November 14, 2003
CapitalSource Finance LLC
0000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
RE: Revolving Credit Facility and Term Loan (the "Loans") from
CapitalSource Finance LLC ("Lender") to Opticare Health Systems, Inc.,
a Delaware corporation, Opticare Eye Health Centers, Inc., a
Connecticut corporation, Primevision Health, Inc., a Delaware
corporation, and Opticare Acquisition Corporation, a New York
corporation (collectively, "Borrower")
The undersigned, Palisade Concentrated Equity Partnership, L.P. ("Palisade") is
a substantial direct or indirect equity holder of Borrower. The Loans are
evidenced by that certain Xxxxxxx and Restated Revolving Credit, Term Loan and
Security Agreement, dated January 25, 2002 (as the same has been and may
hereafter be amended, supplemented or modified from time to time, the "Loan
Agreement") by and between Lender and Borrower. Capitalized terms used but not
otherwise defined in this letter agreement are as defined in the Loan Agreement.
Xxxxxxxx acknowledges and confirms that, as a direct and indirect owner of
Borrower that it will benefit from the advancement of funds, including the
Overadvances, under the Revolving Facility to Borrower.
In order to induce Xxxxxx to enter into the Loan Agreement and to consummate the
transactions contemplated thereby (including providing the Overadvances), and in
consideration therefore, the parties agree as follows:
Xxxxxxxx agrees to guaranty due and punctual payment when due of all
Overadvances made pursuant to the Loan Agreement and the interest thereon and
any and all other monies and amounts due or which may become due on or with
respect to, in any case whether according to the present terms thereof, at any
earlier or accelerated date or dates or pursuant to any extension of time or to
any change in the terms, covenants, agreements and conditions thereof now or at
any time hereafter made or granted ("Palisade Obligations").
This letter agreement is a promise of payment of the Overadvances and not of
collection. If any Palisade Obligation is not satisfied when due, whether by
acceleration or otherwise, Palisade shall forthwith satisfy such Palisade
Obligation, upon demand, and no such satisfaction shall discharge the
obligations of the Palisade hereunder until all Palisade Obligations have been
indefeasibly paid in cash and performed and satisfied in full and Xxxxxx's
commitment to make Overadvances under the Loan Agreement has terminated.
Palisade's agreement to pay the Palisade Obligations under this letter agreement
shall be primary and direct and not conditional or contingent upon the
enforceability of any obligation, the solvency of Borrower or any other Person,
any obligation or circumstance which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor or the pursuit by Lender
of any remedies it may have against Borrower or any other Palisade of the
Palisade Obligations or any other Person. Without limiting the generality of the
foregoing, Lender shall not be required to make any demand on Borrower or any
other Person or to sell at foreclosure or otherwise pursue or exhaust its
remedies against any Collateral of Borrower or any guarantor of the Palisade
Obligations or any other
Person before, simultaneously with or after enforcing its rights and remedies
hereunder against Xxxxxxxx, and any one or more successive and/or concurrent
actions may be brought against Palisade in the same action brought against
Borrower or any other Person of the Palisade Obligations or in separate actions,
as often as Lender may deem advisable, in its sole discretion. The obligations
of Palisade hereunder shall not in any way be affected by any action taken or
not taken by Xxxxxx.
Palisade hereby represents and warrants to Lender that Xxxxxxxx has all
requisite power and authority (i) to execute, deliver and perform its
obligations under this letter agreement and (ii) to consummate the transactions
contemplated hereunder, and Xxxxxxxx is under no legal restriction, limitation
or disability that would prevent it from doing any of the foregoing.
Palisade hereby waives demand, setoff, counterclaim, presentment, protest,
notice of dishonor or non-payment, as well as all defenses with respect to any
and all instruments, notice of acceptance hereof, notice of Loans or Advances
made, credit extended, collateral received or delivered, or any other action
taken by Lender in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein, it being the
intention hereof that Palisade shall remain liable as a principal until the full
amount of all Palisade Obligations shall have been indefeasibly paid in full in
cash and performed and satisfied in full and the Loan Agreement terminated,
notwithstanding any act, omission, or anything else which might otherwise
operate as a legal or equitable discharge of Palisade.
Palisade acknowledges and agrees that its obligations as Xxxxxxxx shall not be
impaired, modified, changed, released or limited in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower or any other surety or guarantor of the Palisade Obligations or any
other Person or its estate in bankruptcy resulting from the operation of any
present or future provision of the bankruptcy laws or other similar statute, or
from the decision of any court.
Xxxxxxxx acknowledges and agrees that Lender shall have the full right and
power, in its sole discretion and without any notice to or consent from Palisade
and without affecting or discharging, in whole or in part, the liability of
Palisade hereunder to deal in any manner with the Palisade Obligations and any
security or guaranties therefor, including, without limitation, to (A) release,
extend, renew, accelerate, compromise or substitute and administer the Palisade
Obligations and other obligations under the Loan Documents in any manner it sees
fit, (B) release any or all collateral for the Palisade Obligations, (C) release
any guarantor of the Palisade Obligations, (D) extend the time for payment of
the Palisade Obligations or any part thereof, (E) change the interest rate on
the Palisade Obligations or any Note under the Loan Agreement, (F) reduce or
increase the outstanding principal amount of the Palisade Obligations or any
Note under the Loan Agreement, (G) accelerate the Palisade Obligations, (H) make
any change, amendment or modification whatsoever to the terms or conditions of
the Loan Documents, (I) extend, in whole or in part, on one or any number of
occasions, the time for the payment of any principal or interest or any other
amount pursuant to any Note or for the performance of any term or condition of
the Loan Documents, (J) settle, compromise, release, substitute, impair, enforce
or exercise, or fail or refuse to enforce or exercise, any claims, rights, or
remedies, of any kind or nature, which Lender may at any time have against
Borrower or any other guarantor of the Palisade Obligations or any other Person,
or with respect to any security interest of any kind held by Lender at any time,
whether under any Loan Document or otherwise, (K) release or substitute any
security interest of any kind held by Lender at any time, (L) collect and retain
or liquidate any collateral subject to such security interest, (M) make advances
for the purpose of performing any term or covenant contained in the Loan
Documents with respect to which the Borrower or any other guarantor of the
Palisade Obligations is in default, (N) foreclose on any of the Collateral, (O)
grant waivers or indulgences, (P) take additional collateral, (Q) obtain any
additional guarantors, (R) take a deed in lieu of foreclosure and/or (S) take or
fail to take any other action whatsoever with respect to the Palisade
Obligations. Xxxxxxxx hereby waives and agrees not to assert
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against Lender any rights which a guarantor or surety could exercise.
Notwithstanding any other provision of this letter agreement, Xxxxxxxx agrees
that Xxxxxx has no duties of any nature whatsoever to Palisade, whether express
or implied, by virtue of this letter agreement or any other Loan Document,
operation of law or otherwise.
Palisade agrees that its obligations hereunder are irrevocable, joint and
several and independent of the obligations of Borrower or any other guarantor of
the Palisade Obligations or any other Person.
Xxxxxxxx agrees that it shall have no right of subrogation whatever with respect
to the Palisade Obligations or to any collateral securing such Palisade
Obligations unless and until such Palisade Obligations have been irrevocably and
indefeasibly paid in full in cash and performed in full and the Loan Agreement
has terminated.
Xxxxxxxx agrees that this letter agreement shall inure to the benefit of, and
may be enforced by, Xxxxxx, all future holders of any Note or any of the
Palisade Obligations and each of their respective successors and permitted
assigns, and shall be binding upon and enforceable against Palisade and
Xxxxxxxx's assigns and successors. Xxxxxxxx agrees that it may not assign,
delegate or transfer this letter agreement or any of its rights or obligations
under this letter agreement without the prior written consent of Lender.
No course of action or delay, renewal or extension of this letter agreement or
any rights or obligations hereunder, release of Palisade or any of the
foregoing, or delay, failure or omission on Lender's part in enforcing this
letter agreement, or any other Loan Document or in exercising any right, remedy,
option or power hereunder or thereunder shall affect the liability of Palisade
or operate as a waiver of such or of any other right, remedy, power or option or
of any default, nor shall any single or partial exercise of any right, remedy,
option or power hereunder or thereunder affect the liability of Palisade or
preclude any other or further exercise of such or any other right, remedy, power
or option. No waiver by Lender of any one or more defaults by Palisade in the
performance of any of the provisions of this letter agreement shall operate or
be construed as a waiver of any future default or defaults, whether of a like or
different nature.
If any term or provision of this letter agreement is adjudicated to be invalid
under applicable laws or regulations, such provision shall be inapplicable to
the extent of such invalidity or unenforceability without affecting the validity
or enforceability of, the remainder of this Guaranty which shall be given effect
so far as possible.
This letter agreement shall be effective on the date hereof and shall continue
in full force and effect until full performance and indefeasible payment in full
in cash of all Palisade Obligations and termination of Lender's obligations to
make Overadvances under the Loan Agreement, all in accordance with the Loan
Agreement, and the rights and powers granted to Lender hereunder shall continue
in full force and effect notwithstanding the termination of this letter
agreement or the fact that Xxxxxxxx's borrowings under the Loan Agreement may
from time to time be temporarily in a zero or credit position until all of the
Palisade Obligations have been indefeasibly paid in full in cash and performed
and satisfied in full.
This letter agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to its choice of
law provisions.
This letter agreement may be executed in one or more counterparts, all of which
taken together shall constitute one and the same instrument.
Xxxxxxxx agrees to treat this letter agreement and all other Loan Documents and
all provisions thereof confidentially and not to transmit any copy hereof or
thereof or disclose the contents hereof or thereof, in whole or in part, to any
Person (including, without limitation, any financial institution or
intermediary)
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without Xxxxxx's prior written consent, other than to Xxxxxxxx's advisors and
officers on a need-to-know basis.
PALISADE CONCENTRATED EQUITY PARTNERSHIP, L.P.
By: Palisade Concentrated Holdings, LLC, its
general partner
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Its: Member
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ADDRESS:
1 Bridge Plaza
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Fort Xxx, NJ 07024
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ACKNOWLEDGED AND AGREED TO BY:
CAPITALSOURCE FINANCE LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
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Its: Director
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OPTICARE HEALTH SYSTEMS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Its: Chief Executive Officer
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PRIMEVISION HEALTH, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxxx
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Its: President
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OPTICARE EYE HEALTH CENTERS, INC.,
a Connecticut corporation
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Its: President
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OPTICARE ACQUISTION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Its: President
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