EXECUTION
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as
of January __, 2002, is made by and between BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC. (the "Bank"), and CAPITALSOURCE FINANCE LLC ("CapitalSource"; the
Bank and CapitalSource being, individually, each a "Party" and, collectively,
the "Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Bank is a party to the Amended and Restated Loan and
Security Agreement dated as of August 13, 1999, among Opticare Eye Health
Centers, Inc., a Connecticut corporation ("OptiCare"), Primevision Health, Inc.,
a Delaware corporation ("PVH" and, together with OptiCare, the "Borrowers"),
Opticare Health Systems, Inc., a Delaware corporation (the "Parent" and,
collectively with the Borrowers, the "Obligors"), the financial institutions
from time to time party thereto (collectively, the "Lenders"), Bank Austria, AG,
in its capacity as LC Issuer (the "LC Issuer"), and the Bank, in its capacity as
agent (in such capacity, the "Agent") for the Lenders and the LC Issuer (as
amended, restated or modified from time to time, the "Loan Agreement";
capitalized terms used in this Agreement shall have the meanings given them in
the Loan Agreement unless otherwise defined herein); and
WHEREAS, the Bank desires to sell and assign to CapitalSource, and
CapitalSource desires to purchase and assume from the Bank, the Assigned
Interest (as defined below) on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, the Parties hereby agree as follows:
1. Subject to the satisfaction of the conditions set forth in Paragraph
5 below, effective as of the Effective Date (as defined below) the Bank hereby
sells and assigns to CapitalSource, without recourse, representation, warranty
or covenant of any kind or nature (other than as expressly provided herein), and
CapitalSource hereby purchases and assumes from the Bank, all of the Bank's
right, title and interest in and to, and all obligations of the Bank under or in
respect of all Loans (as such Loans have been forgiven in part pursuant to that
certain Instrument of Forgiveness dated the date hereof made by the Bank, but
excluding the obligations of the Obligors to make repayment of any amounts drawn
under that certain Letter of Credit No. 138, dated January 15, 1999, issued by
the Bank for the benefit of CIGNA HealthCare of North Carolina, Inc., in the
original amount of $400,000, which obligations are being novated and fully-cash
collateralized pursuant to that certain Cash Collateral Agreement of even date
herewith between the Bank and the Parent on the Effective Date (the "Cash
Collateral Agreement")) held by the Bank as of the date hereof, and the Loan
Agreement and the other Loan Documents as of the date hereof (it being
understood and agreed that the Cash Collateral Agreement is not a Loan Document
and neither it nor the Bank's rights and obligations thereunder are being
assigned and assumed hereunder) (all of the foregoing, subject to the
immediately preceding parenthetical clause, being, collectively, the "Assigned
Interest").
2. Effective as of the Effective Date (a) the Bank hereby resigns and
retires as Agent; (b) CapitalSource, as Lender, appoints itself successor Agent
and authorizes the Agent to take such action as an agent on its behalf and to
exercise such powers under the Loan Agreement and the other Loan Documents as
are delegated to such Agent, as the case may be, by the terms thereof, together
with such powers as are reasonably incidental thereto; (c) CapitalSource accepts
such appointment and agrees to act as successor Agent; and (d) pursuant to
Section 13.8 of the Loan Agreement, CapitalSource, as successor Agent, shall
hereupon succeed to and become vested with all the rights, powers, privileges
and duties of
the Bank, as retiring Agent, and the Bank, as retiring Agent, is hereupon
discharged from its duties and obligations under the Loan Agreement and the Loan
Documents.
3. The Bank (a) represents and warrants that it is the legal and
beneficial owner of the Assigned Interests free and clear of all encumbrances
created by, through or under it and that it has not assigned any right, title or
interest in the Assigned Interest to any other Person; (b) represents and
warrants that the execution, delivery and performance by the Bank of this
Agreement does not require the consent of any other Person other than, if the
amounts owed to Alexander Enterprise, Palisade Concentrated Equity Partnership,
L.P. ("Palisade") and/or Xxxx X. Xxxxxxxxx ("Yimoyines") under the Subordinated
Note are not paid in full and Alexander Enterprise, Palisade and/or Yimoyines
shall not have entered into an agreement evidencing termination of the
Subordination Agreement and the satisfaction of the Subordinated Note, the
consent of Alexander Enterprise, Palisade and/or Yimoyines may be required; (c)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Loan Agreement or the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto; and (d) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Obligor
or guarantor or any of their respective Subsidiaries or the performance or
observance by any Obligor or guarantor or any of their respective Subsidiaries
of any of their respective obligations under the Loan Agreement or the other
Loan Documents to which they are a party or any other instrument or document
furnished pursuant thereto.
4. CapitalSource (a) confirms that it has received (i) the Original
Term Note, dated as of August 13, 1999, made by PVH, together with a separate
Endorsement thereto; the three Revolving Notes, each dated as of August 13,
1999, made by PVH, Consolidated Eye Care, Inc. and OptiCare, respectively, each
together with a separate Endorsement thereto; an original of each of the
Guaranty and the Security Agreement executed by (among others) OECC and the
Stock Pledge Agreement; and the certificates in the Bank's possession
representing the stock pledged to the Bank pursuant to the Stock Pledge
Agreement (the delivery of which original documents and certificates is a
condition to CapitalSource's willingness to enter into this Agreement); (ii) a
copy of the Loan Agreement and the other Loan Documents, together with copies of
the financial statements referred to therein; and (iii) such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (b) agrees that it will, independently
and without reliance upon the Agent or the Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Agreement; (c)
represents and warrants that immediately prior to the purchase of the Assigned
Interest, either (i) no interest in the Assigned Interest is being purchased by
or on behalf of one or more "employee benefit plans" subject to Title I of
ERISA, "plans" subject to Section 4975 of the Code or any Person whose assets
include the assets of any such employee benefit plan or plan (all of the
foregoing in this subclause (i) being, collectively, "Benefit Plans"), (ii) the
transaction exemption set forth in one or more PTEs (as defined below) issued by
the U.S. Department of Labor, such as PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds), and PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers) is available with respect to
the purchase and holding of the Assigned Interest and the exercise of
CapitalSource's rights thereunder, or (iii) the funds being used by
CapitalSource to purchase the Assigned Interest are from a fund managed by a
Manager (as defined below) within the meaning of Part V of PTE 84-14, the
Manager made the investment decision on behalf of CapitalSource to purchase the
Assigned Interest from the Bank as contemplated by this Agreement, and the
purchase of the Assigned Interest hereunder satisfies the requirements of
sub-sections (b) through (g) of Part I of PTE 84-14; and (d) agrees that it will
perform in accordance with their terms
2
all of the obligations which by the terms of the Loan Agreement are required to
be performed by it as a Lender.
5. This Agreement shall become effective upon the satisfaction of the
following conditions:
(a) CapitalSource shall have executed a counterpart of this
Agreement;
(b) Each of the Obligors shall have consented to this Agreement and
the transactions contemplated hereby by subscribing their consent
below; and
(c) CapitalSource shall have paid the sum of $21,800,000 (the
"Purchase Price"; the date on which the Bank receives the Purchase
Price pursuant to this clause (c) being the "Effective Date") to the
Bank by wire transfer of immediately available funds addressed as
follows:
Pay to: Bayerische Hypo-und Vereinsbank AG, New York
Branch, via Fedwire
ABA 000000000
Account Number 594-012033-4055-01
Account Name Loan Clearing
Account Reference Opticare
Attention: Loan Servicing Department - Xxxxxxxx
Xxxxxxxxxxx
6. Subject to the satisfaction of the conditions set forth in Paragraph
5 above, effective as of the Effective Date (a) CapitalSource shall be a party
to the Loan Agreement and have the rights and obligations of a Lender thereunder
and under the other Loan Documents and (b) the Bank shall relinquish all of its
rights and be released from all of its obligations under the Loan Agreement and
the other Loan Documents.
7. It is agreed that all payments of principal, interest and other
amounts in respect of the Loans and other Obligations made on the Assigned
Interest which occur on and after the Effective Date will be paid directly by
the Agent to CapitalSource.
8. The Bank and CapitalSource agree to execute and deliver all such
documents and instruments, and to take all such actions, as the other Party may
reasonably request to effectuate the intent and purposes, and to carry out the
terms, of this Agreement; provided, however, that prior to such execution and
delivery of any such documents or instruments by the Bank or the taking of such
action by the Bank, the Obligors or CapitalSource shall have paid or reimbursed
the Bank for all fees, costs and expenses (including the reasonable fees and
disbursements of counsel) incurred or paid or to be incurred or paid by the Bank
in connection with the preparation and review of such documents or instruments
by the Bank or the taking of such action by the Bank.
9. CapitalSource agrees that (a) any sale, assignment, grant of a
participation in or other transfer by CapitalSource of all or any portion of the
Assigned Interest, this Agreement, its rights under this Agreement, or any
interest in the Assigned Interest shall not violate any applicable laws, rules
or regulations, including, without limitation, any applicable securities laws,
rules or regulations; and (b) with respect to a transfer by CapitalSource of its
rights against the Bank under this Agreement (i) the transferee shall represent
and warrant that (A) no interest in the Assigned Interest is being acquired by
the transferee by or on behalf of a Person who is, or at any time while the
Assigned Interest is held thereby will be, one or more Benefit Plans, (B) the
transaction exemption set forth in one or more prohibited transaction class
exemptions ("PTEs") issued by the U.S. Department of Labor, such as PTE 84-14 (a
class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class
3
exemption for certain transactions involving insurance company general
accounts), PTE 90-1 (a class exemption for certain transactions involving
insurance company pooled separate accounts), PTE 91-38 (a class exemption for
certain transactions involving bank collective investment funds), and PTE 96-23
(a class exemption for certain transactions determined by in-house asset
managers), is applicable with respect to the acquisition and holding of the
Assigned Interest by the transferee and the exercise of the transferee's rights
thereunder, or (C) the funds being used by the transferee to purchase all or any
portion of the Assigned Interest are from a fund managed by a Qualified
Professional Asset Manager (a "Manager") within the meaning of Part V of PTE
84-14, the Manager made the investment decision on behalf of the transferee to
acquire the Assigned Interest from the transferor, the acquisition and holding
of the Assigned Interest hereunder satisfies the requirements of sub-sections
(b) through (g) of Part I of PTE 84-14 and the individual making the investment
decision to purchase the Assigned Interest on behalf of the transferee has no
actual knowledge (without duty of inquiry or investigation) that the
requirements of subsection (a) of Part I of PTE 84-14 are not satisfied, and
(ii) the transferee must agree that it will obtain from each of its direct
transferees the representations, warranties and covenants contained in this
clause (b) (including, without limitation, this subclause (ii)).
10. CapitalSource shall indemnify, defend, and hold the Bank and its
shareholders, officers, directors, agents and employees (collectively, "Bank
Indemnitees") harmless from and against any liability, claim, cost, loss,
judgment, damage, or expense (including reasonable attorneys' fees and expenses)
that the Bank Indemnitees incur or suffer as a result of or arising out of (a)
any obligation or liability assumed by CapitalSource pursuant to this Agreement
or (b) CapitalSource's breach of any of its representations, warranties,
covenants or agreements in this Agreement. The Bank shall indemnify, defend, and
hold CapitalSource and its shareholders, officers, directors, agents and
employees (collectively, "CapitalSource Indemnitees") harmless from and against
any liability, claim, cost, loss, judgment, damage, or expense (including
reasonable attorneys' fees and expenses) that the CapitalSource Indemnitees
incur or suffer as a result of or arising out of the Bank's breach of any of its
representations, warranties, covenants or agreements in this Agreement.
11. This Agreement constitutes the entire agreement of the Parties with
respect to the respective subject matter matters thereof and supersede all
previous and contemporaneous negotiations, promises, covenants, agreements,
understandings, and representations on such subjects, all of which have become
merged and finally integrated into this Agreement.
12. This Agreement may be executed by telecopy in multiple
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. Transmission by telecopier of an
executed counterpart of any Operative Document shall be deemed to constitute due
and sufficient delivery of such counterpart. Each fully executed counterpart of
this Agreement shall be deemed to be a duplicate original.
13. The relationship between the Bank and CapitalSource shall be that
of seller and buyer. Neither is a trustee or agent for the other, nor does
either have fiduciary obligations to the other. This Agreement shall not be
construed to create a partnership or joint venture between the Parties.
14. All representations, warranties, covenants and other provisions
made by the Parties shall be considered to have been relied upon by the Parties
and shall survive the execution, delivery, and performance of this Agreement.
15. This Agreement, including the representations, warranties,
covenants and undertakings contained in this Agreement, shall inure to the
benefit of, be binding upon and be enforceable by and against the Parties and
their respective successors and permitted assigns.
4
16. The illegality, invalidity, or unenforceability of any provision of
this Agreement under the law of any jurisdiction shall not affect its legality,
validity or enforceability under the law of any other jurisdiction nor the
legality, validity or enforceability of any other provision.
17. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
18. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING,
DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR
ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR
ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
19. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO AND ACCEPT
THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN OR XXX XXXXXX XX XXX
XXXXX XX XXX XXXX LOCATED IN THE COUNTY OF NEW YORK, FOR ANY ACTION, SUIT, OR
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, AND WAIVES ANY OBJECTION
IT MAY HAVE TO THE LAYING OF VENUE IN ANY SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM OR DOES NOT HAVE PERSONAL JURISDICTION OVER IT.
[balance of page intentionally left blank]
5
IN WITNESS WHEREOF, the Parties have caused their duly authorized
officers to execute and deliver this Agreements as of the date first above
writteN.
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
By:___________________________________
Name:
Title:
CAPITALSOURCE FINANCE LLC
By:___________________________________
Name:
Title:
Each of the undersigned hereby consents to and agrees to honor the foregoing
Assignment and Assumption Agreement, the purchase and sale of the Assigned
Interest provided for therein, the retirement of the Bank as Agent and the
appointment and acceptance of CapitalSource as successor Agent provided for
therein and all other provisions of the foregoing Assignment and Assumption
Agreement, notwithstanding anything to the contrary set forth in the Loan
Agreement or any other Loan Document.
OPTICARE EYE HEALTH CENTERS, INC.
By:_____________________________
Name:
Title:
PRIMEVISION HEALTH, INC.
By:_____________________________
Name:
Title:
OPTICARE HEALTH SYSTEMS, INC.
By:_____________________________
Name:
Title:
6
