THIRD AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (as heretofore amended and as may be further amended, restated,
modified and supplemented from time to time) (the "Third Amendment"), is
effective as of January 5, 2001, by and among OPTICARE EYE HEALTH NETWORK, INC.,
formerly known as CONSOLIDATED EYE CARE, INC., a North Carolina corporation
("CEC"), OPTICARE EYE HEALTH CENTERS, INC., a Connecticut corporation
("OptiCare"), PRIMEVISION HEALTH, INC., a Delaware corporation ("PVC" and
together with CEC and OptiCare, the "Borrowers"), OPTICARE HEALTH SYSTEMS, INC.,
a Delaware corporation (the "Parent"; and together with the Borrowers, the
"Obligors"), the financial institutions from time to time party hereto
(collectively, the "Lenders") and BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE,
INC., in its capacity as agent for the Lenders (in such capacity, the "Agent").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Loan Agreement.
WHEREAS, the Obligors, the Lenders, and the Agent are parties to a
certain Amended and Restated Loan and Security Agreement dated as of August 13,
1999 (as the same shall have been amended, restated, modified and supplemented
from time to time, the "Loan Agreement");
WHEREAS, Alexander Enterprise Holdings Corp. ("Alexander Enterprise")
has heretofore made a loan to the Parent in the amount of $2,250,000 pursuant to
a certain subordinated note (the "Subordinated Note") dated October 10, 2000;
WHEREAS, Alexander Enterprises has agreed to loan an additional
$500,000 to the Parent; and
WHEREAS, from and after the Effective Date (as hereinafter defined) of
this Third Amendment, the Loan Agreement shall be amended, subject to and upon
the terms and conditions set forth herein;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and subject to the fulfillment of the
conditions set forth below, the parties hereto agree as follows:
SECTION 1. Amendment to Loan Agreement. The Loan Agreement is hereby amended as
follows:
(a) Section 1.1 of the Loan Agreement is hereby amended by restating
the following definitions in their entirety as follows:
"Maximum Junior Debt Lien" means the junior and subordinated
liens, mortgages and security interests to be granted by the Obligors upon the
Collateral in the maximum aggregate amount of (i) $2,750,000 of principal
obligations plus interest and the reasonable fees, expenses or other costs owed
by the Obligors to Alexander Enterprise not to exceed $17,500; less (ii) the
amount of any Net Cash Proceeds paid by the Obligors to the Investor pursuant to
and in accordance with the terms of the Subordination Agreement.
"Third Amendment" means this Third Amendment to the Loan
Agreement dated as of January 5, 2001.
"Subordination Agreement" means that certain Intercreditor,
Subordination and Partial Sales Proceeds Allocation Agreement between Alexander
Enterprise, the Agent and the Lenders, with the consent of the Obligors,
substantially in the form annexed hereto as Exhibit A to the Second Amendment,
as modified by that certain First Amendment to Intercreditor Subordination and
Partial Sales Proceeds Allocation Agreement dated as of January 5, 2001 in
substantially the form of Exhibit A to the Third Amendment.
"Subordinated Note" shall mean the Subordinated Note in
substantially the form of Exhibit B of the Third Amendment;
(b) Section 1.1 of the Loan Agreement is hereby amended by adding the
new definitions in the appropriate alphabetical order:
"Palisades Warrant Agreement" means that certain Warrant
Agreement dated as of January 5, 2001 between the Parent and Palisades
Concentrated Equity Partnership, L.P.
"Palisades Warrants" shall mean the Warrants issued pursuant to
the Palisades Warrant Agreement.
"Yimoyines Warrant Agreement" means that certain Warrant
Agreement dated as of January 5, 2001 between the Parent and Xxxx Xxxxxxxxx.
"Yimoyines Warrants" shall mean the Warrants issued pursuant to
the Yimoyines Warrant Agreement.
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(c) Section 2.13(b) of the Loan Agreement is amended by deleting the
dollar amount "$2,250,000" contained in clause (ii) of the proviso clause of the
second sentence and substituting in its place the dollar amount "$2,750,000";
and
(d) Section 8.2 (g) of the Loan Agreement is amended by deleting the
amount "$2,250,000" contained therein and substituting in its place the amount
"$2,750,000".
(e) Section 8.7 of the Loan Agreement is amended to (i) delete the
clause (d) thereof and substituting in its place the following provisions:
, (d) the issuance of the Alexander Enterprise Warrants to Alexander
Enterprise for the purchase of 2.29 million shares of Alexander
Enterprise Common Stock, 300,000 of which shall have an exercise price
of $.40 per share and 2,000,000 of which shall have an exercise price
of $1.00 per share with a term of 5 years,
, (e) the issuance of the Palisades Warrants to Palisades Concentrated
Equity Partnership, L.P. for the purchase of 400,000 shares of Common
Stock (as defined in the Palisades Warrant Agreement) at an exercise
price of $.40 per share and (f) the issuance of the Yimoyines Warrants
to Xxxx Xxxxxxxxx for the purchase of 50,000 shares of Common Stock
(as defined in the Yimoyines Warrant Agreement) at an exercise price
of $.40 per share.
(f) Schedule 6.27 to the Loan Agreement is hereby amended to include
the Palisades Warrants and the Yimoyines Warrants.
SECTION 2. Representations and Warranties. Each Obligor hereby represents and
warrants (which representations and warranties shall survive the execution and
delivery hereof) to the Lenders and the Agent that all of such Obligor's
representations and warranties contained in the Loan Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
date hereof as fully as though such representations and warranties had been made
on the date hereof and with specific reference to this Third Amendment and any
and all documents executed in connection herewith. To induce the Lenders and the
Agent to enter into this Third Amendment, each Obligor hereby represents and
warrants that, on and as of the date of this Third Amendment, no Event of
Default, nor any event or condition which, with notice, lapse of time or both,
would constitute an Event of Default has occurred and is continuing under the
Loan Agreement, except with respect to the Interest Default, the non-payment of
principal due under the Credit Agreement on December 31, 2000 and certain
financial covenants contained in the Credit Agreement. As further inducement of
the Lenders and
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the Agent to enter into this Third Amendment the Obligors represent and warrant
to the Agent and the Lenders as follows:
(a) It has the corporate power and authority to execute, deliver and
carry out the terms and provisions of this Third Amendment and the transactions
contemplated hereby and has taken or caused to be taken all necessary corporate
action to authorize the execution, delivery and performance of this Third
Amendment and the transactions contemplated hereby;
(b) No consent of any person (including, without limitation,
shareholders or creditors of the Obligors), and no action of, or filing with any
governmental or public body or authority is required to authorize, or is
otherwise required in connection with the execution, delivery and performance of
this Third Amendment and the other instruments and documents contemplated hereby
which has not been obtained;
(c) This Third Amendment and the other instruments and documents
contemplated hereby have been duly executed and delivered by a duly authorized
officer on behalf of such party, and constitutes a legal, valid and binding
obligation of such party enforceable against such party in accordance with its
terms, subject to bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general principles of equity;
and
(d) The execution, delivery and performance of this Third Amendment and
the other instruments and documents contemplated hereby will not violate any
law, statute or regulation, or any order or decree of any court or governmental
instrumentality, or conflict with, or result in the breach of, or constitute a
default under any contractual obligation of such party.
SECTION 3. Expenses. The Obligors, jointly and severally, agree to pay,
immediately upon demand by the Lenders and the Agent, all attorneys' fees, and
other out-of-pocket charges and expenses incurred by the Lenders and the Agent
in connection with the negotiation, preparation, execution, and delivery of this
Third Amendment and other instrument, document, agreement or amendment executed
in connection with this Third Amendment
SECTION 4. Defaults Hereunder. The breach of any representation, warranty or
covenant contained herein or in any document executed in connection herewith, or
failure to observe or comply with any term or agreement contained herein or in
any document executed in conjunction herewith, shall constitute an Event of
Default under the Loan Documents and the Lenders and the Agent shall be entitled
to exercise all rights and remedies they may have under the Loan Agreement, any
of the other Loan Documents, and applicable law.
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SECTION 5. Conditions to Effectiveness.
(a) This Third Amendment shall become effective on the date (the
"Effective Date") upon which the following conditions have been satisfied in
full or waived by the Agent in writing:
(i) The Agent shall have received in form and substance
satisfactory to the Agent and its counsel, counterparts of this Third Amendment
executed by each of the Obligors and the Required Lenders and such other
approvals or documents as the Agent may reasonably request;
(ii) All representations and warranties contained in this Third
Amendment or otherwise made in writing to the Agent in connection herewith shall
be true and correct in all material respects; and
(iii) The Agent shall have received payment in full of all
reasonable costs and expenses owing to the Agent and the Lenders in accordance
with Section 3 hereof, including, without limitation, the reasonable fees and
expenses of counsel to the Agent and counsel to the individual Lenders;
Once all the conditions precedent set forth above have been fulfilled, this
Third Amendment will be deemed effective as of the date of such fulfillment.
SECTION 6. Ratification; Waiver of Defenses.
(a) The Loan Agreement and the Loan Documents remain in full force and
effect and are hereby ratified and affirmed. Each Obligor hereby (i) confirms
and agrees that such Obligor is truly and justly indebted to the Agent and the
Lenders in the aggregate amount of the Obligations without defense, counterclaim
or offset of any kind whatsoever; and (ii) reaffirms and admits the validity and
enforceability of the Loan Agreement and the Loan Documents and the Liens in the
Collateral which were granted pursuant to the Loan Documents and otherwise.
(b) This Third Amendment shall be limited precisely as written and
shall not be deemed (i) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Loan Agreement or any of the
instruments or agreements referred to therein or a waiver of any Default or
Event of Default under the Loan Agreement, whether or not known to the Agent or
the Lenders or (ii) to prejudice any other right or rights which the Agent or
the Lenders may now have or have in the future under or in connection with the
Loan Agreement or any of the instruments or agreements referred to therein.
(c) Other than expressly provided for in this Third Amendment, nothing
contained in this Third Amendment shall constitute a modification or waiver of
any term or provision of the Loan Agreement.
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SECTION 7. References. All references to the Loan Agreement in the Loan
Agreement or any other Loan Document and the other documents and instruments
delivered pursuant to or in connection therewith shall mean such Loan Agreement
as modified hereby and as each may in the future be amended, restated,
supplemented or modified from time to time. This Third Amendment shall
constitute a Loan Document.
SECTION 8. Counterparts. This Third Amendment may be executed by the parties
hereto individually or in combination, in one or more counterparts, each of
which shall be an original and all of which, taken together, shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page by telecopier shall be effective as delivery of a manually executed
counterpart.
SECTION 9. Governing Law. THIS AMENDMENT 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 GIVING EFFECT TO ANY CONFLICT OF LAW
PRINCIPLES.
SECTION 10. Miscellaneous. The parties hereto shall, at any time and from time
to time following the execution of this Third Amendment, execute and deliver all
such further instruments and take all such further action as may be reasonably
necessary or appropriate in order to carry out the provisions of this Third
Amendment.
SECTION 11. Headings. Section headings in this Third Amendment are included
herein for convenience of reference only and are not to affect the construction
of, or to be taken into consideration in interpreting, this Third Amendment.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Obligors, the Lenders and the Agent
have caused this Amendment to be duly executed by their respective officers of
the day and year first above written.
OPTICARE HEALTH SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
OPTICARE EYE HEALTH CENTERS, INC.
By:
---------------------------------
Name:
Title:
PRIMEVISION HEALTH, INC.
By:
---------------------------------
Name:
Title:
OPTICARE EYE HEALTH NETWORK, INC.
By:
---------------------------------
Name:
Title:
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BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., AS AGENT
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., AS LENDER
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
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