CONSENT AND AMENDMENT NUMBER ONE TO
LOAN AND SECURITY AGREEMENT
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THIS CONSENT AND AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
(this "Consent and Amendment") is entered into as of July 28, 1997 (but
effective only in accordance with the terms and conditions of Section 4 of this
Consent and Amendment), by and among FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), LASERSIGHT INCORPORATED, a Delaware corporation
("LaserSight"), LASERSIGHT TECHNOLOGIES, INC., a Delaware corporation
("Technologies"), MEC HEALTH CARE, INC., a Maryland corporation ("MEC"), LSI
ACQUISITION, INC., a New Jersey corporation ("LSI"), LASERSIGHT CENTERS
INCORPORATED, a Delaware corporation ("Centers"), and MRF, INC., a Missouri
corporation ("MRF," together with LaserSight, Technologies, MEC, LSI, and
Centers, individually and collectively, jointly and severally, "Borrower"), with
reference to the following facts:
A. Foothill and Borrower heretofore have entered into that certain Loan and
Security Agreement, dated as of March 31, 1997 (the "Loan Agreement");
B. Borrower has requested that Foothill consent to the following
transactions (collectively, the "Transactions") being contemplated by
Borrower and to the amendment of the Loan Agreement as required thereby:
(i) the formation by LaserSight of its wholly-owned Subsidiary, Photomed
Acquisition, Inc., a Delaware corporation ("Photomed-A"); (ii) the
merger of Photomed, Inc., a Pennsylvania corporation ("Photomed"), with
and into Photomed-A, which corporation shall be the surviving entity,
and which merger shall be effected in accordance with the terms and
conditions of that certain Agreement and Plan of Merger, dated as of
July 15, 1997, among LaserSight, Photomed-A, Photomed, Xxxxxxxx X.
Xxxxxx, M.D., an individual ("Xxxxxx"), Xxxxx Xxxxxx, an individual,
Xxxxxx Xxxxxxx, Trustee for Xxxx Xxxxxxx Xxxxxx, u/t/d December 27,
1991, and Xxxxxx Xxxxxxx, Trustee for Xxxx Xxxx Xxxxxx, u/t/d December
27, 1991 (the "Merger Agreement"); (iii) the acquisition by LaserSight
of that certain U.S. letters patent known as number 5,586,980, dated
December 24, 1996, (together with related foreign counterparts
pertaining to a microkeratome) (the "Acquired Patent") pursuant to the
terms and conditions of that certain Patent Purchase Agreement, dated as
of July 15, 1997, between LaserSight and Xxxxxx (the "Xxxxxx Patent
Purchase Agreement"); and (iv) the entry by LaserSight into a consulting
arrangement with Xxxxxx pursuant to the terms and conditions of that
certain Consulting Agreement, dated as of July __, 1997, between
LaserSight and Xxxxxx (the "Consulting Agreement").
C. Borrower also has requested that Foothill waive the Events of Default
that have occurred prior to the date hereof as a result of Borrower's
failure to keep or observe certain financial covenants contained in
Section 7.20 of the Loan Agreement (the "Existing Events of Default").
D. Foothill is willing to consent to the Transactions, to provide such
waivers, and to amend the Loan Agreement, in each case, in accordance
with the terms and conditions hereof; and
E. All capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Loan Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein, Foothill and Borrower hereby agree as follows:
1. Amendments to the Loan Agreement.
a. Section 1.1 of the Loan Agreement hereby is amended to include
the following defined terms:
"Xxxxxx" means Xxxxxxxx X. Xxxxxx, M.D., an individual.
"Xxxxxx Patent Purchase Agreement" means that certain Patent Purchase
Agreement, dated as of July 15, 1997, between LaserSight and Xxxxxx, in form and
substance satisfactory to Foothill.
"LST" means LST Laser, S.A. (Costa Rica), a corporation.
"Photomed-A" means Photomed Acquisition, Inc., a Delaware corporation.
b. The defined term "Guarantor" set forth in Section 1.1 of the
Loan Agreement hereby is amended in its entirety to read as follows:
"Guarantor" means LST and Photomed-A, individually and collectively.
c. The defined term "Guaranty" set forth in Section 1.1 of the Loan
Agreement hereby is amended in its entirety to read as follows:
"Guaranty" means that certain General Continuing Guaranty, in form and
substance satisfactory to Foothill, executed and delivered by LST in favor of
Foothill.
d. All references to the defined term "Guarantor" set forth in the
following sections of the Loan Agreement shall be amended to read "LST": the
definition of "Intercompany Agreement" set forth in Section 1.1 and Sections
3.1(e), (f), (g), (h), and (j).
e. The defined term "Permitted Disposition" set forth in Section
1.1 of the Loan Agreement hereby is amended in its entirety to read as follows:
"Permitted Dispositions" means: (a) the sale of Inventory to buyers in
the ordinary course of business; (b) the sale or other disposition of obsolete
or substantially worn-out Equipment in the ordinary course of business; (c) the
sale of Technologies if and only if this Agreement is terminated pursuant to
Section 3.4 and all Obligations have been fully and finally discharged; and (d)
so long as no Default or Event of Default has occurred and is continuing, the
sale by LaserSight of that certain U.S. letters patent known as number
5,586,980, dated December 24, 1996, to a third Person for consideration of not
less than $3,000,000 and which sale shall otherwise be on terms and conditions
satisfactory to Foothill.
f. The defined term "Permitted Patent Acquisition Transaction" set
forth in Section 1.1 of the Loan Agreement hereby is amended in its entirety to
read as follows:
"Permitted Patent Acquisition Transaction" means (a) the acquisition
of the patents and related rights contemplated under the IBM Option Agreement
made by: (i) a joint venture including Borrower (the "Joint Venture"), so long
as (x) Borrower has granted to Foothill a security interest with respect to all
of Borrower's right, title, and interest in and to the Joint Venture, (y) the
Joint Venture and Technologies have executed and delivered a license agreement,
in form and substance satisfactory to Foothill, pursuant to which the Joint
Venture licenses to Technologies the right to use the acquired patents, and (z)
Technologies has granted to Foothill a security interest in all of its right,
title, and interest in and to such licenses; or (ii) LaserSight utilizing the
proceeds of purchase money financing from a Person (that is not a Borrower or an
Affiliate thereof), so long as (x) LaserSight and Technologies have executed and
delivered a license agreement, in form and substance satisfactory to Foothill,
pursuant to which LaserSight licenses to Technologies the right to use the
acquired patents, (y) Technologies has granted to Foothill a security interest
in all of its right, title, and interest in and to such licenses, and (z) if
such purchase money Foothill requires the subordination by Foothill of
Foothill's security interest in the acquired patents in favor of the interests
therein of such purchase money Foothill (the terms and conditions of which
subordination shall be reasonably satisfactory to Foothill), such purchase money
Foothill has executed and delivered a non-disturbance and attornment agreement,
in form and substance satisfactory to Foothill, in respect of the licenses
granted by LaserSight to Technologies pursuant to clause (ii)(x) above; and (b)
the acquisition of the patent and related rights contemplated under the Xxxxxx
Patent Purchase Agreement; provided, however, that LaserSight shall not enter
into any license agreement with any Person in respect of such patent and related
rights without the prior written consent of Foothill.
g. Schedule 5.8 of the Loan Agreement hereby is deleted in its
entirety and the replacement Schedule 5.8 attached hereto as Exhibit A is
substituted in lieu therefor.
2. Foothill's Consent and Waivers.
a. Foothill hereby consents to the Transactions, and agrees that
the Transactions shall be deemed not to cause any Default or Event of Default
under the Loan Agreement, as amended by this Consent and Amendment.
b. Foothill hereby agrees to waive any Default or Event of Default
that has occurred prior to the date hereof as a result of Borrower's failure to
keep or observe certain of the financial covenants contained in Section 7.19 of
the Loan Agreement.
3. Representations and Warranties. Borrower hereby represents and
warrants to Foothill that (a) the execution, delivery, and performance of this
Consent and Amendment and of the Loan Agreement, as amended by this Consent and
Amendment, are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected, and (b) this Consent and Amendment
and the Loan Agreement, as amended by this Consent and Amendment, constitute
Borrower's legal, valid, and binding obligation, enforceable against Borrower in
accordance with its terms.
4. Conditions Precedent to the Effectiveness of this Consent and
Amendment. The effectiveness of this Consent and Amendment is subject to the
fulfillment, to the satisfaction of Foothill and its counsel, of each of the
following conditions:
a. Foothill shall have received each of the following documents,
duly executed, and each such document shall be in full force and effect:
(1) a General Continuing Guaranty, in form and substance
satisfactory to Foothill, executed and delivered by Photomed-A in favor of
Foothill (the "Photomed-A Guaranty");
(2) a Security Agreement, in form and substance satisfactory to
Foothill, executed and delivered by Photomed-A and Foothill;
(3) a Patent Security Agreement, in form and substance
satisfactory to Foothill, executed and delivered by Photomed-A and Foothill;
(4) a Pledge Amendment in the form of Exhibit B attached hereto;
and
(5) an Amendment to Patent Security Agreement in the form of
Exhibit C attached hereto;
b. Foothill shall have received the original certificates
representing or evidencing all of the Pledged Shares (as defined in the Stock
Pledge Agreement) of Photomed-A, together with stock powers or equivalent
assignments with respect thereto duly endorsed in blank;
c. Foothill shall have received a certificate from the Secretary or
other officer acceptable to Foothill of Photomed-A attesting to the resolutions
of Photomed-A's Board of Directors authorizing its execution, delivery, and
performance of the Photomed-A Guaranty and the other Loan Documents to which
Photomed-A is a party and authorizing specific officers of Photomed-A to execute
the same;
d. Foothill shall have received copies of Photomed-A's Governing
Documents, as amended, modified, or supplemented to the date hereof, certified
by the Secretary or other officer acceptable to Foothill of Photomed-A;
e. Foothill shall have received a certificate of status with
respect to Photomed-A, dated within 30 days of the date hereof, such certificate
to be issued by the appropriate officer of the State of Delaware, which
certificate shall indicate that Photomed-A is in good standing in such
jurisdiction;
f. Foothill shall have received certificates of status with respect
to Photomed-A, each dated within 30 days of the date hereof, such certificates
to be issued by the appropriate officer of the jurisdictions in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that Photomed-A is in good standing in
such jurisdictions;
g. Photomed-A shall have executed and delivered to Foothill such
UCC-1 Financing Statements as Foothill may require;
h. Foothill shall have received copies, certified by an appropriate
officer of LaserSight or Photomed-A, as the case may be, as being true and
correct, of the Merger Agreement, the Xxxxxx Patent Purchase Agreement, the
Consulting Agreement, and any other documents or instruments executed and/or
delivered in connection therewith, each of which shall be in form and substance
satisfactory to Foothill;
i. Other than with respect to the Existing Events of Default, no
Material Adverse Change in the financial condition of Borrower or in the value
of the Collateral shall have occurred;
j. Other than with respect to the Existing Events of Default, the
representations and warranties in this Consent and Amendment, the Loan Agreement
as amended by this Consent and Amendment, and the other Loan Documents shall be
true and correct in all respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
k. Other than the Existing Events of Default, no Event of Default
or event which with the giving of notice or passage of time would constitute an
Event of Default shall have occurred and be continuing on the date hereof, nor
shall result from the consummation of the transactions contemplated herein; and
l. No injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
governmental authority against Borrower, Foothill, or any of their Affiliates.
5. Condition Subsequent to the Effectiveness of this Consent and
Amendment. As a condition subsequent to the effectiveness of this Consent and
Amendment, Borrower shall perform or cause to be performed the following (the
failure by Borrower to so perform or cause to be performed constituting an Event
of Default):
a. On or before August 5, 1997, Foothill shall have received a set
of projections as to the projected financial performance of Borrower.
6. Effect on Loan Agreement. The Loan Agreement, as amended hereby,
shall be and remain in full force and effect in accordance with its respective
terms and hereby is ratified and confirmed in all respects. The execution,
delivery, and performance of this Consent and Amendment shall not operate as a
waiver of or, except as expressly set forth herein, as an amendment, of any
right, power, or remedy of Foothill under the Loan Agreement, as in effect prior
to the date hereof.
7. Further Assurances. Borrower shall execute and deliver all
agreements, documents, and instruments, in form and substance satisfactory to
Foothill, and take all actions as Foothill may reasonably request from time to
time, to perfect and maintain the perfection and priority of Foothill's security
interests in the Collateral and to fully consummate the transactions
contemplated under this Consent and Amendment and the Loan Agreement, as amended
by this Consent and Amendment.
8. Miscellaneous.
a. Upon the effectiveness of this Consent and Amendment, each
reference in the Loan Agreement to "this Agreement," "hereunder," "herein,"
"hereof," or words of like import referring to the Loan Agreement shall mean and
refer to the Loan Agreement as amended by this Consent and Amendment.
b. Upon the effectiveness of this Consent and Amendment, each
reference in the Loan Documents to the "Loan Agreement," "thereunder,"
"therein," "thereof," or words of like import referring to the Loan Agreement
shall mean and refer to the Loan Agreement as amended by this Consent and
Amendment.
c. This Consent and Amendment shall be governed by and construed in
accordance with the laws of the State of California.
d. This Consent and Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Consent and Amendment
by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Amendment to be duly executed as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice President
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LASERSIGHT INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: President/Chief Executive Officer
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LASERSIGHT TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: Vice President
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MEC HEALTH CARE, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: Vice President
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LSI ACQUISITION, INC.,
a New Jersey corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: Secretary/Treasurer
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LASERSIGHT CENTERS INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: Vice President
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MRF, INC.,
a Missouri corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: Secretary/Treasurer
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