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 ▇▇▇▇ ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇"), La ▇▇▇▇▇ ▇.▇., a Luxembourg company represented by ▇▇▇▇▇ ▇▇▇▇▇▇▇
("▇▇ ▇▇▇▇▇"), 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"). ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ are parties to the Common Stock
Purchase Agreement dated of even date herewith (the "Purchase Agreement"), by
and among the Parties and E. ▇▇▇▇ ▇▇▇▇▇▇ (sometimes referred to hereafter
together with ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ have agreed to grant to Carlyle the right
to cause the Shares (as hereafter defined) to be purchased by ▇▇▇▇▇▇▇▇ and ▇▇
▇▇▇▇▇ (or their Permitted Grantor Transferees) in the amounts and under the
terms and conditions provided in this Agreement; and
WHEREAS, as consideration to induce ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ 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
▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ fail to negotiate with, or if ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇
within five days after making such selection, and such selection shall be final
and binding on all the Parties to this Agreement, unless ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇
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
▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ notify Carlyle within the time period specified in the
preceding sentence and propose an alternative accounting firm, Carlyle has five
days after ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or each
Permitted Grantor Transferee, and "Grantors" mean collectively, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ and all Permitted Grantor Transferees.
(i) "▇▇ ▇▇▇▇▇" 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
▇▇▇▇▇▇▇▇ or ▇▇ ▇▇▇▇▇, as the case may be, has substituted as the grantor and
obligor of all of ▇▇▇▇▇▇▇▇'▇ or ▇▇ ▇▇▇▇▇'▇ 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
▇▇▇▇▇▇▇▇ or ▇▇ ▇▇▇▇▇, 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) "▇▇▇▇▇▇▇▇" 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, ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇,
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) ▇▇▇▇▇▇▇▇ and his Permitted
Grantor Transferees shall be obligated to purchase and acquire up to an
aggregate of 5,600,000 Shares, except that ▇▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇▇ and its Permitted Grantor Transferees would then exceed $4,000,000, and
(b) ▇▇ ▇▇▇▇▇ and its Permitted Grantor Transferees shall be obligated to acquire
up to an aggregate of 1,400,000 Shares except that ▇▇ ▇▇▇▇▇ 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 ▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ and its
Permitted Grantor Transferees on the one hand, and ▇▇ ▇▇▇▇▇ 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
▇▇▇▇▇▇▇▇ and his Permitted Grantor Transferees, and 1,400,000 in the case of ▇▇
▇▇▇▇▇ 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.
▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇
or ▇▇ ▇▇▇▇▇, as the case may be, ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇ (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. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 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.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
12
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To, ▇▇▇▇▇▇▇▇:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
Collier, Halpern, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To, ▇▇ ▇▇▇▇▇, ▇.▇.
c/o MEVEA s.a.r.l.
▇-▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇. Mr. R. Meneguz)
Fax: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
Collier, Halpern, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇, 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, ▇▇▇▇▇▇▇▇ AND ▇▇ ▇▇▇▇▇, 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/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
C/S VENTURE INVESTORS, L.P.
---------------------------
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
CARLYLE U.S. VENTURE PARTNERS, L.P.
-----------------------------------
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
CARLYLE VENTURE COINVESTMENT, L.L.C.
------------------------------------
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
▇▇ ▇▇▇▇▇, ▇.▇.
--------------
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
/S/ E. ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
16