[EXECUTION COPY]
THIS AMENDED AND RESTATED SECURED PROMISSORY NOTE MAY NOT BE ASSIGNED
WITHOUT THE PRIOR CONSENT OF BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE,
INC., AS AGENT FOR THE LENDERS UNDER THE BANK AUSTRIA LOAN AGREEMENT (AS
DEFINED HEREIN), AND IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
INTERCREDITOR, SUBORDINATION AND PARTIAL SALES
PROCEEDS ALLOCATION AGREEMENT
DATED THE DATE HEREOF
AMENDED AND RESTATED SECURED PROMISSORY NOTE
$2,750,000 Dated as of October 10, 2000
FOR VALUE RECEIVED, OptiCare Eye Health Centers, Inc., a Connecticut
corporation ("OptiCare"), Primevision Health, Inc., a Delaware corporation
("PVH"), and OptiCare Eye Health Networks, Inc, a North Carolina corporation
formerly known as Consolidated Eye Care, Inc., ("CEC" and, together with
OptiCare and PVH, the "Makers"), jointly and severally, promise to pay to the
order of Alexander Enterprise Holdings Corp., or its successors or assigns (the
"Payee"), in the lawful money of the United States of America the principal sum
of Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000) on the Maturity
Date (as hereinafter defined), together with interest from the date of this Note
to and including the date immediately preceding the Maturity Date calculated at
the Applicable Interest Rate (as hereinafter defined) on the outstanding
principal amount owing hereunder from time to time.
1. Joint and Several Liability. The obligations and liabilities of each of
the Makers shall be joint and several.
2. Interest. Interest shall accrue on the unpaid principal amount of this
Note at the Applicable Interest Rate from and including the date of this Note to
and including the day immediately preceding the Maturity Date and shall be
payable on each date on which any principal amount outstanding hereunder is
paid, whether at maturity, by acceleration or prepayment or otherwise. For the
purposes of this Section 2, the following terms shall have the meaning set forth
below:
"Advances" shall mean the advance of the sum of $2,250,000 made by the
Payee on October 10, 2000 and the advance of the sum of $500,000 made by the
Payee on January 8, 2001.
"Applicable Interest Rate" shall mean an interest rate per annum equal to
the Eurodollar Rate plus two and one-quarter percent (2 1/4%).
"Business Day" means a day on which banks are not authorized or required to
be closed in New York, New York and on which dealings are carried on in the
London interbank market.
"Eurodollar Rate" shall mean for any Interest Period:
(a) the offered rate for deposits in United States Dollars with a
maturity comparable to such Interest Period appearing on the display
designated on page "EDS" of the Bloomberg Service (or any other relevant
page or screen of such Service, or on any successor or substitute page of
such Service, or any successor to such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Payee from time to time, for purposes of providing
quotations of interest rate applicable to United States Dollar deposits in
the London interbank market) as of approximately 11:00 a.m. (London time)
on the date two Business Days prior to the commencement of such Interest
Period; and
(b) if such rate does not appear on said "EDS" page (or such successor
or substitute), the offered rate for deposits in United States Dollars with
a maturity comparable to such Interest Period appearing on the display
designated on page "LIBO" on the Xxxxxx Monitor Money Rates Service (or on
any successor or substitute page for such Service, or any successor to such
Service, providing rate quotations comparable to those currently provided
on such page for such Service, as determined by the Payee from time to
time, for purposes of providing quotations of interest rate applicable to
United States Dollar deposits in the London interbank market) as of
approximately 11:00 a.m. (London time) on the date two Business Days prior
to the commencement of such Interest Period; and
(c) in the event that neither rate referred to in clauses (a) or (b)
is available at such time for any reason, the offered rate for deposits in
United States Dollars with a maturity comparable to such Interest Period
appearing on Page 3750 of the Telerate Service of Bridge Information
Services (or on any successor or substitute page of such Service, or any
successor to such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Payee
from time to time, for purposes of providing quotations of interest rates
applicable to United States Dollar deposits in the London interbank market)
as of approximately 11:00 a.m. (London time) on the date two Business Days
prior to the commencement of such Interest Period;
provided, however, that if (1) the relevant rates do not appear on page "EDS" on
the Bloomberg Service, (2) the relevant rates do not appear on page "LIBO" on
the Router monitor money Rate Service or (3) the relevant rates do not appear on
Telerate Page 3750, then the Eurodollar Rate shall be deemed to mean for such
Interest Period a fluctuating rate of interest per annum, calculated daily,
equal to the prime rate of interest as published in The Wall Street Journal
(Eastern edition) (and if more than one such rate is reported, the highest rate)
less 25 basis points (.25%).
"Interest Period" shall mean the period of six (6) months commencing on
the date of each Advance and each successive period of six (6) months, provided,
however, that:
(i) no Interest Period shall end after the Maturity Date;
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(ii) each Interest Period that begins on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month, provided that such Business
Day does not occur after the Maturity Date; and
(iii) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the immediately preceding Business Day.
Interest on the principal sum of this Note shall be calculated on the basis
of the actual number of days elapsed in a Three Hundred sixty-five (365) day
year.
3. Maturity Date; Mandatory Prepayment.
(a) The term "Maturity Date" as used in this Note shall mean June 1,
2003.
(b) Upon the completion of any one or more Qualified Sales, as such
term is defined in that certain Amended and Restated Loan and Security
Agreement dated as of August 13, 1999, as amended, by and among the Makers,
OptiCare Health Systems, Inc., the lenders from time to time party thereto
(the "Lenders"), Bank Austria, AG, in its capacity as LC Issuer, and Bank
Austria Creditanstalt Corporate Finance, Inc., as agent for the Lenders
(the "Agent") (such Amended and Restated Loan and Security Agreement, as
amended by a certain First Amendment dated June 30, 2000 and a certain
Second Amendment dated the date hereof and as it may be further amended
from time to time, being hereinafter referred to as the "Bank Austria Loan
Agreement"), and following the mandatory prepayment to the Lenders of the
sum of $5,000,000 pursuant to Section 2.13(b) of the Bank Austria Loan
Agreement, the Makers shall mandatorily prepay the lesser of (i) the unpaid
principal amount of this Note, together with all accrued and unpaid
interest and any other amounts due and owing to the Payee hereunder or
under the Security Agreement (as hereinafter defined) and (ii) in the event
that the Net Cash Proceeds (as such term is defined in the Bank Austria
Loan Agreement) are not sufficient to prepay the entire unpaid principal
amount of this Note, such portion of the unpaid principal amount of this
Note as is equal to the balance of such Net Cash Proceeds, together with
interest accrued and unpaid on such principal amount prepaid.
4. Security. The obligations of the Makers under this Note are secured
pursuant to the terms of (i) the Security Agreement (as amended from time to
time, the "Security Agreement") dated the date hereof, made by the Debtors party
thereto in favor of the Payee, (ii) the Pledge and Security Agreement (as
amended from time to time, the "Pledge and Security Agreement") dated the date
hereof, made by the Pledgors party thereto in favor of the Payee and (iii) the
Guaranty (as amended from time to time, the "Guaranty") dated the date hereof,
made by the Guarantors party thereto in favor of the Payee. If an Event of
Default (as hereinafter defined) shall have occurred and the principal amount of
this Note shall have become immediately due and payable, the Payee shall be
entitled to exercise, in addition to any right, power or remedy permitted by law
or equity, all his remedies under the Security Agreement, the Pledge and
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Security Agreement and the Guaranty, subject, however, to the terms and
conditions of the Intercreditor, Subordination and Partial Sales Proceeds
Allocation Agreement dated the date hereof made by the Payee in favor of the
Agent and the Lenders (as amended from time to time, the "Intercreditor
Agreement").
5. Defaults and Remedies.
(a) The following events shall be "Events of Default" hereunder:
(i) the Makers default in the payment when due (whether at
maturity, by acceleration or mandatory prepayment or otherwise) of any
principal amount of this Note or interest on the principal amount of
this Note;
(ii) a court of competent jurisdiction enters a decree or order
in an voluntary or involuntary case under any present or future
federal or state bankruptcy, insolvency or similar law or appoints a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of the affairs of any Maker,
which decree or order shall have remained in force undischarged or
unstayed for a period of 60 days;
(iii) any Maker consents to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property;
(iv) any Maker admits in writing its inability to pay its debts
generally as they become due, files a petition to take advantage of
any applicable insolvency or reorganization statute, makes an
assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; or
(v) an Event of Default under, and as defined in, the Bank
Austria Loan Agreement, shall have occurred. -
(b) If an Event of Default, other than the Event of Default specified
in Sections 5(a)(ii), (iii) or (iv), occurs and is continuing, the Payee
may, at its option and in addition to any right, power or remedy permitted
by law or equity or herein granted, by notice to the Makers declare the
principal amount of this Note to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable; provided, however, that the Payee agrees that, if an Event of
Default specified in Section 5(a)(v) occurs, the Payee shall not declare
the principal amount of this Note to be due and payable immediately unless
and until the unpaid principal amount outstanding under the Bank Austria
Loan Agreement has been declared or has otherwise become immediately due
and payable. If an Event of Default specified in Sections 5(a)(ii), (iii)
or (iv) hereof occurs, the principal amount of this Note shall
automatically become and be immediately due and payable, without any
declaration or other act on the part of the Payee.
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6. Waivers. The Makers hereby waive presentment, demand for payment, notice
of dishonor and any and all other notices or demands in connection with the
delivery, acceptance, performance, default or enforcement of this Note and
hereby consent to any waivers or modifications that may be granted or consented
to by the Payee of this Note. No waiver by the Payee of any breach of any
covenant of the Makers herein contained or any term or condition hereof shall be
construed as a waiver of any subsequent breach of the same or of any other
covenant, term or condition herein.
7. Default Interest. If any amount required to be paid under this Note
shall not be paid when due, the Makers shall pay default interest on the unpaid
balance of such amount at a rate per annum equal to the Applicable Interest Rate
plus two percent (2%).
8. Tax Indemnity.
(a) If, as a result of any change in, or amendment to, the laws or
treaties (or regulations or rulings promulgated thereunder) of the United
States of America (or any political subdivision or taxing authority thereof
or therein) affecting taxation, or any change in official position
regarding the application or interpretation of such laws, treaties,
regulations or rulings (including a holding, judgment or order by court of
competent jurisdiction), which change amendment application or
interpretation becomes effective after the date hereof, the Makers are
required to deduct or withhold any tax from any sum payable by the Makers
hereunder, then, from and after such date, all sums payable by the Makers
hereunder, whether principal, interest, expenses or otherwise, shall be
paid in full, without any deduction or withholding whatsoever and, each
Maker hereby jointly and severally agrees to pay to the Payee such
additional amount as will result in the receipt by the Payee of the full
amount stated herein (including after deducting any required amounts from
such additional payments). In such event, the Makers shall pay directly to
the appropriate taxing authority any tax to be paid by them pursuant to
this Section 8. Each Maker jointly and severally indemnifies and agrees to
hold the Payee harmless from any liability or fines with respect to the
delay or failure of any Maker to report such transaction or to pay such
taxes or other withholding, duties, fees or charges or to make any filing
with any taxing authority or any other government agency.
(b) If any Maker shall pay any tax or charge as provided herein or
shall make any deduction or withholding from any amount paid hereunder,
within 10 days of payment of such amount, such Maker shall forward to the
Payee official receipts or other evidence acceptable to the Payee
establishing payment of such amount. Notwithstanding the obligation of the
Makers under this Section 8 to pay taxes as required by this Section 8, if
the Payee is required to pay any taxes or other charges, the Payee may pay
any such taxes and charges (if required under law or otherwise) and shall
be entitled to reimbursement if so entitled hereunder upon forwarding to
the Makers official receipts or other evidence establishing payment of such
amounts.
9. Enforcement. In the event that any Payee of this Note shall institute
any action for the enforcement or the collection of this Note, and such action
shall be successful, there shall be immediately due and payable, in addition to
the unpaid balance of this Note, all late charges,
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and all costs and expenses of such action, including reasonable attorneys' fees.
The Makers waive the right to interpose any setoff, counterclaim or defense of
any nature or description whatsoever.
10. Replacement of Note. Upon receipt by the Makers of evidence
satisfactory to them of the loss, theft, destruction or mutilation of this Note,
and (in case of loss, theft or destruction) of an indemnity reasonably
satisfactory to it, and upon reimbursement to the Makers of all reasonable
expenses incidental thereto, and upon surrender and cancellation of this Note if
mutilated, the Makers will make and delivery a new Note of like tenor in lieu of
this Note.
11. Amendments. This Note may not be changed, modified, amended, or
terminated except by a writing duly executed by the Makers and the Payee.
12. Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and either delivered personally to the
addressee, faxed to the addressee or mailed, certified mail, postage prepaid,
and shall be deemed given when so delivered personally, faxed with confirmed
answer back, or if mailed, three (3) days after the date of mailing, as follows:
If to the Makers, to:
c/o Opticare Health Systems, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
If to the Payee, to:
c/o Alpha Private Equity Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Coudert Brothers
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
13. Governing Law. This Note and all transactions contemplated hereunder or
evidenced hereby shall be governed by, construed under, and enforced in
accordance with the laws of the State of New York
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14. Assignment. None of the Makers may assign its rights or obligations
under this Note without the prior written consent of the Payee.
15. Successors. This Note shall be binding upon the successors and
permitted assignees of the parties hereto.
16. Intercreditor Agreement. This Note and the rights of the Payee herein
are subject, in all respects, to the terms and provisions of the Intercreditor
Agreement in the event of any conflict between the terms of this Note and the
Intercreditor Agreement, the Intercreditor Agreement shall govern.
IN WITNESS WHEREOF, the Makers have caused this Note to be executed by
their duly authorized officers as of the day and year first above written.
OPTICARE EYE HEALTH CENTERS, INC.
By: _________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
PRIMEVISION HEALTH, INC.
By: _________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
OPTICARE EYE HEALTH NETWORK, INC.
By: _________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
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