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EXHIBIT 4.40
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VISION TWENTY-ONE, INC.
CONVERTIBLE NOTE AGREEMENT
Dated as of November 10, 2000
Re:
$6,385,000 7% Convertible Senior Secured Notes
Due October 31, 2003
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TABLE OF CONTENTS
SECTION HEADING PAGE
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SECTION 1. DESCRIPTION OF NOTES...................................................................2
Section 1.1. Description of Notes...................................................................2
Section 1.2. Security for the Notes.................................................................2
Section 1.3. Commitment; Closing Date...............................................................2
SECTION 2. PREPAYMENT OF NOTES....................................................................3
Section 2.1. Required Prepayments of Notes..........................................................3
Section 2.2. Optional Prepayments of Notes..........................................................3
Section 2.3. Place and Application of Payments......................................................4
Section 2.4. Collateral and Guaranties..............................................................4
SECTION 3. CLOSING CONDITIONS.....................................................................4
Section 3.1. Closing Certificate....................................................................4
Section 3.2. Legal Opinions.........................................................................5
Section 3.3. Concurrent Issuance of Notes...........................................................5
Section 3.4. Registration Rights Agreement..........................................................5
Section 3.5. Credit Agreement.......................................................................5
Section 3.6. Consent of Holders of Other Securities and Shareholders................................5
Section 3.7. Satisfactory Proceedings...............................................................5
Section 3.8. Waiver of Conditions...................................................................6
SECTION 4. EVENTS OF DEFAULT AND REMEDIES THEREFOR................................................6
Section 4.1. Events of Default......................................................................6
Section 4.2. Notice to Holders......................................................................7
Section 4.3. Acceleration of Maturities.............................................................7
Section 4.4. Rescission of Acceleration.............................................................8
SECTION 5. AMENDMENTS, WAIVERS AND CONSENTS.......................................................8
Section 5.1. Consent Required.......................................................................8
Section 5.2. Effect of Amendment or Waiver..........................................................9
Section 5.3. Solicitation of Holders................................................................9
SECTION 6. INTERPRETATION OF CONVERTIBLE NOTE AGREEMENT; DEFINITIONS..............................9
Section 6.1. Definitions............................................................................9
Section 6.2. Accounting Principles.................................................................14
Section 6.3. Directly or Indirectly................................................................14
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SECTION HEADING PAGE
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SECTION 7. CONVERSION OF NOTES...................................................................14
Section 7.1. Conversion Rights and Manner of Exercise..............................................14
Section 7.2. Issuance of Common Stock Certificates.................................................15
Section 7.3. Cash Adjustments on Conversion........................................................15
Section 7.4. Adjustments of Conversion Price.......................................................15
Section 7.5. Mergers, Consolidations, Sales........................................................20
Section 7.6. Dissolution or Liquidation............................................................21
Section 7.7. Notice of Extraordinary Dividends.....................................................21
Section 7.8. Reservation of Common Stock...........................................................21
Section 7.9. Fully Paid Stock; Taxes...............................................................22
Section 7.10. Closing of Transfer Books.............................................................22
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH SECURITIES
ACT...................................................................................22
Section 8.1. Restrictions on Transferability.......................................................22
SECTION 9. REPRESENTATIONS.......................................................................23
Section 9.1. Representations of the Borrower.......................................................23
Section 9.2. Representations of the Lenders........................................................23
SECTION 10. THE AGENT.............................................................................23
Section 10.1. Appointment and Authorization of Agent................................................23
Section 10.2. Agent and its Affiliates..............................................................23
Section 10.3. Action by Agent.......................................................................24
Section 10.4. Consultation with Experts.............................................................24
Section 10.5. Liability of Agent; Credit Decision...................................................24
Section 10.6. Indemnity.............................................................................25
Section 10.7. Resignation of Agent and Successor Agent..............................................25
SECTION 11. MISCELLANEOUS.........................................................................26
Section 11.1. Withholding Taxes.....................................................................26
Section 11.2. No Waiver, Cumulative Remedies........................................................27
Section 11.3. Non-Business Days.....................................................................27
Section 11.4. Documentary Taxes.....................................................................27
Section 11.5. Survival of Representations...........................................................27
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SECTION HEADING PAGE
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Section 11.6. Survival of Indemnities...............................................................28
Section 11.7. Notices...............................................................................28
Section 11.8. Counterparts..........................................................................29
Section 11.9. Successors and Assigns................................................................29
Section 11.10. Headings..............................................................................29
Section 11.11. Costs and Expenses....................................................................29
Section 11.12. Entire Agreement......................................................................29
Section 11.13. Governing Law.........................................................................30
Section 11.14. Severability of Provisions............................................................30
Section 11.15. Excess Interest.......................................................................30
Section 11.16. Confidentiality.......................................................................30
Section 11.17. Submission to Jurisdiction; Waiver of Jury Trial......................................30
Section 11.18. Registered Notes......................................................................31
Section 11.19. Exchange of Notes.....................................................................31
Section 11.20. Loss, Theft, Etc. of Notes............................................................31
Signatures.......................................................................................................33
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ATTACHMENTS TO CONVERTIBLE NOTE AGREEMENT:
Schedule 3.6 - Consents of Shareholders and Others
Exhibit A - Form of Convertible Senior Secured Note
Exhibit B - Representations and Warranties
Exhibit C - Opinion of Counsel to the Borrower
Exhibit D - Form of Registration Rights Agreement
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VISION TWENTY-ONE, INC.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
CONVERTIBLE NOTE AGREEMENT
Re:
$6,385,000 7% Convertible Senior Secured Notes
Due October 31, 2003
Dated as of
November 10, 2000
To the Institutions party to
this Agreement
Ladies and Gentlemen:
The undersigned, VISION TWENTY-ONE, INC., a Florida corporation (the
"BORROWER"), agrees with the banks and other investors and institutions party to
this Agreement (the "LENDERS"), and Bank of Montreal, as agent for the Lenders
(the "AGENT") as follows:
PRELIMINARY STATEMENTS
A. Reference is hereby made to that certain Amended and Restated
Credit Agreement dated as of July 1, 1998, as amended, by and among the
Borrower, the Lenders, and the Agent (the "ORIGINAL CREDIT AGREEMENT"). The
Borrower is currently indebted to the Lenders in the aggregate amount of
$63,928,986.76 under the Original Credit Agreement, of which $7,134,413
represents outstanding principal under the revolving credit facility as
revolving loans, $41,622,572.23 represents outstanding principal as term loans,
$8,787,735.26 represents outstanding principal as bridge loans and $6,384,266.27
(exclusive of interest due on the current bridge loan and reimbursement for
certain costs and expenses) is outstanding representing accrued but unpaid
interest and fees (the "UNPAID FEES AND INTEREST") due under the Original Credit
Agreement at the pre-default rates therefor (any increase in the accrued but
unpaid amount thereof representing default rate pricing increases being waived
by the Lenders for the periods ending prior to the date hereof). In addition,
$10,000 of letters of credit remain outstanding under the Original Credit
Agreement.
B. The Borrower has requested that the amounts outstanding under the
Original Credit Agreement be restructured under the terms set forth in the
Amended and Restated Credit Agreement dated as of November 10, 2000 (as amended,
modified or restated from time to time, the "CREDIT AGREEMENT"), that the
financial covenants be amended, that certain other terms and conditions provided
for in the Original Credit Agreement be amended, that for the sake of clarity
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Vision Twenty-One, Inc. Convertible Note Agreement
and convenience, that the Original Credit Agreement be restated in its entirety
as so amended, and that the Unpaid Fees and Interest be converted into
indebtedness evidenced by the 7% Convertible Senior Secured Notes due October
31, 2003 issued pursuant to this Agreement in the aggregate principal amount of
$6,385,000.
C. The parties hereto hereby agree that this Agreement shall become
effective as of the date hereof, upon the execution of this Agreement by each of
the parties hereto and fulfillment of the conditions precedent contained in
Section 3 hereof.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DESCRIPTION OF NOTES.
SECTION 1.1. DESCRIPTION OF NOTES.
The Borrower will authorize the issue and delivery of $6,385,000
aggregate principal amount of its 7% Convertible Senior Secured Notes due
October 31, 2003 (the "NOTES"), to be convertible into shares of Common Stock of
the Borrower as hereinafter provided. The Notes shall be (i) dated the date of
issue, (ii) expressed to bear interest prior to maturity at the rate of 7% per
annum payable at maturity, and to bear interest on overdue principal (including
any overdue required or optional prepayment (if any) of principal) and premium,
if any, and (to the extent legally enforceable) on any overdue installment of
interest at the rate of 9% per annum after the date due, whether by acceleration
or otherwise, until paid, (iii) expressed to mature on October 31, 2003, and
(iv) otherwise substantially in the form attached hereto as Exhibit A. Interest
on the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The term Notes as used herein shall include each Note delivered pursuant
to this Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Borrower prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in SS.2 of
this Agreement.
SECTION 1.2. SECURITY FOR THE NOTES. The Notes, together with all other
amounts outstanding from time to time under this Agreement and the Credit
Agreement will be guaranteed by the Guaranties and secured by the Collateral
Documents (as hereinafter defined).
SECTION 1.3. COMMITMENT; CLOSING DATE.
In consideration of the execution and delivery of the Credit Agreement
and the restructuring of the Unpaid Fees and Interest, the Borrower agrees to
issue to each Lender, a Note or Notes of the Borrower in the aggregate principal
amount set forth opposite such Lender's name in Schedule I at a price of 100% of
the amount of Unpaid Fees and Interest owing to such Lender on the Closing Date
mentioned below. The parties agree that upon the satisfaction of the conditions
set forth in Section 3 below and the issuance of the Notes as set forth herein,
the Unpaid Fees and Interest owing to a Lender shall be applied in satisfaction
in full of the purchase price therefore.
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Delivery of the Notes will be made at the offices of Xxxxxxx and
Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, on November 10, 2000 or
such later date (not later than November 15, 2000) as shall mutually be agreed
upon by the Borrower and the Lenders (the "CLOSING DATE"). The Notes will be
delivered to the Lenders in the form of a single registered Note, registered in
such Lender's name or in the name of such Lender's nominee as such Lender may
specify at any time prior to the date fixed for delivery.
The obligations of the Lenders shall be several and not joint and no
Lender shall be liable or responsible for the acts or defaults of any other
Lender.
SECTION 2. PREPAYMENT OF NOTES.
SECTION 2.1. REQUIRED PREPAYMENTS OF NOTES. (a) The Borrower agrees
that the entire principal amount of the Notes shall become due and payable on
October 31, 2003.
(b) Notwithstanding any term or provision to the contrary contained in
any Note or this Agreement, if the provisions of the Xxxx-Xxxxx-Xxxxxx Act, as
amended (or other similar statute or law), require the Borrower and the Holder
or Holders of the Notes or portion thereof to be converted to make a filing in
connection with conversion of such Notes (or portion thereof), then the right of
conversion with respect to such Notes (or portion thereof) shall not expire
until all of the conditions of the Xxxx-Xxxxx-Xxxxxx Act, as amended (or such
other similar statute or law), relating to such conversion (including, without
limitation, the expiration of any waiting period) have been satisfied.
SECTION 2.2. OPTIONAL PREPAYMENTS OF NOTES.
Upon compliance with this SS.2.2 and subject to SS.7, the Company shall
have the privilege, at any time from and after the date on which all of the
Obligations outstanding under the Credit Loan Documents shall have been paid in
full and all commitments to extend credit thereunder shall have terminated or
expired, of prepaying the outstanding Notes in whole and not in part, by payment
of the aggregate unpaid principal amount of the outstanding Notes (at par) and
accrued interest thereon to the date of such prepayment and without any premium
or make-whole amount.
The Company shall give written notice of any prepayment of the Notes
pursuant to this SS.2.2 to each Holder not less than 30 days nor more than 60
days before the date fixed for such optional prepayment. Such notice shall
specify (i) such date, (ii) that the entire unpaid principal amount of each
Holder's Note shall be prepaid on the prepayment date, (iii) the accrued
interest applicable to such prepayment, and (iv) that the right of conversion
with respect to the Notes shall expire at the time fixed for such prepayment.
Such notice of prepayment shall also set forth sufficient information to
establish satisfaction of all conditions precedent to any such prepayment.
Notice of prepayment having been given in accordance with this SS.2.2, the
aggregate principal amount of the Notes outstanding, together with accrued
interest thereon shall become due and payable on the prepayment date.
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Vision Twenty-One, Inc. Convertible Note Agreement
Notwithstanding anything to the contrary contained in this Agreement or
the Notes, the right of the Borrower to optionally prepay the Notes pursuant to
this SS.2.2 shall always be subject to the right of each Holder to convert its
Notes pursuant to SS.7 hereof at any time prior to the prepayment in full of the
aggregate principal amount of such Notes outstanding and all accrued and unpaid
interest thereon.
SECTION 2.3. PLACE AND APPLICATION OF PAYMENTS.
All payments of principal and interest on the Notes and of all other
obligations payable by the Borrower under this Agreement, the Notes and the
other Convertible Loan Documents, shall be made by the Borrower to the Agent by
no later than 12:00 Noon (Chicago time) on the due date thereof at the office of
the Agent in Chicago, Illinois (or such other location in the State of Illinois
as the Agent may designate to the Borrower) for the benefit of the Lender or
Lenders entitled thereto. Any payments received after such time shall be deemed
to have been received by the Agent on the next Business Day. All such payments
shall be made in U.S. Dollars, in immediately available funds at the place of
payment, in each case without set-off or counterclaim. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on the Notes ratably to the Lenders and like funds
relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Notes and the other obligations due
hereunder and all proceeds of the Collateral received, in each instance, by the
Agent or any of the Lenders after the acceleration or maturity of the
Obligations, or a part thereof, or the enforcement of Liens on the Collateral
granted in favor of the Agent and the Lenders following the occurrence and
during the continuation of an Event of Default shall be remitted in accordance
with the terms and provisions of Section 3 of the Credit Agreement, which terms
and provisions are incorporated herein by reference as though set forth herein
in full.
SECTION 2.4. COLLATERAL AND GUARANTIES. The Notes and all other
obligations due hereunder shall be secured by the Collateral Documents and
guarantied by the Guaranties, all as more fully provided for in the Credit
Agreement.
SECTION 3. CLOSING CONDITIONS.
The obligations of each Lender to accept the Notes will be subject to
the performance by the Borrower of its agreements hereunder which by the terms
hereof are to be performed at or prior to the time of delivery of the Notes, and
to the following further conditions precedent:
SECTION 3.1. CLOSING CERTIFICATE.
Such Lender shall receive a certificate dated the Closing Date, signed
by the chief financial officer, the president or a vice president of the
Borrower, the truth and accuracy of which shall be a condition to such Lender's
obligation to accept the Notes proposed to be issued to such Lender, to the
effect that (i) the representations and warranties of the Borrower set forth in
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Vision Twenty-One, Inc. Convertible Note Agreement
Exhibit B hereto are true and correct on and with respect to the Closing Date,
(ii) the Borrower has performed all of its obligations hereunder which are to be
performed on or prior to the Closing Date, and (iii) no Default or Event of
Default has occurred and is continuing.
SECTION 3.2. LEGAL OPINIONS.
Such Lender shall receive from Xxxxxxxx, Loop & Xxxxxxxx, LLP, counsel
for the Borrower, its opinion dated the Closing Date, in form and substance
satisfactory such Lender, and covering the matters set forth in Exhibit C
hereto.
SECTION 3.3. CONCURRENT ISSUANCE OF NOTES.
On the Closing Date, the Borrower shall have consummated the issuance
of the entire principal amount of the Notes scheduled to be issued on the
Closing Date pursuant to this Agreement.
SECTION 3.4. REGISTRATION RIGHTS AGREEMENT.
The Registration Rights Agreement shall have been duly executed by the
parties thereto and delivered substantially in the form attached hereto as
Exhibit D.
SECTION 3.5. CREDIT AGREEMENT.
The Credit Agreement shall be in full force and effect and all of the
conditions precedent contained in Section 7 thereof shall have been fulfilled to
the satisfaction of the Lenders.
SECTION 3.6. CONSENT OF HOLDERS OF OTHER SECURITIES AND SHAREHOLDERS.
On or prior to the Closing Date, except as disclosed in Schedule 3.6,
any consent or approvals required to be obtained from any holder or holders of
any outstanding securities of the Borrower or any shareholder of the Borrower
which shall be necessary to permit the consummation of the transactions
contemplated hereby shall have been obtained and all such consents or amendments
shall be satisfactory in form and substance to such Lender and such Lender's
special counsel.
SECTION 3.7. SATISFACTORY PROCEEDINGS.
All proceedings taken in connection with the transactions contemplated
by this Agreement, and all documents necessary to the consummation thereof,
shall be satisfactory in form and substance to such Lender, and such Lender
shall have received a copy (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the consummation of said
transactions.
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SECTION 3.8. WAIVER OF CONDITIONS.
If on the Closing Date the Borrower fails to tender to any Lender the
Notes to be issued to such Lender on such date or if the conditions specified in
this SS.3 have not been fulfilled, such Lender may thereupon elect to be
relieved of all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this SS.3 have not been fulfilled,
such Lender may waive compliance by the Borrower with any such condition to such
extent as such Lender may in its sole discretion determine.
SECTION 4. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
SECTION 4.1. EVENTS OF DEFAULT.
Any one or more of the following shall constitute an "EVENT OF DEFAULT"
as the term is used herein:
(a) default in the payment when due of all or any part of the
principal of any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or default for a period of 3
Business Days in the payment when due of any interest on any Note or of
any fee or other obligation payable hereunder or under the Registration
Rights Agreement;
(b) any representation or warranty made herein or in any
certificate furnished to the Agent or the Lenders pursuant hereto or in
connection with any transaction contemplated hereby proves untrue in
any material respect as of the date of the issuance or making or deemed
making thereof;
(c) any event occurs or condition exists which is specified
as an event of default under any of the Collateral Documents or any of
the Collateral Documents shall for any reason fail to create a valid
and perfected first priority Lien in favor of the Agent in any
Collateral purported to be covered thereby except as expressly
permitted by the terms thereof, or any Subsidiary shall default in the
observance or performance of any of its obligations under any Guaranty,
or the Borrower or any Subsidiary takes any action for the purpose of
terminating, repudiating or rescinding any Collateral Document or
Guaranty executed by it or any of its obligations thereunder;
(d) any Indebtedness for Borrowed Money aggregating in excess
of $2,500,000 issued, assumed or guaranteed by the Borrower shall not
be paid when due (whether by demand, lapse of time, acceleration or
otherwise) or any such Indebtedness for Borrowed Money shall be
declared to be due and payable as a result of any default under any
indenture, agreement or other instrument under which the same may be
issued;
(e) default shall occur in the observance or performance of
the agreements and undertakings of the Borrower set forth in the
Registration Rights Agreement or the Registration Rights Agreement
shall be held by a court of competent jurisdiction to be invalid or
unenforceable in any material respect;
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(f) default shall occur of the Borrower in the observance or
performance of any covenant or provision contained in any Lockup
Agreement;
(g) the Borrower shall (i) have entered involuntarily against
it an order for relief under the United States Bankruptcy Code, as
amended, (ii) except as disclosed in the Plan of Restructuring with
respect to claims in the process of being settled in accordance with
the terms thereof, not pay, or admit in writing its inability to pay,
its debts generally as they become due, (iii) make an assignment for
the benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to Bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i) through (v) above, or (vii) fail to contest in
good faith any appointment or proceeding described in SS.4.1(H) hereof;
or
(h) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any substantial
part of any of its Property, or a proceeding described in SS.4.1(G)(V)
shall be instituted against the Borrower, and such appointment
continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 days; or
(i) the Borrower and its shareholders fail to approve and
authorize the increase of authorized shares of the Borrower's capital
stock pursuant to the Plan of Restructuring by February 28, 2001, or
the Borrower fails to reserve sufficient shares of authorized capital
stock of the Borrower to satisfy the requirements of the Notes and this
Agreement by such date.
SECTION 4.2. NOTICE TO HOLDERS.
When any Event of Default described in SS.4.1 has occurred, or if any
Holder or if any holder of any other evidence of indebtedness of the Borrower
gives any notice or takes any other action with respect to a claimed default,
the Borrower agrees to give notice within three Business Days of such event to
all Holders.
SECTION 4.3. ACCELERATION OF MATURITIES.
When any Event of Default described in paragraphs (a) through (f),
inclusive, of SS.4.1 has happened and is continuing, the Agent upon the
direction of the Required Lenders may, by notice in writing sent by registered
or certified mail to the Borrower, declare the principal of the Notes to be, and
all principal of and interest on all outstanding Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraph (g) or (h) of SS.4.1 has occurred, then all
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Vision Twenty-One, Inc. Convertible Note Agreement
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind, all of which are hereby expressly waived. Upon the
Notes becoming due and payable as a result of any Event of Default as aforesaid,
the Borrower will forthwith pay to the Holders, subject to the provisions of
SS.7, all principal of and interest accrued on the Notes. Neither any course of
dealing on the part of any Holder nor any delay or failure on the part of any
Holder to exercise any right shall operate as a waiver of such right or
otherwise prejudice such Holder's rights, powers and remedies. The Borrower
further agrees, to the extent permitted by law, to pay to the Holder or Holders
all expenses incurred by them in the collection of any Notes upon any default
hereunder or thereon, including reasonable compensation to such Holder's or
Holders' attorneys for all services rendered in connection therewith.
SECTION 4.4. RESCISSION OF ACCELERATION.
The provisions of SS.4.3 are subject to the condition that if the
principal of and accrued interest on all or any outstanding Notes have been
declared immediately due and payable by reason of the occurrence of any Event of
Default described in paragraphs (a) through (f), inclusive, of SS.4.1, the Agent
upon the direction of the Required Lenders may, by written instrument filed with
the Borrower, rescind and annul such declaration and the consequences thereof,
PROVIDED that at the time such declaration is rescinded and annulled:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under SS.4.3) shall have
been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant toSS.4.1;
and PROVIDED FURTHER, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
SECTION 5. AMENDMENTS, WAIVERS AND CONSENTS.
SECTION 5.1. CONSENT REQUIRED.
Any term, covenant, agreement or condition of this Agreement may, with
the consent of the Borrower, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), if the Borrower shall have obtained the consent in writing of
the Required Lenders; PROVIDED that without the written consent of all of the
Lenders, no such waiver, modification, alteration or amendment shall be
effective which will (i) extend the time of payment (including any prepayment
pursuant to SS.2.L) of the principal of or the interest or premium, if any, on
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Vision Twenty-One, Inc. Convertible Note Agreement
any Note or reduce the principal amount thereof or change the rate of interest
thereon, or (ii) change any of the provisions with respect to optional
prepayments, or (iii) change any of the provisions of SS.7, or (iv) change the
percentage of Lenders required to consent to any such waiver, amendment,
alteration or modification of any of the provisions of this SS.5 or SS.4, or (v)
release any guarantor under a Guaranty or all or any substantially part of the
Collateral (excepT as otherwise provided for in the Credit Loan Documents).
SECTION 5.2. EFFECT OF AMENDMENT OR WAIVER.
Any such amendment or waiver shall apply equally to all of the Lenders
and shall be binding upon them, upon each future Holder and upon the Borrower,
whether or not any Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
SECTION 5.3. SOLICITATION OF HOLDERS.
The Borrower will not solicit, request or negotiate for or with respect
to any proposed waiver or amendment of any of the provisions of this Agreement
or the Notes unless each Holder (irrespective of the amount of Notes then owned
by it) shall be concurrently informed thereof by the Borrower and shall be
afforded the opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this SS.5 shall be delivered by
the Borrower to each HoldeR forthwith following the date on which the same shall
have been executed and delivered by the Holder or Holders of the requisite
percentage of outstanding Notes. The Borrower will not, directly or indirectly,
pay or cause to be paid any fee (whether denominated as servicing fee or
otherwise) remuneration, including supplemental or additional interest, expenses
or other amount, to any Holder as consideration for or as an inducement to the
consideration or review of or entering into by such Holder of any waiver or
amendment of any of the terms and provisions of this Agreement (or any proposed
waiver or amendment hereof) unless such remuneration is concurrently paid, on
the same terms, ratably to all Holders.
SECTION 6. INTERPRETATION OF CONVERTIBLE NOTE AGREEMENT; DEFINITIONS.
SECTION 6.1. DEFINITIONS.
In addition to the terms defined in other Sections of this Agreement,
the following terms will mean:
"ADDITIONAL SHARES OF COMMON STOCK" all shares of Common Stock issued
by the Borrower on or after the date hereof except:
(i) shares of Common Stock to be issued upon conversion of the Notes;
(ii) shares of Common Stock to be issued upon the exercise of the
Warrants;
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Vision Twenty-One, Inc. Convertible Note Agreement
(iii) up to 2,250,000 shares of Common Stock (as such number shall be
appropriated adjusted by the board of directors of the Company for stock splits,
dividends, combinations and other similar events) to be issued upon the exercise
of options granted after the Closing Date pursuant to an incentive stock option
plan;
(iv) up to 6,500,000 shares of Common Stock to be issued in connection
with strategic opportunities which the board of directors of the Company
believes to be in the best interest of the Company and its shareholders; and
(v) up to 11,194,000 shares of Common Stock (as such number shall be
appropriated adjusted by the board of directors of the Company for stock splits,
dividends, combinations and other similar events) to be issued on or before
February 28, 2001 or to be issued upon exercise of options granted before
February 28, 2001 in connection with, and as an express part of, the
consummation of the Plan of Restructuring.
"AGENT" means Bank of Montreal, and any successor pursuant to Section
10.7 hereof.
"BORROWER" is defined in the introductory paragraph of this Agreement.
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on which
Lenders are not authorized or required to close in Chicago, Illinois.
"CLOSING DATE" is defined in SS.1.3.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"COLLATERAL" means all properties, rights, interests and privileges
from time to time subject to the Liens granted to the Agent, or any security
trustee therefor, by the Collateral Documents.
"COLLATERAL DOCUMENTS" is defined as the Credit Agreement.
"COMMISSION" mean the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act or the Trust
Indenture Act of 1939, as amended, as the case may be.
"COMMON STOCK" shall mean any class of capital stock of the Borrower
now or hereafter authorized, the right of which to share in distributions either
of earnings or assets of the Borrower is without limit as to any amount or
percentage; PROVIDED, HOWEVER, that the shares of Common Stock deliverable upon
conversion of the Notes shall include only the common stock, $0.001 per share
par value, of the Borrower authorized at the date hereof (or to be authorized as
contemplated by SS.7.8 hereof) and any class of Common Stock issued in
substitutioN therefor.
"CONVERSION NOTICE" is defined in SS.7.1.
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Vision Twenty-One, Inc. Convertible Note Agreement
"CONVERSION PRICE" is defined in SS.7.1.
"CONVERSION SHARES" means the shares of Common Stock of the Borrower
issued upon the conversion of any of the Notes.
"CONVERTIBLE SECURITIES" means any evidence of indebtedness, shares of
Common Stock, preferred stock or other Securities which are convertible into or
exchangeable for additional shares of Common Stock, either immediately or upon
the arrival of a specified date or the happening of a specified event.
"CREDIT AGREEMENT" is defined in the preliminary paragraphs hereto.
"CONVERTIBLE LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Guaranties and the Registration Rights Agreement, and
each other instrument or document to be delivered hereunder or otherwise in
connection herewith.
"CREDIT LOAN DOCUMENTS" means the Credit Agreement, any note
outstanding under the Credit Agreement, any application or reimbursement
agreement relating to a letter of credit issued under the Credit Agreement, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered thereunder or otherwise in connection therewith.
"CURRENT MARKET PRICE" means with respect to shares of Common Stock
shall be, as of the date of any determination thereof, deemed to be the average
of the daily Market Prices per share for the five consecutive trading days
immediately preceding the date of determination. The MARKET PRICE for each day
of such five trading day period shall be (i) if the Common Stock shall at the
time be listed or admitted to unlisted trading privileges on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"), on the
basis of the last reported sale price regular way of the Common Stock on the
composite tape on each such trading day upon which such a sale shall have been
effected (or if no sale takes place on any such day on such exchange, the
average of the closing bid and asked prices on such day as officially quoted on
such exchange), or (ii) if the Common Stock shall at the time be listed or
admitted to unlisted trading privileges on the New York Stock Exchange, on the
basis of the last reported sale price regular way of the Common Stock on the
composite tape (or if no sale takes place on any such day on such exchange, the
average of the closing bid and asked prices on such day as officially quoted on
such exchange), or (iii) if the Common Stock at the time be not listed on either
the NASDAQ or the New York Stock Exchange, the average of the highest reported
bid and lowest reported asked prices of the Common Stock in the over-the-counter
market on each such Business Day, as reported by NASDAQ or similar organization
if NASDAQ is no longer reporting such information. In the event the Market Price
of the Common Stock cannot be determined in accordance with the immediately
preceding sentence, the fair market price shall be determined in good faith by
the Board of Directors (which determination shall be reasonably satisfactory to
the Holders holding more than 66-2/3% in aggregate principal amount of the
outstanding Notes).
"DEFAULT" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
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Vision Twenty-One, Inc. Convertible Note Agreement
"DISCLOSURE LETTER" means the written disclosure letter delivered to
the Agent and the Lenders by the Borrower on the date hereof referencing on its
face it is the disclosure letter being furnished pursuant to this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"EVENT OF DEFAULT" means any event or condition identified as such in
Section 4.1 hereof.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"GUARANTY" and "GUARANTIES" each is defined in the Credit Agreement.
"HOLDER" shall mean any Person which is, at the time of reference, the
registered Holder of any Note.
"INDEBTEDNESS FOR BORROWED MONEY" means for any Person (a) all
indebtedness created, assumed or incurred in any manner by such Person
representing money borrowed (including by the issuance of debt securities), (b)
all indebtedness for the deferred purchase price of property or services (other
than trade accounts payable arising in the ordinary course of business), (c) all
indebtedness secured by any Lien upon Property of such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness,
(d) all capitalized lease obligations of such Person, (e) all obligations of
such Person in respect of any hedging arrangements, and (f) all obligations of
such Person on or with respect to letters of credit, bankers' acceptances and
other extensions of credit whether or not representing obligations for borrowed
money, but in any event not including rentals due under operating leases.
"INSTITUTIONAL HOLDER" shall mean any Holder which is a Lender or any
insurance company, bank, savings and loan association, trust company, investment
company, charitable foundation, employee benefit plan (as defined in ERISA) or
other institutional investor, registered broker dealer or financial institution
and, for purposes of the direct payment provisions of this Agreement, shall
include any nominee of any such Holder.
"LENDER" is defined in the introductory paragraph of this Agreement.
"LIEN" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, capital lease or other title
retention arrangement.
"LOCKUP AGREEMENT" shall mean any Security, instrument or agreement, or
any term or provision contained in any Security, instrument or agreement, which
prohibits or restricts (i) the Borrower from issuing any shares of capital stock
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Vision Twenty-One, Inc. Convertible Note Agreement
upon the exercise of any warrant, option or any other right to purchase capital
stock of the Borrower, or (ii) any shareholder of the Borrower from selling,
disposing or otherwise assigning any shares of capital stock of the Borrower.
"MARKET PRICE" is defined in "Current Market Price".
"NOTES" is defined in SS.1.1.
"OBLIGATIONS" is defined in the Credit Agreement.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"PLAN OF RESTRUCTURING" means the Borrower's plan of restructuring
described in the Disclosure Letter, including its plan to settle claims of its
creditors at an agreed-upon discount or by issuing equity interests in the
Borrower.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement dated as of the date of this Agreement, among the Borrower and the
Lenders.
"REQUIRED LENDERS" means, as of the date of determination thereof,
Lenders whose Notes constitute more than 66-2/3% of the aggregate principal
amount of the Notes outstanding.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SECURITY" has the same meaning as in Section 2(1) of the Securities
Act.
"SUBSIDIARY" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise identified herein, the term "SUBSIDIARY" means a Subsidiary of
the Borrower or of any of its direct or indirect Subsidiaries.
"U.S. DOLLARS" and "$" each means the lawful currency of the United
States of America.
"VOTING STOCK" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary power for
the election of directors or other similar governing body of such Person, other
than stock or other equity interests having such power only by reason of the
happening of a contingency."
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Vision Twenty-One, Inc. Convertible Note Agreement
"WARRANT AGREEMENT" shall mean the Warrant Agreement, dated as of the
date of this Agreement, among the Borrower and the Lenders.
"WARRANTS" shall have the meaning set forth in the Warrant Agreement.
SECTION 6.2. ACCOUNTING PRINCIPLES.
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any accounting computation is
required to be made for the purposes of this Agreement, the same shall be done
in accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
SECTION 6.3. DIRECTLY OR INDIRECTLY.
Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether the action in question is taken directly or indirectly by
such Person.
SECTION 7. CONVERSION OF NOTES.
SECTION 7.1. CONVERSION RIGHTS AND MANNER OF EXERCISE.
Upon compliance with the provisions hereof and subject to the
restrictions contained in this SS.7.1, anY Holder of any Note shall have the
right, at any time and from time to time (subject to SS.7.8), to convert all oR
any portion of the principal amount of such Note and the accrued and unpaid
interest on such principal amount into as many shares of Common Stock of the
Borrower (subject to SS.7.5) as the unpaid principal amount of the NotE and the
amount of the accrued and unpaid interest thereon so converted is a multiple of
the initial conversion price per share of $0.18 or, in case an adjustment of
such price has taken place pursuant to the following provisions hereof, then at
the price as last adjusted and in effect at the date such Note and the accrued
and unpaid interest thereon or portion thereof is surrendered for conversion
(such price or such price as last adjusted, as the case may be, being herein
called the "CONVERSION PRICE").
In order to exercise such conversion right, the Holder shall surrender
its Note to the Borrower at its principal office accompanied by a written
statement (the "CONVERSION NOTICE") designating the unpaid principal amount of
such Note and the amount of the accrued and unpaid interest on such principal
amount to be converted and stating the name and address of the Person in whose
name certificates for shares of Common Stock are to be registered and whether
any portion of the Note to be converted has been called for prepayment.
Each Holder agrees that, except within 90 days of the maturity date of
the Notes (and subject to the satisfaction of any applicable legal
requirements), it shall not convert any portion of the principal or accrued and
unpaid interest of any Note pursuant to this SS.7.1 to the extent that the
aggregate amount of shares of CommoN Stock of the Borrower held by such Holder
after giving effect to such conversion shall equal or exceed 10% of the issued
and outstanding shares of Common Stock of the Borrower.
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Vision Twenty-One, Inc. Convertible Note Agreement
At least ten days prior to delivering a Conversion Notice to the
Borrower, each Holder agrees that it shall deliver written notice to the Agent
of its impending intent to deliver a Conversion Notice to the Borrower, which
notice shall specify the unpaid principal amount of such Note and the amount of
the accrued and unpaid interest thereon to be converted. Upon receipt of such
notice from any Holder, the Agent shall promptly notify each other Holder in
writing of such Holder's impending intent to convert its Note.
SECTION 7.2. ISSUANCE OF COMMON STOCK CERTIFICATES.
As promptly as practicable (but in any event within 5 Business Days)
after the receipt of a Conversion Notice from a Holder, the Borrower shall issue
and deliver to such Holder, issued in the name of such Holder or such other
Person or Persons as such Holder may reasonably request, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Note (or specified portion thereof). Such conversion shall be
deemed to have been effected and the Conversion Price shall be determined as of
the close of business on the date on which such Conversion Notice shall have
been received by the Borrower, and at such time the rights of the Holder in its
Note (or the specified principal amount thereof) as such Holder shall cease, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby.
SECTION 7.3. CASH ADJUSTMENTS ON CONVERSION.
No payment or adjustment shall be made upon any conversion on account
of any cash dividends declared for payment as of a record date prior to the date
of conversion on the shares of Common Stock issued upon conversion of a Note,
and no payment shall be made on account of any accrued and unpaid interest on
the principal amount of any Note surrendered for conversion. The amount of any
accrued and unpaid interest on the principal amount of the Notes outstanding
from time to time shall be paid only at maturity to the extent the amount of
such accrued and unpaid interest shall not have been converted in accordance
with the provisions of this SS.7. In the case oF any Note which is converted in
part only, the Borrower shall, upon such conversion, execute and deliver to the
Holder thereof, at the expense of the Borrower, a new Note in principal amount
equal to the unconverted portion of the Note surrendered (dated as of the last
date to which interest has been paid thereon) and otherwise of like tenor
therewith. No fractional share of Common Stock shall be issued upon conversion
of any Note, but if the conversion results in a fraction, an amount equal to
such fraction multiplied by the applicable Conversion Price shall be paid in
cash to the Holder of the Note being converted.
SECTION 7.4. ADJUSTMENTS OF CONVERSION PRICE.
The Conversion Price and the number of shares deliverable hereunder
shall be adjusted from time to time as hereinafter set forth.
A. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If, after
the date hereof, the Borrower shall:
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Vision Twenty-One, Inc. Convertible Note Agreement
(1) pay a dividend or make a distribution in shares of Common
Stock to holders of its capital stock of any class, or
(2) subdivide the outstanding shares of its Common Stock into
a larger number of shares, or
(3) combine the outstanding shares of its Common Stock into a
smaller number of shares, or
(4) issue by reclassification of its shares of Common Stock
any shares of Common Stock of the Borrower,
then the Conversion Price shall be adjusted to that price determined by
multiplying the Conversion Price in effect immediately prior to such event by a
fraction (i) the numerator of which shall be the total number of outstanding
shares of Common Stock of the Borrower immediately prior to such event, and (ii)
the denominator of which shall be the total number of outstanding shares of
Common Stock of the Borrower immediately after such event. An adjustment made
pursuant to this paragraph A shall become effective immediately after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
B. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. If, after the date
hereof, the Borrower shall (except as hereinafter provided) issue any Additional
Shares of Common Stock for a consideration (i) less than the Conversion Price
then in effect, or (ii) less than the Current Market Price of such shares then
in effect, then the Conversion Price upon each such issuance shall be adjusted
to that price determined by multiplying the Conversion Price in effect
immediately prior to such event by a fraction:
(1) if issued for a consideration per share less than the Conversion
Price per share of Common Stock then in effect:
(a) the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of shares of Common
Stock which the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at the then
effective Conversion Price, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of such Additional
Shares of Common Stock so issued.
(2) if issued for a consideration per share less than the Current
Market Price per share of Common Stock:
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Vision Twenty-One, Inc. Convertible Note Agreement
(a) the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of full shares of
Common Stock which the aggregate consideration for the total number of
such Additional Shares of Common Stock so issued would purchase at the
Current Market Price per share, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of such Additional
Shares of Common Stock so issued.
If such Additional Shares of Common Stock shall be issued at a price
per share less than both the effective Conversion Price and the Current Market
Price per share of Common Stock, the Conversion Price shall be adjusted in the
manner which will result in the greatest reduction of the Conversion Price. The
provisions of this paragraph shall not apply to any Additional Shares of Common
Stock which are distributed to holders of Common Stock as a stock dividend or
subdivision, for which an adjustment is provided for under paragraph A above. No
adjustment of the Conversion Price shall be made under this paragraph upon the
issuance of any Additional Shares of Common Stock which are issued pursuant to
the exercise of any warrants or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any Convertible
Securities, to the extent such adjustment shall previously have been made (or
determined not to be required) upon the date of issuance of such warrants or
other rights or upon the date of issuance of such Convertible Securities (or
upon the date of issuance of any warrants or other rights therefor) pursuant to
paragraphs C or D of this SS.7.4.
C. ISSUANCE OF WARRANTS, STOCK OPTIONS OR OTHER RIGHTS. In case the
Borrower shall issue any warrants, stock options or other rights to subscribe
for or purchase any Additional Shares of Common Stock or to subscribe for or
purchase any Convertible Securities and the consideration per share for which
Additional Shares of Common Stock may at any time thereafter be issuable
pursuant to such warrants, stock options or other rights or pursuant to the
terms of such Convertible Securities shall be less than either (i) the
Conversion Price in effect on the date of grant of such warrants, stock options
or other rights, or (ii) the Current Market Price of such shares on the date of
grant of such warrants, stock options or other rights, then the Conversion Price
shall be adjusted as provided in paragraph B of this SS.7.4 on the basis that
(i) the maximum number of Additional Shares of Common Stock issuablE pursuant to
all such warrants, stock options or other rights or necessary to effect the
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued and (ii) the aggregate consideration for such maximum number of
Additional Shares of Common Stock shall be deemed to be the minimum
consideration received and receivable by the Borrower for the issuance of such
Additional Shares of Common Stock pursuant to such warrants, stock options or
other rights or pursuant to the terms of such Convertible Securities.
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Vision Twenty-One, Inc. Convertible Note Agreement
D. ISSUANCE OF CONVERTIBLE SECURITIES. In case the Borrower shall issue
any Convertible Securities and the consideration per share for which Additional
Shares of Common Stock may at any time thereafter be issuable pursuant to the
terms of such Convertible Securities shall be less than either (i) the
Conversion Price in effect on the date of issuance of such Convertible
Securities, or (ii) the Current Market Price of such shares on the date of
issuance of such Convertible Securities, then the Conversion Price shall be
adjusted as provided in paragraph B above on the basis that (i) the maximum
number of Additional Shares of Common Stock necessary to effect the conversion
or exchange of all such Convertible Securities shall be deemed to have been
issued and (ii) the aggregate consideration for such maximum number of
Additional Shares of Common Stock shall be deemed to be the minimum
consideration received and receivable by the Borrower for the issuance of such
Additional Shares of Common Stock pursuant to the terms of such Convertible
Securities. No adjustment of the Conversion Price shall be made under this
paragraph upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, to the extent such adjustment shall previously have been made
upon the issuance of such warrants or other rights pursuant to paragraph C
above.
E. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments in the
Conversion Price hereinbefore provided in this SS.7.4.
(1) COMPUTATION OF CONSIDERATION. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase any Additional
Shares of Common Stock or any Convertible Securities shall be issued
for a cash consideration, the consideration received by the Borrower
shall be deemed to be the amount of the cash received by the Borrower
therefor, or, if such Additional Shares of Common Stock or Convertible
Securities or warrants or other rights are offered by the Borrower for
subscription, the subscription price, or, if such Additional Shares of
Common Stock or Convertible Securities or warrants or other rights are
sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price, in any such
case excluding any amounts paid or receivable for accrued interest or
accrued dividends and without deduction of any compensation, discounts
or expenses paid or incurred by the Borrower for and in the
underwriting of, or otherwise in connection with the issue thereof.
To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided,
the amount of such consideration shall be deemed to be the fair value
of such consideration as determined in good faith by the Board of
Directors of the Borrower.
The consideration for any Additional Shares of Common Stock
issuable pursuant to any warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the Borrower
for issuing such warrants or other rights, plus the additional
consideration payable to the Borrower upon the exercise of such
warrants or other rights. The consideration for any Additional Shares
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Vision Twenty-One, Inc. Convertible Note Agreement
of Common Stock issuable pursuant to the terms of any Convertible
Securities shall be the consideration received by the Borrower for
issuing any warrants or other rights to subscribe for or purchase such
Convertible Securities plus the consideration paid or payable to the
Borrower in respect of the subscription for or purchase of such
Convertible Securities, plus the additional consideration, if any,
payable to the Borrower upon the exercise of the right of conversion or
exchange in such Convertible Securities.
In case of the issuance at any time of any Additional Shares
of Common Stock or Convertible Securities in payment or satisfaction of
any dividend upon any class of equity securities other than Common
Stock the Borrower shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities consideration equal to
the amount of such dividend so paid or satisfied.
(2) READJUSTMENT OF CONVERSION PRICE. Subject to the
provisions of the second sentence of this paragraph E(2), upon the
expiration of the right to convert or exchange any Convertible
Securities, or upon the expiration of any rights, options or warrants,
or upon any increase in the minimum consideration receivable by the
Borrower for the issuance of Additional Shares of Common Stock pursuant
to such Convertible Securities, rights, options or warrants, if any
such Convertible Securities shall not have been converted or exchanged,
or if any such rights, options or warrants shall not have been
exercised, the number of shares of Common Stock deemed to be issued and
outstanding by reason of the fact that they were issuable upon
conversion or exchange of any such Convertible Securities or upon
exercise of any such rights, options or warrants shall no longer be
computed as set forth above, and the Conversion Price shall forthwith
be readjusted and thereafter be the price which it would have been (but
reflecting any other adjustments in the Conversion Price made pursuant
to the provisions of this SS.7.4 after the issuance of such Convertible
Securities, rights, options or warrants) haD the adjustment of the
Conversion Price made upon the issuance or sale of such Convertible
Securities or the issuance of such rights, options or warrants been
made on the basis of the issuance only of the number of Additional
Shares of Common Stock actually issued upon conversion or exchange of
such Convertible Securities or upon the exercise of such rights,
options or warrants, or upon the basis of such increased minimum
consideration, as the case may be, and thereupon only the number of
Additional Shares of Common Stock actually so issued or the number
thereof issuable upon the basis of such increased minimum consideration
shall be deemed to have been issued and only the consideration actually
received or such increased minimum consideration receivable by the
Borrower (computed as provided in subparagraph E(1) of this SS.7.4)
shall be deemed to have been received by the Borrower. No such
readjustment of thE Conversion Price shall be made unless the
Conversion Price was adjusted under the provisions of paragraph C above
at the time such rights, options or warrants were issued.
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Vision Twenty-One, Inc. Convertible Note Agreement
F. EXTRAORDINARY DIVIDENDS. In case the Borrower shall
declare a dividend upon its Common Stock (except a dividend payable in
shares of Common Stock referred to in Subparagraph A(1) of this SS.7.4
or a dividend payable in warrants, rights or Convertible Securities
referred to in paragraph C or D of this SS.7.4) payable otherwise than
out of retained earnings, the Conversion Price in effecT immediately
prior to the declaration of such dividend shall be reduced by an amount
equal, in the case of a dividend in cash, to the amount thereof payable
per share of Common Stock to the extent otherwise than out of retained
earnings or, in the case of any other dividend, to the fair value
thereof per share of Common Stock as determined in good faith by the
Board of Directors of the Borrower, PROVIDED that in no event shall the
Conversion Price be reduced to less than one cent ($.01) per share. For
the purposes of the foregoing, a dividend payable other than in cash or
capital stock of the Borrower shall be considered payable out of
retained earnings only to the extent that such retained earnings are
charged an amount equal to the fair value of such dividend as
determined by the Board of Directors of the Borrower. Such reduction
shall take effect as of the date on which a record is taken for the
purpose of such dividend or if a record is not taken, the date as of
which the holders of the Common Stock of record entitled to such
dividend are to be determined. Appropriate readjustment of the
Conversion Price shall be made in the event that any dividend referred
to in this paragraph F shall be lawfully abandoned.
G. MINIMUM ADJUSTMENT. Except as hereinafter provided, no
adjustment of the Conversion Price hereunder shall be made if such
adjustment results in a change of the Conversion Price then in effect
of less than one cent ($.01) per share. Any adjustment of less than one
cent ($.01) per share of any Conversion Price shall be carried forward
and shall be made at the time of and together with any subsequent
adjustment which, together with adjustment or adjustments so carried
forward, amounts to one cent ($.01) per share or more. However, upon
conversion of any Note, the Borrower shall make all necessary
adjustments (to the nearest cent) not theretofore made to the
Conversion Price up to and including the date upon which such Note is
converted.
H. NOTICE OF ADJUSTMENTS. Whenever the Conversion Price
shall be adjusted pursuant to this SS.7.4, the Borrower shall promptly
deliver a certificate signed by the President or a Vice PresidenT and
by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Borrower, setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors
of the Borrower made any determination hereunder), by first class mail
postage prepaid to each Holder.
SECTION 7.5. MERGERS, CONSOLIDATIONS, SALES.
In the case of any consolidation or merger of the Borrower with another
entity, or the sale of all or substantially all of its assets to another entity,
or any reorganization or reclassification of the Common Stock or other equity
securities of the Borrower (except a split-up, combination or reclassification,
provision for which is made in paragraph A of SS.7.4 hereof), then, as a
condition of such consolidation, merger, sale, reorganization or
reclassification, lawful and adequate provision shall be made whereby the
Holders shall thereafter have the right to receive upon the basis and upon the
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Vision Twenty-One, Inc. Convertible Note Agreement
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon conversion of their Notes, such shares
of stock, Securities, assets or cash as may (by virtue of such consolidation,
merger, sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for a number of outstanding shares of Common Stock
equal to the number of shares of Common Stock immediately theretofore so
receivable hereunder had such consolidation, merger, sale, reorganization or
reclassification not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holders to the end
that the provisions of this SS.7 (including, without limitation, provisions for
adjustment of the per share ConversioN Price) shall thereafter be applicable as
nearly as may be, in relation to any shares of stock, Securities, assets or cash
thereafter deliverable upon conversion of such Notes. The Borrower shall not
effect any such consolidation, merger or sale, unless prior to or simultaneously
with the consummation thereof, the successor entity (if other than the Borrower)
resulting from such consolidation or merger or the entity purchasing such assets
shall assume by written instrument executed and mailed or delivered to each
Holder, the obligation to deliver to such Holder such shares of stock,
Securities, assets or cash as, in accordance with the foregoing provisions, such
Holder may be entitled to receive.
SECTION 7.6. DISSOLUTION OR LIQUIDATION.
In the event of any proposed distribution of the assets of the Borrower
in dissolution or liquidation (except under circumstances when SS.7.5 shall be
applicable), the Borrower shall mail notice thereof to the HolderS and shall
make no distribution to shareholders until the expiration of 30 days from the
date of mailing such notice and, in any such case, the Holders may exercise the
conversion rights with respect to their Notes within 30 days from the date of
mailing such notice and all rights herein granted not so exercised within such
30 day period shall thereafter become null and void.
SECTION 7.7. NOTICE OF EXTRAORDINARY DIVIDENDS.
If the Board of Directors of the Borrower shall declare any dividend or
other distribution on its Common Stock except out of retained earnings or by way
of a stock dividend payable in shares of its Common Stock on its Common Stock,
the Borrower shall mail notice thereof to the registered Holders not less than
15 days prior to the record date fixed for determining shareholders entitled to
participate in such dividend or other distribution and the Holders shall not
participate in such dividend or other distribution or be entitled to any rights
on account or as a result thereof (except adjustments in the Conversion Price as
provided in paragraph F of SS.7.4) unless anD to the extent that such conversion
rights are exercised prior to such record date. The provisions of this SS.7.7
shall not apply to distributions covered by paragraph A of SS.7.4 or made in
connection with transactions covereD by SS.7.5.
SECTION 7.8. RESERVATION OF COMMON STOCK.
The Borrower represents and warrants that on the Closing Date it has
reserved and set aside solely for the purpose of issuance upon the conversion of
the Notes 32,405,937 authorized shares of its Common Stock and agrees that it
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Vision Twenty-One, Inc. Convertible Note Agreement
will, on or before February 28, 2001, cause the requisite number of shareholders
required to approve and ratify under applicable state law an increase in the
number of authorized shares of capital stock of the Company so that from and
after the date such approval is obtained (and in all events, from and after
February 28, 2001) it will at all times reserve and keep available such number
of authorized shares of its Common Stock, solely for the purpose of issue upon
the conversion of Notes as herein provided for, as shall then be issuable upon
the conversion of all outstanding Notes.
SECTION 7.9. FULLY PAID STOCK; TAXES.
The Borrower covenants and agrees that the shares of stock represented
by each and every certificate for its Common Stock to be delivered on the
exercise of the conversion rights herein provided for shall, at the time of such
delivery, be validly issued and outstanding and be fully paid and nonassessable.
The Borrower further covenants and agrees that it will pay when due and payable
any and all Federal and state taxes (other than income taxes) which may be
payable in respect of the Notes or any Common Stock or certificates therefor
upon the exercise of the conversion rights herein provided for pursuant to the
provisions hereof. The Borrower shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the transfer and
delivery of stock certificates in the name other than that of the Holder of the
Note converted, and any such tax shall be paid by such Holder at the time of
presentation.
SECTION 7.10. CLOSING OF TRANSFER BOOKS.
The right to convert any Note shall not be suspended during any period
while the stock transfer books of the Borrower for its Common Stock may be
closed. The Borrower shall not be required, however, to deliver certificates of
its Common Stock upon such conversion while such books are duly closed for any
purpose, but the Borrower may postpone the delivery of the certificates for such
Common Stock until the opening of such books, and they shall, in such case, be
delivered forthwith upon the opening thereof, or as soon as practicable
thereafter.
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
SECURITIES ACT.
SECTION 8.1. RESTRICTIONS ON TRANSFERABILITY.
The Common Stock issued upon the conversion of any of the Notes
pursuant to SS.7 shall not be transferablE except upon the conditions specified
in the Registration Rights Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act (or any similar Federal
statute at the time in effect) and any applicable state securities laws, in
respect of the transfer of any such Common Stock.
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Vision Twenty-One, Inc. Convertible Note Agreement
SECTION 9. REPRESENTATIONS.
SECTION 9.1. REPRESENTATIONS OF THE BORROWER.
The Borrower represents and warrants that all representations and
warranties set forth in Exhibit B are true and correct as of the date hereof and
are incorporated herein by reference with the same force and effect as though
herein set forth in full.
SECTION 9.2. REPRESENTATIONS OF THE LENDERS. Each Lender, severally but
not jointly and severally, represents and warrants that:
(a) it is acquiring the Notes in exchange for debt previously
contracted and is accepting such Notes for the purpose of investment for its own
account and not with a view to or for sale in connection with any distribution
thereof (except as may be required by applicable law); it being understood,
however, that the disposition of each Lender's property shall at all times be
and remain within its control;
(b) it understands that the Securities have not been registered under
the Securities Act, and may be resold only if registered pursuant to the
provisions of the Securities Act and any applicable state "blue sky" laws or if
an exemption from such registration is available, except under circumstances
where neither such registration nor such an exemption is required by law; and
(c) it is an "accredited investor" within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as in effect on the Closing Date.
SECTION 10. THE AGENT.
SECTION 10.1. APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
appoints Bank of Montreal as the Agent under this Agreement, the Notes and the
other Convertible Loan Documents and hereby authorizes the Agent to take such
action as Agent on its behalf and to exercise such powers under the Convertible
Loan Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto. The Lenders expressly agree
that the Agent is not acting as a fiduciary of the Lenders in respect of the
Convertible Loan Documents, the Borrower or otherwise, and nothing herein or in
any of the other Convertible Loan Documents shall result in any duties or
obligations on the Agent or any of the Lenders except as expressly set forth
herein.
SECTION 10.2. AGENT AND ITS AFFILIATES. The Agent shall have the same
rights and powers under this Agreement and the other Convertible Loan Documents
as any other Lender and may exercise or refrain from exercising such rights and
power as though it were not the Agent, and the Agent and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Affiliate of the Borrower as if it were not
the Agent under the Convertible Loan Documents. The term "LENDER" as used herein
and in all other Convertible Loan Documents, unless the context otherwise
clearly requires, includes the Agent in its individual capacity as a Lender.
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Vision Twenty-One, Inc. Convertible Note Agreement
SECTION 10.3. ACTION BY AGENT. If the Agent receives from the Borrower a
written notice of an Event of Default pursuant to Section 4.2 hereof, the Agent
shall promptly give each of the Lenders written notice thereof. The obligations
of the Agent under the Convertible Loan Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action hereunder with respect to any Default or
Event of Default, except as expressly provided in Section 4. Upon the occurrence
of an Event of Default, the Agent shall take such action to enforce its Lien on
the Collateral and to preserve and protect the Collateral in accordance with the
terms and provisions of the Convertible Loan Documents. Unless and until the
Required Lenders give any direction, the Agent may (but shall not be obligated
to) take or refrain from taking such actions as it deems appropriate and in the
best interest of all the Lenders, PROVIDED HOWEVER, that the Lenders hereunder
shall have no right to require or direct the Agent to take or refrain from
taking any action against any Collateral under any Collateral Document or any
Subsidiary under any Guaranty unless and until all obligations owing to the
Lenders under the Credit Agreement have been paid and satisfied in full and all
commitments to extend credit thereunder have expired or terminated and, until
such time, the Lenders rights and benefits in the Collateral and the Guaranties
shall consist solely of their right to receive proceeds thereof in the manner
and order provided for in SS.3 of the Credit Agreement. In no event, however,
shall the Agent be required to take any action in violation of applicable law or
of any provision of any Convertible Loan Document, and the Agent shall in all
cases be fully justified in failing or refusing to act hereunder or under any
other Convertible Loan Document unless it first receives any further assurances
of its indemnification from the Lenders that it may require, including
prepayment of any related expenses and any other protection it requires against
any and all costs, expense, and liability which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall be entitled to
assume that no Default or Event of Default exists unless notified in writing to
the contrary by a Lender or the Borrower. In all cases in which the Convertible
Loan Documents do not require the Agent to take specific action, the Agent shall
be fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Convertible
Loan Documents, shall be binding upon all the Lenders and the holders of the
Obligations.
SECTION 10.4. CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 10.5. LIABILITY OF AGENT; CREDIT DECISION. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for any
action taken or not taken by it in connection with the Convertible Loan
Documents: (i) with the consent or at the request of the Required Lenders or
(ii) in the absence of its own gross negligence or willful misconduct. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify: (i) any
statement, warranty or representation made in connection with this Agreement,
any other Convertible Loan Document or any request for credit thereunder; (ii)
the performance or observance of any of the covenants or agreements of the
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Borrower contained herein or of the Borrower or any Subsidiary in any other
Convertible Loan Document; (iii) the satisfaction of any condition specified in
Section 3 hereof, except receipt of items required to be delivered to the Agent;
or (iv) the validity, effectiveness, genuineness, enforceability, perfection,
value, worth or collectibility hereof or of any other Convertible Loan Document
or of any other documents or writing furnished in connection with any
Convertible Loan Document or of any Collateral; and the Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence. The Agent may execute any of its duties under any of
the Convertible Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care, except for its gross negligence
or willful misconduct. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, other document or statement
(whether written or oral) believed by it to be genuine or to be sent by the
proper party or parties. In particular and without limiting any of the
foregoing, the Agent shall have no responsibility for confirming the accuracy of
any compliance certificate or other document or instrument received by it under
the Convertible Loan Documents. The Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with the
Agent signed by such payee in form satisfactory to the Agent. Each Lender
acknowledges that it has independently and without reliance on the Agent or any
other Lender, and based upon such information, investigations and inquiries as
it deems appropriate, made its own credit analysis and decision to extend credit
to the Borrower in the manner set forth in the Convertible Loan Documents. It
shall be the responsibility of each Lender to keep itself informed as to the
creditworthiness of the Borrower, and the Agent shall have no liability to any
Lender with respect thereto.
SECTION 10.6. INDEMNITY. The Lenders shall ratably, in accordance with
their respective percentages of the outstanding principal amount of the Notes,
indemnify and hold the Agent, and its directors, officers, employees, agents and
representatives harmless from and against any liabilities, losses, costs or
expenses suffered or incurred by it under any Convertible Loan Document or in
connection with the transactions contemplated thereby, regardless of when
asserted or arising, except to the extent they are promptly reimbursed for the
same by the Borrower and except to the extent that any event giving rise to a
claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. The obligations of the Lenders under this Section
shall survive termination of this Agreement.
SECTION 10.7. RESIGNATION OF AGENT AND SUCCESSOR AGENT. The Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation of the Agent, the Required Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be any Lender hereunder or any commercial Lender
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Agent under the Convertible Loan Documents, and the retiring Agent
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shall be discharged from its duties and obligations thereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
10 and all protective provisions of the other Convertible Loan Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent, but no successor Agent shall in any event be liable or responsible
for any actions of its predecessor. If the Agent resigns and no successor is
appointed, the rights and obligations of such Agent shall be automatically
assumed by the Required Lenders and (i) the Borrower shall be directed to make
all payments due each Lender hereunder directly to such Lender and (ii) subject
to the prior rights and interests of the Lenders under the Credit Agreement, the
Agent's rights in the Collateral Documents shall be assigned without
representation, recourse or warranty to the Lenders as their interests may
appear.
SECTION 11. MISCELLANEOUS.
SECTION 11.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING.
Except as otherwise required by law and subject to Section 11.1(b) hereof, each
payment by the Borrower under this Agreement or the other Convertible Loan
Documents shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient) imposed by
or within the jurisdiction in which the Borrower is domiciled, any jurisdiction
from which the Borrower makes any payment, or (in each case) any political
subdivision or taxing authority thereof or therein. If any such withholding is
so required, the Borrower shall make the withholding, pay the amount withheld to
the appropriate governmental authority before penalties attach thereto or
interest accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Lender and the
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Agent (as the case may
be) would have received had such withholding not been made. If the Agent or any
Lender pays any amount in respect of any such taxes, penalties or interest, the
Borrower shall reimburse the Agent or such Lender for that payment on demand in
the currency in which such payment was made. If the Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Lender or Agent on whose account
such withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Agent on or before the date hereof or, if later,
the date such financial institution becomes a Lender hereunder, two duly
completed and signed copies of (i) either Form W-8 BEN (relating to such Lender
and entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Lender, including fees, pursuant to the
Convertible Loan Documents and the Obligations) or Form W-8 EC1 (relating to all
amounts to be received by such Lender, including fees, pursuant to the
Convertible Loan Documents and the Obligations) of the United States Internal
Revenue Service or (ii) solely if such Lender is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8 BEN, or any successor form
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prescribed by the Internal Revenue Service, and a certificate representing that
such Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code). Thereafter and
from time to time, each Lender shall submit to the Borrower and the Agent such
additional duly completed and signed copies of one or the other of such Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) and such other certificates as may be (i)
requested by the Borrower in a written notice, directly or through the Agent, to
such Lender and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Lender, including fees, pursuant
to the Convertible Loan Documents or the Obligations. Upon the request of the
Borrower or the Agent, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and
the Agent a certificate to the effect that it is such a United States person.
(c) INABILITY OF LENDER TO SUBMIT FORMS. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or the Agent any form or certificate that such Lender is obligated to
submit pursuant to subsection (b) of this Section 11.1 or that such Lender is
required to withdraw or cancel any such form or certificate previously submitted
or any such form or certificate otherwise becomes ineffective or inaccurate,
such Lender shall promptly notify the Borrower and Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
SECTION 11.2. NO WAIVER, CUMULATIVE REMEDIES. No delay or failure on the
part of the Agent or any Lender or on the part of the holder or holders of any
Notes in the exercise of any power or right under any Convertible Loan Document
shall operate as a waiver thereof or as an acquiescence in any default, nor
shall any single or partial exercise of any power or right preclude any other or
further exercise thereof or the exercise of any other power or right. The rights
and remedies hereunder of the Agent, the Lenders and of the holder or holders of
any Notes are cumulative to, and not exclusive of, any rights or remedies which
any of them would otherwise have.
SECTION 11.3. NON-BUSINESS DAYS. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
SECTION 11.4. DOCUMENTARY TAXES. The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement,
the Notes or any other Convertible Loan Document, including interest and
penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or available
hereunder.
SECTION 11.5. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in any other Convertible Loan Document or in
certificates given pursuant hereto or thereto shall survive the execution and
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delivery of this Agreement and the other Convertible Loan Documents, and shall
continue in full force and effect with respect to the date as of which they were
made as long as any credit is in use or available hereunder.
SECTION 11.6. SURVIVAL OF INDEMNITIES. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders, shall survive the termination of this
Agreement and the other Convertible Loan Documents and the payment of the Notes.
SECTION 11.7. NOTICES. Except as otherwise specified herein, all
notices hereunder and under the other Convertible Loan Documents shall be in
writing (including, without limitation, notice by telecopy) and shall be given
to the relevant party at its address or telecopier number set forth below, or
such other address or telecopier number as such party may hereafter specify by
notice to the Agent and the Borrower given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Convertible Loan Documents to the Lenders and the Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrower to:
Vision Twenty-One, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with notices of any Event of Default also sent to:
Xxxxxxxx, Xxxx & Xxxxxxxx, XXX
Xxxxxxx Xxxxx, Xxxxx 0000
000 Xxxx Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof.
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SECTION 11.8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
SECTION 11.9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of the Agent and each of the Lenders and the benefit of their respective
successors and assigns, including any subsequent holder of any of the Notes. The
Borrower may not assign any of its rights or obligations under this Agreement,
the Notes or any other Convertible Loan Document without the written consent of
all of the Lenders. The holders of the Notes may not assign their Notes or their
rights under any other Convertible Loan Document without the written consent of
the Agent, which consent shall not be unreasonably withheld.
SECTION 11.10. HEADINGS. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
SECTION 11.11. COSTS AND EXPENSES. The Borrower agrees to pay all
reasonable costs and out-of-pocket expenses of the Agent in connection with the
preparation, negotiation, and administration of the Convertible Loan Documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Agent, in connection with the preparation and execution of the
Convertible Loan Documents, and any amendment, waiver or consent related
thereto, whether or not the transactions contemplated herein are consummated.
The Borrower agrees to pay to the Agent and each Lender, and any other holder of
any Note outstanding hereunder, all expenses reasonably incurred or paid by the
Agent and such Lender or any such holder, including reasonable attorneys' fees
and court costs, in connection with any Default or Event of Default by the
Borrower hereunder or in connection with the enforcement of any of the
Convertible Loan Documents.
The Borrower further agrees to indemnify the Agent, each Lender, and
their respective directors, officers and employees, against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor,
whether or not the indemnified Person is a party thereto or any settlement
arrangement arising from or relating to any such litigation) which any of them
may pay or incur arising out of or relating to any Convertible Loan Document or
any of the transactions contemplated thereby or the direct or indirect
application or proposed application of the proceeds of any credit extended
thereunder, other than those which arise from the gross negligence or willful
misconduct of the party claiming indemnification. The Borrower, upon demand by
the Agent or a Lender at any time, shall reimburse the Agent or such Lender for
any legal or other expenses incurred in connection with investigating or
defending against any of the foregoing (including any settlement costs relating
to the foregoing) except if the same is directly due to the gross negligence or
willful misconduct of the party to be indemnified. The obligations of the
Borrower under this Section shall survive the termination of this Agreement.
SECTION 11.12. ENTIRE AGREEMENT. The Convertible Loan Documents
constitute the entire understanding of the parties thereto with respect to the
subject matter thereof and any prior agreements, whether written or oral, with
respect thereto are superseded hereby.
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SECTION 11.13. GOVERNING LAW. This Agreement and the other Convertible
Loan Documents, and the rights and duties of the parties hereto, shall be
construed and determined in accordance with the internal laws of the State of
Illinois.
SECTION 11.14. SEVERABILITY OF PROVISIONS. Any provision of any
Convertible Loan Document which is unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such unenforceability
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
SECTION 11.15. EXCESS INTEREST. Notwithstanding any provision to the
contrary contained herein or in any other Convertible Loan Document, no such
provision shall require the payment or permit the collection of any amount in
excess of the maximum amount of interest permitted by applicable law to be
charged for the use or detention, or the forbearance in the collection, of all
or any portion of the Notes or other obligations outstanding under this
Agreement or any other Convertible Loan Document ("EXCESS INTEREST"). If any
Excess Interest is provided for, or is adjudicated to be provided for, herein or
in any other Convertible Loan Document, then in such event (a) the provisions of
this Section 11.15 shall govern and control; (b) neither the Borrower nor any
guarantor or endorser shall be obligated to pay any Excess Interest; (c) any
Excess Interest that the Agent or any Lender may have received hereunder shall,
at the option of the Agent, be (i) applied as a credit against the then
outstanding principal amount of Notes hereunder, accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law) and any
other obligations, or all of the foregoing; (ii) refunded to the Borrower, or
(iii) any combination of the foregoing; (d) the interest rate payable hereunder
or under any other Convertible Loan Document shall be automatically subject to
reduction to the maximum lawful contract rate allowed under applicable usury
laws, and this Agreement and the other Convertible Loan Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in the relevant interest rate; and (e) neither the Borrower nor any
guarantor or endorser shall have any action against the Agent or any Lender for
any damages whatsoever arising out of the payment or collection of any Excess
Interest.
SECTION 11.16. CONFIDENTIALITY. Any information disclosed by the
Borrower or any of its Subsidiaries to the Agent or any Lender which was
designated proprietary or confidential at the time of its receipt by the Agent
or such Lender, and which it is not otherwise in the public domain, shall not be
disclosed by the Agent or such Lender to any other Person except (i) to its
independent accountants and legal counsel (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such information and instructed to keep such information confidential), (ii)
pursuant to statutory and regulatory requirements, (iii) pursuant to any
mandatory court order, subpoena or other legal process, (iv) to the Agent or any
other Lender, (v) pursuant to any agreement heretofore or hereafter made between
such Lender and the Borrower which permits such disclosure, (vi) in connection
with the exercise of any remedy under the Convertible Loan Documents, or (vii)
subject to an agreement containing provisions substantially the same as those of
this Section, to any assignee of any Notes.
SECTION 11.17. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
-30-
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Vision Twenty-One, Inc. Convertible Note Agreement
arising out of or relating to this Agreement, the Notes and the other
Convertible Loan Documents or the transactions contemplated hereby or thereby.
The Borrower 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 and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. THE BORROWER,
THE AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY CONVERTIBLE
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 11.18. REGISTERED NOTES.
The Borrower shall cause to be kept at its principal office a register
for the registration and transfer of the Notes (hereinafter called the "NOTE
REGISTER"), and the Borrower will register or transfer or cause to be registered
or transferred as hereinafter provided any Note issued pursuant to this
Agreement.
At any time and from time to time any Holder which has been duly
registered as hereinabove provided may transfer its Note upon surrender thereof
at the principal office of the Borrower duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or its attorney duly
authorized in writing.
The person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof and a Holder for all
purposes of this Agreement. Payment of or on account of the principal and
interest on any Note shall be made to or upon the written order of such
registered Holder.
SECTION 11.19. EXCHANGE OF NOTES.
At any time and from time to time, upon not less than ten days notice
to that effect given by any Holder of any Note initially delivered or of any
Note substituted therefor pursuant to SS.11.18, this SS.11.19 or SS.11.20, and
upon surrender of any Note to the Borrower at its office, the Borrower will
deliver in exchange therefor, without expense to such Holder, except as set
forth below, Notes for the same aggregate principal amount as the then unpaid
principal amount of the Note so surrendered, in a denomination equal to the Note
so surrendered or in such other denomination in excess of $500,000 as such
Holder shall specify, dated as of the date to which interest has been paid on
the Note so surrendered or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, registered in the name of
such Person or Persons as may be designated by such Holder, and otherwise of the
same form and tenor as the Note so surrendered for exchange. The Borrower may
require the payment of a sum sufficient to cover any stamp tax or governmental
charge imposed upon such exchange or transfer.
SECTION 11.20. LOSS, THEFT, ETC. OF NOTES.
Upon receipt of evidence satisfactory to the Borrower of the loss,
theft, mutilation or destruction of any Note, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Borrower, or in the event of
such mutilation upon surrender and cancellation of the Note, the Borrower will
make and deliver without expense to the Holder thereof, a new Note, of like
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37
Vision Twenty-One, Inc. Convertible Note Agreement
tenor, in lieu of such lost, stolen, destroyed or mutilated Note. If an
Institutional Holder is the owner of any such lost, stolen or destroyed Note,
then the affidavit of an authorized officer of such owner, setting forth the
fact of loss, theft or destruction and of its ownership of the Note at the time
of such loss, theft or destruction shall be accepted as satisfactory evidence
thereof and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written agreement of such
owner to indemnify the Borrower.
-32-
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Vision Twenty-One, Inc. Convertible Note Agreement
The execution hereof by the Lenders shall constitute a contract among
the Borrower and the Lenders for the uses and purposes hereinabove set forth.
This Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
VISION TWENTY-ONE, INC.
By: /s/ Xxxx Xxxxxx
------------------------
Its: CEO
Vision Twenty-One, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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39
Vision Twenty-One, Inc. Convertible Note Agreement
Accepted as of the first date written above.
BANK OF MONTREAL, in its individual
capacity as a Lender and as Agent
By /s/ Xxxx X. Xxxx
-------------------------------
Name Xxxx X. Xxxx
Title Director
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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Vision Twenty-One, Inc. Convertible Note Agreement
BANK ONE TEXAS, N.A.
By /s/ Xxxxxx Xxxxxx
----------------------------------
Name Xxxxxx Xxxxxx
Title Vice President
Address:
One First National Plaza
Mail Code: IL1-0631
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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Vision Twenty-One, Inc. Convertible Note Agreement
PACIFICA PARTNERS I, L.P.
By:Imperial Credit Asset
Management, as its Investment
Manager
By /s/ Xxxx X. Xxxxx
-------------------------------
Name Xxxx X. Xxxxx
Title Vice President
Address:
c/o Imperial Credit Asset Management
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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Vision Twenty-One, Inc. Convertible Note Agreement
PILGRIM PRIME RATE TRUST
By:Pilgrim Investments, Inc., as its
Investment Manager
By /s/ Xxxxxxx X. XxXxxxx
----------------------------------
Name Xxxxxxx X. XxXxxxx, CFA
Title Vice President
Address:
Pilgrim Prime Rate Trust
c/o Pilgrim Investments, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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Vision Twenty-One, Inc. Convertible Note Agreement
PILGRIM AMERICA HIGH INCOME
INVESTMENTS LTD.
By: Pilgrim Investments, Inc.,
as its Investment Manager
By /s/ Xxxxxxx X. XxXxxxx
--------------------------------
Name Xxxxxxx X. XxXxxxx, CFA
Title Vice President
Address:
Pilgrim Prime Rate Trust
c/o Pilgrim Investments, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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Vision Twenty-One, Inc. Convertible Note Agreement
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES, INC.
By /s/ Xxxx X. Xxxxxxx
-------------------------------
Name Xxxx X. Xxxxxxx
Title Vice President
Address:
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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45
SCHEDULE I
(to Convertible Note Agreement)
NAME AND ADDRESSES PRINCIPAL AMOUNT OF
OF LENDERS NOTES TO BE ISSUED
---------- -------------------
Bank of Montreal $ 3,418,408.96
Bank One Texas, N.A. $ 754,551.00
Pilgrim Prime Rate Trust $ 368,022.32
Pilgrim America High Income
Investments Ltd. $ 368,022.32
Pacifica Partners I, L.P. $ 736,045.08
Xxxxxxx Xxxxx Business
Financial Services, Inc. $ 739,950.32
--------------
TOTAL $ 6,385,000
==============
46
SCHEDULE 3.6
(to Convertible Note Agreement)
CONSENTS
The consent of the Borrower's shareholders has not been obtained for
the Plan of Restructuring and the issuance of the Borrower's equity securities,
options and warrants to its creditors in connection therewith, including the
issuance by the Borrower of a portion of the shares of its Common Stock
necessary for issuance upon conversion of the Notes.
47
EXHIBIT A
(to Convertible Note Agreement)
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
BE OFFERED OR SOLD ONLY IF REGISTERED UNDER APPLICABLE SECURITIES LAWS OR IF AN
EXEMPTION THEREFROM IS AVAILABLE. THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF ARE TRANSFERABLE ONLY UPON THE CONDITIONS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT REFERRED TO HEREIN.
VISION TWENTY-ONE, INC.
7% Convertible Senior Secured Note
Due October 31, 2003
No. R- _____________, 20___
$
$
VISION TWENTY-ONE, INC., a Florida corporation (the "BORROWER"), for
value received, hereby promises to pay to
or registered assigns
on the 31st day of October, 2003
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7% per annum from the date hereof until maturity, payable at maturity.
The Borrower agrees to pay interest on overdue principal and premium, if any,
and (to the extent legally enforceable) on any overdue installment of interest,
at the rate of 9% per annum after the due date, whether by acceleration or
otherwise, until paid. Both the principal hereof and interest hereon are payable
at the principal office of the Agent in Chicago, Illinois (or such other
location in the State of Illinois as the Agent may designate to the Borrower) in
coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.
This Note is one of the 7% Convertible Senior Secured Notes of the
Borrower in the aggregate principal amount of $6,385,000 issued or to be issued
under and pursuant to the terms and provisions of the Convertible Note
Agreement, dated as of November 10, 2000, entered into by the Borrower with the
original Lenders therein referred to and this Note and the holder hereof are
entitled equally and ratably with the holders of all other Notes outstanding
under the Convertible Note Agreement to all the benefits provided for thereby or
referred to therein, to which Convertible Note Agreement reference is hereby
made for the statement thereof.
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48
This Note and the other Notes outstanding under the Convertible Note
Agreement may be declared due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Convertible Note
Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Borrower prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in SS.2 of
the Convertible Note Agreement.
Subject to and upon compliance with the provisions of the Convertible
Note Agreement, the holder hereof shall have the right and option at any time to
convert the principal hereof and accrued and unpaid interest hereon or any
portion hereof into fully paid and nonassessable shares of Common Stock of the
Borrower at a conversion price per share of $0.18. Said conversion price is
subject to adjustment in certain events as more fully set forth in SS.7 of the
Convertible Note Agreement. Reference is hereby made to SS.7 for a full
statement oF the terms and conditions relating to such conversion right.
This Note is registered on the books of the Borrower and is
transferable only by surrender thereof at the principal office of the Borrower
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest on
this Note shall be made only to or upon the order in writing of the registered
holder.
VISION TWENTY-ONE, INC.
By:
-----------------------------
Its:
-----------------------------
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49
EXHIBIT B
(to Convertible Note Agreement)
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders as follows:
1. CORPORATE ORGANIZATION AND AUTHORITY. The Borrower,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be conducted
except where the failure to obtain such licenses or permits would not
have a material adverse effect on the condition (financial or
otherwise) of the Borrower or on the ability of the Borrower to perform
its obligations under the Agreement, the Registration Rights Agreement
or the Notes; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary except where the
failure to be so licensed or qualified would not have a material
adverse effect on the condition (financial or otherwise) of the
Borrower or on the ability of the Borrower to perform its obligations
under the Agreement, the Registration Rights Agreement or the Notes.
2. AUTHORIZED CAPITAL STOCK. The authorized capital stock of the
Borrower consists of (i) 50,000,000 shares of Common Stock, par value $0.001 per
share, of which 13,969,260 shares are outstanding on the date hereof and all of
said outstanding shares are duly authorized, validly issued, fully paid and
non-assessable and (ii) 10,000,000 shares of Preferred Stock, par value $0.001
per share, of which zero shares will be issued and outstanding on the Closing
Date and all of said outstanding shares will be duly authorized, validly issued,
fully paid and non-assessable when issued. The Borrower does not have
outstanding any warrants, options, Convertible Securities or other rights for
the purchase or acquisition of shares of its Common Stock other than the Notes,
the Warrants and the rights providing for the purchase of 2,270,213 shares of
Common Stock as described in Annex A attached hereto. The Board of Directors of
the Borrower has duly reserved for issuance upon (i) conversion of the Notes
32,405,937 shares of Common Stock. The Board of Directors of the Borrower has
not reserved for issuance upon conversion of the Notes 3,066,285 shares of
Common Stock and has not reserved any shares of Common Stock exercise of the
Warrants. No shareholder of the Borrower or any other Person is entitled to
preemptive or similar rights with respect to the shares of Common Stock which
are issuable upon conversion of the Notes and, if and when issued upon
conversion of the Notes in accordance with the provisions of SS.7 of the
Agreement or the Warrants, such shares will be validly issued, fully paid and
non-assessable shares (plus increases in such number of shares as shall be
required following the occurrence of certain dilutive events giving rise to
reductions in the Conversion Price).
B-1
50
3. FULL DISCLOSURE. No other written statement furnished to any Lender
by or on behalf of the Borrower in connection with the negotiation of the
issuance of the Notes, contains any untrue statement of a material fact or omit
a material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Borrower which the Borrower has not
disclosed to each Lender in writing which materially affects adversely or, so
far as the Borrower can now foresee, will materially affect adversely the
properties, business, prospects, profits or condition (financial or otherwise)
of the Borrower.
4. ISSUANCE IS LEGAL AND AUTHORIZED. The issuance of the Notes and
compliance by the Borrower with all of the provisions of the Agreement, the
Notes and the Registration Rights Agreement:
(a) are within the corporate powers of the Borrower;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or Bylaws of the Borrower or any indenture or other
agreement or instrument to which the Borrower is a party or by which it
may be bound or result in the imposition of any liens or encumbrances
on any property of the Borrower; and
(c) have been duly authorized by proper corporate and
shareholder action on the part of the Borrower, executed and delivered
by the Borrower and the Agreement, the Notes or the Registration Rights
Agreement constitute the legal, valid and binding obligations,
contracts and agreements of the Borrower enforceable in accordance with
their respective terms; PROVIDED, HOWEVER, shareholder approval
authorizing the increase in the authorized shares of the Borrower's
capital stock required for the conversion of all Notes into Common
Stock shall be obtained in connection with the Plan of Restructuring on
or before February 28, 2001.
5. GOVERNMENTAL CONSENT. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Borrower of the
Agreement, the Notes or the Registration Rights Agreement or compliance by the
Borrower with any of the provisions of the Agreement, the Notes or the
Registration Rights Agreement.
6. COMPLIANCE WITH LAW. The Borrower is (a) not in violation of any
law, ordinance, franchise, governmental rule or regulation to which it is
subject or (b) has not failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain would materially
adversely affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Borrower or impair the ability of the Borrower
to perform its obligations contained in the Agreement, the Registration Rights
Agreement or the Notes. The Borrower is not in default with respect to any order
of any court or governmental authority or arbitration board or tribunal.
B-2
51
ANNEX A
Existing Warrants as described on Exhibit A to this Annex A: 974,803
Existing Incentive Stock Options
Employee Plan 1,215,411
Affiliated Plan 79,999
---------
Total 2,270,213
=========
52
EXHIBIT C
(to Convertible Note Agreement)
DESCRIPTION OF CLOSING OPINION OF COUNSEL
TO THE BORROWER
The closing opinion of Xxxxxxxx, Loop & Xxxxxxxx, LLP called for by
SS.3.2 of the Convertible Note Agreement, shall be dated the Closing Date and
addressed to the Lenders, shall be satisfactory in scope and form to the Lenders
and shall be to the effect that:
1. The Borrower is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Florida,
has the corporate power and the corporate authority to execute and
perform the Convertible Note Agreement and to issue the Notes and has
the full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified
and is in good standing as a foreign corporation in each jurisdiction
in which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary except where the failure to be so licensed or
qualified would not have a material adverse effect on the condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole or on the ability of the Borrower to perform its obligations
under the Convertible Note Agreement or the Notes.
2. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has the full corporate power and authority to execute
and perform its Guaranty and the Collateral Documents executed by it
and has the full corporate power and authority to conduct the
activities in which it is now engaged and is duly licensed or qualified
and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary and
all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable and
are owned by the Borrower, by one or more Subsidiaries, or by the
Borrower and one or more Subsidiaries except where the failure to be so
licensed or qualified would not have a material adverse effect on the
condition (financial or otherwise) of the Borrower and its Subsidiaries
taken as a whole or on the ability of the Borrower to perform its
obligations under the Convertible Note Agreement or the Notes.
3. The Convertible Note Agreement and the Registration
Rights Agreement have been duly authorized by all necessary corporate
action on the part of the Borrower, have been duly executed and
delivered by the Borrower and constitutes the legal, valid and binding
contracts of the Borrower enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Borrower, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Borrower and constitute the legal, valid and binding obligations of
C-1
53
the Borrower enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
5. Each Guaranty has been duly authorized by all necessary
corporate action on the part of the guarantor, has been duly executed
and delivered by the guarantor and constitutes the legal, valid and
binding contract and agreement of the guarantor enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors' rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity
or at law).
6. No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Convertible Note Agreement, the
Registration Rights Agreement or the Notes.
7. The issuance and sale of the Notes and the execution,
delivery and performance by the Borrower of the Convertible Note
Agreement and the Registration Rights Agreement do not conflict with or
result in any breach of any of the provisions of or constitute a
default under or result in the creation or imposition of any lien upon
any of the property of the Borrower pursuant to the provisions of the
Articles of Incorporation or Bylaws of the Borrower or any agreement or
other instrument known to such counsel to which the Borrower is a party
or by which the Borrower may be bound.
8. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Convertible Note Agreement do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
9. The Borrower has duly authorized Common Stock consisting
of _________ shares of Common Stock, $___ per share par value, of which
_________ shares have been issued and are outstanding. All such
outstanding shares have been duly and validly issued and are fully paid
and non-assessable.
10. The Conversion Shares when issued in accordance with the
terms of the Convertible Note Agreement will be duly authorized, fully
paid, validly issued and nonassessable shares of the Borrower.
11. None of the transactions contemplated by the Convertible
Note Agreement including, without limitation, the use of the proceeds
from the issuance of the Notes will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any
regulation issued pursuant thereto, or Regulations U, T and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chap. II.
C-2
54
The opinion of Xxxxxxxx, Loop & Xxxxxxxx, LLP shall cover such other
matters relating to the sale of the Notes as the Lenders may reasonably request.
With respect to matters of fact on which such opinion is based, such counsel
shall be entitled to rely on appropriate certificates of public officials and
officers of the Borrower.
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55
EXHIBIT D
(to Convertible Note Agreement)
FORM OF REGISTRATION RIGHTS AGREEMENT
D-1
