Document:

exv10w43

 

EXHIBIT 10.43

COMMERCIAL SECURITY AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal
	 	Loan Date
	 	Maturity
	 	Loan No.	 	Call / Coll
	 	Account
	 	Officer	 	Initials
	$1,250,000.00
	 	03-10-2000
	 	01-16-2001
	 	 	 	61
	 	500359790000
	 	G49
	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

	 	 	 	 	 	 	 
	Grantor:

	 	SYNERGETICS, INC., a Missouri Corporation
	 	Lender:
	 	Union Planters Bank NA
	 

	 	(TIN: 43-1585312)
	 	 	 	Clayton Banking Center
	 

	 	88 Hubble
	 	 	 	8182 Maryland Avenue Suite 200
	 

	 	St. Charles, MO 63304
	 	 	 	St. Louis, MO 63105

THIS COMMERCIAL SECURITY AGREEMENT is entered into between SYNERGETICS, INC., a Missouri
Corporation (referred to below as “Grantor”); and Union Planters Bank N.A. (referred to below as
“Lender”). For valuable consideration, Grantor grants to Lender a security interest in the
Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which Lender may have by
law.

DEFINITIONS. The following words shall have the following meanings when used in this Agreement.
Terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in
the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money
of the United States of America.

Agreement. The word “Agreement” means this Commercial Security Agreement, as this
Commercial Security Agreement may be amended or modified from time to time, together with
all exhibits and schedules attached to this Commercial Security Agreement from time to time.

Collateral. The word “Collateral” means the following described property of Grantor,
whether now owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

All Inventory, accounts and equipment, together with the following specifically described
property: See Exhibit A and B attached hereto and made a part hereof

In addition, the word “Collateral” also includes all the following, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever located:

(A) All attachments, accessions, accessories, tools, parts, supplies, increases, and
additions to and all replacements of and substitutions for any property described
above.

(B) All products and produce of any of the property described in this Collateral
section.

(C) All accounts, general intangibles, instruments, rents, monies, payments, and all
other rights, arising out of a sale, lease, or other disposition of any of the
property described in this Collateral section.

(D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or
other disposition of any of the property described in this Collateral section.

(E) All records and data relating to any of the property described in this
Collateral section, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of Grantor’s right, title, and
interest in and to all computer software required to utilize, create, maintain, and
process any such records or data on electronic media.

Event of Default. The words “Event of Default” mean and include without limitation any of
the Events of Default set forth below in the section titled “Events of Default”.

Grantor. The word “Grantor” means SYNERGETICS, INC., a Missouri Corporation, its successors
and assigns.

 

 

Guarantor. The word “Guarantor” means and includes without limitation each and all of the
guarantors, sureties, and accommodation parties in connection with the Indebtedness.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note,
including all principal and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or under any of the Related
Documents. In addition, the word “Indebtedness” includes all other obligations, debts and
liabilities, plus interest thereon, of Grantor, or any one or more of them, to Lender, as
well as all claims by Lender against Grantor, or any one or more of them, whether existing
now or later; whether they are voluntary or involuntary, due or not due, direct or indirect,
absolute or contingent, liquidated or unliquidated; whether Grantor may be liable
individually or jointly with others; whether Grantor may be obligated as guarantor, surety,
accommodations party or otherwise; whether recovery upon such Indebtedness may be or
hereafter may become barred by any statute of limitations; and whether such indebtedness may
be or hereafter may become otherwise unenforceable.

Lender. The word “Lender” means Union Planters Bank N.A., its successors and assigns.

Note. The word “Note” means the note or credit agreement dated March 10, 2000, in the
principal amount of $1,250,000.00 from SYNERGETICS, INC., a Missouri Corporation to Lender,
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the note or credit agreement.

Related Documents. The words “Related Documents” mean and include without limitation all
promissory notes, credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.

RIGHT OF SETOFF. Grantor hereby grants Lender a contractual security interest in and hereby
assigns, conveys, delivers, pledges, and transfers all of Grantor’s right, title and interest in
and to Grantor’s accounts with Lender (whether checking, savings, or some other account), including
all accounts held jointly with someone else and all accounts Grantor may open in the future,
excluding, however, all IRA and Keogh accounts, and all trust accounts for which the grant of a
security interest would be prohibited by law, Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all Indebtedness against any and
all such accounts.

OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:

Perfection of Security Interest. Grantor agrees to execute financing statements and to take
whatever other actions are requested by Lender to perfect and continue Lender’s security
interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and
all of the documents evidencing or constituting the Collateral, and Grantor will note
Lender’s interest upon any and all chattel paper if not delivered to Lender for possession
by Lender.

Grantor hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to continue the security interest granted in this Agreement. Lender may at any
time, without further authorization from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all its expenses for the perfection and the
continuation of the perfection of Lender’s security interest of the collateral. Grantor promptly will notify Lender before any change in Grantor’s name including any change to the assumed business names of Grantor.
This is a continuing Security Agreement and will continue in effect even though all or any part of the indebtedness is paid in full and even though for a period of time
Grantor may not be indebted to Lender.

No Violation. The execution and delivery of this Agreement will not violate any law or
agreement governing Grantor or to which Grantor is a party, and its certificate or articles
of incorporation and bylaws do not prohibit any term or condition of this Agreement.

Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel
paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with all applicable
laws and concerning form, content and manner of preparation and execution, and
all persons appearing to be obligated on the Collateral have

					
	 	 	 	 	 
	 
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authority and capacity to contract and are in fact obligated as they appear to be on the
Collateral. At the time any account becomes subject to a security
interest in favor of Lender, the account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred
by the account debtor, for merchandise held subject to delivery
instructions or theretofore shipped or delivered pursuant to a
contract of sale, or a service theretofore performed by Grantor with
or for the account debtor, there shall be no setoffs or counterclaims
against any such account; and no Agreement under which any deductions
or discounts may be claimed shall have been made with the account
debtor except those disclosed to Lender in writing.

Location
of the Collateral. Grantor, upon request of Lender, will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral locations relating to
Grantor’s operations, including without limitation the
following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by
Grantor; (c) all
storage facilities owned, rented, leased or being used by Grantor;
and (d) all other properties where
Collateral is or may be located. Except in the ordinary course of
business, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender.

Removal
of the Collateral. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as
accounts, the records concerning the Collateral) at Grantor’s address
shown above, or at such other locations as are acceptable to Lender.
Except in the ordinary course of its business, including the
sale of inventory, Grantor
shall not remove the Collateral from its existing location without the prior written
consent of Lender. To the extent that the Collateral consists of vehicles, or other titled property,
Grantor shall not take or permit any action which would require application for certificates
of title for the vehicles outside the State of Missouri, without the prior written
consent of Lender.

Transactions Involving Collateral. Except for inventory sold or accounts collected in the
ordinary course of Grantor’s business, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may
sell inventory, but only in the ordinary course of its business and
only to buyers in the ordinary course of business. A sale in the
ordinary course of Grantor’s business does not include a transfer in
partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be
subject to any lien, security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written consent of Lender. This
includes security interests even if junior in right to the security interests granted under
this Agreement. Unless waived by Lender, all proceeds from any disposition of the
Collateral (for whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately
deliver any such proceeds to Lender.

Title.
Grantor represents and warrants to Lender that it holds good and marketable
title to the Collateral, free and clear of all liens and encumbrances except for the lien of
this Agreement. No financing statement covering any of the Collateral is on file in any
public office other than those which reflect the security interest created by this Agreement
or to which Lender has specifically consented. Grantor shall defend Lender’s rights in the
Collateral against the claims and demands of all other persons.

Collateral Schedules and Locations. As often as Lender shall require, and insofar as the
Collateral consists of accounts, Grantor shall deliver to Lender schedules of such
Collateral, including such information as Lender may require, including without limitations
names and addresses of account debtors and agings of accounts. Insofar as the Collateral
consists of inventory and equipment, Grantor shall deliver to Lender, as often as Lender
shall require, such lists, descriptions, and designations of such Collateral as Lender may
require to identify the nature, extent, and location of such Collateral. Such information
shall be submitted for Grantor and each of its subsidiaries or related companies.

Maintenance and Inspection of Collateral. Grantor shall maintain all tangible Collateral in
good condition and repair. Grantor will not commit or permit damage to or destruction of
the Collateral or any part of the Collateral. Lender and its designated representatives and
agents shall have the right at all reasonable times to examine, inspect and audit the
Collateral wherever located. Grantor shall immediately notify Lender of all cases involving
the return, rejection, repossession, loss or damage of or to any Collateral; of any request
for credit or adjustment or of any other dispute arising with respect to the Collateral; and
generally of all happenings and events affecting the Collateral or the value or the amount
of the Collateral.

Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens
upon the Collateral, its use or operation, upon this Agreement, upon any promissory note or
notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and so long as
Lender’s interest in the Collateral is not jeopardized in Lender’s sole opinion. If the
Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor
shall deposit with Lender cash, a sufficient corporate surety bond or other security
satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus
any interest, costs, attorneys’ fees or other

					
	 	 	 	 	 
	 
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charges that could accrue as a result of foreclosure or sale of the Collateral. In any
contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender as an additional
obligee under any surety bond furnished in the contest proceedings.

Compliance with Governmental Requirements. Grantor shall comply promptly with all laws,
ordinances, rules and regulations of all governmental authorities, now or hereafter in
effect, applicable to the ownership, production, disposition, or use of the Collateral.
Grantor may contest in good faith any such law, ordinance or regulation and withhold
compliance during any proceeding, including appropriate appeals, so long as Lender’s
interest in the Collateral, in Lender’s opinion, is not jeopardized.

Hazardous Substances. Grantor represents and warrants that the Collateral never has been,
and never will be so long as this Agreement remains a lien on the Collateral, used for the
generation, manufacture, storage, transportation, treatment, disposal, release or threatened
release of any hazardous waste or substance, as those terms are defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of
the foregoing. The terms “hazardous waste” and “hazardous substance” shall also include,
without limitation, petroleum and petroleum by-products or any fraction thereof and
asbestos. The representations and warranties contained herein are based on Grantor’s due
diligence in investigating the Collateral for hazardous wastes and substances. Grantor
hereby (a) releases and waives any future claims against Lender for indemnity or
contribution in the event Grantor becomes liable for cleanup or other costs under such laws,
and (b) agrees to indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This obligation to indemnify
shall survive the payment of the Indebtedness and the satisfaction of this Agreement.

Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance,
including without limitation fire, theft and liability coverage together with such other
insurance as Lender may require with respect to the Collateral, in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company or companies reasonably
acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to
time the policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least thirty (30)
days’ prior written notice to Lender and not including any disclaimer of the insurer’s
liability for failure to give such a notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Grantor or any other person. In connection with all
policies covering assets in which Lender holds or is offered a security interest, Grantor
will provide Lender with such loss payable or other endorsements as Lender may require. In
no event shall the insurance be in an amount less than the amount agreed upon in the
Agreement to Provide Insurance. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not be obligated to)
obtain such insurance as Lender deems appropriate, including if it so chooses “single
interest insurance,” which will cover only Lender’s interest in the Collateral.

Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or
damage to the Collateral. Lender may make proof of loss if Grantor fails to do so within
fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral,
including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If
Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender
shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
for the reasonable cost of repair or restoration. If Lender does not consent to repair or
replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to
pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
not been disbursed within six (6) months after their receipt and which Grantor has not
committed to the repair or restoration of the Collateral shall be used to prepay the
Indebtedness.

Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment
of insurance premiums, which reserves shall be created by monthly payments from Grantor of a
sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the
premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen
(15) days before payment is due, the reserve funds are insufficient, Grantor shall upon
demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account which Lender may

					
	 	 	 	 	 
	 
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satisfy by payment of the insurance premiums required to be paid by Grantor as they become
due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the
agent of Grantor for payment of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor’s sole responsibility.

Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each
existing policy of insurance showing such information as Lender may reasonably request
including the following: (a) the name of the insurer; (b) the risks insured; (c) the amount
of the policy; (d) the property insured; (e) the then current value on the basis of which
insurance has been obtained and the manner of determining that value; and (f) the expiration
date of the policy. In addition, Grantor shall upon request by Lender (however not more
often than annually) have an independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.

GRANTOR’S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except as otherwise
provided below with respect to accounts, Grantor may have possession of the tangible personal
property and beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that Grantor’s right to
possession and beneficial use shall not apply to any Collateral where possession of the Collateral
by Lender is required by law to perfect Lender’s security interest in such Collateral. Until
otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At
any time and even though no Event of Default exists, Lender may exercise the rights to collect the
accounts and to notify account debtors to make payments directly to Lender for application to the
Indebtedness. If Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as Grantor shall
request or as Lender, in Lender’s sole discretion, shall deem appropriate under the circumstances,
but failure to honor any request by Grantor shall not of itself be deemed to be a failure to
exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or maintain any security
interest given to secure the Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but shall not be obligated
to) discharge or pay any amounts required to be discharged or paid by Grantor under this Agreement,
including without limitation all taxes, liens, security interests, encumbrances, and other claims,
at any time levied or placed on the Collateral. Lender also may (but shall not be obligated to)
pay all costs for insuring, maintaining and preserving the Collateral. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate charged under the
Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender’s option, will (a) be payable on
demand; (b) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (1) the term of any applicable insurance policy;
or (2) the remaining term of the Note; or (c) be treated as a balloon payment which will be due and
payable at the Note’s maturity. The Agreement also will secure payment of these amounts. Such
right shall be in addition to all other rights and remedies to which Lender may be entitled upon an
Event of Default.

REINSTATEMENT OF SECURITY INTEREST. If payment is made by Grantor, whether voluntarily or
otherwise, or by guarantor or by any third party, on the Indebtedness and thereafter Lender is
forced to remit the amount of that payment (a) to Grantor’s trustee in bankruptcy or to any similar
person under any federal or state bankruptcy law or law for the relief of debtors, (b) by reason of
any judgment, decree or order of any court or administrative body having jurisdiction over Lender
or any of Lender’s property, or (c) by reason of any settlement or compromise of any claim made by
Lender with any claimant (including without limitation Grantor), the Indebtedness shall be
considered unpaid for the purpose of enforcement of this Agreement and this Agreement shall
continue to be effective or shall be reinstated, as the case may be, notwithstanding any
cancellation of this Agreement or of any note or other instrument or agreement evidencing the
Indebtedness and the Collateral will continue to secure the amount repaid or recovered to the same
extent as if that amount never had been originally received by Lender, and Grantor shall be bound
by any judgment, decree, order, settlement or compromise relating to the Indebtedness or to this
Agreement.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

Default on Indebtedness. Failure of Grantor to make any payment when due on the
Indebtedness.

Other Defaults. Failure of Grantor to comply with or to perform any other term, obligation,
covenant or condition contained in this Agreement or in any of the Related Documents or in
any other agreement between Lender and Grantor.

					
	 	 	 	 	 
	 
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False Statements. Any warranty, representation or statement made or furnished to Lender by
or on behalf of Grantor under this Agreement, the Note or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in
full force and effect (including failure of any collateral documents to create a valid and
perfected security interest or lien) at any time and for any reason.

Insolvency. The dissolution or termination of Grantor’s existence as a going business, the
insolvency of Grantor, the appointment of a receiver for any part of Grantor’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Grantor or by any governmental agency against the Collateral or any collateral securing
the Indebtedness. This includes a garnishment of any of Grantor’s accounts with Lender.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or such Guarantor dies or becomes incompetent.

Adverse Change. A material adverse change occurs in Grantor’s financial condition, or
Lender believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time
thereafter, Lender shall have all the rights of a secured party under the Missouri Uniform
Commercial Code. In addition and without limitation, Lender may exercise any one or more of the
following rights and remedies:

Accelerate Indebtedness. Lender may declare the entire Indebtedness, including any
prepayment penalty which Grantor would be required to pay, immediately due and payable,
without notice.

Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of
the Collateral and any and all certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have full power to enter
upon the property of Grantor to take possession of and remove the Collateral. If the
Collateral contains other goods not covered by this Agreement at the time of repossession,
Grantor agrees Lender may take such other goods, provided that Lender makes reasonable
efforts to return them to Grantor after repossession.

Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise
deal with the Collateral or proceeds thereof in Lender’s own name or that of Grantor.
Lender may sell the Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give Grantor reasonable notice of the time after which any private sale
or any other intended disposition of the Collateral is to be made. The requirements of
reasonable notice shall be met if such notice is given at least ten (10) days before the
time of the sale or disposition. All expenses relating to the disposition of the
Collateral, including without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of the Indebtedness
secured by this Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid.

Appoint Receiver. To the extent permitted by applicable law, Lender shall have the
following rights and remedies regarding the appointment of a receiver: (a) Lender may have
a receiver appointed as a matter of right, (b) the receiver may be an employee of Lender and
may serve without bond, and (c) all fees of the receiver and his or her attorney shall
become part of the Indebtedness secured by this Agreement and shall be payable on demand,
with interest at the Note rate from date of expenditure until repaid.

Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect
the payments, rents, income, and revenues from the Collateral. Lender may at any time in
its discretion transfer any

					
	 	 	 	 	 
	
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Collateral into its own name or that of its nominee and receive the payments, rents, income,
and revenues therefrom and hold the same as security for the Indebtedness or apply it to
payment of the Indebtedness in such order of preference as Lender may determine. Insofar as
the Collateral consists of accounts, general intangibles, insurance policies, instruments,
chattel paper, choses in action, or similar property, Lender may demand, collect, receipt
for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender
may determine, whether or not Indebtedness or Collateral is then due. For these purposes,
Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail
addressed to Grantor; change any address to which mail and payments are to be sent; and
endorse notes, checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To facilitate collection,
Lender may notify account debtors and obligors on any Collateral to make payments directly
to Lender.

Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may
obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to
Lender after application of all amounts received from the exercise of the rights provided in
this Agreement. Grantor shall be liable for a deficiency even if the transaction described
in this subsection is a sale of accounts or chattel paper.

Other Rights and Remedies. Lender shall have all the rights and remedies of a secured
creditor under the provisions of the Uniform Commercial Code, as may be amended from time to
time. In addition, Lender shall have and may exercise any or all other rights and remedies
it may have available at law, in equity, or otherwise.

Cumulative Remedies. All of Lender’s rights and remedies, whether evidenced by this
Agreement or the Related Documents, or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to take action
to perform an obligation of Grantor under this Agreement, after Grantor’s failure to
perform, shall not affect Lender’s right to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Agreement.
No alteration of or amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by the alteration or
amendment.

Applicable Law. This Agreement has been delivered to Lender and accepted by Lender in the
State of Missouri. If there is a lawsuit, Grantor agrees upon Lender’s request to submit to
the jurisdiction of the courts of St. Louis County the State of Missouri. Subject to the
provisions on arbitration, this Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri.

Arbitration. Lender and Grantor agree that all disputes, claims and controversies between
them whether individual, joint, or class in nature, arising from this Agreement or
otherwise, including without limitation contract and tort disputes, shall be arbitrated
pursuant to the Rules of the American Arbitration Association, upon request of either party.
No act to take or dispose of any Collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This includes, without
limitation, obtaining injunctive relief or a temporary restraining order; invoking a power
of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of
a receiver; or exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness
or reasonableness of any act, or exercise of any right, concerning any Collateral, including
any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall have the right or the
power to enjoin or restrain any act of any party. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement shall
preclude any party from seeking equitable relief from a court of competent jurisdiction.
The statute of limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed
the commencement of an action for these purposes. The Federal Arbitration Act shall apply
to the construction, interpretation, and enforcement of this arbitration provision.

					
	 	 	 	 	 
	 
	 	7
	 	 

 

 

Attorneys’ Fees; Expenses. Grantor agrees to pay upon demand all of Lender’s costs and
expenses, including attorneys’ fees and Lender’s legal expenses, incurred in connection with
the enforcement of this Agreement. Lender may pay someone else to help enforce this
Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a
lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and appeals and any
anticipated post-judgment collection services. Grantor also shall pay all court costs and
such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and
are not to be used to interpret or define the provisions of this Agreement.

Notices. Any notice required to be given under this Agreement shall be given in writing,
may be sent by telefacsimile (unless otherwise required by law), and shall be effective when
actually delivered or when deposited with a nationally recognized overnight courier or
deposited in the United States mail, as first class, postage prepaid, addressed to the party
to whom the notice is to be given at the address shown above. Any party may change its
address for notices under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party’s address. To the
extent permitted by applicable law, if there is more than one Grantor, notice to any Grantor
will constitute notice to all Grantors. For notice purposes, Grantor will keep Lender
informed at all times of Grantor’s current address(es).

Power of Attorney. Grantor hereby appoints Lender as its true and lawful attorney-in-fact,
irrevocably, with full power of substitution to do the following: (a) to demand, collect,
receive, receipt for, sue and recover all sums of money or other property which may now or
hereafter become due, owing or payable from the Collateral; (b) to execute, sign and endorse
any and all claims, instruments, receipts, checks, drafts or warrants issued in payment for
the Collateral; (c) to settle or compromise any and all claims arising under the Collateral,
and, in the place and stead of Grantor, to execute and deliver its release and settlement
for the claim; and (d) to file any claim or claims or to take any action or institute or
take part in any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or advisable. This
power is given as security for the Indebtedness, and the authority hereby conferred is and
shall be irrevocable and shall remain in full force and effect until renounced by Lender.

Severability. If a court of competent jurisdiction finds any provision of this Agreement to
be invalid or unenforceable as to any person or circumstance, such finding shall not render
the offending provision invalid or unenforceable as to any other persons or circumstances.
If feasible any such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all other
respects shall remain valid and enforceable.

Successors Interests. Subject to any limitations set forth above on transfer of the
Collateral, this Agreement shall be binding upon and inure to the benefit of the parties,
their successors and assigns.

Waiver. Lender shall not be deemed to have waived any rights under this Agreement unless
such waiver is given in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender’s right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Grantor’s obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of Lender.

EXHIBIT A. An exhibit, titled “Exhibit A,” is attached to this Agreement and by this reference is
made a part of this Agreement just as if all the provisions, forms and conditions of the Exhibit
had been fully set forth in this Agreement.

EXHIBIT B. An exhibit, titled “Exhibit B,” is attached to this Agreement and by this reference is
made a part of this Agreement just as if all the provisions, forms and conditions of the Exhibit
had been fully set forth in this Agreement.

					
	 	 	 	 	 
	 
	 	8
	 	 

 

 

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT, AND
GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 10, 2000.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

	 	 	 
	GRANTOR:
	 

	 	 
	 

	 	 
	SYNERGETICS, INC., a Missouri Corporation
	 

	 	 
	By:

	 	/s/ William Bates VP
	 

	 	 
	 

	 	William Bates, Vice President
	 

	 	 
	 

	 	 
	LENDER:
	 

	 	 
	 

	 	 
	Union Planters Bank, N.A.
	 

	 	 
	By:

	 	/s/ Anne Silvestri V.P.
	 

	 	 
	 

	 	Authorized Officer

					
	 	 	 	 	 
	 
	 	9
	 	 

 

 

EXHIBIT A

	 	 	 	 	 	 	 
	Borrower:

	 	SYNERGETICS, INC., a
	 	Lender:
	 	Union Planters Bank, N.A.
	 

	 	Missouri Corporation
	 	 	 	Clayton Banking Center
	 

	 	(TIN: 43-1585312)
	 	 	 	8182 Maryland Avenue
	 

	 	88 Hubble
	 	 	 	St. Louis, MO 63105
	 

	 	St. Charles, MO 63304	 	 	 	 

This Exhibit A is attached to and by this reference is made a part of such Security Agreement,
dated March 10, 2000, and executed in connection with a loan or other financial accommodations
between Union Planters Bank, N.A. and SYNERGETICS, INC., a Missouri Corporation.

All (a) inventory, including raw materials, goods and merchandise, work in process, parts and
supplies, finished products and returned items, (b) Accounts, including accounts receivable, (c)
Contract Rights, (d) goods, merchandise or other personal property (i) returned to or repossessed
by or on behalf of Debtor, and (ii) the sale or lease of which shall have given or shall give rise
to any Accounts, Contract Rights, chattel paper or instrument, (e) notes, drafts, cash,
acceptances, instruments, chattel paper, warehouse receipts, letters of credit and repurchase
agreements, (f) General Intangibles, including goodwill, patent rights, patents, licenses,
trademarks, service marks, trade names and copyrights, and all income including infringement
damages with respect thereto, (g) documents and instruments evidencing any obligation to Debtor for
payment of goods, merchandise or other personal property sold or services rendered, (h) all federal, state and local tax refunds, (i) customer lists and files, (j) drawings, blueprints, promotional
brochures and mailing lists, (k) insurance policies covering any collateral, (l) franchises and
licenses, (m) [illegible], (n) proceeds and cash surrender values of any life insurance policies of
which the Debtor may be a beneficiary or owner, (o) documents, books and records relating to the
Collateral, and (p) cash and non-cash proceeds (including insurance proceeds), substitutes,
replacements, accretions and products of the Collateral.

THIS EXHIBIT A IS EXECUTED ON MARCH 10, 2000.

BORROWER:

	 	 	 
	SYNERGETICS, INC., a Missouri Corporation
	 

	 	 
	By:

	 	/s/ William Bates VP
	 

	 	 
	 

	 	William Bates, Vice President
	 

	 	 
	 

	 	 
	LENDER:
	 

	 	 
	Union Planters Bank, N.A.
	 

	 	 
	By:

	 	/s/ Anne Silvestri V.P.
	 

	 	 
	 

	 	Authorized Officer

					
	 	 	 	 	 
	 
	 	10
	 	 

 

 

EXHIBIT B

	 	 	 	 	 	 	 
	Borrower:

	 	SYNERGETICS, INC., a
	 	Lender:
	 	Union Planters Bank, N.A.
	 

	 	Missouri Corporation
	 	 	 	Clayton Banking Center
	 

	 	(TIN: 43-1585312)
	 	 	 	8182 Maryland Avenue
	 

	 	88 Hubble
	 	 	 	St. Louis, MO 63105
	 

	 	St. Charles, MO 63304	 	 	 	 

This Exhibit B is attached to and by this reference is made a part of such Security Agreement,
dated March 10, 2000, and executed in connection with a loan or other financial accommodations
between Union Planters Bank, N.A. and SYNERGETICS, INC., a Missouri Corporation.

All (a) equipment, (b) furniture, fixtures and machinery, (c) accessories, furnishings, molds,
motor vehicles, tools, toolings, jigs, dies, sparer parts, manufacturing implements, trailers and
improvements to real property, (d) tangible personal property, artwork and drawings, (e) insurance
policies covering any Collateral, (f) documents, books and records relating to the Collateral, and
(g) cash and non-cash proceeds (including insurance proceeds), substitutes, replacements,
accretions, accessions and products of the Collateral.

THIS EXHIBIT B IS EXECUTED ON MARCH 10, 2000.

BORROWER:

	 	 	 
	SYNERGETICS, INC., a Missouri Corporation
	 

	 	 
	By:

	 	/s/ William Bates VP
	 

	 	 
	 

	 	William Bates, Vice President
	 

	 	 
	 

	 	 
	LENDER:
	 

	 	 
	Union Planters Bank, N.A.
	 

	 	 
	By:

	 	/s/ Anne Silvestri V.P.
	 

	 	 
	 

	 	Authorized Officer

					
	 	 	 	 	 
	 
	 	11exv10w44

 

EXHIBIT 10.44

BUSINESS LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal
	 	Loan Date
	 	Maturity
	 	Loan No.
	 	Call / Coll
	 	Account	 	Officer	 	Initials
	$1,427,105.00
	 	09-30-2005
	 	09-30-2008
	 	232000226394
	 	4A / 51
	 	 
	 	***
	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. Any item
above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 
	Borrower:

	 	SYNERGETICS, INC. (MISSOURI CORPORATION)
	 	Lender:
	 	Union Planters Bank NA
	 

	 	(TIN: 43-1585312)
	 	 	 	Clayton Commercial Lending
	 

	 	3845 CORPORATE CENTRE DRIVE
	 	 	 	8182 Maryland Avenue Suite 200
	 

	 	O’FALLON, MO 63368
	 	 	 	St. Louis, MO 63105

THIS BUSINESS LOAN AGREEMENT dated September 30, 2005, is made and executed between SYNERGETICS,
INC. (MISSOURI CORPORATION) (“Borrower”) and Union Planters Bank NA (“Lender”) on the following
terms and conditions. Borrower has received prior commercial loans from Lender or has applied to
Lender for a commercial loan or loans or other financial accommodations, including those which may
be described on any exhibit or schedule attached to this Agreement (“Loan”). Borrower understands
and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower’s representations, warranties, and agreements as set forth in this Agreement; (B) the
granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s
sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.

TERM. This Agreement shall be effective as of September 30, 2005, and shall continue in full force
and effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1)
the Note; (2) Security Agreements granting to Lender security interests in the Collateral;
(3) financing statements and all other documents perfecting Lender’s Security Interests; (4)
evidence of insurance as required below; (5) guaranties; (6) together with all such Related
Documents as Lender may require for the Loan; all in form and substance satisfactory to
Lender and Lender’s counsel.

Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory
to Lender properly certified resolutions, duly authorizing the execution and delivery of
this Agreement, the Note and the Related Documents. In addition, Borrower shall have
provided such other resolutions, authorizations, documents and instruments as Lender or its
counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and
other expenses which are then due and payable as specified in this Agreement or any Related
Document.

Representations and Warranties. The representations and warranties set forth in this
Agreement, in the Related Documents, and in any document or certificate delivered to Lender
under this Agreement are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this
Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. Borrower is a corporation for profit which is, and at all times shall be,
duly organized, validly existing, and in good standing under and by virtue of the laws of
the State of Missouri Borrower has the full power and authority to own its properties and to
transact the business in which it is presently engaged or presently proposes to engage.
Borrower maintains an office at 3845 CORPORATE CENTER DRIVE,

 

 

O’FALLON, MO 63368. Unless Borrower has designated otherwise in writing, the principal
office is the office at which Borrower keeps its books and records including its records
concerning the Collateral. Borrower will notify Lender prior to any change in the location
of Borrower’s state of organization or any change in Borrower’s name, Borrower shall do all
things necessary to preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court applicable to Borrower
and Borrower’s business activities.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by
law relating to all assumed business names used by Borrower. Excluding the name of
Borrower, the following is a complete list of all assumed business names under which
Borrower does business: None.

Authorization. Borrower’s execution, delivery, and performance of this Agreement and all
the Related Documents have been duly authorized by all necessary action by Borrower and do
not conflict with, result in a violation of, or constitute a default under (1) any provision
of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement
or other instrument binding upon Borrower or (2) any law, governmental regulation, court
decree, or order applicable to Borrower or to Borrower’s properties.

Financial Information. Each of Borrower’s financial statements supplied to Lender truly and
completely disclosed Borrower’s financial condition as of the date of the statement, and
there has been no material adverse change in Borrower’s financial condition subsequent to
the date of the most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is
required to give under this Agreement when delivered will constitute legal, valid, and
binding obligations of Borrower enforceable against Borrower in accordance with their
respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in
Borrowers financial statements or in writing to Lender and as accepted by Lender, and except
for property tax liens for taxes not presently due and payable, Borrower owns and has good
title to all of Borrower’s properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such properties. All of
Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing,
Borrower represents and warrants that: (1) During the period of Borrower’s ownership of the
Collateral, there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on, under, about or
from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that
there has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants
of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind
by any person relating to such manors. (3) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or from any of
the Collateral; and any such activity shall be conducted in compliance with all applicable
federal, state, and local laws, regulations, and ordinances, including without limitation
all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the
Collateral to make such inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement. Any inspections or tests
made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not
be construed to create any responsibility or liability on the part of Lender to Borrower or
to any other person. The representations and warranties contained herein are based on
Borrower’s due diligence in investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and
all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly
or indirectly sustain or suffer resulting from a breach of this section of the Agreement or
as a consequence of any use, generation, manufacture, storage, disposal, release or
threatened release of a hazardous waste or substance on the Collateral. The provisions of
this section of the Agreement, including the obligation to indemnify, shall survive the
payment of the Indebtedness and the

					
	 	 	 	 	 
	 
	 	2
	 	 

 

 

termination, expiration or satisfaction of this Agreement and shall not be affected by
Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or
otherwise.

Litigation and Claims. No litigation, claim, investigation, administrative proceeding or
similar action (including those for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially adversely affect Borrower’s financial
condition or properties, other than litigation, claims, or other events, if any, that have
been disclosed to and acknowledged by Lender in writing.

Taxes. To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports that
are or were required to be filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those presently being or to be contested
by Borrower in good faith in the ordinary course of business and for which adequate reserves
have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not
entered into or granted any Security Agreements, or permitted the filing or attachment of
any Security Interests on or affecting any of the Collateral directly or indirectly securing
repayment of Borrower’s Loan and Note, that would be prior or that may in any way be
superior to Lender’s Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related
Documents are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with their respective
terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material
adverse changes in Borrower’s financial condition, and (2) all existing and all threatened
litigation, claims, investigations, administrative proceedings or similar actions affecting
Borrower or any Guarantor which could materially affect the financial condition of Borrower
or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GAAP, applied on a
consistent basis, and permit Lender to examine and audit Borrower’s books and records at all
reasonable times.

Financial Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than 180 days after
the end of each fiscal year, Borrower’s balance sheet and income statement for the
year ended, audited by a certified public accountant satisfactory to Lender.

Interim Statements. As soon as available, but in no event later than sixty (60)
days after the end of each fiscal quarter, Borrower’s balance sheet and profit and
loss statement for the period ended, prepared by Borrower.

All financial reports required to be provided under this Agreement shall be prepared in
accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true
and correct.

Additional Information. Furnish such additional information and statements, as Lender may
request from time to time.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such
other insurance as Lender may require with respect to Borrower’s properties and operations,
in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower,
upon request of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30) days prior
written notice to Lender. Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way by any act, omission or
default of Borrower or any other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest for the Loans, Borrower will provide
Lender with such lender’s loss payable or other endorsements as Lender may require.

					
	 	 	 	 	 
	 
	 	3
	 	 

 

 

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing
insurance policy showing such information as Lender may reasonably request, including
without limitation the following: (1) the name of the insurer; (2) the risks insured; (3)
the amount of the policy; (4) the properties insured; (5) the then current property values
on the basis of which insurance has been obtained, and the manner of determining those
values; and (6) the expiration date of the policy. In addition, upon request of Lender
(however not more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or replacement cost
of any Collateral. The cost of such appraisal shall be paid by Borrower.

Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the
Loans in favor of Lender, executed by the guarantor named below, on Lender’s forms, and in
the amount and under the conditions set forth in those guaranties.

	 	 	 
	Name of Guarantor	 	Amount
	 
	 	 
	SYNERGETICS
USA, INC. (DELAWARE

	 	Unlimited
	PUBLIC CORPORATION)
	 	 

Other Agreements. Comply with all terms and conditions of all other agreements, whether now
or hereafter existing, between Borrower and any other party and notify Lender immediately in
writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless
specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental charges,
levies and liens, of every kind and nature, imposed upon Borrower or its properties, income,
or profits, prior to the date on which penalties would attach, and all lawful claims that,
if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or
profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and
provisions set forth in this Agreement, in the Related Documents, and in all other
instruments and agreements between Borrower and Lender. Borrower shall notify Lender
immediately in writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same
qualifications and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower’s expense, all such
investigations, studies, samplings and testings as may be requested by Lender or any
governmental authority relative to any substance, or any waste or by-product of any
substance defined as toxic or a hazardous substance under applicable federal, state, or
local law, rule, regulation, order or directive, at or affecting any property or any
facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities applicable to the
conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of
the Collateral, including without limitation, the Americans With Disabilities Act. Borrower
may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified
Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized. Lender may require Borrower to post
adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s
interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and
all Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit
Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s
books, accounts, and records. If Borrower now or at any time hereafter maintains any
records (including without limitation computer generated records

					
	 	 	 	 	 
	 
	 	4
	 	 

 

 

and computer software programs for the generation of such records) in the possession of a
third party, Borrower, upon request of Lender, shall notify such party to permit Lender free
access to such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower’s expense.

Compliance Certificates. Unless waived in writing by Lender, provide Lender at least
annually, with a certificate executed by Borrower’s chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations and warranties
set forth in this Agreement are true and correct as of the date of the certificate and
further certifying that, as of the date of the certificate, no Event of Default exists under
this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and
all Environmental Laws; not cause or permit to exist, as a result of an intentional or
unintentional action or omission on Borrower’s part or on the part of any third party, on
property owned and/or occupied by Borrower, any environmental activity where damage may
result to the environment, unless such environmental activity is pursuant to and in
compliance with the conditions of a permit issued by the appropriate federal, state or local
governmental authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other communication from any governmental agency or instrumentality concerning any
intentional or unintentional action or omission on Borrower’s part in connection with any
environmental activity whether or not there is damage to the environment and/or other
natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes,
mortgages, deeds of trust, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably
request to evidence and secure the Loans and to perfect all Security Interests.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on any Collateral
and paying all costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note from the date incurred or paid by Lender to the date of repayment by
Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s option, will
(A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note’s maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without the prior written consent of Lender:

Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business
and indebtedness to Lender contemplated by this Agreement, create, incur or assume
indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage,
assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s assets
(except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower’s
accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different
than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge,
transfer, acquire or consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends
on Borrower’s stock (other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower is a “Subchapter S
Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay
cash dividends on its stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from their status
as Shareholders of a Subchapter S Corporation because of their ownership of shares

					
	 	 	 	 	 
	 
	 	5
	 	 

 

 

of Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares or alter or
amend Borrower’s capital structure.

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any
other person, enterprise or entity, (2) purchase, create or acquire any interest in any
other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in
the ordinary course of business.

Agreements. Borrower will not enter into any agreement containing any provisions which
would be violated or breached by the performance of Borrower’s obligations under this
Agreement or in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the
terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C)
there occurs a material adverse change in Borrower’s financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s guaranty
of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to
protect Lender’s charge and setoff rights provided in this paragraph.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Agreement or in any of the Related Documents or to
comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property,
any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in
full force and effect (including failure of any collateral document to create a valid and
perfected security interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Borrower or by any governmental agency against any collateral securing the Loan. This
includes a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.

					
	 	 	 	 	 
	 
	 	6
	 	 

 

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
In the event of a death, Lender, at its option, may, but shall not be required to, permit
the Guarantor’s estate to assume unconditionally the obligations arising under the guaranty
in a manner satisfactory to Lender, and, in doing so, cure any Event of Default.

Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the
common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or
Lender believes the prospect of payment or performance of the Loan is impaired.

Insecurity. Lender in good faith believes itself insecure.

Right to Cure. If any default, other than a default on Indebtedness, is curable and if
Borrower or Grantor, as the case may be, has not been given a notice of a similar default
within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case
may be, after receiving written notice from Lender demanding cure of such default: (1) cure
the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15)
days, immediately initiate steps which Lender deems in Lender’s sole discretion to be
sufficient to cure the default and thereafter continue and complete all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and obligations of Lender
under this Agreement or the Related Documents or any other agreement immediately will terminate
(including any obligation to make further Loan Advances or disbursements), and, at Lender’s option,
all Indebtedness immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described in the “Insolvency”
subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall
have all the rights and remedies provided in the Related Documents or available at law, in equity,
or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies
shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue
any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or
to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s
right to declare a default and to exercise its rights and remedies.

LOAN COVENANT. DEBT SERVICE COVERAGE RATIO TO BE MEASURED ANNUALLY. DEBT SERVICE COVERAGE RATIO
> 1.20. DEFINED AS: EARNINGS BEFORE INTEREST, DEPRECIATION AND AMORTIZATION DIVIDED BY
INTEREST EXPENSE PLUS CURRENT MATURITIES OF LONG-TERM DEBT FOR BORROWER AND GUARANTOR ON A
CONSOLIDATED BASIS.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Agreement.
No alteration of or amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by the alteration or
amendment.

Arbitration. Borrower and Lender agree that all disputes, claims and controversies between
them whether individual, joint, or class in nature, arising from this Agreement or
otherwise, including without limitation contract and tort disputes, shall be arbitrated
pursuant to the Rules of the American Arbitration Association in effect at the time the
claim is filed, upon request of either party. No act to take or dispose of any Collateral
shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration
agreement. This includes, without limitation, obtaining Injunctive relief or a temporary
restraining order; Invoking a power of sale under any deed of trust or mortgage; obtaining a
writ of attachment or imposition of a receiver; or exercising any rights relating to
personal property, including taking or disposing of such property with or without judicial
process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or exercise of any
right, concerning any Collateral, including any claim to rescind, reform, or otherwise
modify any agreement relating to the Collateral, shall also be arbitrated, provided however
that no arbitrator shall have the right or the power to enjoin or restrain any act of any
party. Judgment upon any award rendered by any arbitrator may be entered in any court
having jurisdiction. Nothing in this Agreement shall preclude

7

 

any party from seeking equitable relief from a court of competent jurisdiction. The statute
of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be
applicable In an action brought by a party shall be applicable in any arbitration
proceeding, and the commencement of an arbitration proceeding shall be deemed the
commencement of an action for these purposes. The Federal Arbitration Act shall apply to
the construction, interpretation, and enforcement of this arbitration provision.

Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s costs and
expenses, including Lender’s attorneys’ fees and Lender’s legal expenses, incurred in
connection with the enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender’s attorneys’ fees and legal expenses whether
or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), and
appeals. Borrower also shall pay all court costs and such additional fees as may be
directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and
are not to be used to interpret or define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer,
whether now or later, of one or more participation interests in the Loan to one or more
purchasers, whether related or unrelated to Lender, Lender may provide. without any
limitation whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect
to such matters. Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation interests.
Borrower also agrees that the purchasers of any such participation interests will be
considered as the absolute owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale of such
participation interests. Borrower further waives all rights of offset or counterclaim that
it may have now or later against Lender or against any purchaser of such a participation
interest and unconditionally agrees that either Lender or such purchaser may enforce
Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder
of any interest in the Loan, Borrower further agrees that the purchaser of any such
participation interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Lender.

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Missouri without regard to
its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
Missouri.

Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to
the jurisdiction of the courts of St. Louis County, State of Missouri.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No delay or omission
on the part of Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender’s right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender’s rights or of any of Borrower’s or any Grantor’s
obligations as to any future transactions. Whenever the consent of Lender is required under
this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases
such consent may be granted or withheld in the sole discretion of Lender.

Notices. Any notice required to be given under this Agreement shall be given in writing,
and shall be effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail, as first class, certified
or registered mail postage prepaid, directed to the addresses shown near the beginning of
this Agreement. Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of the notice is to
change the party’s address. For notice purposes, Borrower agrees to keep Lender informed at
all times of Borrower’s current address. Unless otherwise provided or required by law, if there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.

8

 

Severability. If a court of competent jurisdiction finds any provision of this Agreement to
be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make
the offending provision illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it shall be
considered deleted from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this Agreement.

Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of
this Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word “Borrower” as used in this Agreement shall include all of
Borrower’s subsidiaries and affiliates. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to make any Loan or other
financial accommodation to any of Borrower’s subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained
in this Agreement or any Related Documents shall bind Borrower’s successors and assigns and
shall inure to the benefit of Lender and its successors and assigns. Borrower shall not,
however, have the right to assign Borrower’s rights under this Agreement or any interest
therein, without the prior written consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that in
extending Loan Advances, Lender is relying on all representations, warranties, and covenants
made by Borrower in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees
that regardless of any investigation made by Lender, all such representations, warranties
and covenants will survive the extension of Loan Advances and delivery to Lender of the
Related Documents, shall be continuing in nature, shall be deemed made and redated by
Borrower at the time each Loan Advance is made, and shall remain in full force and effect
until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement
shall be terminated in the manner provided above, whichever is the last to occur.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this Agreement:

Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the
terms and conditions of this Agreement.

Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and
schedules attached to this Business Loan Agreement from time to time.

Borrower. The word “Borrower” means SYNERGETICS, INC. (MISSOURI CORPORATION) and includes
all co-signers and co-makers signing the Note.

Collateral. The word “Collateral” means all property and assets granted as collateral
security for a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the form of a
security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.

9

 

Environmental Laws. The words “Environmental Laws” mean any and all state, federal and
local statutes, regulations and ordinances relating to the protection of human health or the
environment, including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
(“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
(“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable
state or federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words “Event of Default” mean any of the events of default set forth
in this Agreement in the default section of this Agreement.

GAAP. The word “GAAP” means generally accepted accounting principles.

Grantor. The word “Grantor” means each and all of the persons or entities granting a
Security Interest in any Collateral for the Loan, including without limitation all Borrowers
granting such a Security Interest.

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any
or all of the Loan.

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including
without limitation a guaranty of all or part of the Note.

Hazardous Substances. The words “Hazardous Substances” mean materials that, because of
their quantity, concentration or physical, chemical or infectious characteristics, may cause
or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise
handled, The words “Hazardous Substances” are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or waste as defined
by or listed under the Environmental Laws. The term “Hazardous Substances” also includes,
without limitation, petroleum and petroleum by-products or any fraction thereof and
asbestos.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or
Related Documents, including all principal and interest together with all other indebtedness
and costs and expenses for which Borrower is responsible under this Agreement or under any
of the Related Documents.

Lender. The word “Lender” means Union Planters Bank NA, its successors and assigns.

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.

Note. The word “Note” means the Note executed by SYNERGETICS, INC. (MISSOURI CORPORATION)
in the principal amount of $1,427,105.00 dated September 30, 2005, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.

Permitted Liens. The words “Permitted Liens” mean (1) liens and security interests securing
Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar
charges either not yet due or being contested in good faith; (3) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of
business and securing obligations which are not yet delinquent; (4) purchase money liens or
purchase money security interests upon or in any property acquired or held by Borrower in
the ordinary course of business to secure indebtedness outstanding on the date of this
Agreement or permitted to be incurred under the paragraph of this Agreement titled
“Indebtedness and Liens”; (5) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens
and security interests which in the aggregate constitute an immaterial and insignificant
monetary amount with respect to the net value of Borrower’s assets.

Related Documents. The words “Related Documents” mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust,
security deeds, collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loan.

10

 

Security Agreement. The words “Security Agreement” mean and include without limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether
created by law, contract, or otherwise, evidencing, governing, representing, or creating a
Security Interest.

Security Interest. The words “Security Interest” mean, without limitation, any and all
types of collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT
OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE
LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT
YOU (BORROWER(S)) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT. ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING. WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT
OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

WAIVE JURY. All parties to this Agreement hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by any party against any other party.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED SEPTEMBER 30, 2005.

	 	 	 
	BORROWER:
	 
	 	 
	SYNERGETICS, INC. (MISSOURI CORPORATION)
	 
	 	 
	By:

	 	/s/ Gregg D. Scheller
	 

	 	 
	 

	 	GREGG D. SCHELLER, President of SYNERGETICS, INC. (MISSOURI CORPORATION)
	 
	 	 
	LENDER:
	 
	 	 
	UNION PLANTERS BANK NA
	 
	 	 
	By:

	 	/s/ Anne D. Silvestri
	 

	 	 
	 

	 	Authorized Signer

11

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