EXHIBIT 10.93
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Settlement
Agreement") is made effective the 27th day of February 2003, by and between
Richard Leza ("Leza") and STAAR Surgical Company ("Staar").
RECITALS
A. There is pending, in the Superior Court of California for the
Los Angeles County Superior Court, an action entitled Richard Leza v. Staar
Surgical Company, et al., filed under Case No. BC257159 in which, among other
things, Leza alleges that Staar acted wrongfully in connection with Leza's
employment at Staar (the "Action"); and
B. Leza and Staar desire to settle all disputes that exist
between them, including, but not limited to those related to the Action.
AGREEMENT
WHEREFORE, in full settlement and satisfaction of all of the claims and
potential claims of Leza and Staar against each other, whether relating to the
Action or otherwise, for valuable consideration, including the promises as set
forth below, Leza and Staar (collectively "the Parties") agree as follows:
1. Payment by Staar to Leza. Staar shall pay Leza and his
counsel of record, Lafayette & Kumagai LLP, as jointly directed by them, the
total amount of $180,000 as follows:
a. $15,000 by March 4, 2003, with $10,000 paid to Leza
and $5,000 paid to Lafayette & Kumagai LLP;
b. $15,000 by March 15, 2003, with $10,000 paid to Leza
and $5,000 paid to Lafayette & Kumagai LLP;
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c. $10,000 a month by the first of each month for 15
months commencing April 1, 2003 and concluding June
1, 2004, with $5,000 paid each month to Leza and
$5,000 paid each month to Lafayette & Kumagai LLP;
d. All payments to Leza will be made to "AI Research
Corporation" and will be directly deposited into
Wells Fargo Account #0072-025729, and all payments to
Lafayette & Kumagai LLP will be mailed to its offices
at 100 Spear Street, Suite 400, San Francisco, CA
94105.
e. In the event that any payment is not made within 5
days of the date it is due, that payment shall bear
simple interest at the rate of 5% per annum until
paid.
f. In the event Staar fails to make any payment due
within 59 days of the date it is due, Leza may apply
for and have judgment entered against Staar in the
amount of all remaining unpaid amounts under this
paragraph 1, which Staar expressly waives its right
to dispute.
2. Consulting Agreement and Stock Options. Leza and Staar agree
to enter into a consulting agreement in the form attached hereto as Exhibit A,
which is incorporated herein by reference and made a part of this Agreement. In
consideration for Leza's agreement to provide services as a consultant in
investor relations under the terms of the attached consulting agreement, Staar
shall immediately issue Leza an unrestricted option certificate expiring
February 1, 2005 to purchase 75,000 shares of Staar common stock at $3.50, which
option shall vest immediately upon execution of this Settlement Agreement and
may be
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exercised by Leza, subject to the subparagraphs below, by taking the option
certificate to any brokerage firm and exercising his option in a cashless
action:
a. If Leza exercises any portion of his stock option
prior to February 1, 2004, Staar shall have no
further obligations to Leza under this paragraph 2.
b. If the "Target Date," which is defined as the first
date that the NASDAQ closing price for Staar common
stock is $6.17 or higher, occurs on or before
February 1, 2004, and Leza has not exercised any
portion of his stock option, as of the Target Date,
Staar shall have no further obligations to Leza under
this paragraph 2, other than to allow Leza to
exercise his option if he so chooses prior to its
expiration.
c. If the Target Date does not occur on or before
February 1, 2004, and Leza has not exercised any
portion of his stock option, Staar shall execute no
later than February 5, 2004 a promissory note in
favor of Leza in the amount of $200,000 principal,
with no interest to accrue thereon, and in the form
attached hereto as Exhibit B, which is incorporated
herein by reference and made a part of this
Agreement. The promissory note will be payable
commencing February 1, 2005 in monthly payments of at
least $10,000 for up to five months, with any balance
remaining to be paid the following month, subject to
subparagraphs (d) and (e), below.
d. If the Target Date occurs after February 1, 2004 and
before February 1, 2005, and Staar has not exercised
its rights under subparagraph (e),
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below, Staar shall be deemed to have paid the
promissory note in full and Staar shall have no
further obligations to Leza under this paragraph 2,
other than to allow Leza to exercise his option if he
so chooses prior to its expiration;
e. At any time after February 1, 2004 and before
February 1, 2005, Staar, upon giving Leza 48 hours
written notice, may elect to effect a "virtual
exercise" of Leza's option, and the net amounts that
would have been realized by Leza if he had exercised
his option at the NASDAQ closing price for Staar
common stock at the end of that 48-hour notice period
shall be deducted from the $200,000 principal due
under the promissory note, and Staar shall pay Leza
the balance due in monthly payments of at least
$10,000 for up to five months, with any balance
remaining to be paid the following month, commencing
the first day of the first month after Staar elects
the "virtual exercise." Notwithstanding Staar's
election of a "virtual exercise," Leza retains the
right to actually exercise his option if he so
chooses prior to its expiration.
g. In the event that any installment under the
promissory note is not paid within 15 days of the
date it is due, the whole of the principal shall
become immediately due without notice or demand,
together with all interest that has accrued, and Leza
may apply for and have judgment entered against Staar
in the amount of all remaining unpaid amounts under
the note, which Staar expressly waives its right to
dispute.
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3. Loan Forgiveness. Staar shall issue Leza a Form 1099
reflecting the forgiveness in calendar year 2003 of the principal and interest
due on Staar's earlier $120,000 loan to him. Staar shall further hand deliver to
Leza an original, signed and notarized Reconveyance of the Deed of Trust to the
real property commonly known as 2090 Liliano Drive, Sierra Madre, California,
which Deed of Trust Staar holds as security for the $120,000 loan to Leza. The
Reconveyance of the Deed of Trust shall be in a form suitable for recording in
the Los Angeles County Recorders Office.
4. Dismissal of Action With Prejudice. Leza's counsel shall
immediately dismiss the Action with prejudice.
5. Continuing Jurisdiction of Court in Action. The Parties agree
that the Court in the Action shall retain jurisdiction to enforce the terms of
this Settlement Agreement pursuant to California Code of Civil Procedure section
664.6.
6. General Release of All Claims by Leza and Staar.
a. Leza and Staar, for themselves and on behalf of their
respective present and former agents, employees,
employers, officers and directors, corporations
(including, but not limited to, professional
corporations), parent and subsidiary corporations,
partners, joint venturers, heirs, spouses, children,
relatives, issue, estates, beneficiaries,
representatives, executors, administrators, current
attorneys, trustors, trustees, insurers,
predecessors, successors and assigns, and each of
them, and all those claiming by, through, under or in
concert with them or any of them (collectively
"Releasing Parties"), hereby absolutely, forever and
fully, generally and specifically, release and
discharge the other and their
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respective present and former agents, employees,
employers, officers and directors, corporations
(including, but not limited to, professional
corporations), parent and subsidiary corporations,
partners, joint venturers, heirs, spouses, children,
relatives, issue, estates, beneficiaries,
representatives, executors, administrators, current
attorneys (excluding Pollet & Richardson and Pollet,
Richardson & Patel), trustors, trustees, insurers,
predecessors, successors and assigns, and each of
them, and all those claiming by, through, under or in
concert with them or any of them (collectively the
"Released Parties"), from any and all claims,
contentions, rights, debts, liabilities, demands,
accounts, reckonings, obligations, duties, promises,
costs, expenses (including, but not limited to,
attorneys' fees), liens, subrogation rights,
indemnification rights, damages, losses, actions, and
causes of action, of any kind whatsoever whether
asserted by way of affirmative claims or causes of
action, affirmative defenses, offset or otherwise in
any proceeding whatsoever whether due or owing in the
past, present or future and whether based upon
contract, tort, statute or any other legal or
equitable theory of recovery, and whether known or
unknown, suspected or unsuspected, fixed or
contingent, matured or unmatured, with respect to,
pertaining to, or arising from any matters, acts,
omissions, events, conduct or occurrences at any time
prior to the date of this Settlement Agreement,
including, without limiting the generality of the
foregoing provisions, any and all causes of action or
claims referred to
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or based upon the facts alleged in the Action and any
affirmative defenses or claims of offset based
thereon.
b. Notwithstanding anything in subparagraph a, above,
the Parties do not release Pollet & Richardson, or
Pollet, Richardson & Patel or any individual attorney
associated therewith, in any regard whatsoever.
7. Waiver of Civil Code Section 1542. The Parties and each of
them, hereby waive any and all rights or benefits which any of them may have
under Section 1542 of the Civil Code of the State of California, providing that:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
The Parties, and each of them, hereby represent and warrant, and each
of them, that they understand the effect of this waiver of said Civil Code
section and that they are represented and have been advised in this General
Release by an attorney licensed to practice law in the State of California.
8. Release of Unknown Claims. The Parties, and each of them,
acknowledge that they, or any of them, may hereafter discover Claims and/or
facts now unknown or unsuspected, or in addition to, or different from, those
which the Parties now know or believe to be true with respect to this Settlement
Agreement. Nevertheless, the Parties, and each of them, intend by this
Settlement Agreement to release fully, finally, and forever all claims
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released hereby. Accordingly, this Settlement Agreement shall remain in full
force as a complete release of such claims notwithstanding the discovery or
existence of any such additional or different claims and/or facts before or
after the date of this Settlement Agreement.
9. Representations and Warranty by Releasing Parties. The
Parties, and each of them, represent and warrant, that they (a) are the lawful
owners of everything released hereunder, (b) have all necessary power and
authority to make such release, including any necessary consent or approval from
any person or Board of Directors and including the absence of any duty or
obligation that would prevent, or be put in breach or default by, such release,
and (c) have not heretofore transferred or attempted to transfer all or any part
of any such thing released in any manner whatsoever, including by way of
subrogation or operation of law. The Parties, and each of them, shall indemnify
and hold each of the other Parties harmless with respect to any liability, cost,
expense, or claim with respect to, pertaining to, or arising from any assertion
of any such obligation or transfer or lack of such power or authority including,
but not limited to, reasonable attorneys' fees and costs. The Parties, and each
of them, represent and warrant further to each other, that this Settlement
Agreement is executed voluntarily, and without duress or undue influence on the
part of or on behalf of the Parties, or any other person or entity whatsoever.
10. Representations and Warranties of Each Party. Each Party
hereto represents and warrants to the other that he or it has the full power and
authority to execute, deliver and perform under this Settlement Agreement and
all documents referred to herein, and that any needed consent or approval from
any other person has been obtained, including, but not limited to, valid
corporate franchise and approval of the board of directors for any corporate
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party, and including the absence of any duty or obligation that would prevent,
or be put in breach or default by, such execution, delivery or performance; and
each Party shall indemnify and hold the other Party or Parties harmless with
respect to any and all liability, cost, expense (including reasonable attorneys'
fees), or claim with respect to, pertaining to, or arising from any assertion of
any such obligation or lack of such power or authority.
11. Compromise of Disputed Claim; No Admissions. This Agreement
constitutes a compromise and settlement of claims which are denied and contested
and nothing in this Settlement Agreement or any document referred to herein, nor
any act (including, but not limited to, the execution of this Settlement
Agreement and/or in the consideration for this Settlement Agreement) of any
Party hereto, nor any transaction occurring between any Parties hereto prior to
the date hereof, is or shall be treated, construed or deemed as an admission by
any Party hereto of any liability, fault, responsibility, or guilt of any kind
to any other Party hereto or to any person, as to any allegation or claim in the
various actions or otherwise, for any purpose whatsoever, all such liability,
fault, responsibility and guilt of any kind being expressly denied.
12. Binding Effect. The settlement, and this Settlement Agreement
and all documents referred to herein, shall bind and inure to the benefit of
each of the Parties hereto and the Released Parties and their respective
successors in interest. This Settlement Agreement is not for the benefit of any
person not a Party hereto or specifically identified as a beneficiary herein or
specifically identified herein as a person or entity released hereby, and is not
intended to constitute a third party beneficiary contract.
13. Final Integrated Agreement. This Settlement Agreement and the
documents referred to herein constitute the entire, final and binding
understanding between the Parties
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hereto; that no other statement or representation, written or oral, express or
implied, has been received or relied upon in the settlement, and that all prior
discussions, statements and negotiations made or which have occurred prior to
the date of the Settlement Agreement shall be deemed merged into this Settlement
Agreement and the documents referred to herein, and shall not be used for any
other purpose whatsoever.
14. Understanding of Agreement. Each Party hereto understands and
agrees to the terms and conditions contained in this Settlement Agreement and in
the documents referred to herein, and has relied upon his, her or its own
judgment, belief, knowledge, understanding and expertise after careful
consultation with his, her or its own legal counsel concerning the legal effect
of the settlement and all of the terms of this Settlement Agreement.
15. Voluntary Settlement. Each Party hereto enters into the
settlement, this Settlement Agreement and the documents referred to herein,
knowingly and voluntarily, in the total absence of any fraud, mistake, duress,
coercion, or undue influence and after careful thought and reflection upon the
settlement, this Settlement Agreement and the documents referred to herein; and
accordingly, by signing this document and the documents referred to herein, each
signifies full understanding, agreement and acceptance.
16. Investigation of Facts. Each Party hereto has investigated the
facts pertaining to the settlement and the Settlement Agreement and all matters
pertaining thereto as deemed necessary by each. Each Party hereto fully assumes
the risk that the investigation they have conducted, if any, relating to all
matters herein may be inadequate in that the facts with respect to which this
Settlement Agreement is executed may hereafter be found to be different from the
facts which such Party now believes to be true. Each Party assumes the risk of
such
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possible differences of facts and hereby agrees that this Settlement Agreement
shall remain in effect notwithstanding such difference of fact.
17. No Additional Representations. Except as may be set forth in
this Settlement Agreement, no statement or representation, written or oral,
express or implied, has been made to the Parties by any of the other Parties, or
any of their respective agents, representatives, employees, attorneys or any
other person regarding any matter, including, but not limited to, the federal or
state income tax consequences of the Settlement Agreement to any Party. Each of
the Parties expressly acknowledges and agrees that each shall be responsible for
their own taxes arising out of this Settlement Agreement and that each has
relied solely upon the advice of their own attorneys and/or accountants as to
the tax consequences of the Settlement Agreement.
18. No Other Actions. The Parties have not commenced or prosecuted
and will not commence or prosecute any other action or proceeding for recovery
of damages or for any form of equitable relief, declaratory relief or any other
form of action or proceeding or arbitration against any Party or other person
based upon the claims released in this Settlement Agreement, including, but not
limited to, the claims that are the subject of the Action or any other action.
This Settlement Agreement shall constitute a judicial bar to the institution of
any such action or proceeding or any assignment thereof.
19. Ambiguities or Uncertainties. The settlement, this Settlement
Agreement and the documents referred to herein, and any ambiguities or
uncertainties herein or therein, shall be equally and fairly interpreted and
construed without reference to the identity of the Party or Parties preparing
this document or the documents referred to herein, on the express understanding
and agreement that the Parties participated equally in the negotiation and
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preparation of the Settlement Agreement and the documents referred to herein, or
have had equal opportunity to do so. Accordingly, the Parties hereby waive the
benefit of California Civil Code Section 1654 and any successor or amended
statute, providing that in cases of uncertainty, language of a contract should
be interpreted most strongly against the Party who caused the uncertainty to
exist.
20. Survival of Executory Provisions. Any and all executory
provision under this Settlement Agreement and the documents referred to herein
shall survive the consummation of this Settlement Agreement and shall continue
in full force and effect until fully performed and satisfied.
21. Attorneys' Fees and Costs. Each Party hereto shall bear his,
her or its own attorneys' fees and costs.
22. Confidentiality. Leza represents and warrants that he will not
discuss the terms of this Settlement Agreement or the negotiations leading
thereto with anyone (with the exception of his parents, attorneys, financial
advisors, including CPA, and fiance/spouse) and that he will not make public or
disclose to anyone in any manner the terms of this Settlement Agreement or the
negotiations leading thereto unless required to do so by law. To the extent the
existence or terms of this Settlement Agreement must be disclosed to the
individuals set forth above, Leza will advise them of, and they shall be bound
by, this Confidentiality provision.
23. California Law. The settlement, this Settlement Agreement, and
the documents referred to herein, shall be governed by and construed and
interpreted in accordance with, the laws of the State of California. In the
language of this document and the documents referred to herein, the singular and
plural numbers, and the masculine, feminine and neutral genders,
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shall each be deemed to include all others, and the word "person" shall be
deemed to include corporations and every other entity, as the context may
require.
24. Severability. In the event that any provision of this
Settlement Agreement should be held to be void, voidable or unenforceable, the
remaining portions hereof shall remain in full force and effect.
25. Waiver, Modification and Amendment. No breach of this
Settlement Agreement or of any provision herein can be waived except by an
express written waiver executed by the Party waiving such breach. Wavier of any
one breach shall not be deemed a waiver of any other breach of the same or other
provisions of this Settlement Agreement. The Settlement Agreement may be
amended, altered, modified or otherwise changed in any respect or particular
only by new consideration and a writing duly executed by the Parties hereto or
their authorized representatives.
26. Effective Date/Additional Documents. This Settlement Agreement
shall be effective as of the date first above written. The Parties shall execute
any additional documents reasonably necessary to effectuate the intent and
purposes of this Settlement Agreement.
27. Notices. All notices under this Settlement Agreement shall be
in writing and shall be deemed effective on the date of delivery if delivered
personally (and a receipt obtained therefor), or on the third calendar day after
mailing if mailed by first class mail, registered or certified, postage prepaid;
and shall be addressed as follows, or as may be amended by a communication
delivered pursuant to this paragraph 23):
To Leza: Richard Leza
2090 Liliano Drive
Sierra Madre, CA 91024
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With a copy to: Gary T. Lafayette, Esq.
Lafayette & Kumagai LLP
100 Spear Street, Suite 400
San Francisco, CA 94105
Telephone: (415) 357-4600
To Staar: Diann H. Kim, Esq.
Winston & Strawn
333 So. Grand Avenue, 38th Floor
Los Angeles, CA 90071-1543
Telephone: (213) 615-1700
With a copy to: David Bailey, President
STAAR Surgical Company
1991 Walker Avenue
Monrovia, CA 91016
28. Captions. Section, paragraph and other captions or headings
contained in this Settlement Agreement are inserted as a matter of convenience
and for reference, and in no way define, limit, extend or otherwise describe the
scope or intent of this Settlement Agreement or any provision hereof and shall
not affect in any way the meaning or interpretation of this Settlement
Agreement.
29. Execution in Several Counterparts. This Settlement Agreement
may be executed in several counterparts and as so executed, shall constitute one
agreement binding on all the Parties, notwithstanding that all the Parties are
not signatories to the original or same counterparts.
IN WITNESS WHEREOF, the Parties to this Settlement Agreement execute
this Settlement Agreement as of the day and year first above written.
DATE: February 28 , 2003
------------
/s/ Richard Leza
-------------------------
Richard Leza
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DATE: February 28 , 2003
------------
/s/ David Baily
-------------------------
David Bailey, Chief Executive Officer,
on behalf of Staar Surgical Company
APPROVED AS TO FORM AND CONTENT:
LAFAYETTE & KUMAGAI LLP
By: /s/ Eric DeWalt
---------------------------------
Eric DeWalt, Esq.
Attorney for Richard Leza
WINSTON & STRAWN
By: /s/ Diann H. Kim
---------------------------------
Diann H. Kim, Esq.
Attorney for Staar Surgical Company
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