Document:

Exhibit 10.109

 

FIFTEENTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

AND LIMITED CONSENT

 

This FIFTEENTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND LIMITED CONSENT (this “Amendment”) is dated as of June 12, 2008 (the “Amendment Date”) and entered into by and among BANK OF AMERICA, N.A., as lender (the “Lender”), with offices at 55 South Lake Avenue, Suite 900, Pasadena,
California 91101, and MEADE INSTRUMENTS CORP., a Delaware corporation, SIMMONS
OUTDOOR CORPORATION, a Delaware corporation, and CORONADO INSTRUMENTS, INC., a
California corporation (such entities being referred to hereinafter each
individually as a “Borrower” and
collectively, the “Borrowers”).

 

WHEREAS, the Lender and the Borrowers have entered
into that certain Amended and Restated Credit Agreement dated as of October 25,
2002 (as amended, restated or modified from time to time, the “Agreement”);

 

WHEREAS,
the Borrowers have informed the Lender that they intend to sell certain
trademarks and inventory related to the “Simmons” brands (the “Simmons Transaction”) pursuant to an Asset Purchase
Agreement among Simmons Outdoor Corporation, Meade Instruments Corp. and
Bushnell, Inc. (the “Simmons Asset Purchase
Agreement”); and

 

WHEREAS,
the Borrowers have requested that the Lender consent to the Simmons Transaction
and amend the Agreement in certain respects and the Lender has agreed to such
consent and amendments pursuant to the terms and conditions set forth herein.

 

NOW,
THEREFORE, in consideration of the mutual conditions and agreements set forth
in the Agreement and this Amendment, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

Definitions

 

Section 1.01.          Definitions.  Initially capitalized terms
used but not defined in this Amendment have the respective meanings set forth
in the Agreement, as amended hereby.

 

ARTICLE II

 

Amendments

 

Section 2.01.          New Definitions.  The
following definitions are hereby added to Annex A to the Agreement in proper
alphabetical order to read in their entirety as follows:

 

“‘Simmons Transaction’ has the meaning
set forth in the Fifteenth Amendment.”

 

“‘Simmons Transaction Reserve’ means a
reserve in the amount at all times equal to $500,000.”

 

“‘Fifteenth Amendment’ means that
certain Fifteenth Amendment to Amended and Restated Credit Agreement and
Limited Consent dated as of June 12, 2008 by and among Lender and
Borrowers.”

 

 

Section 2.02.          Amendment to the Definition of “Borrowing
Base”.  The definition of “Borrowing Base” as set
forth in Annex A to the Agreement is hereby amended and restated in its
entirety to read as follows:

 

“‘Borrowing Base’ means, at any time, an amount equal to the sum
of (a) the Accounts Advance Amount, plus (b) the Inventory
Advance Amount, minus (c) Reserves from time to time established by
the Lender in its reasonable credit judgment, where:

 

‘Accounts Advance Amount’ means, at any time, an amount equal to eighty
percent (80%) of the Net Amount of Eligible Accounts; provided,
however, that the aggregate Revolving
Loans advanced against Approved Foreign Accounts shall not exceed $2,000,000;
and

 

‘Inventory Advance Amount’ means, at any time other than set forth
below, an amount equal to the lesser of (i) $15,000,000, or (ii) the
lesser of (x) sixty percent (60%) of the Net Value of Eligible Inventory
owned by the Borrowers, or (y) eighty-five percent (85%) of the Net
Orderly Liquidation Value of Eligible Inventory owned by the Borrowers.”

 

Section 2.03.          Amendment to the Definition of “Maximum
Revolver Amount”.  The definition of “Maximum Revolver Amount”
as set forth in Annex A to the Agreement is hereby amended and restated in its
entirety to read as follows:

 

“‘Maximum Revolver Amount’ means $15,000,000.”

 

Section 2.04.          Amendment to the Definition of “Reserves”.  The
definition of “Reserves” as set forth in Annex A to the Agreement is hereby
amended and restated in its entirety to read as follows:

 

“‘Reserves’ means reserves that limit
the availability of credit hereunder, consisting of reserves against
Availability, Eligible Accounts or Eligible Inventory, established by Lender
from time to time in Lender’s reasonable credit judgment.  Without limiting the generality of the
foregoing, the following reserves shall be deemed to be a reasonable exercise
of Lender’s credit judgment: (a) Bank Product Reserves; (b) a reserve
for accrued, unpaid interest on the Obligations; (c) reserves for rent at
leased locations subject to statutory or contractual landlord liens; (d) the
Slow Moving Reserve; (e) the Dilution Adjustment Reserve; (f) warehousemen’s
or bailees’ charges; (g) the Working Capital Reserve; (h) the
Availability Reserve; (i) the EBITDA Reserve; (j) the Brand Sales
Reserve; and (k) the Simmons Transaction Reserve.”

 

Section 2.05.          Amendment to Section 1.1.  Section 1.1
of the Agreement is hereby amended and restated to read in its entirety as
follows:

 

“1.1         Total
Facility.  Subject to all of the terms and conditions of
this Agreement, the Lender agrees to make available a total credit facility of
up to $15,000,000 (the ‘Total Facility’) to the Borrowers from time to
time during the term of this Agreement. 
The Total Facility shall be composed of a revolving line of credit
consisting of Revolving Loans and Letters of Credit described herein.”

 

2

 

ARTICLE III

 

LIMITED CONSENT

 

Section 3.01.          Limited Consents. 
Notwithstanding anything contrary in the Agreement or any other
provision set forth in the Loan Documents, and subject to the terms,
conditions, and other restrictions set forth herein, the Lender hereby consents
to the Simmons Transaction.  This consent
is limited to the Simmons Transaction and is not a consent to any other
transaction, whether or not similar to the foregoing.  The consent to the Simmons Transaction is
conditioned upon satisfaction of each of the following conditions precedent
thereto, as well as the conditions precedent set forth in Article V
below:

 

(i)            The Borrowers shall have delivered to the
Lender an executed copy of Simmons Asset Purchase Agreement together with true
and correct copies of all exhibits and schedules thereto and all agreements
executed or delivered in connection therewith, all of which must be in form and
substance satisfactory to the Lender in its sole discretion;

 

(ii)           The Borrowers shall have delivered to the Lender an updated Borrowing
Base Certificate reflecting the consummation of the Simmons Transaction;

 

(iii)          No Default or Event of Default shall have occurred and be continuing or
result from the consummation of the Simmons Transaction, except as previously
disclosed to the Lender in writing; and

 

(iv)          100% of the cash proceeds of the Simmons Transaction to be received by
the Borrowers shall be paid directly to the Lender (to be applied to the
Obligations in accordance with the Agreement) at such account as the Lender may
direct.

 

Upon satisfaction of the foregoing conditions with respect to the
Simmons Transaction (or concurrently therewith), and upon the Borrowers’
request, the Lender will execute and deliver such lien releases (including
UCC-3 financing statement amendments) as may be necessary to effectively
terminate any and all of the Lender’s Liens on the property to be sold pursuant
to the Simmons Transaction, all at Borrowers’ sole cost and expense.

 

ARTICLE IV

 

Amendment Fee

 

Section 4.01.          Amendment Fee.  In
connection with the preparation, negotiation and execution of this Amendment,
the Borrowers shall pay to the Lender an amendment fee (the “Amendment Fee”) in the amount of Fifty Thousand Dollars
($50,000), which, at the Lender’s option, may be charged as an advance and a
Revolving Loan under the Agreement, and which fee is fully earned and payable
as of the Amendment Date.

 

3

 

ARTICLE V

 

Conditions Precedent

 

Section 5.01.          Conditions Precedent.  This
Amendment shall not be binding upon the Lender until each of the following
conditions precedent have been satisfied in form and substance satisfactory to
the Lender:

 

(i)            The representations and warranties contained
herein and in the Agreement, as amended hereby, shall be true and correct in
all material respects as of the date hereof as if made on the date hereof,
except for such representations and warranties limited by their terms to a
specific date;

 

(ii)           The Borrowers shall have delivered to the Lender an executed original
copy of this Amendment;

 

(iii)          The Borrowers shall have delivered to the Lender executed original
copies of each of the Consents and Reaffirmations attached to this Amendment;

 

(iv)          The Borrowers shall have paid to the Lender the Amendment Fee and all
other fees, costs, and expenses owed to and/or incurred by the Lender in
connection with this Amendment;

 

(v)           No Default or Event of Default shall have occurred and be continuing,
except as previously disclosed to the Lender in writing; and

 

(vi)          All proceedings taken in connection with the transactions contemplated
by this Amendment and all documentation and other legal matters incident
thereto shall be satisfactory to the Lender in its sole and absolute
discretion.

 

ARTICLE VI

 

Miscellaneous

 

Section 6.01.          Inventory.  Each Borrower hereby
represents and warrants that after the consummation of each of the Simmons
Transaction, no Inventory bearing the brands sold in connection therewith will
be held, manufactured or sold by any Borrower.

 

Section 6.02.          Acknowledgment.  Each
Borrower hereby represents and warrants that the execution and delivery of this
Amendment and compliance by such Borrower with all of the provisions of this
Amendment:  (a) are within its
powers and purposes; (b) have been duly authorized or approved by such
Borrower; and (c) when executed and delivered by or on behalf of such
Borrower, will constitute valid and binding obligations of such Borrower,
enforceable in accordance with their terms. 
Each Borrower reaffirms its obligation to pay all amounts due the Lender
under the Loan Documents in accordance with the terms thereof, as modified
hereby.

 

Section 6.03.          Loan Documents Unmodified. 
Except as otherwise specifically modified by this Amendment, all terms
and provisions of the Agreement and all other Loan Documents, as modified
hereby, shall remain in full force and effect. 
Nothing contained in this Amendment shall in any way impair the validity
or enforceability of the Loan Documents, as modified hereby or alter, waive,
annul,

 

4

 

vary, affect, or impair any provisions,
conditions, or covenants contained therein or any rights, powers, or remedies
granted therein.  Any lien and/or
security interest granted to the Lender in the Collateral set forth in the
Agreement or any other Loan Document is and shall remain unchanged and in full
force and effect and the Agreement and the other Loan Documents shall continue
to secure the payment and performance of all of the Obligations thereunder, as
modified hereby, and the Borrowers’ obligations hereunder.

 

Section 6.04.          Parties, Successors and Assigns.  This
Amendment shall be binding upon and shall inure to the benefit of each of the
Borrowers, the Lender, and their respective successors and assigns.

 

Section 6.05.          Counterparts.  This
Amendment may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which, when taken
together shall constitute one and the same instrument.  A facsimile signature shall be deemed
effective as an original.

 

Section 6.06.          Headings.  The headings, captions and
arrangements used in this Amendment are for convenience only and shall not
affect the interpretation of this Amendment.

 

Section 6.07.          Expenses of the Lender.  The
Borrowers agree to pay on demand (a) all reasonable costs and expenses
incurred by the Lender in connection with the preparation, negotiation and
execution of this Amendment and the other Loan Documents executed pursuant
hereto and any and all subsequent amendments, modifications, and supplements
hereto or thereto, including, without limitation, the costs and fees of the
Lender’s legal counsel and the allocated cost of staff counsel, and (b) all
costs and expenses reasonably incurred by the Lender in connection with the
enforcement or preservation of any rights under the Agreement, this Amendment
and/or other Loan Documents, including, without limitation, the reasonable
costs and fees of the Lender’s legal counsel, the allocated cost of staff
counsel, and the costs and fees associated with any environmental due diligence
conducted in relation hereto.

 

Section 6.08.          Total Agreement.  This
Amendment, the Agreement, and all other Loan Documents shall constitute the
entire agreement between the parties relating to the subject matter hereof, and
shall rescind all prior agreements and understandings between the parties
hereto relating to the subject matter hereof, and shall not be changed or
terminated orally.

 

Section 6.09.          WAIVER OF JURY TRIAL.  TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, EACH OF THE BORROWERS AND THE
LENDER IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AMENDMENT, THE AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
LENDER-RELATED PERSON OR PARTICIPANT, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE.  WITHOUT
LIMITING THE APPLICABILITY OF ANY OTHER PROVISION OF THE AGREEMENT, THE TERMS
OF SECTION 12.3 OF THE AGREEMENT SHALL APPLY TO THIS AMENDMENT.

 

Section 6.10.          RELEASE.  THE BORROWERS EACH HEREBY
REPRESENT AND WARRANT THAT AS OF THE DATE OF THIS AMENDMENT THERE ARE NO CLAIMS
OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO THE BORROWERS’ OBLIGATIONS
UNDER THE AGREEMENT OR ANY OTHER LOAN DOCUMENT, INCLUDING THIS AMENDMENT.  THE BORROWERS WAIVE AND RELEASE ANY AND ALL
SUCH CLAIMS, OFFSETS, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN,
ARISING PRIOR TO THE DATE OF THIS AMENDMENT.

 

5

 

THE BORROWERS INTEND THE ABOVE RELEASE TO
COVER, ENCOMPASS, RELEASE, AND EXTINGUISH, INTER ALIA, ALL
CLAIMS, DEMANDS, AND CAUSES OF ACTION THAT MIGHT OTHERWISE BE RESERVED BY THE
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.”

 

THE BORROWERS ACKNOWLEDGE THAT THEY MAY HEREAFTER
DISCOVER FACTS DIFFERENT FROM OR IN ADDITION TO THOSE NOW KNOWN OR BELIEVED TO
BE TRUE WITH RESPECT TO SUCH CLAIMS, DEMANDS, OR CAUSES OF ACTION, AND AGREE
THAT THIS AMENDMENT AND THE ABOVE RELEASE ARE AND WILL REMAIN EFFECTIVE IN ALL
RESPECTS NOTWITHSTANDING ANY SUCH DIFFERENCES OR ADDITIONAL FACTS.

 

[Signature Pages Follow]

 

6

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Amendment as of
the day and year first above written.

 

 

	
   

  	
  “BORROWERS”:

  
	
   

  	
   

  
	
   

  	
  MEADE INSTRUMENTS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIMMONS OUTDOOR CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CORONADO INSTRUMENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “LENDER”:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ROBERT M. DALTON

  
	
   

  	
  Name:

  	
  Robert
  M. Dalton

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

Signature Page

 

 

CONSENTS AND REAFFIRMATIONS

 

Each of MEADE INSTRUMENTS EUROPE CORP., a California corporation, and
MEADE INSTRUMENTS HOLDINGS CORP., a California corporation, hereby acknowledges
the execution of, and consents to, the terms and conditions of that certain
Fifteenth Amendment to Amended and Restated Credit Agreement and Limited dated
as of June 12, 2008, among MEADE INSTRUMENTS CORP., SIMMONS OUTDOOR CORP.,
CORONADO INSTRUMENTS, INC. and BANK OF AMERICA, N.A. (the “Creditor”),
and reaffirms its obligations under (a) that certain Continuing Guaranty
(the “Guaranty”) dated as of September 24,
2001, made by the undersigned in favor of the Creditor, and (b) that
certain Security Agreement (the “Security Agreement”)
dated as of September, 2001, by and between the undersigned and the
Creditor.  Each of the undersigned
acknowledges and agrees that each of the Guaranty and the Security Agreement
remain in full force and effect and are hereby ratified and confirmed.

 

 

Dated
as of June 12, 2008.

 

 

	
   

  	
  MEADE INSTRUMENTS EUROPE CORP.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADE INSTRUMENTS HOLDINGS CORP.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

 

CONSENTS AND REAFFIRMATIONS

 

Each of MTSC HOLDINGS, INC., a California corporation (“MTSC”), MC HOLDINGS, INC., a California corporation (“MC HOLDINGS”), and MEADE CORONADO HOLDINGS CORP., a
California corporation (“MCHC”), hereby
acknowledges the execution of, and consents to, the terms and conditions of
that certain Fifteenth Amendment to Amended and Restated Credit Agreement and
Limited Consent dated as of June 12, 2008, among MEADE INSTRUMENTS CORP.,
SIMMONS OUTDOOR CORP., CORONADO INSTRUMENTS, INC. and BANK OF AMERICA, N.A. (“Creditor”), and reaffirms its obligations under that certain
Continuing Guaranty (the “Guaranty”)
dated as of September 24, 2001 executed in favor of the Creditor and
joined by each of the undersigned pursuant to an Instrument of Joinder, dated
as of (i) October 25, 2002 with respect to MTSC and MC HOLDINGS, and (ii) December 1,
2004 with respect to MCHC (respectively, the “Instrument”).  Each of the undersigned acknowledges and
agrees that each of the Guaranty and Instrument remain in full force and effect
and are hereby ratified and confirmed.

 

 

	
  Dated
  as of June 12, 2008.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MTSC HOLDINGS, INC.,

  
	
   

  	
  a California corporation,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MC HOLDINGS, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADE CORONADO HOLDINGS CORP.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/PAUL E. ROSS

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Chief Financial OfficerExhibit 10.110

 

ASSET
PURCHASE AGREEMENT

 

AMONG

 

SIMMONS
OUTDOOR CORPORATION,

 

MEADE
INSTRUMENTS CORP.

 

AND

 

BUSHNELL,
INC.

 

Transfer
of the Simmons Brand

And Simmons Inventory

 

 

ASSET
PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (“Agreement”), dated as of June 12,
2008, is entered into by and among Simmons Outdoor Corporation, a Delaware
corporation (“Seller”), and Bushnell, Inc., a Delaware corporation (“Buyer”),
and Meade Instruments Corp. (“Parent” and together with Seller, the “Meade
Parties”).

 

RECITALS

 

WHEREAS, the Meade Parties are engaged in the marketing, sale,
distribution and servicing of certain sports optics under the brand name
Simmons (the “Business”);

 

WHEREAS, the Meade Parties wish to sell to Buyer, and Buyer wishes to
purchase from the Meade Parties, upon the terms and subject to the conditions
of this Agreement, certain of the assets of the Meade Parties relating to the
Business; and

 

WHEREAS, concurrently with the consummation of the transactions
contemplated by this Agreement, the Meade Parties and Buyer shall enter into a
Transition Services Agreement, dated as of the date hereof, pursuant to which
the Meade Parties shall agree to provide Buyer with certain services related to
the operation of the Business following Closing.

 

ACCORDINGLY, in consideration of the premises and the mutual
agreements, covenants, representations and warranties hereinafter set forth,
the parties hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

In addition to terms that may be defined elsewhere herein, the
following terms shall have the respective meanings set forth below:

 

“Action” means any litigation, suit, investigation, originating
application to an employment tribunal, binding arbitration or proceeding of any
kind.

 

“Affiliate” means, with respect to any specified 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 specified
Person.

 

“Agreement” means this Asset Purchase Agreement entered into by Seller,
Parent and Buyer, together with any amendments, exhibits and schedules.

 

“Assignment of Patents and Trademarks” means collectively, the
documents to record the assignment of the patents, patent applications and
trademark registrations and applications for registration included in the
Purchased Assets to Buyer in the United States Patent and Trademark Office and
the corresponding government offices in all the applicable jurisdictions,
substantially in the forms attached as Exhibit A.

 

1

 

“Bill of Sale” means the bill of sale transferring to Buyer title to
the Purchased Assets (as defined in Section 2.1), substantially in the
form attached as Exhibit B.

 

“Buyer” means Bushnell, Inc., a Delaware corporation, together
with its successors and permitted assigns.

 

“Claim” means any legal claim, legal demand or Action.

 

“Closing Date” means the date and time of closing on the sale and
purchase under the Agreement as set forth in Section 3.4.

 

“Code” means the Internal Revenue Code of 1986, as amended, including
without limitation, any successor revenue code of the United States federal
government, together with the rules and regulations promulgated
thereunder.

 

“Confidential Information” means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as “confidential”),
in any form or medium, that relates to the Business and/or its suppliers,
distributors, customers, independent contractors and/or other business
relations, but excludes any information already properly in the public
domain.  Confidential Information also
includes confidential and proprietary information and trade secrets that third
parties entrust to the Meade Parties in confidence regarding the foregoing.

 

“GAAP” means Unites Stated generally accepted accounting principles, as
in effect from time to time.

 

“General Assignment and Assumption Agreement” means the agreement
defined in Section 2.4, substantially in the form attached as Exhibit C.

 

“Governmental License” means any permission, order, certificate,
variance, license, permit, consent, registration, exemption, approval,
authorization or qualification obtained from a Governmental Body.

 

“Governmental Body” means any government or agency, administration,
department, commission, board, subdivision, court, or bureau of any foreign,
federal, state or local government or political subdivision thereof, or any
quasi-governmental, arbitral or private body exercising any regulatory, taxing,
importing or any other governmental or quasi-governmental authority.

 

“Indebtedness” means (i) any indebtedness for borrowed money; (ii) any
indebtedness evidenced by any note, bond, debenture or other debt security; (iii) any
liabilities or obligations for the deferred purchase price of property or
services with respect to which the Meade Parties are liable, contingently or
otherwise, as obligor or otherwise (other than account payables which are not
more than ninety (90) days past due); (iv) any commitment by which the
Meade Parties assure a creditor against loss (including contingent
reimbursement obligations with respect to letters of credit); (v) any
indebtedness guaranteed in any manner by the Meade Parties (including
guarantees in the form of an agreement to repurchase or reimburse); (vi) any
indebtedness or liabilities secured by a Lien on the Purchased Assets; (vii) any
amounts owed by Seller to any 

 

2

 

Person under any noncompetition or consulting
arrangements; and (viii) any amounts owed to Affiliates of Seller
(including intercompany trade and accounts payable).

 

“Know-How” means technical knowledge.

 

“Knowledge of Seller” means the actual knowledge, after reasonable
inquiry, of any of the individuals listed on Schedule 1.0 (collectively, the “Specified
Individuals”).

 

“Laws” means all applicable laws (whether statutory, common law, or
otherwise), rules, regulations, orders, ordinances, judgments, decrees, writs,
statues, codes and injunctions enacted or promulgated by any Governmental Body.

 

“Liabilities” means any and all Claims, causes of action, assessments,
losses, damages (compensatory, punitive or other), liabilities, obligations,
reimbursements, costs and expenses of any kind or nature, actual, contingent,
present or future, including, without limitation, where applicable under the
operative documents, laws or statutes, interest, penalties and reasonable
attorneys’ and experts’ fees and expenses.

 

“Liens” means any liens, pledges, deeds of trusts, hypothecation,
Claims, licenses, leases, mortgages, security interests, charges, voting
trusts, restrictions on transfer, or other encumbrances.

 

“Loss” means any loss, Liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or expense, whether or not
arising out of third party claims (including interest, penalties, reasonable
attorneys’ fees and expenses and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing and the enforcement of any rights
hereunder).

 

“Material Adverse Effect” means any circumstance, change, event or
effect that, individually or in the aggregate with any other circumstance,
change, event or effect, is or reasonably could be expected to be materially
adverse to the business, assets, financial condition or results of operations
of the Business taken as a whole, but excluding the effects of: (i) changes
to the industries and markets in which the Business operates, to the extent
such changes do not have a disproportionately adverse effect on the Seller or
the Business (ii) changes in the United States or world financial markets,
to the extent such changes do not have a disproportionately adverse effect on
the Seller or the Business, or (iii) a public announcement related to this
Agreement.

 

“Parent” means Meade Instruments Corp., a Delaware corporation,
together with its successors and permitted assigns.

 

“Person” means any individual, corporation, Governmental Body,
association, partnership, limited liability company, or other entity.

 

“Product(s)” means all products manufactured, marketed, sold,
distributed and serviced by or on behalf of the Meade Parties in connection
with the Business and listed on Schedule 1.2 by SKU.

 

3

 

“Proprietary Rights” means all (i) patents, patent applications
and inventions (whether or not patentable or reduced to practice); (ii) Trademarks
and internet domain names; (iii) works of authorship (whether or not
copyrightable) and copyrights; (iv) Trade Secrets, Know-How and
confidential information; (v) software (including source code, executable
code, systems, tools, data, databases, firmware, and related documentation); (vi) registrations
and applications for any of the foregoing; (vii) all other intellectual
property and proprietary rights; and (viii) all copies and tangible
embodiments of any of the foregoing, in whatever form or medium.

 

“Related Agreements” means the Assignment of Patents and Trademarks (Exhibit A),
the Bill of Sale (Exhibit B), and the General Assignment and Assumption
Agreement (Exhibit C).  The Related
Agreements are a part of this Agreement.

 

“Seller” means Simmons Outdoor Corporation, a Delaware corporation,
together with its successors and permitted assigns.

 

“Taxes,” means any federal, state, local, provincial and foreign
income, payroll, withholding, excise, value added, social security, sales, use,
real and personal property, occupancy, business and occupation, mercantile,
capital stock, franchise, profits, gross receipts, transfer, employment, wage,
severance, real estate, stamp, alternative or add-on minimum, environmental,
license, capital, intangible, services, premium, ad valorem, windfall profits,
import, custom, and any other taxes, fees, duties, assessments or governmental
charges of any kind whatsoever (including interest, other additions to Taxes
and penalties thereon and including estimated taxes thereof).

 

“Tax Return” means any report, return, statement, declaration or other
written information (including any related or supporting schedule, statement or
information) required to be supplied to or filed with a taxing authority in
connection with Taxes.

 

“Trademarks” means trademarks, service marks, trade names, corporate
names, business names, logos, slogans, trade dress, and all other indicia of
origin, together with all translations, adaptations, derivations, and
combinations thereof and all goodwill associated therewith.

 

“Trade Secrets” means all trade secrets and other proprietary
information, technologies, processes, techniques, protocols, methods, formulae,
compositions, industrial models, architectures, designs, drawings, plans,
specifications, methodologies, ideas, research and development, and
confidential information (including technical data, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals), in each case to the extent protectable under applicable law.

 

“$” means U.S. Dollar.

 

ARTICLE 2

PURCHASE AND SALE OF ASSETS

 

2.1.          Assets to be Purchased.  On the terms
and subject to the conditions set forth in this Agreement, the Meade Parties
hereby sells, transfers, conveys, assigns and delivers to or causes to be sold,
transferred, conveyed, assigned and delivered to Buyer and Buyer hereby
purchases from the Meade Parties, free and clear of any and all Liens, all of
the Meade Parties’s 

 

4

 

right, title and interest in and to the following
assets, properties, rights, titles and interests used or held for use by the
Meade Parties in connection with the Business, as exists immediately prior to
the Closing Date, except to the extent constituting Retained Assets as provided
in Section 2.2 (the “Purchased Assets”):

 

(a)           all tooling, machinery and equipment owned and used
primarily for the design, manufacture, inspection and testing of the Products,
including without limitation, the manufacturing, maintenance and testing tools,
dies, jigs, molds, fixtures, patterns, and equipment (including, without
limitation, all special test equipment), and spare or replacement parts,
described on Schedule 2.1(a);

 

(b)           all inventory related primarily to the Business as set
forth on Schedule 2.1(b) (the “Inventory”);

 

(c)           subject to Sections 2.3 and 6.4 below, all of the
Meade Parties’ right, title and interest in and to all contracts, subcontracts,
purchase orders and licenses under which the Meade Parties have committed to
provide goods or services primarily in connection with the Products, including
the contracts set forth on Schedule 2.1(c), other than in violation of Section 6.1
(collectively, “Contracts”);

 

(d)           subject to Sections 2.3 and 6.4 below, all of the
Meade Parties’ right, title and interest in and to the contracts, subcontracts,
purchase orders, co-production arrangements and licenses under which the Meade
Parties has committed to acquire goods or services primarily in connection with
the Products, including the subcontracts set forth on Schedule 2.1(d), other
than in violation of Section 6.1 (collectively, “Subcontracts”);

 

(e)           subject to Section 2.2(c) below, a copy of
operating records used by the Meade Parties primarily for the Business as
follows: sales and sales promotional data, sales order files, advertising
materials, customer lists and records, vendor/supplier lists, customer bid and
proposal information, catalogs, price lists, and marketing photographs;
supplier lists and records; test data and reports; training materials and
equipment; market research; customer surveys; media plans; raw artwork files
including catalogues, ads, POP and promotions; promotional material including
banners, signs, posters, hats, clothing, scope cap covers, CDs, DVDs, and
videos, and technical publications and related data, in each case whether
evidenced in writing, electronic data, computer software or otherwise;

 

(f)            all Proprietary Rights used or held for use primarily
for the design, manufacture, testing, marketing, sale, or service of the
Products, including the issuances, registrations or applications therefor and
unregistered Trademarks, set forth on Schedule 2.1(f), and all rights to
collect royalties, products and proceeds in connection with the foregoing and
all rights to sue and bring other claims for past, present and future
infringement, misappropriation or other violation of any of the foregoing, and
all rights to recover damages (including attorneys’ fees and expenses) or lost
profits in connection therewith;

 

(g)           all software used or held for use primarily for the
design, manufacture, testing, sale, or service of the Products or otherwise in
connection with the Business(excluding commercial software and related
licenses) including source code and executable code (collectively, the “Exclusive
Seller Software”), set forth on Schedule 2.1(g);

 

5

 

(h)           all products used or held for use by the Meade Parties
primarily in connection with marketing or testing relating to the Products,
including the products listed on Schedule 2.1(h) and dated as of the dates
indicated in such schedule;

 

(i)            to the extent transferable, all of the Meade Parties’s
copies and tangible embodiments, in whatever form or medium, containing and
documenting any Proprietary Rights;

 

(j)            the domain names listed on Schedule 2.1(j);

 

(k)           all credits, prepaid expenses, deferred charges,
advance payments, security deposits and other prepaid items made by, or
received by, the Meade Parties to the extent they relate to the performance of
Contracts or Subcontracts following the Closing;

 

(l)            subject to Section 2.3, all Governmental Licenses
primarily used or intended for use by the Business, and the rights to all data
and records held by any Governmental Body relating to the Purchased Assets;

 

(m)          with respect to contracts pursuant to which the Meade
Parties provide to the counterparty both services relating to the Products and
other services, the rights thereunder relating to the Products (such rights
relating to the Products, the “Shared Contracts”), including the Shared
Contracts listed on Schedule 2.1(m); and

 

(n)           the phone number 1-800-285-0689.

 

2.2.          Retained Assets. 
Notwithstanding any other provision of this Agreement, subject to the
licenses granted in Section 6.13, the Meade Parties shall retain their
right, title and interest in and to all assets, properties, rights and
interests relating to or arising from Seller’s business that are not included
in the Purchased Assets (the “Retained Assets”), including without limitation:

 

(a)           except and to the extent provided in Section 2.1(k),
all cash, cash equivalents and accounts receivable;

 

(b)           all rights, recoveries, refunds (including credits and
refunds for Taxes attributable to the operations of Seller’s business with
respect to any period, or portion thereof, ending on or prior to the Closing
Date or otherwise attributable to the period prior to the Closing Date),
counterclaims, rights of set-off and other causes of action and Claims against
third parties with respect to the Business before the Closing Date;

 

(c)           Seller’s corporate minute books, stock transfer
records, stock certificates, consolidating entry records, corporate seals, Tax
Returns, tax and accounting records, and all other books and records not
specifically set forth in Section 2.1(e), except such books and accounting
records necessary to support the Purchased Assets;

 

(d)           subject to Section 6.2, all Claims, rights of
recovery and rights of setoff of any kind related to the Retained Assets or the
Retained Liabilities, including without limitation, any liens, mechanic’s liens
or any rights to payment or to enforce payment in connection with 

 

6

 

work performed on or prior to the Closing Date, except
to the extent that retention of Claims or rights impairs the Purchased Assets
or the Liabilities assumed by Buyer;

 

(e)           all corporate purchase agreements under which Seller
makes purchases for products, other than primarily for the Business;

 

(f)            any insurance policies of Seller (any coverage
thereunder) and any proceeds of any claims made against such policies;

 

(g)           all Governmental Licenses relating to Seller’s
business, except to the extent the Licenses are assigned or assumed by Buyer
under the terms of this Agreement;

 

(h)           any assets of any “employee benefit plans” (as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)) and any rights under any plan, program, policy,
arrangement or agreement relating to employee benefits, employment or
compensation of Seller or its ERISA Affiliates;

 

(i)            all tooling, test equipment and other machinery and
equipment other than that described in Section 2.1(a), and all rolling
stock, vehicles, security equipment, telephones, facsimile machines, photocopy
equipment, computers, and networking equipment used by Seller;

 

(j)            all credits and refunds for Taxes attributable to the
operation of the Business with respect to any period, or portion of a period,
ending on or prior to the Closing Date or otherwise attributable to the period
prior to the Closing Date;

 

(k)           all obligations or Liabilities under any intercompany
accounts payable to or intercompany obligations among the Seller, Parent and
their respective Affiliates; and

 

(l)            the patent and patent application listed on Schedule
2.2(l), together with all inventions and technology related to the foregoing,
subject to Section 6.13.

 

2.3.          Nonassignable Contracts. 
Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any Contract,
Subcontract, claim, authorization of a Governmental Body, or any claim, right
or benefit arising thereunder or resulting therefrom, if the transfer of any
such Contract, Subcontract, claim, authorization of a Governmental Body, or any
claim, right or benefit arising thereunder or resulting therefrom, or any other
assets under this Agreement would be deemed an attempted assignment thereof
without the required consent of a third party thereto and would constitute a
breach or a claim of breach thereof or in any way affect the rights of Seller
or Buyer thereunder.  Any assumption by
Buyer of obligations under this Agreement, whether by operation of Law or in
connection with the transfer of assets under this Agreement, which assumption
shall require the consent or approval of any third party shall be made subject
to such consent or approval being obtained. If any such consent shall not be
obtained despite Seller’s and Buyer’s commercially reasonable efforts to
procure same, then Seller shall cooperate with Buyer in any reasonable
arrangement designed to provide for the Buyer the benefits intended to be
transferred to Buyer with respect to the underlying Contract, including,
enforcement of such Contract at the cost and for the account of the Buyer of
any and all rights of the Seller against any other party to such Contract
arising out of the breach, nonfulfillment or cancellation thereof by such other
party or otherwise, and 

 

7

 

subject to the terms and conditions contained herein,
Buyer shall assume liability for Seller’s obligations thereunder arising on or
after the Closing Date.

 

2.4.          Liabilities to be Assumed. 
Subject to the terms and conditions of this Agreement, on the Closing
Date, Buyer shall deliver to Seller an agreement (the “General Assignment and
Assumption Agreement”), whereby Seller shall assign, cause to be assigned,
delegate or otherwise transfer to Buyer, and Buyer shall assume and agree to
perform and discharge when due only the following the Liabilities
(collectively, the “Assumed Liabilities”):

 

(a)           Subject to Sections 2.3 and 6.4, all Liabilities
of Seller and its Affiliates under all the Contracts and Subcontracts actually
assigned to and assumed by Buyer with respect to performance required after the
Closing Date, but specifically excluding any Liabilities relating to or arising
out of such Assumed Contracts as a result of (A) any breach of such
Contract or Subcontract occurring on or prior to the Closing Date, (B) any
violation of law, breach of warranty, tort or infringement occurring on or prior
to the Closing Date; or (C) any charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand that arises as a result of
a matter referred to in clause (A) or clause (B) above or that is
filed prior to the Closing Date;

 

(b)           Subject to Section 6.2, Liabilities for warranty
claims for Products sold by Seller and solely based upon the express warranty
of Seller as described on Schedules 4.15(a)(i) and (ii) up to an
aggregate of $200,000 over the first 24 months following Closing; and

 

(c)           All Liabilities arising from Buyer’s ownership of the
Purchased Assets after the Closing Date.

 

2.5.          Retained Liabilities. Notwithstanding anything to the contrary in this
Agreement, except for the Assumed Liabilities, Seller retains all Liabilities of
any nature whatsoever, whether accrued, absolute, contingent or otherwise,
whether known or unknown, whether due or to become due, whether related to the
Business or the Purchased Assets and whether disclosed on the schedules
attached hereto, and regardless of when or by whom asserted, including, without
limitation, all of the following (collectively the “Retained Liabilities”):

 

(a)           any of Seller’s liabilities or obligations under this
Agreement, the schedules attached hereto, and the Related Agreements;

 

(b)           all Liabilities arising out of or relating to the
Retained Assets;

 

(c)           all Liabilities of the Meade Parties to the extent
that they do not arise out of, or are not related to, the Business or the
Purchased Assets;

 

(d)           all Liabilities relating to the Meade Parties’
employees and any employee benefit plans, programs, policy or arrangement
presently or formerly maintained or contributed to by Seller or its ERISA
Affiliates, or with respect to which Seller or any such ERISA Affiliate has any
liability; provided, however, that nothing herein shall imply or create an
obligation of Seller or its Affiliates to provide or continue to provide
compensation or benefits to Seller’s employees who are hired by Buyer other
than those which are required by Law to be provided to individuals who
terminate their employment with Seller;

 

8

 

(e)           all Liabilities of the Meade Parties, or any Affiliate
of the Meade Parties, for Taxes other than Transfer Taxes as defined in Section 3.3
which are attributable to any period without regard to whether such Taxes
relate to periods (or portions thereof) ending on or prior to the Closing Date,
including without limitation, all Taxes on taxable gain or loss resulting from
the sale of the Purchased Assets to the Buyer;

 

(f)            Liabilities, if any, for severance pay or other
separation benefits to Seller’s employees;

 

(g)           all Liabilities, whether arising in contract or in
tort (including warranty, negligence and strict liability), arising from events
occurring prior to the Closing Date relating to or arising from the Business or
Purchased Assets;

 

(h)           all Liabilities with respect to any Products that were
sold or services that were performed prior to or on the Closing Date, including
any obligation to pay a commission, product liability claims, infringement
claims and any related Claims and Actions;

 

(i)            all Liabilities for attorneys’, accountants’ and other
advisor fees and expenses and other costs and expenses incurred by or on behalf
of Seller or any of its Affiliates in connection with the transactions
contemplated by this Agreement;

 

(j)            any of Seller’s liabilities or obligations arising (A) by
reason of any violation or alleged violation of any federal, state, local or
foreign law or any requirement of any Governmental Body, or (B) by reason
of any breach by the Meade Parties of any Contract, Subcontract or Shared
Contract on or before the Closing Date;

 

(k)           any Liabilities relating to any Law, Claim or Action
arising out of or in connection with Seller’s or any of its Affiliate’s conduct
of the Business or any other conduct of Seller, Seller’s officers, directors,
employees, consultants, agents or advisors on or prior to the Closing Date;

 

(l)            any of the Meade Parties’ Liabilities for Indebtedness;

 

(m)          Subject to Section 6.2, Liabilities for warranty
claims for Products sold by Seller and based upon the express warranties of
Seller as described on Schedules 4.15(a)(i) and (ii) in excess
of $200,000 over the first 24 months following Closing; and

 

(n)           all Liabilities whether arising in contract or in tort
(including warranty, negligence and strict liability), arising prior to, on or
after the Closing Date which involve (i) any Products sold or otherwise
transferred by Seller before the Closing Date or (ii) Retained Assets,
other than Products, and any Claims or Actions related to (i) or (ii) arising
prior to, on or after the Closing Date.

 

ARTICLE 3

PRICE AND TERMS

 

3.1.          Purchase Price.  The purchase
price of the Purchased Assets (the “Purchase Price”) shall be $7,250,000.

 

9

 

3.2.          Payment of the Purchase Price. 
At the Closing, Buyer shall pay to Seller the Purchase Price in
immediately available funds by way of wire transfer to the bank account designated
by Seller.

 

3.3.          Transfer Taxes.  Buyer and
Seller shall share equally all costs of any sales, use, privilege and other
transfer or similar taxes, (but excluding all withholding and other taxes
computed on the basis of net income) including any interest and penalties (“Transfer
Taxes”), imposed upon either party hereto as a result of the transactions
contemplated hereby.  To the extent any
exemptions from such Transfer Taxes are available, Buyer and Seller shall
cooperate to prepare any certificates or other documents necessary to claim
such exemptions.

 

3.4.          Closing Date.  The closing
of the transactions contemplated by this Agreement (the “Closing”) shall take
place at the offices of Kirkland & Ellis LLP, 153 East 53rd Street,
New York, NY 10022, at 10:00 a.m., local time, on June 12, 2008, or
such other date as the Parties may mutually agree upon in writing (the “Closing
Date”).

 

3.5.          Allocation of Purchase Price. 
The Purchase Price (and all other capitalizable costs) shall be
allocated among the Purchased Assets in accordance with Schedule 3.5.  Such allocation shall be binding upon Buyer
and Seller for purposes of Section 1060 of the Code and the Treasury
Regulations promulgated thereunder (and any similar provision of state, local
or foreign law, as appropriate).  Buyer
and Seller and their respective affiliates shall report, act and file Tax
Returns (including, but not limited to Internal Revenue Service Form 8594)
in all respects consistent with such allocation.  Neither Buyer nor Seller, nor any of them,
shall take any position in Tax Returns that is inconsistent with such
allocation unless expressly required to do so by applicable law.

 

3.6.          Inventory Statement.

 

(a)           No later than two (2) days prior to Closing,
Seller will deliver to Buyer a written statement (the “Estimated Inventory
Statement”) setting forth in good faith the Seller’s estimate of the value of
the Inventory (as defined below), together with an itemization.  The value of the Inventory will be based on
Seller’s currently disclosed cost by SKU as listed on the Estimated Inventory
Statement.  Within 30 days after the
Closing Date, Buyer will prepare and deliver to Seller a statement setting
forth Buyer’s calculation of the value of the Inventory (the “Closing Statement”),
together with an itemization.  Within
five (5) days after receipt of the Closing Statement, Seller will notify
Buyer in writing of its agreement or disagreement, as the case may be, with the
Closing Statement.  If the Seller does
not provide written notice to the Buyer objecting to the Closing Statement
within five (5) days of receipt, the Closing Statement will be deemed the
Final Inventory Statement (as defined below). 
If the Seller disputes any aspect of the Closing Statement, the Seller’s
written notice of objection must include its proposed alternative calculation
of the value of the Inventory, and basis therefore.  Thereafter, Buyer and Seller will attempt in
good faith to resolve and finally determine the value of the Inventory.  In connection with the resolution of any
dispute, each party shall pay its own fees and expenses, including without
limitation, legal, accounting and consultant fees and expenses.

 

(c)           Upon the final determination of the value of the
Inventory pursuant to Section 3.6(b) (the “Final Inventory Statement”),
the Purchase Price will be adjusted as set forth in this Section 3.6(c).  If the Final Inventory Statement is less than
the Estimated Inventory Statement, the Purchase Price will be decreased by the
difference and the Seller will promptly 

 

10

 

pay to Buyer such amount.  Any payment due under this Section 3.6(c) will
be made by wire transfer of immediately available funds within five business
days after the Final Inventory Statement has been determined.

 

ARTICLE 4

SELLER’S REPRESENTATIONS AND WARRANTIES

 

As of the date of this Agreement, Seller represents and warrants to and
agrees with Buyer as follows:

 

4.1.          Existence, Power, Authorization and Qualifications of
Seller.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and corporate authority to execute,
deliver and perform this Agreement and the Related Agreements, and to carry on its
business as it is now being conducted, and is duly qualified to do business and
is in good standing in every jurisdiction in which Seller’s Business requires
it to be so qualified, except where the failure to be so qualified would not
have a Material Adverse Effect.  The
execution, delivery and performance by Seller of this Agreement and the Related
Agreements have been duly authorized by all necessary corporate action of
Seller, and no other proceeding on the part of Seller or its shareholder are
necessary to authorize the execution, delivery or performance of this Agreement
or the other agreements contemplated hereby. 
This Agreement, and the Related Agreements, to be executed and delivered
by Seller constitute valid and legally binding obligations of Seller
enforceable against it in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or law), including without limitation, possible
unavailability of specific performance, injunctive relief, or other equitable
remedies.  No Claim exists or has been
asserted that would prevent or delay consummation of the Closing or transfer of
the Purchased Assets to Buyer.

 

4.2.          Non-Contravention.  Neither the
execution and delivery by Seller of this Agreement, the Related Agreements and
the other documents and agreements contemplated by this Agreement, nor the
consummation by Seller of the transactions contemplated by this Agreement
(including, without limitation, the assignment to Buyer of all right, title and
interest of Seller in and to the Contracts and Subcontracts), will violate,
conflict with or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, require any consent, waiver or approval under, or require any offer to
purchase or any prepayment of any material debt or result in the creation of
any Lien upon any of the Purchased Assets under any of the terms, conditions or
provisions of the certificate of incorporation and bylaws of Seller, any
material Law, judgment, decree, order, award, citation, policy, standard,
official interpretation, writ, injunction, regulation or rule of any court
or other Governmental Body applicable to Seller or any material loan, credit
agreement or guarantee to which either Seller is a party or by which either
Seller or any of its properties or assets may be bound or affected or upon any
Contract or Subcontract.

 

11

 

4.3.          Consents.  Except for
the consents set forth in Schedule 4.3, no consent, approval, license, permit
or authorization or order of or with any Governmental Body, or other Person is
required under any Contracts or Subcontracts, business license, Governmental
Licenses, Laws or otherwise in connection with the execution and delivery of
this Agreement by Seller or the consummation of the transactions contemplated
under this Agreement (including, without limitation, the assignment to Buyer of
all right, title and interest of Seller in and to the Contracts and
Subcontracts).

 

4.4.          Title to Personal Property. 
Except as set forth on Schedule 4.4, Seller has, and the Buyer on
the Closing Date will receive, good and marketable title to the Purchased
Assets free and clear of any Liens.

 

4.5.          Tooling and Test Equipment.  Section 2.1(a) identifies
each item of tooling and test equipment including, without limitation, all
manufacturing, maintenance and testing tools, dies, jigs, molds, fixtures,
patterns, training devices and equipment including, without limitation, all
special test equipment and all spares or replacement parts therefore, used by
Seller as of the date of this Agreement primarily for the manufacture and servicing
of the Products.

 

4.6.          Compliance with Laws, Licenses.

 

(a)           Laws.  Except as set
forth in Schedule 4.6(a), Seller has conducted its Business in compliance
in all material respects with all Laws.

 

(b)           Governmental Licenses.  Schedule 4.6(b) lists
the Governmental Licenses issued to or possessed by Seller concerning the
Business, Products or Purchased Assets. 
The Governmental Licenses set forth in Schedule 4.6(b) comprise all
of the Governmental Licenses required to operate the Business as presently
conducted by Seller, except where the failure to hold such Governmental
Licenses would not, individually or in the aggregate, be material to the
operations of the Business.  Seller has
not received any written or other notification of any threatened suspension or
cancellation of any of the Governmental Licenses.  Each of the Governmental Licenses is valid
and in full force and effect and Seller has not received notice of any claim
or, to the actual knowledge of each Specified Individual, threat to revoke any
of the Governmental Licenses or to declare them invalid.  Seller makes no representations or warranties
regarding Governmental Licenses that may be required by Buyer.

 

4.7.          Contracts and Commitments.

 

(a)           Schedules 2.1(c) and 2.1(d) lists all
agreements under which Seller or its Affiliates have outstanding commitments
related to the Business.  Schedule 4.7
lists each of the contracts and agreements of the types described below,
excluding, however, any such contracts or agreements which relate exclusively
to Retained Assets, to which the Seller or any of its Affiliates is a party or
is otherwise bound as of the date hereof (together with the agreements in
Sections 2.1(c) and 2.1(d), the “Material Contracts”):

 

(i)            any material Contract or Subcontract containing
covenants limiting the freedom of the Seller to compete in any line of
business, with any Person or in any area or territory;

 

12

 

(ii)           any material license, to which Seller is a party
either as licensor or licensee, that restricts Seller’s use of any of the
Proprietary Rights or Exclusive Seller Software in connection with the
Business;

 

(iii)          [any Contract or Subcontract, whether exclusive or
otherwise, containing expressed terms and conditions with any Person relating
to the Products or Purchased Assets and the terms of which are material to the
Business;]

 

(iv)          agreement or indenture relating to Indebtedness or placing
a Lien on any of the Purchased Assets  or
letter of credit arrangements;

 

(v)           nondisclosure or confidentiality agreements pursuant
to which Seller is obligated to maintain the confidentiality of, or not to
disclose, designated information related to the Business;

 

(vi)          lease or agreement under which Seller is lessee of or
holds or operates any personal property leases, owned by any other party for
which the annual rent exceeds $100,000;

 

(vii)         broker, distributor, vendor or maintenance agreements;

 

(viii)        contracts and licenses (including all inbound licenses)
to which Seller is a party either as licensee or licensor with respect to any
Proprietary Rights; or

 

(ix)           all client and customer engagements of which Seller,
at the time of the engagement or any subsequent amendment, provided for
Products at non-standard rates of Seller or non-customary terms or conditions
of Seller.

 

(b)           Subject to obtaining the consents listed on Schedule
4.3, the enforceability of the Material Contracts will not be affected in any
material manner by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. Neither Seller nor, to
the Knowledge of Seller, any other party, is in default under or in violation
of, nor, to the Knowledge of each Specified Individual, is there any basis for
any valid claim of default under or violation of, any Material Contract that
could, individually or in the aggregate, have a Material Adverse Effect.  Each Material Contract is in all material
respects valid, binding and in full force and effect and is enforceable by
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law), including, without limitation, possible unavailability of specific
performance, injunctive relief or other equitable remedies; and there have been
no cancellations or threatened cancellations thereof nor outstanding material
disputes thereunder.

 

4.8.          Intellectual Property.

 

(a)           Except as disclosed in Schedule 4.8(a), Seller
owns the entire right, title and interest in and to, or has a valid and
enforceable right to use, the Proprietary Rights included 

 

13

 

in the Purchased Assets (“Business Proprietary Rights”),
free and clear of Liens except for Permitted Liens in connection with the
Products.

 

(b)           Except as disclosed in Schedule 4.8(b), (i) all
Business Proprietary Rights issuances, registrations and applications are
valid, subsisting and in full force and effect; (ii) Seller has the right
to bring actions for infringement or unauthorized use of the Business
Proprietary Rights, and (iii) to the actual knowledge of each Specified
Individual, no other Person is infringing upon the Business Proprietary Rights,
or has infringed upon the Business Proprietary Rights at any time during the
four years preceding the date of this Agreement.  Seller has taken all actions reasonably
necessary, and all actions common in the industry, to maintain, protect, and
enforce the Business Proprietary Rights, including the secrecy, confidentiality
and value of its Trade Secrets and other confidential information.  All of the Business Proprietary Rights and
the Exclusive Seller Software shall be owned or available for use by Buyer
immediately after the Closing on terms and conditions substantially similar  to those under which Seller owned or used
the Business Proprietary Rights and the Exclusive Seller Software immediately
prior to the Closing.

 

(c)           Except as disclosed in Schedule 4.8(c), (i) to
the Knowledge of Seller, during the four years before the date of this
Agreement, no written or recorded claim has been made or asserted that alleges
that the conduct of the Business or the use of any Business Proprietary Rights
infringes, misappropriates or otherwise conflicts with the Proprietary Rights
of another Person, and Seller has not received any threats or notices of the
foregoing (including any demands or offers to license any Proprietary Rights
from any other person); (ii) no intellectual property-related litigation,
arbitration or other proceeding is currently pending with respect to the
Products or any Business Proprietary Rights; and (iii) to the Knowledge of
Seller, no written or recorded claim has been made or asserted that challenges
the validity, enforceability, use or ownership of any of the Business
Proprietary Rights.

 

(d)           Except as set forth in Schedule 4.8(d), all
maintenance, license and registration fees, costs or expenses for any Business
Proprietary Rights issuances, registrations and applications have been paid
current as of the Closing Date.

 

(e)           With respect to that certain License Agreement between
Seller and Alliant Techsystems Inc., dated as of October 25, 2002, except
as set forth in Schedule 4.8(e), the only mark covered by the exclusive license
granted by Seller to Alliant Techsystems Inc. is “Simmons” and Seller has
neither (i) added any trademarks to the definition of “Licensed Marks” as
defined in the License Agreement (ii) to the Knowledge of Seller, adopted
or registered any “Derivative Marks” as defined in the License Agreement nor (iii) created
or obtained any additional marks that the parties to the License Agreement
mutually agreed to include in the definition of Licensed Marks.

 

4.9.          Claims.  There are no
Claims or, to the Knowledge of Seller, threatened Claims against or affecting
Seller or its Affiliates in any court or before any arbitration panel of any
kind or before or by any Governmental Body the outcome of which could
reasonably be expected to have a Material Adverse Effect on the Purchased
Assets or that questions the validity or legality of this Agreement or any
Related Agreement or any action taken or to be taken by Seller in connection
with this Agreement or any Related Agreement.

 

14

 

4.10.        Inventory.  Schedule 2.1(b) sets forth the Inventory
as of May 31, 2008.  Except as
otherwise noted on Schedule 2.1(b), the Inventory is new, not obsolete, in good
condition, and merchantable, and has been maintained in the ordinary course and
consistent with past practice.  To the
Knowledge of Seller, there are no defects, facts or conditions affecting the
Inventory which could, individually or in the aggregate, interfere in any
respect with the use, occupancy or operation thereof as currently used,
occupied or operated, or their adequacy for such use except, in each case, as
would not have, individually or in the aggregate, a Material Adverse Effect.

 

4.11.        Books and Records.

 

(a)           Seller maintains in the ordinary course of business
the Books, Records and accounts in all material respects and in sufficient detail
to reflect accurately and fairly the operations, transactions and disposition
of the assets, liabilities and equities concerning the Purchased Assets. To
actual knowledge of the Specified Individuals, there has not been any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Seller’s internal control over financial reporting.

 

(b)           Seller represents and warrants to Buyer that, since December 31,
2007, Seller has not (1) paid trade or account payables other than in the
ordinary course of business or, delayed or postponed other than in the ordinary
course of business the payment of any trade or accounts payable or commissions
or any other liability or litigation or agreed or negotiated with any party
other than in the ordinary course of business to extend the payment date of any
trade or accounts payable or commission or any other liability or obligation or
(2) instituted or permitted any material change in the conduct of the
Business, or any material change in its method of purchase, sale, lease,
management, marketing, promotion or operation.

 

4.12.        Assets.  Except as set
forth in Schedule 4.12, all equipment, machinery, tools, dies, molds and test
equipment described in Section 2.1(a) are in good repair and
operating condition (subject to normal wear and tear) and, to the Knowledge of
Seller, there are no defects, facts or conditions affecting the Purchased
Assets which could, individually or in the aggregate, interfere in any respect
with the use, occupancy or operation thereof as currently used, occupied or
operated, or their adequacy for such use.

 

4.13.        Brokers.  Except as
provided in Schedule 4.13, neither Seller nor any of its Affiliates has
employed any broker, agent or finder in connection with any transaction
contemplated by this Agreement.

 

4.14.        Litigation.  There is no
claim, litigation, proceeding or investigation of any kind related to the
Business, pending or threatened by or against Seller and, to the Knowledge of
Seller, there is no basis for any such claim, litigation, proceeding or
investigation.  The Purchased Assets are
not subject to any outstanding consent, settlement, decree, order, injunction,
judgment or ruling restricting the use thereof.

 

4.15.        Product Warranties; Product Liability.

 

(a)           Product Warranty.  Schedule
4.15(a)(i) contains the standard forms of product warranty of Seller used
in the conduct of the Business.  Seller
has not undertaken any performance obligations or made any warranties or
guarantees with respect to the Products other than those disclosed in Schedule
4.15(a)(i).  Schedule 4.15(a)(ii) sets
forth the approximate cost 

 

15

 

to Seller for warranty claims for the Products in each
of the past three years.  Each of the
Products produced or sold by Seller in the conduct of the Business (i) is,
and at all times has been, in compliance in all material respects with all
applicable Laws, and (ii) is, and at all relevant times has been, fit for
the ordinary purposes for which it is intended to be used and conforms in all
material respects to any promises or affirmations of fact made in the warranty
or on the container or label for such product or in connection with its sale,
whether through advertising or otherwise.

 

(b)           Product Liability.  There is no
design defect with respect to any of the Products.  Seller has not recalled any Products
manufactured, serviced, distributed or sold by Seller in the conduct of the
Business, and there is no reasonable basis known to Seller for any such recall
on or after the Closing Date.

 

4.16.        Effect of Transfer.  Seller is
currently not insolvent or unable to pay its debts, liabilities and obligations
as they become due, and the transfer of the Purchased Assets to Buyer will not
render Seller insolvent or unable to pay its debts, liabilities and obligations
as they become due.

 

4.17.        Taxes.  Seller
represents and warrants to Buyer with respect to Taxes related to the Purchased
Assets and the Business that Seller has timely filed all federal, state, local,
foreign and other returns, reports, information returns and declarations of
estimated tax required to be filed with Seller with respect to Taxes,
including, without limitation, returns or reports with respect to backup
withholding and other payments to third parties, and has timely paid all Taxes
shown to be due on (or required to have been shown on) the Tax Returns or
otherwise required to be paid with respect to any period before the date of
this Agreement.

 

4.18.        Suppliers and Customers.

 

(a)           Schedule 4.18(a) sets forth a complete list of the top fifteen
customers (measured by gross revenues received) of the Seller during the twelve
month period ended February 29, 2008 (each a “Material Customer”) and sets
forth opposite the name of each such customer the aggregate amount of sales
attributable to such customer.

 

(b)           Except as set forth on Schedule 4.18(b), no
Material Customer has (i) permanently or indefinitely stopped, or given
the Seller notice that it intends to stop, trading with, purchasing from or
supplying the Seller; (ii) materially reduced, or given the Seller notice
that it intends to materially reduce, its trading with, purchasing from or
provision of supplies to the Seller, except for variances in the timing or
quantity of products purchased from the Seller; or (iii) materially
changed, or given the Seller notice that it intends to change, the terms,
including price terms, on which it is prepared to trade with, purchase from or
supply the Sellers.

 

4.19.        Affiliated Transactions.  Except as set forth in Schedule 4.19, neither
Parent nor any of its Affiliates (i) owns any property or right, whether
tangible or intangible, included in the Purchased Assets; (ii) has any
claim or cause of action against the Business or the Purchased Assets; or (iii) provided
services or resources to the Business.

 

16

 

ARTICLE 5

REPRESENTATIONS AND
WARRANTIES BY BUYER

 

As of the date of this Agreement, Buyer hereby represents and warrants
to and agrees with Seller as follows:

 

5.1.          Existence, Power, Authorization and Qualifications of
Buyer.  Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
corporate power and corporate authority to execute, deliver and perform this
Agreement and the Related Agreements, to own all its properties and assets, and
to carry on its business as it is now being conducted, and is duly qualified to
do business and is in good standing in every jurisdiction in which Buyer’s
business requires it to be so qualified. Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby.  The
execution, delivery and performance of this Agreement and the Related
Agreements by Buyer have been duly authorized by all necessary corporate action
of Buyer, and this Agreement has been, and the Related Agreements will be, duly
executed and delivered by Buyer and constitute or will constitute valid and
legally binding obligations of Buyer enforceable against it in accordance with
their terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally, and by general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or law),
including without limitation, possible unavailability of specific performance,
injunctive relief, or other equitable remedies.

 

5.2.          Non-Contravention.  Neither the
execution and delivery by Buyer of this Agreement, the Related Agreements and
the other documents and agreements contemplated hereby, and thereby, nor the
consummation by Buyer of the transactions contemplated hereby or thereby, will
violate any provision of the certificate of incorporation, bylaws or charter
documents of Buyer, or, to the knowledge of the Buyer will violate any Law or
any judgment, decree, order, award, citation, policy, standard, official
interpretation, writ, injunction, regulation or rule of any court or other
Governmental Body.

 

5.3.          Consents.  Except for
the consents that may be required to transfer certain of the Contracts, and
except for Contracts that may require novation, no consent, approval, license,
permit or authorization or order of or with any Governmental Body, or other
Person is required in connection with the execution and delivery of this
Agreement by Buyer or the consummation of the transactions contemplated herein.

 

5.4.          Brokers.  Neither Buyer
nor any of its Affiliates has employed any broker, agent or finder in
connection with any transaction contemplated by this Agreement.

 

5.5.          Claims.  There are no
Claims pending, or to the knowledge of Buyer, threatened against or affecting
Buyer or its Affiliates in any court or before any arbitration panel of any
kind or before or by any Governmental Body that questions the validity or
legality of this Agreement or any Related Agreement or any action taken or to
be taken by the Buyer in connection with this Agreement or any Related
Agreement.

 

5.6.          No Implied Representation. 
Any cost estimates, projections or other predictions contained in the
due diligence materials that have been provided to Buyer are not and shall not 

 

17

 

be deemed to be representations or warranties of
Seller, except to the extent arising from fraud or intentional misconduct.

 

ARTICLE 6

COVENANTS

 

6.1.          Access to Records and Personnel After the Closing.

 

(a)           Seller shall retain the books, records, documents,
instruments, accounts, correspondence, writings, evidences of title and other
papers relating primarily to the Products, the Purchased Assets and the Assumed
Liabilities in their possession (the “Books and Records”) for the period of
time set forth in their respective records retention policies at Closing or for
such longer period as may be required by law or any applicable court order.

 

(b)           Seller will allow Buyer reasonable access, during its
normal business hours and upon reasonable notice, to such Books and Records
(excluding Tax Returns, personnel files, medical and Workers’ Compensation
files, and drug-free workplace testing results (collectively, the “Private
Information”)), and to Seller’s personnel having knowledge of the whereabouts and/or
contents of such Books and Records (excluding the Private Information), for
legitimate business reasons.  Seller
shall be entitled to recover its reasonable out-of-pocket costs (including,
without limitation, reasonable copying costs) incurred in providing such Books
and Records and/or personnel to Buyer. 
Buyer will hold in confidence all information obtained from Seller, any
of its officers, agents, representatives or employees (collectively, the “Seller
Parties”); provided, however, that the following shall not be deemed to be
confidential information for purposes of this Agreement: (i) information
which is or becomes generally available to the public other than as a result of
a disclosure by the Seller Parties or (ii) information which becomes available
to Buyer on a non-confidential basis from a source other than the Seller
Parties if such source was not subject to any prohibition against transmitting
the information to the receiving party.

 

(c)           Buyer will allow Seller reasonable access, during its
normal business hours and upon reasonable notice, to such Books and Records
(excluding Tax Returns, personnel files, medical and Workers’ Compensation
files, and drug-free workplace testing results (collectively, the “Private
Information”)), and to Buyer’s personnel having knowledge of the whereabouts
and/or contents of such books and records (excluding the Private Information),
for legitimate business reasons related to warranty costs and expenses incurred
by Buyer with respect to its obligation under Section 2.4(b).  Buyer shall be entitled to recover its
reasonable out-of-pocket costs (including, without limitation, reasonable
copying costs) incurred in providing such books and records and/or personnel to
Seller.  Seller will hold in confidence
all information obtained from Buyer or any of its officers, agents,
representatives or employees.

 

6.2.          Efforts; Obtaining Consents; Government Filings.

 

(a)           Subject to the terms and conditions of this Agreement,
Seller and Buyer each agrees to cooperate fully to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable, the
transactions contemplated by this Agreement and to cooperate with the other in
connection with the foregoing (i) to obtain all necessary waivers,
consents and approvals from 

 

18

 

other parties to material Contracts, Subcontracts and
Governmental Licenses (it being understood by the parties, however, that the
consent or other approval of any third party shall not be required to be
obtained prior to the Closing and such consents or approval shall not be listed
as a condition of Buyer’s obligation to close), and (ii) to fulfill all
conditions to this Agreement (it being understood that such efforts shall not
include any requirement of Seller to expend any sums of money or grant any
financial or other accommodation). 
Seller and Buyer further covenant and agree, with respect to a threatened
or pending Action or Law that would adversely affect the ability of the parties
hereto to consummate the transfer of assets under this Agreement, to use their
respective best efforts to prevent the entry, enactment or promulgation
thereof, as the case may be (it being understood that such efforts shall not
include any requirement of Seller to expend material sums of money or grant any
material financial or other accommodation). 
Seller and Buyer further covenant and agree, upon request, to cooperate
fully, as and to the extent requested by the other party, in connection with
any Action to enforce any warranty or other rights to indemnification or
recourse against any manufacturer of the Products or other third party,
including cooperation enforcing any rights to an Action that is included in the
Retained Assets, the recovery of which shall inure to the benefit of Buyer to
the extent it is required under Section 2.4(b) to pay a warranty
claim.

 

(b)           In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Section 6.2,
the proper officers of Buyer and Seller shall use all commercially reasonable
efforts in connection therewith.

 

6.3.          Further Assurances; Cooperation. 
Upon the execution of this Agreement and thereafter, each party shall
take such actions and execute and deliver such documents as may be reasonably
requested by the other party hereto in order to effect the transactions
contemplated by this Agreement.  The
parties shall cooperate fully with each other and their respective counsel and
accountants or designees in connection with any actions required to be taken as
part of their respective obligations under this Agreement.

 

6.4.          Expenses.  Except as
otherwise specifically provided in this Agreement and the Related Agreements,
each party shall bear its own expenses in connection with and in performance of
this Agreement and Related Agreements.

 

6.5.          Publicity.  From and
after the date hereof each party shall consult with and obtain the consent of
the other before issuing any press release or other public announcement
regarding the transactions contemplated by this Agreement, unless, in the
reasonable judgment of the party making the announcement, such announcement is
required to discharge its or its Affiliates’ legal obligations or to comply
with any applicable requirements of a securities exchange (in which case the
party required to make the release or announcement shall allow Buyer or Seller,
as applicable, reasonable time to comment on such release or announcement in
advance of such issuance; provided, however, that each of Buyer and Seller may
make internal announcements to their respective employees that are consistent
with such parties’ prior permitted public disclosures regarding the transactions
contemplated hereby).

 

6.6.          Title, Risk of Loss and Delivery. 
Title and risk of loss for all Purchased Assets shall pass to Buyer at
Closing.  Delivery of all Purchased
Assets shall be in place wherever located around the world and shall occur at
Closing.

 

19

 

6.7.          Non-Solicitation.  During the
period from the Closing Date to and including the first anniversary of the
Closing Date, neither Buyer nor Seller shall, and shall not permit any of their
Affiliates to, (i) induce or attempt to induce any employee of the other
party or any of their Affiliates to terminate his or her employment with the
other party or such Affiliate or in any way interfere with the relationship
between the other party or any of their Affiliates and any such employee, (ii) hire
directly or through an Affiliate any person who is or was employed by the other
party or any of their Affiliates until such person ceases to be an employee of
Seller or any of its Affiliates for at least 180 days.

 

6.8.          Confidentiality.  After the
Closing, Seller shall continue to maintain the confidentiality of all
Confidential Information, except to the extent information is required to be
disclosed to its auditors, attorneys, financial advisors and other consultants,
agents and advisors in connection with post-Closing matters hereunder or other
matters as to which the Seller has retained obligations or liabilities
hereunder or otherwise as required by applicable law.  In the event Seller is required by law to
disclose any Confidential Information, Seller shall promptly notify Buyer in
writing, which notification shall include the nature of the legal requirement
and the extent of the required disclosure, and shall cooperate with Buyer to preserve
the confidentiality of such information consistent with applicable law.

 

6.9.          Accounts Receivable.  After the
Closing, Seller shall continue to collect the accounts receivable retained by
Seller relating to the Purchased Assets, Contracts or Shared Contracts in the
ordinary course and consistent with past practices.  Seller shall also use its reasonable
commercial efforts to preserve the relationships with each of the customers and
other Persons with whom the Seller has business relations and is reasonably
necessary to preserve substantially intact the Business, and will not take
Action related to any accounts receivable without ten (10) days notice to
Buyer.

 

6.10.        No Competition.  For a period
of six months beginning on the Closing Date, Parent shall not, and shall cause
its Affiliates and subsidiaries not to, distribute or otherwise sell any
riflescopes in Europe.

 

6.11.        Accounts Payable.  After the Closing, Seller shall not delay or
postpone the payment of accounts payable and other Liabilities outside the
ordinary course of Business.

 

6.12.        Commissions Payable.  After the Closing, Seller shall not delay or
postpone the payment of commissions to the extent the commissions relate to the
Business, the Purchased Assets, Contracts or Shared Contracts.

 

6.13.        Use of Meade Proprietary Rights.  To the extent that any Proprietary Rights
(including any Trademarks) of Parent have been incorporated in or used or held
for use in connection with any Inventory, Parent hereby grants to Buyer a
royalty-free, non-exclusive, worldwide license to use such Proprietary Rights
on or in connection with the distribution and sale of the Inventory, and to the
extent any Proprietary Rights of Parent are currently incorporated in or used
or held for use in connection with the Products, Parent hereby grants to Buyer
a royalty-free, non-exclusive, worldwide license to use such Proprietary Rights
(excluding such Proprietary Rights described in Section 2.2(l) and
the Trademarks of Parent) in the design manufacturing, marketing, distribution
and sale of the Products in the form in which the Products currently
exist.  Parent for itself and on behalf
of its affiliates and subsidiaries covenants and agrees that they shall never
commence, aid, prosecute, or cause or permit to be commenced or 

 

20

 

prosecuted, any lawsuit, charge or other proceeding against Buyer with
respect to the Proprietary Rights described in the preceding sentence so long
as Buyer’s use is in accordance with the licenses provided above.

 

6.14.        Use of “Simmons” Name.  As soon as commercially practicable after the
Closing Date, but in no event more than thirty (30) calendar days thereafter,
Seller shall (i) amend or terminate any organizational document, business
registration, certificate of assumed name and/or d/b/a filings and any other
documents as may be necessary to eliminate Seller’s right to use, or to do
business under, the “Simmons” name and/or any other name or Trademark included
in the Purchased Assets or any other name or mark similar to, or any
variations, abbreviations, acronyms or other formatives of or based on or
including, any of the foregoing, whether alone or in combination with any other
words, phrases or designs, and thereafter, not to make any filings that would
give Seller or any Affiliate of Seller the right to use, or do business under
any such Trademark.

 

6.15.        ITU Application.  At any time after the Closing Date, promptly
upon the request of Buyer, Parent shall either (i) assign U.S. Trademark
Application Serial No. 77/415258 for the mark “QUADZERO” (the “ITU”)
to Buyer, which Parent acknowledges and agrees shall be, upon consummation of
the transactions contemplated by this Agreement, the successor to the portion
of Parent’s ongoing and existing business to which the ITU pertains, or (ii) file
a written statement of abandonment and withdrawal of the ITU with the United
States Patent and Trademark Office.

 

6.16.        Collections.  After the Closing, Seller shall promptly (but
in no even later than thirty (30) days after receipt thereof) deliver to Buyer
any cash, checks or other property that it receives in connection with or
relating to the Purchased Assets following the Closing.

 

ARTICLE 7

INDEMNIFICATION

 

7.1.          Parent’s and Seller’s Agreement to Indemnify.

 

(a)           Subject to the terms and conditions of this Article 7,
from and after the Closing, each of Parent and Seller agrees to indemnify,
defend and hold harmless Buyer and its Affiliates and their respective
officers, directors, employees, shareholders, agents, representatives,
successors and assigns (collectively, the “Buyer Parties”) from and against all
Losses suffered or incurred by a Buyer Party arising from, relating to or
otherwise in respect of (i) all Retained Liabilities and Retained Assets, (ii) any
breach of any representations or warranties contained in Article 4 hereof
(disregarding any Material Adverse Effect or materiality qualifications set
forth in the applicable representation or warranty), or (iii) any breach
by Seller of any of its covenants hereunder (collectively, “Buyer Claims”).

 

(b)           With respect to Section 7.1(a)(ii) and (iii) above,
no Buyer Claim shall be asserted until the aggregate amount which the Buyer
Parties would be entitled to recover is equal to or greater than $50,000 in
value, and the first $50,000 in the aggregate, of claims shall be excluded from
Buyer Claims.  No individual Buyer Claim
of less than $15,000 (each a “Small 

 

21

 

Claim”) shall be asserted until the aggregate amount
of all Small Claims exceeds $50,000 in value, and the first $50,000 in the
aggregate of Small Claims shall be excluded from Buyer Claims for all purposes,
including in calculating Buyer Claims under the first sentence of this Section 7.1(b).  Likewise, with respect to indemnification
arising out of Section 7.1(a)(ii) and (iii) above, no Buyer
Claim shall be asserted or recognized if the amount of all Buyer Claims
recognized or paid at any time with respect to Section 7.1(a)(ii) and
(iii) above exceeds individually or in the aggregate 20% of the Purchase
Price; provided, however that the limitations in the preceding sentence shall
not apply to any Buyer Claim resulting from fraud, an inaccuracy or breach of Section 4.17
(Taxes) or of any Fundamental Representations or an intentional failure by
Seller to perform its obligations under this Agreement or the Related
Agreements, including such failure by reason of an obstacle intentionally
created by Seller.

 

7.2.          Buyer’s Agreement to Indemnify.

 

(a)           Subject to the terms and conditions of this Article 7,
from and after Closing, Buyer agrees to indemnify, defend and hold harmless
Seller and its Affiliates and their respective officers, directors, employees,
shareholders, agents, representatives, successors and assigns (collectively,
the “Seller Parties”) from and against all Losses suffered or incurred by a
Seller Party arising from, relating to or otherwise in respect of (i) all
Assumed Liabilities, (ii) any breach of any representations or warranties
contained in Article 5 hereof (disregarding any Material Adverse Effect or
materiality qualifications set forth in the applicable representation or
warranty), or (iii) any breach by Buyer of any of its covenants in this
Agreement, or (iv) the use, application or disposition of the Purchased
Assets after the Closing Date (collectively, “Seller Claims”).

 

(b)           With respect to Section 7.2(a)(ii) and (iii) above,
no Seller Claim shall be asserted until the aggregate amount which the Seller
Parties would be entitled to recover is equal to or greater than $50,000 in
value, and the first $50,000, in the aggregate, of claims shall be excluded
from Seller Claims.  No individual Seller
Claim of less than $15,000 (each a “Small Claim”) shall be asserted until the
aggregate amount of all Small Claims exceeds $50,000 in value, and the first
$50,000 in the aggregate of Small Claims shall be excluded from Buyer Claims
for all purposes, including in calculating Seller Claims under the first
sentence of this Section 7.2(b). 
Likewise, with respect to indemnification arising out of Section 7.2(a)(ii) and
(iii) above, no Seller Claim shall be asserted or recognized if the amount
of all Seller Claims recognized or paid at any time with respect to Section 7.2(a)(ii) and
(iii) above exceeds individually or in the aggregate 20% of the Purchase
Price. provided, however that these limitations shall not apply to any Seller
Claim resulting from fraud, an inaccuracy or breach of any Fundamental
Representations or an intentional failure by Buyer to perform its obligations
under this Agreement or the Related Agreements, including such failure by
reason of an obstacle intentionally created by Buyer.

 

7.3.          Procedures for Resolution and Payment of Claims for
Indemnification.

 

(a)           Except as otherwise provided in this Agreement, in the
event (i) any third party asserts a Claim with respect to any matter as to
which the indemnities in this Agreement relate, the party against whom the
Claim is asserted (the “Indemnitee”) shall give prompt written notice to the
other party (the “Indemnitor”) in reasonable detail so that the Indemnitor is
or will 

 

22

 

be able to reasonably understand the basis of the
Claim; provided that the failure of the Indemnitee to provide such notice shall
not relieve the Indemnitor of its obligations hereunder except (and then only)
to the extent the Indemnitor is materially prejudiced thereby.  Thereafter, the Indemnitor shall have the
right at its election to take over the defense or settlement of the third party
Claim at its own expense by giving prompt notice to the Indemnitee.  If the Indemnitor does not give such notice
and does not proceed diligently so to defend the third party Claim within 30
days after receipt of the notice of the third party Claim, the Indemnitor shall
be bound by any defense or settlement that the Indemnitee may make as to those
Claims and shall reimburse the Indemnitee for its Liabilities and expenses
related to the defense or settlement of the third party Claim. Subject to
Indemnitor retaining control of the Claim or settlement thereof, the Indemnitee
shall, at its option and expense, have the right to participate in the defense
of any such Claims defended by the Indemnitor (except that Indemnitor shall not
be responsible for the fees and expenses of counsel to Indemnitee following
such time that the Indemnitee controls such defense unless agreed to in
writing).  The parties shall cooperate in
defending against any asserted third party Claims.

 

(b)           Anything in this Section 7.3 to the contrary
notwithstanding, (i) if there (A) is a reasonable probability that a
third party Claim may materially and adversely affect the Indemnitee other than
as a result of money damages or other money payments, (B) the Claim for
indemnification relates to or arises in connection with any criminal
proceeding, Action, indictment, criminal allegation or investigation or (C) the
Indemnitee shall be advised in writing by counsel chosen by it that there are
one or more defenses available to the Indemnitee which the Indemnitor cannot
assert on behalf of the Indemnitee, the Indemnitee shall have the right, at the
Indemnitor’s cost and expense, to defend, compromise or settle such Claim;
provided, however, that if such Claim is settled without the Indemnitor’s consent
(which consent shall not be unreasonably withheld or delayed), the Indemnitee
shall be deemed to have waived all rights hereunder against the Indemnitor for
money damages arising out of such Claim, and (ii) the Indemnitor shall
not, without the written consent of the Indemnitee, settle or compromise any
Claim or consent to the entry of any judgment, except no consent shall be
required if such settlement or compromise (A) includes as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnitee a
release from all liability in respect to such Claim (B) does not involve a
finding or admission of any violation of applicable Law and (c) only
involves the payment of monetary damages that are entirely paid or reimbursed
by the Indemnitor.

 

7.4.          Exclusive Remedy.  Except as
otherwise provided in this Article 7, 
and for claims under Section 2.3, Section 6.4 and Section 8.6,
the indemnification provided in this Article 7 shall be the sole and
exclusive post-Closing remedy available to the parties hereto for any claim
under this Agreement (other than equitable relief if available) for breaches of
representations, warranties and covenants, other than for a claim of fraud or
intentional misconduct.  Nothing herein
shall restrict the rights or remedies available to Seller or Buyer at law or
equity to implement, impose or enforce the remedies under this Section 7.4.

 

7.5.          Purchase Price Adjustment. 
Seller and Buyer agree that any indemnity payment made hereunder will be
treated by the parties on their Tax Returns as an adjustment to the Purchase
Price, subject to the Seller’s consent based on satisfactory review of the tax
authority for the tax of any such indemnity payment.  In the event a taxing jurisdiction, or
applicable law, requires a different treatment for the indemnity payment, such
payment shall be made in an 

 

23

 

amount sufficient to indemnify the party on a net
after tax basis.  Buyer is responsible
for preparing an amended Form 8594, which shall be provided no later than
30 days after Seller provides in writing its consent to such tax treatment.

 

7.6.          Survival Periods.  All
representations and warranties contained or made in this Agreement or in any
Schedule, or any Related Agreement delivered in connection herewith, shall
survive for a period of twelve (12) months following the Closing Date (the “Indemnity
Period”); except that (i) the representations and warranties in Section 4.17
(Taxes) shall terminate 90 days following the expiration of the applicable
statutes of limitations and (ii) the representations and warranties in Section 4.1
(Existence, Power, Authorization, and Qualifications of Seller), Section 4.4
(Title to Assets), Section 4.13 (Brokers), Section 5.1 (Existence,
Power, Authorization, and Qualifications of Seller), and Section 5.4
(Brokers) (collectively, the “Fundamental Representations”) shall survive the
Closing indefinitely.  No claim for
indemnification based on a breach of a representation or warranty may be asserted
after the expiration of the Indemnity Period. 
Notwithstanding anything herein to the contrary, any representation or
warranty which is the subject of a claim which is asserted in writing prior to
the expiration of the Indemnity Period shall survive with respect to such claim
or any dispute with respect thereto until the final resolution thereof.

 

ARTICLE 8

MISCELLANEOUS

 

8.1.          Reformation and Severability. 
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as part of this Agreement a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable consistent with the intentions of the
parties, and the legality, validity and enforceability of the remaining
provisions shall not in any way be affected or impaired.

 

8.2.          Further Assurances.  Each party
shall, from time to time after the Closing Date, at the request of any other
party and without further consideration, execute and deliver such other
instruments of conveyance, assignments, transfer and assumption, and take such
other actions, as such other party may reasonably request to effect the
transactions contemplated by this Agreement. Seller shall promptly pay or
deliver to Buyer any amounts or items that may be received by Seller after the
Closing Date which constitute Purchased Assets.

 

8.3.          Notices.  Any notice or
other communication required or permitted to be given hereunder shall be in
writing and shall be sent by certified mail, return receipt requested (or by
the most nearly comparable method if mailed from or to a location outside of
the United States), or by cable, telex, telegram or facsimile transmission, or
delivered by hand or by overnight or similar delivery services, fees prepaid,
to the party to whom it is to be given at the address of such party set forth
below or to such other address for notice as such party shall provide in
accordance with the terms of this Section 8.3.  Except as otherwise specifically provided in
this Agreement, notice so given shall, in the case of notice given by certified
mail (or by such comparable method) be deemed to be given and received three
business days after mailing, in the case of notice so given overnight delivery
service, on the date of actual delivery, and, in the case of notice so given by
cable, telegram, facsimile transmission, or personal delivery, on the date of
actual transmission or, as the case may be, personal delivery.

 

24

 

	
  If to Seller:

  	
  Meade Instruments
  Corporation

  
	
   

  	
  6001 Oak Canyon

  
	
   

  	
  Irvine, California
  92618-5200

  
	
   

  	
  Attention: Paul Ross

  
	
   

  	
  Fax: (949) 654-2688

  
	
   

  	
   

  
	
   

  	
  And

  
	
   

  	
   

  
	
  If to Buyer:

  	
  Bushnell, Inc.

  
	
   

  	
  9200 Cody

  
	
   

  	
  Overland Park, Kansas
  66214-1734

  
	
   

  	
  Attention: Blake Lipham

  
	
   

  	
  Fax: (913) 752-3550

  
	
   

  	
   

  
	
  and (which shall not be
  considered notice):

  	
  MidOcean Partners

  
	
   

  	
  320 Park Avenue

  
	
   

  	
  Suite 1700

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attention: J. David
  Basto

  
	
   

  	
  Fax: (212) 497-1373

  
	
   

  	
   

  
	
  with a copy to (which
  shall not be considered notice):

  	
  Kirkland &
  Ellis LLP

  655 Fifteenth Street, N.W.

  
	
   

  	
  Washington, DC 20005

  
	
   

  	
  Attention: Andrew
  Herman

  
	
   

  	
  Fax: (202) 879-5200

  

 

8.4.          Headings and Interpretations. 
The headings of Articles and Sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning
or construction of any provision of this Agreement.

 

8.5.          Waiver.  The failure
of any party to insist, in any one or more instances, upon performance of any
of the terms, covenants or conditions of this Agreement shall not be construed
as a waiver or a relinquishment of any right or claim granted or arising
hereunder or of the future performance of any such term, covenant, or
condition, and such failure shall in no way effect the validity of this
Agreement or the rights and obligations of the parties hereto.  Additionally, no waiver of any breach of this
Agreement shall be a waiver of any subsequent breach.

 

8.6.          Bulk Sales Act.  Buyer waives
compliance by Seller with any bulk sales law which may be applicable to the
transactions contemplated by this Agreement; provided, however, that Seller
agrees to indemnify Buyer and hold it harmless from any loss, damage,
liability, and expenses (including reasonable legal fees) resulting from such
noncompliance.

 

8.7.          CHOICE OF LAW, JURISDICTION AND VENUE. 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE  WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS 

 

25

 

RULES OR CHOICE OF LAWS RULES THEREOF.  BOTH PARTIES CONSENT TO THE JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE.

 

8.8.          Counterparts.  This
Agreement may be executed in counterparts, and by facsimile, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument notwithstanding that any parties are not
signatories to each counterpart.

 

8.9.          Assignability and Binding Effect. 
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.  This Agreement may not be assigned by either
party without the express written consent of the other, which consent shall not
be unreasonably withheld; provided, however, that Buyer may (and may cause
Seller to) assign its rights to any lender providing financing to the Buyer or
any of its facilities as security for such financing (or any refinancing of
such financing).  Nothing in this Section 8.9
shall operate or be construed as a restriction on the assignability of any of
the Purchased Assets by Buyer after the Closing, and Seller hereby consents to
any such assignment of the Purchased Assets or any portion thereof (including,
without limitation, any and all Contracts or licenses that comprise the
Purchased Assets).

 

8.10.        Amendments.  This
Agreement may not be modified, amended or supplemented except by an agreement
in writing signed by each of the parties hereto.

 

8.11.        Third Parties.  Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.

 

8.12.        Number.  When the
context so requires in this Agreement, the singular number shall include the
plural.

 

8.13.        Entire Agreement.  This
Agreement and the Related Agreements together with the Schedules and Exhibits
hereto and thereto, shall constitute the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and shall supersede
all prior negotiations, understandings and agreements.

 

8.14.        Construction.  The parties
have participated jointly in the negotiation and drafting of this
Agreement.  If an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.  Any
reference to any federal, state, local, or foreign “law” shall be deemed also
to refer to all rules and regulations promulgated thereunder.  The term “including” is not a limitation on
that general statement and shall mean “including without limitation.”  All references to Articles, Sections,
Schedules and Exhibits are to Articles, Sections, Schedules and Exhibits of
this Agreement.

 

8.15.        Effective Date.  This
Agreement shall be effective as of the date first written above (“Effective
Date”).

 

[SIGNATURE PAGE FOLLOWS]

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

 

 

	
   

  	
  SIMMONS OUTDOOR
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Steven L.
  Muellner

  
	
   

  	
  Name:

  	
  Steven L.
  Muellner

  
	
   

  	
  Title:

  	
  President &
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADE
  INSTRUMENTS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Steven L.
  Muellner

  
	
   

  	
  Name:

  	
  Steven L.
  Muellner

  
	
   

  	
  Title:

  	
  President &
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUSHNELL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Blake Lipham

  
	
   

  	
  Name:

  	
  Blake Lipham

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  

 

27

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