Common Stock Purchase Agreement - Sight Resource Corp., The Carlyle Group, E. Dean Butler, Excalibur Investments B.V. and La Sesta S.A.
COMMON STOCK PURCHASE AGREEMENT
by and among
SIGHT RESOURCE CORPORATION
and
THE PERSONS LISTED ON EXHIBIT A HERETO
Dated as of December 30, 2002
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................... 2
Section 1.01 Definitions............................................. 2
ARTICLE II PURCHASE AND SALE OF THE SHARES.................................. 4
Section 2.01 Purchase And Sale Of The Shares......................... 4
Section 2.02 Acknowledgement by Purchasers........................... 5
ARTICLE III CONDITIONS TO CLOSING........................................... 6
Section 3.01 Mutual Conditions To Closing............................ 6
Section 3.02 Conditions To Purchaser's Obligations................... 6
Section 3.03 Conditions To The Company's Obligations................. 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................... 9
Section 4.01 Representations And Warranties Of The Company........... 9
Section 4.02 Representations And Warranties Of The Purchasers........ 13
ARTICLE V COVENANTS......................................................... 14
Section 5.01 Board of Directors...................................... 14
Section 5.02 Transaction Documents................................... 15
Section 5.03 Cooperation............................................. 15
Section 5.04 Dividend Shares......................................... 15
Section 5.05 Conversion Shares....................................... 15
Section 5.08 Third Party Consents; Regulatory Matters................ 15
Section 5.09 Cancellation of Class I (Mirror) and
Class II Warrants Held by Carlyle.................. 15
ARTICLE VI LIMITATIONS AND RESTRICTIONS..................................... 16
Section 6.01 Restrictions On Sales By Purchasers..................... 16
Section 6.02 Registration Rights..................................... 16
ARTICLE VII MISCELLANEOUS................................................... 17
Section 7.01 Notices................................................. 17
Section 7.02 Legends................................................. 18
Section 7.03 Termination............................................. 18
Section 7.04 Action By Purchasers.................................... 18
Section 7.05 Entire Agreement........................................ 19
Section 7.06 Modifications And Amendments............................ 19
Section 7.07 Waivers And Consents.................................... 19
Section 7.08 Assignment.............................................. 19
Section 7.09 Benefit................................................. 19
Section 7.10 Governing Law........................................... 19
Section 7.11 Severability............................................ 19
Section 7.12 Interpretation.......................................... 20
Section 7.13 Headings And Captions................................... 20
Section 7.14 Enforcement............................................. 20
2
<PAGE>
Section 7.15 No Waiver Of Rights, Powers And Remedies................ 20
Section 7.16 Expenses................................................ 20
Section 7.17 Confidentiality......................................... 20
Section 7.18 Publicity............................................... 21
Section 7.19 Counterparts............................................ 21
Section 7.20 Obligations Several, Not Joint.......................... 21
3
<PAGE>
EXHIBITS
SECTION
DESIGNATION DESCRIPTION REFERENCES
Exhibit A Name of Purchasers and Number of Shares
to Be Purchased by Each Purchase 1.01
Exhibit B Name of Carlyle Entity and Number of
Dividend Shares to be Issued by Company
to Each of Them in Lieu of Payment of
Cash Dividends Set Forth Opposite Name
of Each of Them
Exhibit C Name of Carlyle Entity and Number of
Conversion Shares Issued by the Company to
Each Carlyle Entity Upon Conversion of Shares
of Series B Stock Set Forth Opposite Name
of Each
Exhibit D Escrow Agreement 1.01
Exhibit E Put and Right of First Refusal Agreement
Exhibit F Registration Rights Agreement
Exhibit G Opinion of Counsel to the Company 3.01
Exhibit H Sixth Loan Modification Agreement
SCHEDULES
DESIGNATION DESCRIPTION
4.01(c) Government Approvals
4.01(d) Rights to Purchase Shares
4.01(e) Outstanding Registration Rights
4.01(g) Conflicts
<PAGE>
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of the
30th day of December, 2002 (the "EFFECTIVE DATE"), by and among SIGHT RESOURCE
CORPORATION, a Delaware corporation (the "COMPANY"), and the persons listed on
Exhibit A attached hereto (each a "PURCHASER" and collectively the
"PURCHASERS"), under the following circumstances:
R E C I T A L S
WHEREAS, the Company has secured new senior financing in an amount of
$2,000,000 (the "Senior Financing") from CadleRock Joint Venture, LP ("CADLE"),
effective as of the Closing Date (as hereinafter defined); and
WHEREAS, subject to the Senior Financing, each Purchaser has agreed to
purchase and acquire shares of the Common Stock, par value $.01 per share (the
"COMMON STOCK"), of the Company, in the amounts, at the purchase price and
subject to the terms and conditions specified herein;
WHEREAS, the Company desires to issue and sell to each of the Purchasers
shares of the Common Stock of the Company, in the amounts, at the purchase price
and subject to the terms and conditions specified herein; and
WHEREAS, the Company and the Purchasers have agreed to the other
transactions and agreements provided for, and upon the terms and conditions
described herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, references to either
gender shall include the other gender, and the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined). The following terms are defined as
follows:
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common
control with, the Person specified.
"AGREEMENT" means this Common Stock Purchase Agreement, as amended,
modified or supplemented from time to time in accordance with the terms
hereof.
2
<PAGE>
"BUSINESS DAY" means any day on which commercial banks are not
authorized or required by law to close in Cincinnati, Ohio.
"CARLYLE" means Carlyle Venture Partners, L.P., C/S Venture Investors,
L.P., Carlyle U.S. Venture Partners, L.P. and Carlyle Venture Coinvestment,
L.L.C.
"CLOSING" and "CLOSING DATE" shall have the meanings specified in
Section 2.01(b).
"COMMISSION" means the United States Securities and Exchange
Commission or any other agency successor thereto.
"COMMON STOCK" has the meaning specified in the recitals to this
Agreement.
"COMPANY" means and shall include Sight Resource Corporation, a
Delaware corporation, and its successors and permitted assigns.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"FINANCIAL STATEMENTS" means (i) the Company's consolidated balance
sheet as of December 29, 2001 and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended,
as set forth in the Company's Report on Form 10-K for the year ended
December 29, 2001, and (ii) the Company's consolidated balance sheet as of
September 28, 2002 and the related consolidated statements of operations
and cash flows for the nine months then ended, as set forth in the
Company's Report on Form 10-Q for the period ended September 28, 2002.
"FLEET" means Fleet National Bank, a national banking association.
"FLEET LOAN DOCUMENTS" means (i) the Loan Agreement dated April 15,
1999 among Fleet, the Company and certain subsidiaries and affiliates of
the Company (the Company and such subsidiaries and affiliates being
hereinafter referred to as the "Original Borrowers"), as modified or
amended by Modification Agreement dated March 31, 2000, Second Modification
Agreement dated November 30, 2000, Amended and Restated Third Modification
Agreement dated May 14, 2001, Fourth Modification Agreement dated July 31,
2002, and Fifth Modification Agreement dated November 15, 2002, (ii) the
Secured Revolving Line Note dated April 15, 1999 in the maximum principal
amount of $3,000,000 made by the Original Borrowers payable to Fleet, (iii)
the Secured Term Note dated April 15, 1999 in the original principal amount
of $7,000,000 made by the Original Borrowers payable to Fleet, (iv) the
eight Security Agreements (All Assets) dated April 15, 1999 of each of the
Original Borrowers, as amended and confirmed by certain Ratifications and
Amendments of Security Agreements dated January 31, 2002, and (v)
3
<PAGE>
the Security Agreement (All Assets) dated July 31, 2002 by Kent Optometric
Providers P.C.
"LIQUIDITY EVENT" means (a) the closing of a firm commitment
underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer
and sale of common stock for the account of the Company to the public with
net proceeds to the Company of not less than $15,000,000 or (b) the closing
of a consolidation or merger of the Company, or a sale of all or
substantially all of the assets of the Company, other than a merger,
consolidation or sale of all or substantially all of the assets of the
Corporation in a transaction in which the shareholders of the Company
immediately prior to the transaction possess more than 50% of the voting
securities of the surviving entity (or parent, if any) immediately after
the transaction.
"OBLIGATIONS" has the meaning specified in Section 3.02(g).
"PAYOFF AMOUNT" has the meaning specified in Section 3.02(g).
"PERSON" means an individual, corporation, partnership, association,
joint venture, trust, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"PURCHASER" means and shall include each Person who purchases Shares
(as defined herein) hereunder and each of its or their successors and
permitted assigns.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SEC REPORTS" has the meaning specified in Section 4.01(i).
"SHARES" has the meaning specified in Section 2.01(a).
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Escrow
Agreement dated the Closing Date and attached hereto as Exhibit D, the Put
and Right of First Refusal Agreement dated of even date herewith by and
among the Purchasers attached hereto as Exhibit E, the Registration Rights
Agreement dated of even date herewith by and among the Company and the
Purchasers attached hereto as Exhibit F, and any other instruments or
certificates to be executed and delivered in connection with this Agreement
upon the Closing.
ARTICLE II
PURCHASE AND SALE OF THE SHARES
SECTION 2.01 PURCHASE AND SALE OF THE SHARES
4
<PAGE>
(a) ISSUANCE OF THE SHARES. Subject to the terms and conditions of
this Agreement, at the Closing (as defined below), the Company agrees to issue
and sell to each Purchaser, and each Purchaser agrees to purchase, that number
of shares of the Company's Common Stock ("SHARES") as is set forth opposite such
Purchaser's name on EXHIBIT A attached hereto and incorporated by reference
herein at a purchase price of $0.20 per share. The Shares shall be sold by the
Company free and clear of all liens, security interests, pledges, hypothecation
and other encumbrances.
(b) CLOSINGS; DELIVERY OF THE SHARES. The purchase and sale of the
Shares shall take place on December 30, 2002 at the offices of Thompson Hine
LLP, 2000 Courthouse Plaza N.E., Dayton, Ohio at 10:00 a.m. (local time) or at
such other location, time and date as may be mutually agreed upon by the parties
(the "CLOSING" and the "CLOSING DATE"). At the Closing, subject to the terms and
conditions contained in this Agreement, the Company will provide evidence
satisfactory to each Purchaser that the Company has taken all steps necessary to
cause to be issued to each Purchaser stock certificates evidencing the Shares,
registered in the names of the Purchasers and dated as of the Closing Date,
which stock certificates shall be delivered to the Purchasers within two
Business Days of the Closing, against receipt of wire transfers of immediately
available funds to an account of the Company specified to the Purchasers, in an
aggregate amount equal to the purchase price set forth opposite the name of such
Purchaser on Exhibit A attached to this Agreement and incorporated by reference
herein for the Shares issued and sold to such Purchaser at the Closing.
(c) At the time of the execution of this Agreement, each Purchaser
other than the Carlyle entities shall deposit the purchase price to be paid to
the Company for the purchase of the number of Shares set forth opposite its name
on Exhibit A in to escrow pursuant to the terms of an escrow agreement in the
form of EXHIBIT D attached hereto and incorporated by reference herein.
(d) For the convenience of the Company, the Company hereby directs
Carlyle to wire transfer to Fleet the purchase price to be paid by Carlyle for
the Shares set forth on Exhibit A. Such wire transfer to Fleet by Carlyle shall
constitute payment to the Company for the Shares to be issued to Carlyle
pursuant to this Agreement.
SECTION 2.02 ACKNOWLEDGEMENT BY PURCHASERS. Each Purchaser acknowledges (i)
that the Company has furnished to such Purchaser all such information as such
Purchaser has requested in connection with the investment determination by such
Purchaser to enter into this Agreement and to purchase Shares, and (ii) that
such Purchaser has had the opportunity to ask questions and receive answers
concerning the Company and the terms and conditions of the purchase of the
Shares.
5
<PAGE>
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.01 MUTUAL CONDITIONS TO CLOSING. The obligation of each Purchaser
to purchase and pay for, and the obligation of the Company to issue and sell to
each Purchaser, the Shares at the Closing and to consummate the other
transactions contemplated by this Agreement or the Transaction Documents to
which it is a party, is subject to the following conditions:
(a) NO INJUNCTION. No injunction or order of any court or other
governmental authority restraining the consummation of the transactions provided
for herein or contemplated by the other Transaction Documents shall be in
effect; and
(b) NO TERMINATION. This Agreement shall not have been terminated
pursuant to Section 7.03.
(c) All consents, approvals, registration and qualifications from, and
all filings with, any third party or governmental authority necessary for the
consummation of the transactions contemplated herein or in the Transaction
Documents shall have been received.
SECTION 3.02 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of each
Purchaser to purchase and pay for the Shares and to consummate the other
transactions contemplated by this Agreement or the Transaction Documents to
which it is a party, at the Closing is subject to the following additional
conditions:
(a) COMPLIANCE WITH AGREEMENT. Each of the representations and
warranties of the Company set forth in Article IV hereof shall be true and
correct in all material respects on and as of the date of the Closing, and all
agreements, covenants and conditions required by this Agreement to be complied
with or performed or fulfilled by the Company at or prior to such Closing shall
have been complied with, performed or fulfilled in all material respects;
(b) EXECUTED COUNTERPARTS. Each Purchaser shall have received prior to
or at the Closing counterparts of each of the Transaction Documents, each in
form and substance reasonably satisfactory to the Purchaser, to which the
Company is a party, duly executed by or on behalf of the Company;
(c) TRANSACTION DOCUMENTS. All of the Purchasers shall have executed
and delivered the Transaction Documents required to be executed and delivered by
them pursuant to this Agreement, including, but not limited to, the Put and
Right of First Refusal Agreement;
(d) PAYMENT BY OTHER PURCHASERS. Each other Purchaser shall have, at
the Closing, made payment for the Shares being purchased by such Purchaser in
the amount of the purchase price set forth opposite its name on Exhibit A;
(e) DELIVERY OF STOCK CERTIFICATES. The Company shall have delivered
to each Purchaser at the Closing, evidence reasonably satisfactory to such
Purchaser that the Company
6
<PAGE>
has taken all steps necessary to cause to be issued to such Purchaser a
stock certificate evidencing the Shares, no later than two business days
following the Closing;
(f) OPINION OF COUNSEL. The Purchasers shall have received prior to or
at the Closing an opinion from counsel to the Company in substantially the form
attached hereto as EXHIBIT C;
(g) PENDING ACTIONS. No suit, action or proceeding, injunction or
preliminary injunction which seeks to prohibit consummation of the transactions
contemplated by this Agreement shall be pending;
(h) DEBT REDUCTION. On the Closing Date, Cadle shall have acquired all
rights under the Fleet Loan Documents, the total amount of indebtedness of the
Company under the Fleet Loan Documents shall have been reduced to $2,000,000,
and all events of default, defaults, and matters that with the passage of time
would mature into defaults under the Fleet Loan Documents shall have been waived
by Cadle as of the Closing Date, and the Sixth Loan Modification Agreement shall
have been executed and delivered by the parties thereto and shall be in full
force and effect.
(i) ISSUANCE OF DIVIDEND SHARES. The Company shall have issued to
Carlyle the number of shares of Common Stock set forth opposite the name of each
Carlyle entity (the "Dividend Shares"), on Exhibit B attached hereto and
incorporated by reference herein, on account of accrued and unpaid dividends on
the shares of Series B Convertible Preferred Stock of the Company ("Series B
Stock") held by them in lieu of accrued and unpaid cash dividends thereon, and
the Company has delivered to Carlyle at the Closing, evidence reasonably
satisfactory to Carlyle that the Company will issue and deliver certificates
representing such shares of the Common Stock to Carlyle no later than two
Business Days following the Closing.
(j) ISSUANCE OF CONVERSION SHARES. The Company shall have issued to
Carlyle the number of shares of Common Stock (the "Conversion Shares") set forth
opposite the name of each Carlyle entity on Exhibit C attached hereto and
incorporated by reference herein, upon conversion of the number of shares of
Series B Stock set forth opposite the name of each Carlyle entity on Exhibit C,
and the Company has delivered evidence reasonably satisfactory to Carlyle that
the Company will issue and deliver certificates representing such shares of
Common Stock to Carlyle no later than two Business Days following the Closing.
(k) DOCUMENTATION AT CLOSING. The Purchasers shall have received,
prior to or at such Closing, (I) a certificate, executed by the Secretary or
Assistant Secretary of the Company and dated as of the Closing Date, together
with and certifying as to (A) the resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement and the other
Transaction Documents and the performance by the Company of all transactions
contemplated hereby and thereby and the election of Marco Brustio as a director
of the Company and the steps to be taken to identify the person to be appointed
as a director of the Company who would be the person of significant financial
and accounting expertise contemplated by Section 5.01(c) of this Agreement; (B)
a copy of the Certificate of Incorporation of the Company, as
7
<PAGE>
amended and in effect as of the date of such Closing; (C) a copy of the by-laws
of the Company, as amended and in effect as of the date of such Closing; and (D)
the names of the officers of the Company authorized to sign the Transaction
Documents together with the true signatures of such officers; and (II) a
certificate, executed by an executive officer of the Company and dated as of the
Closing Date, to the effect that, to the best of the knowledge of such
individual, the conditions set forth in Section 3.02 have been satisfied; and
(l) DOCUMENTS AND PROCEEDINGS. All documents to be provided to the
Purchasers hereunder, and all corporate and other proceedings taken or required
to be taken in connection with the transactions contemplated hereby and to be
consummated at or prior to such Closing and all documents incident thereto,
shall be reasonably satisfactory in form and substance to the Purchasers or to
their counsels.
(m) ELECTION OF DIRECTORS. Mr. Schwarz and Mr. Tabacchi shall continue
as directors of the Company; Mr. Marco Brustio shall be elected a director
effective as of the Closing Date; and the Board of Directors of the Company
shall have agreed to elect, as soon as reasonably practicable after the Closing,
an additional director who has significant financial and accounting expertise
and who is neither employed by the Company nor an Affiliate of the Company as an
employee or consultant.
WAIVER. Any condition specified in this Section 3.02 may be waived by
the consent of all the Purchasers.
SECTION 3.03 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the
Company to issue and sell the Shares at the Closing is subject to the following
additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Purchasers set forth in Section 4.02 hereof shall be true and
correct in all material respects on the date of such Closing;
(b) EXECUTED COUNTERPARTS. The Company shall have received prior to or
at the Closing counterparts of each of the Transaction Documents to which a
Purchaser is a party, in form and substance reasonably satisfactory to the
Company, duly executed by such Purchaser;
(c) PAYMENT. The Company shall have received payment in full for the
Shares to be purchased at the Closing in accordance with Section 2.01;
(d) DOCUMENTATION AT CLOSING.
(A) With respect to each of the Purchasers that are United States
corporate entities, the Company shall have received, prior to or at
the Closing, a certificate, executed by the Secretary of such
Purchaser and dated as of the Closing Date, together with and
certifying as to (i) the resolutions of the Board of Directors of such
Purchaser authorizing the execution and delivery of this Agreement and
the other Transaction Documents and the performance by such Purchaser
of all
8
<PAGE>
transactions contemplated hereby and thereby; and (ii) the names of
the officers of such Purchaser authorized to sign the Transaction
Documents together with the true signatures of such officers; and
(B) With respect to all other Purchasers, the Company shall have
received, prior to or at the Closing, such certification as the
Company may reasonably request with respect to each Purchaser's
compliance with the representation and warranties set forth in Section
4.02(f); and
(e) DOCUMENTS AND PROCEEDINGS. All documents to be provided to the
Company hereunder, and all corporate and other proceedings taken or required to
be taken in connection with the transactions contemplated hereby and to be
consummated at or prior to such Closing and all documents incident thereto,
shall be reasonably satisfactory in form and substance to the Company or its
counsel.
WAIVER. Any condition specified in this Section 3.03 may be waived by the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Purchaser as follows:
(a) ORGANIZATION AND STANDING OF THE COMPANY. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware, is duly qualified and in good standing in every other
state in which by reason of the nature or location of the Company's assets or
operation of the Company's business, such qualification is necessary and has all
requisite corporate power and authority to own and operate its assets and
properties and to conduct its business as presently conducted, and is duly
qualified to transact business and is in good standing under the laws of each
jurisdiction where its ownership, lease or operation of assets and property or
the conduct of its business requires such qualification except where the failure
to do so would not, and reasonably could not be expected to, have a material
adverse effect on the business operations, financial condition, liabilities,
assets or properties (a "Material Adverse Effect") of the Company and its
subsidiaries taken as a whole. True and correct copies of the Certificate of
Incorporation of the Company, as amended and in effect as of the date of this
Agreement, and the By-Laws of the Company, as amended and in effect as of the
date of this Agreement, both certified by the Secretary or an Assistant
Secretary of the Company, have been made available to the Purchasers.
(b) CORPORATE ACTION. The Company has all necessary corporate power
and authority to execute and deliver, and perform all obligations and agreements
under this Agreement and the Transaction Documents to which it is a party and
the Company has all necessary corporate power and has authorized the issuance
and sale of the Shares and to consummate the other transactions contemplated by
this Agreement and the Transaction
9
<PAGE>
Documents. The execution, delivery and performance of this Agreement and the
Transaction Documents to which it is a party, and the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate,
including shareholder (if required) action on the part of the Company.
(c) GOVERNMENTAL APPROVALS. Except as indicated on SCHEDULE 4.01(C),
no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is necessary for, or in
connection with, the issuance and sale of the Shares on the Closing Date, or the
execution and delivery by the Company of, or for the performance by it of its
obligations under, this Agreement and the Transaction Documents.
(d) CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of (i) 70,000,000 shares of Common Stock, par
value $.01 per share, of which 30,667,709 shares are issued and outstanding and
30,600 shares are treasury shares, and (ii) 5,000,000 shares of Preferred Stock,
par value $.01 per share, of which 200,000 shares have been designated as Series
A Preferred Stock, none of which are issued and outstanding, and 1,452,119
shares have been designated as Series B Preferred Stock, all of which are issued
and outstanding. The Shares, when issued against payment of the purchase price
set forth in Section 2.01, will be duly authorized, validly issued and fully
paid and non-assessable and not subject to any lien, claim or encumbrance by
reason of the Company's charter or by-laws or by reason of any other consensual
action taken by the Company. The Dividend Shares and Conversion Shares at
Closing will be duly authorized, validly issued, and fully paid and
non-assessable. As of the date hereof, except as described or contemplated in
the SEC Reports filed with respect to periods ending on or after December 29,
2001 and as set forth on SCHEDULE 4.01(D), there are no options, warrants,
convertible securities or other rights to purchase shares of capital stock or
other securities of the Company which are authorized, issued or outstanding, nor
is the Company obligated in any other manner contingent or otherwise to issue
shares of its capital stock or other securities or securities exercisable
therefore or convertible therewith, and the Company has no obligation to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof, except as contemplated by this Agreement and the Transaction
Documents. Except as described in the SEC Reports, and except as otherwise
contemplated by the this Agreement and the Transaction Documents, no person is
entitled to any preemptive right, right of first refusal or similar right with
respect to the issuance of any capital stock of the Company, including the
Shares, Dividend Shares and Conversion Shares.
(e) REGISTRATION RIGHTS. As of the date hereof, except as set forth on
SCHEDULE 4.01(E), no person has demand or other rights to cause the Company to
file any registration statement under the Securities Act relating to any
securities of the Company or any right to participate in any such registration
statement.
(f) ENFORCEABILITY. The Company has duly authorized, executed and
delivered this Agreement and the Transaction Documents to which it is a party,
and this Agreement and the Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
10
<PAGE>
creditors' rights generally and subject to general principles of equity and
limitations on availability of equitable relief, including specific performance,
and except as rights to indemnification therein may be limited by applicable
laws.
(g) ABSENCE OF CONFLICTS. Except as set forth in SCHEDULE 4.01(G), the
Company's execution, delivery and performance of its obligations under this
Agreement and the other Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, do not and will not (i) contravene
its Certificate of Incorporation or By-laws, (ii) violate, conflict with or
constitute a default under (with or without notice of lapse of time or both) any
law, rule, regulation, order, judgment or decree applicable to or binding upon
the Company or its properties, which violation would have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole, (iii) constitute a
breach or default under (with or without notice or lapse of time or both) or
require any consent under any agreement or instrument to which the Company is a
party or by which the Company or its properties is bound or affected, which
breach or default, or the absence of such consent, would have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole, or (iv) require any
consent, permit, approval, action, filing or recording of any third party or
U.S. federal, state and local, or any foreign, governmental authority.
(h) FINANCIAL STATEMENTS. The Financial Statements are correct in all
material respects, present fairly the financial condition and results of
operations of the Company as of the dates and for the periods indicated, and
have been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied.
(i) SEC REPORTS. Since December 30, 2000, the Company has filed with
the Commission all reports (the "SEC REPORTS") each in the form (including
exhibits and any amendments thereto) required to be filed by it under the
Exchange Act. All of the SEC Reports filed by the Company comply in all material
respects with the requirements of the Exchange Act. All financial statements
contained in the SEC Reports have been prepared in accordance with GAAP
consistently applied throughout the period indicated and in conformity with the
SEC's Regulation S-X. Each balance sheet presents fairly in accordance with GAAP
the financial position of the Company as of the date of such balance sheet, and
each statement of operations, of stockholders' equity and of cash flows presents
fairly in accordance with GAAP the results of operations, the stockholders'
equity and the cash flows of the Company for the periods then ended.
(j) SECURITIES LAWS. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4.02 hereof, the issuance of
the Shares and the Dividend Shares and the Conversion Shares will be exempt from
the registration requirements of the Securities Act and applicable state
securities laws. Neither the Company nor its agents has solicited or will
solicit any offers to sell or has offered to sell, or will offer to sell all or
any part of the Shares to any person or persons so as to make the exemption from
registration under the Securities Act unavailable.
11
<PAGE>
(k) BROKER'S FEE. No brokers or finders are entitled to compensation
in connection with the sale of the Shares or the issuance of the Dividend Shares
and Conversion Shares attributable to any agreement or commitment made by or on
behalf of the Company.
(l) EXEMPTION FROM STATE ANTI-TAKEOVER LAWS. No "moratorium," "control
share acquisition," shareholder approval requirement, Company "poison pill"
plan, or other form of anti-takeover statute or regulation applies to the
transactions contemplated by this Agreement if such transactions are consummated
in the manner contemplated by this Agreement.
(m) RIGHTS AGREEMENT. Prior to the execution of this Agreement, the
Company has amended its Amended and Restated Rights Agreement dated as of May
15, 1997 with American Stock Transfer & Trust Purchasers (the "RIGHTS
AGREEMENT") so that the execution of this Agreement and the Transaction
Documents and consummation of the transactions contemplated hereby and thereby
do not and will not, with or without the passage of time, result in (i) the
grant of any rights to any person under the Rights Agreement or enable or
require Company's outstanding rights to be exercised, distributed or triggered,
(ii) the Purchasers or any of their Affiliates becoming an "Acquiring Person"
(as defined in the Rights Agreement), or (iii) a "Distribution Date" (as defined
in the Rights Agreement).
(n) BOARD OF DIRECTORS. The members of the Board of Directors of the
Company consist of nine members of which Mr. Dino Tabacchi and one designee of
Carlyle have been duly elected as directors.
(o) DEBT REDUCTION. On the Closing Date, Cadle shall have acquired all
rights under the Fleet Loan Documents, the amount of indebtedness of the Company
under the Fleet Loan Documents shall have been reduced to $2,000,000, and all
events of default, defaults, and matters that with the passage of time would
mature into defaults under the Fleet Loan Documents shall have been waived by
Cadle as of the Closing Date. This Agreement and the Transaction Documents and
consummation of the transactions contemplated hereby and thereby will not
violate any provisions of the Fleet Loan Documents as revised. The Fleet Loan
Documents as revised and as shall be in full force and effect on the Closing
Date contain no financial covenants, negative covenants or affirmation covenants
that could have a Material Adverse Effect on the Company and its subsidiaries
taken as whole. None of the Company or any of its officers, directors,
employees, agents or affiliates are parties to any side letters or other
agreements with Cadle, Fleet or any of their respective officers, directors,
employees, agents or affiliates other than the Sixth Loan Modification
Agreement. None of the Company or any officers, directors, employee, agent or
affiliate of the Company or any of its subsidiaries is affiliated with or
otherwise related to Cadle or any of its officers, directors, employees, agents
or affiliates.
(p) NO PENDING TRANSACTIONS. Except for the transactions contemplated
by this Agreement and the Transaction Documents, neither the Company nor any
subsidiary is a party to or bound by or the subject of any agreement,
undertaking, commitment or discussions or negotiations with any person or entity
that could result in (i) the sale, merger, consolidation or recapitalization of
the Company or any subsidiary, (ii) the sale of all or substantially all of the
12
<PAGE>
assets of the Company or any subsidiary, or (iii) a change of control of more
than five percent of the outstanding capital stock of the Company or any
subsidiary.
(q) DISCLOSURE. Neither this Agreement nor any of the Transaction
Documents which the Company is a party nor any Exhibits or Schedules hereto or
thereto, nor any report, certificate or instrument furnished to any Purchaser or
its counsel in connection with the transactions contemplated hereby or thereby,
when read together, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
(r) LITIGATION. There is no suit, claim, action, proceeding,
arbitration, hearing or investigation pending, or to the knowledge of the
Company, threatened against the Company or any of its subsidiaries or any
properties or assets, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole.
(s) CHANGES. Since the meeting of the Board of Directors of the
Company in November at which November estimated financial results were
distributed, there has not been any material adverse change in the assets,
liabilities, financial conditions, operating results of the Company and its
subsidiaries taken as a whole, or events or circumstances that could reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole.
SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each
Purchaser, severally but not jointly, represents and warrants to the Company as
follows:
(a) INVESTMENT INTENT. Purchaser is acquiring the Shares on the
Closing Date for its own account for the purpose of investment and not with a
view to, or for sale in connection with, the distribution thereof, and it has no
present intention of distributing or selling such Shares. Such Purchaser
understands that such Shares have not been registered under the Securities Act
or the securities laws of any state or other jurisdiction and that the Company
has no obligation to so register the Shares other than pursuant to the
Registration Rights Agreement dated the Closing Date. Such Purchaser hereby
agrees not to make any sale, transfer or other disposition of such Shares unless
either (i) such Shares have been registered under the Securities Act and all
applicable state and other securities laws and any such registration remains in
effect or (ii) the Company shall have received an opinion of counsel in form and
substance satisfactory to the Company that registration is not required under
the Securities Act or under applicable securities laws.
(b) OPPORTUNITY TO INVESTIGATE. The Purchaser (i) has had the
opportunity to ask questions concerning the Company and all such questions posed
have been answered to its satisfaction; (ii) has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Company; and (iii) has such knowledge
and experience in financial and business matters that it is able to
13
<PAGE>
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
(c) ACCREDITED INVESTOR. Such Purchaser is an "accredited investor" as
such term is defined in Regulation D under the Securities Act.
(d) ENFORCEABILITY. Such Purchaser has duly authorized, executed and
delivered the Transaction Documents to which it is a party, and this Agreement
and such Transaction Documents constitute the legal, valid and binding
obligations of such Purchaser, enforceable in accordance with their respective
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject to general principles of equity and
limitations on availability of equitable relief, including specific performance,
and except as rights to indemnification therein may be limited by applicable
laws.
(e) BROKER'S FEE. Except as heretofore disclosed in writing by such
Purchaser to the Company, no brokers or finders are entitled to compensation in
connection with the sale of the Shares attributable to any agreement or
commitment made by or on behalf of such Purchaser.
(f) With respect to such Purchaser that is a corporation:
(i) ORGANIZATION AND STANDING OF THE PURCHASER. Such Purchaser is
a duly organized and validly existing corporation in good standing and has
all requisite corporate power and authority to own and operate its assets
and properties and to conduct its business as presently conducted, except
where the failure to do so would not have a material adverse effect on the
Purchaser and its subsidiaries taken as a whole.
(ii) CORPORATE ACTION. Such Purchaser has all necessary corporate
or other power and has taken all corporate or other action required to
authorize its execution and delivery of, and its performance under, this
Agreement and the Transaction Documents to which it is a party and has all
necessary corporate power and has taken all corporate action required to
authorize its purchase of the Shares and to consummate the other
transactions contemplated by the Transaction Documents.
(g) FOREIGN PURCHASERS. If such Purchaser resides in a country other
than the United States, such Purchaser represents and warrants that the purchase
of the Shares by such Purchaser is in compliance with the applicable laws of its
jurisdiction.
ARTICLE V
COVENANTS
SECTION 5.01 BOARD OF DIRECTORS. For a period of three years following the
Closing Date, the Company's Board of Directors shall take such action as may be
consistent with its fiduciary duties to cause the Board of Directors to remain
consistent with its current composition subject to the following: (a) Mr.
Tabacchi and one representative of Carlyle will be
14
<PAGE>
members of the Board of Directors of the Company, (b) Mr. Marco Brustio will be
a director of the Company, and (c) the Board shall nominate an additional
director who shall have significant financial and accounting expertise and who
is neither employed by the Company nor an Affiliate of the Company as an
employee or consultant and the identity and financial and accounting experience
of such director shall be reasonably satisfactory to Carlyle; and (d) Mr.
Tabacchi shall have the right to designate the director to fill the first
vacancy on the Board of Directors of Company (other than vacancies caused by the
resignation, removal or failure to nominate a director by Carlyle or Mr.
Brustio) following the Closing.
SECTION 5.02 TRANSACTION DOCUMENTS. The Company and each of the Purchasers
covenant that each of them will execute and deliver at Closing the Transaction
Documents to which it is a party. Each Purchaser covenants to each other
Purchaser that it or its affiliate named therein will execute and deliver the
Put and Right of First Refusal Agreement at Closing.
SECTION 5.03 COOPERATION. Each party shall endeavor in good faith to
perform and fulfill all conditions and obligations on their respective parts to
be fulfilled or performed hereunder or under the other Transaction Documents, to
the end that the transactions contemplated hereby and thereby will be fully and
timely consummated.
SECTION 5.04 DIVIDEND SHARES. Simultaneously with the Closing, the Company
shall issue to each Carlyle entity the number of Dividend Shares set forth
opposite the name of each Carlyle entity on Exhibit B attached hereto in payment
of accrued and unpaid dividends on the shares of Series B Stock held by each of
them to and including the date of this Agreement. At Closing, the Company will
deliver to Carlyle evidence reasonably satisfactory to Carlyle that certificates
representing the number of Dividend Shares issued to each Carlyle entity will be
delivered to each Carlyle entity no later than two Business Days following the
Closing Date. The Company covenants that the Dividend Shares when issued will be
duly authorized, validly issued, fully paid and non-assessable and will be free
and clear of all liens, security interests, pledges, hypothecation and other
encumbrances.
SECTION 5.05 CONVERSION SHARES. Simultaneously with the Closing, the
Company shall issue to each Carlyle entity the number of Conversion Shares set
forth opposite the name of each Carlyle entity on Exhibit C attached hereto upon
conversion of the number of shares of Series B Stock set forth opposite the name
of each Carlyle entity on Exhibit C. At Closing, the Company will deliver to
Carlyle, evidence reasonably satisfactory to Carlyle that certificates
representing the number of Conversion Shares issued to each Carlyle entity will
be delivered to each Carlyle entity no later than two Business Days following
the Closing Date. The Company covenants that the Conversion Shares when issued
will be duly authorized, validly issued, fully paid and non-assessable and will
be free and clear of all liens, security, interests, pledges, hypothecation and
other encumbrances.
SECTION 5.06 THIRD PARTY CONSENTS; REGULATORY MATTERS. Each of the Company
and each Purchaser will (i) make on a prompt and timely basis all governmental
or regulatory notifications, filings or submissions, under U.S. federal, state
and local, and foreign, law, rules and regulations, necessary for the
consummation of the transactions contemplated by this
15
<PAGE>
Agreement and the Transaction Documents, and (ii) use reasonable efforts to
take, or cause to be taken, all other action and do, or cause to be done, all
other reasonable things necessary or appropriate to consummate the transactions
contemplated by this Agreement. None of the Purchasers shall have any obligation
to expend funds for the Company to consummate the transactions contemplated
herein.
SECTION 5.07 CANCELLATION OF CLASS I (MIRROR) AND CLASS II WARRANTS HELD BY
CARLYLE. Simultaneously with the Closing and issuance of the Shares, Dividend
Shares and Conversion Shares, the Carlyle entities and the Company covenant and
agree that the Class I (Mirror) and Class II Warrants held by each Carlyle
entity shall be marked cancelled on the books and records of the Company and
will be of no further force and effect.
ARTICLE VI
LIMITATIONS AND RESTRICTIONS
SECTION 6.01 RESTRICTIONS ON SALES BY PURCHASERS. Subject to the provisions
of Section 6.02 herein, each Purchaser agrees that until the date that is two
years after the Closing Date, it will not, nor will it permit any of its
Affiliates to, sell, solicit an offer to sell or propose to sell, any Shares
purchased at the Closing except as follows:
(a) each Purchaser may transfer Shares to any of its Affiliates or to
any other Purchaser so long as such Affiliates or Purchaser agree in writing to
be bound by the terms of this Article VI;
(b) each Purchaser may transfer Shares to any of its Affiliates upon
the occurrence of a Liquidity Event; and
(c) each Purchaser may transfer Shares to any of its Affiliates if and
to the extent permitted under Rule 144 promulgated under the Securities Act of
1933, as amended.
(d) the Carlyle entities may transfer Shares pursuant to and in
accordance with the Put and Right of First Refusal Agreement.
(e) each Purchaser may transfer Shares, pursuant to the Registration
Rights Agreement.
SECTION 6.02 REGISTRATION RIGHTS. At or prior to the Closing, the Company
shall execute and tender to the Purchasers for execution by them a Registration
Rights Agreement (the "Registration Rights Agreement") in form and substance
satisfactory to the Company and the Purchasers.
16
<PAGE>
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telecopy or facsimile transmission (receipt confirmed), (iii) sent
by international overnight or express courier, or (iv) sent by registered mail,
return receipt requested, postage prepaid.
If to the Company: Sight Resource Corporation
6725 Miami Avenue, Suite 102
Cincinnati, Ohio 45243
Attn: Chief Executive Officer
Fax: (513)
with a copy to: Thompson Hine LLP
2000 Courthouse Plaza, N.E.
Dayton, Ohio 45402
Attn: J. Michael Herr, Esq.
If to the Purchasers: To the addresses set forth on EXHIBIT A
With a copy to: Carlyle Entities
c/o Carlyle Venture Partners, L.P.
1001 Pennsylvania Avenue
Suite 220 South
Washington, D.C. 20004
Attn: Ryan Schwarz
Fax: (202) 347-1818
Wilmer, Cutler & Pickering
100 Light Street
Baltimore, MD 21202
Attn: John B. Watkins, Esq.
(If to Excalibur Investments B.V. or La Sesta S.A.)
Collier, Halpern, Newberg, Nolletti & Bock, LLP
One North Lexington Avenue
White Plains, NY 10601
Attn: David A. Newberg, Esq.
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telecopy or facsimile transmission, at the time that receipt
thereof has been acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight or express courier, on the Business Day following the day such
notice is
17
<PAGE>
delivered to the courier service, or (iv) if sent by
registered mail, on the fifth Business Day following the day such mailing is
made.
SECTION 7.02 LEGENDS. Each Purchaser acknowledges that, until registered
under the Securities Act and any applicable state securities laws or transferred
pursuant to the provisions of Rule 144 promulgated under the Securities Act
("RULE 144"), each certificate representing a Share, whether upon initial
issuance or upon any transfer thereof, shall bear a legend (and the Company and
its transfer agent shall make a notation on its books of transfer to such
effect), prominently stamped or printed thereon, in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
LAWS OF ANY APPLICABLE STATE OR OTHER JURISDICTION, HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE
SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES
UNDER THE ACT AND ANY SECURITIES LAWS OF ANY APPLICABLE STATE OR OTHER
JURISDICTION OR A WRITTEN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR UNDER OTHER APPLICABLE SECURITIES LAWS."
SECTION 7.03 TERMINATION. If the Closing has not occurred on or prior to
February 15, 2003, or if prior to the Closing the Company or any Purchaser has
been notified that the U.S. Department of Justice or the Federal Trade
Commission, or any other Federal, state or other governmental agency or
instrumentality the consent or approval of which is contemplated by the terms of
this Agreement or any other Transaction Document, is prepared to (a) seek a
preliminary injunction to enjoin the consummation of the transactions
contemplated hereunder or thereunder or (b) grant such consent or approval upon
the condition that any material action or forbearance of action not otherwise
specifically required of the party choosing to terminate pursuant to this
Section 7.03 be taken, then (i) the Company may terminate this Agreement by
written notice to the Purchasers and (ii) the Purchasers may terminate this
Agreement by written notice to the Company.
SECTION 7.04 ACTION BY PURCHASERS. In any situation in which this Agreement
either grants to the Purchasers as a group any rights or calls for the consent
or waiver of the Purchasers as a group, such rights may be exercised, or such
consent or waiver may be granted in writing by the Purchasers holding 80% of the
Shares then held by all Purchasers (or if no Shares have then been purchased, by
Purchasers entitled to purchase a majority of the Shares to be purchased.)
SECTION 7.05 ENTIRE AGREEMENT. This Agreement, together with its Exhibits
and Schedules, embodies the entire agreement and understanding between the
parties hereto with respect to the provisions hereof and supersedes all prior
oral or written agreements and
18
<PAGE>
understandings relating to the provisions hereof. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.
SECTION 7.06 MODIFICATIONS AND AMENDMENTS. The material terms and
provisions of this Agreement may be modified or amended only by written
agreement executed by all parties hereto.
SECTION 7.07 WAIVERS AND CONSENTS. Except as other than expressly provided
herein, the terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by all
parties to this Agreement. No such waiver or consent shall be deemed to be or
shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given, and shall not constitute a continuing waiver or consent.
SECTION 7.08 ASSIGNMENT. The rights and obligations under this Agreement
may not be assigned by any Purchaser on the one hand or by the Company on the
other hand without the prior written consent of all other parties hereto (which
consent shall not be unreasonably withheld), except that each Purchaser without
the consent of the Company may assign this Agreement or any of its rights or
obligations to an Affiliate of such Purchaser or to an entity (other than an
entity that competes with the Company) with which the Purchaser shall merge or
consolidate or to which the Purchaser shall sell or assign all or substantially
all of its assets.
SECTION 7.09 BENEFIT. All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person
or entity shall be regarded as a third-party beneficiary of this Agreement.
SECTION 7.10 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the law of the State of Delaware, without giving effect to the conflict of law
principles thereof.
SECTION 7.11 SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then such
provision shall be deemed limited to the extent that such court deems it
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
SECTION 7.12 INTERPRETATION. The parties hereto acknowledge and agree that:
(i) each party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all
19
<PAGE>
parties hereto and not in favor of or against any party, regardless of which
party was generally responsible for the preparation of this Agreement. The
Recitals and Exhibits and Schedules to this Agreement are hereby incorporated by
reference herein.
SECTION 7.13 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify or affect the meaning or construction of any of the terms
or provisions hereof.
SECTION 7.14 ENFORCEMENT. Each of the parties hereto acknowledges and
agrees that the rights acquired by each party hereunder are unique and that
irreparable damage would occur in the event that any of the provisions of this
Agreement to be performed by the other party were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, in addition
to any other remedy to which the parties hereto are entitled at law or in
equity, each party hereto shall be entitled to an injunction or injunctions
(without the necessity of posting a bond) to prevent breaches of this Agreement
by the other party.
SECTION 7.15 NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay
by a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing between the parties hereto, shall operate as a waiver
of any such right, power or remedy of the party. No single or partial exercise
of any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
SECTION 7.16 EXPENSES. The Company shall pay its own and each of the
Purchasers fees and expenses (including reasonable attorneys fees, expenses,
disbursements) in connection with this Agreement and the Transaction Documents,
and the transactions contemplated hereby and thereby whether or not the
transactions contemplated hereby and thereby are consummated.
SECTION 7.17 CONFIDENTIALITY. Each of the Purchasers, on the one hand, and
the Company, on the other hand, acknowledges and agrees that any information or
data it has acquired from the other, not otherwise properly in the public
domain, was received in confidence. Each party agrees not to divulge,
communicate or disclose, or use to the detriment of the disclosing party or for
the benefit of any other person or persons, or misuse in any way, any
confidential information of the disclosing party concerning the subject matter
hereof; PROVIDED that (i) the foregoing obligation with respect to the
disclosure and use of such information shall not apply to any information which
such party can reasonably demonstrate (prior to disclosure or, if immediate
disclosure is required under clause (o) below, promptly after disclosure) (A)
was at the time of disclosure to such party or thereafter, but prior to its
disclosure by such party to any third party, through no fault of such party,
publicly available (other than as a result of disclosure
20
<PAGE>
by such party), (B) has been disclosed to such party on a nonconfidential basis
from a source other than any other party which, to such party's knowledge, was
not prohibited from disclosing such information to such party by a legal,
contractual, fiduciary or other obligation, (C) has been independently developed
by the such party without the violation of any of my obligations under this
Agreement, or (D) is required to be disclosed by applicable law (including,
without limitation, the federal securities laws) and (ii) such party may, if
required by subpoena or valid legal process, disclose any such information, but
only to the extent so required and only after using its best efforts to give the
other party or parties (as the case may be) prior notice of such required
disclosure in order to afford such party or parties an opportunity to obtain an
injunction, a protective order or other relief.
SECTION 7.18 PUBLICITY. Neither the Purchasers on the one hand nor the
Company on the other hand shall issue any press release or otherwise make any
public statement with respect to the execution of, or the transactions
contemplated by, this Agreement or any of the Transaction Documents, without the
prior written consent of the other, except as may be required by applicable law,
rule or regulation. However, the parties recognize that the Company is a
publicly held company obligated under the Federal securities laws to make
disclosures of material events affecting it. Consequently, if the Company is
advised by its counsel that it is required to make such announcement under
Federal or state securities laws, the Company may make such announcement. The
Company agrees promptly to inform the Purchasers of such advice by counsel,
provide a copy of such announcement prior to disclosure and, if practicable, to
give the Purchasers an opportunity to comment upon the form of any required
announcement.
SECTION 7.19 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. With regard to this Agreement and any other
document relating to the transactions to be consummated under this Agreement, a
party's execution may be evidenced by, and a party's delivery may be effected
by, facsimile transmission.
SECTION 7.20 OBLIGATIONS SEVERAL, NOT JOINT. The obligations of each
Purchaser hereinunder and under the Transactions Documents are several and not
joint. No Purchaser shall be liable for breach of this Agreement or any
Transaction Document by any other Party hereto or thereto. Notwithstanding
anything in this Agreement to the contrary, no Purchaser shall be obligated to
purchase any Shares, or consummate any other transactions contemplated by this
Agreement and the Transaction Documents unless each of the other Purchasers
shall purchase the Shares set forth opposite the name on Exhibit A and executes
and delivers this Agreement and each Transaction Document to which it is a party
or causes its affiliates or designees to execute and deliver each Transaction
Document to which it is a party.
[Remainder of page intentionally left blank]
21
<PAGE>
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed in their names by their duly authorized officers or
representatives effective as of the date first above written.
THE COMPANY:
SIGHT RESOURCE CORPORATION
By /s/ Carene S. Kunkler
-------------------------------------
Carene S. Kunkler
President & Chief Executive Officer
PURCHASERS:
/s/ E. Dean Butler
----------------------------------------
E. DEAN BUTLER
Number of Shares: 1,250,000
---------
Aggregate Purchase Price: $250,000.00
-----------
EXCALIBUR INVESTMENTS B.V.
By /s/ Dino Tabacchi
-------------------------------------
Name: Dino Tabacchi
Title:
Number of Shares: 5,500,000
---------
Aggregate Purchase Price: $1,100,000.00
-------------
22
<PAGE>
LA SESTA S.A.
By /s/ Marco Brustio
-------------------------------------
Name: Marco Brustio
Title: Chairman
Number of Shares: 3,000,000
---------
Aggregate Purchase Price $600,000.00
-----------
CARLYLE VENTURE PARTNERS, L.P.
By /s/ Robert Grady
-------------------------------------
Name: Robert Grady
Title: Managing Director
Number of Shares: 1,940,295
---------
Aggregate Purchase Price $388,059.00
-----------
CARLYLE U.S. VENTURE PARTNERS, L.P.
By /s/ Robert Grady
-------------------------------------
Name: Robert Grady
Title: Managing Director
Number of Shares: 257,335
-------
Aggregate Purchase Price $51,467.00
----------
C/S VENTURE INVESTORS, L.P.
By /s/ Robert Grady
-------------------------------------
Name: Robert Grady
Title: Managing Director
Number of Shares: 396,255
-------
Aggregate Purchase Price $79,251.00
----------
23
<PAGE>
CARLYLE VENTURE COINVESTMENT, L.L.C.
By /s/ Robert Grady
-------------------------------------
Name: Robert Grady
Title: Managing Director
Number of Shares: 156,115
-------
Aggregate Purchase Price $31,223.00
----------
24
<PAGE>
EXHIBIT A
NAME AND ADDRESS AGGREGATE NUMBER OF AGGREGATE
OF PURCHASER SHARES PURCHASED PURCHASE PRICE
------------ ---------------- --------------
Carlyle Venture Partners, L.P.
c/o
The Carlyle Group 1,940,295 $388,059
1001 Pennsylvania Ave. N.W.
Washington, DC 20004
Attn: Ryan Schwarz
Carlyle U.S. Venture Partners, L.P.
c/o
The Carlyle Group 257,335 $51,467
1001 Pennsylvania Ave. N.W.
Washington, DC 20004
Attn: Ryan Schwarz
C/S Venture Investors, L.P.
c/o
The Carlyle Group 396,255 $79,251
1001 Pennsylvania Ave. N.W.
Washington, DC 20004
Attn: Ryan Schwarz
Carlyle Venture Coinvestment, L.L.C.
c/o
The Carlyle Group 156,115 $31,223
1001 Pennsylvania Ave. N.W.
Washington, DC 20004
Attn: Ryan Schwarz
E. Dean Butler
4325 Drake Road
Cincinnati, Ohio 45243-4209 1,250,000 $250,000
<PAGE>
NAME AND ADDRESS AGGREGATE NUMBER OF AGGREGATE
OF PURCHASER SHARES PURCHASED PURCHASE PRICE
------------ ---------------- --------------
Excalibur Investments B.V.
Leidseplein 98, 5,500,000 $1,100,000
1017 PP Amsterdam
Postbus 782
1000 AT
Amsterdam
With a copy to:
Dino Tabacchi
Via Patriarcato 15
35100 Padova
ITALY
NO EIN
La Sesta S.A.
c/o MEVEA s.a.r.l.
(Attention Mr. R. Meneguz) 3,000,000 $600,000
6-12 Place d' Armes
L-1136 Luxembourg
TOTALS: 12,500,000 $2,500,000
<PAGE>
EXHIBIT B
NAME OF CARLYLE ENTITY AND
NUMBER OF DIVIDEND SHARES
TO BE ISSUED BY COMPANY TO EACH OF THEM
IN LIEU OF PAYMENT OF CASH DIVIDENDS
SET FORTH OPPOSITE NAME OF EACH OF THEM
NUMBER OF SHARES OF COMMON
STOCK ISSUED IN LIEU OF
PAYMENT OF CASH DIVIDEND
FISCAL QUARTER ENDED ACCRUED CASH
NAME DIVIDEND
Carlyle Venture Partners, L.P. 11/30/02 $358,426 1,305,025
C/S Venture Investors, L.P. 11/30/02 $73,199 266,517
Carlyle U.S. Venture Partners, L.P. 11/30/02 $47,537 173,080
Carlyle Venture Coinvestment, L.L.C. 11/30/02 $28,839 105,003
<PAGE>
EXHIBIT C
NAME OF CARLYLE ENTITY AND NUMBER OF
CONVERSION SHARES ISSUED BY THE COMPANY
TO EACH CARLYLE ENTITY UPON CONVERSION OF
SHARES OF SERIES B STOCK SET FORTH OPPOSITE NAME OF EACH
NUMBER OF SHARES OF COMMON
STOCK ISSUED UPON CONVERSION
OF SHARES OF SERIES B STOCK
NAME
Carlyle Venture Partners, L.P. 2,288,773
C/S Venture Investors, L.P. 467,421
Carlyle U.S. Venture Partners, L.P. 303,551
Carlyle Venture Coinvestment, L.L.C. 184,155
<PAGE>
EXHIBIT D
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is made as of
December__, 2002 by the undersigned purchasers (each a "Purchaser" and
collectively the "Purchasers"), SIGHT RESOURCE CORPORATION, a Delaware
Corporation ("SRC") and DONALD D. BUTLER (the "Escrow Agent").
RECITALS:
WHEREAS, SRC and the Purchasers have agreed to enter into a
Common Stock Purchase Agreement, dated December ___, 2002 (the "Purchase
Agreement").
WHEREAS, capitalized terms not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
WHEREAS, pursuant to the Purchase Agreement, the Purchasers
will deposit funds into escrow on or prior to the execution of the Purchase
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. ESCROW AGENT. The Purchasers and SRC do hereby appoint the
Escrow Agent as the escrow agent for the purposes set forth herein, and Escrow
Agent hereby accepts such appointment, subject to the terms and conditions
contained in this Agreement.
2. PAYMENT INTO ESCROW. Each Purchaser will deposit with the
Escrow Agent the amount set forth opposite his/her/its names on EXHIBIT A as the
"Amount of Deposit" on or prior to the execution of the Purchase Agreement, in
the aggregate amount of the Escrowed Funds. The Amount of Deposit shall be
hereinafter referred to as the "Escrowed Funds." The Escrow Agent will hold the
Escrowed Funds in escrow pursuant to the terms of this Agreement.
3. NO INTEREST ON THE DEPOSIT. The Escrow Agent shall invest
the Escrowed Funds in a non-interest bearing account.
4. DISTRIBUTION OF THE ESCROWED FUNDS. The Escrow Agent shall
hold and continue to hold the Escrowed Funds until the same are disbursed as
provided in this Section 4 and in Section 6.
4.1 At the Closing of the Purchase Agreement, and subject to satisfaction
or waiver of applicable conditions as set forth in the Purchase
Agreement, the Escrow Agent shall pay the entire amount of the Escrowed
Funds to SRC as payment for the Shares under the Purchase Agreement. If
so instructed by SRC, the Escrow Agent shall transmit all or a
<PAGE>
portion of the Escrowed Funds to Fleet National Bank ("Fleet") for
application against amounts owing by SRC to Fleet.
4.2 If the Closing Date does not occur prior to [FEBRUARY 15,
2003,] then on or promptly after such date, the Escrow Agent shall return to
each Purchaser the amount such Purchaser contributed to the Escrowed Funds in
accordance with the written instructions of such Purchaser.
5. TERMINATION. The escrow provided hereunder shall expire
completely upon the release of all Escrowed Funds, and this Agreement, except
for the provisions of Sections 6.3 and 6.7 hereof, shall terminate.
6. ESCROW AGENT
6.1 ESCROW AGENT'S FEES. Escrow Agent shall not charge for its
services under this Agreement. SRC shall reimburse Escrow Agent to the extent
that Escrow Agent properly incurs fees and expenses in carrying out its duties
under this Agreement.
6.2 DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Escrow Agent hereunder shall be limited to those
expressly set forth in this Agreement, and the Escrow Agent shall not be bound
in any way by any other contract or agreement between the parties hereto,
whether or not the Escrow Agent has knowledge of any such contract or agreement
or of the terms or conditions thereof. In the event the Escrow Agent shall be
uncertain as to any duties or responsibilities hereunder or shall receive
instructions from any of the parties hereto with respect to the Escrowed Funds
which in its belief are in conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action until it shall
be directed to do so in writing by order of a court of competent jurisdiction
(the time for all appeals therefrom having expired) in proceedings which the
Escrow Agent or any other party hereto shall be entitled to commence. The Escrow
Agent may act upon any instrument or other writing (including wire transfer
instructions) believed in good faith to be genuine and to be signed and
presented by the proper person or persons and may assume that any person
purporting to give notice, instruction, consent or request or acknowledge
receipt in connection with the provisions hereof has been duly authorized to do
so and that the same is properly made or given. The Escrow Agent may rely upon
any order, judgment, certification, demand or other writing delivered to it
without being required to determine the propriety or validity of the service
thereof or the jurisdiction of any court.
6.3 LIABILITY. The Escrow Agent undertakes to perform such
duties as are expressly set forth herein and no additional duties or obligations
shall be implied hereunder. The duties of the Escrow Agent are purely
ministerial in nature and shall not be construed as fiduciary and the Escrow
Agent will not be liable for any error in judgment, or for any mistake of fact
or law, or for any act done or step taken or omitted by it in good faith, or for
anything which it may do or refrain from doing in connection herewith, except
for willful misconduct or gross negligence. Accordingly, and without limiting
the foregoing, the Escrow Agent shall not incur any such liability with respect
to (a) any action taken or omitted under this Agreement, except for willful
misconduct or gross negligence, or (b) any action taken or omitted in reliance
upon any instrument, including any written notice or instruction provided for
herein, not only as to its due execution by
<PAGE>
an authorized person and as to the validity and effectiveness of such
instrument, and also as to the truth and accuracy of any information contained
therein. In no event will the Escrow Agent be liable for indirect, punitive,
special or consequential damages.
6.4 DISPUTES. In the event of a dispute between any of the
parties hereto sufficient in the discretion of the Escrow Agent to justify its
doing so, the Escrow Agent shall be entitled to tender the Escrowed Funds into
the registry or custody of any court of competent jurisdiction, to initiate such
legal proceedings as it deems appropriate, and pursuant thereto, to be
discharged from all further duties and liabilities under this Agreement with
respect to the Escrowed Funds so tendered. Any such legal action may be brought
in any such court as the Escrow Agent shall determine to have jurisdiction with
respect to such matter. The filing of any such legal proceedings shall not
deprive the Escrow Agent of its rights to indemnification hereunder.
6.5 ATTACHMENT. In the event all or any part of the Escrowed
Funds shall be attached, garnished or levied upon pursuant to any court order,
or the delivery thereof shall be stayed or enjoined by a court order, or any
other order, judgment or decree shall be made or entered by any court affecting
the Escrowed Funds or any part hereof or any act of the Escrow Agent, the Escrow
Agent is authorized to obey and comply with all writs, orders, judgments or
decrees so entered or issued by any such court, without the necessity of
inquiring whether such court has jurisdiction; and if the Escrow Agent obeys or
complies with any such writ, order, or decree, it shall not be liable to the
parties hereto or any other person by reason of such compliance.
6.6 LEGAL ACTION. The Escrow Agent shall have no duty to incur
any out-of-pocket expenses or to take any legal or other action in connection
with this Agreement or towards its enforcement, or to appear in, prosecute or
defend any action or legal proceeding that would result in or might require it
to incur any cost, expense, loss, or liability, unless and until it shall be
indemnified with respect thereto in accordance with Section 6.7 of this
Agreement.
6.7 INDEMNIFICATION. The Purchasers and SRC jointly and
severally hereby agree to indemnify and hold harmless the Escrow Agent (and its
officers, directors, employees and agents) against any and all cost, loss,
damage, disbursement, liability, and expense, including reasonable attorneys'
fees, which may be imposed upon or incurred by the Escrow Agent hereunder, or in
connection with the performance of its duties hereunder, including any
litigation arising out of this Agreement, or involving the subject matter
hereof.
6.8 RESIGNATION. The Escrow Agent, and the Escrow Agent's
successors hereinafter appointed, may at any time resign by giving notice in
writing to the Purchasers and SRC and shall be discharged of all duties
hereunder upon the appointment of a successor escrow agent which shall be
appointed by mutual agreement of the SRC and the unanimous consent of the
Purchasers. If the parties are unable to agree on a successor escrow agent
within 10 days after such notice, any of such parties may petition a court of
competent jurisdiction to appoint one. From the date upon which the Escrow Agent
sends notice of any resignation until the acceptance by a successor escrow agent
appointed as provided herein, the Escrow Agent's sole obligation hereunder shall
be to hold the Escrowed Funds delivered to it in accordance with this Agreement.
7. MODIFICATION OR AMENDMENT. No modification or amendment of
any provision of this Agreement shall be effective unless made in a written
instrument, duly executed
<PAGE>
by the party to be bound thereby, which refers specifically to this Agreement
and states that an amendment or modification is being made in the respects set
forth in such instrument.
8. NOTICES. Any and all notices or other communications or
deliveries required or permitted to be given or made pursuant to any provisions
of this Agreement shall be deemed to have been duly given or made for all
purposes if (i) hand delivered, (ii) sent by a nationally recognized overnight
courier or (iii) sent by telephone facsimile transmission (with prompt oral
confirmation of receipt) as follows:
If the Escrow Agent: Donald D. Butler
7 Spring Knoll Drive
Cincinnati, Ohio 45227
Fax:
IF TO THE PURCHASERS: TO THE ADDRESSES SET FORTH OPPOSITE EACH PURCHASER'S
name on EXHIBIT A
If to SRC: Sight Resource Corporation
6725 Miami Avenue
Cincinnati, Ohio 45243
Phone: (513) 527-9700
Fax: (513) 527-9708
With a copy to: J. Michael Herr, Esq.
Thompson Hine LLP
2000 Courthouse Plaza, N.E.
P.O. Box 8801
Dayton, Ohio 45401-8801
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 8. The date of giving of any such notice
shall be the date of hand delivery, the date sent by telephone facsimile, and
the day after delivery to an overnight courier service.
9. COUNTERPARTS. This Agreement may be executed by one or more
counterparts, each of which independently shall be deemed to be an original and
all taken together shall constitute one instrument.
10. WAIVERS AND CONSENTS. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only by
written document executed by the party or parties entitled to the benefits of
such terms or provisions. No such waiver or consent shall be deemed to be or
shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given, and shall not constitute a continuing waiver or consent.
<PAGE>
11. ASSIGNMENT. The rights and obligations under this
Agreement may not be assigned by the parties hereto without the prior written
consent of the other parties.
12. GOVERNING LAW. This Agreement shall be exclusively
governed by and construed in accordance with the domestic laws of the State of
Ohio without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of Ohio or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of Ohio.
13. SEVERABILITY. In the event that any word, phrase, clause,
sentence, or other provision of this Agreement shall violate or be deemed
unenforceable under any applicable statute, ordinance, or rule of law in the
jurisdiction which governs this Agreement, such provisions shall be ineffective
to the extent of such violation without invalidating any other provision hereof.
14. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein shall constitute the complete and entire agreement between
the parties hereto with respect to the subject matter hereof and shall supersede
all previous oral, written or implied negotiations and commitments and any other
writing with respect to such subject matter.
15. FORCE MAJEURE. The Escrow Agent shall not be responsible
for delays or failures in performance resulting from acts beyond its control.
Such acts shall include but not be limited to acts of God, strikes, lockouts,
riots, acts of war, epidemics, governmental regulations imposed after the fact,
fire, earthquakes or other disasters.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day first written above.
SIGHT RESOURCE CORPORATION
By:
----------------------------
Name:
--------------------------
TITLE:
--------------------------
ESCROW AGENT
-------------------------------
DONALD D. BUTLER
<PAGE>
PURCHASERS
------------------------------
E. Dean Butler
EXCALIBUR INVESTMENTS B.V.
By:
---------------------------------
Name:
---------------------------------
Title:
--------------------------------
EURO VENTURES EQUITY HOLDINGS B.V.
By:
---------------------------------
Name:
---------------------------------
Title:
--------------------------------
LA SESTA
By:
---------------------------------
Name: MARCO BRUSTIO
---------------------------------
Title:
--------------------------------
[CARLYLE ENTITIES]
By:
---------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE>
EXHIBIT A - PURCHASERS
NAME ADDRESS NUMBER OF SHARES AMOUNT OF DEPOSIT
---- ------- ---------------- -----------------
E. Dean Butler 4325 Drake Road
Cincinnati, Ohio 45243
La Sesta S.A. Siege Social 26 Boulevard
Royal L-2449
LUXEMBOURG
Euro Ventures Equity Holdings Leidseplein 98,
B.V. 1017 PP Amsterdam
Postbus 782
1000 AT
Amsterdam
Excalibur Investments B.V. Leidseplein 98,
1017 PP Amsterdam
Postbus 782
1000 AT
Amsterdam
Carlyle Entities
TOTAL:
<PAGE>
EXHIBIT E
PUT AND RIGHT OF FIRST REFUSAL AGREEMENT
[Omitted]
<PAGE>
EXHIBIT F
12/31/02
SIGHT RESOURCE CORPORATION
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of this
31st day of December, 2002 (the "Effective Date"), is made and entered into by
and among SIGHT RESOURCE CORPORATION, a Delaware corporation (the "Company"),
and the persons listed on EXHIBIT A attached hereto (each a "Purchaser" and
collectively the "Purchasers").
A. The Company entered into a certain Common Stock Purchase
Agreement dated of even date herewith (the "Purchase Agreement") with
each Purchaser, for the purchase by each Purchaser, and the issuance
and sale by the Company, of the number of shares of Common Stock, par
value $.01 per share (the "Common Stock"), of the Company, set forth
opposite the name of each Purchaser on EXHIBIT A attached hereto and
incorporated by reference herein, subject to the terms and conditions
specified therein.
B. The Purchase Agreement provides that simultaneously with
the closing of the issuance and sale of shares of Common Stock by the
Company, and the purchase of shares of Common Stock by each Purchaser,
the Company shall issue to each Carlyle entity the number of shares of
Common Stock set forth opposite the name of such Carlyle entity on
EXHIBIT B attached thereto and incorporated by reference herein in
payment of accrued and unpaid dividends on shares of Series B
Convertible Preferred Stock, par value $ .01 per share (the "Series B
Stock").
C. The Purchase Agreement provides that simultaneously with
the closing of the issuance and sale of shares of Common Stock by the
Company, and the purchase of shares of Common Stock by each Purchaser,
each share of Series B Stock held by each Carlyle shall convert into
the number of shares of Common Stock of the Company set forth opposite
the name of each Carlyle entity on EXHIBIT C.
D. The Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of each Purchaser and its
direct and indirect transferees successors and assigns upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
DEFINITIONS
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Purchase Agreement. For the purposes of this
Agreement the following Capitalized terms shall have the following meanings:
<PAGE>
"AFFILIATE" has the meaning ascribed to that term in Rule 12b-2 under
the Exchange Act (as defined below), or any successor rule.
"CARLYLE" means Carlyle Venture Partners, L.P., C/S Venture Investors,
L.P., Carlyle U.S. Venture Partners, L.P. and Carlyle Venture Coinvestment,
L.L.C.
"COMMON STOCK" means (a) the common stock, par value $.01 per share,
of the Company, (b) any other capital stock of the Company, however designated,
authorized on or after the date hereof, the holders of which shall have the
right, without limitation as to amount, either to all or to a share of the
balance of dividends and liquidating dividends or payments after the payment of
dividends and distributions on any shares entitled to preference, (c) all
securities of the Company convertible into, exercisable for or exchangeable for
shares of Common Stock of the Company; (d) any other securities into which or
for which any of the securities described in (a), (b), (c) and (d) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or other similar transaction; and (e) in the case of (a),
(b) and (d) as adjusted for stock splits, reverse stock splits and stock
dividends declared and paid thereon.
"COMMISSION" means the U.S. Securities and Exchange Commission or any
other governmental authority from time to time administering the Securities Act.
"CONVERSION SHARES" means the shares of Common Stock issued to Carlyle
on December 31, 2002 upon conversion of the shares of Series B Stock held by
Carlyle as set forth on EXHIBIT C to this Agreement, as adjusted for stock
splits, reverse stock splits and Common Stock dividends declared and paid
thereon, and securities issued with respect thereof in connection with any
recapitalization, merger, sale of assets or similar transaction.
"DTC" means the Depository Trust Company. "
DIVIDEND SHARES" means the shares of Common Stock issued to Carlyle on
December 31, 2002 in payment of accrued as unpaid shares of Series B Stock held
by Carlyle as set forth on EXHIBIT B to this Agreement, as for stock splits,
reverse stock splits and Common Stock dividends declared and paid thereon, and
securities issued with respect thereof in connection with any recapitalization,
merger, sale of assets or similar transactions.
"EFFECTIVE DATE" means December 31, 2002.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute and the rules and the regulations of the
Commission promulgated thereunder, all as the same shall be in effect from time
to time.
"NASD" means the National Association of Securities Dealers, Inc.
"PERSON" means any natural person, firm, partnership, association,
corporation, company, joint venture, unincorporated association, trust, business
trust, government or department or agency of a government, limited liability
company or other entity.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus
<PAGE>
filed as part of an effective registration statement in reliance upon Rule
430A), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering or any portion of the Registrable Securities covered
by such Registration Statement and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement, or, as the context may require, under the Exchange Act
or applicable state securities laws.
"REGISTRABLE SECURITIES" means (a) the shares of Common Stock
purchased by each Purchaser pursuant to the Purchase Agreement (b) all Dividend
Shares, (c) all Conversion Shares, and (d) any capital stock or other securities
of the Company issued or issuable with respect to the Common Stock, (i) upon any
conversion or exchange thereof, (ii) by way of stock dividend or other
distribution, stock split or reverse stock split, or (iii) in connection with a
combination of shares or recapitalization, or reorganization, merger or sale of
assets. As to any particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when (A) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (B) the Company is current in making its
filings pursuant to the Exchange Act and such securities become eligible to be
distributed to the public in reliance upon Rule 144 (or any successor provision)
under the Securities Act, PROVIDED THAT at the time such securities are proposed
to be disposed of, they may be sold under Rule 144 without any limitation on the
amount of such securities which may be sold or (C) they shall have ceased to be
outstanding. Registrable Securities that have cease to be Registrable Securities
pursuant to clause (B) of the foregoing sentence shall again become Registrable
Securities if the Company fails to remain current in making its filings pursuant
to the Exchange Act.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in compliance with Articles 2, 3 and 4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
Carlyle, and one counsel for all the other Purchasers, in an amount in each case
not to exceed $15,000, and all blue sky and state securities law fees (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company); PROVIDED, HOWEVER, that the Company shall
have no obligation to pay or otherwise bear any portion of the underwriter's
commissions or discounts attributable to the Registrable Shares.
"REGISTRATION STATEMENT" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 (or any successor provision) under the
Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
<PAGE>
"SPECIAL REGISTRATION" means the registration of shares of equity
securities and/or options or other rights in respect thereof to be offered
solely to directors, members of management, employees, consultants or sales
agents, distributors or similar representatives of the Company or its direct or
indirect Subsidiaries, solely on Form S-8 or any successor form, a registration
on Form S-4 with respect to any merger, consolidation or acquisition, or a
registration on another form not available for registering Registrable
Securities for sale to the public.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a
registration in which securities of the Company (including Registrable
Securities) are sold to an underwriter for reoffering to the public.
DEMAND REGISTRATION
REQUEST FOR REGISTRATION. Subject to the provisions of Section 2(d) and
Article 8, at any time or from time to time, commencing one (1) year after
the Effective Time, one or more of the Purchasers holding Registrable
Securities constituting at least [25%] of the total shares of Registrable
Securities then outstanding may request the Company to register for sale
under the Securities Act all or any portion of the shares of Registrable
Securities held by such requesting Purchasers for sale in the manner
specified in such notice. A request for registration pursuant to this
Article 2 (a "Demand Registration") shall specify the approximate number of
Registrable Securities requested to be registered, the anticipated per
share price range for such offering and the intended method or disposition
thereof by such Purchasers PROVIDED, HOWEVER, that at least twelve months
shall have elapsed between each Demand Registration.
OBLIGATION TO EFFECT REGISTRATION. Following receipt of any notice for
Demand Registration under this Article 2, the Company shall promptly give
written notice of such requested registration to all Purchasers. Such
Purchasers shall have the right, by giving written notice to the Company
within twenty (20) days after the Company provides its notice, to elect to
have included in such registration such of their Registrable Securities as
such Purchasers may request in such notice of election. Thereupon, the
Company shall use reasonable efforts to effect the registration under the
Securities Act of all Registrable Securities that the Company has been
requested to so register; PROVIDED that if the underwriter (if any)
managing the offering determines that, because of marketing factors, all of
the Registrable Securities requested to be registered by all Purchasers may
not be included in the offering, then all Purchasers who have requested
registration shall participate in the offering in accordance with Section
2(h).
REGISTRATION STATEMENT FORM. Registrations under this Article 2 shall be on
such appropriate form of Registration Statement of the Commission as shall
be selected by the Company and available to it under the Securities Act.
The Company agrees to include in any such Registration Statement all
information which, in the opinion of counsel to the Company, is required to
be included therein under the Securities Act.
LIMITATIONS ON REGISTRATION. The Company shall not be required to effect
more than two (2) Demand Registrations pursuant to this Article 2. The
Company shall not be required to effect the Demand Registration if the
Purchasers propose to sell the Registrable Securities at an aggregate price
to the public of less than $1,000,000. The Company shall not be required to
effect any such registration (other than on Form S-3 or any other successor
form relating to
<PAGE>
secondary offerings) during the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and ending on the
date ninety (90) days immediately following the effective date of, any
registration statement (other than a Special Registration) pertaining to
the securities of the Company, provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective. The Company shall not be required to effect
the Demand Registration within one hundred twenty (120) days after the
effective date of a Registration Statement filed by the Company covering an
underwritten public offering in which the Purchasers of Registrable
Securities shall have been entitled to participate pursuant to Articles 3
and 4 hereof.
INCLUSION OF OTHER SECURITIES. The Registration Statement filed pursuant to
the request of the Purchasers may, subject to the provisions of Section
2(h), include other securities of the Company with respect to which
registration rights have been granted ("Section 2 Other Shares"), and may
include securities of the Company being sold for the account of the
Company. If the Company shall request inclusion in any registration,
securities being sold for its own account, or if other persons shall
request inclusion in any registration pursuant to Section 2(a), the
Purchasers shall offer to include such securities in the underwriting
subject to the provisions of Section 2(h).
EFFECTIVE REGISTRATION STATEMENT. A Demand Registration shall not be deemed
to have been effected unless a Registration Statement covering all of the
Registrable Securities requested to be included in such registration by the
holders thereof and as reduced, if necessary, in accordance with Section
2(g) hereto has been declared effective by the Commission and remains
continually effective for the period specified in Section 6(b).
SUSPENSION. If the Board of Directors of the Company, in its good faith
judgment, determines that any registration under the Securities Act of
Registrable Securities should not be made or continued because it would
materially interfere with any material financing, acquisition, corporate
reorganization, merger, or other transaction involving the Company or any
of its subsidiaries (a "Valid Business Reason"), (i) the Company may
postpone filing a Registration Statement relating to a Demand Registration
until such Valid Business Reason no longer exists, but in no event for more
than one hundred twenty (120) days, and (ii) in case a Registration
Statement has been filed relating to a Demand Registration, the Company may
cause such Registration Statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such Registration
Statement until such Valid Business Reason no longer exists, but in no
event for more than one hundred twenty (120) days (the "Postponement
Period"); PROVIDED, HOWEVER, that in no event shall the Company be
permitted to postpone or withdraw a Registration Statement within one
hundred twenty (120) days after the expiration of any Postponement Period.
ALLOCATION. If any Demand Registration involves an underwritten offering
and the managing underwriter of such offering shall advise the Company
that, in its view, the number of Registrable Securities and other shares of
Common Stock of the Company with registration rights (the "Section 2 Other
Shares") requested to be included in such registration exceeds the largest
number that can be sold in an orderly manner in such offering within a
price range acceptable to the Purchasers requesting the registration, the
Company shall include in such registration:first, to each Purchaser
requesting registration pursuant to either Section 2(a) or 2(b), pro rata
on the basis of the number of shares of Registrable Securities held by such
Purchaser that such Purchaser had requested to be included in the
registration, provided
<PAGE>
however, if any Purchaser does not request inclusion of the maximum number
of shares of Registrable Securities allocated to such Purchaser pursuant to
the above-described procedure, the remaining portion of his/her/its
allocation shall be reallocated among the remaining Purchasers whose
allocations did not satisfy their requests pro rata on the basis of the
number of shares of Registrable Securities held by such remaining
Purchasers had requested to be included in the registration, and this
procedure shall be repeated until all of the shares of Registrable
Securities which may be included in the registration on behalf of the
Purchasers have been so allocated, thereafter, to the selling holders of
Section 2 Other Shares, and thereafter to the Company. The Company shall
not limit the number of Registrable Securities to be included in a
registration pursuant to this Section 2(h) in order to include shares held
by stockholders with no registration rights or to include founder's stock
or any other shares of stock issued to employees, officers, directors, or
consultants pursuant to the Company's employee stock option plans in order
to include in such registration securities registered for the Company's own
account.
PIGGYBACK REGISTRATION
INCLUSION IN PIGGYBACK REGISTRATION. If the Company at any time, proposes
to register any of its securities under the Securities Act (other than
pursuant to Article 2, Article 3 or a Special Registration), or if any
holder of securities of the Company pursuant to which demand registration
rights have been granted by the Company exercises its demand registration
rights with respect to such securities ("Article 3 Other Shares") whether
or not for sale for its own account, (an "Other Registration"), the Company
shall each such time, prior to such filing, give prompt written notice to
all Purchasers and, upon the written request of any Purchaser given to the
Company within twenty (20) days after the Company has provided such notice
(which request shall state the intended method of disposition of such
Registrable Securities), the Company shall use reasonable efforts to cause
all Registrable Securities that the Company has been requested by the
Purchasers thereof to register to be so registered under the Securities Act
to the extent necessary to permit their disposition in accordance with the
intended methods of distribution specified in the request of such
Purchaser; PROVIDED that if at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
Registration Statement filed in connection with such registration, the
Company or the holders of such Article 3 Other Shares, as applicable, shall
determine for any reason not to register any securities pursuant to such
Other Registration, the Company may, at its election, give written notice
of such determination to each Purchaser that was previously notified of
such registration, and, thereupon, shall not register any Registrable
Securities in connection with such registration (but shall nevertheless pay
the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any Purchaser to request that a registration be
effective under Article 2.
TERMS OF UNDERWRITING. In connection with any offering under this Article 3
involving an underwritten offering, the Company shall not be required to
include any Registrable Securities in such offering unless the Purchaser
who is the holder thereof accepts the terms and enters into an underwriting
agreement, if any, of the underwriting as agreed upon between the Company
and the underwriters selected by it provided that such terms must be
reasonably satisfactory in substance and form to the Purchaser and
consistent with this Agreement, and then only in such quantity as will not,
in the opinion of the managing underwriter, jeopardize the success of the
offering by the Company or the holders of Article 3 Other Shares, as
applicable. If any person does not agree to the terms of any such
<PAGE>
underwriting, such person shall be excluded therefrom by written notice
from the Company or the underwriter. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration. If shares are so withdrawn from the registration or
if the number of shares of Registrable Securities to be included in such
registration was previously reduced as a result of marketing factors, the
Company shall then offer to all persons who have retained the right to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number
of shares so withdrawn, with such shares to be allocated among the persons
requesting additional inclusion in accordance with Article 3(c).
ALLOCATION. If any Other Registration involves an underwritten offering and
the managing underwriter of such offering shall advise the Company that, in
its view, the number of securities requested to be included in such
registration exceeds the largest number that can be sold in an orderly
manner in such offering within a price range acceptable to the Company, the
Company shall include in such registration:in the event of a Company
initiated Other Registration, first to the Company for securities being
sold for its own account, or in the event of an Other Registration
initiated by holders of Article 3 Other Shares, first to the demanding
holders of such Article 3 Other Shares.
Thereafter the number of shares to be included in the registration shall be
allocated among the Purchasers with respect to the Registrable Securities,
and the holders of other securities of the Company with respect to which
the Company has granted piggyback registration rights (the "Other Piggyback
Securities"), that have exercised their respective piggyback registration
rights, such that the Purchasers and the holders of the Other Piggyback
Securities shall have their shares included pro rata on the basis of the
number of shares of Registrable Securities held by the Purchasers and the
number of shares of Other Piggyback Securities held by the other selling
stockholders that such Purchasers and selling stockholders had requested to
be included in the registration; provided, however, that such allocation
shall not operate to reduce the aggregate number of Registrable Securities
and Other Piggyback Securities to be included in such registration.
Notwithstanding the foregoing provisions, the Company may withdraw any
Registration Statement referred to in Article 3(a), without thereby
incurring any liability to the Purchasers (but the Company shall
nevertheless pay the Registration Expenses in connection therewith). If any
Purchaser disapproves of the terms of any such underwriting, it may elect
to withdraw therefrom by written notice to the Company and the underwriter.
Any Registrable Securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
REGISTRATION ON FORM S-3
In addition to the rights provided in Articles 2 and 3, if at any time,
commencing two (2) years after the Effective Date, (i) any Purchaser or
Purchasers request that the Company file a registration statement on Form
S-3 or any comparable or successor form thereto for a public offering of
all or any portion of the shares of Registrable Securities held by such
requesting holder or holders, the reasonably anticipated aggregate price to
the public of which would be at least $1,000,000, and (ii) the Company is a
registrant entitled to use Form S-3 or any comparable or successor form
thereto to register such shares, then the Company shall use reasonable
efforts to register under the Securities Act on Form S-3 or any comparable
or successor form thereto, for public sale in accordance with the method of
disposition specified in such request and the number of shares of
Registrable Securities specified in such request. Whenever the Company is
required by this Article 4(a) to use reasonable efforts to effect the
registration of Registrable Securities, each of the procedures and
requirements of Article 2,
<PAGE>
including but not limited to the requirement that the Company notify all
Purchasers from whom notice has not been received and provide them with the
opportunity to participate in the offering, shall apply to such
registration, PROVIDED, HOWEVER, that except as provided above, there shall
be no limitation on the number of registrations on Form S-3 which may be
requested and obtained under this Section 4(a). Notwithstanding any other
provision of this Section 4(a) if the underwriter determines that marketing
factors require a limitation on the number of shares to be underwritten,
(i) the Purchasers of Registrable Securities shall have priority over the
Company and all other Persons, and (ii) as among such Purchasers, such
limitation will be imposed pro rata with respect to all Registrable
Securities whose holders have requested inclusion in such registration
pursuant to this Section 4(a). The Company shall use reasonable efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms.
ALLOCATION OF EXPENSES
The Company will pay all Registration Expenses of all registrations under
this Agreement.
OBLIGATIONS OF THE COMPANY
If and whenever the Company is required to use best efforts to effect the
registration under the Securities Act of any Registrable Securities pursuant to
Articles 2, 3 and 4 of this Agreement, the Company shall:
file with the Commission, as soon as practicable, a Registration Statement
with respect to such Registrable Securities, make all required filings with
the NASD and/or any other applicable exchange, and use best efforts to
cause such Registration Statement to become effective at the earliest
possible date and remain effective; prepare and file with the Commission
such amendments and supplements to the Registration Statement and the
Prospectus used in connection therewith and such other documents as may be
necessary to keep the Registration Statement effective until the later of
(i) one hundred twenty (120) days after the effective date of such
Registration Statement or (ii) the consummation of the disposition by the
Purchasers of all the Registrable Securities covered by such Registration
Statement and otherwise comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement; furnish to each seller of such securities the
number of conformed copies of such Registration Statement and of each such
amendment and supplement thereto (in each case, including all exhibits, the
numbers of copies of the Prospectus included in such Registration Statement
(including each preliminary prospectus) in conformity with the requirements
of the Securities Act, and such other documents, as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller; use its reasonable efforts to
register or qualify and cooperate with the Purchasers, the underwriters and
their respective counsels in connection with the registration or
qualification (or exemption from such registration or qualification) of the
securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
request; PROVIDED, HOWEVER, that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified, subject itself to taxation
in any jurisdiction wherein it is not so subject, or take any action which
would subject it to general service of process in any jurisdiction wherein
it is not so subject; in connection with an underwritten public offering
only, furnish to each underwriter in a signed counterpart, addressed to the
underwriters, of
<PAGE>
an opinion of counsel for the Company experienced in securities law
matters, dated the effective date of the Registration Statement, and a
letter from the independent public accountants retained by the Company,
addressed to the underwriters stating that they are independent public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements of the Company
included in the registration statement or the Prospectus, or any amendment
or supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including
information as to the period ending no more than five (5) business days
prior to the date of such letter) with respect to such registration as such
underwriters reasonably may request; immediately notify each Purchaser and
each underwriter under such registration statement, at any time when a
Prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the Prospectus contained in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing, and promptly prepare and furnish to
such Purchaser a reasonable number of copies of a Prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; comply with all
applicable rules and regulations under the Securities Act and Exchange Act;
promptly notify each Purchaser of Registrable Securities covered by such
Registration Statement, their counsel and the underwriters (i) when such
Registration Statement, or any post-effective amendment to such
Registration Statement, shall have become effective, or any amendment of or
supplement to the Prospectus used in connection therewith shall be filed,
(ii) of any request by the Commission to amend such Registration Statement
or to amend or supplement such Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation or
threatening of any proceedings for any of such purposes, (iv) of the
suspension of the qualification of such securities for offering or sale in
any jurisdiction, or of the institution of any proceedings for any of such
purposes and (v) if at any time when a Prospectus is to be required by the
Securities Act to be delivered in connection with the sale of the
Registrable Securities, the representations and warranties of the Company
contained in any agreement (including the underwriting agreement
contemplated in Section 7(b) below), to the knowledge of the Company, cease
to be true and correct in any material respect; cooperate with the
Purchasers and the managing underwriter, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive
legends whatsoever and shall be in a form eligible for deposit with DTC,
and enable such Registrable Securities to be in such denominations and
registered in such names as the underwriters, if any, or Purchasers may
reasonably request at least two (2) business days prior to any sale of
Registrable Securities in a firm commitment underwritten public offering;
use its reasonable efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with, and to obtain the consent or
approval of, each governmental agency or authority, whether federal, state,
local or foreign, which may be required to effect such registration or the
offering or sale in connection therewith or to enable the sellers to
<PAGE>
offer, or to consummate the disposition of, the Registrable Securities
subject to such Registration Statement, except as may be required solely as
a consequence of the nature of such seller's business, in which case the
Company will cooperate with all reasonable respects with the filing of the
Registration Statement and the granting of such approvals; prior to the
effective date of the Registration Statement, (i) provide the registrar for
the Common Stock or such other Registrable Securities with printed
certificates for such securities in a form eligible for deposit with DTC
and (ii) provide a CUSIP number for such securities; the Company agrees not
to file or make any amendment to any Registration Statement with respect to
any Registrable Securities, or any amendment of or supplement to the
Prospectus used in connection therewith, which refers to any seller of any
securities covered thereby by name, or otherwise identifies such seller as
the holder of any securities of the Company, without the consent of such
seller, such consent not to be unreasonably withheld, except that no such
consent shall be required for any disclosure that is required by law.
In connection with each registration hereunder, the Purchasers will
furnish to the Company in writing such information required by the Company with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with Federal and applicable
state securities laws. The Company shall not be obligated to register the
Registrable Securities of any Purchaser who fails promptly to provide to the
Company such information as the Company may reasonably request at the time to
enable the Company to comply with applicable laws or regulations or to
facilitate preparation of the registration statement, including any information
that the Purchaser fails to provide on the basis that such information would
violate any law or any contractual arrangement.
UNDERWRITTEN OFFERINGS
The provisions of this Article 7 do not establish additional registration rights
but instead set forth procedures applicable, in addition to those set forth in
Articles 2, 3 and 4, to any registration that is an underwritten offering.
UNDERWRITTEN OFFERINGS EXCLUSIVE. Whenever a request for Demand
Registration is for an underwritten offering, only securities that are to
be distributed by the underwriters may be included in the Registration.
UNDERWRITING AGREEMENT. If requested by the underwriters for any
underwritten offering by Purchasers pursuant to a request for Demand
Registration, the Company shall enter into an underwriting agreement with
such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company and Purchasers of a
majority of the Registrable Securities to be covered by such registration
and to the underwriters and to contain such representations and warranties
by the Company and such other terms and provisions as are customarily
contained in agreements of this type.
SELECTION OF UNDERWRITERS. The Company shall have the right to select any
underwriters to administer any underwritten offerings hereunder, subject to
the consent of the Purchasers of a majority of the Registrable Securities
to be registered pursuant to such offering, which shall not be unreasonably
withheld.
PREPARATION, REASONABLE INVESTIGATION
In connection with the preparation and filing of each Registration Statement
registering Registrable Securities under the Securities Act, the Company shall
give the Purchasers of Registrable Securities to be so registered and their
<PAGE>
underwriters, if any, and their respective counsel and accountants, such access
to all pertinent financial, corporate, and other documents and properties of the
Company and its Subsidiaries, and such opportunities to discuss the business of
the Company with its officers, directors, employees and the independent public
accountants who have issued audit reports on its financial statements as shall
be necessary, in the opinion of such Purchasers' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
OTHER REGISTRATIONS
If and whenever the Company is required to use its best efforts to effect the
registration under the Securities Act of any Registrable Securities pursuant to
Articles 2, 3 or 4, and if such registration shall not have been withdrawn or
abandoned, the Company shall not be obligated to and shall not file any
Registration Statement with respect to any of its securities (including
Registrable Securities) under the Securities Act (other than a Special
Registration), whether of its own accord or at the request or demand of any
holder or holders of such securities, until a period of 90 days shall have
elapsed from the effective date of such previous registration, PROVIDED that the
Company shall not be excused from filing a Registration Statement by virtue of
this Article 9 more than once in a 360 day period.
CERTAIN OBLIGATIONS OF PURCHASERS
The Company may require each Purchaser of any Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such Purchaser and the intended method of disposition
of such securities as the Company may from time to time reasonably request
and as shall be required to effect the registration of such Purchaser's
Registrable Securities. Each such Purchaser agrees to furnish promptly to
the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Purchaser not
materially misleading. Each Purchaser of Registrable Securities covered by
a Registration Statement agrees that, upon receipt of any notice from the
Company pursuant to Section 6(g), such Purchaser will promptly discontinue
the disposition of Registrable Securities pursuant to such Registration
Statement until such Purchaser shall have received, in the case of clause
(i) of Section 6(g), notice from the Company that such Registration
Statement has been amended, as contemplated by Section 6(g), and, in the
case of clause (ii) of Section 6(g), copies of the supplemented or amended
Prospectus contemplated by Section 6(g). If so directed by the Company,
each Purchaser will deliver to the Company all copies, other than permanent
file copies, in such Purchaser's possession of the Prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
that the Company shall give any such notice, the period mentioned in
Section 6(b) shall be extended by the number of days during the period from
and including the date of the giving of such notice to and including the
date when each seller of any Registrable Securities covered by such
Registration Statement shall have received copies of the supplemented or
amended Prospectus covering such Registrable Securities contemplated by
Section 6(g).
INDEMNIFICATION AND CONTRIBUTION
In the event of any registration of any of the Registrable Securities under
the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such securities, its directors, officers,
and employees, each other Person who participates as an underwriter, broker
or dealer in the offering or sale of such securities, and each other
person, if any, who controls such seller, underwriter, broker, dealer or
any such participating Person within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, or liabilities,
joint or several, to which such seller or any such director, officer,
employee, underwriter, broker, dealer, participating Person, or controlling
Person may become subject under the Securities Act, the Exchange Act, state
securities or blue sky laws, or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon any untrue
<PAGE>
statement or alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Securities were
registered under the Securities Act, any preliminary prospectus or
Prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based
upon the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the Company shall reimburse such seller and each such
director, officer, employee, underwriter, broker, dealer, participating
Person, and controlling Person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding as
such expenses are incurred; PROVIDED, HOWEVER, that the Company will not be
liable to any of such seller, underwriter, participating Person or
controlling person, as the case may be, in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is
based upon any untrue statement or omission made in such Registration
Statement, preliminary prospectus, or Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished
to the Company, in writing, by or on behalf of such seller, underwriter,
participating Person or controlling Person, as applicable, specifically for
use in the preparation thereof. The limitation on liability in the
foregoing sentence shall only limit the Company's liability to such Person
who provided such information to the Company and shall not serve to limit
the rights of any other Person to indemnification under this Article 11(a).
The indemnity agreement contained in this Article 11(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company.
In the event of any registration of any of the Registrable Securities under
the Securities Act pursuant to this Agreement, each seller of such
securities, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities, joint or several, to which the
Company, such directors and officers, underwriters, or controlling Persons
may become subject under the Securities Act, Exchange Act, state securities
or blue sky laws, or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, any preliminary
prospectus or Prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or
are based upon any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, if the statement or omission was made in reliance upon and
in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller for use in connection with
the preparation of such Registration Statement, preliminary prospectus,
Prospectus, amendment, or supplement; PROVIDED, HOWEVER, that the liability
of each such seller hereunder shall be in proportion to and limited to the
gross amount received by such seller from the sale of Registrable
Securities sold in connection with such registration. Each party entitled
to indemnification under this Article 11 (the "Indemnified Party") shall
give notice to the party required to provide indemnification (the
"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);
<PAGE>
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 under this Article 11, except to the extent that the
Indemnifying Party is adversely affected by such failure. The Indemnified
Party may participate in such defense at such party's expense; PROVIDED,
HOWEVER, that the Indemnifying Party shall pay such expense if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential
differing interests or conflicts between the 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 that 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 of such claim or litigation, and
no Indemnified Party shall consent to entry of any judgment or settle such
claim or litigation without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.
If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an Indemnified Party, other than by reason of
the exceptions provided in this Article 11, then the Indemnifying Party
shall, in lieu of indemnifying such Indemnified Party, contribute to the
amount paid or payable by the Indemnifying Party as a result of such
losses, claims, damages liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and such Indemnified Party on the other in connection with the
statements or omissions which resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or such Indemnified Party and each of
the Indemnifying Party's or such Indemnified Party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING
In the event that Registrable Securities are sold pursuant to a Registration
Statement in an underwritten offering, the Company agrees to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the Purchasers the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the
Commission that may at any time permit a Purchaser to sell Registrable
Securities of the Company to the public without Registration, the Company agrees
to use its reasonable efforts to:
Make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act; file with the Commission
in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and furnish to any
Purchaser, so long as such Purchaser owns any Registrable Securities,
forthwith upon request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144 under the Securities
Act, any other such applicable reporting requirements under the Securities
Act and all applicable reporting requirements
<PAGE>
under the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Purchaser of any rule or regulation of the Commission which
permits the selling of any such securities without Registration or pursuant
to such form.
SUCCESSORS, ASSIGNS AND TRANSFEREES
This Agreement shall be binding upon and shall inure to the benefit of each
party hereto, and their respective successors, assigns and transferees. Each
Purchaser may assign its rights under this Agreement only to (i) an Affiliate or
(ii) other successors, assigns and transferees of such Purchaser who will be the
holder of the not less than (1) 250,000 shares of Registrable Securities or (2)
all the remaining shares of Registrable Securities held by such assignor;
PROVIDED, HOWEVER, that the Company is given written notice from the Purchaser
at the time of such transfer stating the name and address of the transferee or
assign and identifying the securities with respect to which the rights hereunder
are being transferred. As a condition to the effectiveness of any transfer
permitted hereunder (i) the transferee or assign shall agree, in writing, to be
bound by the provisions of this Agreement; PROVIDED, HOWEVER, that the Company
shall be given written notice at the time of or within a reasonable time after
said transfer or assignment, stating the name and address of said transferee or
assign and identifying the securities with respect to which such registration
rights are being assigned. Provided that the Purchaser and any transferee or
assignee has complied with the foregoing conditions, this Agreement shall
survive any transfer of Registrable Securities to and shall inure to the benefit
of an Affiliate or such other successors, assigns and transferees of the
Purchaser.
MISCELLANEOUS
NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with or
violates the rights granted to the Purchasers in this Agreement.
SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants, and restrictions
without including any of such which may be hereafter declared invalid, void
or unenforceable. TERMINATION. This Agreement shall terminate upon the
earlier to occur of (i) all the Registrable Securities held by the
Purchasers cease to be Registrable Securities or (ii) ten (10) years after
the Effective Date.
NOTICES. All notices and other communications required or permitted under
this Agreement shall be effective upon receipt and shall be in writing and
may be delivered in person, by telecopy, overnight delivery service or
registered or certified United States mail, addressed to the Company or
Purchasers (or the Purchaser's transferee or assign to the address of such
Person in the stock record books of the Company), as the case may be, at
their respective addresses set forth below:
<PAGE>
If to the Company: Sight Resource Corporation
6725 Miami Avenue
Cincinnati, Ohio 45243
Attn: Chief Executive Officer
Phone: (513) 527-9700
Fax: (513) 527-9708
with a copy to: Thompson Hine LLP
2000 Courthouse Plaza N.E.
P.O. Box 8801
Dayton, Ohio 45401-8801
Attn: J. Michael Herr, Esq.
Fax: (937) 443-6635
If to the Purchasers: To the addresses set forth on EXHIBIT A
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (a) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (b) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communications was delivered to such delivery service, and (c) in the case of
notices and communications sent by United States mail, seven days after such
notice or communication shall have been deposited in the United States mail. Any
notice delivered to a party hereunder shall be sent simultaneously, by the same
means, to such party's counsel as set forth above.
ENTIRE AGREEMENT. This Agreement contains the entire understanding of the
parties with respect to the matters covered hereby.
AMENDMENTS AND WAIVERS. This Agreement may be amended as to the Purchasers
and their successors and assigns (determined as provided in Article 14),
and the Company may take any action herein prohibited, or omit to perform
any act required to be performed by it, only if the Company shall obtain
the written consent of the Purchasers of 2/3 of the Registrable Securities.
This Agreement may not be waived, changed, modified, or discharged orally,
but only by an agreement in writing signed by the party or parties against
whom enforcement of any waiver, change, modification or discharge is sought
or by parties with the right to consent to such waiver, change,
modification or discharge on behalf of such party; PROVIDED, HOWEVER, that
any consent required by the Purchasers shall require the consent in writing
of no less than the Purchasers of 2/3 of the Registrable Securities.
HEADINGS; COUNTERPARTS. Headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one and
the same instrument, and shall become effective when one or more of the
counterparts have been signed by each party and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
<PAGE>
GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to conflicts
of law principles.
NO THIRD PARTY BENEFICIARIES. Except as provided by Articles 11 and 14,
nothing contained in this Agreement is intended to confer upon any Person
other than the parties hereto and their respective successors and permitted
assigns and transferees, any benefit, right or remedies under or by reason
of this Agreement.
CONSENT TO JURISDICTION. Each of the parties hereto irrevocably submits to
the personal exclusive jurisdiction of the United States District Court for
the Southern District of New York for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction
contemplated hereby (and, to the extent permitted under applicable rules of
procedure, agrees not to commence any action, suit or proceeding relating
hereto except in such court). Each of the parties hereto further agrees
that service of any process, summons, notice or document hand delivered or
sent by registered mail to such party's respective address set forth in
Section 15(d) will be effective service of process for any action, suit or
proceeding in the United States District Court for the Southern District of
New York with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each of
the parties hereto irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in the United States
District court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
such court that any such action, suit or proceeding brought in such court
has been brought in an inconvenient forum.
Signature Page Follows
<PAGE>
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed in their names by their duly authorized officers or
representatives effective as of the date first above written.
THE COMPANY:
SIGHT RESOURCE CORPORATION
By:
----------------------------------
Name:
Title:
PURCHASERS:
--------------------------------------
E. Dean Butler
CARLYLE VENTURE PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
CARLYLE U.S. VENTURE PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
C/S VENTURE INVESTORS, L.P.
By:
----------------------------------
Name:
Title:
CARLYLE VENTURE COINVESTMENT, L.L.C.
By
-----------------------------------
Name:
Title:
LA SESTA S.A.
<PAGE>
By:
----------------------------------
Name:
Title:
EXCALIBUR INVESTMENTS B.V.
By:
----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NAMES OF PURCHASERS, ADDRESSES; NUMBER OF SHARES OF COMMON STOCK
NAME AND ADDRESS NUMBER OF SHARES OF COMMON STOCK
---------------- --------------------------------
1. E. Dean Butler 1,250,000
Mere Hall
Broughton Green, Droitwich Spa
Worcestershire WR9 7EE
ENGLAND
2. Carlyle Entities 2,750,000
c/o Carlyle Venture Partners, L.P.
1001 Pennsylvania Avenue
Suite 220 South
Washington, D.C. 20004
Attn: Ryan Schwarz
Fax: (202) 347-1818
Wilmer, Cutler & Pickering
100 Light Street
Baltimore, MD 21202
Attn: John B. Watkins, Esq.
3. La Sesta S.A. 3,000,000
c/o MEVEA s.a.r.l. (Attention R. Meneguz)
6-12 Place d' Armes
L-1136 Luxembourg
With a copy to:
Marco Brustio
c/o Mazzucchelli 1849 spa
Via S. e.P. Mazzucchelli 7
21043 Catinglione Olona
ITALY
4. Excalibur Investments B.V. 5,500,000
Leidseplein 98,
1017 PS Amsterdam
Postbus 782
1000 AT
AMSTERDAM
With a copy to:
Dino Tabachi
Via Patriarcato 15
35100 Padova
ITALY
<PAGE>
EXHIBIT B
NAMES OF PUCHASERS; DIVIDEND SHARES
NAME OF HOLDER NUMBER OF DIVIDEND SHARES
-------------- -------------------------
CARLYLE VENTURE PARTNERS, L.P. 1,305,025
CARLYLE U.S. VENTURE PARTNERS, L.P. 173,080
C/S VENTURE INVESTORS, L.P. 266,517
CARLYLE VENTURE COINVESTMENT, L.L.C. 105,003
<PAGE>
EXHIBIT C
NAMES OF PURCHASERS; CONVERSION SHARES
NAME OF HOLDER NUMBER OF CONVERSION SHARES
-------------- ---------------------------
CARLYLE VENTURE PARTNERS, L.P. 2,288,773
CARLYLE U.S. VENTURE PARTNERS, L.P. 303,551
C/S VENTURE INVESTORS, L.P. 467,421
CARLYLE VENTURE COINVESTMENT, L.L.C. 184,155
<PAGE>
EXHIBIT G
OPINION OF COUNSEL TO THE COMPANY
December 31, 2002
To the Purchasers of Common Stock
Listed on Exhibit A to the Stock Purchase
Agreement Referred to Below
Re: SIGHT RESOURCE CORPORATION
Ladies and Gentlemen:
We have acted as special counsel to Sight Resource Corporation, a
Delaware corporation (the "Company"), in connection with the proposed issuance
of 17,593,525 shares of the Company's Common Stock, par value $0.01 per share
(the "Shares"), pursuant to the Common Stock Purchase Agreement by and among the
Company and each of you dated as of December 30, 2002 (the "Stock Purchase
Agreement"). This opinion is delivered to you pursuant to Section 3.02(f) of the
Stock Purchase Agreement. Capitalized terms used herein but not defined herein
shall have the meanings ascribed to such terms in the Stock Purchase Agreement.
In connection with rendering the opinions set forth herein, we have
examined the following:
A. The Restated Certificate of Incorporation of the Company, as
amended to date (the "Certificate of Incorporation");
B. The Bylaws of the Company, as amended to date (the "Bylaws");
C. A Certificate of legal existence and good standing of the Company
issued by the Secretary of State of the State of Delaware as of a recent date
(the "Certificate of Good Standing");
D. Executed copies of (i) the Stock Purchase Agreement, (ii) the Sixth
Loan Modification Agreement dated December 27, 2002 by and among Cadlerock Joint
Venture, LP, the Company and certain subsidiaries of the Company (the "Loan
Modification Agreement"), and (iii) the Registration Rights Agreement dated
December 31, 2002 by and among the Company and each of you (the "Registration
Rights Agreement") (the Stock Purchase
<PAGE>
Agreement, the Loan Modification Agreement and the Registration Rights
Agreement, being collectively referred to as the "Transaction Documents");
E. Such minutes of corporate proceedings and other corporate records
of the Company as we deemed necessary for the purposes of this opinion;
F. A certificate of the Company dated this day, as to the correctness
of certain representations and warranties and as to certain factual matters; and
G. Such other certificates, documents, agreements and records as we
deemed necessary to render the opinions set forth below.
In conducting our examination, we have assumed, without independently
verifying such assumptions, (i) the genuineness of the signatures on all of the
documents examined by us, (ii) the authenticity of all documents furnished for
our examination as originals, (iii) the conformity to original documents of all
documents furnished to us as copies, including documents transmitted by
telecopier, (iv) that all parties to each of the Transaction Documents, other
than the Company, possess the requisite power and authority to enter into the
Transaction Documents and to effect the consummation of the transactions
contemplated thereby and (v) that each Transaction Document constitutes the
legal, valid and binding obligation of each of such other parties enforceable in
accordance with its respective terms.
In rendering the opinions set forth below, any reference to "our
knowledge," "known to us," "of which we are aware" or words of similar import
shall, except as otherwise specifically described, mean the awareness of the
existence or absence of any facts or other information by any lawyer in this
firm who has participated in the specific transactions, or who is primarily
responsible for a particular subject matter, to which this opinion relates.
Except as expressly set forth in this opinion, we have not undertaken any
independent investigation, including, without limitation, any investigation of
corporate, court or other documents or records, to determine the existence or
absence of any such facts or other information, and no inference as to our
knowledge of the existence or absence of any facts or other information should
be drawn from the fact of our representation of the Company.
No opinion is expressed herein with respect to any matter that is
determined by the law of any jurisdiction except the federal laws of the United
States of America, the laws of the State of Ohio and the Delaware General
Corporation Law.
Our opinion contained in paragraph 2 below as to enforceability is
subject to the further qualification that such enforceability may be (A) limited
by bankruptcy, insolvency (including, without limitation, fraudulent conveyances
and fraudulent transfers), reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, (B) limited by general
equitable principles, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (C) subject
to the effect of any public policy considerations or court decisions which may
limit the rights of any person or entity to obtain indemnification and (D)
subject to the effects of generally applicable rules of law that (1) limit or
affect the enforcement of provisions that purport to require waiver of the
obligations of good faith, fair dealing, diligence and reasonableness or (2)
provide that forum selection clauses are not necessarily binding on the court or
courts in the forum selected. For purposes of our opinion expressed in the first
sentence of paragraph 1 below, we have relied exclusively upon our review of the
Certificate of Good
<PAGE>
Standing. Further, no opinion is expressed herein with respect to the
enforceability of the provisions set forth in Section 5.01 of the Stock Purchase
Agreement.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company has full
corporate power and authority to conduct its business as presently conducted by
it and to enter into and perform the Stock Purchase Agreement and to carry out
the transactions contemplated thereby.
2. The execution, delivery and performance by the Company of the
Transaction Documents has been duly authorized by all necessary corporate action
of the Company, and the Transaction Documents have been duly executed and
delivered by the Company. The Transaction Documents constitute valid and binding
obligations of the Company enforceable in accordance with their terms.
3. The execution and delivery of the Transaction Documents, and the
performance by the Company of its obligations thereunder do not (A) violate any
provision of the Certificate of Incorporation or Bylaws of the Company, (B)
violate, conflict with or constitute a default under any material contract,
commitment, trust or agreement of any kind known to us to which the Company is a
party or by which it is bound, or (C) violate the Delaware General Corporation
Law or any U.S. federal statute, regulation or rule or, to our knowledge, any
judgment, decree, writ, order or injunction of any arbitrator, court or
governmental authority binding upon the Company.
4. The issuance, sale and delivery of the Shares in accordance with
the Stock Purchase Agreement have been duly authorized by all necessary
corporate action on the part of the Company. When issued in accordance with the
Stock Purchase Agreement, the Shares will be duly authorized and validly issued
and fully paid and nonassessable and, to our knowledge, free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company.
5. Assuming the accuracy of the representations and warranties of the
Purchasers set forth in the Stock Purchase Agreement, the offer, issue, sale and
delivery of the Shares to the persons to whom this letter is addressed is a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (subject to any post-closing requirements
to file Form D pursuant to Regulation D).
<PAGE>
The opinions expressed herein are given as of the date hereof and we
undertake no obligation and hereby disclaim any obligation to advise you of any
change after the date of this opinion pertaining to any matter referred to
herein. The opinions expressed herein are given to you solely for your use in
connection with the transactions contemplated by the Stock Purchase Agreement
and may not be used or relied upon in connection with any other matter or
transaction or by any other person or entity. This letter may not be published,
distributed or disseminated by you to any person.
Sincerely yours,