Document:

exv10w4

 

Exhibit 10.4

Diamond Management & Technology Consultants, Inc.

875 N. Michigan Avenue, Suite 3000

Chicago, IL 60611

312.255.5000

 

NOTICE OF GRANT OF RESTRICTED STOCK UNITS — PARTNER

 

	 	 	 	 	 
	«FIRST_NAME»

«COUNTRY»

	 	«LAST_NAME»
	 	EMPLOYEE ID:      «ID»

 

	 	 	 
	Plan:

	 	«PLAN»
	Grant Number:

	 	«NUMBER»
	Date of Grant:

	 	«DATE»
	RSUS Granted:

	 	«SHARES»
	Fair Market Value on Date of Grant:

	 	«COST_BASIS»

The shares will be issued as follows:

	 	 	 
	RSUS	 	Vest Date
	 
	 	 
	«SHARES1»

	 	«VEST1»
	«SHARES2»

	 	«VEST2»
	«SHARES3»

	 	«VEST3»
	«SHARES4»

	 	«VEST4»
	«SHARES5»

	 	«VEST5»
	«SHARES6»

	 	«VEST6»
	«SHARES7»

	 	«VEST7»
	«SHARES8»

	 	«VEST8»
	«SHARES9»

	 	«VEST9»
	«SHARES10»

	 	«VEST10»

By accepting this grant, you and Diamond Management & Technology Consultants, Inc. (the “Company”)
agree that these Restricted Stock Units (“RSUs”) are granted under and governed by the terms and
conditions of the Equity Plan indicated above, provided as part of this package, and the attached
Restricted Stock Units Agreement, both of which are incorporated herein and made a part of this
document. All capitalized terms herein shall have the meanings ascribed by the attached Restricted
Stock Units Agreement.

 

 

Diamond Management & Technology Consultants, Inc.

875 N. Michigan Avenue, Suite 3000
 Chicago, IL
60611
 312.255.5000

 

NOTICE OF GRANT OF RESTRICTED STOCK UNITS – NON-PARTNER

 

	 	 	 	 	 
	«First_Name»

	 	«LAST_NAME»
	 	EMPLOYEE ID:     «ID»
	«Middle_Name»
	 	 	 	 
	«COUNTRY»
	 	 	 	 

 

	 	 	 
	Plan:

	 	«PLAN»
	Grant Number:

	 	«NUMBER»
	Date of Grant:

	 	«DATE»
	Restricted Stock Units Granted:

	 	«SHARES»
	Fair Market Value on Date of Grant:

	 	«Cost_Basis_»

The Shares will be issued as follows:

	 	 	 
	Shares	 	Issue Date
	 
	 	 
	«SHARES1»

«SHARES2»

«SHARES3»

«SHARES4»

«SHARES5»

«SHARES6»

«Shares7»

«Shares8»

	 	«VEST1»

«VEST2»

«VEST3»

«VEST4»

«VEST5»

«VEST6»

«Vest7»

«Vest8»

By accepting this grant, you and Diamond Management & Technology Consultants, Inc. (the “Company”)
agree that these Restricted Stock Units (“RSUs”) are granted under and governed by the terms and
conditions of the Equity Plan indicated above, provided as part of this package, and the attached
Restricted Stock Unit Agreement, both of which are incorporated herein and made a part of this
document. All capitalized terms herein shall have the meanings ascribed by the attached Restricted
Stock Unit Agreement.

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DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS, INC.

RESTRICTED
STOCK UNIT AGREEMENT

     WHEREAS, Diamond Management & Technology Consultants, Inc., a Delaware corporation (the
“Company”), has adopted the Diamond Management & Technology Consultants, Inc. Amended and Restated
1998 Equity Incentive Plan, as amended from time to time, and incorporated herein (the “Plan”),
which provides for, among other things, the grant of restricted stock units to employees of the
Company as selected by the Committee representing shares of $.001 par value common stock of the
Company;

     WHEREAS, the individual designated on the attached “Notice of Grant of Restricted Stock Units”
(the “Recipient”) has been selected by the Committee to receive Restricted Stock Units in
accordance with the provisions of the Plan indicated on the Notice of Grant of Restricted Stock
Units; and

     WHEREAS, the parties hereto desire to evidence in writing the terms and conditions of the
Restricted Stock Units.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
herein contained and as an inducement to the Recipient to begin employment with the Company or to
continue as an employee of the Company, the parties hereto hereby agree as follows:

     1. Definitions.

     All capitalized terms used herein shall have the same meanings as are ascribed to them in the
Plan, unless expressly provided otherwise in this Agreement.

     “Agreement” means this Restricted Stock Unit Agreement.

     “Committee” means the Company’s Management Committee, as constituted from time to
time.

     “Date of Grant” means the date the Restricted Stock Unit award is granted, as set
forth in the Notice of Grant.

     “Disability” means any medically determinable physical or mental impairment which
prevents the Recipient from engaging in any substantial gainful activity and which can be
expected to result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months. Disability shall be determined by the Committee based
upon medical reports and other evidence satisfactory to the Committee.

     “Employee” means an employee of the Company.

     “Notice of Grant” means the “Notice of Grant of Restricted Stock Units” attached
hereto and incorporated herein by reference.

     “Restricted Stock Units” means the grant of units representing Stock of the Company.
Upon vesting of the Restricted Stock Units, one share of Stock is issued for each
Restricted Unit that vests in accordance with the terms of this Agreement and the Notice of
Grant.

     “Partner” means the internal company designation for such position.

     “Partner Compensation Program” means the Diamond Management & Technology Consultants,
Inc. Partner Compensation Program dated April 1, 2007, as amended from time to time.

     “Stock” means the $.001 per share par value common stock of the Company.

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     “Value” means the average of the high and low price of a share of Stock on the
NASDAQ Global Market System on the vest date.

     “Vest Date” means the date upon which the Restricted Stock Unit becomes vested, as set
forth in the Notice of Grant.

     2. Grant
of Restricted Stock Units.

     The Committee hereby awards to the Recipient the Restricted Stock Units, on the terms and
conditions set forth herein and subject in all respects to the terms and provisions of the Plan and
the Notice of Grant, which terms and conditions are incorporated herein by reference.

     3. Restrictions
on Transfer.

     The Restricted Stock Units may not be transferred, assigned, pledged or hypothecated in any
way and will not be subject to execution, attachment or similar process, except by will or under
the laws of descent and distribution.

     4. Vesting
of Restricted Stock Units.

     (a) The Restricted Stock Units will be replaced with Stock issued by the Company only
upon and after the Vest Date.

     (b) The Recipient’s vesting rights herein are predicated upon the Recipient’s
continuous employment with the Company from the Date of Grant to the Vest Date. Except as
provided below, no portion of this Restricted Stock Unit award shall vest after the date
the Recipient ceases to be an Employee for any reason, and any unvested portion of the
Restricted Stock Unit award in such case shall be canceled as of that date.

     (c) Notwithstanding anything to the contrary in this Agreement or the Notice of Grant,
if the Recipient dies or suffers a Disability prior to a Vest Date, and the Recipient was
an Employee at the time of such death or Disability, or if the Recipient retires at or
after: (i) age 62, or (ii) age 50 where such Partner shall have been a Partner for at least
five consecutive years, the unvested portion of this Restricted Stock Unit award shall
automatically vest on the date of such death, Disability or retirement. Notwithstanding
the foregoing, accelerated vesting pursuant to this section in the case of retirement shall
only apply to the unvested Equity or Shares granted during the 36 months prior to the
retirement date multiplied by a fraction, the numerator of which is the number of months
elapsed between the date of grant and the retirement date, and the denominator is 36.

     5. Acceptance
of Grant.

     The Recipient is required to accept the grant upon receipt and review of the grant
documentation by promptly returning a signed copy of this Agreement to the Company within 30 days
of receipt of the grant documentation. Grants shall not be effective nor any rights exercisable
until the Company has received an executed copy of this Agreement evidencing that
the grant has been accepted. The Committee may cancel any grant not accepted within 180 days
of receipt of the grant documentation.

     6. Modification
of Restricted Stock Units.

     At any time and from time to time the Committee may modify, extend or renew the Restricted
Stock Units granted hereunder, provided that no such modification, extension or renewal shall
impair in any respect the benefit of the Restricted Stock Units to the Recipient without the
consent of the Recipient.

     7. Stockholder
Rights.

     The Recipient shall have none of the rights of a stockholder with respect to the Restricted
Stock Units until the Company has issued Stock in lieu of the Units upon the vesting of such Units
and such Stock has been duly recorded on

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the stock transfer books of the Company. The certificates representing the Stock issued in
lieu of the Restricted Stock Units shall bear the legends provided in the Partner Compensation
Program, if a partner, and any other required legends.

     8. Other Documents. 

     The Recipient acknowledges receipt of copies of the Plan and the Partner Compensation Program,
if a Partner, and agrees to all of the respective terms, conditions, restrictions and limitations
contained therein.

     9. Continued Employment.

     The granting of this Restricted Stock Unit award is neither a contract nor a guarantee of
continued employment; employment is and always will be on an at will basis. The granting of this
Restricted Stock Unit award is a one-time discretionary act and it does not impose any obligations
to offer future stock grants or awards.

     10. Personal Data. 

     In order to grant Restricted Stock Units to you, the Company may have had to and may continue
to process your personal data that it currently has on record and/or data it may obtain from you in
the future. Additionally, the Company may have had to and may continue to transfer (electronically
or otherwise) such personal data to other Diamond Management & Technology Consultants, Inc.
entities for processing in connection with the granting of Restricted Stock Units. Such transfer
of personal data may be to other Diamond Management & Technology Consultants, Inc. entities outside
of your country, in particular to Diamond Management & Technology Consultants, Inc. in the United
States, and where necessary, may be further transferred to other Diamond Management & Technology
Consultants, Inc. subsidiaries or to outside service providers (such as brokers). Your personal
data will be treated as private and confidential and will only be used to the extent necessary in
relation to the Restricted Stock Unit award and to comply with any applicable legal, regulatory,
tax or accounting requirements. In accordance with the requirements of data protection legislation,
your own personal data will be made available to you and in the event such data are incorrect, you
may ask for its rectification upon written request. Employees wishing to exercise any such right of
access and rectification should contact the Human Resources department in Chicago.

     By signing this Agreement you are acknowledging receipt of this notification and you are
consenting to the processing and transfer of your personal data as described above. If you withhold
your consent to the transfer and processing of your personal data, the Company will not be able to
grant you the Restricted Stock Units.

     11. Notices. 

     All notices by one party to the other under this Agreement shall be in writing. Any notice
under this Agreement to the Committee or to the Company shall be addressed to the Company at Suite
3000, 875 N. Michigan Avenue, Chicago, Illinois 60611, and any notice to the Recipient shall be
addressed to the Recipient at the address listed in the records of the Company. If mailed by United
States mail, properly addressed and proper postage prepaid or if sent by recognized overnight
courier service, notice shall be effective on the date of mailing or delivery to such courier. If
served personally, notice shall be effective as of the date of delivery to the address of the party
to whom the notice is addressed. If the effective date as provided above is not a business day,
the effective date shall be the next regular business day. Either party may at any time notify the
other in writing of a new address for service of notice upon that party.

     12. Severability. 

     If any provision of this Agreement for any reason should be found by any arbitrator or court
of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, such
declaration shall not affect the validity, legality, or enforceability of any remaining provision
or portion hereof, which remaining provision or portion shall remain in full force and effect as if
this Agreement had been adopted with the invalid, illegal or unenforceable provision or portion
eliminated.

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     13. Agreed Forum. 

     All acts required to be performed by the Recipient hereunder shall be deemed to be performed
in Chicago, Cook County, Illinois, and the Recipient hereby submits to the jurisdiction of any
state or Federal court located in Chicago, Illinois and waives any and all objections to the
jurisdiction of such courts and the venue of any action brought therein.

     14. Arbitration. 

     In the event of a dispute relating to this Agreement, the parties agree to attempt in good
faith to resolve the dispute among themselves. If this is unsuccessful, the parties shall attempt
to mutually agree on an alternative dispute resolution mechanism. If the parties cannot so agree on
an alternative dispute resolution mechanism, then the parties shall submit this dispute to binding
arbitration under the Commercial Rules of the American Arbitration Association. The parties shall
each bear one-half (1/2) of the costs of the alternative dispute resolution mechanism.

     In the event arbitration is chosen, each party shall select an arbitrator of its choice within
20 days of the giving or receipt of notice of arbitration. The two, in turn, shall choose a third
presiding arbitrator. If the two shall be unable to agree upon the presiding arbitrators or if any
party fails or refuses to appoint an arbitrator, the appointing authority shall have the power to
make an appointment.

     The award of the arbitrators, which shall be in writing and furnished within thirty days of
the last day of the hearing, shall be final and binding upon the parties and neither party shall
appeal the award to any court. Judgment for enforcement of the award of the arbitrators may be
entered in any court having jurisdiction thereof. The parties acknowledge that this provision and
any award rendered pursuant to it shall be governed by the federal Uniform Arbitration Act.

     15. Equitable Relief. 

     The Company shall be entitled to enforce the terms and provisions of this Agreement by an
action for injunction or specific performance or an action for damages or all of them, or may be
made the subject of the arbitration proceedings described in the preceding section.

     16. Applicable State Law. 

     This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Illinois.

     IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the ___ day
of                                         , 200                    .

	 	 	 
	RECIPIENT:

	 	THE COMPANY:
	 
	 	 
	 

	 	Diamond Management & Technology Consultants, Inc.
	 
	 	 
	 

	 	/s/ Adam J. Gutstein
	 

	 	 
	(Signature)

	 	Adam J. Gutstein
	 

	 	Chief Executive Officer
	 
	 	 
	 

(Print Name)
	 	 

6exv10w1

 

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     This Third Amendment to Credit and Security Agreement (“Third Amendment”) is entered into as
of June 7, 2007, by and among Synergetics, Inc., a Missouri corporation (“Synergetics”), and
Synergetics USA, Inc., a Delaware corporation (“Synergetics USA”), (individually, a “Borrower” and
together, the “Borrowers”), and Regions Bank (“Lender”).

RECITALS

     A. Borrowers and Lender entered into a certain Credit and Security Agreement dated as of March
13, 2006, as heretofore amended by First Amendment (the “First Amendment”) dated as of September
26, 2006 and by Second Amendment (the “Second Amendment”) dated as of December 8, 2006 (as so
amended, the “Existing Credit Agreement”).

     B. Effective on or prior to the date of this Third Amendment, Lender has purchased the loan of
Wachovia Bank to Borrowers heretofore made under the Existing Credit Agreement and is currently the
sole Lender to Borrowers under the Existing Credit Agreement.

     C. Borrowers and Lenders desire to amend the Existing Credit Agreement as hereinafter
provided.

     D. The Existing Credit Agreement and this Third Amendment constitute the “Credit Agreement”
from and after the effectiveness of this Third Amendment.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers, Lenders and
Agent agree as follows:

     1. Defined Terms. Each term used herein without definition or a modification to
definition shall have the same meaning as set forth in the Existing Credit Agreement.

     2. Sole Lender. From and after the effectiveness of this Third Amendment, all
references in the Credit Agreement to “Wachovia” are hereby deleted and all references to “Agent”
or “Lender” or “Lenders” shall mean Regions Bank as the sole Lender under the Credit Agreement.

     3. Credit Agreement Amendments. The Existing Credit Agreement is hereby amended as
follows, effective upon fulfillment of conditions set forth in Section 4 of this Third Amendment:

     A. Section 1.2, entitled “Primary Definitions,” is hereby amended by modifying
the following definitions:

	 	(1)	 	“Borrowing Base” means, at any time and subject
to change from time to time in Lenders’ sole discretion, the lesser of:

 

 

	 	(a)	 	the Revolving Loan Commitment, or

	 
	 	(b)	 	the sum of

	 	(i)	 	up to 85% of Eligible Accounts, plus
	 
	 	(ii)	 	up to the lesser of (A) 50% of Eligible
Inventory or (B) $4,250,000.

	 	 	 	Lender reserves the right to adjust the percentages and maximums
stated above as a result the Field Audit in Lender’s reasonable
discretion.

	 	(2)	 	The definition of “Collateral” is hereby
amended by adding the following to the end of the definition thereof:

“Anything to the contrary in this Agreement notwithstanding,
from and after the effectiveness of the Third Amendment,
there shall be deleted from this definition and from the
Collateral all Accounts owed by an account debtor outside the
United States (“Foreign Accounts”) and all general intangible
rights of Borrower under foreign accounts insurance now and
hereafter obtained by Borrower to insure Foreign Accounts.”

	 	(3)	 	Item (6) under the definition of “Eligible
Accounts” is hereby amended to read as follows in its entirety:

“(6) Accounts owed by an account debtor located outside the
United States;”

	 	(4)	 	A new definition, “Field Audit”, is hereby
added to read as follows in its entirety:

“‘Field Audit’ means the one-time field audit (to be
conducted within ninety (90) days of the date of the Third
Amendment) of the facilities properties, books, records and
Collateral of Borrowers as provided in Section 6.2 hereof.”

	 	(5)	 	“Fixed Charge Coverage Ratio” means
consolidated EBITDA less unfinanced Capital Expenditures, cash taxes
paid or due, and distributions (including dividend distributions)
divided by Current Maturities of Long Term Debt and cash interest
expense paid or due plus all payments to Iridex (and Borrowers
represent and warrant that the required payments are $800,000 annually,
with first payment due April 15, 2008).

2

 

	 	(6)	 	“Foreign Accounts” is defined within the
definition of Collateral.
	 
	 	(7)	 	“Foreign Accounts and Insurance Security
Interest” is defined in Section 10.10 hereof.
	 
	 	(8)	 	“‘Notes’ and ‘Revolving Notes’ mean the Third
Amended and Restated Revolving Note attached to the Third Amendment as
Exhibit A, which replaces (without novation) the Second Amended and
Restated Revolving Notes referred to in the Second Amendment.”
	 
	 	(9)	 	“‘Revolving Loan Commitment’ means $8,500,000,
unless in either case said amount is reduced pursuant to Section
2.10(b) hereof, in which event it means the aggregate amount to which
said amount is reduced.”
	 
	 	(10)	 	“Termination Date” means December 1, 2008.”

     B. Section 2.16, entitled “Fees,” is hereby amended by adding the following subsection
(c):

	 	“(c) 	 	 Borrowers agree to pay Lender its costs
incurred in connection with the Field Audit.”

     C. Subsections (c) and (d) to Section 6.1, entitled “Reporting Requirements,” are
hereby amended to read as follows in their entirety:

	 	“(c)	 	 Within 30 days after the end of each month,
agings of the Borrowers’ accounts receivable and their accounts payable
report as at the end of such month.
	 
	 	(d)	 	As soon as available, and in any event within
30 days after the end of each month (or more frequently if requested by
Lender), a Borrowing Base certificate in a form acceptable to the
Lender (currently, the form attached to the Third Amendment as
Exhibit C, showing the computation of the Borrowing Base as of
the close of business on the last day of the immediately preceding
fiscal month (except that Inventory calculations may be updated not
less than every 60 days), prepared by the Borrowers and certified by
the Borrowers’ chief financial officer.”

     D. Section 6.11, entitled “Maximum Leverage Ratio,” is hereby amended to read as
follows in its entirety:

“Section 6.11 Maximum Leverage Ratio. The Borrowers will not, as
of the end of the fiscal quarter ending April 30, 2007, allow their Leverage

3

 

Ratio to be greater than 3.90 to 1.00, and will not, as of the end of each
subsequent fiscal quarter allow their Leverage Ratio to be greater than 3.75
to 1.00”

     E. Section 10.10, entitled “Release of Collateral,” is hereby amended by adding the
following sentence:

“Lender, upon the effectiveness of the Third Amendment and the execution and
delivery by Borrower of the Foreign Accounts Credit Agreement (as defined in
Section F to this Third Amendment), hereby releases the security interest
granted to Lender in all of its Foreign Accounts and in all general
intangible rights of Borrowers under any and all insurance insuring the
collection of Foreign Accounts (the “Foreign Accounts and Insurance Security
Interest”). Effective at such time as payment in full is made of all
obligations of Borrower under, and termination of, the Foreign Accounts
Credit Agreement and all payments and requirements have been made and
accomplished as required under the Foreign Accounts Insurance, including
without limitation, the assignment to the Insurer of all Accounts as to
which a claim shall have been made under the Foreign Accounts Insurance,
Borrower agrees to grant a security interest in the Foreign Accounts to
Lender (or if at such time there are one or more co-lenders under this
Credit Agreement, to Regions Bank as Agent for the benefit of all such
Lenders), and any proceeds thereafter received from the insurer of the
Foreign Accounts will be applied to reduce the principal amount of Advances
outstanding, and item (6) under the definition of “Eligible Accounts” as in
effect prior to this Third Amendment will be reinstated as set forth in the
Existing Credit Agreement.

     F. Lender and Borrowers acknowledge that: (i) Borrowers and Lender are entering into a
certain Foreign Accounts Credit and Security Agreement (“Foreign Accounts Credit
Agreement”); (ii) when executed and delivered, the Indebtedness to be incurred thereunder
will constitute Indebtedness permitted to be incurred under Section 7.2 of the Existing
Credit Agreement, entitled “Indebtedness”; and (iii) the Foreign Accounts and Insurance
Security Interest to be granted to Regions to secure such Indebtedness will constitute a
“Permitted Encumbrance” under the definition thereof and Section 7.1 of the Existing Credit
Agreement, entitled “Liens”.

     G. Lender and Borrowers acknowledge that the following Indebtedness of Borrowers to
Lender constitutes Indebtedness permitted under Section 7.2 of the Existing Credit Agreement
and that the liens securing such Indebtedness are Permitted Encumbrances under the
definition thereof and Section 7.1 of the Existing Credit Agreement:

	 	(i)	 	equipment loan in current principal amount of $594,474;

4

 

	 	(ii)	 	equipment loan in current principal amount of $784,709;
	 
	 	(iii)	 	$1,000,000 equipment purchase line of credit;
	 
	 	(iv)	 	two industrial revenue bond real estate
financings of $2,087,292 and $2,099,959, respectively, in favor of
Synergetics Development Company (wholly owned subsidiary of
Synergetics); and
	 
	 	(v)	 	real estate mortgage loan to Synergetics
Development Company in current principal amount of $153,750.

     4. Representations and Warranties. The Borrowers jointly and severally hereby
represent and warrant to the Lender as follows:

     (a) This Third Amendment and the Revolving Note have been duly and validly executed by
authorized officers of the Borrowers and constitute the legal, valid and binding obligation
of the Borrowers, enforceable against the Borrowers in accordance with their terms. The
Existing Credit Agreement, as amended by this Third Amendment, remains in full force and
effect and remains the valid and binding obligation of the Borrowers, enforceable against
the Borrowers in accordance with its terms. The Borrowers hereby ratify and confirm the
Existing Credit Agreement, as amended by this Third Amendment.

     (b) No Default or Event of Default has occurred or now exists under the Existing Credit
Agreement and no Default or Event of Default will occur as a result of the effectiveness of
this Third Amendment.

     (c) The representations and warranties of the Borrower contained in the Existing Credit
Agreement, as modified by the Disclosure Schedule Amendment attached hereto as Exhibit
B (the “Disclosure Schedule Amendment”), are true and correct in all material respects
on and as of the date of this Third Amendment.

     5. Conditions to Effectiveness of Third Amendment. The effectiveness of this Third
Amendment and the agreements set forth herein are subject to fulfillment, as determined in the sole
judgment of Agent, of the following conditions:

     (a) Borrowers shall have executed and delivered to Lender this Third Amendment, the
Revolving Note and the Disclosure Schedule Amendment and Lender shall have determined that
the Disclosure Schedule Amendment is acceptable to Lender in its good faith determination;

     (b) Each Borrower shall have delivered to Lender a Certificate of the Secretary or an
Assistant Secretary of such Borrower certifying that appropriate corporate actions
authorizing the execution and delivery of this Third Amendment and the Revolving Note have
been taken and covering such other matters as Agent may reasonably request;

5

 

     (c) Lender shall have determined that no Default or Event of Default exists;

     (d) Lender shall have scheduled the Field Audit, to be conducted within 90 days of
the date of this Third Amendment; and

     (e) Borrowers shall have delivered such other documents and shall have taken such
other actions as Lender in its reasonable discretion may require.

     6. Release. In consideration of the agreement of Lender to modify the terms of the
Existing Credit Agreement as set forth in this Third Amendment, Borrowers hereby release, discharge
and acquit forever Lender and any of its officers, directors, servants, agents, employees and
attorneys, past and present, from any and all claims, demands and causes of action, of whatever
nature, whether in contract or tort, accrued or to accrue, contingent or vested, known or unknown,
arising out of or relating to the loans evidenced by the Existing Credit Agreement, as hereby
amended, or Lender’s administration of the same or any other actions taken pursuant to the Existing
Credit Agreement or under any other documents or instruments evidencing loans made by Lender to
Borrowers or the administration of same; provided, however, that the foregoing release and the
following indemnity relate only to actions or inactions of Lender through the date hereof.

     7. Payment of Costs/Expenses. Without limiting the generality of provisions in the
Existing Credit Agreement (as amended by this Third Amendment) relating to payment of Lender’s
costs and expenses, the Borrower will pay all reasonable out-of-pocket expenses, costs and charges
of Lender’s attorneys incurred in connection with the preparation and implementation of this Third
Amendment.

     8. Other Documents/Provisions to Remain in Force. Except as expressly amended hereby,
the Existing Credit Agreement and all documents and instruments executed in connection therewith or
contemplated thereby and all indebtedness incurred pursuant thereto shall remain in full force and
effect and are in all respects hereby ratified and affirmed.

     9. Successors and Assigns. Subject to any restriction on assignment set forth in the
Existing Credit Agreement, this Third Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

     10. Counterparts. This Third Amendment may be executed in any number of counterparts,
each of which shall constitute one and the same Amendment.

     11. Incorporation by Reference. The Existing Credit Agreement and all exhibits
thereto, and the exhibits to this Third Amendment are incorporated herein by this reference, except
to the extent replaced by Exhibits attached to this Third Amendment.

     12. No Oral Loan Agreements. Pursuant to Mo. Rev. Stat. § 432.045 and § 432.047, the
parties agree to the quoted language below (all references to “you” are references to Borrower and
all references to “us” are references to Agent and Lenders):

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR 
     FROM ENFORCING REPAYMENT OF A

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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) AND US (AGENT AND LENDERS) 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.

[Remaining portion of page is intentionally blank. Signature page follows]

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     IN WITNESS WHEREOF, Lenders, Agent and Borrowers have caused this Third Amendment to be
executed effective as of the date first written above.

	 	 	 	 	 
	 	BORROWERS:

SYNERGETICS, INC.

 	 
	 	By:  	/s/ Pamela G. Boone
 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	and

SYNERGETICS, USA, INC.

 	 
	 	By:  	/s/ Pamela G. Boone
 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	LENDER:

REGIONS BANK

 	 
	 	By:  	/s/ Anne D. Silvestri
 	 
	 	 	Name:  	Anne D. Silvestri 	 
	 	 	Title:  	Senior Vice President 	 
	 

8

 

TABLES OF EXHIBITS TO THIRD AMENDMENT

Exhibit A - Third Amended and Restated Revolving Note Payable to Regions Bank

Exhibit B - Disclosure Schedule Amendment

Exhibit C - Amended and Restated Borrowing Base Certificate

9

 

Exhibit A to Third

Amendment to Credit and

Security Agreement

AMENDED AND RESTATED

REVOLVING NOTE

$8,500,000.00

St. Louis, Missouri

June 7, 2007

     FOR VALUE RECEIVED, the undersigned, SYNERGETICS, INC., a Missouri corporation, and
SYNERGETICS USA, INC., a Delaware corporation (individually, a “Borrower” and together, the
“Borrowers”), hereby jointly and severally promise to pay on the Termination Date to the order of
Regions Bank (the “Lender”), at its main office in St. Louis, Missouri, or at any other place
designated at any time by the holder hereof, in lawful money of the United States of America and in
immediately available funds, the principal sum of Eight Million Five Hundred Thousand and
00/100 ($8,500,000.00) or, if less, the aggregate unpaid principal amount of all
Advances and Swing Line Loans made by the Lender to the Borrowers under the Credit Agreement
(defined below), together with interest on the principal amount hereunder remaining unpaid from
time to time, computed on the basis of the actual number of days elapsed and a 360-day year, from
the date hereof until this Note is fully paid at the rate from time to time in effect under the
Credit and Security Agreement dated as of March 13, 2006, as heretofore amended by First Amendment
dated as of September 26, 2006, by Second Amendment dated as of December 8, 2006 and by Third
Amendment of even date herewith (as so amended, the “Credit Agreement”) by and among the Lender and
the Borrowers. The principal hereof and interest accruing thereon shall be due and payable as
provided in the Credit Agreement. This Note may be prepaid only in accordance with the Credit
Agreement.

     This Note is issued pursuant, and is subject, to the Credit Agreement, which provides, among
other things, for acceleration hereof. This Note is the Revolving Note referred to in the Credit
Agreement. This Note evidences not only all Advances of Lender under the Revolving Credit Facility
but also all Swing Line Loans made by Lender pursuant to Section 2.1A of the Credit Agreement.

     This Note, among other things, is secured pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more other security
agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

     The Borrowers hereby agree to pay all costs of collection, including attorneys’ fees and legal
expenses in the event this Note is not paid when due, whether or not legal proceedings are
commenced.

     Presentment or other demand for payment, notice of dishonor and protest are expressly waived.

10

 

     This Note shall be governed by the internal substantive laws of the State of Missouri, without
regard for its conflicts-of-law principles.

     This Note is a replacement for, but not a novation or refinancing of: (A) the Revolving Note
dated as of September 26, 2006, as amended by Amended and Restated Revolving Note dated as of
December 8, 2006, by Borrowers payable to the order of Lender; and (B) the Revolving Note dated as
of September 26, 2006, as amended by Amended and Restated Revolving Note dated as of December 8,
2006, by Borrowers payable to the order of Wachovia Bank National Association, which Note has been
purchased by Lender. This Note does not evidence or effect a release, or relinquishment of the
priority, of the security interests in any Collateral (as defined in the Credit Agreement).

     ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR 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 (BORROWERS) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING (THIS NOTE, THE CREDIT AGREEMENT AND THE
LOAN DOCUMENTS REFERRED TO THEREIN), WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENTS OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

11

 

	 	 	 	 	 
	 	BORROWERS:

SYNERGETICS, INC.

 	 
	 	BY:  	 	 
	 	 	NAME:       Pamela G. Boone 	 
	 	 	TITLE:      Chief Financial Officer 	 
	 
	 	and

SYNERGETICS USA, INC.

 	 
	 	BY:  	 	 
	 	 	NAME:        Pamela G. Boone 	 
	 	 	TITLE:       Chief Financial Officer 	 

12

 

	 	 	 	 	 

Exhibit B to Third

Amendment to Credit and

Security Agreement

DISCLOSURE SCHEDULE

13

 

Exhibit C to Third

Amendment to Credit and

Security Agreement

AMENDED AND RESTATED

BORROWING BASE CERTIFICATE

Date of Computation:                     

     The undersigned (“Borrowers”) are the Borrowers under a Credit and Security Agreement dated
March 13, 2006, as heretofore amended and as may be further amended from time to time, between the
undersigned and Regions Bank (“Lender”).

     Borrowers hereby reaffirm all warranties made in the Credit and Security Agreement and other
agreements in connection therewith and certifies and warrants that Borrowers hold, subject to the
security interest of the Lender granted pursuant to the Credit and Security Agreement and all other
documents creating a security interest which secures the Loan described therein, the following
Collateral:

	 	 	 	 	 
	1.) Borrowers’ Total Accounts Receivable
	 	 	                    	 
	 
	 	 	 	 
	2.) Less: Ineligible Accounts Receivable:
	 	 	 	 
	 
	 	 	 	 
	a.) Receivables over 90 days old
	 	 	                    	 
	 
	 	 	 	 
	b.) Contra Accounts
	 	 	                    	 
	 
	 	 	 	 
	c.) Affiliate/ Sub
	 	 	                    	 
	 
	 	 	 	 
	d.) Employee
	 	 	                    	 
	 
	 	 	 	 
	e.) Government
	 	 	                    	 
	 
	 	 	 	 
	f.) Foreign
	 	 	                    	 
	 
	 	 	 	 
	g.) Other
	 	 	                    	 
	 
	 	 	 	 
	h.) Accounts of Synergetics IP, Inc.
	 	 	                    	 
	 
	 	 	 	 
	3.) Eligible Accounts Receivable
	 	 	                    	 
	 
	 	 	 	 
	4.) Loan Value of Eligible Accounts Receivable
(85% of Line 3)
	 	 	                    	 
	 
	 	 	 	 
	5.) Borrowers Total Inventory
	 	 	                    	 

14

 

	 	 	 	 	 
	6.) Less: Ineligible Inventory
	 	 	 	 
	 
	 	 	 	 
	a.) Work in Process
	 	 	                    	 
	 
	 	 	 	 
	b.) Slow Moving
	 	 	                    	 
	 
	 	 	 	 
	c.) Obsolete
	 	 	                    	 
	 
	 	 	 	 
	7.) Eligible Inventory
	 	 	                    	 
	 
	 	 	 	 
	8.) Loan Value of Inventory
(50% of Line 7, but not more than $4,250,000)
	 	 	                    	 
	 
	 	 	 	 
	9.) Loan Value of Eligible Accounts Receivable and
Eligible Inventory (Line 4 plus Line 8), but in no event
more than $8,500,000
	 	 	                    	 
	 
	 	 	 	 
	10.) Outstanding Principal Balance and Amount of
Letters of Credit
	 	 	                    	 
	 
	 	 	 	 
	11.) Excess (Deficit) Availability (line 9 minus Line 10
	 	 	                    	 

Deficit Must be Repaid within 5 Days of the Date of this Certificate

Borrowers further certify and warrant that no Default under the Credit and Security Agreement is
existing at the date of this Certificate and, to the best of the knowledge and belief of the
Officer of the Borrowers executing this Certificate, there has not been (except as may be otherwise
indicated below) any change since the computation date specified above which would materially
reduce the amounts shown above if such amounts were computed as of the date of this Certificate.

	 	 	 	 	 
	Borrowers:   	 SYNERGETICS, INC

 	 
	Dated:                      	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	and

SYNERGETICS USA, INC.

 	 
	Dated:                      	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

15

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