LIMITED FORBEARANCE AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT
EXHIBIT 10.1
LIMITED FORBEARANCE
AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT
AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT
THIS LIMITED FORBEARANCE AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT (this
“Forbearance”), is made and entered into as of August 20, 2009 with respect to that certain
Transfer Rights Agreement, dated as of July 12, 2005, as amended by the First Amendment to Transfer
Rights Agreement, dated as of April 1, 2007, and as amended by the Second Amendment to Transfer
Rights Agreement, dated as of July 31, 2007 (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the “Transfer Rights
Agreement”), by and among Xxxxxxx Xxxxxxx, M.D., Xxxxx Xxxxxxx, M.D., Xxxxxx Xxxxxxxx, M.D.,
and Xxxxxxx Xxxxxxx, M.D. (each a “Buyer” and collectively, the “Buyers”), TLC
Vision (USA) Corporation, a Delaware corporation (“TLC”), XxxXxx ASC, LLC, a Delaware
limited liability company (“ASC LLC”), and TLC Management (Delaware Valley), LLC, a
Delaware limited liability company (“Management LLC,” together with TLC and ASC LLC, the
“TLC Entities”).
W I T N E S S E T H:
WHEREAS, TLC is a party to that certain Amended and Restated Credit Agreement, dated as of
June 21, 2007 (as amended as of the date hereof and as the same now exists or may hereafter be
amended, modified, supplemented, extended, renew, restated or replaced, the “Credit
Agreement”);
WHEREAS, Buyers, TLC, ASC LLC and Management LLC are parties to the Transfer Rights Agreement;
WHEREAS, pursuant to Section 2.2 of the Transfer Rights Agreement, each Buyer has a right to
offer to sell a portion of his or her Original Equity Interests in ASC LLC and Management LLC to
TLC on certain specified dates;
WHEREAS, on or around June 12, 2009, Buyers provided notice to TLC that each of them was
offering to sell 40% of their respective interests in Management LLC pursuant to the Transfer
Rights Agreement;
WHEREAS, TLC provided and each of the Buyers consented to a valuation of the Offered Interests
on July 14, 2009;
WHEREAS, payment on account of the Offered Interests (the “Put Amount”) was due and
payable on August 12, 2009;
WHEREAS, TLC failed to pay the Put Amount on August 12, 2009 (the “Event of Default”);
and
WHEREAS, pursuant to the terms and subject to conditions set forth herein, each Buyer agrees
to forbear from (i) exercising any and all rights and remedies against TLC under the Transfer
Rights Agreement, and (ii) exercising any and all rights and remedies against the TLC Entities
pursuant to any other written agreement to which he or she has entered into with any or all of the
TLC Entities (including without limitation any employment or non-compete agreement), in each case
to the extent arising as a result of the occurrence of the Event of Default, as set forth herein.
NOW THEREFORE, in consideration of the agreements and subject to the terms and conditions
herein and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. Definitions. Any capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Transfer Rights Agreement.
(a) “Forbearance Termination Date” means the later of
(i) 5:00 p.m. Eastern time on September 8, 2009, provided that if the certain Limited
Waiver and Amendment No. 4 to Credit Agreement, dated as of June 30, 2009, by and among TLC, the
other Loan Parties (as defined therein) and the Lenders (as defined therein) is terminated on a
date prior to September 8, 2009, this Forbearance shall terminate on such date; and
(ii) if on or before September 8, 2009, TLC, the other Loan Parties (as defined in the Credit
Agreement) and the Lenders (as defined in the Credit Agreement) enter into a waiver, forbearance,
amendment or other similar modification of the Credit Agreement, the earlier of (A) one day prior
to the expiration of such waiver, forbearance, amendment or modification, and (B) October 12, 2009.
(b) “Term” means the period from the Effective Date (as defined below) through and
including the Forbearance Termination Date.
2. Forbearance. Subject to the terms and conditions set forth herein and solely in
respect of the Event of Default, Buyers agree to forbear, during the Term of this Forbearance, from
(a) exercising any and all rights and remedies against TLC under the Transfer Rights Agreement, and
(b) exercising any and all rights and remedies against any of the TLC Entities pursuant to any
other written agreement to which he or she has entered into with any or all of the TLC Entities
(including without limitation any employment or non-compete agreement), in each case to the extent
arising as a result of the occurrence of the Event of Default.
3. Payment Obligations. Each of the TLC Entities hereby irrevocably and
unconditionally agrees, acknowledges and affirms to Buyers that TLC has an existing obligation to,
and will, pay the Put Amount to the Buyers on the day immediately following the Forbearance
Termination Date otherwise in accordance with the Transfer Rights Agreement, it being understood
that time is of the essence.
4. Amendment to Transfer Rights Agreement. The Transfer Rights Agreement is hereby
amended as set forth below.
(a) Employee Member Put Rights. Section 2.2 of the Transfer Rights Agreement is
amended by replacing each instance of “seventh (7th) Anniversary Date” therein with “sixth (6th)
Anniversary Date.”
(b) Agreement Price Upon Termination of Employment. Section 3.1.2 of the Transfer
Rights Agreement is amended by replacing “seventh (7th) Anniversary Date” in the sixth line thereof
with “sixth (6th) Anniversary Date.”
(c) Agreement Price for Put Rights and Call Rights.
(i) Section 3.2.2 of the Transfer Rights Agreement is amended by replacing “seventh (7th)
Anniversary Date” in the third line thereof with “sixth (6th) Anniversary Date.”
(ii) Section 3.2.3 of the Transfer Rights Agreement is amended by replacing “seventh (7th)
Anniversary Date” in the third line thereof with “sixth (6th) Anniversary Date.”
5. Conditions Precedent to Effectiveness. This Forbearance shall be effective as of
the date upon which all of the following conditions are satisfied (the “Effective Date”):
(a) Payment by TLC to the Buyers, in the aggregate, the sum of $250,000 by wire transfer in
immediately available funds, payable upon execution of this Forbearance; and
(b) after giving effect to this Forbearance, the representations and warranties of the
Borrowers contained in this Forbearance shall be true and accurate in all material respects.
6. Representations and Warranties. Each of the TLC Entities hereby represents and
warrants to Buyers that (a) this Forbearance has been duly executed and delivered by each TLC
Entity; (b) the execution and delivery by each TLC Entity of this Forbearance is within such TLC
Entity’s powers and has been duly authorized by all necessary action on its party; and (c) this
Forbearance constitutes the legal, valid and binding obligations of such TLC Entity, enforceable
against such TLC Entity in accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.
7. Acknowledgement. Each of TLC and Management LLC, as guarantors under certain
Guaranty agreements dated July 11, 2005 in favor of each of the Buyers hereby consent to this
Forbearance and hereby confirm and agree that, notwithstanding the effectiveness of such
Forbearance each Guaranty is and shall continue to be in full force and effect and is hereby
ratified and confirmed in all respects.
8. Costs and Expenses. Each Party shall be responsible for its own fees and expenses,
including attorneys’ fees, incurred in connection with the preparation, execution, delivery,
administration, modification and amendment of this Forbearance and the other instruments and
documents to be delivered hereunder; provided, however, that TLC hereby agrees to
pay on demand all reasonable fees and expenses incurred by the Buyers, including reasonable
attorneys’ fees, in connection with any enforcement of the Buyers’ rights under the Transfer Rights
Agreement after the date hereof resulting from the Event of Default or any subsequent failure to
timely honor Put Rights by TLC, unless a court of competent jurisdiction finds by final,
nonappealable order or judgment that neither TLC nor its affiliates were obligated to honor any
such Put Right; provided further, that TLC’s liability for such fees shall not exceed
$50,000 in the aggregate with respect to each of the Put Rights under the Transfer Rights
Agreement.
9. No Other Waiver or Other Forbearance. Except as otherwise expressed herein, the
execution, delivery and effectiveness of this Forbearance shall not operate as a waiver of or
forbearance with respect to any right, power or remedy of Buyers under the Transfer Rights
Agreement, nor constitute a waiver of or forbearance with respect to any provision of the Transfer
Rights Agreement. The provisions of the Transfer Rights Agreement not herein specifically amended
shall continue in full force and effect. This Forbearance shall not constitute a modification of
the Transfer Rights Agreement or a course of dealing between the Buyers, on the one hand, and any
of the TLC Entities, on the other hand, at variance with the Transfer Rights Agreement such as to
require further notice by Buyers to any of the TLC Entities to require strict compliance with the
terms of the Transfer Rights Agreement in the future, except as expressly set forth herein.
10. No Third Party Beneficiaries. Nothing in this Forbearance is intended, nor shall
anything herein be construed, to confer any rights, legal or equitable in any person or entity
other than the parties hereto and their respective successors, heirs, devisees, assigns, legal
representatives, executors and administrators.
11. Severability. Each provision of this Forbearance shall be considered severable,
and if for any reason any provision or provisions hereof are determined to be invalid and contrary
to any existing or future law, such invalidity shall not impair the operation of or affect those
portions of this Forbearance which are valid.
12. Interpretation. Each party has had the opportunity to have this Forbearance
reviewed by counsel and be advised by counsel as to the rights and obligations of each party. This
Forbearance shall not be construed or interpreted more strictly against one party than another on
grounds that this Forbearance or any draft thereof was prepared by a party or his, her or its
counsel.
13. Counterparts. This Forbearance may be executed in counterparts, each of which
shall be an original and, collectively shall constitute one instrument. Any signature delivered by
a party by facsimile transmission or electronic mail shall be deemed an original signature hereto.
14. Applicable Law. This Forbearance shall be governed by, construed, and enforced in
accordance with the laws of the State of Delaware excluding conflicts of law provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Forbearance as of the date first
written above.
| TLC VISION (USA) CORPORATION, A Delaware corporation |
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| By: /s/ Xxxxxxx XxXxxxx | ||||
| Name: | Xxxxxxx XxXxxxx | |||
| Title: | Interim Chief Financial Officer | |||
| XXXXXX ASC, LLC, A Delaware limited liability company |
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| By: /s/ Xxxxxxxx X. Xxxxxxx | ||||
| Name: | Xxxxxxxx X. Xxxxxxx | |||
| Title: | Assistant Treasurer | |||
| TLC MANAGEMENT (DELAWARE
VALLEY), LLC, A Delaware limited liability company |
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| By: /s/ Xxxxxxxx X. Xxxxxxx | ||||
| Name: | Xxxxxxxx X. Xxxxxxx | |||
| Title: | Assistant Treasurer | |||
[SIGNATURE PAGE TO LIMITED FORBEARANCE]
BUYERS
| XXXXXXX XXXXXXX, M.D. |
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| /s/ Xxxxxxx Xxxxxxx | ||||
| XXXXX XXXXXXX, M.D. |
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| /s/ Xxxxx Xxxxxxx | ||||
| XXXXXX XXXXXXXX, M.D. |
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| /s/ Xxxxxx Xxxxxxxx | ||||
| XXXXXXX XXXXXXX, M.D. |
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| /s/ Xxxxxxx Xxxxxxx | ||||
[SIGNATURE PAGE TO LIMITED FORBEARANCE]
