<\/p>\n TABLE OF CONTENTS<\/p>\n
1. Definitions; Interpretation……………………………………………………………………1<\/p>\n
1.1 Definitions………………………………………………………………………….1
\n 1.2 Interpretation……………………………………………………………………….6<\/p>\n
2. Purchase and Sale of Business………………………………………………………………….6<\/p>\n
2.1 Purchase and Sale…………………………………………………………………….6
\n 2.2 Assumed Liabilities…………………………………………………………………..7
\n 2.3 Excluded Liabilities………………………………………………………………….8<\/p>\n
3. Payment……………………………………………………………………………………..8<\/p>\n
3.1 Purchase Price, Payment on the Closing Date……………………………………………..8
\n 3.2 Allocation of Purchase Price…………………………………………………………..9
\n 3.3 Purchase Price Adjustment……………………………………………………………..9<\/p>\n
4. The Closing…………………………………………………………………………………10<\/p>\n
4.1 The Closing…………………………………………………………………………10
\n 4.2 Seller’s Deliveries………………………………………………………………….10
\n 4.3 Buyer’s Deliveries…………………………………………………………………..11
\n 4.4 Further Assurances…………………………………………………………………..12<\/p>\n
5. Representations and Warranties of Seller……………………………………………………….12<\/p>\n
5.1 Corporate Status…………………………………………………………………….12
\n 5.2 Corporate Authority………………………………………………………………….12
\n 5.3 Non-Contravention, Approvals and Consents………………………………………………13
\n 5.4 Transferred Assets…………………………………………………………………..13
\n 5.5 Changes…………………………………………………………………………….13
\n 5.6 Taxes………………………………………………………………………………15
\n 5.7 Employee Benefit Plans……………………………………………………………….15
\n 5.8 Litigation………………………………………………………………………….17
\n 5.9 Brokers…………………………………………………………………………….17
\n 5.10 Intellectual Property………………………………………………………………..17
\n 5.11 Agreements………………………………………………………………………….18
\n 5.12 Leases, Other Real Property…………………………………………………………..19
\n 5.13 Financial Statements…………………………………………………………………19
\n 5.14 Compliance with Laws…………………………………………………………………20
\n 5.15 Environmental Compliance……………………………………………………………..20
\n 5.16 Condition of Transferred Assets……………………………………………………….20
\n 5.17 Insurance…………………………………………………………………………..20
\n 5.18 Inventories…………………………………………………………………………21
\n 5.19 Accounts Receivable………………………………………………………………….21
\n 5.20 Labor Matters, etc…………………………………………………………………..21
\n 5.21 Limitation on Representations and Warranties……………………………………………21<\/p>\n
6. Representations and Warranties of Buyer………………………………………………………..22<\/p>\n
6.1 Corporate Status…………………………………………………………………….22
\n 6.2 Corporate Authority………………………………………………………………….22
\n 6.3 Non-Contravention……………………………………………………………………22
\n 6.4 Brokers…………………………………………………………………………….23
\n 6.5 Litigation………………………………………………………………………….23
\n 6.6 Financial Statements…………………………………………………………………23
\n 6.7 Capitalization………………………………………………………………………23
\n 6.8 Subsidiaries………………………………………………………………………..24
\n 6.9 Valid Issuance of Securities………………………………………………………….24
\n 6.10 Financing…………………………………………………………………………..24
\n 6.11 Buyer’s Business…………………………………………………………………….24
\n 6.12 Limitation on Representations and Warranties……………………………………………24<\/p>\n
7. Interim Covenants of Seller…………………………………………………………………..25<\/p>\n
7.1 Operation of the Business…………………………………………………………….25
\n 7.2 Application for Regulatory Consent and Licenses…………………………………………26
\n 7.3 Access to Facilities, Files and Records………………………………………………..26
\n 7.4 Notice of Proceedings………………………………………………………………..27
\n 7.5 Hart-Scott-Rodino Filing……………………………………………………………..27
\n 7.6 Reasonable Commercial Efforts…………………………………………………………27
\n 7.7 Notification of Certain Matters……………………………………………………….27
\n 7.8 Transfers…………………………………………………………………………..27
\n 7.9 No Solicitation……………………………………………………………………..27
\n 7.10 Fiduciary Out……………………………………………………………………….28<\/p>\n
8. Interim Covenants of Buyer……………………………………………………………………29<\/p>\n
8.1 Application for Regulatory Consent and Licenses…………………………………………29
\n 8.2 Notice of Proceedings………………………………………………………………..29
\n 8.3 Hart-Scott-Rodino Filing……………………………………………………………..29
\n 8.4 Reasonable Commercial Efforts…………………………………………………………29
\n 8.5 Notification of Certain Matters……………………………………………………….30<\/p>\n
9. Conditions Precedent to Buyer’s Obligations…………………………………………………….30<\/p>\n
9.1 Representations, Warranties and Covenants………………………………………………30
\n 9.2 Proceedings…………………………………………………………………………31
\n 9.3 Regulatory Approvals…………………………………………………………………31
\n 9.4 Hart-Scott-Rodino……………………………………………………………………31
\n 9.5 Deliveries, Release of Liens………………………………………………………….31
\n 9.6 Consents to Assignment of Leases………………………………………………………31
\n 9.7 Opinion of Counsel to the Company and Summit……………………………………………31
\n 9.8 Financing…………………………………………………………………………..31<\/p>\n
10. Conditions Precedent to Sellers’ Obligations……………………………………………………31<\/p>\n
10.1 Representations, Warranties and Covenants………………………………………………31
\n 10.2 Proceedings…………………………………………………………………………32
\n 10.3 Hart-Scott-Rodino……………………………………………………………………32
\n 10.4 Deliveries………………………………………………………………………….32
\n 10.5 Opinion of Counsel to Buyer…………………………………………………………..32<\/p>\n
11. Certain Post-Closing Matters………………………………………………………………….32<\/p>\n
11.1 Access to Records, Information and Personnel……………………………………………32
\n 11.2 Insurance…………………………………………………………………………..33
\n 11.3 Books and Records……………………………………………………………………33
\n 11.4 Taxes………………………………………………………………………………33
\n 11.5 Employee and Employee Benefits………………………………………………………..34
\n 11.6 Covenant Not to Compete………………………………………………………………35
\n 11.7 Post Closing Confidentiality………………………………………………………….35<\/p>\n
12. Indemnification……………………………………………………………………………..36<\/p>\n
12.1 By Seller…………………………………………………………………………..36
\n 12.2 By Buyer……………………………………………………………………………37
\n 12.3 Entitlement to Indemnification, Exclusivity…………………………………………….38
\n 12.4 Notice and Defense of Claims………………………………………………………….38
\n 12.5 Survival of Representations and Warranties……………………………………………..40
\n 12.6 Limitations on Parties’ Right to Indemnification………………………………………..40
\n 12.7 Special Indemnity……………………………………………………………………41<\/p>\n
13. Termination…………………………………………………………………………………41<\/p>\n
13.1 Termination…………………………………………………………………………41
\n 13.2 Effect of Termination………………………………………………………………..42<\/p>\n
14. Miscellaneous……………………………………………………………………………….42<\/p>\n
14.1 Amendment and Modification, Waiver of Provisions………………………………………..42
\n 14.2 Expenses……………………………………………………………………………43
\n 14.3 Successors and Assigns; Assignments……………………………………………………43
\n 14.4 Confidentiality, Public Announcement…………………………………………………..43
\n 14.5 Notices…………………………………………………………………………….44
\n 14.6 No Third Parties Benefited……………………………………………………………45
\n 14.7 Law Governing……………………………………………………………………….45
\n 14.8 Counterparts………………………………………………………………………..45
\n 14.9 Severability………………………………………………………………………..45
\n 14.10 Entire Agreement…………………………………………………………………….45
\n 14.11 Construction………………………………………………………………………..45
\n 14.12 Consent to Jurisdiction………………………………………………………………46
\n 14.13 Waiver of Jury Trial…………………………………………………………………46
\n 14.14 Supplements to Disclosures……………………………………………………………46
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
Disclosure Schedules<\/p>\n
Schedule 1.1.7(a) Payor Contracts
\nSchedule 1.1.7(b) Provider Contracts
\nSchedule 1.1.7(c) Miscellaneous Contracts
\nSchedule 1.1.18 Employees
\nSchedule 1.1.20 Excluded Assets
\nSchedule 1.1.22 Financial Statements
\nSchedule 1.1.34 Leases
\nSchedule 1.1.41 Personal Property
\nSchedule 2.3 Excluded Liabilities
\nSchedule 3.2 Allocation
\nSchedule 4.2(g) Required Consents
\nSchedule 5.3(a) Seller’s Consents
\nSchedule 5.4 Transferred Assets
\nSchedule 5.5 Changes
\nSchedule 5.6 Taxes
\nSchedule 5.7 Employee Benefit Plans
\nSchedule 5.8 Litigation (Seller)
\nSchedule 5.10 Owned Intellectual Property
\nSchedule 5.11(a) Affiliate Agreements
\nSchedule 5.11(b) Contracts
\nSchedule 5.13 Undisclosed Liabilities
\nSchedule 5.14 Compliance with Laws
\nSchedule 5.17 Insurance
\nSchedule 6.3 Buyer’s Consents
\nSchedule 6.5 Litigation (Buyer)
\nSchedule 6.6 Financial Statements of Buyer
\nSchedule 7.1 Operation of Business
\nSchedule 11.5(b) Assumed Employee Benefit Plans<\/p>\n
Exhibits<\/p>\n
Exhibit A……. Assignment and Assumption Agreement
\nExhibit B……. Bill of Sale
\nExhibit C……. SOH Stockholders’ Agreement
\nExhibit D……. SOH Registration Rights Agreement
\nExhibit E……. Opinion of Counsel to the Company and Summit<\/p>\n
THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of this 4th
\nday of May, 2000, by and between LENS EXPRESS, INC., a Florida corporation
\n(“Seller” and the “Company”), SUMMIT TECHNOLOGY, INC., a Massachusetts
\ncorporation and, directly or indirectly, the owner of all of the issued and
\noutstanding capital stock of Seller (“Summit”), and STRATEGIC OPTICAL HOLDINGS,
\nINC., a Delaware corporation (“Buyer”).<\/p>\n
Background Provisions<\/p>\n
A……..Seller is engaged in the Business (as defined below).<\/p>\n
B……..Buyer wishes to purchase from Seller and Seller and Summit
\nwish that Seller shall sell to Buyer, such Business in accordance with the
\nprovisions set forth herein.<\/p>\n
NOW THEREFORE, in consideration of and subject to the terms and
\nconditions hereof, and intending to be legally bound hereby, Seller, Summit and
\nBuyer hereby agree as follows:<\/p>\n
1. Definitions; Interpretation.<\/p>\n
1.1 Definitions. The following terms, as used herein, have the following
\nmeanings:<\/p>\n
1.1.1 “Accountants” shall mean Arthur Andersen LLP or another nationally
\nrecognized accounting firm mutually designated by Buyer and Seller.<\/p>\n
1.1.2 “Affiliate” shall mean, with respect to any Person, any other Person
\ndirectly or indirectly controlling, controlled by or under common control with
\nsuch other Person. For purposes of this definition, “control” (including with
\ncorrelative meaning, the terms “controlled by” and “under common control with”)
\nas used with respect to any Person shall mean (a) the ownership of 50% or more
\nof the voting securities or other voting interests of any Person, or (b) the
\npossession, directly or indirectly, of the power to direct or cause the
\ndirection of management and policies of such Person, whether through ownership
\nof voting securities, by contract or otherwise.<\/p>\n
1.1.3 “Agreement” shall mean this Asset Purchase Agreement and all exhibits and
\nschedules attached hereto, as the same may be amended from time to time in
\naccordance with the provisions hereof.<\/p>\n
1.1.4 “Applicable Law” shall mean all applicable provisions of all (i)
\nconstitutions, treaties, statutes, laws (including the common law), rules,
\nregulations, ordinances, by-laws, codes or orders of any Regulatory Authority,
\n(ii) Governmental Approvals and (iii) orders, decisions, directives,
\ninjunctions, judgments, awards, decrees of, requirements of or agreements with
\nany Governmental Authority.<\/p>\n
1.1.5 “Asserting Party” shall have the meaning set forth in Section 12.4(a).<\/p>\n
1.1.6 “Assignment and Assumption Agreement” shall mean the Assignment and
\nAssumption Agreement between Buyer and Seller in substantially the form of
\nExhibit A – Assignment and Assumption Agreement attached hereto.<\/p>\n
1.1.7 “Assumed Contracts” shall mean, as of the date hereof, the following
\ncontracts relating to the Business to which Seller is a party: (a) the contracts
\nset forth on Schedule 1.1.7(a) – Payor Contracts; (b) the contracts referred to
\non Schedule 1.1.7(b) – Provider Contracts; and (c) the contracts set forth on
\nSchedule 1.1.7(c) – Miscellaneous Contracts.<\/p>\n
1.1.8 “Assumed Liabilities” shall have the meaning set forth in Section 2.2.<\/p>\n
1.1.9 “Bill of Sale” shall mean the Bill of Sale and Assignment from Seller to
\nBuyer, in substantially the form of Exhibit B – Bill of Sale attached hereto.<\/p>\n
1.1.10 “Books and Records” shall mean all Seller’s books, manuals and other
\nsimilar materials of any kind relating to the Transferred Assets, whether in
\ndocumentary form or on microfilm, microfiche, magnetic tape, computer disk or
\nother form.<\/p>\n
1.1.11 “Business” shall mean the business carried on by Seller from time to
\ntime, including the sale and distribution, by Seller or any of its Affiliates,
\nof contact lenses and related products, and all businesses and activities
\nancillary thereto and including all rights, agreements and arrangements relating
\nto Managed Vision Limited, a Florida limited partnership, and Managed Vision
\nInc., a Florida corporation.<\/p>\n
1.1.12 “Business Day” shall mean any day other than a day on which the New York
\nStock Exchange is closed.<\/p>\n
1.1.13 “Closing” and “Closing Date” shall have the meanings set forth in Section
\n4.1.<\/p>\n
1.1.14 “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
\nrules and regulations promulgated thereunder.<\/p>\n
1.1.15 “Commitment Letter” shall have the meaning set forth in Section 6.10.<\/p>\n
1.1.16 “Defending Party” shall have the meaning set forth in Section 12.4(a).<\/p>\n
1.1.17 “Employee Benefit Plans” shall include pension and profit sharing plans,
\nretirement and post retirement welfare benefits, health insurance benefits
\n(medical, dental and vision), disability, life and accident insurance, sickness
\nbenefits, vacation, employee loans and banking privileges and any bonus,
\nincentive, deferred compensation, stock purchase, stock option, phantom stock or
\nother equity-based severance, employment, change of control or fringe benefit
\nplan, program or agreement (whether written or oral), including any employee
\nbenefit plans as defined in Section 3.3 of ERISA.<\/p>\n
1.1.18 “Employees” shall mean the individuals employed by Seller or an Affiliate
\nof Seller who are engaged in the Business (including those individuals who are
\non temporary leave for medical, family, military, personal or other reasons).
\nSchedule 1.1.18 – Employees lists the Employees as of April 25, 2000.<\/p>\n
1.1.19 “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
\nas amended.<\/p>\n
1.1.20 “Excluded Assets” shall mean the assets of Seller specified on Schedule
\n1.1.20 – Excluded Assets.<\/p>\n
1.1.21 “Excluded Liabilities” shall have the meaning set forth in Section 2.3.<\/p>\n
1.1.22 “Financial Statements” shall mean the unaudited financial statements of
\nSeller for the three (3) months ended April 2, 2000 (the “April 2 Financial
\nStatements”), and the audited financial statements of Seller for each of the
\ntwelve (12) months ended December 31, 1998 and December 31, 1999 (the “1999
\nFinancial Statements”), respectively, a copy of each of which is attached hereto
\nas Schedule 1.1.22 – Financial Statements.<\/p>\n
1.1.23 “GAAP” shall mean United States generally accepted accounting principles,
\nas in effect from time to time.<\/p>\n
1.1.24 “Governmental Approval” shall mean all material approvals, permits,
\nqualifications, authorizations, licenses, franchises, consents, orders,
\nregistrations or other approvals of all Regulatory Authorities necessary in
\norder to permit Seller to carry on the Business.<\/p>\n
1.1.25 “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
\n1976, as amended, and the rules and regulations promulgated thereunder.<\/p>\n
1.1.26 “Indemnified Buyer Claims” shall have the meaning set forth in Section
\n12.1.<\/p>\n
1.1.27 “Indemnified Buyer Party” shall have the meaning set forth in Section
\n12.1.<\/p>\n
1.1.28 “Indemnified Seller Claims” shall have the meaning set forth in Section
\n12.2.<\/p>\n
1.1.29 “Indemnified Seller Party” shall have the meaning set forth in Section
\n12.2.<\/p>\n
1.1.30 “Intellectual Property” shall mean any and all: (a) patents and patent
\napplications, patent disclosures awaiting filing determination, inventions and
\nimprovements thereto; (b) trademarks, service marks, certification marks, trade
\nnames, trade dress, domain names, logos, business and product names, slogans,
\nand registrations and applications for registration thereof; (c) copyrights
\n(including software) and registrations and Internet Web sites and the content
\nthereof; (d) inventions, processes, designs, formulae, trade secrets, know-how,
\nindustrial models, confidential and technical information, manufacturing,
\nengineering and technical drawings, product specifications and confidential
\nbusiness information; (e) mask work and other semiconductor chip rights and
\nregistrations thereof, if any; (f) intellectual property rights similar to any
\nof the foregoing; (g) Software, if any; (h) licenses of any of the foregoing and
\n(i) copies and tangible embodiments thereof (in whatever form or medium,
\nincluding electronic media).<\/p>\n
1.1.31 “Intellectual Property Assets” shall have the meaning set forth in
\nSection 5.10.<\/p>\n
1.1.32 “Knowledge” shall mean, with respect to Seller, the actual knowledge of
\none or more of Peter Litman, James Lightman, Robert Kelly, Robert Palmisano,
\nMenderes Akdag, Brian O’Neill and Harvey Berkowitz.<\/p>\n
1.1.33 “Leased Premises” shall mean the offices and other facilities leased by
\nSeller or any of its Affiliates pursuant to the Leases and used in connection
\nwith the Business.<\/p>\n
1.1.34 “Leases” shall mean the real property leases and rental agreements
\n(including subleases), as amended, entered into with respect to the Leased
\nPremises, as set forth on Schedule 1.1.34 – Leases.<\/p>\n
1.1.35 “Lien” shall mean any lien, pledge, charge, encumbrance, security
\ninterest, mortgage, deed of trust, lease, option or other adverse claim of any
\nkind or description.<\/p>\n
1.1.36 “Material Adverse Effect” shall mean, with respect to Seller or the
\nBusiness, (i) a material adverse effect on Seller’s ability to consummate the
\ntransactions contemplated by this Agreement and the other Transaction Documents,
\nor (ii) a material adverse effect on the business, financial condition or
\noperations of the Business taken as a whole. “Material Adverse Effect” shall
\nmean, with respect to Buyer, (i) a material adverse effect on Buyer’s ability to
\nconsummate the transactions contemplated by this Agreement and the other
\nTransaction Documents, or (ii) a material adverse effect on the business,
\nfinancial condition or results of operations of the Buyer’s business taken as a
\nwhole.<\/p>\n
1.1.37 “Non-Third Party Claims” shall have the meaning set forth in Section
\n12.4(b).<\/p>\n
1.1.38 “Owned Intellectual Property” shall have the meaning set forth in Section
\n5.10.<\/p>\n
1.1.39 “Permitted Liens” shall mean (a) any Liens for Taxes not yet due and
\npayable or being contested by Seller or any Affiliate of Seller in good faith by
\nappropriate proceedings and for which appropriate reserves in accordance with
\nGAAP have been established on the Financial Statements, (b) Liens resulting from
\na filing by a lessor as a precautionary filing for a true lease, (c) customary
\nlandlord’s Liens under Leases and (d) any other customary encumbrance affecting
\nany asset which does not materially impede or otherwise affect the ownership or
\noperation of such asset.<\/p>\n
1.1.40 “Person” shall mean any individual, corporation, partnership, joint
\nventure, association, joint stock company, limited liability company, trust,
\nunincorporated organization or government or any agency or political subdivision
\nthereof.<\/p>\n
1.1.41 “Personal Property” shall mean all personal property and leasehold
\nimprovements leased by or owned by Seller or any Affiliate of Seller as part of
\nthe Business as of the date hereof, less any items sold or otherwise disposed of
\nplus new items acquired, leased or obtained by Seller or such Affiliate, in each
\ncase, in the ordinary course of the Business consistent with past practices
\nthrough the close of business on the Closing Date. Schedule – 1.1.41 Personal
\nProperty lists all Personal Property as of April 28, 2000.<\/p>\n
1.1.42 “Pre-Closing Period” shall mean any taxable year or period (or a portion
\nthereof) ending on or prior to the Closing Date. Taxes with respect to any
\nperiod that begins before and ends after the Closing Date shall be allocated to
\nthe Pre-Closing Period (i) on a per diem basis in the case of real and personal
\nproperty Taxes and (ii) on the basis of an interim closing of the books at the
\nend of the Closing Date in the case of all other Taxes.<\/p>\n
1.1.43 “Purchase Price” shall have the meaning set forth in Section 3.1.<\/p>\n
1.1.44 “Regulatory Authority” shall mean any federal, state, local or other
\ngovernment authority or instrumentality, domestic or foreign.<\/p>\n
1.1.45 “Software” shall mean the following: (a) computer software and subsequent
\nversions thereof developed or currently being developed by Seller or any
\nAffiliate of Seller or acquired or licensed from third parties and used in the
\nBusiness, including without limitation, source code, object code, objects,
\ncomments, screens, and user interfaces; and (b) all files, data materials,
\nmanuals, design notes and other items and documentation related thereto or
\nassociated therewith.<\/p>\n
1.1.46 “SOH Common Stock” shall have the meaning set forth in Section 3.1.<\/p>\n
1.1.47 “SOH Registration Rights Agreement” shall have the meaning set forth in
\nSection 3.1.<\/p>\n
1.1.48 “SOH Stockholders’ Agreement” shall have the meaning set forth in
\nSection 3.1.<\/p>\n
1.1.49 “Supplies” shall mean all supplies and inventory owned by Seller or any
\nAffiliate of Seller as part of the Business as of the date hereof, less any
\nitems sold or consumed plus new items acquired or obtained, in each case in the
\nordinary course of the Business consistent with past practices through the close
\nof business on the Closing Date.<\/p>\n
1.1.50 “Tax” shall mean all taxes, charges, fees, levies or other assessments
\n(including without limitation, income, gross receipts, gains, transfer, ad
\nvalorem, value added, excise, property, sales, use, production, recording,
\nlicense, payroll, transfer, net worth, capital, business and occupation,
\ndisability, employment severance, franchise or withholding taxes), imposed
\n(whether directly or by withholding) by any Regulatory Authority and includes
\nany estimated tax, assessment interest and penalties (civil or criminal) or
\nadditions to tax. It shall include any obligations of a Person in connection
\nwith or related to any tax sharing or similar arrangements between such Person
\nand any other Person.<\/p>\n
1.1.51 “Tax Returns” shall mean any report, return, schedule, form, attachment
\nor other information required to be supplied to a Regulatory Authority by a
\nPerson in connection with Taxes including, where permitted or required, combined
\nor consolidated returns for any group of entities that includes such Person or
\nany Affiliate of Such Person.<\/p>\n
1.1.52 “Third Party Claim” shall have the meaning set forth in Section 12.4(a).<\/p>\n
1.1.53 “Transaction Documents” shall mean this Agreement, the Assignment and
\nAssumption Agreement, the Bill of Sale, the SOH Stockholders’ Agreement and the
\nRegistration Rights Agreement and all other documents required to give effect to
\nthe transactions contemplated hereby.<\/p>\n
1.1.54 “Transferred Assets” shall have the meaning set forth in Section 2.1.<\/p>\n
1.1.55 “WARN Acts” shall mean the Worker Adjustment and Retraining Notification
\nAct, 29 U.S.C. ss. 2 101 et seq., and its corresponding regulations, and any
\nsimilar state law, rule or regulation or local ordinance, rule or regulation
\nproviding for notification to employees affected by a closing, relocation, sale
\nof a business, mass layoff or similar event.<\/p>\n
1.2 Interpretation. The headings preceding the text of Articles, Sections,
\nsubsections, Exhibits and Schedules included in this Agreement are for
\nconvenience only and shall not be deemed part of this Agreement or be given any
\neffect in interpreting this Agreement. The use of the terms “including” or
\n“include” shall, in all cases, mean “including, without limitation,” and
\n“include, without limitation,” respectively. The use of the masculine, feminine
\nor neuter gender herein shall, as applicable, also refer to the other gender(s).
\nExcept as the context otherwise requires, the use of the singular form of any
\nterm shall also refer to the plural, and vice versa. Unless the context
\notherwise requires, whenever the terms “hereto,” “hereunder,” “herein” or
\n“hereof” are used in this Agreement, such terms shall be construed as referring
\nto this Agreement and references to “Articles,” “Sections,” “subsections,”
\n“paragraphs,” “subparagraphs,” “clauses,” “Schedules,” “Exhibits” and “Recitals”
\nshall be construed as referring to those of this Agreement.<\/p>\n
2. Purchase and Sale of Business.<\/p>\n
2.1 Purchase and Sale.<\/p>\n
(a) Seller agrees to sell, assign, transfer and convey to Buyer or cause to be
\nsold, assigned, transferred and conveyed to Buyer, and Buyer agrees to purchase,
\nacquire and accept from Seller, at the Closing, all rights, titles and interests
\nin, to and under all of the properties, assets, rights, licenses, permits,
\nGovernmental Approvals, claims and contracts of every kind, character and
\ndescription owned or leased by Seller or any of its Affiliates, or used or held
\nfor use by Seller or any of its Affiliates, primarily in connection with the
\nBusiness, as the same may exist on the Closing Date, whether real, personal or
\nmixed, tangible or intangible (including goodwill), and whether now owned or
\nhereafter acquired, including all assets reflected on the Closing Balance Sheet,
\nless the Excluded Assets (the “Transferred Assets”). The Transferred Assets
\nshall include the following:<\/p>\n
(i) all rights and interests of Seller and its Affiliates in and to the
\nPersonal Property;<\/p>\n
(ii) all assignable rights and interests of Seller and its Affiliates in
\nand to the Assumed Contracts;<\/p>\n
(iii) all assignable rights and interests of Seller and its Affiliates in
\nand to the Leases;<\/p>\n
(iv) the Books, and Records;<\/p>\n
(v) all assignable rights and interests of Seller and its Affiliates in
\nand to the Intellectual Property Assets;<\/p>\n
(vi) all rights and interests of Seller and its Affiliates in and to the
\nSupplies; and<\/p>\n
(vii) all rights and interests of Seller and its Affiliates in and to the
\naccounts receivable of the Business.<\/p>\n
(b) To the extent that the sale, conveyance, transfer or assignment of any
\nagreement, lease, license, contract or other document or instrument requires the
\nconsent of any person or entity other than Buyer, Summit, or Seller, this
\nAgreement shall not constitute an agreement to effect such sale, conveyance,
\ntransfer or assignment if such action would constitute a breach thereof. If
\nSeller is unable to obtain any of the consents set forth on Schedule 5.3(a) –
\nSeller’s Consents, the Closing shall nevertheless take place if such consents
\nset forth on Schedule 5.3(a) – Seller’s Consents, that Buyer is unable so to
\nobtain prior to the Closing shall relate to such agreements, licenses, leases,
\ncontracts and other Transferred Assets that, individually and in the aggregate,
\nare not material to the Business or the Transferred Assets as a whole, as
\ndetermined by Buyer in its reasonable discretion. In the event that Seller is
\nunable to obtain any consent to the assignment of any agreement, lease, license,
\ncontract or other document or instrument and the Closing takes place, Seller and
\nSummit shall take all reasonable action requested by Buyer to secure such
\nconsents after the Closing or otherwise to transfer to Buyer the benefits of
\nsuch agreements, licenses, leases, contracts, documents or instruments.<\/p>\n
2.2 Assumed Liabilities. Subject to the terms and conditions set forth in this
\nAgreement, from and after the Closing Date, Buyer shall assume and agree to pay,
\nperform and discharge the following obligations, in each case whether arising,
\naccruing or occurring before, on or after the Closing Date, (collectively, the
\n“Assumed Liabilities”): all liabilities and obligations of every kind, nature or
\ndescription of Seller, whether known or unknown, absolute, accrued, contingent
\nor otherwise and whether due or to become due, except for the Excluded
\nLiabilities. Nothing contained in this Agreement shall require Buyer to pay,
\nperform or discharge any of the Assumed Liabilities so long as it shall in good
\nfaith contest or cause to be contested the amount or validity thereof and shall
\nhave indemnified and have held harmless Seller and Summit with respect thereto.<\/p>\n
2.3 Excluded Liabilities. Notwithstanding anything to the contrary set forth in
\nthis Agreement, Buyer shall not assume or be responsible for any liabilities or
\nobligations of Seller or any of its Affiliates of any kind, known or unknown,
\ncontingent or otherwise, other than the Assumed Liabilities (all of such
\nliabilities or obligations for which Buyer is not assuming any liability are
\nreferred to collectively herein as the “Excluded Liabilities”). The parties
\nagree that the Excluded Liabilities shall be (1) any and all liabilities for
\nTaxes of Seller or any of its Affiliates and any and all liabilities for Taxes
\nin respect of, or relating to, the Business or the Transferred Assets for any
\nPre-Closing Period, (2) any and all liabilities arising out of or relating to
\n(x) any Employee Benefit Plan not set forth on Schedule 11.5(b), and (y) any
\nEmployee Benefit Plan set forth on Schedule 11.5(b) to the extent such liability
\nor obligation is accrued as of the Closing Date, but is not reserved for on the
\nClosing Balance Sheet or otherwise matched by a dedicated asset for such purpose
\nheld by any such Employee Benefit Plan or reflected on the Closing Balance
\nSheet, (3) any and all obligations, liabilities or responsibilities of Seller or
\nany of its Affiliates arising out of or relating to the breach by Seller or any
\nof its Affiliates of all indebtedness for borrowed money of Seller or any of its
\nAffiliates, (4) any obligations or liabilities with respect to gross-payments
\npursuant to Section 2 of the Severance Agreement, dated August 4, 1998, between
\nMenderes Akdag and Seller and (5) any obligations, liability or responsibility
\nset forth on Schedule 2.3 hereto.<\/p>\n
3. Payment.<\/p>\n
3.1 Purchase Price, Payment on the Closing Date.<\/p>\n
(a) Cash Payment. On the Closing Date (by Noon, Eastern time), Buyer shall
\npay to Seller $31,000,000, to an account designated by Seller, by fedwire
\ntransfer in immediately available U.S. dollars (the “Cash Purchase Price”).<\/p>\n
(b) Equity Payment. On the Closing Date (by Noon, Eastern time), Buyer shall
\ndeliver to Seller, 21,563 shares of the Buyer’s Common Stock, representing
\napproximately 9.7% of the fully-diluted Common Stock of Buyer, after giving
\neffect to the transactions contemplated hereby (the “SOH Common Stock”) (the
\n“Stock Purchase Price,” together with the Cash Purchase Price, the “Purchase
\nPrice”) and Summit shall execute and deliver to Buyer a Stockholders’ Agreement
\n(the “SOH Stockholders’ Agreement”) in the form attached hereto as Exhibit C,
\nand a Registration Rights Agreement (the “SOH Registration Rights Agreement”) in
\nthe form attached hereto as Exhibit D.<\/p>\n
3.2 Allocation of Purchase Price. The Purchase Price for the Transferred Assets
\nand the Assumed Liabilities shall be allocated, for Tax purposes, as set forth
\non Schedule 3.2 – Allocation hereto. Neither Buyer nor Seller shall file any Tax
\nReturns (including filing of Internal Revenue Service Form 8594) or, in a
\njudicial or administrative proceeding, assert or maintain any Tax reporting
\nposition that is inconsistent with this Agreement or the allocation agreed to in
\naccordance with this Agreement, unless required to do so by Applicable Law.<\/p>\n
3.3 Purchase Price Adjustment.<\/p>\n
(a) Within ninety (90) days after the Closing Date, the Buyer shall prepare and
\ndeliver to Seller (i) an audited balance sheet of the Company as of the time
\nimmediately preceding the Closing, prepared in accordance with GAAP, applied on
\na basis consistent with the preparation of the 1999 Financial Statements (the
\n“Closing Balance Sheet”); provided, however, that the Closing Balance Sheet
\nshall (u) include the effect of paying off indebtedness and distributing cash
\npursuant to Section 7.1(b) or otherwise, (v) include a $50,000 reserve for
\nreturns, (w) not include any liability for Taxes accrued for any Pre-Closing
\nPeriod, (x) include a reserve for liabilities associated with Seller’s “new and
\nfresh” program, determined in accordance with the methodology utilized in
\nestablishing such reserve on the 1999 Financial Statements, (y) not include any
\nExcluded Asset, and (z) not include any Excluded Liability and (ii) a
\ncalculation based on the Closing Balance Sheet of the Company’s working capital
\n(accounts receivable, inventory, prepaid expenses, cash, cash equivalents and
\nother current assets, less accounts payable, accrued expenses and other current
\nliabilities) (the “Closing Working Capital”). In connection with the preparation
\nof the Closing Balance Sheet and Buyer’s calculation of the Closing Working
\nCapital (collectively, the “Closing Financial Statements”), Buyer and its
\nauthorized representatives, upon signing the necessary accountant’s release,
\nshall have the right to review the information used in the preparation of
\nSeller’s historical financial statements, including all existing workpapers of
\nthe accountants that audited or reviewed such statements.<\/p>\n
(b) The Purchase Price shall be decreased by the amount by which the $3,939,000
\nexceeds Closing Working Capital. If the Closing Working Capital equals or
\nexceeds $3,939,000, there will be no adjustment to the Purchase Price pursuant
\nto this Section 3.3. Seller and Summit, jointly and severally, shall pay to the
\nBuyer the amount of any such decrease in cash in same day funds within ten (10)
\ndays after the first to occur of the events described in the last sentence of
\nparagraph 3.3(d) below , plus interest thereon at the rate of 10% from the
\nClosing Date to the date of such payment.<\/p>\n
(c) Upon receipt of the Closing Financial Statements, Seller and Summit, and
\ntheir respective representatives, upon signing the necessary accountant’s
\nrelease, shall have the right to review the work papers of the Buyer and its
\naccountants utilized in preparing the Closing Financial Statements and other
\nrelevant documents, and to discuss related matters with the Buyer and
\nappropriate representatives of its accountants. The Closing Financial Statements
\nshall be binding on Seller unless Seller presents the Buyer within thirty (30)
\ndays after its receipt of the Closing Financial Statements with written notice
\nof disagreement in accordance with Section 3.3(d).<\/p>\n
(d) Seller may dispute items reflected on the Closing Financial Statements only
\non the basis that such amounts were not arrived at in accordance with the
\napplication of the principles, procedures and elections set forth in this
\nSection 3.3 or resulted from mechanical errors of computation. In the event
\nSeller so disagrees with any item on the Closing Financial Statements, Seller
\nshall, within 30 days after receipt thereof, give Buyer notice of such
\ndisagreement specifying the items on the Closing Financial Statements in dispute
\nand setting forth Seller’s proposed adjustments. If Seller and the Buyer are
\nunable to resolve any disagreement with respect to the Closing Financial
\nStatements within 15 days after the Buyer receives a timely notice of
\ndisagreement, the items of disagreement alone shall be referred for final
\ndetermination to the Accountants. The Accountants shall, within 30 days after
\nsuch submission, determine and report to the parties upon such disputed items
\nand such report shall be final, binding and conclusive on the parties with
\nrespect to such items. The Closing Financial Statements shall be deemed to be
\nbinding on Seller and Buyer upon (i) Seller’s failure to deliver to the Buyer a
\nnotice of disagreement within 30 days of its receipt of the Closing Financial
\nStatements prepared by the Buyer, (ii) resolution of any disagreement by mutual
\nagreement of the parties after a timely notice of disagreement has been
\ndelivered to the Buyer, or (iii) notification by the Accountants of their final
\ndetermination of the items of disagreement submitted to them.<\/p>\n
(e) The fees and disbursements of the Accountants shall be shared equally
\nbetween the Buyer and Seller.<\/p>\n
4. The Closing.<\/p>\n
4.1 The Closing. The consummation of the transactions provided for in this
\nAgreement (the “Closing”) shall take place (a) at the offices of Buyer’s
\nCounsel, Debevoise & Plimpton, 875 Third Avenue, New York, New York, at 9:00
\na.m., Eastern time, on the fifth Business Day after the last of the conditions
\nrequired to be satisfied or waived pursuant to Articles 9 and 10 is either
\nsatisfied or waived (other than those conditions that by their nature are to be
\nsatisfied at Closing, but subject to the fulfillment or waiver of those
\nconditions), or (b) at such other place, time or date as the parties shall agree
\nupon in writing. The date on which the Closing is to occur is referred to herein
\nas the “Closing Date.” The Closing shall be deemed effective as of the close of
\nbusiness on the Closing Date.<\/p>\n
4.2 Seller’s Deliveries.<\/p>\n
At the Closing, Seller shall deliver to Buyer the following:<\/p>\n
(a) a duly executed Bill of Sale;<\/p>\n
(b) a duly executed Assignment and Assumption Agreement;<\/p>\n
(c) certified copies of resolutions, duly adopted by the Board of Directors of
\nSeller, which shall be in full force and effect at the time of the Closing,
\nauthorizing the execution, delivery and performance by Seller of this Agreement
\nand the consummation of the transactions contemplated hereby,<\/p>\n
(d) the officer’s certificate referred to in Section 9.1(c);<\/p>\n
(e) UCC termination statements or partial release statements, as appropriate and
\nnecessary to release in full all of the Transferred Assets from the Liens of the
\ncredit facilities to which Seller and the Transferred Assets are bound;<\/p>\n
(f) a duly executed SOH Stockholders’ Agreement and SOH Registration Rights
\nAgreement;<\/p>\n
(g) the consents and approvals listed on Schedule 4.2(g) – Required
\nConsents;<\/p>\n
(h) a copy of Seller’s best estimate of the composition of the Closing
\nBalance Sheet, prepared in accordance with the methodology set forth in Section
\n3.3(a); and<\/p>\n
(i) such other documents as are reasonably required to be delivered by Seller to
\neffectuate the transfer of the Transferred Assets to, and the assumption of the
\nAssumed Liabilities by, Buyer.<\/p>\n
4.3 Buyer’s Deliveries.<\/p>\n
At the Closing, Buyer shall deliver to Seller the following:<\/p>\n
(a) the Purchase Price;<\/p>\n
(b) the SOH Common Stock;<\/p>\n
(c) a duly executed Assignment and Assumption Agreement;<\/p>\n
(d) certified copies of resolutions, duly adopted by Buyer’s Board of Directors,
\nwhich shall be in full force and effect at the time of the Closing, authorizing
\nthe execution, delivery and performance by Buyer of this Agreement and the
\nconsummation of the transactions contemplated hereby, including without
\nlimitation the issuance of the Shares;<\/p>\n
(e) the officer’s certificate referred to in Section 10.1(c); and<\/p>\n
(f) a duly executed SOH Registration Rights Agreement and SOH Stockholders
\nAgreement;<\/p>\n
(g) Such other documents or payments as are reasonably required to be delivered
\nor paid by Buyer to effectuate the transfer of the Transferred Assets to, and
\nthe assumption of the Assumed Liabilities by, Buyer.<\/p>\n
4.4 Further Assurances. After the Closing Date, each of Summit, Seller and Buyer
\nshall use reasonable commercial efforts from time to time to execute and deliver
\nat the request of the other party such additional documents and instruments as
\nmay be reasonably required to carry out the intent of this Agreement and the
\ntransactions contemplated hereby, to provide whatever documents or other
\nevidence of title as may be reasonably requested by Buyer to confirm Buyer’s
\nownership of the Transferred Assets and to provide whatever documents or other
\nevidence as may be reasonably requested by Seller to confirm Buyer’s assumption
\nof the Assumed Liabilities. Without limiting the generality of the foregoing,
\nafter the Closing Date, each of Summit and Seller will use reasonable commercial
\nefforts (at Buyer’s expense) to ensure that Buyer continues to enjoy the
\nbenefits of, and has the right to enforce, any confidentiality, standstill or
\nlike agreement or arrangement entered into by Summit or Seller in connection
\nwith the possible sale of the stock or assets of Seller or any other business
\ncombination involving Seller.<\/p>\n
5. Representations and Warranties of Seller.<\/p>\n
In order to induce Buyer to enter into this Agreement and to consummate
\nthe transactions contemplated hereby, Seller and Summit each represents and
\nwarrants to Buyer as follows:<\/p>\n
5.1 Corporate Status. Each of Summit and Seller is duly organized, validly
\nexisting and in good standing as a corporation under the laws of the state of
\nits incorporation. Each of Summit and Seller has the requisite corporate power
\nand authority to own or lease all of its properties and assets and to conduct
\nits businesses as they are now being conducted, except where the failure to have
\nsuch corporate power or to conduct its business has not had and would not
\nreasonably be expected to have a Material Adverse Effect.<\/p>\n
5.2 Corporate Authority. Each of Summit and Seller, as applicable, has the
\ncorporate power and authority to execute and deliver this Agreement and the
\nother Transaction Documents to which it is a party and to consummate the
\ntransactions contemplated hereby and thereby. All corporate actions and
\nproceedings necessary to be taken by or on the part of Seller or Summit, as
\napplicable, in connection with this Agreement and the other Transaction
\nDocuments and the transactions contemplated hereby and thereby have been or will
\nprior to the Closing be duly and validly taken. This Agreement has been, and at
\nthe Closing the other Transaction Documents will be, duly and validly executed
\nand delivered by each of Summit (which is the sole owner of the issued and
\noutstanding shares of capital stock of Seller) and Seller, as applicable, and
\nconstitute the legal, valid and binding obligation of each such Person,
\nenforceable against it in accordance with and subject to their terms, except as
\nsuch enforceability may be limited by applicable bankruptcy, reorganization,
\ninsolvency, moratorium or other similar laws from time to time in effect
\naffecting creditors’ rights generally or by principles governing the
\navailability of equitable remedies.<\/p>\n
5.3 Non-Contravention, Approvals and Consents.<\/p>\n
(a) Neither the, execution and delivery by Seller or Summit, as applicable, of
\nthis Agreement and the other Transaction Documents to which it is a party nor
\nthe consummation by such Person of the transactions contemplated hereby and
\nthereby is an event that, of itself or with the giving of notice or the passage
\nof time or both, will (i) conflict with the charter or bylaws (or similar
\ngoverning instruments with different names) of such Person, (ii) assuming that
\nthe consents and approvals described in Schedule 5.3(a) – Seller’s Consents are
\nobtained, constitute a violation of, or conflict with or result in any breach of
\nor any default under, or constitute grounds for termination or acceleration of,
\nany material agreement or instrument to which such Person is a party or by which
\nsuch Person is, or any of the Transferred Assets are, bound, or result in the
\ncreation of any material Liens upon any of the Transferred Assets, including,
\nunder any of the Contracts or (iii) assuming receipt of the consents and
\napprovals described in Schedule 5.3(a) – Seller’s Consents, violate any
\nGovernmental Approval, material judgment, decree or order or statute, rule or
\nregulation applicable to Seller, the Business, or any of the Transferred Assets,
\nexcept in the case of clauses (ii) and (iii) above, for violations, conflicts,
\nbreaches, defaults or Liens which, either individually or in the aggregate would
\nnot have a Material Adverse Effect.<\/p>\n
(b) Except as set forth on Schedule 5.3(a) – Seller’s Consents, neither Seller
\nnor any of its Affiliates nor any of their respective officers, directors or
\nmanaging employees is required to obtain any license, approval or consent from,
\nor give any notice or make any other filing with respect to, any Regulatory
\nAuthority in connection with the consummation of the transactions contemplated
\nby this Agreement and the other Transaction Documents, except for licenses,
\napprovals, consents, notices or filings the absence or failure to obtain of
\nwhich, either individually or in the aggregate, would not have a Material
\nAdverse Effect.<\/p>\n
5.4 Transferred Assets. At Closing, Seller will have good and marketable title
\nto or a valid leasehold interest in all of the Transferred Assets, free and
\nclear of any and all Liens, except for Permitted Liens. Except as disclosed in
\nSchedule 5.4 – Transferred Assets, the Transferred Assets, taken as a whole,
\nconstitute all assets necessary for the continued conduct of the Business as the
\nBusiness has been conducted historically by Seller and its Affiliates, up
\nthrough the Closing Date.<\/p>\n
5.5 Changes. Except as disclosed in Schedule 5.5 – Changes, since
\nDecember 31, 1999, there has not been:<\/p>\n
(a) any change in the assets, liabilities, financial condition or operations of
\nSeller or the Business from that reflected in the Financial Statements, except
\nchanges in the ordinary course of the Business and consistent with past
\npractices that individually, or in the aggregate, have not had a Material
\nAdverse Effect;<\/p>\n
(b) any damage, destruction or loss, whether or not covered by insurance,
\nmaterially and adversely affecting the Business,
\nproperties or financial condition of Seller;<\/p>\n
(c) any waiver or compromise by Seller of a valuable right or of a
\nmaterial debt owed to it;<\/p>\n
(d) any satisfaction or discharge of any lien, claim, or encumbrance or payment
\nof any obligation by Seller, except in the ordinary course of business
\nconsistent with past practices and that is not material to the Business,
\nproperties or financial condition of Seller;<\/p>\n
(e) any new material contract or agreement or any material change to a
\nmaterial contract or agreement by which Seller or any of
\nits assets is bound or subject;<\/p>\n
(f) any material change in any compensation (including severance and
\nother benefits), arrangement or agreement with any
\nemployee, officer, director or shareholder;<\/p>\n
(g) any sale, assignment, transfer or license of any Intellectual Property
\nor any settlement regarding the breach or
\ninfringement of any license or any Intellectual Property;<\/p>\n
(h) any resignation or termination of employment of any officer or key
\nemployee of Seller; and Seller, is not aware of any impending resignation or
\ntermination of employment of any such officer or key employee;<\/p>\n
(i) any mortgage, pledge, transfer of a security interest in, or Lien, created
\nby Seller, with respect to any of its material properties or assets, except
\nLiens for Taxes not yet due or payable;<\/p>\n
(j) any loan or guarantee made by Seller to any Person, other than travel
\nadvances and other advances to employees, officers or directors made in the
\nordinary course of its business, consistent with past practices;<\/p>\n
(k) receipt of notice that there has been a loss of, or material order
\ncancellation by, any major customer of, or third-party
\ndoing business with, Seller;<\/p>\n
(l) any declaration, setting aside or payment or other distribution in respect
\nto any of Seller’s capital stock (or any securities convertible into or
\nexchangeable for any such shares), or any direct or indirect redemption,
\npurchase, or other acquisition of any of such stock by Seller;<\/p>\n
(m) to Seller’s Knowledge, any other event or condition of any character
\nrelating principally to the Business that is reasonably
\nlikely to result in a Material Adverse Effect;<\/p>\n
(n) any material transaction or event not in the ordinary course of
\nbusiness and consistent with past practices; or<\/p>\n
(o) any arrangement or commitment by Seller to do any of the things
\ndescribed in this Section 5.5.<\/p>\n
5.6 Taxes. Except as set forth in Schedule 5.6 – Taxes, (i) the Company or
\nSummit has timely filed all Tax Returns required to be filed by or on behalf of
\nthe Company or the Business for any period on or before the date hereof, taking
\ninto account any extension of time to file that has been granted to or obtained
\non behalf of the Company or Summit, and all such Tax Returns are correct and
\ncomplete in all material respects, (ii) the Company or Summit has paid when due
\nall Taxes shown as due on such Tax Returns, and (iii) all other Taxes that are
\ndue (or claimed by any Regulatory Authority to be due) in connection with the
\nBusiness or the Transferred Assets, that are chargeable as a lien upon the
\nBusiness or the Transferred Assets, or that may become due in connection with
\nthe Business or the Transferred Assets with respect to any Pre-Closing Period,
\nhave been paid or have been adequately reserved for in the books and records of
\nSeller. All Taxes required to be withheld by the Business have been duly
\nwithheld and paid to the proper taxing authority or properly reserved for in
\naccounts for such purpose. No deficiency for Tax has been asserted or assessed
\nby a taxing authority against the Company, the Business or the Transferred
\nAssets. No written document or comparable consent extending or waiving, or
\nhaving the effect of extending or waiving, the application of the statute of
\nlimitations with respect to any Taxes or Tax Returns in respect of, or relating
\nto, the Business or the Transferred Assets, and no power of attorney with
\nrespect to any such Taxes or Tax Returns, is currently outstanding, pending or
\notherwise in effect with the IRS or any other taxing authority. No Tax Returns
\nor Taxes in respect of, or relating to, the Business or the Transferred Assets
\nare currently under audit by any taxing authority.<\/p>\n
5.7 Employee Benefit Plans.<\/p>\n
(a) Schedule 5.7 – Employee Benefit Plans lists and identifies each Employee
\nBenefit Plan maintained or contributed to by Seller, or under which Seller has
\nany liability or contingent liability (individually a “Plan” and collectively,
\nthe “Plans”), that provides or may provide benefits or compensation in respect
\nof any employee or former employee of any member of Seller or the beneficiaries
\nor dependents of any such employee or former employee (collectively, the
\n“Employees”) or under which any Employee is or may become eligible to
\nparticipate or derive a benefit and that is or has been maintained or
\nestablished by Seller, or any other trade or business, whether or not
\nincorporated, which, together with Seller or Summit, is or would have been at
\nany date of determination occurring within the preceding six years, treated as a
\nsingle employer under section 414 of the Code (such other trades and businesses
\nhereinafter referred to as the “Related Persons”), or to which Seller, Summit or
\nany Related Person contributes or is or has been obligated or required to
\ncontribute (collectively, the “Plans”). With respect to each such Plan that is
\nan Assumed Employee Benefit Plan identified on Schedule 11.5(b), Seller has
\nprovided the Buyer complete and correct copies of: (i) such Plan, if written, or
\na description of such Plan if not written, and (ii) to the extent applicable to
\nsuch Plan, all trust agreements, insurance contracts or other funding
\narrangements, the two most recent trust reports, the two most recent Forms 5500
\nrequired to have been filed with the IRS and all schedules thereto, the most
\nrecent IRS determination letter, all current summary plan descriptions, all
\nmaterial communications received from or sent to the IRS or the Department of
\nLabor (including a written description of any oral communication), if any, and
\nall amendments and modifications to any such document. Neither any Seller nor
\nSummit has communicated to any Employee any intention or commitment to modify
\nany Plan or to establish or implement any other employee or retiree benefit or
\ncompensation plan or arrangement.<\/p>\n
(b) Each Assumed Employee Benefit Plan is in material compliance with Applicable
\nLaws and has been and currently is administered and operated in accordance with
\nits terms. Each Plan which is intended to be “qualified” within the meaning of
\nsection 401(a) of the Code has received a favorable determination letter from
\nthe Internal Revenue Service and no event has occurred and no condition exists
\nwhich could reasonably be expected to result in the revocation of any such
\ndetermination. There are no material pending or threatened claims by or on
\nbehalf of any of the Assumed Employee Benefit Plans, by any Employee or
\notherwise involving any such Plan or the assets of any Plan (other than routine
\nclaims for benefits, all of which have been fully reserved for on the regularly
\nprepared balance sheets of Seller).<\/p>\n
(c) None of the Plans provide benefits with respect to current or former
\nemployees, officers, or directors (or their beneficiaries) of Seller beyond
\ntheir retirement or other termination of employment, other than (i) coverage for
\nbenefits mandated by Applicable Law, (ii) death benefits or retirement benefits
\nunder an employee pension benefit plan (as defined by section 3(2) of ERISA), or
\n(iii) benefits, the full cost of which is borne by such current or former
\nemployees, officers, directors, or beneficiaries.<\/p>\n
(d) No Plan is a “multiemployer plan” within the meaning of section 4001(a)(3)
\nof ERISA or a “multiple employer plan” as addressed in section 413 of the Code.
\nNone of the Plans, now, or within the preceding six years, is or has been
\nsubject to Title IV of ERISA. None of Seller, or any entity required to be
\naggregated with Seller for purposes of section 414 of the Code or section 4001
\nof ERISA has ever maintained, contributed to, or had any liability for any
\nemployee pension benefit plan (as defined in section 3(2) of ERISA) that is or
\nhas been subject to Title IV of ERISA.<\/p>\n
(e) Neither Seller, Summit nor any Related Person has incurred (either directly
\nor indirectly, including as a result of an indemnification obligation) any
\nmaterial liability under or pursuant to Title I or IV of ERISA or the penalty,
\nexcise Tax or joint and several liability provisions of the Code relating to
\nEmployee Benefit Plan and, to the best knowledge of Seller after due inquiry, no
\nevent, transaction or condition has occurred or exists that could result in any
\nsuch liability to Seller, Summit, any such Related Person or, following the
\nClosing, the Buyer or any of its Affiliates. All required contributions to, and
\nall payments with respect to, the Plans have been timely made.<\/p>\n
(f) The consummation of the transactions contemplated by this Agreement will not
\n(i) entitle any current or former employee, officer, or director of Seller to
\nany severance or termination pay, or (ii) increase the amount of or accelerate
\nthe time of payment of any compensation due any such employee, officer, or
\ndirector. Except as set forth on Schedule 5.7(f), no payment or benefit which
\nwill or may be made by Seller, Summit, the Buyer or any of their respective
\nAffiliates with respect to any Employee will be characterized as an “excess
\nparachute payment” within the meaning of Section 280G(b) of the Code.<\/p>\n
5.8 Litigation. Except as set forth on Schedule 5.8 – Litigation (Seller), there
\nis no litigation, proceeding or investigation pending or, to Seller’s Knowledge,
\nthreatened, against Seller, any of its Affiliates or the Business that has had
\nor would, if adversely determined, reasonably be expected to have a Material
\nAdverse Effect.<\/p>\n
5.9 Brokers. There is no investment banker, broker or finder or other Person
\nretained by Seller or any Affiliate thereof who would have a valid claim against
\nSeller or Buyer for a commission or brokerage fee in connection with this
\nAgreement or the transactions contemplated hereby.<\/p>\n
5.10 Intellectual Property. Seller owns or possesses sufficient legal rights to
\nall Intellectual Property used in the Business (the “Intellectual Property
\nAssets”) without any conflict with, or infringement of, the rights of others.
\nSchedule 5.10 – Owned Intellectual Property contains a list or description of
\nall Intellectual Property owned by Seller (the “Owned Intellectual Property”).
\nThere are no outstanding options, licenses or agreements of any kind relating to
\nthe Owned Intellectual Property, other than end-user licenses or agreements
\nentered into in the ordinary course of business consistent with past practices,
\nnor is Seller bound by or a party to any options, licenses or agreements of any
\nkind with respect to the Intellectual Property of any other person or entity,
\nother than end user licenses entered into in the ordinary course of business
\nconsistent with past practices. Seller is not aware of any third party that is
\ninfringing or violating any of its Intellectual Property. The conduct of the
\nBusiness as currently conducted does not infringe or violate any Intellectual
\nProperty rights of any other person or entity. After reasonable inquiry, Seller
\ndoes not have knowledge that any of its employees is obligated under or in
\nviolation of any contract (including licenses, covenants or commitments of any
\nnature) or other agreement, or subject to any judgment, decree or order of any
\ncourt or administrative agency, that would interfere with the use of such
\nemployee’s best efforts to promote the interest of Seller or that would conflict
\nwith the Business. Neither the execution or delivery of this Agreement, nor the
\ncarrying on of Seller’s Business by the employees of Seller, nor the conduct of
\nSeller’s Business as proposed, will, to Seller’s Knowledge after reasonable
\ninquiry, conflict with or result in a breach of the terms, conditions, or
\nprovisions of, or constitute a default under, any contract, covenant or
\ninstrument under which any such employee is now obligated. The material Owned
\nIntellectual Property has been duly registered with, filed in or issued by, as
\nthe case may be, the United States Patent and Trademark Office, United States
\nCopyright Office or such other filing offices, domestic or foreign, and Seller
\nhas taken such other actions (including maintaining the confidentiality of all
\nconfidential Intellectual Property), to ensure protection under any Applicable
\nLaws, and such registrations, filings, issuances and other actions remain in
\nfull force and effect, in each case to the extent material to the Business,
\nexcept that Seller has not so registered, or obtained such other protections
\ndescribed in this sentence with respect to, any Owned Intellectual Property for
\nwhich Seller has made a commercially reasonable determination that such
\nregistration or other protection is not required for the conduct of the Business
\nas now being conducted. Notwithstanding the other provisions of this Section
\n5.10, Seller makes no representation or warranty with respect to readily
\navailable, “off-the-shelf” software programs used in connection with the
\nBusiness, except that Seller owns or possesses sufficient legal rights to
\nutilize all such software in the manner in which it is utilized in the Business.<\/p>\n
5.11 Agreements.<\/p>\n
(a) Except for agreements explicitly set forth in Schedule 5.11(a) – Affiliate
\nAgreements, there are no agreements, understandings or proposed transactions
\nbetween Seller and any of its officers, directors, Affiliates, or any Affiliate
\nthereof.<\/p>\n
(b) Except for agreements explicitly set forth in Schedule 5.11(b) – Contracts,
\nthere are no agreements, understandings, instruments, contracts, commitments or
\nproposed transactions to which Seller is a party or by which it is bound that
\n(i) involve obligations (contingent or otherwise) of, or payments to, Seller in
\nexcess of, $50,000, (ii) involve the license to or from others, or the
\nrestriction, of Intellectual Property, other than end-user licenses granted in
\nthe ordinary course of business consistent with past practices, (iii) involve
\nthe grant of rights to manufacture, produce, assemble, license, market, or sell
\nits products to any other person or affect Seller’s exclusive right to develop,
\nmanufacture, assemble, distribute, market or sell its products, or (iv) are
\notherwise material to the Business or constitute Assumed Contracts
\n(collectively, the “Contracts”). All the Contracts are valid, binding and in
\nfull force and effect in all material respects. Neither Seller nor any of its
\nAffiliates nor, to the Knowledge of Seller, any other party thereto has
\nmaterially breached any of the Contracts. Seller has delivered to Buyer correct
\nand complete copies of each of the Contracts.<\/p>\n
(c) Seller is not a party to and is not bound by any contract, agreement or
\ninstrument, or subject to any restriction under its Certificate of Incorporation
\nor Bylaws, as applicable, that adversely affects or, so far as Seller may now
\nreasonably foresee in the future, is reasonably likely to adversely affect its
\nBusiness, assets, properties or financial condition.<\/p>\n
(d) Seller does not have any liability or obligation in connection with any
\nContract which has been terminated by Seller or for which notice of termination
\nhas been delivered by Seller.<\/p>\n
5.12 Leases, Other Real Property.<\/p>\n
(a) No real property, or interest in real property, is used in the operation of
\nthe Business except for the Leased Premises. Seller has delivered to Buyer
\ncorrect and complete copies of the Leases.<\/p>\n
(b) Each Lease is the legal, valid and binding obligation of the signatories
\nthereto, and each is enforceable in accordance with its terms, except as such
\nenforceability may be limited by applicable bankruptcy, reorganization,
\ninsolvency, moratorium or other similar laws from time to time in effect
\naffecting creditors’ rights generally or by principles governing the
\navailability of equitable remedies. Except for such matters as would not result
\nin a Material Adverse Effect, Seller has performed in all material respects all
\nobligations required to be performed by it under the Leases and is not in
\ndefault thereunder, and no event has occurred which, with the lapse of time or
\naction by a third party could result in a default by Seller, or, to Seller’s
\nKnowledge, by any other party thereto, under any Lease. Seller enjoys peaceful
\nand undisturbed possession under its Leases.<\/p>\n
(c) To the Knowledge of Seller, the Leased Premises is in full compliance with
\nall Applicable Law including applicable building, zoning, subdivision and other
\nland use and similar laws and regulations affecting the Real Property
\n(collectively, “Real Property Laws”), and Seller has not received any notice of
\nviolation or claimed violation or, the Knowledge of Seller, no violation is
\nthreatened in respect of any Real Property Law.<\/p>\n
(d) Seller has no Knowledge that (i) any real property taxes, sales levies or
\nassessments with respect to the Leased Premises have not been paid in full or
\n(ii) any proceedings with respect thereto have been commenced.<\/p>\n
5.13 Financial Statements.<\/p>\n
(a) A true and complete copy of the Financial Statements is attached hereto as
\nSchedule 1.1.22 – Financial Statements. The Financial Statements (i) are derived
\nfrom the Books and Records of Seller and its Affiliates, (ii) have been prepared
\nin accordance with GAAP consistently applied throughout the periods covered
\nthereby, subject, in the case of the interim Financial Statements, to year end
\nadjustments and, in the case of the Financial Statements, to the absence of
\nfootnotes, and (iii) fairly present in all material respects the results of
\noperations of the Business for the periods covered thereby.<\/p>\n
(b) Seller does not have any liabilities or obligations of any nature, whether
\nknown, unknown, absolute, accrued, contingent or otherwise and whether due or to
\nbecome due, except (i) as set forth in Schedule 5.13 — Undisclosed Liabilities,
\n(ii) as and to the extent disclosed on, or reserved against on the face of the
\nApril 2 Financial Statements and (iii) for liabilities and obligations that are
\n(A) incurred after April 2 in the ordinary course of the Business consistent
\nwith past practices, and are not prohibited by this Agreement or (B)
\nindividually and in the aggregate would not have or result in a Material Adverse
\nEffect.<\/p>\n
5.14 Compliance with Laws. The conduct of the Business as currently conducted
\ndoes not violate, breach, constitute a default under, or conflict with, and to
\nthe Knowledge of Seller, there exists no event that, with the giving of notice,
\nthe passage of time or both, would constitute a violation, breach, default or
\nconflict with, of or under any Applicable Law, including any Governmental
\nApproval, except (a) as set forth in Part A of Schedule 5.14 – Compliance with
\nLaws and (b) solely with respect to the compliance of the Business with
\nApplicable Law and all Governmental Approvals (other than Applicable Law or any
\nGovernmental Approval of the State of Florida) relating to the fulfillment of
\ncontact lens orders, except as disclosed on Part B of Schedule 5.14 – Compliance
\nwith Laws, where such violation would not reasonably be expected to have a
\nMaterial Adverse Effect. Part C of Schedule 5.14 – Compliance with Laws sets
\nforth a complete and correct general description of all efforts of the Company,
\nSummit, and their Affiliates to comply with Applicable Law relating to the
\nfulfillment of contact lens orders.<\/p>\n
5.15 Environmental Compliance. Except as would not reasonably be expected to
\nhave a Material Adverse Effect, (a) the Company currently holds all the permits,
\nlicenses and approvals of Regulatory Authorities arising under any applicable
\nenvironmental law or regulation necessary for the current use, occupancy or
\noperation of its respective properties and assets (the “Environmental Permits”)
\nand is in compliance with all such permits, licenses and approvals, (b) the
\nCompany is in compliance with all applicable environmental laws and regulations,
\n(c) the Company has not received any written claim, demand, notice or complaint
\nalleging violation of, or liability under, any applicable environmental law and
\n(d) there are no pending environmental claims, or to the Company’s knowledge,
\nenvironmental claims which have been threatened in writing, against the Company
\nor any of the Company’s properties.<\/p>\n
5.16 Condition of Transferred Assets. The Transferred Assets are in good
\noperating condition and repair, ordinary wear and tear excepted. The Transferred
\nAssets are adequate for the purposes for which such assets are currently used or
\nare held for use.<\/p>\n
5.17 Insurance. Schedule 5.17 – Insurance contains a list of all insurance
\npolicies relating to the Business or Transferred Assets. Seller has made
\navailable to Buyer complete and correct copies of all such insurance policies,
\ntogether with all riders and amendments thereto. Seller has complied in all
\nmaterial respects with the terms and provisions of such policies. No notice of
\ntermination or premium increase has been received under any of the policies. To
\nthe knowledge of Seller, the insurance coverage provided by such policies is
\nadequate and suitable for the Business and Transferred Assets, and is on such
\nterms (including, without limitation, as to deductibles and self-insured
\nretentions), covers such risks, contains such deductibles and retentions, and is
\nin such amounts, as the insurance customarily carried by comparable companies of
\nestablished reputation similarly situated and carrying on the same or similar
\nbusiness as Seller.<\/p>\n
5.18 Inventories. All inventories of raw materials, work in process, finished
\nproducts, goods, spare parts, replacement and component parts, and office and
\nother supplies reflected in the April 2, 2000 Financial Statements
\n(collectively, the “Inventories”) of Seller or, to the extent related to the
\nBusiness, any of Seller’s affiliates, taken as a whole, are of good, usable and
\nmerchantable quality. All such Inventories are located at Seller’s facility
\nlocated in the Quadrant Business Center, Phase II, Building 7, 350 Southwest
\n12th Avenue, Deerfield Beach, Broward County, Florida.<\/p>\n
5.19 Accounts Receivable. Except to the extent expressly reserved against in the
\nApril 2 Financial Statements or the Closing Balance Sheet, the accounts and
\nnotes receivable reflected in such April 2 Financial Statements arose, and all
\nreceivables reflected in the Closing Balance Sheet shall have arisen, only from
\nbona fide transactions in the ordinary course of business and consistent with
\npast practices.<\/p>\n
5.20 Labor Matters, etc. Seller is not a party to or bound by any collective
\nbargaining agreement and there are no labor unions or other organizations
\nrepresenting, purporting to represent or attempting to represent any employees
\nemployed in the operation of the Business. Since January 1, 1999 there has not
\noccurred or, to the Knowledge of Seller, been threatened any material strike,
\nslowdown, picketing, work stoppage, concerted refusal to work overtime or other
\nsimilar labor activity with respect to any employees employed in the operation
\nof the Business. There are no labor disputes currently subject to any grievance
\nprocedure, arbitration or litigation and there is no representation petition or,
\nto the knowledge of Seller, no representation application pending or, to the
\nknowledge of Seller, threatened with respect to any employee employed in the
\noperation of the Business. Seller has complied with all provisions of laws and
\nregulations pertaining to the employment of employees, including, without
\nlimitation, all such Applicable Laws relating to labor relations, equal
\nemployment, fair employment practices, entitlements, prohibited discrimination
\nor other similar employment practices or acts, except for any failure so to
\ncomply that, individually or together with all such other failures, has not and
\nwill not result in a material liability or obligation on the part of Buyer or
\nthe Business, and has not had or resulted in, and will not have or result in, a
\nMaterial Adverse Effect.<\/p>\n
5.21 Limitation on Representations and Warranties. Except as otherwise set forth
\nherein, Seller makes no representations or warranties as to the Transferred
\nAssets, the Assumed Liabilities or the Business. Without limiting the generality
\nof the foregoing, Seller makes no representation or warranty to Buyer with
\nrespect to (a) any projections, estimates or budgets heretofore delivered to or
\nmade available to Buyer of future revenues, expenses or expenditures, future
\nresults of operations (or any component thereof), future cash flows or future
\nfinancial condition (or any component thereof) of the Business; or (b) any other
\ninformation or documents made available to Buyer or its counsel, accountants or
\nadvisors with respect to the Business or the business or operations of the
\nBusiness, except as expressly covered by a representation and warranty contained
\nin Sections 5.1 through 5.20. EXCEPT AS EXPRESSLY STATED HEREIN, ALL WARRANTIES
\nAND REPRESENTATIONS OF SELLER ARE EXCLUDED. EXCEPT AS EXPRESSLY SET FORTH
\nHEREIN, SELLER HAS MADE NO REPRESENTATION OR WARRANTY OF MERCHANTABILITY OR
\nFITNESS FOR A PARTICULAR PURPOSE REGARDING ANY OF THE TRANSFERRED ASSETS.<\/p>\n
6. Representations and Warranties of Buyer.<\/p>\n
Buyer hereby represents and warrants to Seller as set forth below in
\nthis Section 6. For purposes of this Section 6, the term “Buyer” shall mean the
\nBuyer and its subsidiaries.<\/p>\n
6.1 Corporate Status. Buyer is duly organized, validly existing and in good
\nstanding as a corporation under the laws of Delaware. Buyer has the requisite
\npower and authority to own or lease all of its properties and assets and to
\nconduct its business as it is now being conducted, except where the failure to
\nhave such corporate power or to conduct its business has not had and would not
\nreasonably be expected to have a Material Adverse Effect.<\/p>\n
6.2 Corporate Authority. Buyer has the corporate power and authority to execute
\nand deliver this Agreement and the other Transaction Documents to which it is a
\nparty and to consummate the transactions contemplated hereby and thereby,
\nincluding the authorization, execution and delivery of the SOH Stockholders’
\nAgreement and the SOH Registration Rights Agreement, and the authorization,
\nissuance (or reservation for issuance), sale, and delivery of the SOH Common
\nStock. All actions and proceedings necessary to be taken on the part of Buyer in
\nconnection with this Agreement and the other Transaction Documents and the
\ntransactions contemplated hereby and thereby have been or will prior to the
\nClosing be duly and validly taken. This Agreement has been, and at the Closing
\nthe other Transaction Documents to which it is a party will be, duly and validly
\nexecuted and delivered by Buyer and constitute the legal, valid and binding
\nobligation of Buyer, enforceable against Buyer in accordance with and subject to
\ntheir terms, except as such enforceability may be limited by applicable
\nbankruptcy, reorganization, insolvency, moratorium or other similar laws from
\ntime to time in effect affecting creditors’ rights generally or by principles
\ngoverning the availability of equitable remedies.<\/p>\n
6.3 Non-Contravention. Neither the execution and delivery by Buyer of this
\nAgreement and the other Transaction Documents to which it is a party nor the
\nconsummation by Buyer of the transactions contemplated hereby and thereby is an
\nevent that, of itself or with the giving of notice or the passage of time or
\nboth, will (a) conflict with the charter or bylaws (or similar governing
\ninstruments with different names) of Buyer, (b) assuming that the consents and
\napprovals described in Schedule 6.3 – Buyer’s Consents are obtained, constitute
\na violation of, or conflict with or result in any breach of or any default
\nunder, or constitute grounds for termination or acceleration of, any material
\nmortgage, indenture, lease, contract, agreement or instrument to which Buyer is
\na party or by which Buyer is bound, or result in the creation of any material
\nLiens upon any of Buyer’s assets, or (c) assuming receipt of the consents and
\napprovals described in Schedule 6.3 – Buyer’s Consents, violate any material
\njudgment, decree or order or statute, rule or regulation applicable to Buyer,
\nexcept, in the case of clauses (b) and (c) above, for violations, conflicts,
\nbreaches, defaults or Liens which, either individually or in the aggregate,
\nwould not have a Material Adverse Effect.<\/p>\n
6.4 Brokers. Except for fees paid by Buyer, there is no investment banker,
\nbroker or finder or other Person retained by Buyer or any Affiliate thereof who
\nwould have a valid claim against Buyer or Seller for a commission or brokerage
\nfee in connection with this Agreement or the transactions contemplated hereby.<\/p>\n
6.5 Litigation. Except as set forth on Schedule 6.5 – Litigation (Buyer), there
\nis no litigation, proceeding or investigation pending or, to Buyer’s knowledge,
\nthreatened, against Buyer or any Affiliate which has had or would, if adversely
\ndetermined, reasonably be expected to have a material adverse effect on Buyer’s
\nability to consummate the transactions contemplated by this Agreement.<\/p>\n
6.6 Financial Statements. A true and complete copy of each of (i) the audited
\nfinancial statements of Wise\/Contact Us Optical Corp. (“Wise”) for the fiscal
\nyear ended October 31, 1999, (ii) the financial statements, of which the balance
\nsheet is audited, of The Ultimate Contact, Inc. (“Ultimate”) for the year ended
\nDecember 31, 1999, (iii) the unaudited financial statements of Wise for the four
\nmonths ended February 25, 2000, and (iv) the unaudited financial statements of
\nUltimate for the two months ended February 29, 2000. The financial statements of
\nBuyer (a) are derived from the Books and Records of Wise and Ultimate, as
\napplicable, (b) have been prepared in accordance with GAAP consistently applied
\nthroughout the periods covered thereby, subject in the case of any interim
\nfinancial statements to year end adjustments and the absence of footnotes, and
\n(c) fairly present in all material respects the results of operations of the
\nBuyer for the periods covered thereby.<\/p>\n
6.7 Capitalization. After giving effect to the Closing, the authorized
\ncapital of the Buyer will consist of: <\/p>\n
(a) Two hundred fifty thousand (250,000) shares of SOH Common Stock are
\nauthorized, 204,500 shares of which will be issued and outstanding immediately
\nafter the Closing. All of the outstanding shares of Common Stock will have been
\nduly authorized, fully paid and be non-assessable and issued in compliance with
\nall applicable federal and state securities laws.<\/p>\n
(b) The Buyer will have reserved 14,000 shares of SOH Common Stock for issuance
\nto officers, directors, employees and consultants of the Buyer pursuant to its
\nStock Option Plan duly adopted by the Board of Directors and approved by the
\nBuyer shareholders (the “Stock Plan”). Of such reserved shares of Common Stock,
\nno shares will have been issued upon exercise of options previously granted,
\noptions to purchase 4,250 shares will have been granted and be outstanding, and
\noptions for 9,750 shares of Common Stock will remain available for grant to
\nofficers, directors, employees and consultants pursuant to the Stock Plan.<\/p>\n
(c) Except for outstanding options issued pursuant to the Stock Plan, and except
\nfor warrants for 2% of the issued and outstanding shares of SOH Common Stock to
\nbe issued in connection with the Facilities delivered in the Commitment Letter,
\nthere are no outstanding options, warrants, rights (including conversion or
\npreemptive rights and rights of first refusal or similar rights) or agreements,
\norally or in writing, for the purchase or acquisition from the Buyer, either
\ndirectly or indirectly, of any shares of its capital stock.<\/p>\n
6.8 Subsidiaries. Buyer does not currently own or control, directly or
\nindirectly, any interest in any other corporation, association, or other
\nbusiness entity other than Wise and Ultimate (the “Buyer Subsidiaries”). Buyer
\nowns all of the outstanding equity securities of the Buyer Subsidiaries.<\/p>\n
6.9 Valid Issuance of Securities. The SOH Common Stock that is being issued to
\nSummit hereunder, when issued, sold and delivered in accordance with the terms
\nhereof for the consideration expressed herein, will be duly and validly issued,
\nfully paid and nonassessable.<\/p>\n
6.10 Financing. Buyer has previously delivered to Summit the following: (a) a
\nfully executed commitment letter (the “Commitment Letter”) from The Bank of New
\nYork and its affiliated BNY Capital Markets, Inc. (the “Bank”) and accepted by
\nBuyer providing the detailed terms and conditions upon which the Bank has
\ncommitted to provide a portion of the financing required by Buyer to consummate
\nthe transactions hereunder. Buyer has also previously delivered to Summit a
\nfully exercised commitment letter (the “Equity Commitment Letter”) from
\nAffiliates of Buyer providing the terms and conditions upon which such
\nAffiliates have committed to provide a portion of the financing required for
\nBuyer to consummate the transactions hereunder.<\/p>\n
6.11 Buyer’s Business. To the actual knowledge of the executive officers of
\nRutledge & St. Dennis, Inc., a Delaware corporation, without any independent
\ninvestigation or duty of inquiry of any kind, the representations and warranties
\ncontained in (i) Article II of the Merger Agreement, dated as of January 11,
\n1999, among Wise\/Contact Holdings Inc., a Delaware corporation, Wise\/Contact
\nAcquisition Inc., a New York corporation and wholly-owned subsidiary of
\nHoldings, Wise\/Contact Us Optical Corporation, a New York corporation, and Barry
\nWeisfeld, and (ii) Article 6 of the Asset Purchase Agreement, dated as of March
\n3, 2000. among The Ultimate Contact, Inc., a New Jersey corporation, Larry
\nEdelson, Anthony Micale, Ultimate Contact Acquisition Corp., a Delaware
\ncorporation and Strategic Optical Holdings, Inc., a Delaware corporation, in
\neach case were true and correct in all material respects as of the date of such
\nagreement, subject to the terms and limitations, including the matters reflected
\nin the disclosure schedules, of such agreement.<\/p>\n
6.12 Limitation on Representations and Warranties. Except as otherwise set forth
\nherein, Buyer makes no representations or warranties as to the Buyer’s business.
\nWithout limiting the generality of the foregoing, Buyer makes no representation
\nor warranty to Seller or Summit with respect to (a) any projections, estimates
\nor budgets heretofore delivered to or made available to Seller or Summit of
\nfuture revenues, expenses or expenditures, future results of operations (or any
\ncomponent thereof), future cash flows or future financial condition (or any
\ncomponent thereof) of the Buyer’s business; or (b) any other information or
\ndocuments made available to Seller or Summit or its counsel, accountants or
\nadvisors with respect to the Buyer’s business or the business or operations of
\nthe Buyer, except as expressly covered by a representation and warranty
\ncontained in Sections 6.1 through 6.11. EXCEPT AS EXPRESSLY STATED HEREIN, ALL
\nWARRANTIES AND REPRESENTATIONS OF BUYER ARE EXCLUDED.<\/p>\n
7. Interim Covenants of Seller.<\/p>\n
From the date of this Agreement until the completion of the Closing,
\nsubject to the requirements of Applicable Law and Regulatory Authorities, Seller
\n(and Buyer, as specified) and their respective Affiliates shall, and Summit
\nshall use commercially reasonable efforts to cause Seller to, comply with the
\ncovenants set forth in this Article 7.<\/p>\n
7.1 Operation of the Business. The Business will continue to be carried on in
\nthe ordinary course and consistent with past practices in compliance in all
\nmaterial respects with all Applicable Laws and reasonable commercial efforts
\nwill be used to preserve the Business, its operations and employees and the
\ngoodwill of its customers and others having business relations with it. Without
\nlimiting the generality of the foregoing, without the prior written consent of
\nBuyer, Summit and Seller, jointly and severally, covenant and agree that Seller
\nwill not do or agree to do any of the following (other than in the ordinary
\ncourse of business consistent with Seller’s past practices) on or before the
\nClosing, except as expressly permitted by Section 5.5 or listed in Schedule 7.1
\n– Operation of Business:<\/p>\n
(i) grant any increase in salary, fringe benefits or other compensation
\npayable, or to become payable, by Seller to any officer, employee, agent or
\nrepresentative of Seller;<\/p>\n
(ii) enter into any contract, commitment or transaction;<\/p>\n
(iii) make any capital expenditure on or lease any item of capital equipment;<\/p>\n
(iv) sell or dispose of any capital equipment;<\/p>\n
(v) waive, cancel or compromise any material right or claim of Seller;<\/p>\n
(vi) modify, amend, cancel or terminate any material contract or agreement
\nby which Seller or any of its assets is bound;<\/p>\n
(vii) conduct all Tax affairs relating to Seller in a manner as such affairs
\nwould have been conducted if the parties had not entered into this Agreement; or<\/p>\n
(viii) take any action that would cause any of the representations and
\nwarranties set forth in Section 5 to be untrue.<\/p>\n
(b) Notwithstanding Section 7.1(a), Seller shall have the right, immediately
\nbefore the Closing, to pay off indebtedness for borrowed money and to distribute
\ncash to Summit provided, that the effect of all paying off of indebtedness and
\ndistribution of cash pursuant to this Section 7.1(b) shall be included on the
\nClosing Balance Sheet.<\/p>\n
(c) During the period from the date of this Agreement to the Closing, Seller and
\nSummit, jointly and severally, covenant and agree that Seller will continue, in
\nthe ordinary course of its business and consistent with its past practices, to:<\/p>\n
(i) market its services; and<\/p>\n
(ii) use its commercially reasonable efforts to keep the Business intact, retain
\nits present employees so that they will be available after the Closing, and
\nmaintain its relationships with its customers, suppliers and others with whom
\nSeller does business so that they will be preserved after the Closing.<\/p>\n
7.2 Application for Regulatory Consent and Licenses. To the extent that Buyer or
\nits Affiliates requires any license or other approvals, consents or
\nauthorizations from, or is required to give or make any notices to or filings
\nwith respect to, any Regulatory Authority to permit Buyer or its Affiliates to
\nconduct the Business from and after the Closing Date, Seller shall use all
\ncommercially reasonable efforts, as promptly as practicable after the date of
\nthis Agreement, and in no event later than fifteen (15) days after the date of
\nthis Agreement, to assist Buyer in the filing of all requisite applications and
\nmake all other requisite filings with the appropriate Regulatory Authorities (as
\nlisted on Schedule 5.3(a) – Seller’s Consents) in all cases at Buyer’s expense.
\nSeller shall diligently assist Buyer in taking all steps (at Buyer’s expense)
\nthat are necessary, proper or desirable to expedite the preparation of such
\nregulatory and license applications and filings and their prosecution to a
\nfavorable conclusion. Seller will promptly provide Buyer with copies of any
\napplication, amendment, pleading, notice, order, request for additional
\ninformation or other document filed by it or served on it relating to such
\napplications. Buyer shall cooperate with Seller and provide to Seller all
\ninformation regarding the Business reasonably required by Seller for use in
\nconnection with such applications and filings.<\/p>\n
7.3 Access to Facilities, Files and Records. Upon the reasonable request of
\nBuyer and upon not less than one (1) Business Day prior notice, Seller and its
\nAffiliates will give or cause to be given to the officers, employees,
\naccountants, counsel and authorized representatives of Buyer (a) reasonable
\naccess during normal business hours to the management personnel, property,
\ncopies of the Assumed Contracts, Leases and other records and files relating to
\nthe Business except for any of the foregoing relating to the Excluded Assets or
\nExcluded Liabilities, and (b) all such other information solely relating to the
\ntransactions contemplated by this Agreement as Buyer may reasonably request;
\nprovided, however, that neither Seller nor its Affiliates shall be required to
\npermit such access or provide such information to the extent it would:
\nunreasonably interfere with the Business; jeopardize any relationship with a
\ncustomer of the Business; jeopardize any attorney-client privilege of Seller or
\nany of its Affiliates; or contravene any law, rule, regulation, order, judgment,
\nor decree applicable to Seller or any of its Affiliates; in each case in the
\ncommercially reasonable judgment of Seller or any of its Affiliates.<\/p>\n
7.4 Notice of Proceedings. Seller will promptly notify Buyer in writing upon (a)
\nbecoming aware of any order or decree or any complaint praying for any order or
\ndecree restraining or enjoining the execution of this Agreement or the
\nconsummation of the transactions contemplated hereunder, or (b) receiving any
\nnotice from any court or any Regulatory Authority of its intention (i) to
\ninstitute a suit or proceeding to restrain or enjoin the execution of this
\nAgreement or the consummation of the transactions contemplated by this
\nAgreement, or (ii) to nullify or render ineffective this Agreement if executed
\nor such transactions if consummated.<\/p>\n
7.5 Hart-Scott-Rodino Filing. As promptly as practicable after the date of this
\nAgreement (but in no event later than ten (10) days after the date of this
\nAgreement), Seller shall prepare and file all documents and notifications with
\nthe Federal Trade Commission and the United States Department of Justice as are
\nrequired to comply with the HSR Act, requesting early termination of the waiting
\nperiod thereunder. Seller will furnish promptly all materials thereafter
\nrequested by any Regulatory Authority having jurisdiction over such filings.
\nSeller will cooperate with Buyer in the preparation of all such filings and
\nresponses.<\/p>\n
7.6 Reasonable Commercial Efforts. Subject to the terms of this Agreement,
\nSeller agrees, at its sole expense, to use its reasonable commercial efforts in
\ngood faith to take, or cause to be taken, all actions, and to do, or cause to be
\ndone, all things necessary under Applicable Laws to permit consummation of the
\ntransactions contemplated hereby and by the other Transaction Documents as
\npromptly as practicable and otherwise enable consummation of the transactions
\ncontemplated hereby, including satisfaction of the conditions set forth in
\nArticle 10 hereof, and shall cooperate fully with Buyer to that end.<\/p>\n
7.7 Notification of Certain Matters. Seller shall give prompt notice to Buyer of
\nany fact, event or circumstance known to it that (a) is reasonably likely,
\nindividually or taken together with all other facts, events and circumstances
\nknown to it, to result in any Material Adverse Effect or (b) would cause or
\nconstitute a material breach of any of its representations, warranties,
\ncovenants or agreements contained herein.<\/p>\n
7.8 Transfers. Prior to the Closing, Seller shall cause all of its Affiliates to
\ntransfer to Seller all right, title and interest in and to all assets used
\nsolely in connection with the Business (other than assets which would comprise
\nExcluded Assets), for transfer to Buyer at the Closing.<\/p>\n
7.9 No Solicitation. During the term of this Agreement, Seller and Summit shall
\nnot, and Seller and Summit shall cause each employee, agent, officer, director,
\nor other representative of Seller or Summit not to, directly or indirectly
\nsolicit or encourage any inquiries or proposals for, or enter into or continue
\nany discussions with respect to, the acquisition by any Person of any of the
\nTransferred Assets (except for those assets disposed of in the ordinary course
\nconsistent with past practices), or any other shares of capital stock or other
\nsecurities of Seller (or any of its subsidiaries) or all or any material portion
\nof the Business; provided, that this Section 7.9 shall not apply to any Person
\nmaking an unsolicited Superior Offer.<\/p>\n
7.10 Fiduciary Out. Nothing in this Agreement shall prevent the Board of
\nDirectors of Summit or Seller from withholding, withdrawing, amending or
\nmodifying its unanimous recommendation in favor of the transactions contemplated
\nhereby or from accepting a Superior Offer (as defined below) if (i) an
\nunsolicited Superior Offer is made to Summit or Seller and is not withdrawn,
\n(ii) Summit or Seller shall have provided prompt written notice to Buyer (a
\n“Notice of Superior Offer”) advising Buyer that Summit or Seller has received a
\nSuperior Offer, specifying in detail the material terms and conditions of such
\nSuperior Offer and identifying the Person making such Superior Offer, (iii)
\nSummit and Seller shall have caused their financial and legal advisors to
\nnegotiate in good faith with Buyer during the three-day period referred to below
\nto make such adjustments to the terms and conditions of this Agreement as would
\nenable the parties to proceed with the sale of the Business to Buyer (iv) Buyer
\nshall not have, within three (3) Business Days of Buyer’s receipt of the Notice
\nof Superior Offer, made an offer that the Summit Board by a majority vote
\ndetermines in its good faith judgment (after consultation with a financial
\nadviser of nationally recognized reputation) to be at least as favorable to
\nSummit’s stockholders as such Superior Proposal (it being agreed that Summit’s
\nBoard shall convene a meeting to consider any such offer by Buyer promptly
\nfollowing the receipt thereof), (v) the Board of Directors of Summit is advised
\nin writing by Hutchins, Wheeler & Dittmar, or another law firm of national
\nstanding reasonably acceptable to Buyer, that, in light of such Superior Offer,
\nthe withholding, withdrawal, amendment or modification of such recommendation or
\nthe acceptance of such Superior Offer is required in order for the Board of
\nDirectors of Summit to comply with its fiduciary obligations to Summit’s
\nstockholders under applicable law and (v) neither Summit nor any of its
\nrepresentatives shall have violated any of the restrictions set forth in Section
\n7.9 or this Section 7.10. Summit shall provide Buyer with at least three
\nbusiness days prior notice (or such lesser prior notice as provided to the
\nmembers of Summit’s Board of Directors but in no event less than twenty-four
\nhours) of any meeting of Summit’s Board of Directors at which Summit’s Board of
\nDirectors is reasonably expected to consider any Superior Offer (as defined
\nbelow). For purposes of this Agreement “Superior Offer” shall mean an
\nunsolicited, bona fide written offer made by a third party to consummate any of
\nthe following transactions: (i) a merger, consolidation involving Seller
\npursuant to which Summit holds no more than 20% of the equity interest in the
\nsurviving or resulting entity of such transaction or (ii) the acquisition by any
\nperson or group (including by way of a tender offer or an exchange offer),
\ndirectly or indirectly, of ownership of at least 80% of the then outstanding
\nshares of capital stock of Seller, in each case on terms that the Board of
\nDirectors of Summit determines, in its reasonable judgment (based on the written
\nadvice of a financial adviser of nationally recognized reputation) to provide
\nSummit with consideration (in cash and other property or securities) of not less
\nthan $39 million; provided, however, that any such offer shall not be deemed to
\nbe a “Superior Offer” if all of the financing required to consummate the
\ntransaction contemplated by such offer is not fully committed.<\/p>\n
8. Interim Covenants of Buyer.<\/p>\n
From the date of this Agreement until the completion of the Closing,
\nsubject to the requirements of Applicable Law and Regulatory Authorities, Buyer
\n(and Seller, as specified) shall comply with the covenants set forth in this
\nArticle 8.<\/p>\n
8.1 Application for Regulatory Consent and Licenses. To the extent that Buyer or
\nits Affiliates requires any license or other approvals, consents or
\nauthorizations from, or is required to give or make any notices to or filings
\nwith respect to, any Regulatory Authority in connection with the consummation of
\nthe transactions contemplated by this Agreement or the other Transaction
\nDocuments or to permit Buyer or its Affiliates, to conduct the Business from and
\nafter the Closing Date, as promptly as practicable after the date of this
\nAgreement, and in no event later than fifteen (15) days after the date of this
\nAgreement, Buyer will file all requisite applications and make all other
\nrequisite filings with the appropriate Regulatory Authorities (as listed on
\nSchedule 6.3 – Buyer’s Consents). Buyer will diligently take all steps that are
\nnecessary, proper or desirable to expedite the preparation of such regulatory
\nand license applications and filings and their prosecution to a favorable
\nconclusion. Buyer will promptly provide Seller with copies of any application,
\namendment, pleading, notice, order, request for additional information or other
\ndocument filed by it or served on it relating to such applications. Seller shall
\ncooperate with Buyer and provide to Buyer all information regarding the Business
\nreasonably required by Buyer for use in connection with such applications and
\nfilings.<\/p>\n
8.2 Notice of Proceedings. Buyer will promptly notify Seller in writing upon (a)
\nbecoming aware of any order or decree or any complaint praying for an order or
\ndecree restraining or enjoining the execution of this Agreement or the
\nconsummation of the transactions contemplated hereunder, or (b) receiving any
\nnotice from any court or Regulatory Authority of its intention (i) to institute
\na suit or proceeding to restrain or enjoin the execution of this Agreement or
\nthe consummation of the transactions contemplated by this Agreement, or (ii) to
\nnullify or render ineffective this Agreement if executed or such transactions if
\nconsummated.<\/p>\n
8.3 Hart-Scott-Rodino Filing. As promptly as practicable after the date of this
\nAgreement (but in no event later than ten (10) days after the date of this
\nAgreement), Buyer shall prepare and file all documents and notifications with
\nthe Federal Trade Commission and the United States Department of Justice as are
\nrequired to comply with the HSR Act, requesting early termination of the waiting
\nperiod thereunder. Buyer shall promptly furnish all materials thereafter
\nrequested by any Regulatory Authority having jurisdiction over such filings.
\nBuyer will cooperate with Seller in the preparation of all such filings and
\nresponses.<\/p>\n
8.4 Reasonable Commercial Efforts. Subject to the terms of this Agreement, Buyer
\nagrees to use its reasonable commercial efforts in good faith to take, or cause
\nto be taken, all actions, and to do, or cause to be done, all things necessary
\nunder Applicable Laws to permit consummation of the transactions contemplated
\nhereby and by the Transaction Documents as promptly as practicable and otherwise
\nenable consummation of the transactions contemplated hereby, including
\nsatisfaction of the conditions set forth in Article 10 hereof, and shall
\ncooperate fully with Seller to that end.<\/p>\n
8.5 Notification of Certain Matters.<\/p>\n
(a) Buyer shall give prompt notice to Seller of any fact, event or circumstance
\nknown to it that (i) is reasonably likely, individually or taken together with
\nall other facts, events and circumstances known to it, to result in any Material
\nAdverse Effect as to Buyer or (ii) would cause or constitute a material breach
\nof any Buyer’s representations, warranties, covenants or agreements contained
\nherein.<\/p>\n
9. Conditions Precedent to Buyer’s Obligations.<\/p>\n
The obligations of Buyer under this Agreement are, at Buyer’s option,
\nsubject to the fulfillment (or waiver by Buyer) of the following conditions
\nprior to or at the Closing Date:<\/p>\n
9.1 Representations, Warranties and Covenants.<\/p>\n
(a) Except, in the case of clauses (x) and (y) below, for such breaches as have
\nnot had and would not have, in the aggregate, a Material Adverse Effect, the
\nrepresentations and warranties of Seller contained in this Agreement shall (x)
\nhave been true and correct as of the date when made and (y) shall be deemed to
\nbe made again on and as of the Closing Date and shall then be true and correct,
\nexcept, in all cases, to the extent that (i) such representations and warranties
\nspeak as of the date of this Agreement or as of a specific date, in which case
\nthey shall be deemed to have been made again on and as of the Closing Date but
\nspeaking only as of the date of this Agreement or such specific date, as the
\ncase may be, and (ii) changes are permitted or contemplated pursuant to this
\nAgreement; provided, however, that for purposes of determining the satisfaction
\nof the condition contained is this Section 9.1(a), no effect will be given to
\nany exception or qualification in such representations and warranties relating
\nto materiality or Material Adverse Effect except with respect to clause (b) of
\nSection 5.14.<\/p>\n
(b) Except for any lack of performance or compliance that has not had and would
\nnot have, in the aggregate, a Material Adverse Effect, Seller shall have
\nperformed and complied with the covenants and agreements required by this
\nAgreement to be performed or complied with by it prior to or on the Closing
\nDate.<\/p>\n
(c) Seller shall have furnished Buyer with certificate(s), dated the Closing
\nDate and duly executed by an officer of Seller authorized to give such a
\ncertificate, to the effect that the conditions set forth in subparagraphs (a)
\nand (b) of this Section 9.1 have been satisfied.<\/p>\n
(d) Seller shall have delivered to Buyer a certificate of Seller, dated the
\nClosing Date and sworn to under penalty of perjury, setting forth the name,
\naddress and federal tax identification number of Seller and stating that Seller
\nis not a “foreign person” within the meaning of section 1445 of the Code, such
\ncertificate to be in the form set forth in the Treasury Regulations thereunder.<\/p>\n
9.2 Proceedings. Neither Buyer nor any of its Affiliates shall be subject to any
\nrestraining order or injunction restraining or prohibiting Buyer’s performance
\nof the transactions contemplated hereby.<\/p>\n
9.3 Hart-Scott-Rodino. The waiting period under the HSR Act shall have
\nexpired or been terminated.<\/p>\n
9.4 Deliveries, Release of Liens. Buyer shall have received the items to
\nbe delivered by Seller pursuant to Section 4.2.<\/p>\n
9.5 Consents to Assignment of Leases. The landlords under the Leases shall have
\nfurnished consents to the assignments of the Leases to Buyer, to the extent such
\nconsents are required under the terms of the Leases.<\/p>\n
9.6 Opinion of Counsel to the Company and Summit. Buyer shall have received
\nfavorable opinions of counsel to the Company and Summit dated the Closing Date,
\nreasonably satisfactory to the Buyer and substantially in the form and substance
\nset forth in Exhibit E.<\/p>\n
9.7 Financing. Buyer shall have received the financing proceeds under the
\nCommitment Letter and the Equity Commitment Letter on the terms and conditions
\nset forth therein or upon terms and conditions substantially equivalent thereto.<\/p>\n
10. Conditions Precedent to Sellers’ Obligations.<\/p>\n
The obligations of Seller under this Agreement are, at Seller’s option,
\nsubject to the fulfillment (or waiver by Seller) of the following conditions
\nprior to or at the Closing Date:<\/p>\n
10.1 Representations, Warranties and Covenants.<\/p>\n
(a) Except for such breaches as have not had and would not reasonably be
\nexpected to have, in the aggregate, a Material Adverse Effect, the
\nrepresentations and warranties of Buyer contained in this Agreement shall have
\nbeen true and correct as of the date when made and shall be deemed to be made
\nagain on and as of the Closing Date and shall then be true and correct, except
\nto the extent that (i) such representations and warranties speak as of the date
\nof this Agreement or as of a specific date, in which case they shall be deemed
\nto have been made again on and as of the Closing Date but speaking only as of
\nthe date of this Agreement or such specific date, as the case may be, and (ii)
\nchanges are permitted or contemplated pursuant to this Agreement; provided,
\nhowever, that for purposes of determining the satisfaction of the condition
\ncontained is this Section 10.1(a), no effect will be given to any exception in
\nsuch representations and warranties relating to materiality.<\/p>\n
(b) Except for any lack of performance or compliance that has not had and would
\nnot reasonably be expected to have, in the aggregate, a Material Adverse Effect,
\nBuyer shall have performed and compiled with the covenants and agreements
\nrequired by this Agreement to be performed or complied with by it prior to or at
\nthe Closing Date.<\/p>\n
(c) Buyer shall have furnished Seller with certificate(s) dated the Closing Date
\nand duly executed by an officer of Buyer authorized on behalf of Buyer to give
\nsuch a certificate, to the effect that the conditions set forth in subsections
\n(a) and (b) of this Section 10.1 have been satisfied.<\/p>\n
10.2 Proceedings. Neither Seller nor any of its Affiliates shall be subject to
\nany restraining order or injunction restraining or prohibiting Seller’s
\nperformance of the transactions contemplated hereby.<\/p>\n
10.3 Hart-Scott-Rodino. The waiting period under the HSR Act shall have
\nexpired or been terminated.<\/p>\n
10.4 Deliveries. Seller shall have received the items to be delivered by
\nBuyer pursuant to Section 4.3.<\/p>\n
10.5 Opinion of Counsel to Buyer. Seller and Summit shall have received an
\nopinion of counsel to the Buyer dated the Closing Date and reasonably
\nsatisfactory to Seller and Summit, in form and substance reasonably satisfactory
\nto Seller.<\/p>\n
11. Certain Post-Closing Matters.<\/p>\n
11.1 Access to Records, Information and Personnel.<\/p>\n
(a) Information and Records. Subsequent to the Closing, Buyer agrees to provide
\nSeller with reasonable access to all Books and Records transferred to Buyer at
\nClosing and required by Seller for purposes of responding to any audits,
\ninvestigations or other proceedings by any Regulatory Authority or other Person
\nor for the defense or prosecution of any Excluded Liability or other Indemnified
\nBuyer Claim. Such access will be during normal business hours, upon reasonable
\nprior notice and without unreasonable interference with normal business
\noperations and will be at the sole cost and expense of Seller.<\/p>\n
(b) Personnel. If, after the Closing Date, Seller shall require the
\nparticipation of officers and employees formerly employed by Seller for purposes
\nof responding to any audits, investigations or other proceedings by any
\nRegulatory Authority or the defense or prosecution of any Excluded Liability or
\nother Indemnified Buyer Claim, and so long as there exists no conflict of
\ninterest between the parties, Buyer shall make such officers and employees
\nreasonably available to Seller to participate in such defense or prosecution;
\nprovided, that Seller shall pay all out-of-pocket costs, charges and expenses
\narising from such participation.<\/p>\n
11.2 Insurance.<\/p>\n
(a) Effective at 12:01 am on the Closing Date, the Business shall cease to be
\ncovered by Seller’s and its Affiliates’ insurance policies. Prior to Closing,
\nSeller will put each insurance carrier on written notice in regard to known
\nincidents and claims and will provide Buyer with written documentation stating
\nthere are no known claims that have not been reported to the appropriate
\ncarrier.<\/p>\n
(b) Effective at 12:01 am on the first day after Closing Date or at Closing,
\nSeller will provide written evidence of notice of cancellation to any bonding
\nand\/or to every insurance company who have issued bonds or insurance policies on
\nbehalf of or providing coverage to the Business under which Seller or an
\nAffiliate of Seller might be liable. Buyer will provide certificates of
\ninsurance at the Closing with respect to the following categories of insurance:
\ndirectors’ and officers’ liability; errors and omissions; workers’ compensation;
\nauto liability; commercial general liability; crime insurance; fiduciary
\ncoverage; and property insurance (fixed and mobile). Said certificates of
\ninsurance shall show the: type of coverage (occurrence or claims made); dates of
\ncoverage; carrier name; address of carrier; limits of insurance; retroactive
\ndate; and contact person for each line of insurance.<\/p>\n
11.3 Books and Records.<\/p>\n
(a) For a period of five (5) years after the Closing Date, or such longer period
\nas required by law, if Buyer desires to dispose of any of the Books and Records
\nrelating to Taxes and acquired from Seller pursuant to this Agreement that
\nrelate to the Business conducted prior to the Closing Date, notice to such
\neffect shall be given by Buyer to Seller and Seller shall be given an
\nopportunity prior to any such disposition, at its cost and expense, to remove
\nand retain all or any part of such Books and Records as it may select.<\/p>\n
(b) For a period of five (5) years after the Closing Date, or such longer period
\nas required by law, if Seller desires to dispose of any of the Books and Records
\nin its possession on the Closing Date that relate to the Business conducted
\nprior to the Closing Date, notice to such effect shall be given by Seller to
\nBuyer and Buyer shall be given an opportunity prior to any such disposition, at
\nits cost and expense, to remove and retain all or any part of such Books and
\nRecords as it may select. During the period such Books and Records are preserved
\nand kept by Seller, duly authorized representatives of Buyer shall, on
\nreasonable prior notice, have access thereto during normal business hours to
\nexamine, inspect and copy such Books and Records at Buyer’s expense.<\/p>\n
11.4 Taxes.<\/p>\n
(a) Seller and Buyer shall each be responsible for paying half of any and all
\ntransfer, conveyance, recording and similar fees or Taxes (including, without
\nlimitation, sales, use and real and personal property transfer Taxes) arising
\nfrom the sale of the Transferred Assets pursuant to this Agreement, and Buyer
\nshall be responsible for preparing and filing any Tax Returns in connection
\ntherewith.<\/p>\n
(b) Seller shall be liable for all Taxes in respect of or relating to the
\nTransferred Assets or the Business for any Pre Closing Period. Buyer shall be
\nliable for all Taxes in respect of or relating to the Transferred Assets or
\nBusiness for any taxable year or period that is not a Pre-Closing Period.<\/p>\n
(c) From time to time after the Closing, the parties shall deliver (at the cost
\nof the requesting party) to each other such information and data as any party
\nmay reasonably request, including that required in order to enable such party to
\ncomplete and file all Tax Returns that may be required to be filed by it and to
\ncomplete all customary Tax and accounting procedures and otherwise to enable
\nsuch party to satisfy its internal accounting, Tax and other requirements,
\nprovided, that the foregoing shall be done in a manner so as not to interfere
\nunreasonably with the conduct of the business of the other party or its
\nAffiliates.<\/p>\n
11.5 Employee and Employee Benefits.<\/p>\n
(a) (i) Subject to Section 11.5(a)(ii), for a period of one year following the
\nClosing Date, Buyer shall be responsible for severance pay payable to any
\nEmployee who is (x) employed by Seller immediately preceding the Closing and (y)
\neither (1) not offered employment with Buyer or (2) hired and thereafter
\nterminated by Buyer. Such payments shall be made pursuant to Buyer’s severance
\npolicy in effect on the date of termination. Buyer shall compute such severance
\npay by giving affected Employees credit for years of service with Seller and its
\nAffiliates.<\/p>\n
(ii) Notwithstanding anything to the contrary set forth in
\n this Agreement, Buyer shall pay and otherwise be responsible for thirty
\n percent (30%), and Summit and Seller, jointly and severally, shall pay
\n and otherwise be responsible for seventy percent (70%), of all
\n liabilities and obligations of Summit, Seller and Buyer arising under
\n the Severance Agreement, dated August 4, 1998, between Menderes Akdag
\n and Seller; provided that Summit shall be entitled to 100% of the
\n savings of any waiver by Mr. Akdag of any amounts due him under the
\n Severance Agreement due to inducements provided by Summit.<\/p>\n
(b) Effective as of the Closing, the Buyer shall assume sponsorship of all of
\nthe Employee Benefit Plans listed on Schedule 11.5(b) Assumed Employee Benefit
\nPlans.<\/p>\n
(c) Neither Buyer nor Seller intends this Agreement to create any rights or
\ninterests, except as between Buyer and Seller, and no present, former or future
\nemployee of Buyer or Seller shall be treated as a third party beneficiary by, in
\nor under this Agreement.<\/p>\n
(d) (i) Seller and Buyer will (x) treat Buyer and each Affiliate thereof, as
\napplicable, as a “successor employer” and Seller (as applicable) as a
\n“predecessor,” within the meaning of sections 3121(a)(1) and 3306(b)(1) of the
\nCode, with respect to the employees of the Business who are employed by Buyer or
\nany of its Affiliates for purposes of Taxes imposed under the United States
\nFederal Unemployment Tax Act (“FUTA”) or the United States Federal Insurance
\nContributions Act (“FICA”) and (y) cooperate with each other to avoid, to the
\nextent possible, the filing of more than one IRS Form W-2 with respect to each
\nsuch employee for the calendar year within which the Closing Date occurs, and
\n(ii) at the request of Buyer with respect to any particular applicable Tax law
\nrelating to employment, unemployment insurance, social security, disability,
\nworkers’ compensation, payroll, health care or other similar Tax other than
\nTaxes imposed under FICA and FUTA, Seller will (x) treat Buyer and each of its
\nAffiliates, as applicable, as a successor employer and Seller, as applicable, as
\na predecessor employer, within the meaning of the relevant provisions of such
\nTax law, with respect to the employees of the Business who are employed by Buyer
\n(or, if applicable, any Affiliate thereof) and (y) cooperate with each other to
\navoid, to the extent possible, the filing of more than one individual
\ninformation reporting form pursuant to each such Tax law with respect to each
\nsuch employee for the calendar year within which the Closing Date occurs.<\/p>\n
11.6 Covenant Not to Compete.<\/p>\n
(a) Seller and Summit each agrees that it will not at any time within the
\nthree-year period immediately following the Closing (i) directly or indirectly
\nengage, or have any ownership interest in any firm, corporation, partnership,
\nproprietorship or other business entity that engages (directly or indirectly) in
\nthe activities now engaged in by Seller (or any other activities included in the
\nBusiness, whether or not engaged in by Seller) in North America or any other
\ngeographic areas in which the Business is now conducted, so long as Buyer or any
\nof its Affiliates, remains engaged in the Business; or (ii) employ, or solicit
\nor offer to employ, any employee of the Business to whom Buyer of any of its
\nAffiliates offers employment; provided, however, that notwithstanding the
\nforegoing Summit shall be deemed not to be in breach of this Section 11.6 if
\nsuch breach would arise solely from a passive investment of less than an
\naggregate of 5% of the capital stock of a Person.<\/p>\n
(b) Seller and Summit each acknowledges that the covenants contained in this
\nSection 11.6 were a material and necessary inducement for Buyer to agree to the
\ntransactions contemplated by this Agreement, and that Summit and Seller will
\nrealize significant monetary benefit from these transactions, that violation of
\nany of the covenants contained in this Section 11.6 will cause irreparable and
\ncontinuing damage to Buyer, that Buyer shall be entitled to injunctive or other
\nequitable relief from any court of competent jurisdiction restraining any
\nfurther violation of such covenants and that such injunctive relief shall be
\ncumulative and in addition to any other rights or remedies to which Buyer may be
\nentitled.<\/p>\n
11.7 Post Closing Confidentiality. Seller and Summit each covenants and agrees
\nthat at all times subsequent to the Closing it will, and it will cause its
\nAffiliates to, maintain the confidentiality of non-public information regarding
\nthe Business and the Transferred Assets unless disclosure of such information is
\nrequired by law or in connection with a proceeding arising out of or relating to
\nthis Agreement.<\/p>\n
12. Indemnification.<\/p>\n
12.1 By Seller. From and after the Closing and subject to the limitations of
\nthis Article 12, Seller and Summit, jointly and severally, covenant and agree to
\nindemnify, hold harmless, pay and reimburse Buyer, its Affiliates and any
\ndirector, shareholder, employee, officer, adviser or representative of Buyer or
\nany of its Affiliates (an “Indemnified Buyer Party”) from and against the
\nfollowing (referred to herein as the “Indemnified Buyer Claims”):<\/p>\n
(a) any and all damages, losses, claims, deficiencies, liabilities, obligations,
\ncosts and expenses, whether or not resulting from third-party claims,
\n(including, but not limited to, any interest, penalties, fines, reasonable
\nattorneys’ fees and costs and expenses incurred in the defense or settlement of
\nany claims of an Indemnified Buyer Party covered by this Article 12) incurred or
\nsuffered by any Indemnified Buyer Party arising out of:<\/p>\n
(i) the Excluded Liabilities;<\/p>\n
(ii) subject to Section 12.1(d) below, any breach of a representation or
\nwarranty on the part of Seller contained in Article 5 (without taking into
\naccount any qualification as to materiality or Material Adverse Effect contained
\nin any such representation or warranty other than, in the case of the
\nrepresentations and warranties in Section 5.14, the qualification as to Material
\nAdverse Effect contained in clause (b) of such Section.<\/p>\n
(iii) any breach or non-fulfillment of any agreement or covenant to be
\nperformed by Seller or Summit pursuant to this Agreement;<\/p>\n
(iv) any failure to comply with the requirements of any applicable bulk
\nsales law; and<\/p>\n
(b) any and all actions, suits, claims, proceedings, demands, assessments,
\njudgments, costs and other expenses (including reasonable attorneys’ fees and
\ndisbursements) incident to any of the foregoing or to the enforcement of this
\nSection 12.1.<\/p>\n
(c) Notwithstanding anything to the contrary contained herein, Seller shall not
\nhave any liability hereunder for (i) the failure of Seller or Buyer to receive,
\nfor any reason whatsoever, any consent identified in Schedule 5.3 that is
\nrequired as a result of the transactions contemplated by this Agreement or (ii)
\nany special, punitive or consequential damages. Buyer shall use commercially
\nreasonable efforts to mitigate any damages arising from Indemnified Buyer
\nClaims.<\/p>\n
(d) Notwithstanding anything in this Agreement to the contrary, each Indemnified
\nBuyer Party’s right to indemnification for any breach of the representations and
\nwarranties in Section 5.14, insofar as such breach arises out of or relates to
\nApplicable Laws or Governmental Approvals relating to the fulfillment of contact
\nlens orders, shall (i) be determined without giving effect to any disclosure on
\nSchedule 5.14 and (ii) be limited to any damages, losses, claims, deficiencies,
\nobligations, costs and expenses (including, but not limited to, any interest,
\npenalties, fines, reasonable attorneys’ fees and costs and expenses incurred in
\nthe defense or settlement of any claims), resulting from Third-Party Claims (x)
\narising out of or relating to any enforcement or like action initiated by any
\nRegulatory Authority with respect to the manner in which the Business was
\noperated at any time up through Closing (it being understood and agreed that for
\nthis purpose, a Third-Party Claim shall be deemed to include the cost to Buyer
\nof implementing any changes in the methods of operating the Business required in
\nresponse to any such action from the methods used prior to the Closing) and (y)
\notherwise arising out of or relating to such breach; it being understood and
\nagreed that to the extent Buyer continues any such operations from and after the
\nClosing on a basis consistent with the practices prior to the Closing, each
\nBuyer Indemnified Party’s right to indemnification hereunder will extend to any
\nsuch damages, losses, claims, deficiencies, obligations, costs and expenses
\narising out of or related to, Buyer’s operation of the Business in such fashion
\npost-Closing. Any claim subject to this Section 12.1(d) shall be deemed to be
\nmade pursuant to 12.1(a)(ii) arising from a breach of Section 5.14, subject to
\nthe limitations on claims contained in this Agreement with respect to claims
\nmade pursuant thereto.<\/p>\n
12.2 By Buyer. From and after the Closing and subject to the limitations of this
\nArticle 12, Buyer agrees to indemnify, hold harmless, pay and reimburse Seller,
\nits Affiliates and any director, shareholder, employee, officer, adviser or
\nrepresentative of Seller or any of its Affiliates (an “Indemnified Seller
\nParty”), from and against the following (referred to herein as the “Indemnified
\nSeller Claims”):<\/p>\n
(a) any and all damages, losses, claims, deficiencies, liabilities obligations,
\ncosts and expenses, whether or not resulting from third-party claims,
\n(including, but not limited to, any interest, penalties, fines, reasonable
\nattorneys’ fees and costs and expenses incurred in the defense or settlement of
\nany claims of all Indemnified Seller Party covered by this Article 12) incurred
\nor suffered by any Indemnified Seller Party arising out of:<\/p>\n
(i) the operation by Buyer or any of its Affiliates of the Business from and
\nafter the Closing Date (except to the extent the same is incurred by such
\nIndemnified Seller Party solely in its capacity as a stockholder of Buyer);<\/p>\n
(ii) the Assumed Liabilities;<\/p>\n
(iii) any breach of a representation or warranty on the part of Buyer
\ncontained in Article 6; or<\/p>\n
(iv) any breach or non-fulfillment of any agreement or covenant to be
\nperformed by Buyer pursuant to this Agreement; and<\/p>\n
(b) any and all actions, suits, claims, proceedings, demands, assessments,
\njudgments, costs and other expenses (including reasonable attorneys’ fees and
\ndisbursements) incident to any of the foregoing or to the enforcement of this
\nSection 12.2.<\/p>\n
(c) Notwithstanding anything to the contrary contained herein, Buyer shall not
\nhave any liability hereunder for any special, punitive or consequential damages.
\nBuyer shall use commercially reasonable efforts to mitigate any damages arising
\nfrom Indemnified Buyer Claims.<\/p>\n
12.3 Entitlement to Indemnification, Exclusivity.<\/p>\n
(a) Each Indemnified Buyer Party or Indemnified Seller Party, as the case may
\nbe, shall be entitled to indemnity under Section 12.1(a)(ii) or 12.2(a)(iii), as
\napplicable, for any and all claims as to which notice is given pursuant to
\nSection 12.4 during the periods set forth in Section 12.5. The termination of
\nthe representations and warranties contained in this Agreement shall not affect
\nthe rights of any Indemnified Buyer Party or Indemnified Seller Party, as
\napplicable, to prosecute to conclusion any claim resulting from any breach of a
\nrepresentation or warranty as to which notice is given pursuant to Section 12.4
\nprior to the termination of such representation or warranty.<\/p>\n
(b) The indemnification provided in this Article 12 shall be the sole and
\nexclusive remedy of any Indemnified Seller Party or Indemnified Buyer Party in
\nrespect of breach of the representations and warranties of Seller and Buyer or
\n(except for Sections 7.9 and 14.4) the breach of any covenants of Seller or
\nBuyer hereunder to be performed on or prior to the Closing.<\/p>\n
(c) The parties agree that all indemnification payments made pursuant to
\nSections 12.1, 12.2 and 12.7 shall be treated as an adjustment to the Purchase
\nPrice for all Tax Purposes unless otherwise required by law.<\/p>\n
12.4 Notice and Defense of Claims.<\/p>\n
(a) Promptly upon receipt of notice of any claim, demand or assessment or the
\ncommencement of any suit, action, arbitration or proceeding in respect of which
\nindemnity may be sought on account of the indemnity agreement contained in this
\nArticle 12 (a “Third Party Claim”), the party seeking indemnification (the
\n“Asserting Party”) will notify in writing, within sufficient time to respond to
\nsuch claim or answer or otherwise plead in such action, the party from whom
\nindemnification is sought (the “Defending Party”). Any such notice shall include
\na description of the Third Party Claim, an estimate of the amount of the claim,
\na reference to the Section of this Agreement under which indemnification is
\nbeing sought (including, in the case of a claim under Sections 12.1(a)(ii),
\n12.1(a)(iii), 12.2(a)(iii) or 12.2(a)(iv), reference to the representation,
\nwarranty, covenant or other provision of this Agreement alleged to have been
\nbreached or non-fulfilled) and, if the Third Party Claim involves an Assumed
\nContract, the identity of such Assumed Contract, in each case, to the extent
\nthen known. Except to the extent the Defending Party is materially prejudiced as
\na result of the failure of the Asserting Party to give notice as provided in
\nthis Section 12.4, the omission of such Asserting Party so to notify promptly
\nthe Defending Party of any such Third Party Claim shall not relieve such
\nDefending Party from any liability, it may have to such Asserting Party, in
\nconnection therewith, on account of the indemnity agreements contained in this
\nArticle 12. If any Third Party Claim shall be asserted or commenced, the
\nAsserting Party shall notify the Defending Party of the commencement thereof,
\nthe Asserting Party shall have the right to control the defense thereof, but the
\nDefending Party will be entitled, at its expense, to participate therein, and in
\nthe settlement thereof, provided that the Defending Party shall be entitled, if
\nit so elects, to take control of the defense and investigation of such Third
\nParty Claim and to employ and engage attorneys of its own choice to handle and
\ndefend the same, at the Defending Party’s cost, risk and expense. After notice
\nfrom the Defending Party to the Asserting Party of its election to assume the
\ndefense of such Third Party Claim, the Defending Party shall not be liable to
\nthe Asserting Party under this Article 12 for any legal or other expenses
\nsubsequently incurred by the Asserting Party in connection with the defense of
\nsuch Third Party Claim; provided that the Asserting Party shall have the right
\nto employ separate counsel in any such action and to participate in the defense
\nthereof, but the fees and expenses for such counsel shall be at the expense of
\nthe Asserting Party unless (x) the employment thereof has been specifically
\nauthorized by the Defending Party or (y) the Asserting Party shall have been
\nadvised by counsel that due to the existence of conflicting interests, in the
\nreasonable judgment of such counsel, it is advisable for the Asserting Party to
\nemploy separate counsel. No Third Party Claim shall be settled by the Defending
\nParty without the Asserting Party’s prior written consent; provided however,
\nthat the Asserting Party shall not unreasonably withhold or delay its consent to
\nany proposed settlement if (i) such proposed settlement involves only the
\npayment of money and (ii) the Defending Party demonstrates to the reasonable
\nsatisfaction of the Asserting Party that it is able to pay the amount of such
\nsettlement and all related expenses. Each party will cooperate with the other
\nparty in connection with any such Third Party Claim, make personnel, books and
\nrecords relevant to the Third Party Claim available to the other party, and
\ngrant such authorizations or limited powers of attorney to the agents,
\nrepresentatives and counsel of such other party as such party may reasonably
\nconsider desirable in connection with the defense of any such Third Party Claim.<\/p>\n
(b) With respect to all Indemnified Buyer Claims and Indemnified Seller Claims
\nthat do not constitute or involve Third Party Claims (“Non-Third Party Claims”),
\nthe Asserting Party will notify in writing, within fifteen (15) days of becoming
\naware of the basis for such claim, the Defending Party. Any such notice shall
\ninclude a description of the Non-Third Party Claim, a good faith estimate of the
\namount of the claim, a reference to the Section of this Agreement under which
\nindemnification is being sought (including, in the case of a claim under
\nSections 12.1 (a)(ii), 12.1(a)(iii), 12.2(a)(iii) or 12.2(a)(iv), reference to
\nthe representation, warranty, covenant or other provision of this Agreement
\nalleged to have been breached or non-fulfilled) and, if the Non-Third Party
\nClaim involves an Assumed Contract, the identity of such Assumed Contract, in
\neach case, to the extent then known. Except to the extent that such failure of
\nthe Asserting Party to give notice as provided in this Section 12.4 results in
\nthe Defending Party being materially prejudiced as a result of such failure to
\ngive notice, the omission of such indemnified party so to notify promptly the
\nindemnifying party of any such Non-Third Party Claim shall not relieve such
\nindemnifying party from any liability it may have to such indemnified party, in
\nconnection therewith, on account of the indemnity agreements contained in this
\nArticle 12.<\/p>\n
12.5 Survival of Representations and Warranties.<\/p>\n
(a) The representations and warranties of Seller contained in this Agreement or
\nin any agreement, document or instrument delivered pursuant to this Agreement
\nshall survive through the 30th day following the first anniversary of the
\nClosing Date, except that (i) the representations and warranties contained in
\nSections 5.1, 5.2, 5.4 and 5.9 shall survive without limitation and (ii) the
\nrepresentations and warranties contained in Section 5.6 and 5.7 shall survive
\nfor so long as any applicable statute of limitations remains open, in whole or
\nin part, including without limitation by reason of waiver of such statute of
\nlimitations, and for 30 days thereafter.<\/p>\n
(b) The representations and warranties of Buyer contained in this Agreement or
\nin any agreement, document or instrument delivered pursuant to this Agreement
\nshall survive through the 30th day following the first anniversary of the
\nClosing Date, except that the representations and warranties contained in
\nSections 6.1 and 6.2 shall survive without limitation.<\/p>\n
12.6 Limitations on Parties’ Right to Indemnification.<\/p>\n
(a) The maximum liability, in the aggregate, of Seller and Summit to indemnify
\nthe Indemnified Buyer Parties for any and all Indemnified Buyer Claims pursuant
\nto clauses (ii) or (iii) of Section 12.1(a) shall be limited to an aggregate
\namount equal to $5,000,000; provided that the limitation contained in this
\nsubparagraph for claims pursuant to clause (iii) of Section 12.1(a) shall apply
\nonly to breaches of any of the covenants in Sections 7.1-7.7.<\/p>\n
(b) The Indemnified Buyer Parties shall be entitled to seek indemnification for
\nIndemnified Buyer Claims pursuant to clauses (ii) or (iii) of Section 12.1(a)
\nfrom Seller and Summit only when the aggregate value of all such Indemnified
\nBuyer Claims of any and all of the Indemnified Buyer Parties thereto exceeds
\n$300,000, at which point Seller and Summit shall only be liable to the
\nIndemnified Buyer Parties for the value of any additional Indemnified Buyer
\nClaims over $300,000, subject to the limitation set forth in Section 12.6(a)
\nprovided that the limitation contained in this subparagraph for claims pursuant
\nto clause (iii) of Section 12.1(a) shall apply only to breaches of any of the
\ncovenants set forth in Sections 7.1-7.7.<\/p>\n
(c) The maximum liability, in the aggregate, of Buyer to the Indemnified Seller
\nParties for any and all Indemnified Seller Claims pursuant to clauses (iii) or
\n(iv) of Section 12.2(a) shall be limited to an aggregate amount equal to
\n$5,000,000; provided, that the limitation contained in this subparagraph for
\nclaims pursuant to clause (iv) of Section 12.2(a) shall apply only to breaches
\nof any of the covenants set forth in Sections 8.1-8.5.<\/p>\n
(d) The Indemnified Seller Parties shall be entitled to seek indemnification for
\nIndemnified Seller Claims pursuant to clauses (iii) or (iv)of Section 12.2(a)
\nfrom Buyer only when the aggregate value of all such Indemnified Seller Claims
\nexceeds $300,000, at which point Buyer shall only be liable to the Indemnified
\nSeller Parties for the value of any additional Indemnified Seller Claims over
\n$300,000, subject to the limitation in Section 12.6(c); provided, that the
\nlimitation contained in this subparagraph for claims pursuant to clause (iv) of
\nSection 12.2(a) shall apply only to breaches of any of the covenants set forth
\nin Sections 8.1-8.5.<\/p>\n
12.7 Special Indemnity. From and after the Closing, Buyer shall manage the
\nlitigation arising from the civil complaint filed by Thomas Crosley against
\nSeller in the United States District Court for the Western District of Texas,
\nSan Antonio Division, as Civil Action No. SA00CA0385 (the “Texas Litigation”),
\nand Seller and Summit, jointly and severally, covenant and agree to indemnify,
\nhold harmless, pay and reimburse the Indemnified Buyer Parties for one half of
\nany and all damages, losses, claims, deficiencies, liabilities, obligations,
\ncosts and expenses (including, but not limited to, any interest, penalties,
\nfines, reasonable attorneys’ fees and costs and expenses) incurred or suffered
\nby any Indemnified Buyer Party arising from or relating to the Texas Litigation.
\nDamages, losses, claims, deficiencies, liabilities, obligations, costs and
\nexpenses in the form of the distribution by any Indemnified Buyer Party of free
\nor discounted goods or services shall be deemed to equal the difference of the
\nactual cost basis of such Indemnified Buyer Party of such goods or the actual
\ncost to such Indemnified Buyer Party of providing such services, less, in the
\ncase of any such discounted items, any proceeds actually received by such
\nIndemnified Buyer Party with respect to such goods or services, as the case may
\nbe. Payments made pursuant to this Section 12.7 shall be made promptly following
\nSummit’s receipt of invoices identifying in reasonable detail the amount of any
\nsuch payment or reimbursement required to be made hereunder. Notwithstanding
\nanything to the contrary set forth in this Agreement, (i) the Texas Litigation
\nmay not be settled without prior written consent of Summit, which consent may
\nnot unreasonably be withheld, and (ii) Summit and Seller shall have no liability
\nor obligation to the Indemnified Buyer Parties with respect to the Texas
\nLitigation except as provided in this Section 12.7.<\/p>\n
13. Termination.<\/p>\n
13.1 Termination. This Agreement may be terminated at any time on or prior to
\nthe Closing Date (a) by the mutual written consent of Seller and Buyer, (b) by
\nthe non-defaulting party if there has been a material breach of any
\nrepresentation, warranty, covenant or agreement contained in this Agreement on
\nthe part of the other party which, if not cured, would excuse the performance
\nhereof by the non-defaulting party, and such breach cannot be cured at or prior
\nto the time the Closing would have taken place in accordance with Section 4.1,
\n(c) by any party hereto if the Closing has not taken place by July 31, 2000, and
\nthe party seeking to terminate this Agreement has not contributed in any
\nmaterial way to the failure of the Closing to occur by such date, and (d) by
\nSummit if Summit or Seller shall have accepted a Superior Offer pursuant to
\nSection 7.10 and Summit shall have paid to Buyer, in cash, an amount equal to
\n$1.5 million and (e) by Buyer if Summit or Seller shall have accepted a Superior
\nOffer pursuant to Section 7.10 (the “Termination Fee”).<\/p>\n
13.2 Effect of Termination.<\/p>\n
(a) Except for the obligations contained in Sections 14.2 and 14.4, which shall
\nsurvive any termination of this Agreement, upon the termination of this
\nAgreement pursuant to Section 13.1, this Agreement shall forthwith become null
\nand void, and no party hereto or any of its officers, directors, employees,
\nagents, consultants, stockholders, partners or principals shall have any rights,
\nliabilities or obligations hereunder or with respect hereto, except that, if
\nsuch termination results from the willful breach by a party of any
\nrepresentations, warranties, or covenants of such party contained in this
\nAgreement, such party shall be fully liable for any and all damages, costs and
\nexpenses (including reasonable attorneys’ fees) sustained or incurred by the
\nother parties to this Agreement arising from such breach.<\/p>\n
(b) Notwithstanding anything to the contrary contained in this Agreement, in the
\nevent Summit terminates this Agreement pursuant to Section 13.1(d), or Buyer
\nterminates this Agreement pursuant to Section 13.1(e), Summit shall pay to Buyer
\nas liquidated damages, at the effective time of such termination, in cash, an
\namount equal to the Termination Fee. In addition, if Buyer terminates this
\nAgreement pursuant to Section 13.1(b) as a result of a willful and material
\nbreach of this Agreement by Summit or Seller, and within six months of such
\ntermination, Summit or Seller enters into a definitive agreement to consummate
\nany sale, merger, consolidation, business combination, recapitalization,
\nliquidation, dissolution, or similar transaction involving Seller or affecting a
\nsubstantial portion of its assets, or, within such six month period, any such
\ntransaction is consummated, Summit shall pay to Buyer, at the date of the
\nexecution of such definitive agreement or, if earlier, the date of the
\nconsummation of such transaction, an amount in cash equal to the Termination
\nFee. Payment pursuant to this Section 13.2(b) shall be the sole and exclusive
\nremedy of Buyer against Summit or Seller in connection with the transactions
\ncontemplated hereby.<\/p>\n
14. Miscellaneous<\/p>\n
14.1 Amendment and Modification, Waiver of Provisions. This Agreement may be
\namended, modified or waived only by a written instrument executed by all of the
\nparties hereto. The failure of any party at any time or times to require
\nperformance of any provision of this Agreement shall in no manner affect the
\nright of such party at a later date to enforce the same. No waiver by any party
\nof any condition or the breach of any provision, term, covenant, representation,
\nor warranty contained in this Agreement, whether by conduct or otherwise, in any
\none or more instances shall be deemed to be or construed as a further or
\ncontinuing waiver of any such condition or of the breach of any other provision,
\nterm, covenant, representation, or warranty of this Agreement.<\/p>\n
14.2 Expenses. Except as otherwise expressly provided herein, the parties hereto
\nagree that fees and out-of-pocket expenses shall be paid as follows:<\/p>\n
(a) fees and disbursements of counsel, consultants and accountants shall
\nbe paid by the party retaining such Persons;<\/p>\n
(b) expenses related to filings under the HSR Act and obtaining all
\nrequired Regulatory Authority approvals shall be paid by Buyer; and<\/p>\n
(c) all other fees and out-of-pocket expenses incurred in connection with the
\ntransactions contemplated hereby shall be paid by the party incurring such
\nexpenses.<\/p>\n
14.3 Successors and Assigns; Assignments. All terms and provisions of this
\nAgreement shall be binding upon and inure to the benefit of the parties hereto
\nand their respective transferees, successors and assigns. Except as set forth
\nbelow, no party hereto may assign or transfer any of its rights or delegate any
\nof its duties hereunder without the prior written consent of the other party,
\nand any such attempted assignment, transfer or delegation without such consent
\nshall be null and void. Notwithstanding the foregoing, Buyer may assign its
\nrights under this Agreement to any of its Affiliates without Seller’s consent,
\nprovided, that Buyer shall remain jointly and severally liable for its
\nobligations hereunder.<\/p>\n
14.4 Confidentiality, Public Announcement.<\/p>\n
(a) From and after the date of this Agreement, the parties hereto and their
\nAffiliates shall keep confidential the terms of this Agreement and the
\nnegotiations relating hereto and all documents and information obtained by a
\nparty from another party in connection with the transactions contemplated
\nhereby, except (i) to the extent this Agreement and such negotiations need to be
\ndisclosed to obtain approval of any Regulatory Authority, (ii) for disclosures
\nmade in accordance with the terms of this Agreement and (iii) to the extent
\nrequired by Applicable Law, regulations or rules of any national securities
\nexchange.<\/p>\n
(b) Except as otherwise required by law, regulations or rules of any national
\nstock exchange, the parties hereto shall each furnish to the other the text of
\nall notices and communications, written or oral, proposed to be sent by the
\nfurnishing party regarding the transactions contemplated hereby. Except as
\notherwise required by law, regulations or rules of any national stock exchange,
\nthe furnishing party shall not send or transmit such notices or communications
\nor otherwise make them public unless and until the consent of the other party is
\nreceived, which consent shall not be unreasonably withheld or delayed.<\/p>\n
(c) Buyer and Seller shall issue a mutually agreed press release following
\nexecution of this Agreement and following the Closing.<\/p>\n
14.5 Notices. All notices, request, demands and other communications hereunder
\nshall be in writing and shall be delivered personally, by courier, by telecopy
\nor by mail (regular, certified or registered), postage prepaid, addressed as
\nfollows:<\/p>\n
If to Seller:<\/p>\n
Lens Express, Inc.
\n 350 12th Avenue
\n Deerfield Beach, FL 33442
\n Attention: Mr. Mendo Akdag
\n Facsimile: 954-480-9446<\/p>\n
With a copy to<\/p>\n
Hutchins, Wheeler & Dittmar
\n 101 Federal Street
\n Boston, MA 02110
\n Attention: Steven M. Peck, Esq.
\n Facsimile: (617) 951-1295<\/p>\n
If to Summit:<\/p>\n
Summit Technology Inc.
\n 21 Hickory Drive
\n Waltham, MA 02451
\n Attention: James A. Lightman, Senior Vice President
\n Facsimile: 781-890-6316<\/p>\n
With a copy to:<\/p>\n
Hutchins, Wheeler & Dittmar
\n 101 Federal Street
\n Boston, MA 02110
\n Attention: Steven M. Peck, Esq.
\n Facsimile: (617) 951-1295<\/p>\n
If to Buyer:<\/p>\n
Strategic Optical Holdings, Inc.
\n One Greenwich Office Park
\n Greenwich, CT 06831
\n Attention: Mr. Robert Tucker
\n Facsimile: 203-869-7978<\/p>\n
With a copy to:<\/p>\n
Debevoise & Plimpton
\n 875 Third Avenue
\n New York, NY 10022
\n Attention: Stephen R. Hertz, Esq.
\n Facsimile: 212-909-6836<\/p>\n
With a copy to:<\/p>\n
Shapiro, Forman & Allen, LLP
\n 380 Madison Avenue, 25th Fl.
\n New York, NY 10017
\n Attention: Robert Forman, Esq.
\n Fax: 212-557-1275<\/p>\n
or to such other address as a party may from time to time designate in writing
\nin accordance with this Section. Each notice or other communication given to any
\nparty hereto in accordance with the provisions of this Agreement shall be deemed
\nto have been received (a) on the Business Day it is sent, if sent by personal
\ndelivery, or (b) on the Business Day it is sent, if sent by facsimile
\ntransmission and an activity report showing the correct facsimile number of the
\nparty on whom notice is served and the correct number of pages transmitted is
\nobtained by the sender, or (c) on the first Business Day after sending, if sent
\nby courier or overnight delivery, or (d) on the third Business Day after
\nsending, if sent by mail (regular, certified or registered), provided that
\nnotice of change of address shall be effective only upon receipt.<\/p>\n
14.6 No Third Parties Benefited. This Agreement is made and entered into for the
\nprotection and benefit of the parties hereto and their permitted successors and
\nassigns, and no other Person shall be a direct or indirect beneficiary of or
\nhave any direct or indirect cause of action or claim in connection with this
\nAgreement or any of the documents executed in connection herewith.<\/p>\n
14.7 Law Governing. This Agreement shall be governed by, construed and
\nenforced in accordance with the laws of the State of New York, without giving
\neffect to the choice of law provisions thereof.<\/p>\n
14.8 Counterparts. This Agreement may be executed simultaneously in one or more
\ncounterparts, each of which shall be deemed an original, but all of which shall
\nconstitute but one and the same instrument.<\/p>\n
14.9 Severability. Any provision of this Agreement which is invalid, illegal or
\nunenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
\nto the extent of such invalidity, illegality or unenforceability, without
\naffecting in any way the remaining provisions hereof in such jurisdiction or
\nrendering that or any other provision of this Agreement invalid, illegal or
\nunenforceable in any other jurisdiction.<\/p>\n
14.10 Entire Agreement. This Agreement, including the schedules and exhibits
\nhereto, which are incorporated herein and made an integrated part hereof by this
\nreference, and the Transaction Documents, constitute the entire agreement
\nbetween the parties and supersede and cancel any and all prior agreements
\nbetween them relating to the subject matter hereof.<\/p>\n
14.11 Construction. The parties acknowledge that each party and its counsel have
\nreviewed and revised this Agreement and that the normal rule of construction to
\nthe effect that any ambiguities are to be resolved against the drafting party
\nshall not be employed in the interpretation of this Agreement or any amendments
\nor exhibits hereto.<\/p>\n
14.12 Consent to Jurisdiction. Each of the parties hereto agrees that any suit,
\naction or proceeding instituted against such party under or in connection with
\nthis Agreement shall be brought exclusively in a court of competent jurisdiction
\nof the State of New York. By execution hereof, each party hereto irrevocably
\nwaives any objection to, and any right of immunity on the grounds of, improper
\nvenue, the convenience of the forum, the personal jurisdiction of such courts or
\nthe execution of judgments resulting therefrom. Each party hereto hereby
\nirrevocably accepts and submits to the exclusive jurisdiction of such courts in
\nany such action, suit or proceeding.<\/p>\n
14.13 Waiver of Jury Trial. EACH OF SELLER, SUMMIT AND BUYER WAIVES TRIAL BY
\nJURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST
\nANY OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR ANY
\nOTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF
\nOR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN. No party to this Agreement shall
\nseek a jury trial in any lawsuit, proceeding, counterclaim, or any other
\nlitigation procedure based upon, or arising out of, this Agreement or any
\nrelated instruments or the relationship between the parties. No party will seek
\nto consolidate any such action, in which a jury trial has been waived, with any
\nother action in which a jury trial cannot be or has not been waived. THE
\nPROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND
\nTHESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
\nAGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
\nSECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.<\/p>\n
14.14 Supplements to Disclosures. From time to time, not later than three
\nBusiness Days prior to the Closing Date, Seller, in respect of Section 5, or
\nBuyer, as relates to Section 6, may amend or supplement any Schedules to such
\nSection 5 or 6, as applicable, with respect to any matter arising after the date
\nof this Agreement that, if existing or occurring at or prior to the date of this
\nAgreement, would have been required to be set forth or described therein or that
\nis necessary to complete or correct any information in any representation or
\nwarranty contained in Section 5 or 6, as applicable, and Seller or Buyer, as
\napplicable, shall notify the other party in writing of such amendment or
\nsupplement. For purposes of determining the fulfillment of the condition
\nprecedent set forth in Section 9.1(a), no such amendment or supplement shall be
\ngiven effect; for all other purposes, including, without limitation, Section
\n12.1(a)(ii), each such amendment and supplement shall be given effect. At all
\ntimes prior to the Closing, each party shall as promptly as possible notify the
\nother party of the occurrence of any event as to which it obtains knowledge that
\nwould make any of the representations, warranties and disclosures made herein
\nwith respect to such party, any of its Affiliates or, in the case of Seller, the
\nBusiness, untrue or misleading or which is reasonably likely to result in the
\nfailure of a condition specified in Article 9 or 10 hereof.<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Asset Purchase
\nAgreement to be duly executed by their duly authorized officers, as of the day
\nand year first above written.<\/p>\n
\n
\nBUYER: SELLER:<\/p>\nSTRATEGIC OPTICAL HOLDINGS, INC. LENS EXPRESS, INC.<\/p>\n
By:___________________________________________________ By:___________________________________________________
\n Name: Name: Robert J. Palmisano
\n Title: Title: Chief Executive Officer<\/p>\n
SUMMIT TECHNOLOGY, INC.<\/p>\n
By:___________________________________________________
\n Name: Robert J. Palmisano
\n Title: Chief Executive Officer<\/p>\n
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