Exhibit 10.1
 
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
 
This Settlement Agreement and Mutual General Release (“Settlement Agreement”) is
made effective the 12th day of November, 2002, by and between JOHN R. WOLF
(“WOLF”), STAAR SURGICAL COMPANY (“Staar”), David Bailey (“Bailey”) and Peter
Utrata (“Utrata”) .
 
RECITALS
 
A.  There is pending, in the Superior Court of California for the Los Angeles
County Superior Court, an Action entitled Wolf v. Staar Surgical Company, and
related cross-claims, filed under Case No. BC235396 in which, among other
things, WOLF alleges that Staar, Bailey and Utrata acted wrongfully in
connection with certain transactions involving Wolf’s employment at Staar; and
where Staar alleges Wolf acted wrongfully at Staar (hereinafter referred to as
the “Action”);
 
B.  There is and has been also pending, in the United States Bankruptcy Court
for the Central District of California (Northern Division) Proofs of Claim filed
by WOLF (“WOLF Claim”) and Staar (“Staar Claim”) in connection with the
bankruptcy proceeding In re: SALLY M. POLLET, Case No. ND 01-13364RR (“POLLET
Bankruptcy Proceeding”) wherein similar allegations regarding Staar are made;
and
 
C.  WOLF, Staar, Bailey and Utrata desire to settle all disputes which exist
between them, including, but not limited to those related to the Action, the
WOLF Claim and the Staar Claim as it affects Wolf.
 
WHEREFORE, for valuable consideration, including the promises as set forth
below, WOLF, Staar, Bailey and Utrata (collectively “the Parties”) agree as
follows:

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1.  In full settlement and satisfaction of all of the claims and potential
claims of WOLF against Staar, Bailey and Utrata, on the one hand, and Staar,
Bailey and Utrata against WOLF, on the other hand, against each or all of them,
whether relating to the Action, the WOLF Claim, the Staar Claim, or otherwise,
the Parties agree as follows:
 

 
a.
 
The Parties agree to complete WOLF’s transfer of 243,067 shares of Staar stock
to Staar, in full payment of any and all promissory notes executed by WOLF in
favor of Staar, pursuant to the Form 4 executed May 9, 2000 (the “Transfer”),
attached as Exhibit A hereto;

 

 
b.
 
WOLF authorizes Staar to apply, and Staar agrees to apply, the 20,000 shares of
Staar stock currently being held by Staar for WOLF’s beneficial interest to the
Transfer;

 

 
c.
 
No later than December 5, 2002, WOLF shall deliver to Staar the remaining
223,067 shares of Staar stock to complete the Transfer;

 

 
d.
 
Upon WOLF’s delivery pursuant to 1.c., above, any and all promissory notes
executed by WOLF in favor of Staar are thereby paid in full and Staar shall have
no further rights thereunder;

 

 
e.
 
No later than December 6, 2002, the Parties shall dismiss with prejudice any and
all actions in the Los Angeles Superior Court, United States Bankruptcy Court or
any other court, and do any act necessary under the rules and statutes to
effectuate this settlement including but not limited to filing Requests for
Dismissal;

 

 
f.
 
The Parties agree that all terms and conditions of this Settlement Agreement
shall remain non-public and confidential through and

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including the filing of dismissals pursuant to 1.e., above, and that the Parties
shall mutually agree to the language of the press release announcing this
settlement; and
 

 
g.
 
The Parties hereby 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.

 
2.  General Release of All Claims by WOLF, Staar, Bailey and Utrata.
 

 
a.
 
WOLF for himself and on behalf of his 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 "WOLF Releasing Parties"), hereby absolutely, forever and fully,
generally and specifically, releases and discharges Staar, Bailey and Utrata and
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 (excluding Pollet
& Richardson and Pollet, Richardson & Patel), trustors, trustees, insurers,
predecessors,

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successors and assigns, and each of them, and all those claiming by, through,
under or in concert with them or any of them (collectively “Staar, Bailey and
Utrata 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 or based upon the facts alleged in the Action, the WOLF Claim, the
Staar Claim and any affirmative defenses or claims of offset based thereon.
 

 
b.
 
Staar, Bailey and Utrata, 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,

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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 “Staar, Bailey and
Utrata Releasing Parties”), hereby absolutely, forever and fully, generally and
specifically, releases and discharges WOLF and his 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 “WOLF 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

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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 or
based upon the facts alleged in the Action, the WOLF Claim, the Staar Claim and
any affirmative defenses or claims of offset based thereon.

 

 
c.
 
Notwithstanding anything in 2.a. and 2.b., above, the Parties do not release
Pollet & Richardson, or Pollet, Richardson & Patel or any individual attorney
associated therewith, in any regard whatsoever.

 
3.    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.

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4.    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 Mutual and General
Release. Nevertheless, the Parties, and each of them, intend by this Mutual and
General Release to release fully, finally, and forever all Claims released
hereby. Accordingly, this Mutual and General Release 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.
 
5.    Representation 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 Mutual and General
Release 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.

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6.    Representations and Warranties of Each Party.  Each Party hereto
represents and warrants to the other Party or Parties that he, she 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 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.
 
7.    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.
 
8.    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

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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.
 
9.      Final Integrated Agreement.  This Settlement Agreement and the documents
referred to herein constitute the entire, final and binding understanding
between the Parties 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.
 
10.    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.
 
11.    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.

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12.  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 possible differences of facts and hereby agrees that this Settlement
Agreement shall remain in effect notwithstanding such difference of fact.
 
13.  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.
 
14.  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 and in the POLLET Bankruptcy
Proceeding or any other action. This Settlement Agreement shall

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constitute a judicial bar to the institution of any such action or proceeding or
any assignment thereof.
 
15.  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 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.
 
16.  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.
 
17.  Attorneys’ Fees and Costs.    Each Party hereto shall bear his, her or its
own attorneys’ fees and costs.
 
18.  Attorneys’ Fees/Prevailing Party.    In any action or proceeding or motion
between or among the Parties hereto at law or in equity with respect to,
pertaining to, or arising from the settlement, including this Settlement
Agreement or any document referred to herein, whether for enforcement, or for
damages by reason of any alleged breach, or for a declaration of rights or
obligations, or otherwise, and including any appeal, contempt proceeding,

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bankruptcy proceeding, and any action or proceeding to enforce and/or collect
any judgment or other relief granted, whether or not such action or proceeding
is compromised or is prosecuted to final judicial determination (collectively
“Litigation”), the unsuccessful party to the Litigation shall pay to the
prevailing party, in addition to any other relief that may be granted, all costs
and expenses of the Litigation, including, without limitation, the prevailing
party’s actual attorneys’ fees and expenses. “Attorneys’ fees and expenses”
includes, without limitation, paralegals’ fees and expenses, attorneys’
consultants’ fees and expenses, expert witnesses’ fees and expenses, and all
other expenses incurred by the prevailing party’s attorneys in the course of
their representation of the prevailing party in anticipation of and/or during
the course of the Litigation, whether or not otherwise recoverable as
“attorney’s fees” or as “costs” under California law; and the same may be sought
and awarded in accordance with California procedure as pertaining to an award of
contractual attorneys’ fees. The Court in the Action retains jurisdiction
pursuant to California Code of Civil Procedure section 664.6.
 
19.  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, 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.
 
20.  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.
 

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21.  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.
 
22.  Effective Date/Additional Documents.    This Settlement Agreement shall be
effective as of the date first above written, upon execution by the last of the
Parties, but without regard to the date of execution. The Parties shall execute
any additional documents reasonably necessary to effectuate the intent and
purposes of this Settlement Agreement.
 
23.  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 30):
 
To WOLF:
  
John Wolf
1496 Bedford Road
San Marino, CA 91108
Telephone: (626) 792-2083
      
With a copy to:
  
Marvin L. Rudnick, Esq.
42 East Colorado Boulevard, 2nd Floor
Pasadena, CA 91105-3794
Telephone: (626) 796-7799
      
To Staar or Bailey:
  
David C. Scheper, Esq.
Winston & Strawn
333 So. Grand Avenue, 38th Floor

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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
To Utrata:
 
Peter Utrata, M.D.
   
1289 Arlington Avenue
   
Columbus, OH 43232
With a copy to:
 
Kelley B. Poleynard, Esq.
   
Overland & Borenstein LP
   
6060 Center Drive, 7th Floor
   
Los Angeles, CA 90045- Telephone (310) 215-6580
     

24.     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.
 
25.     Execution in Several Counterparts. This 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: November 12, 2002
/s/    John R. Wolf         

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JOHN R. WOLF

 
DATE: November 12, 2002

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/s/ John C. Bily        

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  John C. Bily, Chief Financial Officer, on
  behalf of Staar Surgical Company

DATE: November 12, 2002
 
/s/ David Bailey        

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David Bailey

 
DATE: November 12, 2002
 
/s/ Peter Utrata         

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Peter Utrata

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APPROVED AS TO FORM AND CONTENT:
 
LAW OFFICES OF MARVIN L. RUDNICK
 
By:
 
/s/ Marvin L. Rudnick, Esq.       

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  Marvin L. Rudnick, Esq.
  Attorney for JOHN R. WOLF

 
WINSTON & STRAWN
 
By:
 
/s/ Diann H. Kim       

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  Diann H. Kim, Esq.
  Attorney for Staar and David Bailey

 
By:
 
/s/ Kelly B. Poleynard         

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  Kelley B. Poleynard, Esq.
  Attorney for Peter Utrata

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