EXHIBIT 10.1
LIMITED FORBEARANCE
AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT
     THIS LIMITED FORBEARANCE AND THIRD AMENDMENT TO TRANSFER RIGHTS AGREEMENT
(this “Forbearance”), is made and entered into as of August 20, 2009 with
respect to that certain Transfer Rights Agreement, dated as of July 12, 2005, as
amended by the First Amendment to Transfer Rights Agreement, dated as of
April 1, 2007, and as amended by the Second Amendment to Transfer Rights
Agreement, dated as of July 31, 2007 (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
“Transfer Rights Agreement”), by and among Michael Aronsky, M.D., Carol Hoffman,
M.D., George Pronesti, M.D., and Anthony Zacchei, M.D. (each a “Buyer” and
collectively, the “Buyers”), TLC Vision (USA) Corporation, a Delaware
corporation (“TLC”), DelVal ASC, LLC, a Delaware limited liability company (“ASC
LLC”), and TLC Management (Delaware Valley), LLC, a Delaware limited liability
company (“Management LLC,” together with TLC and ASC LLC, the “TLC Entities”).
W I T N E S S E T H:
     WHEREAS, TLC is a party to that certain Amended and Restated Credit
Agreement, dated as of June 21, 2007 (as amended as of the date hereof and as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renew, restated or replaced, the “Credit Agreement”);
     WHEREAS, Buyers, TLC, ASC LLC and Management LLC are parties to the
Transfer Rights Agreement;
     WHEREAS, pursuant to Section 2.2 of the Transfer Rights Agreement, each
Buyer has a right to offer to sell a portion of his or her Original Equity
Interests in ASC LLC and Management LLC to TLC on certain specified dates;
     WHEREAS, on or around June 12, 2009, Buyers provided notice to TLC that
each of them was offering to sell 40% of their respective interests in
Management LLC pursuant to the Transfer Rights Agreement;
     WHEREAS, TLC provided and each of the Buyers consented to a valuation of
the Offered Interests on July 14, 2009;
     WHEREAS, payment on account of the Offered Interests (the “Put Amount”) was
due and payable on August 12, 2009;
     WHEREAS, TLC failed to pay the Put Amount on August 12, 2009 (the “Event of
Default”); and
     WHEREAS, pursuant to the terms and subject to conditions set forth herein,
each Buyer agrees to forbear from (i) exercising any and all rights and remedies
against TLC under the Transfer Rights Agreement, and (ii) exercising any and all
rights and remedies against the TLC Entities pursuant to any other written
agreement to which he or she has entered into with any or all of the TLC
Entities (including without limitation any employment or non-compete agreement),
in each case to the extent arising as a result of the occurrence of the Event of
Default, as set forth herein.
     NOW THEREFORE, in consideration of the agreements and subject to the terms
and conditions herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

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     1. Definitions. Any capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Transfer Rights Agreement.
     (a) “Forbearance Termination Date” means the later of
               (i) 5:00 p.m. Eastern time on September 8, 2009, provided that if
the certain Limited Waiver and Amendment No. 4 to Credit Agreement, dated as of
June 30, 2009, by and among TLC, the other Loan Parties (as defined therein) and
the Lenders (as defined therein) is terminated on a date prior to September 8,
2009, this Forbearance shall terminate on such date; and
               (ii) if on or before September 8, 2009, TLC, the other Loan
Parties (as defined in the Credit Agreement) and the Lenders (as defined in the
Credit Agreement) enter into a waiver, forbearance, amendment or other similar
modification of the Credit Agreement, the earlier of (A) one day prior to the
expiration of such waiver, forbearance, amendment or modification, and
(B) October 12, 2009.
     (b) “Term” means the period from the Effective Date (as defined below)
through and including the Forbearance Termination Date.
     2. Forbearance. Subject to the terms and conditions set forth herein and
solely in respect of the Event of Default, Buyers agree to forbear, during the
Term of this Forbearance, from (a) exercising any and all rights and remedies
against TLC under the Transfer Rights Agreement, and (b) exercising any and all
rights and remedies against any of the TLC Entities pursuant to any other
written agreement to which he or she has entered into with any or all of the TLC
Entities (including without limitation any employment or non-compete agreement),
in each case to the extent arising as a result of the occurrence of the Event of
Default.
     3. Payment Obligations. Each of the TLC Entities hereby irrevocably and
unconditionally agrees, acknowledges and affirms to Buyers that TLC has an
existing obligation to, and will, pay the Put Amount to the Buyers on the day
immediately following the Forbearance Termination Date otherwise in accordance
with the Transfer Rights Agreement, it being understood that time is of the
essence.
     4. Amendment to Transfer Rights Agreement. The Transfer Rights Agreement is
hereby amended as set forth below.
          (a) Employee Member Put Rights. Section 2.2 of the Transfer Rights
Agreement is amended by replacing each instance of “seventh (7th) Anniversary
Date” therein with “sixth (6th) Anniversary Date.”
          (b) Agreement Price Upon Termination of Employment. Section 3.1.2 of
the Transfer Rights Agreement is amended by replacing “seventh (7th) Anniversary
Date” in the sixth line thereof with “sixth (6th) Anniversary Date.”
          (c) Agreement Price for Put Rights and Call Rights.
               (i) Section 3.2.2 of the Transfer Rights Agreement is amended by
replacing “seventh (7th) Anniversary Date” in the third line thereof with “sixth
(6th) Anniversary Date.”
               (ii) Section 3.2.3 of the Transfer Rights Agreement is amended by
replacing “seventh (7th) Anniversary Date” in the third line thereof with “sixth
(6th) Anniversary Date.”
     5. Conditions Precedent to Effectiveness. This Forbearance shall be
effective as of the date upon which all of the following conditions are
satisfied (the “Effective Date”):
          (a) Payment by TLC to the Buyers, in the aggregate, the sum of
$250,000 by wire transfer in immediately available funds, payable upon execution
of this Forbearance; and

 

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               (b) after giving effect to this Forbearance, the representations
and warranties of the Borrowers contained in this Forbearance shall be true and
accurate in all material respects.
     6. Representations and Warranties. Each of the TLC Entities hereby
represents and warrants to Buyers that (a) this Forbearance has been duly
executed and delivered by each TLC Entity; (b) the execution and delivery by
each TLC Entity of this Forbearance is within such TLC Entity’s powers and has
been duly authorized by all necessary action on its party; and (c) this
Forbearance constitutes the legal, valid and binding obligations of such TLC
Entity, enforceable against such TLC Entity in accordance with its terms subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
     7. Acknowledgement. Each of TLC and Management LLC, as guarantors under
certain Guaranty agreements dated July 11, 2005 in favor of each of the Buyers
hereby consent to this Forbearance and hereby confirm and agree that,
notwithstanding the effectiveness of such Forbearance each Guaranty is and shall
continue to be in full force and effect and is hereby ratified and confirmed in
all respects.
     8. Costs and Expenses. Each Party shall be responsible for its own fees and
expenses, including attorneys’ fees, incurred in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Forbearance and the other instruments and documents to be delivered
hereunder; provided, however, that TLC hereby agrees to pay on demand all
reasonable fees and expenses incurred by the Buyers, including reasonable
attorneys’ fees, in connection with any enforcement of the Buyers’ rights under
the Transfer Rights Agreement after the date hereof resulting from the Event of
Default or any subsequent failure to timely honor Put Rights by TLC, unless a
court of competent jurisdiction finds by final, nonappealable order or judgment
that neither TLC nor its affiliates were obligated to honor any such Put Right;
provided further, that TLC’s liability for such fees shall not exceed $50,000 in
the aggregate with respect to each of the Put Rights under the Transfer Rights
Agreement.
     9. No Other Waiver or Other Forbearance. Except as otherwise expressed
herein, the execution, delivery and effectiveness of this Forbearance shall not
operate as a waiver of or forbearance with respect to any right, power or remedy
of Buyers under the Transfer Rights Agreement, nor constitute a waiver of or
forbearance with respect to any provision of the Transfer Rights Agreement. The
provisions of the Transfer Rights Agreement not herein specifically amended
shall continue in full force and effect. This Forbearance shall not constitute a
modification of the Transfer Rights Agreement or a course of dealing between the
Buyers, on the one hand, and any of the TLC Entities, on the other hand, at
variance with the Transfer Rights Agreement such as to require further notice by
Buyers to any of the TLC Entities to require strict compliance with the terms of
the Transfer Rights Agreement in the future, except as expressly set forth
herein.
     10. No Third Party Beneficiaries. Nothing in this Forbearance is intended,
nor shall anything herein be construed, to confer any rights, legal or equitable
in any person or entity other than the parties hereto and their respective
successors, heirs, devisees, assigns, legal representatives, executors and
administrators.
     11. Severability. Each provision of this Forbearance shall be considered
severable, and if for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this
Forbearance which are valid.
     12. Interpretation. Each party has had the opportunity to have this
Forbearance reviewed by counsel and be advised by counsel as to the rights and
obligations of each party. This Forbearance shall not be construed or
interpreted more strictly against one party than another on grounds that this
Forbearance or any draft thereof was prepared by a party or his, her or its
counsel.
     13. Counterparts. This Forbearance may be executed in counterparts, each of
which shall be an original and, collectively shall constitute one instrument.
Any signature delivered by a party by facsimile transmission or electronic mail
shall be deemed an original signature hereto.

 

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     14. Applicable Law. This Forbearance shall be governed by, construed, and
enforced in accordance with the laws of the State of Delaware excluding
conflicts of law provisions.
     IN WITNESS WHEREOF, the parties hereto have executed this Forbearance as of
the date first written above.

            TLC VISION (USA) CORPORATION,
A Delaware corporation
      By: /s/ William McManus               Name: William McManus       
      Title: Interim Chief Financial Officer        DELVAL ASC, LLC,
A Delaware limited liability company
      By: /s/ Jonathan P. Compton               Name: Jonathan P. Compton       
      Title: Assistant Treasurer        TLC MANAGEMENT (DELAWARE VALLEY), LLC,
A Delaware limited liability company
      By: /s/ Jonathan P. Compton               Name: Jonathan P. Compton       
      Title: Assistant Treasurer     

[SIGNATURE PAGE TO LIMITED FORBEARANCE]

 

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BUYERS

            MICHAEL ARONSKY, M.D.
      /s/ Michael Aronsky                     CAROL HOFFMAN, M.D.
      /s/ Carol Hoffman                     GEORGE PRONESTI, M.D.
      /s/ George Pronesti                     ANTHONY ZACCHEI, M.D.
      /s/ Anthony Zacchei                  

[SIGNATURE PAGE TO LIMITED FORBEARANCE]