<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT,
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): December 16, 1999
STERLING VISION, INC.
(Exact Name of Registrant as Specified in Charter)
New York 1-14128 11-3096941
- ---------------------------- ------------------------ ------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
1500 Hempstead Turnpike
East Meadow, New York 11554
---------------------------
(Address of Principal Executive Offices)
(516) 390-2100
--------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
------------
1. On December 16, 1999, the Registrant and Rare Medium, Inc.
("RMI") entered into an Engagement Letter pursuant to which
RMI (subject to the parties negotiation and execution of a
definitive Services Agreement) agreed to render certain
services to the Registrant in connection with its development
and launching of a new Internet (Web) business and strategy;
and
2. On December 16, 1999, the Registrant issued and delivered to
MY2000, LLC, a Delaware limited partnership, in consideration
of its oral agreement to act as an independent advisor to the
Registrant's Board of Directors in connection with its new
Internet (Web) business and strategy, Warrants to purchase an
aggregate of 2.5 million shares of the Registrant's Common
Stock at a price of $2.00 per share.
Item 7. Financial Statements and Exhibits
---------------------------------
Exhibit No. Document.
- ----------- ---------
10.91 Form of Engagement Letter, dated December 16, 1999, between the
Registrant and Rare Medium, Inc.
10.92 Press Release, dated December 17, 1999.
10.93 Form of Warrant, dated December 16, 1999, in favor of MY2000, LLC.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned hereunto duly authorized.
STERLING VISION, INC.
By: /s/Joseph Silver
----------------------------------
Name: Joseph Silver
Title: Executive Vice President & General
Counsel
Date: December 23, 1999
<PAGE>
December 16, 1999
Sterling Vision, Inc.
1500 Hempstead Turnpike
East Meadow, New York 11554
Attn.: Dr. Robert Cohen, Chairman
Letter of Engagement
--------------------
Gentlemen:
This Letter of Engagement confirms that Sterling Vision, Inc., a New
York corporation ("Sterling Vision"), hereby engages Rare Medium, Inc., a New
York corporation ("Rare Medium") to provide a complete turn-key solution for
creating and operating a robust Optical Portal business.
In connection therewith, the parties hereto shall, immediately following the
date hereof, attempt to negotiate and thereafter execute a services agreement
(the "Services Agreement") to provide Sterling Vision with the following
services:
o a web-based business strategy;
o the development and launch of the new web business;
o specific advertising planning, public relations and branding
campaign for the new web based business; and
o an operations plan including the staffing, managing, and
operating of the web business.
In order for Rare Medium to allocate and dedicate the resources necessary to
commence delivering these services, Sterling Vision shall deliver to Rare
Medium:
1. An aggregate of one million U.S. dollars ($1,000,000) (the "Cash
Payment") immediately upon the execution of this Letter of Engagement;
provided, that $500,000 of such cash payment shall not be refundable in any
event and the remaining $500,000 shall be placed in escrow until such time as
the Services Agreement is executed when it shall immediately be released to
Rare Medium; provided, however, that in the event the parties do not agree to
<PAGE>
the terms of, and execute the Services Agreement within a maximum period of
thirty (30) days from the date hereof, either party, in its sole and absolute
discretion shall have the right to serve upon the other written notice of its
election to terminate this Letter of Engagement whereupon Rare Medium shall
promptly release to Sterling Vision the $500,000 in cash remaining in escrow
together with a copy of all materials developed for the engagement, whereupon
this Letter of Engagement shall terminate and each of the parties hereto shall
be released and discharged of and from their respective obligations hereunder;
and
2. Within five (5) business days after the execution of the Services
Agreement, cause to be issued to Rare Medium an aggregate of one million
(1,000,000) unregistered shares (collectively, the "Common Shares") of its
common stock, par value $.01 per share (the "Common Stock").
All such Common Shares shall be afforded the Price Protection Guaranty
described below.
Price Protection Guaranty. In the event Rare Medium shall sell, in the
open market, any of the Common Shares to be issued to it at a price (exclusive
of any fees, commissions or other transaction-related payments) of less than
$3.00 per Common Share, Sterling Vision shall, within a maximum period of five
(5) business days after its receipt of written notice of such a sale, together
with reasonable evidence thereof, either: (i) pay to Rare Medium an amount (the
"Deficiency Amount") equal to the product obtained by multiplying (x) the
Common Shares so sold by Rare Medium; by (y) the difference between $3.00 and
the price for which each such Common Share was sold by Rare Medium; or (ii)
cause to be issued to Rare Medium registered shares of its Common Stock
(collectively, the "Additional Shares") having a value equal to the Deficiency
Amount based upon the average of the closing price of Sterling Vision's Common
Stock, as reported on Nasdaq (or, if not then reported on Nasdaq, another
quotation system or exchange), during the immediately preceding five (5)
trading days; provided, however, that if, at any time after the expiration of
one-hundred twenty (120) days following the respective dates that any of the
Common Shares are not subject to the Restrictions on Resale provisions
described below, but prior to the date that Rare Medium shall actually sell any
of the Common Shares in the open market (in accordance with the requirements
herein set forth), the composite closing price of Sterling Vision's Common
Stock shall be in excess of $3.00 for five (5) or more consecutive trading
days, the obligation of Sterling Vision, (as set forth herein) shall not apply
to any such Common Shares that then could have been sold by Rare Medium.
Registration Rights.
--------------------
(a) Sterling Vision and Rare Medium each hereby acknowledge and
agree that the Common Shares to be initially issued to Rare
Medium shall contain the restrictive legend set forth on Exhibit
A attached hereto, shall be issued in the form of, and shall
constitute "restricted securities," as such term is defined in
Rule 144(a)(3) under the Securities Act of 1933, as amended (the
"Securities Act"), and will be issued pursuant to the exemption
from registration afforded by Section 4(2) of,
<PAGE>
or other provisions under the Securities Act and Regulation D
promulgated thereunder.
(b) Sterling Vision hereby agrees to (i) prepare for filing and file
with the Securities and Exchange Commission ("SEC") under the
Securities Act, on or before the expiration of the five (5)
business day period immediately following the issuance of the
Common Shares to Rare Medium, a registration statement on Form
S-1, or Form S-3, or on any other appropriate form (the
"Registration Statement") for the purpose of registering, on
behalf of Rare Medium (hereafter inferred to as the
"Shareholder"), the Common Shares of Sterling Vision to
initially be issued to the Shareholder pursuant to the terms
hereof, and (ii) use its reasonable good faith efforts to have
the Registration Statement declared effective as promptly
thereafter as is reasonably practicable, but in no event later
than sixty (60) days immediately following the issue of the
Common Shares to Rare Medium. Sterling Vision further agrees to
maintain the effectiveness of the Registration Statement, and to
promptly file with the SEC any supplements or post-effective
amendments thereto which may be required in order to maintain
such effectiveness for a period of not less than two (2) years
from the date of the initial issuance of such Common Shares to
the Shareholder. Sterling Vision hereby agrees to bear all
expenses associated with the Registration Statement other than
the fees and expenses of the Shareholder (and its attorneys and
accountants) incurred in the review of such Registration
Statement and/or the sale of the Common Shares, and any
broker-dealers, agents or underwriters who participate in any
sales of stock by such Shareholder thereunder.
(c) The Shareholder agrees, at its sole cost and expense, to timely
cooperate with Sterling Vision in connection with the
preparation and filing of the Registration Statement and any
disclosure document prepared by Sterling Vision for delivery to
the Shareholder pursuant to Rule 502 of Regulation D (the
"Disclosure Statement"), and to promptly furnish to Sterling
Vision any information which each of counsel to the Shareholder
and counsel to Sterling Vision determines to be legally required
to be disclosed therein. In the event Sterling Vision files a
Registration Statement on Form S-1, the Shareholder further
agrees that, prior to the filing of any such Registration
Statement, it, together with its counsel, will review such
Registration Statement from time to time and suggest appropriate
additions, deletions or revisions thereto to ensure that the
information relating to it, and/or any of its affiliates
presented therein, remains true, accurate and complete in all
material respects as of the date of review. Sterling Vision
hereby agrees not to revise, amend or otherwise change any such
written information furnished by the Shareholder for inclusion
in such Registration Statement, in any material respect, without
prior consultation with the Shareholder. The Shareholder shall
have no responsibility to Sterling Vision hereunder for (i) any
written information that is furnished by it pursuant to this
Subsection (c) unless such information is included in the
Registration Statement as submitted by the Shareholder or as
modified with the written consent of the Shareholder; or (ii)
any
<PAGE>
such information unless all additions, deletions or revisions
suggested by the Shareholder with respect thereto are
incorporated in the Registration Statement, as the case may
be, in their entirety. In addition and in the event Sterling
Vision files a Registration Statement on Form S-1, from time
to time after the filing of said Registration Statement, the
Shareholder shall each promptly advise Sterling Vision, in
writing, of any material changes in any such information
(previously furnished to Sterling Vision hereunder) and any
additional information that may be legally required to ensure
that the information contained in such Registration Statement
regarding the Shareholder and/or any of its affiliates is
true and correct in all material respects and does not omit
to state a fact necessary to make the statements contained
therein not misleading.
Restrictions on Resale. Any disposition of the Common Shares received
by the Shareholder shall be effected in compliance with the provisions
of this Letter of Engagement. Subject to the foregoing limitations and
applicable law, the Shareholder shall be allowed to sell its Common
Shares as follows:
a) Up to an aggregate of 250,000 Common Shares upon the earlier of
(i) the date the Registration Statement is declared effective by
the SEC or (ii) upon the expiration of the ninety (90) day
period following the date of the issuance of the Common Shares
to the Shareholder (the "Issue Date");
b) up to an aggregate of 500,000 Common Shares (which amount shall
include the 250,000 Common Shares referenced above) from and
after the expiration of the one-hundred twenty (120) day period
following the Issue Date;
c) up to an aggregate of 750,000 Common Shares (which amount shall
include the 500,000 and 250,000 Common Shares referenced above)
from and after the expiration of the one-hundred eighty (180)
day period following the Issue Date; and
d) all of the Common Shares held by the Shareholder (including any
shares of Common Stock issued pursuant to the provisions of the
Price Protection Guaranty detailed above) from and after the
expiration of the two-hundred seventy (270) day period following
the Issue Date.
Nothing contained herein shall be construed as obligating Rare Medium
to sell any shares of Common Stock. In addition, any and all Additional Shares
issued to Rare Medium shall not be subject to the foregoing time limitations or
the provisions of the Price Protection Guaranty.
Upon receipt of the Cash Payment, Rare Medium shall immediately begin
performing the services required of it hereunder and Rare Medium and Sterling
Vision shall thereafter use their best efforts to negotiate and execute the
Services Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Letter of Engagement
to be executed by their duly authorized representatives, on the dates set forth
below.
Rare Medium, Inc. Dated: Dec. 16, 1999
------------------
By: /s/ SURESH MATHEWS
--------------------------
Name: Suresh Mathews
Title: President
Sterling Vision, Inc. Dated: Dec. 16, 1999
--------------------
By: /s/ ALAN COHEN
-------------------------------
Name: Dr. Alan Cohen
Title: President and Chief Executive Officer
<PAGE>
Exhibit A
RESTRICTIVE LEGENDS
1. The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act").
Neither such securities nor any interest therein may be offered, sold
or otherwise transferred, pledged or hypothecated, except pursuant to:
(1) a Registration Statement covering such securities or such interest
and the disposition thereof that shall have become effective under the
Act; or (2) an exemption from registration under the Act relating to
the disposition of such securities or such interest, and in each case
in accordance with any applicable laws of any state of the United
States.
2. The transfer of the securities represented by this Certificate is
restricted pursuant to the terms of that certain Letter of Engagement,
dated December 16, 1999, between Rare Medium, Inc. and Sterling
Vision, Inc. (the "Agreement") Neither such securities nor any
interest therein may be offered, sold or otherwise transferred,
pledged, hypothecated or encumbered, except in strict compliance with
the terms and conditions of the Agreement.
www.raremedium.com
------------------
<PAGE>
FOR IMMEDIATE RELEASE:
- ----------------------
CONTACT: Eliezer Becher
(914) 271-5361
RARE MEDIUM AND STERLING VISION TEAM TO
CREATE WORLD-CLASS OPTICAL PORTAL
East Meadow, New York - December 17, 1999 - Sterling Vision, Inc.
(NASDAQ: ISEE), one of the largest retail optical chains in the United States
and one of the oldest U.S. operators of corrective laser surgery centers, and
Rare Medium, Inc., the Web consulting services arm of Rare Medium Group, Inc.
(NASDAQ: RRRR), today announced that they have signed an agreement to develop a
world-class, web-based, optical portal business. In addition to a cash payment,
Rare Medium will receive an equity interest in Sterling Vision.
As part of the long-term arrangement, Sterling Vision, Inc. and Rare
Medium, Inc. will work together to develop and launch a new web business
strategy. It is anticipated that this new e-commerce capability will be the
state-of-the-art information site for all eye care needs, offering Sterling
customers the ability to fulfill their optical needs directly through the site,
as well as an unparalleled ability to customize their optical needs to
individual tastes and lifestyles. This new capability is expected to set the
standards for new levels of online customer shopping and customer care
experience by offering sunglasses, contact lenses and numerous other products
and services.
In addition, the companies intend to develop strategic business models
and design and build the new web capabilities to launch these new operations,
in addition to managing ongoing operations and hosting. This capability also
will feature ASP outsource components. The parties expect to execute a definite
agreement within thirty (30) days.
Dr. Robert Cohen, Chairman of Sterling Vision, stated, "We were drawn
to Rare because they are a new kind of company with an excellent reputation for
improving business processes through strategic Internet solutions. They
understand the challenges of creating new web-based businesses from the ground
up, and we believe that they will be more than able to deliver this kind of
capability, something which most well-established system integration companies
of the past are not familiar with."
<PAGE>
"We are very excited about working with Sterling Vision" said Suresh
Mathews, Rare's President and Chief Operating Officer. "This assignment allows
us to 'pull out all the stops' and draw upon each of our Rare disciplines to
truly build a blockbuster company".
About Rare Medium Group, Inc.
- -----------------------------
Rare Medium Group, Inc., through its wholly-owned subsidiary, Rare
Medium, Inc., www.raremedium.com, provides Internet solutions and E-commerce
strategies that improve business processes and develop branding strategies,
marketing communications and interactive content to large and medium-sized
companies in the financial, automotive, consumer service, retail, technology,
entertainment and consumer goods industries. Clients include Microsoft, The New
York Times, Merrill Lynch, Epson and Hotel Reservations Network, among other
leading companies. Rare Medium Group, Inc. seeks to incubate paradigm-shifting
ideas and build the next wave of blockbuster Internet companies by investing
capital and leveraging its Internet development and solutions expertise. Rare
Medium Group, Inc. is headquartered in New York City and, with its
subsidiaries, employs more than 600 Internet professionals in its 12 offices
throughout the United States, Canada and abroad. More information about Rare
Medium Group, Inc. and companies currently in development is available at
www.raremediumgroup.com.
All statements contained herein (other than historical facts) are based upon
current expectations. These statements are forward looking in nature and
involve a number of risks and uncertainties. Actual results may differ
materially from the anticipated results or other expectations expressed in the
Company's forward looking statements. Generally, the words "anticipate",
"believe", "estimate", "expects", and similar expressions as they relate to the
Company and/or its management, are intended to identify forward looking
statements.
<PAGE>
THIS WARRANT AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR
UNDER ANY STATE SECURITIES LAW AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD,
ASSIGNED, HYPOTHECATED, OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
COMPANY OR COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.
THE TRANSFER OF THIS WARRANT AND THE SHARES ISSUABLE UPON THE
EXERCISE HEREOF IS RESTRICTED AS DESCRIBED HEREIN.
STERLING VISION, INC.
Warrant for the purchase of shares of Common Stock,
$.01 par value per share
THIS CERTIFIES that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, MY2000, LLC, a Delaware
limited liability company having an office at 565 Fifth Avenue, New York, New
York 10017 (the "Initial Holder"), is entitled to subscribe for and purchase
from Sterling Vision, Inc., a New York corporation (the "Company"), upon the
terms and conditions set forth herein, at any time or from time to time during
the period commencing on the date hereof and expiring at 5:00 p.m. on December
2, 2004 (the "Exercise Period"), 2,500,000 shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), at a price (the "Exercise
Price") per share of Common Stock of Two ($2.00) Dollars. As used herein, the
term "this Warrant" shall mean and include this Warrant and any Warrant or
Warrants hereafter issued as a consequence of the exercise or transfer of this
Warrant in whole or in part. As used herein, the term "Holder" shall include
the Initial Holder and any transferee to whom this Warrant has been transferred
in accordance with, and as permitted by, the terms hereof.
The number of shares of Common Stock issuable upon exercise of this
Warrant (the "Warrant Shares") may be adjusted from time to time as hereinafter
set forth.
1. This Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of whole Warrant Shares, by transmission to the
Company, by telecopy, of the Election to Exercise attached hereto followed,
within three (3) business days, by the surrender of this Warrant (with the
Election to Exercise duly executed) to the Company at its office at 1500
Hempstead Turnpike, East Meadow, New York 11554, or at such other place as is
designated in
<PAGE>
writing by the Company, together with a certified or bank cashier's check
payable to the order of the Company, in an amount equal to the product of the
Exercise Price and the number of Warrant Shares for which this Warrant is being
exercised (the "Aggregate Exercise Price").
2. Notwithstanding anything to the contrary contained in this Warrant,
this Warrant shall not be exercisable by the Holder to the extent that and so
long as the Common Stock which would be acquired upon such exercise when
aggregated with any other shares of Common Stock at the time of exercise
beneficially owned by the Holder and not previously sold by the Holder would
aggregate more than 4.9% of the then outstanding shares of Common Stock of the
Company. For this purpose, "beneficial ownership" shall be calculated in
accordance with the provisions of Section 13(d) of the Securities Exchange Act
of 1934 and the rules and regulations promulgated thereunder. The opinion of the
Holder's counsel shall be conclusive in calculating the Holder's beneficial
ownership.
3. Upon each exercise of the Holder's rights to purchase Warrant
Shares, the Holder shall be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise, notwithstanding that the transfer books of
the Company shall then be closed or certificates representing such Warrant
Shares shall not then have been actually delivered to the Holder. Within seven
(7) business days after each such exercise of this Warrant and receipt by the
Company of this Warrant, the Election to Exercise and the Aggregate Exercise
Price, the Company shall issue and deliver to the Holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or his/its designee. If this Warrant should be exercised
in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the Warrant Shares (or portions thereof)
subject to purchase hereunder.
4. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be registered in a warrant register (the "Warrant Register") as
they are issued. The Company shall be entitled to treat the registered holder of
this Warrant on the Warrant Register as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to, or
interest in, such Warrant on the part of any other person, and shall not be
liable for any registration of transfer of this Warrant which are registered or
to be registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge of the general counsel of the Company that a
fiduciary or nominee is committing a breach of trust in requesting such
registration of transfer. This Warrant shall be transferable on the Warrant
Register only upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer, subject in all cases to
compliance with the terms and provisions hereof. In all cases of transfer by an
attorney, executor, administrator, guardian, or other legal representative, duly
authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Warrant or Warrants to
the person(s) entitled thereto. This Warrant may be exchanged, at the option of
the Holder thereof, for another Warrant, for other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares (or portions thereof), upon surrender
to the Company or its duly authorized agent. Notwithstanding anything contained
herein to the
<PAGE>
contrary, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person if, in the opinion of counsel to the
Company, such transfer: (i) is not then permitted pursuant to the terms hereof;
or (ii) does not comply with the provisions of the Act, and the rules and
regulations promulgated thereunder, and any applicable state securities laws.
5. The Company shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of providing
for the exercise of the rights to purchase all Warrant Shares granted pursuant
to this Warrant, such number of shares of Common Stock equal to the number of
Warrants covered hereby. The Company covenants that all shares of Common Stock
issuable upon the exercise of this Warrant, upon receipt by the Company of the
Aggregate Exercise Price therefor, shall be validly issued, fully paid,
nonassessable, and free of preemptive rights.
6. The issuance of any shares or other securities upon the exercise of
this Warrant, and the delivery of certificates or other instruments
representing such shares or other securities, shall be made without charge to
the Holder for any tax or other charge in respect of such issuance, other than
applicable transfer taxes. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Holder, and the Company shall not be required to issue or deliver any such
certificate unless and until the person or persons requesting such issuance
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
7. The Company shall use its reasonable, good faith efforts to file a
registration statement covering the Warrant Shares within forty-five (45) days
from the date hereof and shall use its reasonable good faith efforts to maintain
the effectiveness thereof for a period of not less than one (1) year thereafter.
All expenses incurred in connection with the filing of such registration
statement shall be paid for by the Company.
8. In the event that as a result of reorganization, merger,
consolidation, liquidation, recapitalization, stock split, or combination of
shares, the outstanding shares of Common Stock of the Company are at any time
increased or decreased or changed into or exchanged for a different number or
kind of shares or other security of the Company or of another corporation, then
appropriate adjustments in the Exercise Price and in the number and kind of such
securities then subject to this Warrant shall be made effective as of the date
of such occurrence so that the position of the Holder, upon exercise, will be
the same as it would have been had he/it owned, immediately prior to the
occurrence of such events the Common Stock subject to this Warrant. Such
adjustment shall be made successively whenever any event listed above shall
occur and the Company will notify the Holder of this Warrant of each such
adjustment. Any fraction of a share resulting from any adjustment shall be
eliminated.
9. Unless registered as contemplated by Section 7 hereof, the Warrant
Shares issued upon exercise of this Warrant shall be subject to a stop transfer
order and the certificate or certificates evidencing such Warrant Shares shall
bear the following legend:
<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGIS-
TRATION STATEMENT UNDER SUCH ACT, OR AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT. SUCH SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AS CONTAINED IN A WARRANT, DATED DECEMBER 3, 1999, COPIES OF
WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
10. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses and, if reasonably requested, an indemnity reasonably
acceptable to the Company, the Company shall execute and deliver to the Holder
thereof a new Warrant of like date, tenor, and denomination.
11. The Holder of this Warrant shall not have, solely on account of
such status, any rights of a stockholder of the Company, either at law or in
equity, or to any notice of meetings of stockholders or of any other proceedings
of the Company, except as provided in this Warrant.
12. This Warrant shall be construed in accordance with the laws of the
State of New York applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.
Dated: December 3, 1999
STERLING VISION, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, __________________________ hereby sells, assigns,
and transfers unto __________________ a Warrant to purchase __________ shares
of Common Stock, $.01 par value per share, of Sterling Vision, Inc. (the
"Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint ____________ attorney to transfer
such Warrant on the books of the Company, with full power of substitution.
Dated:
Signature
-----------------------
Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
To: Sterling Vision, Inc.
1500 Hempstead Turnpike
East Meadow, New York 11554
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to
purchase _______ Warrant Shares covered by the within Warrant and
tenders payment herewith in the amount of $_________ in accordance with
the terms thereof; and the undersigned certifies that this Warrant is
owned by the undersigned free and clear of any and all claims, liens
and/or encumbrances and requests that certificates for such securities
be issued in the name of, and delivered to:
---------------------
---------------------
---------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant
Shares covered by the within Warrant, that a new Warrant for the balance
of the Warrant Shares covered by the within Warrant be registered in the
name of, and delivered to, the undersigned at the address stated below.
The undersigned request that the shares to be issued pursuant to this Notice of
Conversion be issued by issuance of a Certificate therefor to the above
entity/individual.
Dated: ________________ Name:_______________________
(Print)
Address:__________________________________________________________________
-----------------------------
(Signature)
