EXHIBIT 10.1
MODIFICATION AGREEMENT
----------------------
THIS MODIFICATION AGREEMENT (hereinafter, this "AGREEMENT") is made this
31st day of March, 2000 by and among:
FLEET NATIONAL BANK (hereinafter, the "BANK"), a bank organized under
the laws of the United States of America with its principal office located
at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx;
SIGHT RESOURCE CORPORATION (hereinafter, the "SIGHT RESOURCE"), a
Delaware corporation with a principal place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx;
CAMBRIDGE EYE ASSOCIATES, INC. (hereinafter, "CAMBRIDGE EYE"), a
Delaware corporation with a principal place of business at 0 Xxxxxxxx
Xxxxxx, Xxxx 0X, Xxxxxx, Xxxxxxxxxxxxx;
XXXXXXX VISION WORLD, INC. (hereinafter, "XXXXXXX VISION"), a Delaware
corporation with a principal place of business at 0 Xxxxxxxx Xxxxxx, Xxxx
0X, Xxxxxx, Xxxxxxxxxxxxx;
X.X. XXXXX OPTICIANS, INC. (hereinafter, "X.X. XXXXX"), a Delaware
corporation with a principal place of business at 0000 X. 00xx Xxxxxx,
Xxxxxxxxx, Xxxx;
EYEGLASS EMPORIUM, INC. (hereinafter, "EYEGLASS EMPORIUM"), a Delaware
corporation with a principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx;
KENT OPTICAL COMPANY, F/K/A KENT ACQUISITION CORP. (hereinafter, "KENT
OPTICAL"), a Delaware corporation with a principal place of business at 000
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx;
SHAWNEE OPTICAL, INC. (hereinafter, "SHAWNEE OPTICAL"), a Delaware
corporation with a principal place of business at 0000 X. 00xx Xxxxxx,
Xxxx, Xxxxxxxxxxxx; and
VISION PLAZA, CORP. (hereinafter, "VISION PLAZA"), a Delaware
corporation with a principal place of business at 0000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxx 00X, Xxxxxxx, Xxxxxxxxx.
Hereinafter, the Sight Resource, Cambridge Eye, Xxxxxxx Vision, X.X. Xxxxx,
Eyeglass Emporium, Kent Optical, Shawnee Optical, and Vision Plaza shall be
referred to collectively, jointly, and severally, as the "OBLIGORS".
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BACKGROUND
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Reference is hereby made to certain loan arrangements (hereinafter, the
"LOAN ARRANGEMENTS") entered into by and between the Bank and the Obligors,
evidenced by, among other things, the following documents, instruments, and
agreements (hereinafter, together with this Agreement and all documents,
instruments, and agreements executed incidental hereto, and contemplated hereby,
this Agreement, collectively the "LOAN DOCUMENTS"):
1. Secured Revolving Line Note (hereinafter, the "REVOLVING NOTE")
dated April 15, 1999 in the maximum principal amount of $3,000,000.00 made
by the Obligors payable to the Bank;
2. Secured Term Note (hereinafter, the "TERM NOTE") dated April 15,
1999 in the original principal amount of $7,000,000.00 made by the Obligors
payable to the Bank;
3. Acquisition Term Note (hereinafter, the "ACQUISITION TERM NOTE")
dated April 15, 1999 in the maximum principal amount of $10,000,000.00 made
by the Obligors payable to the Bank;
4. Loan Agreement (hereinafter, the "LOAN AGREEMENT") dated April 15,
1999, entered into by and between the Bank and the Obligors;
5. Security Agreement (All Assets) (hereinafter, the "SECURITY
AGREEMENT") dated April 15, 1999 pursuant to which each of the Obligors
granted the Bank a security interest in the Collateral (as defined in the
Security Agreement); and
Capitalized terms used herein and not otherwise defined shall have the
meanings as set forth in the Loan Agreement.
The Obligors acknowledge and agree that, as of December 31, 1999, they
failed to comply with the provisions of certain Negative Covenants contained in
Section 7.01, 7.03, 7.04, 7.05, and 7.06 of the Loan Agreement (collectively,
the "NEGATIVE COVENANT DEFAULTS"). As a result of the Obligors failure to
comply with the foregoing Negative Covenants, an Event of Default has occurred
under the Loan Documents, and, as such, any obligation on the part of the Bank
to continue to make Advances to the Obligors terminated. At this time, the
Obligors have requested that the Bank waive the Negative Covenant Defaults,
modify certain terms and conditions of the Loan Documents, and continue to make
Advances to the Obligors under the Loan Agreement. The Bank has agreed to do
so, BUT ONLY upon the terms and conditions set forth herein.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed by and among
the Bank and the Obligors, as follows:
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ACKNOWLEDGMENT OF INDEBTEDNESS
------------------------------
1. The Obligors each hereby acknowledge and agree that, in accordance with
the terms and conditions of (i) the Loan Documents, (ii) this Agreement, and
(iii) all documents, instruments, and agreements executed incidental to, and
contemplated by, this Agreement, the Obligors are jointly and severally liable
to the Bank as of March 29, 2000, as follows:
(a) Revolving Note:
(1) Principal: $1,525,000.00
(2) Interest: $ 9,641.80
(3) Legal Fees & Expenses
(As of March 29, 2000): $ 5,944.97
Subtotal $1,540,586.77
(b) Term Note:
(1) Principal: $6,583,335.00
(2) Interest: $ 42,217.46
Subtotal $6,625,552.46
(c) Acquisition Term Note:
(1) Principal: $ 0.00
(2) Interest: $ 0.00
Subtotal $ 0.00
TOTAL $8,166,139.23
(d) All interest accruing from and after March 29, 2000 under the Revolving
Note, and the Term Note, and all late fees, reasonable costs, expenses,
and costs of collection (including reasonable attorneys' fees and the
allocated costs of the Bank's in-house counsel) incurred by the Bank from
and after March 29, 2000 in connection the Loan Documents, including,
without limitation, all reasonable attorney's fees and expenses incurred
in connection with the negotiation and preparation of this Agreement and
all documents, instruments, and agreements incidental hereto.
(e) Hereinafter all amounts due as set forth in this Paragraph 1, and elsewhere
payable under this Agreement, shall be referred to collectively as the
"OBLIGATIONS".
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WAIVER OF CLAIMS
----------------
2. The Obligors each hereby acknowledge and agree that they have no
offsets, defenses, claims, or counterclaims against the Bank or the Bank's
officers, directors, employees, attorneys, representatives, predecessors,
successors, and assigns with respect to the Obligations, or otherwise, and that
if any of the Obligors now have, or ever did have, any offsets, defenses,
claims, or counterclaims against the Bank or the Bank's officers, directors,
employees, attorneys, representatives, predecessors, successors, and assigns,
whether known or unknown, at law or in equity, from the beginning of the world
through this date and through the time of execution of this Agreement, all of
them are hereby expressly WAIVED, and the Obligors each hereby RELEASE the Bank
and the Bank's officers, directors, employees, attorneys, representatives,
predecessors, successors, and assigns from any liability therefor.
RATIFICATION OF LOAN DOCUMENTS; FURTHER ASSURANCES
--------------------------------------------------
3. The Obligors:
(a) Hereby ratify, confirm, and reaffirm all and singular the terms and
conditions of the Loan Documents. The Obligors further acknowledge
and agree that except as specifically modified in this Agreement,
all terms and conditions of those documents, instruments, and
agreements shall remain in full force and effect; and
(b) Shall, from and after the execution of this Agreement, execute and
deliver to the Bank whatever additional documents, instruments, and
agreements that the Bank reasonably may require in order to vest or
perfect the Loan Documents and the collateral granted therein more
securely in the Bank and to otherwise give effect to the terms and
conditions of this Agreement.
WAIVER OF DEFAULTS
------------------
4. In consideration for the Obligors promise to perform each and every
term and condition of this Agreement, the Bank hereby waives the Negative
Covenant Defaults. The Obligors acknowledge and agree that this waiver of the
Negative Covenant Defaults shall apply only to the defaults specified herein
which have occurred under the Loan Documents prior to the execution of this
Agreement, and shall not constitute a waiver of any default or Event of Default
occurring or continuing after the execution of this Agreement, other than of the
Negative Covenant Defaults.
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TERMINATION OF ACQUISITION LINE
-------------------------------
5. The Obligors hereby acknowledge and agree that the Acquisition Line, as
more particularly described in Article IV of the Loan Agreement, is hereby
terminated. As such, the Obligors may no longer make any requests for Advances
under the Acquisition Line, and the Bank shall have no obligation to honor any
requests for Advances made by the Obligors under the Acquisition Line.
LOAN ADVANCES
-------------
6. From and after the execution of this Agreement:
(a) The Bank will make Advances to the Obligors under the Revolving
Loan, subject to the following:
(1) Any and all requests for Advances shall be made in
accordance with the provisions of the Loan Agreement, shall
constitute a portion of the Obligations, and shall be secured by all
of the Collateral granted to the Bank under the Loan Documents or
otherwise;
(2) The aggregate sum of all advances shall not exceed the
LESSER of:
(i) $2,500,000.00, or
(ii) the Borrowing Base;
(3) Any and all requests for Advances shall be made in
accordance with the terms of the Loan Agreement, and shall be:
(i) Submitted to the Bank by telecopier, to the
attention of Xx. Xxxxxx Xxxxxxxxx (telecopier 401-278-6005);
(ii) Accompanied by: (x) a Borrowing Base Certificate in
the form attached hereto as Exhibit A, which Borrowing Base
Certificate shall indicate that the Obligors have adequate
levels of Eligible Accounts Receivable and Eligible Inventory
as of the date of the requested Advance, in order to support
the amount of the requested Advance, and (y) a Compliance
Certificate in the form attached hereto as Exhibit B, which
Compliance Certificate shall indicate that the Obligors are in
compliance with each of the Negative Covenants, as amended by
this Agreement.
(4) The Obligors ability to request that an Advance under the
Revolving Loan shall constitute a LIBOR Loan is hereby terminated.
Any and all Advances which the Bank agrees to make shall constitute
a Prime Rate Loan, and shall accrue interest and be repaid in
accordance with the terms and conditions of this Agreement.
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(b) The Bank's agreement to make Advances to the Obligors hereunder
shall terminate upon the earlier of the following (i) the occurrence
of an Event of Default, or (ii) March 31, 2001 (hereinafter, the
"MATURITY DATE").
INTEREST RATE; REPAYMENT OF THE OBLIGATIONS
-------------------------------------------
7. From and after the execution of this Agreement, interest shall accrue
upon, and the Obligors shall repay, the Obligations as follows:
(a) Interest shall accrue on the unpaid principal balance of the
Revolving Note and the Term Note at a floating rate equal to the
aggregate of the Prime Rate PLUS the following percentages for the
corresponding time periods set forth below, each calculated on a per
annum basis:
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TIME PERIOD APPLICABLE PERCENTAGE
----------- ---------------------
--------------------------------------------------------------------------------
Upon Execution of this Agreement
through and including August 31, 2000 1.0%
--------------------------------------------------------------------------------
From September 1, 2000 through and
including October 31, 2000 2.0%
--------------------------------------------------------------------------------
From November 1, 2000 through and
including the Maturity Date: 3.0%
--------------------------------------------------------------------------------
(b) The interest rate increases scheduled for September 1, 2000 and
November 1, 2000 for are subject to the following:
(1) In the event that, on or before August 31, 2000, the
Obligors provide the Bank with a commitment letter (hereinafter, the
"COMMITMENT LETTER"), reasonably acceptable to the Bank,
demonstrating a commitment, subject only to documentation and no
further contingencies of any kind, from an acceptable financial
institution, in an amount sufficient to satisfy the Obligations in
full by no later than September 30, 2000, then, the interest rate
increase scheduled for September 1, 2000 shall be deferred.
Notwithstanding the foregoing, in the event that the Obligations
have not been paid in full on or before September 30, 2000, then the
interest rate increase originally scheduled for September 1, 2000
shall be immediately effective, retroactive to September 1, 2000;
and
(2) In the event that, on or before October 31, 2000, the
Obligors provide the Bank with a Commitment Letter, reasonably
acceptable to the Bank, demonstrating a commitment, subject only to
documentation and no further contingencies of any kind, from an
acceptable financial institution, in an amount sufficient to satisfy
the Obligations in full by no later than November 30, 2000, then,
the interest rate increase scheduled for November 1, 2000 shall be
deferred. Notwithstanding the foregoing, in the event that the
Obligations have not been paid in full on or before November 30,
2000, then the interest rate increase originally
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scheduled for November 1, 2000 shall be immediately effective,
retroactive to November 1, 2000.
(c) The Obligors shall pay all accrued interest on the Obligations in
arrears on the first Banking Day of each calendar month.
(d) The Obligors shall make regular scheduled payments in reduction of
the principal balance of the Term Note, in the following amounts
during the corresponding time periods:
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TIME PERIOD AMOUNT OF PRINCIPAL PAYMENT
----------- ---------------------------
--------------------------------------------------------------------------------
Commencing April 1, 2000 and
continuing on the like day of each
calendar month through and including $ 83,333.33
July, 2000:
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Commencing August 1, 2000 and
continuing on the like day of each
calendar month through and including $100,000.00
December, 2000:
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Commencing January 1, 2001 and
continuing on the like day of each
calendar month through and including $125,000.00
March, 2001:
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(e) The Obligors shall pay all Obligations in full by federal funds wire
transfer on or before the earlier of (i) the occurrence of an Event
of Default, or (ii) the Maturity Date.
RESTRICTION ON DIVIDENDS
------------------------
8. From and after the execution of this Agreement, the Obligors shall not
pay any dividends, or make other distributions of any kind, nature, or manner to
any party without the prior written consent of the Bank.
CASH MANAGEMENT RELATIONSHIP
----------------------------
9. The Obligors agree further that :
(a) The Bank shall have no obligation to pay any items presented to the
Bank for payment unless there are collected funds in the specific
account drawn upon in an amount sufficient to pay each item
presented;
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(b) The Obligors shall not be permitted to incur any overdrafts in any
of the Obligors' demand deposit accounts maintained by any of the
Obligors with the Bank; and
(c) The maximum availability under the ACH Line is hereby reduced to
$250,000.00.
FINANCIAL CONSULTANT
--------------------
10. The Obligors have advised the Bank that the Obligors have, at the
Obligors sole cost and expense, retained Venture Management to serve as the
Obligors financial consultant (hereinafter, the "FINANCIAL CONSULTANT"), for the
purpose of assessing the status of the Obligors continuing business operations
and analyzing the Obligors business plan and strategy for ensuring payment in
full of the Obligations by the Maturity Date. The Obligors shall (i) cooperate
fully with the Financial Consultant, (ii) instruct the Financial Consultant to
provide the Bank with true and accurate copies of any and all financial and
other information concerning the Obligors with respect to the Obligations,
whether generated by the Financial Consultant or otherwise, which the Bank shall
request, and (iii) continue to retain the Financial Consultant, or some other
financial consultant reasonably acceptable to the Bank, during the entire term
of this Agreement.
INSURANCE; SCHEDULES
--------------------
11. Within ten (10) days of the execution of this Agreement, the Obligors
shall provide the Bank with:
(a) Evidence of current insurance policies covering all of Obligors' real and
personal property. Such insurance policies shall be in an amount, of a
type, and issued by an insurance company, acceptable to the Bank in its
sole and exclusive discretion. In addition, each insurance policy must
name the Bank as additional insured and loss payee.
(b) Updated schedules containing, among other things, the following
information:
(1) A listing, including street addresses, of all locations at which
the Obligors conduct business, maintain records, and/or store inventory,
equipment, machinery, or other personal property;
(2) A listing of all states and/or foreign countries in which the
Obligors are incorporated and/or authorized/licensed to conduct business;
(3) A description of the corporate structure and capitalization of
the Obligors, including a listing of any and all subsidiaries of the
Obligors, and all investments of the Obligors;
(4) A description of all outstanding litigation to which the
Obligors are a party, or any threatened litigation to which the Obligors
are aware;
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(5) A description of type and location of any accounts and/or
lockboxes of each of the Obligors;
(6) A description of all indebtedness (other than the Obligations)
of the Obligors to any other party;
(7) A description of any and all liens against the assets of any of
the Obligors; and
(8) A description of any compensation paid to any shareholder,
officer or director of any of the Obligors.
FIELD EXAMINATIONS
------------------
12. The Obligors agree to fully cooperate and assist the Bank and/or the
Bank's auditors, consultants, and/or other representatives in conducting
independent field examinations of the Obligors' operations and their books and
records (including without limitation all records relating to the Obligors'
accounts receivable, inventory, and accounts payable), which cooperation shall
include, without limitation, providing the Bank and/or the Bank's auditors,
consultants, and/or other representatives, reasonable access upon reasonable
prior notice to the Obligors' business premises, books and records, and/or other
information as may be reasonably required by the Bank. The Obligors shall
reimburse the Bank on demand for any and all reasonable costs and expenses
incurred by the Bank in connection with such appraisals and field examinations.
The Obligors hereby acknowledge and agree that the Bank may conduct, at the
Obligors' sole costs and expense, as many field examinations as the Bank may
determine are necessary in the Bank's sole and exclusive discretion.
WARRANTS
--------
13. Within ten (10) days of the execution of this Agreement, Sight
Resource shall execute and deliver to the Bank a common stock purchase warrant
(hereinafter, the "Warrant"), substantially in the form of the Warrant annexed
hereto as Exhibit C, together with such other documents as the Bank may require
in connection therewith. The Obligors expressly acknowledge and agree that the
Bank's agreements to modify the Loan Documents and continue to make Advances, as
more particularly set forth in this Agreement, are expressly conditioned upon
Sight Resource's prior execution and delivery of the Warrant to the Bank.
MODIFICATION OF NEGATIVE COVENANTS
----------------------------------
14. During the term of this Agreement the Negative Covenants contained in
Article VII of the Loan Agreement shall be modified as follows:
(a) Section 7.01 is hereby deleted in its entirety and the following is
inserted in its place:
7.01 (MINIMUM NET WORTH). BORROWER (ON A CONSOLIDATED BASIS) WILL
NOT PERMIT ITS NET WORTH TO BE LESS THAN $21,000,000.00 AS AT THE
END OF ANY FISCAL QUARTER OF BORROWER COMMENCING WITH THE FISCAL
QUARTER ENDING MARCH 31, 2000. THE MINIMUM NET WORTH FIGURE SHALL
INCREASE ANNUALLY (COMMENCING WITH THE FISCAL QUARTER ENDING MARCH
31, 2001) BY AN AMOUNT EQUAL TO 50% OF THE PRIOR YEAR'S NET INCOME
AFTER TAXES, WITHOUT DEDUCTION FOR ANY LOSSES SUSTAINED.
(b) Section 7.03 is hereby deleted in its entirety and the following is
inserted in its place:
7.03 (MINIMUM DEBT SERVICE COVERAGE RATIO). BORROWER (ON A
CONSOLIDATED BASIS) WILL NOT PERMIT ITS EBITDA TO BE LESS THAN THE
FOLLOWING PERCENTAGES OF ITS DEBT SERVICE FOR THE YEAR TO DATE
PERIOD ENDING ON THE LAST DAY OF ANY OF THE FOLLOWING FISCAL
QUARTERS OF THE BORROWER:
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Quarter Ending Applicable Percentage
------------------------------------------------------------------
March 31, 2000 45%
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June 30, 2000 60%
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September 30, 2000 120%
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December 31, 2000 110%
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AS USED IN THIS AGREEMENT, THE TERM "EBITDA" SHALL MEAN AND REFER TO,
FOR THE APPLICABLE PERIOD, INCOME FROM CONTINUING OPERATIONS BEFORE
THE PAYMENT OF INTEREST AND TAXES PLUS DEPRECIATION AND AMORTIZATION,
DETERMINED IN ACCORDANCE GAAP.
(c) Section 7.04 is hereby deleted in its entirety and the following is
inserted in its place:
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7.04 (MAXIMUM FUNDED DEBT COVERAGE RATIO). BORROWER (ON A
CONSOLIDATED BASIS) WILL NOT PERMIT THE PRINCIPAL AMOUNT OF
OUTSTANDING LOANS ON THE LAST DAY OF ANY FISCAL QUARTER OF BORROWER TO
BE MORE THAN THE FOLLOWING PERCENTAGES OF THE BORROWER'S EBITDA, ON AN
ANNUALIZED BASIS, AS FOLLOWS:
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Quarter Ending Applicable Percentage
------------------------------------------------------------------
March 31, 2000 840%
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June 30, 2000 490%
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September 30, 2000 350%
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December 31, 2000 350%
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(d) Section 7.05 is hereby deleted in its entirety and the following is
inserted in its place:
7.05 (MINIMUM NET PROFIT). BORROWER WILL NOT PERMIT ITS
CONSOLIDATED NET PROFIT/(LOSS) AFTER TAXES TO BE LESS THAN/(GREATER
THAN) THE FOLLOWING AMOUNTS ON THE LAST DAY OF ANY OF THE FOLLOWING
FISCAL QUARTERS:
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Quarter Ending Applicable Amount
------------------------------------------------------------------
March 31, 2000 ($980,000.00)
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June 30, 2000 ($670,000.00)
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September 30, 2000 $320,000.00
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December 31, 2000 ($620,000.00)
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Annual Fiscal Year 2000 ($1,950,000.00)
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EACH OF THE FIRST THREE QUARTERS OF EACH FISCAL YEAR AND THE ANNUAL
CALCULATION SHALL BE SEPARATE AND DISTINCT TESTS.
FINANCIAL REPORTING
-------------------
15. In addition to all other reporting requirements contained in the Loan
Documents, each of the Obligors shall also furnish the Bank with the following:
(a) Monthly Financial Statements: The Obligors shall submit, on a
consolidating basis, to the Bank, within thirty (30) days of the
close of each calendar month, a statement of income, cash flow, and
balance sheet for the immediately preceding month and year-to-date
period. Simultaneously with the furnishing of such financial
statements, the Obligors shall submit to the Bank (i) a detailed
reconciliation analysis of the actual monthly and year-to-date
results compared to the projected results to be delivered to the
Bank, and as further amended to reflect any interest and/or fees
that are incurred as a result of this Agreement, and (ii) a detailed
written explanation of any and all material variances.
(b) Rolling Thirteen (13) Week Cash Flow Forecast: Commencing upon the
execution of this Agreement, and continuing on a weekly basis, on
Wednesday of each calendar week, the Obligors shall submit to the
Bank, an updated rolling thirteen (13) week
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cash flow forecast, whereby the first week shall be deleted and
updated with the week immediately succeeding the last week included
in the previous report.
(c) Accounts Receivable Agings, Inventory Reports, Accounts Payable
Agings, and Borrowing Base Certificates: Commencing upon the
execution of this Agreement, and continuing on or before the 20th
day of each month thereafter, the Obligors shall submit to the Bank
(i) an aging of its open accounts receivable, (ii) a detailed
inventory report, (iii) an accounts payable aging, and (iv) a
Borrowing Base Certificate, for the immediately preceding month. The
Borrowing Base Certificate shall be in the form required to be
submitted to the Bank by the Obligors in accordance with the terms
of this Agreement.
(d) Financial Statements: Within thirty (30) days of the execution of
this Agreement, the Obligors shall deliver to the Bank an original
copy of the Obligors audited consolidated and consolidating
financial statements, including statements of profit and loss, cash
flow, and a balance sheet for the fiscal year ended December 31,
1999. In addition, within thirty (30) days of providing the
foregoing audited financial statements, the Obligors shall provide
the Bank with a copy of their certified public accountant's
unqualified opinion and management letter with respect to the fiscal
year ended December 31, 1999.
(e) Certifications: All financial reporting required to be provided to
the Bank shall be certified (to the best knowledge and belief of the
certifying officer) both as to the accuracy and compliance with
required covenants by the Chief Executive Officer or Chief Financial
Officer of the Obligors.
EVENTS OF DEFAULT
-----------------
16. The occurrence of any one or more of the following events shall
constitute an event of default (hereinafter, a "EVENT OF DEFAULT") under this
Agreement, and under each of the Loan Documents:
(a) The failure of the Obligors to pay any amount required to be paid to
the Bank under this Agreement as and when due, including the failure
of the Obligors to pay all Obligations in full on or before 5:00
p.m. Boston time on the Maturity Date, it being expressly
acknowledged and agreed that TIME IS OF THE ESSENCE;
(b) The failure of the Obligors to promptly, punctually, or faithfully
perform any term or condition of this Agreement as and when due, it
being expressly acknowledged and agreed that TIME IS OF THE ESSENCE;
(c) A materially adverse change in the financial condition of any of the
Obligors;
(d) The failure of any financial information or representations
heretofore or hereafter submitted to the Bank by any of the Obligors
to have been materially true, accurate,
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or complete at the time submitted, which failure shall be the result
of a knowing or intentional act of any of the Obligors; or
(e) The occurrence of any default or event of default by any of the
Obligors under, and as defined in, any of the Loan Documents.
RIGHTS UPON OCCURRENCE OF AN EVENT OF DEFAULT
---------------------------------------------
17. Upon the occurrence of any Event of Default:
(a) Interest shall accrue upon the unpaid principal balance of the
Obligations at a rate which is four (4%) percentage points per annum
greater than the rate of interest which is then in effect;
(b) The Obligors ability to request Advances shall automatically
terminate, without notice to the Obligors;
(c) All Obligations shall be immediately due and payable in full,
without demand, notice, or protest, all of which are hereby
expressly WAIVED; and
(d) The Bank may immediately commence enforcing its rights and remedies
pursuant to this Agreement, the Loan Documents, and/or otherwise, in
such manner and order as the Bank may determine in its sole and
exclusive discretion.
MODIFICATION FEE
----------------
18. In consideration of the Bank's agreement to enter into this Agreement,
the Obligors shall be obligated to pay to the Bank the sum of $160,000.00 as a
modification fee (hereinafter, the "MODIFICATION FEE").
(a) The Modification Fee shall be:
(1) Paid by the Obligors to the Bank in installments by no
later than 5:00 p.m. Boston time on or before the following dates,
in the corresponding amounts:
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TIME PERIOD AMOUNT OF PAYMENT
--------------------------------------------------------------
Upon execution of this Agreement: $80,000.00
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September 1, 2000: $50,000.00
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November 1, 2000: $30,000.00
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(2) Fully earned as of the date of the execution of this
Agreement; and
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(3) Retained by the Bank under all circumstances as a fee and
not be applied in reduction of the Obligations.
(b) Notwithstanding the foregoing, in the event that the Obligations
have been paid in full at any time prior to October 31, 2000, then
the Bank shall waive the Obligors obligation to pay any unpaid
installment of the Modification Fee. Further, in the event that the
Obligors have paid the Obligations in full on or before August 31,
2000, then the Bank shall credit the Obligors the amount of
$30,000.00 towards the repayment of the outstanding Obligations.
COSTS OF COLLECTION
-------------------
19. (a) On or before the execution of this Agreement, the Obligors shall
pay the Bank the sum of $5,944.97 in reimbursement for reasonable costs,
expenses, and costs of collection (including reasonable attorneys' fees and
expenses) incurred by the Bank through March 29, 2000, in connection with the
protection, preservation, and enforcement by the Bank of its rights and remedies
under the Loan Documents, including, without limitation, the negotiation and
preparation of this Agreement.
(b) The Obligors shall reimburse the Bank on demand for any and all
reasonable costs, expenses, and costs of collection (including reasonable
attorneys' fees and expenses) incurred by the Bank from and after March 29,
2000, in connection with the protection, preservation, and enforcement by the
Bank of its rights and remedies under the Loan Documents, including, without
limitation, the negotiation and preparation of this Agreement.
NOTICES
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20. Any communication between the Bank and the Obligors shall be forwarded
via certified mail, return receipt requested, or via recognized overnight
courier, addressed as follows:
If to the Bank: Fleet National Bank
Managed Assets Division
Mail Stop: RI-DE-03320A
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn.: Mr. Xxxxxx Xxxxxx
Vice President
With a copy via telecopier to:
Xxxxxx X. Xxxxxx, Esquire
Xxxxxx & Xxxxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
13
If to the Obligors: Sight Resource Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
President and CEO
With a copy via telecopier to:
Xxxxx Xxxxxx, Esquire
Xxxx-Xxxxx Xxxxxx, Esquire
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
WAIVERS
-------
21. NON-INTERFERENCE. From and after the occurrence of any Event of
Default, the Obligors agree not to interfere with the exercise by the Bank of
any of its rights and remedies. The Obligors further agree that they shall not
seek to distrain or otherwise hinder, delay, or impair the Bank's efforts to
realize upon any of the collateral granted to the Bank under the Loan Documents,
or otherwise to enforce the Bank's rights and remedies pursuant to the Loan
Documents. This provision shall be specifically enforceable by the Bank.
22. AUTOMATIC STAY. The Obligors hereby expressly assent to any motion
filed by the Bank seeking relief from the automatic stay in connection with any
Petition for Relief filed by or against any one or more of the Obligors under
the United States Bankruptcy Code.
23. JURY TRIAL. The Obligors and the Bank hereby make the following waiver
knowingly, voluntarily, and intentionally, and understand that the other, in
entering into this Agreement, is relying on such a waiver: THE OBLIGORS EACH
HEREBY IRREVOCABLY WAIVE ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF
ANY CASE OR CONTROVERSY IN WHICH ANY OF THE OBLIGORS BECOME A PARTY (WHETHER
SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE OBLIGORS OR IN WHICH THE
OBLIGORS ARE JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT
OF, OR IS IN RESPECT OF, ANY RELATIONSHIP BETWEEN THE OBLIGORS, OR ANY OTHER
PERSON, AND THE BANK.
ENTIRE AGREEMENT
----------------
24. This Agreement shall be binding upon the Obligors and the Obligors'
respective employees, representatives, successors, and assigns, and shall inure
to the benefit of the Bank and the Bank's successors and assigns. This Agreement
and all documents, instruments, and agreements executed in connection herewith
incorporate all of the discussions and negotiations between the Obligors and the
Bank, either expressed or implied, concerning the matters included herein and in
14
such other documents, instruments and agreements, any statute, custom, or usage
to the contrary notwithstanding. No such discussions or negotiations shall
limit, modify, or otherwise affect the provisions hereof. No modification,
amendment, or waiver of any provision of this Agreement, or any provision of any
other document, instrument, or agreement between the Obligors and the Bank shall
be effective unless executed in writing by the party to be charged with such
modification, amendment, or waiver, and if such party be the Bank, then by a
duly authorized officer thereof.
CONSTRUCTION OF AGREEMENT
-------------------------
25. In connection with the interpretation of this Agreement and all other
documents, instruments, and agreements incidental hereto:
(a) All rights and obligations hereunder and thereunder, including
matters of construction, validity, and performance, shall be
governed by and construed in accordance with the law of the
Commonwealth of Massachusetts and are intended to take effect as
sealed instruments.
(b) The captions of this Agreement are for convenience purposes only,
and shall not be used in construing the intent of the Bank and the
Obligors under this Agreement.
(c) In the event of any inconsistency between the provisions of this
Agreement and any other document, instrument, or agreement entered
into by and between the Bank and the Obligors, the provisions of
this Agreement shall govern and control.
(d) The Bank and the Obligors have prepared this Agreement and all
documents, instruments, and agreements incidental hereto with the
aid and assistance of their respective counsel. Accordingly, all of
them shall be deemed to have been drafted by the Bank and the
Obligors and shall not be construed against either the Bank or the
Obligors.
ILLEGALITY OR UNENFORCEABILITY
------------------------------
26. Any determination that any provision or application of this Agreement
is invalid, illegal, or unenforceable in any respect, or in any instance, shall
not affect the validity, legality, or enforceability of any such provision in
any other instance, or the validity, legality, or enforceability of any other
provision of this Agreement.
INFORMED EXECUTION
------------------
27. The Obligors warrant and represent to the Bank that the Obligors:
(a) Have read and understand all of the terms and conditions of this
Agreement;
(b) Intend to be bound by the terms and conditions of this Agreement;
15
(c) Are executing this Agreement freely and voluntarily, without duress,
after consultation with independent counsel of their own selection;
and
(d) Acknowledge and agree that the modifications provided to the
Obligors by the Bank pursuant to this Agreement constitute a fair
and reasonable time frame within which all Obligations are to be
paid in full.
16
IN WITNESS WHEREOF, this Agreement has been executed this 31st day of
March, 2000.
FLEET NATIONAL BANK SIGHT RESOURCE CORPORATION
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
----------------- -------------------
Title: Vice President Title: Chief Financial Officer
-------------- -----------------------
CAMBRIDGE EYE ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
XXXXXXX VISION WORLD, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
X.X. XXXXX OPTICIANS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
EYEGLASS EMPORIUM, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
KENT OPTICAL COMPANY,
f/k/a KENT ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
17
SHAWNEE OPTICAL, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
VISION PLAZA, CORP.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Title: Chief Financial Officer
-----------------------
18
EXHIBIT C
---------
SIGHT RESOURCE CORPORATION
Right to Purchase Shares of Common Stock
of Sight Resource Corporation
Common Stock Purchase Warrant No. W-1
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. FURTHERMORE,
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT MAY BE
SOLD OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED
IN THIS WARRANT.
Common Stock Purchase Warrant
Sight Resource Corporation, a [Delaware] corporation (together with any
corporation which shall succeed to or assume the obligations of Sight Resource
Corporation hereunder, the "COMPANY"), hereby certifies that, for value
received, Fleet National Bank, or its assigns ("FLEET" or "HOLDER"), is
entitled, subject to the terms set forth below, to purchase from the Company (i)
subject to paragraph (A) below, the First Condition Shares, and (ii) subject to
paragraph (B) below, the Second Condition Shares, at any time and from time to
time on and after the respective dates on which this Warrant becomes exercisable
for First Condition Shares and the Second Condition Shares as determined
pursuant to Section 2.1 below until the expiration hereof pursuant to Section
2.3 below, at a purchase price per share equal to the Exercise Price. The
Warrant Stock and the Exercise Price are subject to adjustment from time to time
as provided herein.
(A) First Condition Shares. This Warrant shall become exercisable for Fifty
Thousand (50,000) shares (the "FIRST CONDITION SHARES") of Warrant Stock
(subject to any and all adjustments as provided herein, including without
limitation any adjustments in connection with events occurring prior to the date
on which this Warrant first becomes exercisable for the First Condition Shares)
on and as of 5:00 PM, Eastern time, on August 31, 2000, if the Borrower (as
defined in that certain Loan Agreement dated as of March 31, 2000 by and among
Fleet, the Company and the other parties named therein, as modified by that
certain Modification Agreement of even date herewith (the "LOAN AGREEMENT")) on
or before such date shall not have repaid in full all principal advances by
Fleet under the Loan Agreement and otherwise fully and timely performed all of
its obligations (including without limitation payment of all accrued interest,
late payment fees and other charges) thereunder; provided, that notwithstanding
that the Borrower shall not have repaid in full all
1
principal advances by Fleet under the Loan Agreement and otherwise fully and
timely performed all of its obligations (including without limitation payment of
all accrued interest, late payment fees and other charges) thereunder on or
before August 31, 2000, this Warrant shall not become exercisable for the First
Condition Shares until September 30, 2000 if (i) on or before August 31, 2000
the Company shall have delivered to Fleet an executed commitment letter from one
or more third party financial institutions acceptable to Fleet in its sole
discretion providing for the refinancing by such institution(s) of all
outstanding principal, accrued interest and other charges then outstanding under
the Loan Agreement, where the closing of such refinancing is stated therein to
occur no later than September 30, 2000 and such closing is subject only to
execution of a definitive agreement with respect thereto and to no other
contingencies or conditions precedent, and (ii) (a) the closing of such
refinancing does not occur, for any reason or no reason, on or before September
30, 2000, or (b) the Borrower otherwise, on or before September 30, 2000, have
repaid in full all principal advances by Fleet under the Loan Agreement and
otherwise fully and timely performed all of its obligations (including without
limitation payment of all accrued interest, late payment fees and other charges)
thereunder.
(B) Second Condition. This Warrant shall become exercisable for Fifty
Thousand (50,000) additional shares (the "SECOND CONDITION SHARES") of Warrant
Stock (subject to any and all adjustments as provided herein, including without
limitation any adjustments in connection with events occurring prior to the date
on which this Warrant first becomes exercisable for the Second Condition Shares)
on and as of 5:00 PM, Eastern time, on December 31, 2000, if the Borrower on or
before such date shall not have repaid in full all principal advances by Fleet
under the Loan Agreement and otherwise fully and timely performed all of its
obligations (including without limitation payment of all accrued interest, late
payment fees and other charges) thereunder.
For purposes hereof:
"EXERCISE PRICE" means (subject to any and all adjustments as provided
herein), the Fair Market Value, as determined pursuant to Section 2.1 below, of
a share of Warrant Stock on and as of the date on which this Warrant first
becomes exercisable as to the First Condition Shares.
"WARRANT STOCK" means shares of Common Stock or Other Securities issuable
upon exercise of this Warrant.
1. DEFINITIONS. In addition to the terms which are defined in the body of this
Warrant, certain terms used in this Warrant are defined in Section 15 hereof.
2. EXERCISE OF WARRANT.
2.1 Exercise. This Warrant may be exercised prior to its expiration at any
time and from time to time on and after the date(s), if any, on which this
Warrant becomes exercisable for the First Condition Shares and the Second
Condition Shares, respectively by surrender of this Warrant, with the form of
Notice of Exercise or Conversion at the end hereof duly executed by such holder,
to the Company at its principal office, accompanied by payment, by certified or
official bank check payable to the
2
order of the Company or by wire transfer to its account, in the amount obtained
by multiplying the number of shares of Common Stock for which this Warrant is
then being exercised by the Exercise Price then in effect. In the event the
Warrant is not exercised in full, the Company, at its expense, will forthwith
issue and deliver to or upon the order of the holder hereof a new Warrant or
Warrants of like tenor, in the name of the holder hereof or as such holder (upon
payment by such holder of any applicable transfer taxes) may request, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock equal to the balance of the number shares then purchasable under this
Warrant. Upon any exercise of this Warrant, in whole or in part, the holder
hereof may, in lieu of paying the aggregate Exercise Price which otherwise would
be payable with respect to the shares of Warrant Stock for which this Warrant is
then being exercised (collectively, the "EXERCISE SHARES"), (a) in the event the
holder of this Warrant is also the holder of a promissory note of the Company,
convert a like amount of outstanding principal and/or interest amount of such
note into such number of Common Stock, or (b)surrender this Warrant to the
Company together with a notice of cashless exercise, in which event the Company
shall issue to the Holder the number of shares of Warrant Stock determined as
follows:
X = Y (A-B)/A
where:
X = the number of shares of Warrant Stock to be issued
to the holder.
Y = the number of shares of Warrant Stock with respect to
which this Warrant is being exercised.
A = the Fair Market Value (as defined below) of one share of
the Warrant Stock.
B = the Exercise Price.
For purposes of this Section 2.1, the "Fair Market Value" of one share of
Warrant Stock (the "FAIR MARKET VALUE") at any date shall be determined as
follows:
(a) If shares of the same class or series as the Warrant Stock (or shares
of the Company's Common Stock into which shares of Warrant Stock are
convertible) are at such time listed or admitted for trading on any
national securities exchange or quoted on the National Quotation Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), then the Fair Market Value shall be equal to
the average of the daily closing market prices of such shares over a period
of five (5) consecutive trading days prior to the day on which Fair Market
Value is being determined. As used in this subparagraph (a), "market
price" for each such trading day shall be the average of the closing prices
on such day of such shares on all domestic primary national securities
exchanges on which such shares are then listed, or, if there shall have
been no sales on any such exchange on such day, the average of the highest
bid and lowest asked prices on all such exchanges at the end of such day,
or if such shares shall not be so listed, the average of the representative
bid and asked prices at the end of such trading day as reported by NASDAQ.
3
(b) If shares of the same class or series as the Warrant Stock (or shares
of the Company's Common Stock into which shares of Warrant Stock are
convertible) are not at such time listed or admitted for trading on any
national securities exchange or quoted on NASDAQ, then the Fair Market
Value of one share of Warrant Stock shall be equal to the fair market value
of the entire capital equity of the Company taken as a whole, divided by
the number of shares of Common Stock (on a fully diluted, as converted, as
exercised basis) then issued (or deemed issued) and outstanding, without
premium for control and without discount for minority interest or
restriction on transfer, as determined by the Company's Board of Directors
in good faith and set forth in writing to Fleet within fifteen (15) days
after the occurrence of the event which requires the valuation, unless
Fleet shall object in writing within five (5) days after receipt of the
Board of Directors' determination, in which case the Fair Market Value
shall be determined (x) by a reputable independent appraiser selected by
mutual agreement of the Company and Fleet and set forth in writing to the
Company and Fleet within thirty (30) days after the occurrence of the event
which requires the valuation, or (y) (if the Company and Fleet shall have
been unable to agree upon an appraiser within ten (10) days after Fleet's
objection to the Board of Directors' determination of Fair Market Value) as
the average of the two (2) closest appraisals by three (3) reputable
independent appraisers, one chosen by the Company, one chosen by Fleet, and
the third selected by the other two (2) appraisers, set forth in writing
within sixty (60) days after the occurrence of the event which requires the
valuation. If the Fair Market Value as determined by appraisal pursuant to
clause (x) above, or by the average of the appraisals determined in
accordance with clause (y) above, as the case may be, is greater than the
Fair Market Value determined by the Board of Directors by five percent (5%)
or more, then all expenses of such appraisals shall be paid by the Company,
and in all other circumstances, such appraisal expenses shall be borne by
the party engaging such appraiser or, as the case may be, jointly, as to
the jointly scheduled appraiser pursuant to clause (x) and the third
appraiser pursuant to clause (y).
2.2 Warrant Agent In the event that a bank or trust company shall have
been appointed as trustee for the holder of the Warrant pursuant to Section 6.2
hereof, such bank or trust company shall have all the powers and duties of a
warrant agent appointed pursuant to Section 16 hereof and shall accept, in its
own name for the account of the Company or such successor entity as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 2.
2.3 Termination. This Warrant shall terminate as to the First Condition
Shares and the Second Condition Shares, respectively, at 5:00 PM, Eastern time
on the date that is ten (10) years following the date on which this Warrant
first becomes exercisable as to such shares.
3. REGISTRATION RIGHTS.
3.1 Registration Rights. Not later than January 31, 2001 (the
"Registration Date"), the Company at its sole expense shall cause the First
Condition Shares and the Second Condition Shares, if any, issued or issuable
hereunder to be registered for public re-sale by Fleet in accordance with the
provisions of this Section 3. Notwithstanding the foregoing, if prior to the
Registration Date the Company shall otherwise register with the Securities and
Exchange Commission ("SEC") any shares of Warrant Stock, either for its own
account or the account of any of its securityholders or both, the
4
Company shall give written notice thereof to Fleet not less than twenty (20)
days prior to the filing of such registration statement with the SEC and shall
cause all shares of Warrant Stock issued and issuable hereunder to be included
therein at the sole expense of the Company; provided, that if any such other
registration by the Company is for a firm commitment underwritten offering or
sale of shares of Warrant Stock and the managing underwriters advise the Company
in writing that marketing factors require a limitation on the number of shares
of Warrant Stock to be offered and sold by stockholders of Company in such
offering, there shall be included in such registration: (i) first, all shares of
Warrant Stock proposed by Company to be sold for its account; and (ii) second,
that number of shares of Warrant Stock, if any, requested to be included in such
registration statement by Fleet and by stockholders of the Company having
contractual rights to include shares in such registration, on a pro rata basis
based upon the number of shares of Warrant Stock Fleet and each such stockholder
beneficially owns.
3.2 Shelf Registration. The Company shall prepare and file with the SEC
pursuant to Rule 415 under the Securities Act of 1933, as amended, or any
successor statute (the "Act"), a registration statement on Form S-3 under the
Act or any successor form or, if such form is not then available to the Company,
on such form as permitted by the SEC, for the delayed or continuous offering of
the shares of Warrant Stock issued and issuable hereunder (the "Registration
Statement"), and shall cause such Registration Statement to become effective not
later than the Registration Date. The Company shall cause such Registration
Statement to remain effective until the earlier to occur of (i) the sale by
Fleet of all shares of Warrant Stock issued and issuable hereunder pursuant
thereto or otherwise, or (ii) two (2) years from the Registration Date (the
"Effective Period"). The Company shall also, in connection with the
Registration Statement or such other registration in which the shares of Warrant
Stock issued and issuable hereunder are included pursuant to Section 3.1 above,
cause the shares of Warrant Stock issued and issuable hereunder to be registered
or qualified under such state securities or "blue sky" laws as Fleet shall
reasonably request and to maintain the effectiveness of such state registrations
and qualifications throughout the Effective Period (or effective period of such
other registration). At all times during the Effective Period (or effective
period of such other registration) the Company shall provide such number of
copies of the prospectus (as amended or supplemented from time to time) under
the Registration Statement (or such other registration statement) as reasonably
requested by Fleet in order to facilitate its disposition of the shares of
Warrant Stock issued and issuable hereunder pursuant thereto.
3.3 Expenses of Registration. All expenses (including without limitation
fees of counsel to Fleet up to a maximum of $20,000.00) incurred in connection
with the Registration Statement and any other registration in which the shares
of Warrant Stock issued and issuable hereunder are included pursuant to Section
3.1 above, including without limitation, all registration, filing and
qualification fees, printing expenses, underwriting fees, discounts and
commissions (other than underwriting fees, discounts and commissions relating
solely to the shares of Warrant Stock issued and issuable hereunder), fees and
disbursements of counsel for the Company and expenses of any special audits
incidental to or required by such registration, shall be borne by the Company.
3.4 Indemnification.
(a) The Company will indemnify Fleet and each of its officers,
directors, affiliates and each controlling person of Fleet, in connection with
the Registration Statement and/or
5
any other registration in which the shares of Warrant Stock issued and issuable
hereunder are included pursuant to Section 3.1 above, and all state
registrations and qualifications in connection therewith, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
incident thereto or forming a part thereof or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder ("Exchange Act") or
any state securities law applicable to the Company or any rule or regulation
promulgated any such state law and relating to action or inaction required of
the Company in connection with such Registration Statement or such other
registration, qualification or compliance, and will reimburse Fleet and each of
its officers, directors, affiliates and controlling persons, within a reasonable
amount of time after incurred for any reasonable legal and any other expenses
incurred in connection with investigating, defending or settling any such claim,
loss, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 3.4(a) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability, or action if such
settlement is effected without the written consent of the Company (which consent
shall not be unreasonably withheld or delayed); and provided further, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by an
instrument duly executed by such Fleet specifically for use therein.
(b) Fleet will indemnify the Company, each of its directors and
officers and controlling persons against all claims, losses, expenses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
the Registration Statement and/or any other registration statement or state
registration or qualification in which the shares of Warrant Stock issued and
issuable hereunder are included pursuant to Section 3.1 above, and in any
prospectus, offering circular or other document incident thereto or forming a
part thereof, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and such directors, officers and
controlling persons for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement or other registration
statement, or prospectus, offering circular or other document, in reliance upon
and in conformity with written information furnished to the Company by an
instrument duly executed by Fleet specifically for use therein; provided,
however, that the indemnity agreement contained in this subsection 3.4(b) shall
not apply to amounts paid in settlement of any such claim, loss, damage,
liability or action if such settlement is effected without the written consent
of Fleet (which consent shall not be unreasonably withheld or delayed); and
provided further, that the total amount for which Fleet shall be liable under
this subsection 3.4(b) shall not in any event exceed the aggregate proceeds
received by Fleet from the sale of shares of Warrant Stock sold by Fleet
pursuant to the Registration Statement or such other registration.
(c) Each party entitled to indemnification under this section 3.4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the
6
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at such party's expense; and
provided further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
hereunder, unless such failure resulted in prejudice to the Indemnifying Party;
and provided further, that an Indemnified Party (together with all other
Indemnified Parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the Indemnifying Party, if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would be inappropriate
due to actual or potential differing interests between such Indemnified Party
and any other party represented by such counsel in such proceeding. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
3.5 NASDAQ, etc. listing. In connection with the Registration Statement
and/or any other registration in which any shares of Warrant Stock issued or
issuable hereunder are included pursuant to Section 3.1 above, the Company shall
at its sole expense and not later than the effective date of such Registration
Statement or other registration, cause all shares of Warrant Stock issued and
issuable hereunder and covered thereby to be approved for listing or quotation
on the NASDAQ National Market and to maintain such approval at all times during
the Effective Period (or the effective period of such other registration) or, if
the Warrant Stock is no longer traded on the NASDAQ National Market, on such
other securities exchange. inter-dealer quotation system or over-the-counter
trading system as the Warrant Stock is traded.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1 Delivery. As soon as practicable after the exercise of this Warrant
in full or in part, and in any event within ten (10) days thereafter, the
Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the holder
hereof, or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Warrant Stock (or Other Securities) to
which such holder shall be entitled on such exercise, together with any other
stock or other securities and property (including cash, where applicable) to
which such holder is entitled upon such exercise.
4.2 Fractional Shares. In the event that the exercise of this Warrant,
in full or in part, results in the issuance of any fractional share of Warrant
Stock, then, in such event, the holder of this Warrant shall be entitled to cash
equal to the Fair Market Value of such fractional share determined in the same
manner as for one share of Warrant Stock pursuant to Section 2.1 hereof.
7
5. ADJUSTMENTS FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Warrant Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional, or rights to acquire, stock or other securities
or property (other than cash) by way of dividend;
(b) any cash (excluding cash dividends payable solely out of earnings or
earned surplus of the Company); or
(c) other or additional stock or other securities or property (including
cash) by way of spin-off, split-up, reclassification, recapitalization,
combination of shares or similar corporate restructuring;
other than additional shares of Warrant Stock or adjustments in respect of which
are provided for in Section 7.1 hereof, then and in each such case, the holder
of this Warrant, on the exercise hereof as provided in Section 2 hereof, shall
be entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in subsections (b) and (c) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof it had been the holder of record of the number of
shares of Warrant Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and received and retained all such other or
additional stock and other securities and property (including cash in the cases
referred to in subsections (b) and (c) of this Section 5) receivable by such
holder as aforesaid during such period, giving effect to all further adjustments
called for during such period by Sections 6 and 7 hereof.
6. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
6.1 Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other person, or (iii)
transfer all or substantially all of its properties or assets to any other
person, (an "ACQUISITION") then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 2 hereof at any time after the
consummation of such reorganization, recapitalization, consolidation, or merger
or the effective date of such dissolution, as the case may be, shall receive, in
lieu of the shares of Warrant Stock (or Other Securities) issuable on such
exercise immediately prior to such consummation or effective date, the stock and
other securities and property (including cash) to which such holder would have
been entitled upon such consummation (or thereafter as a result of such
consummation, including in connection with any dissolution of the Company) if
such holder had so exercised this Warrant immediately prior thereto, all subject
to further adjustment thereafter as provided in Sections 5 and 7 hereof.
6.2 Appointment of Trustee for Warrant Holders Upon Dissolution. In the
event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets,
8
the Company, prior to such dissolution, shall, at its expense, deliver or cause
to be delivered the stock and other securities and property (including cash,
where applicable) receivable by the holders of the Warrant after the effective
date of such dissolution pursuant to this Section 6 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrant.
6.3 Continuation of Terms. Upon an Acquisition, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable to
the shares of stock and other securities and property receivable on the exercise
of this Warrant after the consummation of such reorganization, reclassification,
recapitalization, consolidation, merger or transfer (and the effective date of
dissolution following any such transfer), as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 8 hereof.
Notwithstanding the foregoing, at the election of Fleet, the Company shall
purchase the unexercised portion of this Warrant for cash upon the closing of
any Acquisition for an amount equal to (a) the fair market value of any
consideration that would have been received by Fleet in consideration of the
shares of Warrant Stock had Fleet exercised the unexercised portion of this
Warrant immediately before the record date for determining the shareholders
entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Exercise Price of the shares of Warrant Stock, but in no event less
than zero.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND AMOUNT OF OUTSTANDING
COMMON STOCK.
7.1 General. If at any time there shall occur any stock split, stock
dividend, reverse stock split or other subdivision of the Company's Common Stock
(a "STOCK EVENT"), then (a) the number of shares of Common Stock to be received
by the holder of this Warrant upon exercise hereof or upon conversion of the
shares of Warrant Stock issuable hereunder shall be appropriately adjusted such
that the proportion of the number of shares issuable hereunder to the total
number of shares of the Company outstanding (on a fully diluted as converted, as
exercised basis) prior to such Stock Event is equal to the proportion of the
number of shares issuable hereunder after such Stock Event to the total number
of shares of the Company outstanding (on a fully diluted basis) after such Stock
Event, and (b) if the Warrant Stock is Common Stock, the Exercise Price shall be
proportionately decreased or increased upon the occurrence of any stock split or
other subdivision of the Common Stock.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (i) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and non-
assessable shares of stock on the exercise of the Warrant from time to time
outstanding, (iii) will not transfer all or substantially all of its properties
and assets to
9
any other person (corporate or otherwise), or consolidate with or merge into any
other person or permit any other person to consolidate with or merge into the
Company (if the Company is not the surviving entity), unless such other person
shall expressly assume in writing and will be bound by all the terms of this
Warrant.
9. CERTIFICATE AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Warrant Stock issuable on the
exercise of this Warrant or the shares of Common Stock issuable upon conversion
of such shares of Warrant Stock, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail, the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the consideration received or receivable by the
Company for any additional shares of Warrant Stock, Common Stock (or Other
Securities) issued or sold or deemed issued or sold,(ii) the number of shares of
Warrant Stock and Common Stock then outstanding or deemed to be outstanding on a
fully diluted, as converted, as exercised basis, and (iii) the Exercise Price
and the number of shares of Warrant Stock and Common Stock to be received upon
exercise of this Warrant and conversion of the shares of Warrant Stock, in
effect immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7) on account thereof. The Company will
forthwith mail a copy of each such certificate to each holder of a Warrant, and
will, on the written request at any time of any holder of a Warrant, furnish to
such holder a like certificate setting forth the calculations used to determine
such adjustment or readjustment. At its option, the holders of a Warrant may
confirm the adjustment noted on the certificate by causing such adjustment to be
computed by the Company's independent accounting firm or another independent
certified public accountant at the expense of the Company.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Holder as follows:
10.1 Organization and Good Standing. The Company is duly organized and
existing as a corporation in good standing in the [State of Delaware] and is
duly qualified as a foreign corporation and authorized to do business in all
other jurisdictions in which the nature of its business or property makes such
qualification necessary. The Company has the corporate power to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
10.2 Authorization, The execution, delivery and performance by the Company
of this Warrant, and the issuance and sale by the Company of the Securities
hereunder (a) are within the Company's corporate power and authority, (b) have
been duly authorized by all necessary corporate proceedings, and (c) do not
conflict with or result in any breach of any provision of, or the creation of
any lien upon any of the property of the Company or require any consent or
approval pursuant to, the Certificate or by-laws of the Company or any law,
regulation, order, judgment, writ, injunction, license, permit, agreement or
instrument applicable to the Company.
10.3 Enforceability. The execution and delivery by the Company of this
Warrant, the issuance and sale by the Company of the Securities hereunder and
the performance by the Company of its obligations hereunder, will result in
legally binding obligations of the Company, enforceable against the Company in
accordance with the respective terms and provisions hereof.
10
10.4 Governmental Approvals. The execution, delivery and performance by
the Company of this Warrant, and the issuance and sale of the Securities
hereunder, do not require the approval or consent of, or any filing with, any
governmental authority or agency.
10.5 Reservation, Etc. Sufficient shares of authorized but unissued
Securities have been, and at all times will be, reserved by appropriate
corporate action in connection with the prospective exercise of this Warrant and
conversion of the shares of Warrant Stock issuable upon such exercise. The
issuance of the Securities will not require any further corporate action by the
stockholders or directors of the Company, will not be subject to preemptive
rights in any present or future stockholders or other securities holders of the
Company and will not conflict with any provision of any agreement to which the
Company is a party or by which it is bound, and all Securities, when issued upon
exercise of this Warrant in accordance with its terms or upon conversion hereof
or of the shares of Warrant Stock issuable upon exercise or conversion hereof,
will be duly authorized, validly issued, fully paid and non-assessable.
10.6 Defaults. The Company is not in default under any provisions of its
Certificate or by-laws, or under any provisions of any franchise, contract,
agreement, lease or other instrument to which it is a party or by which it or
its property is bound or in violation of any law, judgment, decree or
governmental order, rule or regulation, which default or violation could affect
adversely in any material manner the business, assets or financial condition of
the Company.
10.7 Issuance of Securities. All securities of the Company to be issued
pursuant to this Warrant when issued will have been issued in accordance with
all applicable laws and regulations, including without limitation the Act and
state securities or "blue sky" laws.
10.8 Disclosure. No representation, warranty or statement made in this
Warrant, any Financing Agreement, or any agreement, certificate, statement or
document furnished by or on behalf of the Company in connection herewith or
therewith contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances in which they were made, not misleading.
11. INVESTMENT REPRESENTATION. Fleet represents and warrants to the Company
that Fleet is (a) an "accredited investor" within the meaning of Rule 501(a)
promulgated under the Securities Act, and (b) acquiring the Securities for
investment and not with a view to selling or otherwise distributing the
Securities, other than as contemplated in Section 3 above; provided, however,
that the disposition of Fleet's property shall at all times be and remain in
Fleet's control, subject to Section 20 hereof.
12. NOTICES OF RECORD DATE. In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right;
or
11
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all
or substantially all the assets of the Company to or any consolidation or
merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company; or
then, and in each such event, the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, (ii)
the date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is
anticipated to take place, and the time, if any is to be fixed, as of which the
holders of record of Warrant Stock (or Other Securities) shall be entitled to
exchange their shares of Warrant Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant and the persons or class of persons to whom
such proposed issue or grant is to be offered or made. Such notice shall be
mailed at least thirty (30) days prior to the date specified in such notice on
which any such action is to be taken.
13. INFORMATION RIGHTS. So long as Fleet holds this Warrant and/or any of the
Warrant Stock, the Company shall deliver to the holder (a) promptly after
mailing/sending, copies of all press releases, reports, financial statements,
notices or other written communications to any shareholders of the capital stock
of the Company, (b) within ninety (90) days after the end of each fiscal year of
the Company, the annual audited financial statements of the Company certified by
independent public accountants of recognized standing, (c) such other financial
statements required under and in accordance with any loan documents between
Fleet and the Company or if there are no such requirements (or if the subject
loan(s) no longer are outstanding), then within forty-five (45) days after the
end of each of the first three quarters of each fiscal year, the Company's
quarterly, unaudited financial statements, and (d) annually, no later than prior
to the start of each fiscal year, capital and operating expense budgets, cash
flow projections and income and loss projections for the Company and its
subsidiaries, if any, which have been approved by the Board of Directors of the
Company and any revisions to the foregoing.
14. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times take all actions necessary to reserve and keep available, solely for
issuance and delivery on the exercise of this Warrant and conversion of the
shares of Warrant Stock issuable hereunder, a sufficient number of shares of
Warrant Stock and Other Securities to permit exercise from time to time in full
of this Warrant and conversion of such shares of Warrant Stock.
15. DEFINITIONS. As used herein the following terms have the following
respective meanings:
15.1 The term "AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with Fleet
(or other specified Person).
12
15.2 "BANK AFFILIATE" See Section 19 hereof.
15.3 "BANK HOLDING COMPANY ACT" See Section 19 hereof.
15.4 The term "COMMON STOCK" includes the Company's Common Stock, $___ par
value, and (ii) any other securities into which or for which any of the
securities described in clause (i) above have been converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
15.5 The term "CERTIFICATE" shall mean the Company's Certificate of
Incorporation, as amended and/or restated and in effect from time to time,
including without limitation any Certificate of Designation applicable to the
Warrant Stock.
15.6 The term "FINANCING AGREEMENTS" shall include this Warrant and the
Loan Agreement and all present and future documents, instruments, agreements and
certificates executed and delivered to Fleet National Bank. and/or Fleet by any
Person in connection therewith.
15.7 The term "OTHER SECURITIES" refers to any stock (other than Warrant
Stock) and other securities of the Company or any other Person (i) which the
holder of this Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of this Warrant, in lieu of or in addition to Warrant
Stock, or (ii) which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Warrant Stock or Other Securities.
15.8 The term "PERSON" shall mean an individual, partnership, corporation,
limited liability company, association, trust, joint venture, unincorporated
organization, and any government, governmental department or agency or political
subdivision thereof.
15.9 The term "SECURITIES" shall mean, collectively, the Warrant, the
shares of Warrant Stock and the shares of Other Securities issuable upon
exercise of this Warrant or conversion of the shares of Warrant Stock issuable
hereunder.
15.10 The term "SMALL BUSINESS ACT" shall mean the Small Business
Investment Act of 1958, as amended, or any successor federal statute, and the
rules and regulations of the Small Business Administration thereunder, all as
the same shall be in effect from time to time.
16. WARRANT AGENT. The Company may, by written notice to the holder of this
Warrant, appoint an agent having an office in Boston, Massachusetts for the
purpose of issuing Warrant Stock on the exercise of this Warrant pursuant to
Section 2 hereof, and exchanging or replacing this Warrant, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
17. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be
13
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
18. NOTICES. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, or sent by overnight courier at such address as may have
been furnished to the Company in writing by such holder or, until any such
holder furnishes to the Company an address, then to, and at the address of, the
last holder of this Warrant who has so furnished an address to the Company.
19. REGULATORY RESTRICTIONS.
19.1 Holding Company. No Person which is a bank holding company or a
subsidiary of a bank holding company (a "BANK AFFILIATE") as defined in the Bank
Holding Company Act of 1956, as amended, or other applicable banking laws of the
United States of America and the rules and regulations promulgated thereunder
(the "BANK HOLDING COMPANY ACT") shall acquire Warrant Stock, if, after giving
effect to such acquisition, the Bank Affiliate, together with its Affiliates,
would own more than five percent (5%) of the outstanding voting securities of
the Company. Notwithstanding the foregoing, shares of Warrant Stock may
otherwise be acquired or held by Fleet or any Affiliate of Fleet which is a
Small Business Investment Company consistent with and subject to the limitations
contained in the Small Business Act and, to the extent not inconsistent with the
Bank Holding Company Act, shares of Warrant Stock may be acquired in the event
that:
(a) the Company shall vote to merge or consolidate with or into any other
Person and after giving effect to such merger or consolidation Fleet or
Affiliate of Fleet would not own more than five percent (5%) of the
outstanding voting securities of the surviving corporation; or
(b) said holder exercises its registration rights pursuant to Section 3
hereof and the registration statement resulting therefrom is effective.
14
20. RESTRICTIONS ON TRANSFER.
20.1 General Restriction. The Securities shall be transferable only upon
the satisfaction of the conditions set forth below in this Section 20.
20.2 Restrictions on Transfer. The holder of this Warrant and each Person
to whom this Warrant is subsequently transferred represents and warrants to the
Company (by acceptance of such transfer) that such Person will not transfer this
Warrant or any Warrant Stock except (i) pursuant to an effective registration
statement under the Act, (ii) pursuant to Rule 144 under the Securities Act (or
any other rule under the Act related to the disposition of securities), (iii)
transfers by or between Fleet and any of its Affiliates, or (iv) upon the
delivery of an opinion of counsel, reasonably satisfactory to the Company, that
such transfer is exempt from registration under the Act.
20.3 Restrictive Legends. Except as otherwise permitted by this Section
20, each Security shall bear a legend substantially in accordance with Section
20.2 above.
20.4 Transferability. Subject to the provisions of this Section 20, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the holder hereof, at the office or agency of the Company by the
registered holder thereof in person or by a duly authorized attorney, upon
surrender of this Warrant together with an assignment hereof properly endorsed.
Until transfer hereof on the registration books of the Company, the Company may
treat the registered holder hereof as the owner hereof for all purposes. Any
transferee of this Warrant and any rights hereunder, by acceptance thereof,
agrees to assume all of the obligations of a holder thereunder and to be bound
by all of the applicable terms and provisions of this Warrant.
21. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant shall be
governed by and construed in accordance with the domestic substantive laws (and
not the conflict of law rules) of the Commonwealth of Massachusetts. All
representations and warranties set forth in this Warrant shall survive the
execution and delivery of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. This Warrant shall take effect as an instrument under seal.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
15
IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Warrant under seal as of March ___, 2000.
(Corporate Seal) SIGHT RESOURCE CORPORATION
Attest: By:___________________________________
Name:_________________________________
______________________________ Title:________________________________
Name:
Title:
FLEET NATIONAL BANK.
By:_________________________________
Name:_______________________________
Title:______________________________
16
NOTICE OF EXERCISE OR CONVERSION
--------------------------------
Date:_____________,
Sight Resource Corporation
__________________
__________________
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise or convert the enclosed Warrant
issued to it by Sight Resource Corporation. (the "Company") and dated as of
____________________ ____, _________.
The undersigned elects to:
Exercise the Warrant and to purchase thereunder
____________________________ shares of the Warrant Stock of the
Company (the "Shares") at an exercise price of ________________ per
Share for an aggregate purchase price of _____________________________
Dollars ($_____________) (the "Purchase Price"). Pursuant to the
terms of the Warrant, the undersigned has delivered the Purchase Price
herewith in full.
17
Convert ____% of the value of the Warrant at the current Exercise
Price (as defined in the Warrant) of $____________ per Share.
Convert $____________ of the outstanding principal and interest under
that certain [Note] dated _____________________, in the face amount of
$_________________________, issued by the Company and held by the
undersigned, at the current Exercise Price of $___________ per share.
Very truly yours,
_________________________________
Receipt Acknowledged:
SIGHT RESOURCE CORPORATION
By _________________________________
Title:______________________________
on _____________________, __________
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
___________________________ of
_____________________________________________________ the right represented by
the within Stock Purchase Warrant to purchase _____ shares of Warrant Stock of
Sight Resource Corporation, a Delaware corporation, to which the within Common
Stock Purchase Warrant relates, and appoints ___________________________________
Attorney to transfer such right on the books of Sight Resource Corporation, with
full power of substitution in the premises.
Dated: __________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
____________________________________
(Address)
Signed in the presence of:
_________________________________
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