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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT,
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - July 31, 1998
(Date of Earliest Event Reported)
STERLING VISION, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
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<S> <C> <C>
New York 1-14128 11-3096941
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
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1500 Hempstead Turnpike
East Meadow, New York 11554
(Address of Principal Executive Offices)
(516) 390-2100
(Registrant's telephone number, including area code)
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Item 5. Other Events:
On April 1, 1997, Sterling Vision, Inc. ("SVI") acquired
from Messrs. Sidney, Alan and David Singer (collectively, the "Singers") all
of their equity interests in Singer Specs, Inc. ("SSI" and, together with SVI,
the "Company"), all pursuant to a certain Agreement and Plan of
Reorganization, dated as of February 19, 1997 (the "Plan").
Pursuant to the Plan, the Singers: (i) agreed to indemnify
the Company under certain circumstances; and (ii) pledged all of their shares
of SVI's Common Stock (collectively, the "Shares') to secure such indemnity,
205,347 of which are presently so pledged to SVI.
As a result of certain disputes presently existing between
the Company and the Singers, the parties, on July 31, 1998, entered into a
Settlement Agreement with the Singers pursuant to which such disputes were
resolved.
The terms of said Agreement provide, in part, for the
following:
1. The release, to the Singers, of the balance of the
Shares previously pledged by them, to SVI, to
secure their obligations under the Plan;
2. The reduction of SVI's Price Protection Guaranty
with respect to the Shares (all as set forth in the
Plan), from $8.2094 per Share, to $6.60 per Share;
3. The requirement that the Singers pay to the Company
the first $300,000 of net proceeds realized by them
in connection with their future sales of such
Shares above the reduced Price Protection Guaranty;
4. The waiver, by the Company, of certain claims
against the Singers; and
5. That the Singers be restricted from selling such
Shares except pursuant to an agreed upon schedule.
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Item 7. Financial Statements and Exhibits.
---------------------------------
Exhibit No. Document
- ---------- --------
10.83 Settlement Agreement, dated July 31, 1998,
pursuant to which Sterling Vision, Inc. and
Singer/Specs, Inc. settled various disputes
existing between these entities and Messrs.
Sidney, Alan and David Singer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned hereunto duly authorized.
STERLING VISION, INC.
By: /S/ Joseph Silver
-------------------------------------------------
Name: Joseph Silver
Title: Executive Vice President & General Counsel
Date: August 6, 1998
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SETTLEMENT AGREEMENT
--------------------
THIS AGREEMENT is made this 31st day of July, 1998, by and among
STERLING VISION, INC., a New York corporation ("Sterling"); SIDNEY SINGER,
ALAN SINGER and DAVID SINGER (collectively the "Shareholders" and individually
a "Shareholder"); and SINGER SPECS, INC., a Delaware corporation ("Singer").
BACKGROUND
----------
A. The parties hereto are parties to an Agreement and Plan of
Reorganization dated as of February 19, 1997, as amended (the "Sale
Agreement"). At the closing of the Sale Agreement, ancillary agreements were
entered into by and among the parties, including, inter alia, a Pledge
Agreement dated as of April 1, 1997 (the "Pledge Agreement").
B. The Sale Agreement closed on April 1, 1997, and on that date the
Shareholders transferred one hundred (100%) percent of the outstanding shares
of stock of Singer to Sterling in exchange for the transfer by Sterling to the
Shareholders of 305,747 shares of Sterling's common stock (the "Sterling
Shares").
C. Pursuant to the Sale Agreement, there was to be a Post Closing
Adjustment with respect to the number of Sterling Shares received by the
Shareholders in the exchange depending on the identity of those Singer
Franchisees who converted their existing Singer Franchise Agreements to
Sterling's form of Franchise Agreement within 150 days after the date of
Closing (the "Post Closing Adjustment").
D. Pursuant to the Sale Agreement, the Shareholders and Sterling each
assumed the obligation to indemnify the other against certain "Losses", as
defined therein. The Shareholders secured their indemnification obligation by
pledging to Singer all 305,747 Sterling Shares pursuant
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to the terms of the Pledge Agreement, 100,000 shares of which were released
prior to the date hereof in accordance with the terms of the Sale Agreement
and Pledge Agreement, leaving 205,747 Sterling Shares subject thereto.
E. Pursuant to the Sale Agreement, Sterling guaranteed that the
Shareholders, in certain events and upon the sale of any of the Sterling
Shares, then released from the pledge, would realize (exclusive of 50% of
commissions) the sum of $8.2094 per share (the "Price Protection Guarantee").
F. Pursuant to the Sale Agreement, on April 1, 1998, Singer was
required to release 40,000 Sterling Shares to the Shareholders; and on the
second, third and fourth anniversary dates of the date of closing of the Sale
Agreement, subject to the terms of the Pledge Agreement, Singer will be
required to release 33-1/3% of the remaining Sterling Shares to the
Shareholders.
G. Between April 1, 1997 and the date hereof, Sterling has notified
the Shareholders of a number of events which have taken place that have and/or
may result in Losses for which it is and/or would be entitled to
indemnification, including but not limited to (i) Westmoreland; (ii) Charlotte
Style; (iii) Normoyle; (iv) operating, licensing or franchising of Macy's
Vision Express stores of any kind by Vision Express Enterprises, Inc., a
corporation owned, in part, by Alan Singer; (v) the obligations under each
Sterling Optical Center Franchise Agreement entered into at Closing by each
Spin-Off Company which owned a Company Store which converted to a Sterling
Optical Center simultaneously with the Closing and was thereafter sold by said
Spin-Off Company (collectively the "Identified Claims"). In addition, Sterling
has notified the Shareholders of the Post Closing Adjustment required by the
terms of the Sale Agreement and has demanded the return of 10,592 Sterling
Shares.
H. The Shareholders have notified Sterling that they dispute
Sterling's claims for indemnification for the Identified Claims and its
calculation of the Post Closing Adjustment. As a
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result of the dispute, Singer has not released to the Shareholders the 40,000
Sterling Shares it was required to release on April 1, 1998.
I. As a result of Singer's refusal to release the 40,000 Sterling
Shares, the Shareholders filed a lawsuit against Sterling and Singer in The
United States District Court For the Eastern District of Pennsylvania at No.
98-CV-3024 (the "Lawsuit").
J. In order to avoid the undue cost and delay of litigation that
would necessarily be incurred by all parties concerned to resolve the Lawsuit
and all of the controversies, past, present, and future, surrounding the Sale
Agreement, Pledge Agreement, Identified Claims, Post Closing Adjustment, other
claims for indemnification, except as otherwise specifically set forth in
paragraph 7 hereof, and the release of all of the Sterling Shares to the
Shareholders, the parties hereto have agreed to enter into this Settlement
Agreement as a global settlement of all outstanding matters.
NOW, THEREFORE, in consideration of the Background, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Incorporation of Background. The Background is hereby incorporated
herein by reference, the truth and accuracy of which is hereby acknowledged by
the parties hereto, which Background is agreed to be a material consideration
for entering into this Agreement.
2. Release of Shares. Simultaneously with the execution of this
Agreement by all parties hereto (the "Settlement Date"), Singer shall be
deemed to have released all 205,747 Sterling Shares which it is holding
pursuant to the Pledge Agreement, free and clear of all liens and encumbrances
(other than as set forth herein), including but not limited to the
restrictions of the Sale Agreement and Pledge Agreement, and, together with
Sterling, shall forthwith deliver to Sterling's transfer agent the
certificates representing all such Sterling Shares together with appropriate
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documentation which such transfer agent may require so as to enable it to
reissue new certificates, without any restrictive legends thereon, to the
Shareholders in the following amount of shares:
Sidney Singer: 63,741 Shares
Alan Singer: 77,822 Shares
David Singer: 64,184 Shares
3. Limitation on Sales. Notwithstanding the release of all the
Sterling Shares to the Shareholders, the Shareholders agree that they shall
not, as a group, sell in the open market more Sterling Shares, on a cumulative
basis, than that set forth in the following schedule:
Within one (1) week after Settlement Date - 10,000 Shares
Within two (2) weeks after Settlement Date - 20,000 Shares
Within three (3) weeks after Settlement Date - 30,000 Shares
Within four (4) weeks after Settlement Date - 40,000 Shares
Within two (2) months after Settlement Date - 50,000 Shares
Within three (3) months after Settlement Date - 60,000 Shares
Within four (4) months after Settlement Date - 70,000 Shares
Within five (5) months after Settlement Date - 80,000 Shares
Within six (6) months after Settlement Date - 90,000 Shares
Within seven (7) months after Settlement Date - 100,000 Shares
Within eight (8) months after Settlement Date - 110,000 Shares
Within nine (9) months after Settlement Date - 120,000 Shares
Within ten (10) months after Settlement Date - 130,000 Shares
Within eleven (11) months after Settlement Date - 140,000
After eleven (11) months - No limit
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Notwithstanding the foregoing schedule, at any time and from time to time
after the Settlement Date, Sterling, by written notices given to the
Shareholders (by fax transmission to Alan Singer, David Singer and Joel Luber,
Esq. at the numbers set forth in paragraph 13) may direct the Shareholders to
then sell a specified number of such Sterling Shares, which number may be more
Sterling Shares than otherwise then permitted to be sold pursuant to said
schedule; and, in the event any such notice(s) are so given by Sterling to the
Shareholders, the Shareholders shall, within three (3) business days
thereafter, cause to be sold (in the open market) such number of Sterling
Shares. With respect to the foregoing, it is understood that in the event the
Shareholders do not, collectively, forthwith sell such number of Sterling
Shares, as so directed by Sterling, the Shareholders shall promptly thereafter
pay to Sterling an amount equal to the product of (A) the number of Sterling
Shares so directed by Sterling to be forthwith sold by the Shareholders, and
(B) the difference between (i) the closing bid price of Sterling's Common
Stock (as reported on Nasdaq) on the third business day next following the
date of the Shareholder's receipt of said notice of direction to sell Sterling
Shares, and (ii) the Revised Closing Price (as said term is hereafter
defined); provided, however, that the proviso contained in Subsection
1.8(g)(ii) of the Agreement , as modified hereby, shall be applicable with
respect to the:(i) Price Protection Guaranty applicable to such Sterling
Shares directed to be sold by Sterling; and (ii) maximum amount to become
payable to Sterling pursuant to the provisions hereof. In addition, in the
event Sterling defaults in the payment of any Price Protection Guarantee (for
a period in excess of seven (7) days after receipt of written notice thereof
by the Shareholders) required to be made hereunder, the Shareholders shall, at
any time thereafter until any such default shall have been cured by Sterling,
be free to sell as many, and up to all of their Sterling Shares as they may
desire to sell, in their sole discretion, without the restriction of the
within schedule.
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4. Revised Closing Price. Section 1.1 of the Sale Agreement, which
defined the "Closing Price" of the Sterling Shares as of the Closing Date to
be $8.2094, is hereby amended, effective as of the Settlement Date, to be
$6.60 (the "Revised Closing Price"). The Revised Closing Price shall be the
price for measuring the Price Protection Guarantee, if any, required to be
paid by Sterling to the Shareholders upon their sale of all or any portion
(then permitted and/or directed by Sterling to be sold hereunder) of the
Sterling Shares after the date hereof, and for all other purposes material to
the Sale Agreement, other than upon a default in payment by Sterling pursuant
to the provisions of paragraph 6 hereof.
5. Price Protection Guarantee. Section 1.8(g) of the Sale Agreement
is hereby deleted in its entirety and the following shall be substituted in
its place:
" (g)(i) In the event any Shareholder shall actually sell
any of his or her Sterling Shares (then permitted and/or
directed by Sterling to be sold pursuant to the terms of
that certain Settlement Agreement dated as of July 30, 1998,
entered into by and among the parties hereto [the
"Settlement Agreement"]) in the open market at a price
(exclusive of any and all customary or reasonable
commissions payable to broker-dealers, underwriters, etc.)
less than the Revised Closing Price (as defined in the
Settlement Agreement) , Sterling shall within three (3)
business days after receipt of written demand therefor, pay
to such Shareholder an amount equal to the product of (A)
the number of Sterling Shares actually sold and/or directed
by Sterling to be sold by such Shareholder, and (B) the
difference between the Revised Closing Price and either (x)
the gross selling price (net of any such commissions) of
such Sterling Shares actually so sold by such Shareholder or
(y) in the event the Shareholders do not sell all of the
Sterling Shares directed by Sterling to be sold by them, the
closing bid price, as reported on Nasdaq, of Sterling's
Common Stock on the third business day following the
Shareholder's receipt of any such notice of direction from
Sterling, as the case may be; provided, however, that if, at
any time after the expiration of thirty (30) days following
the respective dates that any of the Shareholders are then
permitted to sell any of the Sterling Shares pursuant to the
terms of the Settlement Agreement but prior to the date that
any Shareholder shall actually sell any of the Shares in the
open market, the closing bid price of Sterling's Common
Stock shall be in excess of the Revised Closing Price for
five (5) or more
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consecutive trading days, the obligation of Sterling (as set
forth herein) shall not apply to any such Sterling Shares
that could have been sold.
(ii) In the event any Shareholder shall actually
sell any of his or her Sterling Shares (then permitted
and/or directed by Sterling to be sold pursuant to the terms
of the Settlement Agreement) in the open market at a price
(exclusive of any and all customary or reasonable
commissions payable to broker-dealers, underwriters, etc.)
more than the Revised Closing Price of said Sterling Shares,
that Shareholder shall, within ten (10) days after its
receipt of the proceeds of said sale, pay to Sterling an
amount equal to the product of (A) the number of Sterling
Shares actually sold by such Shareholder, and (B) the
difference between the gross selling price (net of any such
commissions) of such Sterling Shares actually so sold by
such Shareholder and the Revised Closing Price; provided,
however, that the aggregate of all payment(s) to become due
Sterling by all Shareholders on account of all such sales of
Sterling Shares in excess of the Revised Closing Price shall
in no event exceed the sum of Three Hundred Thousand
($300,000) Dollars (unless otherwise adjusted as described
in clause (iii) of this subsection(g)), with any proceeds
realized by the Shareholders, in the aggregate, in excess of
said $300,000 remaining the property of the Shareholders;
and provided, further, that there does not exist at the time
of any such sale an event of default (after any required
notice and expiration of any applicable cure period) by
Sterling in its obligation to make a payment to the
Shareholders pursuant to clause (i) of this subsection (g),
in which event this entire clause (ii) of this subsection
(g) shall become of no force and/or effect with respect to
such Sterling Shares actually so sold by the Shareholders.
(iii) Notwithstanding the terms of clause (ii) of
this subsection (g), in the event Singer sells the Real
Estate, as defined in Section 1.6(a), on or before June 30,
1999 and realizes net proceeds after reduction for Singer's
cost of owning and operating the Real Estate from April
1,1997 through the date of said sale, in excess of
$400,000.00, such excess amount shall reduce dollar for
dollar, the $300,000.00 amount set forth in said clause (ii)
of this subsection (g) (herein the "Real Estate Credit"). In
the event the Shareholders shall have paid to Sterling, in
the aggregate, any amount in excess of the difference
between $300,000.00 and the Real Estate Credit prior to the
sale of the Real Estate, and the Real Estate is thereafter
sold on or before June 30, 1999, Singer shall refund to the
Shareholders at the closing of the sale of the Real Estate
said excess payments made theretofore.
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(iv) Reconciliation statements shall be prepared by
the Shareholders for each and every sale of Sterling Shares
showing the gross selling price realized, commissions paid,
and amounts due from or due to Sterling based on the Closing
Price or Revised Closing Price, as the case may be, which
statements shall be submitted to Sterling within seven (7)
days of any such sale by the Shareholders but not, in any
event, less often than monthly, unless otherwise requested
by Sterling."
6. Default. In the event Sterling fails to make any payment to any
Shareholder pursuant to Section 1.8(g)(i) of the Sale Agreement, as amended
hereby, for a period in excess of seven (7) days after Sterling's receipt of
written notice thereof, the following consequences, in addition to that set
forth by the second proviso contained in Shareholders 1.8(g)(ii) of the Sale
Agreement, as amended hereby, shall be effective as of the date of said
default until such date as Sterling shall actually cure such default, if any,
and without notice or any further action required to be taken by any party
hereto:
(i) All Sterling Shares may thereafter be disposed of by the
Shareholders in any manner and over any period of time they may choose, in
their sole and absolute discretion;
(ii) The original Closing Price of $8.2094 shall be
reinstated for all purposes material to the Sale Agreement and this Settlement
Agreement, and shall apply to all sales of Sterling Shares made subsequent to
such event of default; and
(iii) Sterling and Singer irrevocable authorize any attorney
of any court of competent jurisdiction to appear for either one or both of
them at any time after said default to waive the issuance and service of
process and to confess judgment against Sterling and Singer in favor of the
Shareholders, without the filing of an averment of default, with release of
errors, without stay of execution, and for such amount as may be due to the
Shareholders based on a Closing Price of the Sterling Shares of $8.2094,
together with interest thereon, computed at the rate of twelve (12%)
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percent per annum, and reasonable attorney's fees and costs; and Singer and
Sterling hereby waive and release all benefit and relief from any and all
appraisement, stay of exemption laws of any state, now in force or hereafter
to be passed. If a copy of this Agreement shall be produced in any proceeding
brought upon the warrant of attorney contained in this paragraph, such copy
shall be conclusive evidence of such attorneys' authority to take the action
specified herein and it shall not be necessary to produce the original
instrument. The authority granted herein to confess judgment shall not be
exhausted by any exercise thereof but shall continue from time to time and at
all times until payment in full of all the amounts due hereunder.
7. Discharge of Indemnification and Release.
(a) Effective as of the Settlement Date, Section 10 of the
Sale Agreement, entitled "Indemnification", with respect to each and every
provision thereof which includes representations, warranties, covenants and
agreements of the Shareholders, including but not limited to their agreement
to indemnify Sterling, Singer, and the other Indemnitees, as defined therein,
is hereby declared to be null and void and of no further force or effect, as
if never included in the Sale Agreement, other than the following specific
exceptions: (i) the representations and warranties contained in Section 3.16
thereof; (ii) the covenants set forth in Section 1.4 thereof; (iii) the
representations and warranties contained in Section 3.14 thereof, as the same
pertains to the four (4) legal actions described in Mary Huwaldt, Esquire's
letter to Joseph Silver, dated May 22,1997; and (iv) the obligations of
Singer/Specs of Exton, Inc. under its Sterling Optical Franchise Agreement
entered into at Closing (together the "Excepted Obligations").
(b) Sterling and Singer, on their own behalf and on behalf
of each of their respective former and present successors, parents,
subsidiaries and affiliated corporations and partnerships, all partnerships in
which any of the foregoing or any affiliated corporation or
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partnership has an interest, and the former and present officers, directors,
shareholders, partners, fiduciaries, trustees, agents, attorneys,
representatives and employees of any of the foregoing, and their personal
representatives, administrators, executors, successors, heirs and assigns
(collectively, the "SVI Releasors"), for good and valuable consideration,
including, without limitation, the transactions contemplated by this
Settlement Agreement, the receipt and sufficiency of which are hereby
acknowledged, hereby fully, irrevocably and unconditionally remise, release,
acquit, satisfy and forever discharge the Shareholders, as well as each of
their former and present successors, parents, subsidiaries and affiliated
corporations and partnerships, all partnerships in which any of the foregoing
or any affiliated corporation or partnership has an interest, and the former
and present officers, directors, shareholders, partners, fiduciaries,
trustees, agents, attorneys, representatives and employees of any of the
foregoing, and their personal representatives, administrators, executors,
successors, heirs and assigns, and each of them (collectively, the "SVI
Releasees") of, from and against any and all claims, demands, accounts,
rights, sums of money, charges, contracts, agreements, promises, covenants,
causes of action, including, but not limited to, negligence and all other tort
actions, suits, controversies, judgments, damages, debts, obligations,
equities, statutory claims or liabilities, trespasses, loses, expenses and
liabilities, of whatever kind or nature, whether in law or in equity, which
the SVI Releasors ever had, now have, or which any personal representative,
administrator, executor, successor, heir or assign of the SVI Releasors
hereafter can, shall or may have against the Releasees (collectively, the
"Claims"), for, upon or by reason of any matter, cause or thing whatsoever,
from the beginning of the world through the date of this Agreement. This
general release includes, but is not limited to, any matter, cause or thing
whatsoever, arising out of, concerning or connected with, based upon, or
relating to (i) the Identified Claims and all claims asserted or which could
have been asserted in, or which are related to or
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connected with the Lawsuit, (ii) any matter, cause or thing concerning,
connected with or relating to the Sale Agreement, Pledge Agreement and any
other agreements entered into in connection therewith, including without
limitation any claims for fees, expenses reimbursements, distributions,
indemnities or other payments or rights to payments from the Shareholders; and
(iii) any claims for attorneys' fees, interest, costs or litigation expenses
in connection with or arising out of the foregoing. Notwithstanding the
foregoing, or any other terms contained herein, the releases set forth herein
shall not apply to (i) the Excepted Obligations, and (ii) any claims or causes
of action to enforce the terms of this Agreement.
(c) Except as set forth hereinabove, this is a full and
final general release by the SVI Releasors applying to all known or unknown,
anticipated or unanticipated, asserted or unasserted, existing or contingent,
direct or derivative Claims which existed, may have existed or may hereafter
arise in any manner or degree from facts and circumstances whether now known,
or in addition to or different from those now believed to be true, occurring
prior to or after the date of this Agreement. The SVI Releasors understand
that they may have serious Claims which have not been manifested or presently
known or have not been identified as of the date of this Agreement, but the
SVI Releasors nevertheless intend to and do deliberately release their
possible future Claims that occurred through the date hereof.
(d) The SVI Releasors, and each of them, hereby agree that
they will forever refrain and forbear from commencing, instituting or
prosecuting any lawsuit, action or other proceeding of any kind whatsoever, by
way of action, claim, defense, set-off, cross-complaint, counterclaim or third
party action, against the SVI Releasees, or any of them, based on, relating
to, arising out of, or in connection with any Claims released and discharged
hereunder.
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(e) The SVI Releasors hereby waive, to the fullest extent
permitted by law, the benefit of any statute, law, rule or regulation that may
limit the scope of the covenants and releases granted herein.
(f) Except as set forth hereinabove, the SVI Releasors
intend by this Agreement to forever release, remise, acquit, waive, satisfy
and forever discharge the SVI Releasees of and from any and all claims and
rights described above, it being understood that all claims or rights which
the SVI Releasors or any person who claims by, through or under any SVI
Releasor may have against the SVI Releasees shall be forever released,
remised, acquitted, waived, satisfied and forever discharged, and such persons
shall be forever barred from bringing or asserting the same in their own name
or names, jointly or with or through any other person, natural, corporate or
otherwise.
(g) The SVI Releasors acknowledge that the SVI Releasees
expressly deny any liability to the SVI Releasors, that nothing contained or
referred to herein can be construed as a default under the Sale Agreement or
any admission of liability by any SVI Releasee and that any payments,
agreements, undertakings or exchanges provided in connection herewith are
solely for the purposes of settlement and compromise.
(h) The SVI Releasors represent and warrant with respect to
each Claim released hereby that they have not in any manner assigned, pledged
or otherwise voluntarily or involuntarily disposed of or transferred to any
party an interest in any Claim released hereby, and that each Claim of the SVI
Releasors against the SVI Releasees described herein is fully and finally
discharged, settled and satisfied. The SVI Releasors further represent and
warrant that with respect to the Excepted Obligation described in subparagraph
(a)(ii) herein, as of the date hereof, they know of no fact or circumstance
which has created or would create any obligation of any Shareholder to take
any action with respect to those covenants set forth in Section 1.4 of the
Sale Agreement, which
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representation and warranty the Shareholders have expressly relied upon in
agreeing to remain liable therefore in accordance with the terms of the Sale
Agreement.
(i) The SVI Releasors shall indemnify and hold the SVI
Releasees harmless from any and all costs, expense, liabilities and damages,
including, without limitation, reasonable counsel fees, costs and litigation
expenses and disbursements at the trial level and on one or more appeals,
incurred by reason of any breach of the SVI Releasors' covenants, warranties
and representations contained herein.
8. Limited Release By Shareholders.
(a) Effective as of the Settlement Date, the Shareholders on
their own behalf and on behalf of each of their personal representatives,
administrators, executors, successors, heirs and assigns (collectively, the
"Releasors"), for good and valuable consideration, including, without
limitation, the transactions contemplated by this Settlement Agreement, the
receipt and sufficiency of which are hereby acknowledged, hereby fully,
irrevocably and unconditionally remise, release, acquit, satisfy and forever
discharge Sterling, Singer, as well as each of their former and present
successors, parents, subsidiaries and affiliated corporations and
partnerships, all partnerships in which any of the foregoing or any affiliated
corporation or partnership has an interest, and the former and present
officers, directors, shareholders, partners, fiduciaries, trustees, agents,
attorneys, representatives and employees of any of the foregoing, and their
personal representatives, administrators, executors, successors, heirs and
assigns, and each of them (collectively, the "Releasees") of, from and against
any and all claims, demands, accounts, rights, sums of money, charges,
contracts, agreements, promises, covenants, causes of action, including, but
not limited to, negligence and all other tort actions, suits, controversies,
judgments, damages, debts, obligations, equities, statutory claims or
liabilities, trespasses, loses, expenses and liabilities, of whatever kind
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or nature, whether in law or in equity, which the Releasors ever had, now
have, or which any personal representative, administrator, executor,
successor, heir or assign of the Releasors hereafter can, shall or may have
against the Releasees (collectively, the "Claims"), for, upon or by reason of
any matter, cause or thing arising out of, concerning or connected with, based
upon, or relating to (i) only those claims asserted or which could have been
asserted in, or which are related to or connected with the Lawsuit; and (ii)
any claims for attorneys' fees, interest, costs or litigation expenses in
connection with or arising out of the foregoing. Notwithstanding the
foregoing, or any other terms contained herein, the releases set forth herein
shall not apply to any claims or causes of action to enforce the terms of this
Agreement.
(b) This is a limited release by Releasors applying only to
those direct or derivative Claims which existed, may have existed or may
hereafter arise in any manner or degree from the allegations set forth in the
Lawsuit.
(c) The Releasors, and each of them, hereby agree that they
will forever refrain and forbear from commencing, instituting or prosecuting
any lawsuit, action or other proceeding of any kind whatsoever, by way of
action, claim, defense, set-off, cross-complaint, counterclaim or third party
action, against Releasees, or any of them, based on, relating to, arising out
of, or in connection with any Claims released and discharged hereunder.
(d) The Releasors hereby waive, to the fullest extent
permitted by law, the benefit of any statute, law, rule or regulation that may
limit the scope of the covenants and releases granted herein.
(e) The Releasors intend by this Agreement to forever
release, remise, acquit, waive, satisfy and forever discharge the Releasees of
and from any and all claims and rights described above, it being understood
that all claims or rights which the Releasors or any person who
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claims by, through or under any Releasor may have against the Releasees shall
be forever released, remised, acquitted, waived, satisfied and forever
discharged, and such persons shall be forever barred from bringing or
asserting the same in their own name or names, jointly or with or through any
other person, natural, corporate or otherwise.
(f) The Releasors acknowledge that the Releasees expressly
deny any liability to the Releasors, that nothing contained or referred to
herein can be construed as a default under the Sale Agreement or any admission
of liability by any Releasee and that any payments, agreements, undertakings
or exchanges provided in connection herewith are solely for the purposes of
settlement and compromise.
(g) The Releasors represent and warrant with respect to each
Claim released hereby that they have not in any manner assigned, pledged or
otherwise voluntarily or involuntarily disposed of or transferred to any party
an interest in any Claim released hereby, and that each Claim of the Releasors
against the Releasees described herein is fully and finally discharged,
settled and satisfied.
(h) The Releasors shall indemnify and hold the Releasees
harmless from any and all costs, expense, liabilities and damages, including,
without limitation, reasonable counsel fees, costs and litigation expenses and
disbursements at the trial level and on one or more appeals, incurred by
reason of any breach of the Releasors' covenants, warranties and
representations contained herein.
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9. Representations of Parties.
(a) The Shareholders have all power and authority to make,
execute and deliver this Agreement and to consummate the transactions
contemplated hereunder.
(b) Consummation of the transactions contemplated by this
Agreement will not violate or result in a breach of or constitute a default
under any provision of any indenture, mortgage, lease, agreement, contract,
decree, instrument, order, judgment, ordinance, regulation or any other
restriction of any kind or character to which the Shareholders or Sterling or
Singer is subject or by which any of the parties hereto are bound.
(c) Sterling and Singer have full power and authority to
make, execute and deliver this Agreement to consummate all of the transactions
contemplated hereunder.
(d) Each of the parties hereto acknowledge that he or she is
a person experienced in business transactions, that he or she has entered into
this Settlement Agreement entirely in reliance upon his or her own judgment
and that of his or her own advisors and not in reliance on any representations
made by any other party hereto and that he or she assumes the full risk of
discovery or more complete understanding of any facts, events, law or thing
whatsoever which, if presently known or correctly understood, would have
affected his or her determination to enter into this Settlement Agreement.
Each of the parties signing on behalf of Sterling and Singer hereby (i)
certifies that each is signing in their capacity as an officer of the
corporation; (ii) represents that he or she has been duly authorized by all
necessary corporate action to sign this Agreement on behalf of said
corporation and to consummate all of the transactions contemplated hereby; and
(iii) represents that he or she has no knowledge of any pending or threatened
action, suit, claim, proceeding, inquiry or investigation before any court,
governmental agency, board or bureau that might restrain or prevent the
consummation of the transactions contemplated by this Agreement or
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that might reasonably be expected to affect the right of the Shareholders to
own the Sterling Shares and sell or otherwise dispose of same after their
receipt of said Shares.
10. Dismissal of Lawsuit. Within ten (10) days after execution of
this Agreement and delivery of the Sterling Shares to the Shareholders in
accordance herewith, the Shareholders shall withdraw the Lawsuit with
prejudice and/or satisfy any judgment of record entered with respect thereto.
11. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
12. Waivers, Entire Agreement, Amendment. This Agreement shall
constitute the entire and whole agreement between the parties hereto and may
not be modified or amended except by a written instrument signed by each of
the parties hereto expressing assent to such amendment or such modification.
No failure on the part of any party hereto to exercise, and no delay in
exercising any right, power or remedy hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
13. Notices. Solely for purposes of paragraph 3 of this Agreement and
the notices which may be given by Sterling to the Shareholders directing them
to sell Sterling Shares, the facsimile numbers are as follows:
Alan Singer 602-460-8225
David Singer 610-458-0555
Joel Luber 610-640-9865
The foregoing numbers may be changed from time to time by written notice
delivered to Sterling at: Sterling Vision, Inc., 1500 Hempstead Turnpike, East
Meadow, New York 11554, Attention: General Counsel, or by fax transmission to
516-350-2150, Attention: Joseph Silver, Esq.
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IN WITNESS WHEREOF, intending to be legally bound, the parties have
set their seal on the date first above written.
STERLING VISION, INC.
By:/s/Jerry Lewis
----------------------------
Attest:/s/Joseph Silver
----------------------------
SINGER SPECS, INC.
By:/s/Jerry Lewis
----------------------------
Attest:/s/Joseph Silver
----------------------------
/s/ Sidney Singer
----------------------------
SIDNEY SINGER
/s/Alan Singer
----------------------------
ALAN SINGER
/s/David Singer
----------------------------
DAVID SINGER
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