Document:

Exhibit
10.29

No. WC-1A

THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE OR JURISDICTION AND MAY NOT BE
SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
RECEIVES AN OPINION, IN REASONABLY ACCEPTABLE FORM AND SCOPE, OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION, QUALIFICATION OR
OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY SUCH LAWS.

FISCHER IMAGING
CORPORATION

AMENDED
AND RESTATED WARRANT TO PURCHASE SHARES OF COMMON STOCK

(Expires February 22, 2010)

	
  Warrant No. WC-1A

  	
   

  	
  2,000,000 Shares of Common Stock

  

 

FOR VALUE RECEIVED,
subject to the provisions set forth below, the undersigned, Fischer Imaging
Corporation, a Delaware corporation (the “Company”),
hereby certifies that ComVest Investment Partners II LLC, a Delaware limited
liability company or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to two million (2,000,000) fully
paid and non-assessable shares (the “Warrant Shares”)
of the Company’s common stock, $0.01 par value per share (the “Common Shares”), for cash at a price of four dollars and
twenty five cents ($4.25) per share (the “Exercise  Price”)
at any time from and after the Exercise Date (as defined below) and until 5:00
p.m. (Mountain time) on February 22, 2010 (the “Expiration Date”) upon surrender to the Company at its
principal office (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed with the Notice of
Exercise attached hereto duly filled in and signed and, if applicable, upon
payment in cash or by check of the aggregate Exercise Price for the number of
shares for which this Warrant is being exercised determined in accordance with
the provisions hereof. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this
Warrant. For purposes of this Warrant, “Exercise
Date” means the first to occur of (i) an Option Triggering Event (as
defined below), (ii) the entering into of an Option Triggering Event Agreement
(as defined below), (iii) the delivery by the Holder to the Company of a written
agreement pursuant to which the Holder agrees not to resell any Warrant Shares
to the public prior to August 23, 2005 or (iv) August 23, 2005. This Warrant
amends and restates in its entirety the Warrant No. WC-1 issued to the Holder
dated February 22, 2005, the surrender of which is hereby acknowledged by the
Company and the Holder.

1.     Exercise of Warrant.

1.1   Exercise. This Warrant shall be exercisable
from the Exercise Date until the Expiration Date, and this Warrant shall expire
on the Expiration Date. Upon exercise of this Warrant, the Exercise Price shall
be payable in cash or check. This Warrant may be exercised in whole or in part
so long as any exercise in part hereof would not involve the issuance of
fractional Warrant Shares. If exercised in part, the Company shall deliver to
the Holder a new

 

 

Warrant, identical in form to this Warrant, in the name of
the Holder, evidencing the right to purchase the number of Warrant Shares as to
which this Warrant has not been exercised, which new Warrant shall be signed by
an appropriate officer of the Company. The term “Warrant” as used herein shall
include any subsequent Warrant issued as provided herein.

1.2   Exercise Procedures; Delivery of Certificate.
Upon surrender of this Warrant with a duly executed Notice of Exercise in the
form of Annex A attached hereto, together
with payment of the Exercise Price for the Warrant Shares purchased, at the
Company’s principal executive offices (the “Designated
Office”), the Holder shall be entitled to receive a certificate or
certificates for the Warrant Shares so purchased. The Company agrees that the
Warrant Shares shall be deemed to have been issued to the Holder as of the
close of business on the date on which this Warrant shall have been surrendered
together with the Notice of Exercise and payment for such Warrant Shares.

1.3   Cashless Exercise. In lieu of payment of the Exercise Price, a
Holder may exercise this Warrant, in whole or in part, by presentation and
surrender of this Warrant to the Company, together with a Cashless Exercise
Form attached hereto as Annex B (or a reasonable facsimile thereof)
duly executed (a “Cashless Exercise”).
Acceptance by the Company of such presentation and surrender shall be deemed a
waiver of the Holder’s obligation to pay all or any portion of the Exercise
Price, as the case may be. In the event of a Cashless Exercise, the Holder
shall exchange this Warrant for that number of Common Shares determined by
multiplying the number of Common Shares for which this Warrant is being exercised
by a fraction, the numerator of which shall be the difference between (i) the
higher of (A) $7.10 or (B) the then current market price per Common Share and
(ii) the Exercise Price, and the denominator of which shall be the higher of
(i) $[7.10] or (ii) the then current market price per Common Share. For
purposes of any computation under this Section l.3, the then current market
price per Common Share at any date shall be deemed to be the average for the
ten (10) consecutive business days immediately prior to the Cashless Exercise
of the daily closing prices of the Common Shares on the principal national
securities exchange on which the Common Shares are admitted to trading or
listed, or if not listed or admitted to trading on any such exchange, the last
reported sales prices as included for quotation on Nasdaq, or if not included
for quotation on Nasdaq, the average of the highest reported bid and lowest
reported asked prices as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System, or if not then publicly traded, the
fair market price of the Common Shares as determined, in good faith, by the
Board of Directors of the Company.

1.4   Holder’s Put Option.
 (a) Subject to, and in accordance with,
the provisions of this Section 1.4, the Holder shall have the right and option
(the “Put Option”) to require the
Company to redeem and purchase from the Holder all or any portion of this
Warrant. The Put Option shall be exercisable from time to time for all or part
of the Warrant Shares, as provided in Sections 1.4(b) or 1.4(c). The purchase
price (the “Option  Purchase Price”) shall be $0.90 multiplied
by the number of Warrant Shares as to which this Put Option is then being
exercised.

(b)           The Put Option shall be exercisable
at any time and from time to time after the occurrence of an Option Triggering
Event. If the Holder desires to exercise a Put Option after an Option
Triggering Event, the Holder shall surrender this Warrant, together with a Put
Option Exercise Form attached hereto as Annex C (or a reasonable facsimile
thereof) duly executed, to the Company at the Designated Office. Within five
(5) business days after its receipt

 

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of the surrendered Warrant and the Put Option Exercise
Form, the Company shall purchase from the Holder that portion of this Warrant
as shall be specified in the Put Option Exercise Form at the Option Purchase
Price and pay the applicable Option Purchase Price to the Holder, either by
wire transfer of immediately available funds to the account specified by the
Holder in the Put Option Exercise Form or by certified or bank check of
immediately available funds delivered to the Holder at the address specified in
the Put Option Exercise Form. If the Put Option is exercised in part, the
Company shall deliver to the Holder a new Warrant, identical in form to this
Warrant, in the name of the Holder, evidencing the right to purchase the number
of Warrant Shares as to which the Put Option has not been exercised, which new
Warrant shall be signed by an appropriate officer of the Company.

(c)           Subject to the last sentence of this
paragraph (c), the Put Option shall be exercisable at any time and from time to
time after the Company has entered into an Option Triggering Event Agreement. If
the Holder desires to exercise a Put Option after the Company has entered into
an Option Triggering Event Agreement, the Holder shall surrender this Warrant, together with a Put Option Exercise
Form (or a reasonable facsimile thereof) duly executed, to the Company at the
Designated Office. Immediately prior to the consummation of the transactions
contemplated by Option Triggering Event Agreement, the Company shall
purchase from the Holder that portion of this Warrant as shall be specified in
the Put Option Exercise Form at the Option Purchase Price and pay the
applicable Option Purchase Price to the Holder, either by wire transfer of
immediately available funds to the account specified by the Holder in the Put
Option Exercise Form or by certified or bank check of immediately available
funds delivered to the Holder at the address specified in the Put Option
Exercise Form. If the Put Option is exercised in part, the Company shall
deliver to the Holder a new Warrant, identical in form to this Warrant, in the
name of the Holder, evidencing the right to purchase the number of Warrant
Shares as to which the Put Option has not been exercised, which new Warrant
shall be signed by an appropriate officer of the Company. If the Option
Triggering Event Agreement shall be terminated or abandoned without the
transactions contemplated thereby being consummated, the Company shall not be
required to purchase any part of this Warrant and instead shall return this
Warrant to the Holder with a notice in writing to the effect that the Option
Triggering Event Agreement has been terminated or abandoned and confirming to
the Holder that this Warrant remains in full force and effect.

(d)           For purposes of this Warrant, “Option
Triggering Event” shall mean any of the following:

(i)            any Change
of Control of the Company (as defined below), including any transaction or
series of transactions that result in a Change of Control of the Company; or

(ii)           any liquidation or dissolution of the
Company, or any action (A) by the Company relating to bankruptcy,
insolvency, reorganization or relief from creditors seeking to adjudicate it
bankrupt or seeking reorganization, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the Company or
(B) seeking appointment of a receiver, trustee, custodian or other similar
official for it or all or any substantial part of its assets, or making a
general assignment for the benefit of its creditors.

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(e)           For purposes of this Warrant, “Option Triggering Event Agreement” shall
mean any agreement by the Company to engage in any transaction or series of
transactions that would result in a Change of Control of the Company (but, in
the case of the transactions contemplated by Section 1.4(f)(i)(C)(III) (below),
only if the agreement to engage in the transaction or series of transactions
contemplated thereby is entered into on or prior to December 31, 2005).

(f)            For
purposes of this Warrant, “Change of Control
of the Company” shall mean any of the following at any time after
the date hereof:

(i)            the “Sale of the Company”, which
shall mean any transaction or series of transactions pursuant to which any
person(s) (meaning an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, Section 13D group, or a governmental entity (or
any department, agency or political subdivision thereof)) other than the Holder
acquire(s), directly or indirectly, (A) beneficial ownership of interests
in the Company (or the surviving or resulting entity in such transaction or
transactions) possessing more than fifty percent (50%) of the outstanding
voting power of the Company (on a fully diluted basis), whether by merger,
consolidation, reorganization, combination, issuance, sale or transfer of the
Company’s capital stock, or otherwise, (B) the power, whether through ownership
or securities, as trustee or executor, by proxy or other voting arrangement,
contract or otherwise, to elect a majority of the board of directors of the
Company, or (C) of all or a material portion of (including, without
limitation, by the Company granting a license or similar transaction regarding
related intellectual property which has the same or similar economic effect to
a sale of such assets) (I) the Company’s Digital Mammography or SenoScan
business, including the sale of inventories or services contracts associated
therewith outside the ordinary course of business, (II) the Company’s
Sterotactic Biopsy Table or MammoTest business, including the sale of
inventories or services contracts associated therewith outside the ordinary
course of business or (III) the Company’s general radiological, electrocardiography
or surgical businesses (but, in the case of this clause (III), only if the
agreement to engage in such transaction or series of transactions is entered
into on or prior to December 31, 2005); or

 (ii)          a
majority of the board of directors of the Company shall consist at such time of
individuals other than (A) members of the board of directors of the Company on
the date hereof and (B) other members of the board of directors of the Company
recommended, elected or approved to succeed or become a director of the
Company, as the case may be, by a majority of such members referred to in
clause (C) or by members so recommended, elected or approved.

2.     Transfer; Issuance
of Stock Certificates; Restrictive Legends.

2.1   Transfer. Each transfer of this Warrant and
all rights hereunder, in whole or in part, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant
at the Designated Office, together with a written assignment of this

 

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Warrant in the form of Annex D attached hereto
duly executed by the Holder or its agent or attorney. Upon such surrender and
delivery, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, if any. A Warrant may
be exercised by the new Holder for the purchase of Warrant Shares without
having a new Warrant issued. Prior to due presentment for registration of
transfer thereof, the Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than a duly authorized
officer of the Company) for all purposes and shall not be affected by any
notice to the contrary. All Warrants issued upon any assignment of Warrants
shall be the valid obligations of the Company, evidencing the same rights, and
entitled to the same benefits as the Warrants surrendered upon such
registration of transfer or exchange.

2.2   Stock Certificates. Certificates for the
Warrant Shares shall be delivered to the Holder within three (3) business days
after the rights represented by this Warrant shall have been exercised pursuant
to Section 1, and a new Warrant representing the shares of Common Shares, if
any, with respect to which this Warrant shall not then have been exercised
shall also be issued to the Holder within such time. The issuance of
certificates for Warrant Shares upon the exercise of this Warrant shall be made
without charge to the Holder hereof including, without limitation, any
documentary, stamp or similar tax that may be payable in respect thereof; provided, however, that the Company shall not be required to
pay any income tax to which the Holder hereof may be subject in connection with
the issuance of this Warrant or the Warrant Shares.

2.3   Restrictive Legend. Except as otherwise provided
in this Section 2, each certificate for Warrant Shares initially issued upon
the exercise of this Warrant and each certificate for Warrant Shares issued to
any subsequent transferee of any such certificate, shall be stamped or
otherwise imprinted with a legend in substantially the following form:

“THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION IN FORM AND FROM COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.”

Notwithstanding the foregoing, the legend requirements
of this Section 2.3 shall terminate as to any particular Warrant Shares when
(i) the Warrant Shares are transferred pursuant to an effective resale
registration statement, as contemplated in the Registration Rights Agreement
between the Company and the Holder of even date herewith, or (ii) the
Company shall have received from the Holder thereof an opinion of counsel in
form and substance reasonably acceptable to the Company that such legend is not
required in order to ensure compliance with the Securities Act. Whenever the
restrictions imposed by this Section 2.3 shall terminate, the Holder or
subsequent transferee, as the case may be, shall be entitled to receive from
the

 

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Company without cost to such Holder or transferee a
certificate for the Warrant Shares without such restrictive legend.

3.     Adjustment of Number
of Shares; Exercise Price; Nature of Securities lssuable Upon Exercise of
Warrants.

3.1   Exercise Price; Adjustment of Number of Shares.
The Exercise Price and the number of shares purchasable hereunder shall be
subject to adjustment from time to time as hereinafter provided; provided, however, that, notwithstanding the below, in no
case shall the Exercise Price be reduced to below the par value of the class of
stock for which this Warrant is exercisable at such time.

3.2   Adjustments Upon
Distribution, Subdivision or Combination. If the Company, at any
time or from time to time after the issuance of this Warrant, shall
(i) make a dividend or distribution on its shares of Common Stock payable
in shares of Common Stock, (ii) subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares, or (iii) combine
or reclassify the outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect at that time and the number of Warrant
Shares into which the Warrant is exercisable at that time shall be
proportionately adjusted effective as of the record date for the dividend or
distribution or the effective date of the subdivision, combination or
reclassification.

3.3   Adjustment Upon Other
Distributions. If the Company, at any time or from time to time
after the issuance of this Warrant, makes a distribution to the holders of the
Common Stock payable in securities of the Company other than shares of Common
Stock, then, in each such event, provision shall be made so that the Holder
shall receive upon exercise of the Warrant, in addition to the number of
Warrant Shares, the amount of such securities of the Company which would have
been received if the portion of the Warrant so exercised had been exercised for
Warrant Shares on the date of such event, subject to adjustments subsequent to
the date of such event with respect to such distributed securities which shall
be on terms as nearly equivalent as practicable to the adjustments provided in
this Section 3 and all other adjustments under this Section 3.

3.4   Adjustment Upon Merger,
Consolidation or Exchange. If at any time or from time to time after
the issuance of this Warrant there is any merger, consolidation, arrangement or
statutory share exchange of the Company with or into any other person or
company, then, in each such event, provision shall be made so that the Holder
shall receive upon exercise of the Warrant the kind and amount of shares and
other securities and property (including cash) which would have been received
upon such merger, consolidation, arrangement or statutory share exchange by the
Holder if the portion of the Warrant so exercised had been exercised for
Warrant Shares immediately prior to such merger, consolidation, arrangement or
statutory share exchange, subject to adjustments for events subsequent to the
effective date of such merger, consolidation, arrangement or statutory share
exchange with respect to such shares and other securities which shall be on
terms as nearly equivalent as practicable to the adjustments provided in this
Section 3 and all other adjustments under this Section 3.

 

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3.5   Adjustments for Recapitalization or Reclassification.
If, at any time or from time to time after the issuance of this Warrant, the
Warrant Shares issuable upon exercise of the Warrant are changed into the same
or a different number of securities of any class of the Company, whether by recapitalization,
reclassification or otherwise (other than a merger, consolidation, arrangement
or statutory share exchange provided for elsewhere in this Section 3),
then, in each such event, provision shall be made so that the Holder shall
receive upon exercise of the Warrant the kind and amount of securities or other
property which would have been received in connection with such
recapitalization, reclassification or other change by the Holder if the portion
of the Warrant so exercised had been exercised immediately prior to such
recapitalization, reclassification or change, subject to adjustments for events
subsequent to the effective date of such recapitalization, reclassification or
other change with respect to such securities which shall be on terms as nearly
equivalent as practicable to the adjustments provided in this Section 3
and all other adjustments under this Section 3.

3.6   Extraordinary Dividends or Distributions. If,
at any time or from time to time after the issuance of this Warrant, the Company
shall declare a dividend or any other distribution upon the Common Stock
payable otherwise than out of current earnings, retained earnings or earned
surplus and otherwise than in shares of Common Stock, then the Exercise Price
in effect immediately prior to such declaration shall be reduced by an amount
equal, in the case of a dividend or distribution in cash, to the amount thereof
payable per share of Common Stock or, in the case of any other dividend or
distribution, to the value thereof per share of Common Stock at the time such
dividend or distribution was declared, as determined by the Board of Directors
of the Company in good faith. Such reductions shall take effect as of the date
on which a record is taken for the purposes of the subject dividend or
distribution, or, if a record is not taken, the date as of which the holders of
record of Common Stock entitled to such dividend or distribution are to be
determined.

3.7   Adjustment Upon Issuance of
Shares of Common Stock Below Exercise Price.

(a)   If
the Company, at any time or from time to time, issues or sells any Additional
Shares of Common Stock (as defined below), other than as provided in the
foregoing subsections of this Section 3, for a price per share (which, in
the case of options, warrants, convertible securities or other rights, includes
the amounts paid therefor plus the exercise price, conversion price or other
such amounts payable thereunder) that is less than the then applicable Exercise
Price, then and in each such case, the then applicable Exercise Price shall
automatically be reduced as of the opening of business on the date of such
issue or sale, to a price determined by multiplying the Exercise Price by a
fraction (i) the numerator of which shall be (A) the number of shares
of Common Stock deemed outstanding (as determined below) immediately prior to
such issue or sale, plus (B) the number of shares of Common Stock which
the aggregate consideration received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at such Exercise
Price, and (ii) the denominator of which shall be the number of shares of
Common Stock deemed outstanding (as defined below) immediately prior to such
issue or sale plus the total number of Additional Shares of Common Stock so
issued; provided, however, that upon the expiration or other
termination of options, warrants, or other rights to purchase or acquire shares
of Common Stock, and upon the expiration or termination of the right to convert
or exchange convertible or exchangeable securities (whether

 

7

by reason of redemption or otherwise), if any thereof shall
not have been exercised, converted or exchanged, as applicable, the number of
shares of Common Stock deemed to be outstanding pursuant to this
Section 3.7(a) shall be reduced by the number of shares as to which
options, warrants, and rights to purchase or acquire shares of Common Stock
shall have expired or terminated unexercised, and as to which conversion or exchange
rights shall have expired or terminated unexercised, and such number of shares
shall no longer be deemed to be outstanding; and the Exercise Price then in
effect shall forthwith be readjusted and thereafter be the price that it would
have been had adjustment been made on the basis of the issuance only of the
shares of Common Stock actually issued. For purposes of the preceding sentence,
the number of shares of Common Stock deemed to be outstanding as of a given
date shall be the sum of (A) the number of shares of Common Stock actually
outstanding, (B) the number of Shares for which the Warrant could be
exercised on the day immediately preceding the given date, and (C) the
number of shares of Common Stock which could be obtained through the exercise
or conversion of all other rights, options and convertible securities
outstanding on the day immediately preceding the given date. “Additional Shares of Common Stock” shall
mean all shares of Common Stock, and all options, warrants, convertible
securities or other rights to purchase or acquire shares of Common Stock,
issued by the Company other than (A) shares of Common Stock and/or
options, warrants or other Common Stock purchase rights for up to an aggregate
of 300,000 shares of Common Stock (such number to be subject to adjustment in
accordance with Section 3.2 above), where such options, warrants or other
rights are issued both (i) with exercise prices per share of Common Stock at
the then-current fair market value of a share of Common Stock, as determined in
good faith by the Board of Directors of the Company or the Compensation
Committee thereof, and (ii) to employees, officers or directors of, or
consultants to, the Company or any subsidiary pursuant to stock purchase or
stock option plans or other arrangements that are approved by the Company’s
Board of Directors or the Compensation Committee and (B) shares of Common
Stock issued pursuant to the exercise of options, warrants or convertible
securities outstanding as of the date hereof.

(b)   In
the event that the exercise price, conversion price, purchase price or other
price at which shares of Common Stock are purchasable pursuant to any options,
warrants, convertible securities or other rights to purchase or acquire Common
Stock is reduced at any time or from time to time (other than under or by
reason of provisions designed to protect against dilution), then, upon such
reduction becoming effective, the Exercise Price then in effect hereunder shall
forthwith be decreased to such Exercise Price as would have been obtained had
the adjustments made and required under this Section 3.7 upon the issuance of
such options, warrants, convertible securities or other rights been made upon
the basis of (and the total consideration received therefor) (A) the issuance
of the number of shares of Common Stock theretofore actually delivered upon the
exercise, conversion or exchange of such options, warrants, convertible
securities or other rights, (B) the issuance of all of the Common Stock and all
other options, warrants, convertible securities and other rights to purchase or
acquire Common Stock issued after the issuance of the modified options,
warrants, convertible securities or other rights, and (C) the original issuance
at the time of the reduction of any such options, warrants, convertible
securities or other rights then still outstanding.

(c)   In
no event shall an adjustment under this Section 3.7 be made if it would
result in an increase in the then applicable Exercise Price.

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3.8   Adjustment of Option Purchase Price. At any
time there is an adjustment to the number of Warrant Shares underlying this
Warrant, the Company shall adjust the Option Purchase Price proportionately so
that the consideration to be received by the Holder in connection with the
exercise of the Put Option would not be less than would be received by the
Holder had such adjustment to the number of Warrant Shares not occurred.

3.9   Notice of Adjustment. Whenever the Exercise
Price or Option Purchase Price is adjusted, the Company shall promptly deliver
to the Holder a certificate of adjustment, setting forth the Exercise Price
and/or Option Purchase Price after adjustment, a brief statement of the facts
requiring the adjustment and the computation by which the adjustment was made. The
certificate of adjustment shall be conclusive evidence of the correctness of
the adjustment.

3.10 Successive Adjustments. The provisions of
this Section 3 shall be applicable successively to each event described herein
which may occur subsequent to the issuance of this Warrant and prior to the
exercise in full of this Warrant.

4.     Registration;
Exchange and Replacement of Warrant; Reservation of Shares. The
Company shall keep at the Designated Office a register in which the Company
shall provide for the registration, transfer and exchange of this Warrant. The
Company shall not at any time, except upon the dissolution, liquidation or
winding-up of the Company, close such register so as to result in preventing or
delaying the exercise or transfer of this Warrant.

The Company may deem and
treat the person in whose name this Warrant is registered as the Holder and
owner hereof for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration or transfer as
provided in this Section 4.

Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and (in case of loss, theft or
destruction) of indemnity satisfactory to it, and (in the case of mutilation)
upon surrender and cancellation of this Warrant, the Company will (in the
absence of notice to the Company that the Warrant has been acquired by a bona
fide purchaser) make and deliver a new Warrant of like tenor, in lieu of this
Warrant without requiring the posting of any bond or the giving of any
security.

The Company shall at all
times reserve and keep available out of its authorized shares of capital stock,
solely for the purpose of issuance upon the exercise of this Warrant, such
number of shares of Common Shares as shall be issuable upon the exercise
hereof. The Company covenants and agrees that, upon exercise of this Warrant
and payment of the Exercise Price therefor, if applicable, all Warrant Shares
issuable upon such exercise shall be duly and validly authorized and issued,
fully paid and non-assessable.

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5.     Investment
Representations. The Holder, by accepting this
Warrant, covenants and agrees that, at the time of exercise of this Warrant,
the securities acquired by the Holder upon exercise hereof are for the account
of the Holder or are being acquired for its own investment and account and are
not acquired with a view to, or for sale in connection with, any distribution
thereof (or any portion thereof) and with no present intention (at any such
time) of offering and distributing such securities (or any portion thereof),
except in compliance with applicable federal and state securities laws.

6.     Fractional Warrants
and Fractional Shares. If the number of Warrant Shares
purchasable upon the exercise of this Warrant is adjusted pursuant to Section 3
hereof, the Company shall nevertheless not be required to issue fractions of
shares, upon exercise of this Warrant or otherwise, or to distribute
certificates that evidence fractional shares. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall pay to the Holder
an amount in cash equal to such fraction multiplied by the current market value
of such fractional share as may be prescribed, in good faith, by the Board of
Directors of the Company.

7.     Warrant Holders Not
Deemed Stockholders. No Holder of this Warrant shall, as
such, be entitled to vote or to receive dividends or be deemed the holder of
Warrant Shares that may at any time be issuable upon exercise of this Warrant,
nor shall anything contained herein be construed to confer upon the Holder of
this Warrant, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value,
consolidation, merger or conveyance or otherwise), or to receive notice of
meetings, or subscription rights, until such Holder shall have exercised this
Warrant and been issued Warrant Shares or deemed to have been issued Warrant
Shares in accordance with the provisions hereof.

8.     Sales of Company
Securities. The Holder agrees that for a period of three (3)
years from the date of this Warrant, it will not, and will cause its Affiliates
not to, sell short, sell short against the box, engage in any other similar
derivative transactions or otherwise effect any sales of securities of the
Company except for sales which are covered through the delivery of the Warrant
Shares.

9.     Notices. Any notice
which is required to be given by this Warrant must be in writing, and shall be
given or served, unless otherwise expressly provided herein, by depositing the
same in the United States Mail, postpaid and certified and addressed to the
party to be notified, with return receipt requested, or by delivering the same
by courier or in person to such party (or, if the party or parties to be
notified be incorporated, to an officer of such party). Notice deposited in the
mail, postpaid and certified with return receipt requested, shall be deemed
received and effective upon the deposit in a proper United States depository. Notice
given in any other manner shall be effective only if and when received by the
party to be notified. For the purposes of notice, the addresses of the parties
for the receipt of notice hereunder are:

10

 

	
   

  	
  If to the
  Company:

  	
   

  
	
   

  	
   

  Fischer Imaging Corporation

  12300 N. Grant Street

  Denver, CO 80241

  	
   

  
	
   

  	
  Attention:

  	
  Harris Ravine

  	
   

  
	
   

  	
  Tel No.:

  	
  (303) 450-4370

  	
   

  
	
   

  	
  Fax No.:

  	
  (303) 252-4256

  	
   

  

 

	
   

  	
  If to the Holder:

  	
   

  
	
   

  	
   

  ComVest Investment Partners II LLC

  One North Clematis, Suite 300

  West Palm Beach, Florida 33401

  Attention: Carl Kleidman

  Telephone: (561) 868-6070

  e-mail: carlk@comvest.com

  	
   

  

 

Any party shall have the
right from time to time, and at any time, to change its address for the receipt
of notice by giving at least five (5) days’ prior written notice of the change
of its address to the other parties in the manner specified herein.

10.  Successors. All the
covenants, agreements, representations and warranties contained in this Warrant
shall bind the parties hereto and their respective heirs, executors,
administrators, distributees, successors, assigns and transferees.

11.  Law Governing. THIS
WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

12.  Entire Agreement;
Amendments and Waivers. This Warrant sets forth the entire
understanding of the parties with respect to the transactions contemplated
hereby. The failure of any party to seek redress for the violation or to insist
upon the strict performance of any term of this Warrant shall not constitute a
waiver of such term and such party shall be entitled to enforce such term
without regard to such forbearance. This Warrant may be amended, and any breach
of or compliance with any covenant, agreement, warranty or representation may
be waived, only if the Company has obtained the written consent or written
waiver of the Holder, and then such consent or waiver shall be effective only
in the specific instance and for the specific purpose for which given.

13.  Severability;
Headings. If any term of this Warrant as applied to any person or to
any circumstance is prohibited, void, invalid or unenforceable in any jurisdiction,
such term shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or invalidity without in any way affecting any other term of this
Warrant or affecting the validity or enforceability of this Warrant or of such
provision in any other jurisdiction. The Section headings in this Warrant have
been inserted for purposes of convenience only and shall have no substantive
effect.

 

11

 

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be duly executed as of the 22nd
day of February, 2005.

 

	
   

  	
  FISCHER IMAGING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harris Ravine

  
	
   

  	
   

  	
  Name: Harris Ravine

  
	
   

  	
   

  	
  Title:   President and Chief
  Executive Officer

  

 

 

12

 

ANNEX A

NOTICE OF EXERCISE

(To be
executed upon partial or full

exercise of the within Warrant)

 

The undersigned
hereby irrevocably elects to exercise the right to purchase __________ shares
of Common Stock of Fischer Imaging Corporation covered by the within Warrant
according to the conditions hereof and herewith makes payment of the Exercise
Price of such shares in full in the amount of $______________.

 

	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature of Registered Holder)

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  

 

 

 

ANNEX B

 

CASHLESS EXERCISE FORM

 

(To be executed
upon partial or full

exercise of Warrants
pursuant to Section 1.3 of the Warrant)

 

                                The undersigned
hereby irrevocably elects to surrender ____________ shares of Common Stock of
Fischer Imaging Corporation purchasable under the Warrants for such shares of
Common Stock issuable in exchange therefor pursuant to the Cashless Exercise
provisions of the within Warrants, as provided for in Section 1.3 of such
Warrant.

 

                                Please issue a
certificate or certificates for such Common Stock in the name of, and pay cash
for fractional shares in the name of:

 

(Please print name, address, and social security number/tax
identification number:)

 

and, if said
number of shares of Common Stock shall not be all the shares of Common Stock
purchasable thereunder, that a new Warrant for the balance remaining of the
shares of Common Stock purchasable under the within Warrants be registered in
the name of the undersigned Holder or its transferee as below indicated and
delivered to the address stated below.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Warrant Holder

  
	
  or transferee:

  	
   

  	
   

  
	
   

  	
   

  	
  (Please print)

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTICE:

  	
   

  	
  The signature on this
  form must correspond with the name as written upon the face of this Warrant
  in every particular, without alteration or enlargement or any change
  whatsoever.

  

 

 

 

 

ANNEX D

ASSIGNMENT FORM

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

	
   

  Name
  and Address of Assignee

  	
  No. of Shares of

  Common
  Stock

  
	
   

  	
   

  
	
   

  	
   

  

 

and does hereby irrevocably constitute and
appoint _______________________ attorney-in-fact to register such transfer onto
the books of Fischer Imaging Corporation maintained for the purpose, with full
power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness:

  	
   

  

 

	
  NOTICE:

  	
   

  	
  The signature on this
  assignment must correspond with the name as written upon the face of this
  Warrant in every particular, without alteration or enlargement or any change
  whatsoever.

  

 

 

 

ANNEX C

 

PUT OPTION EXERCISE FORM

 

(To be executed
upon partial or full

exercise of the Put
Option pursuant to Section 1.4 of the Warrant)

 

                                The undersigned
hereby irrevocably elects to require Fischer Imaging Corporation to purchase
[all] [a portion] of the Warrant No. WC-1A [representing the right to receive
____________ Warrant Shares] pursuant to the Put Option provisions of the
within Warrant, as provided for in Section 1.4 of such Warrant.

 

                                Please send cash
in the amount of the applicable Option Purchase Price (either by wire transfer
of immediately available funds or bank or certified check of immediately
available funds) to:

 

(Please print name, address, and social security number/tax
identification number:)

 

Wire transfer
instructions:

 

(insert wire instructions)

 

and, if said
Warrant is not to be purchased in full, please send a new Warrant for the right
to purchase the balance remaining of the Warrant Shares purchasable under the
within Warrant to be registered in the name of the undersigned Holder or its
transferee as below indicated and delivered to the address stated below.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Warrant
  Holder

  
	
  or transferee:

  	
   

  	
   

  
	
   

  	
   

  	
  (Please print)

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTICE:

  	
   

  	
  The signature on
  this form must correspond with the name as written upon the face of this
  Warrant in every particular, without alteration or enlargement or any change
  whatsoever.Second Amendment

Exhibit 4.1(D)

SECOND AMENDMENT 

TO 

SECOND AMENDED AND RESTATED 

TERM LOAN AGREEMENT

This Second Amendment (“Second Amendment”), dated as of December 20, 2004 is made by and between SERVOTRONICS, INC. (“Borrower”), a Delaware corporation having its principal office at 1110 Maple Street, P.O. Box 300, Elma, New York 14059 and FLEET NATIONAL BANK, a Bank of America company which is a national banking association and successor to Fleet Bank, with an office at Bank of America Building, Ten Fountain Plaza, Buffalo, New York 14202 (“Bank”).

Statement of the Premises

Borrower and Bank have previously entered into a Second Amended and Restated Term Loan Agreement dated February 26, 1999, as amended by First Amendment to Second Amended and Restated Term Loan Agreement dated as of December 17, 1999 (as amended, the “Loan Agreement”). 

Borrower and Bank have agreed that Bank will extend to Borrower and Borrower will borrow from Bank a term loan to be used to refinance the outstanding indebtedness under the Loan Agreement and the Term Notes, as defined therein, and certain other indebtedness of Borrower to Bank, and have agreed to amend the Loan Agreement to set forth the terms and conditions of such term loan, to amend certain financial covenants in the Loan Agreement and to make certain other changes, all upon the terms and conditions set forth herein.

Statement of Consideration

Accordingly, in consideration of the premises and under the authority of Section 5-1103 of the New York General Obligations Law, Borrower and Bank agree as follows:

Agreement

1.    Amendment. Effective upon the satisfaction of all conditions specified in Section 3 hereof, the Loan Agreement is hereby amended as follows:

A.    Sections 1.8 and 1.9 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:

1.8    “Debt Service Coverage Ratio” shall refer to the sum of Borrower’s and Borrower’s consolidated subsidiaries’ (i) net profits, (ii) depreciation and amortization, (iii) interest expense, and (iv) non-cash expense for such period, compared to the sum of Borrower’s and Borrower’s consolidated subsidiaries’ (v) current maturities of long-term debt (including capitalized leases), (vi) interest expense, and (vii) capital expenditures not funded by debt.

	 
	 		 
	

	 

1.9    “Default Interest Rate” means the Stated Prime Rate, as the same may change from time to time, plus four percent (4%) per annum, provided, however, that if any portion of the principal of the Term Note bears interest calculated by reference to a LIBOR Based Rate at the time of maturity or acceleration, Borrower’s right to select pricing options shall cease and such principal shall bear interest at four percent (4%) over such rate until the end of the LIBOR Period then in effect and shall thereafter bear interest at the Stated Prime Rate plus four percent (4%) until paid.

B.    Sections 1.12, 1.13, 1.14 and 1.15 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:

1.12       Intentionally omitted. 

1.13       Intentionally omitted.

1.14       Intentionally omitted.

1.15       “GAAP” means generally accepted accounting principles in the United States of America.

C.    Section 1.17 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

1.17       “LIBOR” means, the rate per annum as determined on the basis of the offered rates for deposits in U.S. dollars, for a period of time comparable to the corresponding LIBOR Period which appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that is two London Banking Days preceding the first day of such LIBOR Period; provided, however, if the rate described above does not appear on the Telerate System on any applicable interest determination date, the LIBOR rate shall be the rate (rounded upwards, if necessary to the nearest one hundred-thousandth of a percentage point), determined on the basis of the offered rates for deposits in U.S. dollars for a period of time comparable to such LIBOR Period which are offered by four major banks in the London interbank market at approximately 11:00 a.m. London time, on the day that is two (2) London Banking Days preceding the first day of such LIBOR Period as selected by the Bank. The principal London office of each of the four major London banks will be requested to provide a quotation of its U.S. dollar deposit offered rate. If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in U.S. dollars to leading European banks for a period of time comparable to such LIBOR Period offered by major banks in New York City at approximately 11:00 a.m. New York City time, on the day that is two London Banking Days preceding the first day of such LIBOR Period. In the event that Bank is unable to obtain any such quotation as provided above, it will be deemed that LIBOR cannot be determined and the outstanding principal amount of the Term Loan shall bear interest at the Stated Prime Rate commencing on the day on which any current LIBOR Period then in effect shall expire and continuing until the Bank using commercially reasonable efforts is able to obtain such a quotation as provided above and Borrower again requests a LIBOR Based Rate. As used in this Agreement, “Banking Day” shall mean, in respect of any city, any date on which commercial banks are open for business in that city. 

In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of Bank then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

D.    Section 1.19 of the Loan Agreement is hereby amended to delete the word “corresponding” from such Section.

E.    Section 1.24 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

	 
	 	 - 2 -	 
	

	 

1.24.      “Obligations” means all debts, liabilities and obligations of Borrower to Bank now existing or hereafter arising or created (including but not limited to all obligations of Borrower under this Agreement and the Term Note), without limitation as to amount, and including without limitation all debts, liabilities and obligations which are direct or indirect, absolute or contingent, and any sums which Bank receives in payment of Obligations and is obligated by a Bankruptcy Court or other legal authority to repay and does so repay. Without limitation of the foregoing, Obligations includes all obligations of the Borrower under any interest rate or currency protection agreement, interest rate or currency future, interest rate or currency option, interest rate or currency swap or cap or other interest rate or currency hedge agreement with the Bank or its Affiliate relating to the Term Loan.

F.    Section 1.31 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

1.31.      “Term Note” means the Term Note in substantially the form of Exhibit A hereto.

G.    Section 1.32 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

1.32       Intentionally omitted.

H.    Section 2 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

2.    Term Loan Facility

2.1.    Term Loan. Subject to the terms and conditions of this Agreement, on the date hereof the Bank shall lend and the Borrower shall borrow the principal amount of $750,000. The Term Loan shall be evidenced by the Term Note in the original principal amount of $750,000.

2.2.    Rates and Payment of Interest.

    (i)    Interest will be charged on the principal amount outstanding from time to time under the Term Note, from the date hereof until paid in full, at a per annum rate which shall be, at Borrower’s election, from time to time, either (A) the Stated Prime Rate or (B) the applicable LIBOR Based Rate. 

    (ii)    All interest accrued on the Term Loan shall be payable on the first day of each month after the date hereof.

    (iii)    All interest shall be computed on the basis of a year of 360 days and the actual number of days elapsed and charged for each day on which principal is outstanding at the close of business of such day, including any days for which the payment of principal is extended by reason of Sundays and holidays.

2.3.    LIBOR Based Rate Elections. Borrower shall give Bank two (2) Business Days notice prior to electing a LIBOR Based Rate and corresponding LIBOR Period. If Borrower does not elect a new LIBOR Period at least two Business Days prior to the expiration of any LIBOR Period, the interest rate for the Term Loan may be set by the Bank at the Stated Prime Rate or the LIBOR Based Rate for a 1 month LIBOR Period. Not more than one LIBOR Period may be in effect at one time.

Borrower will have the right to change from a Stated Prime Based Rate to a LIBOR Based Rate at any time with respect to the Term Loan but may change from a LIBOR Based Rate to a Stated Prime Rate only at the end of the applicable LIBOR Period. 

	 
	 	  - 3 -	 
	

	 

2.4.    Payment of Principal. The principal of the Term Loan shall be payable in twenty-eight substantially equal, consecutive quarterly installments, commencing January 1, 2005 and continuing on the first day of each January, April, July and October thereafter as follows: twenty-seven installments in the amount of $26,785.71 each and a twenty-eighth and final installment due October 1, 2011 in the amount of $26,785.83, at which time all outstanding principal and accrued interest shall be paid in full.

2.5.    Voluntary Prepayment of Principal.

(i)    Except as otherwise provided in this Section 2.5, Borrower shall have the right at any time to terminate this Agreement, and the Term Loan hereunder, by payment in full of the then outstanding aggregate principal and accrued interest of the Term Note.

(ii)    All or any portion of the Term Loan bearing interest at a Stated Prime Based Rate may be repaid at any time without penalty. 

(iii)    Borrower may repay all or any portion of the Term Loan bearing interest at a LIBOR Based Rate only on the last day of the applicable LIBOR Period. 

(iv)    Borrower shall pay to Bank, upon request of Bank, such amount or amounts as shall be sufficient (in the reasonable opinion of Bank) to compensate it for any loss, cost, or expense incurred as a result of: (i) any repayment of the Term Loan then bearing interest at a LIBOR Based Rate on a date other than the last day of the applicable LIBOR Period (which shall be considered a prepayment); and (ii) any failure by Borrower to pay any portion of the Term Loan then bearing interest at a LIBOR Based Rate on the date for payment specified in Borrower’s written notice. Without limiting the foregoing, Borrower shall pay to Bank a “yield maintenance fee” in an amount computed as follows: The current rate for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent) with a maturity date closest to the last day of the term chosen pursuant to the LIBOR Rate Election as to which the prepayment is made, shall be subtracted from the LIBOR Based Rate in effect at the time of prepayment. If the result is zero or a negative number, there shall be no yield maintenance fee. If the result is a positive number, then the resulting percentage shall be multiplied by the amount of the principal balance being prepaid. The resulting amount shall be divided by 360 and multiplied by the number of days remaining in the term chosen pursuant to the LIBOR Rate Election as to which the prepayment is made. Said amount shall be reduced to present value calculated by using the above referenced United States Treasury security rate and the number of days remaining in the term chosen pursuant to the LIBOR Rate Election as to which prepayment is made. The resulting amount shall be the yield maintenance fee due to Bank upon the prepayment of a LIBOR Loan. Each reference in this paragraph to “LIBOR Rate Election” shall mean the election by Borrower of a LIBOR Based Rate. If by reason of an Event of Default, Bank elects to declare the Term Note to be immediately due and payable, then any yield maintenance fee with respect to the Term Loan shall become due and payable in the same manner as though Borrower had exercised such right of prepayment.

2.6.    Payments Generally. All payments shall be made by Borrower to Bank at Ten Fountain Plaza, Buffalo, New York or such other place as Bank may from time to time specify in writing in lawful currency of the United States of America and in immediately available funds, without counterclaim or setoff and free and clear of, and without any deduction or withholding for, any taxes or other payments. Whenever any payment (including principal, interest or any fees or other amounts) hereunder shall become due, or otherwise would occur, on a day that is not a Business Day, the due date of such payment shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees. All payments shall be applied first to the payment of all fees, expenses and other amounts due to the Bank (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after an Event of Default, payments will be applied to the obligations of Borrower to Bank as Bank determines in its sole discretion.

2.7.    Use of Proceeds. The proceeds of the Term Loan shall be used by Borrower to refinance certain indebtedness of Borrower to Bank. 

	 
	 	  - 4 -	 
	

	 

I.    Sections 4.2 and 4.3 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:

4.2    Intentionally omitted. 

4.3    Intentionally omitted.

J.    Section 4.6 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 

4.6    Will furnish to Bank: (i) within forty-five (45) days after the end of each of its fiscal quarters other than year end, an internally prepared consolidated and consolidating balance sheet, operating statement and statement of changes in shareholders’ equity (if such changes result from other than income) of Borrower at and as of the end of such quarter, together with copies of Borrower’s SEC Form 10-Q SB or equivalent filing; (ii) within one hundred twenty (120) days after the end of each of its fiscal years: a copy of SEC Form 10-K SB or equivalent filing, and consolidated and consolidating financial statements of Borrower as of the end of each such year audited by PricewaterhouseCoopers, LLP or any other independent certified public accountants reasonably satisfactory to Bank; (iii) together with each quarterly financial statement a certificate of the Chairman or Treasurer of Borrower certifying, to his best knowledge and belief, that (a) no Event of Default under the terms of this Agreement has occurred, and (b) no event which would constitute an Event of Default under this Agreement but for the requirement that notice be given or time elapse, or both, has occurred or, if any such event has occurred or then exists, stating the nature thereof and the steps being taken by Borrower to cure same; (iv) as soon as they are available, copies of all proxy statements, annual reports made available to its security holders and annual reports filed by Borrower with the Securities and Exchange Commission; and (v) as soon as they are available, copies of any management letters prepared by Borrower’s accountants.

K.    Section 5.5 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

5.5    Mortgage, pledge or otherwise encumber any of its assets, except for (i) liens granted to Bank; and (ii) “purchase money security interests in goods” as described in Section 9.103 of the New York Uniform Commercial Code.

L.    Section 6.2 of the Loan Agreement is hereby amended to delete the last sentence thereof.

M.    Section 8.3 of the Loan Agreement is hereby amended to change the words “Gerald A. Lee Vice President” to “Colleen M. O’Brien Vice President.”

N.    Section 8.5 of the Loan Agreement is hereby amended to change the words “any of the Term Notes” to “the Term Note.”

O.    Section 8.7 of the Loan Agreement is hereby amended to change the word “Company” therein to “Borrower” and the words “Term Notes” therein to “Term Note.”

P.    Sections 8.8 and 8.10 of the Loan Agreement are each amended to change the words “either of the Term Notes” therein to “the Term Note.” 

Q.    All references to the “Term Notes” in any Section of the Loan Agreement which is not amended above shall be amended to change the words “Term Notes” to the words “Term Note.”

	 
	 	  - 5 -	 
	

	 

R.    Exhibit A to the Loan Agreement is hereby amended and restated to read as Exhibit A to this Second Amendment.

2.    Representations and Warranties. Borrower makes the following representations and warranties to Bank which shall be deemed to be continuing representations and warranties so long as any obligations, including indebtedness of Borrower to Bank arising under the Loan Agreement or any note delivered pursuant thereto remain unpaid:

A.    Authorization. Borrower has full power and authority to borrow under the Loan Agreement, as amended hereby, and to execute, deliver and perform this Second Amendment and any documents delivered in connection with it and all other related documents and transactions, all of which have been duly authorized by all proper and necessary corporate action. The execution and delivery of this Second Amendment by Borrower will not violate the provisions of, or cause a default under, Borrower’s Certificate of Incorporation or By-Laws or any agreement to which the Borrower is a party or by which it or its assets are bound. 

B.    Binding Effect. This Second Amendment has been duly executed and delivered by Borrower and constitutes the legal, valid and binding obligation of Borrower enforceable in accordance with its terms.

C.    Consents; Governmental Approvals. To the best of the Company’s knowledge, no consent, approval or authorization of, or registration, declaration or filing with, any governmental body or authority or any other party is required in connection with the valid execution, delivery or performance of this Second Amendment or any other document executed and delivered therewith or in connection with any other transactions contemplated hereby. 

D.    No Events of Default. There is, on the date hereof, no event or condition which constitutes an Event of Default under any of the Loan Documents or which, with notice and/or the passage of time, would constitute an Event of Default.

E.    No Material Misstatements. Neither this Second Amendment nor any document delivered to Bank by or on behalf of Borrower to induce Bank to enter into this Second Amendment contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading in light of the circumstances in which they were made.

3.    Conditions of Effectiveness. This Second Amendment shall become effective when and only when Bank shall have received counterparts of this Second Amendment executed by Borrower and Bank and the following conditions shall have been fulfilled:

A.    Documents. All instruments, certificates and agreements to be furnished to the Bank hereunder shall be of such form and content as the Bank shall reasonably require, and the Borrower shall furnish such consents, authorizations and other instruments and agreements as the Bank may reasonably deem necessary to effectuate the intent of this Second Amendment.

	 
	 	  - 6 -	 
	

	 

B.    Opinion of Counsel. Counsel to Borrower shall have delivered to the Bank an opinion in form and substance satisfactory to the Bank.

C.    Authorization. The Borrower shall have taken appropriate corporate action to authorize, and the Borrower’s Board of Directors shall have adopted resolutions authorizing the execution and delivery of this Second Amendment and the taking of all action called for by this Second Amendment, and the Borrower shall have furnished to Bank certified copies of all such corporate action and Board resolutions and such other certified corporate documents as the Bank may request.

D.    Costs and Expenses. Borrower shall have complied with Section 5 of this Second Amendment.

E.    Acknowledgment. G. N. Metals Products, Inc., The Ontario Knife Company and Queen Cutlery Company, Inc. shall each have delivered to Bank an Acknowledgment in form and substance satisfactory to Bank and such additional documents as Bank or its counsel may reasonably require and all documents, instruments and other legal matters in connection with this Second Amendment shall be satisfactory in form and substance to Bank and its counsel.

4.    Reference to and Effect on Loan Documents.

A.    Upon the effectiveness hereof, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the Loan Documents to the Loan Agreement shall mean and be a reference to the Loan Agreement as amended by this Second Amendment.

B.    The Loan Agreement, as amended by this Second Amendment, represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereof. This Second Amendment supersedes all prior negotiations and any course of dealing between the parties with respect to the subject matter hereof. This Second Amendment shall be binding upon Borrower and its successors and assigns, and shall inure to the benefit of, and be enforceable by, Bank and each of its successors and assigns. The Loan Agreement, as amended hereby, is in full force and effect and, as so amended, is hereby ratified and reaffirmed in its entirety. The Borrower acknowledges and agrees on the date hereof that the Loan Agreement (as amended by this Second Amendment) and each other Borrower Document, as defined in the Loan Agreement, to which Borrower is a party is in full force and effect, that its obligations thereunder and under this Second Amendment are its legal valid and binding obligations enforceable against it in accordance with the terms thereof and hereof, subject to bankruptcy, insolvency, and other similar laws affecting creditors’ rights generally, and it has no defense, whether legal or equitable, setoff or counterclaim to the payment and performance of such obligations.

	 
	 	  - 7 -	 
	

	 

C.    The execution, delivery and effectiveness of this Second Amendment shall not operate as a waiver of any right, power or remedy of Bank under the Loan Agreement, nor constitute a waiver of any provision of the Loan Agreement.

5.    Costs and Expenses. Borrower agrees to pay on demand all costs and expenses of Bank in connection with the preparation, negotiation, administration, execution and delivery of this Second Amendment and the other documents related hereto, including the reasonable fees, charges and disbursements of counsel for Bank. 

6.    Governing Law. Pursuant to Section 5-1401 of the New York General Obligations Law, the laws of the State of New York shall govern the validity, construction, enforcement and interpretation of this Second Amendment in whole without regard to any rules of conflicts-of-laws that would require the application of the laws of any jurisdiction other than the State of New York.

7.    Headings. Section headings in this Second Amendment are included herein for convenience of reference only and shall not limit or otherwise affect the meanings of this Second Amendment or be used to construe its provisions.

8.    Execution in Counterparts. This Second Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which shall be deemed to be an original, and all of which taken together shall constitute one and the same Second Amendment, regardless of whether or not the execution by all parties shall appear on any single counterpart. Delivery of an executed counterpart of a signature page to this Second Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Second Amendment.

	 
	 	  - 8 -	 
	

	 

 

IN WITNESS WHEREOF, the parties hereto have each caused a counterpart of this Second Amendment to be executed by their respective representatives thereunto duly authorized, as of the date first above written.

 

 

SERVOTRONICS, INC.

	
       By:  /s/Lee D. Burns
	 
	
          Lee D. Burns
	 
	
                                                                                        Treasurer and Chief Financial
	 
	
 Officer
	 

FLEET NATIONAL BANK,

A Bank of America company

	
                              By:  /s/Colleen M. O’Brien

	
                                     Colleen M. O’Brien

	
                                      Vice President

	 
	 	  - 9 -	 
	

	 

	
STATE OF NEW YORK
	
)

	 	
) SS.:

	
COUNTY OF ERIE
	
)

On the 20th day of December, in the year 2004, before me, the undersigned, personally appeared LEE D. BURNS, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument. 

	 	
/s/George F. Bellows

	 	
Notary Public

	 	
George F. Bellows

	 	
Notary Public, State of New York

	 	
Qualified in Erie County

	 	
My Commission Expires 04/14/2006

 

 

 

	
STATE OF NEW YORK
	
)

	 	
) SS.:

	
COUNTY OF ERIE
	
)

On the 20th day of December, in the year 2004, before me, the undersigned, personally appeared COLLEEN M. O’BRIEN, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument. 

	 	
/s/Lynn M. Kisker

	 	
Notary Public

	 	
Lynn M. Kisker

	 	
Notary Public, State of New York

	 	
Qualified in Erie County

	 	
My Commission Expires 04/11/2006

 

 - 10 -

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