EXHIBIT 10.86
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT (hereinafter "Agreement") is made and
entered into as of March 29, 2002, by and between Xxxxx X. Xxxxxx, an individual
("Pledgor"), and STAAR Surgical Company, a Delaware corporation ("Pledgee"),
with reference to the following facts:
RECITALS
WHEREAS, Pledgor has executed in favor of Pledgee a promissory note (the
"Note"), a copy of which is attached hereto as Exhibit "1" and is incorporated
herein by this reference, for the sum of two million one hundred eighty-nine
thousand seven hundred ninety-five dollars ($2,189,795.00); and
WHEREAS, Pledgor desires to pledge to Pledgee the interest of Pledgor in
certain common stock, which is included on Exhibit "2", attached hereto and
incorporated herein by this reference, pursuant to the terms of this Agreement,
for the purpose of securing payment of the Note;
THEREFORE, in consideration of mutual covenants and promises contained
herein, and for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement (hereinafter collectively
"parties" and individually "party") agree as follows:
AGREEMENT
1. PLEDGE OF STOCK AND PROCEEDS.
(a) Original Pledge. As collateral security for the payment
and/or performance of all of Pledgor's presently existing or hereinafter arising
obligations and liabilities to Pledgee under the Note, Pledgor hereby pledges,
grants and assigns to Pledgee a continuing first-priority security interest in
the following:
(i) four hundred thousand (400,000) shares of the
common stock of STAAR Surgical Company and all certificates evidencing such
shares (the "Stock"); and
(ii) the proceeds of the Stock including, without
limitation, any and all dividends, cash, instruments and other property from
time-to-time received, receivable, or otherwise distributed in respect of or in
exchange for any of the Stock ("Proceeds"). The Stock and the Proceeds shall
hereinafter be collectively referred to as the "Collateral."
(b) Delivery of Stock Power to Pledgee. Pledgor shall
deliver to Pledgee, concurrently with the execution of this Agreement, the
original certificates evidencing such Stock along with an Assignment of
Corporate Shares in the form of Exhibit "3" attached hereto and incorporated
herein by this reference ("Stock Assignment"), signed by Pledgor, in blank, such
Stock Assignment to be used by Pledgee in accordance with the terms of this
Agreement.
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(c) Pledgee's Acceptance of Collateral and Appointment as
Pledgor's Attorney-In-Fact. Pledgee hereby agrees to accept the Collateral and
agrees to hold and dispose of the Collateral in accordance with and subject only
to the terms of this Agreement. Pledgor hereby irrevocably appoints Pledgee as
Pledgor's attorney-in-fact to arrange for the transfer of the Collateral and to
do and perform all actions that are necessary or appropriate in order to effect
the terms of this Agreement.
(d) Release of Collateral. Pledgee shall release the
Collateral from this Agreement and return the Collateral to Pledgor upon
satisfaction in full of Pledgor's obligations under the Note.
2. MATTERS PERTAINING TO THE COLLATERAL.
(a) Voting and Consensual Rights. Pledgor shall retain the
right to vote the Stock and to exercise any other rights pertaining to the
Stock, provided, however, so long as Pledgor is in "Default" as defined in
Paragraph 3 of this Agreement, Pledgee may vote the Stock and exercise any
rights pertaining to the Stock. Pledgor may sell the Stock, or any portion
thereof, free and clear of STAAR's first-priority security interest therein, so
long as Pledgor contemporaneously pays to Pledgee an amount equal to or greater
than five dollars and fifty cents ($5.50) per share of the Stock so sold.
Pledgee shall apply such payments against all amounts due under the Note.
(b) Rights to Dividends and Distributions. Pledgee, rather
than Pledgor, shall be entitled to collect and receive all of the following
types of proceeds, which shall be added to and shall become a part of the
Collateral:
(i) all proceeds paid or payable, and all
instruments and other property distributed in respect of, or in exchange for,
the Stock;
(ii) all proceeds paid or payable with respect to the
Stock in connection with a partial or total liquidation or dissolution of the
issuing corporation or in connection with a reduction of capital, capital
surplus or paid-in surplus of the issuing corporation; and
(iii) all proceeds distributed in redemption of, or in
exchange for, the Stock. To the extent the foregoing proceeds exceed the amount
of Pledgor's obligations and liabilities under the Note and/or this Agreement,
Pledgor shall be entitled to receive these excess proceeds.
(c) Stock Adjustments. In the event that, during the term of
this Agreement, any stock dividend, reclassification, readjustment, or other
change is declared or made in the capital structure of the issuing corporation,
all new, substituted and additional shares or other securities issued with
respect to the Stock by reason of any such change shall be delivered to and held
by Pledgee under the terms of this Agreement in the same manner as the Stock.
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3. DEFAULT AND REMEDY ON DEFAULT.
At the option of Pledgee, upon the happening of any of the
following events of default ("Default"):
(a) Default Under Note. If an event of default, as set forth
in paragraph 8 of the Note, occurs and is not cured as specifically provided
therein; or
(b) Default Under This Agreement. If Pledgor defaults in the
due performance or observance of any representation or obligation under this
Agreement;
Pledgee shall have all of the rights and remedies set forth in this Stock Pledge
Agreement and paragraph 9 of the Note, in addition to the rights and remedies of
a secured party under Division 9 of the California Uniform Commercial Code. Upon
default, the right of Pledgor to vote the Stock and to exercise any other rights
pertaining to the Stock shall cease.
4. PLEDGOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Pledgor represents, warrants and covenants to Pledgee as
follows:
(a) Upon delivery to Pledgee as contemplated hereby, and
upon approval by the United States Bankruptcy Court for the Central District of
California in case no. ND01-13364RR, the Collateral will be free of any security
interests, liens, pledges or encumbrances created by Pledgor or her
predecessors-in-interest (except for the security interest created hereby), or
any claims of third parties of any nature whatsoever, charges, escrows, options,
rights of first refusal, or other agreements, restrictions, arrangements,
commitments or obligations, written or oral, created by Pledgor or her
predecessors-in-interest, affecting the legal or beneficial ownership of the
Collateral.
(b) From and after the date hereof, Pledgor shall not make
any agreements restricting in any manner the transferability of the Collateral
or otherwise affecting the Collateral;
(c) Pledgor shall, at Pledgor's expense, take any steps
necessary to preserve Pledgee's rights in the Collateral against any claims of
third parties;
(d) Pledgor has arrangements for keeping informed of changes
or potential changes affecting the Collateral (including, without limitation,
rights to convert, rights to subscribe, payment of dividends, reorganization or
other exchanges, tender offers and voting rights), and Pledgee shall not have
any responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto; and
(e) Pledgor's full and correct legal name is Xxxxx X.
Xxxxxx. Pledgor's principal residence is located at 00000 Xxxx Xxxxx, Xxx Xxxx,
Xxxxxxxxxx. Pledgor shall notify Pledgee within five (5) days of changing either
Pledgor's full and correct legal name or Pledgor's principal residence.
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5. MISCELLANEOUS.
(a) It is acknowledged by each party that such party either
had separate and independent advice of counsel or the opportunity to avail
himself or itself of same. This Agreement was prepared by each party in
conjunction with counseling from such party's respective attorney or the
opportunity to obtain such counseling. In light of these facts it is
acknowledged that no party shall be construed to be solely responsible for the
drafting of this Agreement, and therefore any ambiguity shall not be construed
against any party as the alleged draftsman of it. Each party shall pay all costs
and expenses incurred or to be incurred by such party in negotiating and
preparing this Agreement and in performing and complying with all
representations, warranties, covenants, agreements and conditions contained in
this Agreement to be performed or complied with by such party, including legal
fees.
(b) Each party agrees, without further consideration, to
cooperate and diligently perform any further acts, deeds and things and to
execute and deliver any documents that may be reasonably necessary to
consummate, evidence, confirm and/or carry out the intent and provisions of this
Agreement, all without undue delay or expense. Pledgor shall reimburse Pledgee
for any costs and expenses incurred by Pledgee in connection with any breach or
default of Pledgor under this Agreement, including collection efforts, whether
or not suit is commenced or judgment is entered. Further, should any party
institute or should the parties otherwise become a party to any action or
proceeding to enforce or interpret this Agreement, the prevailing party in any
such action or proceeding shall be entitled to receive from the non-prevailing
party all costs and expenses of prosecuting or defending the action or
proceeding. Pledgor's liability, if any, under this paragraph, shall constitute
a recourse liability. This Agreement and the rights of each party under this
Agreement shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of California, excluding any law relating
to the conflict of laws.
(c) Any agreement hereafter made shall be ineffective to
modify, supplement or discharge the terms of this Agreement, in whole or in
part, unless such agreement is in writing and signed by the party against whom
enforcement of the modification, supplement or discharge is sought. By execution
hereof, the parties specifically disavow any desire or intention to create a
"third party" beneficiary contract, and specifically declare that no person or
entity, save and except for the parties and their permitted successors, and
assigns, shall have any rights hereunder nor any right of enforcement hereof. No
waiver of any breach of any agreement or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof. If any term or
provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be determined to be invalid, illegal or
unenforceable, then the remaining part of this Agreement shall nevertheless not
be affected thereby and shall continue in full force and effect to the fullest
extent provided by law. This Agreement is to be read, construed and applied
together with the Note and that certain Settlement Agreement And General Release
of even date, which, taken together, set forth the complete understanding and
agreement of the parties with respect to the matters referred to herein and
therein.
(d) Pledgor may not delegate its duties under this
Agreement, in whole or in part, without the prior written consent of Pledgee,
which consent may be withheld in Pledgee's sole and arbitrary discretion.
Notwithstanding the preceding sentence, no such delegation shall
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release Pledgor from any liability or obligation under this Agreement without
the written consent of Pledgee, which consent may be withheld in Pledgee's sole
and arbitrary discretion. Subject to the foregoing, all of the representations,
warranties, covenants, conditions and provisions of this Agreement shall be
binding upon and shall inure to the benefit of each party and such party's
respective heirs, executors, administrators, legal representatives, successors
and/or assigns.
(e) The headings used in this Agreement are for convenience
and reference purposes only, and shall not be used in construing or interpreting
the scope or intent of this Agreement or any provision hereof. References to
this Agreement shall include all amendments or renewals thereof. As used in this
Agreement, each gender shall be deemed to include each other gender, including
neutral genders or genders appropriate for entities, if applicable, and the
singular shall be deemed to include the plural, and vice versa, as the context
requires.
(f) All notices, demands, requests, consents, approvals or
other communications ("Notices") given hereunder shall be as provided in the
Note.
(g) If a Default is not cured within the prescribed time
period, whether or not any of the Collateral has been effectively registered
under the Securities Act of 1933, as amended, or other applicable laws, Pledgee
may, in its sole and absolute discretion, sell all or any part of such
Collateral at private sale in such manner and under such circumstances as
Pledgee may deem necessary or advisable in order that the sale may be lawfully
conducted. Without limiting the following, Pledgee may (i) approach and
negotiate with a limited number of potential purchasers, and (ii) restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing such Collateral for their own account for investment and not
with a view to the distribution or resale thereof. If Collateral is sold at
private sale, Pledgor agrees that if such Collateral is sold for a price which
Pledgee in good faith believes to be reasonable under the circumstances then
existing, then (a) the sale shall not be deemed to be commercially unreasonable
by reason of price, (b) Pledgor shall not be entitled to a credit against the
Note in any amount in excess of the purchase price, and (c) Pledgee shall not
incur any liability or responsibility to Pledgor in connection therewith,
notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. Pledgor recognizes that a ready market may not
exist for such Collateral if it is not regularly traded on a recognized
securities exchange, and that a sale by Pledgee of any such Collateral for an
amount substantially less than a pro rata share of the fair market value of the
issuer's assets minus liabilities may be commercially reasonable in view of the
difficulties that may be encountered in attempting to sell a large amount of
such Collateral or Collateral that is privately traded.
(continued on following page)
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WHEREFORE, the parties hereto have executed this Agreement as of the
date first set forth above.
PLEDGOR:
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Xxxxx X. Xxxxxx
00000 Xxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
PLEDGEE:
STAAR SURGICAL COMPANY
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
By: --------------------------
Xxxx Xxxx, CFO
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WHEREFORE, the parties hereto have executed this Agreement as of the
date first set forth above.
PLEDGOR:
/s/Xxxxx X. Xxxxxx
------------------
Xxxxx X. Xxxxxx
00000 Xxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
PLEDGEE:
STAAR SURGICAL COMPANY
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, CFO
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