exv10w85






Exhibit 10.85




 

 










ASSET
PURCHASE AGREEMENT




By
and Among




Syntax-Brillian Corporation,

Syntax-Brillian SPE, Inc., and Syntax Groups Corporation

(As Sellers),




OLEVIA INTERNATIONAL GROUP, LLC

(As Purchaser),

and




MR. JUNG-JYH WU

a/ka MR. JOHN WU




(As
Guarantor)




 

 









 









 








TABLE OF CONTENTS 




	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	1.1
	 	Defined Terms	 	 	2	 
	1.2
	 	Use Of Singular Or Plural	 	 	12	 
	1.3
	 	Reference To Agreement	 	 	12	 
	1.4
	 	Recitals, Schedules and Exhibits	 	 	12	 
	1.5
	 	Including	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE II PURCHASE AND SALE OF ASSETS	 	 	12	 
	 
	 	 	 	 	 	 
	2.1
	 	Agreement to Purchase and Sell	 	 	12	 
	2.2
	 	Excluded Assets	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE III ASSUMED AND EXCLUDED LIABILITIES	 	 	16	 
	 
	 	 	 	 	 	 
	3.1
	 	Assumption of Liabilities	 	 	16	 
	3.2
	 	Assignment of Contracts and Rights	 	 	16	 
	3.3
	 	Excluded Liabilities	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE IV CONSIDERATION AND DEPOSIT	 	 	17	 
	 
	 	 	 	 	 	 
	4.1
	 	Purchase Price	 	 	17	 
	4.2
	 	Deposit	 	 	17	 
	4.3
	 	Sale “As Is  Where Is”	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS OF SELLERS	 	 	18	 
	 
	 	 	 	 	 	 
	5.1
	 	Organization	 	 	18	 
	5.2
	 	Conflicts; Consents of Third Parties	 	 	18	 
	5.3
	 	Title to Purchased Assets	 	 	19	 
	5.4
	 	Brokers	 	 	19	 
	5.5
	 	Board Approval and Recommendation	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER AND GUARANTOR	 	 	21	 
	 
	 	 	 	 	 	 
	6.1
	 	Organization and Good Standing	 	 	21	 
	6.2
	 	Authorization of Agreement	 	 	21	 
	6.3
	 	Conflicts; Consents of Third Parties	 	 	22	 
	6.4
	 	Brokers	 	 	22	 
	6.5
	 	DigiMedia Investment	 	 	22	 
	6.6
	 	Defaults	 	 	22	 






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	6.7
	 	Litigation	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE VII OPERATIONS PENDING CLOSING	 	 	23	 
	 
	 	 	 	 	 	 
	7.1
	 	Operation of Business	 	 	23	 
	7.2
	 	Retention of Interim CEO	 	 	23	 
	7.3
	 	Material Operational Decisions; Cooperation	 	 	23	 
	7.4
	 	No New Contracts	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE VIII BANKRUPTCY COURT MATTERS	 	 	24	 
	 
	 	 	 	 	 	 
	8.1
	 	Competing Transaction	 	 	24	 
	8.2
	 	Bidding Procedures Order	 	 	24	 
	8.3
	 	Submission to Bankruptcy Court	 	 	25	 
	8.4
	 	Break-Up Fee and Expense Reimbursement	 	 	25	 
	8.5
	 	Payment of Break-Up Fee and DigiMedia Investment	 	 	25	 
	8.6
	 	Purchaser’s Back-Up Commitment; Payment of Expense Reimbursement	 	 	26	 
	8.7
	 	Sale Order; Adequate Assurance	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE IX COVENANTS OF THE PARTIES	 	 	27	 
	 
	 	 	 	 	 	 
	9.1
	 	Preservation and Access to Books and Records	 	 	27	 
	9.2
	 	Publicity	 	 	27	 
	9.3
	 	Disclosure Schedules	 	 	27	 
	9.4
	 	Schedules and Exhibits	 	 	28	 
	9.5
	 	Best Efforts; Further Assurances	 	 	28	 
	9.6
	 	Certain Filings	 	 	28	 
	9.7
	 	Guaranty	 	 	28	 
	9.8
	 	Certain Contracts	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE X EMPLOYEES AND EMPLOYEE BENEFITS	 	 	29	 
	 
	 	 	 	 	 	 
	10.1
	 	No Successor Liability To Sellers’ Employees	 	 	29	 
	10.2
	 	Employment	 	 	29	 
	10.3
	 	Employee Matters	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE XI CONDITIONS TO CLOSING	 	 	31	 
	 
	 	 	 	 	 	 
	11.1
	 	Conditions to Purchaser’s Obligations	 	 	31	 
	11.2
	 	Purchaser’s Obligations at the Closing	 	 	32	 
	11.3
	 	Conditions to Sellers’ Obligations	 	 	32	 
	11.4
	 	Sellers’ Obligations at the Closing	 	 	33	 
	11.5
	 	Closing Costs	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE XII CLOSING	 	 	34	 
	 
	 	 	 	 	 	 
	12.1
	 	Closing Date	 	 	34	 






 ii 




 









 








	 	 	 	 	 	 	 
	ARTICLE XIII TAXES	 	 	34	 
	 
	 	 	 	 	 	 
	13.1
	 	Tax Ownership	 	 	34	 
	13.2
	 	Cooperation and Audits	 	 	34	 
	13.3
	 	Transfer Taxes	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE XIV TERMINATION	 	 	35	 
	 
	 	 	 	 	 	 
	14.1
	 	Grounds for Termination	 	 	35	 
	14.2
	 	Effect of Termination	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE XV MISCELLANEOUS	 	 	36	 
	 
	 	 	 	 	 	 
	15.1
	 	Notices	 	 	36	 
	15.2
	 	Amendments and Waivers	 	 	37	 
	15.3
	 	Successors and Assigns	 	 	37	 
	15.4
	 	Bulk Sales Laws	 	 	38	 
	15.5
	 	Injunctive Relief	 	 	38	 
	15.6
	 	Communications with Employees, Customers and Vendors	 	 	39	 
	15.7
	 	Incorporation by Reference; Captions	 	 	39	 
	15.8
	 	No Survival of Representations and Warranties	 	 	39	 
	15.9
	 	Bankruptcy Court Jurisdiction	 	 	39	 
	15.10
	 	Third Party Beneficiaries	 	 	39	 
	15.11
	 	Entire Agreement	 	 	40	 
	15.12
	 	Applicable Law	 	 	40	 
	15.13
	 	Timing	 	 	40	 
	15.14
	 	Invalid Provision	 	 	40	 
	15.15
	 	Multiple Counterparts	 	 	40	 
	15.16
	 	Further Assurances	 	 	40	 






SCHEDULES




Schedule 1.1(A)            SPV Accounts Receivable

Schedule 1.1(B)            Kolin Contracts

Schedule 1.1(C)            TCV Group

Schedule 2.1(A)            Foreign Investments

Schedule 2.1(B)            Assumed Contracts and Leases

Schedule 2.1(C)            Insurance Policies

Schedule 2.2                 Excluded Assets

Schedule 5.7                 Intellectual Property

Schedule 5.8                 Litigation

Schedule 5.9                 Employees

Schedule 5.10               Contracts

Schedule 8.4                 DigiMedia Investment




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EXHIBITS




Exhibit A — APA Guaranty

Exhibit B — Designated Asset Agreement

Exhibit C — New Term Loan Documents

Exhibit D — Debt Assumption Agreement

Exhibit E — Assignment and Assumption Agreement

Exhibit F — Guaranty

Exhibit G — Bills of Sale

Exhibit H — Earn Out Assignment and Procedures Agreement

Exhibit I — IP License Agreement

Exhibit J — Assignment of Receivables




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ASSET PURCHASE AGREEMENT




     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 7, 2008,
(the “Effective Date”) by and among Syntax-Brillian Corporation, a Delaware corporation,
Syntax-Brillian SPE, Inc., a Delaware corporation, and Syntax Groups Corporation, a Delaware
corporation (collectively the “Sellers”), Olevia International Group, LLC, a California limited
liability company (the “Purchaser”) and Mr. Jung-Jyh Wu a/k/a Mr. John Wu (as guarantor of
Purchaser’s obligations hereunder, the “Guarantor”).



RECITALS




     WHEREAS, the Sellers are leading designers, developers, and distributors of high-definition
televisions, or HDTVs utilizing liquid crystal display (“LCD”) technology (excluding the business
of Vivitar Corporation (as defined below) and its subsidiaries, the “Business”). The Seller’s lead
products include their Olevia brand high definition widescreen LCD televisions. In addition,
through Vivitar Corporation (“Vivitar”) and Vivitar’s subsidiaries, the Sellers are also
distributors of the Vivitar brand digital still and video cameras and accessories;



     WHEREAS, the Purchaser is a California limited liability company which was formed to purchase
certain of the assets of Sellers related to the Business as provided herein;



     WHEREAS, upon the execution of this Agreement, Sellers have agreed to file voluntary petitions
for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as
amended (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware
(the “Bankruptcy Court”) on or about July 7, 2008. (the “Bankruptcy Case”);



     WHEREAS, upon the terms and subject to the conditions set forth herein and as authorized under
Sections 105, 363 and 365 of the Bankruptcy Code, Purchaser desires to purchase from the Sellers,
and Sellers desire to sell to Purchaser the Purchased Assets (as defined herein), other than the
Excluded Assets and Excluded Liabilities (as defined herein), and Purchaser desires to assume
certain leases and executory contracts, in exchange for the payment to Sellers of the Purchase
Price (as defined herein) and the assumption by the Purchaser of the Assumed Liabilities;



     WHEREAS, Sellers have made efforts to identify and solicit potential purchasers for their
Business and assets prior to the date hereof and have identified Purchaser as the only party
interested in making an offer for the Business and the Purchased Assets (as defined below) to date;



     WHEREAS, Sellers believe, following consultation with Sellers’ legal and financial advisors
and upon consideration of available alternatives, that, in light of the Sellers’ current liquidity
and financial position, a sale of the Purchased Assets is necessary to maximize value and is in the
best interest of Sellers, Sellers’ creditors and Sellers’ stockholders;



     WHEREAS, simultaneously with the execution of this Agreement, the Guarantor has executed a
guaranty in the form attached as Exhibit A hereto (the “APA Guaranty”) and has delivered it to the
Sellers and the Lenders (as defined herein); and



 









 





     WHEREAS, the transactions contemplated by this Agreement (the “Transactions”) are subject to
the approval of the Bankruptcy Court and will be consummated only pursuant to a Sale Order (as
defined herein) to be entered in the Bankruptcy Case.



     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements hereinafter contained, and intending to be bound hereby, the parties
hereto hereby agree as follows:



ARTICLE I




DEFINITIONS




     1.1 Defined Terms



     Defined terms used in this Agreement shall, unless the context otherwise requires, have the
following meanings:



     “Accounts Receivable” has the meaning ascribed to such term in Section 2.1(b)(ix).



     “Accounts Receivable Collections” means the cash collections on Accounts Receivable received
by the Sellers from the Effective Date through the Closing Date.



     “Accounts Receivable Collections Threshold” means $10.56 million.



     “Action” means any complaint, claim, litigation, arbitration, mediation, or proceeding.



     “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with,
such Person, and the term “control” (including the terms “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or use the direction of
the management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise.



     “Agreement” means this Asset Purchase Agreement by and between Sellers and Purchaser and the
Guarantor together with the Disclosure Schedules and Exhibits attached to this Agreement, each as
amended, consolidated, supplemented, novated or replaced by the parties from time to time in
accordance with the terms hereof.



     “Allocation Statement” has the meaning ascribed to such term in Section 13.1.



     “APA Guaranty” has the meaning given to such term in the Recitals.



     “Assigned Real Property” has the meaning ascribed to it in Section 2.1(b)(iii).



     “Assignment” means the assignment of Contracts and Leases by Sellers to Purchaser pursuant to
and in accordance with this Agreement and section 365(f) of the Bankruptcy Code.



2









 





     “Assignment of Receivables” means those certain Assignment of Receivables by Sellers to
Purchaser or the SPV pursuant to and in accordance with this Agreement in the form attached hereto
as Exhibit J.



     “Assignment Order” means an Order of the Bankruptcy Court, in form and substance reasonably
acceptable to Sellers, Purchaser and Lenders authorizing the assumption and Assignment of a
Contract or Cured Lease pursuant to section 365 of the Bankruptcy Code, which Order may be the Sale
Order.



     “Assumed Contracts” means only those Contracts and Leases relating to the Business that
Purchaser identifies in writing no more than ten (10) days after the Effective Date, it being
understood that Purchaser shall not be required to assume any Contract and that any assignment of a
Contract to Purchaser by Sellers shall be at the sole discretion of Purchaser and subject to
approval of the Bankruptcy Court, and, to the extent that the Assumed Contracts relate to the
Designated Assets or the SPV, to the consent of the Lenders, which consent shall not be
unreasonably withheld. Assumed Contracts shall include the Cured Leases. The list of Assumed
Contracts shall be incorporated into Schedule 2.1(B) to this Agreement. Notwithstanding anything
herein to the contrary, Assumed Contracts shall not include (a) any Contracts related to Vivitar
Corporation or its subsidiaries and (b) any Contracts with Kolin or its Affiliates including,
without limitation, those Contracts set forth on Schedule 1.1(B).



     “Assumed Liabilities” has the meaning given such term in Section 3.1.



     “Assumed Portion of the Existing Debt Facility” means the $60 million less (i) up to $3.5
million if all or a portion of the Critical Vendor Motion related to DigiMedia is not granted, or
is granted and DigiMedia is not paid prior to the Closing Date and (ii) up to $2.0 million if all
or a portion of the Critical Vendor Motion related to TCV is not granted, or is granted and TCV is
not paid prior to the Closing Date (which $60 million is inclusive of the $18 million to be paid at
Closing and as reduced if the Critical Vendor Motion is not granted or is granted and the Critical
Vendors are not paid prior to Closing as provided herein) in principal amount of the Existing Debt
Facility which shall be assumed by Purchaser at the Closing and modified on the terms agreed to by
the Purchaser and the Lenders immediately thereafter pursuant to the New Term Loan Documents. For
clarification, Purchaser shall not assume any of the Existing Debt Facility in excess of $60
million less (i) up to $3.5 million if all or a portion of the Critical Vendor Motion related to
DigiMedia is not granted, or is granted and DigiMedia is not paid prior to the Closing Date and
(ii) up to $2.0 million if all or a portion of the Critical Vendor Motion related to TCV is not
granted, or is granted and TCV is not paid prior to the Closing Date. Notwithstanding the
foregoing, to the extent the Accounts Receivable Collections exceed the Accounts Receivable
Collections Threshold, the Assumed Portion of the Existing Debt Facility, and correspondingly the
first monthly amortization payment of $7 million pursuant to the New Term Loan Documents, shall
each be reduced by such excess amount.



     “Auction” means the auction to take place pursuant to the Bidding Procedures Order.



     “Auction Date” means the date of the Auction scheduled by the Bankruptcy Court pursuant to the
Bidding Procedures Order.



3









 





     “Avoidance Actions” means any avoidance cause of action Sellers may have against a third party
other than Purchaser arising under chapter 5 of the Bankruptcy Code or applicable state law,
including without limitation, causes of action under sections 550 and 551 of the Bankruptcy Code to
recover any such avoided transfers; provided, however, that Sellers may not bring any Avoidance
Action against any member of the TCV Group or, to the extent of direct contract claims under an
Assumed Contract in question only, against any party who is a counterparty to such Assumed Contract
and/or any party who receives a Cure Amount under such Assumed Contract in accordance herewith.



     “Bankruptcy Case” has the meaning given to such term in the Recitals.



     “Bankruptcy Code” has the meaning given to such term in the Recitals.



     “Bankruptcy Court” has the meaning given to such term in the Recitals.



     “Bid Deadline” means the date set forth in the Bidding Procedures Order by which initial
Qualified Bids must be submitted to the Sellers.



     “Bidding Procedures” has the meaning as more fully described in Section 8.2.



     “Bidding Procedures Order” means an order of the Bankruptcy Court, approving the Bidding
Procedures in form and substance reasonably acceptable to Sellers, Lenders and Purchaser.



     “Break-Up Fee” has the meaning given such term in Section 8.4(a).



     “Business” has the meaning given to such term in the Recitals.



     “Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to be closed in the State of Delaware.



     “Claims” has the meaning set forth in section 101(5) of the Bankruptcy Code.



     “Closing” means the consummation of the sale and purchase of the Purchased Assets and all
other Transactions contemplated in this Agreement.



     “Closing Date” means July 30, 2008 or such other date on or as of which the Closing occurs,
but no later than the applicable date in clause 14.1(a) (or such other date as the Purchaser,
Sellers and Lenders agree to in writing.



     “COBRA” has the meaning given such term in Section 10.2.



     “Competing Transaction” means (i) a transaction (or series of transactions) involving the
direct or indirect sale, transfer or other disposition of the Purchased Assets as a single,
integrated transaction to a purchaser or group of purchasers jointly bidding, other than Purchaser,
(ii) if the conditions precedent in Sections 11.1 and 11.3 are met and the Sellers choose not to
consummate the Transactions, a plan of reorganization (other than a plan of liquidation), or (iii)
a refinancing of all, but not part of, the Existing Debt Facility.



4









 





     “Contract” means any contract, lease or agreement to which any of the Sellers is a party
relating to the Purchased Assets and not relating to Vivitar and its subsidiaries, (i) existing as
of the Effective Date or (ii) which is entered into by any of the Sellers between the date hereof
and the Closing Date, including, but not limited to, agreements, warranties and guaranties relating
to the Purchased Assets, and any amendments, modifications or supplements thereto.



     “Copyrights” means any foreign or United States copyright registrations and applications for
registration thereof, and any nonregistered copyrights.



     “Critical Vendor Motion” has the meaning given such term in Section 7.1.



     “Cure” or “Cure Amounts” means amounts that must be paid and obligations that otherwise must
be satisfied, pursuant to sections 365(f) (and 365(b)(1)(A) and (B)) of the Bankruptcy Code, in
connection with the Assignment of the Assumed Contracts; provided, however, that Purchaser shall be
liable for all Cure or Cure Amounts.



     “Cured Leases” means the leases of non-residential real property that are related to the
Business (and not relating to Vivitar and its subsidiaries) that Purchaser elects to assume as an
Assumed Contract under section 365 of the Bankruptcy Code.



     “Debt Assumption Agreement” has the meaning set forth in Section 11.2(iii).



     “Designated Asset Agreement” means the Designated Asset Agreement in the form attached hereto
as Exhibit B governing a portion of the Designated Assets.



     “Designated Assets” means all of the Sellers’ right, title and interest in and to (a) the
accounts receivable (including interest and penalties thereon) owing to the Sellers as at the
Closing Date from South China House of Technology, Olevia Far East and their respective Affiliates,
including, but not limited to, the accounts receivable included in Schedule 1.1(A), (b) Inventory
existing on the Closing Date held outside the United States and warranties received from suppliers
with respect to such Inventory, (c) all Intellectual Property and goodwill related to the Business,
and (d) all Assumed Contracts related to the Designated Assets which the Lenders consent to have
assigned to the SPV.



     “Deposit” means a deposit of $5 million provided on the Effective Date by Purchaser in an
interest bearing escrow account with Escrow Holder.



     “DigiMedia Investment” has the meaning ascribed to such term in Section 8.4 (c). To the
extent requested by the Sellers, the Purchaser shall provide reasonable documentation for the
amount of the DigiMedia Investment.



     “DIP Facility” means debtor-in-possession financing provided in the Sellers’ Bankruptcy

Case.



     “Disclosure Schedules” means the disclosure schedules delivered by Sellers to Purchaser
concurrently with the execution and delivery of this Agreement.




5












 





     “Earn Out” means any Tax Refunds as determined from time to time other than the Retained
Portion.



     “Earn Out Agreement” means that certain Earn Out Assignment and Procedures Agreement, dated as
of the date hereof, between the Sellers, the Purchaser and the agent for the Lenders a copy of
which is attached hereto as Exhibit H.



     “Earn Out Procedures” means the procedures as set forth in the Earn Out Agreement.



     “Effective Date” has the meaning ascribed to such term in the Preamble.



     “Employee Benefit Plans” means any employee benefit plans, as defined in Section 3(3) of
ERISA, and any “multi-employer plan” as defined in Section 3(37) of ERISA or each deferred
compensation and each bonus or other incentive compensation, stock purchase, stock option and other
equity related compensation plan, program, agreement or arrangement; each medical, surgical,
hospitalization, life insurance and other “welfare” plan, fund or program (within the meaning of
Section 3(1) of ERISA); each profit-sharing, stock bonus or other “pension” plan, fund or program
(within the meaning of Section 3(2) of ERISA); each employment, termination, change in control,
retention or agreement or arrangement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or contributed to, or
required to be contributed to, by the Sellers or an ERISA Affiliate or to which Sellers or an ERISA
Affiliate is party, whether written or oral, for the benefit of any director or employee or former
director or employee of the Sellers or any former subsidiary of the Sellers.



     “Employee Claims” has the meaning given such term in Section 10.1.



     “Employees” means all individuals, as of the date hereof, who are employed by the Sellers.



     “Entitled Real Property” has the meaning ascribed to it in Section 2.1(b)(iii).



     “Equipment” has the meaning ascribed to such term in Section 2.1(b)(iv).



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     “ERISA Affiliate” means any entity that with the Sellers is:




	 	(a)	 	a member of a controlled group of corporations within the meaning of Section
414(b) of the IRC;
	 
	 	(b)	 	a member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the IRC;
	 
	 	(c)	 	a member of an affiliated service group within the meaning of Section 414(m) of
the IRC; or
	 
	 	(d)	 	a member of a group of organizations required to be aggregated under Section
414(o) of the IRC.





6









 





     “Escrow Holder” means U.S. Bank National Association, a national banking association.



     “Excluded Assets” has the meaning given to such term in Section 2.2.



     “Excluded Estate Actions” means all legal claims and/or causes of action of Sellers pursuant
to applicable Law or agreement including, without limitation, claims against insiders and
Third-Parties but excluding Avoidance Actions and claims against members of the TCV Group except
for claims arising under this Agreement.



     “Excluded Contracts” means all Contracts that are not Assumed Contracts.



     “Excluded Liabilities” has the meaning given such term in Section 3.3.



     “Expense Reimbursement” has the meaning given such term in Section 8.4(b).



     “Existing Debt Facility” means that certain Credit and Guaranty Agreement, dated as of October
26, 2007, as amended between the Sellers, the Lenders and the other parties thereto.



     “GAAP” means generally accepted accounting principles in the United States, consistently
applied throughout the specified period.



     “Governmental Authority” means any federal, state, or local court, tribunal, governmental
department, agency, board or commission, regulatory authority, or other governmental body,
subdivision or instrumentality.



     “Guarantor” means Mr. Jung-Jyh Wu a/k/a Mr. John Wu.



     “Hired Employees” has the meaning given such term in Section 10.2(a).



     “Improvements” has the meaning given such term in Section 2.1.



     “Initial Overbid Amount” has the meaning set forth in the Bidding Procedures Order.



     “Incremental Bid Amount” has the meaning set forth in the Bidding Procedures Order.



     “Intellectual Property” means all intellectual property rights owned by or licensed to Sellers
(excluding those rights relating exclusively to Vivitar and its subsidiaries), whether foreign or
domestic, and arising under any law, including without limitation, intellectual property arising
from or in respect of the following:




	 	(i)	 	all patents and applications therefor, including continuations, divisionals,
continuations-in-part, or reissues of patent applications and patents issuing thereon;
	 
	 	(ii)	 	all trademarks, service marks, trade names, service names, brand names, all
trade dress rights, logos, Internet domain names (“Domain Names”) and corporate names
and general intangibles of a like nature, together with the goodwill




7









 






	 	 	 	associated with any of the foregoing, and all applications, registrations and
renewals thereof;
	 
	 	(iii)	 	copyrights and registrations and applications therefor and works of
authorship, and mask work rights;
	 
	 	(iv)	 	trade secrets;
	 
	 	(v)	 	all software;
	 
	 	(vi)	 	technical, scientific and other know-how, trade secrets, confidential or
proprietary information; and
	 
	 	(vii)	 	all claims, causes of action and rights to sue for past, present and future
infringement of the foregoing.





     “Interest” means an “interest in property” as such phrase is used in section 363(f) of the
Bankruptcy Code.



     “IP License Agreement” means the IP License Agreement between Olevia LLC and the SPV in the
form of Exhibit I hereto.



     “Inventory” has the meaning given such term in Section 2.1(b)(vi).



     “IRC” means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury
regulations promulgated and the rulings issued thereunder.



     “Law” means any federal, state, commonwealth, local or foreign law, statute, code, ordinance,
rule or regulation or common law requirement.



     “Lease” means all unexpired leases or other agreements, including all amendments, extensions,
renewals, and guarantees with respect thereto, pursuant to which any of Sellers hold or use any
non-residential real property.



     “Leased Real Property” has the meaning ascribed to it in Section 2.1(b)(i).



     “Legal Proceeding” means any judicial, administrative or arbitral actions, suits, proceedings
(public or private) or claims or any proceedings by or before a Governmental Authority or
arbitration panel.



     “Legal Requirements” means any and all judicial decisions, orders, injunctions, judgments,
decrees and writs, and any and all laws, statutes, rules, regulations, permits, certificates or
ordinances of any governmental or municipal authority that are applicable to the Purchased Assets.



     “Lenders” means the lenders under the Existing Debt Facility.



8









 





     “License” means any approvals, authorizations, consents, licenses, permits or certificates of
a Governmental Authority.



     “Liability” means any debt, liability or obligation (whether direct or indirect, known or
unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to
become due), and including all costs and expenses relating thereto.



     “Lien” means, with respect to any of the Purchased Assets, regardless of whether created or
incurred pre- or post- Petition Date, any lien, pledge, charge, option, right of first refusal,
license to a third party, lease to a third party, security agreement, security interest,
encumbrance or other adverse claim, restriction, interest or limitation of any kind in respect of
any of the Purchased Assets or irregularities in title thereto. For the purposes of this
Agreement, without limiting the definition of the term “Lien,” Lien shall also have the meaning set
forth in section 101(37) of the Bankruptcy Code and Sellers will be deemed to own subject to a Lien
any asset which Sellers have acquired or held subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention agreement relating to such
asset.



     “Marked Agreement” has the meaning given to such term in the definition of “Qualified Bid.”



     “Material Adverse Effect” has the meaning given such term in Section 11.1(a).



     “New Term Loan Documents” means that certain Credit and Guaranty Agreement dated as of the
Closing Date among Purchaser, Olevia LLC, the Guarantor, the lenders party thereto, Silver Point
Finance, LLC, as administrative and collateral agent, and any other parties thereto and the
documents and instruments related thereto, in each case as amended or modified from time to time.



     “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
award of a Governmental Authority or arbitration panel.



     “Ordinary Course of Business” means, except as otherwise specifically ordered by the
Bankruptcy Court, the ordinary course of business consistent with past prudent custom and practices
of the Sellers with respect to the ownership, operation or maintenance of the Purchased Assets and
the Business.



     “Patents” means all (a) patents and patent applications, and (b) business methods, inventions,
and discoveries that may be patentable.



     “Permits” mean any approvals, authorizations, consents, licenses, permits or certificates of a
Governmental Authority.



     “Person” means any individual, corporation, limited liability company, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated organization, Governmental
Authority or other entity.



     “Petition” means the voluntary petition of each of the Sellers under chapter 11 of the
Bankruptcy Code to be filed in the Bankruptcy Court.



9









 





     “Petition Date” means the date on which Sellers file their Petitions.



     “Purchaser” has the meaning given such term in the Preamble.



     “Purchased Assets” has the meaning given such term in Section 2.1.



     “Purchase Price” has the meaning given such term in Section 4.1.



     “Qualified Bid” means a “Qualified Bid” as defined in the Bidding Procedures Order.



     “Qualified Bidder” means a “Qualified Bidder” as defined in the Bidding Procedures Order. The
Purchaser shall be deemed a Qualified Bidder.



     “Retained Portion” means the excess, if any, of (a) 31% of the excess (if any) of the
aggregate amount of Tax Refunds in respect of the taxable year ended June 30, 2007 (determined by
also reducing such Tax Refunds by any costs and expenses, including reasonable attorneys’ fees,
incurred by Lenders in connection with such refunds under the Earn Out Procedures) over $10
million; provided, that in no event shall the Retained Portion exceed $3.1 million in total; over
(b) the amount, if any, by which the Accounts Receivable Collections are less than the Accounts
Receivable Collections Threshold.



     “Sale Hearing” means the hearing held before the Bankruptcy Court at which the sale of the
Purchased Assets is approved by entry of the Sale Order.



     “Sale Motion” means the motion to be filed by the Sellers with the Bankruptcy Court, in form
and substance reasonably acceptable to the Lenders, Sellers and Purchaser, seeking an order from
the Bankruptcy Court authorizing, among other things, (a) the sale of the Purchased Assets free and
clear of all Liens, Claims, and Interests as provided in the Sale Order, subject to higher and/or
better offers; and (b) the Sellers to consummate the Transactions.



     “Sale Order” means an order issued by the Bankruptcy Court authorizing the sale, transfer,
assignment, conveyance and delivery of the Purchased Assets to Purchaser (or in the case of the
Designated Assets, to the SPV), in form and substance reasonably acceptable to the Sellers, Lenders
and Purchaser, and containing, among other things, a “good faith purchaser” finding under Section
363(m) of the Bankruptcy Code.



     “Sellers” has the meaning given such term in the Preamble.



     “Sellers Benefit Plans” has the meaning given such term in Section 2.2(f).



     “Sellers Controlled Group” has the meaning given such term in Section 2.2(f).



     “Shared Services Agreement” means that certain Shared Services Agreement to be entered into on
the Closing Date by Vivitar Corporation and its subsidiaries and Purchaser in form and substance
reasonably acceptable to Purchaser, Sellers and Lenders.



     “Software” means any computer software programs, including any computer software programs that
incorporate and run Seller’s pricing models, formulas and algorithms, source code,



10









 







object code, data, databases, compilations and documentation, including user manuals and
training materials.



     “SPV” means the special purpose vehicle or vehicles formed by the Lenders to hold the
Designated Assets as of the Closing Date.



     “Tax” or “Taxes” means all taxes, assessments, charges, duties, fees, levies or other
governmental charges including, without limitation, all federal, state, local, foreign and other
net or gross income, gross receipts, alternative or add-on minimum tax, franchise, profits, capital
gains, capital, transfer, sales, use, ad valorem, occupation, premium, property, excise, severance,
environmental (including taxes under IRC §59A) or windfall profits tax, stamp, license, payroll,
employment, withholding and other taxes, assessments, charges, customs, duties, fees, levies or
other governmental assessments or charges of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest, whether disputed or not.



     “Tax Refunds” means all federal, state and local Tax refunds received after June 30, 2008 with
respect to the Sellers’ taxable years ended on or before June 30, 2008 (net of any costs and
expenses, including reasonable attorneys’ fees, incurred in connection with such refunds by
Sellers).



     “Tax Return” means any return, report, claim for refund, information return, or statement,
including in each case any amendments, schedules or attachments thereto, filed or required to be
filed with any U.S. federal, state, local or non-U.S. governmental entity or other authority in
connection with the determination, assessment or collection of any Tax or the administration of any
Laws regulating, or administrative requirements relating to, any Tax.



     “TCV Group” means, collectively, the Purchaser and those parties listed on Schedule 1.1(C).



     “Third Party” means any Person other than Sellers or Purchaser.



     “Trademarks” means any foreign or U.S. trademarks, service marks, trade dress, trade names,
brand names, designs and logos, corporate names, product or service identifiers, and general
intangibles of like nature whether registered or unregistered, together with all of the goodwill
relating thereto and all registrations and applications for registration thereof.



     “Trade Secrets” means any confidential information, trade secrets, research records,
processes, procedures, manufacturing formulas, technical know-how, technology, blueprints, designs,
plans, models and methodologies (whether patentable and whether reduced to practice), invention
disclosures and improvements thereto.



     “Transactions” has the meaning given to such term in the Recitals.



     “Treasury Regulations” means any final, proposed or temporary regulations promulgated under
the IRC.



11









 





     “Vivitar Assets” means (i) the shares of capital stock of Vivitar Corporation and its
subsidiaries and all of such entities’ assets and operations and (ii) all amounts owed by Vivitar
and its subsidiaries to the Sellers.



     1.2 Use Of Singular Or Plural



     As used in this Agreement, the singular shall include the plural and the masculine gender
shall include the feminine and neuter and vice versa, as the context requires.



     1.3 Reference To Agreement



     Words such as “herein,” “hereinafter,” “hereof,” “hereto” and “hereunder,” when used with
reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise
requires.



     1.4 Recitals, Schedules and Exhibits



     The Recitals, Disclosure Schedules and Exhibits annexed hereto, and the capitalized terms
defined therein, are hereby incorporated by reference into the body of this Agreement as if the
same were fully set forth herein.



     1.5 Including



     The term “including” shall be construed to mean “including without limitation.”



ARTICLE II




PURCHASE AND SALE OF ASSETS




     2.1 Agreement to Purchase and Sell




     (a) At the Closing, and upon the terms and conditions herein set forth, Sellers shall
sell, transfer, convey and deliver to Purchaser (and/or one or more wholly-owned
subsidiaries of Purchaser designated by Purchaser at or before the Closing; and in the case
of the Designated Assets, to the SPV), and Purchaser (and/or or one or more wholly-owned
subsidiaries of Purchaser designated by Purchaser at or before the Closing; and in the case
of the Designated Assets, the SPV) shall purchase, acquire and/or accept from Sellers, all
right, title and interest of Sellers in, to and under the Purchased Assets, free and clear
of all Liens, Claims, and Interests to the fullest extent permitted by sections 363 and 365
of the Bankruptcy Code.




     (b) For all purposes of and under this Agreement, the term “Purchased Assets” shall
mean all of Sellers’ rights, title and interest in and to the assets related to the Business
listed below to the extent transferable, but shall exclude the Excluded Assets:




     (i) the Cured Leases as set forth on Schedule 2.1(B) including rights
to related security deposits and prepaid deposits (the real property leased
by Seller pursuant to the Leases, the “Leased Real Property”);



12









 






     (ii) certain foreign investments specifically identified on Schedule
2.1(A), which shall be incorporated herein by ten (10) days after the
Petition Date;




     (iii) easements, rights of way, real property licenses, and other real
property entitlements related to the Cured Leases (the “Entitled Real
Property” and, together with the Leased Real Property, the “Assigned Real
Property”);




     (iv) to the extent assignable and transferable to Purchaser, all of (A)
the buildings, improvements and fixtures now or hereafter located on the
Assigned Real Property, subject to limitations set forth in the Leases
(collectively, the “Improvements”); (B) owned equipment, security devices,
furniture, fixtures, tools, tooling (excluding, for the avoidance of doubt,
any tooling deposits) and other tangible personal property used in
connection with the Business including, without limitation, all machinery
and equipment located at the Assigned Real Property, but excluding any of
the foregoing items under capitalized leases and similar instruments not
constituting Assumed Contracts (collectively, the “Equipment”); (C)
warranties and licenses received from manufacturers of the Equipment,
Improvements or any component thereof; and (D) all letters of credit related
to customer purchase orders for the Business where any Seller is the
applicant or the beneficiary.




     (v) the Assumed Contracts other than those that are Designated Assets;




     (vi) (A) the inventory owned by Seller on the Closing Date, including,
but not limited to inventory located in outside warehouses and consignment
inventory located at customer or at supplier sites, but excluding inventory
held outside the United States which shall be part of the Designated Assets
(“Inventory”), (B) the warranties received from suppliers with respect to
such Inventory, (C) the vendor and customer codes to the extent transferable
or assignable, and (D) work in process;




     (vii) Claims and causes of action, if any, against the TCV Group other
than claims and causes of action arising under this Agreement;




     (viii) to the extent assignable and transferable to Purchaser, the
Permits;




     (ix) all accounts and notes receivable (the “Accounts Receivable”)
other than those Accounts Receivable that are part of the Designated Assets;




     (x) all prepaid expenses of the Sellers related to the Business other
than tooling deposits;



13









 






     (xi) all intangible personal property of the Sellers including all
rights, privileges, claims, causes of action, and options relating or
pertaining to the Purchased Assets other than Avoidance Actions and Excluded
Estate Actions;




     (xii) all customer lists;




     (xiii) to the extent assignable and transferable to Purchaser, all
computer hardware and software (including, without limitation, process
control software) owned by Sellers or licensed to Sellers pursuant to an
Assumed Contract but excluding any Intellectual Property which would
otherwise fall within this clause which shall be a Designated Asset;




     (xiv) all books, files, documents and records owned by or in the
control of Sellers (in whatever format they exist, whether in hard copy or
electronic format), including, without limitation, all computer data bases,
records and information, test results, product specifications, plans, data,
studies, drawings, diagrams, engineering data, safety and environmental
reports and documents, maintenance schedules and operating and production
records, inventory records, business plans, and marketing materials
(collectively the “Records and Reports”) that are related to the Purchased
Assets;




     (xv) all communication equipment owned, leased or licensed by Sellers
used in the operation of the Purchased Assets;




     (xvi) all Tax Refunds;




     (xvi) all prepaid deposits relating to the Purchased Assets other than
those constituting Excluded Assets;




     (xvii) all insurance policies described in Schedule 2.1(C) and all
proceeds of such insurance policies related to events after the Closing
Date;




     (xviii) to the extent assignable and transferable to the Purchaser, all
other assets used in the operation of the Business in the Ordinary Course of
Business; and




     (xx) the Designated Assets.



     2.2 Excluded Assets



     Notwithstanding anything to the contrary in this Agreement, nothing herein shall be deemed to
sell, transfer, assign or convey, the Excluded Assets (including, without limitation, the Excluded
Estate Actions or the Avoidance Actions) to Purchaser or the SPV, and Sellers shall retain all
right, title and interest to, in and under, and all obligations with respect to the Excluded



14









 







Assets. For all purposes of and under this Agreement the term “Excluded Assets” includes, but
is not limited to, the following:




     (a) any asset of Sellers that otherwise would constitute a Purchased Asset but for the
fact that they are conveyed, leased or otherwise disposed of, in the Ordinary Course of
Business, consistent with the terms of this Agreement, during the time from the date hereof
until the Closing;




     (b) all of the assets set forth on Schedule 2.2 hereto;




     (c) all Avoidance Actions and any rights, defenses, cross claims or counterclaims with
respect to any Avoidance Actions;




     (d) the Excluded Estate Actions and any rights, defenses, cross claims or counterclaims
with respect to any Excluded Estate Actions;




     (e) all Excluded Contracts;




     (f) all Employee Benefit Plans currently or previously sponsored or maintained by
Sellers or any of Sellers’ ERISA Affiliates (collectively, the “Sellers Controlled Group”)
or their respective predecessors or with respect to which the Sellers Controlled Group or
their respective predecessors has made or is required to make payments, transfers or
contributions in respect of any present or former employees, directors, officers,
shareholders, consultants or independent contractors of Sellers or any of the Sellers’ ERISA
Affiliates or their respective predecessors (collectively, the “Sellers Benefit Plans”), and
all insurance policies, fiduciary liability policies, benefit administration contracts,
actuarial contracts, trusts, escrows, surety bonds, letters of credit and other contracts
primarily relating to any Sellers Benefit Plan;




     (g) all cash, cash equivalents and short-term investments other than Tax Refunds;




     (h) all personnel records of Sellers’ Employees who are not Hired Employees;




     (i) the shares of capital stock of Sellers and Vivitar Corporation, Vivitar’s
Subsidiaries and Sellers’ Subsidiaries and any and all Vivitar Assets;




     (j) any amounts payable by any Affiliate of the Sellers to the Sellers or any other
receivable payable to the Sellers by any Affiliate thereof;




     (k) all security and utility deposits, credits, allowances, rebates and set-offs for
(i) utility deposits paid after commencement of the Bankruptcy Cases and (ii) such items
relating to Leases which are not Cured Leases or Contracts which are not Assumed Contracts;




     (l) tooling deposits;



15









 






     (m) all other assets not used in the operation of the Business in the Ordinary Course
of Business except to the extent they are specifically included in the Purchaed Assets; and




     (n) all insurance policies of Sellers not listed on Schedule 2.1(C).



ARTICLE III




ASSUMED AND EXCLUDED LIABILITIES




     3.1 Assumption of Liabilities



     Upon the terms and subject to the conditions of this Agreement, Purchaser agrees, effective at
the time of Closing, that the Purchaser shall assume, pay, perform and/or discharge only the
following liabilities of the Sellers arising in connection with the operation of the Business
except for the Excluded Liabilities (the “Assumed Liabilities”) and no other liabilities of Sellers
whatsoever:




     (a) the Assumed Portion of the Existing Debt Facility, to the extent provided in the
Debt Assumption Agreement;




     (b) all liabilities and obligations relating to any Assumed Contracts;




     (c) all Cure Amounts;




     (d) all liabilities and obligations relating to the Purchased Assets from and after the
Closing Date; and




     (e) any liabilities incurred in the Ordinary Course of Business that are identified in
writing by the Purchaser and notified to Sellers three (3) Business Days prior to Closing as
liabilities that the Purchaser wishes to assume in the ordinary course.



     3.2 Assignment of Contracts and Rights



     Subject to the approval of the Bankruptcy Court and pursuant to the Sale Order or other
Assignment Order, the Assumed Contracts, will be assumed by Sellers and assigned to Purchaser on
the Closing Date pursuant to section 365(f) of the Bankruptcy Code.



     3.3 Excluded Liabilities



     Except for the Assumed Liabilities, the Purchaser shall not assume by virtue of this
Agreement, the Transactions, or otherwise, and shall have no liability whatsoever for, any debts,
Liabilities or obligations of the Sellers of any kind, character or description whatsoever
regardless of whether any such debt, Liability or obligation is disclosed in this Agreement or the
Disclosure Schedules, including without limitation, any obligations under the Existing Debt
Facility that are not part of the Assumed Portion of the Existing Debt Facility and any obligation
under the DIP Facility (collectively, the “Excluded Liabilities”).




16












 





ARTICLE IV




CONSIDERATION AND DEPOSIT




     4.1 Purchase Price



     The purchase price (the “Purchase Price”) to be paid by Purchaser for the Purchased Assets
shall be the assumption of the Assumed Liabilities by Purchaser and the Earn Out. The Purchase
Price shall be paid at Closing through the assumption of the Assumed Liabilities by Purchaser. No
cash shall be paid to Sellers at Closing; provided, that Purchaser shall be responsible for payment
of any Cure Amounts.



     4.2 Deposit



     On the Effective Date, the Purchaser shall make the Deposit. In the event (a) the Closing
occurs hereunder and the Purchaser complies with clause 11.2(b), (b) the conditions set forth in
Section 11.1 have not been satisfied or waived by the applicable date in clause 14.1(a), or (c) the
Sellers are pursuing a Competing Transaction, then on the earlier of the consummation of such
Competing Transaction or the applicable date in clause 14.1(a), the Deposit and all interest
thereon will be returned and released to or as directed by the Purchaser and Sellers shall execute
any documentation required by the Escrow Holder to release to Purchaser or its designee. In any
other event, the Deposit and all interest thereon shall be retained by the Sellers and paid to or
as directed by the Lenders and the Purchaser shall execute any documentation required by the Escrow
Holder to release the Deposit.



     4.3 Sale “As Is Where Is”



     Notwithstanding anything to the contrary contained herein, Purchaser acknowledges and agrees
that: (a) the Purchased Assets are conveyed “AS IS,” “WHERE IS” and “WITH ALL FAULTS” and that all
warranties, including warranties of merchantability, usage or suitability or fitness for a
particular purpose are disclaimed, except as specifically provided herein; and (b) only to the
extent that the Sale Order or other order of the Bankruptcy Court covers and provides protection to
Purchaser on or regarding any or all of the matters covered by Sellers’ representations,
warranties, covenants and agreements set forth in this Agreement: (i) Sellers shall have no
liability or responsibility for such representations, warranties, covenants and agreements, (ii)
they shall not be conditions to the Purchaser’s obligation to close under Article XI hereof, and
(iii) they shall not be the basis for Purchaser’s termination of this Agreement or its obligation
hereunder under Article XIV hereof, in each case to the extent that the Sale Order or other order
of the Bankruptcy Court is in full force and effect at Closing and not subject to any stay.



17









 





ARTICLE V




REPRESENTATIONS, WARRANTIES, COVENANTS,

AND AGREEMENTS OF SELLERS




     To induce Purchaser to enter into this Agreement and to consummate the sale and purchase of
the Purchased Assets in accordance with this Agreement, Sellers represent and warrant the following
to Purchaser subject to the Disclosure Schedules, as of the date hereof and as of the Closing Date:



     5.1 Organization



     Sellers are duly organized, validly existing and in good standing under the laws of the State
of Delaware. Sellers are not “foreign persons” as defined in Section 1445 of the IRC and the
regulations promulgated thereunder. Subject to the limitations imposed on Sellers under the
Bankruptcy Code, Sellers have the requisite corporate power and authority to own, lease and operate
their properties and to carry on their business as now conducted.



     Subject to entry of the Sale Order and authorization as required by the Bankruptcy Court:




     (a) Sellers have the requisite power and authority and all requirements for corporate
action on the part of the Sellers have been complied with for Sellers to execute and deliver
this Agreement and each other agreement, document or instrument contemplated hereby or
thereby to which they are a party and to perform their respective obligations hereunder and
thereunder; and




     (b) this Agreement and each other agreement, document or instrument contemplated hereby
or thereby to which Sellers are a party has been duly and validly executed and delivered by
Sellers and (assuming the due authorization, execution and delivery by the other parties
hereto) this Agreement and each other agreement, document or instrument contemplated hereby
or thereby to which it is a party constitutes a legal, valid and binding obligation of
Sellers enforceable against Sellers in accordance with its respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement thereof or relating to creditors’
rights generally and subject to the availability of equitable remedies and the effect of
general principles of equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in
equity).



     5.2 Conflicts; Consents of Third Parties




     (a) The execution and delivery by Sellers of this Agreement and each other agreement,
document or instrument contemplated hereby or thereby to which it is a party, the
consummation of the Transactions contemplated hereby and thereby, or compliance by Sellers
with any of the provisions hereof do not conflict with, or result in any violation of or
default (except for defaults of the type referred to in section 365(b)(2) of the



18









 







Bankruptcy Code), with or without notice or lapse of time, or both, under, or give rise
to a right of termination or cancellation under any provision of:




     (i) Any certificate of incorporation and by-laws or comparable organizational
documents of Sellers;




     (ii) subject to entry of the Sale Order, any Assumed Contract, Lease or Permit
to which Sellers are a party or by which Purchased Assets of Sellers are bound; or




     (iii) subject to entry of the Sale Order, any Order of any Governmental Body
applicable to Sellers or the Purchased Assets of Sellers as of the date hereof.




     (b) If the Sale Order is entered, no consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to, any Person or
Governmental Authority is required on the part of Sellers in connection with the execution
and delivery of this Agreement or any other agreement, document or instrument contemplated
hereby or thereby to which it is a party, the compliance by Sellers with any of the
provisions hereof or thereof, the consummation of the transactions contemplated hereby or
thereby, the assignment or conveyance of the Purchased Assets, or the taking by Sellers of
any other action contemplated hereby or thereby.



     5.3 Title to Purchased Assets



     Sellers either own or have the right to transfer the Purchased Assets, and, subject to the
entry of the Sale Order, Purchaser will be vested with good title to such Purchased Assets, free
and clear of all Liens, Claims, and Interests, other than Liens for Taxes for the current tax year
which are not yet due and payable, which shall be prorated. For clarification, notwithstanding
anything to the contrary in this Section 5.3, all Taxes discussed in Section 13.4 shall be paid as
provided in Section 13.4.



     5.4 Brokers



     To the Sellers’ knowledge, Sellers have no obligation to pay any fees, commissions or other
similar compensation to any broker, finder, investment banker, financial advisor or other similar
Person in connection with this Agreement, the Transactions, or the sale of the Purchased Assets.
Sellers acknowledge that Thomas Lloyd has made a claim for a fee purportedly related to this
Transaction but the Sellers do not believe that such claim is valid. Sellers shall be responsible
for all such fees, commissions or other similar compensation, if any, that have become due and
payable, and Purchaser shall have no liability or responsibility therefor. In the event that any
person, including Thomas Lloyd, makes a claim in this regard, Sellers shall (i) respond to and
defend against such claim, and (ii) notify Purchaser of such claim and if such claim is in writing,
provide a copy of such claim to Purchaser.



19









 





     5.5 Board Approval and Recommendation



     The Board of Directors of each of the Sellers has determined that, based upon its
consideration of the available alternatives, and subject to the approval of the Bankruptcy Court
and the provisions in this Agreement regarding the solicitation of Competing Transactions, a sale
of the Purchased Assets and the assumption and assignment of the Assumed Contracts pursuant to this
Agreement and under sections 105, 363, and 365 of the Bankruptcy Code is in the best interests of
Sellers.



     5.6 [Intentionally Omitted]



     5.7 Intellectual Property



          (a) To the knowledge of Sellers, Schedule 5.7 sets forth, for all material Intellectual
Property owned by Sellers, a complete and accurate list of all U.S. and foreign: (i) registered
Trademarks and material unregistered Trademarks; (ii) registered Copyrights, (iii) Patents and
applications or registrations for Patents; and (iv) Domain Names.




          (b) To the knowledge of Sellers, Schedule 5.7 lists all material contracts for Software that
is licensed, leased or otherwise used by Sellers (other than off-the-shelf Software), and all
Software that is owned by Sellers other than off the shelf Software (“Proprietary
Software”), and identifies which software is owned, licensed, leased, or otherwise used, as the
case may be.




          (c) To the knowledge of Sellers, Schedule 5.7 sets forth a complete and accurate list of all
material agreements (whether verbal or written) granting or obtaining any right to use or practice
any rights under any Intellectual Property, to which any Seller is a party or otherwise bound, as
licensee or licensor thereunder, including license agreements, settlement agreements and covenants
not to sue (collectively, the “License Agreements”); provided, that on the Effective Date,
Schedule 5.7 will not include a complete list of all distribution, marketing and other agreements
under which the Sellers may have provided someone a right to use their name or other Intellectual
Property but such Schedule shall be updated within ten (10) days of the Effective Date to list such
additional agreements.




          (d) Sellers take reasonable measures to protect the confidentiality of material Trade Secrets.




     5.8 Litigation



     To the knowledge of Sellers, except as set forth on Schedule 5.8, Sellers are not subject to
any outstanding Order and are not parties to any Action except which would not have, either
individually or in the aggregate, a Material Adverse Effect on the Purchased Assets (as defined in
Section 11.1(a)).



     5.9 Employees and Employee Benefit Plans



20









 





          (a) To the knowledge of Sellers, Schedule 5.9(a) sets forth a complete and correct list of all
employees of Sellers. Sellers are not party to any collective bargaining agreement, and none of
their employees are subject to any collective bargaining agreement.




          (b) To the knowledge of Sellers, Schedule 5.9(b) sets forth a complete and correct list of all
Sellers Benefit Plans. To the knowledge of Sellers, no Sellers Benefit Plan (i) is subject to the
minimum funding standards of Section 412 of the IRC or Title IV of ERISA, (ii) is a “multiemployer
plan” as defined in Section 3(37) of ERISA or (iii) provides health or life insurance benefits
beyond termination of service or retirement except for continuation coverage required under COBRA.
To the knowledge of Sellers, neither Sellers nor any member of Sellers Controlled Group sponsors or
contributes to any other Employee Benefit Plans for the benefit of their employees or the employees
of any other Persons other than the Sellers Benefits Plans required to be listed on Schedule
5.9(b).




     5.10 Contracts



     To the knowledge of Sellers, Schedule 5.10 contains a correct and complete list of all
Contracts material to the Purchased Assets and the Business.



ARTICLE VI




REPRESENTATIONS AND WARRANTIES OF PURCHASER AND GUARANTOR




     Purchaser and the Guarantor hereby represent and warrant, jointly and severally, to Sellers
that:



     6.1 Organization and Good Standing



     The Purchaser is an entity duly organized, validly existing and in good standing under the
laws of California and has the requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now conducted.



     6.2 Authorization of Agreement



     Each of Purchaser and the Guarantor has the requisite power and authority to execute and
deliver this Agreement and each other agreement, document or instrument contemplated hereby or
thereby to which it is a party and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite corporate action on the
part of Purchaser and Guarantor. This Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which Purchaser and/or Guarantor is a party has been duly and
validly executed and delivered by Purchaser or Guarantor and (assuming the due authorization,
execution and delivery by the other parties hereto) this Agreement and each other agreement,
document or instrument contemplated hereby or thereby to which Purchaser or



21









 







Guarantor is a party constitutes a legal, valid and binding obligation of Purchaser or
Guarantor enforceable against it in accordance with its respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement thereof or relating to creditors’ rights generally and
subject to the availability of equitable remedies and the effect of general principles of equity.



     6.3 Conflicts; Consents of Third Parties



     The execution and delivery by Purchaser and Guarantor of this Agreement and each other
agreement, document or instrument contemplated hereby or thereby to which Purchaser or Guarantor is
a party, the consummation of the transactions contemplated hereby and thereby, or compliance by
Purchaser or Guarantor with any of the provisions hereof or thereof do not conflict with, or result
in any violation of or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination or cancellation under any provision of (i) in the case of the
Purchaser, its certificate of formation or operating agreement; (ii) any Contract, Lease or Permit
to which Purchaser or Guarantor is a party or by which any of its properties or assets are bound;
(iii) any Order of any Governmental Body applicable to Purchaser or Guarantor or any of their
respective properties or assets as of the date hereof; or (iv) any applicable Law.



     6.4 Brokers



     To the Purchaser’s knowledge, none of Purchaser or Guarantor has any obligation to pay any
fees, commissions or other similar compensation to any broker, finder, investment banker, financial
advisor or other similar Person in connection with this Agreement, the Transactions or the sale of
the Purchased Assets. Purchaser shall be responsible for all such fees, commissions or similar
compensation, if any, that become due and payable, and Sellers shall have no liability or
responsibility therefor. In the event that any person makes a claim in this regard, Purchaser
shall (i) respond to and defend against, such claim, and (ii) notify Sellers of such claim and if
such claim is in writing, provide a copy of such claim to Sellers.



     6.5 DigiMedia Investment



     Purchaser, Guarantor or their respective Affiliates have collectively made the Digimedia
Investment in the amount set forth on Schedule 8.4 and own and control 51% of DigiMedia.



     6.6 Defaults



     Neither the execution of this Agreement nor the consummation by Purchaser or the Guarantor of
the Transactions contemplated hereby will conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default, or result in a termination of any material
agreement or instrument to which Purchaser or any Guarantor is a party; or will violate any
applicable Law that is likely to adversely affect in any manner the performance by Purchaser or any
Guarantor of this Agreement.



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     6.7 Litigation



     There is no action, suit, proceeding or claim which is pending or, to Purchaser’s or any
Guarantor’s knowledge, threatened in any court or by or before any federal, state, county or
municipal department, commission, board, bureau or agency or other governmental instrumentality
which would affect Purchaser’s or such Guarantor’s ability to perform its obligations under this
Agreement.



ARTICLE VII




OPERATIONS PENDING CLOSING




     7.1 Operation of Business



     Subject to changes resulting from the filing of the Bankruptcy Case, the requirements of the
Bankruptcy Code and any Order of the Bankruptcy Court, including any Orders authorizing the DIP
Facility (and the terms of the DIP Facility), an operating budget and/or the Sellers’ use of cash
collateral, Sellers shall manage, operate, repair and maintain the Purchased Assets in the Ordinary
Course of Business, shall keep the Purchased Assets in their present states of repair, subject to
normal wear and tear, shall maintain insurance on the Purchased Assets and shall collect their
Accounts Receivable in a manner that will maximize value to the estates but which is consistent
with past practices of the Sellers. Without limiting the generality of the foregoing sentence,
Sellers shall also (i) seek approval of the Bankruptcy Court as a first-day motion to pay (and
shall pay upon receiving Bankruptcy Court approval) the pre-petition amounts owed to DigiMedia up
to $3.5 million and TCV up to $2.0 million (the “Critical Vendor Motion”), (ii) use all reasonable
efforts to obtain approval of the Critical Vendor Motion at the first-day hearing or as soon
thereafter as practicable, (iii) if the Critical Vendor Motion is granted, promptly make the
payments authorized and directed thereunder subject to the above limits, and (iv) pay all
post-petition license, royalty, registration and other fees and costs required to be paid under all
licenses of Intellectual Property to which any Seller is a party except for Cure Amounts as and
when payable under the terms thereunder; provided that with respect to licenses of Intellectual
Property, Sellers shall not be required to pay any pre-petition amounts.



     7.2 Retention of Interim CEO



     Except as may otherwise be ordered by the Bankruptcy Court, Sellers shall continue to retain
Greg Rayburn of FTI Consulting, Inc. or, in the event Mr. Rayburn is unable to serve in such
capacity, such other person as is acceptable to the Purchaser and Lenders, acting reasonably, as
the Sellers’ Interim Chief Executive Officer.



     7.3 Material Operational Decisions; Cooperation



     Sellers shall consult with Purchaser on any material operational decisions prior to the
Closing Date. The Sellers will cooperate with the Purchaser prior to Closing to provide them
access to information, documents and files within the knowledge and possession of Sellers and FTI
Consulting (including, without limitation, information and documents relating to Sellers’



23









 







current and former employees) and assist in development of post-sale plans for the Business
subject to reasonable limitations established by the Sellers’ Interim CEO.



     7.4 No New Contracts



     Except in connection with the Existing Debt Facility and the DIP Facility or otherwise in the
Ordinary Course of Business, Sellers shall not modify, extend, renew or cancel in writing (except
as a result of a default by the other party thereunder) any Assumed Contracts relative to the
Purchased Assets or enter into any new contract or agreement related to the Purchased Assets
without Purchaser’s prior written consent (which consent shall not be unreasonably withheld,
conditioned or delayed).



ARTICLE VIII




BANKRUPTCY COURT MATTERS




     8.1 Competing Transaction



     This Agreement is subject to approval by the Bankruptcy Court and the consideration by Sellers
and the Bankruptcy Court of higher or better Competing Transactions. Nothing contained herein
shall be construed to prohibit Sellers and their representatives from soliciting, considering,
negotiating, agreeing to, or otherwise taking action in furtherance of, any Competing Transaction
once the Petitions have been filed.



     8.2 Bidding Procedures Order




     (a) Sellers agree promptly following, but no later than three (3) days after, the
execution of this Agreement, to:




     (i) file the Bankruptcy Case; and




     (ii) file the Sale Motion requesting a hearing date to approve the Bidding
Procedures Order and for a hearing date to approve the Sale Order.




     (b) The Bidding Procedures Order shall, among other things,




     (i) approve the Break-Up Fee and Expense Reimbursement, and provide that the
Purchaser’s claim to the Expense Reimbursement shall be entitled to superpriority
administrative claim treatment in the Bankruptcy Case, senior to all other
superpriority claims and that the Break-Up Fee and Expense Reimbursement must be
paid to Purchaser in full upon consummation of a Competing Transaction;




     (ii) authorize the Purchaser to include the Break-Up Fee and Expense
Reimbursement in any bid made by it at any Auction;




     (iii) establish the Bid Deadline as defined herein;



24









 






     (iv) establish an Auction Date; and




     (v) establish a date for the Sale Hearing.




     (c) The Bidding Procedures Order shall also establish the procedures for the
solicitation of higher and/or better offers from Qualified Bidders for the Purchased Assets
as a single integrated transaction.




     (d) Sellers hereby agree not to change or modify any of the dates or procedures set
forth in the Bidding Procedures Order, including without limitation (i) the dates of the Bid
Deadline, Auction and Sale Hearing, (ii) the procedures for determining any Qualified Bid
and Qualified Bidders, or (iii) the Initial Overbid Amount and the Incremental Bid Amount,
without the prior written consent of Purchaser and the Lenders, except as otherwise ordered
by the Bankruptcy Court.




     (e) Sellers agree, and shall represent to the Bankruptcy Court, that Sellers actively
solicited this “stalking horse” bid from the Purchaser.



     8.3 Submission to Bankruptcy Court



     Within one (1) day following the Petition Date, Sellers shall file with the Bankruptcy Court
this Agreement and such notices as may be appropriate in connection therewith. Purchaser shall
cooperate with Sellers in obtaining Bankruptcy Court approval of the Bidding Procedures Order and
the Sale Order.



     8.4 Break-Up Fee and Expense Reimbursement



     The Bidding Procedures Order shall provide that:




     (a) Purchaser is entitled to be paid an amount equal to $3,000,000 as a fair and
reasonable break-up fee (the “Break-Up Fee”) in accordance with the terms of this Agreement;




     (b) Purchaser is entitled to reimbursement of reasonable documented expenses of up to
$500,000 (the “Expense Reimbursement”) in accordance with the terms of this Agreement; and




     (c) Any purchaser under a Competing Bid that is to be deemed higher and/or better shall
be required to purchase the Purchaser’s interest in DigiMedia (the “DigiMedia Investment”)
from Purchaser at the price set forth on Schedule 8.4 hereto.



     8.5 Payment of Break-Up Fee and DigiMedia Investment



     The Break-Up Fee and purchase of the DigiMedia Investment shall be due and payable pursuant to
8.6 to the Purchaser if:




     (a) Purchaser is not the winning bidder at the Auction;



25









 






     (b) the Bankruptcy Court approves a Competing Transaction with a Qualified Bidder other
than the Purchaser;




     (c) the Sellers consummate such Competing Transaction; and




     (d) Purchaser is not otherwise in breach of this Agreement.



     The Break-Up Fee and the purchase of the DigiMedia Investment described in this Article VIII
shall be paid upon and subject to the occurrence of a Closing of a Competing Transaction, by the
winning Qualified Bidder or by the Debtor from the proceeds of such Competing Transaction.



     8.6 Purchaser’s Back-Up Commitment; Payment of Expense Reimbursement



     If a Competing Transaction is approved by the Bankruptcy Court with a Qualified Bidder other
than the Purchaser, then (a) the Purchaser shall remain bound to this Agreement, on its existing
terms and at the Purchase Price set forth herein, as a back-up purchaser, unless and until the
Competing Transaction is consummated or, if earlier, until the applicable date in clause 14.1(a),
and (b) provided Purchaser is not otherwise in breach of this Agreement, the Seller shall pay the
Expense Reimbursement to the Purchaser on the earlier of (i) one Business Day after the applicable
date in clause 14.1(a), and (ii) within five (5) Business Days of the Closing of a Competing
Transaction.



     8.7 Sale Order; Adequate Assurance




     (a) Purchaser and Guarantor agree that they will promptly take such actions as are
reasonably requested by Sellers to assist in obtaining entry of the Sale Order and a finding
of adequate assurance of future performance by Purchaser with respect to the Assumed
Contracts, including furnishing affidavits or other documents or information for filing with
the Bankruptcy Court for the purposes, among others, of providing necessary assurances of
performance by Purchaser under this Agreement and the Assumed Contracts, and demonstrating
that Purchaser is a “good faith” purchaser under section 363(m) or any other section of the
Bankruptcy Code and that the Purchase Price was not controlled by an agreement in violation
of section 363(n) or any other section of the Bankruptcy Code. The Sale Order shall provide
that it shall be effective and enforceable immediately upon entry by the Bankruptcy Court
notwithstanding Rules 6004(g) and 6006(d) of the Federal Rules of Bankruptcy Procedure. In
the event the entry of the Sale Order shall be appealed, Sellers and Purchaser shall use
their respective reasonable efforts to defend such appeal.




     (b) Purchaser will timely provide such information to Sellers as is required by the
Sellers to provide “adequate assurance” pursuant to and in accordance with section 365 of
the Bankruptcy Code with respect to the Assumed Contracts; provided, that Sellers and
Purchaser agree to use reasonable efforts to obtain a protective order and/or an order
allowing Purchaser to file such information under seal covering such information if
requested by Purchaser.




26












 





ARTICLE IX




COVENANTS OF THE PARTIES




     9.1 Preservation and Access to Books and Records



     Sellers and their successors, including any Chapter 11 Trustee or Chapter 7 Trustee, and
Purchaser agree that each of them shall preserve and keep the books and records prior to and after
the Closing Date held by it or their Affiliates relating to the Purchased Assets and Hired
Employees for five (5) years after the Closing Date (except as provided below) and shall make such
records available to the other as may be reasonably required by such party in connection with,
among other things, any Avoidance Actions, Excluded Estate Actions, insurance claims by, legal
proceedings or tax audits against or governmental investigations of Sellers or Purchaser. In the
event Sellers or Purchaser wish to destroy such records after five years, such party shall first
give 90 days prior written notice to the other and such other party shall have the right at its
option and expense, upon prior written notice given to such party within such 90 day period, to
take possession of the records within 90 days after the date of such notice.



     9.2 Publicity



     Except as required by operation of law or applicable securities regulations, none of the
parties hereto shall issue any press release concerning this Agreement or the Transactions without
obtaining the prior written approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of Purchaser or Sellers, disclosure
is otherwise required by applicable Law or by the Bankruptcy Court with respect to filings to be
made with the Bankruptcy Court in connection with this Agreement, provided that the party intending
to make such release shall use its commercially reasonable efforts consistent with such applicable
law or Bankruptcy Court requirement to consult with the other party with respect to the text
thereof. Without expanding the scope of the prior sentence, Purchaser shall be entitled to
disclose the Sale Order as necessary to defend against any Claims against Purchaser related to this
Agreement or the Transactions.



     9.3 Disclosure Schedules



     The Disclosure Schedules shall be provided by Sellers to Purchaser on or before the Effective
Date, unless otherwise agreed to by the parties. Any updates to the Disclosure Schedules shall be
provided to Purchaser on or before three Business Days prior to the Closing and, if Sellers do not
have any update, Sellers shall provide a statement to Purchaser to that effect. The information in
the Disclosure Schedules constitutes (i) exceptions to particular representations, warranties,
covenants and obligations of Sellers as set forth in this Agreement or (ii) descriptions or lists
of assets and liabilities and other items referred to in this Agreement. Any update shall be
deemed to amend and supplement the Disclosure Schedules for the purpose of determining the accuracy
of any representations and warranties or providing lists of assets and liabilities.



27









 





     9.4 Schedules and Exhibits



     Sellers shall work in good faith to complete the Disclosure Schedules and exhibits to be
attached to this Agreement and Purchaser shall reasonably cooperate where necessary.



     9.5 Best Efforts; Further Assurances




     (a) Subject to the terms and conditions of this Agreement, Purchaser and Sellers will
each use their best efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary or desirable under applicable Laws to consummate the
Transactions. Sellers and Purchaser each agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as may be
reasonably necessary in order to consummate or implement expeditiously the Transactions and
to vest in Purchaser or, in the SPV for the Designated Assets, good title to the Purchased
Assets.




     (b) Subject to the terms and conditions of this Agreement, Purchaser and Sellers will
each use their best efforts to take all action and to do all things necessary, proper, or
advisable to consummate and make effective the Transactions and to obtain approval and entry
of the Sale Order and the Bid Procedures Order.



     9.6 Certain Filings



     Sellers and Purchaser shall cooperate with one another:




     (a) in determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection with the
consummation of the Transactions,




     (b) in taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions, consents, approvals
or waivers, and




     (c) in continuing to prepare and file claims for Tax Refunds in accordance with the
Earn Out Procedures.



     9.7 Guaranty



     The Guarantor hereby unconditionally and irrevocably guarantees the due and punctual payment
and performance of all of the obligations of the Purchaser under this Agreement as provided in the
APA Guaranty.



     9.8 Certain Contracts



     Sellers shall maintain their contracts with Technology Resource Group, Inc., the QMI Group,
and Innovative Marketing Services during the cases (as proposed to be amended by the Sellers after
the Petition Date) and shall pay all amounts due and payable thereunder in



28









 







accordance with the budget provided for under the DIP Facility. The Sellers shall also remain
current on the Cured Leases after the Petition Date in accordance with the budget provided for
under the DIP Facility.



ARTICLE X




EMPLOYEES AND EMPLOYEE BENEFITS




     10.1 No Successor Liability To Sellers’ Employees



     Under no circumstances shall Purchaser assume or be obligated to pay, and the Purchased Assets
shall not be or become liable for or subject to, any claims of or liabilities of Sellers’
Employees, including but not limited to, any claims or liabilities related to employment practices,
COBRA (as defined herein) equal employment opportunity, nondiscrimination, harassment, wrongful
termination, breach of contract, immigration, wage and hour laws, any other state, federal or local
labor and employment laws, liability under the WARN Act, salaries, vacations, sick pay, incentives,
severance pay, bonus, overtime, meal period, pension profit sharing retirement and/or deferred
compensation and any other compensation or benefits (the “Employee Claims”), which Employee Claims
shall be and remain the liability, responsibility and obligation of Sellers.



     10.2 Employment



     (a) Hired Employees. Purchaser may (but shall not be required to), in its sole and absolute
discretion, offer employment to any and all individuals employed by Sellers in connection with the
Business (and not relating solely to Vivitar and its subsidiaries) as of the Closing Date to
commence immediately following the Closing, each such offer contingent upon the issuance of the
Sale Order of the Bankruptcy Court and the Closing. Purchaser’s employment of any individuals
previously employed by Sellers shall be on an “at will” basis and on such other terms and
conditions of employment as Purchaser shall offer in its sole discretion. Except as otherwise
agreed to in writing, Purchaser shall be under no obligation to employ or continue to employ any
individual for any period. The employees who accept Purchaser’s offer of employment and who
commence employment with Purchaser from and after the Closing Date shall be referred to herein as
the “Hired Employees.” Under no circumstance shall any individual employed or formerly employed by
Sellers become an employee of Purchaser unless such individual becomes a Hired Employee.



     With respect to each Hired Employee, Sellers hereby waive and release each such individual
from any and all contractual, common law or other restrictions enforceable by Sellers on the
employment, activities or other conduct of such individuals after their termination of employment
with Sellers; provided, however, that Sellers shall assign to the Purchaser
Sellers’ rights to all obligations of each Hired Employee not to disclose confidential information
relating to the Business (and not relating to Vivitar and its subsidiaries) and all obligations not
to compete with the Business owed to Sellers by such Hired Employee.



29









 





     Except as expressly provided herein, nothing herein shall be construed as transferring to
Purchaser (i) any Contract or agreement with any current or former employee of Sellers or for the
employment of any Person or engagement of any independent contractor by Sellers or (ii) any rights
or obligations Sellers may owe to or be owed by any current or former employee, officer, director,
consultant, independent contractor or agent of Sellers.



     Nothing herein, express or implied, shall confer upon any employee or former employee of
Sellers any rights or remedies (including any right to employment or continued employment for any
specified period) of any nature or kind whatsoever, under or by reason of this Agreement.
Purchaser and Sellers agree that the provisions contained herein are not intended to be for the
benefit of or otherwise be enforceable by, any third party, including any employee or former
employee of Sellers.



     Purchaser shall have no obligation to pay severance to any individual previously employed by
Sellers, irrespective of whether such individual becomes a Hired Employee, and any such obligations
remain obligations of the Seller.



     (b) No Obligations. Nothing contained in this Agreement shall be construed to require, or
prevent the termination of, employment of any individual, require minimum benefit or compensation
levels or prevent any change in the employee benefits provided to any individual Employee. No
provision of this Agreement shall create any third party beneficiary rights in any employee or
former employee of Sellers or any other persons or entities (including any beneficiary or dependent
thereof), in respect of continued employment (or resumed employment) for any specified period of
any nature or kind whatsoever.



     10.3 Employee Matters



     Sellers shall comply with all notice requirements under the WARN Act and any similar state or
local statute with respect to its Employees on or prior to or after the Closing Date and also with
respect to those Sellers’ Employees who decline or reject offers of employment from Purchaser.
Sellers shall be liable for any liability under the WARN Act.



     10.4 COBRA Continuation Coverage



     Sellers shall (i) comply with all notice requirements under Section 4980B(f) of the IRC and
Part 6 of Title I of ERISA (hereinafter, collectively referred to as “COBRA”) to the extent
applicable to Sellers, and (ii) to the extent required by applicable law, provide or cause its
subsidiaries to provide COBRA continuation coverage to all “M&A Qualified Beneficiaries,” as that
term is defined by Treasury Regulations §54.4980B-9, Q&A-4, with respect to the Transactions for
the minimum period that continuation coverage is required by law to be available to the M&A
Qualified Beneficiaries (including any second Qualifying Events experienced by the M&A Qualified
Beneficiaries) under COBRA and any similar state laws. Prior to the Closing, Sellers shall provide
Purchaser with a complete and accurate list of all Employees that are, or will be considered, M&A
Qualified Beneficiaries with respect to the Transaction. Notwithstanding the foregoing, in the
event a change in circumstances of the Sellers and/or their subsidiaries excuses the obligation to
provide such coverage, Sellers and/or their subsidiaries will no longer have an obligation to
provide such coverage.



30









 





ARTICLE XI




CONDITIONS TO CLOSING




     11.1 Conditions to Purchaser’s Obligations



     The obligations of Purchaser to consummate the Transactions are subject to the satisfaction,
as of the Closing, of each of the following conditions (any of which may be waived in whole or in
part in writing by Purchaser at or prior to the Closing):




     (a) The representations and warranties of Sellers set forth herein shall be true and
correct in all material respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made on and as of the Closing
Date, except to the extent the failure of such representations and warranties to be so true
and correct on and as of the Closing Date does not have a material adverse effect on the
Purchased Assets, Business, financial condition or results of operations of Sellers, taking
into account the poor and precarious financial condition of the Sellers and their
subsidiaries that exists at and will continue after the Effective Date and ignoring for this
purpose any adverse changes or conditions arising prior to the Effective Date or related to
the filing of the Bankruptcy Case (a “Material Adverse Effect”).




     (b) Target Corporation shall not have notified Sellers or, to the Sellers knowledge,
Technology Resource Group, Inc., in writing or by email that Target Corporation has
terminated or intends to terminate its relationship with the Sellers.




     (c) Sellers shall have performed, observed, and complied in material respects with the
covenants, agreements, obligations and conditions required by this Agreement to be
performed, observed and complied with by Sellers prior to or as of the Closing, except to
the extent such non-compliance does not have a Material Adverse Effect.




     (d) No Order or other Legal Requirement preventing the consummation of the Transactions
shall be in effect.




     (e) The Bankruptcy Court shall have approved the DIP Facility, and the order approving
the DIP Facility shall not be subject to any stay.




     (f) The Bankruptcy Court shall have entered the Bidding Procedures Order and the
Bidding Procedures Order shall not be subject to a stay.




     (g) The Bankruptcy Court shall have issued the Sale Order and any Assignment Order in
accordance herewith, which shall not be subject to any stay.




     (h) Sellers shall have executed any and all documents and instruments necessary to
convey good title to the Purchased Assets to Purchaser.



31









 






     (i) All consents and approvals, if any, required to close the Transactions shall have
been received except for such consents and approvals, if any, which, if not received, would
not have a Material Adverse Effect.




     (j) The Debt Assumption Agreement and the New Term Loan Documents in the form of
Exhibit C hereto shall have been executed and delivered by the Lenders and, if applicable,
the Sellers.




     (k) Sellers shall have delivered to Purchaser properly executed certificates of
non-foreign status for purposes of satisfying Purchaser’s obligations under Treasury
Regulations Section 1.1445-2(b)(2).



     11.2 Purchaser’s Obligations at the Closing




     (a) Purchaser shall deliver or cause to be delivered to Sellers the following items at
the Closing:




     (i) the Purchase Price required by Section 4.1 above;




     (ii) a copy of the resolutions of its Board of Directors of Purchaser
authorizing the Transactions;




     (iii) an executed assumption agreement in relation to the Assumed Portion of
the Existing Debt Facility in the form of Exhibit D hereto (the “Debt Assumption
Agreement”);




     (iv) an executed assignment and assumption agreement in relation to the Assumed
Liabilities and the Assumed Contracts, in the form of Exhibit E hereto (the
“Assignment and Assumption Agreement”);




     (v) a guaranty executed by the Guarantor in the form of Exhibit F hereto;




     (vi) an executed Designated Assets Agreement, the Assignments of Receivables
and an executed IP License Agreement; and




     (vii) executed New Term Loan Documents and an executed Shared Services
Agreement.




     (b) Purchaser shall pay to the Lenders at the Closing the first amortization payment due under
the New Term Loan Documents in the amount of $18,000,000.



     11.3 Conditions to Sellers’ Obligations



     The obligations of Sellers to consummate the Transactions are subject to the satisfaction, as
of the Closing, of each of the following conditions (any of which may be waived in whole or in part
in writing by Sellers at or prior to the Closing):



32









 






     (a) The representations and warranties of Purchaser set forth herein shall be true and
correct in all material respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made on and as of the Closing
Date, except to the extent the failure of such representations and warranties to be so true
and correct on and as of the Closing Date does not have a material adverse effect on the
assets or financial condition of Purchaser or Guarantor.




     (b) Purchaser shall have performed, observed, and complied in all material respects
with all of the covenants, agreements, obligations and conditions required by this Agreement
to be performed, observed and complied with by Purchaser prior to or as of the Closing,
except to the extent such non-compliance does not have a material adverse effect on the
assets or financial condition of Purchaser or Guarantor.




     (c) No Order or other Legal Requirement preventing the consummation of the Transactions
shall be in effect.




     (d) Purchaser shall have paid the Purchase Price to Sellers as set forth in Section
4.1.




     (e) The Bankruptcy Court shall have issued the Sale Order, which shall not be subject
to any stay.



     11.4 Sellers’ Obligations at the Closing




     (a) Sellers shall deliver or cause to be delivered to Purchaser the following items at
the Closing:




     (i) Bills of Sale executed by Sellers in the form of Exhibit G hereto;




     (ii) An executed Debt Assumption Agreement;




     (iii) An executed Assignment and Assumption Agreement;




     (iv) All keys to any real property, the Purchased Assets and any combinations
to any safes thereon, passwords for all computers thereon and any security devices
therein;




     (v) An executed Designated Assets Agreement, the Assignments of Receivables and
an executed IP License Agreement; and




     (vi) Such other documents and affidavits as may be reasonably required by this
Agreement in order to consummate the Transactions, including without limitation,
documents evidencing the transfer of the material Intellectual Property except to
the extent such non-compliance does not have a Material Adverse Effect.




     (b) Sellers shall cause the Designated Assets to be transferred to the SPV at the
Closing.



33









 





     11.5 Closing Costs



     Except as otherwise provided in this Agreement, Sellers and Purchaser shall pay their own
respective costs and expenses, including, without limitation, attorneys’ fees.



ARTICLE XII




CLOSING




     12.1 Closing Date



     If the Sale Order is entered, the consummation of the transactions contemplated by this
Agreement (the “Closing”) shall take place at a location mutually acceptable to Sellers and
Purchaser at 10:00 a.m. on the Closing Date.



ARTICLE XIII




TAXES




     13.1 Tax Ownership



     For all federal income and applicable state and local Tax purposes, the parties hereto agree
to treat the Designated Assets as acquired by Purchaser (and not by the SPV), and thereafter as
owned by Purchaser so long as such assets remain available to service or support the Assumed
Portion of the Existing Debt Facility or Purchaser’s obligations under the New Term Loan Documents
(including as such documents may be subsequently amended), and not to take any position (whether in
a Tax Return or before any Governmental Authority) inconsistent therewith, except pursuant to a
final “determination” (as defined in Section 1313(a) of the IRC or corresponding provision of state
or local Law); provided, however, that no party shall be required in the event of an
adverse determination upon audit or examination by a Governmental Authority to appeal such
determination.



     13.2 Cooperation and Audits



     Subject to Section 9.1, Purchaser and Sellers shall cooperate fully with each other regarding
Tax matters (including matters regarding purchase price allocation and the execution of appropriate
powers of attorney) and shall make available to the other as reasonably requested all information,
records and documents relating to Taxes by this Agreement until the expiration of the applicable
statute of limitations or extension thereof or the conclusion of all audits, appeals or litigation
with respect to such Taxes.



     13.3 Transfer Taxes



     Any transfer, documentary, sales, use, registration, recording, stamp, value-added and other
similar Taxes (but excluding any Taxes based on or attributable to income or gains) and related
fees including notarial fees (collectively, the “Transfer Taxes”) arising out of or incurred in
connection with this Agreement will be borne equally by Purchaser, on the one hand, and the
Sellers, on the other. The party that is required to file a Tax Return relating to the Transfer



34









 





Taxes will be responsible for preparing and timely filing such a Tax Return. Such party will
prepare the Transfer Tax returns for which it is responsible as soon as is practicable and provide
the other party with a copy to review. The reviewing party will provide the preparing party with
comments and the amount of Transfer Tax to be paid by the reviewing party in sufficient time to
enable the preparing party to timely file the return and pay the Transfer Tax. Purchaser and
Sellers will cooperate with each other in the preparation of such Tax Returns, including (if
applicable) in connection with substantiating exemptions. Purchaser shall use commercially
reasonable efforts to file a resale certificate in a timely manner so that inventory is not subject
to such Transfer Taxes.



ARTICLE XIV




TERMINATION




     14.1 Grounds for Termination



     This Agreement may be terminated at any time prior to the Closing:




     (a) by Purchaser or Sellers, if the Closing shall not have occurred for any reason by
September 2, 2008, which date shall be subject to extension to September 15, 2008 at the
option of the Purchaser upon written notice delivered no later than five (5) Business Days
prior to September 2, 2008 to the Sellers and the Lenders, and upon such notice all
obligations of the Parties shall be extended to September 15, 2008.




     (b) by Purchaser, if except as permitted herein, a material portion of the Purchased
Assets or Intellectual Property is sold to a Third Party.




     (c) by the mutual written agreement of Purchaser and Sellers (with the consent of the
Lenders).




     (d) by Purchaser or Sellers if the Bankruptcy Court approves a Competing Transaction
and it is consummated.



     14.2 Effect of Termination



     If this Agreement is terminated as permitted herein, such termination shall be without
liability of any party (or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party to this Agreement; provided, however, that if the
conditions to closing set forth in Section 11.1 hereof shall have been met, or if such conditions
would have been met but for any action of, omission of, or failure to use best efforts by
Purchaser, then all parties agree that the Transactions contemplated hereby shall be closed and
Sellers or the Lenders may sue for, and shall be entitled to, specific performance of this
Agreement (including but not limited to Purchaser’s assumption of the Assumed Liabilities and
execution of the New Term Loan Documents) and/or to receive full money damages (including, but not
limited to, Sellers’ right to retain the Deposit and to apply it as Seller determines).



35









 





     The confidentiality agreement dated June 9, 2008 between Sellers and Purchaser (the
“Confidentiality Agreement”) shall survive any termination of this Agreement and nothing in this
Agreement or any termination of this Agreement shall relieve Purchaser of any of its obligations
under the Confidentiality Agreement.



ARTICLE XV




MISCELLANEOUS




     15.1 Notices



     All notices or other communications required or permitted to be given under this Agreement
shall be in writing and shall be delivered by hand, sent by confirmed facsimile or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier service and shall
be deemed given when so delivered by hand, confirmed faxed or if mailed, three days after mailing
(one Business Day in the case of express mail or overnight courier service), as follows (or to such
other address or telecopy number as the applicable party shall have notified the other party in
writing in accordance with this Section. If given by certified or registered mail, the notice
shall be deemed to have been given three (3) Business Days after such certified or registered
letter containing such notice, properly addressed, with postage prepaid, is deposited in the United
States mail. Such notices shall be given to the parties hereto at the following addresses or, if
given by facsimile transmission at the following facsimile numbers:


If to Sellers to:



Mr. Greg Rayburn

Syntax Brillian Corporation

20400 E. Business Parkway

City of Industry, CA 91789

Facsimile Number: (909) 859-8402



With a copy to:



Nancy A. Mitchell

Greenberg Traurig

200 Park Avenue

New York, New York 10166

Facsimile Number: (212) 805-9375



If to Lenders:



Silver Point Finance, LLC

2 Greenwich Plaza

Greenwich, CT 06830

Attention: Marc Diagonale, with a copy to Anthony DiNello

Facsimile Number: (312) 357-7203




36









 







With a copy to:



Weil Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Stephen Karotkin and Simeon Gold

Facsimile Number: (212) 310-8007



If to Purchaser to



Olevia International Group, LLC

Attn: Michael Wu

c/o TCV Group

No. 20, Ta You 1st Street

Ta Fa Ind’l District

Kaohsiung Hsien

Tawian, R.O.C.

Facsimile No: 011-886-7-7872943



With a copy to:



Sheppard Mullin Richter & Hampton LLP

Attn: David Sunkin, Esq.

333 South Hope Street, 48th Floor

Los Angeles, California 90071

Facsimile Number: (213) 443-2750




     15.2 Amendments and Waivers




     (a) Any provision of this Agreement may be amended or waived prior to the Closing Date
if, but only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement and the Lenders, or in the case of a waiver, by
the party against whom the waiver is to be effective.




     (b) No failure or delay by any party in exercising any right, power or privilege under
this Agreement shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in this Agreement shall be cumulative
and not exclusive of any rights or remedies provided by law.



     15.3 Successors and Assigns



     The provisions of this Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and assigns, including any Chapter 11 Trustee or Chapter 7 Trustee
that may be appointed in Sellers’ Bankruptcy Cases. Purchaser may assign some or all



37









 







of its rights and obligations hereunder to one or more subsidiaries formed by Purchaser prior
to the Closing and/or, upon notice to the Company, to one or more persons or entities that are
shareholders of Purchaser that Purchaser may designate, in its sole discretion. Notwithstanding
the foregoing, no assignment of any obligations hereunder shall relieve the parties hereto of any
such obligations and the obligations of such parties and the Guarantor shall remain in full force
and effect. Upon any such assignment, the references in this Agreement to Sellers or Purchaser
shall also apply to any such assignee unless the context otherwise requires.



     15.4 Bulk Sales Laws



     Purchaser and Sellers each waive compliance by Sellers with the provision of the “bulk sales”,
“bulk transfer” or similar Laws of any State.



     15.5 Injunctive Relief



     The parties hereto agree that this Agreement shall be specifically enforceable by the Sellers
or the Lenders if the circumstance described in the proviso to Section 14.2 shall have occurred
(which specific performance shall include but not be limited to Purchaser’s assumption of the
Assumed Liabilities hereunder and execution of the New Term Loan Documents), irrespective of any
other condition of fact or law.



38









 





     15.6 Communications with Employees, Customers and Vendors



     Upon execution of this Agreement and making of the Deposit, Purchaser and its agents are
authorized to negotiate and communicate with Sellers’ employees, customers and vendors subject to
reasonable oversight and coordination with the Sellers’ Interim CEO and provided that Purchaser
shall not interfere with or have any negotiation, communication or consultation rights in relation
to the collection of accounts and notes receivable by Sellers between the Effective Date and the
Closing Date.



     15.7 Incorporation by Reference; Captions



     The Preamble and WHEREAS clauses set forth above and the Schedules referred to above are
incorporated into this Agreement as if the same were fully set forth. The Captions included in
this Agreement are included for convenience of reference only and shall be ignored in the
construction or interpretation of this Agreement in this Agreement.



     15.8 No Survival of Representations and Warranties



     The parties hereto agree that the representations and warranties contained in this Agreement
shall not survive the Closing hereunder and no Person shall have any liability for any breach
thereof. The parties hereto agree that the covenants contained in this Agreement to be performed
at or after the Closing shall survive the Closing hereunder, and each party hereto shall be liable
to the other after the Closing for any breach thereof.



     15.9 Bankruptcy Court Jurisdiction



     The Bankruptcy Court shall have and retain exclusive jurisdiction to enforce the terms of
this Agreement and to decide any claims or disputes which may arise or result from, or be connected
with, this Agreement, any breach or default hereunder, or the Transactions, and any and all
proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy Court,
and the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court
and shall receive notices at such locations as indicated in Section 15.1 hereof; provided, however,
that if the Bankruptcy Court declines jurisdiction after the Bankruptcy Case has closed or for any
other reason, the parties agree to unconditionally and irrevocably submit to the exclusive
jurisdiction of the United States District Court for the District of Delaware and any appellate
court thereof, for the resolution of any such claim or dispute. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable Law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute maybe enforced in other jurisdictions by suit on the judgment or in
any other manner provided by Law.



     15.10 Third Party Beneficiaries



     Nothing in this Agreement shall create or be deemed to create any third party beneficiary
rights in any person or entity (except for the Lenders and SPV) not a party to this Agreement.



39









 





     15.11 Entire Agreement



     This Agreement and its Exhibits and Schedules embodies and constitutes the entire
understanding between the parties hereto with respect to the Transactions, and all prior or
contemporaneous agreements, understandings, representations and statements, oral or written, are
superseded by this Agreement.



     15.12 Applicable Law



     This agreement shall be governed by, and construed in accordance with, the laws of the State
of Delaware.



     15.13 Timing



     If the final date of any period which is set out in any provision of this Agreement or the
Closing Date falls on a Saturday, Sunday or legal holiday under the laws of the United Sates of
America, then the time of such period or the Closing Date, as the case may be, shall be extended to
the next date which is not a Saturday, Sunday or legal holiday.



     15.14 Invalid Provision



     If any provision of this Agreement is held to be illegal, invalid or unenforceable under
present or future laws, such provision shall be fully severable; this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of
this Agreement; and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by such illegal, invalid or unenforceable provision or by its
severance from this Agreement.



     15.15 Multiple Counterparts



     This Agreement may be executed in a number of identical counterparts, each of which for all
purposes is deemed an original, and all of which constitute collectively one agreement.



     15.16 Further Assurances



     On and after the Closing Date, each party shall take such other actions and execute such other
documents and instruments of conveyance and transfer as may be reasonable requested by the other
party from time to time to fully effectuate the transfer of the Property to Purchaser in accordance
with the terms of this Agreement.



[Signature Pages Follow]





40










 





     IN
WITNESS WHEREOF, Sellers, Guarantor and Purchaser have executed
this Agreement effective as of the date hereof.



	 	 	 	 	 
	 	SYNTAX-BRILLIAN CORPORATION, a Delaware corporation

 	 
	 	By:  	/s/ Greg Rayburn
 	 
	 	 	Name:  	Greg Rayburn 	 
	 	 	Title:  	Interim
Chief Executive Officer	 
	 



	 	 	 	 	 
	 	SYNTAX-BRILLIAN SPE, INC., a Delaware corporation

 	 
	 	By:  	/s/ Greg Rayburn
 	 
	 	 	Name:  	Greg Rayburn 	 
	 	 	Title:  	Interim
Chief Executive Officer	 
	 




	 	 	 	 	 
	 	SYNTAX GROUPS CORPORATION, a Delaware corporation

 	 
	 	By:  	/s/ Greg Rayburn
 	 
	 	 	Name:  	Greg Rayburn 	 
	 	 	Title:  	CEO 	 
	 




	 	 	 	 	 
	 	Olevia International Group, LLC, a California

limited liability company

 	 
	 	By:  	/s/ Michael Wu
 	 
	 	 	Name:  	Michael Wu 	 
	 	 	Title:  	President 	 
	 



	 	 	 	 	 
	 	 	 
	 	                                               /s/ Mr. Jung-Jyh Wu
 	 
	 	Mr. Jung-Jyh Wu