prepayment. Borrower may prepay principal on the Term Loan solely in
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accordance with the provisions of the Term Note.
3. FOREIGN EXCHANGE FACILITY:
(a) Foreion Exchange Facility. Bank will enter into foreign exchange
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contracts for the account of Borrower under the Foreign Exchange Facility for
the purchase and/or sale by Borrower in United States dollars of Five Million;
provided however, that the aggregate of all outstanding foreign exchange
contracts shall not at any time exceed the maximum principal amount available
under the Foreign Exchange Facility, as set forth above. No foreign exchange
contract shall be executed for a term in excess of two (2) months or for a term
which extends beyond the maturity date of the Line of Credit. Borrower shall
have a "Delivery Limit" under the Foreign Exchange Facility not to exceed at any
time the aggregate principal amount of One Million United States Dollars
(US$1,000,000.00), which Delivery Limit reflects the maximum principal amount of
Borrower's foreign exchange contracts which may mature during any sixty (60) day
period. All foreign exchange transactions shall be subject to the additional
terms of a Foreign Exchange Agreement, substantially in the form of
Exhibit C attached hereto ("Foreign Exchange Agreement"), all terms of
which are incorporated herein by this reference.
(b) Settlement. Each foreign exchange contract under the Foreign Exchange
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Facility shall be settled on its maturity date by Bank's debit to any demand
deposit account maintained by Borrower with Bank.
II. INTEREST/FEES:
1. Interest. The outstanding principal balance of the Line of Credit and
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Term Loan shall bear interest at the rate of interest set forth in the Line of
Credit Note and the Term Note.
2. Computation and Payment. Interest shall be computed on the basis of a
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360-day year, actual days elapsed. Interest shall
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be payable at the times and place set forth in the Line of Credit Note and the
Term Note.
3. Unused Commitment Fee. Borrower shall pay to Bank an unused commitment
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fee equal to a percentage per annum (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit,
which percentage shall be determined on the basis of the following grid which
sets a different percentage depending upon the "Applicable Libor Margin" in
effect under the Line of Credit Note during the calculation period. This unused
commitment fee shall be calculated on a quarterly basis by Bank and shall be due
and payable by Borrower in arrears within thirty (30) days after each billing is
sent by Bank.
Applicable Libor Margin Unused Fee Percentage
1.750% .25%
1.500% .20%
1.375% .15%
1.250% .15%
4. Letter of Credit Fees. Borrower shall pay to Bank (a) fees upon the
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issuance of each Letter of Credit equal to one percent (1.00%) per annum
(computed on the basis of a 360-day year, actual days elapsed) of the face
amount thereof; and (b) fees upon the payment or negotiation by Bank of each
draft under any Letter of Credit and fees upon the occurrence of any other
activity with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank's standard fees and charges then in effect for such
activity.
5. Collection of Payments. Borrower authorizes Bank to collect all
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principal, interest and fees due under each Credit by charging Borrower's demand
deposit account number 4 159-251172 with Bank, or any other demand deposit
account maintained by Borrower with Bank, for the full amount thereof. Should
there be insufficient funds in any such demand deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.
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III. REPRESENTATIONS AND WARRANTIES:
Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this letter and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this letter.
1. Legal Status. Borrower is a corporation, duly organized and existing and
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in good standing under the laws of the state of Delaware, and is qualified or
licensed to do business in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.
2. Authorization and Validity. This letter, the Line of Credit Note and
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Term Note, and each other document, contract or instrument deemed necessary by
Bank to evidence any extension of credit to Borrower pursuant to the terms and
conditions hereof, or now or at any time hereafter required by or delivered to
Bank in connection with this letter (collectively, the "Loan Documents") have
been duly authorized, and upon their execution and delivery in accordance with
the provisions hereof will constitute legal, valid and binding agreements and
obligations of Borrower or the party which executes the same, enforceable in
accordance with their respective terms.
3. No Violation. The execution, delivery and performance by Borrower of
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each of the Loan Documents do not violate any provision of any law or
regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in a breach of or constitute a default under any
contract, obligation, indenture or other instrument to which Borrower is a party
or by which Borrower may be bound.
4. Litigation. There are no pending, or to the best of Xxxxxxxx's knowledge
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threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
could have a material adverse effect on the financial condition or operation of
Borrower other than those disclosed by Borrower to Bank in writing prior to the
date hereof.
5. Correctness of Financial Statement. The financial statement of Borrower
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dated April 3, 1998, a true copy of which has been delivered by Borrower to Bank
prior to the date hereof, (a) is complete and correct and presents fairly the
financial condition of Borrower, (b) discloses all liabilities of Borrower
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that are required to be reflected or reserved against under generally accepted
accounting principles, whether liquidated or unliquidated, fixed or contingent,
and (c) has been prepared in accordance with generally accepted accounting
principles consistently applied. Since the date of such financial statement
there has been no material adverse change in the condition or operation of
Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or
otherwise encumbered any of its assets or properties except in favor of Bank or
as otherwise permitted by Bank in writing.
6. Income Tax Returns. Borrower has no knowledge of any pending assessments
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or adjustments of its income tax payable with respect to any year.
7. No Subordination. There is no agreement, indenture, contract or
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instrument to which Borrower is a party or by which Borrower may be bound that
requires the subordination in right of payment of any of Borrower's obligations
subject to this letter to any other obligation of Borrower.
8. Permits, Franchises. Borrower possesses, and will hereafter possess, all
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permits, consents, approvals, franchises and licenses required and all rights to
trademarks, trade names, patents and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance with
applicable law.
9. ERISA. Borrower is in compliance in all material respects with all
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applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended or recodified from time to time ("ERISA"); Borrower has not violated any
provision of any defined employee pension benefit plan (as defined in ERISA)
maintained or contributed to by Borrower (each, a "Plan"); no Reportable Event,
as defined in ERISA, has occurred and is continuing with respect to any Plan
initiated by Borrower; Borrower has met its minimum funding requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as they come due in accordance with the Plan documents and
under generally accepted accounting principles.
10. Other Obligations. Borrower is not in default on any obligation for
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borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
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11. Environmental Matters. Except as disclosed by Borrower to Bank in
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writing prior to the date hereof, Borrower is in compliance in all material
respects with all applicable federal or state environmental, hazardous waste,
health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower's operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
Borrower is the subject of any federal or state investigation evaluating whether
any remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment.
Borrower has no material contingent liability in connection with any release of
any toxic or hazardous waste or substance into the environment.
IV. CONDITIONS:
1. Conditions of Initial Extension of Credit. The obligation of Bank to
-----------------------------------------
grant any of the Credits is subject to fulfillment to Bank's satisfaction of all
of the following conditions:
(a) Documentation. Bank shall have received each of the Loan Documents,
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duly executed and in form and substance satisfactory to Bank.
(b) Financial Condition. There shall have been no material adverse change,
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as determined by Bank, in the financial condition or business of Borrower, nor
any material decline, as determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets
of Borrower.
(c) Insurance. Borrower shall have delivered to Bank evidence of insurance
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coverage on all Borrower's property, in form, substance, amounts, covering risks
and issued by companies satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank, including without limitation,
policies of fire and extended coverage insurance covering all real property
collateral required hereby, with replacement cost and mortgagee loss payable
endorsements, and such policies of insurance against specific hazards affecting
any such real property as may be required by governmental regulation or Bank.
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2. Conditions of Each Extension of Credit. The obligation of Bank to make
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each extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank's satisfaction of each of the following conditions:
(a) Compliance. The representations and warranties contained herein
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and in each of the other Loan Documents shall be true on and as of the date of
the signing of this letter and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
default hereunder, and no condition, event or act which with the giving of
notice or the passage of time or both would constitute such a default, shall
have occurred and be continuing or shall exist.
(b) Documentation. Bank shall have received all additional documents which
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may be required in connection with such extension of credit.
V. COVENANTS:
Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:
1. Punctual Payment. Punctually pay all principal, interest, fees or other
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liabilities due under any of the Loan Documents at the times and place and in
the manner specified therein, and immediately upon demand by Bank, the amount by
which the outstanding principal balance of any of the Credits at any time
exceeds any limitation on borrowings applicable thereto].
2. Accounting Records. Maintain adequate books and records in accordance
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with generally accepted accounting principles consistently applied, and permit
any representative of Bank, at any reasonable time, to inspect, audit and
examine such books and records, to make copies of the same and inspect the
properties of Borrower.
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3. Financial Statements. Provide to Bank all of the following, in form and
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detail satisfactory to Bank:
(a) not later than 120 days after and as of the end of each fiscal year, an
audited financial statement of Xxxxxxxx, prepared by a certified public
accountant acceptable to Bank, to include balance sheet, income statement,
statement of cash flow and all footnotes;
(b) not later than 60 days after and as of the end of each fiscal quarter,
a consolidating financial statement of Xxxxxxxx, prepared by Xxxxxxxx, to
include balance sheet and income statement;
(c) from time to time such other information as Bank may reasonably
request.
4. Compliance. Preserve and maintain all licenses, permits, governmental
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approvals, rights, privileges and franchises necessary for the conduct of its
business; and comply with the provisions of all documents pursuant to which
Borrower is organized and/or which govern Borrower's continued existence and
with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to Borrower and/or its business.
5. Insurance. Maintain and keep in force insurance of the types and in
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amounts customarily carried in lines of business similar to that of Borrower,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to Bank, and deliver to Bank from time to
time at Bank's request schedules setting forth all insurance then in effect.
6. Facilities. Keep all properties useful or necessary to Borrower's
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business in good repair and condition, and from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall be
fully and efficiently preserved and maintained.
7. Taxes and Other Liabilities. Pay and discharge when due any and all
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indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for
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eventual payment thereof in the event Borrower is obligated to make such
payment.
8. Litigation. Promptly give notice in writing to Bank of any litigation
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pending or threatened against Borrower with a claim in excess of $250,000.00.
9. Financial Condition. Maintain Borrower's financial condition as follows
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using generally accepted accounting principles consistently applied and used
consistently with prior practices (except to the extent modified by the
definitions herein):
(a) Tangible Net Worth not at any time less than $30,000,000.00, with
"Tangible Net Worth" defined as the aggregate of total stockholders' equity plus
subordinated debt less any intangible assets.
(b) Total Liabilities divided by Tangible Net Worth not at any time greater
than 0,80 to 1.0, with "Total Liabilities" defined as the aggregate of current
liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" defined as the aggregate of total stockholders' equity plus
subordinated debt less any intangible assets.
(c) Quick Ratio not at any time less than 0.90 to 1.0, with "Quick Ratio"
defined as the aggregate of unrestricted cash, unrestricted marketable
securities and receivables convertible into cash divided by total current
liabilities.
(d) Net income after taxes not less than $1.00 on an annual basis,
determined as of each fiscal year end, and pre-tax profit not less than $1.00 on
a quarterly basis, determined as of each fiscal quarter end.
(e) Funded Debt/EBITDA Coverage Ratio not greater than 2.0 to 1.0, on a
rolling four-fiscal quarter basis, determined as of each fiscal quarter end,
commencing with the fiscal quarter ending June 30, 1998; with "Funded Debt"
defined as all interest bearing obligations, including but not limited to all
interest bearing obligations owing to Bank and all interest bearing obligations
owing to shareholders, plus capital leases; with "EBITDA" defined as net profit
before tax plus interest expense (net of capitalized interest expense),
depreciation expense and amortization expense; and with "Funded Debt/EBITDA
Coverage Ratio" defined as Funded Debt divided by EBITDA.
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10. Capital Expenditures. Not make any additional investment in fixed
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assets in any fiscal year in excess of an aggregate of $5,000,000.00.
11. Lease Expenditures. Not incur operating lease expense in any fiscal
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year in excess of an aggregate of $3,000,000.00.
12. Other Indebtedness. Not create, incur, assume or permit to exist any
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indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank, and (b) any
other liabilities of Borrower existing as of, and disclosed to Bank prior to,
the date hereof and (c) purchase money contracts not to exceed in aggregate of
$3,000,000.00.
13. Merger, Consolidation, Transfer of Assets. Not merge into or
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consolidate with any other entity; nor make any substantial change in the nature
of Borrower's business as conducted as of the date hereof; nor acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.
14. Guaranties. Not guarantee or become liable in any way as surety,
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endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank.
15. Loans, Advances, Investments. Not make any loans or advances to or
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investments in any person or entity, except any of the foregoing existing as of,
and disclosed to Bank prior to, the date hereof, and additional investments in
amounts not to exceed an aggregate of $5,000,000.00 in any fiscal year.
16. Pledge of Assets. Not mortgage, pledge, grant or permit to exist a
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security interest in, or lien upon, all or any portion of Borrower's assets now
owned or hereafter acquired,
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except any of the foregoing in favor of Bank or which are existing as of, and
disclosed to Bank in writing prior to, the date hereof.
17. Year 2000 Compliance. Perform all acts reasonably necessary to ensure
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that (a) Borrower and any business in which Borrower holds a substantial
interest, and (b) all customers, suppliers and vendors that are material to
Borrower's business, become Year 2000 Compliant in a timely manner. Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing of such systems. As
used herein, "Year 2000 Compliant" shall mean, in regard to any entity, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of such entity, will
properly perform date sensitive functions before, during and after the year
2000. Borrower shall, immediately upon request, provide to Bank such
certifications or other evidence of Borrower's compliance with the terms hereof
as Bank may from time to time require.
VI. DEFAULT, REMEDIES:
1. Default, Remedies. Upon the violation of any term or condition of any of
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the Loan Documents, or upon the occurrence of any default or defined event of
default under any of the Loan Documents: (a) all indebtedness of Borrower under
each of the Loan Documents, any term thereof to the contrary notwithstanding,
shall at Bank's option and without notice become immediately due and payable
without presentment, demand, protest or notice of dishonor, all of which are
expressly waived by Xxxxxxxx; (b) the obligation, if any, of Bank to extend any
further credit under any of the Loan Documents shall immediately cease and
terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any of the Credits and
to exercise any or all of the rights of a beneficiary or secured party pursuant
to applicable law. All rights, powers and remedies of Bank may be exercised at
any time by Bank and from time to time after the occurrence of any such breach
or default, are cumulative and not exclusive, and shall be in addition to any
other rights, powers or remedies provided by law or equity.
2. No Waiver. No delay, failure or discontinuance of Bank in exercising any
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right, power or remedy under any of the Loan Documents shall affect or operate
as a waiver of such right,
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power or remedy; nor shall any single or partial exercise of any such right,
power or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power or remedy. Any
waiver, permit, consent or approval of any kind by Bank of any breach of or
default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.
VII. MISCELLANEOUS:
1. Notices. All notices, requests and demands which any party is required
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or may desire to give to any other party under any provision of this letter must
be in writing delivered to each party at its address first set forth above, or
to such other address as any party may designate by written notice to all other
parties. Each such notice, request and demand shall be deemed given or made as
follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.
2. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Bank
-----------------------------------
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
letter and the other Loan Documents, Bank's continued administration hereof and
thereof, and the preparation of amendments and waivers hereto and thereto, (b)
the enforcement of Bank's rights and/or the collection of any amounts which
become due to Bank under any of the Loan Documents, and (c) the prosecution or
defense of any action in any way related to any of the Loan Documents, including
without limitation, any action for declaratory relief, whether incurred at the
trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested
matter or motion brought by Bank or any other person) relating to any Borrower
or any other person or entity.
3. Successors, Assignment. This letter shall be binding upon and inure to
----------------------
the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interest hereunder without Bank's prior written
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consent. Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank's rights and
benefits under each of the Loan Documents. In connection therewith Bank may
disclose all documents and information which Bank now has or hereafter may
acquire relating to any of the Credits, Borrower or its business, [any guarantor
hereunder or the business of such guarantor,] or any collateral required
hereunder.
4. Entire Agreement; Amendment. This letter and the other Loan Documents
---------------------------
constitute the entire agreement between Borrower and Bank with respect to the
Credits and supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof. This letter may be amended
or modified only in writing signed by each party hereto.
5. No Third Party Beneficiaries. This letter is made and entered into for
----------------------------
the sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity shall be a third
party beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this letter or any other of the Loan Documents to which it is
not a party.
6. Severability of Provisions. If any provision of this letter shall be
--------------------------
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
letter.
7. Governing Law. This letter shall be governed by and construed in
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accordance with the laws of the state of California.
8. Arbitration.
-----------
(a) Arbitration. Upon the demand of any party, any Dispute shall be
-----------
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this letter. A "Dispute" shall mean any action, dispute, claim
or controversy of any kind, whether in contract or tort, statutory or common
law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities, transactions
or obligations of any kind related directly or indirectly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents. Any party may by summary proceedings
bring an action in court to compel
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arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered by the
---------------
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. SS91 or any similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
----------------------------------------------------------
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
--------------------------------------------
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
Staar Surgical Company
June 1, 1998
Page
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the contrary, in
---------------
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding anything
--------------------------------------------
herein to the contrary, no Dispute shall be submitted to arbitration if the
Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
Staar Surgical Company
June 1, 1998
Page
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
-------------
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
Staar Surgical Company
June 1, 1998
Page
Your acknowledgment of this letter shall constitute acceptance of the
foregoing terms and conditions. Bank's commitment to extend any credit to
Borrower pursuant to the terms of this letter shall terminate on June 30, 1998,
unless this letter is acknowledged by Xxxxxxxx and returned to Bank on or before
that date.
Sincerely,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Xxxxx Xxxxxxxxx
Vice President
Acknowledged and accepted as of :
-------------
STAAR SURGICAL COMPANY
By:
-------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
[LOGO OF XXXXX FARGO BANK]
San Xxxxxxx RCBO
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
June 1, 1998
Staar Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Gentlemen:
It is anticipated that from time to time your company (the "Customer") and
Xxxxx Fargo Bank, National Association ("Bank"), at the request of Customer, may
enter into foreign exchange contracts for either spot or future delivery of
foreign currencies and/or for options to purchase or sell (i.e., trade) foreign
currencies. This letter sets forth the terms and conditions governing such
transactions as follows:
1. Confirmations. Bank will send Customer a confirmation of each
-------------
transaction duly requested by Customer and agreed to by Bank. Upon Customer's
receipt of each such confirmation, Customer shall promptly sign and return a
copy of such confirmation to Bank; provided however, that Customer's failure
either to sign or to return any confirmation shall not release Customer from any
of its obligations or liabilities hereunder or with respect to the foreign
exchange transaction described therein.
2. Performance. Should Customer fail fully to perform its obligations under
-----------
any foreign exchange contract entered into by Bank with or for the benefit of
Customer as set forth herein on the due date thereof, or to perform any of
Customer's obligations hereunder, or should Customer breach any representation
or warranty made by Customer to Bank herein, without limiting Bank's rights and
remedies under applicable law: (a) Bank may, in its sole discretion, cancel any
foreign exchange contracts then existing for the benefit of Customer; (b)
Customer shall indemnify Bank for, and defend and hold Bank harmless from and
against, any and all damages, costs, expenses and losses that may arise from any
such failure or breach, and/or from the exercise of Bank's rights as aforesaid,
including without limitation, all losses resulting from the liquidation of
Bank's positions in the relevant currencies, and all reasonable legal fees (to
include outside counsel fees and all allocated costs of Bank's in-house
Staar Surgical Company
June 1, 1998
Page
counsel) incurred by Bank in pursuance of its rights hereunder; and (c) Bank may
set off and apply against Customer's liability to Bank any deposits or any other
liability to Customer, irrespective of the due date or nature thereof,
notwithstanding that such set off may give rise to penalties for early
withdrawal of funds.
3. Cancellation. Bank shall evaluate any request for a trade hereunder
------------
individually, and may, in its sole discretion, refuse to enter into or perform
any proposed foreign exchange contract, without prejudice to entering into or
performing any other foreign exchange contract with or for the benefit of
Customer. In the event that (a) Customer shall request that Bank cancel or
extend the term of a foreign exchange contract, and (b) Bank, in its sole
discretion, shall agree to such request, Customer shall forthwith reimburse Bank
for any and all damages, costs, expenses and tosses that may arise as a result
thereof, including without limitation, all losses resulting from the liquidation
of Bank's position in the relevant currency.
4. Warranties. Each request by Customer that Bank enter into a foreign
----------
exchange contract with or for the benefit of Customer shall be deemed a
representation and warranty by Customer that such transaction is in conformity
with all applicable laws and regulations. Bank is not an investment advisor, and
Bank expressly disclaims all investment advice with respect to any transaction
ordered by Customer pursuant hereto. Customer agrees to take the sole risk of
any and all market fluctuations in any currency traded pursuant to the terms
hereof.
5. Liability. Bank shall not be liable for any losses or damages in
---------
consequence of any present or future laws, regulations or other directives of
any government or of any other event or circumstances beyond Bank's control, or
due to any other actions performed by Bank pursuant to the terms hereof, all
such risks being expressly assumed by Customer, except for the gross negligence
or willful misconduct of Bank. In no event shall Bank be responsible or liable
for any consequential damages resulting from its actions pursuant to this
agreement. The provisions of this paragraph 5 shall survive any termination
hereof.
6. Term. The agreements set forth in this letter may be terminated in
----
writing by either party, at which point the obligations of the parties hereto
shall end, except for closing out existing foreign exchange contracts and except
as otherwise set forth herein.
Staar Surgical Company
June 1, 1999
Page 3
7. Successors and Assigns. This letter shall be binding upon and inure to
----------------------
the benefit of the respective heirs, legal representatives, successors and
assigns of the parties; provided however, that Customer may not assign or
otherwise transfer any of its rights or obligations hereunder or under any
foreign exchange contract subject hereto without Bank's prior written consent.
8. Governing Law. This letter and all foreign exchange contracts subject
-------------
hereto shall be governed by and construed in accordance with the laws of the
State of California.
Please indicate your acceptance of the terms and conditions contained
herein by signing and dating the enclosed copy of this letter and returning it
to Bank at the above address.
Very truly yours,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxx
-------------------------
Xxxxx Xxxxxxxxx
Vice President
Agreed and accepted as of :
-----------------
STAAR SURGICAL COMPANY
By:
------------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
"Exhibit B"
TERM COMMITMENT NOTE
$5,000,000.00 West Covina, California
November 7, 1997
FOR VALUE RECEIVED, the undersigned STAAR SURGICAL COMPANY ("Borrower")
promises to pay to the order of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its San Xxxxxxx Valley Regional Commercial Banking Office at 0000 X. Xxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxx, or at such other place as the
holder hereof may designate, in lawful money of the United States of America and
in immediately available funds, the principal sum of Five Million Dollars
($5,000,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in California are authorized or
required by law to close.
(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for three (3), six (6), nine (9) or twelve (12) months, as
designated by Borrower, during the outstanding principal balance of this
Note bears interest determined in relation to LIBOR; provided however, that
no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day which is not a Business Day, then
such Fixed Rate Term shall be extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:
LIBOR = Base LIBOR
-------------------------------
100% - LIBOR Reserve Percentage
(i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference thereto,
on the first day of a Fixed Rate Term for delivery of funds on said date
for a period of time approximately equal to the number of days in such
Fixed Rate Term and in an amount approximately equal to the principal
amount to
which such Fixed Rate Term applies. Borrower understands and agrees that
Bank may base its quotation of the Inter-Bank Market Offered Rate upon such
offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate
offered for U.S. dollar deposits on the London Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of
the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as
the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as Bank
may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (i) at a fluctuating rate per annum one-quarter percent
(.25%) below the Prime Rate in effect from time to time, or (ii) at a fixed
rate per annum determined by Bank to be one and one and three-quarters
percent (1.75%) above LIBOR in effect on the first day of the applicable
Fixed Rate Term. When interest is determined in relation to the Prime Rate,
each change in the rate of interest hereunder shall become effective on the
date each Prime Rate change is announced within Bank. With respect to each
LIBOR selection hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term applicable thereto and
any payments made thereon on Bank's books and records (either manually or
by electronic entry) and/or on any schedule attached to this Note, which
notations shall be prima facie evidence of the accuracy of the information
noted.
(b) Selection of Interest Rate Options. At any time this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower
at the end the Fixed Rate Term applicable thereto so that it bears interest
determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate
Term designated by Borrower. At any time this Note bears interest
determined in relation to the Prime Rate, Borrower may convert it so that
it bears interest determined in relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as Xxxxxxxx requests an advance
hereunder or wishes to select a LIBOR option for the
2
outstanding principal balance hereof, and at the end of each Fixed Rate Term,
Borrower shall give Bank notice specifying: (i) the interest rate option
selected by Borrower and (ii) for each LIBOR selection, the length of the
applicable Fixed Rate Term. Any such notice may be given by telephone so long
as, with respect to each LIBOR selection, (A) Bank receives written confirmation
from Borrower not later than three (3) Business Days after such telephone notice
is given, and (B) such notice is given to Bank prior to 10:00 am., California
time, on the first day of the Fixed Rate Term. For each LIBOR option requested
hereunder, Bank will quote the applicable fixed rate to Borrower at
approximately 10:00 a.m., California time, on the first day of the Fixed Rate
Term. If Borrower does not immediately accept the rate quoted by Bank, any
subsequent acceptance by Borrower shall be subject to a redetermination by Bank
of the applicable fixed rate; provided however, that if Borrower fails to accept
any such rate by 11:00 a.m., California time, on the Business Day such quotation
is given, then the quoted rate shall expire and Bank shall have no obligation to
permit a LIBOR option to be selected on such day. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end of
any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest
selection for such advance or the principal amount to which such Fixed Rate Term
applied.
(c) Additional LIBOR Provisions.
---------------------------
(i) If Bank at any time shall determine that for any reason
adequate and reasonable means do not exist for ascertaining LIBOR, then
Bank shall promptly give notice thereof to Borrower. If such notice is
given and until such notice has been withdrawn by Bank, then (A) no new
LIBOR option may be selected by Borrower, and (B) the outstanding principal
balance hereof which bears interest determined in relation to LIBOR,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.
(ii) If any law, treaty, rule, regulation or determination of a
court or governmental authority or any change therein or in the
interpretation or application thereof (each, a "Change in Law") shall make
it unlawful for Bank (A) to make LIBOR options available hereunder, or (B)
to maintain interest rates based on LIBOR, then in the former event, any
obligation of Bank to make available such unlawful LIBOR options shall
immediately be cancelled, and in the latter event, any such unlawful LIBOR-
based interest rates then outstanding shall be converted, at Bank's option,
so that interest on the outstanding principal balance subject thereto is
determined in relation to the Prime Rate; provided however, that if any
such Change in Law shall permit any LIBOR-based interest rates to remain in
effect until the expiration of the Fixed Rate Term applicable thereto, then
such permitted LIBOR-based interest rates shall continue in effect until
the expiration of such Fixed Rate Term. Upon the
3
occurrence of any of the foregoing events, Borrower shall pay to Bank
immediately upon demand such amounts as may be necessary to compensate Bank for
any fines, fees, charges, penalties or other costs incurred or payable by Bank
as a result thereof and which are attributable to any LIBOR options made
available to Borrower hereunder, and any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.
(iii) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall;
(A) subject Bank to any tax, duty or other charge with respect to any
LIBOR options, or change the basis of taxation of payments to
Bank of principal, interest, fees or any other amount payable
hereunder (except for changes in the rate of tax on the overall
net income of Bank); or
(B) impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances
or loans by, or any other acquisition of funds by any office of
Bank; or
(C) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to
reduce any amount receivable by Bank in connection therewith, then in any
such case, Borrower shall pay to Bank immediately upon demand such amounts
as may be necessary to compensate Bank for any additional costs incurred by
Bank and/or reductions in amounts received by Bank which are attributable
to such LIBOR options. In determining which costs incurred by Bank and/or
reductions in amounts received by Bank are attributable to any LIBOR
options made available to Borrower hereunder, any reasonable allocation
made by Bank among its operations shall be conclusive and binding upon
Borrower.
(c) Payment of Interest. Interest accrued on this Note shall be payable on
-------------------
the first day of each month, commencing November 1, 1997.
(d) Default Interest. From and after the maturity date of this Note, or
----------------
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.
4
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time to and
-----------------------
including March 31, 1998, borrow and partially or wholly repay its outstanding
borrowings, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that amounts repaid may not be reborrowed; and provided further, that
the total borrowings under this Note shall not exceed the principal amount
stated above. The unpaid principal balance of this obligation at any time shall
be the total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder.
(b) Required Principal Payments. Principal shall be payable on the first
---------------------------
day each month in installments of Eighty-Three Thousand, Three Hundred, Thirty-
Four Dollars ($83,334.00) each, commencing April 1, 1998, and continuing up to
and including February 1, 2003, with a final installment consisting of all
remaining unpaid principal due and payable in full on March 1, 2003.
(c) Advances. Advances hereunder, to the total amount of the principal sum
--------
stated above, may be made by the holder at the oral or written request of
Xxxxxxx X. Xxxxxxxxxx or Xxxx X. Xxxx or Xxxx Xxxxxx or Xxxxxxx Xxxxxxx, any one
acting alone, who are authorized to request advances and direct the disposition
of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any account of any Borrower with
the holder, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by any
Borrower.
(d) Application of Payments. Each payment made on this Note shall be
-----------------------
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
5
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on this Note which bears
----------
interest determined in relation to the Prime Rate at any time, in any amount and
without penalty.
(b) LIBOR. Borrower may prepay principal on this Note when it bears
-----
interest determined in relation to LIBOR at any time and in the minimum amount
of One Hundred Thousand Dollars ($100,000.00); provided however, that if the
outstanding principal balance of this Note is less than said amount, the minimum
prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if this
Note shall become due and payable at any time prior to the last day of the Fixed
Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to
Bank immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:
(i) Determine the amount of interest which would have accrued each month
on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term
applicable thereto.
(ii) Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount
prepaid for the remaining term of such Fixed Rate Term at LIBOR in
effect on the date of prepayment for new loans made for such term and
in a principal amount equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2.00%)
above the Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed). Each change in the rate of interest on any
such past due prepayment fee shall become effective on the date each Prime Rate
change is announced within Bank.
6
EVENTS OF DEFAULT:
The occurrence of any of the following shall constitute an "Event of
Default" under this Note:
(a) The failure to pay any principal, interest, fees or other charges
when due hereunder or under any contract, instrument or document executed
in connection with this Note.
(b) The filing of a petition by or against any Borrower, any guarantor
of this Note or any general partner or joint venturer in any Borrower which
is a partnership or a joint venture (with each such guarantor, general
partner and/or joint venturer referred to herein as a "Third Party
Obligor") under any provisions of the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended or recodified from time to time, or
under any similar or other law relating to bankruptcy, insolvency,
reorganization or other relief for debtors; the appointment of a receiver,
trustee, custodian or liquidator of or for any part of the assets or
property of any Borrower or Third Party Obligor; any Borrower or Third
Party Obligor becomes insolvent, makes a general assignment for the benefit
of creditors or is generally not paying its debts as they become due; or
any attachment or like levy on any property of any Borrower or Third Party
Obligor.
(c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.
(d) Any default in the payment or performance of any obligation, or
any defined event of default, under any provisions of any contract,
instrument or document pursuant to which any Borrower or Third Party
Obligor has incurred any obligation for borrowed money, any purchase
obligation, or any other liability of any kind to any person or entity,
including the holder.
(e) Any financial statement provided by any Borrower or Third Party
Obligor to Bank proves to be incorrect, false or misleading in any material
respect.
(f) Any sale or transfer of all or a substantial or material part of
the assets of any Borrower or Third Party Obligor other than in the
ordinary course of its business.
(g) Any violation or breach of any provision of, or any defined event
of default under, any addendum to this Note or any loan agreement,
guaranty, security agreement, deed of trust, mortgage or other document
executed in connection with or securing this Note.
7
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the holder of
--------
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower. Each
Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the holder's
in-house counsel), expended or incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or entity
-----------------------------
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) Governing Law. This Note shall be governed by and construed in
-------------
accordance with the laws of the State of California.
See Addendum to Promissory Note attached hereto, all terms of which are
incorporated herein by this reference.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
STAAR SURGICAL COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
8
[LOGO OF XXXXX FARGO]
San Xxxxxxx RCBO
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
June 1, 1998
Staar Surgical Company
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Gentlemen:
It is anticipated that from time to time your company (the "Customer") and
Xxxxx Fargo Bank, National Association ("Bank"), at the request of Customer, may
enter into foreign exchange contracts for either spot or future delivery of
foreign currencies and/or for options to purchase or sell (i.e., trade) foreign
currencies. This letter sets forth the terms and conditions governing such
transactions as follows:
1. Confirmations. Bank will send Customer a confirmation of each
-------------
transaction duly requested by Customer and agreed to by Bank. Upon Customer's
receipt of each such confirmation, Customer shall promptly sign and return a
copy of such confirmation to Bank; provided however, that Customer's failure
either to sign or to return any confirmation shall not release Customer from any
of its obligations or liabilities hereunder or with respect to the foreign
exchange transaction described therein.
2. Performance. Should Customer fail fully to perform its obligations under
-----------
any foreign exchange contract entered into by Bank with or for the benefit of
Customer as set forth herein on the due date thereof, or to perform any of
Customer's obligations hereunder, or should Customer breach any representation
or warranty made by Customer to Bank herein, without limiting Bank's rights and
remedies under applicable law: (a) Bank may, in its sole discretion, cancel any
foreign exchange contracts then existing for the benefit of Customer; (b)
Customer shall indemnify Bank for, and defend and hold Bank harmless from and
against, any and all damages, costs, expenses and losses that may arise from any
such failure or breach, and/or from the exercise of Bank's rights as aforesaid,
including without limitation, all losses resulting from the liquidation of
Bank's positions in the relevant currencies, and all reasonable legal fees (to
include outside counsel fees and all allocated costs of Bank's in-house
Staar Surgical Company
June 1, 1998
Page 2
counsel) incurred by Bank in pursuance of its rights hereunder; and (c) Bank may
set off and apply against Customer's liability to Bank any deposits or any other
liability to Customer, irrespective of the due date or nature thereof,
notwithstanding that such set off may give rise to penalties for early
withdrawal of funds.
3. Cancellation. Bank shall evaluate any request for a trade hereunder
------------
individually, and may, in its sole discretion, refuse to enter into or perform
any proposed foreign exchange contract, without prejudice to entering into or
performing any other foreign exchange contract with or for the benefit of
Customer. In the event that (a) Customer shall request that Bank cancel or
extend the term of a foreign exchange contract, and (b) Bank, in its sole
discretion, shall agree to such request, Customer shall forthwith reimburse Bank
for any and all damages, costs, expenses and losses that may arise as a result
thereof, including without limitation, all losses resulting from the liquidation
of Bank's position in the relevant currency.
4. Warranties. Each request by Customer that Bank enter into a foreign
----------
exchange contract with or for the benefit of Customer shall be deemed a
representation and warranty by Customer that such transaction is in conformity
with all applicable laws and regulations. Bank is not an investment advisor, and
Bank expressly disclaims all investment advice with respect to any transaction
ordered by Customer pursuant hereto. Customer agrees to take the sole risk of
any and all market fluctuations in any currency traded pursuant to the terms
hereof.
5. Liability. Bank shall not be liable for any losses or damages in
---------
consequence of any present or future laws, regulations or other directives of
any government or of any other event or circumstances beyond Bank's control, or
due to any other actions performed by Bank pursuant to the terms hereof, all
such risks being expressly assumed by Customer, except for the gross negligence
or willful misconduct of Bank. In no event shall Bank be responsible or liable
for any consequential damages resulting from its actions pursuant to this
agreement. The provisions of this paragraph 5 shall survive any termination
hereof.
6. Term. The agreements set forth in this letter may be terminated in
----
writing by either party, at which point the obligations of the parties hereto
shall end, except for closing out existing foreign exchange contracts and except
as otherwise set forth herein.
Staar Surgical Company
June 1, 1999
Page 3
7. Successors and Assigns. This letter shall be binding upon and inure to
----------------------
the benefit of the respective heirs, legal representatives, successors and
assigns of the parties; provided however, that Customer may not assign or
otherwise transfer any of its rights or obligations hereunder or under any
foreign exchange contract subject hereto without Bank's prior written consent.
8. Governing Law. This letter and all foreign exchange contracts subject
-------------
hereto shall be governed by and construed in accordance with the laws of the
State of California.
Please indicate your acceptance of the terms and conditions contained
herein by signing and dating the enclosed copy of this letter and returning it
to Bank at the above address.
Very truly yours,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxx
Vice President
Agreed and accepted as of :
-----------------
STAAR SURGICAL COMPANY
By:
------------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
ADDENDUM TO PROMISSORY NOTE
(LIBOR PRICING ADJUSTMENTS)
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by STAAR SURGICAL COMPANY ("Borrower") and payable to XXXXX FARGO
BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of June 1, 1998, in the
principal amount of Ten Million Dollars ($l0,000,000.00) (the "Note").
The following provisions are hereby incorporated into the Note to reflect
the interest rate adjustments agreed to by Bank and Borrower:
INTEREST RATE ADJUSTMENTS:
(a) Initial LIBOR Margin. The initial LIBOR margin applicable to this Note
--------------------
shall be as set forth in the "Interest" paragraph herein.
(b) LIBOR Rate Adjustments. Bank shall adjust the LIBOR margin used to
----------------------
determine the rate of interest applicable to LIBOR options selected by Borrower
under this Note on a quarterly basis, commencing with Borrower's fiscal quarter
ending June 30, 1998, if required to reflect a change in Borrower's Funded
Debt/EBITDA Coverage Ratio as defined in the Credit Agreement referenced
herein),in accordance with the following grid:
Applicable
Funded Debt/EBITDA LIBOR
Coverage Ratio Margin
-------------- ------
1.50 to 1.0 or greater 1.750%
at least 1.00 to 1.0 but
less than 1.50 to 1.0 1.500%
at least .50 to 1.0 but
less than 1.00 to 1.0 1.375%
less than .50 to 1.0 1.250%
Each such adjustment shall be effective on the first Business Day of Borrower's
fiscal quarter following the quarter during which Bank receives and reviews
Borrower's most current fiscal quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.
IN WITNESS WHEREOF, this Xxxxxxxx has been executed as of the same date as
the Note.
STAAR SURGICAL COMPANY
By:
-----------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
-2-
XXXXX FARGO BANK REVOLVING LINE OF CREDIT NOTE
--------------------------------------------------------------------------------
$10,000,000.00 West Covina, California
June 1,1998
FOR VALUE RECEIVED, the undersigned STAAR SURGICAL COMPANY ("Borrower)
promises to pay to the order of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at San Xxxxxxx Valley RCBO, 0000 Xxxxx Xxxxx, Xxxxx 000, Xxxx
Xxxxxx, XX 00000, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of $10,000,000.00, or so much thereof as may be advanced and
be outstanding, with Interest thereon, to be computed on each advance from the
date of its disbursement as set forth herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in California are authorized or required by
law to close.
(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2, 3 or 6 months, as designated by Borrower, during which all
or a portion of the outstanding principal balance of this Note bears interest
determined in relation to LIBOR; provided however, that no Fixed Rate Term may
be selected for a principal amount less than $500,000.00; and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day which is not a Business Day, then such
Fixed Rate Term shall be extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage
equal to 100% less any LIBOR Reserve Percentage.
(i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited: to, the rate offered for U.S. dollar deposits on the London Inter-
Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve system (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall bear
--------
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum .50000% below the Prime Rate in effect from
time to time, or (ii) at a fixed rate per annum determined by Bank to be
1.37500% above LIBOR in effect on the first day of the applicable Fixed Rate
Term. When interest is determined in relation to the Prime Rate, each change in
the rate of Interest hereunder shall become effective on the date each Prime
Rate change is announced within Bank. With respect to each LIBOR selection
option selected hereunder, Bank is hereby authorized to [ILLEGIBLE] date,
principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.
(b) Selection of Interest Rate Options. At any time any portion of this
----------------------------------
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term. Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower: (ii) the
Revolving Line of Credit Note (08/96), Page 1
principal amount subject thereto; and (iii) for each LIBOR selection, the length
of the applicable Fixed Rate Term. Any such notice may be given by telephone so
long as, with respect to each LIBOR selection, (A) Bank receives written
confirmation from Borrower not later than 3 Business Days after such telephone
notice is given, and (B) such notice is given to Bank prior to 10:00 a.m.,
California time, on the first day of the Fixed Rate Term. For each LIBOR option
requested hereunder, Bank will quote the applicable fixed rate to Borrower at
approximately 10:00 a.m., California time, on the first day of the Fixed Rate
Term. If Borrower does not immediately accept the rate quoted by Bank, any
subsequent acceptance by Borrower shall be subject to a redetermination by Bank
of the applicable fixed rate; provided however, that if Borrower fails to accept
any such rate by 11:00 a.m., California time, on the Business Day such quotation
is given, then the quoted rate shall expire and Bank shall have no obligation to
permit a LIBOR option to be selected on such day. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end of
any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest
selection for such advance or the principal amount to which such Fixed Rate Term
applied.
(c) Additional LIBOR Provisions.
---------------------------
(i) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining LIBOR, then Bank shall
promptly give notice thereof to Borrower. If such notice is given and until
such notice has been withdrawn by Bank, then (A) no new LIBOR option may be
selected by Borrower, and (B) any portion of the outstanding principal
balance hereof which bears interest determined in relation to LIBOR,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.
(ii) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for
Bank (A) to make LIBOR options available hereunder, or (B) to maintain
interest rates based on LIBOR, then in the former event, any obligation of
Bank to make available such unlawful LIBOR options shall immediately be
cancelled, and in the latter event, any such unlawful LIBOR-based interest
rates then outstanding shall be converted, at Bank's option, so that
interest on the portion of the outstanding principal balance subject
thereto is determined in relation to the Prime Rate; provided however, that
if any such Change in Law shall permit any LIBOR-based interest rates to
remain in effect until the expiration of the Fixed Rate Term applicable
thereto, then such permitted LIBOR-based interest rates shall continue in
effect until the expiration of such Fixed Rate Term. Upon the occurrence of
any of the foregoing events, Borrower shall pay to Bank immediately upon
demand such amounts as may be necessary to compensate Bank for any fines,
fees, charges, penalties or other costs incurred or payable by Bank as a
result thereof and which are attributable to any LIBOR options made
available to Borrower hereunder, and any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.
(iii) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(A) subject Bank to any tax, duty or other charge with respect to any
LIBOR options, or change the basis of taxation of payments to Bank
of principal, interest, fees or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income
of Bank); or
(B) impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances
or loans by, or any other acquisition of funds by any office of
Bank; or
(C) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce any
amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available to
Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be payable on
-------------------
the 1st day of each month, commencing July 1, 1998.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may, from time to time during the
-----------------------
term of this Note [ILLEGIBLE], partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for any Borrower, which balance may be endorsed
hereon from time to time by the holder. The outstanding principal balance of
this Note shall be due and payable in fall on June 1, 2001.
(b) Advances. Advances xxxxxxxxx, to the total amount of the principal sum
--------
available hereunder, may be made by the holder at the oral or written request of
(i) XXXXXXX X. XXXXXXXXXX or XXXX X. XXXX or XXXX
Revolving Line of Credit Note (08/96), Page 2
XXXXXX or XXXXXXX XXXXXXX, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (ii) any person, with respect to advances deposited to the credit of
any account of any Borrower with the holder, which advances, when so deposited,
shall be conclusively presumed to have been made to or for the benefit of each
Borrower regardless of the fact that persons other than those authorized to
request advances may have authority to draw against such account. The holder
shall have no obligation to determine whether any person requesting an advance
is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this Note shall be
-----------------------
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on any portion of this Note
----------
which bears interest determined in relation to the Prime Rate at any time, in
any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this Note which
-----
bears interest determined in relation to LIBOR at any time and in the minimum
amount of $500,000.00; provided however, that if the outstanding principal
balance of such portion of this Note is less than said amount, the minimum
prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if any
such portion of this Note shall become due and payable at any time prior to the
last day of the Fixed Rate Term applicable thereto by acceleration or otherwise,
Borrower shall pay to Bank immediately upon demand a fee which is the sum of the
discounted monthly differences for each month from the month of prepayment
through the month in which such Fixed Rate Term matures, calculated as follows
for each such month:
(i) Determine the amount of interest which would have accrued each month
---------
on the amount prepaid at the interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed Rate Term applicable
thereto.
(ii) Subtract from the amount determined in (i) above the amount of
--------
interest which would have accrued for the same month on the amount prepaid for
the remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower falls to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.
EVENTS OF DEFAULT:
The occurrence of any of the following shall constitute an "Event of Default"
under this Note:
(a) The failure to pay any principal, interest, fees or other charges when
due hereunder or under any contract, Instrument or document executed In
connection with this Note.
(b) The filing of a petition by or against any Borrower, any guarantor of
this Note or any general partner or joint venturer in any Borrower which is a
partnership or a joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as
amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for debtors;
the appointment of a receiver, trustee, custodian or liquidator of or for any
part of the assets or property of any Borrower or Third Party Obligor; any
[ILLEGIBLE] generally not paying its debts as they become due; or any attachment
or like levy on any property of any Borrower or Third Party Obligor.
(c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.
(d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which any Borrower or Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder.
Revolving Line of Credit Note (08/96), Page 3
(e) Any financial statement provided by any Borrower or Third Party Obligor
to Bank proves to be incorrect, false or misleading in any material respect.
(f) Any sale or transfer of all or a substantial or material part of the
assets of any Borrower or Third Party Obligor other than in the ordinary course
of its business.
(g) Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the holder of
--------
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder In connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or entity
-----------------------------
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) Governing Law. This Note shall be governed by and construed in
-------------
accordance with the laws of the state of California.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
STAAR SURGICAL COMPANY
By:
------------------------
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
Revolving Line of Credit Note (08/96), Page 4
