CONSENT AND AMENDMENT NUMBER FOUR TO
LOAN AND SECURITY AGREEMENT
---------------------------
THIS CONSENT AND AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT
(this "Consent and Amendment") is entered into as of December 30, 1997 (but
effective only in accordance with the terms and conditions of Section 5 of this
Consent and Amendment), by and among FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), LASERSIGHT INCORPORATED, a Delaware corporation
("LaserSight"), LASERSIGHT TECHNOLOGIES, INC., a Delaware corporation
("Technologies"), MEC HEALTH CARE, INC., a Maryland corporation ("MEC"), LSI
ACQUISITION, INC., a New Jersey corporation ("LSI"), LASERSIGHT CENTERS
INCORPORATED, a Delaware corporation ("Centers"), and MRF, INC., a Missouri
corporation ("MRF," together with LaserSight, Technologies, MEC, LSI, and
Centers, individually and collectively, jointly and severally, "Borrower"), with
reference to the following facts:
A. Foothill and Borrower heretofore have entered into that certain
Loan and Security Agreement, dated as of March 31, 1997, as
amended by that certain Consent and Amendment Number One to Loan
and Security Agreement, dated as of July 28, 1997, by that certain
Consent and Amendment Number Two to Loan and Security Agreement,
dated as of August 29, 1997, and by that certain Consent and
Amendment Number Three to Loan and Security Agreement, dated as of
September 10, 1997 (as amended, the "Loan Agreement");
B. Borrower has requested that Foothill consent to the sale by
LaserSight of all of the issued and outstanding capital stock of
MEC and LSI to Vision Twenty-One, Inc., a Florida corporation
("Vision") for a total purchase price of $13,000,000, payable
$6,500,000 in cash at closing to occur on the date hereof, and the
balance of $6,500,000 (subject to certain purchase price
adjustments) to be paid between the date hereof and May 29, 1998
through LaserSight's disposition, on a periodic basis, of shares
of Vision's common stock received from Vision at the closing (the
"Vision Pledged Shares"), and, in the event that LaserSight has
not received $6,500,000 through the disposition of the Vision
Pledged Shares on or before May 29, 1998, Vision will pay the
amount of any such shortfall on such date to LaserSight in cash;
that Foothill further agree to a waiver of compliance by Borrower
with the Financial Covenants as set forth in the Loan Agreement
until June 15, 1998; that the Loan Agreement be amended to delete
MEC and LSI as borrowers thereunder and that all other Loan
Documents, including, but not limited to, the Stock Pledge
Agreement, the Copyright Security Agreement, the Patent Security
Agreement, the Trademark Security Agreement, and the Suretyship
Agreement, in each case between the Borrower and Foothill and
dated as of March 31, 1997, be simultaneously amended to delete
MEC and LSI as parties thereto; and that Foothill further agree to
release its lien of the capital stock and assets of each of MEC
and LSI and to amend all filed financing statements to delete MEC
and LSI as debtors (the foregoing hereinafter referred to as the
"Transaction").
C. In response to the foregoing request that Foothill consent to the
Transaction, Foothill requires that the Borrower, out of the
initial cash proceeds received by it from the Transaction, reduce
the amount outstanding under the Term Loan as of the date hereof
by $2,000,000, with the balance of the Term Loan to be repaid on
or before June 15, 1998, out of the proceeds received from
LaserSight's disposition of the Vision Pledged Shares after
LaserSight has received $2,500,000 of such proceeds; that the
Borrower, also out of the initial cash proceeds from the
Transaction, repay all Revolving Advances outstanding as of the
date hereof; and that the Loan Agreement be amended to change the
Maximum Revolver Amount from $4,000,000 to $2,000,000, with all
Revolving Advances being fully repaid and the Loan Agreement
terminated as of June 15, 1998.
D. Foothill is willing to consent to the Transaction and to amend the
Loan Agreement in accordance with the terms and conditions hereof;
and
E. All capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Loan Agreement, as amended
hereby.
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein, Foothill and Borrower hereby agree as follows:
1. Amendments to the Loan Agreement.
---------------------------------
A. Section 1.1 of the Loan Agreement is hereby amended to revise
the following defined terms:
"Borrower" means LaserSight, Technologies, Centers and MRF,
individually and collectively, jointly and severally.
"Maximum Revolver Amount" means $2,000,000.
B. Section 1.1 of the Loan Agreement hereby is amended to include
the following defined terms:
"Vision" means Vision Twenty-One, Inc., a Florida corporation.
"Vision Pledged Shares" means 812,500 shares of the issued and
outstanding common stock of Vision received by LaserSight as part of the
consideration for the sale by LaserSight to Vision of all of the issued and
outstanding capital stock of MEC and LSI pursuant to the terms of the Vision
Stock Purchase Agreement.
"Vision Stock Purchase Agreement" means that certain Stock Purchase
Agreement between Vision and LaserSight dated as of December 1, 1997 pursuant to
which LaserSight has agreed to sell to Vision all of the issued and outstanding
capital stock of MEC and LSI for a total consideration of $13,000,000, payable
$6,500,000 in cash and the balance through the issuance of the Vision Pledged
Shares.
"Vision Stock Distribution Agreement" means that certain Stock
Distribution Agreement between Vision and LaserSight dated as of December 30,
1997 pursuant to which Vision and LaserSight have agreed to the procedures for
the disposition of the Vision Pledged Shares through the period from the date
hereof through May 29, 1998, at which time, in the event that LaserSight has not
received a minimum of $6,500,000 from the disposition of the Vision Pledges
Shares, Vision will pay any such shortfall in cash to LaserSight in
consideration for any remaining Vision Pledged Shares held by LaserSight on such
date.
C. Section 2.3 of the Loan Agreement hereby is amended in its
entirety to read as follows:
2.3 Term Loan. Foothill has agreed to make a "Term Loan" to
Borrower in the original principal amount of $4,000,000. The Term Loan
shall be repaid with an initial repayment of $2,000,000 on or before
December 30, 1997, and the balance of $2,000,000 repaid through the
proceeds received by LaserSight from the disposition of the Vision
Pledged Shares pursuant to the terms of the Vision Stock Distribution
Agreement, it being agreed between Borrower and Foothill that the first
$2,500,000 of such proceeds shall be made available by Foothill to
Borrower for Revolving Advances in accordance with the terms hereof
through the application of such proceeds to the Foothill Account
pursuant to Section 2.7 hereof; and all proceeds received after the
receipt of initial $2,500,000 in proceeds shall be applied by Foothill
as and when received from Vision, pursuant to the Vision Stock
Distribution Agreement or that certain Escrow Agreement between Vision
and LaserSight dated as of December 30, 1997 (the "Escrow Agreement"),
in repayment of the remaining outstanding balance from time to time
under the Term Loan until the Term Loan is fully repaid; and, on May
29, 1998, in the event that the Term Loan has not been fully repaid
from proceeds received from the disposition of the Vision Pledged
Shares and Vision is obligated, pursuant to the Vision Stock
Distribution Purchase Agreement, to pay a shortfall to LaserSight in
the amount of the difference between $6,500,000 (subject to certain
purchase price adjustments) and the amount received from the
disposition of the Vision Pledged Shares, any such cash payment made by
Vision shall be applied by Foothill first to the payment of any balance
remaining outstanding under the Term Loan, and any amount of such
shortfall payment remaining after such application, shall be made
available to Borrower for Revolving Advances in accordance with the
terms hereof by application to the Foothill Account. The outstanding
principal balance and all accrued and unpaid interest under the Term
Loan shall be due and payable upon the termination of this Agreement,
whether by its terms, by prepayment, by acceleration, or otherwise. The
unpaid principal balance of the Term Loan may be prepaid in whole or in
part without penalty of premium at any time during the term of this
Agreement upon 30 days prior written notice by Borrower to Foothill.
All amounts outstanding under the Term Loan shall constitute
Obligations.
D. Section 3.4 of the Loan Agreement hereby is amended in is
entirety to read as follows:
3.4 Term. This Agreement shall become effective upon the execution
and delivery hereof by each Borrower and Foothill and shall continue in
full force and effect for a term ending on the date (the "Maturity
Date") that is the earlier of (a) June 15, 1998, and (b) the date on
which the sale of Technologies by LaserSight is consummated. The
foregoing notwithstanding, Foothill shall have the right to terminate
its obligations under this Agreement immediately without notice upon
the occurrence and during the continuance in the Event of Default.
2. Consent. Foothill hereby consents to the Transaction, and agrees
that the Transaction shall not be deemed to cause any Default or Event of
Default under the Loan Agreement, as amended by this Consent and Amendment
including, but not limited to, any Default or Event of Default that would
otherwise have occurred as a result of the Transaction absent this Consent and
Amendment under Sections 7.3, 7.4 or 7.7 of the Loan Agreement. Foothill and
each Borrower hereby agrees and consents to the deletion of MEC and LSI as
Borrowers under the Loan Agreement and each remaining Borrower hereby
acknowledges and confirms that the deletion of MEC and LSI as Borrowers under
the Loan Agreement shall not impair the obligations and liabilities of the
remaining Borrowers to Foothill. Foothill and Borrower further agree and consent
to conforming amendments to the Loan Documents to effect the deletion of MEC and
LSI as parties thereto, including, but not limited to, the Stock Pledge
Agreement, the Copyright Security Agreement, the Trademark Security Agreement,
the Patent Security Agreement and the Suretyship Agreement, in each case dated
as of March 31, 1997, between the Borrower and Foothill.
3. Waiver of Financial Covenant and Compliance. Foothill hereby waives
Borrower's compliance with the financial covenants set forth in Section 7.20 of
the Loan Agreement until June 16, 1998.
4. Representations and Warranties. Borrower hereby represents and
warrants to Foothill that (a) the execution, delivery, and performance of this
Consent and Amendment and of the Loan Agreement, as amended by this Consent and
Amendment, are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected, and (b) this Consent and Amendment
and the Loan Agreement, as amended by this Consent and Amendment, constitute
Borrower's legal, valid, and binding obligation, enforceable against Borrower in
accordance with its terms.
5. Conditions Precedent to the Effectiveness of this Consent and
Amendment. The effectiveness of this Consent and Amendment is subject to the
fulfillment, to the satisfaction of Foothill and its counsel, of each of the
following conditions:
A. Foothill shall have received each of the following documents,
duly executed, and each such document shall be in full force and effect:
(1) a Collateral Assignment of Rights Under Stock Purchase
Agreement, Stock Distribution Agreement and Escrow Agreement, in form
and substance satisfactory to Foothill, executed and delivered by
LaserSight and consented to by Vision, in the form of Exhibit A
attached hereto; and
(2) a Stock Pledge Agreement, in form and substance satisfactory
to Foothill, executed by LaserSight in favor of Foothill in the form of
Exhibit B attached hereto.
B. Foothill shall have received the original certificates
representing or evidencing all of the Vision Pledged Shares, together with stock
powers or equivalent assignments with respect thereto duly endorsed in blank;
C. Foothill shall have received copies, certified by an
appropriate officer of LaserSight, as being true, complete, and correct, of the
Vision Stock Purchase Agreement, the Vision Stock Distribution Agreement, the
Escrow Agreement and any other documents or agreement executed and/or delivered
in connection therewith, each of which shall be in form and substance
satisfactory to Foothill;
D. No Material Adverse Change in the financial condition of
Borrower or in the value of the Collateral shall have occurred;
E. The representations and warranties in this Consent and
Amendment, the Loan Agreement as amended by this Consent and Amendment, and the
other Loan Documents shall be true and correct in all respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
F. No Event of Default or event which with the giving of notice or
passage of time would constitute an Event of Default shall have occurred and be
continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein;
G. No injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
governmental authority against Borrower, Foothill, or any of their Affiliates;
H. Foothill shall have received from Borrower a modification fee
in the amount of $75,000, such fee fully earned by Foothill upon its execution
of this Consent and Amendment, such modification fee payable $50,000 upon the
execution of this Consent and Amendment by Foothill and the balance of $25,000
to be paid on the earlier to occur of (i) June 15, 1998 or (ii) the date on
which all of the Obligations of Borrower to Foothill under the Loan Agreement
have been paid in full; and
I. Foothill shall have received from Vision into the Foothill
Account $6,500,000, the cash portion of the purchase price for the shares of MEC
and LSI under the Vision Stock Purchase Agreement, and shall also have received
a direction letter from Borrower, in form and substance satisfactory to
Foothill, directing the application of such funds to repay outstanding Revolving
Advances, to pay down the Term Loan by $2,000,000, and the use of the balance of
such funds.
6. Effect on Loan Agreement. The Loan Agreement, as amended hereby,
shall be and remain in full force and effect in accordance with its respective
terms and hereby is ratified and confirmed in all respects. The execution,
delivery, and performance of this Consent and Amendment shall not operate as a
waiver of or, except as expressly set forth herein, as an amendment, of any
right, power, or remedy of Foothill under the Loan Agreement, as in effect prior
to the date hereof.
7. Further Assurances. Borrower shall execute and deliver all
agreements, documents, and instruments, in form and substance reasonably
satisfactory to Foothill, and take all actions as Foothill may reasonably
request from time to time, to perfect and maintain the perfection and priority
of Foothill's security interests in the Collateral and to fully consummate the
transactions contemplated under this Consent and Amendment and the Loan
Agreement, as amended by this Consent and Amendment. Foothill shall execute and
deliver all agreements, documents and instruments, in form and substance
reasonably satisfactory to Vision, and take all actions as Vision may reasonably
request from time to time, to release Foothill's security interests in the
capital stock of MEC and LSI, and in the personal property assets of MEC and LSI
as required by the terms and conditions of the Vision Stock Purchase Agreement.
8. Miscellaneous.
A. Upon the effectiveness of this Consent and Amendment, each
reference in the Loan Agreement to "this Agreement," "hereunder," "herein,"
"hereof," or words of like import referring to the Loan Agreement shall mean and
refer to the Loan Agreement as amended by this Consent and Amendment.
B. Upon the effectiveness of this Consent and Amendment, each
reference in the Loan Documents to the "Loan Agreement," "thereunder,"
"therein," "thereof," or words of like import referring to the Loan Agreement
shall mean and refer to the Loan Agreement as amended by this Consent and
Amendment.
C. This Consent and Amendment shall be governed by and construed
in accordance with the laws of the State of California.
D. This Consent and Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Consent and Amendment
by signing any such counterpart.
E. Upon the effectiveness of this Consent and Amendment, Foothill
hereby terminates its security interests in, security titles to and other liens
on all real and personal property assets of MEC and LSI without any further
action.
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IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Amendment to be duly executed as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxx Xxxx
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Title: E.V.P.
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LASERSIGHT INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: President
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LASERSIGHT TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President
----------------------
MEC HEALTH CARE, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President
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[Signatures Continued on Next Page]
LSI ACQUISITION, INC.,
a New Jersey corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Secretary/Treasurer
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LASERSIGHT CENTERS INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President
----------------------
MRF, INC.,
a Missouri corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Secretary/Treasurer
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