ASSIGNMENT OF NOTES AND SECURITY AGREEMENTS
THIS ASSIGNMENT OF NOTES AND SECURITY AGREEMENTS (the "Assignment") is
dated as of August 13, 1999, by and between PRIMEVISION HEALTH, INC., a Delaware
corporation ("PVH"), and BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
("BACACF").
W I T N E S S E T H:
WHEREAS, PVH and BACACF are parties to that certain Amended and
Restated Loan and Security Agreement dated as of May 30, 1997, as amended (as so
amended, the "Original Loan Agreement"), pursuant to which BACACF made available
to PVH revolving credit loans and term loans (collectively, the "Loans"), the
aggregate outstanding principal balance of which Loans, as of the date hereof,
is $37,955,307.34; and
WHEREAS, PVH has entered into that certain Agreement and Plan of
Merger, dated as of April 12, 1999, with Opticare Health Systems, Inc., a
Delaware corporation f/k/a Saratoga Resources, Inc. (the "Parent"), Opticare
Shellco Merger Corporation, a Delaware corporation, PrimeVision Shellco Merger
Corporation, a Delaware corporation ("PVH Shellco"), and Opticare Eye Health
Centers, Inc., a Connecticut corporation ("Opticare"), pursuant to which, among
other things, PVH Shellco shall merge with and into PVH and PVH shall become a
wholly-owned subsidiary of Parent (the "Acquisition"); and
WHEREAS, PVH and/or certain of its subsidiaries are parties to certain
Administrative Services Agreements (collectively, the "Administrative Services
Agreements") with the physician practices listed on Schedule I attached hereto
(collectively, the "Practices"); and
WHEREAS, in conjunction with the Acquisition, PVH, its subsidiaries and
the Practices have agreed to terminate the Administrative Services Agreements,
and in connection therewith the applicable Practice will either enter into a
Transition Agreement and Services Agreement, or will repurchase its receivables,
inventory, equipment and other assets owned by PVH or its subsidiaries; and
WHEREAS, in connection with each such entry into a Transition Agreement
and Services Agreement (collectively, the "Conversion Agreements"), or with such
repurchase of assets, the applicable Practice has executed and delivered, or
will execute and deliver, to PVH the promissory notes (the "Notes") and the
security agreements (the "Security Agreements" and, together with the "Notes",
the "Assigned Agreements") described on Schedule I attached hereto; and
WHEREAS, in connection with the Acquisition, BACAF and PVH will enter
into that certain Amended and Restated Loan and Security Agreement dated as of
even date herewith (the "Restated Loan Agreement"), by and among the Parent,
PVH, Opticare, Consolidated Eye Care, Inc., a North Carolina corporation
("CEC"), the lenders party thereto (the "Lenders"), Bank
Austria, AG, as the LC Issuer (the "LC Issuer"), and BACACF, as agent for the
Lenders and the LC Issuer, pursuant to which, among other things, the existing
indebtedness and other obligations owing by PVH to BACACF under the Original
Loan Agreement will be restructured; and
WHEREAS, in connection with the Acquisition and the restructuring of
the indebtedness and other obligations owing by PVH to BACACF under the Original
Loan Agreement, PVH desires to assign all of its rights and remedies under the
Notes and the Security Agreements to BACACF as satisfaction of a portion of the
indebtedness owing under the Original Loan Agreement in an amount equal to
$3,902,387.00; and
WHEREAS, BACACF is willing to agree to such assignment, subject to the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the terms and
conditions herein, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, it is hereby agreed as follows:
1. DEFINITIONS. Capitalized terms contained herein and not otherwise
defined herein shall have the meanings given to such terms in the Restated Loan
Agreement.
2. ASSIGNMENT. PVH hereby assigns, transfers and sets over unto BACACF
as absolute owner and not as security, without recourse or warranty except as
provided herein, all of PVH's right, title and interest in and to the Notes and
the Security Agreements, and all of its rights and remedies thereunder,
including in each case, without limitation, the right to receive payments under
the Notes, the right to exercise any and all rights and remedies under any Note
or any Security Agreement upon the happening of any breach or default giving
rise to any such right or remedy (including rights to the payment of money,
rights of indemnity and setoff, and rights to defer payment or amounts or to
compel specific performance) in favor of PVH under the Assigned Agreements, and
the right to do any and all other things whatsoever which PVH is or may become
entitled to do under the Notes and Security Agreements.
3. SATISFACTION OF INDEBTEDNESS. In consideration of the assignment
contained herein, and subject to the terms and conditions of this Assignment,
BACACF agrees that, upon the effectiveness of the assignment contained herein,
the Obligations owing under the Original Loan Agreement shall be reduced by an
amount equal to Three Million Nine Hundred Two Thousand Three Hundred
Eighty-Seven Dollars ($3,902,387.00) (the "Reduction Amount").
4. RIGHT OF RECOURSE IN THE EVENT OF OFFSET. If and to the extent,
notwithstanding the foregoing, any Practice asserts any right of offset or any
defense to payment or performance under the Assigned Agreements to which such
Practice is a party, which right of offset or defense arises in whole or in part
out of the failure or alleged failure by PVH or any Affiliate of PVH to perform
any obligation owing to such Practice after the date hereof, whether under the
Conversion Agreements or otherwise, PVH shall pay to BACACF the amount of such
offset, or the amount of such Note subject to, or alleged to be subject to, such
defense. Any amount owing
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hereunder shall be payable to BACACF on demand, shall constitute a part of the
Obligations and shall be secured by the Collateral. Upon payment of any amount
hereunder, BACACF shall, at the request of PVH, assign to PVH, without recourse
or warranty, any claim BACACF may have in respect of such offset or defense
against the Practice asserting such offset or defense. If in any proceeding to
collect on any of the Notes any Practice raises any defense that is adverse to
the interests of PVH, PVH shall be entitled, at its own expense, to intervene in
and participate in such proceeding to the extent reasonably necessary to protect
its interests.
5. ADDITIONAL CONSIDERATION.. (a) Any and all amounts recovered by
BACACF from the Practices in respect of the Assigned Agreements shall be applied
by BACACF as it shall deem appropriate; provided, however, that as additional
consideration to PVH for the assignment hereunder, BACACF agrees that to the
extent the amount recovered in respect of the Assigned Rights (as hereinafter
defined) exceeds the sum of (i) the aggregate costs and expenses incurred after
the date hereof by BACACF and its Affiliates in connection with the collection
of the Assigned Rights (including, without limitation, attorneys' fees and
expenses); plus (ii) interest on the uncollected amount of the Aggregate
Reduction Amount (as hereinafter defined), calculated from the date hereof until
the collection of the Aggregate Reduction Amount in full at the rate of eight
percent (8%), calculated on the basis of a 360-day year and actual days elapsed;
plus (iii) the Aggregate Reduction Amount; it will apply such excess to the
reduction of the Obligations outstanding under the Restated Loan Agreement. The
parties hereto hereby acknowledge and agree that such application shall be
deemed to be for all purposes a reduction of the purchase price paid for the
Assigned Rights.
(b) For purposes of this Section 5:
(i) "Aggregate Reduction Amount" shall mean the sum of (w) the
"Reduction Amount", as such term is defined in that certain Assignment
of Rights to Payments under Services Agreements dated as of the date
hereof (as amended, restated, supplemented or otherwise modified from
time to time, the "Assignment of Rights to Payments under Services
Agreements"), by and between PVH and BACACF, (x) the "Reduction
Amount", as such term is defined in that certain Irrevocable Power of
Attorney and Assignment of Claim Proceeds dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to
time, the "Assignment of Claim Proceeds"), by and among BACACF, PVH,
PrimeVision East, Inc., a Delaware corporation, and PrimeVision West,
Inc., a Delaware corporation, (y) the "Reduction Amount", as such term
is defined in that certain Irrevocable Power of Attorney and Assignment
of Claim Proceeds (Asheville Eye) dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to
time, the "Asheville Assignment of Claim Proceeds"), by and among
BACACF, PVH, and PrimeVision of North Carolina, Inc., a North Carolina
corporation, and (z) the Reduction Amount hereunder, and
(ii) "Assigned Rights" shall mean, collectively, (1) the
"Assigned Payments", as such term is defined in the Assignment of
Rights to Payments under Services
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Agreements, (2) the "Assigned Proceeds", as such term is defined in
the Assignment of Claim Proceeds, and (3) the Assigned Agreement
hereunder.
6. REPRESENTATIONS AND WARRANTIES. PVH represents and warrants to
BACACF as follows:
(a) PVH is a corporation duly organized, validly existing and
in good standing under the laws of the State of North Carolina and is
duly qualified as a foreign corporation in good standing in each other
state wherein the conduct of its business or the ownership of its
property requires such qualification;
(b) PVH has the corporate right, power and authority to
execute, deliver and perform, and has taken all necessary corporate and
other action to authorize the execution, delivery and performance of,
this Assignment and the agreements, documents and instruments executed
in connection herewith and to assign the Assigned Agreements as set
forth herein; this Assignment has been duly executed and delivered by
the duly authorized officers of PVH, and constitutes the legal, valid
and binding obligation of PVH, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar state or
federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of
equitable remedies;
(c) the execution, delivery and performance by PVH of this
Assignment in accordance with its terms, and the transactions
contemplated hereby, do not and will not, by the passage of time, the
giving of notice or otherwise, (1) require any Governmental Approval or
violate any Applicable Law, (2) conflict with, result in a breach of or
constitute a default under the articles of incorporation, bylaws of PVH
or any indenture, agreement or other instrument to which PVH is a party
or by which PVH or any of its properties may be bound or any
Governmental Approval relating to PVH, or (3) result in or require the
creation or imposition of any Lien upon or with respect to any of the
Assigned Agreements;
(d) the original of each Note has been delivered to BACACF,
duly endorsed by PVH;
(e) PVH's interest in each of the Assigned Agreements is free
and clear of any Liens or other encumbrances, and PVH has not assigned
all or any part of its right, title and interest in and to the Assigned
Agreements to any Person, other than to BACACF pursuant to this
Assignment;
(f) PVH has entered into no agreement with any of the
Practices to compromise or otherwise render the Assigned Agreement
unenforceable in whole or in part; and
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(f) this Assignment is effective to transfer all of PVH's
right, title and interest in and to the Assigned Agreements to BACACF.
7. PAYMENTS TO PVH. If any amount shall be paid to PVH or any Affiliate
of PVH on account of any of the Notes or Security Agreements, such amount shall
be held by PVH or such Affiliate in trust for BACACF, segregated from other
funds of PVH or such Affiliate, and shall, forthwith upon receipt by PVH or such
Affiliate, be turned over to BACACF in the exact form received (duly indorsed to
BACACF, if required).
8. NO ASSUMPTION OF LIABILITY. This Assignment is limited to the
Assigned Agreement, the rights of PVH thereunder and the duties of PVH expressly
provided for therein. This Assignment shall not subject BACACF to, or transfer
or pass to BACACF, or in any way affect or modify, any liability of PVH or any
other Person to the makers of the Notes or the debtors under the Security
Agreements other than the liabilities, if any, expressly arising under the terms
of the Assigned Agreements.
9. INDEMNITY. PVH hereby indemnifies BACACF from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, reasonable fees and disbursements of counsel)
which may be imposed on, incurred by, or asserted against BACACF arising out of
any breach or violation by PVH of any of the representations, warranties or
covenants contained herein in any material respect.
10. EFFECTIVENESS. The assignment contained herein shall not become
effective unless and until all of the conditions precedent to the effectiveness
of the Restated Loan Agreement have been satisfied, and the Restated Loan
Agreement has become effective in accordance with its terms.
11. FURTHER ASSURANCES. In furtherance of the assignment effected
hereby, PVH will, from time to time, do and perform any other act or acts and
will execute, acknowledge, deliver and file, register, record and deposit (and
will refile, reregister, rerecord and redeposit whenever required) any and all
further instruments required by law or requested by BACACF in order to confirm,
evidence or further assure the assignment of the Assigned Agreements hereunder.
Without limiting the foregoing, PVH agrees that it shall (a) execute any
agreements, documents and instruments that may be necessary or desirable to
assign each financing statement which perfects the security interest granted
under any Security Agreement to BACACF, and (b) execute and deliver any notice
to the makers of the Notes requested by BACACF to notify such makers of the
assignment of the Notes to BACACF hereunder and irrevocably directing each such
maker to make all payments on such Notes directly to BACACF.
12. POWER OF ATTORNEY. PVH does hereby constitute BACACF its true and
lawful attorney, irrevocably, with full power of substitution, in BACACF's name
or otherwise, to ask, require, demand, receive, compound and give acquittance
for each and every payment due or to become due, or any such payment or
payments, under or arising out of any of the Assigned
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Agreements to which PVH is or may become entitled, to enforce compliance with
each or any term or provision of any one (1) or more of the Assigned Agreements
by each other party thereto, to endorse each and every check or other instrument
or order in connection therewith, or any one (1) or more of them, and to file
any claim or claims, take any action or actions or institute any proceeding or
proceedings which BACACF may deem to be necessary or advisable. The foregoing
power of attorney is coupled with an interest and shall be irrevocable until all
amounts owing under the Notes and Security Agreements have been fully paid and
discharged.
13. COOPERATION. PVH, at its own expense, and without unreasonable
condition or delay, shall cooperate with BACACF, its Affiliates, and their
respective attorneys and agents, as any such Person may reasonably request, to
assist BACACF and its Affiliates in their efforts to enforce the Assigned
Agreements and to recover any and all amounts now or hereafter owing in respect
thereof. Without limiting the foregoing, PVH shall, and shall cause its
Subsidiaries to:
(i) make available to BACACF and its counsel, upon reasonable
notice, its employees, agents, officers, directors and counsel
for questioning, deposition, or testimony at any trial,
hearing or other proceeding in connection with the Assigned
Agreement; and
(ii) provide copies or, to the extent requested by BACACF,
originals of such corporate records, files or documents
pertaining to the Assigned Agreement or which are reasonably
necessary or appropriate to enforce the Assigned Agreements.
PVH also agrees that BACACF may, upon reasonable notice, call
at any place of business or property location of PVH or any of
its Subsidiaries during normal business hours, and, without
hindrance or delay, to inspect, audit, check and make extracts
from any such Person's books, records, journals, orders,
receipts and any correspondence and other data relating to
Assigned Agreements and to discuss any of the foregoing with
any of such Person's employees, officers and directors and
with its independent accountants and attorneys. PVH hereby
authorizes its accountants and its attorneys to discuss any
matter relating to the Assigned Agreements with BACACF and its
agents, attorneys, officers, directors or employees.
14. NO FURTHER ASSIGNMENTS. PVH agrees to make no further assignments
of the Assigned Agreements or any interest therein.
15. LOAN DOCUMENT. This Assignment constitutes a Loan Document, as such
term is defined in the Restated Loan Agreement, and all amounts owing hereunder
are included in the Obligations under the Restated Loan Agreement, are secured
by the Collateral, and are guaranteed pursuant to the Guaranty.
16. COUNTERPARTS. This Assignment may be executed in counterparts, each
of which shall be an original, and all such counterparts shall constitute but
one and the same instrument.
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17. TIME IS OF THE ESSENCE. Time is of the essence in this Assignment.
18. GOVERNING LAW; CONSENT TO JURISDICTION. THIS ASSIGNMENT, AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. PVH HEREBY (A) SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR THE
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT;
(B) AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT; AND (C) IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE RIGHT OF BACACF TO BRING
PROCEEDINGS AGAINST PVH IN THE COURTS OF ANY OTHER JURISDICTION.
19. WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION SPECIFICALLY
WITH ITS RESPECTIVE COUNSEL, PVH AND BACACF HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN CONNECTION
WITH, OR RELATING TO THIS ASSIGNMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN),
OR ACTIONS OF PVH OR BACACF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BACACF
TO ENTER INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to set their hands and seals as of the date first above
written.
"PVH"
PRIMEVISION HEALTH, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Acting President
Attest: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
[CORPORATE SEAL]
"BACACF"
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Xxxxx Xxxx
-----------------------------------------
Xxxxx Xxxx
Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
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