-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DHpJSDm6jS0XEM98RzYH8L2N8k9oenNCzRVXeB1pmUiRNpig5EuO6M9v8WC1pd27 QNSDUidAJRQcf3xR/Ql1ag== 0000950133-03-000008.txt : 20030103 0000950133-03-000008.hdr.sgml : 20030103 20030103153852 ACCESSION NUMBER: 0000950133-03-000008 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030103 GROUP MEMBERS: C/S VENTURE INVESTORS L.P. GROUP MEMBERS: CARLYLE U.S. VENTURE PARTNERS, L.P. GROUP MEMBERS: CARLYLE VENTURE COINVESTMENT, L.L.C. GROUP MEMBERS: CARLYLE VENTURE PARTNERS, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SIGHT RESOURCE CORP CENTRAL INDEX KEY: 0000895651 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 043181524 STATE OF INCORPORATION: DE FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45654 FILM NUMBER: 03503071 BUSINESS ADDRESS: STREET 1: 100 JEFFREY AVENUE CITY: HOLLISTON STATE: MA ZIP: 01746 BUSINESS PHONE: 5084296916 MAIL ADDRESS: STREET 1: 100 JEFFREY AVENUE CITY: HOLLISTON STATE: MA ZIP: 01746 FORMER COMPANY: FORMER CONFORMED NAME: NEWVISION TECHNOLOGY INC DATE OF NAME CHANGE: 19940224 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TC GROUP LLC CENTRAL INDEX KEY: 0000933790 IRS NUMBER: 527656007 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O THE CARLYLE GROUP STREET 2: 1001 PENNSYLVANIA AVENUE NW SUITE 220 S CITY: WASHINGTON STATE: DC ZIP: 20004-2505 BUSINESS PHONE: 2023472626 MAIL ADDRESS: STREET 1: C/O CARLYLE GROUP STREET 2: 1001 PENNSYLVANIA AVENUE NW SUITE 220 S CITY: WASHINGTON STATE: DC ZIP: 20004 SC 13D/A 1 w70832sc13dza.txt AMENDMENT NO. 2 TO SCHEDULE 13D OMB APPROVAL OMB Number: 3235-0145 Expires: December 31, 2005 Estimated average burden hours per response. . .14.9 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 2)* Sight Resource Corporation - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.01 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 82655N105 - -------------------------------------------------------------------------------- (CUSIP Number) John B. Watkins, Wilmer, Cutler & Pickering, 2445 M Street, N.W., Washington, D.C.20037, Tele: 202-663-6000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 31, 2002 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-l(e), 240.13d-l(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on following pages) SEC 1746 Potential persons who are to respond to the collection of (12-5-02) information contained in this form are not required to respond unless the form displays a currently valid OMB control number. CUSIP No. 82655N105 PAGE 1 OF 13 PAGES - --------------------------------------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Carlyle Venture Partners, L.P. - --------------------------------------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) ................................................................................ (b) X............................................................................... - --------------------------------------------------------------------------------------------------------------- 3. SEC Use Only........................................................................... - --------------------------------------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - --------------------------------------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e).... - --------------------------------------------------------------------------------------------------------------- 6. Citizenship or Place of Organization - --------------------------------------------------------------------------------------------------------------- Cayman Islands, British West Indies - --------------------------------------------------------------------------------------------------------------- Number of 7. Sole Voting Power 7,101,852............................................................. Shares Bene- ------------------------------------------------------------------------------------------------ ficially by Owned by Each 8. Shared Voting Power 0................................................................... Reporting ------------------------------------------------------------------------------------------------ Person With 9. Sole Dispositive Power 7,101,852........................................................ ------------------------------------------------------------------------------------------------ 10. Shared Dispositive Power 0............................................................... - --------------------------------------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 7,101,852 - --------------------------------------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - --------------------------------------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 14.4% - --------------------------------------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN...............................................................................................
1 CUSIP No. 82655N105 PAGE 2 OF 13 PAGES - --------------------------------------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). C/S Venture Investors, L.P. - --------------------------------------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) ......................................................................................... (b) X........................................................................................ - --------------------------------------------------------------------------------------------------------------- 3. SEC Use Only.................................................................................... - --------------------------------------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - --------------------------------------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) - --------------------------------------------------------------------------------------------------------------- 6. Citizenship or Place of Organization - --------------------------------------------------------------------------------------------------------------- Cayman Islands, British West Indies - --------------------------------------------------------------------------------------------------------------- Number of 7. Sole Voting Power 1,450,365............................................................. Shares Bene- ------------------------------------------------------------------------------------------------ ficially by Owned by Each 8. Shared Voting Power 0................................................................... Reporting ------------------------------------------------------------------------------------------------ Person With 9. Sole Dispositive Power 1,450,365........................................................ ------------------------------------------------------------------------------------------------ 10. Shared Dispositive Power 0.............................................................. - --------------------------------------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,450,365 - --------------------------------------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - --------------------------------------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 2.9% - --------------------------------------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN.............................................................................................. ................................................................................................ ................................................................................................ ................................................................................................
2 USIP No. 82655N105 PAGE 3 OF 13 PAGES - --------------------------------------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Carlyle U.S. Venture Partners, L.P. - --------------------------------------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) ......................................................................................... (b) X ....................................................................................... - --------------------------------------------------------------------------------------------------------------- 3. SEC Use Only.................................................................................... - --------------------------------------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - --------------------------------------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e).... - --------------------------------------------------------------------------------------------------------------- 6. Citizenship or Place of Organization - --------------------------------------------------------------------------------------------------------------- Delaware - --------------------------------------------------------------------------------------------------------------- Number of 7. Sole Voting Power 941,892............................................................... Shares Bene- ------------------------------------------------------------------------------------------------ ficially by Owned by Each 8. Shared Voting Power 0................................................................... Reporting ------------------------------------------------------------------------------------------------ Person With 9. Sole Dispositive Power 941,892.......................................................... ------------------------------------------------------------------------------------------------ 10. Shared Dispositive Power 0.............................................................. - --------------------------------------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 941,892........................... - --------------------------------------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - --------------------------------------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 1.9% - --------------------------------------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN.............................................................................................. ................................................................................................ ................................................................................................ .................................................................................................
3 CUSIP No. 82655N105 PAGE 4 OF 13 PAGES - --------------------------------------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Carlyle Venture Coinvestment, L.L.C. - --------------------------------------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) ......................................................................................... (b) X ....................................................................................... - --------------------------------------------------------------------------------------------------------------- 3. SEC Use Only.................................................................................... - --------------------------------------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - --------------------------------------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)............. - --------------------------------------------------------------------------------------------------------------- 6. Citizenship or Place of Organization - --------------------------------------------------------------------------------------------------------------- Delaware - --------------------------------------------------------------------------------------------------------------- Number of 7. Sole Voting Power 571,415............................................................... Shares Bene- ------------------------------------------------------------------------------------------------ ficially by Owned by Each 8. Shared Voting Power 0................................................................... Reporting ------------------------------------------------------------------------------------------------ Person With 9. Sole Dispositive Power 571,415.......................................................... ------------------------------------------------------------------------------------------------ 10. Shared Dispositive Power 0.............................................................. - --------------------------------------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 571,415........................... - --------------------------------------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - --------------------------------------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 1.2% - --------------------------------------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) OO Limited Liability Company ................................................................................................ ................................................................................................ ................................................................................................
4 SCHEDULE 13D (CONTINUED) PAGE 5 OF 13 PAGES Pursuant to Rule 13d-2(a) of Regulation 13D promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Reporting Persons (as hereafter defined) hereby amend their Schedule 13D dated November 25, 1997 and filed with the Securities and Exchange Commission (the "SEC") on December 5, 1997 (the "Schedule 13D") as amended by the Amendment No. 1 to Schedule 13D dated May 6, 2002 and filed with the SEC on May 9, 2002, relating to the common stock, par value $.01 per share ("Common Stock"), of Sight Resource Corporation, a Delaware corporation (the "Issuer"). ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source of funds used by each Reporting Person (as defined in Item 4(a)(i) below) to acquire additional shares of Common Stock of the Issuer pursuant to the Purchase Agreement (as defined in Item 4(a)(i) below) were contributions from the partners or members, as the case may be, of each Reporting Person. ITEM 4. PURPOSE OF TRANSACTION. Item 4(a) and (d) of the Schedule 13D is hereby amended as follows: (a) The acquisition by the Reporting Persons of additional securities of the Issuer, and the disposition by the Reporting Persons of securities of the Issuer, as follows: (i) Pursuant to that certain Common Stock Purchase Agreement dated as of December 30, 2002 (the "Purchase Agreement"), by and among the Company and the persons identified on Exhibit A to the Purchase Agreement, as of December 31, 2002, Carlyle Venture Partners, L.P. ("CVP") purchased 1,940,295 shares of Common Stock, C/S Venture Investors, L.P. ("C/S") purchased 396,255 shares of Common Stock, Carlyle U.S. Venture Partners, L.P. ("CUS") purchased 257,335 shares of Common Stock, and Carlyle Venture Coinvestment, L.L.C. ("CVC" and together with CVP, C/S and CUS, the "Reporting Persons") acquired 156,115 shares of Common Stock, which were purchased from the Issuer in a private placement for a purchase price of $0.20 per share. (ii) Pursuant to the Certificate of Incorporation of the Issuer (as amended) and the Purchase Agreement, as of December 31, 2002, the Issuer issued shares of Common Stock as payment of accrued and unpaid dividends on the shares of Series B Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock"), held by each Reporting Person, for the quarters ended, and in the amounts, set forth below:
Quarters Ended CVP C/S CUS CVC -------------- --- --- --- --- February 2002 275,712 56,307 36,566 22,184 May 2002 217,028 44,322 28,784 17,462 August 2002 364,253 74,390 48,309 29,308 November 2002 448,032 91,498 59,421 36,049
(iii) Pursuant to the Certificate of Incorporation of the Issuer (as amended) and the Purchase Agreement, as of December 31, 2002, each Reporting Person converted all shares of Preferred Stock of the Issuer held by it into shares of Common Stock of the Issuer at a conversion price of $1.57 per share, as follows: (i) CVP converted 1,024,560 shares of Preferred Stock into 2,288,773 shares of Common Stock, (ii) C/S converted 209,239 shares of Preferred Stock into 467,421 shares of Common Stock, (iii) CUS converted 135,883 shares of Preferred Stock into 303,551 shares of Common Stock, and (iv) CVC converted 82,436 shares of Preferred Stock into 184,155 shares of Common Stock. 5 SCHEDULE 13D (CONTINUED) PAGE 6 OF 13 PAGES (iv) Pursuant to the Purchase Agreement, each Reporting Person agreed to cancel, and the Issuer did cancel, all Class I (Mirror) Warrants, and all obligations to acquire shares of Common Stock upon exercise thereof, held by each Reporting Person, and the Class II Warrants and all rights to acquire shares of Common Stock of the Issuer upon exercise thereof, held by the each Reporting Person expired by their own terms on November 25, 2002, as follows:
- ------------------------------------------------------------------------------------------------------- Number of Shares Number of Class I Issuable Exercise Shares (Mirror) Upon Price of Class II Issuable Exercise Warrant Exercise of Cancelled Warrant Upon Price of Name of Issue Date Class I Class I Issue Date Exercise of Expired Reporting (Obligation (Mirror) (Mirror) (Right to Class II Class II Person to Buy) Warrants (1) Warrants Buy) Warrants (2) Warrants - ------------------------------------------------------------------------------------------------------- CVP 11/25/97 44,369 (1) 11/25/1997 464,082 $3.09 - ------------------------------------------------------------------------------------------------------- C/S 11/25/97 9,061 (1) 11/25/1997 94,776 $3.09 - ------------------------------------------------------------------------------------------------------- CUS 11/25/97 5,884 (1) 11/25/1997 61,549 $3.09 - ------------------------------------------------------------------------------------------------------- CVC 11/25/97 3,570 (1) 11/25/1997 37,340 $3.09 - -------------------------------------------------------------------------------------------------------
(1) On November 25, 1997, the Reporting Persons acquired Class I (Mirror) Warrants ("Mirror Warrants"), which represented as of December 31, 2002, an obligation to buy a number of shares of Common Stock of the Issuer, in the case of (i) CVP, corresponding to approximately 14.041%, (ii) C/S, corresponding to approximately 2.867%, (iii) CUS, corresponding to approximately 1.862%, and (iv) CVC, corresponding to approximately 1.130%, of the number of shares of Common Stock issued, from time to time, upon exercise of certain stock options and warrants specified on Schedule A (collectively the "Counterpart Warrants") to the Class I (Mirror) Warrant Agreements; provided, further, that the Reporting Persons would have been required to exercise the Mirror Warrants if or when the applicable holders exercised the Counterpart Warrants, at the same exercise prices and on the same terms as the applicable Counterpart Warrants. The Mirror Warrants could not have been exercised unless and until the applicable Counterpart Warrants were first exercised by the holders thereof. The Counterpart Warrants were issued at various dates, continue to be exercisable by the holders thereof for various numbers of shares of Common Stock at various exercise prices, on various terms, and continue to expire at various dates. The purpose of the disclosure in this Item 4(a)(iv) is to report the cancellation, pursuant to the terms of the Purchase Agreement, as of December 31, 2002, of the Class I (Mirror) Warrants (Obligations to Buy) for no additional cash consideration or other value received by the Reporting Persons pursuant to the terms of the Purchase Agreement. (2) The Class II Warrants (Rights to Buy) expired by their own terms on November 25, 2002, with no cash consideration or other value having been received by the Reporting Persons. (v) On December 31, 2002, the Reporting Persons entered into a Put and Right of First Refusal Agreement dated as of December 31, 2002 (the "Put Agreement"), with Mr. Dino Tabacchi and La Sesta S.A., a Luxembourg corporation, that is an affiliate of Mr. Marco Brustio, whereby, the Reporting Persons were granted the right to require Mr. Tabacchi and La Sesta S.A. or their permitted assigns, to purchase from the Reporting Persons an aggregate of up to 7,000,000 shares of Common Stock of the Issuer held by them at the purchase price, in the amounts, during the periods and on the terms set forth in the Put Agreement, of which each Reporting Person has the right to sell, the following number of shares of Common Stock: (i) CVP, up to 4,938,935 shares of Common Stock, (ii) C/S, up to 1,008,646 shares of Common Stock, (iii) CUS, up to 655,032 shares of Common Stock, and (iv) CVC, up to 397,387 shares of Common Stock. The Reporting Persons disclaim that they are a "group" for purposes of Section 13(d) of the Exchange Act and Regulation 13D-G thereunder or for any other purpose. Each Reporting Person disclaims beneficial ownership of all securities of the Issuer deemed directly or indirectly beneficially owned by the other Reporting 6 SCHEDULE 13D (CONTINUED) PAGE 7 OF 13 PAGES Persons or their respective affiliates, or by any other stockholder of the Issuer and their affiliates, including Messrs. Tabacchi and Brustio or their respective affiliates (including stockholders or their affiliates who are parties to the Purchase Agreement). (d) Pursuant to the Purchase Agreement, the Reporting Persons contractually agreed with the Issuer and the other parties to the Purchase Agreement that, for a period of three years, the Board of Directors of the Issuer shall consist of nine members, of which the Reporting Persons shall have the right to nominate one member, Mr. Marco Brustio shall have the right to be nominated as a director, the Board shall have the right to nominate one independent director, and Mr. Dino Tabacchi shall have the right to nominate one director upon the occurrence of the first vacancy on the Board following the date of closing of the transactions pursuant to the Purchase Agreement. The Reporting Persons disclaim that they are a group with each other and with Messrs. Tabacchi and Brustio and their affiliates (including any stockholder who is a party to the Purchase Agreement) for purposes of Section 13(d) of the Exchange Act and Regulation 13D-G thereunder or for any other purpose. Each Reporting Person disclaims beneficial ownership of all securities of the Issuer deemed directly or indirectly beneficially owned by the other Reporting Persons or their respective affiliates or by any other stockholder of the Issuer, including Messrs. Tabacchi and Brustio or their respective affiliates (including any stockholder who is a party to the Purchase Agreement). Mr. Ryan Schwarz is the designee of the Reporting Persons to the Board of Directors of the Issuer. Mr. Schwarz is also a non-managing member of CVC. Mr. Schwarz disclaims beneficial ownership of the securities of the Issuer deemed directly or indirectly beneficially owned by each Reporting Person or their respective affiliates, including TCG (as hereafter defined) and TCG Ltd. (as hereafter defined), except to the extent of his pecuniary interest therein, and this Amendment No. 2 to Schedule 13D shall not be deemed an admission that Mr. Schwarz is the beneficial owner of any such securities for purposes of Section 13(d) of the Exchange Act or any other purpose. Mr. Schwarz disclaims that he is a member of a "group" with the Reporting Persons or their respective affiliates, or with any other stockholder of the Issuer, including Messrs. Tabacchi and Brustio and their respective affiliates (including any stockholder who is a party to the Purchase Agreement), for purposes of Section 13(d) of the Exchange Act and Regulation 13D-G thereunder or for any other purpose. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5(a) of the Schedule 13D is hereby amended as follows: (a) The following Table summarizes the beneficial ownership of each Reporting Person of all securities of the Issuer on December 31, 2002 (after giving effect to the purchase of shares of Common Stock pursuant to the Purchase Agreement, stock dividends paid on December 31, 2002, the conversion of all shares of Preferred Stock held by each Reporting Person as of December 31, 2002, the cancellation of all Class I (Mirror) Warrants held by each Reporting Person as of December 31, 2002, and the expiration of the Class II Warrants held by each Reporting Person as of November 25, 2002).
- ------------------------------------------------------------------------------------------------- Reporting Persons (1) Common Stock (2), (3), (4) (5) Percentage of Ownership on a Common Stock Basis as of December 31, 2002 (6) - ------------------------------------------------------------------------------------------------- CVP 7,101,852 14.4% - ------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------- C/S 1,450,365 2.9% - ------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------- CUS 941,892 1.9% - ------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------- CVC 571,415 1.2% - ------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------
7 SCHEDULE 13D (CONTINUED) PAGE 8 OF 13 PAGES (1) Ryan Schwarz, a director of the Issuer, is a non-managing member of CVC, and is a Principal of affiliates of the Reporting Persons and TCG Ventures, L.L.C., a Delaware limited liability company ("TCG"), which is the general partner of CUS and the managing member of CVC, and TCG Ventures Ltd., a Cayman Islands corporation ("TCG Ltd."), which is the general partner of CVP and C/S. Each Reporting Person, TCG and TCG Ltd. and Mr. Schwarz disclaim that they are a "group" for purposes of Section 13(d) of the Exchange Act and Regulation 13D-G thereunder or for any other purpose. Each Reporting Person, TCG and TCG Ltd. disclaims beneficial ownership of all Securities deemed directly or indirectly beneficially owned by the other Reporting Persons or their respective affiliates. Mr. Schwarz disclaims beneficial ownership of all Securities of the Issuer directly or indirectly beneficially owned by the Reporting Persons or their respective affiliates, including TCG and TCG Ltd., other than with respect to his pecuniary interest therein. This Amendment No. 2 to Schedule 13D shall not be deemed an admission that Mr. Schwarz is the beneficial owner of such securities for purposes of Section 13(d) of the Exchange Act or any other purpose. (2) As of December 31, 2002, the Issuer paid a stock dividend on the shares of Preferred Stock held by the Reporting Persons on account of accrued but unpaid dividends for the periods ended February 2002, May 2002, August 2002, and November 2002, allocated as follows: (i) CVP was dividended an aggregate of 1,305,025 shares of Common Stock, (ii) C/S was dividended an aggregate of 266,517 shares of Common Stock, (iii) CUS was dividended an aggregate of 173,080 shares of Common Stock, and (iv) CVC was dividended an aggregate of 105,003 shares of Common Stock. (3) Pursuant to the Purchase Agreement, the Reporting Persons and the Issuer have agreed that the number of shares of Common Stock into which the shares of Preferred Stock were converted as of December 31, 2002 (based on a conversion price of $1.57 per share), are as follows: (i) CVP converted 1,024,560 shares of Preferred Stock into 2,288,773 shares of Common Stock, (ii) C/S converted 209,239 shares of Preferred Stock into 467,421 shares of Common Stock, (iii) CUS converted 135,883 shares of Preferred Stock into 303,521 shares of Common Stock, and (iv) CVC converted 82,436 shares of Preferred Stock into 184,155 shares of Common Stock. (4) As of December 31, 2002, the Reporting Persons agreed to the cancellation of, and the Issuer cancelled, Class I (Mirror) Warrants (Obligations to Buy), which represented an obligation to buy a number of shares of Common Stock of the Issuer, in the case of (i) CVP, corresponding to approximately 14.041%, (ii) C/S, corresponding to approximately 2.867%, (iii) CUS, corresponding to approximately 1.862%, and (iv) CVC, corresponding to approximately 1.130%, of the number of shares of Common Stock issued, from time to time, upon exercise of the Counterpart Warrants; provided, further, that the Reporting Persons would have been required to exercise the Mirror Warrants if and when the applicable holders exercised such Counterpart Warrants, at the same exercise prices and on the same terms as the applicable Counterpart Warrants. The Mirror Warrants could not have been exercised unless or until the applicable Counterpart Warrants were first exercised by the holders thereof. The Counterpart Warrants were issued at various times, continue to be exercisable by the holders thereof for various numbers of shares of Common Stock, at various exercise prices, on various terms and continue to expire at various dates. The Class I (Mirror) Warrants have been cancelled for no additional cash consideration or other value received by the Reporting Persons pursuant to the terms of the Purchase Agreement. (5) The Class II Warrants, which represented a right to buy, that were exercisable as follows (i) CVP, 464,082 shares of Common Stock at an exercise price of $3.09 per share; (ii) C/S, 94,776 shares of Common Stock at an exercise price of $3.09 per share, (iii) CUS, 61,549 shares of Common Stock at an exercise price of $3.09 per share, and (iv) CVC, 37,340 shares of Common Stock at an exercise price of $3.09 per share, expired by their own terms on November 25, 2002, with no cash consideration or other value having been received by the Reporting Persons. (6) Percentage of Ownership is calculated based on an aggregate of 49,291,834 shares of Common Stock of the Issuer outstanding as of December 31, 2002 (after giving effect to the issuance of shares of Common Stock pursuant to the Purchase Agreement, the stock dividend paid to the Reporting Persons as of December, 31, 2002, and the conversion of the shares of Preferred Stock held by the Reporting Persons as of December 31, 2002), plus, in the case of: (i) CVP, 705,562 shares of Common Stock; (ii) C/S, 144,092 shares of Common Stock; (iii) CUS, 93,576 shares of Common Stock; and (iv) CVC, 56,770 shares of Common Stock, in each case issuable upon exercise of outstanding Warrants held by the Reporting Persons exercisable within 60 days. Item 6 Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer Item 6 of the Schedule 13D is hereby amended as follows: The Purchase Agreement includes provisions requiring, simultaneously with the closing of the sale of shares of Common Stock of the Issuer to the Reporting Persons described in Item 4(a)(i), pursuant to the terms thereof, the closing of the following other transactions (i) the Issuer is required to issue shares of Common Stock as payment for accrued and unpaid dividends on the shares of Preferred Stock held by the Reporting Persons, as described in Item 4(a)(ii), (ii) the Reporting Persons are required to convert the shares of Preferred Stock held by them into shares of Common Stock of the Issuer at a conversion price of $1.57 per share, as described in Item 4(a)(iii), (iii) the Reporting Persons agreed to cancel, and the Issuer cancelled, all Class I (Mirror) Warrants (Obligations to Buy), as described in Item 4(a)(iv), and (iv) the Reporting Persons agreed to certain provisions relating to the composition of the Board of Directors of the Issuer as described in Item 4(d). The Class II Warrants (Rights to Buy) held by the Reporting Persons expired by their terms on November 25, 2002. The provisions relating to the nomination of directors of the Issuer will survive for three years following the closing of the 8 SCHEDULE 13D (CONTINUED) PAGE 9 OF 13 PAGES transactions under the Purchase Agreement. Mr. Schwarz is the designee of the Reporting Persons to the Board of Directors of the Issuer. Mr. Schwarz is a non-managing member of CVC. Mr. Schwarz also is a Principal of affiliates of the Reporting Persons and TCG, which is the general partner of CUS and the managing member of CVC, and TCG Ltd., which is the general partner of CVP and C/S. Mr. Schwarz disclaims beneficial ownership of all securities of the Issuer deemed directly or indirectly beneficially owned by the Reporting Persons and their respective affiliates, including TCG and TCG Ltd., other than with respect to his pecuniary interest therein. This Amendment No. 2 to Schedule 13D shall not be deemed an admission that Mr. Schwarz is the beneficial owner of such securities for purposes of Section 13(d) of the Exchange Act or for any other purpose. Each Reporting Person, TCG and TCG Ltd. and Mr. Schwarz disclaim that they are a "group" for purposes of Section 13(d) of the Exchange Act and Regulation 13D-G thereunder or for any other purpose. Each Reporting Person, TCG and TCG Ltd. disclaims beneficial ownership of all securities directly or indirectly owned by the other Reporting Persons or their respective affiliates or any other stockholders of the Company and their affiliates, including Messrs. Tabacchi and Brustio and their respective affiliates (including any stockholder who is a party to the Purchase Agreement) and disclaim that they are a group with any such persons or entities. 9 SCHEDULE 13D (CONTINUED) PAGE 10 OF 13 PAGES ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1 Joint Filing Agreement, dated as of January 2, 2003, by and among CVP, C/S, CUS and CVC Exhibit 2 Common Stock Purchase Agreement dated as of December 30, 2002. Exhibit 3 Put and Right of First Refusal Agreement dated as of December 31, 2002.
10 SCHEDULE 13D (CONTINUED) PAGE 11 OF 13 PAGES SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: January 2, 2003 CARLYLE VENTURE PARTNERS, L.P., a Cayman Islands exempted limited partnership By: TCG Ventures, Ltd., as the General Partner By: /S/ JOHN HARRIS ------------------------------ Name: John Harris Title: Managing Director C/S VENTURE INVESTORS, L.P., a Cayman Islands exempted limited partnership By: TCG Ventures, Ltd., as the General Partner By: /S/ JOHN HARRIS ------------------------------ Name: John Harris Title: Managing Director CARLYLE U.S. VENTURE PARTNERS, L.P., a Delaware limited partnership By: TCG Ventures, L.L.C., as the General Partner By: /S/ JOHN HARRIS ------------------------------ Name: John Harris Title: Managing Director CARLYLE VENTURE COINVESTMENT, L.L.C., a Delaware limited liability company By: TCG Ventures, L.L.C., as the Managing Member By: /S/ JOHN HARRIS ------------------------------ Name: John Harris Title: Managing Director The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative's authority to sign on behalf of such person shall be filed with the statement: provided, however, that a power of attorney for this purpose which is already on file with the Securities and Exchange Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature. Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001) 11 SCHEDULE 13D (CONTINUED) PAGE 12 OF 13 PAGES EXHIBIT INDEX Exhibit 1 Joint Filing Agreement dated as of January 2, 2003, by and among CVP, C/S, CUS and CVC Exhibit 2 Common Stock Purchase Agreement dated as of December 30, 2002. Exhibit 3 Put and Right of First Refusal Agreement dated as of December 31, 2002.
12 EX-1 3 w70832exv1.txt JOINT FILING AGREEMENT SCHEDULE 13D (CONTINUED) PAGE 13 OF 13 PAGES EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $.01 per share, of Sight Resource Corporation, a Delaware corporation, and that this Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 2nd day of January, 2003 CARLYLE VENTURE PARTNERS, L.P., a Cayman Islands exempted limited partnership By: TCG Ventures, Ltd., as the General Partner By: /S/ JOHN HARRIS ---------------------------- Name: John Harris Title: Managing Director C/S VENTURE INVESTORS, L.P., a Cayman Islands exempted limited partnership By: TCG Ventures, Ltd., as the General Partner By: /S/ JOHN HARRIS ---------------------------- Name: John Harris Title: Managing Director CARLYLE U.S. VENTURE PARTNERS, L.P., a Delaware limited partnership By: TCG Ventures, L.L.C., as the General Partner By: /S/ JOHN HARRIS ---------------------------- Name: John Harris Title: Managing Director CARLYLE VENTURE COINVESTMENT, L.L.C., a Delaware limited liability company By: TCG Ventures, L.L.C., as the Managing Member By: /S/ JOHN HARRIS ---------------------------- Name: John Harris Title: Managing Director 13 EX-2 4 w70832exv2.txt COMMON STOCK PURCHASE AGREEMENT EXECUTION COPY -Revision #1 COMMON STOCK PURCHASE AGREEMENT by and among SIGHT RESOURCE CORPORATION and THE PERSONS LISTED ON EXHIBIT A HERETO Dated as of December 30, 2002 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............................................4 ARTICLE III CONDITIONS TO CLOSING............................................................4 Section 3.01 Mutual Conditions To Closing.............................................5 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...................................................14 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...................................................................16 Section 7.01 Notices.................................................................16 Section 7.02 Legends.................................................................17 Section 7.03 Termination.............................................................18 Section 7.04 Action By Purchasers....................................................18 Section 7.05 Entire Agreement........................................................18 Section 7.06 Modifications And Amendments............................................18 Section 7.07 Waivers And Consents....................................................18 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..........................................................19 Section 7.13 Headings And Captions...................................................19 Section 7.14 Enforcement.............................................................19 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...............................................................20 Section 7.19 Counterparts............................................................21 Section 7.20 Obligations Several, Not Joint..........................................21
EXHIBITS
DESIGNATION DESCRIPTION SECTION 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
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 "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) the Security Agreement (All Assets) dated July 31, 2002 by Kent Optometric Providers P.C. 3 "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. (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 4 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. 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: 5 (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 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; 6 (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 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 7 (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 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 8 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 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 9 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 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 10 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. (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. 11 (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 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. 12 (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 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 13 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 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 14 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 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. 15 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. 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 16 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 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 17 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 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. 18 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 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. 19 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 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 20 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 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/ E. DINO TABACCHI ---------------------------------------- Name: Dino Tabacchi Number of Shares: 5,500,000 Aggregate Purchase Price: $1,100,000.00 22 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 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 EXHIBIT A
- ------------------------------------------------------------------------------------------ AGGREGATE NUMBER NAME AND ADDRESS 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 - ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------ AGGREGATE NUMBER NAME AND ADDRESS 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 - ------------------------------------------------------------------------------------------
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 FISCAL QUARTER ACCRUED CASH PAYMENT OF CASH NAME ENDED DIVIDEND 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
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 NAME SHARES OF SERIES B STOCK 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
EXHIBIT D ESCROW AGREEMENT [See attached] EXHIBIT E PUT AND RIGHT OF FIRST REFUSAL AGREEMENT [See attached] EXHIBIT F REGISTRATION RIGHTS AGREEMENT [See attached] EXHIBIT G OPINION OF COUNSEL TO THE COMPANY [See attached] EXHIBIT H SIXTH LOAN MODIFICATION AGREEMENT [See attached] EX-3 5 w70832exv3.txt PUT AND RIGHT OF FIRST REFUSAL AGREEMENT EXHIBIT 3 PUT AND RIGHT OF FIRST REFUSAL AGREEMENT THIS PUT AND RIGHT OF FIRST REFUSAL AGREEMENT is made and entered into as of the 31 day of December 2002 (this "Agreement"), by and among Dino Tabacchi ("Tabacchi"), La Sesta S.A., a Luxembourg company represented by Marco Brustio ("La Sesta"), and 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. (collectively, "Carlyle"). Tabacchi, La Sesta and Carlyle are sometimes referred to herein individually as a "Party" and collectively as the "Parties." W I T N E S S E T H: WHEREAS, Tabacchi, La Sesta and Carlyle are parties to the Common Stock Purchase Agreement dated of even date herewith (the "Purchase Agreement"), by and among the Parties and E. Dean Butler (sometimes referred to hereafter together with Tabacchi, La Sesta and Carlyle, collectively, as the "Securities Purchasers") and Sight Resource Corporation, a Delaware corporation ("SRC"), pursuant to which each of them has committed to acquire shares of Common Stock of SRC ("Common Stock"), in the amounts, at the purchase price and on the terms and conditions specified therein; and WHEREAS, as consideration to induce Carlyle to commit to acquire additional shares of Common Stock pursuant to the Purchase Agreement and to agree to convert all of the shares of Series B Convertible Preferred Stock of SRC (the "Series B Stock") held by Carlyle into shares of Common Stock pursuant to the terms of the Purchase Agreement, SRC has agreed to pay all accrued and unpaid dividends on the Series B Stock to Carlyle through the issuance of additional shares of Common Stock pursuant to the terms of the Purchase Agreement, and Tabacchi and La Sesta have agreed to grant to Carlyle the right to cause the Shares (as hereafter defined) to be purchased by Tabacchi and La Sesta (or their Permitted Grantor Transferees) in the amounts and under the terms and conditions provided in this Agreement; and WHEREAS, as consideration to induce Tabacchi and La Sesta to commit to acquire additional shares of Common Stock pursuant to the Purchase Agreement, Carlyle agrees to convert all of the shares of Series B Convertible Preferred Stock of SRC (the "Series B Stock") held by Carlyle into shares of Common Stock and to cancel the Class I (Mirror) and Class II Warrants of the Company held by Carlyle, simultaneously with the closing of the sale of shares of Common Stock pursuant to the Purchase Agreement. NOW, THEREFORE, the Parties having duly authorized the execution and delivery of this Agreement as required by the laws of the jurisdiction in which each is organized or incorporated, and in consideration of the premises and the mutual covenants and agreements herein, and intending to be bound hereby, the Parties agree as follows: 1 ARTICLE I DEFINITIONS SECTION 1.01 Definitions Capitalized terms used and not otherwise defined in this Agreement have the meanings respectively ascribed to them in the Purchase Agreement. In addition, the following terms when capitalized have the following meanings in this Agreement: (a) "Affiliate" means, with respect to any Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified. (b) "Business Day" means any day on which commercial banks are not authorized or required by law to close in Cincinnati, Ohio. (c) "Common Stock" means the common stock, par value $.01 per share, of SRC. (d) "Entity" means a partnership, a joint venture, a corporation, a trust, a limited liability company or any other organization legally organized under the laws of any jurisdiction. (e) "Fair Market Value" means the average close price of shares of Common Stock as quoted on the OTC Bulletin Board (or such other primary bulletin board or exchange or market system on which shares of Common Stock are then quoted or listed) for the latest 30 trading days ended as of the last day of each quarter during which the Put Notice exercising the Put Option has been delivered to the Grantors, without including in such calculations the highest and lowest price of the shares of Common Stock achieved during such period, such high and low prices to be eliminated only once in computing each such average. In the event the closing prices required by the preceding sentence are unavailable, Fair Market Value shall be determined using a method to be mutually agreed to by the Grantors and Carlyle negotiating in good faith, and if Tabacchi and La Sesta fail to negotiate with, or if Tabacchi, La Sesta and Carlyle cannot agree to such method or Fair Market Value, within 10 days after the date that Fair Market Value was initially to be determined, the Fair Market Value shall be the amount determined by one of the three largest nationally recognized accounting firms based on annual revenues, who shall be selected by Carlyle. Carlyle shall give notice of such selection to Tabacchi and La Sesta within five days after making such selection, and such selection shall be final and binding on all the Parties to this Agreement, unless Tabacchi and La Sesta shall object to such selection within five days after receiving notice from Carlyle pursuant to Section 4.07 of this Agreement, by written notice to Carlyle, which notice shall propose one of the other two remaining largest accounting firms based on annual revenues to determine the Fair Market Value. If Tabacchi and La Sesta notify Carlyle within the time period specified in the preceding sentence and propose an alternative accounting firm, Carlyle has five days after Tabacchi and La Sesta provides notice to Carlyle to object to their proposal, in which case the remaining one of the three largest 2 accounting firms based on annual revenues, which has not been selected by any of the Parties hereto shall be the firm engaged to determine Fair Market Value. (f) "First Put Period" means the first three full quarters commencing on the Put Period Commencement Date and ending on the last day of the third full quarter following the Put Period Commencement Date. (g) "Grantee" means individually, 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., and "Grantees" mean collectively, Carlyle. (h) "Grantor" means individually, Tabacchi, La Sesta or each Permitted Grantor Transferee, and "Grantors" mean collectively, Tabacchi, La Sesta and all Permitted Grantor Transferees. (i) "La Sesta" has the meaning ascribed to it in the introductory paragraph to this Agreement. (j) "New Securities" mean all shares of Common Stock issued to Carlyle (i) pursuant to the Purchase Agreement, (ii) upon conversion of the Series B Stock, and (iii) the Dividend Shares, as adjusted for stock splits, reverse stock splits and Common Stock dividends declared and paid on account of shares of Common Stock and any recapitalization, reorganization, merger, sale of assets or similar transaction. (k) "Permitted Grantor Transferee" means any Entity who Tabacchi or La Sesta, as the case may be, has substituted as the grantor and obligor of all of Tabacchi's or La Sesta's obligations pursuant to the Put Option or the Right of First Refusal, as applicable, subject to fulfillment of the following conditions: (i) such Entity is demonstrably able to fulfill all monetary obligations required to purchase all Shares required to be purchased by Tabacchi or La Sesta, as applicable, pursuant to the Put Option or the Right of First Refusal, as applicable, (ii) such Entity meets (and does not violate) and complies with all applicable legal and regulatory requirements as may be imposed by federal, state, local and foreign jurisdictions and governmental agencies and authorities upon each of the Parties to this Agreement and SRC and with respect to the transactions provided for by this Agreement, and (iii) such Entity becomes a party to this Agreement by executing and delivering to Carlyle a counterpart of the signature page to this Agreement. (l) "Person" means and includes an individual, a partnership, a joint venture, a corporation, a trust, a limited liability company, an unincorporated organization, any foreign, federal, state or local court or tribunal or administrative, governmental or regulatory body, agency commission, division, department, public body or other authority, or any other organization or entity. (m) "Purchase Agreement" has the meaning ascribed to it in the Recitals to this Agreement. 3 (n) "Put Option" means Carlyle's right and option to require each Grantor, on the terms and conditions set forth in this Agreement, to purchase the Shares, effective as of the date of this Agreement. (o) "Put Period Commencement Date" means the date that is the later of (i) January 1, 2003 or (ii) the date that Carlyle and the other Securities Purchasers acquire shares of Common Stock pursuant to the Purchase Agreement. (p) "Put Term" means (a) the period commencing on the Put Period Commencement Date, and (b) ending on the last day of the ninth full quarter after such Put Period Commencement Date, plus (c) all Extensions. (q) "Second Put Period" means the three full quarters commencing on the first day of the fourth full quarter following the Put Period Commencement Date and ending on the last day of the sixth full quarter following the Put Period Commencement Date. (r) "Securities Purchasers" has the meaning ascribed to it in the Recitals to this Agreement. (s) "Shares" means 7,000,000 shares of Common Stock (including New Securities), as adjusted from time to time for stock splits, reverse stock splits and Common Stock dividends declared and paid on account of shares of Common Stock and any recapitalization of the Company where such securities are issued to all stockholders of the Company on a pro rata basis. (t) "SRC" has the meaning ascribed to it in the Recitals of this Agreement. (u) "Subsidiary" means any Person of which a Party shall now or hereafter own or be owned by, directly or indirectly, through one or more Subsidiaries or otherwise, a Person holding equity interests representing 100% of the voting securities of such Person. (v) "Tabacchi" has the meaning ascribed to it in the introductory paragraph to this Agreement. (w) "Third Put Period" means the three full quarters commencing on the first day of the seventh full quarter following the Put Period Commencement Date and ending on the last day of the ninth full quarter following Put Period Commencement Date. (x) "Trading Day" with respect to a securities exchange or quotation system or bulletin board means a day on which such exchange or quotation system or bulletin board is open and conducting business. (y) "Transfer" (including with correlative meanings, the terms "transferring" and "transferred") means the direct or indirect sale, assignment, transfer, grant of a participation or derivative interest in, pledge or other disposition of any Shares (or solicitation of any offers to buy or otherwise acquire, or take a pledge of, any Shares). 4 SECTION 1.02 Other Terms. Each of the following terms is defined in the Section set forth opposite such term:
Term Section ---- ------- Carry-Over Shares 2.02 Excess Exercised Shares 2.04(c) Extensions 2.02 Proposed Transferee 3.01 Offer 3.01 Offerees 3.01 Offered Shares 3.01 Offered Shares Closing 3.03 Over-Allotment Right 3.02 Purchasers 3.02 Put Closing 2.04(b) Put Period 2.02 Put Notice 2.03 Put Period 2.01 Put Price 2.04(a) Right of First Refusal Exercise Notice 3.02 Standoff 2.02 Standoff Conditions 2.02
ARTICLE II PUT RIGHTS SECTION 2.01 Grant of Put Rights. Subject to the terms and conditions of this Agreement, Tabacchi and La Sesta, and each of their Permitted Grantor Transferees, irrevocably grants and issues to each Grantee a Put Option to require the Grantors to purchase the Shares, in whole or in part, exercisable in such Grantee's sole discretion, during the Put Period, at the Put Price, in the following proportions: (a) one-third or 2,333,333 Shares for the First Put Period; (b) one-third or 2,333,333 Shares for the Second Put Period, and (c) one-third or 2,333,333 Shares for the Third Put Period (and with the First Put Period and Second Put Period, sometimes referred to individually, as a "Put Period" and collectively, as the "Put Periods"). By way of clarification and not limitation, the Grantees may exercise the Put Option as of the last Business Day of any given quarter within a Put Period for as many Shares as it may determine subject to the above maximums (for example, the Grantees may, but are not required to, exercise the Put Option for the entire 2,333,333 Shares for the First Put Period, in the first quarter). If at the last day of the First Put Period, Second Put Period or Third Put Period, as the case may be, Grantees have not exercised the Put Option with respect to any of the Shares allocable to such Put Period, the Grantees' right to exercise the Put Option and to require the Grantors to purchase such Shares shall expire, subject to the Grantees' right, in the event of a Standoff, to carry-over any Shares to the remaining quarters of the Put Term, as 5 described in Section 2.02 below. The Grantors obligations to acquire Shares shall be up to the following maximum amounts: (a) Tabacchi and his Permitted Grantor Transferees shall be obligated to purchase and acquire up to an aggregate of 5,600,000 Shares, except that Tabacchi and his Permitted Grantor Transferees shall not be required to purchase such shares at any Put Closing (as hereafter defined) if the aggregate purchase price for all Shares purchased by Tabacchi and its Permitted Grantor Transferees would then exceed $4,000,000, and (b) La Sesta and its Permitted Grantor Transferees shall be obligated to acquire up to an aggregate of 1,400,000 Shares except that La Sesta and its Permitted Grantor Transferees shall not be required to purchase such shares at any Put Closing if the aggregate purchase price for all Shares purchased by La Sesta and its Permitted Grantor Transferees would then exceed $1,000,000. The Grantors shall have no rights or interests in any Shares that are not purchased and paid for by them. SECTION 2.02 Put Period and Standoff. The Put Option shall continue in effect during the Put Term and all Extensions thereof, except that if as of the last day of any quarter during the Put Period the index for the national market of the Nasdaq Stock Market, Inc. ("Nasdaq") or any successor thereto, as reported by Nasdaq, has increased (i) by 60% or more during the prior six-month period as reported for the first day of such six-month period and the last day of such six-month period, or (ii) by 120% or more during the prior 12 month period as reported for the first day of such 12--month period and the last day of such 12-month period (collectively, the "Standoff Conditions"), the Put Option relating to such quarter shall not be exercisable by any Grantee (each case being a "Standoff"). If a Standoff shall be in effect at the end of the First Put Period, Second Put Period or Third Put Period, as the case may be, the Grantees shall carry-over any unexercised Shares (the "Carry-Over Shares") allocable to such Put Period, by reallocating those Carry-Over Shares on a pro-rata basis to the remaining Put Periods during the Put Term; provided, that if any Standoff is in effect as of the end of the Third Put Period, the Put Term shall be extended by successive full quarters (each an "Extension" and together the "Extensions") until such time as such Standoff Conditions shall be no longer in effect. Following each Standoff, the Put Option shall resume being exercisable by the Grantees on each date that the Standoff shall no longer be in effect. In the final quarter of an Extension, the Grantees shall have the right to exercise the Put Option, and, if so exercised, the Grantors shall have the obligation to purchase, all remaining Shares that have not yet been purchased by the Grantors. SECTION 2.03 Put Notice. The Put Option may be exercised in the sole discretion of each Grantee by delivering written notice ("Put Notice") of exercise to the Grantor as of the last day of each quarter within a Put Period. The Put Notice shall indicate the number of Shares each Grantee is putting to the Grantors. Upon receipt of a Put Notice in accordance with the terms hereof, the applicable Grantees shall be obligated to sell all of the Shares to which the Put Notice relates, free and clear of all liens and encumbrances created by each of them or their respective Affiliates (other than pursuant to this Agreement). The Grantors shall be obligated to purchase pro rata all of such Shares put by the applicable Grantees, at the applicable Put Price in accordance with, and subject to, the terms of this Agreement; provided, however, that the Put Option may not be exercised if 6 the Standoff Conditions have occurred and are continuing. For purposes of the foregoing sentence, the "pro rata" portion of Shares that Tabacchi and its Permitted Grantor Transferees on the one hand, and La Sesta and its Permitted Grantor Transferees on the other hand, shall be obligated to purchase, shall mean a fraction, (A) the numeration of which shall be 5,600,000 in the case of Tabacchi and his Permitted Grantor Transferees, and 1,400,000 in the case of La Sesta and its Permitted Grantor Transferees and the (B) denominator of which shall be 7,000,000, subject to the aggregate limitations set forth in Section 2.01 of this Agreement. SECTION 2.04 Put Price; Closing and Limitation on Shares. (a) The "Put Price" at which the Put Shares shall be sold to the Grantors shall be the Fair Market Value determined as of the last day of each quarter for which the Put Option has been exercised. Notwithstanding anything herein to the contrary, the Put Price shall not (a) exceed $1.00 per share, and (b) be less than $0.20 per share, provided, further, that the Put Price at which the first 2,333,333 Shares sold to and purchased by the Grantors during the last five quarters of the Put Term shall be not less than $0.30 per share. (b) The Grantees shall be obligated to sell, and the Grantors shall be obligated to pay the purchase price for and acquire, the Shares being sold and purchased pursuant to each Put Notice at the Put Closing (as hereafter defined). The closing of the purchase and sale of Shares pursuant to each Put Option, shall take place at the principal office of Carlyle or at such other location as the Parties shall mutually agree, on a Business Day to be mutually agreed upon by the Grantors and the Grantees, which date shall be no later than 30 days following the last day of the quarter during which the Put Notice was delivered, or if the Parties do not mutually agree to a closing date, the closing date shall be the next Business Day following such thirtieth day (each a "Put Closing"); provided, however, that if the purchase of Shares is subject to prior regulatory approval, the Grantors and Grantees will use their reasonable best efforts to obtain the necessary regulatory approvals and the Put Closing shall be postponed until the expiration of five Business Days after the date that all such regulatory approvals shall have been received. At each Put Closing, the Grantees shall deliver to the Grantors the certificates representing the Shares being sold pursuant to the exercise of such Put Option, duly endorsed or accompanied by stock powers executed in blank, in form and substance customary in the United States of America for transactions of this type, and evidence reasonably satisfactory to the Grantor that the Shares are being transferred free and clear of all liens and encumbrances created by such Grantee or its Affiliates (it being understood that in no event shall a Grantee be obligated to make any representations and warranties, or to provide any indemnities, with respect to (i) any matters relating to the Company, or (ii) with respect to any other matters other than (1) title to the Shares held by such Grantee, such title being free and clear of all liens and encumbrances created by it or its Affiliates, (2) such Grantee's authority, authorization and right to enter into and consummate the sale without contravention of any law or agreement, and without the need for any third party consent or approval (not including any governmental or regulatory consent or approval which shall have been applied for or received), and (3) the existence of pending or, to the knowledge of the Grantee, threatened litigation involving such Grantee that could reasonably be expected to prohibit or limit the sale of good title to the Shares by such Grantee). At each Put Closing, the Grantors shall pay the Put Price to each Grantee by delivery of cash by wire transfer to the accounts of the applicable Grantees. 7 (c) Notwithstanding anything in Section 2.04(b) to the contrary, if Grantees exercise their Put Option (including Excess Exercised Shares, as defined below, if any, carried over from the previous quarter) for more than an aggregate of 777,777 Shares as of the last day of a quarter that is not the last day of the First Put Period, Second Put Period or Third Put Period, or any Extension thereof, as the case may be, the Put Closing and payment of the Put Price for such number of Shares in excess of 777,777 (the "Excess Exercised Shares") shall take place at a date not later than 30 days following the first to occur of (i) the end of the next quarter during which Put Notices exercising the Put Option for fewer than an aggregate of 777,777 Shares (including Excess Exercised Shares) have been delivered to the Grantors, or (ii) the end of the next quarter that shall be the last quarter of a Put Period, it being understood that no payment shall be required to be made for more than 777,777 Shares for any quarter in any Put Period, except for the last quarter in each Put Period at which time the Grantors shall be obligated to purchase all Excess Exercised Shares from the Grantees. (d) If any of the Grantors do not pay the full amount of the Put Price for all Shares to be purchased by such Grantors at any Put Closing or during the Put Period, Article III, Right of First Refusal, immediately shall terminate and no longer be in effect, and, at the Grantees' option, in their sole discretion, the Grantees may (i) withdraw the exercise of the Put Option with respect to such Shares, in which case they would retain all rights and obligations with respect thereto, (ii) deem the exercise of the Put Option to remain in effect, in which case, if the Grantors do not pay the Put Price within 30 days of the date of the Put Notice, the Put Price shall double, and (iii) exercise all of their other rights and remedies, in law and in equity, pursuant to this Agreement and otherwise. The Grantors and Grantees acknowledge and agree that this Section 2.05 does not constitute a liquidated damages provision or a penalty. SECTION 2.05 Assignment. Tabacchi and La Sesta may assign their respective rights and obligations to purchase the Shares pursuant to the Put Option to their respective Permitted Grantor Transferees. Notwithstanding an assignment of the Put Option by Tabacchi or La Sesta, as the case may be, Tabacchi and La Sesta shall remain primarily liable for all payment and performance obligations of the Grantors under the Put Option and this Agreement. SECTION 2.06 Exercise of Put Option Not a Transfer. None of the exercises by Grantees of the Put Option, nor the consummation of the transactions contemplated thereby, shall constitute a Transfer that is subject to the Right of First Refusal set forth in Article III of this Agreement (by way of example and not limitation, the sale of shares by a Grantee pursuant to the Put Option to a Permitted Grantor Transferee, shall not require any Grantee to comply with the Right of First Refusal provisions of Article III). ARTICLE III RIGHT OF FIRST REFUSAL SECTION 3.01 Right of First Refusal. 8 (a) During the Put Period, prior to selling any Shares to a third party, Carlyle agrees that upon receipt of a bona fide written binding offer (subject only to this Right of First Refusal) from a third party (the "Proposed Transferee"), Carlyle shall submit a written offer (the "Offer") to sell all Shares proposed to be purchased by the Proposed Transferee (the "Offered Shares"), on terms and conditions, including price, not less favorable than those on which Carlyle proposes to sell such Offered Shares to the Proposed Transferee, to Tabacchi and La Sesta (the "Offerees"). (b) The rights of each Offeree shall be in addition to and not in substitution of its rights and obligations under the Put Option. (c) The Offer shall disclose the number of Offered Shares proposed to be sold, the terms and conditions (including price) of the proposed sale, and any other material facts relating to the proposed sale. The Offer shall further state that the Offerees may acquire, in accordance with the provisions of this Agreement, the Offered Shares for the price and upon the other terms and conditions set forth therein. SECTION 3.02 Notice of Intent to Purchase. If the Offerees exercise their right to acquire the Offered Shares, such right may only be exercised to acquire all such Offered Shares and not a portion of such Offered Shares. If the Offerees desire to purchase the Offered Shares offered to them, they shall communicate in writing their election to purchase all the Offered Shares (the "Right of First Refusal Exercise Notice") to Carlyle no later than 20 days after the date of the Offer (the parties providing such Right of First Refusal Exercise Notice, are sometimes referred to hereafter individually, as a "Purchaser," and collectively as, the "Purchasers"). If an Offeree declines to purchase, or otherwise defaults and fails to purchase, any Offered Shares, in order for the remaining Offerees to have the right to acquire Offered Shares, such remaining Offerees shall be required to acquire the declining Offeree's allotment of Offered Shares (the "Over-Allotment Right"), in whole and not in part, and such Offerees shall provide written notice to Carlyle specifying the number of additional Offered Shares it will acquire pursuant to the Over-Allotment Right. Such Right of First Refusal Exercise Notice shall, when taken in conjunction with the Offer, be deemed to constitute a valid, binding and enforceable agreement for the sale and purchase of the Offered Shares. SECTION 3.03 Offered Shares Closing. The closing of the purchase and sale of Offered Shares pursuant to the Offer, shall take place no later than 30 days following the date of the Right of First Refusal Exercise Notice at the principal office of Carlyle or at such other location as the Parties shall mutually agree, on a Business Day to be mutually agreed to by Carlyle and the Purchasers or if the Parties do not mutually agree to a closing date, the closing date shall be the next Business Day following such fifteenth day (the "Offered Shares Closing"), provided that if the purchase of Offered Shares is subject to prior regulatory approval, Carlyle and the Purchasers will use their reasonable best efforts to obtain the necessary regulatory approvals and the Offered Shares Closing shall be postponed until the 9 expiration of five Business Days after the date that all such regulatory approvals shall have been received, except that if such regulatory approvals are not received within 60 days following the date of the Right of First Refusal Exercise Notice, Carlyle shall have the right to sell the Offered Shares pursuant to Section 3.04 below. At the Offered Shares Closing, Carlyle shall deliver to the Purchasers the certificates representing the Offered Shares duly endorsed or accompanied by stock powers executed in blank, in form and substance customary in the United States of America for transactions of this type to the Purchasers, and evidence reasonably satisfactory to the Purchasers that the Offered Shares are being transferred free and clear of all liens and encumbrances created by Carlyle or its Affiliates (it being understood that in no event shall a Grantee be obligated to make any representations and warranties, or to provide any indemnities, with respect to (i) any matters relating to the Company, or (ii) with respect to any other matters other than (1) title to the Shares held by such Grantee, such title being free and clear of all liens and encumbrances created by it or its Affiliates, (2) such Grantee's authority, authorization and right to enter into and consummate the sale without contravention of any law or agreement, and without the need for any third party consent or approval (not including any governmental or regulatory consent or approval which shall have been applied for or received), and (3) the existence of pending or, to the knowledge of the Grantee, threatened litigation involving such Grantee that could reasonably be expected to prohibit or limit the sale of good title to the Shares by such Grantee). At the Offered Shares Closing, the Purchasers shall pay the purchase price for the Offered Shares to Carlyle in such amount and on such payment terms as set forth in the Offer. SECTION 3.04 Sale to Third Party. If the Purchasers do not exercise this Right of First Refusal in whole, or do not offer to purchase all of the Offered Shares, the Offered Shares may be sold by Carlyle at any time within three months after the date the Offer was made. Any such sale shall be to the Proposed Transferee on terms and conditions not materially different than those specified in the Offer. If any Offered Shares are not sold within the three month period or if the terms of the Offer shall change, the Offered Shares shall be subject to renewed compliance with the requirements of the Right of First Refusal pursuant to Section 3.01. Any third party to whom Shares are sold shall have no rights or obligations under this Agreement. None of the provisions of this Article III shall be applicable to, nor shall prohibit, the offer and sale of any Offered Shares in open market transactions on any exchange, market system or bulletin board on which shares of Common Stock are quoted, or offers and sales of the Shares can be made, from time to time, and pursuant to the exercise of registration rights under the Registration Rights Agreements with the Company to which the Grantees are party covering Shares. ARTICLE IV MISCELLANEOUS SECTION 4.01 Publicity. To the extent that any of he Parties intends to issue any press release or make any similar public announcement or communication regarding the execution or performance of this Agreement, the transactions contemplated hereby, and the ongoing business relationship between the Parties, 10 which release, announcement or disclosure mentions any other Parties to this Agreement, the Party making the disclosure shall consult with each of the Parties so named in such disclosure; provided, however, that no Party shall be restrained, after consultation with the other Parties, to the extent such consultation is feasible, from making such disclosure as it shall be required to make by applicable law or by applicable regulations of any regulatory body or securities exchange. SECTION 4.02 Equitable Relief. The Parties hereto acknowledge and agree that it will be impossible to measure the damages that would be suffered if any Party fails to comply with the provisions of this Agreement that it is required to comply with and, in the event of any such failure, the non-breaching Parties will have the right to obtain specific performance of the breaching Party's obligations under this Agreement and to obtain immediate injunctive relief. These rights shall be in addition to, and not in substitution of, any other rights that any non-breaching Party may have in law or in equity. Tabacchi, La Sesta and their Permitted Grantor Transferees on the one hand, and Carlyle on the other hand, agree that the rights, powers and remedies given to each other Party by this Agreement are cumulative and concurrent and not exclusive of any thereof or of any other powers, rights or remedies available to such Party, whether existing at law or in equity of by statute or otherwise, and shall be in addition to every other right, power or remedy provided in this Agreement, and the exercise or beginning of the exercise by such Party of any one or more of such rights, powers and remedies shall not preclude the simultaneous or later exercise by such Party of any or all such other rights, powers and remedies. No failure on the part of any Party to exercise any right, power or remedy shall operate as a waiver thereof. SECTION 4.03 Entire Agreement. Each Party expressly acknowledges and agrees that this Agreement is the final expression of the Parties agreement, and supercedes all prior and contemporaneous agreements and understandings, both oral and written, including the Term Sheet dated November 27, 2002, by and among the Parties, with respect to the subject matter hereof. Except as set forth in this Agreement, the Parties hereto acknowledge that they are not Parties to, and have no knowledge of, any agreements or understandings, both oral and written, to act in concert or as a group (including, without limitation, as a group within the meaning of Section13(d) of the Securities Exchange Act of 1934, as amended), or otherwise act together, with respect to SRC or its securities. SECTION 4.04 Binding Effect; Benefit. This Agreement shall inure to the benefit and be binding upon the Parties hereto and the Permitted Grantor Transferees, as the case may be, to the extent set forth in this Agreement; and, in the case of a natural person, upon his successors, assigns, heirs, legatees, distributees, estates, executors, administrators, personal representatives and other legal representatives. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties hereto and their respective Permitted Grantor Transferees, as the case may be, and, in the case of a natural person, upon his successors, assigns, heirs, legatees, distributees, estates, executors, 11 administrators, personal representatives and other legal representatives, any rights, remedies, obligations or liabilities under or by reason of this Agreement. Nothing in this Agreement, expressed or implied, shall confer on any Party or Permitted Grantor Transferee, as the case may be, and, in the case of a natural person, upon his successors, assigns, heirs, legatees, distributees, estates, executors, administrators, personal representatives and other legal representatives, any greater rights, remedies, obligations or liabilities than as set forth in this Agreement. SECTION 4.05 Assignability. Except as set forth in this Agreement, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Party hereto or any Permitted Grantor Transferees. SECTION 4.06 Amendment; Waiver; Termination. No provision of this Agreement may be waived except by an instrument in writing signed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or modified except by an instrument in writing signed by all of the parties who would have any rights or obligations under the relevant provision the Agreement. This Agreement shall terminate on the day following the last day of the Put Term. SECTION 4.07 Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be deemed validly given, made or served and received, if delivered personally or transmitted by facsimile transmission with receipt acknowledged by the addressee or electronically, three days after being mailed by first class mail, or the next Business Day after being deposited for next-day delivery with a nationally recognized, receipted, overnight delivery service, charges and postage prepaid, properly addressed to the Party to receive such notice or communication at the addresses specified below: To, Carlyle: c/o Carlyle Venture Partners, L.P. 1001 Pennsylvania Avenue, NW Suite 220 South Washington, DC 20004 Attn: Ryan Schwarz Fax: (202) 347-1818 with a copy (which shall not constitute notice) to: Wilmer, Cutler & Pickering 2445 M Street, NW Washington, DC 20037-1420 Attn: John B. Watkins 12 Fax: 202-663-6363 To, Tabacchi: Via Patriarcato 15 35100 Padova Italy Fax: 011-39-049-663138 with a copy (which shall not constitute notice) to: Collier, Halpern, Newberg, Nolletti & Bock, LLP One North Lexington Avenue White Plains, NY 10601 Attn: David A. Newberg, Esq. Fax: (914) 684-6986 To, La Sesta, S.A. c/o MEVEA s.a.r.l. 6-12 Place d'Armes L-1136 Luxembourg Attn. Mr. R. Meneguz) Fax: 011-39-0331-826370 with a copy (which shall not constitute notice) to: Collier, Halpern, Newberg, Nolletti & Bock, LLP One North Lexington Avenue White Plains, NY 10601 Attn: David A. Newberg, Esq. Fax: (914) 684-6986 or to such other address or facsimile number as any Party may, from time to time, designate in a written notice given in a like manner to all of the other Parties to this Agreement. SECTION 4.08 Fees and Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such Party may be entitled. SECTION 4.09 Headings. 13 The headings contained in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. SECTION 4.10 Counterparts. This Agreement may be executed in any number of counterparts (including facsimiles), each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. SECTION 4.11 Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE UNITED STATES OF AMERICA, LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, NY, OR IF JURISDICTION IS NOT AVAILABLE IN FEDERAL COURT, ALTERNATIVELY, THE COURTS OF THE STATE OF NEW YORK, LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, NY, FOR ANY SUIT, ACTION OR OTHER PROCEEDING (ANY "PROCEEDINGS") ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY PROCEEDINGS RELATING HERETO OR THERETO EXCEPT IN SUCH COURTS, EXCEPT AS OTHERWISE PROVIDED HEREIN). EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE PERSONAL EXCLUSIVE JURISDICTION OF THE COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK, AS APPLICABLE, IN EACH CASE LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, NY, FOR THE PURPOSES OF ANY PROCEEDINGS RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY PROCEEDINGS RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK, AS APPLICABLE, IN EACH CASE LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, NY, HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT (i) HAND DELIVERED, (ii) SENT BY REGISTERED MAIL TO SUCH PARTY'S RESPECTIVE ADDRESS SET FORTH IN SECTION 4.07 OF THIS AGREEMENT, OR TO SUCH OTHER ADDRESS AS SUCH PARTY SHALL PROVIDE IN WRITING TO EACH OTHER PARTY TO THIS AGREEMENT PURSUANT TO THE PROVISIONS HEREOF, DELIVERED TO ANY PERSON LOCATED AT SUCH ADDRESSES, OR (iii) SOLELY IN THE CASE OF CARLYLE, TO CARLYLE'S OFFICE LOCATED IN MILAN, ITALY, SO LONG AS CARLYLE HAS SUCH AN OFFICE LOCATION, DELIVERED TO ANY PERSON LOCATED AT SUCH OFFICE, OR (iv) DELIVERED USING ANY OTHER METHOD OF SERVICE PERMITTED UNDER THE FEDERAL RULES OF CIVIL PROCEDURE, OR THE NEW YORK RULES OF CIVIL PROCEDURE RELATING TO THE SERVICE OF PROCESS OR SUMMONS, AS APPLICABLE, SHALL IN EACH SUCH CASE BE EFFECTIVE SERVICE OF PROCESS FOR ANY PROCEEDING WITH RESPECT TO ANY MATTERS RELATING TO OR ARISING UNDER THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER PARTIES THAT ANY PERSON LOCATED AT THE ADDRESS SENT FORTH IN SECTION 4.07 OF THIS AGREEMENT OR AT ANY OTHER ADDRESS DESIGNATED BY SUCH PARTY PURSUANT TO SECTION 4.07, OR, SOLELY IN THE CASE OF CARLYLE, ANY PERSON LOCATED IN CARLYLE'S OFFICE LOCATED IN MILAN, ITALY, BE AND HEREBY IS AUTHORIZED TO ACCEPT SERVICE OF 14 PROCESS, SUMMONS, NOTICE OR ANY OTHER DOCUMENT SENT BY REGISTERED MAIL OR PERSONAL DELIVERY TO SUCH ADDRESS, OR BY ANY OTHER METHOD PERMITTED UNDER THE FEDERAL RULES OF CIVIL PROCEDURE OR THE NEW YORK RULES OF CIVIL PROCEDURE RELATING TO THE SERVICE OF PROCESS OR SUMMONS, AS APPLICABLE. NOTWITHSTANDING ANYTHING IN THIS SECTION 4.11 TO THE CONTRARY, TABACCHI AND LA SESTA, ON ITS OWN BEHALF AND ON BEHALF OF THEIR RESPECTIVE PERMITTED GRANTOR TRANSFEREES AND SUCCESSORS AND PERMITTED ASSIGNS, ON THE ONE HAND, AND CARLYLE WITH RESPECT TO EACH CARLYLE ENTITY ON THE OTHER HAND, HEREBY AGREES THAT AT ANY PREVAILING PARTY'S OPTION IT MAY ENFORCE ANY JUDGMENT, AGAINST THEM OR ANY ONE OF THEM, IN ANY U.S. FEDERAL, STATE OR LOCAL, OR FOREIGN JURISDICTION. SECTION 4.12 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. SECTION 4.13 Mutual Drafting. This Agreement is the mutual product of the Parties hereto, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of each of the Parties, and shall not be construed for or against any Party hereto. SECTION 4.14 Further Representations. Each Party to this Agreement acknowledges and represents that it has been represented by its own legal counsel in connection with the transactions contemplated by this Agreement, with the opportunity to seek advice as to its legal rights from such counsel, and is not relying on any representation or statements made by any other Party hereto. SECTION 4.15 Cooperation. Each of the Parties hereby agrees that it will reasonably cooperate with each of the other Parties to this Agreement in connection with the making of any required governmental or regulatory notifications, filings or submissions under U.S. federal and state and local securities laws relating to the consummation of any of the transactions contemplated by this Agreement. [SIGNATURES APPEAR ON NEXT PAGE] 15 IN WITNESS WHEREOF, each Party hereto have caused this Agreement to be duly executed by himself or itself or its authorized officer as of the day and year first above written. CARLYLE: ------- CARLYLE VENTURE PARTNERS, L.P. ------------------------------ By: /S/ ROBERT GRADY --------------------- Name: Robert Grady Title: Managing Director C/S VENTURE INVESTORS, L.P. --------------------------- By: /S/ ROBERT GRADY --------------------- Name: Robert Grady Title: Managing Director CARLYLE U.S. VENTURE PARTNERS, L.P. ----------------------------------- By: /S/ ROBERT GRADY --------------------- Name: Robert Grady Title: Managing Director CARLYLE VENTURE COINVESTMENT, L.L.C. ------------------------------------ By: /S/ ROBERT GRADY --------------------- Name: Robert Grady Title: Managing Director LA SESTA, S.A. -------------- By: /S/ MARCO BRUSTIO --------------------- Name: Marco Brustio Title: Chairman /S/ E. DINO TABACCHI ------------------------- Dino Tabacchi 16 -----END PRIVACY-ENHANCED MESSAGE-----