CONSENT AND AMENDMENT NUMBER THREE TO
LOAN AND SECURITY AGREEMENT
---------------------------
THIS CONSENT AND AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT
(this "Consent and Amendment") is entered into as of September 10, 1997 (but
effective only in accordance with the terms and conditions of Section 4 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, and as further
amended by that certain Consent and Amendment Number Two to Loan
and Security Agreement dated as of August 29, 1997 (as amended, the
"Loan Agreement");
B. Borrower has requested that Foothill consent to the acquisition by
Borrower of a worldwide, limited license in certain U.S. letters
patent and foreign patents from ▇▇▇▇ ▇. ▇▇▇▇, M.D. and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (the "Transaction") and to the amendment of the Loan
Agreement to permit Borrower to incur the Indebtedness associated
with the acquisition of such patent license rights;
C. Foothill is willing to consent to the Transactions and to amend the
Loan Agreement, in each case, in accordance with the terms and
conditions hereof; and
D. 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 hereby is amended to include
the following defined terms:
"Lenchig" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual.
"License Agreement" means that certain License and Royalty Agreement,
dated as of September 10, 1997, among Technologies, ▇▇▇▇ and Lenchig, in
form and substance satisfactory to Foothill.
"▇▇▇▇" means ▇▇▇▇ ▇. ▇▇▇▇, M.D., an individual.
"▇▇▇▇/Lenchig Reserve" means a reserve of $800,000 against the
Borrowing Base, which reserve shall remain in effect until the earlier to
occur of: (i) the indefeasible termination, without any continuing recourse
of ▇▇▇▇ or Lenchig against Borrower or liability of Borrower to ▇▇▇▇ or
Lenchig, of the License Agreement, or (ii) ▇▇▇▇ and Lenchig entering into a
revised Consent Agreement with Foothill in form and substance acceptable to
Foothill in its sole discretion permitting the encumbrance and further
assignment of the rights, title and interest of Technologies under the
License Agreement.
b. Section 1.1 of the Loan Agreement is hereby amended to revise
the following defined terms:
"Change of Contract" is amended to read "Change of Control" to correct
a typographical error.
"Guarantor" means, collectively, LST Laser, S.A. (Costa Rica), a
corporation organized under the laws of Costa Rica, Photomed Acquisition,
Inc., a Delaware corporation, and LaserSight Patents, Inc., a Delaware
corporation.
c. The second sentence of Section 2.1 (a) of the Loan Agreement
is hereby amended to read as follows:
For purposes of this Agreement, "Borrowing Base", as of any date of
determination, shall mean the result of:
(x) 80% of Eligible Contract Receivables, minus
(y) the ▇▇▇▇/Lenchig Reserve, if applicable, minus
(z) the aggregate amount of reserves, if any, established by
Foothill under Section 2.1(b).
d. Section 7.1 of the Loan Agreement hereby is amended to add the
following as a new clause (e):
"(e) Indebtedness evidenced by the License Agreement."
e. Section 7.8 of the Loan Agreement hereby is amended to add a
reference to Section 7.1(e) in the Section 7.1 references in subsection (b)
thereof.
2. Foothill's Consent. Foothill hereby consents to the Transaction,
and agrees that the Transactions shall be deemed not to cause any Default or
Event of Default under the Loan Agreement, as amended by this Consent and
Amendment.
3. 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.
4. 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) Consent Agreement, in form and substance satisfactory to
Foothill, executed and delivered by ▇▇▇▇ and Lenchig in favor of Foothill
(the "▇▇▇▇/Lenchig Consent");
▇. ▇▇▇▇ and Lenchig shall have executed and delivered to Foothill
such additional documents, instruments and agreements as Foothill shall require;
c. Foothill shall have received a copy, certified by an
appropriate officer of Technologies as being true and correct, of the License
Agreement, and any other documents or instruments 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; and
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.
5. 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.
6. Further Assurances. Borrower shall execute and deliver all
agreements, documents, and instruments, in form and substance 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.
7. 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.
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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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LASERSIGHT INCORPORATED,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Chief Financial Officer
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LASERSIGHT TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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MEC HEALTH CARE, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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LSI ACQUISITION, INC.,
a New Jersey corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Secretary/Treasurer
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LASERSIGHT CENTERS INCORPORATED,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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MRF, INC.,
a Missouri corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Secretary/Treasurer
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