SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 1997
LCA-VISION INC.
(Exact name of Registrant as specified in its Charter)
Delaware 0-27610 11-2882328
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification Number)
incorporation)
7840 Montgomery Road, Cincinnati, Ohio 45236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 792-9292
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
LCA-Vision Inc. (NASDAQ:LCAV) obtained a new financing agreement
from The Fifth Third Bank of Cincinnati to replace its expired
existing package. The package, effective August 18, 1997, consists
of an $8 million secured line of credit and a secured 13-month term
loan in the amount of $3.053 million.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description Page
99 Loan documents dated August 18, 1997 by and
between LCA-Vision Inc. and The Fifth Third
Bank
99 LCA-Vision Inc. Press Release dated August 22,
1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
LCA-VISION INC.
Date: August 26, 1997 By: /s/ Larry P. Rapp
Larry P. Rapp
Chief Financial Officer
LOAN AND SECURITY AGREEMENT
between
LCA-VISION INC.
and
THE FIFTH THIRD BANK
Dated as of August 18, 1997
TABLE OF CONTENTS
Page
Section 1. Definitions 1
1.1 Specific Definitions 1
1.2 Rules of Construction 4
Section 2. Loans and Term 4
2.1 Revolving Credit Loans 4
2.2 Term Loan 6
2.3 Fees 7
2.4 Accounting 7
2.5 Costs 7
2.6 Depository 7
2.7 Banking Services 7
2.8 Use of Proceeds 8
2.9 Maximum Interest Rate 8
Section 3. Security 8
3.1 Security Interest of Bank 8
3.2 Representations in Exhibit 3.2 9
3.3 Provisions Concerning Accounts 9
3.4 Provisions Concerning General Intangibles 10
3.5 Provisions Concerning Inventory 10
3.6 Provisions Concerning Equipment 11
3.7 Liens 11
3.8 Further Assurances 11
3.9 Reinstatement of Lien 12
3.10 Other Amounts Deemed Loans 12
3.11 Borrower Remains Liable 12
3.12 Mortgage 12
Section 4. Representations and Warranties 12
4.1 Organization and Qualification 12
4.2 Due Authorization 13
4.3 Litigation 13
4.4 Margin Stock 13
4.5 Business 13
4.6 Laws and Taxes 13
4.7 Environmental Laws 14
4.8 Financial Condition 14
4.9 Solvency 14
Section 5. Financial Statements and Information 14
5.1 Financial Statements 14
Section 6. Covenants 16
6.1 Existence; Merger; Disposition of Assets 16
6.2 Pledge or Encumbrance of Assets 16
6.3 Guarantees and Loans 16
6.4 Business 16
6.5 Condition and Repair 16
6.6 Indebtedness to Tangible Net Worth 16
6.7 Minimum Tangible Net Worth 16
6.8 Insurance 16
6.9 Taxes 17
6.10 Compliance with Law 17
6.11 Transactions with Affiliates 17
6.12 Indebtedness 17
6.13 Capital Stock; Dividends 17
6.15 Leases 18
6.16 Capital Expenditures 18
6.17 Representations 18
Section 7. Conditions Precedent 18
7.1 Conditions to Loans 18
7.2 Conditions to Each Revolving Loan 18
Section 8. Events of Default and Remedies 19
8.1 Events of Default 19
8.2 Remedies 20
8.3 Cumulative 21
8.4 Fees and Expenses 21
Section 9. Miscellaneous Provisions 21
9.1 Delays and Waiver 21
9.2 Waiver by Borrower 21
9.3 Complete Agreement 21
9.4 Severability 22
9.5 Binding Effect 22
9.6 Indemnification 22
9.7 Subsidiaries 22
9.8 Notices 22
9.9 Governing Law; Jurisdiction 23
9.10 Confession of Judgment 23
EXHIBIT 2.1 26
REVOLVING NOTE 26
EXHIBIT 2.2 30
TERM NOTE 30
EXHIBIT 3.2 33
SPECIFIC REPRESENTATIONS 33
EXHIBIT 4.1 40
CERTIFICATE OF BORROWER 40
EXHIBIT 4.3 44
LITIGATION 44
EXHIBIT 7.1(d) 45
OPINION OF COUNSEL FOR BORROWER 45
This Loan and Security Agreement (the "Agreement") is entered into
as of August 18, 1997, by and between LCA-VISION INC., a Delaware
corporation (the "Borrower") and THE FIFTH THIRD BANK, an Ohio
banking corporation (the "Bank").
Section 1. Definitions.
1.1 Specific Definitions. The following definitions shall apply:
"Account Debtors" means Borrower's customers and all other persons
who are obligated or indebted to Borrower in any manner, whether
directly or indirectly, primarily or secondarily, contingently or
otherwise, with respect to Accounts or General Intangibles.
"Accounts" means all accounts, contract rights, instruments,
documents, chattel paper, and all obligations in any form arising
out of the sale or lease of goods or the rendition of services by
Borrower; all guaranties, letters of credit and other security for
any of the above; all merchandise returned to or reclaimed by
Borrower; and all books and records (including computer programs,
tapes and data processing software) evidencing an interest in or
relating to the above.
"Affiliate" means, as to Borrower, (a) any person which, directly or
indirectly, is in control of, is controlled by or is under common
control with, Borrower, or (b) any person who is a director, officer
or employee (i) of Borrower or (ii) of any person described in the
preceding clause (a). For purposes of this definition, control of
a person shall mean (a) the power, direct or indirect, (i) to vote
ten percent (10%) or more of the securities having ordinary voting
power for the election of directors of such person or (ii) to direct
or cause the direction of the management and policies of such person
whether by contract or otherwise, or (b) the ownership, direct or
indirect, of ten percent (10%) or more of any class of equity
securities of such person.
"Bank Affiliate" means Bank, Fifth Third Leasing Company, and every
other entity of which Fifth Third Bancorp is the majority owner.
"Default" means any event that, with the giving of notice or the
passage of time, or both, would be an Event of Default.
"Environmental Laws" means all federal, state, local and foreign
laws relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the
environment (including without limitation ambient air, surface
water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes,
and any and all regulations, codes, plans, orders, decrees,
judgments, injunctions, notices or demand letters issued, entered,
promulgated or approved thereunder.
"Equipment" means all machinery, machine tools, equipment, fixtures,
office equipment, furniture, furnishings, motors, motor vehicles,
tools, dies, parts, jigs, goods (including, without limitation, each
of the items of equipment set forth on any schedule which is either
now or in the future attached to Bank's copy of this Agreement), and
all attachments, accessories, accessions, replacements,
substitutions, additions and improvements thereto, and all supplies
used or useful in connection therewith.
"Facility" has the meaning set forth in Section 2.1.
"General Intangibles" means all general intangibles, choses in
action, causes of action, obligations or indebtedness owed to
Borrower from any source whatsoever, and all other intangible
personal property of every kind and nature (other than Accounts)
including without limitation patents, trademarks, trade names,
service marks, copyrights and applications for any of the above, and
goodwill, trade secrets, licenses, franchises, rights under
agreements, tax refund claims, and all books and records including
all computer programs, disks, tapes, printouts, customer lists,
credit files and other business and financial records, and the
equipment containing any such information.
"Hillside Lien" means a Lien on the Accounts of Borrower in favor of
Hillside Financial, which is limited to a secured amount of $50,000.
"Indebtedness" means (i) all items (except items of capital stock,
of capital surplus, of general contingency reserves or of retained
earnings, deferred income taxes, and amount attributable to minority
interest if any) which in accordance with generally accepted
accounting principles would be included in determining total
liabilities on a consolidated basis (if Borrower should have a
Subsidiary) as shown on the liability side of a balance sheet as at
the date as of which Indebtedness is to be determined, (ii) all
indebtedness secured by any mortgage, pledge, lien or conditional
sale or other title retention agreement to which any property or
asset owned or held is subject, whether or not the indebtedness
secured thereby shall have been assumed (excluding non-capitalized
leases which may amount to title retention agreements but including
capitalized leases), and (iii) all indebtedness of others which
Borrower or any Subsidiary has directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary
course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise
acquire, or in respect of which Borrower or any Subsidiary has
agreed to apply or advance funds (whether by way of loan, stock
purchase, capital contribution or otherwise) or otherwise to become
directly or indirectly liable.
"Insolvency Event" means, with respect to a person, any of the
following: a court enters a decree or order for relief in respect
to such person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law then in effect, or
appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of such person or for any
substantial part of its property, or orders the wind-up or
liquidation of its affairs; or a petition initiating an involuntary
case under any such bankruptcy, insolvency or similar law is filed
against such person; or such person commences a voluntary case under
any applicable bankruptcy, creditors, or fails generally to pay its
debts as such debts become due, or takes corporate action in
furtherance of any of the foregoing.
"Inventory" means any and all goods, supplies, wares, merchandise
and other tangible personal property, including raw materials, work
in process, supplies and components, and finished goods, whether
held for sale or lease, or furnished or to be furnished under any
contract for service, and also including products of and accessions
to inventory, packing and shipping materials, and all documents of
title, whether negotiable or non-negotiable, representing any of the
foregoing.
"Lien" means any security interest, mortgage, pledge, assignment, or
voluntary or involuntary lien, charge or other encumbrance of any
kind, including interests of vendors or lessors under conditional
sale contracts or capital leases.
"Loan Documents" means this Agreement, the Notes, and all mortgages,
instruments and documents securing Obligations, all guaranties of
Obligations, and all other documents delivered or required, as a
condition to the making of any Loan or otherwise, in connection with
this Agreement.
"Loans" means the Revolving Loans and the Term Loan.
"Mortgage" has the meaning set forth in Section 3.12.
"Notes" means the Revolving Note and the Term Note.
"Obligation(s)" means all loans, advances, indebtedness and other
obligations of Borrower owed to Bank or any other Bank Affiliate of
every description whether now existing or hereafter arising
(including those owed by Borrower to others and acquired by Bank or
any other Bank Affiliate by purchase, assignment or otherwise) and
whether direct or indirect, primary or as guarantor or surety,
absolute or contingent, liquidated or unliquidated, matured or
unmatured, whether or not secured by additional collateral, and
including without limitation obligations to perform or forbear from
performing acts, all amounts represented by letters of credit now or
hereafter issued by Bank or Bank Affiliate for the benefit of or at
the request of Borrower, and all expenses and attorney's fees
incurred by Bank under this Agreement or any other document or
instrument related to any Obligations.
"Prime Rate" means the rate of interest per annum announced to be
its prime rate from time to time by Bank at its principal office in
Cincinnati, Ohio, whether or not Bank shall at times lend to
borrowers at lower rates of interest or, if there is no such prime
rate, then its base rate or such other rate as may be substituted by
Bank for the prime rate.
"Subsidiary" means any corporation of which Borrower directly or
indirectly owns or controls at the time outstanding stock having
under ordinary circumstances (not depending on the happening of a
contingency) voting power to elect a majority of the board of
directors of said corporation.
"Tangible Net Worth" shall mean the total of the capital stock (less
treasury stock), paid-in surplus, general contingency reserves and
retained earnings (deficit) of Borrower and any Subsidiary as
determined on a consolidated basis in accordance with generally
accepted accounting principles after eliminating all inter-company
items and all amounts properly attributable to minority interests,
if any, in the stock and surplus of any Subsidiary, minus the
following items (without duplication of deductions), if any,
appearing on the consolidated balance sheet of Borrower:
(i) all deferred charges (less amortization, unamortized debt
discount and expense and corporate organization expenses);
(ii) the book amount of all assets which would be treated as
intangibles under generally accepted accounting principles,
including, without limitation, such items as goodwill, trademark
applications, trade names, service marks, brand names, copyrights,
patents, patent applications and licenses, and rights with respect
to the foregoing; and
(iii) the amount by which aggregate inventories or aggregate
securities appearing on the asset side of such consolidated balance
sheet exceed the lower of cost or market value (at the date of such
balance sheet) thereof.
1.2 Rules of Construction. All financial terms used in this
Agreement, other than those defined in this Section 1, shall have
the meanings given to them by generally accepted accounting
principles. All other undefined terms shall have the meanings given
to them in the Uniform Commercial Code. The words "herein" and the
like refer to this entire Agreement. Unless the context otherwise
requires, any reference to a law or a document means that law or
document as in effect from time to time, including any amendment or
replacement thereof.
Section 2. Loans and Term.
2.1 Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, Bank hereby extends
to Borrower a line of credit facility (the "Facility") under which
Bank may make loans (the "Revolving Loans") to Borrower at
Borrower's request from time to time during the term of the
Facility, in an amount up to Eight Million Dollars ($8,000,000).
However, Bank shall have discretion at all times as to whether or
not to make any Revolving Loans. Bank may create and maintain
reserves from time to time based on such credit and collateral
considerations as Bank may deem appropriate. Borrower may borrow,
prepay, and reborrow hereunder, provided that the aggregate
principal amount of all Revolving Loans outstanding at any one time
shall not exceed $8,000,000. If the amount of Revolving Loans
outstanding at any time exceeds those limits, Borrower shall
immediately pay the amount of such excess to Bank in cash.
(b) Bank will apply funds in Borrower's principal depository
account at Bank (the "Corporate Bank Account") on a daily basis to
the payment of Revolving Loans automatically and without notice,
request or demand by Borrower, in accordance with Bank's automatic
sweep program. Pursuant to that program, Bank will either make
Revolving Loans or apply toward the payment of interest and
principal of Revolving Loans an amount necessary to maintain a
minimum balance in the Corporate Bank Account of $150,000. However,
in no event will the principal amount of the Revolving Loans exceed
the amount provided for in clause (a) of this Section. Bank
reserves the right to change the provisions and mechanics of its
automatic sweep program in a separate writing to Borrower and such
change need not be reflected by an amendment to this Agreement in
order to be effective.
(c) On the closing date, Borrower shall duly issue and deliver to
Bank a Note in the form of Exhibit 2.1 (the "Revolving Note"), in
the principal amount of $8,000,000.
(d) All Revolving Loans outstanding from time to time shall bear
interest as follows:
(i) from the date hereof until February 28, 1998, at a rate of one
percent (1.0%) per year above the Prime Rate of Bank in effect from
time to time.
(ii) from February 28, 1998 until August 31, 1998, at a rate of
three percent (3.0%) per year above the Prime Rate of Bank in effect
from time to time.
(iii) from August 31, 1998 until September 30, 1998 (the "Maturity
Date"), at a rate of six percent (6.0%) per year above the Prime
Rate of Bank in effect from time to time.
The interest rate shall change automatically upon each change in the
Prime Rate. Interest will be calculated based on a 360 day year and
charged for the actual number of days elapsed, and will be payable
in immediately available funds at the principal office of Bank on
the first day of each calendar month and Bank may, at its option,
charge such interest to Borrower's account with Bank. Those amounts
shall thereupon constitute Obligations hereunder and shall
thereafter accrue interest as provided for in this Agreement. After
the occurrence of an Event of Default, the Revolving Loans shall
bear interest at a rate of 6% per annum above the rate that would
otherwise be in effect, or in the alternative Bank may impose a
fixed charge of $50.00; this provision does not constitute a waiver
of any Event of Default or an agreement by Bank to permit any late
payments whatsoever.
(e) The term of the Facility shall expire on the Maturity Date, and
the entire outstanding principal balance of the Revolving Note, and
all accrued interest, shall become due and payable not later than
that date. Borrower may prepay the principal balance of the
Revolving Note in whole or part at any time, subject however to the
required prepayment provision of Section 2.2(c) of this Agreement.
Until all Obligations have been fully repaid and this Agreement has
terminated, Bank shall retain its security interest in all
Collateral then existing or arising thereafter, and Borrower shall
continue to immediately turn over to Bank, in kind, all collections
received respecting the Accounts.
2.2 Term Loan.
(a) Bank agrees on the terms and conditions hereinafter set forth,
to make a term loan (the "Term Loan") to Borrower on the date of
this Agreement in the principal sum of $3,053,000. Borrower's
obligation to repay the Term Loan shall be evidenced by its
promissory note (the "Term Note") in substantially the form of
Exhibit 2.2 hereto. The Term Note shall be dated the date of this
Agreement. The principal amount of the Term Note will be payable in
14 monthly installments, due on the 1st day of each calendar month,
commencing September 1, 1997, with a final payment on the Maturity
Date. The first 13 installments of principal shall each be in the
amount of Thirteen Thousand Seven Hundred Fifty Dollars ($13,750),
and the final installment on the Maturity Date shall be in the
amount of the entire unpaid principal balance. However, if the
Facility is terminated (whether by acceleration of the Revolving
Loans or otherwise) prior to the stated maturity of the Term Loan,
the Term Loan shall instead become due and payable in full upon
termination of the Facility.
(b) Borrower shall pay interest to Bank on the outstanding principal
amount of the Term Loan as follows:
(i) from the date hereof until February 28, 1998, at a rate of one
percent (1.0%) per year above the Prime Rate of Bank in effect from
time to time.
(ii) from February 28, 1998 until August 31, 1998, at a rate of
three percent (3.0%) per year above the Prime Rate of Bank in effect
from time to time.
(iii) from August 31, 1998 until the Maturity Date, at a rate of six
percent (6.0%) per year above the Prime Rate of Bank in effect from
time to time.
The interest rate shall change automatically upon each change in the
Prime Rate. Interest will be calculated based on a 360 day year and
charged for the actual number of days elapsed, and will be payable
in immediately available funds at the principal office of Bank on
the first day of each calendar month and Bank may, at its option,
charge such interest to Borrower's account with Bank. Those amounts
shall thereupon constitute Obligations hereunder and shall
thereafter accrue interest as provided for in this Agreement. After
the occurrence of an Event of Default, the Term Loan shall bear
interest at a rate of 6% per annum above the rate that would
otherwise be in effect, or in the alternative Bank may impose a
fixed charge of $50.00; this provision does not constitute a waiver
of any Event of Default or an agreement by Bank to permit any late
payments whatsoever.
(c) Upon any sale/leaseback relating to the Collateral (or any
portion thereof), Borrower shall apply the proceeds from such
transaction as follows: (i) 100% of the initial $2,000,000 of
proceeds shall be applied as a prepayment of principal of the Term
Loan, then (ii) 75% of all remaining proceeds shall be applied first
to the Term Loan until it is paid in full and then to the Revolving
Loans as a prepayment thereafter.
2.3 Fees.
(a) Closing Fee: On the date hereof, Borrower shall pay to Bank a
nonrefundable closing fee of $110,530.
(b) Facility Fee: So long as this Agreement is in effect Borrower
shall pay to Bank a facility fee at an annual rate of one percent
(1.0 %) of an amount equal to (i) the outstanding principal amount
of the Loans less (ii) the amount of cash and certificates of
deposit of Borrower held by Bank as collateral for the Loans
(originally anticipated to be $5,000,000) as of the last day of each
calendar quarter; this facility fee is payable in installments on
the first day of each quarter in arrears, with a final payment due
upon termination of this Agreement.
2.4 Accounting. After the end of each calendar month, Bank will:
(a) if Bank so elects, charge Borrower's account for any or all
amounts due to Bank under this Agreement for interest, expenses and
the like and notify Borrower of such charges; and
(b) render to Borrower a statement of Borrower's loan account with
Bank hereunder, which statement shall be considered correct and to
have been accepted by Borrower and shall be conclusively binding
upon Borrower unless Borrower notifies Bank in writing of any
discrepancy within ten (10) days from the mailing of such statement.
2.5 Costs. Borrower shall pay to Bank its costs and expenses
(including, without limitation, reasonable attorneys' fees, court
costs, litigation and other expense) incurred or paid by Bank in
negotiating, documenting, administering and enforcing this Agreement
and the Loan Documents and in establishing, maintaining, protecting,
perfecting or enforcing any of Bank's rights or Borrower's
obligations, including, without limitation, any and all such costs
and expenses incurred or paid by Bank in defending Bank's title or
right to the Collateral or in collecting or enforcing payment of the
Collateral and all costs of filing financing, continuation or
termination statements with respect to the Collateral.
2.6. Depository. If Borrower should ever take any action, the
result of which is that Bank is no longer the principal depository
in which the majority of Borrower's funds are deposited or is no
longer the principal bank of account of Borrower, the applicable
interest rate shall be increased to a rate which is six percent (6%)
greater than the rate that would otherwise be in effect, such change
in the applicable interest rate to be effective automatically and
without notice from the date of Borrower's action.
2.7 Banking Services. Borrower shall give Bank the first and last
opportunity to provide any banking services required by Borrower,
provided Bank is willing to provide such services on terms
competitive in the marketplace.
2.8 Use of Proceeds. The proceeds of the Loans will be used only
for general working capital purposes.
2.9 Maximum Interest Rate. In no event shall the interest rate and
other charges hereunder exceed the highest rate permissible under
any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that a court
determines that Bank has received interest and other charges
hereunder in excess of the highest permissible rate applicable
hereto, such excess shall be deemed received on account of, and
shall automatically be applied to reduce, the principal balance of
the Loans, in the inverse order of maturity, and the provisions
hereof shall be deemed amended to provide for the highest
permissible rate. If there are no Obligations outstanding, Bank
shall refund to Borrower such excess.
Section 3. Security.
3.1 Security Interest of Bank. To induce Bank to make the Loans,
and as security for all Obligations, Borrower hereby assigns to Bank
as Collateral and grants to Bank a continuing pledge and security
interest, for itself and as agent for all Bank Affiliates, in the
following property of Borrower (the "Collateral"), whether now owned
or existing or hereafter acquired or arising and regardless of where
located:
(a) all Accounts.
(b) all Inventory.
(c) all Equipment.
(d) all General Intangibles.
(e) all proceeds and products of Collateral and all additions and
accessions to, replacements of, insurance or condemnation proceeds
of, and documents covering Collateral, all tort or other claims
against third parties arising out of damage or destruction of
Collateral, all property received wholly or partly in trade or
exchange for Collateral, all leases of Collateral and all rents,
revenues, issues, profits and proceeds arising from the sale, lease,
license, encumbrance, collection, or any other temporary or
permanent disposition, of the Collateral or any interest therein.
(f) all cash, certificates of deposit, instruments, documents,
securities, money or other property, owned by Borrower or in which
Borrower has an interest, which now or hereafter are at any time in
the possession or control of Bank or in transit by mail or carrier
to or in the possession of any third party acting on behalf of Bank,
without regard to whether Bank received the same in pledge, for
safekeeping, as agent for collection or transmission or otherwise or
whether Bank had conditionally released the same, and any deposit
accounts of Borrower with Bank, including all demand, time, savings,
passbook or other accounts.
3.2 Representations in Exhibit 3.2. Borrower represents and
warrants that the representations and warranties set forth in
Exhibit 3.2, the Specific Representations Exhibit, are true and
correct. Except as otherwise permitted hereunder, Borrower shall
not change its name, transfer its executive offices or maintain
records with respect to Accounts at any location other than its
present executive offices specified in that Exhibit.
3.3 Provisions Concerning Accounts.
(a) Borrower represents and warrants that each Account reflected in
Borrower's books and records is, or will at the time it arises be,
owned by Borrower free and clear of all Liens in favor of any third
party (excluding the Hillside Lien), will be a bona fide existing
obligation created by the final sale and delivery of goods or the
completed performance of services by Borrower in the ordinary course
of its business, will be for a liquidated amount maturing as stated
in the supporting data covering such transaction, and will not be
subject to any known deduction, offset, counterclaim, return
privilege or other condition except as reflected on Borrower's books
and records. Borrower shall not redate any invoices. Any
allowances between Borrower and its customers will be in accordance
with the usual customary practices of Borrower, as they exist on the
date of this Agreement.
(b) Any officer, employee or agent of Bank shall have the right, at
any time or times hereafter, in the name of Bank or its nominee
(including Borrower), to verify the validity, amount or any other
matter relating to any Accounts by mail, telephone, or otherwise.
Bank or its designee may at any time notify Account Debtors that
Accounts have been assigned to Bank or of Bank's security interest
therein, and after default by Borrower hereunder collect the same
directly and charge all collection costs and expenses to Borrower's
account.
(c) Bank shall not be liable to Borrower or any third person for the
correctness, validity or genuineness of any instruments or documents
released or endorsed to Borrower by Bank (which shall automatically
be deemed to be without recourse to Bank in any event), or for the
existence, character, quantity, quality, condition, value or
delivery of any goods purporting to be represented by any such
documents; and Bank, by accepting a Lien in the Collateral, or by
releasing any Collateral to Borrower, shall not be deemed to have
assumed any obligation or liability to any supplier or Account
Debtor of Borrower or to any other third party, and Borrower agrees
to indemnify and defend Bank and hold it harmless in respect to any
claim or proceeding arising out of any matter referred to in this
subparagraph.
(d) Borrower appoints Bank and Bank's designees as its
attorney-in-fact to endorse Borrower's name on any checks, notes,
acceptances, money orders, drafts or other forms of payment or
security that may come into Bank's possession; to sign Borrower's
name on any invoice or bill of lading relating to any Accounts or
Inventory, on drafts against Account Debtors, on schedules and
assignments of Accounts or Inventory, on verifications of Accounts,
on notices to Account Debtors, and on proofs of claim, releases of
lien or any other documents needed to collect Accounts or General
Intangibles; to notify post office authorities to change the address
for delivery of Borrower's mail to an address designated by Bank, to
receive and open all mail addressed to Borrower and to retain all
mail relating to Collateral and forward all other mail to Borrower;
to send requests for verification of Accounts to customers or
Account Debtors, and to do all things necessary to carry out or
enforce this Agreement. Borrower ratifies and approves all acts of
Bank or its designees as attorney-in-fact. Bank or its designees as
attorney-in-fact will not be liable for any acts or omissions, or
for any error of judgment or mistake of fact or law except for bad
faith. This power, being coupled with an interest, is irrevocable
until all Obligations have been fully satisfied. Any person dealing
with Bank shall be entitled to conclusively rely on any written or
oral statement of Bank or its designee that this power of attorney
is in effect.
(e) If any Accounts shall arise out of a contract with the United
States of America or any department, agency, subdivision or
instrumentality thereof, Borrower shall promptly notify Bank thereof
in writing and take all other action requested by Bank to perfect
Bank's Lien in such Accounts under the provisions of the Federal
laws on assignment of claims.
(f) If any Account Debtor is located in New Jersey or Minnesota,
Borrower represents and warrants that it has filed or will have
filed within thirty (30) days of the date of this Agreement all
legally-required Notice of Business Activities Reports with the New
Jersey Division of Taxation or the Minnesota Department of Revenue,
respectively.
3.4 Provisions Concerning General Intangibles. Borrower represents
and warrants that all of the General Intangibles assigned to Bank,
or in which Borrower grants Bank a Lien, are owned by Borrower free
and clear of any Liens in favor of any person other than Bank.
Borrower will maintain and preserve all patents, trademarks,
copyrights, licenses, permits and other General Intangibles and the
like which are necessary or useful for the conduct of its business.
3.5 Provisions Concerning Inventory.
(a) Borrower represents and warrants that each item of Inventory
will be valued by Borrower at the lower of cost or market on a FIFO
basis. The Specific Representations Exhibit is a true and correct
list showing all places where Borrower maintains Inventory or has
maintained Inventory at any time during the past four months,
including, without limitations, facilities leased and operated by
Borrower and locations neither owned nor leased by Borrower. No
Inventory will be removed from the current locations set forth in
such Exhibit or stored at locations other than the current locations
set forth in such Exhibit, except (i) for shipment to purchasers in
the ordinary course of Borrower's business or (ii) upon thirty (30)
days prior written notice to Bank, to such other locations as to
which all action required to perfect and protect Bank's Lien in such
Inventory has been taken. Inventory may be moved from one current
location set forth in such Exhibit to another.
(b) Borrower shall keep all Inventory in good order and condition
and shall maintain full, accurate and complete books and records
with respect to Inventory at all times. Except during the
continuance of an Event of Default, Borrower may sell Inventory in
the ordinary course of its business (which does not include a
transfer in full or partial satisfaction of indebtedness).
3.6 Provisions Concerning Equipment.
(a) Borrower warrants and represents that the Specific
Representations Exhibit hereto is a true and correct list showing
all places where any of Borrower's Equipment is located or has been
located at any time during the past four months. Borrower shall not
permit any Equipment to be located at any place other than (i)
current locations set forth in the Specific Representations Exhibit,
and (ii) upon 30 days' prior written notice to Bank, at such other
locations as to which all action required to perfect and protect
Bank's Lien in such Equipment has been taken.
(b) Borrower shall keep and maintain the Equipment in good operating
condition and repair, make all necessary replacements thereto so
that the value and operating efficiency thereof shall at all times
be maintained and preserved. Borrower shall immediately notify Bank
of any material loss or damage to the Collateral. Borrower shall
not permit any item of Equipment to become a fixture to real estate
or accession to other property and the Equipment is now and shall at
all times remain and be personal property.
(c) Borrower shall immediately deliver to Bank, properly endorsed,
any and all certificates of title or applications for title or the
like for any ships, airplanes or vehicles covered by certificates of
title. Borrower shall take all steps necessary to perfect Bank's
Lien in such assets.
(d) If any of the Collateral is or may become a fixture, Borrower
shall obtain from all persons with an interest in the relevant real
estate such waivers or subordinations as Bank shall reasonably
require.
3.7 Liens. Borrower represents and warrants that: Borrower has
good and marketable title to the Collateral, and the Liens granted
to Bank pursuant to this Agreement are fully perfected first
priority Liens in and to the Collateral with priority over the
rights of every person other than Borrower in the Collateral (other
than the Hillside Lien); Borrower is the owner of all personal
property in its possession or shown on its books and records; and
all assets of Borrower are owned free, clear and unencumbered,
except for the Lien of Bank, Liens imposed by law which secure
amounts not yet due and payable and the Hillside Lien.
3.8 Further Assurances.
(a) Borrower shall execute and deliver to Bank at Bank's request
all financing statements, continuation statements, fixture filings,
endorsements of filings, certificates of title, schedules of
accounts, letters of authority and all other documents that Bank may
reasonably request, in form satisfactory to Bank, to perfect and
maintain perfected Bank's security interest in the Collateral and to
fully consummate all transactions contemplated under this Agreement.
Borrower hereby irrevocably appoints Bank and Bank's designee as
Borrower's true and lawful attorney-in-fact with power to sign the
name of Borrower on any such documents. Borrower ratifies and
approves all acts of Bank and its designees as attorney-in-fact.
Bank or its designees as attorney-in-fact will not be liable for any
acts or omissions, or for any error of judgment or mistake of fact
or law, except for bad faith.
(b) If any Collateral, including proceeds, consists of a letter of
credit, advice of credit, instrument, money, negotiable documents,
chattel paper or similar property (collectively, "Negotiable
Collateral") Borrower shall, immediately upon receipt thereof,
endorse and assign such Negotiable Collateral over to Bank and
deliver actual physical possession of the Negotiable Collateral to
Bank.
(c) Bank may, at any time or times hereafter, during Borrower's
usual business hours, or during the usual business hours of any
third party having control over the records of Borrower, inspect and
verify the Collateral and Borrower's books and records in order to
verify the amount or condition of, or any other matter relating to,
the Collateral and Borrower's financial condition. Borrower shall
promptly deliver to Bank copies of all books and records requested
by Bank.
3.9 Reinstatement of Lien. If, at any time after payment in full by
Borrower of all Obligations and termination of Bank's Liens, any
payments on Obligations theretofore made by Borrower or any other
person must be disgorged by Bank for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower or such other person), this Agreement and
Bank's Liens granted hereunder shall be reinstated as to all
disgorged payments as though such payment had not been made, and
Borrower shall sign and deliver to Bank all documents and things
necessary to reperfect all terminated Liens.
3.10 Other Amounts Deemed Loans. If Borrower fails to pay any tax,
assessment, government charge or levy or to maintain insurance
within the time permitted by this Agreement, or to discharge any
Lien prohibited hereby, or to comply with any other obligation, Bank
may, but shall not be required to, pay, satisfy, discharge or bond
the same for the account of Borrower, and to the extent permitted by
law and at the option of Bank all monies so paid out shall be deemed
Loans.
3.11 Borrower Remains Liable. Borrower shall remain liable under
any contracts and agreements included in the Collateral to perform
all of its duties and obligations thereunder to the same extent as
if this Agreement had not been executed, and Bank shall not have any
obligation or liability under such contracts and agreements by
reason of this Agreement or otherwise.
3.12 Mortgage. Borrower shall enter into a mortgage satisfactory
to Bank granting Bank a Lien in its real property located at 7840
Montgomery Road, Cincinnati, Ohio 45236 (the "Mortgage").
Section 4. Representations and Warranties.
Borrower hereby warrants and represents to Bank the following:
4.1 Organization and Qualification. Borrower is duly organized and
validly existing in good standing under the laws of the State of
Delaware, qualified to do business as a foreign corporation in the
State of Ohio, has the power and authority (corporate and otherwise)
to carry on its business and to enter into and perform this
Agreement, the Notes and each Loan Document to which Borrower is a
party and is qualified and licensed to do business in each
jurisdiction in which such qualification or licensing is required.
All information set forth in Exhibit 4.1 hereto, the Certificate of
Borrower, and in all attachments thereto, is true and correct.
4.2 Due Authorization. The execution, delivery and performance by
Borrower of this Agreement, the Notes and each Loan Document to
which Borrower is a party have been duly authorized by all necessary
corporate action, and will not contravene any law or any
governmental rule or order binding on Borrower, or the certificate
of incorporation or regulations of Borrower, nor violate any
agreement or instrument by which Borrower is bound nor result in the
creation of a Lien on any assets of Borrower except the Lien to Bank
granted herein. Borrower has duly executed and delivered this
Agreement, the Notes and each Loan Document to which Borrower is a
party and they are valid and binding obligations of Borrower
enforceable according to their terms except as limited by equitable
principles and by bankruptcy, insolvency or similar laws affecting
the rights of creditors generally. No notice to or consent by any
government body is needed in connection with this transaction.
4.3 Litigation. There are no suits or proceedings pending or
threatened against or affecting Borrower, and no proceedings before
any governmental body pending or threatened against Borrower, except
as listed on Exhibit 4.3.
4.4 Margin Stock. No part of the Loans will be used to purchase or
carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing
or carrying any margin stock. If requested by Bank, Borrower will
furnish to Bank statements in conformity with the requirements of
Federal Reserve Form U-1.
4.5 Business. Borrower has all franchises, authorizations, patents,
trademarks, copyrights and other rights necessary to advantageously
conduct its business. They are all in full force and effect and are
not in known conflict with the rights of others. Borrower is not a
party to or subject to any agreement or restriction which in the
opinion of Borrower's management is so unusual or burdensome that it
might have a material adverse effect on Borrower's business,
properties or prospects. Borrower is in compliance with all
material agreements applicable to it, including obligations to
contribute to any employee benefit plan or pension plan regulated by
the federal Employee Retirement Income Security Act ("ERISA").
4.6 Laws and Taxes. Borrower is in material compliance with all
laws applicable to it, has filed all required tax returns and has
paid all taxes shown to be due and payable on those returns. No
taxing authority has asserted or assessed any additional tax
liabilities against Borrower.
4.7 Environmental Laws.
(a) Borrower has obtained all permits, licenses and other
authorizations which are required under Environmental Laws and
Borrower is in compliance in all material respects with all terms
and conditions of the required permits, licenses and authorizations,
and is also in compliance in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws;
(b) Borrower is not aware of, and has not received notice of, any
past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may
interfere with or prevent compliance or continued compliance in any
material respect with Environmental Laws, or may give rise to any
material common law or legal liability, or otherwise form the basis
of any material claim, action, demand, suit, proceeding, hearing,
study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or
threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic or hazardous substance
or waste; and
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice or demand letter, notice of
violation, investigation, or proceeding pending or threatened
against Borrower, relating in any way to Environmental Laws.
4.8 Financial Condition. All financial statements and information
relating to Borrower which have been or may hereafter be delivered
by Borrower to Bank are true and correct and have been prepared in
accordance with generally accepted accounting principles
consistently applied. Borrower does not have any material
obligations or liabilities of any kind not disclosed in that
financial information, and there has been no material adverse change
in the financial condition of Borrower since the submission of such
financial information to Bank.
4.9 Solvency. Borrower is Solvent and upon consummation of the
transactions contemplated by this Agreement will be Solvent.
"Solvent" means that: (a) the total amount of the Borrower's assets
is in excess of the total amount of its liabilities (including
contingent liabilities), at a fair valuation; (b) Borrower does not
have unreasonably small capital for the business and transactions in
which Borrower is engaged or is about to engage; and (c) Borrower
does not intend to or believe it will incur obligations beyond its
ability to pay as they become due.
Section 5. Financial Statements and Information.
5.1 Financial Statements. So long as any Obligations to Bank are
outstanding, Borrower shall maintain a standard and modern system
for accounting in accordance with generally accepted principles of
accounting and shall furnish to Bank:
(a) Within forty five (45) days after the end of each quarter of
each fiscal year, a copy of Borrower's Form 10-Q with all
attachments, as filed with the United States Securities and Exchange
Commission;
(b) Within ninety (90) days after the end of each fiscal year
beginning with the current fiscal year, a copy of its Form 10-K with
all attachments, as filed with the United States Securities and
Exchange Commission and including financial statements for such year
which statements shall be audited by a firm of independent certified
public accountants acceptable to Bank (which acceptance shall not be
unreasonably withheld), and accompanied by a standard audit opinion
of such accountants without significant qualification;
(c) With the statements submitted under (a) and (b) above, a
certificate signed by the principal financial officer of the
Borrower, (i) stating he is familiar with all documents relating to
the Bank and that no Default or Event of Default has occurred, or if
any such condition or event existed or exists, specifying it and
describing what action the Borrower has taken or proposes to take
with respect thereto, and (ii) setting forth, in summary form,
figures showing the financial status of the Borrower in respect of
the financial restrictions contained in this Agreement;
(d) With the annual financial statements required above, a
certificate of the firm of certified public accountants regularly
employed by Borrower that they have reviewed this Agreement and,
based upon their audit, they are unaware of any Event of Default
specified in this Agreement;
(e) Promptly after any officer of Borrower obtains knowledge of any
condition or event which constitutes a Default or Event of Default,
a certificate of such person specifying the nature and period of the
existence thereof, and what action Borrower has taken or is taking
or proposes to take in respect thereof;
(f) Promptly upon receipt thereof, copies of all letters to
management and all audit reports submitted to Borrower by
independent certified public accountants in connection with each
audit of the books of Borrower made by such accountants;
(g) Copies of all statements, notices and reports Borrower shall
hereafter send to its creditors generally;
(h) Upon the request of Bank copies of all federal, state and local
income tax returns;
(i) Before the start of each fiscal year, financial projections for
such year in detail satisfactory to Bank; and
(j) With reasonable promptness, such other information as Bank
requests.
If at any time Borrower has any subsidiaries which have financial
statements that could be consolidated with those of Borrower under
generally accepted accounting principles, the financial statements
required by subsections (a) and (b) above shall be the financial
statements of Borrower and all such subsidiaries prepared on a
consolidated and consolidating basis.
Section 6 Covenants. Borrower hereby covenants to Bank the
following:
Existence; Merger; Disposition of Assets. Except for the
acquisition of the shares of Refractive Centers International Inc.
("RCII") from Summit Technology, Inc. and certain shareholders and
as otherwise disclosed to and approved by Bank, Borrower will
maintain its existence and will not change its capital structure nor
merge or consolidate with any corporation, nor sell, lease, transfer
or otherwise dispose of all or any substantial part of its assets
whether now owned or hereafter acquired, except for sales of
inventory in the ordinary course of business and except for
dispositions of obsolete or worn-out property with a book value not
used or useful in its business.
6.2 Pledge or Encumbrance of Assets. Borrower will not create,
incur, assume or permit to continue in existence any Lien on any
property or asset now owned or hereafter acquired by Borrower,
except for Liens to Bank and Liens of governmental entities which
secure amounts not at the time due and payable and which are imposed
by law without the consent of Borrower.
6.3 Guarantees and Loans. Borrower will not enter into any direct
or indirect guarantees other than by endorsement of checks for
deposit in the ordinary course of Borrower's business, nor make any
advance or loan; provided, however, that Borrower may enter into
guarantees of leases and other obligations as required or
contemplated in connection with purchase of the shares of RCII.
6.4 Business. Borrower will engage primarily in business of the
same general character as that now conducted, and will not make any
investment in any other entity, through the direct or indirect
holding of securities or otherwise.
6.5 Condition and Repair. Borrower will maintain in good repair and
working order all properties used in its business and from time to
time will make all appropriate repairs and replacements thereof.
6.6 Indebtedness to Tangible Net Worth. At the end of each fiscal
quarter of Borrower, the ratio of Borrower's outstanding
Indebtedness to the Borrower's Tangible Net Worth, all on a
consolidated basis, shall not exceed 1.0:1.0.
6.7 Minimum Tangible Net Worth. At the end of each fiscal quarter
of Borrower, Borrower shall maintain a minimum Tangible Net Worth on
a consolidated basis of at least $15,000,000.
6.8 Insurance. Borrower will maintain, with financially sound and
reputable insurers, insurance with respect to its properties and
business against loss or damage of the kinds and in the amounts
customarily insured against by corporations of established
reputation engaged in the same or similar businesses, together with
any other insurance requested by Bank. All such policies will name
Bank as an additional insured and, where applicable, as loss payee
under a lender loss payable endorsement satisfactory to Bank, and
shall provide for thirty (30) days written notice to Bank before
such policy is altered or canceled.
6.9 Taxes. Borrower has paid and will pay all taxes, assessments
and other governmental charges imposed upon it or any of its assets
or in respect of any of its franchises, business, income or profits
before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable
and which by law have or might become a Lien or charge upon any of
its assets, provided that (unless any material item or property
would be lost, forfeited or materially damaged as a result thereof)
no such charge or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly initiated and
diligently conducted, if Bank is notified in advance of such contest
and if Borrower establishes any reserve or other appropriate
provision required by generally accepted accounting principles and
deposits with Bank cash or bond in an amount acceptable to Bank.
6.10 Compliance with Law. Borrower will comply with all federal,
state and local laws, regulations and orders applicable to Borrower
or its assets, in all respects material to Borrower's business,
assets or prospects, including without limitation all Environmental
Laws.
6.11 Transactions with Affiliates. Without the prior consent of
Bank, Borrower will not (a) directly or indirectly make or cause to
be made any guarantee for the benefit of any of its Affiliates
(except as contemplated in Section 6.3 hereof), (b) directly or
indirectly make or cause to be made any loans or advances to or
investments in any of its Affiliates outside the ordinary course of
business, or (c) enter into any transaction with any of its
Affiliates outside the ordinary course of business.
6.12 Indebtedness. Borrower will not incur, create, assume or
permit to exist indebtedness for borrowed money (other than the
Obligations), or indebtedness on account of deposits, notes, bonds,
debentures or similar obligations.
6.13 Capital Stock; Dividends. Without the prior consent of Bank
(which consent shall not be unreasonably withheld), Borrower will
not issue any additional shares of its capital stock, nor grant any
warrants, options or other rights to purchase such stock (excluding
however the existing stock option plans disclosed in Borrower's most
recent Form 10-K as filed with the United States Securities and
Exchange Commission). Borrower will not declare or pay any dividend
or distributions (except stock dividends) on its capital stock, or
redeem any shares of its capital stock.
6.14 Cash Collateral. At all times during the term of this
Agreement, Borrower shall maintain at least $4,000,000 in cash, cash
equivalents, certificates of deposit or other form of investment
acceptable in its entirety to Bank, pledged to the Bank as security
for the Obligations. Such cash deposits or certificates of deposits
shall be held by Bank.
6.15 Leases. Borrower will not enter into any operating or capital
lease of real or personal property which is not in existence on this
date, without the prior written consent of Bank (which consent shall
not be unreasonably withheld); provided, however, that Borrower may
enter into any such lease with an aggregate payment commitment of
less than $50,000 without the prior consent of Bank.
6.16 Capital Expenditures. Borrower will not make any capital
expenditures (including capitalized leases) or any commitment
therefor in excess of $75,000, without the prior written consent of
Bank (which consent shall not be unreasonably withheld).
6.17 Representations. Borrower covenants that the representations
set forth herein will continue to be correct so long as this
Agreement is in effect. Borrower will, within three (3) days of its
knowledge thereof, give written notice to Bank of the existence of
any event which would prohibit Borrower from continuing to make the
representations set forth in this Agreement.
Section 7. Conditions Precedent.
7.1 Conditions to Loans. Bank shall not make any Loans until
Borrower has delivered to Bank, in addition to this Agreement and
the Notes, the following in form and substance satisfactory to Bank:
(a) all appropriate financing statements (Form UCC-1), all consents
or waivers of landlords, warehouses and mortgagees, and all items of
Negotiable Collateral.
(b) a Certificate of Borrower in the form of Exhibit 4.1, and all
attachments thereto.
(c) UCC searches, tax lien and litigation searches, insurance
certificates, notices, filings or other documents which Bank may
require to reflect, perfect, or protect the priority of Bank's
priority Lien in the Collateral and to fully consummate this
transaction.
(d) a favorable opinion of counsel to Borrower, substantially in the
form of Exhibit 7.1(d).
(e) payment by Borrower of all fees and expenses of Bank's counsel
and all recording fees and taxes, if any.
(f) executed copies of all documents set forth on Bank's document
list for this transaction.
(g) such additional information and materials as Bank may reasonably
request.
7.2 Conditions to Each Revolving Loan. Bank will not make any
Revolving Loan if there exists a Default or Event of Default that
has not been waived.
Section 8. Events of Default and Remedies.
8.1 Events of Default. Any of the following events shall be an
Event of Default:
(a) any representation or warranty made by Borrower or officer of
Borrower herein, or in any other Loan Document or any document
furnished to Bank by Borrower under this Agreement, is incorrect
when made or when reaffirmed; or
(b) Borrower defaults in the payment of any principal or interest on
any Obligation when due and payable, by acceleration or otherwise;
or
(c) Borrower fails to observe or perform any covenant, condition or
agreement set forth in any of the following sections: 2.2(c); 5.1;
6.1; 6.2; 6.3; 6.6 through 6.16.
(d) Borrower fails to observe or perform any covenant, condition or
agreement to be observed or performed pursuant to the terms hereof
(other than as set forth in Sections 8.1(a) and (b) hereof),
provided such default continues unremedied for 30 days after written
notice thereof to Borrower by Bank; or
(e) Borrower fails to keep its assets insured as required herein, or
material uninsured damage to or loss, theft or destruction of the
Collateral occurs; or
(f) an Insolvency Event occurs with respect to Borrower or any
guarantor of an Obligation; or
(g) Borrower defaults under the terms of any indebtedness or lease
involving total payment obligations of Borrower in excess of Fifty
Thousand Dollars ($50,000) which is not cured within the time period
permitted pursuant to the terms and conditions of such indebtedness
or lease, or an event occurs which gives any creditor or lessor the
right to accelerate the maturity of any such indebtedness or lease
payments; or
(h) final judgment for the payment of money in excess of Fifty
Thousand Dollars ($50,000) is rendered against Borrower and remains
undischarged for ten (10) days during which execution is not
effectively stayed; or
(i) except to the extent permitted by the Section entitled Pledge or
Encumbrance of Assets, any of the following occurs: there is a
material impairment of the value or priority of Bank's Lien in
Collateral; or a notice of lien, levy or assessment is filed against
Borrower or an asset of Borrower by any government authority; or a
judgment or other claim becomes a Lien on any Collateral; or any
asset of Borrower is seized, attached, or otherwise levied upon by
a judicial officer; or
(j) any event occurs which might, in Bank's opinion, have an adverse
effect on the Collateral or on Borrower's financial condition,
operations or prospects; or
(k) a reportable event (as defined in the Employee Retirement Income
Security Act of 1974) occurs with respect to any employee benefit
plan maintained by Borrower for its employees other than a
reportable event caused solely by a decrease in employment; or a
trustee is appointed by a United States District Court to administer
any plan; or the Pension Guaranty Benefit Corporation institutes
proceedings to terminate any plan; or
(l) an Event of Default occurs under any Loan Document, including
without limitation the Mortgage.
8.2 Remedies. If any Event of Default shall occur:
(a) Bank may cease advancing money hereunder, and/or declare all
Obligations to be due and payable immediately (and, upon the
occurrence of an Event of Default based on an Insolvency Event, all
Obligations shall become automatically due and payable without a
declaration by Bank), whereupon they shall immediately become due
and payable without presentment, demand, protest, or notice of any
kind, all of which are hereby expressly waived by Borrower.
(b) Bank may set off against the Obligations, all Collateral,
balances, credits, deposits, accounts or monies of Borrower then or
thereafter held with Bank, including amounts represented by
certificates of deposit.
(c) Bank may resort to the rights and remedies of a secured party
under the Uniform Commercial Code including the right to enter any
premises of Borrower, with or without legal process and take
possession of the Collateral and remove it and any records
pertaining thereto and/or remain on such premises and use it for the
purpose of collecting, preparing and disposing of the Collateral.
(d) Bank may dispose of the Collateral as is or at its election may
refurbish, repair, improve, process, finish, operate, demonstrate
and prepare for sale the Collateral, and may store, ship, reclaim,
recover, protect, advertise for sale or lease, and insure the
Collateral; Bank may use and operate Equipment of Borrower in order
to process or finish Inventory included in the Collateral; if any
Collateral consists of documents, Bank may proceed either as to the
documents or as to the goods represented thereby; Bank's failure to
take steps to preserve rights against any parties or property shall
not be deemed to be failure to exercise reasonable care with respect
to the Collateral.
(e) Bank may in its sole discretion pay, purchase, contest or
compromise any encumbrance, charge or lien which in the opinion of
Bank appears to be prior or superior to its Lien, and pay all
expenses incurred in connection therewith.
(f) Bank may sell the Collateral at public or private sale, and
Borrower shall be credited with the net proceeds of such sale only
when they are actually received by Bank; any requirement of
reasonable notice of any disposition of the Collateral shall be
satisfied if such notice is sent to Borrower, as provided in the
Notices Section of this Agreement, ten (10) days prior to such
disposition.
(g) Borrower shall upon request of Bank assemble the Collateral and
any records pertaining thereto and make them available at a place
designated by Bank.
(h) Bank may use, in connection with any assembly or disposition of
the Collateral, any trademark, trade name, tradestyle, copyright,
patent right, trade secret or technical process used or utilized by
Borrower.
8.3 Cumulative. No remedy set forth herein is exclusive of any other
available remedy or remedies, but each is cumulative and in addition
to every other remedy given under this Agreement or any other
agreement or now or hereafter existing at law or in equity or by
statute. Bank may pursue its rights and remedies concurrently or in
any sequence, and no exercise of one right or remedy shall be deemed
to be an election. If Borrower fails to comply with this Agreement,
no remedy of law will provide adequate relief to Bank, and Bank
shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.
8.4 Fees and Expenses. Upon a sale, lease or other disposition of
the Collateral, the proceeds shall be applied first to the expenses
of retaking, holding, storing, processing and preparing for sale,
selling and the like, and, to the extent permitted by law, to
reasonable attorneys' fees and legal expenses, and then to the
satisfaction of the Obligations secured by this Agreement. Borrower
shall be liable for any deficiency.
Section 9. Miscellaneous Provisions.
9.1 Delays and Waiver. No delay or omission to exercise any right
shall impair any such right or be a waiver thereof, but any such
right may be exercised from time to time and as often as may be
deemed expedient. A waiver on one occasion shall be limited to that
particular occasion.
9.2 Waiver by Borrower. Borrower waives notice of non-payment,
demand, presentment, protest, or notice of protest of any Accounts
or other Collateral, and all other notices; consents to any renewals
or extensions of time of payment thereof; and generally waives any
and all suretyship defenses and defenses in the nature thereof.
9.3 Complete Agreement. This Agreement and the Exhibits are the
complete agreement of the parties hereto and supersede all previous
understandings relating to the subject matter hereof. This
Agreement may be amended only by an instrument in writing which
explicitly states that it amends this Agreement, and is signed by
the party against whom enforcement of the amendment is sought. This
Agreement may be executed in counterparts, each of which will be an
original and all of which will constitute a single agreement.
9.4 Severability. If any part of this Agreement or the application
thereof to any person or circumstance is held invalid, the remainder
of this Agreement shall not be affected thereby. The section
headings herein are included for convenience only and shall not be
deemed to be a part of this Agreement.
9.5 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the respective legal representatives, successors
and assigns of the parties hereto; however, Borrower may not assign
any of its rights or delegate any of its obligations hereunder.
Bank (and any subsequent assignee) may transfer and assign this
Agreement and deliver the Collateral to the assignee, who shall
thereupon have all of the rights of Bank; and Bank (or such
subsequent assignee who in turn assigns as aforesaid) shall then be
relieved and discharged of any responsibility or liability with
respect to this Agreement and said Collateral. Bank may also assign
partial interests or participations in the Loans to other persons.
Bank may disclose to all prospective and actual assignees and
participants all financial, business and other information about
Borrower which Bank may possess at any time.
9.6 Indemnification. Borrower will indemnify, defend, save and hold
Bank, its officers, directors, attorneys, and employees harmless of,
from and against all claims, demands, liabilities, judgments,
losses, damages, costs and expenses, joint or several (including all
accounting fees and attorneys' fees reasonably incurred), that Bank
or any such indemnified party may incur arising out of this
Agreement, any of the Loan Documents or any act taken by Bank
hereunder except for the willful misconduct or gross negligence of
such indemnified party. The provisions of this Section will survive
the termination of this Agreement.
9.7 Subsidiaries. If Borrower has any Subsidiaries at any time
during the term of this Agreement, the term "Borrower" in each
representation, warranty and covenant herein shall mean "the
Borrower and each Subsidiary individually and in the aggregate," and
Borrower shall cause each Subsidiary to be in compliance therewith.
9.8 Notices. Any notices under or pursuant to this Agreement shall
be deemed duly sent when delivered in hand or when mailed by
registered or certified mail, return receipt requested, or when
delivered by courier or when transmitted by telex, facsimile or
similar electronic medium to the following addresses:
To Borrower: LCA-Vision Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
Attn: President
Fax No.: (513) 782-5633
with a copy to: Dinsmore & Shohl LLP
19 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
Attn: Charles F. Hertlein, Jr.
Fax No.: (513) 977-8141
To Bank: The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Commercial Loan Department
Fax No.: (513) 579-5226
with a copy to: The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Legal Department
Fax No. : (513) 744-6757
Either party may change such address by sending notice of the change
to the other party.
9.9 Governing Law; Jurisdiction. All acts and transactions
hereunder and the rights and obligations of the parties hereto shall
be governed, construed and interpreted in accordance with the
domestic laws of the State of Ohio. Borrower agrees that the state
and federal courts in Hamilton County, Ohio or any other court in
which Bank initiates proceedings have exclusive jurisdiction over
all matters arising out of this Agreement, and that service of
process in any such proceeding shall be effective if mailed to
Borrower at its address described in the Notices section of this
Agreement. BANK AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY
JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
9.10 Confession of Judgment. Borrower authorizes any attorney of
record to appear for it in any court of record in the State of Ohio,
after an Obligation becomes due and payable whether by its terms or
upon default, waive the issuance and service of process, and release
all errors, and confess a judgment against it in favor of the holder
of such Obligation, for the principal amount of such Obligation plus
interest thereon, together with court costs and attorneys' fees.
Stay of execution and all exemptions are hereby waived. If an
Obligation is referred to an attorney for collection, and the
payment is obtained without the entry of a judgment, the obligors
shall pay to the holder of such obligation its attorneys' fees.
BORROWER AGREES THAT AN ATTORNEY WHO IS COUNSEL TO BANK OR ANY OTHER
HOLDER OF SUCH OBLIGATION MAY ALSO ACT AS ATTORNEY OF RECORD FOR
BORROWER WHEN TAKING THE ACTIONS DESCRIBED ABOVE IN THIS PARAGRAPH.
BORROWER AGREES THAT ANY ATTORNEY TAKING SUCH ACTIONS MAY BE PAID
FOR THOSE SERVICES BY BANK OR THE HOLDER OF SUCH OBLIGATION.
BORROWER WAIVES ANY CONFLICT OF INTEREST THAT MAY BE CREATED BECAUSE
THE ATTORNEY WHO ACTS FOR BORROWER PURSUANT TO THIS PARAGRAPH IS
ALSO REPRESENTING BANK OR THE HOLDER OF SUCH OBLIGATION, OR BECAUSE
SUCH ATTORNEY IS BEING PAID BY BANK OR THE HOLDER OF SUCH
OBLIGATION.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this
Agreement in Hamilton County, Ohio by their duly authorized officers
as of the date first above written.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
LCA-VISION INC.
By /s/Larry P. Rapp
Its Chief Financial Officer
THE FIFTH THIRD BANK
By /s/H. Lytle Thomas
Its Vice President
STATE OF OHIO )
: ss.
COUNTY OF HAMILTON )
BEFORE ME, a Notary Public, in and for said State, personally
appeared Larry P. Rapp, the Chief Financial Officer of LCA-VISION
INC., a corporation, who acknowledged that he/she did sign the Loan
and Security Agreement and that the same is his/her free act and
deed as such officer and is the free act and deed of said
corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 18th day of August, 1997.
/s/Jeffrey L. Rohr, Attorney at Law
Notary Public
STATE OF OHIO )
: ss.
COUNTY OF HAMILTON )
BEFORE ME, a Notary Public, in and for said State, personally
appeared H. Lytle Thomas, a Vice President of The Fifth Third Bank,
a corporation, who acknowledged that he/she did sign the Loan and
Security Agreement and that the same is his/her free act and deed as
such officer and is the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 18th day of August, 1997.
/s/Jeffrey L. Rohr
Notary Public
EXHIBIT 2.1
REVOLVING NOTE
Cincinnati, Ohio
$8,000,000 August 18, 1997
On September 30, 1998, LCA-VISION INC., a Delaware corporation (the
"Borrower"), for value received, hereby promises to pay to the order
of THE FIFTH THIRD BANK (the "Bank") at its offices, 38 Fountain
Square Plaza, Cincinnati, Ohio 45263, in lawful money of the United
States of America and in immediately available funds, the principal
sum of Eight Million Dollars ($8,000,000) or such lesser unpaid
principal amount as may be advanced by the Bank pursuant to the
terms of the Loan and Security Agreement of even date herewith by
and between the Borrower and the Bank, as same may be amended from
time to time (the "Agreement").
The principal balance hereof outstanding from time to time shall
bear interest at the rate specified in the Agreement. After the
occurrence of an Event of Default, this Note shall bear interest
(computed and adjusted in the same manner, and with the same effect,
as interest hereon prior to maturity), payable on demand, at a rate
per annum equal to six percent (6%) above the rate that would
otherwise be in effect, until paid, and whether before or after the
entry of judgment hereon or in the alternative Bank may impose a
fixed charge of Fifty Dollars ($50).
The principal amount of each loan made by the Bank and the amount of
each prepayment made by the Borrower shall be recorded by the Bank
on the schedule attached hereto or in the regularly maintained data
processing records of the Bank. The aggregate unpaid principal
amount of all loans set forth in such schedule or in such records
shall be presumptive evidence of the principal amount owing and
unpaid on this Note. However, failure by Bank to make any such
entry shall not limit or otherwise affect Borrower's obligations
under this Note or the Agreement.
This Note is the Revolving Note referred to in the Agreement, and is
entitled to the benefits, and is subject to the terms, of the
Agreement. The principal of this Note is prepayable in the amounts
and under the circumstances, and its maturity is subject to
acceleration upon the terms, set forth in the Agreement. Except as
otherwise expressly provided in the Agreement, if any payment on
this Note becomes due and payable on a day other than one on which
Bank is open for business (a "Business Day"), the maturity thereof
shall be extended to the next Business Day, and interest shall be
payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest
rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that Bank has received
interest and other charges under this Note in excess of the highest
permissible rate applicable hereto, such excess shall be deemed
received on account of, and shall automatically be applied to reduce
the amounts due to Bank from the Borrower under this Note, other
than interest, and the provisions hereof shall be deemed amended to
provide for the highest permissible rate. If there are no such
amounts outstanding, Bank shall refund to Borrower such excess.
Borrower and all endorsers, sureties, guarantors and other persons
liable on this Note hereby waive presentment for payment, demand,
notice of dishonor, protest, notice of protest and all other demands
and notices in connection with the delivery, performance and
enforcement of this Note, and consent to one or more renewals or
extensions of this Note.
This Note may not be changed orally, but only by an instrument in
writing.
This Note is being delivered in, is intended to be performed in,
shall be construed and enforceable in accordance with, and be
governed by the internal laws of, the State of Ohio without regard
to principles of conflict of laws. Borrower agrees that the State
and federal courts in Hamilton County, Ohio or any other court in
which Bank initiates proceedings have exclusive jurisdiction over
all matters arising out of this Note, and that service of process in
any such proceeding shall be effective if mailed to Borrower at its
address described in the Notices section of the Agreement. BORROWER
HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT
OF THIS NOTE.
Each and every obligor hereunder authorizes any attorney of record
to appear for them in any court of record in the state of Ohio,
after this Note becomes due and payable whether by its terms or upon
default, waive the issuance and service of process, and release all
errors, and confess a judgment against them in favor of the holder
of this Note, for the principal amount of this Note plus interest at
the Note rate, together with court costs and attorneys' fees. Stay
of execution and all exemptions are hereby waived. If this Note is
referred to any attorney for collection, and the payment is obtained
without the entry of a judgment, the obligors shall pay to Holder
its attorneys' fees. BORROWER AGREES THAT AN ATTORNEY WHO IS
COUNSEL TO BANK OR ANY OTHER HOLDER OF SUCH OBLIGATION MAY ALSO ACT
AS ATTORNEY OF RECORD FOR BORROWER WHEN TAKING THE ACTIONS DESCRIBED
ABOVE IN THIS PARAGRAPH. BORROWER AGREES THAT ANY ATTORNEY TAKING
SUCH ACTIONS MAY BE PAID FOR THOSE SERVICES BY BANK OR THE HOLDER OF
SUCH OBLIGATION. BORROWER WAIVES ANY CONFLICT OF INTEREST THAT MAY
BE CREATED BECAUSE THE ATTORNEY WHO ACTS FOR BORROWER PURSUANT TO
THIS PARAGRAPH IS ALSO REPRESENTING BANK OR THE HOLDER OF SUCH
OBLIGATION, OR BECAUSE SUCH ATTORNEY IS BEING PAID BY BANK OR THE
HOLDER OF SUCH OBLIGATION.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
LCA-VISION INC.
By/s/Larry P. Rapp
ItsChief Financial Officer
STATE OF OHIO )
: ss.
COUNTY OF HAMILTON )
BEFORE ME, a Notary Public, in and for said State, personally
appeared Larry P. Rapp, the Chief Financial Officer of LCA-VISION
INC., a corporation, who acknowledged that he/she did sign the
foregoing instrument and that the same is his/her free act and deed
as such officer and is the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 18th day of August, 1997.
/s/Jeffrey L. Rohr
Notary Public
LOANS AND PAYMENTS OF PRINCIPAL
Expiration
Unpaid Date of
Amount of Principal Principal Interest Interest
Date Loan Paid Balance Rate Period
EXHIBIT 2.2
TERM NOTE
$3,053,000
Cincinnati, Ohio August 18, 1997
LCA VISION INC., a Delaware corporation (the "Borrower"), for value
received, hereby promises to pay to the order of THE FIFTH THIRD
BANK (the "Bank") at its offices, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263, in lawful money of the United States of
America, the principal sum of Three Million Fifty-Three Thousand
Dollars ($3,053,000). Interest on the outstanding principal balance
of this Note will accrue at a rate specified in the Agreement
(defined below). Principal and interest shall be payable in
immediately available funds at the principal office of Bank. After
the occurrence of any Event of Default, this Note shall bear
interest (computed and adjusted in the same manner, and with the
same effect, as interest hereon prior to maturity), payable on
demand, at a rate per annum equal to six percent (6%) above the rate
that would otherwise be in effect, until paid, and whether before or
after the entry of judgment hereon or in the alternative the Bank
may impose a fixed charge of $50.00; this provision does not
constitute a waiver of any Events of Default or an agreement by Bank
to permit any late payments whatsoever.
The principal amount of this Note will be payable in 14 monthly
installments, due on the 1st day of each calendar month, commencing
September 1, 1997, with a final payment on September 30, 1998. The
first 13 installments of principal shall each be in the amount of
Thirteen Thousand Seven Hundred Fifty Dollars ($13,750), and the
final installment on September 30, 1998 shall be in the amount of
the entire unpaid principal balance.
This Note is the Term Note referred to in the Loan and Security
Agreement between the Borrower and the Bank of even date herewith,
as it may be amended from time to time (the "Agreement"), and is
entitled to the benefits, and is subject to the terms, of the
Agreement. The principal of this Note is prepayable in the amounts
and under the circumstances, and its maturity is subject to
acceleration upon the terms, set forth in the Agreement. Except as
otherwise expressly provided in the Agreement, if any payment on
this Note becomes due and payable on a day other than one on which
Bank is open for business (a "Business Day"), the maturity thereof
shall be extended to the next Business Day, and interest shall be
payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest
rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that Bank has received
interest and other charges under this Note in excess of the highest
permissible rate applicable hereto, such excess shall be deemed
received on account of, and shall automatically be applied to reduce
the amounts due to Bank from the Borrower under this Note, other
than interest and discount charges, in the inverse order of
maturity, and the provisions hereof shall be deemed amended to
provide for the highest permissible rate. If there are no such
amounts outstanding, Bank shall refund to Borrower such excess.
Borrower and all endorsers, sureties, guarantors and other persons
liable on this Note hereby waive presentment for payment, demand,
notice of dishonor, protest, notice of protest and all other demands
and notices in connection with the delivery, performance and
enforcement of this Note, and one or more extensions and renewals of
this Note.
This Note may not be changed orally, but only by an instrument in
writing.
This Note is being delivered in, is intended to be performed in,
shall be construed and enforceable in accordance with, and be
governed by the internal laws of, the State of Ohio without regard
to principles of conflict of laws. Borrower agrees that the State
and federal courts in Hamilton County, Ohio or any other court in
which Bank initiates proceedings have exclusive jurisdiction over
all matters arising out of this Note, and that service of process in
any such proceeding shall be effective if mailed to Borrower at its
address described in the Notices section of the Agreement. BORROWER
HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT
OF THIS NOTE.
Each and every obligor hereunder authorizes any attorney of record
to appear for them in any court of record in the state of Ohio,
after this Note becomes due and payable whether by its terms or upon
default, waive the issuance and service of process, and release all
errors, and confess a judgment against them in favor of the holder
of this Note, for the principal amount of this Note plus interest at
the Note rate, together with court costs and attorneys' fees. Stay
of execution and all exemptions are hereby waived. If this Note is
referred to any attorney for collection, and the payment is obtained
without the entry of a judgment, the obligors shall pay to Holder
its attorneys' fees. BORROWER AGREES THAT AN ATTORNEY WHO IS
COUNSEL TO BANK OR ANY OTHER HOLDER OF SUCH OBLIGATION MAY ALSO ACT
AS ATTORNEY OF RECORD FOR BORROWER WHEN TAKING THE ACTIONS DESCRIBED
ABOVE IN THIS PARAGRAPH. BORROWER AGREES THAT ANY ATTORNEY TAKING
SUCH ACTIONS MAY BE PAID FOR THOSE SERVICES BY BANK OR THE HOLDER OF
SUCH OBLIGATION. BORROWER WAIVES ANY CONFLICT OF INTEREST THAT MAY
BE CREATED BECAUSE THE ATTORNEY WHO ACTS FOR BORROWER PURSUANT TO
THIS PARAGRAPH IS ALSO REPRESENTING BANK OR THE HOLDER OF SUCH
OBLIGATION, OR BECAUSE SUCH ATTORNEY IS BEING PAID BY BANK OR THE
HOLDER OF SUCH OBLIGATION.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
LCA-VISION INC.
By /s/Larry P. Rapp
Its Chief Financial Officer
STATE OF OHIO )
: ss.
COUNTY OF HAMILTON )
BEFORE ME, a Notary Public, in and for said State, personally
appeared Larry P. Rapp, the Chief Financial Officer of LCA-VISION
INC., a corporation, who acknowledged that he/she did sign the Term
Note and that the same is his/her free act and deed as such officer
and is the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this day of August, 1997.
/s/Jeffrey L. Rohr
Notary Public
EXHIBIT 3.2
SPECIFIC REPRESENTATIONS
1. The exact legal name of the Borrower is: LCA-Vision Inc.
2. The Borrower's federal Employer I.D. number is: 11-2882328.
3. If the Borrower has changed its name since it was incorporated,
its past legal names were: Kessef Technologies Inc., Maxoil
Incorporated.
4. The Borrower uses in its business and owns the following trade
names: See Attachment I.
5. The Borrower was incorporated on October 6, 1987, under the laws
of the State of Delaware and is in good standing under those laws.
6. The Borrower is qualified to transact business in the following
states: Delaware, Ohio, California.
7. The Borrower has its chief executive office and principal place
of business at 7840 Montgomery Road, Cincinnati, Ohio 45236. This
office is in Hamilton County. Borrower maintains all of its records
with respect to its Accounts at that address.
8. The Borrower also has places of business at: See Attachment II.
9. No inventory, equipment or fixtures owned by the Borrower are
located at any other place, nor were they located at any other place
within the past four months, except at the locations listed in items
7 and 8 above.
10. In the past five years the Borrower has never maintained its
chief executive office or principal place of business or records
with respect to accounts, nor owned personal property, at any
locations except those set forth above and except St. Gregory
Street, Cincinnati, Ohio 45202.
11. The following entities (a) have been merged into the Borrower,
(b) have sold substantially all of their assets to the Borrower or
(c) have sold assets to the Borrower outside the ordinary course of
their business since the Borrower was incorporated: Laser Centers of
America, Inc.; Refractive Centers International, Inc.; and 938051
Ontario Inc.
12. The Borrower owns the following numbers of motor vehicles: --
autos; 3 trucks; -- tractors; -- trailers.
13. The Borrower is not the owner or licensee of any registered
patents, trademarks or copyrights except: See Attachment I.
14. The Borrower does not have any subsidiaries, or own stock in
any other corporations, or own an interest in any partnerships or
joint ventures, except: See Attachment III.
15. The Borrower is not the owner of any life insurance policies
except: no exceptions. Such life insurance policy is in the face
amount of $_________, has a policy number of _________ and was
issued by _______________________________________________.
16. The Borrower is not the owner of any business interruption
insurance policies except (i) Fireman's Fund Insurance Company and
(ii) St. Paul Mercury Insurance Company. Such insurance policies
have policy numbers of S07MX80658427 and FK03401575 respectively.
17. If the Borrower is incorporated in Kentucky or qualified to do
business there, its registered agent and registered office there as
listed on the Kentucky secretary of state's corporate records are:
N/A.
18. The Borrower is not a plaintiff or defendant in any litigation
except as set forth on the Litigation exhibit.
Attachment I to
Specific Representations
Mark Reg./Serial No. Reg./Filing Date
The Advanced Surgery of
Cincinnati and Design 74/656,008 April 5, 1995
Beam and Design 1,768,953 May 4, 1993
Gentle Surgery with Lasers 1,705,543 August 4, 1992
SNJ 1,823,927 February 22, 1994
We Focus on Better Ways 1,880,199 February 21, 1995
Vision & Design 75/238,175 February 7, 1997
Facility Leases
for
LCA Vision Laser Centers
Center Address
ALBANY 12 Corporate Woods Blvd.
Albany, NY 12211
BUFFALO University Corporate Center
300 Corporate Pkwy., Su. 106N
Amherst, NY 14226
CHARLOTTE 521 E. Morehead Street, Su. 130
Charlotte, NC 28202
CLEARWATER 15950 Bay Vista Drive, Su. 100
Clearwater, FL 34620
CLEVELAND 23200 Chagrin Blvd., Bldg. 5, Su. 200
(Sublease) Beachwood, OH 44122
COLUMBUS 6100 East Main Street, Su. 108
Columbus, OH 43213
DAYTON 6470 Centerville Business Pky.
Centerville, OH 45459
FT. ERIE 238 Bertie Street
Ft. Erie, Ontario, Canada L2A1Z3
MOUNTAIN VIEW Castro Commons Professional Center
1174 Castro Street, Su. 112
Mountain View, CA 94040
TOLEDO Waterplace South, Su. 211,
6135 Trust Drive
Holland, OH 43528
TORONTO Atria II, Su. 101
2235 Sheppard Avenue E.
Willowdale, Ontario, Canada, M2J5B5
WARREN 2580 Elm Road
Cortland, OH 44410
WESTCHESTER 251 Main Street
Mt. Kisco, NY 10549
Disclosure Schedule
Section 3.11
PROPERTY LEASES
Location: Lessor:
Agoura Hills, CA The Palamo Group
5040 Palo Comado,
Suite 103
Concord, CA 1390 Willow Pass Associates, L.P.
Two Corporate Centre
1390 Willow Pass Road
Costa Mesa, CA Metropolitan Life Insurance Company
3090 Bristol Street,
Suite 185
Glendale, CA HOWLOW
500 North Central Avenue
San Bernadino, CA Rancon Realty Fund V
180 Montgomery Street,
17th Floor
San Jose, CA Westmark Metro Plaza, Inc.
101 Metro Drive,
Suite 255
Torrance, CA WHC-SIX Real Estate Limited Partnership
23441 Madison Street
________________________________________________________________
Miami, FL Waterside Center Corporation
20801 Biscayne Blvd.,
Suite 302
Plantation, FL New Boston Jacranda Limited Partnership
7800 Peters Road
W. Palm Beach, FL Northpoint Corporate Center-701, Limited
701 Noerthpoint Parkway
Disclosure Schedule
Section 3.11
PROPERTY LEASES
(Continued)
Chicago, IL La Salle National Trust
500 North Michigan Avenue
Schaumburg, IL National Plaza III, LLC
999 Plaza Drive
Vernon Hills, IL Great Lakes Reit, Inc.
175 E. Hawthorn,
Suite 315
___________________________________________________________________
Bethesda, MD Central Properties Limited Partnership
7201 Wisconsin Avenue
Towson, MD Claremount Limited Partnership
100 West Road
___________________________________________________________________
Edina, MN Edinborough Corp. East Limited Partnership
3300 Edinborough Way,
Suite 412
___________________________________________________________________
Worthington, OH Epicenter Equities, Inc.
170 Northwoods, Blvd.,
Suite 210
__________________________________________________________________
Tyson's Corner, VA 7799 Leesburg Pike, LP
7799 Leesburg Pike
Attachment III to
Specific Representations
Subsidiaries:
LCA-Vision (Canada) Inc.
The Toronto Laservision Centre (1992) Inc.
Toronto Lasersight Centre
938051 Ontario, Inc.
LCA-Vision (Ohio), Inc.
Refractive Centers International, Inc.
Investments:
The Baltimore Laser Sight Center Ltd.
Excimer Associates LLC
The Georgia Laser Sight Center, Ltd.
Silmalaseri Oy
As to RCII
University Vision Centers LLC
RCII, Inc.
New Image Laser Center Holdings BV
New Image Laser Centers S.L.
New Image Laser Centers Limited
EXHIBIT 4.1
CERTIFICATE OF BORROWER
LCA-VISION INC.
re: Financing
From The Fifth Third Bank
The undersigned does hereby certify that he/she is the duly elected,
qualified and acting Secretary of LCA-VISION INC., a Delaware
corporation (the "Borrower"), and the undersigned does hereby
further certify as follows:
1. Attached hereto, marked Attachment A, is a true and correct copy
of the current Certificate of Incorporation of the Borrower together
with all amendments thereto, certified by the Secretary of State of
the state of incorporation of Borrower within the past 30 days.
2. Attached hereto, marked Attachment B, is a true and correct copy
of the By-laws of the Borrower, including all amendments thereto, as
in effect on the date hereof.
3. Attached hereto, marked Attachment C, is a true and correct copy
of a certain resolution of the board of directors of the Borrower
dated August 18, 1997, which was duly and lawfully adopted by the
board of directors of the Borrower. Such resolution has not been
amended, altered or rescinded and is in full force and effect on the
date hereof.
4. The following persons are the duly elected officers of the
Borrower, holding the office set forth opposite their respective
names. Each officer who has executed or will execute any documents
in connection with this loan transaction has set forth his true and
customary signature opposite his name:
Name Title Signature
Stephen N. Joffe President /s/Stephen N. Joffe
Vice-President and Chief
Larry P. Rapp Financial Officer /s/Larry P. Rapp
Sandra F.W. Joffe Secretary /s/Sandra F.W. Joffe
Susan B. Zaunbrecher Assistant Secretary /s/Susan B. Zaunbrecher
5. Each officer whose personal signature appears above has been
duly authorized by resolution of the board of directors of the
Borrower to execute any and all instruments or documents which he
may deem necessary or appropriate in connection with this loan
transaction.
6. Borrower is in good standing in the state of its incorporation.
Attached hereto, marked Attachment D, is a certificate of good
standing issued within the past 30 days by that state.
7. Borrower is qualified to do business as a foreign corporation in
the following states: Ohio and California. Attached hereto, marked
Attachments F through G are certificates of good standing issued
within the past 30 days by each of those states.
IN WITNESS WHEREOF, the undersigned hereby certifies the above to be
true and has executed this certificate on August 18, 1997.
/s/Sandra F.W. Joffe
Secretary
ATTACHMENT C
to
Exhibit 4.1
LCA-VISION INC.
DIRECTORS' ACTION
BY WRITTEN CONSENT
Pursuant to the authority of Section 141 of the General Corporation
Law of the State of Delaware, the undersigned, being all the
directors of LCA-Vision, Inc., a Delaware corporation (the
"Corporation"), do hereby adopt the following Resolutions in an
action in writing without a meeting:
WHEREAS, the Board of Directors of the Corporation deem it in the
best interest of the Corporation to borrow approximately $11,053,000
from The Fifth Third Bank ("Bank") to finance various operations of
the Corporation; and
WHEREAS, negotiations have been carried on by and between the
Corporation and the Bank relating to the structuring of the
transaction and the form of documents to be used in connection with
the financing; and
WHEREAS, the following documents (collectively called the "Loan
Documents") have been substantially finalized:
1. The Loan and Security Agreement between the Corporation as
Borrower, and the Bank (the "Agreement");
2. Revolving Note of the Corporation, as Maker, to the Bank (the
"Revolving Note");
3. Term Note of the Corporation, as Maker, to the Bank (the "Term
Note"); and
4. The other "Loan Documents," as defined in the Agreement.
NOW THEREFORE, BE IT RESOLVED, that the Loan Documents are hereby
approved with such additional or changed terms and provisions as the
officer executing the same shall approve and the execution and
delivery of such documents by such officer shall be conclusive
evidence that the same has been authorized by this resolution; and
RESOLVED FURTHER, that any one of the following officers of the
Corporation are hereby authorized to execute and deliver the Loan
Documents on behalf of the Corporation, and any and all other
documents that he deems necessary and advisable in order to complete
the transaction authorized by these resolutions and to perform such
other acts, as in his judgment may be necessary or appropriate in
order to effectuate the financing and the intent and purposes of the
foregoing resolutions, the signature of only one such officer being
necessary:
President and Chief Executive Officer Stephen N. Joffe, M.D.
Secretary Sandra F.W. Joffe
Chief Financial Officer Larry P. Rapp
RESOLVED FURTHER, that the President and Chief Executive Officer,
Chief Financial Officer and Secretary of the Corporation are hereby
authorized to execute, the signature of only one such officer being
necessary, any and all closing documents including but not limited
to the closing certificates and financing statements necessary to
obtain the financing with such additional or changed terms and
provisions as the officer executing the same shall approve and the
execution and delivery of such documents by such officer shall be
conclusive evidence that the same has been authorized by this
resolution.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
this 18th day of August, 1997.
/s/Stephen N. Joffe, M.D.
Stephen N. Joffe, M.D.
/s/Sandra F. W. Joffe
Sandra F. W. Joffe
/s/John C. Hassan
John C. Hassan
EXHIBIT 4.3
LITIGATION
The Company's wholly-owned subsidiary Toronto Laservision Centre
(1992) Inc. ("Centre") is a named party in a claim filed by Jolanda
Witvliet filed March 27, 1997 in the Ontario Court (General
Division). The Plaintiff is seeking $5,000,000 plus attorney fees
for damages to her right eye resulting from a LASIK procedure
performed at the Centre in March 1996. The company's attorney
(Armel, Cohen, Stieber) has filed a Statement of Defense and a Third
Party Claim against Chiron Vision Canada, Inc., the manufacturer or
distributor of the LASIK machinery utilized during the procedure.
On August 13, 1997, the company received a letter from counsel to
The Angus Group, a recruiting and placement firm, threatening suit
to recover $15,000 allegedly owed to such firm arising out of a hire
made by the Company. The Company denies that it owes any fee to the
Angus Group.
On August 7, 1997, the Company received a letter from counsel to
Laser Vision Centers, Inc. ("LVC") threatening suit arising out of
an alleged infringement of LVC's trademark. The Company does not
believe it infringed LVC's trademark and is currently considering an
appropriate response to such letter.
EXHIBIT 7.1(d)
OPINION OF COUNSEL FOR BORROWER
Charles F. Hertlein, Jr., Esq.
(513) 977-8315
August 18, 1997
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Commercial Loan Department
Graydon, Head & Ritchey
Attorneys at Law
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: Jeffrey L. Rohr
Re: LCA-Vision Inc.
Gentlemen:
We have acted as general counsel for LCA-Vision Inc. (the
"Borrower") in connection with the negotiation and execution of the
Loan and Security Agreement of even date herewith between The Fifth
Third Bank ("Bank") and the Borrower (the "Loan Agreement") and all
other documents described therein executed by Borrower
(collectively, the "Loan Documents"). All capitalized terms not
defined herein have the meanings set forth in the Loan Agreement.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the American Bar
Association Section of Business Law (1991). As a consequence, it is
subject to a number of qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion letter should
be read in conjunction therewith.
Based on the foregoing, as well as the certificate attached hereto
as Exhibit "A" as to matters of fact from the Borrower, our
examination of applicable laws and other documents as we deem
necessary, and subject to the assumptions, qualifications and
limitations hereinafter set forth, it is our opinion that:
The Fifth Third Bank
Graydon, Head & Ritchey
August 18, 1997
Page 2
(1) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, having
full corporate power and authority to execute and deliver and to
carry out and perform its obligations under the Loan Documents.
(2) The execution and performance of the Loan Documents have been
duly authorized by all necessary corporate action of the Borrower
and the Loan Documents have been duly executed and delivered by the
Borrower and are valid and binding obligations of the Borrower
enforceable in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by equitable
principles or by bankruptcy, insolvency or other similar laws
affecting the rights of creditors generally.
(3) To our knowledge, the execution and delivery of the Loan
Documents and the performance by the Borrower of its obligations
thereunder do not and will not conflict with or constitute on the
part of the Borrower a breach of or default under the Restated
Certificate of Incorporation, as amended, or Amended Bylaws, as
amended, governing the Borrower, any existing law, regulation, court
order or consent decree to which the Borrower is subject, or any
agreement, indenture, note, mortgage, or other obligation or
instrument to which the Borrower is a party or by which it may be
bound.
(4) There is not pending, or to our knowledge, threatened, any
action, suit, proceeding (at law or in equity) or investigation
before or by any court, administrative agency, or public board or
body against the Borrower or its properties, except as disclosed on
Exhibit 4.3 to the Loan Agreement.
(5) The Loan Documents grant to Bank a security interest in those
items of Collateral in which a security interest can be created
under the Uniform Commercial Code as in effect in Ohio (O.R.C.
Chapters 1301 through 1309) as Collateral for the Obligations, and
such security interest of Bank can be perfected in those items of
Collateral in which a security interest can be perfected by the
filing of financing statements in the State of Ohio.
(6) The execution, delivery and performance by the Borrower of the
Loan Documents are not subject to any authorization, consent,
approval or review by any governmental body or regulatory authority
not heretofore obtained or effected.
(7) The Notes are not usurious under the laws of the State of Ohio.
The Fifth Third Bank
Graydon, Head & Ritchey
August 18, 1997
Page 3
The foregoing opinion is, with your approval, expressed subject to
and conditioned strictly upon, the following assumptions,
qualifications and limitations:
A. We have assumed (i) the full power and authority of each of the
parties to the Loan Documents to enter into and perform the
transactions contemplated thereby, (ii) the due authorization by
such parties of such transactions, (iii) the due execution and
delivery of the Loan Documents, (iv) the requisite authority of the
persons executing the Loan Documents, (v) the authenticity of all
documents submitted to us as original documents, (vi) the conformity
to original documents of all documents, draft or otherwise,
submitted to us and copies thereof, (vii) the genuineness and
authenticity of the signatures of all parties to the Loan Documents,
and (viii) the capacity of any natural persons; provided, however,
that assumptions in clauses (i)-(iv) above do not apply to the
Borrower.
B. Insofar as this opinion relates to the enforceability of the
Loan Documents, the enforceability thereof may be limited by federal
or state laws or jurisprudence relating to bankruptcy,
reorganization, moratorium, insolvency, fraudulent conveyance and
other similar laws or jurisprudence from time to time in effect
affecting generally the enforcement of creditors' rights. We
express no opinion as to the enforceability of the provisions in the
Loan Documents purporting to grant the Bank a power of sale or a
right to strict foreclosure. Certain other remedies under such
instruments and agreements may be qualified by application of laws
or jurisprudence of the States of Ohio or Delaware.
C. Insofar as this opinion relates to the enforceability of the
Loan Documents, such opinion does not mean that every remedy, waiver
or other provision contained therein is enforceable. We express no
opinion, for example, concerning recovery of attorneys' fees or the
waiver of redemption rights.
D. We have assumed that the Bank is a validly formed and duly
existing corporation, or banking corporation, as the case may be,
under the laws of the jurisdiction of its formation. We have also
assumed that the Bank is not subject to any federal statute or
regulation which limits the power of the Bank to make loans or which
limits the rate of interest which the Bank may charge on loans.
E. We have not examined and express no opinion with respect to (i)
the title to any of the realty ("Realty") or personal property
("Personalty") intended to be encumbered pursuant to the Loan
Documents, (ii) the adequacy of the description of the Realty or
Personalty intended to be encumbered by the Loan Documents, or (iii)
whether the properties and interests described in the Loan Documents
are the properties and interests intended to be covered thereby.
The Fifth Third Bank
Graydon, Head & Ritchey
August 18, 1997
Page 4
F. Some title insurance companies in Ohio will issue an endorsement
insuring additional indebtedness under a mortgage but will take
exception to (i) future advances of principal indebtedness made
after petition for relief under the federal bankruptcy code by or on
behalf of the mortgagor, (ii) the loss of priority of future
advances of principal indebtedness as a result of taxes,
assessments, or notice of a federal tax lien filed against the
mortgagor, (iii) the loss of priority of future advances of
principal indebtedness made after the mortgagor is divested as owner
of the estate or interest covered by the mortgage, (iv) the loss of
priority of future advances of principal indebtedness made during
any period in which a declared default exists under the terms of
such mortgage, and (v) the loss of priority of a future advance of
principal indebtedness made after the mortgagee has actual knowledge
of the existence of liens, encumbrances or other matters affecting
the insured premises described in the mortgage intervening between
the date of such mortgage and the future advance, as to such
intervening lien, encumbrances or other matters. Our opinions set
forth herein are likewise limited by such matters.
G. The enforceability of the Loan Documents is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and the applicable
statutes of limitations.
H. No opinion is expressed as to the enforceability of (i) self-help
provisions, (ii) provisions which purport to establish
evidentiary standards, (iii) provisions purporting to avoid the
doctrine of a mortgagee in possession, (iv) provisions which purport
to give the Bank a right to exclude the Borrower from possession of
the Realty prior to the time the Bank obtains possession of the
Realty through foreclosure or appointment of a receiver, (v)
provisions related to waiver of remedies (or the delay or omission
of enforcement thereof), disclaimers, authorization of the Bank to
act as the Borrower's attorney-in-fact, liability limitations with
respect to third parties, releases or waivers of legal or equitable
rights, discharges of defenses, liquidated damages or choice of law,
(vi) provisions purporting to indemnify the Bank from any losses,
damages or expenses that the Bank may incur post-foreclosure (or
post-deed-in-lieu), and (vii) provisions relating to rights of
subrogation.
I. No opinion is expressed with respect to the enforceability of
any provisions of the Loan Documents which purport to require
payment or reimbursement of attorneys' fees, recording fees, court
costs and other expenses.
J. We do not express an opinion as to the Realty.
The Fifth Third Bank
Graydon, Head & Ritchey
August 18, 1997
Page 5
K. The opinions contained herein are based on the assumption that
all terms, provisions and conditions of the loans contemplated by
the Loan Documents are correctly and completely embodied in the Loan
Documents and that the Borrower and the Bank will conduct themselves
solely as debtor and creditor, respectively.
L. We express no opinion except as specifically set forth in the
numbered paragraphs above, and no opinion as to any other matters
shall be deemed to be implied by or may be inferred from the
numbered paragraphs set forth above.
M. We express no opinion as to the laws of any jurisdiction other
than those of the United States of America and the States of Ohio
and Delaware, limited to the Delaware General Corporation Law.
This opinion is for the benefit of the parties to whom it is
addressed only and may not be delivered to, or relied upon by, any
other person without our prior written consent. It is provided as
a legal opinion only and not as a guarantee or warranty of the
matters discussed herein. No opinions may be inferred or implied
beyond the matters expressly stated herein. This opinion speaks of
its date only, and we disclaim any undertaking or obligation to
advise you of changes that hereafter may be brought to our
attention.
Very truly yours,
DINSMORE & SHOHL LLP
By:/s/Charles F. Hertlein, Jr.
Charles F. Hertlein, Jr.
EXHIBIT "A"
CERTIFICATE
The undersigned, LCA-Vision, Inc. (the "Corporation"), does hereby
certify to Dinsmore & Shohl LLP as of August 18, 1997 that:
(i) The Corporation has full power and authority to own and operate
its real estate and personalty and to carry on its businesses, as
and in the places where such real estate and personalty are to be
owned and such business is to be conducted.
(ii) The loan documents (the "Loan Documents") executed this day by
the Corporation in connection with the loan from The Fifth Third
Bank ("Lender"), as more particularly described in the foregoing
opinion letter ("Opinion"), do not violate the terms or provisions
of any agreement, indenture, debenture, note, mortgage, deed of
trust, guaranty, other obligation or instrument, or other security
instrument, borrowing or guarantee made by the Corporation, or of
any writ, order, consent decree, injunction or decree of any court
or governmental authority affecting the Corporation.
(iii) There is not pending or threatened any action, suit,
proceeding (at law or in equity) or investigation before or by any
court, administrative agency, or public board or body against the
Borrower or its properties, except as disclosed on Exhibit 4.3 to
the Loan Agreement, as defined in the Opinion.
(iv) There has been no order for relief entered or petition therefor
filed by or against the Corporation in any United States Bankruptcy
Court.
(v) Except as disclosed or contemplated by the Loan Documents, there
are no outstanding deeds, mortgages, leases, easements, contracts of
sale or equities of any kind not fully disclosed of record or
unrecorded affecting the title to and priority of security interests
in the real estate and personalty securing the loan under the Loan
Documents and there are no interests in said real estate and
personalty and that there are no parties in possession or entitled
to possession other than the Corporation; that there are neither
unsatisfied or unreleased judgments or liens of record or rights to
take liens nor decrees of bankruptcy nor court proceedings of any
kind that would affect the title to said real estate and personalty.
The undersigned hereby acknowledges that Dinsmore & Shohl LLP will
rely on this Certificate and the truth and accuracy of the
statements contained herein in issuing its Opinion to The Fifth
Third Bank and Graydon, Head & Ritchey.
IN WITNESS WHEREOF, the undersigned have executed this certificate
dated as of the 18th day of August, 1997.
LCA-VISION, INC.
By:/s/Stephen N. Joffe, M.D.
President and Chief Executive Officer
By:/s/Larry P. Rapp
Chief Financial Officer
Contacts: Larry Rapp, CFO Joel Pomerantz
LCA-Vision, Inc. The Dilenschneider Group
(513) 792-5620 (212) 922-0900
LCA-VISION SECURES NEW BANK FINANCING
CINCINNATI, August 22 - LCA-Vision, Inc. (NASDAQ:LCAV), the nation's
largest provider of laser eye surgery for vision correction, said
today it had obtained a new financing agreement from The Fifth Third
Bank of Cincinnati to replace its expired existing package.
The package, effective August 18, consists of an $8 million secured
line of credit and a secured 13-month term loan in the amount of
$3.053 million.
LCA-Vision now operates 40 laser eye treatment centers in the U.S.,
two in Canada, and one in Europe. The company also manages laser,
and minimally invasive, multi-specialty surgery programs in major
hospitals around the country.
