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Exhibit 4.28
May 19, 2000
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Chairman of the Board
Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of
July 1, 1998, as amended, between you and us (the "Credit Agreement"). All
capitalized terms used herein without definition shall have the same meaning
herein as such terms are defined in the Credit Agreement.
The Borrower has advised the Banks that the Borrower has entered into
an Agreement and Plan of Merger and Reorganization, dated as of February 10,
2000 (the "Merger Agreement"), among the Borrower, Opticare Health Systems,
Inc. (the "Parent"), and OC Acquisition Corp., a wholly-owned subsidiary of the
Parent ("Merger Sub"), pursuant to which the parties intend to merge Merger Sub
with and into the Borrower subject to the terms and conditions thereof which
include, among other things, restructuring the Obligations owing to the Banks
on terms and conditions mutually agreed upon by the Borrower and the Banks.
While the Borrower and the Banks have initiated discussions and due diligence
concerning the Merger and any proposed restructuring of the Obligations, the
Borrower acknowledges that the Banks have not consented to the Merger nor have
the Banks agreed to any terms and conditions relating to any restructuring of
the Obligations. In the meantime, however, the Borrower intends to continue to
sell the remaining physician practice management groups operated by the
Borrower and its Subsidiaries (collectively being referred to herein as the
"PPM Businesses") and use a portion of the proceeds from the sale of the PPM
Businesses to meet its reasonable and necessary operating expenses.
To afford the Borrower an opportunity to proceed with the transactions
described above, the Borrower has requested that (i) the Banks extend the
temporary waiver period provided for in Sections 2.1 and 2.2 of that certain
Seventh Amendment and Waiver to Credit Agreement dated as of December 10, 1999,
among the Borrower, the Banks, and the Agent (the "Seventh Amendment") (as
further amended, in part, by a December 30, 1999, letter agreement, a February
29, 2000, letter agreement, a March 24, 2000, letter agreement, and an April
14, 2000, letter agreement, and a May 5, 2000, letter agreement, in each case
between the Borrower, the Banks and the Agent) and, in addition, that the Banks
temporarily waive any non-compliance by the Borrower as of December 31, 1999,
and as of March 31, 2000, with Sections 8.8 (Total
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May 19, 2000
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Funded Debt/Adjusted EBITDA Ratio), 8.10 (Interest Coverage Ratio), and 8.11
(Debt Service Coverage Ratio) of the Credit Agreement and the Borrower's
non-compliance with Section 8.5(b) of the Credit Agreement with respect to the
timely delivery of the Borrower's March 31, 2000, financial statements, in each
case to the earlier of June 2, 2000, or the termination of the Merger Agreement
pursuant to its terms (the earlier of such dates being referred to herein as
the "Waiver Termination Date"), (ii) Bank of Montreal extend the Bridge Loan
Period from May 19, 2000, to the Waiver Termination Date, and (iii) postpone
the due date for the payment of principal, interest and unused commitment fees
otherwise due on or before May 19, 2000, to the Waiver Termination Date. By
signing below, the Banks (including Bank of Montreal with respect to the Bridge
Loan Commitment) hereby agree to extend the waiver period provided in Sections
2.1 and 2.2 of the Seventh Amendment from May 19, 2000, to the Waiver
Termination Date, temporarily waive any non-compliance by the Borrower as of
December 31, 1999, and March 31, 2000, with Sections 8.8 (Total Funded
Debt/Adjusted EBITDA Ratio), 8.10 (Interest Coverage Ratio), and 8.11 (Debt
Service Coverage Ratio) of the Credit Agreement and the Borrower's
non-compliance with Section 8.5(b) of the Credit Agreement with respect to the
timely delivery of the Borrower's March 31, 2000, financial statements through
the period ending on the Waiver Termination Date, agree to extend the Bridge
Loan Period to the Waiver Termination Date, and agree to postpone the due date
for the payment of principal, interest, and unused commitment fees otherwise
due on or before May 19, 2000, to the Waiver Termination Date, provided that:
(a) the Borrower agrees to promptly provide to the Banks
copies of any instruments and documents entered into or proposed to be
entered into in connection with the Merger (including, without
limitation, any executed shareholder lock-up agreements) and to
promptly advise the Banks of any termination, amendment, or waiver of
the Merger Agreement or of any material breach thereof by any party
thereto, in each case subject to its directors' fiduciary duties;
(b) until the Obligations are paid in full, the Borrower
shall provide to the Banks a weekly Budget pursuant to Section 1.14(f)
of the Credit Agreement and such Budget shall be subject to the
Approved Budget and reconciliation procedures set forth therein,
regardless of whether or not then being accompanied by a request for a
Borrowing of Bridge Loans;
(c) at all times on and after the date hereof (i) all
proceeds from the sale of any assets of the Borrower and its
Subsidiaries (including, without limitation, proceeds from the sale of
the PPM Businesses or any part thereof), and (ii) cash receipts
arising from the operation of the business of the Borrower and its
Subsidiaries not applied pursuant to an Approved Budget, shall in each
case be remitted promptly upon receipt to the Agent; and
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May 19, 2000
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(d) except to the extent applied to payments pursuant to an
Approved Budget or applied to the Obligations owing to the Banks,
proceeds received pursuant to clause (c) above shall be held by the
Agent as collateral for the remaining Obligations owing to the Banks
(the Agent hereby being granted a Lien on and right of set-off for the
benefit of the Banks against all such amounts so held).
The Borrower hereby acknowledges and agrees to the foregoing conditions. The
Borrower also hereby acknowledges and agrees that (i) the consummation of the
Merger and of any restructuring of the terms and conditions relating to the
Obligations shall in each case be subject to the Banks' consent, which may be
given or withheld in their discretion and (ii) any sale of the Borrower's or
its Subsidiaries' assets or businesses shall be subject to the prior written
consent of the Banks, and all proceeds from any such sale represent proceeds of
the Banks' Collateral, to be held by the Agent or applied to the Obligations
pursuant to the terms of the Credit Agreement as modified hereby.
Except as specifically modified hereby, all of the terms and
conditions of the Credit Agreement and the other Loan Documents shall stand and
remain unchanged and in full force and effect. This waiver shall become
effective upon the execution and delivery hereof by each of the Banks and the
Borrower as set forth below. This waiver may be executed in counterparts and by
different parties on separate counterpart signature pages, each of which shall
be an original and all of which taken together shall constitute one and the
same instrument. This waiver shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
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May 19, 2000
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This waiver letter is entered into by and among the parties hereto as
of the date first above written.
BANK OF MONTREAL, in its individual BANK ONE TEXAS, N.A.
capacity as a Bank and as Agent
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx Xxxxxx
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Name: Xxxx X. Xxxx Name: Xxxxxx Xxxxxx
Title: Director Title: Vice President
PACIFICA PARTNERS I, X.X. XXXXXXX PRIME RATE TRUST
By: Imperial Credit Asset Management, By: Pilgrim Investments, Inc.,
as its Investment Manager as its Investment Manager
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxx X. Xxxxx Name: Xxxxxxx X. XxXxxxx, CFA
Title: Vice President Title: Assistant Vice President
PILGRIM AMERICA HIGH INCOME XXXXXXX XXXXX BUSINESS FINANCIAL
INVESTMENTS LTD. SERVICES, INC.
By: Pilgrim Investments, Inc.,
as its Investment Manager By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx, CFA
Title: Assistant Vice President
Acknowledged and agreed to as of the date first above written.
VISION TWENTY-ONE, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chairman
