PRE-WORKOUT AGREEMENT
---------------------
AGREEMENT, made as of February 26, 2001 among BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., in its capacity as agent ("Agent") for the financial
institutions (the "Lenders") from time to time party to the Loan Agreement
(defined below) and OPTICARE EYE HEALTH NETWORK, INC., formerly known as
CONSOLIDATED EYE CARE, INC., a North Carolina corporation ("CEC"), OPTICARE
EYE HEALTH CENTERS, INC., a Connecticut Corporation ("OptiCare"), PRIMEVISION
HEALTH INC., a Delaware corporation ("PVH") and together with CEC and OptiCare,
the "Borrowers"), OPTICARE HEALTH SYSTEMS, INC., a Delaware corporation (the
"Parent"; and together with the Borrowers, the "Obligors").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS:
A. The Lenders made loans and other financial accommodations (the "Loans")
to the Borrowers pursuant to a certain Amended and Restated Loan and Security
Agreement dated as of August 13, 1999 (the "Loan Agreement") (as the same shall
have been amended, restated, modified and supplemented from time to time, the
"Loan Documents").
B. The Borrowers are in default under the Loan Documents and have requested
the Agent and the Lenders to enter into discussions for a possible workout
arrangement with respect to the Loans (the "Discussions").
C. The Agent and the Lenders are unwilling to enter into the Discussions
unless the Obligors make certain representations, and agree to certain
understandings with respect to the Discussions, as are more particularly set
forth in this Agreement.
NOW, THEREFORE, to induce the Agent and the Lenders to enter into the
Discussions, and in consideration of Ten ($10) Dollars and other good and
valuable consideration, the receipt and sufficiently of which are hereby
acknowledged by the Agent, Lenders and Obligors, the parties hereto agree as
follows:
1. Borrower Representations. The Borrowers represent, warrant and
covenant to the Agent and the Lenders that (a) the outstanding principal balance
of the Senior Loans as of the date hereof is See Attached Schedule I [and
outstanding accrued and unpaid interest on the Senior Loans as of the date
hereof is See Attached Schedule I] (b) the Loan Documents are set forth in
Exhibit A annexed hereto and made a part hereof, and have not been modified or
amended except as may be set forth in Exhibit A; (c) there are no other
understandings or agreements relating to the Loans other than the Loan
Documents; (d) the Loan Documents are and shall remain in full force and effect;
(e) Borrowers are in default under the Loan Documents as set forth in Exhibit B
annexed hereto and made a part hereof and there are no other defaults by the
Borrowers under the Loan Documents; (f) the Agent and the Lenders are not in
default under any of the Loan Documents and there are no offsets, counterclaims
or defenses to the obligations of the Obligors, or the rights, remedies or
powers of the Lenders, thereunder; (g) there are no defenses, set-offs or
counterclaims to or with respect to the obligations of the Obligors under the
Loan Documents and the Obligors agree not to interpose any defense, set-off or
counterclaim in any action brought by the Agent or the Lenders with respect
thereto; (h) the Obligors have been represented by counsel of their choice in
connection with this Agreement which it has executed freely and without coercion
or duress.
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2. Definitive Documents. No understanding, offer, commitment, assurance,
intention, agreement or proposal which may arise during the Discussions,
whether oral or written, shall be binding or of any force or effect unless and
until definitive documents, satisfactory in all respects to the Agent and
the Lenders, in its sole and absolute discretion, shall have been fully
executed and delivered by an authorized representative of the Agent and the
Lenders.
3. No Waivers. Unless (and only to the extent) contained in the definitive
documents described in Section 2 hereof, no correspondence, memoranda,
instruments, documents, negotiations, statements, conversations, proposals or
other actions or communications heretofore, now or hereafter made or undertaken
by the Agent and Lenders (or any representative, officer, director, employee,
counsel or other party acting, or purporting to act, on behalf of the Agent and
Lenders) in connection with the discussions, shall (a) constitute a waiver, cure
or extension of time with respect to any default, or the performance of any
obligation, of the Obligors under the Loan Documents (whether or not such
default or non-performance is known or set forth in Exhibit B hereof; (b)
constitute a waiver of, or evidence an intention to forbear in the exercise of,
any rights, powers or remedies of the Agent and Lenders under any of the Loan
Documents at law or otherwise, all of which obligations, rights, powers and
remedies are expressly reserved and may be exercised at any time in accordance
with the provisions of the Loan Documents and/or applicable law; (c) be relied
upon by the Obligors for any purpose; (d) give rise to any liability, duty or
obligation of the Agent and Lenders; (e) be admissable as evidence or for any
other purpose in or in connection with any action, hearing, litigation,
arbitration or other proceeding; (f) constitute a tolling or extension of any
time period with respect to, or evidence an intention or agreement to forbear
in the prosecution of, any legal proceedings which may have been brought or
commenced, or may hereafter be brought or commenced, by the Agent and Lenders;
(g) constitute a modification, amendment or waiver of any provisions of the
Loan Documents; or (h) affect in any manner the Agent's and Lenders' right to
sell, assign or otherwise transfer all or any portion of its interest in any of
the Loans.
4. Authorized Representatives. Each party executing and delivering this
letter agreement on behalf of the Obligors represents and warrants to the
Agent and the Lenders that (a) s/he is authorized to execute and deliver this
Agreement on behalf of the respective Obligor and to represent the respective
Obligors in the discussions; (b) all necessary consents for such execution,
delivery and representation have been obtained; and (c) this Agreement has been
duly and validly executed and delivered on behalf of the Obligors and
constitutes the binding agreement and obligations of the Obligors enforceable
in accordance with its terms.
5. Termination. The discussions may be terminated by the Agent and Lenders
at any time and for any reason or for no reason, in its sole and absolute
discretion. Any such termination shall be without liability to the Agent and
Lenders whatsoever. The provisions of this Agreement shall survive any such
termination, whether or not pursuant to a settlement.
6. Legal Fees. All out-of-pocket costs and expenses incurred by the Agent
and Lenders in connection with the discussions (including, without limitation,
legal, accounting and other professional and consultant's fees and
disbursements) shall be paid by the Obligors and shall constitute a portion
of the indebtedness secured by the Loan Documents.
7. Release. The Obligors hereby release all claims (including any lender
liability claims) against the Agent and the Lenders.
8. References. All references to the Loan Agreement in the Loan Agreement
or any other Loan Document and the other documents or instruments delivered
pursuant to or in connection therewith
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shall mean such Loan Agreement as modified hereby and as each may in the future
be amended, restated, supplemented or modified from time to time. This
Agreement shall constitute a Loan Document.
9. Counterparts. This Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which, taken together, shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
by telecopier shall be effective as delivery of a manually executed counterpart.
10. Effectiveness. This Agreement shall become effective upon execution of
a counterpart of this Agreement by each party.
11. Miscellaneous. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes any prior
understandings or agreements which may exist with respect thereto. This
Agreement shall be binding upon the Obligors, their successors, assigns, heirs,
legatees, distributees and legal representatives, and shall inure to the
benefit of the Agent and the Lenders, their successors, assigns, subsidiaries,
designees and legal representatives. This Agreements shall be governed by the
law of the State of New York, without regard to principles of conflicts of
laws. If any provision of this Agreement shall be unenforceable by applicable
law, such provision shall be ineffective without invalidating the remaining
provisions of this Agreement. Section headings used herein are for convenience
only and shall not be a part of this Agreement or used to interpret any of the
provisions hereof. This Agreement may not be modified or amended except in a
written instrument executed by the party to be charged.
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IN WITNESS WHEREOF, the Obligors, the Agent and the Lenders have caused
this Agreement to be duly executed by their respective officers of the day and
year first above written.
OPTICARE EYE HEALTH NETWORK, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: President
Attest: /s/ Xxxxxxx Blaskzewicz
----------------------------
Name: Xxxxxxx Blaskzewicz
Title: C.A.O.
OPTICARE EYE HEALTH CENTERS, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: President
Attest: /s/ Xxxxxxx Blaskzewicz
----------------------------
Name: Xxxxxxx Blaskzewicz
Title: C.A.O.
PRIMEVISION HEALTH, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: President
Attest: /s/ Xxxxxxx Blaskzewicz
----------------------------
Name: Xxxxxxx Blaskzewicz
Title: C.A.O.
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OPTICARE HEALTH SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: President
Attest: /s/ Xxxxxxx Blaskzewicz
----------------------------
Name: Xxxxxxx Blaskzewicz
Title: C.A.O.
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC., as Agent
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior V.P.
By: /s/ X.X. Xxxxxx
----------------------------
Name: X.X. Xxxxxx
Title: SVP
Attest: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC., as Lender
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior V.P.
By: /s/ X.X. Xxxxxx, SVP
----------------------------
Name: X.X. Xxxxxx
Title: SVP
Attest: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
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SCHEDULE I
OPTICARE
REVOLVER
outstanding principal 12,700,000.00 includes 400,000 standly L/C
outstanding libor interest 200,364.69
interest accrued to 26/2 44,317.72
Total interest 244,682.41
TERM LOAN A
outstanding Principal 17,375,000.00
Outstanding libor interest 246,269.43
interest accrued to 26/2 52,847.75
Total interest 299,117.18
PHYSICIAN L/Cs
L/Cs outstanding 692,344.00 162,500.00 Xxxx X. Xxxxxxxxxx expiry 9/5/01 *
162,500.00 Xxxx X. Xxxxxxx expiry 9/5/01 *
183,672.00 Xxxxxxx Xxxxxx expiry 2/27/01
183,672.00 Xxxx X. Xxxxxxx expiry 2/27/01
Total principal outstanding 30,767,344.00
Total principal outstanding 543,799.00
* these are Physician Put Letters of Credit subject to the limitations set
forth in the Loan Agreement.
