Document:

Seventh Amendment and extension to Line of Credit with Comerica Bank.

  Exhibit 10.5.1
  SEVENTH AMENDMENT
 TO
 CREDIT AGREEMENT
          This Seventh Amendment to Amended and Restated Loan and Security Agreement is entered into as of September 25, 2002 by and between COMERICA BANK-CALIFORNIA (“Bank”) and
CARDIODYNAMICS INTERNATIONAL CORPORATION, a California corporation (“Borrower”).
  RECITALS
          Borrower and Bank are parties to that certain Credit Agreement dated as of January 15, 1999, as amended from time to time, including but not limited to that certain First
Amendment to Credit Agreement dated as of February 14, 2000, that certain Second Amendment to Credit Agreement dated as of September 7, 2000, that certain Third Amendment to Credit Agreement dated as of March 29, 2001, that certain Fourth Amendment
to Credit Agreement dated as of April 14, 2001, that certain Fifth Modification to Credit Agreement dated as of June 13, 2001 and that certain Sixth Modification to Credit Agreement dated as of June 13, 2002 (collectively, the
“Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.
          NOW, THEREFORE, the parties agree as
follows:

	          1.     The date “September 13, 2002” in Section 1.01(a) of the Agreement (the
“ABL Maturity Date”) hereby is amended to read “September 13, 2003.”
 
	  
 	  
 	  
 
	         2.      Section 1.01(a) of the Agreement hereby is hereby is amended in its entirety to read
as follows:
 
	  
 	  
 	  
 
	  
 	          “(a)     Line of Credit – Accounts Receivable, Notes Receivable Borrowing Base
Constrained.  Subject to all the terms and conditions of this Agreement, provided that no event of default has occurred and is continuing, and Borrower’s Cash position remains above Four Million Dollars ($4,000,000), Bank shall upon
Borrower’s request, make advances (“ABL Loans”) to Borrower, from time to time and in such amounts as Borrower shall request up to an aggregate principal amount outstanding not to exceed:
 
	  
 	  
 	  
 	  
 
	  
 	  
 	  (1)
 	  Eighty percent (80%) maximum of Eligible Accounts Receivable; plus
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 (2)
 	  Twenty-five percent (25%) of the current portion of eligible notes receivable (meaning “those notes receivables that are no more than 60 days past due”) generated from
product sales, not to exceed $350,000;
 
	  
 	  
 	  
 	  
 
	  
 	  as such Eligible Accounts, and notes receivable generated from product sales may be adjusted from time to time as provided for under Section 4.15 hereof (the
“Borrowing Base”) and in no event more than $4,000,000 (the “ABL Line of Credit”).  Should Borrower’s Cash position fall below Four Million Dollars ($4,000,000), the advance rate will be based on the results of the
accounts receivable audit most recently conducted by Bank.
 
	  
 	  
 
	  
 	           If at any time or for any reason, the outstanding principal amount of the ABL Loan Account (as defined below) is
greater than the lesser of:  (x) the Borrowing Base or (y) the ABL Line of Credit, Borrower shall immediately pay to Bank, in cash, the amount of such excess.  Any commitment of Bank, pursuant to the terms of this Agreement, to make ABL
Loans shall expire on the ABL Maturity Date (as hereinafter defined), subject to Bank’s right to renew said commitment in its sole and absolute discretion at Borrower’s request.  Any such renewal of said commitment shall not be
binding upon Bank unless it is in writing and signed by an officer of Bank.  Provided that no Event of Default (as hereinafter defined) has occurred and is continuing, all or any portion of the ABL Loans advanced by Bank which are repaid by
Borrower shall be 
 
					

  

	  
 	 available for reborrowing in accordance with the terms hereof.  Borrower promises to pay to Bank the entire outstanding unpaid principal balance (and all accrued
unpaid interest thereon) of the ABL Loan Account on the earlier of demand by Bank or September 13, 2003 (“ABL Maturity Date”).”
 
	  
 	  
 	  
 	  
 
	          3.      Section 4.07 of the Agreement hereby is amended in its entirety to read as
follows:
 
	  
 	  
 	  
 
	                   “4.07     Maximum
Loss.  Maintain a maximum aggregate loss for the period June 1, 2002 through May 31, 2003, measured as of each fiscal quarter ending August 31, 2002, November 30, 2002, February 28, 2003 and May 31, 2003, not to exceed Five Hundred Thousand
Dollars ($500,000).  As used herein, “maximum aggregate loss” means Borrower’s GAAP net losses after taxes for the period of measurement.
 
	  
 	  
 	  
 	  
 
	         4.      Section 4.18 of the Agreement hereby is amended in its entirety to read as
follows:
 
	  
 	  
 	  
 
	                   “4.18     Compensating
Balances.  Borrower shall maintain net free collected balances in demand deposit accounts with Bank, equal to at least Three Hundred and Fifty Dollars ($350,000) (the “Compensating Balance Limit”).  The Compensating Balance
Limit shall be adjusted quarterly in arrears based on the average amount outstanding for the prior quarter according to the following table:
 
						

 

	  
 	  $0 to $499,999
 	  =
 	  $350,000
 
	  
 	  
 	  
 	  
 
	  
 	 $500,000 to $999,999
 	  =
 	  $300,000
 
	  
 	  
 	  
 	  
 
	  
 	  $1,000,000 to $1,499,999
 	  =
 	  $250,000
 
	  
 	  
 	  
 	  
 
	  
 	  $1,500,000 to $1,999,999
 	  =
 	  $200,000
 
	  
 	  
 	  
 	  
 
	  
 	 $2,000,000 to $2,499,999
 	  =
 	  $150,000
 
	  
 	  
 	  
 	  
 
	  
 	  $2,500,000 to $4,000,000
 	  =
 	  $100,000
 

 

	          5.      Borrower hereby authorizes Bank to file such UCC Amendments as Bank deems reasonably
necessary to maintain perfection of Bank’s security interest in the Collateral, including a UCC Amendment attaching the collateral description attached hereto as Exhibit A.
 
	  
 	  
 	  
 
	          6.      Unless otherwise defined, all capitalized terms in this Amendment shall be as defined
in the Agreement.  Except as amended, the Agreement remains in full force and effect.
 
	  
 	  
 	  
 
	         7.      Borrower represents and warrants that the representations and warranties contained in
the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.
 
	  
 	  
 	  
 
	          8.      This Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one instrument.
 
	  
 	  
 	  
 
	          9.      As a condition to the effectiveness of this Amendment, Bank shall have received, in
form and substance satisfactory to Bank, the following:
 
	  
 	  
 	  
 
	  
 	  
 	  (a)
 	  this Amendment, duly executed by Borrower;
 
	  
 	  
 	   
 	  
 
	  
 	  
 	 (b)
 	  Resolutions to borrow;
 
	  
 	  
 	   
 	  
 
	  
 	  
 	  (c)
 	  an amount equal to all Bank Expenses incurred in connection with this Amendment;
 
	  
 	  
 	   
 	  
 
	  
 	  
 	  (d)
 	  a UCC Amendment; and
 

  

	  
 	  
 	 (e)
 	  such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
 

          IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	  
 	  CARDIODYNAMICS INTERNATIONAL
CORPORATION
 
	  
 	  
 
	  
 	  By:
 	  /s/ STEPHEN P. LOOMIS

	  
 	  
 	 
 
	  
 	 Title:
 	  CFO
 
	  
 	  
 	   
 
	  
 	  COMERICA BANK-CALIFORNIA
 
	  
 	  
 
	  
 	  By:
 	  /s/ PETER M. DREES

	  
 	  
 	 
 
	  
 	  Title:
 	  Vice President
 

  

	 DEBTOR:
 	  
 	  CARDIODYNAMICS INTERNATIONAL CORPORATION
 
	  SECURED PARTY: 
 	  
 	  COMERICA BANK-CALIFORNIA
 

  EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
 TO
SEVENTH AMENDMENT TO CREDIT AGREEMENT/UCC FINANCING STATEMENT
          All personal property of Borrower (herein referred to as “Borrower” or
“Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:

	                      (a)       all accounts
(including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general
intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including
returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment
containing said books and records;
 
	  
 
	                      (b)        all common
law and statutory copyrights and copyright registrations, applications for registration, now existing or hereafter arising, in the United States of America or in any foreign jurisdiction, obtained or to be obtained on or in connection with any of
the forgoing, or any parts thereof or any underlying or component elements of any of the forgoing, together with the right to copyright and all rights to renew or extend such copyrights and the right (but not the obligation) of Secured Party to sue
in its own name and/or in the name of the Debtor for past, present and future infringements of copyright;
 
	  
 
	                       (c)        all
trademarks, service marks, trade names and service names and the goodwill associated therewith, together with the right to trademark and all rights to renew or extend such trademarks and the right (but not the obligation) of Secured Party to sue in
its own name and/or in the name of the Debtor for past, present and future infringements of trademark;
 
	  
 
	                       (d)        all (i)
patents and patent applications filed in the United States Patent and Trademark Office or any similar office of any foreign jurisdiction, and interests under patent license agreements, including, without limitation, the inventions and improvements
described and claimed therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii) income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the name of Debtor and/or in the name of Secured Party for past, present and future
infringements thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals, extensions and continuations-in-part with
respect to any of the foregoing; and
 
	  
 
	                      (e)        any and all
cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment.  All terms above have the meanings given to
them in the California Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section 35, operative July 1,
2001.Employment Agreement

EXHIBIT 10.9 
October 15, 2002 
 
Lori S. Richardson Pellicioni 
9040 Alto Cedro Drive 
Beverly Hills, CA 90210 
 
Dear Lori: 
 
On behalf of DaVita
Inc., I am pleased to finalize the terms of your new position as Vice President, Compliance and Chief Compliance Officer. In this new role, you will report to the DaVita Board of Directors, Joe Mello and me. Your start date has yet to be determined.
The following represents the terms and conditions in this regard: 
 
As we discussed, your base salary for this position has been set at $210,000.00 per annum, less standard deductions and authorized withholdings. Your base salary will be reviewed each year during DaVita’s annual salary
review. DaVita, in its sole discretion, may increase the base salary as a result of any such review. In addition, you will be eligible to receive an annual performance bonus between zero and $135,000, which will be prorated the first year and is
payable in a manner consistent with our practices and procedures. Your position is exempt under the wage and hour laws. You will be paid bi-weekly pursuant to our normal payroll practices. Your status will be that of a regular full-time benefit
eligible employee. 
 
You and your family shall be
eligible for participation in and receive all benefits under DaVita’s health and welfare benefit plans under the same terms and conditions applicable to DaVita executives at similar levels of compensation and responsibility. A summary of those
benefits will be presented to you at the start of your employment. 
 
The Board of Directors has approved that you receive a grant of stock options to purchase 80,000 shares of DaVita stock. Such options will have a five-year term and will vest over a four-year period, one-quarter vesting on
each anniversary of the grant. The exercise price will be the closing price on the New York Stock Exchange on the start date of your employment. The options will be reflected in a separate Stock Option Agreement. DaVita is currently in the process
of developing an Executive Equity Ownership requirement. Specific details will be communicated when completed. In the meantime, should you have any questions, you can feel free to contact either Rich Whitney, CFO, or myself. 
 
The Company will provide you with a separate indemnification
agreement. Our indemnification agreement is currently being reviewed by outside counsel to ensure that it is consistent with the newly enacted federal laws; once that review is completed, we will send the indemnity agreement to you. DaVita also
agrees to reimburse you in accordance with its travel and entertainment policies, as well as other business-related expenses, incurred in the performance of your duties. Based upon your estimated travel schedule, DaVita agrees to allow you to
purchase coach seats as per our normal travel policy. For trips in excess of three (3) hours, DaVita will reimburse you for upgrades to Business Class. This is subject to change at DaVita’s discretion. 
 
Our offer of employment is conditioned upon your successful
completion of a pre-employment drug test, which must be successfully completed before you can start your employment. Please contact Moira Ireland at 310/750-2232 to arrange for a pre-employment drug test, which must be completed before you can start
your employment. 
 
This Agreement, separate Stock
Option Agreement, Non-Compete/Confidentiality/Non-Solicitation Agreement and provisions relating to termination of employment represent the entire understanding of the parties hereto with respect to your employment and supercedes all prior
agreements with respect thereto. This Agreement may not be altered or amended except in writing executed by both parties hereto. 

 

	  October 15, 2002
	  	  
	  Lori S. Richardson Pellicioni
	  	  Page 2

 
This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Photographic or facsimile copies of such signed counterparts may be used in lieu of
the originals for any purpose. 
 
In the event that
any provision of the Agreement is determined to be illegal, invalid or void for any reason, the remaining provisions hereof shall continue in full force and effect. 
 
If the above terms of employment are acceptable to you, please sign below and return this Agreement to me as
soon as possible. In addition, please read and sign the attached Non-Compete/Confidentiality/Non-Solicitation Agreement. 
 
Sincerely, 
 
Kent Thiry 
Chief Executive Officer 
DaVita Inc. 
 
I accept the position of Vice President, Compliance and Chief Compliance Officer under the terms and conditions outlined above.

 

	  	  	  	  	  
	
	  	  	  	  	  	  	  
	
	  	  	  	  	

	  Lori S. Richardson Pellicioni
	  	  	  	  	  	  Date

 
cc: Joe Mello

Chief Operating Officer 
 
Robert D. Armstrong 
Vice President, People Services

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