Exhibit 99.1
SECOND MODIFICATION AGREEMENT
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THIS SECOND MODIFICATION AGREEMENT (hereinafter, this "Agreement") is
made this 30th day of November, 2000 by and among:
SOVEREIGN BANK as successor-in-interest to Fleet National Bank
(hereinafter, the "Bank"), a federal savings bank having an office
located at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx;
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.
00/xx/ 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.
00/xx/ 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. Loan Agreement (hereinafter, as amended, the "Loan Agreement") dated
April 15, 1999, entered into by and between the Bank and the Obligors, as
amended by a certain Modification Agreement (hereinafter, the "Modification
Agreement") dated March 31, 2000 entered into by the Bank and the Obligors;
2. 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;
3. 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; and
4. 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).
Capitalized terms used herein and not otherwise defined shall have the
meanings as set forth in the Loan Agreement, as amended by the Modification
Agreement.
The Obligors have advised the Bank that they are unable to make certain
required payments in reduction of the indebtedness evidenced by the Term Note as
a result of insufficient cash flow. At this time, the Obligors have requested
that the Bank defer certain payments required under the Term Note, and amend
certain terms and conditions of the Loan Agreement. The Bank has agreed to do
so, but only upon the terms and conditions set forth herein.
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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:
Acknowledgment of Indebtedness
------------------------------
5. 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,
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instruments, and agreements executed incidental to, and contemplated by, this
Agreement, the Obligors are jointly and severally liable to the Bank as of
November 1, 2000, as follows:
(a) Revolving Note:
(i) Principal: $2,500,000.00
(ii) Legal Fees & Expenses
(As of November 16, 2000): $ 1,627.40
Subtotal $2,501,627.40
(b) Term Note: Principal: $5,850,002.01
TOTAL $8,351,629.41
All interest accruing from and after November 1, 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 November 1, 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.
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".
Waiver of Claims
----------------
6. 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.
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Ratification of Loan Documents; Further Assurances
--------------------------------------------------
7. 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.
Subordination of Certain Indebtedness
-------------------------------------
8. The Obligors have represented to the Bank that they are indebted to
the note holders set forth on Exhibit "A" attached hereto and incorporated
herein (the "Note Holders"). The Obligors have further represented that they are
unable to make certain scheduled payments to the Note Holders as a result of
insufficient cash flow, and, therefore, shall not make any payments on account
of any indebtedness owed to the Note Holders shown on Exhibit "A" during the
term of this Agreement, as same may be extended in writing. The Obligors shall
use their reasonable good faith efforts to obtain executed subordination
agreements from each of the Note Holders listed on Exhibit "B" within thirty
(30) days from the date of this Agreement. Each subordination agreement shall be
in form and substance satisfactory to the Bank in its sole and exclusive
discretion. Further, the Obligors shall cause to be executed and delivered to
the Bank whatever additional documents, instruments, and agreements that the
Bank may reasonably require from time to time in order to confirm that all
indebtedness (and any and all liens and encumbrances which secure said
indebtedness) owed by the Obligors to any person or entity other than the Bank
shall continue to be subordinate to the Obligations and the liens and
encumbrances which secure the Obligations. The Bank and the Obligors agree that
any default arising from the Obligors' failure to make any required payments to
the Note Holders shall not constitute an Event of Default under the Loan
Documents.
Deferment of Certain Scheduled Repayments
-----------------------------------------
9. The Obligors have requested that the Bank defer the required payments
due on account of the Term Note on December 1, 2000 in the amount of $100,000.00
(the "December Payment") and on January 1, 2001 in the amount of $125,000.00
(the "January Payment") until March 1, 2001 and March 22, 2001, respectively.
Accordingly, the December Payment and the January Payment shall be deferred and
repaid as follows:
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Original Due Date New Due Date Amount of Payment
----------------- ------------ -----------------
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December 1, 2000 March 1, 2001 $100,000.00
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January 1, 2001 March 22, 2001 $125,000.00
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The foregoing payments shall be in addition to, not in lieu of, any and
all other regularly scheduled payments due on account of the Term Note or any
other Obligations.
Costs of Collection
-------------------
10. (a) On or before the execution of this Agreement, the Obligors
shall pay the Bank the sum of $1,627.40 in reimbursement for costs, expenses,
and costs of collection (including attorneys' fees and expenses) incurred by the
Bank through November 16, 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 November 16,
2000, in connection with the protection, preservation, and enforcement by the
Bank of its rights and remedies under the Loan Documents.
Notices
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11. 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: Sovereign Bank
Managed Assets Division
Mail Stop: CT 1 PLO 0504
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn.: Xx. Xxxxxxx X. 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
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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
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12. 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.
13. 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.
14. 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
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15. 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
such other documents, instruments and agreements, any statute,
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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
-------------------------
16. 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
------------------------------
17. 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
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18. 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;
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(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.
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IN WITNESS WHEREOF, this Agreement has been executed this 30/th/ day of
November, 2000.
SOVEREIGN BANK SIGHT RESOURCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------- -----------------------
Title: Vice President Title: President
CAMBRIDGE EYE ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
XXXXXXX VISION WORLD, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
X.X. XXXXX OPTICIANS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
EYEGLASS EMPORIUM, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
KENT OPTICAL COMPANY,
f/k/a KENT ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
SHAWNEE OPTICAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
VISION PLAZA, CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: President
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Exhibit "A"
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Note Holder Payment Due Date Amount Due
----------- ---------------- ----------
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Xxxx Xxxxxxxxx December 31, 2000 $29,167
Xxxxxxxx Xxxxxxxxx
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Xxxxxxxxxxx X. Xxxx, OD January 22, 2001 $100,000
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
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Xxxx Xxxxxxxxx March 31, 2001 $29,167
Xxxxxxxx Xxxxxxxxx
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Xxxxxxx X. Xxxxxx April 23, 2001 $333,333
Xxxx X. Xxxxx, OD
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Xxxxxxxxxxx X. Xxxx, OD January 22, 2002 $100,000
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx April 23, 2002 $333,333
Xxxx X. Xxxxx, OD
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Exhibit "B"
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Note Holder Payment Due Date Amount Due
----------- ---------------- ----------
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Xxxxxxxxxxx X. Xxxx, OD January 22, 2001 $100,000
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx April 23, 2001 $333,333
Xxxx X. Xxxxx, OD
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Xxxxxxxxxxx X. Xxxx, OD January 22, 2002 $100,000
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx April 23, 2002 $333,333
Xxxx X. Xxxxx, OD
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