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EXHIBIT 4.16
VISION TWENTY-ONE, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (herein, the "Amendment") is
entered into as of June 10, 1999, among Vision Twenty-One, Inc., a Florida
corporation, the Banks party hereto, and Bank of Montreal as Agent for the
Banks.
PRELIMINARY STATEMENTS
A. The Borrower, the Banks, and the Agent are parties to an Amended
and Restated Credit Agreement, dated as of July 1, 1998, as amended (herein, the
"Credit Agreement"). All capitalized terms used herein without definition shall
have the same meanings herein as such terms have in the Credit Agreement.
B. The Borrower and the Banks have agreed to make certain other
changes to the Credit Agreement as provided for in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as follows:
1.1. Section 1.4 of the Credit Agreement shall be amended by
adding at the end thereof a new subsection (f) which shall read as
follows:
(f) Anything in this Agreement to the contrary
notwithstanding, the Borrower and the Floating Rate Payor have
agreed to convert all Fixed Rate Loans outstanding on June 30,
1999, into Base Rate Loans or Eurodollar Loans (as designated
by the Borrower in accordance with the procedures set forth in
Section 1.6 hereof), and on and after such date no Fixed Rate
Loans shall be outstanding or available to the Borrower
hereunder In connection with the cancellation of the Fixed
Rate Loan option, the Floating Rate Payor will pay to the
Borrower approximately $75,000 in settlement of the implicit
interest rate trade (which amount shall be held by the Agent
in an account in the manner set forth in Section 9.4 hereof as
collateral security for the Obligation, provided that, in the
absence of any Event of Default and instructions from the
Required Banks to the contrary, such amount shall be made
available to the Borrower for the payment of professional fees
due and owing by it).
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1.2. Section 1.7 (Interest Periods) of the Credit Agreement
shall be amended by striking the phrase "(b) in the case of a
Eurodollar Loan, 1, 2, 3, or 6 months thereafter" and inserting in lieu
thereof the following:
(b) in the case of a Eurodollar Loan advanced,
continued, or created by conversion at any time on or after
June 8, 1999, through and including December 31, 1999, 1 month
thereafter and in the case of a Eurodollar Loan advanced,
continued, or created by conversion at any time on or after
January 1, 2000, 1, 2, or 3 months thereafter."
1.3. Section 1.9 of the Credit Agreement shall be amended by
adding at the end thereof a new subsection 1.9(c) which shall read as
follows:
(c) Application of Prepayments. Anything in this
Agreement to the contrary notwithstanding, all prepayments
(whether voluntary or mandatory) made at any time on or after
June 1, 1999, and required to be applied to any Term Loans
shall be applied to the relevant Term Loans in the inverse
order of maturity.
1.4. The second paragraph of Section 3 of the Credit Agreement
shall be amended and restated in its entirety to read as follows:
Anything contained herein to the contrary notwithstanding, all
payments and collections received in respect of the
Obligations and all proceeds of the Collateral received, in
each instance, by the Agent or any of the Banks after the
occurrence and during the continuation of an Event of Default
shall be remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs
and expenses reasonably incurred by the Agent, and any
security trustee therefor, in monitoring, verifying,
protecting, preserving or enforcing the Liens on the
Collateral or by the Agent, and any security trustee therefor,
in protecting, preserving or enforcing rights under the Loan
Documents, and in any event all costs and expenses of a
character which the Borrower has agreed to pay the Agent under
Section 12.15 hereof (such funds to be retained by the Agent
for its own account unless it has previously been reimbursed
for such costs and expenses by the Banks, in which event such
amounts shall be remitted to the Banks to reimburse them for
payments theretofore made to the Agent);
(b) second, to the payment of any outstanding
interest or other fees or amounts due under the Notes and the
other Loan
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Documents (including amounts owing to the Banks or the
Floating Rate Payor under Section 1.12 hereof), in each case
other than for principal on the Loans or in reimbursement or
collateralization of L/C Obligations, pro rata as among the
Agent and the Banks in accord with the amount of such interest
and other fees or amounts owing each;
(c) third, to the payment of the principal of the
Notes and any unpaid Reimbursement Obligations and to the
Agent to be held as collateral security for any other L/C
Obligations (until the Agent is holding an amount of cash
equal to the then outstanding amount of all such L/C
Obligations) and to ACH Liability then outstanding (up to
$1,500,000 at any one time), the aggregate amount paid to or
held as collateral security for the Agent and the Banks to be
allocated pro rata in accord with the aggregate unpaid
principal balances of Loans, interests in the Letters of
Credit, and ACH Liability, owing to each;
(d) fourth, to the Agent and the Banks ratably in
accordance with the amounts of any other indebtedness,
obligations or liabilities of the Borrower and its
Subsidiaries owing to each of them and secured by the
Collateral Documents (other than for Hedging Liability
described in subsection (e) below), unless and until all such
indebtedness, obligations and liabilities have been fully paid
and satisfied;
(e) fifth, to the payment of the Hedging Liability
(if any) pro rata as among the Banks to whom such Hedging
Liability is owed in accordance with the then respective
unpaid amounts of such liability; and
(f) sixth, to the Borrower or whoever else may be
lawfully entitled thereto.
1.5. Section 4.2 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
Section 4.2 Collections. The Borrower shall establish and
maintain such arrangements as shall be necessary or
appropriate to assure that all proceeds of the Collateral of
the Borrower and its Material Subsidiaries are deposited (in
the same form as received) in accounts maintained with, or
under the dominion and control of, the Agent, such accounts to
constitute special restricted accounts, the Borrower
acknowledging that the Agent has (and is hereby granted) a
lien on such accounts and all funds contained therein to
secure the Obligations. If and to the extent that proceeds are
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deposited and/or maintained in one or more accounts maintained
with financial institutions other than the Agent, except as
otherwise permitted under Section 4.1(iii) above, it shall be
a condition to the Borrower's or any Material Subsidiary's
right to establish and maintain such deposit accounts at any
time after July 31, 1999, that the financial institutions
maintaining such accounts shall have delivered to the Agent
blocked account agreements satisfactory to the Agent in form
and substance pursuant to which such financial institutions
acknowledge the Agent's Lien thereon, waive any right of
offset or bankers' liens thereon (other than with respect to
account maintenance charges and returned items) and agree
that, upon notice from the Agent, the collected balances in
such accounts will only be transferred to the Agent. The Banks
agree with the Borrower that if and so long as no Default or
Event of Default has occurred or is continuing, amounts on
deposit in the accounts maintained with the Agent will
(subject to the rules and regulations of the Agent as from
time to time in effect applicable to demand deposit accounts)
be made available to the Borrower and its Material
Subsidiaries for use in the conduct of their business. Upon
the occurrence of an Event of Default, the Agent may apply the
funds on deposit in such accounts to the Obligations.
In furtherance of the requirements set forth above, the
Borrower agrees to establish and implement a cash management
system acceptable to the Agent by no later than September 30,
1999, pursuant to which all available cash and cash
equivalents held or maintained by the Borrower and its
Subsidiaries (exclusive of reasonable account balances
maintained for the account of physician practice groups) are
swept on a daily basis into one or more deposit accounts
subject to the Lien of the Agent as set forth above.
1.6. The definition of "Applicable Margin" appearing in
Section 5.1 of the Credit Agreement shall be amended and restated in
its entirety to read as follows (and the Applicable Margin, as so
amended, shall be effective as of June 10, 1999):
"Applicable Margin" means, with respect to Loans,
Reimbursement Obligations, and the commitment fees and letter
of credit fees payable under Section 2.1 hereof, the rate per
annum specified below:
Applicable Margin for Base Rate Loans under Revolving
Credit, Term A Loans and Term B Loans, and Reimbursement
Obligations : 1.75%
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Applicable Margin for Eurodollar Loans under Revolving
Credit, Term A Loans and Term B Loans, and letter of credit
fee: 3.25%
Applicable Margin for Revolving Credit Commitment fee: .625%
Applicable Margin for Base Rate Loans under Term C Loans 1.75%
Applicable Margin for Eurodollar Loans under Term C Loans 3.875%
; provided, however, that the Applicable Margin shall be
subject to quarterly adjustments on the first Pricing Date,
and thereafter from one Pricing Date to the next the
Applicable Margin shall mean a rate per annum determined in
accordance with the following schedule:
APPLICABLE MARGIN
FOR BASE RATE APPLICABLE MARGIN
LOANS UNDER FOR EURODOLLAR
REVOLVING CREDIT, LOANS UNDER APPLICABLE APPLICABLE
TOTAL FUNDED TERM A CREDIT AND REVOLVING CREDIT, MARGIN FOR THE MARGIN FOR
DEBT/ADJUSTED TERM B CREDIT, AND TERM A CREDIT AND REVOLVING APPLICABLE EURODOLLAR
EBITDA RATIO REIMBURSEMENT TERM B CREDIT, AND CREDIT MARGIN FOR BASE LOANS UNDER
FOR SUCH PRICING OBLIGATIONS SHALL LETTER OF CREDIT COMMITMENT FEE RATE LOANS UNDER TERM C
DATE BE: FEE SHALL BE: SHALL BE: TERM C CREDIT: CREDIT:
Greater than 3.0 1.75% 3.25% .625% 1.75% 3.875%
to 1.0
Equal to or less 1.625% 3.125% .625% 1.625% 3.875%
than 3.0 to 1.0,
but greater than
2.5 to 1.0
Equal to or less 1.50% 3.0% .50% 1.50% 3.625%
than 2.5 to 1.0,
but greater than
2.0 to 1.0
Equal to or less 1.25% 2.75% .50% 1.25% 3.625%
than 2.0 to 1.0,
but greater than
1.5 to 1.0
Equal to or less 1.0% 2.50% .50% 1.0% 3.625%
than 1.5 to 1.0
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; provided, further, that the Applicable Margin for Loans,
Reimbursement Obligations, and Letter of Credit fees set forth
above shall be (a) increased by .25% per annum on December 10,
1999, and by an additional .50% per annum on each June 10 and
December 10 ending thereafter until the Borrower has sold its
Retail Group, which shall be made in accordance with the terms
and conditions of the Loan Documents (it being acknowledged
that the Borrower has advised the Banks that it intends to
sell its Retail Group and reduce its outstanding Obligations
with the proceeds thereof for a purchase price, and otherwise
on terms and conditions, acceptable to the Banks, and the
Banks have relied on such statements in entering into the
Second Amendment to Credit Agreement with the Borrower dated
on or about June 10, 1999), and (b) upon the sale of the
Retail Group, and the reduction of the Obligations to be made
out of the proceeds thereof, on terms and conditions
acceptable to the Banks, the Applicable Margins for Loans,
Reimbursement Obligations, and Letter of Credit fees shall be
reduced to the levels set forth in the chart above without
regard to the increases called for by clause (a) above.
For purposes hereof, the term "Pricing Date" means, for any
fiscal quarter of the Borrower ending on or after June 30,
1999, the date on which the Agent is in receipt of the
Borrower's most recent financial statements for the fiscal
quarter then ended, pursuant to Section 8.5(b) or (c) hereof.
The Applicable Margin shall be established based on the Total
Funded Debt/Adjusted EBITDA Ratio for the most recently
completed fiscal quarter and the Applicable Margin established
on a Pricing Date shall remain in effect until the next
Pricing Date. If the Borrower has not delivered its financial
statements by the date such financial statements (and, in the
case of the year-end financial statements, audit report) are
required to be delivered under Section 8.5(b) or (c) hereof,
until such financial statements and audit report are
delivered, the Applicable Margin shall be the highest
Applicable Margin (i.e., the Total Funded Debt/Adjusted EBITDA
Ratio shall be deemed to be greater than 3.0 to 1.0). If the
Borrower subsequently delivers such financial statements
before the next Pricing Date, the Applicable Margin
established by such late delivered financial statements shall
take effect from the date of delivery until the next Pricing
Date. In all other circumstances, the Applicable Margin
established by such financial statements shall be in effect
from the Pricing Date that occurs immediately after the end of
the Borrower's fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of
the Applicable Margin made by the Agent in accordance with the
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foregoing shall be conclusive and binding on the Borrower and
the Banks if reasonably determined.
1.7. The definition of "Capital Expenditures" appearing in
Section 5.1 of the Credit Agreement shall be amended and restated in
its entirety to read as follows:
"Capital Expenditures" means, with respect to any Person for
any period, the aggregate amount of all expenditures (whether
paid in cash or accrued as a liability) by such Person during
that period which, in accordance with GAAP, are or should be
included as "additions to property, plant or equipment" or
similar items reflected in the statement of cash flows of such
Person, and in any event Capital Expenditures shall be deemed
to include all amounts paid by the Borrower or any of its
Subsidiaries for the assets or business of a Target pursuant
to an Acquisition permitted by this Agreement.
1.8. The definition of "EBITDA" appearing in Section 5.1 of
the Credit Agreement shall be amended and restated in its entirety to
read as follows:
"EBITDA" means, with reference to any period, Net Income for
such period plus the sum (without duplication) of all amounts
deducted in arriving at such Net Income amount in respect of
(a) Interest Expense for such period, (b) federal, state and
local income taxes for such period, (c) depreciation of fixed
assets and amortization of intangible assets for such period,
(d) one-time charges incurred on or about January 30, 1998,
arising out of the prepayment of the indebtedness owing to
Prudential Securities Credit Corporation on or about January
30, 1998, (e) one-time charges incurred on or about July 1,
1998, arising out of the refinancing and restructuring of the
indebtedness owing to Bank of Montreal and the other lenders
party to the Original Credit Agreement, and (f) non-recurring
expenses in an aggregate amount up to $11,300,000 incurred as
a result of the implementation of the Ernst & Young
restructuring plan.
1.9. The definition of "Permitted Acquisition" appearing in
Section 5.1 of the Credit Agreement shall be amended by striking clause
(g) thereof and inserting in its place the following:
(g) the Total Consideration paid for the Target, when
taken together with the aggregate amount of Capital
Expenditures incurred during the current fiscal year
(including other Acquisitions made by the Borrower or any of
its Subsidiaries during the current fiscal year), does not
exceed $3,000,000 in the aggregate.
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1.10. Section 5.1 of the Credit Agreement shall be amended by
adding the following definitions (in appropriate alphabetical order):
"ACH Liability" means the liability of the Borrower or any of
its Subsidiaries owing to Bank of Montreal or any of its
Affiliates (including Xxxxxx Trust and Savings Bank) arising
out of the processing of incoming and outgoing transfers of
funds by automatic clearing house transfer, wire transfer, or
otherwise pursuant to agreement or overdraft and related cash
management services afforded to the Borrower or any such
Subsidiary by any such financial institution.
"Excess Cash Flow" means, with respect to any period, the
amount (if any) by which (a) the sum of Net Income for such
period plus all amounts deducted in arriving at such Net
Income amount in respect of (i) Interest Expense for such
period, (ii) federal, state and local income taxes for such
period, (iii) depreciation expense, amortization expense, and
all other non-cash charges to Net Income for such period,
minus (plus) (iv) additions (reductions) to non-cash working
capital of the Borrower and its Subsidiaries for such period
exceeds (b) the sum of (i) the aggregate amount of payments
made by the Borrower and its Subsidiaries during such period
in respect of all principal and interest on all Indebtedness
for Borrowed Money (whether at maturity, as a result of
mandatory sinking fund redemption, mandatory prepayment,
acceleration or otherwise), plus (ii) federal, state and local
income taxes paid during such period, plus (iii) the aggregate
amount of payments made with respect to Capital Expenditures
of Borrower and its Subsidiaries during such period (including
payments made with respect to Permitted Acquisitions).
"Retail Group" means the assets and business of the Borrower
relating to providing optometric services, selling optical
goods, and providing related services primarily in the State
of New Jersey, Minnesota, and Wisconsin and manufacturing
optical lenses in the State of New Jersey, all as currently
held on and in effect on May 31, 1999.
1.11. Section 8.5 (Financial Reports) of the Credit Agreement
shall be amended by striking the period appearing at the end of
subsection (h) thereof and inserting a semicolon followed by the word
"and" and inserting a new subsection (i) which shall read as follows:
(i) as soon as available, and in any event within 45
days after the close of each fiscal quarter of each fiscal
year of the Borrower, a copy of the Borrower's consolidated
and
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consolidating cash flow report (including projected sources
and uses of cash) prepared on a month-by-month basis for the
current fiscal quarter, which report shall be in reasonable
detail and in a form reasonably acceptable to the Agent.
1.12. Section 8.8 (Total Funded Debt/Adjusted EBITDA Ratio) of
the Credit Agreement shall be amended and restated in its entirety to
read as follows:
Section 8.8. Total Funded Debt/Adjusted EBITDA Ratio.
As of the last day of each fiscal quarter of the Borrower
ending during the periods specified below, the Borrower shall
not permit the Total Funded Debt/Adjusted EBITDA Ratio as of
the last day of such fiscal quarter to be greater than or
equal to:
RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING GREATER THAN OR EQUAL TO
April 1, 1999 June 30, 1999 6.0 to 1.0
July 1, 1999 September 30, 1999 5.25 to 1.0
October 1, 1999 December 31, 1999 3.5 to 1.0
January 1, 2000 March 31, 2000 3.25 to 1.0
April 1, 2000 September 30, 2000 3.0 to 1.0
October 1, 2000 and at all times thereafter 2.75 to 1.0
1.13. Sections 8.10 (Interest Coverage Ratio), 8.11 (Debt
Service Coverage Ratio), and 8.12 (Capital Expenditures) of the Credit
Agreement shall be amended and restated in their entirety to read as
follows:
Section 8.10. Interest Coverage Ratio. As of the last
day of each fiscal quarter of the Borrower ending during the
periods specified below, the Borrower shall maintain a ratio
of EBITDA for the four fiscal quarters of the Borrower then
ended to Interest Expense for the same four fiscal quarters
then ended of not less than:
RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING LESS THAN
April 1, 1999 June 30, 1999 1.5 to 1.0
July 1, 1999 September 30, 1999 1.75 to 1.0
October 1, 1999 December 31, 1999 2.75 to 1.0
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January 1, 2000 March 31, 2000 3.25 to 1.0
April 1, 2000 September 30, 2000 3.5 to 1.0
October 1, 2000 and at all times thereafter 4.0 to 1.0
Section 8.11. Debt Service Coverage Ratio. As of the
last day of each fiscal quarter of the Borrower ending during
the periods specified below, the Borrower shall maintain a
ratio of (a) EBITDA for the four fiscal quarters of the
Borrower then ended less the sum of (i) Capital Expenditures
incurred during such period and (ii) cash payments made during
such period with respect to federal, state, and local income
taxes to (b) the aggregate amount of payments required to be
made by the Borrower and its Subsidiaries during the four
fiscal quarters of the Borrower then ended in respect of all
principal on all Indebtedness for Borrowed Money (whether at
maturity, as a result of mandatory sinking fund redemption,
mandatory prepayment, acceleration or otherwise) plus Interest
Expense for the same four fiscal quarter period then ended, of
not less than:
RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING LESS THAN
April 1, 1999 September 30, 1999 1.25 to 1.0
October 1, 1999 December 31, 2002 1.75 to 1.0
January 1, 2003 and at all time thereafter 2.0 to 1.0
Section 8.12. Capital Expenditures. The Borrower
shall not, nor shall it permit any other Subsidiary to, incur
Capital Expenditures in an aggregate amount in excess of
$3,000,000 during any fiscal year.
1.14. Section 8 of the Credit Agreement shall be amended by
adding at the end thereof new Sections 8.33 (Excess Cash Flow), 8.34
(Physician Advances), and 8.35 (Bank Group Consultant) which shall read
as follows:
Section 8.33. Excess Cash Flow. Within 45 days after
the last day of each fiscal quarter of the Borrower
(commencing with the fiscal quarter ending March 31, 2000),
the Borrower shall pay to the Agent an amount equal to 50% of
Excess Cash Flow (if positive) for the fiscal quarter then
ended, such amount(s) to be held by the Agent in an Account in
the manner provided for in Section 9.4(b) hereof as collateral
security for the Obligations. The
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amounts so held in the Account may, at the Borrower's request
and with the written consent of the Required Banks, be applied
to the Obligations then outstanding (and in such order and
manner as the Required Banks then require). During the
existence of any Event of Default, at the request of or with
the written consent of the Required Banks, the Agent shall
apply the amounts held in the Account (or any part thereof) to
the Obligations then outstanding (such amounts to be applied
in accordance with Section 3 of the Credit Agreement unless
otherwise agreed to by the Required Banks).
Section 8.34. Physician Advances. Within 45 days
after the last day of each fiscal quarter of the Borrower, the
Borrower shall prepare and distribute to the Agent and the
Banks a report of all advances due from physicians and related
professions under management agreements with the Borrower
and/or any one or more of its Subsidiaries, together with a
comparison of such receivable balances with the Borrower's
current operating budget, with such report to be in form and
substance, and in such detail, as the Agent may reasonably
request.
Section 8.35. Bank Group Consultant. The Agent, on
behalf of the Banks, shall have the continuing right to engage
at the Borrower's cost and expense a firm of independent
public accountants or such other financial consultants
selected by the Agent to periodically review the Borrower's
and its Subsidiaries' financial condition and operations as
reasonably requested by the Agent (such review to include,
without limitation, quarterly reviews of the Borrower's and
its Subsidiaries' cash management systems and procedures and
the status of the Borrower's implementation of any
modifications thereto, quarterly reviews of outstanding
material Year 2000 Problems affecting the Borrower or any of
its Subsidiaries and the status of the Borrower's
implementation of any plans to eliminate or mitigate the same,
quarterly reviews of the Borrower's consolidated and
consolidating weekly cash flow reports and quarterly operating
budget, reviewing the Borrower's accounting procedures and
systems, and the operations thereof, relating to accounting
for and reconciling intercompany transactions, and reviews of
all material agreements relating to the sale or other
disposition of any material assets or business of the Borrower
or any of its Subsidiaries or of any proposed Acquisition).
1.14. Section 9.1 of the Credit Agreement shall be amended by
striking the period appearing at the end of Section 9.1(k) thereof and
inserting therefor a semicolon
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followed by the word "or" and inserting a new Section 9.1(l) at the end
of such Section as so amended which shall read as follows:
(l) (i) the aggregate amount of net advances due from practice
group physicians and related professionals from and payable to
the Borrower and/or any one or more of its Subsidiaries under
management agreements between such practice groups and the
Borrower and/or any one or more of its Subsidiaries at any one
time outstanding exceeds the following: (x) $3,100,000 from
June 10, 1999 to and including December 31, 1999, (y)
$2,000,000 from January 1, 2000 to and including December 31,
2000, and (z) $1,000,000 from January 1, 2001 and thereafter;
and (ii) the aggregate amount of net advances due from any
practice group physician or related professional and payable
to the Borrower and/or any one or more of its Subsidiaries
under the relevant management agreement between the relevant
practice group and the Borrower and/or any one or more of its
Subsidiaries as of the last day of any fiscal year beginning
January 1, 2001 and thereafter of such practice group (net of
allocable income for such year actually paid to the Borrower
or its Subsidiaries from such practice group within 120 days
of year-end) exceeds $0.
SECTION 2. WAIVERS.
The Borrower has advised the Banks that as of December 31, 1998, and as
of March 31, 1999, the Borrower was not in compliance with any one or more of
Sections 8.7 (Current Ratio), 8.8 (Total Funded Debt/Adjusted EBITDA Ratio), 8.9
(Net Worth), 8.10 (Interest Coverage Ratio), and 8.11 (Debt Service Coverage
Ratio) of the Credit Agreement (herein, the "Financial Covenant Defaults"); and
that as of the date of this Amendment, the Borrower continues to be in default
under Section 8.5(c) of the Credit Agreement regarding the delivery of its
December 31, 1998, year-end audited financial statements and under Section
8.5(a) of the Credit Agreement regarding the delivery of its January 1999,
February 1999, March 1999, and April 1999 month-end financial statements (the
defaults under Sections 8.5(c) and 8.5(a) referenced above being referred to
herein as the "December 31, 1998--April 30, 1999, Financial Reporting
Defaults"). The Borrower has requested that the Banks waive the Borrower's
non-compliance with the foregoing and, by signing below, the Required Banks
hereby agree to waive the Financial Covenant Defaults for, and only for, the
periods ending on or prior to March 31, 1999, and the December 31, 1998--April
30, 1999, Financial Reporting Defaults for, and only for, the financial
reporting periods so described, provided that the waivers set forth herein shall
not be effective unless and until the conditions precedent set forth in Section
3 below have been satisfied.
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SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
3.1. The Borrower, the Agent, and the Required Banks shall
have executed and delivered this Amendment.
3.2. The Borrower shall, and shall cause each of its
Subsidiaries to, amend the Collateral Documents and the Guaranties so
as to provide that ACH Liabilities from time to time outstanding are
secured or otherwise guarantied by the relevant Loan Document in form
and substance acceptable to the Agent.
3.3. The Agent shall have received for each of the Banks: (a)
drafts of the Borrower's December 31, 1998, Form 10-K report and March
31, 1999, Form 10-Q report to be filed with the Securities and Exchange
Commission substantially concurrently with the execution and deliver of
this Amendment, (b) a copy of the Borrower's consolidated and
consolidating cash flow report (including projected sources and uses of
cash) prepared on a week-by-week basis through the period ending
December 31, 1999, and (c) a copy of the Borrower's consolidated and
consolidating operating budget (including projected operating revenues
and expenses) prepared on a quarter-by-quarter basis for the period
from January 1, 1999, through the period ending December 31, 2000.
3.4. Each Subsidiary shall have executed its acknowledgement
and consent to this Amendment in the space provided for that purpose
below.
3.5. The Agent shall have received for each Bank the favorable
written opinion of counsel to the Borrower and its Subsidiaries, in
form and substance reasonably satisfactory to the Agent.
3.6. The Borrower shall have paid to the Agent for the benefit
of the Lenders an amendment fee equal to .40% on the principal balance
of Term Loans and the total Revolving Credit Commitments outstanding
immediately prior to the Block Vision Sale (such fee to be paid to the
Lenders ratably based upon the outstanding principal balance of the
Term Loans owed to, or the Revolving Credit Commitments held by, such
Lenders). The Borrower shall have also paid to the Agent, for its own
use and benefit, an additional administrative fee in the amount
required by the fee letter being entered into between the Borrower and
the Agent substantially concurrently herewith.
3.7. Legal matters incident to the execution and delivery of
this Amendment shall be satisfactory to the Agent and its counsel.
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SECTION 4. CONDITION SUBSEQUENT.
In addition to the financial information required by Section 8.5 of the
Credit Agreement and Section 3.3 of this Amendment, the Borrower agrees to
deliver to the Agent: (a) within 10 days of the date of this Amendment copies of
the Borrower's December 31, 1998, Form 10-K and March 31, 1999, Form 10-Q
reports filed by the Borrower with the Securities and Exchange Commission and
(b) within 15 days of the date of this Amendment, copies of the monthly
financial statements of the Borrower required under Section 8.5(a) hereof for
the months of January, February, March, and April of 1999. Failure by the
Borrower to timely comply with the foregoing conditions subsequent shall
constitute an Event of Default under the Credit Agreement.
SECTION 5. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this Amendment, the
Borrower hereby represents to the Agent and the Banks that as of the date
hereof, and after giving effect to the amendments and waivers set forth above,
the representations and warranties set forth in Section 6 of the Credit
Agreement are and shall be and remain true and correct (except that the
representations contained in Section 6.5 shall be deemed to refer to the most
recent financial statements of the Borrower delivered to the Banks) and the
Borrower and its Subsidiaries are in compliance with all of the terms and
conditions of the Credit Agreement and the other Loan Documents and no Default
or Event of Default has occurred and is continuing or shall result after giving
effect to this Amendment.
SECTION 6. RELEASE OF CLAIMS.
To induce the Banks and the Agent to enter into this Amendment, the
Borrower and, by signing the acknowledgement and consent referred to below, each
of its Subsidiaries hereby release, acquit, and forever discharge the Banks and
the Agent, and their officers, directors, agents, employees, successors, and
assigns, from all liabilities, claims, demands, actions, and causes of action of
any kind (if any there be), whether absolute or contingent, due or to become
due, disputed or undisputed, at law or in equity, that they now have or ever had
against the Banks and the Agent, or any one or more of them individually, under
or in connection with the Credit Agreement or any of the other Loan Documents.
SECTION 7. MISCELLANEOUS.
7.1. The Borrower has heretofore executed and delivered to the Agent and
the Banks certain of the Collateral Documents. The Borrower hereby acknowledges
and agrees that, notwithstanding the execution and delivery of this Amendment,
the Collateral Documents remain in full force and effect and the rights and
remedies of the Agent and the Banks thereunder, the obligations of the Borrower
thereunder, and the liens and security interests created and provided for
thereunder remain in full force and effect and shall not be affected, impaired,
or discharged hereby. The Borrower hereby acknowledges and agrees that the Loans
as modified by this Amendment constitute Obligations secured by each of the
Collateral Documents. Nothing herein
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contained shall in any manner affect or impair the priority of the liens and
security interests created and provided for by the Collateral Documents as to
the indebtedness which would be secured thereby prior to giving effect to this
Amendment.
7.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
7.3. The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation,
execution, and delivery of this Amendment and the other instruments and
documents to be executed and delivered in connection herewith, including the
fees and expenses of counsel for the Agent.
7.4 This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
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This Second Amendment to Amended and Restated Credit Agreement is dated
as of the date and year first above written.
VISION TWENTY-ONE, INC.
By /s/ Xxxxxxx X. Xxxxx
Name Xxxxxxx X. Xxxxx
Title Chief Financial Officer
Accepted and agreed to as of the day and year last above written.
BANK OF MONTREAL, in its individual capacity
as a Bank and as Agent
By /s/ Xxxx X. Xxxxxxx
Name Xxxx X. Xxxxxxx
Title Managing Director
BANK ONE TEXAS, N.A.
By /s/ Xxxxx X. Xxxxx
Name Xxxxx X. Xxxxx
Title Assistant Vice President
PACIFICA PARTNERS I, L.P.
By: Imperial Credit Asset
Management, as its Investment
Manager
By /s/ Xxxx X. Xxxxx
Name Xxxx X. Xxxxx
Title Vice President
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By /s/ Xxxxxxx X. XxXxxxx
Name Xxxxxxx X. XxXxxxx CFA
Title Assistant Vice President
X-0
00
XXXXXXX XXXXXXX HIGH INCOME
INVESTMENTS LTD.
By: Pilgrim Investments, Inc., as its
Investment Manager
By /s/ Xxxxxxx X. XxXxxxx
Name Xxxxxxx X. XxXxxxx CFA
Title Assistant Vice President
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES, INC.
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title Assistant Vice President
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ACKNOWLEDGEMENT AND CONSENT
The undersigned, being all of the Material Subsidiaries of Vision
Twenty-One, Inc., have heretofore executed and delivered to the Agent and the
Banks one or more Guaranties and Collateral Documents. Each of the undersigned
hereby consents to the Second Amendment to Credit Agreement as set forth above
and confirms that its Guaranty and Collateral Documents, and all of its
obligations thereunder, remain in full force and effect and, without limiting
the foregoing, acknowledges and agrees that the Loans as modified therein
constitute Obligations guaranteed by, or otherwise secured by, the Loan
Documents executed by it. Each of the undersigned further agrees that the
consent of the undersigned to any further amendments to the Credit Agreement
shall not be required as a result of this consent having been obtained, except
to the extent, if any, required by the Loan Documents referred to above.
"GUARANTORS"
VISION 21 PHYSICIAN PRACTICE
MANAGEMENT COMPANY
VISION 21 OF SOUTHERN ARIZONA, INC.
VISION 21 OF SIERRA VISTA, INC.
VISION 21 MANAGEMENT SERVICES, INC.
VISION 21 MANAGED EYE CARE OF TAMPA
BAY, INC.
VISION TWENTY-ONE MANAGED EYE CARE
IPA, INC.
BBG-COA, INC.
BLOCK VISION, INC.
UVC INDEPENDENT PRACTICE ASSOCIATION,
INC.
MEC HEALTH CARE, INC.
LSI ACQUISITION, INC.
VISION TWENTY-ONE EYE SURGERY CENTERS,
INC.
EYE SURGERY CENTER MANAGEMENT, INC.
VISION TWENTY-ONE REFRACTIVE CENTER,
INC.
VISION TWENTY-ONE OF WISCONSIN, INC.
By /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, an authorized signatory
for each of the above-referenced entities
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