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EXHIBIT 4.22
VISION TWENTY-ONE, INC.
SEVENTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
This Seventh Amendment and Waiver to Credit Agreement (herein, the
"Amendment") is entered into as of December 10, 1999, among Vision Twenty-One,
Inc., a Florida corporation (the "Borrower"), the Banks party hereto, and Bank
of Montreal as Agent for the Banks.
PRELIMINARY STATEMENTS
A. The Borrower, the Banks, and the Agent are parties to an Amended
and Restated Credit Agreement, dated as of July 1, 1998, as amended (herein,
the "Credit Agreement"). All capitalized terms used herein without definition
shall have the same meanings herein as such terms have in the Credit Agreement.
B. The Borrower has requested that Bank of Montreal provide the
Borrower with a short-term bridge loan facility under the Credit Agreement on a
secured "last-in first-out" basis, and the Banks are willing to amend the
Credit Agreement to provide for such credit facility on the terms and
conditions as provided for in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as
follows:
1.1. Section 1.14 of the Credit Agreement shall be amended
and restated in its entirety to read as follows:
Section 1.14. Bridge Loans.
(a) Bridge Loans. Subject to all of the terms and conditions
hereof, during the period from and including December 10,
1999, to but not including March 31, 2000 (the "Bridge Loan
Period"), Bank of Montreal (the "Bridge Loan Bank", the
Bridge Loan Bank to constitute a Bank for all purposes of
the Loan Documents) agrees to make loans from time to time
in its discretion in accordance with the terms hereof
(collectively, the "Bridge Loans", the Bridge Loans to
constitute Loans for all purposes of the Loan Documents) to
the Borrower under a short-term bridge loan facility in an
aggregate amount at any one time outstanding not to exceed
$9,400,000 (the "Bridge Loan Commitment"); provided,
however, that Bridge Loans shall be available to the
Borrower only if and so long as the Revolving Credit
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Commitments of the Banks are fully utilized and the maximum
amount of Loans thereunder are outstanding. Bridge Loans may
be availed of by the Borrower from time to time during the
Bridge Loan Period and Borrowings thereunder may be repaid
and used again through but not including the last day of the
Bridge Loan Period, at which time the Bridge Loan Commitment
shall expire. The Borrower hereby promises to pay all Bridge
Loans on the last day of the Bridge Loan Period, the final
maturity thereof. Each Borrowing of Bridge Loans shall be
subject to (i) the notice requirements for Borrowings under
the terms of Section 1.6 of this Agreement, except that the
Borrower shall provide at least 2 Business Days prior
written notice of each Borrowing of Bridge Loans pursuant to
the terms of clause (f) below (except to the extent waived
by the Bridge Loan Bank in its discretion), (ii) the
satisfaction of the conditions set forth in Section 7.2
hereof (with all references therein to a Borrowing to be
deemed a reference to a Borrowing of Bridge Loans, and (iii)
compliance with the terms of clause (f) below. The Bridge
Loan Bank shall maintain on its internal records an account
evidencing the indebtedness of the Borrower owing to the
Bridge Loan Bank in respect of the Bridge Loans, including
the principal amount of the Bridge Loans made by it and the
interest thereon and each repayment and prepayment in
respect thereof. Any such recordation shall be conclusive
and binding on the Borrower, absence manifest error;
provided, that the failure to make any such recordation, or
any error in such recordation, shall not affect the
Borrower's obligation to repay all principal and interest in
respect of the Bridge Loans made by the Bridge Loan Bank to
the Borrower. Upon request by the Bridge Loan Bank, the
Borrower shall execute and deliver to the Bridge Loan Bank a
promissory note to evidence the Bridge Loans (the "Bridge
Loan Note", the Bridge Loan Note to constitute a Note for
all purposes of the Loan Documents), such Bridge Loan Note
to be payable to the order of the Bridge Loan Bank in the
principal amount of its Bridge Loan Commitment and otherwise
in the form of Exhibit J hereto. Without regard to the face
principal amount of the Bridge Loan Note, the actual
principal amount at any time outstanding and owing by the
Borrower on account of such Bridge Loan Note shall be the
sum of all Bridge Loans then or theretofore made thereon
less all payments actually received thereon.
(b) Minimum Borrowing Amount. Each Borrowing of
Bridge Loans shall be in an amount not less than $100,000.
(c) Interest on Bridge Loans. The outstanding
principal balance of the Bridge Loans shall bear interest
(computed on the basis of a year of 360 days and actual days
elapsed) at the Base
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Rate from time to time in effect plus 3.75%, provided that
if the Bridge Loans are not paid when due, at the election
of the Agent, such Bridge Loans shall bear interest at a
rate per annum of 2% in excess of the interest otherwise
payable thereon. Interest on each Bridge Loan shall be
payable monthly in arrears on the last day of each month and
at maturity (whether by lapse of time, acceleration, or
otherwise), and after maturity interest shall be payable
upon demand.
(d) Application of Payments. Notwithstanding
anything herein or in any other Loan Document to the
contrary, the Borrower and the Banks each hereby acknowledge
and agree that all payments received in respect of
Obligations by the Agent and all proceeds of Collateral (in
each case, whether before or after the occurrence of an
Event of Default) shall be applied first to reduce the
Bridge Loans (both for principal and interest) until payment
in full thereof before payment of the other Obligations
outstanding under this Agreement and the other Loan
Documents.
(e) Purpose. Bridge loans made to the Borrower by
Bank of Montreal and outstanding on December 10, 1999, in
the aggregate principal amount of $4,285,874 shall remain
outstanding as Bridge Loans under this Section and
thereafter the Borrower shall apply the proceeds of each new
Borrowing of Bridge Loans to the payment of operating
expenses in accordance with clause (f) below.
(f) Budget. As soon as available, and in any event
no later than noon (CST) on Wednesday of each calendar week
(commencing December 8, 1999, provided that solely for
purposes of facilitating a funding of Bridge Loans requested
on December 10, 1999, the Borrower's Borrowing request and
application of proceeds summary furnished to the Banks on
December 10, 1999, shall be deemed the Approved Budget as of
December 8, 1999), the Borrower shall provide the Agent, the
Banks, and the Banks' financial consultant (at the name and
address furnished to the Borrower by the Agent), a budget (a
"Budget"), signed by an appropriate officer, employee, or
agent of the Borrower and in form and substance satisfactory
to the Agent and the Banks' financial consultant, for the
Borrower of all projected cash receipts and detailed cash
disbursements of the Borrower and its Subsidiaries for the
next calendar week, together with any request for a
Borrowing of Bridge Loans for such week. Within forty-eight
(48) hours after receipt of each Budget, the Agent shall
notify the Borrower as to whether the Bridge Loan Bank will
or will not, in the exercise of its sole discretion,
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authorize the Borrowing of Bridge Loans by the Borrower for
the purposes set forth in, with the proceeds thereof to be
used in accordance with, such Budget; provided that in the
absence of such notification by the Agent, the Bridge Loan
Bank shall be deemed to have authorized (subject to
compliance with the other terms and conditions hereof) the
Borrowing of Bridge Loans by the Borrower for the purposes
set forth in, with the proceeds thereof to be used in
accordance with, such Budget. Any such Budget so approved by
the Bridge Loan Bank shall constitute an "Approved Budget."
Any expenditures under any Approved Budget shall first be
paid from monies currently in the possession of the Borrower
and its Subsidiaries; to the extent monies in the possession
of the Borrower and its Subsidiaries are insufficient to
fund any expenditure item in an Approved Budget, the
Borrower may request, and the Bridge Loan Bank shall make, a
Borrowing under the Bridge Loan Commitment to fund any such
expenditure item subject to the other terms and conditions
of this Agreement.
As soon as available, and in any event no later than noon
(CST) on Wednesday of each calendar week (commencing
December 15, 1999), the Borrower shall provide the Agent,
the Banks, and the Banks' financial consultant (at the name
and address furnished to the Borrower by the Agent), signed
by an appropriate officer, employee, or agent of the
Borrower and in form and substance satisfactory to the Agent
and the Banks' financial consultant, a detailed report on
the source, use, and application of any cash received and
expended by the Borrower and its Subsidiaries during the
previous calendar week pursuant to an Approved Budget, and a
reconciliation, including a line by line item comparison of
budgeted to actual receipts and expenditures setting forth
in reasonable detail an explanation of any differences
between budgeted and actual amounts, of funds received or
expended by the Borrower and its Subsidiaries during said
calendar week.
1.3. The last sentence of Section 8.5 of the Credit
Agreement (relating to the delivery of a weekly cash operating budget)
shall be deleted.
1.4. Any reference in the Credit Agreement to the "Notes"
shall be deemed amended to mean, collectively, all of the promissory
notes of the Borrower issued under the Credit Agreement to the Banks,
including, without limitation, the Bridge Loan Note.
1.5. Any reference in the Credit Agreement to the "Loans"
shall be amended to mean, collectively, all of the loans made to the
Borrower under the Credit Agreement, including, without limitation,
the Bridge Loans.
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1.6. Exhibit J to the Credit Agreement is hereby amended
and restated to read as set forth in the form attached to this
Amendment as Annex A attached hereto.
SECTION 2. WAIVERS.
2.1. The Borrower has requested that the Banks temporarily waive the
Borrower's non-compliance with Section 1.4 which required payment of interest
on November 30, 1999, in the amount of approximately $497,102 (which payment
remains outstanding and unpaid). In order to accommodate the Borrower's
request, the Banks hereby agree to temporarily waive the Borrower's
non-compliance with Section 1.4 of the Credit Agreement with respect to
interest due November 30, 1999, through the period ending December 31, 1999, at
which time all such interest, together with interest otherwise due under
Section 1.4 of the Credit Agreement, shall be due and payable. This waiver is
conditioned upon the satisfaction of the conditions precedent set forth in
Section 3 below.
2.2. The Borrower has requested that the Banks temporarily waive
effective September 30, 1999, the Borrower's non-compliance with the following
covenants contained in the Credit Agreement: (i) Section 1.8(b) which required
payment of the September 30, 1999, principal installment of $388,040.80 due
with respect to the Term A Loans, (ii) Section 1.4 which required timely
payment of interest when due in the amount of $409,411.96 which payment was
received on October 6 and 7, 1999, which was after the applicable grace period,
(iii) Section 8.5(a) which required the furnishing of the July 1999, August
1999, September 1999, and October 1999, monthly financial statements to the
Banks, (iv) Section 4.2 which required putting in place blocked account
arrangements, (v) Section 8.5(h) which required providing the Banks with
written notice of default, (vi) Section 8.34 which will require repayment of
the Loans by $2,000,000 out of the proceeds of repayment of advances made by
the Borrower to the practice groups, and (vii) Sections 8.8 (Total Funded
Debt/Adjusted EBITDA Ratio), 8.10 (Interest Coverage Ratio), and 8.11 (Debt
Service Coverage Ratio) of the Credit Agreement. In order to accommodate the
Borrower's request, the Banks hereby agree to temporarily waive the Borrower's
non-compliance with the above-referenced covenants through the period ending
December 31, 1999. This waiver is conditioned upon the satisfaction of the
conditions precedent set forth in Section 3 below.
2.3. Except as specifically waived hereby, all of the terms and
conditions of the Credit Agreement shall stand and remain unchanged and in full
force and effect. This waiver does not extend to or cover any other Events of
Default which may now or hereafter exist under the Credit Agreement, this
waiver being expressly limited to the covenants referred to in Sections 2.1 and
2.2 above.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
3.1. The Borrower, the Agent, and the Banks shall have
executed and delivered this Amendment.
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3.2. Each Material Subsidiary shall have executed its
acknowledgement and consent to this Amendment in the space provided
for that purpose below.
3.3. The Borrower shall have delivered to the Agent copies
of all written management reports furnished to the Borrower by its
independent public accountants during the current year and the prior
years to the extent available.
3.4. The Agent shall have received for each Bank (i) copies
of resolutions of the Borrower's board of directors authorizing the
execution and delivery of this Amendment and the Loan Documents to be
executed and delivered in connection herewith and ratifying the Loan
Documents executed and delivered prior to the date hereof as well as
the execution and delivery of the warrants referred to in Section 3.4
above and the issuance of any stock pursuant to the terms thereof and
(ii) the favorable written opinion of counsel to the Borrower, in form
and substance reasonably satisfactory to the Agent.
3.5. Legal matters incident to the execution and delivery
of this Amendment shall be satisfactory to the Agent and its counsel.
SECTION 4. AMENDMENT FEE.
In consideration of the Banks execution and delivery of this
Amendment, the Borrower hereby promises to pay to the Agent for the benefit of
the Banks (to be shared ratably based on the outstanding principal balance of
all Obligations, other than Bridge Loans, owing to the Banks on the date
hereof) an amendment fee of $750,000. Such amendment fee shall be fully earned
on the date hereof, payable on the earlier to occur of (i) Xxxxx 00, 0000, (xx)
the payment in full of the Obligations, (iii) the date upon which all
Obligations are due and payable pursuant to Section 9 of the Credit Agreement,
or (iv) the date upon which all or substantially all of the assets of the
Borrower or the Borrower and its Subsidiaries are acquired by another Person or
all or substantially all of the capital stock of the Borrower is acquired by
any Person or group of Persons acting in concert or any other Change of Control
shall occur.
SECTION 5. RELEASE OF CLAIMS.
TO INDUCE THE BANKS AND THE AGENT TO ENTER INTO THIS AMENDMENT, THE
BORROWER AND, BY SIGNING THE ACKNOWLEDGEMENT AND CONSENT REFERRED TO BELOW,
EACH OF ITS SUBSIDIARIES HEREBY RELEASE, ACQUIT, AND FOREVER DISCHARGE THE
BANKS AND THE AGENT AND EACH OF THEIR AFFILIATES (INCLUDING, WITHOUT
LIMITATION, XXXXXXX XXXXX SECURITIES, INC. AND XXXXXX TRUST AND SAVINGS BANK),
AND THEIR OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS, AND ASSIGNS, FROM
ALL LIABILITIES, CLAIMS, DEMANDS, ACTIONS, AND CAUSES OF ACTION OF ANY KIND (IF
ANY THERE BE), WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, DISPUTED
OR UNDISPUTED, AT LAW OR IN EQUITY, THAT THEY NOW HAVE OR EVER HAD AGAINST THE
BANKS AND THE AGENT AND THEIR AFFILIATES, OR ANY ONE OR MORE OF THEM
INDIVIDUALLY, UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR ANY OTHER CREDIT, DEPOSIT OR OTHER
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FINANCIAL ACCOMMODATION MADE AVAILABLE TO THE BORROWER OR ANY ONE OR MORE OF
ITS SUBSIDIARIES.
SECTION 6. MISCELLANEOUS.
6.1. The Borrower has heretofore executed and delivered to the Agent
and the Banks certain of the Collateral Documents. The Borrower hereby
acknowledges and agrees that, notwithstanding the execution and delivery of
this Amendment, the Collateral Documents remain in full force and effect and
the rights and remedies of the Agent and the Banks thereunder, the obligations
of the Borrower thereunder, and the liens and security interests created and
provided for thereunder remain in full force and effect and shall not be
affected, impaired, or discharged hereby. The Borrower hereby acknowledges and
agrees that the Bridge Loans constitute Obligations secured by each of the
Collateral Documents. Nothing herein contained shall in any manner affect or
impair the priority of the liens and security interests created and provided
for by the Collateral Documents as to the indebtedness which would be secured
thereby prior to giving effect to this Amendment.
6.2. Except as specifically amended herein, the Credit Agreement
shall continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection
therewith, or in any certificate, letter or communication issued or made
pursuant to or with respect to the Credit Agreement, any reference in any of
such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
6.3. The Borrower agrees to pay on demand all costs and expenses of
or incurred by the Agent in connection with the negotiation, preparation,
execution, and delivery of this Amendment and the other instruments and
documents to be executed and delivered in connection herewith, including the
fees and expenses of counsel for the Agent.
6.4. This Amendment may be executed in any number of counterparts,
and by the different parties on different counterpart signature pages, all of
which taken together shall constitute one and the same agreement. Any of the
parties hereto may execute this Amendment by signing any such counterpart and
each of such counterparts shall for all purposes be deemed to be an original.
This Amendment shall be governed by the internal laws of the State of Illinois.
6.5. This Amendment together with the other Loan Documents represent
the entire agreement of the Borrower, its Subsidiaries, the Banks and the Agent
with respect to the subject matter hereof and thereof, and there are no
promises or undertakings by the Banks or the Agent relative to the subject
matter hereof or thereof not expressly set forth therein. While the Agent and
the Banks intend to review and discuss with the Borrower the situation arising
as a result of the existing Events of Default and the Borrower's current
financial condition and business prospects, no such discussions shall be
binding upon the Agent or the Banks or otherwise create any additional
obligations unless agrees to in writing by the parties hereto. The Agent and
the Banks make no representations as to what actions, if any, the Agent and the
Banks will take after the expiration of the waiver period set forth in Section
2 above with respect to the Events of Default referred to therein if uncured at
that time or with respect to any other Event of Default not subject to the
limited waiver of Section 2 above, and the Agent and the Banks must and do
specifically reserve any and all rights and remedies they have (after giving
effect to this Amendment) with respect to any such Event of Default.
[SIGNATURE PAGES TO FOLLOW]
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This Seventh Amendment to Amended and Restated Credit Agreement is
dated as of the date and year first above written.
VISION TWENTY-ONE, INC.
By /s/ Xxxxxxxx X. Xxxxxxxx
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Name Xxxxxxxx X. Xxxxxxxx
Title Chief Executive Officer
Accepted and agreed to as of the day and year last above written.
BANK OF MONTREAL, in its individual PILGRIM PRIME RATE TRUST
Capacity as a Bank and as a Agent By: Pilgrim Investments, Inc., as its
Investment Manager
By /s/ Xxxx X. Xxxx By /s/ Xxxxxxx X. XxXxxxx
-------------------------------- -------------------------------
Name Xxxx X. Xxxx Name Xxxxxxx X. XxXxxxx
Title Director Title Assistant Vice President
BANK ONE TEXAS, N.A. PILGRIM AMERICA HIGH INCOME
INVESTMENTS LTD.
By: Pilgrim Investments, Inc., as its Investment
Manager
By /s/ Xxxxxx Xxxxxx By /s/ Xxxxxxx X. XxXxxxx
-------------------------------- -------------------------------
Name Xxxxxx Xxxxxx Name Xxxxxxx X. XxXxxxx
Title Vice President Title Assistant Vice President
PACIFICA PARTNERS I, X.X. XXXXXXX XXXXX BUSINESS FINANCIAL
By: Imperial Credit Asset SERVICES, INC.
Management, as its
Investment Manager
By /s/ Xxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxx
-------------------------------- -------------------------------
Name Xxxx X. Xxxxx Name Xxxxxx X. Xxxxx
Title Vice President Title Assistant Vice President
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ACKNOWLEDGEMENT AND CONSENT
The undersigned, being all of the Material Subsidiaries of Vision
Twenty-One, Inc., have heretofore executed and delivered to the Agent and the
Banks one or more Guaranties and Collateral Documents. Each of the undersigned
hereby consents to the Seventh Amendment to Credit Agreement as set forth above
and confirms that its Guaranty and Collateral Documents, and all of its
obligations thereunder, remain in full force and effect and, without limiting
the foregoing, acknowledges and agrees that the Bridge Loans constitute
Obligations guaranteed by, or otherwise secured by, the Loan Documents executed
by it. Each of the undersigned further agrees that the consent of the
undersigned to any further amendments to the Credit Agreement shall not be
required as a result of this consent having been obtained, except to the
extent, if any, required by the Loan Documents referred to above.
"GUARANTORS"
VISION 21 PHYSICIAN PRACTICE MANAGEMENT COMPANY
VISION 21 OF SOUTHERN ARIZONA, INC.
VISION 21 OF SIERRA VISTA, INC.
VISION 21 MANAGEMENT SERVICES, INC.
VISION 21 MANAGED EYE CARE OF TAMPA BAY, INC.
VISION TWENTY-ONE MANAGED EYE CARE IPA, INC.
BBG-COA, INC.
BLOCK VISION, INC.
UVC INDEPENDENT PRACTICE ASSOCIATION, INC.
MEC HEALTH CARE, INC.
LSI ACQUISITION, INC.
VISION TWENTY-ONE EYE SURGERY CENTERS, INC.
EYE SURGERY CENTER MANAGEMENT, INC.
VISION TWENTY-ONE REFRACTIVE CENTER, INC.
VISION TWENTY-ONE OF WISCONSIN, INC.
By /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx, an authorized
signatory for each of the
above-referenced entities
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ANNEX A TO SEVENTH AMENDMENT TO CREDIT AGREEMENT
EXHIBIT J
BRIDGE LOAN NOTE
U.S. $9,400,000.00 ____________, ____
FOR VALUE RECEIVED, the undersigned, VISION TWENTY-ONE, INC., a
Florida corporation (the "Borrower"), promises to pay to the order of Bank of
Montreal (the "Bank") on the last day of the Bridge Loan Period, at the
principal office of the Agent in Chicago, Illinois, in immediately available
funds, the principal sum of Nine Million Four Hundred Thousand and no/100
Dollars ($9,400,000.00) or, if less, the aggregate unpaid principal amount of
all Bridge Loans made by the Bank to the Borrower pursuant to the Credit
Agreement and with each such Bridge Loan to mature and become payable as
provided in the Credit Agreement, together with interest on the principal
amount of each such Bridge Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates, specified in the Credit
Agreement.
The Bank shall record on its books or records or on a schedule
attached to this Note, each Bridge Loan made by it together with all payments
of principal and interest and the principal balances from time to time
outstanding hereon, and the interest rate applicable thereto, provided that
prior to the transfer of this Note all such amounts shall be recorded on a
schedule attached to this Note. The record thereof, whether shown on such books
or records or on the schedule to this Note, shall be prima facie evidence of
the same, provided, however, that the failure of the Bank to record any of the
foregoing or any error in any such record shall not limit or otherwise affect
the obligation of the Borrower to repay all Bridge Loans made to it under the
Credit Agreement together with accrued interest thereon.
This Note is one of the Notes referred to in the Amended and Restated
Credit Agreement dated as of July 1, 1998, among the Borrower, the Banks party
thereto, and Bank of Montreal as Agent for the Banks (such Amended and Restated
Credit Agreement as the same may from time to time be amended being referred to
as the "Credit Agreement") and payment hereof is secured by the Loan Documents,
and this Note and the holder hereof are entitled to all the benefits provided
for thereby or referred to therein, to which Credit Agreement and Loan
Documents reference is hereby made for a statement thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as in the Credit Agreement. This Note shall be governed by and
construed in accordance with the laws of the State of Illinois.
Prepayments may be made hereon, certain prepayments are required to be
made hereon and this Note may be declared due prior to the expressed maturity
hereof, all in the events, on the terms and in the manner as provided for in
the Credit Agreement.
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The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
VISION TWENTY-ONE, INC.
By
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Name
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Title
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