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AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT

Waiver Agreement

AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT | Document Parties: RADNET, INC. | RADNET MANAGEMENT You are currently viewing:
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Title: AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT
Governing Law: New York     Date: 4/2/2008
Industry: Healthcare Facilities     Sector: Healthcare

AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT, Parties: radnet  inc. , radnet management
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Exhibit 10.39

 

AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT

 

This AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT (this

"Amendment"), dated as of February 22, 2008, by and among RADNET MANAGEMENT,

INC., a California corporation (the "Borrower"), the other persons designated as

Credit Parties on the signature pages hereof, GENERAL ELECTRIC CAPITAL

CORPORATION, a Delaware corporation, as agent ("Agent") and the Persons

signatory thereto from time to time as Lenders. Unless otherwise specified

herein, capitalized terms used in this Amendment shall have the meanings

ascribed to them in the Credit Agreement (each as hereinafter defined).

RECITALS

WHEREAS, the Borrower, the Credit Parties, Agent and Lenders have

entered into that certain Credit Agreement dated as of November 15, 2006 (as

amended by that certain (i) Limited Waiver and Amendment No. 1 to Credit

Agreement dated as of April 5, 2007, (ii) Amendment No. 2 to Credit Agreement

dated as of May 30, 2007, (iii) Amendment No. 3 to Credit Agreement dated as of

August 23, 2007 and (iv) Amendment No. 4 to Credit Agreement dated as of

December 3, 2007, and as further amended, supplemented, restated or otherwise

modified from time to time, the "Credit Agreement"); and

WHEREAS, the Borrowers, Agent, Requisite Lenders and the Supermajority

Revolving Lenders have agreed to the amendments and limited waiver as set forth

herein;

NOW THEREFORE, in consideration of the mutual execution hereof and

other good and valuable consideration, the parties hereto agree as follows:

1. Amendments to Credit Agreement.

(a) Amendment to Section 1.1(a). Section 1.1(a) of the

Credit Agreement is hereby amended by amending and restating the third and

fourth sentence therein to read in their entirety as follows:

"Amounts borrowed under this subsection (a) are collectively

referred to as the "Initial Term Loan B and together with any

Incremental Term Loan (as defined below), the "Term Loan B"." Borrower

shall repay the Initial Term Loan B through periodic payments on the

dates and in the amounts indicated below (together with any scheduled

payments of the Incremental Term Loan, "Scheduled Installments")."

 

(b) Amendment to Section 1.1. Section 1.1 of the Credit

Agreement is hereby amended by inserting the following new clause (g):

"(g) Incremental Loans.

 

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(i) Borrower may make up to five requests for an incremental

term loan (the "Incremental Term Loan") or incremental revolving loan

(the "Incremental Revolving Loan"), each such request being for at

least $5,000,000, and in an aggregate amount not to exceed $40,000,000

for all such requests pursuant to delivery of a written request from

the Borrower to the Agent. Each such notice shall specify the date (an

"Increase Effective Date") on which the Borrower proposes that the

increased or new Commitments shall be effective, which date shall be a

date not less than ten (10) Business Days after such request is

delivered to the Agent. The increased or new Commitments shall become

effective on the applicable Increase Effective Date as long as each of

the following conditions have been met:

(A) no Default or Event of Default has occurred or is

continuing or would result after giving effect to such Incremental Term

Loan or Incremental Revolving Loan;

(B) (1) the maturity date of any Incremental Term

Loan, the weighted average life of any Incremental Term Loan, the

effective yield to the Lenders under such Incremental Term Loan

(including interest, fees received ratably by such Lenders and original

issue discount) shall be the same as the Initial Term Loan B, as

applicable, at the time such Incremental Term Loan is funded and (2)

any Incremental Revolving Loan shall become part of the Revolving Loans

with the same maturity, interest, fees and terms as the Revolving

Loans;

(C) the Borrower has provided evidence reasonably

satisfactory to the Agent that the Borrower would have been in

compliance with the financial covenants set forth in Section 6 assuming

that the Incremental Term Loan or Incremental Revolving Loan, as

applicable, had been incurred on the last day of the then most recently

completed Fiscal Quarter; and

(D) the Agent shall have received amendments to this

Agreement and the Loan Documents, joinder agreements for any new

Lenders, and all other promissory notes, agreements, documents and

instruments reasonably satisfactory to the Agent in its reasonable

discretion evidencing and setting forth the conditions of the

Incremental Term Loan or Incremental Revolving Loan, as applicable.

(ii) Each Lender which (a) holds a Term Loan B on the date the

Borrower delivers a written request to the Agent for a Incremental Term

Loan or a Revolving Loan on the date the Borrower delivers a written

request to the Agent for an Incremental Revolving Loan and (b) notifies

the Agent in writing within five (5) days of receipt of written notice

from the Agent that Borrower has requested an Incremental Term Loan or

Incremental Revolving Loan, as applicable, shall have the right to fund

its pro rata share of the Incremental Term Loan or Incremental

Revolving Loan, as applicable, based upon its share of the Term Loan B

Commitment or the Revolving Loan Commitment, as applicable, as

 

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of the date the Agent originally received the applicable notice from

the Borrower. Notwithstanding anything contained herein or otherwise to

the contrary, no Lender shall have any obligation to fund all or any

portion of, or participate in, the Incremental Term Loan or the

Incremental Revolving Loan. Amounts of the Incremental Term Loan which

are repaid may not be reborrowed.

(iii) On any Increase Effective Date on which Incremental

Revolving Loans are effected, subject to the satisfaction of the

foregoing terms and conditions, (A) each of the Lenders with Revolving

Loan Commitments shall assign to each Lender with an Incremental

Revolving Loan (each, an "Incremental Revolving Loan Lender") and each

of the Incremental Revolving Loan Lenders shall purchase from each of

the Lenders with Revolving Loan Commitments, at the principal amount

thereof (together with accrued interest), such interests in the

Revolving Loans on such Increase Effective Date as shall be necessary

in order that, after giving effect to all such assignments and

purchases, such Revolving Loans will be held by existing Lenders with

Revolving Loan and Incremental Revolving Loan Lenders ratably in

accordance with their Revolving Loan Commitments after giving effect to

the addition of such Incremental Revolving Loans to the Revolving Loan

Commitments, (B) each Incremental Revolving Loan shall be deemed for

all purposes a Revolving Loan Commitment and each Loan made thereunder

shall be deemed, for all purposes, a Revolving Loan and (C) each

Incremental Revolving Loan Lender shall become a Lender with respect to

the Revolving Loan Commitment and all matters relating thereto.

 

(iv) On any Increase Effective Date on which Incremental Term

Loans are effected, subject to the satisfaction of the foregoing terms

and conditions, (A) each Lender with an Incremental Term Loan (each, an

"Incremental Term Loan Lender") shall make a Loan to the Borrower in an

amount equal to the amount of the Incremental Term Loan such Lender has

committed to fund and (B) each Incremental Term Loan Lender shall

become a Lender hereunder with respect to the Incremental Term Loan.

Amounts of the Incremental Term Loan repaid may not be reborrowed.

(v) Each of the Borrower, Lenders and Agent acknowledges and

agrees that an Incremental Term Loan or Incremental Revolving Loan (and

related amendments and documents described in clause (iv) above)

meeting the conditions set forth in this Section 1.1(g) shall not

require the consent of any Lender other than those Lenders, if any,

which have agreed to participate in the Incremental Term Loan or the

Incremental Revolving Loan, as applicable."

(c) Amendment to Section 1.2(a). Section 1.2(a) of

the Credit Agreement is hereby amended by (i) replacing each occurrence of the

term "2.00%" with the term "3.25%" and (ii) replacing each occurrence of the

term "3.50%" with the term "4.25%" therein.

(d) Amendment to Section 1.3(a). Section 1.3(a) of

the Credit Agreement is hereby amended and restated to read in its entirety as

follows:

 

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"Fee Letter. Borrower shall pay to GE Capital, individually,

the Fees specified in that certain fee letter dated as of June 27, 2006

among Borrower and GE Capital, as supplemented by that certain

Supplemental Fee Letter dated as of the Amendment No. 3 Closing Date

and as supplemented by that certain Supplemental Fee Letter dated as of

the Amendment No. 5 Closing Date (collectively, the "GE Capital Fee

Letter"), at the times specified for payment therein."

 

(e) Amendment to Section 1.5(d). Section 1.5(d) of

the Credit Agreement is hereby amended and restated to read in its entirety as

follows:

"Prepayments from Issuance of Securities; Segregated Account.

Immediately upon the receipt by Holdings, Borrower or any of its

Subsidiaries of the proceeds of the issuance of Stock, Borrower shall

prepay the Loans in an amount equal to fifty percent (50%) of such

proceeds, net of underwriting discounts and commissions and other

reasonable out-of-pocket costs associated therewith. The payments shall

be applied in accordance with Section 1.5(e). Notwithstanding the

foregoing, the following proceeds of stock issuance shall be excluded

from any mandatory prepayment: (i) proceeds of issuances of Stock by

Holdings or Borrower on or prior to the Closing Date, (ii) proceeds of

issuances of Stock of Holdings (and options and warrants for the

issuance of Stock of Holdings) to employees and directors of Holdings,

Borrower or Beverly and proceeds from the exercise of options and

warrants by employees and directors and (iii) proceeds of issuances of

Stock by any Subsidiary of Borrower to Borrower which constitutes an

Investment permitted hereunder. On the one hundred twentieth day

following (i) the Amendment No. 5 Closing Date, the Borrower shall

prepay the Loans, in accordance with Section 1.5(e), in an amount equal

to 100% of the remaining funds in the Segregated Account which were

deposited in the Segregated Account on the Amendment No. 5 Closing Date

and have not been used to pay the purchase price of the Strategic

Initiatives and (ii) the date on which any additional funds are

deposited into the Segregated Account, the Borrower shall prepay the

Loans, in accordance with Section 1.5(e), in an amount equal to 100% of

the remaining funds in the Segregated Account which were deposited on

such date and have not been used to pay the purchase price of the

Strategic Initiatives."

(f) Amendment to Section 3.25. Section 3.25 of the

Credit Agreement is hereby amended and restated to read in its entirety as

follows:

"3.25 Segregated Account. As of the Amendment No. 5 Closing Date,

Borrower has deposited into deposit account number 112813519 at City

National Bank $17,271,000 ("Segregated Account") which (i) funds (along

with any additional funds deposited into the Segregated Account within

forty-five (45) days of the Amendment No. 5 Closing Date) will be used

solely to (A) pay for Strategic Initiatives approved in writing by the

Agent or (B) repay Loans hereunder as required by Section 1.5(d) and

(ii) will be subject to a Control Agreement. The Agent shall have sole

dominion and control of the Segregated Account and shall

 

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withdraw funds therefrom (i) upon the written request of the Borrower,

to pay for Strategic Initiatives approved in writing by the Agent or

(ii) to repay Loans as required by Section 1.5(d) (and the Borrower

hereby acknowledges that the Agent may, without notice to the Borrower,

withdraw funds from the Segregated Account for the purposes set forth in

this sentence)."

(g) Amendment to Section 5.1(f). Section 5.1(f) of

the Credit Agreement is hereby amended by replacing the amount "$20,000,000"

which appears therein with "$25,000,000". (h) Amendment to Section 5.6(v).

Section 5.6(v) of the Credit Agreement is hereby amended and restated to read in

its entirety as follows:

"(v) the sum of all amounts payable in connection with any

Permitted Acquisition (including the purchase price, all transaction

costs and all Indebtedness, liabilities and Contingent Obligations

incurred or assumed in connection therewith or otherwise reflected on a

consolidated balance sheet of Borrower and Target) shall not exceed

$20,000,000 and the sum of such amounts payable in connection with all

Permitted Acquisitions shall not exceed $100,000,000, and the portion

thereof allocable to goodwill and intangible assets for all such

Permitted Acquisitions during the term hereof shall not exceed

$60,000,000."

(i) Amendment to Section 6.1(a). Section 6.1(a) of

the Credit Agreement is hereby amended and restated to read in its

entirety as follows:

"Capital Expenditure Limits. Holdings and its Subsidiaries on

a consolidated basis shall not make Capital Expenditures during the

following periods that exceed the aggregate amounts set forth opposite

each of such periods (the "Capex Limit"):

Period Maximum Capital

Expenditures per Period

Fiscal Year 2007 $42,000,000

Fiscal Year 2008 and $50,000,000

each Fiscal Year thereafter

 

provided, however, that the Capex Limit referenced above will

be increased in any period by an amount equal to 50% of the difference

obtained by taking the Capex Limit for the immediately prior period

(excluding any Capex Carry Over Amounts) minus the actual amount of any

Capital Expenditures expended during such prior period (the "Capex Carry

Over Amount"), and for purposes of measuring compliance herewith, the

Capex Carry Over Amount shall be deemed to be the last amount spent on

Capital Expenditures in that succeeding period; provided further that

(i) the Capex Limit for Fiscal Year 2008 shall be reduced by the

positive difference, if any, between (A) the actual amount of

 

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Capital Expenditures expended during Fiscal Year 2007 minus (B) the

Capex Limit for Fiscal Year 2007 and (ii) that the Capex Carry Over

Amount for any Fiscal Year shall not exceed $10,000,000."

(j) Amendment to Section 6.1(c). Section 6.1(c) of

the Credit Agreement is hereby amended and restated to read in its

entirety as follows:

"Minimum Fixed Charge Coverage Ratio. Holdings and its

Subsidiaries shall have on a consolidated basis at the end of each

Fiscal Quarter set forth below, a Fixed Charge Coverage Ratio for the

12-Fiscal Month period then ended of not less than the following:

1.20 for the Fiscal Quarters ending December 31, 2006 and

March 31, 2007;

1.15 for the Fiscal Quarter ending June 30, 2007;

1.10 for each Fiscal Quarter ending after June 30, 2007

but on or prior to December 31, 2011; and

1.20 for each Fiscal Quarter ending thereafter."

(k) Amendment to Section 6.1(e). Section 6.1(e) of

the Credit Agreement is hereby amended and restated to read in its

entirety as follows:

"Maximum Leverage Ratio. Holdings and its Subsidiaries on a

consolidated basis shall have, at the end of each Fiscal Quarter set

forth below, a Leverage Ratio as of the last day of such Fiscal Quarter

and for the 12-Fiscal Month period then ended, of not more than the

following:

4.35 for the Fiscal Quarters ending December 31, 2006,

2006 and March 31, 2007;

4.70 for the Fiscal Quarter ending June 30, 2007; 4.80 for

the Fiscal Quarter ending September 30, 2007;

5.00 for the Fiscal Quarters ending December 31, 2007,

March 31, 2008, June 30, 2008 and September 30, 2008;

4.75 for the Fiscal Quarters ending December 31, 2008 and

March 31, 2009;

4.50 for the Fiscal Quarter ending June 30, 2009 and

September 30, 2009;

4.25 for the Fiscal Quarters ending December 31, 2009,

March 31, 2010 and June 30, 2010;

4.00 for the Fiscal Quarters ending September 30, 2010 and

December 31, 2010;

3.25 for the Fiscal Quarters ending March 31, 2011, June

30, 2011, September 30, 2011 and December 31, 2011;

and

3.00 for the Fiscal Quarter ending March 31, 2012 and for

each Fiscal Quarter ending thereafter."

 

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(l) Amendment to Section 6.1(f). Section 6.1(f) of

the Credit Agreement is hereby amended and restated to read in its

entirety as follows:

"Maximum Senior Leverage Ratio. Holdings and its Subsidiaries

on a consolidated basis shall have, at the end of each Fiscal Quarter

set forth below, a Senior Leverage Ratio as of the last day of such

Fiscal Quarter and for the 12-Fiscal Month period then ended, of not

more than the following:

2.85 for the Fiscal Quarter ending December 31, 2006;

2.85 for the Fiscal Quarter ending March 31, 2007;

2.95 for the Fiscal Quarter ending June 30, 2007;

3.00 for the Fiscal Quarter ending September 30, 2007;

3.15 for the Fiscal Quarters ending December 31,

2007, March 31, 2008, June 30, 2008, September 30,

2008 and December 31, 2008;

3.00 for the Fiscal Quarters ending March 31, 2009, June

30, 2009, September 30, 2009 and December 31, 2009;

2.75 for the Fiscal Quarters ending March 31, 2010, June

30, 2010, September 30, 2010 and December 31, 2010;

and

2.50 for the Fiscal Quarter ending March 31, 2011 and for

each Fiscal Quarter ending thereafter."

(m) Amendment to Section 6.2(a)(i). Section 6.2(a)(i)

of the Credit Agreement is hereby amended and restated to read in its entirety

as follows:

"As soon as available and in any event within forty-five (45)

days (or if Holdings files an extension with the Securities & Exchange

Commission, fifty (50) days; provided, that Borrower has given Agent a

written explanation forty- five (45) days after the end of the

applicable Fiscal Quarter of Holdings, in form and substance reasonably

acceptable to Agent, regarding the need for such extension) after the

end of each Fiscal Quarter (excluding the last Fiscal Quarter of

Holdings' Fiscal Year), Borrower will deliver (1) the consolidated and

consolidating balance sheets of Holdings and its Subsidiaries, as at

the end of such quarter, and the related consolidated and consolidating

statements of income, stockholders' equity and cash flow for such

Fiscal Quarter and for the period from the beginning of the then

current Fiscal Year of Holdings to the end of such Fiscal Quarter, (2)

a report setting forth in comparative form the corresponding figures

for the corresponding periods of the previous Fiscal Year and the

corresponding figures from the most recent Projections for the current

Fiscal Year delivered pursuant to Section 6.2(h) and (3) a schedule of

the outstanding Indebtedness for borrowed money of Holdings and its

Subsidiaries describing in reasonable detail

 

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each such debt issue or loan outstanding and the principal amount and

amount of accrued and unpaid interest with respect to each such debt

issue or loan."

(n) Amendment to Section 6.2(d). Section 6.2(d) of

the Credit Agreement is hereby amended by replacing the term "Fiscal Quarter"

with the term "Fiscal Month" therein.

(o) Amendment to Section 8.2(m). Section 8.2(m) of

the Credit Agreement is hereby amended by adding "AND (E) AUTHORIZES AND

INSTRUCTS THE AGENT ON ITS BEHALF TO ENTER INTO THE FIRST AMENDMENT TO

INTERCREDITOR AGREEMENT AS FIRST LIEN AGENT (AS DEFINED THEREIN) AND ON BEHALF

OF SUCH LENDER" after clause (D) in the first sentence thereof.

(p) Amendment to Section 9.2(b). Section 9.2(b) of

the Credit Agreement is hereby amended by inserting the following sentence after

the third sentence therein: "No amendment, modification, termination or waiver

of or consent with respect to any provision of any Loan Document appropriate (as

reasonably determined by the Agent) to evidence or implement an Incremental

Revolving Loan or Incremental Term Loan, shall be effective unless the same

shall be in writing and signed by Agent, Borrower, and any Incremental Revolving

Loan Lender or Incremental Term Loan Lender, as applicable; provided, however,

that any amendment to Section 1.1(g) shall require the written consent of the

Required Lenders."

(q) Amendments to Annex A. Annex A of the Credit

Agreement is hereby amended by inserting the following defined terms in their

appropriate alphabetical order:

(1) "Amendment No. 5 Closing Date" means

February 22, 2008."

(2) "Delaware Imaging" means Delaware

Imaging Partners, Inc., a Delaware

corporation.

(3) "First Amendment to Intercreditor

Agreement" means that certain First

Amendment to Intercreditor Agreement, dated

February 22, 2008, among the Agent, the

Second Lien Agent and the Credit Parties.

(4) "Increase Effective Date" has the

meaning ascribed to it in Section 1.1(g).

(5) "Incremental Revolving Loan" has the

meaning ascribed to it in Section 1.1(g).

(6) "Incremental Revolving Loan Lender" has

the meaning ascribed to it in Section

1.1(g).

(7) "Incremental Term Loan" has the meaning

ascribed to it in Section 1.1(g).

 

 

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(8) "Incremental Term Loan Lender" has the

meaning ascribed to it in Section 1.1(g).

(9) "New Imaging Center" means, as of any

date of determination, any new imaging

center which has been open for business for

less than (12) months.

 

(10) "New Imaging Center EBITDA" means with

respect to any New Imaging Center for any

period (a "Measurement Period"), the product

of (I) the "center level profit or loss" of

such New Imaging Center determined in

accordance with GAAP for the period (the

"Annualization Period") from and including

the date such New Imaging Center opened

through and including the last day of the

Measurement Period multiplied by (II) a

number obtained by dividing 365 by the

number of days in the Annualization Period.

(r) Amendments to Annex A.

(1) Annex A of the Credit Agreement is

hereby amended by amending and restating the

following definitions to each read in its

entirety as follows:

"Lenders means GE Capital, the other Lenders named on the

signature pages of the Agreement, and, if any such Lender shall decide

to assign all or any portion of the Obligations, such term shall

include any assignee of such Lender, and any other financial

institution that becomes a party hereto by execution of a joinder

agreement in connection with any Incremental Term Loans or Incremental

Revolving Loans and any assignee of such Lender."

"Revolving Loan Commitment means (a) as to any Lender, the

commitment of such Lender to make its Pro Rata Share of Revolving

Credit Advances or incur its Pro Rata Share of Letter of Credit

Obligations (including, in the case of the Swing Line Lender, its

commitment to make Swing Line Advances as a portion of its Revolving

Loan Commitment) as set forth on Annex B (as supplemented by

Supplemental Annex B to the Agreement) or in the most recent Assignment

Agreement, if any, executed by such Lender and, if applicable, the

commitment of such Lender to make Incremental Revolving Loans, which

commitment is in the amount set forth in the applicable joinder

agreement, or in the most recent Assignment Agreement, if any, executed

by such Lender and (b) as to all Lenders, the aggregate commitment of

all Lenders to make the Revolving Credit Advances (including, in the

case of the Swing Line Lender, Swing Line Advances) or incur Letter of

Credit Obligations, which aggregate commitment shall be FIFTY-FIVE

MILLION DOLLARS ($55,000,000) on the Amendment No. 3 Closing Date, as

such amount may be adjusted, if at all, from time to time in accordance

with the Agreement."

 

 

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"Term Loan B Commitment means (a) as to any Lender, the

commitment of such Lender to make its Pro Rata Share of the Term Loan B

(as set forth on Annex B (as supplemented by Supplemental Annex B)) in

the maximum aggregate amount set forth in Section 1.1(a) or in the most

recent Assignment Agreement, if any, executed by such Lender and the

commitment of such Lender to make Incremental Term Loans, which

commitment is in the amount set forth in the applicable joinder

agreement, or in the most recent Assignment Agreement, if any, executed

by such Lender and (b) as to all Lenders, the aggregate commitment of

all Lenders to make the Term Loan B. The Term Loan B Commitment with

respect to each Term Loan B shall reduce automatically by the amount

prepaid or repaid in respect of such Term Loan B (but solely by the

amount of such prepayment or repayment allocable to a Lender, for

purposes of clause (a) of this definition)."

(2) Annex A of the Credit Agreement is

hereby amended by replacing the phrase

"Telerate Page 3750" with the phrase

"Reuters Screen LIBOR01 Page" in the

definition of "LIBOR Rate" therein.

 

(s) Amendment to Annex F. Annex F is hereby replaced

with the revised Annex F attached as Annex F to this Amendment. (t) Schedules.

Each of Schedules 3.1(a), 3.1(b), 3.10, 3.11, 3.12, 3.14, 3.16, 3.17, 3.18,

3.19, 5. 1, and 5.2, to the Credit Agreement is hereby replaced with the

applicable Schedule attached hereto.

(u) Schedule II to Exhibit 6.2(d) is hereby amended

and restated to read in its entirety as set forth on Schedule II to Exhibit

6.2(d) attached hereto.

(v) Omnibus Amendment to Credit Agreement. Each

reference in the Credit A


 
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