Loan and Security Agreement
Loan and Security Agreement | |
LOAN
NO.:
04940
|
THIS
LOAN AND SECURITY AGREEMENT (the
“Agreement”)
is
entered into as of this 24th day of April, 2008, by and between LCA-VISION
INC. (“Borrower”)
with an
address at 0000 Xxxxxxxxxx Xx., Xxxxxxxxxx, XX 00000 and PNC
EQUIPMENT FINANCE, LLC
(“Lender”),
with
an address at 0000 Xxxxxxxxx Xx., Xxxxx 000, Xxxxxx, XX 00000.
1. LOAN.
(a)
Agreement
to Lend.
Lender
hereby agrees, subject to the conditions set forth herein, to make a loan or
loans (collectively, the “Loan”)
to
Borrower, the respective principal amounts, interest rates, repayment terms
and
other provisions relating to which are set forth on the applicable Request
For
Advance (as hereinafter defined). The proceeds of each Loan will be used for
the
purpose of financing the personal property listed on the applicable Request
For
Advance (the “Collateral”).
(b)
Repayment
of Loan; Evidence of Debt.
Borrower hereby unconditionally promises to pay to the order of Lender the
unpaid principal amount of each Loan, together with interest thereon. Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of Borrower to Lender resulting from each Loan
made
by Lender, including the amounts of principal and interest payable and paid
to
Lender from time to time hereunder. The entries made in the accounts maintained
pursuant to the preceding sentence shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
Lender’s failure to maintain such accounts or any error therein shall not in any
manner affect Borrower’s obligation to repay each Loan in accordance with the
terms of this Agreement. In the event of any default by Borrower in payment
or
performance of any of the Obligations (as hereinafter defined), Lender may
declare this Agreement and any other note, schedule, supplement, lease,
guaranty, agreement, instrument or document executed in conjunction herewith
(collectively, the “Loan
Documents”)
to be
in default hereunder and Lender may proceed with its remedies against Borrower
in accordance with paragraph 26, below, with respect to any or all of the Loan
Documents.
(c)
Lender’s
Discretion.
The
Loan is not a committed line of credit. Borrower acknowledges and agrees that
Loans made under this Agreement, if any, shall be made at Lender’s sole
discretion. Lender may decline to make any Loan requested by Borrower pursuant
to any Request For Advance hereunder at any time and for any reason without
prior notice to Borrower.
2. SECURITY.
The
security for the repayment of the Obligations shall be the Collateral,
guaranties and other documents heretofore, contemporaneously or hereafter
executed and delivered to Lender, which shall secure the repayment of the Loan,
all amounts set forth on each Request For Advance and all other advances,
obligations, covenants solely related to the Loan Documents and any amendments,
extensions, renewals and increases of or to any of the foregoing, and all costs
and expenses of Lender incurred in any way in connection therewith, including
but not limited to reasonable attorneys’ fees and expenses (collectively, the
“Obligations”).
3. GRANT
OF SECURITY INTEREST.
To
secure the Obligations, Borrower, as debtor, hereby assigns and grants to
Lender, as secured party, a continuing lien on and security interest in the
Collateral.
4. TERMS.
The
obligations of the parties under this Agreement shall commence upon the written
acceptance hereof by Lender and shall end upon full performance and observation
of each and every term, condition and covenant set forth in this Agreement
and
any extensions, modifications or amendments hereto. The payment terms for the
respective Loan listed on the applicable Request For Advance shall commence
on
the date indicated on such Request For Advance and shall terminate upon payment
in full of such Loan. Any interim payments shall also be set forth in such
Request For Advance.
5. PAYMENTS.
All
payments, including any interim payments, in respect of the Loan as described
in
the applicable Request For Advance shall be in the amount stated in such Request
For Advance. Payments are an absolute obligation of Borrower due and payable
as
set forth on the applicable Request For Advance irrespective of any claims,
demands, set-offs, actions, suits or proceedings that Borrower may have or
assert against Lender or any vendor of any of the Collateral. Payments shall
be
made to Lender at X.X. Xxx 000000, Xxxxxxxxxx, XX 00000-0000, or at such other
place as Lender or its successors or assigns may designate in writing to
Borrower from time to time.
6. DELINQUENT
PAYMENT PENALTY.
If any
payment or other amount due hereunder is not paid when due, Borrower agrees
to
pay a delinquent payment penalty of five percent (5%) of, and in addition to,
the amount of such payment or other amount due hereunder, but not exceeding
the
lawful maximum, if any. Delinquent interest at a rate per annum equal to the
then current Prime Rate (as hereinafter defined) shall be payable upon demand
with respect to all such delinquent amounts. Interest shall accrue at said
rate
whether or not judgment hereon has been entered. As used herein, “Prime Rate”
shall mean the rate publicly announced by PNC Bank, National Association, from
time to time as its prime rate.
7. ADVANCES.
Lender
may, at Borrower’s request, subject to the conditions set forth in this
paragraph 7, make such advances, deposits and reimbursements as may be required
for payment for, and financing of, the Collateral and each such advance, deposit
or reimbursement shall be an advance of principal of the Loan. The Lender’s
obligation to make any such advance, deposit or reimbursement is subject to
the
conditions that as of the date of such advance, deposit or
reimbursement:
(a)
No
Event of Default.
No
Event of Default (as hereinafter defined) or event which with the passage of
time, the giving of notice or both would constitute an Event of Default shall
have occurred and be continuing;
(b)
Authority
Documents.
Lender
shall have received certified copies of resolutions, incumbency certificates,
opinions of counsel and other proof of authorization satisfactory to Lender;
and
(c)
Receipt
of Loan Documents.
Lender
shall have received a Request For Advance in form and substance satisfactory
to
Lender which shall have been completed and executed by Borrower (each, a
“Request
For Advance”)
which,
upon delivery to and acceptance by Lender, will become part of the Loan
Documents, and such other instruments and documents which the Lender may
reasonably request in connection with the transactions provided for in this
Agreement, all in form and substance satisfactory to Lender and duly executed
by
the Borrower.
8. DELIVERY
AND INSTALLATION.
Borrower will select the Collateral and the supplier, and will order the
Collateral from such supplier. Lender shall not be liable for loss or damage
for
any reason such as failure of or delay in delivery, delivery to wrong location,
delivery of improper Collateral or property other than the Collateral, defects
in or damage to the Collateral, governmental regulations, strikes, embargoes
or
other causes, circumstances or events. If the cost of any item of Collateral
differs from the price set forth in the purchase order or the applicable Request
For Advance, the payments due on the applicable Loan shall be changed to fully
reflect any such difference.
9. WARRANTY
OF BORROWER'S QUIET POSSESSION.
Lender
covenants, subject to the disclaimer of warranties set forth immediately below,
that so long as Borrower faithfully performs this Agreement, Borrower may
quietly possess and use the Collateral without interference by Lender, or by
any
party claiming by or through Lender.
10. DISCLAIMER
OF WARRANTIES.
BORROWER ACKNOWLEDGES AND AGREES THAT (i) THE COLLATERAL AND EACH PART THEREOF
IS OF A SIZE, DESIGN, CAPACITY, AND MANUFACTURE SELECTED BY AND ACCEPTABLE
TO
BORROWER, (ii) BORROWER IS SATISFIED THAT THE COLLATERAL AND EACH PART THEREOF
IS SUITABLE FOR ITS RESPECTIVE PURPOSE, (iii) LENDER IS NOT A MERCHANT,
MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND, (iv) THE COLLATERAL AND
EACH
PART THEREOF IS ENCUMBERED HEREUNDER, SUBJECT TO ALL APPLICABLE LAWS AND
GOVERNMENTAL REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED AND IN THE STATE
AND
CONDITION WHEN THE SAME FIRST BECAME SUBJECT TO THIS AGREEMENT, WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND BY LENDER, AND (v) LENDER MAKES NO
WARRANTY OR REPRESENTATION EITHER EXPRESS OR IMPLIED, AS TO THE COLLATERAL,
(A)
THE CONDITION, FITNESS, DESIGN, QUALITY, CAPACITY, WORKMANSHIP, OPERATION,
AND
MERCHANTABILITY OF THE COLLATERAL, (B) ANY OTHER MATTER WHATSOEVER, IT BEING
AGREED THAT ALL SUCH RISKS, AS BETWEEN LENDER AND BORROWER, ARE TO BE BORNE
BY
BORROWER, AND THE BENEFITS OF ANY AND ALL IMPLIED WARRANTIES AND REPRESENTATIONS
OF LENDER ARE HEREBY WAIVED BY BORROWER. Lender is not responsible or liable
for
any direct, indirect, incidental, or consequential damage to, or loss resulting
from, the installation, operation, or use of the Collateral or any product
manufactured thereby. Borrower's recourse for breach of any representation
or
warranty of the vendor or supplier is limited to such vendor or supplier.
Notwithstanding the foregoing, Borrower’s obligations to make payment or
otherwise under this Agreement shall be and are absolute and unconditional.
All
proceeds of any such warranty recovery from the manufacturer or supplier of
the
Collateral shall first be used to repair the affected Collateral.
11. NATURE
OF COLLATERAL.
The
Collateral shall remain personal property, notwithstanding the manner in which
it may be affixed to any real property. Borrower, at its expense, will protect
and defend the title to the Collateral and will otherwise take all action
required to keep the Collateral free and clear of all claims, levies, liens
and
encumbrances except for the security interest of Lender. Lender assumes no
liability and makes no representation as to the treatment by Borrower of this
Agreement, the Collateral, or the payments due hereunder for financial,
accounting or tax purposes.
12. LENDER'S
RIGHT OF INSPECTION.
Lender,
or its authorized agents, shall have the right during normal business hours
to
enter upon the premises where the Collateral is located (to the extent Borrower
can permit) for the purpose of inspection. Provided no Event of Default has
occurred and is continuing, Lender shall provide Borrower prior notice of such
inspection. Lender shall work with Borrower to ensure inspection does not
interrupt the business operation of Borrower
13. USE
OF COLLATERAL.
Borrower represents that it is using the Collateral for a business or commercial
purpose and not for personal, family or household use. Borrower must use the
Collateral in a careful and proper manner in conformity with (i) all statutes
and regulations of each governmental authority having jurisdiction over Borrower
or the Collateral and its use; and (ii) all policies of insurance relating
to
the Collateral or its use. In addition, Borrower shall not (i) use the
Collateral in any manner that would impair the applicability of manufacturer's
warranties or render the Collateral unfit for its originally intended use;
(ii)
permit anyone other than authorized and competent personnel to operate the
Collateral.
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14. ALTERATIONS.
Without
Lender’s prior written consent, Borrower shall make no alterations,
modifications or attachments to the Collateral which impair its economic value,
economic and useful life, or functional utility. Except for improvements
provided by the manufacturer, all alterations, modifications and attachments
of
whatsoever kind or nature made to the Collateral must be removed without
damaging the functional capabilities or economic value of the affected
Collateral upon the termination of the Agreement. Under no circumstances shall
any such alteration, modification or attachment be encumbered by Borrower or
result in the creation of a mechanic's or materialman's lien, excepting as
may
arise by operation of law pending payment within ordinary business
terms.
15. MAINTENANCE
AND REPAIRS.
At its
expense Borrower shall maintain, operate, repair and make all modifications
to
the Collateral in a manner consistent with Borrower’s general practice and in
accordance with good industry practice, manufacturer’s warranty requirements and
specifications and Borrower’s established operation, maintenance and repair
programs, without discrimination as to such Collateral, so as to keep the
Collateral in good working order, and so as to comply with all applicable laws
or applicable governmental actions and so as not to incur liability (whether
or
not there is a lack of compliance) under any environmental law or otherwise
account for any release of, or exposure to, any hazardous material. Lender
shall
not be required to maintain, repair or replace the Collateral or part thereto
and Borrower hereby waives the right, however arising, to (i) require Lender
to
maintain, repair or replace any of the Collateral or part thereto, or (ii)
make
repairs at the expense of Lender pursuant to any applicable law. Lender may
review Borrower's established operating procedures and maintenance records
to
assure compliance with this section. Upon installation, any replacement parts
shall be deemed part of the Collateral.
16. RISK
OF LOSS, DAMAGE AND THEFT.
(a)
Borrower will bear all risk of loss, damage, theft or destruction, partial
or
complete, to the Collateral from and after delivery of the Collateral to a
carrier FOB point of origin, whether the terms of shipment require or authorize
the Collateral to be shipped by carrier, to be delivered to Borrower's place
or
places of business, or provide that Borrower accept possession of or title
to
the Collateral at any other location. Borrower shall promptly notify Lender
of
any theft of or loss or damage to the Collateral.
(b)
Neither total nor partial loss of use or possession of the Collateral shall
xxxxx the requirement to make the payments set forth on the applicable Request
For Advance.
(c)
The
Collateral shall be deemed subjected to total loss (i) if it has disappeared
regardless of the reason for disappearance or (ii) if it has sustained physical
damage and the estimated cost of repair exceeds 75% of its fair market value
on
the date of damage. Borrower's duty to make the payment on the Loan secured
by
the Collateral subjected to total loss shall be discharged by paying to Lender,
on demand, all sums due hereunder. The amount of applicable insurance proceeds,
if any, actually received by Lender shall be subtracted from the amount for
which Borrower is liable under this paragraph 16.
(d)
Borrower shall cause the Collateral subjected to partial loss to be restored
to
original capability. Lender shall, upon receiving satisfactory evidence of
restoration, promptly pay to Borrower, or such other party as Borrower shall
direct, the proceeds of any insurance or compensation received by Lender, by
reason of such partial loss.
(e)
Lender shall not be obligated to undertake the collection of any claim against
any person for either total or partial loss of the Collateral. After Borrower
discharges its obligations to Lender under either paragraph 16(c) or 16(d)
above, Borrower may, for Borrower's own account, proceed to recover from third
parties and shall be entitled to retain any amount recovered. Lender shall
supply Borrower with any necessary assignment of claim.
17. INDEMNIFICATION.
(a) Non-Tax
Liability.
Borrower
agrees to indemnify each of Lender, its directors, officers and employees and
each legal entity, if any, which controls Lender (the “Indemnified
Parties”)
and to
hold each Indemnified Party harmless from and against any and all claims,
damages, losses, liabilities and expenses (including all fees and charges of
internal or external counsel with whom any Indemnified Party may consult and
all
expenses of litigation and preparation therefor) which any Indemnified Party
may
incur or which may be asserted against any Indemnified Party in connection
with
or arising out of the matters referred in this Agreement or any related document
by any person, entity or governmental authority; whether (i) arising from or
incurred in connection with any breach of a representation, warranty or covenant
by Borrower; (ii) the manufacture, installation, use, condition (including,
but
not limited to, patent or other defects and whether or not discoverable by
Borrower or Lender), operation, ownership, selection, delivery, leasing, removal
or return of the Collateral, regardless of where, how or by whom operated;
or
(iii) arising out of or resulting from any suit, action, claim, proceeding
or
governmental investigation, pending or threatened, whether based on statute,
regulation or order, or tort, or contract or otherwise, before any court or
governmental authority, which arises out of or relates to this Agreement or
any
related document; provided, however, that the foregoing indemnity agreement
shall not apply to claims, damages, losses, liabilities and expenses solely
attributable to an Indemnified Party’s gross negligence or willful misconduct.
The indemnity agreement contained in this Paragraph shall survive the
termination of this Agreement, prepayment of any amounts due and assignment
of
any rights hereunder. Borrower may participate at its expense in the defense
of
any such action or claim.
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(b)
Direct
Tax Costs. Borrower
agrees to indemnify, protect, and hold harmless each Indemnified Party, from
and
against any and all taxes, license fees, assessments and other governmental
charges, fees, fines or penalties of whatsoever kind or character and by
whomsoever payable, which are levied, assessed, imposed or incurred during
the
term of this Agreement, (i) on or relating to the Collateral, including any
tax
on the sale, ownership, use, leasing, shipment, transportation, delivery or
operation thereof, (ii) on the exercise of any option, election or performance
of any obligation by Borrower hereunder, (iii) of the kind generally referred
to
in items (i) and (ii) above which may remain unpaid as of the date of delivery
of the Collateral to Borrower irrespective of when the same may have been
levied, assessed, imposed or incurred, and (iv) by reason of all gross receipts
and like taxes on or measured by rents payable hereunder levied by any state
or
local taxing authority having jurisdiction where the Collateral is located.
Borrower agrees to comply with all state and local laws requiring the filing
of
ad valorem tax returns relating to the Collateral. Any statements for such
taxes
received by Lender shall be promptly forwarded to Borrower. This subparagraph
shall not be deemed to obligate Borrower to pay (i) any taxes, fees, assessments
and charges which may have been included in the Loan amount financed by Lender
as set forth in the related Request For Advance, other than as payable pursuant
to the terms of such Request For Advance, or (ii) any income or like taxes
against Lender on or measured by the net income from the payments hereunder.
Borrower shall not be obligated to pay any amount under this subparagraph so
long as it shall, at its expense and in good faith and by appropriate
proceedings, contest the validity or the amount thereof unless such contest
would adversely affect the lien or security interest of Lender on the Collateral
or would subject the Collateral to forfeiture or sale. Borrower agrees to
indemnify each Indemnified Party against any loss, claim, demand and expense
including legal expense resulting from such nonpayment or contest.
(c)
Indemnity
Payment.
The
amount payable pursuant to subparagraphs 17(a) and 17(b) shall be payable upon
demand of Lender accompanied by a statement describing in reasonable detail
such
loss, liability, injury, claim, expense or tax and setting forth the computation
of the amount so payable.
(d)
Survival.
The
indemnities and assumptions of liabilities and obligations provided for in
this
paragraph 17 shall continue in full force and effect notwithstanding the
expiration or other termination of this Agreement.
18. BORROWER'S
ASSIGNMENT.
Without
Lender’s prior written consent, Borrower shall not assign, bail, lease,
hypothecate, encumber, transfer or dispose of the Collateral or any interest
in
this Agreement nor impair Lender's security interest on the Collateral. Any
attempted assignment without Lender’s written consent shall be void and of no
effect. Borrower shall not assign this Agreement, nor shall this Agreement
or
any rights under this Agreement or in the Collateral inure to the benefit of
any
trustee in bankruptcy, receiver, creditor, or other successor of Borrower
whether by operation of law or otherwise.
19. LENDER'S
ASSIGNMENT.
All
rights of Lender hereunder, in the payments and in the Collateral may be
assigned, pledged, mortgaged, transferred, or otherwise disposed of, either
in
whole or in part, with ten (10) day advance written notice to Borrower. No
such
assignee shall be obligated to perform any duty, covenant, or condition required
to be performed by Lender under the terms of this Agreement unless such assignee
expressly assumes such obligations. Lender shall remain liable to Borrower
hereunder to perform such duty, covenant, and condition unless such assignee
expressly assumes Lender's obligations, in which event Borrower hereby releases
Lender from such obligations. Such assignee shall have all rights, powers and
remedies given to Lender by this Agreement, and shall be named as lender loss
payee or co-insured under all policies of insurance maintained pursuant to
paragraph 20 hereof. If Lender assigns this Agreement or the monies due or
to
become due hereunder or any other interest herein, Borrower agrees not to assert
against Lender's assignee any defense, set-off, recoupment, claim or
counterclaim which Borrower may have against Lender, whether arising under
this
Agreement or any other transaction between Lender and Borrower. Subject to
paragraph 18 hereof and this paragraph 19, this Agreement inures to the benefit
of, and is binding upon, the heirs, legatees, personal representatives,
successors and assigns of the parties hereto.
20. INSURANCE.
Borrower will at its own expense insure the Collateral in compliance with the
terms and conditions of the applicable Request For Advance, in form and in
an
amount satisfactory to Lender with insurance carriers approved by Lender. The
proceeds of any insurance claim due to the theft or loss of or damage to the
Collateral shall be applied as provided in paragraph 16 hereof. In addition
to
the compliance with the terms and conditions of the applicable Schedule and
the
other terms and conditions of this paragraph 20, Borrower shall comply with
the
following conditions:
(a)
Borrower, prior to the inception of the term of this Agreement, shall deliver
to
Lender all required policies of insurance or, in the alternative, other proper
evidence of insurance, which shall be sufficiently detailed to advise Lender
of
all types of coverage and inclusions;
(b)
Borrower shall cause each insurer to agree by endorsement to the policies that
each insurer will give at minimum thirty (30) days' written notice to Lender
before any policy will be altered or canceled for any reason, including, without
limitation, failure of the Borrower to pay premiums;
(c)
All
coverage must be in effect upon delivery, or when Borrower assumes the risk
of
loss, whichever is earlier, and will provide coverage without geographic
limitation;
(d)
All
policies must provide that Lender is an additional insured for all aspects
of
general liability insurance, and is lender loss payee for all aspects of
insurance relating to the theft or loss of or damage to the
Collateral;
(e)
Borrower will furnish renewal policies or renewal evidence of insurance listing
Lender as an additional insured and lender loss payee, as required by this
Agreement, no later than thirty (30) days prior to the expiration of any
insurance required hereby;
(f)
Borrower appoints Lender its attorney-in-fact to apply any insurance proceeds
received with respect to the Collateral.
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21. FURTHER
ASSURANCES.
Borrower agrees that if the location of any Collateral changes from the location
listed in the applicable Request For Advance, or if Borrower changes its name
or
form or jurisdiction of organization (or if a natural person or general
partnership, changes his, her or its principal residence), or establishes a
name
in which it may do business, Borrower will immediately notify Lender of the
additions or changes. If Lender shall so request, Borrower shall execute and
deliver to Lender such documents, including UCC financing and continuation
statements as Lender shall deem necessary or desirable for purposes of
continuing this Agreement or recording or filing to protect the interest of
Lender in the Collateral. By its signature hereon, Borrower hereby authorizes
Lender to execute and file against Borrower any such UCC financing, amendment
and continuation statements. All filing fees and expenses shall be borne by
Borrower. Borrower shall also execute such other agreements, documents and
instruments including schedules, supplements and assignments as may be required
by Lender to further set forth the terms hereof and secure the repayment of
the
Loan and protect Lender’s interest in the Collateral.
22. FURNISHING
FINANCIAL INFORMATION.
During
the term of this Agreement and any extensions or renewals hereof, Borrower
will
furnish to Lender:
(a)
Within forty five (45) days of the quarter end of Borrower's first three fiscal
quarters, a balance sheet, statement of cash flows and a statement of income
of
Borrower (“Financial
Statements”)
as of
the close of such period from the beginning of the fiscal year to the date
of
such statement, prepared in accordance with generally accepted accounting
principles, consistently applied, and in such reasonable detail as Lender may
request, certified as true, complete and correct by an authorized officer of
Borrower.
(b)
As
soon as practicable, but in any event within ninety (90) days after the end
of
each fiscal year, a copy of its annual audited Financial Statements certified
without qualification by an independent certified public accountant of
recognized standing.
(c)
In a
timely manner such Financial Statements, reports and other information as the
Borrower shall send from time to time to its stockholders and/or file with
the
Securities and Exchange Commission and/or other materials which Lender shall
reasonably request.
23. PARAGRAPH
INTENTIONALLY LEFT BLANK
24. PERFORMANCE
OF OBLIGATIONS OF BORROWER BY LENDER.
If
Borrower fails to promptly perform any of its obligations under this Agreement,
Lender may perform the same for the account of Borrower without waiving
Borrower's failure as a default. All sums paid or expense or liability incurred
by Lender in such performance (including reasonable legal fees) together with
interest thereon at the highest contract rate enforceable against Borrower,
but
never at a higher rate than fifteen percent (15%) per annum simple interest,
shall be payable by Borrower upon demand as additional sums due as an
Obligation.
25. EVENTS
OF DEFAULT.
Any of
the following events or conditions shall constitute an event of default
(“Event
of Default”)
hereunder and entitle the Lender, at its option, to avail itself of the remedies
more fully set forth in paragraph 26 hereof:
(a)
Non-payment by the Borrower of any payment or other amount provided for in
this
Agreement which continues for a period of ten (10) days following the date
when
due;
(b)
Borrower shall (i) fail to perform any covenant or requirement relating to
insurance or environmental matters;
(ii) fail to keep the Collateral free of any claims, levies, liens and
encumbrances; (iii) fail to prevent the Collateral from being subject to a
foreclosure or forfeiture proceeding, execution or attachment; or (iv) terminate
this Agreement or any other Loan Document prior to payment in full of all
amounts due hereunder;
(c)
Death
or judicial declaration of incompetency of Borrower, if an individual, or death
or judicial declaration of incompetency of an individual partner or member
if
Borrower is a partnership or a limited liability company;
(d)
The
filing by or against Borrower of any proceeding in bankruptcy, receivership,
insolvency, reorganization, liquidation, conservatorship, or similar proceeding
(and in the case of any such proceeding instituted against Borrower, such
proceeding is not dismissed or stayed within thirty (30) days of the
commencement thereof, provided that Lender shall not be obligated to advance
additional funds during such period);
(e)
Borrower shall make an assignment for the benefit of creditors, or any levy,
garnishment, attachment or similar proceedings instituted against any property
of Borrower held by or deposited with Lender;
(f)
A
final judgment for the payment of money in excess of $150,000 is rendered
against Borrower, or any attachment proceedings is instituted with respect
to
any significant portion of Borrower's assets or property, and such judgment
or
attachment remains undischarged for a period of sixty (60) days during which
execution shall not be effectively stayed;
(g)
Borrower shall make any material change in the nature of its business as carried
on as of the date hereof or in
the
composition of its current executive management, or in its
equity
ownership;
(h)
Any
event described in subparagraphs 25(c) through 25(g) hereof shall occur with
respect to any guarantor or any other party liable for payment or performance
of
this Agreement;
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(i)
Any
certificate, statement, representation, warranty or financial statement
heretofore or hereafter furnished pursuant to or in connection with this
Agreement by or on behalf of Borrower or any guarantor or other party liable
for
payment or performance of this Agreement is false in any material respect at
the
time as of which the facts therein set forth were stated or certified, or omits
any substantial contingent or unliquidated liability or claim against Borrower
or any such guarantor or other party, or, upon the date of execution of this
Agreement or any Request For Advance, there shall have been any materially
adverse change in any of the facts disclosed by any such certificate, statement,
representation or warranty, which shall not have been disclosed in writing
to
Lender at or prior to the time of execution of this Agreement or such Request
For Advance;
(j)
The
Borrower shall fail to perform any non-monetary covenant, obligation, term
or
condition of this Agreement or any other Loan Document not described in this
Paragraph 25 which failure continues for a period of thirty (30) days following
the earlier of the date when the responsible Officer of the Borrower became
aware of such failure or the date of written notice thereof to Borrower by
Lender.
26. REMEDIES.
Upon
the happening of any Event of Default hereunder, the rights and duties of the
parties shall be as set forth in this Section. Lender may elect, in its sole
discretion, to do one or more of the following upon the occurrence of an Event
of Default, and at any time thereafter:
(a)
Lender may demand that Borrower deliver the Collateral to Lender whereupon
Borrower shall promptly deliver the Collateral to Lender at that place or those
places designated by Lender. If Borrower does not so deliver the Collateral,
Borrower shall make the Collateral available for retaking and authorizes Lender,
its employees and agents to enter the premises of Borrower and any other
premises (insofar as Borrower can permit) for the purpose of retaking. In the
event of retaking, Borrower expressly waives all rights to possession. Any
repossession accomplished under this paragraph 26 shall not release Borrower
from liability for damages of Lender sustained by reason of Borrower's default
hereunder.
(b)
Lender may revoke Borrower's privilege of making payments in installments
causing acceleration of all remaining payments through the remaining term of
this Agreement, and, upon Lender's demand, as liquidated damages, and not as
a
penalty, Borrower shall promptly pay to Lender the aggregate of (i) all
payments, principal and interest, accrued and unpaid prior to the date of such
Event of Default, (ii) all future payment due through the end of the term of
this Agreement or through the end of any extension thereof, as the case may
be,
(iii) all costs and expenses incurred by Lender in the repossession, recovery,
storage, repair, inspection, appraisal, refurbishing, sale, release or other
disposition of the Collateral, (iv) reasonable attorney's fees and costs,
including any fees or costs incurred by Lender in defending any action relating
to this Agreement or participating in any bankruptcy or insolvency proceeding
to
which Borrower is a party, or otherwise incurred due to Borrower's default,
and
(v) any claim for indemnity, if any, in favor of Lender hereunder. In the event
that any court having jurisdiction shall determine that in calculating damages
hereunder as a result of a default by Borrower that sums payable in the future
under the Agreement must be discounted to present value, the discount rate
to be
applied in such case shall equal the discount rate of the Federal Reserve Bank
of Cleveland then in effect on the earlier of the date of entry of judgment
on
such claim or the date of payment of such sum by Borrower.
(c)
In
its sole discretion, Lender may sell the Collateral or any part thereof, at
public auction or by private sale or lease at such time or times and upon such
terms as Lender may determine, free and clear of any rights of Borrower and
notice shall be given in writing of such sale or Agreement by Lender to Borrower
given not less than fifteen (15) days prior to the date thereof shall constitute
reasonable notice thereof to Borrower. All proceeds of the sale less (i) all
expenses incurred in retaking the Collateral, making necessary repairs to the
Collateral and enforcing this Agreement, (ii) all damages that Lender shall
have
sustained by reason of Borrower's default, and (iii) reasonable attorney's
fees
and expenses shall be credited against Borrower's liability hereunder as and
when received by Lender. Sums in excess of Borrower's liability shall belong
to
Borrower. Borrower shall be liable for any deficiency.
(d)
The
provisions of this paragraph 26 shall not prejudice Lender's right to recover
or
prove damages for unpaid amounts accrued prior to default, or bar an action
for
a deficiency as herein provided, and the bringing of an action with an entry
of
judgment against Borrower shall not bar Lender's right to repossess any or
all
of the Collateral.
(e)
Lender's remedies shall be available to Lender's successors and assigns, shall
be in addition to all other remedies provided to it under the Uniform Commercial
Code (specifically, the remedies set forth in 13 Pa. C.S. §§ 2A523(a), (b) and
(c)) or by any other applicable law, and may be exercised concurrently or
consecutively.
27. BORROWER
REPRESENTATIONS AND WARRANTIES.
In
order to induce Lender to enter into this Agreement and to make the Loan to
Borrower, Borrower represents and warrants, as of the date hereof, and as of
the
date of execution of any Request For Advance hereunder, that:
(a)
If
not a natural person, Borrower is an entity duly organized, validly existing
and
in good standing under the laws of the jurisdiction of its organization with
full power and authority to conduct its business as such business is presently
being conducted, to own or hold property to enter into and perform its
obligations under this Agreement. Borrower is duly qualified to do business
and
is in good standing as a foreign entity in all states where its failure to
so
qualify would have a material adverse effect on its ability to perform its
obligations under this Agreement.
(b)
Borrower has full power and authority to enter into the transactions provided
for in this Agreement and has been duly authorized to do so by all necessary
and
appropriate action, and, when executed and delivered by Borrower, this Agreement
will constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with its terms.
(c)
The
execution, delivery, and performance by Borrower of this Agreement and all
related instruments and the consummation by Borrower of the transactions
contemplated hereby: (i) do not require any stockholder approval or the consent
of any trustee or holder of any indebtedness or obligation of Borrower or any
consent, authorization, or approval or filing of or registration with, or other
actions in respect to any federal, state, governmental authority or agency
(or,
if so required, such approval or consent has been obtained), (ii) do not and
will not result in any material violation of any term of any agreement,
instrument, judgment, decree, franchise, permit, order, law, statute, rule,
or
governmental regulation presently applicable to it, (iii) are not in conflict
with and do not constitute a default under any of the terms or provisions of,
or
subject the Collateral or any part thereof to any lien of, any indenture,
mortgage, lease, contract, or other agreement or instrument (other than this
Agreement) to which Borrower is a party or by which it or its property is bound
or affected, and (iv) do not and will not contravene Borrower's organizational
documents.
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6 -
(d)
Except as disclosed in the LCA-Vision Inc. 2007 form 10K, there are no pending
actions or proceedings to which Borrower is a party, and there are no other
pending or threatened actions or proceedings of which Borrower has knowledge,
before any court, arbitrator, or administrative agency, which either
individually or in the aggregate, would materially adversely affect the
financial condition of Borrower, the ability of Borrower to perform its
obligation hereunder. Further, Borrower is not in default under any material
obligations for the payment of borrowed money, for the deferred purchase price
of property or for the payment of any rent which, either individually or in
the
aggregate, would have the same such effect.
(f)
Under
the laws of the state(s) in which the Collateral is to be located, the
Collateral consists solely of personal property.
(g)
The
financial statements of Borrower (copies of which have been furnished to Lender)
have been prepared in accordance with generally accepted accounting principles
consistently applied, and accurately and completely present Borrower's financial
condition and the results of its operations as of the date of and for the period
covered by such statements, and since the date of such statements there has
been
no material adverse change in such conditions or operations.
(h)
The
address stated on page one of this Agreement is the chief place of business
and
chief executive office of Borrower and the place where all books and records
concerning the Collateral are kept; the address set forth on the applicable
Request For Advance is the location at which the applicable Collateral is kept;
and Borrower does not conduct business under a trade, assumed, or fictitious
name other than Lasik Plus.
28. GOVERNING
LAW AND JURISDICTION.
This
Agreement has been delivered and accepted and will be deemed to be made in
the
State where Lender’s office indicated above is located. THIS AGREEMENT AND ALL
AGREEMENTS, INSTRUMENTS AND DOCUMENTS HERETOFORE, NOW OR HEREAFTER EXECUTED
BY
BORROWER AND DELIVERED TO LENDER RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE
LENDER’S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS
RULES. Borrower hereby irrevocably consents to the exclusive jurisdiction of
any
state or federal court in the county or judicial district where Lender’s office
indicated above is located; provided that nothing contained in this Agreement
will prevent Lender from bringing any action, enforcing any award or judgment
or
exercising any rights against Borrower individually, against any security or
against any of Borrower’s property within any other county, state or foreign or
domestic jurisdiction. Lender and Borrower agree that the venue provided above
is the most convenient forum for both parties. Borrower waives any objection
to
venue and any objection based on a more convenient forum in any action
instituted under this Agreement.
29. NOTICES.
All
notices, demands, requests, consents, approvals and other communications
required or permitted hereunder (“Notices”)
must be
in writing and will be effective upon receipt. Notices may be given in any
manner to which the parties may separately agree, including electronic mail;
provided that Notices relating to any Event of Default shall not be given by
electronic mail. Without limiting the foregoing, first-class mail, facsimile
transmission and commercial courier service are hereby agreed to as acceptable
methods for giving Notices. Regardless of the manner in which provided, Notices
may be sent to a party’s address as set forth above or to such other address as
any party may give to the other for such purpose in accordance with this
paragraph.
30. MISCELLANEOUS
(a)
In
this Agreement, unless Lender and Borrower otherwise agree in writing, the
neuter gender includes the masculine and feminine; the singular includes the
plural and the plural the singular; the word “or” shall be deemed to include
“and/or”; and the words “including”, “includes” and “include” shall be deemed to
be followed by the words “without limitation”. Whenever the word Lender is used
herein, it shall include all assignees of Lender. If there is more than one
Borrower named in this Agreement, the liability of each shall be joint and
several.
(b)
Reference to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications to such instruments,
but may to the extent such amendments and other modifications are not prohibited
by the terms of this Agreement. Section headings in this Agreement are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. Unless otherwise specified by this Agreement,
all accounting terms shall be interpreted and all accounting determinations
shall be in accordance with GAAP.
(c)
Time
is of the essence in the performance of this Agreement and each and all of
its
provisions.
(d)
If
any provision of this Agreement is held invalid or unenforceable, the remaining
provisions will not be affected thereby, and to this end, the provisions of
this
Agreement are declared severable.
(e)
If
there is any conflict between the terms of any Request For Advance and this
document, or between any Request For Advance and any other documents, the terms
of the Request For Advance shall control.
(f)
Borrower will reimburse Lender for Lender’s expenses (including the reasonable
fees and expenses of Lender’s outside and in-house counsel) in connection with
any amendments or modifications to this Agreement or any other Loan Document,
and in connection with any collection or enforcement actions hereunder or
thereunder.
(g)
This
Agreement, the Requests For Advance, and any other Loan Documents executed
and
delivered pursuant hereto or thereto constitute the entire agreement between
Lender or Borrower with respect to the Collateral and the subject matter of
this
Agreement and supersede all other prior agreements and understandings whether
oral or written between the parties with respect to the subject matter hereof.
This Agreement may not be changed, waived, amended or terminated except by
written agreement signed by both Lender and Borrower, except that Lender may
insert on the applicable Request For Advance the serial numbers of the
Collateral after delivery thereof. No express or implied waiver by Lender of
any
Event of Default hereunder shall in any way be, or be construed to be, a waiver
of any future and/or subsequent Event of Default whether similar in kind or
otherwise but shall be effective only in the specific instance and for the
purpose for which given. No Notice to Borrower in any case will entitle Borrower
to any other or further Notice in the same, similar or other
circumstances.
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7 -
(h)
Neither Lender nor Borrower shall not issue any press release or other public
disclosures, whether written or oral, of the existence or terms of this
Agreement without the other party’s prior written consent; provided,
that
the foregoing shall not prohibit either party from making any disclosures to
or
filings with any governmental authority, or from disclosing this Agreement
to
either party’s accountants, attorneys and other agents or to either party’s
lenders, or from reflecting the terms of this Agreement in any financial
statements or reports made public in the ordinary course of either party’s
business.
31. COUNTERPARTS.
This
Agreement may be signed in any number of counterpart copies and by the parties
hereto on separate counterparts, but all such copies shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page
to
this Agreement by facsimile transmission shall be effective as delivery of
a
manually executed counterpart. Any party executing this Agreement by facsimile
transmission shall promptly deliver a manually executed counterpart, provided
that any failure to do so shall not affect the validity of the counterpart
executed by facsimile transmission.
32. WAIVER
OF JURY TRIAL.
EACH OF
LENDER AND BORROWER HEREBY WAIVES ANY RIGHT TO DEMAND A JURY TRIAL WITH RESPECT
TO ANY ACTION OR PROCEEDING INSTITUTED BY LENDER OR BORROWER IN CONNECTION
WITH
THIS AGREEMENT OR ANY TRANSACTION RELATED HERETO. BORROWER AND LENDER
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
Borrower
acknowledges that it has read and understood all the provisions of this
Agreement, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.
WITNESS
the due execution hereof with the intent to be legally bound.
WITNESS/ATTEST: | BORROWER: LCA-VISION INC. | |||
By: | /s/ Xxxxxxx X. Xxxxxxx | By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
Title: | Administrative Director | Title: | Senior Vice President Finance & Treasurer |
LENDER: PNC EQUIPMENT FINANCE, LLC | ||||
By: | /s/ Xxxxxx X. Xxxxxx | |||
Title: | Vice President |
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8 -
Request For Advance | |
Advance Number: 04940-001 |
Loan
and Security Agreement
Number:
04940
|
Date of Request: 4/24/08 |
Date
of Loan and Security Agreement:
4/24/08
|
LCA-VISION
INC.
("Borrower") hereby requests an advance from PNC Equipment Finance, LLC
("Lender") in the amount of $19,184,075.00 ("Loan") under that certain
Loan and
Security Agreement between Lender and Borrower dated April 24, 2008 (as
amended,
restated or replaced from time to time, the "Agreement"). Any capitalized
term
used without definition in this Request For Advance shall have the same
meaning
given to such term in the Agreement. To induce Lender to make such advance,
the
Borrower hereby represents, covenants, warrants and agrees as
follows:
1.
|
COLLATERAL:
The
requested Loan is for the purpose of financing the following-described
property: Advanced
Medical Optics (AMO), IntraLase FS Laser vision correction
Lasik
system
(the "Collateral"). Borrower has attached hereto a copy of
the purchase
invoice for the Collateral and the certificate of title related
thereto.
Borrower hereby grants the Lender a security interest in the
Collateral,
which security interest will be governed by the terms and conditions
of
the Agreement. Borrower agrees to promptly execute and deliver
to Lender
such other instruments or documents as may be required by Lender
to
perfect its security interest in the Collateral, including,
delivery to
Lender of the original titles to vehicles (if any) relating
to the
Collateral.
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2. |
INTEREST:
The Loan shall accrue interest at the following fixed rate
per annum:
4.96%
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3.
|
TERMS:
The Loan will be for a term of sixty (60) months commencing
on April 24,
2008, and maturing on April 24, 2013. Borrower agrees to repay
the Loan in
Sixty (60) equal monthly installments of principal together
with interest
in the amount of $361,675.70, as billed monthly by Lender at
the rate set
forth in paragraph 2 above, each such payment due and payable
on the 24th
day of the month and all other sums due hereunder shall be
due and payable
on April 24, 2013.
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4.
|
PREPAYMENT:
So long as no Event of Default under the Agreement has occurred
and is
continuing, Borrower may prepay all, but not less than all,
of the
outstanding principal of the Loan prior to the maturity date
set forth in
the preceding paragraph, provided that upon such prepayment
Borrower shall
also pay to Lender a prepayment charge equal to three percent
(3%) of the
remaining principal balance of the Loan if such prepayment
is made during
the first (1st)
year of the original term of the Loan set forth in the preceding
paragraph, two percent (2%) of the remaining principal balance
of the Loan
if during the second (2nd)
year of the original term of the Loan, one percent (1%) of
the remaining
principal balance if during the third (3rd)
year of the original term of the Loan, five tenths percent
(.5%) of the
remaining principal balance of the Loan if during the fourth
(4th)
year of the original term of the Loan or zero percent (0%)
of the
remaining principal balance of the Loan if during the fifth
(5th)
year of the original term of the Loan. All prepayments of principal
shall
be accompanied by the payment of accrued interest on the amount
of such
prepayment to the date thereof.
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5.
|
INSURANCE:
In
addition to the requirements contained in the Agreement, the
following
insurance requirements shall apply: (a) liability coverage:
(i) general
liability including/comprehensive form: premises/operations;
products/completed operations; contractual liability; independent
contractors; broad form property damage; personal injury; and
collapse
hazard; (ii) bodily injury and property damage combined single
limit per
occurrence: $3,000,000; (iii) fire-legal liability-custody,
care or
control, each occurrence: $100,000; and (b) property coverage:
all risk of
physical loss; equipment must be insured for at least the total
original
cost.
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6.
|
REPRESENTATIONS
AND WARRANTIES:
Borrower hereby (a) reaffirms the representations and warranties
made by
Borrower to the Lender in the Agreement and the other Loan
Documents; (b)
represents that Borrower is in compliance with all of the terms
and
conditions of the Loan Documents; and (c) represents that no
Event of
Default or event which with the passage of time, the giving
of notice, or
both, would constitute an Event of Default, has occurred and
is
continuing.
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WITNESS
the due execution hereof with the intent to be legally bound.
Accepted By: PNC EQUIPMENT FINANCE, LLC, Lender | LCA-VISION INC., Borrower | |||
By: | /s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
Title: | Vice President | Title: | Senior Vice President Finance & Treasurer |