TEMPORARY WAIVER
AGREEMENT
THIS TEMPORARY WAIVER AGREEMENT
(this “Waiver”), dated as of the 2nd day of April,
2009, is made by and between Broadwood Partners, L.P.
(“Broadwood” or the “Investor”) and STAAR
Surgical Company (“STAAR” or the
“Company”). Unless otherwise defined
herein, capitalized terms used but not defined in this Waiver shall
have the meaning ascribed to such term in the Senior
Note.
WITNESSETH:
WHEREAS, the Investor currently owns
a $5,000,000 senior note (the “Senior Note”), issued to
the Investor on December 14, 2007 by the Company;
WHEREAS, an order of judgment was
rendered on March 23, 2009 by the California Superior Court, County
of Orange (the “Court”), Case No. 07CC10136 in the
matter of Parallax Medical Systems, Inc. v. STAAR Surgical
Company in the amount of $2.2 million in compensatory damages
and $2.7 million in punitive damages, (collectively, and as it may
be modified by the Court, the “Judgment”);
WHEREAS, the Court executed an order
on March 23, 2009 staying execution of judgment (the
“Stay”) pursuant to Section 918 of the California Code
of Civil Procedure (“CCCP”);
WHEREAS, as to any Event of Default
that occurs or may be deemed to have occurred pursuant to Section
8(f) of the Senior Note as a result of the Judgment
(“Judgment Default”), the Investor and the Company wish
to provide, subject to the terms and conditions set forth below,
that remedies for any such default under the Senior Note shall not
be enforced during the period of the Stay.
NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants and
agreements herein contained, the Investor and the Company do hereby
agree as follows:
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The Investor hereby temporarily waives any
Judgment Default during the Stay Period. For purposes
hereof, “Stay Period” shall mean the shorter of (i) the
duration of the Stay, and (ii) July 6, 2009.
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In consideration of the Investor’s
providing this Waiver, the Company hereby agrees, within seven
business days from the date hereof, to amend the Senior Note to
irrevocably grant (i) a first-priority security interest on all of
the Company’s unencumbered assets as of the date hereof and
(ii) a second-priority security interest on all of the
Company’s assets subject to any purchase money indebtedness,
to the Investor to secure the Company’s obligations under the
Senior Note. The Investor agrees that the amendment
shall also provide that the period of notice for prepayment
under
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