LOAN AGREEMENT
This Loan Agreement is made and entered into this 20th day of January, 1998
by and between Coherent, Inc., a Delaware corporation ("Coherent"), and Palomar
Medical Technologies, Inc., a Delaware corporation ("PMTI").
Subject to the terms and conditions contained herein, the parties agree as
follows:
1. LOAN. At Coherent's sole election and discretion, Coherent shall loan
PMTI from time to time amounts to be agreed upon between them, to help finance
PMTI's working capital requirements (the "Loans"), which loans shall be
evidenced by one or more promissory notes in the form set forth in Exhibit A.
The parties agree that the initial loan shall be $_________. The promissory
notes, together with any other promissory notes issued by PMTI to Coherent that
recite that they are secured by this Agreement, are collectively referred to
herein as the "Notes".
1.5. PAYMENT. In accordance with the Sales Agency, Development and
License Agreement entered into between parties on November 17, 1997 (the
"Agreement"), Coherent will be using its reasonable best efforts to collect
PMTI's accounts receivable that are Collateral for this note. As such
accounts receivable are collected by Coherent, the amounts due PMTI under
the Agreement shall be credited against the outstanding principal balance
of the promissory note. Any unpaid principal shall be due and payable six
months after the last due date of the accounts receivable set forth on
Schedule A to each promissory note. Should the principal not be paid in a
timely manner, interest shall accrue on the outstanding principal balance
at the lesser of 1 1/2 % per month or the highest rate permitted by law.
2. SECURITY INTEREST. PMTI hereby creates and grants to Coherent a security
interest in the collateral described in Section 3 hereof to secure the payment
and performance of the following obligations of PMTI to Coherent:
(a) Payment of the indebtedness evidenced by the Notes and any and all
modifications, extensions or renewals thereof,
(b) Performance and discharge of each and every obligation, covenant,
condition and agreement of PMTI herein contained.
3. COLLATERAL. The collateral in which the security interest is created
(the "Collateral") shall consist of those PMTI's accounts receivable identified
on Schedule A to each Note where Coherent has acted as PMTI's sales agent
pursuant to the Agreement, together with all proceeds thereto.
4. RECORDING. PMTI will execute, deliver and cause to be recorded or filed
in the manner and place required by law, any document or instrument that may be
requested by Coherent, including financing statements or other instruments of
similar character, to perfect and protect the lien of this Security Agreement
upon any and all of the Collateral.
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5. EVENTS OF DEFAULT. An Event of Default (as hereinafter defined) of any
Note issued under this Agreement shall cause all Notes to be immediately due and
payable. As used herein, an "Event of Default" shall be any of the following:
(a) The failure of PMTI to punctually and properly pay the
indebtedness evidenced by the Notes in accordance with their terms.
(b) The failure of PMTI punctually and properly to observe, keep or
perform any covenant, agreement or condition required to be observed, kept
or performed by this Security Agreement.
6. RIGHTS OF SECURED PARTY. Coherent shall have all the rights as a secured
party under the laws of California, including the right to sell any part of the
Collateral at a public or private sale or bid as a purchaser of the Collateral.
7. APPLICATION OF PROCEEDS OF SALE. The proceeds of the sale of any
Collateral sold pursuant to Section 6 hereof shall be applied as follows:
FIRST: To the payment of costs and expenses of such sale, including the
fees and out-of-pocket expenses of counsel employed in connection therewith, and
the payment of all other costs and expenses incurred by Coherent and in
connection with the administration and enforcement of this Agreement;
SECOND: To the payment and discharge in full of all obligations
described in Section 2 hereof including, without limitation, the unpaid
principal and interest and other sums then owing in respect of the Notes; and
THIRD: The balance (if any) of such proceeds shall be paid to PMTI, its
successors and assigns, or as a court of competent jurisdiction may direct.
8. COVENANTS OF PMTI. PMTI covenants and warrants that, unless compliance
is waived by Coherent in writing:
(a) PMTI will not further encumber, sell, contract for sale or
otherwise dispose of any of the Collateral until such time as the security
interest created by this Agreement has terminated.
(b) PMTI will take all actions necessary or appropriate to preserve
and defend its title to the Collateral and the validity of the lien created
by this Agreement.
(c) PMTI will promptly notify Coherent in writing of any event which
materially and adversely affects the ability of PMTI or Coherent to dispose
of the Collateral, or the rights or remedies of Coherent in relation
thereto, including, but not limited to, the levy of any legal process
against the Collateral.
(d) PMTI will, without expense to Coherent, do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, all
such further acts and instruments as Coherent shall from time to time
require in order to facilitate the performance of this Agreement.
9. MISCELLANEOUS.
(a) No failure or delay by Coherent in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, and no single or
partial exercise
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thereof shall preclude any other of further exercise of the exercise of any
other right, power or privilege.
(b) Should any one or more of the provisions hereof be determined to
be illegal or unenforceable, all other provisions hereof shall be give
effect separately therefrom and shall not be affected thereby.
(c) The security interest created by this Security Agreement shall
fully terminate immediately upon the full and complete satisfaction and
discharge of all of the Obligations set forth in paragraph 3 hereof. Upon
such termination, Coherent shall execute and deliver to PMTI such
termination statements and other instruments of release of such security
interest as PMTI may reasonably require.
(d) All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered or mailed first class, postage prepaid, to the parties at the
following addresses (or such other address as shall be given in writing by
either party to the other):
To Coherent:
Coherent, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
To PMTI:
Palomar Medical Technologies, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
(e) This Loan Agreement and security interest created hereby shall
inure to the benefit of the Coherent, its successor and assigns and any
transferee of any of the Obligations secured hereby, and shall be binding
upon PMTI and its successors and heirs.
(f) The laws of the State of California shall govern the validity of
this Agreement, the construction of its terms and the interpretation of the
rights and duties of the parties.
The foregoing Agreement is hereby executed as of the date first above
written.
COHERENT, INC.
a Delaware corporation
By:
Title:
PALOMAR MEDICAL TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Title: President and Chief
Executive Officer
EXHIBIT A
PROMISSORY NOTE
$2,210,638 Santa Clara, California
January 20, 1998
FOR VALUE RECEIVED, the undersigned, Palomar Medical Technologies, Inc., a
Delaware corporation ("PMTI"), promises to pay to Coherent, Inc., a Delaware
corporation ("Coherent"), or order, the principal sum of Two Million, Two
Hundred Ten Thousand Six Hundred Thirty-Eight Dollars ($2,210,638.00). No
interest shall accrue on this promissory note, except as set forth below.
In accordance with the Sales Agency, Development and License Agreement
entered into between parties on November 17, 1997 (the "Agreement"), Coherent
will be using its reasonable best efforts to collect PMTI's accounts receivable
that collateralize this note. As such accounts receivable are collected, the
amounts due PMTI under the Agreement shall be credited against the outstanding
principal balance of this promissory note. Any unpaid principal shall be due and
payable on July 26, 1998 (which shall be a date six months after the latest due
date of the accounts receivable set forth on Schedule A). Should the principal
not be paid in a timely manner, interest shall accrue on the outstanding
principal balance at the lesser of 1 1/2 % per month or the highest rate
permitted by law. This promissory note shall be immediately due and payable in
the Event of Default (as defined in the Agreement).
PMTI shall reimburse Coherent for all costs and expenses incurred by it and
shall pay the reasonable fees and disbursements of counsel to Coherent in
connection with the enforcement of Coherent's rights hereunder.
No amendment, modification or waiver of any provision of this Note nor
consent to any departure by PMTI therefrom shall be effective unless the same
shall be in writing and signed by Coherent and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
PMTI hereby waives any requirement of notice of dishonor, notice of protest
and protest.
This Note shall be deemed to be a contract made under the laws of the State
of California and shall be construed in accordance with the laws of said State.
This Note shall be binding upon PMTI and its successors and assigns and the
terms hereof shall inure to the benefit of Coherent and its successors and
assigns, including subsequent holders hereof. The holding of any provision of
this Note to be invalid or unenforceable by a court of competent jurisdiction
shall not affect any other provisions and the other provisions of this Note
shall remain in full force and effect.
This note is secured with certain collateral pursuant to the terms of an
agreement between the undersigned and Coherent, Inc. dated January __, 1998. A
description of the accounts receivables constituting the collateral for this
promissory note is set forth on the attached Schedule A.
PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
