KBL Healthcare Acquisition Corp. II (Form: 8-K, Received: 09/05/2006 14:51:56)

UNITED STATES

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 (Date of earliest event reported): August 31, 2006

KBL HEALTHCARE ACQUISITION CORP. II

(Exact Name of Registrant as Specified in Charter)

Delaware

000-51228

20-1994619

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)


757 Third Avenue, 21st Floor, New York, New York		10017
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 319-5555

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

COMMENCING SHORTLY AFTER THE FILING OF THIS CURRENT REPORT ON FORM 8-K, KBL HEALTHCARE ACQUISITION CORP. II (“KBL”) INTENDS TO HOLD PRESENTATIONS FOR CERTAIN OF ITS STOCKHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING KBL’S SECURITIES, REGARDING ITS ACQUISITION (“ACQUISITION”) OF SUMMER INFANT, INC., AND SII’S SISTER COMPANIES, SUMMER INFANT EUROPE, LIMITED, AND SUMMER INFANT ASIA, LTD. (“COLLECTIVELY, “SUMMER”), AS DESCRIBED IN THIS REPORT. THIS CURRENT REPORT ON FORM 8-K WILL BE DISTRIBUTED TO PARTICIPANTS AT SUCH PRESENTATIONS.

EARLYBIRDCAPITAL, INC. (“EBC”), THE MANAGING UNDERWRITER OF KBL’S INITIAL PUBLIC OFFERING (“IPO”) CONSUMMATED IN APRIL 2005, IS ASSISTING KBL IN THESE EFFORTS WITHOUT CHARGE, OTHER THAN THE REIMBURSEMENT OF ITS OUT-OF-POCKET EXPENSES, ALTHOUGH EBC WILL BE PAID A CASH FINDER’S FEE AT THE CLOSING OF THE ACQUISITION EQUAL TO ONE (1%) PERCENT OF THE CONSIDERATION PAID IN THE ACQUISITION. KBL AND ITS DIRECTORS AND EXECUTIVE OFFICERS, AND EBC MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICIATION OF PROXIES FOR THE SPECIAL MEETING OF KBL’S STOCKHOLDERS TO BE HELD TO APPROVE THE ACQUISITION.

STOCKHOLDERS OF KBL AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, KBL’S PRELIMINARY PROXY STATEMENT AND DEFINITIVE PROXY STATEMENT IN CONNECTION WITH KBL’S SOLICITATION OF PROXIES FOR THE SPECIAL MEETING BECAUSE THESE PROXY STATEMENTS WILL CONTAIN IMPORTANT INFORMATION. SUCH PERSONS CAN ALSO READ KBL’S FINAL PROSPECTUS, DATED APRIL 21, 2005, FOR A DESCRIPTION OF THE SECURITY HOLDINGS OF KBL’S OFFICERS AND DIRECTORS AND OF EBC AND THEIR RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THIS BUSINESS COMBINATION. THE DEFINITIVE PROXY STATEMENT WILL BE MAILED TO STOCKHOLDERS AS OF A RECORD DATE TO BE ESTABLISHED FOR VOTING ON THE ACQUISITION. STOCKHOLDERS WILL ALSO BE ABLE TO OBTAIN A COPY OF THE DEFINITIVE PROXY STATEMENT, WITHOUT CHARGE, BY DIRECTING A REQUEST TO: KBL HEALTHCARE ACQUISITION CORP. II, 757 THIRD AVENUE, 21ST FLOOR, NEW YORK, NEW YORK 10017. THE PRELIMINARY PROXY STATEMENT AND DEFINITIVE PROXY STATEMENT, ONCE AVAILABLE, AND THE FINAL PROSPECTUS CAN ALSO BE OBTAINED, WITHOUT CHARGE, AT THE SECURITIES AND EXCHANGE COMMISSION’S INTERNET SITE ( http://www.sec.gov ).

SUMMER’S FINANCIAL INFORMATION CONTAINED HEREIN IS UNAUDITED AND PREPARED BY SUMMER AS A PRIVATE COMPANY, IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND MAY NOT CONFORM TO SEC REGULATION S-X. ACCORDINGLY, SUCH HISTORICAL INFORMATION MAY BE ADJUSTED AND PRESENTED DIFFERENTLY IN KBL’S PROXY STATEMENT TO SOLICIT STOCKHOLDER APPROVAL OF THE ACQUISITION.

Item 1.01 Entry into a Material Definitive Agreement.

General; Structure of Acquisition

On August 31, 2006, KBL Healthcare Acquisition Corp. II (“KBL”), and its wholly owned subsidiary, SII Acquisition Corp. (“Acquisition Sub”), entered into an Agreement and Plans of Reorganization (“Acquisition Agreement”) with each of Summer Infant, Inc. (“SII”), Summer Infant Europe, Limited (“SIE”), and Summer Infant Asia, Ltd. (“SIA” and, collectively, with SII and SIE, the “Targets”), and all of the stockholders of each of the Targets (collectively, the “Stockholders”). Under the terms of the Acquisition Agreement, (i) SII will be merged with and into Acquisition Sub and (ii) all of the outstanding capital stock of SIE and SIA will be acquired directly by KBL. As a result, upon consummation of these transactions (the “Acquisition”), each of the Targets will be a wholly owned subsidiary of KBL. As used in this Report, the term “Summer” includes each of the Targets.

Based in North Smithfield, Rhode Island, Summer designs, markets and distributes branded durable juvenile health and safety products for infants and toddlers. Summer’s products are sold primarily to large U.S. retailers such as Babies R Us, Target, K-Mart, Buy Buy Baby, Meijer, Chelsea & Scott (One Step Ahead) and Baby Depot (Burlington Coat Factory). Summer currently has over sixty proprietary products, including nursery audio/video monitors, safety gates, durable bath products, bed rails, infant thermometers, booster and potty seats, and bouncers.

Summer maintains through SIE a sales, marketing and distribution office in England, which services the United Kingdom and other parts of Europe. SIE’s largest customers are Mothercare, Toys R Us, Argos, Mammas & Pappas, Sainsbury and Tesco. In 2005, SII accounted for approximately 90% of revenue and SIE accounted for approximately 10%.

Summer maintains through SIA a product development, engineering and quality assurance office, which oversees the production of all product lines made in China.

Summer’s unaudited net sales were approximately $35.4 million for 2005, an increase of more than 65% as compared to net sales of $21.1 million for 2004. Unaudited net sales for the first half 2006 were approximately $26.1 million, an increase of more than 50% as compared to net sales of approximately $16.7 million for the first half 2005. Unaudited net income for 2005 was approximately $1.2 million and was approximately $1.8 million for the first half of 2006.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was approximately $2.1 million in 2005. EBITDA for the first half of 2006 was approximately $2.5 million, an increase of approximately 150% as compared to EBITDA of $1.0 million for the first half of 2005. EBITDA as a percent of net sales increased from 5.9% for 2005 to 9.4% for the first half of 2006.

The current executive officers of Summer, including Jason P. Macari, the Chief Executive Officer, will continue in their positions with Summer after the Acquisition. Mr. Macari also will become the Chief Executive Officer of KBL upon consummation of the Acquisition. Dr. Marlene Krauss, KBL’s current Chief Executive Officer, will become

Chairman of the Board of KBL upon consummation of the Acquisition. Steven Gibree, currently the Executive Vice President of Product Development of Summer, shall become Executive Vice President of Product Development of KBL and Summer upon consummation of the Acquisition. Rachelle Harel, SIE’s current Managing Director will become SIE’s Director and General Manager upon consummation of the Acquisition. It is anticipated that Joseph Driscoll, currently Chief Financial Officer of ACT Electronics, Inc., an electronics manufacturer, will become Chief Financial Officer of Summer and, upon consummation of the Acquisition, of KBL.

Upon consummation of the Acquisition, the board of directors of KBL will be increased to seven members. The board will include two persons designated by the Stockholders, such designees initially being Messrs. Macari and Gibree, and two persons designated by certain stockholders of KBL (“Founding KBL Holders”), such designees initially being Dr. Krauss and a person (“Other KBL Designee”) to be selected prior to the mailing of the proxy statement to KBL stockholders in connection with the meeting of such stockholders to consider the Acquisition. The other three members of the board shall be mutually designated by the Stockholders and Founding KBL Holders. Each of the three mutual designees and the Other KBL Designee shall be “independent directors” within the meaning of the Nasdaq rules. The Stockholders, on the one hand, and the Founding KBL Holders, on the other hand, have entered into a voting agreement pursuant to which they have agreed to vote for the other’s designees to the board of directors of KBL through the annual meeting of the stockholders of KBL to be held in 2009.

The Stockholders owning all of the outstanding voting stock of the Targets have approved and adopted the Acquisition Agreement in accordance with the applicable corporate or company laws of each Target’s jurisdiction of formation.

The Acquisition are expected to be consummated in the fourth quarter of 2006 or the first quarter of 2007 after the required approval by the stockholders of KBL and the fulfillment of certain other conditions, as discussed herein.

Under the terms of the Acquisition Agreement, it has been agreed that any redemption of KBL’s outstanding public warrants following consummation of the acquisition would include the provision of cashless exercise rights to the holders thereof.

Transaction Consideration

Pursuant to the Acquisition Agreement, the Stockholders, in exchange for all of the securities of Summer outstanding immediately prior to the Acquisition, will receive from KBL an aggregate of $20 million cash and 3,916,667 shares of KBL common stock (“Transaction Shares”), subject to downward adjustment based on Summer’s Net Worth (as defined in the Acquisition Agreement), as described below.

The Stockholders also will be entitled to receive up to an additional aggregate of 2,500,000 shares of KBL common stock (“Contingent Shares”) in the event that the last sales price of KBL common stock is equal to or exceeds $8.50 on any twenty (20) trading days during any thirty (30) consecutive trading day period commencing on the three-month anniversary of the closing of the Acquisition and ending on April 20, 2009.

The Stockholders also will be entitled to receive cash payments equal to 50% of the difference between actual EBITDA (as defined in the Acquisition Agreement) for the years ending December 31, 2006, 2007 and 2008 and prescribed EBITDA benchmarks for each of those years of $4.2 million, $10 million and $15 million, respectively. These cash payments shall not exceed $5 million in the aggregate for the three years.

Immediately following the Acquisition, and assuming no holders of KBL common stock vote against the acquisition and elect to convert such stock into cash, the Stockholders will own approximately 25.9% of the total issued and outstanding KBL common stock, assuming that none of the Contingent Shares are issued. Giving effect to the issuance of the Contingent Shares, and assuming no holders of KBL common stock vote against the acquisition and elect to convert such stock into cash, the Stockholders would own approximately 36.4% of the total issued and outstanding KBL common stock.

1,000,000 of the Transaction Shares will be placed into escrow to secure the indemnity rights of KBL under the Acquisition Agreement. An additional 391,667 of the Transaction Shares will be placed into escrow to secure KBL’s right to recapture all or a portion of such shares if Summer’s Net Worth (as defined in the Acquisition Agreement) at the closing of the Acquisition is less than Summer’s Net Worth at June 30, 2006. Each of these escrows will be governed by the terms of an Escrow Agreement, a copy of which is attached to this Report as an exhibit.

The Stockholders have agreed not to sell any of the KBL common stock they receive in the Acquisition until April 21, 2008, subject to certain exceptions.

KBL received an opinion from Capitalink, LLC, dated as of August 24, 2006, that the consideration being paid to the Stockholder by KBL in the Acquisition is fair, from a financial point of view, to KBL’s stockholders and that the fair market value of Summer is at least equal to 80% of KBL’s net assets.

Registration Rights

In connection with the Acquisition, the Stockholders will be granted the rights to have any and all of the shares of KBL common stock received by them in the Acquisition registered under the Securities Act of 1933, as amended, upon the demand of holders of at least the majority of such shares. In addition, the Stockholders receive piggyback registration rights with respect to such shares.

Finders’ Fees

EarlyBirdCapital, Inc. (“EBC”), which served as the managing underwriter in KBL’s initial public offering, will receive a cash finder’s fee at the closing of the Acquisition equal to one (1%) of the consideration to be paid in the Acquisition and Brooks, Houghton & Company, Inc., an advisor to Summer, will receive a cash finder’s fee at the closing of the Acquisition equal to two (2%) of the consideration to be paid in the Acquisition.

Representations and Warranties

The Acquisition Agreement contains representations and warranties of each of Summer and KBL relating to, among other things, (a) proper corporate organization and similar corporate

matters, (b) capital structure of each constituent company, (c) the authorization, performance and enforceability of the Acquisition Agreement, (d) licenses and permits, (e) taxes, (f) financial information and absence of undisclosed liabilities, (g) holding of leases and ownership of other properties, including intellectual property, (h) contracts, (i) litigation, (j) title to properties, (k) absence of certain changes, (l) employee matters, (m) compliance with laws and (n) compliance with applicable provisions of securities laws. The Stockholders (other than Rachelle Harel who is not receiving any shares) have represented and warranted, among other things, as to their accredited investor status and the absence of encumbrances on their Summer securities.

Covenants

KBL and Summer have each agreed to take such actions as are necessary, proper or advisable to consummate the Acquisition. They have also agreed to continue to operate their respective businesses in the ordinary course prior to the closing and not to take certain specified actions without the prior written consent of the other party.

The Acquisition Agreement also contains additional covenants of the parties, including covenants providing for:

(i) The parties to use commercially reasonable efforts to obtain all necessary approvals from stockholders, governmental agencies and other third parties that are required for the consummation of the transactions contemplated by the Acquisition Agreement;

(ii) Summer to maintain insurance polices providing insurance coverage for its business and its assets in the amounts and against the risks as are commercially reasonable for the businesses and risks covered;

(iii) The protection of confidential information of the parties and, subject to the confidentiality requirements, the provision of reasonable access to information;

(iv) KBL to prepare and file a proxy statement to solicit proxies from the KBL stockholders to vote in favor of proposals regarding the adoption of the Acquisition Agreement and the approval of the Acquisition, the change of KBL’s name to one mutually selected by the parties, the increase of the number of authorized shares of KBL common stock from 36,000,000 to 100,000,000, an amendment to KBL’s certificate of incorporation deleting or modifying certain portions of Article Sixth thereof (relating to certain actions that will no longer be required after the Acquisition) and the adoption of a long-term incentive plan providing for the granting of options and other stock-based awards for not less than an aggregate of 1,600,000 shares of KBL common stock;

(v) KBL and Summer to use their reasonable best efforts to obtain the listing for trading on Nasdaq of the KBL common stock, warrants and units;

(vi) Summer to permit KBL to conduct reviews and ongoing due diligence of Summer and its operations, product development efforts, records audits and other reviews and related activities;

(vii) KBL and Summer to use commercially reasonable efforts to negotiate with the creditors of each of the Targets to obtain the agreement of each such creditor to terminate any and all personal guarantees by the Stockholders of any of the Targets’ indebtedness to such creditors, including supplying the guarantee of Parent in lieu of such personal guarantees (“Stockholder Guarantee Terminations”);

(viii) Summer and Messrs. Macari and Gibree, as owners of Faith Realty, LLC, an affiliated entity of Summer that owns the new facilities currently under construction that are intended for use by Summer, to use their best commercial efforts to negotiate and execute all agreements and consents required to affect the contribution of all the assets, properties, liabilities and obligations of Faith Realty, LLC to SII (the “Faith Realty Contribution”) and to consummate the Faith Realty Contribution concurrently with the consummation of the Acquisition without payment of any consideration by Summer (other than SII’s assumption of any mortgage or construction indebtedness related thereto);

(ix) Summer and the Stockholders to waive their rights to make claims against KBL to collect from a trust fund established for the benefit of the KBL stockholders who purchased their securities in KBL’s IPO for any moneys that may be owed to them by KBL for any reason whatsoever, including breach by KBL of the Acquisition Agreement or its representations and warranties therein; and

(x) Each Stockholder, at or prior to closing of the merger, to repay to Summer all direct and indirect indebtedness and other obligations owed by them to Summer.

In addition, as soon as practicable after the closing, there shall be distributed to the Stockholders of SII, currently a subchapter “S” corporation, the sum of (i) an amount equal to the product of (A) SII’s net taxable income for the period commencing January 1, 2006 and ending on the date of Closing and (B) the highest combined marginal federal and state tax rate applicable to individuals residing in the State of Rhode Island with respect to such income or gain (taking into account the amount and character of the income or gain) minus (ii) all previous distributions made by SII to the Stockholders in respect of the 2006 taxable year and the 2007 taxable year, if applicable, prior to the Closing.

Conditions to Closing

General conditions

Consummation of the transactions is conditioned on the KBL stockholders, at a meeting called for these purposes, (i) adopting the Acquisition Agreement and approving the Acquisition, (ii) approving the change of KBL’s name, and (iii) approving the increase of the authorized shares of KBL common stock from 35,000,000 to 100,000,000.

The adoption of the Acquisition Agreement will require the affirmative vote of the holders of a majority of the KBL common stock voting at the meeting. The holders of the KBL common stock issued prior to its IPO, including the current officers and directors of KBL, have agreed to vote their shares in the matter of the approval of the Acquisition Agreement to the same effect as the majority of the shares sold in the IPO (“Public Shares”) are voted. Additionally, if holders owning 20% or more of the Public Shares vote against the transaction and exercise their right to convert their Public Shares into a pro-rata portion of the funds held in trust by KBL for the benefit of the holders of the Public Shares, then the transaction contemplated by the Acquisition Agreement cannot be consummated.

The approval of the KBL name change and the increase in the number of authorized shares of KBL common stock will require the affirmative vote of the holders of a majority of the outstanding common stock of KBL, and such approvals are conditions to the consummation of the Acquisition. The approval of the long-term incentive plan will require the affirmative vote of a majority of the outstanding KBL common stock present in person or by proxy at the stockholder meeting, and the amendment of Article VI of KBL’s certificate of incorporation will require the affirmative vote by the holders of a majority of the outstanding common stock of KBL present in person or by proxy at the stockholder meeting, but these approvals are not conditions to the consummation of the Acquisition.

In addition, the consummation of the transactions contemplated by the Acquisition Agreement is conditioned upon (i) no order, stay, judgment or decree being issued by any governmental authority preventing, restraining or prohibiting in whole or in part, the consummation of such transactions, (ii) the execution by and delivery to each party of each of the various transaction documents, (iii) the delivery by each party to the other party of a certificate to the effect that the representations and warranties of each party are true and correct in all material respects as of the closing and all covenants contained in the Acquisition Agreement have been materially complied with by each party, (iv) the receipt of necessary consents and approvals by third parties and the completion of necessary proceedings and (v) KBL common stock being quoted on the OTC Bulletin Board or listed for trading on Nasdaq.

Summer’s conditions to closing

The obligations of Summer to consummate the transactions contemplated by the Acquisition Agreement also are conditioned upon each of the following, among other things:

(i) At the closing, there shall have been no material adverse change in the assets, liabilities or financial condition of KBL or its business since the date of the Acquisition Agreement;

(ii) The trust fund established for the benefit of the holders of KBL’s Public Shares shall contain no less than $49,168,000 and shall be dispersed to KBL immediately upon the closing, less (i) amounts paid to the Stockholders at closing as consideration in the acquisition ($20 million), (ii) amounts paid to KBL stockholders who have elected to convert their shares to cash in accordance with KBL’s certificate of incorporation, (iii) repayment of any interest-free loans made by certain stockholders of KBL to fund necessary operating expenses of KBL prior to closing and (iv) expenses incurred by KBL in connection with the business combination that are not otherwise paid with KBL’s assets held outside of the trust fund;

(iii) The Stockholders Guarantee Terminations shall have been obtained; and

(iv) At the closing, KBL and Dr. Krauss shall enter into an employment agreement and KBL shall execute and deliver and/or accept employment agreements with each of Messrs. Macari and Gibree and Ms. Harel, as described below.

KBL’s conditions to closing

The obligations of KBL to consummate the transactions contemplated by the Acquisition Agreement also are conditioned upon each of the following, among other things:

(i) At the closing, there shall have been no material adverse change in the assets, liabilities or financial condition of Summer, its subsidiaries or their businesses since the date of the Acquisition Agreement;

(ii) KBL shall have received Summer’s audited consolidated financials for the year ended December 31, 2005 and reviewed consolidated financials for the six months ended June 30, 2006 of Summer (and PCOAB-firm audited 2004 and 2003 financials as and if required by the applicable proxy rules) and such financials shall not materially differ from the draft financials and such supplied by Summer prior to the date hereof.

(iii) The Faith Realty Contribution shall be effective as of the closing and Summer shall have given no consideration therefor, except its assumption of mortgage or construction indebtedness related to such property.

(iv) At the closing, each of Messrs. Macari and Gibree and Ms. Harel shall have executed and delivered the employment agreements, as described below.

Indemnification

As the sole remedy for the obligation of the Stockholders to indemnify and hold harmless KBL for any damages, whether as a result of any third party claim or otherwise, and which arise as a result of or in connection with the breach of representations and warranties and agreements and covenants of Summer or in connection with an identified, existing action (“Pending Claim”), 1,000,000 Transaction Shares will be held back upon consummation of the Acquisition, which shall be placed in escrow with an independent escrow agent (“Escrow Fund”). Any indemnification payments shall be paid solely from the shares held back or, at the election of the Stockholders, in cash paid by the Stockholders in substitution for such shares. For purposes of satisfying an indemnification claim, shares of KBL common stock will be valued at the average reported last sales price for the ten trading days ending on the last day prior to the day that the claim is paid. Claims for indemnification may be asserted by KBL once the damages exceed $500,000 and are indemnifiable to extent that damages exceed $500,000.

Any shares of KBL common stock remaining in the Escrow Fund upon the later of (a) the date that is sixteen months after the Effective Time and (b) 30 days after Parent has filed with the SEC its annual report on Form 10-KSB for the year ending December 31, 2007 (such period, the “Escrow Period”) shall be released to the Stockholders, except those shares reserved against any claims arising prior to that date, including a pending claim identified in Schedule 2.10 of the Acquisition Agreement, if same has not been adjudicated, settled, dismissed or otherwise resolved in its entirety with respect to Summer and its subsidiaries and affiliates prior to such date, in such amounts and manner as prescribed in the Escrow Agreement.

Termination

The Acquisition Agreement may be terminated at any time, but not later than the closing, as follows:

(i) By mutual written consent of KBL and Summer;

(ii) By either Parent or Summer if the Transactions shall not have been consummated by April 21, 2007 for any reason; provided, however, that this right to terminate would not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of the Acquisition Agreement;

(iii) By either KBL or Summer if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Acquisition, which order, decree, ruling or other action is final and nonappealable;

(iv) By either KBL or Summer if the other party has breached any of its covenants or representations and warranties in any material respect and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party is itself not in breach; or

(v) By either KBL or Summer if, at the KBL stockholder meeting, the Acquisition Agreement and the transactions contemplated thereby shall fail to be approved and adopted by the affirmative vote of the holders of KBL common stock, or 20% or more of the Public Shares request conversion of their shares into the pro rata portion of the trust fund in accordance with KBL’s certificate of incorporation.

Employment Agreements

Jason Macari

In connection with the consummation of the Acquisition, Mr. Macari will enter into a full-time employment agreement with KBL. Under the terms of the employment agreement, Mr. Macari will serve as the Chief Executive Officer of KBL and Summer for an initial term of three years. The employment agreement provides that Mr. Macari will receive an annual base salary of $275,000. Mr. Macari also may be awarded a bonus in an amount equal to up to 50% of his base salary during any fiscal year during the employment term. One half of such bonus would be based on his performance against performance criteria for such fiscal year to be set, in writing, by KBL’s compensation committee within 45 days after the Board of Directors approves the budget for such year and the remaining portion would be awarded in the discretion of the compensation committee. The employment agreement provides that, in the event of the termination of Mr. Macari’s employment by KBL without cause or upon termination of his employment as a result of KBL’s

breach of the employment agreement, KBL will continue to pay him his base salary in accordance with KBL’s normal payroll schedule for a period of 12 months from the date of termination. The employment agreement contains certain restrictive covenants that prohibit Mr. Macari from disclosing information that is confidential to KBL and its subsidiaries and generally prohibits him, during the employment term and for one year thereafter, from soliciting or hiring the employees of KBL and its subsidiaries or competing with KBL or Summer.

Steven Gibree

In connection with the consummation of the Acquisition, Mr. Gibree will enter into a full-time employment agreement with KBL. Under the terms of the employment agreement, Mr. Gibree will serve as the Executive Vice President of Product Development of KBL and Summer for an initial term of three years. The employment agreement provides that Mr. Gibree will receive an annual base salary of $220,000. Mr. Gibree also may be awarded a bonus in an amount equal to up to 50% of his base salary during any fiscal year during the employment term. One half of such bonus would be based on his performance against performance criteria for such fiscal year to be set, in writing, by KBL’s compensation committee within 45 days after the Board of Directors approves the budget for such year and the remaining portion would be awarded in the discretion of the compensation committee. The employment agreement provides that, in the event of the termination of Mr. Gibree’s employment by KBL without cause or upon termination of his employment as a result of KBL’s breach of the employment agreement, KBL will continue to pay him his base salary in accordance with KBL’s normal payroll schedule for a period of 12 months from the date of termination. The employment agreement contains certain restrictive covenants that prohibit Mr. Gibree from disclosing information that is confidential to KBL and its subsidiaries and generally prohibits him, during the employment term and for one year thereafter, from soliciting or hiring the employees of KBL and its subsidiaries or competing with KBL or Summer.

Rachelle Harel

In connection with the consummation of the Acquisition, Rachelle Harel will enter into a full-time employment agreement with SIE. Under the terms of the employment agreement, Ms. Harel will serve as the Director and General Manager of SIE until she or SIE terminates the agreement by giving at least six months’ prior written notice to the other party. The employment agreement provides that Ms. Harel will receive an annual base salary of £81,300. Ms. Harel also may be awarded a bonus in the discretion of the board of directors of KBL. The employment agreement contains certain restrictive covenants that prohibit Ms. Harel from disclosing information that is confidential to KBL and Summer and their subsidiaries and generally prohibits her, during the employment term and for one year thereafter, from soliciting or hiring the employees of KBL and its subsidiaries, or during the employment term and for six months thereafter, competing with KBL or Summer.

Joseph Driscoll

It is anticipated that, prior to or upon consummation of the Acquisition, Mr. Driscoll will enter into a full-time employment agreement with Summer. Under the terms of the employment agreement, Mr. Driscoll will serve as the Chief Financial Officer of Summer and after the consummation of the Acquisition, of KBL, for an initial term of two years. The employment agreement provides that Mr. Driscoll will receive an annual base salary of $170,000. Mr. Driscoll will also receive a cash bonus of $50,000 upon the consummation of the Acquisition. Mr. Driscoll also may be awarded a bonus in an amount equal to up to 25% of his base salary during fiscal year 2007 provided, that Summer attains its projected revenue, net income and other performance criteria goals as determined in writing by the Compensation Committee of the Board prior to or within sixty (60) days after Summer’s operating budget is established for calendar 2007. The employment agreement provides that, in the event of the termination of Mr. Driscoll’s employment by Summer without cause or upon termination of his employment as a result of Summer’s breach of the employment agreement, Summer will continue to pay him his base salary in accordance with Summer’s normal payroll schedule for a period of six months from the date of termination. The employment agreement contains certain restrictive covenants that prohibit Mr. Driscoll from disclosing information that is confidential to Summer, KBL and its subsidiaries and generally prohibits him, during the employment term and for one year thereafter, from soliciting or hiring the employees of Summer, KBL and its subsidiaries or competing with Summer or KBL.

Marlene Krauss

In connection with the consummation of the Acquisition, Dr. Krauss will enter into an employment agreement with KBL. Under the terms of the employment agreement, Dr. Krauss will serve as the Chairman of the Board of KBL for an initial term of three years. Dr. Krauss will not be required to devote her full business time to this position. The employment agreement provides that Dr. Krauss will receive an annual base salary of $125,000. The employment agreement provides that, in the event of the termination of Dr Krauss’s employment by KBL without cause or upon termination of her employment as a result of KBL’s breach of the employment agreement, KBL will continue to pay her base salary in accordance with KBL’s normal payroll schedule for a period of 12 months from the date of termination. The employment agreement contains certain restrictive covenants that prohibit Dr. Krauss from disclosing information that is confidential to KBL and its subsidiaries. The employment agreement also provides that if Dr. Krauss engages in competitive activity, such activity would be grounds for termination of her employment for cause.

Item 3.02 Unregistered Sales of Equity Securities.

At closing, the Stockholders will receive an aggregate of 3,916,667 shares of KBL common stock, subject to adjustments described above in Item 1.01. These shares of KBL common stock (in addition to any Contingent Shares that may be issued in the future) will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from the registration requirements as provided in Section 4(2) of the Securities Act.

Item 5.01 Change in Control of Registrant

As a result of the arrangements regarding the election of KBL directors who will serve as such after the closing of the Acquisition that are described above in Item 1.01, a change in control of KBL will occur as a result of the Acquisition. As such event will take place more than 60 days after the filing of this Report and because not all of the persons who will so serve have yet been designated and the amounts of KBL common stock to be owned by the directors immediately after the Acquisition cannot yet be determined, KBL is at this time unable to provide information regarding the beneficial ownership of KBL common stock by those persons who will be its directors immediately after the Acquisition. Such information will be provided in the proxy statement that KBL will distribute to its stockholders to solicit their vote to approve the Acquisition and the other proposals that will be presented to them for consideration in connection with the Acquisition.

Item 7.01 Regulation FD Disclosure

Summer and its Business

General

Based in North Smithfield, Rhode Island, Summer designs, markets and distributes branded durable juvenile health and safety products for infants and toddlers. Summer’s products are sold primarily to large U.S. retailers such as Babies R Us, Target, K-Mart, Buy Buy Baby, Meijer, Chelsea & Scott (One Step Ahead), Baby Depot (Burlington Coat Factory) and Wal-Mart. Summer currently has over sixty proprietary products, including nursery audio/video monitors, safety gates, durable bath products, bed rails, infant thermometers, booster and potty seats, and bouncers.

Summer maintains through SIA a product development, engineering and quality assurance office, which oversees the production of all product lines made in China.

net sales of approximately $16.7 million for the first half 2005. Unaudited net income for 2005 was approximately $1.2 million and was approximately $1.8 million for the first half of 2006.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was approximately $2.1 million in 2005. EBITDA for the first half of 2006 was approximately $2.5 million, an increase of approximately 150% as compared to EBITDA of $0.99 million for the first half of 2005. EBITDA as a percent of net sales increased from 5.9% for 2005 to 9.4% for the first half of 2006.

Products

Summer sells over sixty different proprietary products listed in order of dollar volume importance: (i) baby gates (approximately 28% of 2005 sales), (ii) nursery audio/video monitors (approximately 27% of 2005 sales, (iii) durable bath products (approximately 19% of 2005 sales), (iv) infant thermometers, grooming kits and related health and safety products (approximately 9% of 2005 sales), (v) bed rails (approximately 8% of 2005 sales), (vi) booster seats and potty seats (approximately 5% of 2005 sales), and (vii) bouncers (approximately 4% of 2005 sales).

A brief discussion of each category follows:

Nursery audio/video monitors

Summer produces and distributes audio only monitors, priced to retail between $19.99 and $69.99 per unit; audio/video monitors — both handheld and stationary — priced to retail between $99.99 to $199.99 per unit; a car A/V monitor; and a prenatal heart listening device, retail priced at $19.99 to $39.99 per unit. Summer is the market leader in the A/V segment of the industry with an estimated 45% market share. The A/V monitors enable caregivers to remotely see and hear a baby, provide a coverage range of up to 300 feet from the monitor, and feature night vision technology that allows viewing the baby even in a darkened room.

Summer also produces and distributes prenatal heart listening devices. Summer’s product allows the user to listen to and record the unborn baby’s heartbeat and movements. This product is not marketed as a medical device.

Baby gates

Summer produces and distributes a broad line of gates with distinctive features such as walk-through doors, one-handed operation, simple pressure installation, tall gates, 12’ wide gates, and alarm features. Summer’s baby gates retail in the range of $49.99 to $99.99 per unit.

Durable bath products

Summer produces and distributes approximately ten baby bath tubs/ slings/ showers/ and spas. The products are designed to provide a safe, clean and convenient place to wash and bath the baby. Innovative Summer features include folding tubs, head supports, battery operated shower and spa with clean water reservoir and safety temperature tester. Retail prices range from $ 5.99 for a baby bath sling to $39.99 for a “Baby Bath Spa and Shower.”

Bed rails

Summer produces and distributes four different bed rail safety devices. Distinctive features include fully preassembled, fold down rails, and double and triple rails that are joined under the mattress to insure a tight fit at the head and sides of the bed. Retail prices range from $19.99 for a single rail to $49.99 for a triple-adjustable bed rail.

Infant thermometers, grooming kits and related health and safety products

Summer produces and distributes eight different digital thermometers, forehead thermometer strips, finger brushes, tooth brushes, hair brush and comb kits, nail clippers, medicine dispensers, baby mitts, ear and throat exam kits, and similar products.

Booster Seats and Potty Seats

Summer produces and distributes a booster seat, retailing around $29.99 per unit and a potty seat priced to sell at around $9.99. Booster features include height adjustment and compactness for travel. The potty seat is convertible into a child’s step stool.

Bouncers

Summer produces and distributes six models of bouncers aimed at the mid to upper tier price points which retailing at $39.99 to $49.99 per unit. Distinctive features include vibrating, rocking motions, reclining adjustments, electronic mobiles, multiple melodies, travel cases, and folding canopies.

New product development teams have also been established to enter several new categories in 2007 and 2008. The first team is focused on Wheeled goods, play yards, swings, high chairs, and other “large furniture” categories. The second team is focused on the infant soft goods market comprised mainly of bedding, blankets, home furnishings, layette, and soft bath products. These two teams are scheduled to release new products to the market starting in mid 2007.

Product Development and Design

Summer’s management believes that product development is a critical element of its strategy and success to date. Summer’s product strategy is to produce proprietary products that provide distinctive benefits, are visually appealing, provide convenience and will appeal to the mid-tier and upper-tier buyers. Summer’s U.S. retailers are strategically motivated to buy innovative, up-market products. Summer’s main product development efforts are located at their RI corporate office, but also have development efforts in China (four-person sourcing, electronics, and QA team), S. Carolina (four-person soft goods design office), and England (two person team to meet UK and EU standards and market demands).

Summer obtains all necessary regulatory agency approvals for each of its products. In the U.S., these approvals may include one or more of, among others, the Consumer Product Safety Commission (“CPSM”), the American Society of Test Methods (ASTM, International), the Juvenile Products Manufacturing Association (“JPMA”), the Federal Communications

Commission (“FCC”), and the Food and Drug Administration (“FDA”). Summer conducts its own internal testing, which uses a foreseeable use and abuse testing method, and is designed to subject each product to the “worst case scenario.” Summer’s products are also frequently tested by independent, outside government-certified labs.

Summer carries product liability insurance policy which provides Summer with $8 million of liability coverage, with a small deductible. Summer consults with its insurer to ascertain appropriate liability coverage for its product mix. Summer anticipates increasing its insurance coverage in the future in line with its expanding sales and product breadth.

Suppliers and Manufacturing, Summer Asia

Except for certain injection-molded bath tubs, potty seats, and gates which are manufactured in the U.S, substantially all other Summer’s products are manufactured in southern China at factories near Hong Kong. Summer currently uses seven Chinese factories. Accordingly, Summer is not dependent on any one manufacturer. Summer owns its own molds, SIA provides Summer with a local sourcing presence and the ability to oversee quality, electronic engineering and other issues that may arise during production.

Summer uses two Leominster, MA manufacturers for its injection molded products, bath tubs, potty seats and gates. Domestically produced goods account for between 15% and 20% of Summer’s annual sales.

Facilities; Distribution

Summer is currently headquartered in a leased 13,000 sq. foot facility in North Smithfield, Rhode Island.

Summer maintains its inventory at its warehouses in Long Beach, CA, Cumberland, RI, Worcester and Leominster, MA and Felixstowe, U.K.

Summer is in the process of building a new 52,000 square foot headquarters/warehouse facility in Woonsocket, Rhode Island and intends to move into its new facility by end of June of 2007. The facility plans provide for 12,000 square feet of office space and a 40,000 square foot warehouse. The Woonsocket facility is expected to replace the Cumberland contract warehouse facility and the North Smithfield office headquarters.

Most of Summer’s customers pick up their goods at the regional warehouses on terms that are FOB warehouse. Summer also uses UPS and other common carriers for deliveries to customers, primarily the smaller retailers and specialty stores.

Sales and Marketing, Customers

Approximately 90% of all sales of Summer products are marketed directly by Summer to its large retail customers. Summer also uses the services of independent sales representatives to distribute its products to smaller accounts. These sales representatives are compensated directly by Summer on a commission basis.

Summer Infant Europe

SIE was organized in 2003 to target U.K.’s growing market for juvenile products. SIE is based in Hertfordshire, a suburb north and west of London. SIE is responsible for European sales, marketing and distribution. SIE’s sales are primarily within the U.K.

SIE projects 2006 sales of $5.5 million US (or £3 million).

Management

Summer is lead by an experienced management team with significant experience in the juvenile products industry:

Jason P. Macari, President, Founder and Principal Owner . Mr. Macari, the founder of Summer Infant, Inc., has more than 20 years of industry experience. Prior to his purchase of Summer in 2001, Mr. Macari was Vice President of Product Development and General Manager of Safety 1st, Inc., a leading manufacturer of safety and baby products from August 1994 to June 2001. At Safety 1st, Mr. Macari was responsible for the development of all products as well as manufacturing support and sourcing; functional areas of responsibility included Engineering, R&D, Marketing, QA, Operations, Sales, and HR. From May 1988 to August 1994, Mr. Macari managed the manufacturing engineering group of the Davol Division of CR Bard, a manufacturer of surgical products, and in such capacity was responsible for the transition of new products to production as well as the engineering support to 3 manufacturing facilities located in Rhode Island, Kansas and Mexico. From May 1984 to May 1988, Mr. Macari was employed as project engineer at Hasbro, Inc., the world’s second largest toy manufacturer, and in such capacity Mr. Macari led the product teams as project engineer to design and deliver new boys toys for ages 5 to 12. Mr. Macari is a graduate of Worcester Polytechnic Institute (BS Mechanical Engineering) and a graduate of Bryant College (MBA).

Steven Gibree, Owner and EVP Product Development . Mr. Gibree is Summer’s Executive Vice President of Product Development with management oversight of research and development, product design and engineering and manufacturing relations. Prior to being recruited to Summer, in November 2001, Mr. Gibree was the Vice President of Engineering for Little Kids, Inc., a manufacturer of innovative toys, from March 2001 to November 2001. From May 1997 to March 2001. Mr. Gibree was Director of Engineering at Safety 1st, Inc. From May 1985 to May 1997, Mr. Gibree was employed by Hasbro, rising to Project Manager for the Kid Dimension Division. Mr. Gibree is a graduate of the Hall Institute of Technology.

Joseph Driscoll, Chief Financial Officer. It is anticipated that Mr. Driscoll will become Chief Financial Officer of Summer in September 2006. From May 2001 to the present, Mr. Driscoll was employed as Vice President of Finance and later served as Chief Financial Officer for ACT Electronics, Inc., an electronics manufacturer. From May 2000 to May 2001, Mr. Driscoll was employed as Vice President of Finance for PCI, an internet based marketing services company. From April 1997 to May 2000, Mr. Driscoll was employed as Vice President of Finance and later served as Chief Financial Officer for Safety 1st, Inc. From September 1993 to April 1997, Mr. Driscoll was employed as Assistant Corporate Controller and later served as Director of Financial Reporting for Staples, Inc. From July 1986 to February 1992, Mr. Driscoll was employed as an Audit Manager for KPMG Peat Marwick. From February 1992 to September 1993, Mr. Driscoll was employed as Corporate Controller for E-II Holdings, Inc., an international consumer products company.

Rachelle Harel, SIE Managing Director of European Operations . Ms. Harel joined SIE in September 2002 and is responsible for starting Summer’s sales and distribution operation in the UK and Europe. Based in the U.K., Ms. Harel has more than 20 years of experience in the U.K. juvenile market, including product safety, retailing, and product development. From August 1999 to September 2002, Ms. Harel was employed as Vice President of Product Development for Dorel Europe Ltd., a manufacturer of juvenile consumer products. From June 1995 to August 1999, Ms. Harel was employed as a Director at Quality Management Solutions, a consulting company that provided safety and quality control consulting services to small manufacturers. From February 1990 to June 1995, Ms. Harel was employed as Quality Manager at Mothercare plc, a British retail chain specializing in the juvenile market. From November 1985 to February 1990, Ms. Harel was employed as a Team Leader at SGS Testing Laboratory, a consumer testing laboratory providing testing and certification services.

Brian Sundberg, VP Research and Development . Mr. Sundberg joined Summer in September 2004 as Vice President of Research and Development. His responsibilities include product conceptualization, development as well as industrial design management for new product lines and product line extensions. In October 2001, Mr. Sundberg founded his own company, Integrity Product Development, a consulting company that specialized in identifying and designing new products in the juvenile, medical, architectural lighting and giftware industries. From September 1991 to October 2001, Mr. Sundberg was employed at Safety 1st, Inc., where he held the titles of Senior Designer, Design Director and Vice President of Research and Development. From 1984 through 1991, Mr. Sundberg was employed first as a staff designer and then later as a senior designer for Marketing/Design Consultants, Inc. a consulting company that provided industrial and graphic design services to small manufacturing companies.

William L. Bassett, Vice President Sales . Mr. Bassett joined Summer in June 2003 as Director of Sales and was promoted to Vice President Sales in September 2005. His responsibilities include managing Summer’s sales efforts primarily in the U.S and Canada. He is responsible for Summer’s major retail relationships. From April 2001 to May 2003, Mr. Bassett was employed as Sales Director for Dorel Juvenile Group. While matriculating to obtain his MBA at Xavier University, Mr. Bassett was employed as a sales representative fro Papel Giftware from August 2000 to April 2001. From September 1998 to August 2000 Mr. Bassett was employed as a Director and National Sales Manager for Galerie au Chocolat, and managed all Galerie’s sales efforts in the US and internationally. From September 1996 to September 1998, Mr. Bassett was employed as a National Sales Manager for Dolly, Inc. From October 1988 to September 1996, Mr. Bassett was employed as Regional Sales Manager for Gibson Greetings, Inc., a designer and manufacturer of greeting cards, paper party goods and related specialty products. From September 1986 to October 1988 Mr. Bassett was employed as a Store Manager and Buyer for Juvenile Stores, Inc.

Anthony A. Paolo, Vice President Quality Assurance . Mr. Paolo joined Summer in March 2005 as Vice President Operations and Quality Assurance. His responsibilities include management of Summer’s worldwide supply chain, including purchasing, planning and distribution. He is also responsible for product safety and quality. From May 1996 to October 2004, Mr. Paolo held the position of Vice President of Corporate Quality at The First Years, Inc., a manufacturer and designer of juvenile products. From March 1993 to May 1996, Mr. Paolo was employed as an engineer at Davol, Inc., a subsidiary of CR Bard, a medical device manufacturer. From March 1988 to March 1993, Mr. Paolo was employed at GTE Government Systems, a government manufacturer contractor of telecommunications equipment. Mr. Paolo was employed at Raytheon Company, a government defense manufacturing contractor from August 1985 to March 1988.

Mark Gorton, Vice President Finance and I.T. Mr. Gorton joined Summer in August 2003 as financial controller. Mr. Gorton is now the Vice President of Finance at Summer and is responsible for all accounting and financial matters of Summer’s business, including the generation of financial reporting, bank relations, accounting firm relations and relationships with Summer’s other financial services providers. He is also responsible for the Company’s information technology and communication systems. From May 2001 to August 2003, Mr. Gorton was the Accounting Manager for the Outsource Services Division of Trammell Crow Company, a property management and corporate services company. Mr. Gorton was employed from May 1993 to May 2001 as Financial Controller at Action Automation and Controls, Inc., a distributor and manufacturer of custom automation equipment.

Competition

The industry has many participants with no dominant company, though certain companies have disproportionate strength in certain segments. The largest participants that carry products competitive with Summer Infant are Dorel Industries ( Safety 1st and Cosco brands) , Evenflo (Evenflo, Gerry, and Snugli brands), Fisher-Price (part of Mattel, Inc.), The First Years (a sub of RC2 Corporation), and Graco (sub of Newell Rubbermaid). In addition, the Company competes with a number of smaller private companies with sales under $50 million, such as KidCo, Inc., Kids II, and Regalo International, within certain of its product lines.

Employees

Summer employs 71 people overall with 44 employees working at Summer’s headquarters in North Smithfield, Rhode Island and another five employees at its warehouse facility in Rhode Island. Summer also has four (4) employees in California, eight in the United Kingdom, two in New York, four (4) in South Carolina and four in Hong Kong. Summer’s employees are comprised of the following major categories: (i) product development (24 employees); (ii) operations (26 employees); (iii) administrative and financial (13 employees) and (iv) sales (eight employees).

Non-GAAP Financial Measures

Calculation of EBITDA

Summer presents EBITDA because this information is relevant to Summer’s business. Summer defines EBITDA as net income (loss) before: income taxes; interest expense; other income (expense); and depreciation and amortization.

Summer’s Management uses EBITDA, as an important financial measure to assess the ability of Summer’s assets to generate cash sufficient to pay interest on its indebtedness, meet capital expenditure and working capital requirements, and otherwise meet its obligations as they become due. Summer’s management believes that the presentation of EBITDA included in this Form 8-K provides useful information regarding Summer’s results of operations because they assist in analyzing and benchmarking the performance and value of Summer’s business.

Although Summer uses EBITDA as a financial measure to assess the performance of its business, there are material limitations to using a measure such as EBITDA, as adjusted, including the difficulty associated with using it as the sole measure to compare the results of one company to another and the inability to analyze significant items that directly affect a company’s net income (loss) or operating income because it does not include certain material costs, such as interest and taxes, necessary to operate its business. In addition, Summer’s calculation of EBITDA may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measures that are computed in accordance with GAAP. Summer’s management compensates for these limitations in considering EBITDA in conjunction with its analysis of other GAAP financial measures, such as net income (loss).

The following table presents a reconciliation of EBITDA to net income, its most directly comparable GAAP financial measure, on a historical basis, for the periods presented:

Reconciliation of unaudited EBITDA, as adjusted, to Net Income (Loss) $000s


	Six Months Ended June 30		Fiscal Year Ended December 31
	2006	2005	2005	2004	2003
Net income (loss)	1,758	717	1,222	943	854
Income taxes*	0	0	0	0	0
Interest expense	402	117	448	131	120
Depreciation and amortization	288	156	402	228	144
EBITDA	2,448	990	2,072	1,302	1,118

*	Summer is an “S” Corporation.

Investor Presentation

Attached as Exhibit 99.3 to this Report is the form of slide show presentation that has been used by KBL in presentations for certain of its stockholders.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(c)

Exhibits:


Exhibit		Description
10.1		Acquisition Agreement dated August 31, 2006 among KBL Healthcare Acquisition Corp. II (“KBL”), SII Acquisition Corp. (“Acquisition Corp.”), Summer Infant, Inc. (“SII”), Summer Infant Europe, Limited (“SIE”), Summer Infant Asia, Ltd. (“SIA”) and the stockholders of each of SII, SIE and SIA (the “Stockholders”).

10.2		Voting Agreement dated August 31, 2006 among KBL, certain stockholders of KBL and the Stockholders.

10.3		Form of Lock-Up Agreement, dated August 31, 2006 executed by each of the Stockholders.

10.4		Form of Employment Agreement between KBL and Jason Macari.

10.5		Form of Employment Agreement between KBL and Steven Gibree.

10.6		Form of Employment Agreement between KBL and Dr. Marlene Krauss.

10.7		Form of Employment Agreement between KBL and Joseph Driscoll.

10.8		Form of Escrow Agreement among KBL, the Stockholders’ Representative, and Continental Stock Transfer & Trust Company, as Escrow Agent.

10.9		Form of Registration Rights Agreement among KBL and stockholder parties thereto.

99.1		Press release of KBL, dated August 31, 2006 (including unaudited financial information regarding Summer Infant, Inc. and its affiliated companies).

99.2		Certain unaudited consolidated financial statements of Summer Infant, Inc. and its affiliated companies.

99.3		Investor Presentation.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated: September 5, 2006	KBL HEALTHCARE ACQUISITION CORP. II

	By:	/s/ Michael Kaswan
	Name:	Michael Kaswan
	Title:	Chief Operating Officer

EXHIBIT 10.1

AGREEMENT AND PLANS OF REORGANIZATION

BY AND AMONG

KBL HEALTHCARE ACQUISITION CORP. II,

SII ACQUISITION, INC.

AND

SUMMER INFANT, INC. (“SII”), SUMMER INFANT EUROPE LIMITED (“SIE”) AND

SUMMER INFANT ASIA, LTD. (“SIA”)

AND

ALL OF THE STOCKHOLDERS OF EACH OF SII, SIE AND SIA

DATED AS OF SEPTEMBER 1, 2006

AGREEMENT AND PLANS OF REORGANIZATION

THIS AGREEMENT AND PLANS OF REORGANIZATION is made and entered into as of September 1, 2006, by and among KBL Healthcare Acquisition Corp. II, a Delaware corporation (“ Parent ”), SII Acquisition, Inc., a Rhode Island corporation and a wholly owned subsidiary of Parent (“ SII Merger Sub ”), Summer Infant, Inc., a Rhode Island corporation (“ SII ”), Summer Infant Europe Limited, a United Kingdom limited company (“ SIE ”), Summer Infant Asia, Ltd., a Hong Kong limited company (“ SIA ” and, collectively with SII and SIE, the “ Companies ”) and each of the persons listed under the captions “ SII Stockholders ”, “ SIE Stockholders ” and “ SIA Stockholders ” on the signature pages hereof, each such person being a stockholder of one or more of the Companies (collectively, the “ Stockholders ”). As used in this Agreement, the term “ Summer ” means all of the Companies, taken as a whole, unless the context clearly otherwise indicates.

RECITALS

A. Upon the terms and subject to the conditions of this Agreement (as defined in Section 1.2) and in accordance with the applicable corporate laws of the jurisdictions of the respective jurisdiction of formation of each of the Companies as set forth in the preamble of this Agreement (the “ Applicable Corporate Laws ”), Parent and Summer intend to enter into a business combination transaction by means of a merger and series of related stock sales in which (i) SII will merge with and into SII Merger Sub (with SII Merger Sub being the surviving entity) in exchange for shares of the common stock of the Parent and cash to the holders of the capital stock of SII, (ii) the SIE Stockholders will sell all of the SIE Ordinary Shares held by such SIE Stockholders to the Parent, in exchange for the payment of cash and (iii) the SIA Stockholders will transfer all of the SIA Ordinary Shares held by such SIA Stockholders to the Parent, in exchange for shares of the Common Stock of the Parent.

B. The Boards of Directors of each of the Companies, Parent and SII Merger Sub have determined that each of the Transactions (as defined in Section 1.1) is fair to, and in the best interests of, their respective companies and their respective stockholders.

C. The parties intend, by executing this Agreement, to adopt plans of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows (defined terms used in this Agreement are listed alphabetically in Article IX, together with the Section and, if applicable, paragraph number in which the definition of each such term is located):

ARTICLE I

THE TRANSACTIONS

1.1 The Transactions . At the Effective Time (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement and the Applicable Corporate Laws:

(a) SII will be merged with and into SII Merger Sub, in exchange for the payment of cash by the Parent and those shares of Common Stock of the Parent in such amounts as set forth in Schedule 1.5(a) (the “ SII Merger ”), whereupon the separate corporate existence of SII shall cease and SII Merger Sub shall continue as the surviving corporation of the SII Merger (the “ SII Merger Surviving Corporation ”);

(b) The SIE Stockholders will exchange and transfer all of their SIE Ordinary Shares to the Parent, in exchange for the payment of cash by the Parent in such amounts as set forth in Schedule 1.5(a) (the “ SIE Transaction ”); and

(c) The SIA Stockholders will sell and transfer all of their SIA Ordinary Shares to the Parent, in exchange for the payment of cash by the Parent and those shares of Common Stock of the Parent in such amounts as set forth in Schedule 1.5(a) (the “ SIA Transaction ” and, collectively with the SII Merger and SIE Transaction, the “ Transactions ”).

1.2 Effective Time; Closing . Subject to the conditions of this Agreement, the parties hereto shall concurrently cause the Transactions to be consummated by filing with each jurisdiction set forth on Schedule 1.2 hereto the certificate, articles, forms of merger and/or other transaction documentation necessary to consummate the Transactions (including, but not limited to, any notices, stock transfer forms and payment of any transfer, stamp or duty taxes) described on Schedule 1.2 in accordance with the Applicable Corporate Laws, as the case may be (collectively, the “ Transaction Certificates ”) (the time of the last such filing to be properly completed, or such later time as may be agreed in writing by Parent and SII and specified in the Transaction Certificates, being the “ Effective Time ”) as soon as practicable on or after the Closing Date (as herein defined). The term “ Agreement ” as used herein refers to this Agreement and Plans of Reorganization, as the same may be amended from time to time, and all schedules hereto (including the Summer Schedule and the Parent Schedule, as defined in the preambles to Articles II and III hereof, respectively). Unless this Agreement has been terminated pursuant to Section 8.1, the closing of the Transactions (the “ Closing ”) shall take place concurrently at the offices of Graubard Miller, counsel to Parent, 405 Lexington Avenue, New York, New York 10174-1901 at a time and date to be specified by the parties, which shall be no later than the second business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree in writing (the “ Closing Date ”). Closing signatures may be transmitted by facsimile.

1.3 Effect of the Transactions . At the Effective Time, the effect of the Transactions shall be as provided in this Agreement and the applicable provisions of the Applicable Corporate Laws. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time:

(a) All the property, rights, privileges, powers and franchises of SII and SII Merger Sub shall vest in the SII Merger Surviving Corporation, and all debts, liabilities and duties of SII and SII Merger Sub shall become the debts, liabilities and duties of the SII Merger Surviving Corporation;

(b) All of the outstanding capital stock of SIE shall be transferred to and owned by Parent, and SIE shall become a wholly owned subsidiary of Parent; and

(c) All of the outstanding capital stock of SIA shall be transferred to and be owned by Parent, and SIA shall become a wholly owned subsidiary of Parent.

1.4 Charter Documents .

(a) At the Effective Time:

(i) The articles of incorporation of SII Merger Sub (a copy of which is attached hereto as Exhibit A ) shall be the articles of incorporation of the SII Merger Surviving Corporation until thereafter amended as provided by law and the articles of incorporation, and

(ii) The by-laws of SII Merger Sub (a copy of which is attached hereto as Exhibit B ) shall be the by-laws of the SII Merger Surviving Corporation.

1.5 Effect on Capital Stock . Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Transactions and this Agreement and without any action on the part of the Parent, SII Merger Sub, the Companies or the Stockholders, the following shall occur:

(a) Conversion of Company Common Stock . Other than any shares to be canceled pursuant to Section 1.5(d), all of the shares of Company Common Stock (as defined in Section 2.3(a)(iii)) issued and outstanding immediately prior to the Effective Time will be either automatically converted into or exchanged, transferred or sold for, as applicable and subject to Sections 1.5(b), 1.5(c) and 1.5(f), below, at the Effective Time: (i) an aggregate of 3,916,667 shares (the “ Transaction Shares ”) of common stock, par value $0.0001, of Parent (“ Parent Common Stock ”), (ii) the right to receive a cash payment in the aggregate amount of $20,000,000.00 (the “ Closing Cash Payment ”), (iii) the right to receive an aggregate of 2,500,000 Contingent Shares (as defined in Section 1.12(a)) if same are issued in accordance with this Agreement and (iv) the right to receive the EBITDA Payments (as defined in Section 1.12(d)(i) – (iii)) if same are made in accordance with this Agreement. The Transaction Shares, the Contingent Shares, the Closing Cash Payment and the EBITDA Payments shall be referred to herein collectively as the “ Transaction Consideration .” The Transaction Consideration shall be allocated among the Stockholders and paid to each Stockholder in accordance with Schedule 1.5(a) attached hereto.

(b) Net Worth Calculation and Reduction of Amount of Transaction Shares .

(i) On the Closing Date, Parent shall issue all 3,916,667 Transaction Shares to the holders of the SII Common Stock and SIA Ordinary Shares. Ten percent (10%), or 391,667, of such Transaction Shares (“ Net Worth Shares ”) shall be placed in escrow pursuant to Section 1.10 solely for the purposes described in this Section 1.5(b).

(ii) If Summer’s Net Worth (as defined) at the Closing Date (“ Closing Date Net Worth ”) is less than Summer’s Net Worth at June 30, 2006 (“ June 30 Net Worth ”), as finally determined in accordance with this Agreement and the Escrow Agreement (as defined), the Escrow Agent (as defined) shall return to Parent, for cancellation, that number of Transaction Shares equal to the Transaction Share Reduction Number.

(iii) The term “ Transaction Share Reduction Number ” shall mean the quotient derived by dividing (i) the difference between the June 30 Net Worth and Closing Date Net Worth by (ii) $6.00 (rounded up to the nearest share); provided, however, that if Closing Date Net Worth is equal to or greater than June 30 Net Worth, the Transaction Share Reduction Number shall be zero.

(iv) If the Transaction Share Reduction Number is greater than 391,667 shares (such greater number being the “ Shortfall ”), each of the Stockholders shall return to Parent on demand, for cancellation, that number of Transaction Shares received by him or it determined by multiplying the Shortfall by such Stockholder’s Allocation Factor.

(v) The term “ Net Worth ” shall mean, on the date in question, the assets of Summer (on a consolidated basis) at such date, less all liabilities of Summer (on a consolidated basis) at such date, adjusted to (A) give effect to the payment and/or for the provision of (whether by accrual or otherwise) dividend distributions by SII for the payment of taxes in such fiscal year or prior years, and (B) exclude direct costs and expenses through the applicable date related to the Transactions and related to litigation and settlement of the dispute with Springs Global US, Inc. (“ Springs ”) described on Schedule 2.10 hereto, including without limitation, legal, accounting, investment bankers, road show, expert witness and broker fees and expenses.

(vi) As soon as practicable following the Closing Date, Goldstein Golub Kessler, LLP or such other PCOAB-registered accounting firm then serving as Summer’s independent accounting firm (“GGK”) shall calculate and deliver to Parent a statement of Summer’s June 30 Net Worth (“ June 30 Net Worth Statement ”) and Summer’s Closing Date Net Worth (“ Closing Date Net Worth Statement ”), which shall be derived utilizing generally accepted accounting principles, and which Statements shall be certified by each of Summer’s Chief Executive Officer and Chief Financial Officer. At the same time, GGK shall deliver a written calculation of the difference between Summer’s Closing Date Net Worth and June 30 Net Worth (“ Auditor’s Net Worth Difference Calculation ”). Subject to the procedure set forth in the Escrow Agreement (as defined herein), the Auditor’s Net Worth Difference Calculation shall be binding on the Parties and shall be utilized to determine the Transaction Share Reduction Number and Shortfall, if any.

(c) Certificates for Shares . Certificates evidencing the 391,677 Net Worth Shares, together with 1,000,000 additional Transaction Shares (“ Indemnity Shares ” and, collectively with the Net Worth Shares, the “ Escrow Shares ”), will be placed into escrow at the Effective Time as provided in Section 1.10, with certificates evidencing the remainder of the Transaction Shares (“ Closing Shares ”) being issued to each holder of SII Common Stock or SIA Ordinary Shares upon surrender of the certificates evidencing all of such holder’s shares of Common Stock (“ Company Certificates ”) in the manner provided in Section 1.6.

(d) Cancellation of Treasury and Parent-Owned Stock . Each share of SII Common Stock held by SII Merger Sub, Parent or any direct or indirect wholly-owned subsidiary of SII or of Parent immediately prior to the Effective Time shall be canceled and extinguished without any conversion or payment in respect thereof.

(e) Adjustments to Exchange Ratios . The number of Transaction Shares or Closing Cash Payment, as the case may be that the holders of the Company Common Stock may be entitled to receive as a result of the Transactions, shall be equitably adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent Common Stock or Company Common Stock occurring on or after the date hereof and prior to the Effective Time.

(f) Fractional Shares . No fraction of a share of Parent Common Stock will be issued by virtue of the Merger or SIA Transaction, and each holder of shares of SII Common Stock or SIA Ordinary Shares who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock that otherwise would be received by such holder) shall, upon compliance with Section 1.6, receive from Parent, in lieu of such fractional share, one (1) share of Parent Common Stock.

1.6 Surrender of Certificates .

(a) Exchange Procedures . Upon surrender of Company Certificates at the Closing, the holders of such Company Certificates shall receive in exchange therefor certificates representing the Transaction Shares into which their shares of Company Common Stock shall be converted at the Effective Time, less the Escrow Shares (as defined in Section 1.5(b)). Until so surrendered, outstanding Company Certificates will be deemed, from and after the Effective Time, to evidence only the right to receive the applicable portion of the Transaction Consideration then issuable and/or payable under the terms of this Agreement in accordance with Schedule 1.5(a) .

(b) Required Withholding . The Parent and SII Merger Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock such amounts as are required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

1.7 No Further Ownership Rights in Company Stock . All Transaction Consideration issued and/or paid in accordance with the terms hereof shall be in full satisfaction of all rights pertaining to the Company Common Stock and there shall be no further registration of transfers on the records of the Parent or the SII Merger Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Company Certificates are presented to the Parent or SII Merger Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article I.

1.8 Tax Consequences . It is intended by the parties hereto that the Transactions shall constitute plans of reorganization within the meaning of Section 368 of the Code. The parties hereto adopt this Agreement as “plans of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

1.9 Taking of Necessary Action; Further Action . If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Parent and the SII Merger Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of Summer and the Companies, the appropriate officers and directors of one or more of the appropriate Companies, the Parent and the SII Merger Surviving Corporation will take all such lawful and necessary action.

1.10 Escrow .

(a) As the sole remedy for the indemnity obligations set forth in Article VII, at the Closing, the Stockholders receiving Transaction Shares shall deposit in escrow, to be held from the Closing Date until the later of (a) the date that is sixteen months after the Effective Time and (b) 30 days after Parent has filed with the SEC its annual report on Form 10-KSB for the year ending December 31, 2007 (such period, the “ Escrow Period ”), and for such further period as may be required pursuant to the Escrow Agreement referred to below, an aggregate of 1,000,000 Indemnity Shares, which shares shall be allocated among the Persons entitled to receive them in the same proportions as the Transaction Shares, in their entirety, are allocated among such Persons, all in accordance with the terms and conditions of the Escrow Agreement to be entered into at the Closing between Parent, a representative of the Stockholders (who shall be the person named in Section 1.14(b) until a successor is appointed pursuant to Section 1.14(b) (the “ Representative )), and Continental Stock Transfer & Trust Company (“ Continental ”), as Escrow Agent, in the form annexed hereto as Exhibit C (the “ Escrow Agreement ”).

(b) To effectuate any reduction in the Transaction Shares below 3,916,667 shares as a result of the adjustments described in Section 1.5(b), above, the Persons receiving the Transaction Shares shall deposit all of the Net Worth Shares into escrow to be held until the date that the Auditor’s Net Worth Calculation is delivered to Parent and for such further period as may be required pursuant to the Escrow Agreement.

1.11 Certain Registration Rights . At the Closing, Parent and the Stockholders shall execute and deliver a Registration Rights Agreement in the form annexed hereto as Exhibit D with respect to registration of the Transaction Shares (the “ Registration Rights Agreement ”).

1.12 Potential Additional Issuances and Payments .

(a) Contingent Share Issuance (Based on Stock Price) .

(i) In the event that the Last Reported Sales Price (as defined) of the Parent Common Stock is equal to or exceeds $8.50 (the “ Share Price Trigger ”) on any twenty (20) Trading Days (as defined) during any thirty (30) consecutive Trading Day period (the “ Share Price Measurement Period ”) at any time during the period commencing on the three-month anniversary of the Closing Date and ending on April 20, 2009 (the “ Share Price Trigger Period ”), the SII Stockholders and SIA Stockholders, as a group, will receive an aggregate additional 2,500,000 shares of Parent Common Stock (“ Contingent Shares ”). The number of Contingent Shares to be issued to each SII Stockholder and SIA Stockholder is as set forth on Schedule 1.5(a) . The SIE Stockholders are not entitled to any Contingent Shares.

(ii) The term “ Last Reported Sales Price ” on any date shall mean the closing sale price per share of the Parent Common Stock (or if no closing sale price is reported, the average of the closing bid and asked prices) on that date as reported in composite transactions for the principal U.S. securities exchange on which the Parent Common Stock is traded or, if same is not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq National Market or Nasdaq Capital Market or OTC-BB. If the Parent Common Stock is not listed for trading on a U.S. national or regional securities exchange and not reported by the Nasdaq National Market or Nasdaq Capital Market or OTC-BB on the relevant date, the “ Last Reported Sales Price ” will be the last quoted bid price for a share of Parent Common Stock in the over-the-counter market on the relevant date as reported by the Pink Sheets LLC or similar organization.

(iii) The term “ Trading Day ” shall mean a day during which trading in securities generally occurs on the principal national securities exchange on which the Parent Common Stock is then listed or, if not then listed on a national securities exchange, on the Nasdaq National Market or, if not then quoted on the Nasdaq National Market, on the principal other market or trading system on which the Parent Common Stock is traded or quoted.

(iv) Any Contingent Shares issuable shall be issued by Parent to the Stockholders entitled to receive such Contingent Shares within ten (10) business days after the conditions in Section 1.12(a) have been satisfied.

(v) The Share Price Trigger shall be equitably adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent Common Stock occurring after the Closing Date and prior to the termination of the Share Price Measurement Period.

(b) 2006 EBITDA Payment .

(i) If the Companies have EBITDA (“ 2006 EBITDA ”) of more than $4.2 million for the year ending December 31, 2006 as set forth in Parent’s audited consolidated financial statements for the year ending December 31, 2006, the Stockholders, as a group, shall be entitled to receive cash in the aggregate amount equal to 50% of the difference between 2006 EBITDA and $4.2 million (the “ 2006 EBITDA Payment ”).

(ii) Any 2006 EBITDA Payment payable under this Section 1.12(b) shall be paid by Parent to each Stockholder within 30 business days after the date that the audit for Parent’s fiscal year ending December 31, 2006 has been completed by Parent’s independent auditing firm. Each Stockholder shall receive that portion of such 2006 EBITDA Payment indicated as a percentage of the whole next to his, her or its name on Schedule 1.5(a) .

(i) If the Companies (on a post-Transaction consolidated basis) have EBITDA (“ 2007 EBITDA ”) of more than $10 million for the year ending December 31, 2007 as set forth in Parent’s audited consolidated financial statements for the year ending December 31, 2007, the Stockholders, as a group, shall be entitled to receive cash in the aggregate amount equal to 50% of the difference between 2007 EBITDA and $10 million (the “ 2007 EBITDA Payment ”).

(ii) Any 2007 EBITDA Payment payable under this Section 1.12(c) shall be paid by Parent to each Stockholder within 30 business days after the date that the audit for Parent’s fiscal year ending December 31, 2007 has been completed by Parent’s independent auditing firm. Each Stockholder shall receive that portion of such 2007 EBITDA Payment indicated as a percentage of the whole next to his, her or its name on Schedule 1.5(a).

(d) 2008 EBITDA Payment .

(i) If the Companies (on a post-Transaction consolidated basis) have EBITDA (“ 2008 EBITDA ”) of more than $15 million for the year ending December 31, 2008 as set forth in Parent’s audited consolidated financial statements for the year ending December 31, 2008, the Stockholders, as a group, shall be entitled to receive cash in the aggregate amount equal to 50% of the difference between 2008 EBITDA and $15 million (the “ 2008 EBITDA Payment ” and, collectively with the 2006 EBITDA Payment and the 2007 EBITDA Payment, the “ EBITDA Payments ”).

(ii) Any 2008 EBITDA Payment payable under this Section 1.12(d) shall be paid by Parent to each Stockholder within 30 business days after the date that the audit for Parent’s fiscal year ending December 31, 2008 has been completed by Parent’s independent auditing firm. Each Stockholder shall receive that portion of such 2008 EBITDA Payment indicated as a percentage of the whole next to his, her or its name on Schedule 1.5(a).

(e) Definition of “EBITDA .” “ EBITDA ” for purposes hereof shall consist of Parent’s and the Companies’ consolidated operating earnings before interest expense, depreciation and amortization expense, taxes on income, costs and expenses (including without limitation, legal and accounting) or write-downs directly related to the Transactions or subsequent acquisition or other business combination by Parent or the Companies (except as provided below), foreign exchange gains and losses and extraordinary items of Parent and/or the Companies. The term “EBITDA” shall include all EBITDA generated by Parent, the Companies or any subsidiary thereof from any businesses or assets acquired by any of them after the Effective Time. Notwithstanding anything to the contrary herein, EBITDA calculations for purposes of this Agreement shall give effect to an imputed capital charge equal to 12.5% of the aggregate consideration paid by any of Parent, Summer or their Affiliates in connection with each such acquisition or business combination (but shall not give effect to any other closing costs or upfront, one-time write-offs related to such acquisitions). EBITDA calculations also shall give effect to costs incurred or related to regulatory compliance and any allocated corporate overhead expenses. Notwithstanding the foregoing or anything contrary to this Agreement, any and all EBITDA generated by or attributable to the Parent shall be excluded for purposes of calculating the 2006 EBITDA Payment; provided, further, that any liabilities booked with respect to public warrants by mandate of the SEC or otherwise shall be excluded from all EBITDA calculations.

(f) Maximum EBITDA Payments . Notwithstanding the foregoing, the maximum aggregate amount of cash and stock to be paid to the Stockholders as EBITDA Payments under any and all of the provisions of this Section 1.12 shall not exceed $5,000,000. The SIE Stockholders are not entitled to any EBITDA Payments.

(g) Additional Issuances and/or Payments as Additional “Purchase Price .” Any issuances of Contingent Shares and/or payment of EBITDA Payments shall be deemed to have been made to the Stockholders in consideration for the Transactions and shall be deemed additional “purchase price” paid by Parent for the Transactions.

(h) Stub Period Tax Distributions . As soon as practicable after the Closing, there shall be distributed to the Stockholders the sum of (i) an amount equal to the product of (A) SII’s net taxable income for the period commencing January 1, 2006 and ending on the date of Effective Time and (B) the highest combined marginal federal and state tax rate applicable to individuals residing in the State of Rhode Island with respect to such income or gain (taking into account the amount and character of the income or gain) minus (ii) all previous distributions made by SII to the Stockholders in respect of the 2006 taxable year and the 2007 taxable year, if applicable, prior to the Effective Time (the “ Stub Period Tax Distribution ”). The Stub Period Tax Distribution shall not be deemed to have been made to the Stockholders in consideration for the Transactions and shall not be deemed additional “purchase price” paid by Parent for the Transactions.

1.13 Stockholder Matters .

(a) By his, her or its execution of this Agreement, each Stockholder, in his, her or its capacity as a stockholder of one or more of the Companies, hereby approves and adopts

this Agreement and authorizes such Companies and their respective directors and officers to take all actions necessary for the consummation of the Transactions and the other transactions contemplated hereby pursuant to the terms of this Agreement and its exhibits. Such execution shall be deemed to be action taken by the irrevocable written consent of each Stockholder for purposes of the relevant provisions of the Applicable Corporation Laws.

(b) Each Stockholder (other than Rachelle Harel, who is not receiving any Parent Common Stock in the Transactions), for himself, herself or itself only, represents and warrants as follows: (i) all Parent Common Stock to be acquired by such Stockholder pursuant to this Agreement will be acquired for his, her or its account and not with a view towards distribution thereof other than, with respect to Stockholders that are entities, transfers to its stockholders, partners or members; (ii) such Stockholder understands that he, she or it must bear the economic risk of the investment in the Parent Common Stock, which cannot be sold by him, her or it unless the Parent Common Stock is registered under the Securities Act, or an exemption therefrom is available thereunder; (iii) he, she or it has had both the opportunity to ask questions and receive answers from the officers and directors of Parent and all persons acting on Parent’s behalf concerning the business and operations of Parent and to obtain any additional information to the extent Parent possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of such information; (iv) he, she or it has had access to the Parent SEC Reports filed prior to the date of this Agreement; (v) he, she or it is either (A) an “ accredited investor ” as such term is defined in Rule 501(a) promulgated under the Securities Act or (B) a person alone or with his, her or its purchaser representative (as evidenced by a duly signed purchaser representative certificate) possessing sufficient knowledge and experience in financial and business matters to enable him, her or it to evaluate the merits and risks of an investment in Parent; and (vi) he, she or it understands that the certificates representing the Parent Common Stock to be received by him, her or it may bear legends to the effect that the Parent Common Stock may not be transferred except upon compliance with (A) the registration requirements of the Securities Act (or an exemption therefrom) and (B) the provisions of this Agreement. Each Stockholder that is an entity, for itself, represents, warrants and acknowledges, with respect to each holder of its equity interests, to the same effect as the foregoing provisions of this Section 1.13(b).

(c) Each Stockholder, for himself, herself or itself, represents and warrants, as applicable, that the execution and delivery of this Agreement by such Stockholder does not, and the performance of his, her or its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental or regulatory authority, domestic or foreign (a “ Governmental Entity ”), except (i) for applicable requirements, if any, of the Securities Act of 1933, as amended (“ Securities Act ”), the Securities Exchange Act of 1934, as amended (“Exchange Act”), state securities laws (“ Blue Sky Laws ”), and the rules and regulations thereunder, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (as defined in Section 10.2(a)) on such Stockholder or Summer or, after the Closing, Parent, or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

1.14 Committee and Representative for Purposes of Escrow Agreement .

(a) Parent Committee . Prior to the Closing, the Board of Directors of Parent shall appoint a committee consisting of one or more of its then members to act on behalf of Parent to take all necessary actions and make all decisions pursuant to the Escrow Agreement regarding Parent’s right to indemnification pursuant to Article VII hereof. In the event of a vacancy in such committee, the Board of Directors of Parent shall appoint as a successor a Person who was a director of Parent prior to the Closing Date or some other Person who would qualify as an “ independent ” director of Parent and who has not had any relationship with Summer prior to the Closing. Such committee is intended to be the “ Committee ” referred to in Article VII hereof and the Escrow Agreement.

(b) Representative . The Stockholders hereby designate Jason Macari to represent the interests of the Persons entitled to receive Transaction Shares as a result of the Transactions for purposes of the Escrow Agreement. If such Person ceases to serve in such capacity, for any reason, such Person shall designate his or her successor. Failing such designation within 10 business days after the Representative has ceased to serve, those members of the Board of Directors of Parent who were directors of SII prior to the Closing shall appoint as successor a Person who was a former stockholder of SII or such other Person as such members shall designate. Such Person or successor is intended to be the “ Representative ” referred to in Section 1.10 and Article VII hereof and the Escrow Agreement.

1.15 Derivative Securities; No Other Additional Issuances . Each of the Companies shall arrange that the holders of all of its outstanding options, warrants, convertible preferred stock, convertible debt and any other derivative securities, if any, convert all such securities into shares of Company Common Stock prior to the Effective Time without the payment of any cash by Summer (collectively, the “ Conversions ”). The Conversions may be made contingent upon the occurrence of the Closing. Other than in connection with the Conversions, none of the Companies will issue any of its securities after the date hereof and prior to the earlier of the date this Agreement is terminated and the Effective Time.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SUMMER

Summer hereby represents and warrants to Parent and SII Merger Sub as follows (except as set forth in a Schedule corresponding in number to the applicable Section of this Article II (the “ Summer Schedule ”), provided that the disclosure of an item in one section of the Schedules shall be deemed to modify both (i) the representation and warranties contained in the section of this Agreement to which it corresponds in number and (ii) any other representation and warranty of Summer in this Agreement to the extent that is it reasonably apparent from a reading of such disclosure item that it would also qualify or apply to such other representation and warranty):

2.1 Organization and Qualification .

(a) Each of the Companies is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation (as set forth on Schedule 1.2 ) and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by such Company to be conducted. Summer is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“ Approvals ”) necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Summer to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Summer. Complete and correct copies of the certificate of incorporation and by-laws (or other comparable governing instruments with different names) (collectively referred to herein as “ Charter Documents ”) of each of the Companies, as amended and currently in effect, have been heretofore delivered to Parent or Parent’s counsel. None of the Companies is in violation of any of the provisions of its Charter Documents.

(b) Summer is duly qualified or licensed to do business as a foreign corporation and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Summer. Each jurisdiction in which Summer is so qualified or licensed is listed in Schedule 2.1(b) .

(c) The minute books of each of the Companies contain true, complete and accurate records of all meetings and consents in lieu of meetings of its Board of Directors (and any committees thereof), similar governing bodies and stockholders (“ Corporate Records ”) since the time of corporate organization. Copies of all such Corporate Records have been heretofore delivered to Parent or Parent’s counsel.

(d) The stock transfer, warrant and option transfer and ownership records of each of the Companies contain true, complete and accurate records of the securities ownership as of the date of such records and the transfers involving the capital stock and other securities of each of the Companies since the time of corporate organization. Copies of all such records have been heretofore delivered to Parent or Parent’s counsel.

(e) SII is a duly qualified S Corporation within the meaning of Section 1361 et seq. of the Internal Revenue Code of 1986, as amended. A valid election under IRC § 1362(a) to be treated as an “S” corporation is in effect for SII. Other than in connection with the transactions contemplated hereby, no action has been taken by any shareholder of SII or SII to terminate SII’s status as an “S” corporation.

2.2 Subsidiaries . None of the Companies has any subsidiaries. None of the Companies owns, directly or indirectly, any ownership, equity, profits or voting interest in any Person or has any agreement or commitment to purchase any such interest, and has not agreed

and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

2.3 Capitalization .

(a) As of the date of this Agreement, the authorized capital stock of:

(i) SII consists of 2000 shares of the Common Stock of SII (“ SII Common Stock ”), of which 666 shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable. Schedule 2.3(a)(i) sets forth the name of each holder of SII Common Stock and the number of shares owned by each holder.

(ii) SIE consists of UK 100 shares of common stock $100 par (“ SIE Ordinary Shares ”), of which 100 SIE Ordinary Shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable. Schedule 2.3(a)(ii) sets forth the name of each holder of SIE Ordinary Shares and the number of shares owned by each holder. All of the SIE Ordinary Shares are owned by the Stockholders of SIE free and clear of any liens, mortgages or other encumbrances and each such Stockholder will transfer to Parent complete and unfettered title, free of any lien, mortgage or encumbrance, to the SIE Ordinary Shares upon consummation of the Transactions, except as otherwise set forth on Schedule 1.2 .

(iii) SIA consists of HKD 10,000 ordinary shares (“ SIA Ordinary Shares ” and, collectively with the SII Common Stock and SIE Ordinary Shares, the “ Company Common Stock ”), of which 10,000 SIA Ordinary Shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable. Schedule 2.3(a)(ii) sets forth the name of each holder of SIA Ordinary Shares and the number of shares owned by each holder. All of the SIA Ordinary Shares are owned by the Stockholders of SIA free and clear of any liens, mortgages or other encumbrances and each such Stockholder will transfer to Parent complete and unfettered title, free of any lien, mortgage or encumbrance, to the SIE Ordinary Shares upon consummation of the Transactions, except as otherwise set forth on Schedule 1.2 .

(b) There are (i) no shares of any Company Common Stock reserved for issuance upon the exercise of outstanding options to purchase Company Common Stock granted to employees of Summer or other parties (“ Company Stock Options ”) and there are no outstanding Company Stock Options; (ii) no shares of Company Common Stock are reserved for issuance upon the exercise of outstanding warrants to purchase Company Common Stock (“ Company Warrants ”) and there are no outstanding Company Warrants; and (iii) no shares of Company Common Stock or Company Preferred Stock are reserved for issuance upon the conversion of the Company Preferred Stock or any outstanding convertible notes, debentures or securities (“ Company Convertible Securities ”). All outstanding shares of Company Common Stock have been issued and granted in compliance with (x) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (y) all requirements set forth in any applicable Company Contracts (as defined in Section 2.19).

(c) There are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which any of the Companies is a party or by which it is bound obligating such Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of such Company or obligating such Company to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.

(d) There are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which any of the Companies is a party or by which any of the Companies is bound with respect to any equity security of any class of such Company.

2.4 Authority Relative to this Agreement . Each of the Companies has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and, to consummate the Transactions contemplated hereby. The execution and delivery of this Agreement and the consummation by each of the Companies of the Transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of such Company (including the approval by its Board of Directors and stockholders, subject in all cases to the satisfaction of the terms and conditions of this Agreement, including the conditions set forth in Article VI), and no other corporate proceedings on the part of such Company is necessary to authorize this Agreement or to consummate the transactions contemplated hereby pursuant to the Applicable Corporate Laws and the terms and conditions of this Agreement. This Agreement has been duly and validly executed and delivered by each of the Companies and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of each of the Companies, enforceable against each of the Companies in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

2.5 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by each of the Companies do not, and the performance of this Agreement by Summer shall not, (i) conflict with or violate any of the Companies’ Charter Documents, (ii) conflict with or violate any Legal Requirements (as defined in Section 10.2(c)), (iii) assuming all Company Contract Consents (as defined in Section 5.17) are obtained as contemplated by this Agreement, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair any of the Companies’ rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of any of the Companies pursuant to, any Company Contracts or (iv) result in the triggering, acceleration or increase of any payment to any Person pursuant to any Company Contract, including any “ change in control ” or similar provision of any Company Contract, except, with respect to clauses (ii), (iii) or (iv), for any such conflicts, violations, breaches,

defaults, triggerings, accelerations, increases or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Summer. The Company Contract Consents from each of Bank of America Corporation and MB Capital Fund, II, LLC have been obtained by Summer and each such consent is in full force and effect as of the date of this Agreement and are irrevocable provided that the Transactions are consummated as contemplated by the terms of this Agreement.

(b) The execution and delivery of this Agreement by each of the Companies does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity , except (i) the Company Contract Consents, all of which are set forth on Schedule 2.5(b), (ii) for applicable requirements, if any, of the Securities Act, the Exchange Act or Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents received from or filed with the relevant authorities of other jurisdictions in which Summer is licensed or qualified to do business and (iii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Summer, or, after the Closing, the Parent or the SII Merger Surviving Corporation, or prevent consummation of the Transaction or otherwise prevent the parties hereto from performing their obligations under this Agreement.

2.6 Compliance . Summer has complied with and is not in violation of any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Summer. The businesses and activities of Summer have not been and are not being conducted in violation of any Legal Requirements, except for such violations which, individually and in the aggregate, have not and are not reasonably expected to have a Material Adverse Effect on Summer. Summer is not in default or violation of any term, condition or provision of any applicable Charter Documents. Except as set forth in Schedule 2.6 , no written notice of non-compliance with any Legal Requirements has been received by Summer (and Summer has no knowledge of any such notice delivered to any other Person). Summer is not in violation of any term of any Company Contract, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Summer.

2.7 Financial Statements .

(a) Summer has provided to Parent audited consolidated financial statements in draft form (including any related notes thereto) of Summer and Faith Realty, LLC for the year ended December 31, 2005 (“ Consolidated 2005 Financials ”) and reviewed financial statements (including any related notes thereto) of SII for the year ended December 31, 2004 (the “ SII Reviewed 2004 Financials ” and, together with the Consolidated 2005 Financials, the “ Annual Financial Statements ”). The Annual Financial Statements were prepared in accordance with the published rules and regulations of any applicable Governmental Entity and with generally accepted accounting principles of the United States (“ U.S. GAAP ”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and each fairly presents in all material respects the financial position for the named entities at the respective dates thereof and the results of its operations and cash flows for the periods indicated.

(b) Summer has provided to Parent a correct and complete copy of the unaudited consolidated financial statements (including, in each case, any related notes thereto) of Summer and Faith Realty, LLC for the six months ended June 30, 2006 (the “ Stub Financial Statements ” and, collectively with the Unaudited Annual Financial Statements, the “ Unaudited Financial Statements ”). The Stub Financial Statements comply as to form in all material respects, and were prepared in accordance, with the published rules and regulations of any applicable Governmental Entity and with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and fairly present in all material respects the financial position of Summer at the date thereof and the results of its operations and cash flows for the period indicated, except that such Stub Financial Statements do not contain notes and are subject to normal adjustments that are not expected to have a Material Adverse Effect on Summer.

(c) The minute books, stock certificate books and stock transfer ledgers and other similar books and records of Summer have been maintained in accordance with good business practice, are complete and correct in all material respects and there have been no material transactions that are required to be set forth therein and which have not been so set forth.

2.8 No Undisclosed Liabilities . Except as set forth in Schedule 2.7 or Schedule 2.8 hereto, Summer has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to financial statements which are, individually or in the aggregate, material to the business, results of operations or financial condition of Summer, except: (i) liabilities provided for in or otherwise disclosed in the interim balance sheet included in the Stub Financial Statements or in the notes to the Unaudited Annual Financial Statements, and (ii) such liabilities arising in the ordinary course of Summer’s business since June 30, 2006, none of which would have a Material Adverse Effect on Summer.

2.9 Absence of Certain Changes or Events . Except as set forth in Schedule 2.9 hereto or in the Stub Financial Statements, since June 30, 2006, there has not been: (i) any Material Adverse Effect on Summer, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of Summer’s stock (other than distributions to Stockholders in respect of income taxes with respect to SII’s income), or any purchase, redemption or other acquisition by Summer of any of Summer’s capital stock or any other securities of Summer or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of Summer’s capital stock, (iv) any granting by Summer of any increase in compensation or fringe benefits to any Stockholder, except for normal increases of cash compensation in the ordinary course of business consistent with past practice, or any payment by Summer of any bonus to any Stockholder, except for bonuses made in the ordinary course of business consistent with past practice, or any granting to any Stockholder by Summer of any increase in severance or termination pay or any entry by Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent

or the terms of which are materially altered upon the occurrence of a transaction involving Summer of the nature contemplated hereby, (v) entry by Summer into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property (as defined in Section 2.18 hereof) other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement filed or required to be filed by Summer with respect to any Governmental Entity, (vi) any material change by Summer in its accounting methods, principles or practices, (vii) any change in the auditors of the Company, (viii) any issuance of capital stock of Summer, (ix) any revaluation by Summer of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of Summer other than in the ordinary course of business, or (x) any agreement, whether written or oral, to do any of the foregoing.

2.10 Litigation . Except as disclosed in Schedule 2.10 hereto, there are no claims, suits, actions or proceedings pending or to Summer’s knowledge, threatened against Summer, before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator.

2.11 Employee Benefit Plans .

(a) All employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document) covering any active or former employee, director or consultant of Summer, or any trade or business (whether or not incorporated) which is under common control with Summer, with respect to which Summer has liability (collectively, the “ Plans ”) have been maintained and administered in all material respects in compliance with their respective terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Plans, and all liabilities with respect to the Plans have been properly reflected in the financial statements and records of Summer. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or, to the knowledge of Summer, is threatened, against or with respect to any Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of Summer, threatened by any governmental agency with respect to any Plan. All contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued. Summer does not have any plan or commitment to establish any new Plan, to modify any Plan (except to the extent required by law or to conform any such Plan to the requirements of any applicable law, in each case as previously disclosed to Parent in writing, or as required by this Agreement), or to enter into any new Plan. Each Plan can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without liability to Parent or Summer (other than ordinary administration expenses and expenses for benefits accrued but not yet paid).

(b) Neither the execution and delivery of this Agreement nor the consummation of the Transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any stockholder, director or employee of Summer under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

2.12 Labor Matters . Summer is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by Summer nor does Summer know of any activities or proceedings of any labor union to organize any such employees.

2.13 Restrictions on Business Activities . Except as disclosed in Schedule 2.13 hereto, to Summer’s knowledge, there is no agreement, commitment, judgment, injunction, order or decree binding upon Summer or its assets or to which Summer is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Summer, any acquisition of property by Summer or the conduct of business by Company as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on Summer.

2.14 Title to Property .

(a) All real property owned by Summer (and all improvements and fixtures, easements and rights of way on or relating to such properties) is shown or reflected on the balance sheet of Summer included in the Stub Financial Statements. Except as set forth on Schedule 2.14 , Summer has good, valid and marketable fee simple title to the real property owned by it (and upon completion of the Faith Realty Contribution, will have good, valid and marketable fee simple title to the Contributed Real Property), and except as set forth in the Stub Financial Statements or on Schedule 2.14 hereto, all of such real property is held free and clear of (i) all leases, licenses and other rights to occupy or use such real property and (ii) all Liens, rights of way, easements, restrictions, exceptions, variances, reservations, covenants or other title defects or limitations of any kind, other than liens for taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or materially interfere with the present use of the property affected thereby. Schedule 2.14 hereto also contains a list of all options or other contracts under which Summer has a right to acquire any interest in real property and a description of the Contributed Real Property.

(b) Schedule 2.14 contains a complete listing of all leases of real property held by Summer; except for personal property leased by Summer pursuant to operating leases, all personal property and other property and assets of Summer owned, used or held for use in connection with the business of Summer (the “ Personal Property ”) are shown or reflected on the balance sheet included in the Unaudited Annual Financial Statements. Summer has good and marketable title to the Personal Property owned by it, and all such Personal Property is in each case held free and clear of all Liens, except for Liens disclosed in the Unaudited Annual Financial Statements or in Schedule 2.14 hereto.

(c) All leases pursuant to which Company leases from others material real or Personal Property are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default of Summer or, to Summer’s knowledge, any other party (or any event which with notice or lapse of time, or both,

would constitute a material default), except where the lack of such validity and effectiveness or the existence of such default or event of default could not reasonably be expected to have a Material Adverse Effect on Summer.

2.15 Taxes .

(a) Definition of Taxes . For the purposes of this Agreement, “Tax” or “Taxes” refers to any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other Person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

(b) Tax Returns and Audits . Except as set forth in Schedule 2.15 hereto:

(i) Summer has timely filed all federal, state, local and foreign income, sales and other returns, estimates, information statements and reports relating to Taxes (“ Returns ”) required to be filed by Summer with any Tax authority prior to the date hereof, except such Returns which are not material to Summer. All such Returns are true, correct and complete in all material respects. Summer has paid all Taxes shown to be due and payable on such Returns.

(ii) All Taxes that Summer is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

(iii) Summer has not been delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, proposed or assessed against Summer, nor has Summer executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

(iv) To the knowledge of Summer, no audit or other examination of any Return of Summer by any Tax authority is presently in progress, nor has Summer been notified of any request for such an audit or other examination.

(v) No adjustment relating to any Returns filed by Summer has been proposed in writing, formally or informally, by any Tax authority to Summer or any representative thereof.

(vi) Summer has no liability for any material unpaid Taxes which have not been accrued for or reserved on Summer’s balance sheets included in the Unaudited Annual Financial Statements or the Stub Financial Statements, whether asserted or unasserted, contingent or otherwise, which is material to Summer, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of Summer in the ordinary course of business, none of which is material to the business, results of operations or financial condition of Summer.

(vii) Summer has not taken any action and does not know of any fact, agreement, plan or other circumstance that is reasonably likely to prevent the Transactions from qualifying as plans of reorganization within the meaning of Section 368(a) of the Code.

2.16 Environmental Matters .

(a) Except as disclosed in Schedule 2.16 hereto and except for such matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect: to Summer’s knowledge, (i) Summer has complied with all applicable Environmental Laws; (ii) the properties currently operated by Summer (including soils, groundwater, surface water, buildings or other structures) are not contaminated with any Hazardous Substances in violation of Environmental Law; (iii) the properties formerly owned or operated by Summer were not contaminated with Hazardous Substances in violation of Environmental Law during the period of ownership or operation by Summer or, to Summer’s knowledge, during any prior period; (iv) Summer is not subject to liability for any Hazardous Substance disposal or contamination on any third party property; (v) Summer has not released or threatened the release of any Hazardous Substance; (vi) Summer has not received any notice, demand, letter, claim or request for information alleging that Summer may be in violation of or liable under any Environmental Law; and (vii) Summer is not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

(b) As used in this Agreement, the term “ Environmental Law ” means any federal, state, local or foreign law, regulation, order, decree, permit, authorization, opinion, common law or agency requirement relating to: (A) the protection, investigation or restoration of the environment, health and safety, or natural resources; (B) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination or any injury or threat of injury to persons or property.

(c) As used in this Agreement, the term “ Hazardous Substance ” means any substance that is: (i) listed, classified or regulated pursuant to any Environmental Law; (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; or (iii) any other substance which is the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law.

2.17 Brokers; Third Party Expenses . Except as disclosed in Schedule 2. 17 hereto, Summer has not incurred, nor will it incur, directly or indirectly, any liability for brokerage, finders’ fees, agent’s commissions or any similar charges in connection with this Agreement or any transactions contemplated hereby. Except as disclosed in Schedule 2.17 hereto, no shares of common stock, options, warrants or other securities of either Company or Parent are payable to any third party by Company as a result of the Transactions.

2.18 Intellectual Property . For the purposes of this Agreement, the following terms have the following definitions:

“ Intellectual Property ” shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof (“ Patents ”); (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) software and software programs; (v) domain names, uniform resource locators and other names and locators associated with the Internet (vi) industrial designs and any registrations and applications therefor; (vii) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor (collectively, “ Trademarks ”); (viii) all databases and data collections and all rights therein; (ix) all moral and economic rights of authors and inventors, however denominated, and (x) any similar or equivalent rights to any of the foregoing (as applicable).

“ Company Intellectual Property ” shall mean any Intellectual Property that is owned by, or exclusively licensed to, Summer, including software and software programs developed by or exclusively licensed to Summer (specifically excluding any off the shelf or shrink-wrap software).

“ Registered Intellectual Property ” means all Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any private, state, government or other legal authority.

“ Company Registered Intellectual Property ” means all of the Registered Intellectual Property owned by, or filed in the name of, Summer.

“ Company Products ” means all current versions of products or service offerings of Company.

(a) Except as disclosed in Schedule 2.18 hereto, no Company Intellectual Property or Company Product is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by Summer, or which may affect the validity, use or enforceability of such Company Intellectual Property or Company Product, which in any such case could reasonably be expected to have a Material Adverse Effect on Summer.

(b) Except as disclosed in Schedule 2.18 hereto, Summer owns and has good and exclusive title to each material item of Company Intellectual Property owned by it free and clear of any Liens (excluding non-exclusive licenses and related restrictions granted by it in the ordinary course of business); and Summer is the exclusive owner of all material registered Trademarks used in connection with the operation or conduct of the business of Summer including the sale of any products or the provision of any services by Summer.

(c) To Summer’s knowledge, except as set forth in Schedule 2.18 , the operation of the business of Summer as such business currently is conducted, including Summer’s use of any product, device or process, has not and does not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction.

2.19 Agreements, Contracts and Commitments .

(a) Schedule 2.19 hereto sets forth a complete and accurate list of all Material Company Contracts (as hereinafter defined), specifying the parties thereto. For purposes of this Agreement, (i) the term “ Company Contracts ” shall mean all contracts, agreements, leases, mortgages, indentures, notes, bonds, licenses, manufacturing arrangements, distribution arrangements, permits and franchises, whether written or oral, to which Summer is a party or by or to which any of the properties or assets of Company may be bound, subject or affected (including without limitation notes or other instruments payable to Summer) and (ii) the term “ Material Company Contracts ” shall mean (y) each Company Contract that otherwise is or may be material to the businesses, operations, assets, condition (financial or otherwise) or prospects of Summer and (z) without limitation of subclause (y), each of the following Company Contracts:

(i) any mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by or from Summer by or to any officer, director, stockholder or holder of derivative securities (“ Insider ”) of Summer;

(ii) any guaranty, direct or indirect, by Summer or any Insider of Summer of any obligation for borrowings, or otherwise, excluding endorsements made for collection in the ordinary course of business;

(iii) any Company Contract of employment;

(iv) any Company Contract made other than in the ordinary course of business or (x) providing for the grant of any preferential rights to purchase or lease any asset of Summer or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution of, any product or service of Summer;

(v) any obligation to register any shares of the capital stock or other securities of Summer with any Governmental Entity;

(vi) any obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons;

(vii) any collective bargaining agreement with any labor union;

(viii) any lease or similar arrangement for the use by Summer of real property or personal property;

(ix) any Company Contract granting or purporting to grant, or otherwise in any way relating to, any mineral rights or any other interest (including, without limitation, a leasehold interest) in real property; and

(x) any Company Contract to which any Insider of Summer is a party.

(b) Each Company Contract was entered into at arms’ length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all Material Company Contracts (or written summaries in the case of oral Material Company Contracts).

(c) Except as set forth in Schedule 2.19 , neither Summer nor, to the best of Company’s knowledge, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Company Contract, and no party to any Company Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Summer. Each agreement, contract or commitment to which Summer is a party or by which it is bound that has not expired by its terms is in full force and effect.

2.20 Insurance . Schedule 2.20 sets forth Summer’s insurance policies and fidelity bonds covering the assets, business, products, equipment, properties, operations, employees, officers and directors (collectively, the “ Insurance Policies ”) of Summer.

2.21 Governmental Actions/Filings . Except as set forth in Schedule 2.21 , Summer has been granted and holds, and has made, all Governmental Actions/Filings (including, without limitation, the Governmental Actions/Filings required for (i) emission or discharge of effluents and pollutants into the air and the water and (ii) the manufacture and sale of all products manufactured and sold by it) necessary to the conduct by Summer of its business (as presently conducted and as presently proposed to be conducted) or used or held for use by Summer, and true, complete and correct copies of which have heretofore been delivered to Parent. Each such Governmental Action/Filing is in full force and effect and, except as disclosed in Schedule 2.21 hereto, will not expire prior to December 31, 2007, and to Summer’s knowledge, Summer is in compliance with all of its obligations with respect thereto. To Summer’s knowledge, no event has occurred and is continuing which requires or permits (or after notice or lapse of time or both would require or permit) and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such

events which, either individually or in the aggregate, would not have a Material Adverse Effect upon Summer. Except for (i) renewals in the ordinary course of business or (ii) as set forth in Schedule 2.21 , no Governmental Action/Filing is necessary to be obtained, secured or made by Summer to enable it to continue to conduct its businesses and operations and use its properties after the Closing in a manner which is consistent with current practice.

For purposes of this Agreement, the term “ Governmental Action/Filing ” shall mean any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal, foreign or other governmental, administrative or judicial body, agency or authority.

2.22 Interested Party Transactions . Except as set forth in the Schedule 2.22 hereto, no employee, officer, director or stockholder of Summer or a member of his or her immediate family is indebted to Summer, nor is Summer indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of Summer, and (iii) for other employee benefits made generally available to all employees. Except as set forth in Schedule 2.22 , to Summer’s knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom Summer is affiliated or with whom Summer has a contractual relationship, or in any Person that competes with Summer, except that each employee, stockholder, officer or director of Company and members of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with Company. Except as set forth in Schedule 2.22 , to the knowledge of Summer, no officer, director or Stockholder or any member of their immediate families is, directly or indirectly, interested in any Material Company Contract with Summer (other than such contracts as relate to any such Person’s ownership of capital stock or other securities of Summer or such Person’s employment with Summer).

2.23 Board Approval . The board of directors of each of the Companies (including any required committee or subgroup thereof) has, as of the date of this Agreement, duly approved this Agreement and the Transactions contemplated hereby.

2.24 Stockholder Approval . The shares of Company Common Stock owned by the Stockholders constitute, in the aggregate, all of the outstanding voting shares of each of the Companies and the Stockholders’ execution of this Agreement evidences their approval of the Transactions by the stockholders of each of the Companies in accordance with the Applicable Corporate Laws.

2.25 Representations and Warranties Complete . The representations and warranties of Summer included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

2.26 Product Liability; Product Recalls . Summer has never been found liable in a cause of action based on any product liability or related claims and has never been a party to any action alleging same. Schedule 2.26 sets forth a detailed description of each recall of any product of Summer since formation of any of the Companies.

2.27 Survival of Representations and Warranties . The representations and warranties of Summer set forth in this Agreement shall survive the Closing through the Escrow Period.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent hereby represents and warrants to Summer (except as set forth in a Schedule corresponding in number to the applicable Section of this Article III (the “ Parent Schedule ”), provided that the disclosure of an item in one section of the Schedules shall be deemed to modify both (i) the representation and warranties contained in the section of this Agreement to which it corresponds in number and (ii) any other representation and warranty of Parent in this Agreement to the extent that is it reasonably apparent from a reading of such disclosure item that it would also qualify or apply to such other representation and warranty):

3.1 Organization and Qualification .

(a) Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Parent is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Parent to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent. Complete and correct copies of the Charter Documents of Parent, as amended and currently in effect, have been heretofore delivered to Summer. Parent is not in violation of any of the provisions of the Parent’s Charter Documents.

(b) Parent is duly qualified or licensed to do business as a foreign corporation and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent.

3.2 Subsidiaries .

(a) Except for the SII Merger Sub, which is a wholly-owned subsidiary of Parent, Parent has no subsidiaries and does not own, directly or indirectly, any ownership, equity, profits or voting interest in any Person or has any agreement or commitment to purchase

any such interest, and Parent has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

(b) The SII Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Complete and correct copies of the Charter Documents of each SII Merger Sub, as amended and currently in effect, are annexed hereto as Exhibits A and B. SII Merger Sub is not in violation of any of the provisions of its Charter Documents.

(c) SII Merger Sub does not have any assets or properties of any kind, does not now conduct and has never conducted any business, and has and will have at the Closing no obligations or liabilities of any nature whatsoever except such obligations and liabilities as are imposed under this Agreement.

3.3 Capitalization .

(a) As of the date of this Agreement, the authorized capital stock of Parent consists of 35,000,000 shares of Parent Common Stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share (“ Parent Preferred Stock ”), of which 11,200,000 shares of Parent Common Stock and no shares of Parent Preferred Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable.

(b) Except as set forth in Schedule 3.3(b) , (i) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding options to purchase Parent Common Stock or Parent Preferred Stock granted to employees of Parent or other parties (“ Parent Stock Options ”) and there are no outstanding Parent Stock Options; (ii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding warrants to purchase Parent Common Stock or Parent Preferred Stock (“ Parent Warrants ”) and there are no outstanding Parent Warrants; and (iii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the conversion of the Parent Preferred Stock or any outstanding convertible notes, debentures or securities (“ Parent Convertible Securities ”). All shares of Parent Common Stock and Parent Preferred Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of Parent Common Stock and all outstanding Parent Warrants have been issued and granted in compliance with (x) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (y) all requirements set forth in any applicable Parent Contracts (as defined in Section 3.19). Parent has heretofore delivered to the Company true, complete and accurate copies of the Parent Warrants, including any and all documents and agreements relating thereto.

(c) The shares of Parent Common Stock to be issued by Parent in connection with the Transactions, upon issuance in accordance with the terms of this Agreement, will be duly authorized and validly issued and such shares of Parent Common Stock will be fully paid and nonassessable.

(d) Except as set forth in Schedule 3.3(d) or as contemplated by this Agreement or the Parent SEC Reports (as defined in Section 3.7), there are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreements or understandings to which the Parent is a party or by which the Parent is bound with respect to any equity security of any class of the Parent.

3.4 Authority Relative to this Agreement . Parent and SII Merger Sub has full corporate power and authority to: (i) execute, deliver and perform this Agreement, and each ancillary document that Parent or SII Merger Sub has executed or delivered or is to execute or deliver pursuant to this Agreement, and (ii) carry out Parent’s and SII Merger Sub’s obligations hereunder and thereunder and, to consummate the Transactions contemplated hereby (including the Merger). The execution and delivery of this Agreement and the consummation by Parent and SII Merger Sub of the Transactions contemplated hereby (including the Merger) have been duly and validly authorized by all necessary corporate action on the part of Parent and SII Merger Sub(including the approval by their respective Boards of Directors), and no other corporate proceedings on the part of Parent or SII Merger Sub are necessary to authorize this Agreement or to consummate the Transactions contemplated hereby, other than the Parent Stockholder Approval (as defined in Section 5.1(a)). This Agreement has been duly and validly executed and delivered by Parent and SII Merger Sub and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of Parent and SII Merger Sub, enforceable against Parent and SII Merger Sub in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

3.5 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by Parent and SII Merger Sub do not, and the performance of this Agreement by Parent and SII Merger Sub shall not: (i) conflict with or violate Parent’s or SII Merger Sub’s Charter Documents, (ii) conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair Parent’s or SII Merger Sub’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien on any of the properties or assets of Parent pursuant to, any Parent Contracts, except, with respect to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Parent.

(b) The execution and delivery of this Agreement by Parent and SII Merger Sub do not, and the performance of their respective obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental

Entity, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which Parent or SII Merger Sub is qualified to do business and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent, or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

3.6 Compliance . Parent has complied with, is not in violation of, any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Parent. The business and activities of Parent have not been and are not being conducted in violation of any Legal Requirements. Parent is not in default or violation of any term, condition or provision of its Charter Documents. No written notice of non-compliance with any Legal Requirements has been received by Parent.

3.7 SEC Filings; Financial Statements .

(a) Schedule 3.7(a) sets forth a correct and complete list of each report, registration statement and definitive proxy statement filed by Parent with the SEC (the “ Parent SEC Reports ”), all of which have been made available to Summer and the Stockholders, and which are all the forms, reports and documents required to be filed by Parent with the SEC prior to the date of this Agreement. As of their respective dates the Parent SEC Reports: (i) were prepared in accordance and complied in all respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Parent SEC Reports, with all such Parent SEC Reports having been filed on a timely basis, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent set forth in the preceding sentence, Parent makes no representation or warranty whatsoever concerning the Parent SEC Reports as of any time other than the time they were filed.

(b) Except as set forth on Schedule 3.7(b) hereto, each set of financial statements (including, in each case, any related notes thereto) contained in Parent SEC Reports, including each Parent SEC Report filed after the date hereof until the Closing, complied or will comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, was or will be prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-QSB of the Exchange Act) and each fairly presents or will fairly present in all material respects the financial position of Parent at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were, are or will be subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on Parent taken as a whole.

3.8 No Undisclosed Liabilities . Except as set forth on Schedule 3.7(b) hereto, Parent has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to the financial statements included in Parent SEC Reports which are, individually or in the aggregate, material to the business, results of operations or financial condition of Parent, except (i) liabilities provided for in or otherwise disclosed in Parent SEC Reports filed prior to the date hereof, and (ii) liabilities incurred since March 31, 2006 in the ordinary course of business, none of which would have a Material Adverse Effect on Parent.

3.9 Absence of Certain Changes or Events . Except as set forth in Schedule 3.9 , and except as contemplated by this Agreement, since March 31, 2006, there has not been: (i) any Material Adverse Effect on Parent, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of Parent’s capital stock, or any purchase, redemption or other acquisition by Parent of any of Parent’s capital stock or any other securities of Parent or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of Parent’s capital stock, (iv) any granting by Parent of any increase in compensation or fringe benefits, except for normal increases of cash compensation in the ordinary course of business consistent with past practice, or any payment by Parent of any bonus, except for bonuses made in the ordinary course of business consistent with past practice, or any granting by Parent of any increase in severance or termination pay or any entry by Parent into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving Parent of the nature contemplated hereby, (v) entry by Parent into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement filed or required to be filed by Parent with respect to any Governmental Entity, (vi) any material change by Parent in its accounting methods, principles or practices, except as required by concurrent changes in U.S. GAAP, (vii) any change in the auditors of Parent, (vii) any issuance of capital stock of Parent, or (viii) any revaluation by Parent of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of Parent other than in the ordinary course of business.

3.10 Litigation . Except as set forth on Schedule 3.10 , there are no claims, suits, actions or proceedings pending or to Parent’s knowledge, threatened against Parent, before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator.

3.11 Employee Benefit Plans . Except as may be contemplated by the Parent Plan (as defined in Section 5.1(a)), Parent does not maintain, and has no liability under, any Plan, and neither the execution and delivery of this Agreement nor the consummation of the Transactions contemplated hereby will (i) result in any payment (including severance, unemployment

compensation, golden parachute, bonus or otherwise) becoming due to any stockholder, director or employee of Parent, or (ii) result in the acceleration of the time of payment or vesting of any such benefits.

3.12 Labor Matters . Parent is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by Parent, nor does Parent know of any activities or proceedings of any labor union to organize any such employees.

3.13 Restrictions on Business Activities . Since its organization, Parent has not conducted any business activities other than activities directed toward the accomplishment of a business combination. Except as set forth in the Parent Charter Documents, there is no agreement, commitment, judgment, injunction, order or decree binding upon Parent or to which Parent is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Parent, any acquisition of property by Parent or the conduct of business by Parent as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have, a Material Adverse Effect on Parent.

3.14 Title to Property . Parent does not own or lease any real property or personal property. Except as set forth in Schedule 3.14 , there are no options or other contracts under which Parent has a right or obligation to acquire or lease any interest in real property or personal property.

3.15 Taxes . Except as set forth in Schedule 3.15 hereto:

(a) Parent has timely filed all Returns required to be filed by Parent with any Tax authority prior to the date hereof, except such Returns which are not material to Parent. All such Returns are true, correct and complete in all material respects. Parent has paid all Taxes shown to be due on such Returns.

(b) All Taxes that Parent is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

(c) Parent has not been delinquent in the payment of any material Tax that has not been accrued for in Parent’s books and records of account for the period for which such Tax relates nor is there any material Tax deficiency outstanding, proposed or assessed against Parent, nor has Parent executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. No audit or other examination of any Return of Parent by any Tax authority is presently in progress, nor has Parent been notified of any request for such an audit or other examination.

(d) No adjustment relating to any Returns filed by Parent has been proposed in writing, formally or informally, by any Tax authority to Parent or any representative thereof.

(e) Parent has no liability for any material unpaid Taxes which have not been accrued for or reserved on Parent’s balance sheets included in the audited financial statements for the most recent fiscal year ended, whether asserted or unasserted, contingent or otherwise, which is material to Parent, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of Parent in the ordinary course of business, none of which is material to the business, results of operations or financial condition of Parent.

(f) Parent has not taken any action and does not know of any fact, agreement, plan or other circumstance that is reasonably likely to prevent the Transactions from qualifying as plans of reorganization within the meaning of Section 368(a) of the Code.

3.16 Environmental Matters . Except for such matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect: (i) Parent has complied with all applicable Environmental Laws; (ii) Parent is not subject to liability for any Hazardous Substance disposal or contamination on any third party property; (iii) Parent has not been associated with any release or threat of release of any Hazardous Substance; (iv) Parent has not received any notice, demand, letter, claim or request for information alleging that Parent may be in violation of or liable under any Environmental Law; and (v) Parent is not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

3.17 Brokers . Except as set forth in Schedule 3.17 , Parent has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agent’s commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

3.18 Intellectual Property . Parent does not own, license or otherwise have any right, title or interest in any Intellectual Property or Registered Intellectual Property.

3.19 Agreements, Contracts and Commitments .

(a) Except as set forth in the Schedule 3.19 , there are no contracts, agreements, leases, mortgages, indentures, notes, bonds, liens, license, permit, franchise, purchase orders, sales orders or other understandings, commitments or obligations (including without limitation outstanding offers or proposals) of any kind, whether written or oral, to which Parent is a party or by or to which any of the properties or assets of Parent may be bound, subject or affected, which either (a) creates or imposes a liability greater than $25,000, or (b) may not be cancelled by Parent on less than 30 days’ or less prior notice (“ Parent Contracts ”). All Parent Contracts are listed in Schedule 3.19 .

(b) Each Parent Contract was entered into at arms’ length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all Parent Contracts (or written summaries in the case of oral Parent Contracts) and of all outstanding offers or proposals of Parent have been heretofore delivered to Summer.

(c) Neither Parent nor, to the knowledge of Parent, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Parent Contract, and no party to any Parent Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Parent. Each agreement, contract or commitment to which Parent is a party or by which it is bound that has not expired by its terms is in full force and effect, except where such failure to be in full force and effect is not reasonably likely to have a Material Adverse Effect on Parent.

3.20 Insurance . Except for directors’ and officers’ liability insurance, Parent does not maintain any Insurance Policies.

3.21 Interested Party Transactions . Except as set forth in the Parent SEC Reports filed prior to the date of this Agreement, no employee, officer, director or stockholder of Parent or a member of his or her immediate family is indebted to Parent nor is Parent indebted (or committed to make loans or extend or guarantee credit) to any of them, other than reimbursement for reasonable expenses incurred on behalf of Parent. To Parent’s knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom Parent is affiliated or with whom Parent has a material contractual relationship, or any Person that competes with Parent, except that each employee, stockholder, officer or director of Parent and members of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with Parent. To Parent’s knowledge, no officer, director or stockholder or any member of their immediate families is, directly or indirectly, interested in any material contract with Parent (other than such contracts as relate to any such individual ownership of capital stock or other securities of Parent).

3.22 Indebtedness . Parent has no indebtedness for borrowed money.

3.23 Over-the-Counter Bulletin Board Quotation . Parent Common Stock is quoted on the Over-the-Counter Bulletin Board (“ OTC BB ”). There is no action or proceeding pending or, to Parent’s knowledge, threatened against Parent by Nasdaq or NASD, Inc. (“ NASD ”) with respect to any intention by such entities to prohibit or terminate the quotation of Parent Common Stock on the OTC BB.

3.24 Board Approval . The Board of Directors of Parent (including any required committee or subgroup of the Board of Directors of Parent) has, as of the date of this Agreement, unanimously (i) declared the advisability of the Transactions and approved this Agreement and the transactions contemplated hereby, (ii) determined that the Transactions are in the best interests of the stockholders of Parent, and (iii) determined that the fair market value of Summer is equal to at least 80% of Parent’s net assets.

3.25 Trust Fund . As of the date hereof and at the Closing Date, Parent has and will have no less than $49,168,000 invested in United States Government securities in a trust account administered by Continental Stock Transfer and Trust Company (the “ Trust Fund ”), less amounts payable to the Stockholders under Section 1.5(a), other amounts contemplated under Section 5.22, if any, as Parent is required to pay to stockholders who elect to have their shares converted to cash in accordance with the provisions of Parent’s Charter Documents.

3.26 Governmental Filings . Except as set forth in Schedule 3.26 , Parent has been granted and holds, and has made, all Governmental Actions/Filings necessary to the conduct by Parent of its business (as presently conducted) or used or held for use by Parent, and true, complete and correct copies of which have heretofore been delivered to Summer. Each such Governmental Action/Filing is in full force and effect and, except as disclosed in Schedule 3.26 , will not expire prior to December 31, 2006, and Parent is in compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such events which, either individually or in the aggregate, would not have a Material Adverse Effect upon Parent.

3.27 Representations and Warranties Complete . The representations and warranties of Parent included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

3.28 Survival of Representations and Warranties . The representations and warranties of Parent set forth in this Agreement shall survive until the Closing.

ARTICLE IV

CONDUCT PRIOR TO THE EFFECTIVE TIME

4.1 Conduct of Business by Company and Parent . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Companies, Parent and SII Merger Sub shall, except to the extent that the other party shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, without the prior written consent of the other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Companies, Parent and SII Merger Sub shall not do any of the following:

(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;

(b) Grant any severance or termination pay to any officer except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;

(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any Intellectual Property of Summer or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall Summer or Parent license on an exclusive basis or sell any Intellectual Property of Summer, or Parent as applicable;

(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock (other than distributions to Stockholders in respect of income taxes with respect to SII’s income as set forth in Section 1.12(h));

(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Summer and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to agreements in effect on the date hereof;

(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities;

(g) Amend its Charter Documents, except as otherwise contemplated by this Agreement;

(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in

the aggregate, to the business of Parent or Summer as applicable, or (except for licenses referred to in subsection (c) above) enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;

(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;

(j) Except for extensions and/or renewals of existing Indebtedness, incur any indebtedness for borrowed money in excess of $25,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or Summer, as applicable, enter into any “ keep well ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;

(k) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into (i) in connection with the so called soft goods division employees or (ii) in the ordinary course of business with employees who are terminable “ at will ”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business;

(l) Pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction in the ordinary course of business or in accordance with their terms, or liabilities recognized or disclosed in the Stub Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Summer is a party or of which Summer is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;

(m) Except in the ordinary course of business modify, amend or terminate any Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

(n) Except as required by applicable U.S., U.K. or Hong Kong GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;

(o) Except in the ordinary course of business incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $250,000 in any 12 month period;

(p) Engage in any action that could reasonably be expected to cause the Transactions to fail to qualify as “ plans of reorganization ” under Section 368(a) of the Code;

(q) Settle any litigation to which an Insider is a party or where the consideration given by Summer is other than monetary;

(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;

(s) Form, establish or acquire any subsidiary except as contemplated by this Agreement;

(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;

(u) Make capital expenditures except in accordance with prudent business and operational practices;

(v) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;

(w) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates other than the payment of salary and benefits in the ordinary course of business; or

(x) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1 (a) through (w) above.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 Audited Financials; Proxy Statement; Special Meeting .

(a) As soon as practicable after the date hereof, Summer shall deliver to Parent complete financial statements (including, but not limited to, statements or operations,

statements of cash flows and balance sheets and notes thereto) for the year ended December 31, 2005 as audited by GGK (“ Audited Financials ”) and June 30, 2006 as reviewed by GGK (“ Reviewed Stub Financials ”). As soon as is reasonably practicable after receipt by Parent from Summer of all financial (including the Audited Financials and Reviewed Stub Financials and PCOAB-firm audited 2004 and 2003 financials for Summer (“ PCOAB-firm Audited 2004 and 2003 Financials ”) if required for the proxy materials discussed below) and other information relating to Summer as Parent may reasonably request for its preparation, Parent shall prepare and file with the SEC under the Exchange Act, and with all other applicable regulatory bodies, proxy materials for the purpose of soliciting proxies from holders of Parent Common Stock to vote in favor of: (i) the adoption of this Agreement and the approval of the Transactions (“ Parent Stockholder Approval ”); (ii) the change of the name of Parent to a name mutually selected by Parent and Summer (the “ Name Change Amendment ”); (iii) an increase in the number of authorized shares of Parent Common Stock to 100 million shares (the “ Capitalization Amendment ”); (iv) an amendment to remove the preamble and Sections A through D, inclusive, of Article Sixth from Parent’s Certificate of Incorporation from and after the Closing and to redesignate and restate Section E as Article Sixth and to otherwise ensure that the provisions contemplated by the Voting Agreement are permitted; and (v) the adoption of a Performance Equity Plan in the form attached hereto as Exhibit E (the “ Parent Plan ”), at a meeting of holders of Parent Common Stock to be called and held for such purpose (the “ Special Meeting ”). The Parent Plan shall provide that an aggregate of 1.6 million shares of Parent Common Stock shall be reserved for issuance pursuant to the Parent Plan. Such proxy materials shall be in the form of a proxy statement to be used for the purpose of soliciting such proxies from holders of Parent Common Stock (the “ Proxy Statement ”). Summer shall furnish to Parent on a timely basis all information concerning Summer (or any of the Companies or Subsidiaries) as Parent may reasonably request in connection with the preparation of the Proxy Statement; provided, however, that under no circumstances shall Summer’s response be deemed untimely, if Summer provides the requested information within 10 days after being notified of the same. Summer and its counsel shall be given an opportunity to review, comment on and approve (which such approval shall not be unreasonably withheld) the Proxy Statement prior to its filing with the SEC. Parent, with the assistance of Summer, shall promptly respond to any SEC comments on the Proxy Statement and shall otherwise use best commercial efforts to cause the Proxy Statement to be approved for issuance by the SEC as promptly as practicable. Parent shall also take any and all such actions to satisfy the requirements of the Securities Act and the Exchange Act. Prior to the Closing Date, Parent shall use its best commercial efforts to cause the shares of Parent Common Stock to be issued pursuant to the Transactions to be registered or qualified under all applicable Blue Sky Laws of each of the states and territories of the United States in which it is believed, based on information furnished by Summer, holders of the Company Common Stock reside and to take any other such actions that may be necessary to enable the Parent Common Stock to be issued pursuant to the Transactions in each such jurisdiction.

(b) As soon as practicable following its approval by the Commission, Parent shall distribute the Proxy Statement to the holders of Parent Common Stock and, pursuant thereto, shall call the Special Meeting in accordance with the Delaware General Corporation Law (“ DGCL ”) and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the Transactions and the other matters presented to the stockholders of Parent for approval or adoption at the Special Meeting, including, without limitation, the matters described Section 5.1(a).

(c) Parent shall comply with all applicable provisions of and rules under the Exchange Act and all applicable provisions of the DGCL in the preparation, filing and distribution of the Proxy Statement, the solicitation of proxies thereunder, and the calling and holding of the Special Meeting. Without limiting the foregoing, Parent shall ensure that the Proxy Statement does not, as of the date on which it is distributed to the holders of Parent Common Stock, and as of the date of the Special Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided that Parent shall not be responsible for the accuracy or completeness of any information relating to Summer or any other information furnished by Summer for inclusion in the Proxy Statement). Summer represents and warrants that the information relating to Summer (and each of the Companies and Subsidiaries) supplied by Summer for inclusion in the Proxy Statement will not as of date of its distribution to the holders of Parent Common Stock (or any amendment or supplement thereto) or at the time of the Special Meeting contain any statement which, at such time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statement therein not false or misleading.

(d) Parent, acting through its board of directors, shall include in the Proxy Statement the recommendation of its board of directors that the holders of Parent Common Stock vote in favor of the adoption of this Agreement and the approval of the Transactions, and shall otherwise use best commercial efforts to obtain the Parent Stockholder Approval.

5.2 Directors and Officers of Parent, SII Merger Surviving Corporation, SIE and SIA after the Transactions . Parent, SII Merger Sub and the Companies shall take all necessary actions so that the persons listed in Schedule 5.2 are elected to the positions of officers and directors of Parent and SII Merger Surviving Corporation, as set forth therein, to serve in such positions effective immediately after the Closing. The Stockholders, officers and directors of the Companies and those stockholders of Parent stated to be parties thereto shall enter into a Voting Agreement in the form of Exhibit F hereto concurrently with the execution of this Agreement.

5.3 Other Actions .

(a) At least five (5) days prior to Closing, Parent shall prepare a draft Form 8-K announcing the Closing, together with, or incorporating by reference, the financial statements prepared by Summer and its accountant, and such other information that may be required to be disclosed with respect to the Transactions in any report or form to be filed with the SEC (“ Transaction Form 8-K ”), which shall be in a form reasonably acceptable to Summer and in a format acceptable for EDGAR filing. Prior to Closing, Parent and Summer shall prepare the press release announcing the consummation of the Transactions hereunder (“ Press Release ”). Concurrently with the Closing, Parent shall file the Transaction Form 8-K with the SEC and distribute the Press Release.

(b) Summer and Parent shall further cooperate with each other and use their respective best commercial efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement and applicable laws to consummate the Transactions and the other transactions contemplated hereby as soon as practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings and to obtain as soon as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party (including the respective independent accountants of Summer and Parent) and/or any Governmental Entity, including as required under the laws of the UK and Hong Kong, in order to consummate the Transactions or any of the other transactions contemplated hereby. This obligation shall include, on the part of Parent, sending a termination letter to Continental in substantially the form of Exhibit A attached to the Investment Management Trust Agreement by and between Parent and Continental dated as of April 21, 2005 Subject to applicable laws relating to the exchange of information and the preservation of any applicable attorney-client privilege, work-product doctrine, self-audit privilege or other similar privilege, each of Summer and Parent shall have the right to review and comment on in advance, and to the extent practicable each will consult the other on, all the information relating to such party, that appear in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Transactions and the other transactions contemplated hereby. In exercising the foregoing right, each of Summer and Parent shall act reasonably and as promptly as practicable.

5.4 Required Information . In connection with the preparation of the Transaction Form 8-K and Press Release, and for such other reasonable purposes, Summer and Parent each shall, upon request by the other, furnish the other with all information concerning themselves, their respective directors, officers and stockholders (including the directors of Parent and Summer to be elected effective as of the Closing pursuant to Section 5.2 hereof) and such other matters as may be reasonably necessary or advisable in connection with the Transactions, or any other statement, filing, notice or application made by or on behalf of Summer and Parent to any third party and/or any Governmental Entity in connection with the Transactions and the other transactions contemplated hereby. Each party warrants and represents to the other party that all such information shall be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

5.5 Confidentiality Access to Information .

(a) Confidentiality . Any confidentiality agreement previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement. Each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement. Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party; (ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of

confidentiality; and (iv) disclosure required by law. In the event this Agreement is terminated as provided in Article VIII hereof, each party (i) will return or cause to be returned to the other all documents and other material obtained from the other in connection with the Transactions contemplated hereby, and (ii) will use its commercially reasonable efforts to delete from its computer systems all documents and other material obtained from the other in connection with the Transactions contemplated hereby.

(b) Access to Information .

(i) Summer will afford Parent and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Summer during the period prior to the Closing to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of Summer, as Parent may reasonably request.

(ii) Parent will afford Summer and its financial advisors, underwriters, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Parent during the period prior to the Closing to obtain all information concerning the business, including the status of business or product development efforts, properties, results of operations and personnel of Parent, as Summer may reasonably request.

(iii) Notwithstanding anything to the contrary contained herein, each party hereby agrees that, by proceeding with the Closing, he or it shall be conclusively deemed to have waived for all purposes hereunder any inaccuracy of representation or breach of warranty by another party that is actually known by him or it prior to the execution of this Agreement.

5.6 Public Disclosure . From the date of this Agreement until Closing or termination, the parties shall cooperate in good faith to jointly prepare all press releases and public announcements pertaining to this Agreement and the Transactions governed by it, and no party shall issue or otherwise make any public announcement or communication pertaining to this Agreement or the Transactions without the prior consent of Parent (in the case of Summer and the Stockholders) or Summer (in the case of Parent), except as required by any legal requirement or by the rules and regulations of, or pursuant to any agreement of a stock exchange or trading system. Each party will not unreasonably withhold approval from the others with respect to any press release or public announcement. If any party determines with the advice of counsel that it is required to make this Agreement and the terms of the transaction public or otherwise issue a press release or make public disclosure with respect thereto, it shall, at a reasonable time before making any public disclosure, consult with the other party regarding such disclosure, seek such confidential treatment for such terms or portions of this Agreement or the transaction as may be reasonably requested by the other party and disclose only such information as is legally compelled to be disclosed. This provision will not apply to communications by any party to its counsel, accountants and other professional advisors. In accordance with the foregoing, Parent will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement. Summer and its counsel shall be given reasonable time to review,

comment on and approve (which such approval shall not be unreasonably withheld) the Current Report prior to its filing with the SEC. Any language included in such Current Report may be used by Parent in other filings made by it with the SEC and in other documents distributed by Parent in connection with the transactions contemplated by this Agreement without further review or consent of Summer.

5.7 Best Commercial Efforts . Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its best commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transactions and the other transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining of all necessary actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the obtaining of all consents, approvals or waivers from third parties required as a result of the transactions contemplated in this Agreement, including without limitation the consents referred to in Schedule 2.5(b) of Summer Disclosure Schedule, (iv) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (v) the execution or delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the foregoing, Parent and its board of directors and Summer and its board of directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Transactions, this Agreement or any of the transactions contemplated by this Agreement, use its commercially reasonable efforts to enable the Transactions and the other transactions contemplated by this Agreement to be consummated as promptly as practicable on the terms contemplated by this Agreement. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be deemed to require Parent or Summer to agree to any divestiture by itself or any of its affiliates of shares of capital stock or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and stock.

5.8 Treatment as a Reorganization . Neither Parent nor Summer nor Stockholders shall take any action prior to or following the Transactions that could reasonably be expected to cause the Transactions to fail to qualify as “plans of reorganization” within the meaning of Section 368(a) of the Code.

5.9 No Parent Common Stock Transactions . Each officer, director and Stockholder of Summer shall agree that it shall not, prior to April 21, 2008, sell, transfer or otherwise dispose of an interest in any of the shares of Parent Common Stock it receives as a result of the

Transactions other than as permitted pursuant to the Lock-Up Agreement in the form of Exhibit G hereto executed by such Person concurrently with the execution of this Agreement. The Parent hereby covenants and agrees not to terminate or amend any of the terms of that certain Stock Escrow Agreement dated as of April 21, 2005 by and among the Parent and the other parties named therein.

5.10 Certain Claims .

(a) As additional consideration for the issuance of Parent Common Stock pursuant to this Agreement, each of the Stockholders hereby releases and forever discharges, effective as of the Closing Date, Summer and its directors, officers, employees and agents, from any and all rights, claims, demands, judgments, obligations, liabilities and damages, whether accrued or unaccrued, asserted or unasserted, and whether known or unknown arising out of or resulting from such Stockholder’s (i) status as a holder of an equity interest in Summer; and (ii) employment, service, consulting or other similar agreement entered into with Summer prior to Closing to the extent that the basis for claims under any such agreement that survives the Closing arise prior to the Closing, provided, however , the foregoing shall not release any obligations of Parent set forth in this Agreement or any other documents executed in connection with the transactions contemplated hereby.

(b) As additional consideration for the Stockholders to enter into this Agreement, the Company hereby releases and forever discharges, effective as of the Closing Date, each of the Stockholders from any and all rights, claims, demands, judgments, obligations, liabilities and damages, whether accrued or unaccrued, asserted or unasserted, and whether known or unknown arising out of or resulting from such Stockholder’s employment, service, consulting or other similar agreement entered into with the Company prior to Closing to the extent that the basis for claims under any such agreement that survives the Closing arise prior to the Closing. Notwithstanding the foregoing, no Stockholder shall be released from any obligation for borrowed money owed by him or her to the Company.

5.11 No Securities Transactions . Neither Summer nor any Stockholder or any of their affiliates, directly or indirectly, shall engage in any transactions involving the securities of Parent prior to the time of the making of a public announcement of the transactions contemplated by this Agreement. Summer shall use its commercially reasonable efforts to require each of its officers, directors, employees, agents and representatives to comply with the foregoing requirement.

5.12 No Claim Against Trust Fund . Summer and the Stockholders acknowledge that, if the transactions contemplated by this Agreement are not consummated, Parent will be obligated, under certain circumstances, to return to its stockholders the amounts being held in the Trust Fund. Summer and each of the Stockholders hereby waive all rights against Parent to collect from the Trust Fund any moneys that may be owed to them by Parent for any reason whatsoever, including but not limited to a breach of this Agreement by Parent or any negotiations, agreements or understandings with Parent, and will not seek recourse against the Trust Fund for any reason whatsoever. The foregoing waiver shall not apply if both (a) Parent wrongfully fails or refuses to consummate the transactions contemplated by this Agreement or Summer terminates this Agreement pursuant to Section 8.1(d), and (b) Parent consummates a merger or other business combination with another entity.

5.13 Disclosure of Certain Matters . Each of Parent and Summer will provide the other with prompt written notice of any event, development or condition that (a) would cause any of such party’s representations and warranties to become untrue or misleading or which may affect its ability to consummate the Transactions contemplated by this Agreement, (b) had it existed or been known on the date hereof would have been required to be disclosed under this Agreement, (c) gives such party any reason to believe that any of the conditions set forth in Article VI will not be satisfied, (d) is of a nature that is or may be materially adverse to the operations, prospects or condition (financial or otherwise) of Summer, or (e) would require any amendment or supplement to the Proxy Statement/Prospectus. The parties shall have the obligation to supplement or amend Summer Schedules and Parent Schedules (the “ Disclosure Schedules ”) being delivered concurrently with the execution of this Agreement and annexed hereto with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedules. The obligations of the parties to amend or supplement the Disclosure Schedules being delivered herewith shall terminate on the Closing Date. Notwithstanding any such amendment or supplementation, for purposes of Sections 6.2(a), 6.3(a), 7.1(a)(i), 8.1(d) and 8.1(e), the representations and warranties of the parties shall be made with reference to the Disclosure Schedules as they exist at the time of execution of this Agreement, subject to such anticipated changes as are set forth in Schedule 4.1 or otherwise expressly contemplated by this Agreement or which are set forth in the Disclosure Schedules as they exist on the date of this Agreement.

5.14 Nasdaq Listing . Parent shall use its best commercial efforts to obtain the listing for trading on Nasdaq of the Parent Common Stock, the Units issued in Parent’s initial public offering and the class of warrants included in such Units. If such listing is not obtained by the Closing, the parties shall continue to use their best commercial efforts after the Closing to obtain such listing. Summer will use its best commercially efforts to provide Parent with information regarding Summer required in connection therewith.

5.15 Summer Actions . Summer shall use its commercially reasonable efforts to take such actions as are necessary to fulfill its obligations under this Agreement and to enable Parent and SII Merger Sub to fulfill their obligations hereunder.

5.16 Termination of Stockholder Guarantees . As soon as practicable after the date hereof and prior to the Closing Date, the Parties shall use commercially reasonable efforts to negotiate with the creditors of each of the Companies and take commercially reasonable action to obtain the agreement of each such creditor to terminate any and all personal guarantees by the Stockholders of any of the Companies’ indebtedness to such creditors, including supplying the guarantee of Parent in lieu of such personal guarantees, such terminations to be conditioned upon consummation of the Transactions and to be effective at the Closing Date (the “ Stockholder Guarantee Terminations ”).

5.17 Company Contract Consents . As soon as practicable after the date hereof and prior to the Closing Date, the Companies and the Stockholders shall use commercially reasonable efforts to negotiate with each party to each of the Material Company Contracts and take commercially reasonable action to obtain the consent of each such party to the assignment of each Company Contract to the Parent or SII Merger Sub, as appropriate, in each case without change to the term or provisions of such Company Contract and without the payment of any consideration (the “ Company Contract Consents ”). Each Company Contract Consent shall be conditioned upon the consummation of the Transactions and shall be effective as of the Closing Date.

5.18 Stockholder Obligations . The Stockholders shall repay to the Company, on or before the Closing, all direct and indirect indebtedness and obligations owed by them to the Company, including the indebtedness and other obligations described in Schedule 2.22 and all other amounts owed by them to the Company.

5.19 Charter Protections; Directors’ and Officers’ Liability Insurance .

(a) All rights to indemnification for acts or omissions occurring through the Closing Date now existing in favor of the current directors and officers of Parent or Summer as provided in the Charter Documents of Parent or Summer, respectively or in any indemnification agreements shall survive the Transactions and shall continue in full force and effect in accordance with their terms.

(b) For a period of six (6) years after the Closing Date, each of the Parent and the Surviving Corporations shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by Parent and Summer, respectively (or policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous) with respect to claims arising from facts and events that occurred prior to the Closing Date.

(c) If Parent or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Parent assume the obligations set forth in this Section 5.19.

(d) The provisions of this Section 5.19 are intended to be for the benefit of, and shall be enforceable by, each Person who will have been a director or officer of Parent or Summer for all periods ending on or before the Closing Date and may not be changed without the consent of Committee referred to in Section 1.14(a).

5.20 Faith Realty Contribution . Summer and Jason Macari and Steven Gibree, as owners of Faith Realty, LLC, shall use their best commercial efforts to negotiate and execute all agreements and consents (such agreements and consents to be effective as of the Closing) required to affect the contribution of all the assets, properties, liabilities and obligations of Faith Realty, LLC to SII (the “Faith Realty Contribution”) and to consummate the Faith Realty Contribution without payment of any consideration by Summer (other than SII’s assumption of any mortgage or construction indebtedness related thereto).

5.21 Parent Borrowings . Through the Closing, Parent shall be allowed to borrow funds from its directors, officers and/or stockholders to meet its reasonable capital requirements, with any such loans to be made only as reasonably required by the operation of Parent in due course on a non-interest bearing basis and repayable at Closing. The proceeds of such loans shall not be used for the payment of salaries, bonuses or other compensation to any of Parent’s directors, officers or stockholders.

5.22 Trust Fund Disbursement . Parent shall cause the Trust Fund, which shall contain no less than the amount referred to in Section 3.25, dispersed to Parent immediately upon the Closing with not less than $49,168,000 (less any amounts Parent is required to pay the Stockholders under Section 1.5(a), all amounts payable at closing, including those described below in this Section 5.22, and amounts payable to stockholders who elect to have their shares converted to cash in accordance with the provisions of Parent’s Charter documents) being made available to the Companies for working capital. All liabilities of Parent due and owing or incurred at or prior to the Effective Time, including all tax liabilities (“ Parent Effective Time Liabilities ”), shall be paid as and when due, including the payment at Closing of professional fees related to these transactions, and adequate reserves shall be made against amounts distributed from the Trust Fund therefor.

5.23 Cashless Exercise of Warrants . The parties hereto agree that, in connection with any redemption of Parent’s outstanding warrants, Parent shall offer holders thereof the opportunity to exercise such warrants on a cashless basis.

ARTICLE VI

CONDITIONS TO THE TRANSACTION

6.1 Conditions to Obligations of Each Party to Effect the Transactions . The respective obligations of each party to this Agreement to effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

(a) No Order . No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions, substantially on the terms contemplated by this Agreement.

(b) Stockholder Approval . The Parent Stockholder Approval, the Name Change Amendment and the Capitalization Amendment shall have been duly approved and adopted by the stockholders of Parent by the requisite vote under the laws of the State of Delaware and the Parent Charter Documents and an executed copy of an amendment to Parent’s Certificate of Incorporation reflecting the Name Change Amendment and the Capitalization Amendment shall have been filed with the Delaware Secretary of State to be effective as of the Closing.

(c) Parent Common Stock . Holders of twenty percent (20%) or more of the shares of Parent Common Stock issued in Parent’s initial public offering of securities and outstanding immediately before the Closing shall not have exercised their rights to convert their shares into a pro rata share of the Trust Fund in accordance with Parent’s Charter Documents.

(d) Stock Quotation or Listing . The Parent Common Stock at the Closing will be quoted on the OTC BB or listed for trading on Nasdaq, if the application for such listing is approved, and there will be no action or proceeding pending or threatened against Parent by the NASD to prohibit or terminate the quotation of Parent Common Stock on the OTC BB or the trading thereof on Nasdaq.

6.2 Additional Conditions to Obligations of Summer . The obligations of Summer to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Summer:

(a) Representations and Warranties . Each representation and warranty of Parent contained in this Agreement that is qualified as to materiality shall have been true and correct (i) as of the date of this Agreement and (ii) subject to the provisions of the last sentence of Section 5.13, on and as of the Closing Date with the same force and effect as if made on the Closing Date and each representation and warranty of Parent contained in this Agreement that is not qualified as to materiality shall have been true and correct (iii) as of the date of this Agreement and (iv) in all material respects on and as of the Closing Date with the same force and effect as if made on the Closing Date. Summer shall have received a certificate with respect to the foregoing signed on behalf of Parent by an authorized officer of Parent (“ Parent Closing Certificate ”).

(b) Agreements and Covenants . Parent and SII Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of Parent) does not, or will not, constitute a Material Adverse Effect with respect to Parent, and the Parent Closing Certificate shall include a provision to such effect.

(c) No Litigation . No action, suit or proceeding shall be pending or threatened before any Governmental Entity which is reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect materially and adversely or otherwise encumber the title of the shares of Parent Common Stock to be issued by Parent in connection with the Transactions and no order, judgment, decree, stipulation or injunction to any such effect shall be in effect.

(d) Consents . Parent shall have obtained all consents, waivers and approvals required to be obtained by Parent in connection with the consummation of the transactions contemplated hereby, other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Parent and the Parent Closing Certificate shall include a provision to such effect.

(e) Material Adverse Effect . No Material Adverse Effect with respect to Parent shall have occurred since the date of this Agreement.

(f) SEC Compliance . Immediately prior to Closing, Parent shall be in compliance with the reporting requirements under the Exchange Act.

(g) Opinion of Counsel . Summer shall have received from Graubard Miller, counsel to Parent, an opinion of counsel in substantially the form of Exhibit H annexed hereto.

(h) Other Deliveries . At or prior to Closing, Parent shall have delivered to Summer (i) copies of resolutions and actions taken by Parent’s board of directors and stockholders in connection with the approval of this Agreement and the transactions contemplated hereunder, and (ii) such other documents or certificates as shall reasonably be required by Summer and its counsel in order to consummate the transactions contemplated hereunder.

(i) Resignations . The persons listed in Schedule 6.2(i) shall have resigned from all of their positions and offices with Parent.

(j) Employment Agreements . Employment Agreements between KBL and Dr. Marlene Krauss in the form of Exhibit I (the “ KBL Employment Agreement ”) shall have been executed and delivered at Closing by each of Dr. Krauss and KBL, and Employment Agreements between KBL and/or Summer and, separately, each of Jason Macari, Steven Gibree and Rachelle Harel in the forms of Exhibit K , Exhibit L and Exhibit M , respectively, (the “ Summer Employment Agreements ”) shall have been executed and delivered at Closing by KBL as applicable.

(k) Registration Rights Agreements . The Registration Rights Agreements shall be in full force and effect.

(l) Voting Agreement . The Voting Agreement shall be in full force and effect, and Jason Macari and Steve Gibree directors shall have been elected to the Parent’s Board of Directors.

(m) Stockholder Guarantee Terminations . The Stockholder Guarantee Terminations shall have been obtained as contemplated by Section 5.16.

6.3 Additional Conditions to the Obligations of Parent . The obligations of Parent to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Parent:

(a) Representations and Warranties . Each representation and warranty of Summer contained in this Agreement that is qualified as to materiality shall have been true and correct (i) as of the date of this Agreement and (ii) subject to the provisions of the last sentence of Section 5.13, on and as of the Closing Date with the same force and effect as if made on the Closing Date and each representation and warranty of Summer contained in this Agreement that is not qualified as to materiality shall have been true and correct (iii) as of the date of this Agreement and (iv) in all material respects on and as of the Closing Date with the same force and effect as if made on the Closing Date. Parent shall have received a certificate with respect to the foregoing signed on behalf of Summer by an authorized officer of Parent (“ Company Closing Certificate ”).

(b) Agreements and Covenants . Summer and the Stockholders shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them at or prior to the Closing Date except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of Summer) does not, or will not, constitute a Material Adverse Effect on Summer, and Summer Closing Certificate shall include a provision to such effect.

(c) No Litigation . No action, suit or proceeding shall be pending or threatened before any Governmental Entity which is reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect materially and adversely the right of Parent to own, operate or control any of the assets and operations of the Surviving Corporation following the Transactions and no order, judgment, decree, stipulation or injunction to any such effect shall be in effect.

(d) Consents . Summer shall have obtained all consents, waivers, permits and approvals required to be obtained by Summer in connection with the consummation of the transactions contemplated hereby, including all Company Contract Consents, but excluding those consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Summary and the Company Closing Certificate shall include a provision to such effect.

(e) Material Adverse Effect . No Material Adverse Effect with respect to Summer shall have occurred since the date of this Agreement.

(f) [Reserved]

(g) Opinion of Counsel . Parent shall have received from Greenberg Traurig, counsel to Summer, an opinion of counsel in substantially the form of Exhibit J annexed hereto.

(h) Financials .

(i) Parent shall have received the Audited Financials and Reviewed Stub Financials of Summer, and the PCOAB-firm Audited 2004 and 2003 Financials as and if required by the applicable proxy rules in accordance with Section 5.1 above.

(ii) The Audited Financials shall not materially differ from the Consolidated 2005 Financials, shall not contain any qualifications not contained in the Consolidated 2005 Financials, shall not omit any qualifications contained in the Consolidated 2005 Financials, and shall not utilize any accounting procedure that is materially different from that used in connection with the Consolidated 2005 Financials. The Reviewed Stub Financials shall not materially differ from the Stub Financial Statements, shall not contain any qualifications not contained in the Stub Financial Statements, shall not omit any qualifications contained in the Stub Financial Statements, and shall not utilize any accounting procedure that is materially different from that used in connection with the Stub Financial Statements. Neither the Audited Financials or Reviewed Stub Financials, individually or taken as a whole, shall differ from the Consolidated 2005 Financials or Stub Financial Statements in a manner that causes Capitalink, LC (“ Capitalink ”) to withdraw the fairness opinion, dated August 24, 2006, delivered to Parent’s Board of Directors with respect to Capitalink’s opinion that as of the date of that letter, (i) the Transaction Consideration is fair, from a financial point of view, to Parent’s stockholders, and (ii) the fair market value of Summer is at least equal to 80% of the net assets of Parent.

(i) Faith Realty Contribution . The Faith Realty Contribution shall be effective as of the Closing and Summer shall have given no consideration therefor, except its assumption of mortgage or construction indebtedness related to such property.

(j) Comfort Letters . Parent shall have received “ comfort ” letters in the customary form from Goldstein, Golub & Kessler, dated the date of the Proxy Statement and the Closing Date (or such other date or dates reasonably acceptable to Parent) with respect to certain financial statements and other financial information included in the Proxy Statement.

(k) Other Deliveries . At or prior to Closing, Summer shall have delivered to Parent: (i) copies of resolutions and actions taken by each of the Companies’ board of directors and stockholders in connection with the approval of this Agreement and the transactions contemplated hereunder, and (ii) such other documents or certificates as shall reasonably be required by Parent and its counsel in order to consummate the transactions contemplated hereunder.

(l) Resignations . The persons listed in Schedule 6.3(l) shall have resigned from their positions and offices with Summer.

(m) Company Contract Consents . All of the Company Contract Consents shall have been obtained as contemplated by Section 5.17.

(n) Stockholder Obligations . The Stockholders shall have repaid to the Company, on or before the Closing, all direct and indirect indebtedness and obligations owed by them to the Company, including the indebtedness and other obligations described in Schedule 2.22 and all other amounts owed by them to the Company.

(o) Derivative Securities . All of the Conversions shall have been completed and there shall be outstanding no options, warrants or other derivative securities entitling the holders thereof to acquire shares of Company Common Stock or other securities of any of the Companies.

(p) Employment Agreements . The Summer Employment Agreements shall have been executed and delivered at Closing by each of Jason Macari, Steven Gibree and Rachelle Harel as applicable.

(q) Voting Agreement . The Voting Agreement shall be in full force and effect, and Dr. Krauss and the other KBL designee shall have been elected to the Parent’s Board of Directors.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification of Parent .

(a) Subject to the terms and conditions of this Article VII (including without limitation the limitations set forth in Section 7.4), Parent, the Merger Subs and their respective representatives, successors and permitted assigns (the “ Parent Indemnitees ”) shall be indemnified, defended and held harmless from and against all Losses asserted against, resulting to, imposed upon, or incurred by any Parent Indemnitee by reason of, arising out of or resulting from:

(i) the inaccuracy or breach of any representation or warranty of Summer contained in or made pursuant to this Agreement, any Schedule or any certificate delivered by Summer to Parent pursuant to this Agreement with respect hereto or thereto in connection with the Closing;

(ii) the non-fulfillment or breach of any covenant or agreement of Summer contained in this Agreement; or

(iii) any of the matters set forth on Schedule 2.10 hereto, other than the matter relating to Springs Global US, Inc. (which shall not be subject to indemnification under this Article VII).

(b) As used in this Article VII, the term “ Losses ” shall include all actual losses, liabilities, damages, judgments, awards, orders, penalties, settlements, costs and expenses (including, without limitation, interest, penalties, court costs and reasonable legal fees and expenses), including those arising from any demands, claims, suits, actions, costs of investigation, notices of violation or noncompliance, causes of action, proceedings and assessments whether or not made by third parties or whether or not ultimately determined to be valid. Solely for the purpose of determining the amount of any Losses (and not for determining

any breach) for which Parent Indemnitee may be entitled to indemnification pursuant to Article VII, any representation or warranty contained in this Agreement that is qualified by a term or terms such as “ material ,” “ materially ,” or “ Material Adverse Effect ” shall be deemed made or given without such qualification and without giving effect to such words. Notwithstanding anything to the contrary contained herein, in no event shall the Parent Indemnities be entitled to recover consequential or punitive damages. Notwithstanding the foregoing, “ Losses ” arising from the matters described in Section 7.1(a)(iii) above shall be limited to the amount of any actual judgment or settlement in excess of reserves provided for in the Financial Statements.

(c) The right to indemnification and payment of Losses shall not apply to any information known to the Parent Indemnities prior to the execution of this Agreement.

7.2 Indemnification of Third Party Claims . The indemnification obligations and liabilities under this Article VII with respect to actions, proceedings, lawsuits, investigations, demands or other claims brought against Parent by a Person other than Summer (a “ Third Party Claim ”) shall be subject to the following terms and conditions:

(a) Notice of Claim . Parent, acting through the Committee, will give the Representative prompt written notice after receiving written notice of any Third Party Claim or discovering the liability, obligation or facts giving rise to such Third Party Claim (a “ Notice of Claim ”) which Notice of Third Party Claim shall set forth (i) a brief description of the nature of the Third Party Claim, (ii) the total amount of the actual out-of-pocket Loss or the anticipated potential Loss (including any costs or expenses which have been or may be reasonably incurred in connection therewith), and (iii) whether such Loss may be covered (in whole or in part) under any insurance and the estimated amount of such Loss which may be covered under such insurance, and the Representative shall be entitled to participate in the defense of Third Party Claim at its expense.

(b) Defense . The Representative shall have the right, at its option (subject to the limitations set forth in subsection 7.2(c) below) and at its own expense, by written notice to Parent, to assume the entire control of, subject to the right of Parent to participate (at its expense and with counsel of its choice) in, the defense, compromise or settlement of the Third Party Claim as to which such Notice of Claim has been given, and shall be entitled to appoint a recognized and reputable counsel reasonably acceptable to Parent to be the lead counsel in connection with such defense. If the Representative is permitted and elects to assume the defense of a Third Party Claim:

(i) the Representative shall diligently and in good faith defend such Third Party Claim and shall keep Parent reasonably informed of the status of such defense; provided, however, that in the case of any settlement providing for remedies other than monetary damages for which indemnification is provided, Parent shall have the right to approve the settlement, which approval shall not be unreasonably withheld or delayed; and

(ii) Parent shall cooperate fully in all respects with the Representative in any such defense, compromise or settlement thereof, including, without limitation, the selection of counsel, and Parent shall make available to the Representative all pertinent information and documents under its control.

(c) Limitations of Right to Assume Defense . The Representative shall not be entitled to assume control of such defense if (i) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation; (ii) the Third Party Claim seeks an injunction or equitable relief against Parent; or (iii) there is a reasonable probability that a Third Party Claim may materially and adversely affect Parent other than as a result of money damages or other money payments.

(d) Other Limitations . Failure to give prompt Notice of Claim or to provide copies of relevant available documents or to furnish relevant available data shall not constitute a defense (in whole or in part) to any Third Party Claim by Parent against the Representative and shall not affect the Representative’s duty or obligations under this Article VII, except to the extent (and only to the extent that) such failure shall have adversely affected the ability of the Representative to defend against or reduce its liability or caused or increased such liability or otherwise caused the damages for which the Representative is obligated to be greater than such damages would have been had Parent given the Representative prompt notice hereunder. So long as the Representative is defending any such action actively and in good faith, Parent shall not settle such action. Parent shall make available to the Representative all relevant records and other relevant materials required by them and in the possession or under the control of Parent, for the use of the Representative and its representatives in defending any such action, and shall in other respects give reasonable cooperation in such defense.

(e) Failure to Defend . If the Representative, promptly after receiving a Notice of Claim, fails to defend such Third Party Claim actively and in good faith, Parent will (upon further written notice) have the right to undertake the defense, compromise or settlement of such Third Party Claim as it may determine in its reasonable discretion, provided that the Representative shall have the right to approve any settlement, which approval will not be unreasonably withheld or delayed.

(f) Parent’s Rights . Anything in this Section 7.3 to the contrary notwithstanding, the Representative shall not, without the written consent of Parent, settle or compromise any action or consent to the entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to Parent of a full and unconditional release from all liability and obligation in respect of such action without any payment by Parent.

(g) Representative Consent . Unless the Representative has consented to a settlement of a Third Party Claim, the amount of the settlement shall not be a binding determination of the amount of the Loss and such amount shall be determined in accordance with the provisions of the Escrow Agreement

7.3 Insurance and Tax Effect .

(a) To the extent that any Losses that are subject to indemnification pursuant to this Article VII are covered by insurance, Parent shall use commercially reasonable efforts to obtain the maximum recovery under such insurance; provided that Parent shall nevertheless be entitled to bring a claim for indemnification under this Article VII in respect of such Losses and the time limitations set forth in Section 7.4 hereof for bringing a claim of indemnification under this Agreement shall be tolled during the pendency of such insurance claim. The existence of a claim by Parent for monies from an insurer or against a third party in respect of any Loss shall not, however, delay any payment pursuant to the indemnification provisions contained herein and otherwise determined to be due and owing by the Representative. If Parent has received the payment required by this Agreement from the Representative in respect of any Loss and later receives proceeds from insurance or other amounts in respect of such Loss, then it shall hold such proceeds or other amounts in trust for the benefit of the Representative and shall pay to the Representative, as promptly as practicable after receipt, a sum equal to the amount of such proceeds or other amount received, up to the aggregate amount of any payments received from the Representative pursuant to this Agreement in respect of such Loss. Notwithstanding any other provisions of this Agreement, it is the intention of the parties that no insurer or any other third party shall be (i) entitled to a benefit it would not be entitled to receive in the absence of the foregoing indemnification provisions, or (ii) relieved of the responsibility to pay any claims for which it is obligated.

(b) To the extent that any Losses that are subject to indemnification pursuant to this Article VII are deductible for income tax purposes by the Companies, Parent or SII Merger Sub, as the case may be, the amount of any Loss shall be reduced by the income tax savings to such party as a result of the payment of such Loss.

7.4 Limitations on Indemnification .

(a) Survival; Time Limitation . The representations, warranties, covenants and agreements in this Agreement or in any writing delivered by Summer to Parent in connection with this Agreement (including the certificate required to be delivered by Summer pursuant to Section 6.3(a)) shall survive the Closing until the end of the Escrow Period. A ny claim set forth in a Notice of Claim sent prior to the expiration of the Escrow Period shall survive until final resolution thereof. Except as set forth in the immediately preceding sentence, no claim for indemnification under this Article VII shall be brought after the end of the end of the Escrow Period.

(b) Deductible . No amount shall be payable under Article VII unless and until the aggregate amount of all indemnifiable Losses otherwise payable exceeds $500,000 (the “Deductible”), in which event the amount payable shall only be the amount in excess of the amount of the Deductible.

(c) Aggregate Amount Limitation . Notwithstanding anything to the contrary contained herein, the aggregate liability for Losses pursuant to Section 7.1 shall not in any event exceed the value of the Indemnity Shares and Parent shall have no claim against Summer’s stockholders other than for the Indemnity Shares (and any proceeds of the shares or distributions with respect to the Indemnity Shares).

7.5 Exclusive Remedy . Parent hereby acknowledges and agrees that, from and after the Closing, its sole remedy with respect to any and all claims for money damages arising out of or relating to this Agreement shall be pursuant and subject to the requirements of the indemnification provisions set forth in this Article VII. Notwithstanding any of the foregoing, nothing contained in this Article VII shall in any way impair, modify or otherwise limit Parent’s or Summer’s right to bring any claim, demand or suit against the other party based upon such other party’s actual fraud or intentional or willful misrepresentation or omission, it being understood that a mere breach of a representation and warranty, without intentional or willful misrepresentation or omission, does not constitute fraud.

7.6 Adjustment to Transaction Consideration . Amounts paid for indemnification under Article VII shall be deemed to be an adjustment to the value of the shares of Parent Common Stock issued by Parent as a result of the Transactions, except as otherwise required by Law.

7.7 Representative Capacities; Application of Indemnity Shares . The parties acknowledge that the Representative’s obligations under this Article VII are solely as a representative of Stockholders in the manner set forth in the Escrow Agreement with respect to the obligations to indemnify Parent under this Article VII and that the Representative shall have no personal responsibility for any expenses incurred by him in such capacity and that all payments to Parent as a result of such indemnification obligations shall be made solely from, and to the extent of, the Indemnity Shares. Out-of-pocket expenses of the Representative for attorneys’ fees and other costs shall be borne in the first instance by Parent, which may make a claim for reimbursement thereof against the Indemnity Shares upon the claim with respect to which such expenses are incurred becoming an Established Claim (as defined in the Escrow Agreement). The parties further acknowledge that all actions to be taken by Parent pursuant to this Article VII shall be taken on its behalf by the Committee in accordance with the provisions of the Escrow Agreement. The Escrow Agent, pursuant to the Escrow Agreement after the Closing, may apply all or a portion of the Indemnity Shares to satisfy any claim for indemnification pursuant to this Article VII. The Escrow Agent will hold the remaining portion of the Indemnity Shares until final resolution of all claims for indemnification or disputes relating thereto. Notwithstanding anything to the contrary contained herein, all Indemnity Shares remaining in escrow at the end of the Escrow Period in excess of the Indemnity Shares necessary to satisfy any timely filed claim for indemnification shall be released and delivered to the Persons entitled to them on such date.

ARTICLE VIII

TERMINATION

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

(a) by mutual written agreement of Parent and Summer at any time;

(b) by either Parent or Summer if the Transactions shall not have been consummated by April 21, 2007 for any reason; provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

(c) by either Parent or Summer if a Governmental Entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, ruling or other action is final and nonappealable;

(d) by Summer, upon a material breach of any representation, warranty, covenant or agreement on the part of Parent set forth in this Agreement, or if any representation or warranty of Parent shall have become untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach by Parent is curable by Parent prior to the Closing Date, then Summer may not terminate this Agreement under this Section 8.1(d) for thirty (30) days after delivery of written notice from Summer to Parent of such breach, provided Parent continues to exercise commercially reasonable efforts to cure such breach (it being understood that Summer may not terminate this Agreement pursuant to this Section 8.1(d) if it shall have materially breached this Agreement or if such breach by Parent is cured during such thirty (30)-day period);

(e) by Parent, upon a material breach of any representation, warranty, covenant or agreement on the part of Summer set forth in this Agreement, or if any representation or warranty of Summer shall have become untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach is curable by Summer prior to the Closing Date, then Parent may not terminate this Agreement under this Section 8.1(e) for thirty (30) days after delivery of written notice from Parent to Summer of such breach, provided Summer continues to exercise commercially reasonable efforts to cure such breach (it being understood that Parent may not terminate this Agreement pursuant to this Section 8.1(e) if it shall have materially breached this Agreement or if such breach by Summer is cured during such thirty (30)-day period); or

(f) by either Parent or Summer, if, at the Special Meeting (including any adjournments thereof), (i) (a) this Agreement and the transactions contemplated hereby or (b) the Name Change Amendment or the Capitalization Amendment shall fail to be approved and adopted by the affirmative vote of the holders of Parent Common Stock required under Parent’s certificate of incorporation, or (ii) the holders of 20% or more of the number of shares of Parent Common Stock issued in Parent’s initial public offering and outstanding as of the date of the record date of the Special Meeting exercise their rights to convert the shares of Parent Common Stock held by them into cash in accordance with Parent’s certificate of incorporation.

8.2 Notice of Termination; Effect of Termination . Any termination of this Agreement under Section 8.1 above will be effective immediately upon (or, if the termination is pursuant to

Section 8.1(d) or Section 8.1(e) and the proviso therein is applicable, thirty (30) days after) the delivery of written notice of the terminating party to the other parties hereto. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect and the Transactions shall be abandoned, except for and subject to the following: (i) Sections 5.5, 5.6, 5.12, 8.2 and 8.3 and Article X (General Provisions) shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any breach of this Agreement, including a breach by a party electing to terminate this Agreement pursuant to Section 8.1(b) caused by the action or failure to act of such party constituting a principal cause of or resulting in the failure of the Transactions to occur on or before the date stated therein.

8.3 Fees and Expenses . All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Transactions are consummated, except as contemplated by Section 5.12.

ARTICLE IX

DEFINED TERMS

Terms defined in this Agreement are organized alphabetically as follows, together with the Section and, where applicable, paragraph, number in which definition of each such term is located:


“2006 EBITDA”		Section 1.12(b)(i)
“2006 EBITDA Payment”		Section 1.12(b)(i)
“2007 EBITDA”		Section 1.12(c)(i)
“2007 EBITDA Payment”		Section 1.12(c)(i)
“2008 EBITDA”		Section 1.12(d)(i)
“2008 EBITDA Payment”		Section 1.12(d)(i)
“AAA”		Section 10.12
“Affiliate”		Section 10.2(f)
“Agreement”		Section 1.2
“Annual Financial Statements”		Section 2.7(a)
“Applicable Corporate Laws”		Recital A
“Approvals”		Section 2.1(a)
“Audited Financials”		Section 5.1(a)
“Auditor’s Net Worth Difference Calculation”		Section 1.5(b)(vi)
“Blue Sky Laws”		Section 1.13(c)
“Capitalization Amendment”		Section 5.1(a)
“Charter Documents”		Section 2.1(a)
“Closing”		Section 1.2
“Closing Cash Payment”		Section 1.5(a)
“Closing Date”		Section 1.2
“Closing Date Net Worth		Section 1.5(b)(ii)
“Closing Date Net Worth Statement”		Section 1.5(b)(vi)


“Closing Shares”		Section 1.5(c)
“Code”		Recital C
“Committee”		Section 1.14(a)
“Companies”		Preamble
“Company Certificates”		Section 1.5(c)
“Company Closing Certificate”		Section 6.3(a)
“Company Common Stock”		Section 2.3(a)(iii)
“Company Contract Consents”		Section 5.17
“Company Contracts”		Section 2.19(a)
“Company Convertible Securities”		Section 2.3(b)
“Company Intellectual Property”		Section 2.18
“Company Products”		Section 2.18
“Company Registered Intellectual Property”		Section 2.18
“Company Stock Options”		Section 2.3(b)
“Company Warrants”		Section 2.3(b)
“Consolidated 2005 Financials”		Section 2.7(a)
“Continental”		Section 1.10(a)
“Contingent Shares”		Section 1.12(a)(i)
“Control”		Section 10.2(f)
“Conversions”		Section 1.15
“Corporate Records”		Section 2.1(c)
“Deductible”		Section 7.4(b)
“DGCL”		Section 5.1((b)
“Disclosure Schedules”		Section 5.13
“EBITDA”		Section 1.12(e)
“EBITDA Payments”		Section 1.12(d)(i)
“Effective Time”		Section 1.2
“Environmental Law”		Section 2.16(b)
“Escrow Agreement”		Section 1.10(a)
“Escrow Period”		Section 1.10(a)
“Escrow Shares”		Section 1.5(c)
“Exchange Act”		Section 1.13(c)
“Faith Realty Contribution”		Section 1.4(b)(vi)
“GGK”		Section 1.4(b)(vi)
“Governmental Action/Filing”		Section 2.21
“Governmental Entity”		Section 1.13(c)
“Hazardous Substance”		Section 2.16(c)
“Indemnity Shares”		Section 1.5(c)
“Insider”		Section 2.19(a)(i)
“Insurance Policies”		Section 2.20
“Intellectual Property”		Section 2.18
“June 30 Net Worth”		Section 1.5(b)(ii)
“June 30 Net Worth Statement”		Section 1.5(b)(vi)
“KBL Employment Agreements”		Section 6.3(p)
“Knowledge”		Section 10.2(d)
“Last Reported Sales Price”		Section 1.12(a)(ii)


“Legal Requirements”		Section 10.2(b)
“Lien”		Section 10.2(e)
“Losses”		Section 7.1(b)
“Material Adverse Effect”		Section 7.1(b)
“Material Company Contracts”		Section 2.19(a)
“Name Change Amendment”		Section 5.1(a)
“NASD”		Section 3.23
“Net Worth”		Section (b)(v)
“Net Worth Shares”		Section 1.5(b)(i)
“Notice of Claim”		Section 7.2(a)
“OTC BB”		Section 3.23
“Parent”		Preamble
“Parent Closing Certificate”		Section 6.2(a)
“Parent Common Stock”		Section 1.5(a)
“Parent Contracts”		Section 3.19(a)
“Parent Convertible Securities”		Section 3.3(b)
“Parent Effective Time Liabilities”		Section 5.22
“Parent Indemnitees”		Section 7.1(a)
“Parent Plan”		Section 5.1(a)
“Parent Preferred Stock”		Section 3.3(a)
“Patents”		Section 2.18
“Parent Schedule”		Article III Preamble
“Parent SEC Reports”		Section 3.7(a)
“Parent Stockholder Approval”		Section 5.1(a)
“Parent Stock Options”		Section 3.3(b)
“Parent Warrants”		Section 3.3(b)
“PCOAB-firm Audited 2004 and 2003 Financials”		Section 5.1(a)
“Person”		Section 10.2(c)
“Personal Property”		Section 2.14(b)
“Plans”		Section 2.11(a)
“Press Release”		Section 5.3(a)
“Proxy Statement”		Section 5.1(a)
“Registered Intellectual Property”		Section 2.18
“Registration Rights Agreement”		Section 1.11
“Representative”		Section 1.10(a)
“Returns”		Section 2.15(b)(i)
“Reviewed Stub Financials”		Section 5.1(a)
“Securities Act”		Section 1.13(c)
“Share Price Measurement Period”		Section 1.12(a)(i)
“Share Price Trigger”		Section 1.12(a)(i)
“Share Price Trigger Period”		Section 1.12(a)(i)
“Shortfall”		Section 1.5(b)(iv)
“SIA”		Preamble
“SIA Ordinary Shares”		Section 2.3(a)(iii)
“SIA Stockholders”		Preamble
“SIA Transaction”		Section 1.1(c)


“SIE”		Preamble
“SIE Ordinary Shares”		Section 2.3(a)(ii)
“SIE Stockholders”		Preamble
“SIE Transaction”		Section 1.1(b)
“SII”		Preamble
“SII Common Stock”		Section 2.3(a)(i)
“SII Merger”		Section 1.1(a)
“SII Merger Sub”		Preamble
“SII Merger Surviving Corporation”		Section 1.1(a)
“SII Reviewed 2004 Financials”		Section 2.7(a)
“SII Stockholders”		Preamble
“Special Meeting”		Section 5.1(a)
“Springs”		Section 1.5(b)(v)
“Stockholder Guarantee Terminations”		Section 5.16
“Stockholder/Stockholders”		Preamble
“Stub Financial Statements”		Section 2.7(b)
“Stub Period Tax Distribution”		Section 1.12(h)
“Summer”		Preamble
“Summer Employment Agreements”		Section 6.2(j)
“Summer Schedule”		Article II Preamble
“Tax/Taxes”		Section 2.15(a)
“Third Party Claim”		Section 7.2
“Trademarks”		Section 2.18
“Trading Day”		Section 1.12(a)(iii)
“Transaction Certificates”		Section 1.2
“Transaction Consideration”		Section 1.5(a)
“Transaction Form 8-K”		Section 5.3(a)
“Transactions”		Section 1.1(c)
“Transaction Share Reduction Number”		Section 1.5(b)(iii)
“Transaction Shares”		Section 1.5(a)
“Trust Fund”		Section 3.25
“Unaudited Financial Statements”		Section 2.7(b)
“U.S. GAAP”		Section 2.7(a)

ARTICLE X

GENERAL PROVISIONS

10.1 Notices . All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice):

if to Parent, to:

KBL Healthcare Acquisition Corp. II

757 Third Avenue, 21st Floor

New York, New York 10017

Attention: Marlene Krauss, M.D.

Telephone: 212-319-5555

Facsimile: 212-319-5591

with a copy to:

David Alan Miller, Esq.

Graubard Miller

405 Lexington Avenue

New York, New York 10174-1901

Telephone: 212-818-8661

Facsimile: 212-818-8881

if to Summer or Stockholders, to:

Summer Infant, Inc.

582 Great Road

North Smithfield, Rhode Island 02896

Attention: Jason Macari

Telephone:

Facsimile:

with a copy to:

Steven Rosenbaum, Esq.

Poore & Rosenbaum LLP

The Commerce Center

30 Exchange Terrace

Providence, Rhode Island 02901-1117

Telephone: 401-831-2600

Facsimile: 401-831-2220

and

James Redding, Esq.

Greenberg Traurig

One International Place

Boston, MA 02110

Telephone: 617-310-6000

Facsimile: 617-310-6001

if to Representative:

Jason Macari

10 Hannah Drive

Cumberland, RI 02864

Telephone:

Facsimile:

with a copy to:

Steven Rosenbaum, Esq.

Poore & Rosenbaum LLP

The Commerce Center

30 Exchange Terrace

Providence, Rhode Island 02901-1117

Telephone: 401-831-2600

Facsimile: 401-831-2220

and

James Redding, Esq.

Greenberg Traurig

One International Place

Boston, MA 02110

Telephone: 617-310-6000

Facsimile: 617-310-6001

10.2 Interpretation . When a reference is made in this Agreement to an Exhibit or Schedule, such reference shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated. When a reference is made in this Agreement to Sections or subsections, such reference shall be to a Section or subsection of this Agreement. Unless otherwise indicated the words “ include ,” “ includes ” and “ including ” when used herein shall be deemed in each case to be followed by the words “ without limitation .” The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made herein to “ the business of ” an entity, such reference shall be deemed to include the business of all direct and indirect Subsidiaries of such entity. Reference to the Subsidiaries of an entity shall be deemed to include all direct and indirect Subsidiaries of such entity. For purposes of this Agreement:

(a) the term “ Material Adverse Effect ” when used in connection with an entity means any change, event, violation, inaccuracy, circumstance or effect, individually or when aggregated with other changes, events, violations, inaccuracies, circumstances or effects, that is materially adverse to the business, assets (including intangible assets), revenues, financial condition or results of operations of such entity, it being understood that none of the following alone or in combination shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) changes attributable to the public announcement or pendency of the transactions contemplated hereby, (ii) changes in general national or regional economic conditions, or (iii) any SEC rulemaking requiring enhanced disclosure of reverse merger transactions with a public shell;

(b) the term “ Legal Requirements ” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity and all requirements set forth in applicable Company Contracts or Parent Contracts;

(c) the term “ Person ” shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity;

(d) the term “ knowledge ” means actual knowledge or awareness as to a specified fact or event of a Person that is an individual or of an executive officer or director of a Person that is a corporation or of a Person in a similar capacity of an entity other than a corporation; provided, however, that for the purposes of this Section 2, the term “Summer’s knowledge” or “known to Summer” or words of similar import shall mean the actual knowledge of (i) Mr. Jason Macari, (ii) Mr. Steve Gibree, (iii) Mr. Mark Gorton, (iv) Rachelle Harrel and (v) Robert Weaver, Jr., after due inquiry. Notwithstanding anything to the contrary set forth herein, such persons are named and/or identified solely for purposes of defining the “knowledge” of Seller, and none of such persons shall have any liability on an individual basis with respect to the purchase and sale contemplated hereby, or in connection with this Agreement.

(e) the term “ Lien ” means any mortgage, pledge, security interest, encumbrance, lien, restriction or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof, any sale with recourse against the seller or any Affiliate of the seller, or any agreement to give any security interest);

(f) the term “ Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with, such Person. For purposes of this definition, “ control ” (including with correlative meanings, the terms “ controlling ,” “ controlled by ” and “ under common control with ”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and

(g) all monetary amounts set forth herein are referenced in United States dollars, unless otherwise noted.

10.3 Counterparts; Facsimile Signatures . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Delivery by facsimile to counsel for the other party of a counterpart executed by a party shall be deemed to meet the requirements of the previous sentence.

10.4 Entire Agreement; Third Party Beneficiaries . This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Schedules hereto (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood that the letter of intent between Parent and Summer dated April 27, 2006 is hereby terminated in its entirety and shall be of no further force and effect; and (b) are not intended to confer upon any other person any rights or remedies hereunder (except as specifically provided in this Agreement).

10.5 Severability . In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

10.6 Other Remedies; Injunctive Relief . Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions thereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

10.7 Governing Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the law that might otherwise govern under applicable principles of conflicts of law thereof.

10.8 Rules of Construction . The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

10.9 Assignment . No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the first sentence of this Section 10.9, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

10.10 Amendment . This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties.

10.11 Extension; Waiver . At any time prior to the Closing, any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.

10.12 Arbitration . Any disputes or claims arising under or in connection with this Agreement or the transactions contemplated hereunder shall be resolved by binding arbitration. Notice of a demand to arbitrate a dispute by either party shall be given in writing to the other at their last known address. Arbitration shall be commenced by the filing by a party of an arbitration demand with the American Arbitration Association (“ AAA ”) in its office in the state of residence of the non-moving party. The arbitration and resolution of the dispute shall be resolved by a single arbitrator appointed by the AAA pursuant to AAA rules. The arbitration shall in all respects be governed and conducted by applicable AAA rules, and any award and/or decision shall be conclusive and binding on the parties. The arbitration shall be conducted in the state of the non-moving party. The arbitrator shall supply a written opinion supporting any award, and judgment may be entered on the award in any court of competent jurisdiction. Each party shall pay its own fees and expenses for the arbitration, except that any costs and charges imposed by the AAA and any fees of the arbitrator for his services shall be assessed against the losing party by the arbitrator. In the event that preliminary or permanent injunctive relief is necessary or desirable in order to prevent a party from acting contrary to this Agreement or to prevent irreparable harm prior to a confirmation of an arbitration award, then either party is authorized and entitled to commence a lawsuit solely to obtain equitable relief against the other pending the completion of the arbitration in a court having jurisdiction over the parties. Each party hereby consents to the exclusive jurisdiction of the federal and state courts located in either the State of New York, New York County or the State of Rhode Island, County of Providence, for such purpose. All rights and remedies of the parties shall be cumulative and in addition to any other rights and remedies obtainable from arbitration.

[The remainder of this page has been intentionally left blank.]

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


KBL HEALTHCARE ACQUISITION CORP. II

By:		/s/ Dr. Marlene Krauss
Name:		Dr. Marlene Krauss
Title:		Chief Executive Officer

SII ACQUISITION, INC.

By:		/s/ Dr. Marlene Krauss
Name:		Dr. Marlene Krauss
Title:		Chief Executive Officer

SUMMER INFANT, INC.

By:		/s/ Jason Macari
Name:		Jason Macari
Title:		Chief Executive Officer

SUMMER INFANT EUROPE, LIMITED

By:		/s/ Jason Macari
Name:		Jason Macari
Title:		Director

SUMMER INFANT ASIA, LTD.

By:		/s/ Jason Macari
Name:		Jason Macari
Title:		President

STOCKHOLDERS:

[See separate signature pages.]

STOCKHOLDER SIGNATURE PAGE TO AGREEMENT

/s/ JASON MACARI

JASON MACARI

/s/ STEVEN GIBREE

STEVEN GIBREE

/s/ RACHELLE HAREL

RACHELLE HAREL

By signing below, each of

the Stockholders of SII hereby

affirms and makes the representations

set forth in Section 2.1(e)

/s/ Jason Macari

Jason Macari

/s/ Steven Gibree

Steven Gibree

/s/ Rachelle Harel

Rachelle Harel

By signing below, each of

the Stockholders of SIE hereby

affirms and makes the representations

set forth in Section 2.3(a)(ii)

/s/ JASON MACARI

JASON MACARI

/s/ STEVEN GIBREE

STEVEN GIBREE

/s/ RACHELLE HAREL

RACHELLE HAREL

By signing below, each of

the Stockholders of SIA hereby

affirms and makes the representations

set forth in Section 2.3(a)(iii)

/s/ JASON MACARI

JASON MACARI

/s/ STEVEN GIBREE

STEVEN GIBREE

/s/ RACHELLE HAREL

RACHELLE HAREL

By signing below, Jason Macari and Steven Gibree,

as owners of Faith Realty LLC, hereby agree

to the covenants contained in Section 5.20 hereof.

/s/ JASON MACARI

JASON MACARI

/s/ STEVEN GIBREE

STEVEN GIBREE

INDEX OF EXHIBITS AND SCHEDULES


Exhibits

Exhibit A	-	Articles of Incorporation of SII Merger Sub
Exhibit B	-	By-laws of Merger Sub
Exhibit C	-	Form of Escrow Agreement
Exhibit D	-	Registration Rights Agreement
Exhibit E	-	Performance Equity Plan
Exhibit F	-	Voting Agreement
Exhibit G	-	Form of Lock-Up Agreement
Exhibit H	-	Form of Opinion of Graubard Miller
Exhibit I	-	Form of Employment Agreement for Dr. Marlene Krauss
Exhibit J	-	Form of Opinion of Greenberg Traurig
Exhibit K	-	Form of Employment Agreement for Jason Macari
Exhibit L	-	Form of Employment Agreement for Steve Gibree
Exhibit M	-	Form of Employment Agreement for Rachelle Harel


Schedules

Schedule 1.2	-	Applicable Jurisdictions and Filings
Schedule 1.5(a)	-	Individual Allocations of Transaction Consideration
Schedule 2	-	Summer Schedule
Schedule 3	-	Parent Schedule
Schedule 5.2	-	Directors and Officers of Parent and Summer
Schedule 6.2(i)	-	Parent Resignations
Schedule 6.3(k)	-	Summer Resignations

EXHIBIT 10.2

VOTING AGREEMENT

VOTING AGREEMENT, dated as of this 1 ^st day of September, 2006 (“Agreement”), among each of the persons listed under the caption “Summer Group” on Exhibit A attached hereto (the “Summer Group”), each of the persons listed under the caption “Founders Group” on Exhibit A attached hereto (the “Founders Group”), and KBL Healthcare Acquisition Corp. II, a Delaware corporation (“KBL”). Each of the Summer Group and the Founders Group is sometimes referred to herein as a “Group”. For purposes of this Agreement, each person who is a member of either the Summer Group or the Founders Group is referred to herein individually as a “Stockholder” and collectively as the “Stockholders.”

WHEREAS, as of September 1, 2006, each of KBL, KBL’s wholly owned subsidiary (the “Merger Sub”), Summer Infant, Inc., a Rhode Island corporation (“SII”), Summer Infant Europe, Ltd., a United Kingdom limited company (“SIE”), Summer Infant Asia, Ltd., a Hong Kong limited company (“SIA” and collectively, with SII and SIE, the “Targets”), and the Stockholders who are members of the Summer Group entered into an Agreement and Plans of Reorganization (the “Reorganization Agreement”) that provides, inter alia , upon the terms and subject to the conditions thereof, for the merger of SII with the Merger Sub and the exchange or purchase of all of the outstanding capital stock of each of the Targets for KBL Common Stock and/or cash (as defined) (collectively, the “Transactions”).

WHEREAS, as of the date hereof, each Stockholder who is a member of the Founders Group owns beneficially and of record shares of common stock of KBL, par value $0.0001 per share (“KBL Common Stock”), as set forth opposite such stockholder’s name on Exhibit A hereto (all such shares and any shares of which ownership of record or the power to vote is hereafter acquired by any of the Stockholders, whether by purchase, conversion or exercise, prior to the termination of this Agreement being referred to herein as the “Shares”);

WHEREAS, at the Effective Time, all common shares of each of the Targets (“Company Common Stock”) beneficially owned by each Stockholder who is a member of the Summer Group shall be converted into the right to receive and shall be exchanged for his, her or its pro rata portion of the cash and shares of KBL Common Stock to be issued to the Company’s security holders as consideration in the Transactions;

WHEREAS, as a condition to the consummation of the Reorganization Agreement, the Stockholders have agreed, severally, to enter into this Agreement; and

WHEREAS, capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Reorganization Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and in the Reorganization Agreement, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

VOTING OF SHARES FOR DIRECTORS

SECTION 1.01 Vote in Favor of the Directors . During the term of this Agreement, each Stockholder agrees to vote the shares of KBL Common Stock he, she or it now owns, or will hereafter acquire prior to the termination of this Agreement, for the election and re-election of the following persons as directors of KBL:

(a) Two (2) persons, each of whom shall be designees of the Summer Group; with one (1) of such designees to stand for election in 2009 (“Class C Director”), who shall initially be Jason Macari; and one (1) of such designees to stand for election in 2008 (“Class B Director”), who shall initially be Steven Gibree (together, the “Summer Directors”);

(b) Two (2) persons, each of whom shall be the designee of the Founders Group; with one (1) of such designees being a Class C Director, who shall initially be Dr. Marlene Krauss; and one (1) of such designees being as Class B Director, who shall be an “independent” director within the meaning of the Nasdaq rules (together, the “Founders Directors”); and

(c) Three (3) persons, each of whom shall be mutually designated by the Summer Group and Founders Group, each of whom shall, at all times, be an “independent director” within the meaning of the Nasdaq rules, with two such designees being a Class A Director and one such designee being a Class B Director.

In addition to the foregoing, the Founders Group shall have the right but not the obligation to designate two persons as nonvoting observers (“Observers”), entitled to (i) attend each meeting of the Board of Directors, (ii) receive any and all information furnished to members of the Board of Directors and (c) reimbursement of expenses (in the same manner as members of the Board) in connection with the foregoing. The Observers shall initially be Zachary Berk and Michael Kaswan.

Neither the Stockholders, nor any of the officers, directors, stockholders, members, managers, partners, employees or agents of any Stockholder, makes any representation or warranty as to the fitness or competence of any Director Designee to serve on the Board of Directors by virtue of such party’s execution of this Agreement or by the act of such party in designating or voting for such Director Designee pursuant to this Agreement.

Any Director Designee may be removed from the Board of Directors in the manner allowed by law and KBL’s governing documents except that each Stockholder agrees that he, she or it will not, as a stockholder, vote for the removal of any director who is a member of the Group of which such Stockholder is not a member. If a director is removed or resigns from office, the remaining directors of the Group of which the vacating director is a member shall be entitled to appoint the successor. If any Observer resigns from such position, the Founders Group shall have the right to appoint his successor.

SECTION 1.02 Obligations of KBL . KBL shall take all necessary and desirable actions within its control during the term of this Agreement to provide for the KBL Board of Directors to be comprised of seven (7) members and to enable the election to the Board of Directors of the Director Designees.

SECTION 1.03 Term of Agreement . The obligations of the Stockholders pursuant to this Agreement shall terminate immediately following the election or re-election of directors at the annual meeting of KBL that will be held in 2009.

SECTION 1.04 Obligations as Director and/or Officer . Nothing in this Agreement shall be deemed to limit or restrict any director or officer of KBL from acting in his or her capacity as such director or officer or from exercising his or her fiduciary duties and responsibilities, it being agreed and understood that this Agreement shall apply to each Stockholder solely in his or her capacity as a stockholder of KBL and shall not apply to his or her actions, judgments or decisions as a director or officer of KBL if he or she is such a director or officer.

SECTION 1.05 Transfer of Shares . If a member of the Summer Group desires to transfer his, her or its Shares to a permitted transferee pursuant to the Lock-Up Agreement of even date herewith, executed by such member, or if a member of the Founders Group desires to transfer his or its shares to a permitted transferee pursuant to the escrow agreement dated as of April 21, 2005, it shall be a condition to such transfer that the transferee agree to be bound by the provisions of this Agreement. This Agreement shall in no way restrict the transfer on the public market of Shares that are not subject to the Lock-Up Agreement or the Escrow Agreement, and any such transfers on the public market of Shares not subject to the provisions of the Lock-Up Agreement or the Escrow Agreement, as applicable, shall be free and clear of the restrictions in this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE STOCKHOLDERS

Each Stockholder hereby severally represents warrants and covenants as follows:

SECTION 2.01 Authorization . Such Stockholder has full legal capacity and authority to enter into this Agreement and to carry out such Stockholder’s obligations hereunder. This Agreement has been duly executed and delivered by such Stockholder, and (assuming due authorization, execution and delivery by KBL and the other Stockholders) this Agreement constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.

SECTION 2.02 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, (i) conflict with or violate any Legal Requirement applicable to such Stockholder or by which any property or asset of such Stockholder is bound or affected, or (ii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of any encumbrance on any property or asset of such Stockholder, including, without limitation, the Shares, pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation.

(b) The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Exchange Act, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or materially delay the performance by such Stockholder of such Stockholder’s obligations under this Agreement.

SECTION 2.03 Title to Shares . Such Stockholder is the legal and beneficial owner of its Shares, or will be the legal beneficial owner of the Shares that such Stockholder will receive as a result of the Transactions, free and clear of all liens and other encumbrances except certain restrictions upon the transfer of such Shares.

ARTICLE III

GENERAL PROVISIONS

SECTION 3.01 Notices . All notices and other communications given or made pursuant hereto shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by overnight courier service, by telecopy, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 3.01):

(a)

If to KBL:

KBL Healthcare Acquisition Corp. II

757 Third Avenue, 21st Floor

New York, New York 10017

Attention: Marlene Krauss, M.D.

Telephone: 212-319-5555

Facsimile: 212-319-5591

with a mandatory copy to

Graubard Miller

405 Lexington Avenue

New York, NY 10174-1901

Attention: David Alan Miller, Esq.

Telephone No. : 212-818-8800

Facsimile No.: 212-818-8881

(b) If to any Stockholder, to the address set forth opposite his, her or its name on Exhibit A.

SECTION 3.02 Headings . The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

SECTION 3.03 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

SECTION 3.04 Entire Agreement . This Agreement, collectively with the Lock-Up Agreements and the Reorganization Agreement, constitutes the entire agreement of the parties with respect to the subject matter contained herein and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof. This Agreement may not be amended or modified except in an instrument in writing signed by, or on behalf of, the parties hereto.

SECTION 3.05 Specific Performance . The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.

SECTION 3.06 Governing Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware applicable to contracts executed in and to be performed in that State.

SECTION 3.07 Disputes . All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court in Delaware.

SECTION 3.08 No Waiver . No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 3.09 Counterparts . This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

SECTION 3.10 Waiver of Jury Trial . Each of the parties hereto irrevocably and unconditionally waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this Agreement or the Actions of the parties hereto in the negotiation, administration, performance and enforcement thereof.

SECTION 3.11 Reorganization Agreement . All references to the Reorganization Agreement herein shall be to such agreement as may be amended by the parties thereto from time to time.

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

KBL HEALTHCARE ACQUISITION CORP. II


By:		/s/ Dr. Marlene Krauss
Name:		Dr. Marlene Krauss
Title:		Chief Executive Officer

STOCKHOLDERS:

The Founders Group:

/s/ ZACHARY BERK

ZACHARY BERK

/s/ DR. MARLENE KRAUSS

DR. MARLENE KRAUSS

/s/ MICHAEL KASWAN

MICHAEL KASWAN

The Summer Group:

/s/ JASON MACARI

JASON MACARI

/s/ STEVEN GIBREE

STEVEN GIBREE

/s/ RACHELLE HAREL

RACHELLE HAREL

EXHIBIT A

STOCKHOLDERS

The Founders Group:


Name and Address	Number of Shares
Dr. Marlene Krauss	1,927,997	*
52 East 72 ^nd Street
New York, New York 10021

Dr. Zachary Berk	927,997
52 East 72 ^nd Street
New York, New York 10021

Michael Kaswan	400,000
424 West End Avenue
New York, New York

The Summer Group:


Name and Address		Number of Shares**
Jason Macari		3,528,463
10 Hannah Drive
Cumberland, Rhode Island 02864

Steven Gibree		388,204
83 Franklin Road
Foster, Rhode Island 02825

Rachelle Harel		0
10 Kimble Crescent
Bushey, Watford
Hertfordshire WD23 4SR

*	Includes 1,000,000 shares underlying warrants.

**	Gives effect to shares to be issued in the Transaction.

EXHIBIT 10.3

LOCK-UP AGREEMENT

September 1, 2006

KBL Healthcare Acquisition Corp. II

757 Third Avenue, 21st Floor

New York, New York 10017

Attention: Marlene Krauss, M.D.

Re: Securities Issued in Transactions with Summer Infant, Inc. and Companies

Ladies and Gentlemen:

In connection with the Agreement and Plans of Reorganization (“Agreement”), dated September 1, 2006 by and among KBL Healthcare Acquisition Corp. II (“Corporation”), a wholly owned subsidiary of the Corporation , Summer Infant, Inc., a Rhode Island corporation (“SII”), Summer Infant Europe, Ltd., a United Kingdom limited company (“SIE”), Summer Infant Asia, Ltd., a Hong Kong limited company (“SIA” and collectively, with SII and SIE, the “Targets”), and the stockholders (“Stockholders”) of each of the Targets, to induce the Corporation to enter into the Agreement and consummate the Transactions (as defined in the Agreement), the undersigned agrees to, neither directly nor indirectly, during the “Restricted Period” (as hereinafter defined):

(1)

sell or offer or contract to sell or offer, grant any option or warrant for the sale of, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of (all being referred to as a “Transfer”) any legal or beneficial interest in any shares of stock, $.0001 par value, of the Corporation (“Parent Common Stock”) issued to the undersigned in connection with the Transactions (the “Restricted Securities”); or

(2)

enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any of the Restricted Securities, whether such swap transaction is to be settled by delivery of any Restricted Securities or other securities of any person, in cash or otherwise.

As used herein, “Restricted Period” means the period commencing on the Closing Date (as defined in the Agreement) and ending April 21, 2008.

Notwithstanding the foregoing limitations, this Lock-Up Agreement will not prevent any Transfer of any or all of the Restricted Securities, either during the undersigned’s lifetime or on the undersigned’s death, by gift, will or intestate succession, or by judicial decree, to any other Stockholder or the undersigned’s “family members” (as defined below) or to trusts, family limited partnerships and similar entities primarily for the benefit of the undersigned or the undersigned’s “family members”; provided, however, that in each and any such event it shall be

a condition to the Transfer that the transferee execute an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Lock-Up Agreement, and other than to return the Restricted Securities to the former ownership, there shall be no further Transfer of the Restricted Securities except in accordance with this Lock-Up Agreement. For purposes of this sub-paragraph, “family member” shall mean spouse, lineal descendants, stepchildren, father, mother, brother or sister of the transferor or of the transferor’s spouse. Also notwithstanding the foregoing limitations, in the event the undersigned is an entity rather than an individual, this Lock-Up Agreement will not prevent any Transfer of any or all of the Restricted Securities to the shareholders of such entity, if it is a corporation, to the members of such entity, if it is a limited liability company, or to the partners in such entity, if it is a partnership; provided, however, that in each and any such event it shall be a condition to the Transfer that the transferee execute an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Lock-Up Agreement, and other than to return the Restricted Securities to the former ownership, there shall be no further Transfer of the Restricted Securities in accordance with this Lock-Up Agreement.

Any of the Restricted Securities subject to this Lock-Up Agreement may be released in whole or part from the terms hereof only upon the approval of the board of directors of the Corporation (the “Board”) and the Committee referred to in Section 1.14(a) of the Agreement. Notwithstanding the foregoing, all of the Restricted Securities subject to this Lock-Up Agreement shall be released from the terms hereof upon the termination of the Stock Escrow Agreement (including any early termination by resolution of the Board) between Continental Stock Transfer & Trust Co., the Corporation and certain stockholders of the Corporation, dated April 21, 2005.

The undersigned hereby authorizes the Corporation’s transfer agent to apply to any certificates representing Restricted Securities issued to the undersigned the appropriate legend to reflect the existence and general terms of this Lock-up Agreement.

This Lock-up Agreement will be legally binding on the undersigned and on the undersigned’s heirs, successors, executors, administrators, conservators and permitted assigns, and is executed as an instrument governed by the laws of the State of Delaware.

Very truly yours,

(Signature)

Name (Print):

Address:

EXHIBIT 10.4

KBL Healthcare Acquisition Corp. II

757 Third Avenue

21st Floor

New York, NY 10017

, 200

Dr. Marlene Krauss

[address]

Dear Dr. Krauss:

In connection with the merger and related business combination transactions (collectively, the “Acquisition”) prescribed by the Agreement and Plans of Reorganization (“Acquisition Agreement”) entered into as of September 1, 2006, by and among the KBL Healthcare Acquisition Corp. II (“Company”), SII Acquisition, Inc. (the “Merger Sub”), Summer Infant, Inc., Summer Infant Europe Ltd. and Summer Infant Asia, Ltd. (collectively the “Target Companies”), and the stockholders of the Target Companies, we hereby offer you the position of Chairman of the Board of the Company and offer you employment with the Company on the terms set forth herein.

1. The Company hereby appoints you as Chairman of the Board of Directors of the Company and hereby employs you, and you hereby accept such appointment and employment, on the terms set forth herein, effective as of the date (“Effective Date”) of consummation of the Merger contemplated by the Acquisition Agreement.

2. The term of this Agreement shall be for a period of three (3) years commencing on the Effective Date, unless terminated earlier pursuant to Section 8 hereof.

3. You shall serve as Chairman of the Board of the Company with such duties and responsibilities as may from time to time be assigned to Chairman by the Board of Directors of the Company (the “Board”), commensurate with your title and position. You shall report directly to the Board. You shall perform your duties out of offices that you maintain at your expense at a location in the United Stated determined by you. You shall perform such duties and obligations conscientiously and to the best of your ability and experience and in compliance with law. You agree to comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Chairman’s employment. You shall devote that portion of your business time and energies to the business and affairs of the Company as is reasonably necessary to fully and faithfully execute your duties hereunder. You may, however, engage in other commercial, civic and non-for-profit activities, including those for which compensation is paid, so long as such activities do not interfere with the performance of your duties to the Company and otherwise comply with the terms hereof.

4. During the term of this Agreement, you shall be paid an initial salary of $125,000 per annum, payable as earned at Company’s customary payroll periods in accordance with Company’s customary payroll practices.

5. You will receive such benefits and be eligible to participate in such benefit plans as made available to other Members of the Board of the Company, subject to the terms and conditions, including eligibility of such plans.

6. Company will reimburse you for all reasonable and necessary expenses incurred by you in connection with Company’s business, provided that such expenses are deductible to Company, are in accordance with Company’s applicable policy and are properly documented and accounted for in accordance with the requirements of the Internal Revenue Service.

7. You acknowledge that as a result of your employment with the Company, you have and will obtain secret and confidential information concerning the business of the Company, the Target Companies and their subsidiaries and affiliates (all of such entities referred to collectively in this Section, as the “Company”). Other than in the performance of your duties hereunder, you agree not to disclose, either during the Term of your employment with the Company or at any time thereafter, to any person, firm or corporation any confidential information concerning the Company which is not in the public domain including trade secrets, budgets, strategies, operating plans, marketing plans, patents, copyrights, supplier lists, company agreements, employee lists, or the customer lists or similar information of the Company. If you commit a breach, or threaten to commit a breach, of any of the provisions of Section 7, the Company shall have the right and remedy (in addition to all other remedies under law or equity) to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Chairman that the services being rendered hereunder to the Company are of a special, unique and extraordinary character and that any such breach or threatened breach may cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company.

8. This Agreement may be terminated earlier than the then current term as follows:

(a) at any time by mutual agreement of the parties.

(b) automatically on the date on which you die or become permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company based upon a certification of such incapacity by, in the sole discretion of the Company, either your regularly attending physician or a duly licensed physician selected by the Company, rendering you unable to perform substantially all of you duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. You shall be deemed to have “become permanently incapacitated” on the date 30 days after the Company has determined that you are permanently incapacitated and so notifies you.

(c) by the Company “with cause”, effective upon delivery of written notice to you given at any time in the event of any of the following actions by you: (i) conviction of any felony or any other crime involving moral turpitude, (ii) fraud against the Company or any of its subsidiaries or theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries, (iii) willful or reckless breach of your fiduciary duties to the Company or willful misconduct as an employee of the Company that results in material economic detriment to the Company, (iv) neglect or unreasonable refusal to perform the material duties and responsibilities assigned to you by the Board or under this Agreement, or (v) breach by you of any provision of this Agreement; provided, however, that with respect to clauses (iv) and (v) above, in order for you to be terminated “with cause”, the Company must give you written notice thereof and such breach shall note have been cured within thirty (30) days of receipt of such notice.

(d) by the Company if you engage in a Competitive Activity. “Competitive Activity” shall mean (i) owning, managing, operating or controlling, including as an employee, partner, officer, director or equity owner (other than as a nonemployee, nonmanagement stockholder or member or similar equity holder, or manager or owner of an entity that is a stockholder or member or similar equity holder of 10% or less of the equity of the subject entity), any business in the Geographical Areas (as defined) engaged in the design, research, development, marketing, sale or licensing of products that are substantially similar to or competitive with those offered by the Company and/or its subsidiaries, (ii) soliciting the services of any employee of the Company or its subsidiaries on behalf of any other enterprise or (iii) soliciting business from or attempting to sell, license or provide the same or similar products or services as are then provided by the Company and/or its subsidiaries to any existing customer of the Company. “Geographic Area” means all cities, counties and states of the United States, and all other countries in which Company (or any of its subsidiaries) are conducting business at the time.

(e) by the Company “without cause”, effective upon delivery of 45 days’ prior written notice to you given at any time provided that the Company complies with all provisions of this Agreement related to severance, vesting of options and continuation of benefits as set forth herein.

(f) by giving the Company no less than ninety (90) days’ prior written notice of such termination.

Notwithstanding anything to the contrary, termination of your employment with the Company under this Section, shall not, in and of itself, be grounds for termination of your membership on, or your Chairmanship of, the Company’s Board of Directors.

9. Upon termination of your employment, the Company shall pay to you, within ten days after the effective date of such termination, an amount equal to your then Base Salary accrued as of such date plus any unreimbursed expenses then owed by the Company to you, and you shall not be entitled to any other consideration or compensation, except as provided in Section 10 below.

10. Upon termination of your employment by the Company without cause (i.e., for reasons other than those set forth in Section 8(c) or 8(d)), or upon termination of your employment with the Company resulting from either (i) a breach by the Company of any of the payment obligations owed to you as set forth in this Agreement, or (ii) a breach any material non payment provision of this Agreement and under (i) or (ii) above, where the Company fails to cure such breach upon written notice from you of such breach within a reasonable period of time of such notice, not to exceed thirty (30) business days, the Company shall continue to pay your Base Salary in accordance with normal payroll procedures for a period of 12 months from the date of termination.

11. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Rhode Island.

12. All claims for monetary damages between the Company and you with respect to this Agreement shall be resolved by binding arbitration, with all proceedings conducted in Providence, Rhode Island, administered under the rules and regulations of the American Arbitration Association with the Federal Rules of Evidence applicable in all respects thereto. Neither the Company nor you shall be limited to arbitration with respect to claims for equitable relief hereunder. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys’ fees, legal expenses and court costs incurred in litigating, arbitrating or otherwise attempting to enforce this Agreement or resolve such dispute.

13. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein. In construing this Agreement, no party hereto shall have any term or provision construed against such party solely by reason of such party having drafted or written such term or provision.


Very truly yours,

KBL Healthcare Acquisition Corp. II

By:

Accepted and agreed to:

Dr. Marlene Krauss

EXHIBIT 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made between KBL Healthcare Acquisition Corp. II (“KBL”), a Delaware corporation, and SII Acquisition Corp., a wholly owned subsidiary of KBL (“Merger Sub”), and Jason Macari (the “Executive”) and is being entered into concurrently with the closing of the merger and related business combination transactions (collectively, the “Acquisition”) prescribed by the Agreement and Plans of Reorganization (“Reorganization Agreement”) entered into as of September 1, 2006, by and among the Company, Merger Sub, Summer Infant, Inc., Summer Infant Europe Ltd. and Summer Infant Asia, Ltd. (collectively the “Target Companies”), and the stockholders of the Target Companies, which include the Executive. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Reorganization Agreement.

RECITALS

WHEREAS, the Company desires to be assured of the association and services of Executive; and

WHEREAS, Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto agree as follows:

1. Employment . The Company hereby employs Executive, and Executive hereby accepts such employment, effective as of the Effective Date, upon the mutual terms, covenants and conditions set forth herein.

2. Term .

2.1 Initial Term . The initial term of this Agreement shall be for a period of three (3) years commencing on the Effective Date hereof, unless terminated earlier pursuant to Section 8 hereof; provided, however, that Executive’s obligations in Sections 5 and 7 hereof shall, except as otherwise set forth in Section 5.6 hereof, continue in effect after such termination.

2.2 Additional Terms . This Agreement shall be renewed for successive periods of one (1) year unless either party shall give notice of non-renewal, within sixty (60) days of the expiration of the initial three-year term or any such one-year renewal term.

3. Duties . Executive shall serve as Chief Executive Officer of each of KBL and Merger Sub with such duties and responsibilities as may from time to time be assigned to Executive by the Board of Directors of KBL or Merger Sub (in either case, the “Board”), commensurate with Executive’s title and position described in this

sentence. The duties and services to be performed by Executive under this Agreement are collectively referred to herein as the “Services”. Executive shall report directly to the Board. Executive agrees that he shall at all times conscientiously perform all of the duties and obligations assigned to him under the terms of this Agreement to the best of his ability and experience and in compliance with law. Executive shall perform his duties out of the Company’s Rhode Island office (as same may be relocated in the same metropolitan area from time to time) or at such other location as shall be agreed to by the Company and Executive; provided, that, Executive’s duties will include reasonable travel in the United States and abroad, including but not limited to travel to offices of Company and its subsidiaries and affiliates and current and prospective customers as is reasonably necessary and appropriate to the performance of Executive’s duties hereunder. Executive will comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Executive’s employment.

4. Exclusive Service . Executive agrees to use his best efforts to promote the interests of the Company and to devote his full business time and energies to the business and affairs of the Company and the performance of his duties hereunder. Executive may, however, engage in civic and not-for-profit activities for which no compensation (other than reimbursement of his actual expenses incurred in performance of such activities) is paid to him, so long as such activities do not materially interfere with the performance of his duties to the Company or directly conflict with the Company’s business interests.

5. Non-Competition and Other Covenants .

5.1 Non-Competition Agreement . For so long as the Executive is employed by the Company and for twelve (12) months following the termination date of Executive’s employment under this Agreement, Executive will not, directly or indirectly, individually or as an employee, partner, officer, director or shareholder (except to the extent permitted in Section 4 above) or in any other capacity whatsoever of or for any person, firm, partnership, company or corporation other than Company or its subsidiaries:

(a) Own, manage, operate, sell, control or participate in the ownership, management, operation, sales or control of or be connected in any manner, including as an employee, advisor or consultant or similar role, with any business engaged, in the geographical areas referred to in Section 5 below, in the design, research, development, marketing, sale, or licensing of products or services that are substantially similar to or competitive with the business of Company and any of its subsidiaries; or

(b) Recruit, attempt to hire, solicit, or assist others in recruiting or hiring, in or with respect to the geographical areas referred to in Section 5 below, any person who is an employee of Company or any of its subsidiaries or induce or attempt to induce any such employee to terminate his employment with Company or any of its subsidiaries.

5.2 Geographical Areas . The geographical areas in which the restrictions provided for in this Section 5 apply include all cities, counties and states of the United States, and all other countries in which the Company (or any of its subsidiaries

or affiliates) are conducting business at the time in question, whether or not the Company has an actual physical presence in such location. Executive acknowledges that the scope and period of restrictions and the geographical area to which the restrictions imposed in this Section 5 applies are fair and reasonable and are reasonably required for the protection of Company and that this Agreement accurately describes the business to which the restrictions are intended to apply.

5.3 Non-Solicitation of Customers . In addition to, and not in limitation of, the non-competition covenants of Executive set forth above in this Section 5, Executive agrees with Company that, for as long as the Executive is employed by the Company and for twelve (12) months following the termination date of Executive’s employment under this Agreement, Executive will not, either for Executive or for any other person or entity, directly or indirectly (other than for Company and any of its subsidiaries or affiliates), solicit business from, or attempt to sell, license or provide the same or similar products or services as are then provided, by Company or any subsidiary of Company to any customer of Company.

5.4 Non-Solicitation of Executives or Consultants . In addition to, and not in limitation of, the non-competition covenants of Executive set forth above in this Section 5, Executive agrees with Company that, for as long as the Executive is employed by the Company and for twelve (12) months following the termination date of Executive’s employment under this Agreement, Executive will not, either for Executive or for any other person or entity, directly or indirectly, solicit, induce or attempt to induce any employee, consultant or contractor of Company or any affiliate of Company, to terminate his or her employment or his, her or its services with, Company or any subsidiary or affiliate of Company or to take employment with another party.

5.5 Amendment to Retain Enforceability . It is the intent of the parties that the provisions of this Section 5 will be enforced to the fullest extent permissible under applicable law. If any particular provision or portion of this Section is adjudicated to be invalid or unenforceable, this Agreement will be deemed amended to revise that provision or portion to the minimum extent necessary to render it enforceable. Such amendment will apply only with respect to the operation of this paragraph in the particular jurisdiction in which such adjudication was made.

5.6 Breach by the Company . The restrictive covenants contained in this Section shall terminate and have no further force or effect in the event that the Company shall (i) breach any of the payment obligations owed to the Executive as set forth in this Agreement, or (ii) breach any material non payment provision of this Agreement and under (i) or (ii) above fail to cure such breach upon written notice from Executive of such breach within a reasonable period of time of such notice, not to exceed thirty (30) days, or (iii) terminate the Executive’s employment hereunder without cause; provided, however, that in the case of clause (iii), such covenants shall remain in force so long as Executive is being paid by Company under Section 8.2(b).

5.7 Other Provisions . Notwithstanding the foregoing, in the event that Executive voluntarily resigns from the Company or is terminated with “cause”

during the Initial Term, the noncompetition, nonsolicitation of customers and nonsolicitation of executives or consultants provisions shall not expire until four years from the Effective Date. It is further acknowledged and agreed that the provisions of this Section 5 are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement and the Reorganization Agreement and to consummate the Acquisitions and other transactions contemplated by the Reorganization Agreement.

6. Compensation and Benefits .

6.1 Salary . During the term of this Agreement, Company shall pay Executive an initial salary of $275,000 per annum. Executive’s salary shall be payable as earned at Company’s customary payroll periods in accordance with Company’s customary payroll practices. Executive’s salary shall be subject to review and adjustment in accordance with Company’ customary practices concerning salary review for similarly situated employees of Company or its subsidiaries.

6.2 Benefits . Executive will be eligible to participate in Company’s employee benefit plans of general application as they may exist from time to time, including without limitation those plans covering pension and profit sharing, executive bonuses, stock purchases, stock options, and those plans covering life, health, and dental insurance in accordance with the rules established for individual participation in any such plan and applicable law. Executive will receive such other benefits, including vacation, holidays and sick leave, as Company generally provides to its employees holding similar positions as that of Executive. The Company reserves the right to change or otherwise modify, in its sole discretion, the benefits offered herein to conform to the Company’s general policies as may be changed from time to time during the term of this Agreement. All health and dental insurance benefits shall continue at the Company’s expense after termination of the Executive’s employment by the Company “without cause” for a period of one (1) year from such termination, except where comparable health and dental insurance is available from a subsequent employer.

6.3 Additional Benefits . The Company shall pay to, provide or reimburse Executive during the Term hereof for the following: (i) all leasing, maintenance, repair, insurance, fuel costs for one (1) motor vehicle selected by the Executive in his reasonable discretion, such costs not to exceed $1,500 per month in the aggregate and (ii) all premiums for Executive’s existing life insurance policies listed on Schedule 1, attached hereto.

6.4 Cash Bonus . Executive will be eligible to earn a bonus equal to up to one-half of his Salary (“Cash Bonus”) during each year of the Term of this Agreement. One-half of the Cash Bonus shall be based on the Executive’s performance against performance criteria set by based upon factors to be determined, in writing, by the Compensation Committee of the Board. The Compensation Committee will determine the factors for the performance bonus within forty-five (45) days after the Board of Directors approves the budget for that year.

6.5 Expenses . Company will reimburse Executive for all reasonable and necessary expenses incurred by Executive in connection with Company’s business, provided that such expenses are deductible to Company, are in accordance with Company’s applicable policy and are properly documented and accounted for in accordance with the requirements of the Internal Revenue Service.

7. Confidentiality and Proprietary Rights .

7.1 Confidentiality . Executive acknowledges that as a result of his employment with the Company and his prior employment with the Target Companies, Executive has obtained and will obtain secret and confidential information concerning the business of the Company, the Target Companies and their subsidiaries and affiliates (all of such entities referred to collectively in this Section, as the “Company”). Other than in the performance of his duties hereunder, Executive agrees not to disclose, either during the Term of his employment with the Company or at any time thereafter, to any person, firm or corporation any confidential information concerning the Company which is not in the public domain including trade secrets, budgets, strategies, operating plans, marketing plans, patents, copyrights, supplier lists, company agreements, employee lists, or the customer lists or similar information of the Company.

7.2 Proprietary Rights. All records, files, memoranda, reports, price lists, customer lists, drawings, plans, sketches, documents and the like (together with all copies thereof) relating to the business of the Company and/or its subsidiaries, which Executive shall use or prepare or come in contact with in the course of, or as a result of, his employment shall, as between the parties, remain the sole property of the Companies. Upon termination of his employment with the Company, Executive agrees to immediately return all such materials and shall not thereafter cause removal thereof from the premises of the Company. Further, the Executive agrees to disclose and assign to the Company as its exclusive property, all ideas, writings, inventions, discoveries, improvements and technical or business innovations made or conceived by the Executive, whether or not patentable or copyrightable, either solely or jointly with others during the course of his employment with the Company, which are along the lines of the business, work or investigations of the Company or its subsidiaries.

8. Termination .

8.1 Bases for Termination .

(a) Executive’s employment hereunder may be terminated at any time by mutual agreement of the parties.

(b) This Agreement and Executive’s employment with the Company shall automatically terminate on the date on which Executive dies or becomes permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company based upon a certification of such incapacity by, in the sole discretion of the Company, either Executive’s regularly attending physician or a duly licensed physician selected by the

Company, rendering Executive unable to perform substantially all of his duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have “become permanently incapacitated” on the date 30 days after the Company has determined that Executive is permanently incapacitated and so notifies Executive.

(c) Executive’s employment may be terminated by the Company “with cause”, effective upon delivery of written notice to Executive given at any time (without any necessity for prior notice) in the event of any of the following actions by Executive: (i) conviction of any felony or any other crime involving moral turpitude, (ii) fraud against the Company or any of its subsidiaries or theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries, (iii) willful or reckless breach of Executive’s fiduciary duties to the Company or willful misconduct as an employee of the Company that results in material economic detriment to the Company, (iv) neglect or unreasonable refusal to perform the material duties and responsibilities assigned to Executive by the Board or under this Agreement, or (v) breach by Executive of any provision of this Agreement; provided, however, that with respect to clauses (iv) and (v) above, in order for Executive to be terminated “with cause”, the Company must give Executive written notice thereof and such breach shall note have been cured within 30 days of receipt of such notice.

(d) Executive’s employment may be terminated by the Company “without cause”, effective upon delivery of written notice to Executive given at any time (without any necessity for prior notice) provided that the Company complies with all provisions of this Agreement related to severance, vesting of options and continuation of benefits as set forth herein.

(e) Executive may terminate his employment hereunder by giving the Company no less than 30 days prior written notice of such termination.

8.2 Payment Upon Termination .

(a) Upon termination of Executive’s employment pursuant to Section 8.1, the Company shall pay to Executive, within ten days after the effective date of such termination, an amount equal to Executive’s then Base Salary accrued as of such date plus any unreimbursed expenses then owed by the Company to Executive, and Executive shall not be entitled to any other consideration or compensation except as provided in Section 8.2(b) below.

(b) Upon termination of Executive’s employment by the Company without cause, or upon termination of Executive’s employment with the Company resulting from either (i) a breach by the Company of any of the payment obligations owed to the Executive as set forth in this Agreement, or (ii) a breach any material non payment provision of this Agreement and under (i) or (ii) above the Company fails to cure such breach upon written notice from Executive of such breach within a reasonable period of time of such notice, not to exceed fifteen (15) business days), then the Company shall continue to pay Executive’s Base Salary in accordance

with normal payroll procedures for a period of 12 months from the date of termination. After any such termination, the Company shall not be obligated to further compensate Executive nor provide the benefits to Executive described in Article 6 hereof, except as is required by Section 6.2 hereof which shall continue for a period of 12 months from the date of termination or as may be required by law.

(c) Nothing contained in this Section 8.2 shall affect the terms of any employee stock options that may have been issued by the Company to Executive, which in the event of termination of Executive’s employment with the Company shall continue to be governed by their own terms and conditions; provided however that if Executive’s employment is terminated by the Company “without cause”, any and all options granted to Executive shall then immediately vest.

9. Miscellaneous .

9.1 Transfer and Assignment . This Agreement is personal as to Executive and shall not be assigned or transferred by Executive. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.

9.2 Severability . Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.

9.3 Governing Law . This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Rhode Island.

9.4 Injunctive Relief . If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Sections 5 or 7, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company (and which were rendered to Target Companies prior to the date hereof) are of a special, unique and extraordinary character and that any such breach or threatened breach may cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section 9.4 shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.

9.5 Dispute Resolution . All claims for monetary damages between the Company and Executive with respect to this Agreement shall be resolved by binding arbitration, with all proceedings conducted in Providence, Rhode Island, administered under the rules and regulations of the American Arbitration Association with the Federal Rules of Evidence applicable in all respects thereto. Neither the Company nor Executive shall be limited to arbitration with respect to claims for equitable relief hereunder.

9.6 Counterparts . This Agreement may be executed in several counterparts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts.

9.7 Entire Agreement . This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.

9.8 Modification . This Agreement may be modified, amended, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by all of the parties hereto.

9.9 Attorneys’ Fees and Costs . In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys’ fees, legal expenses and court costs incurred in litigating, arbitrating or otherwise attempting to enforce this Agreement or resolve such dispute. In construing this Agreement, no party hereto shall have any term or provision construed against such party solely by reason of such party having drafted or written such term or provision.

9.10 Waiver . The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.

9.11 Cumulative Remedies . Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.

9.12 Headings . The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.

9.13 Notices . Any notice under this Agreement must be in writing and may be: (i) telecopied, (ii) sent by overnight courier, (iii) hand-delivered, or (iv) sent by United States mail, to the party to be notified at the following address:


If to the Company, to:		KBL Healthcare Acquisition Corp. II
		757 Third Avenue 21st Floor New York, New York 10017

If to the Executive, to:		Jason Macari 10 Hannah Drive Cumberland, Rhode Island 02864

9.14 Survival . Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement (including but not limited to the obligations set forth in Sections 5 and 7 hereof) shall, unless otherwise specified, survive the termination or expiration of this Agreement and be binding on Executive and the Company.

IN WITNESS WHEREOF, Company and Executive have executed this Agreement as of the date first above written.


In the presence of		KBL Healthcare Acquisition Corp. II

____________________________________________		By:_________________________________________

____________________________________________		SII Acquisition Corp.

		By:_________________________________________

____________________________________________		____________________________________________
		Jason Macari

Schedule 1


Policy #	Company	Plan	Policy Date	Death Benefit ($)	Annual Premium ($)	ISA #
17-234-213	NML	Term 80	7/8/05	1,000,000	1,645.00	95-333-03
17-094-418	NML	Term 80	2/15/05	1,000,000	1,705.00	95-333-03
16-404-886	NML	Term 75	5/26/03	200,000	450.00	95-333-03
VIAC053008	CNA	Term 95	10/11/99	1,000,000	740.50	n/a

EXHIBIT 10.6

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made between KBL Healthcare Acquisition Corp. II (“KBL”), a Delaware corporation, and SII Acquisition Corp., a wholly owned subsidiary of KBL (“Merger Sub”), and Steven Gibree (the “Employee”) and is being entered into concurrently with the closing of the merger and related business combination transactions (collectively, the “Acquisition”) prescribed by the Agreement and Plans of Reorganization (“Reorganization Agreement”) entered into as of September 1, 2006, by and among the Company, Merger Sub, Summer Infant, Inc., Summer Infant Europe Ltd. and Summer Infant Asia, Ltd. (collectively the “Target Companies”), and the stockholders of the Target Companies, which include the Executive. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Reorganization Agreement. By executing this Agreement, SII and Employee are agreeing to terminate, effective upon the Closing, that certain Employment Agreement by and between SII and Employee dated as of .

RECITALS

WHEREAS, the Company desires to be assured of the association and services of Employee; and

WHEREAS, Employee is willing and desires to be employed by the Company, and the Company is willing to employ Employee, upon the terms, covenants and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto agree as follows:

1. Employment . The Company hereby employs Employee, and Employee hereby accepts such employment, upon the mutual terms, covenants and conditions set forth herein.

2. Term .

2.1 Initial Term . The initial term of this Agreement shall be for a period of three (3) years commencing on the Effective Date hereof, unless terminated earlier pursuant to Section 8 hereof; provided, however, that Employee’s obligations in Sections 5 and 7 hereof shall, except as otherwise set forth in Section 5.6 hereof, continue in effect after such termination.

3. Duties . Employee shall serve as Executive Vice President of Product Development of KBL and Summer with such duties and responsibilities as may from time to time be assigned to Employee by the Chief Executive Officer (“CEO”) and/or Board of Directors of Company (the “Board”), commensurate with Employee’s title and position described in this sentence. The duties and services to be performed by Employee under this Agreement are collectively referred to herein as the “Services”. Employee shall report directly to the CEO. Employee agrees that he shall at all times conscientiously perform all of the duties and obligations assigned to him under the terms of this Agreement to the best of his ability and experience and in compliance with the law. Employee shall perform his duties out of the Company’s Rhode Island office (as the same may be relocated in the same metropolitan area from time to time) or at such other location as shall be agreed to by the Company and Employee; provided, that, Employee’s duties may include reasonable travel, including but not limited to travel to offices of Company, its subsidiaries and affiliates and current and prospective customers as is reasonably necessary and appropriate to the performance of Employee’s duties hereunder. Employee will comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Employee’s employment.

4. Exclusive Service . Employee agrees to use his best efforts to promote the interests of the Company and to devote his full business time and energies to the business and affairs of the Company and the performance of his duties hereunder. Executive may, however, engage in civic and not-for-profit activities for which no compensation (other than reimbursement of his actual expenses incurred in performance of such activities) is paid to him, so long as such activities do not materially interfere with the performance of his duties to the Company or directly conflict with the Company’s business interests.

5. Non-Competition and Other Covenants .

5.1 Non-Competition Agreement . For so long as the Employee is employed by the Company and for twelve (12) months following the termination date of Employee’s employment under this Agreement, Employee will not, directly or indirectly, individually or as an employee, partner, officer, director or shareholder (except to the extent permitted in Section 0 above) or in any other capacity whatsoever of or for any person, firm, partnership, company or corporation other than Company or its subsidiaries:

(a) Own, manage, operate, sell, control or participate in the ownership, management, operation, sales or control of or be connected in any manner, including as an employee, advisor or consultant or similar role, with any business engaged, in the geographical areas referred to in Section 0 below, in the design, research, development, marketing, sale, or licensing of products or services that are substantially similar to or competitive with the business of Company and any of its subsidiaries; or

(b) Recruit, attempt to hire, solicit, or assist others in recruiting or hiring, in or with respect to the geographical areas referred to in Section 0 below, any person who is an employee of Company or any of its subsidiaries or induce or attempt to induce any such employee to terminate his employment with Company or any of its subsidiaries.

5.2 Geographical Areas . The geographical areas in which the restrictions provided for in this Section 5 apply include all cities, counties and states of the United States, and all other countries in which Company (or any of its subsidiaries) are conducting business at the time. Employee acknowledges that the scope and period of restrictions and the geographical area to which the restrictions imposed in this Section 5 applies are fair and reasonable and are reasonably required for the protection of Company and that this Agreement accurately describes the business to which the restrictions are intended to apply.

5.3 Non-Solicitation of Customers . In addition to, and not in limitation of, the non-competition covenants of Employee set forth above in this Section 5, Employee agrees with Company that, for so long as Employee is employed by Company, and for twelve (12) months following the termination date of Employee’s employment under this Agreement, Employee will not, either for Employee or for any other person or entity, directly or indirectly (other than for Company and any of its subsidiaries or affiliates), solicit business from, or attempt to sell, license or provide the same or similar products or services as are then provided, by Company or any subsidiary of Company to any customer of Company.

5.4 Non-Solicitation of Employees or Consultants . In addition to, and not in limitation of, the non-competition covenants of Employee set forth above in this Section 5, Employee agrees with Company that, for so long as Employee is employed by Company, and for twelve (12) months following the termination date of Employee’s employment under this Agreement, Employee will not, either for Employee or for any other person or entity, directly or indirectly, solicit, induce or attempt to induce any employee, consultant or contractor of Company or any affiliate of Company, to terminate his or her employment or his, her or its services with, Company or any subsidiary or affiliate of Company or to take employment with another party.

5.5 Amendment to Retain Enforceability . It is the intent of the parties that the provisions of this Section 5 will be enforced to the fullest extent permissible under applicable law. If any particular provision or portion of this Section is adjudicated to be invalid or unenforceable, this Agreement will be deemed amended to revise that provision or portion to the minimum extent necessary to render it enforceable. Such amendment will apply only with respect to the operation of this paragraph in the particular jurisdiction in which such adjudication was made.

5.6 Breach by the Company . The restrictive covenants contained in this Section shall terminate and have no further force or effect in the event that the Company shall (i) breach any of the payment obligations owed to the Employee as set forth in this Agreement, or (ii) breach any material non payment provision of this Agreement and under (i) or (ii) above fail to cure such breach upon written notice from Employee of such breach within a reasonable period of time of such notice, not to exceed thirty (30) days, or (iii) terminate the Employee’s employment hereunder without cause; provided, however, that in the case of clause (iii), such covenants shall remain in force so long as Executive is being paid by Company under Section 8.2(b).

5.7 Other Provisions . Notwithstanding the foregoing, in the event that Executive voluntarily resigns from the Company or is terminated with “cause” during the Initial Term, the noncompetition, nonsolicitation of customers and nonsolicitation of executives or consultants provisions shall not expire until four years from the Effective Date. It is further acknowledged and agreed that the provisions of this Section 5 are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement and the Reorganization Agreement and to consummate the Acquisitions and other transactions contemplated by the Reorganization Agreement.

6. Compensation and Benefits .

6.1 Salary . During the term of this Agreement, Company shall pay Employee an initial salary of $220,000 per annum. Employee’s salary shall be payable as earned at Company’s customary payroll periods in accordance with Company’s customary payroll practices. Employee’s salary shall be subject to review and adjustment in accordance with Company’ customary practices concerning salary review for similarly situated employees of Company or its subsidiaries.

6.2 Benefits . Employee will be eligible to participate in Company’s employee benefit plans of general application as they may exist from time to time, including without limitation those plans covering pension and profit sharing, Employee bonuses, stock purchases, stock options, and those plans covering life, health, and dental insurance in accordance with the rules established for individual participation in any such plan and applicable law. Employee will receive such other benefits, including vacation, holidays and sick leave, as Company generally provides to its employees holding similar positions as that of Employee. The Company reserves the right to change or otherwise modify, in its sole discretion, the benefits offered herein to conform to the Company’s general policies as may be changed from time to time during the term of this Agreement. All health and dental insurance benefits shall continue at the Company’s expense after termination of the Employee’s employment by the Company “without cause” for a period of one (1) year from such termination, except where comparable health and dental insurance is available from a subsequent employer.

6.3 Additional Benefits . The Company shall pay to, provide or reimburse Employee during the Term hereof for all leasing, maintenance, repair, insurance, fuel costs for one (1) motor vehicle selected by the Employee and approved by the CEO of the Company, such costs not to exceed $1,500 per month in the aggregate.

6.4 Cash Bonus . Employee will be eligible to earn a bonus equal to up to one-half of his Salary (“Cash Bonus”) during each year of the Term of this Agreement. One-half of the Cash Bonus shall be based on the Employee’s performance against performance criteria set by factors to be determined, in writing, by the Compensation Committee of the Board. The Compensation Committee will determine the factors for the performance bonus within forty-five (45) days after the Board of Directors approves the budget for that year.

6.5 Stock Bonus . Employee will be eligible to participate in a stock bonus plan, under the Company’s equity incentive plan (up to one percent (1%) of the Company’s outstanding shares of common stock), such participation rights to be determined by the Compensation Committee of the Board.

6.6 Expenses . Company will reimburse Employee for all reasonable and necessary expenses incurred by Employee in connection with Company’s business, provided that such expenses are deductible to Company, are in accordance with Company’s applicable policy and are properly documented and accounted for in accordance with the requirements of the Internal Revenue Service.

7. Confidentiality and Proprietary Rights .

7.1 Confidentiality . Employee acknowledges that as a result of his employment with the Company and his prior employment with the Target Companies, Employee has obtained and will obtain secret and confidential information concerning the business of the Company, the Target Companies and their subsidiaries and affiliates (all of such entities referred to collectively in this Section, as the “Company”). Other than in the performance of his duties hereunder, Employee agrees not to disclose, either during the Term of his employment with the Company or at any time thereafter, to any person, firm or corporation any confidential information concerning the Company which is not in the public domain including trade secrets, budgets, strategies, operating plans, marketing plans, patents, copyrights, supplier lists, company agreements, employee lists, or the customer lists or similar information of the Company.

7.2 Proprietary Rights . All records, files, memoranda, reports, price lists, customer lists, drawings, plans, sketches, documents and the like (together with all copies thereof) relating to the business of the Company and/or its subsidiaries, which Employee shall use or prepare or come in contact with in the course of, or as a result of, his employment shall, as between the parties, remain the sole property of the Companies. Upon termination of his employment with the Company, Employee agrees to immediately return all such materials and shall not thereafter cause removal thereof from the premises of the Company. Further, the Employee agrees to disclose and assign to the Company as its exclusive property, all ideas, writings, inventions, discoveries, improvements and technical or business innovations made or conceived by the Employee, whether or not patentable or copyrightable, either solely or jointly with others during the course of his employment with the Company, which are along the lines of the business, work or investigations of the Company or its subsidiaries.

8. Termination .

8.1 Bases for Termination .

(a) Employee’s employment hereunder may be terminated at any time by mutual agreement of the parties.

(b) This Agreement and Employee’s employment with the Company shall automatically terminate on the date on which Employee dies or becomes

permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company based upon a certification of such incapacity by, in the sole discretion of the Company, either Employee’s regularly attending physician or a duly licensed physician selected by the Company, rendering Employee unable to perform substantially all of his duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Employee shall be deemed to have “become permanently incapacitated” on the date 30 days after the Company has determined that Employee is permanently incapacitated and so notifies Employee.

(c) Employee’s employment may be terminated by the Company “with cause”, effective upon delivery of written notice to Employee given at any time (without any necessity for prior notice) in the event of any of the following actions by Employee: (i) conviction of any felony or any other crime involving moral turpitude, (ii) fraud against the Company or any of its subsidiaries or theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries, (iii) willful or reckless breach of Employee’s fiduciary duties to the Company or willful misconduct as an employee of the Company that results in material economic detriment to the Company, (iv) neglect or unreasonable refusal to perform the material duties and responsibilities assigned to the Employee by the CEO and/or Board or under this Agreement, or (v) breach by Employee of any provision of this Agreement; provided, however, that with respect to clause (iv) and (v) above, in order for Employee to be terminated “with cause”, the Company must give the Employee written notice thereof and such breach shall not have been cured within thirty (30) days of receipt of such notice.

(d) Employee’s employment may be terminated by the Company “without cause”, effective upon delivery of written notice to Employee given at any time (without any necessity for prior notice) provided that the Company complies with all provisions of this Agreement related to severance, vesting of options and continuation of benefits as set forth herein.

(e) Employee may terminate his employment hereunder by giving the Company no less than 30 days prior written notice of such termination.

8.2 Payment Upon Termination .

(a) Upon termination of Employee’s employment pursuant to Section 8.1, the Company shall pay to Employee, within ten days after the effective date of such termination, an amount equal to Employee’s then Base Salary accrued as of such date plus any unreimbursed expenses then owed by the Company to Employee, and Employee shall not be entitled to any other consideration or compensation except as provided in Section 8.2 (b) below.

obligations owed to the Employee as set forth in this Agreement, or (ii) a breach any material non payment provision of this Agreement and under (i) or (ii) above, the Company fails to cure such breach upon written notice from Employee of such breach within a reasonable period of time of such notice, not to exceed fifteen (15) business days, then the Company shall continue to pay Employee’s Base Salary in accordance with normal payroll procedures for a period of 12 months from the date of termination. After any such termination, the Company shall not be obligated to further compensate Employee nor provide the benefits to Employee described in Article 6 hereof, except as is required by Section 6.2 hereof which shall continue for a period of 12 months from the date of termination or as may be required by law.

(c) Nothing contained in this Section 8.2 shall affect the terms of any employee stock options that may have been issued by the Company to Employee, which in the event of termination of Employee’s employment with the Company shall continue to be governed by their own terms and conditions; provided however that if Employee’s employment is terminated by the Company “without cause”, any and all options granted to Employee shall then immediately vest.

9. Miscellaneous .

9.1 Transfer and Assignment . This Agreement is personal as to Employee and shall not be assigned or transferred by Employee. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.

9.3 Governing Law . This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Rhode Island.

Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.

9.5 Dispute Resolution . All claims for monetary damages between the Company and Employee with respect to this Agreement shall be resolved by binding arbitration, with all proceedings conducted in Providence, Rhode Island, administered under the rules and regulations of the American Arbitration Association with the Federal Rules of Evidence applicable in all respects thereto. Neither the Company nor Employee shall be limited to arbitration with respect to claims for equitable relief hereunder.

9.12 Headings . The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.


If to the Company, to:		KBL Healthcare Acquisition Corp. II 757 Third Avenue 21st Floor New York, New York 10017

If to the Employee, to:		Steven Gibree 83 Franklin Road Foster, Rhode Island 02825

IN WITNESS WHEREOF, Company and Employee have executed this Agreement as of the date first above written.


In the presence of		KBL Healthcare Acquisition Corp. II

____________________________________________		By:____________________________________________

____________________________________________		SII Acquisition Corp.

		By:____________________________________________

____________________________________________		____________________________________________
		Steven Gibree

EXHIBIT 10.7

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made this day of September, 2006, between Summer Infant, Inc. (the “Company”), a Rhode Island corporation having a principal mailing address at 582 Great Road, PO Box 829, Slatersville, Rhode Island 02876-0899 and Joseph Driscoll (the “Employee”) having a principal mailing address at

RECITALS

WHEREAS, the Company desires to be assured of the association and services of Employee; and

WHEREAS, Employee is willing and desires to be employed by the Company, and the Company is willing to employ Employee, upon the terms, covenants and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto agree as follows:

1. Employment . The Company hereby employs Employee, and Employee hereby accepts such employment, upon the mutual terms, covenants and conditions set forth herein.

2. Term .

2.1 Initial Term . The initial term of this Agreement shall be for a period of two (2) years commencing on , 2006 and expiring on , 2008, unless terminated earlier pursuant to Section 8 hereof; provided, however, that Employee’s obligations in Sections 5 and 7 hereof shall continue in effect after such termination.

3. Duties . Employee shall serve as Chief Financial Officer of the Company with such duties and responsibilities as may from time to time be assigned to Employee by the CEO and/or Board of Directors of Company (the “Board”), commensurate with Employee’s title and position described in this sentence. Whenever used in this Agreement the word “Company” shall also mean and include Summer Infant Europe Limited and Summer Infant Asia Ltd., affiliated entities of Summer Infant, Inc. (collectively the “Affiliated Entities”). Further, to the extent that the Company consummates its proposed merger and related business combination transactions (collectively, the “Acquisition”) with KBL Healthcare Acquisition Corp. II (“KBL”), then any reference to the Company or the Company’s Board shall also include KBL and/or its Board of Directors, any subsidiaries of KBL and the Affiliated Entities. (The duties and services to be performed by Employee under this Agreement are collectively referred to herein as the “Services”). Employee shall report directly to the CEO. Employee agrees that he shall at all times conscientiously perform all of the duties and obligations assigned to him under the terms of this Agreement to the best of his ability and experience and in compliance with the law. Employee shall perform his duties out of the Company’s Rhode Island office (as the same

may be relocated in the same metropolitan area from time to time) or at such other location as shall be agreed to by the Company and Employee; provided, that, Employee’s duties may include reasonable travel , including but not limited to travel to offices of Company and KBL, if applicable, as is reasonably necessary and appropriate to the performance of Employee’s duties hereunder. Employee will comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Employee’s employment.

4. Exclusive Service . Employee agrees to use his best efforts to promote the interests of the Company and to devote his full business time and energies to the business and affairs of the Company and the performance of his duties hereunder. Employee may, however, engage in civic and not-for-profit activities for which no compensation (other than reimbursement of his actual expenses incurred in performance of such activities) is paid to him, so long as such activities do not materially interfere with the performance of his duties to the Company or directly conflict with the Company’s business interests.

5. Non-Competition and Other Covenants .

5.1 Non-Competition Agreement . For so long as the Employee is employed by the Company and for twelve (12) months following the termination date of Employee’s employment under this Agreement, Employee will not, directly or indirectly, individually or as an employee, partner, officer, director or shareholder or in any other capacity whatsoever of or for any person, firm, partnership, company or corporation other than Company and/or KBL, if applicable:

(a) Own, manage, operate, sell, control or participate in the ownership, management, operation, sales or control of or be connected in any manner, including as an employee, advisor or consultant or similar role, with any business engaged, in the geographical areas referred to in Section 5.2 below, in the design, research, development, marketing, sale, or licensing of products or services that are substantially similar to or competitive with the business of Company, and/or KBL if applicable; or

(b) Recruit, attempt to hire, solicit, or assist others in recruiting or hiring, in or with respect to the geographical areas referred to in Section 5.2 below, any person who is an employee of Company or if applicable, KBL or any of its subsidiaries or induce or attempt to induce any such employee to terminate his employment with Company, or if applicable, KBL or any of its subsidiaries.

5.2 Geographical Areas . The geographical areas in which the restrictions provided for in this Section 5 apply include all cities, counties and states of the United States, and all other countries in which Company is conducting business at the time. Employee acknowledges that the scope and period of restrictions and the geographical area to which the restrictions imposed in this Section 5 applies are fair and reasonable and are reasonably required for the protection of Company and that this Agreement accurately describes the business to which the restrictions are intended to apply.

not, either for Employee or for any other person or entity, directly or indirectly (other than for Company and any of its subsidiaries or affiliates), solicit business from, or attempt to sell, license or provide the same or similar products or services as are then provided, by Company or any subsidiary of Company to any customer of Company.

5.5 Tolling of Period of Restraint . Employee expressly acknowledges and agrees that in the event the enforceability of any of the terms of this Agreement shall be challenged in court and Employee is not enjoined from breaching any of the restraints set forth in Section 5, then if a court of competent jurisdiction finds that the challenged restraint is enforceable, the time period of the restraint shall be deemed tolled upon the filing of the lawsuit challenging the enforceability of the restraint until the dispute is finally resolved and all periods of appeal have expired.

5.6 Acknowledgements/ Amendment to Retain Enforceability . Employee acknowledges and agrees that the restrictions contained in Sections 5.1 through 5.6 are fair and reasonable and necessary for the protection of the legitimate business interests of the Company. Employee acknowledges that in the event Employee’s employment with the Company terminates for any reason, Employee will be able to earn a livelihood without violating the restrictions contained in this Section 5 and that Employee’s ability to earn a livelihood without violating such restrictions is a material condition to Employee’s employment and continued employment with the Company.

Employee expressly agrees that the character, duration and geographical scope of the covenants contained in this Section 5 are reasonable in light of the circumstances as they exist at the date upon which this Agreement has been executed. It is the intent of the parties that the provisions of this Section 5 will be enforced to the fullest extent permissible under applicable law. If any particular provision or portion of this Section 5 is adjudicated to be invalid or unenforceable, this Agreement will be deemed amended to revise that provision or portion to the minimum extent necessary to render it enforceable. Such amendment will apply only with respect to the operation of this paragraph in the particular jurisdiction in which such adjudication was made.

6. Compensation and Benefits .

6.1 Salary . During the term of this Agreement, Company shall pay Employee an initial salary of $170,000 per annum. Employee’s salary shall be payable as earned at Company’s customary payroll periods in accordance with Company’s customary payroll practices. Employee’s salary shall be subject to review and adjustment in accordance with Company’ customary practices concerning salary review for similarly situated employees of Company.

6.2 Benefits . Employee will be eligible to participate in Company’s employee benefit plans of general application as they may exist from time to time, including without limitation those plans covering pension and profit sharing, and those plans covering life, health, and dental insurance in accordance with the rules established for individual participation in any such plan and applicable law. Employee will receive such other benefits, including vacation, holidays and sick leave, as Company generally provides to its employees holding similar positions as that of Employee. The Company reserves the right to change or otherwise modify, in its sole discretion, the benefits offered herein to conform to the Company’s general policies as may be changed from time to time during the term of this Agreement.

6.3 Performance Bonus . Employee will be eligible to earn a performance bonus equal to $42,500 (“Performance Bonus”) at the end of calendar year 2007, provided, that the Company attains is projected revenue, net income and other performance criteria goals as determined and approved in writing by the CEO (if the Acquisition has not been consummated) or the Compensation Committee (if the Acquisition has been consummated) of the Board prior to or within sixty (60) days after the Company’s operating budget is established for calendar 2007.

6.4 Cash Bonus . If and to the extent that the Employee is still employed by the Company and the proposed merger and related business combination transactions with KBL is consummated, then the Employee shall receive a cash bonus at the KBL closing of $50,000 (“Cash Bonus”).

6.5 Stock Bonus . To the extent that the Company consummates its proposed merger and related business combination transactions with KBL, then the Employee will be eligible to participate in a stock bonus plan, under the Company’s equity incentive plan (up to 170,000 shares of common stock), such participation rights to be determined by the Compensation Committee of the Board.

7. Confidentiality and Proprietary Rights .

7.1 Confidentiality. Employee recognizes and acknowledges that as a result of his employment with the Company he will have access to certain confidential information relating to the Company, including, but not limited to, operational policies, financial information, marketing information, personnel information, trade secrets, customer information (including customer lists and analytical sales data), and pricing and cost policies, that are valuable, special and unique assets of the Company (collectively, “Confidential Information”). Employee agrees that Employee will not use or disclose such Confidential Information to any person, firm, corporation, association or other entity for any purpose or reason whatsoever, except as is required in the course of performing Employee’s duties unless (i) such information becomes known to the public generally through no breach by Employee of this covenant or (ii) disclosure

is required by law or any governmental authority or is required in connection with the defense of a lawsuit against the disclosing party, provided, that prior to disclosing any information pursuant to this clause (ii), Employee shall give prior written notice to the Company and provide the Company with the opportunity to contest such disclosure. Employee agrees that, both during the Employment Period and after termination or expiration of this Agreement, Employee will hold in a fiduciary capacity for the benefit of the Company and shall not, directly or indirectly, use or disclose, except as authorized by the Company in connection with the performance of Employee’s duties, any Confidential Information, that Employee may have or may acquire (whether or not developed or compiled by Employee and whether or not Employee has been authorized to have access to such Confidential Information) during employment with the Company. The covenants contained in this Section 7.1 shall survive employment with the Company for a period of two (2) years thereafter; provided, however, that with respect to those items of Confidential Information which constitute trade secrets under applicable law, Employee’s obligations of confidentiality and non-disclosure as set forth in this Section 7 shall continue to survive to the greatest extent permitted by applicable law. These rights of the Company are in addition to rights the Company has under the common law or applicable statutes for the protection of trade secrets.

7.2 Proprietary Rights . All records, files, memoranda, reports, price lists, customer lists, drawings, plans, sketches, documents and the like (together with all copies thereof) relating to the business of the Company and/or its subsidiaries, which Employee shall use or prepare or come in contact with in the course of, or as a result of, his employment shall, as between the parties, remain the sole property of the Companies. Upon termination of his employment with the Company, Employee agrees to immediately return all such materials and shall not thereafter cause removal thereof from the premises of the Company. Further, the Employee agrees to disclose and assign to the Company as its exclusive property, all ideas, writings, inventions, discoveries, improvements and technical or business innovations made or conceived by the Employee, whether or not patentable or copyrightable, either solely or jointly with others during the course of his employment with the Company, which are along the lines of the business, work or investigations of the Company or its subsidiaries.

8. Termination .

8.1 Bases for Termination .

(a) Employee’s employment hereunder may be terminated at any time by mutual agreement of the parties.

(b) This Agreement and Employee’s employment with the Company shall automatically terminate on the date on which Employee dies or becomes permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company based upon a certification of such incapacity by, in the sole discretion of the Company, either Employee’s regularly attending physician or a duly licensed physician selected by the Company, rendering Employee unable to perform substantially all of his duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Employee shall be deemed to have “become permanently incapacitated” on the date 30 days after the Company has determined that Employee is permanently incapacitated and so notifies Employee.

(c) Employee’s employment may be terminated by the Company “with cause”, effective upon delivery of written notice to Employee given at any time (without any necessity for prior notice) in the event of any of the following actions by Employee: (i) conviction of any felony or any other crime involving moral turpitude, (ii) fraud against the Company or any of its subsidiaries or theft of or maliciously intentional damage to the property of the Company, (iii) willful or reckless breach of Employee’s fiduciary duties to the Company or willful misconduct as an employee of the Company that results in material economic detriment to the Company, (iv) neglect or unreasonable refusal to perform the material duties and responsibilities assigned to the Employee by the CEO and/or Board or under this Agreement, or (v) breach by Employee of any provision of this Agreement; provided, however, that with respect to clause (iv) and (v) above, in order for Employee to be terminated “with cause”, the Company must give the Employee written notice thereof and such breach shall not have been cured within thirty (30) days of receipt of such notice.

(e) Employee may terminate his employment hereunder by giving the Company no less than 30 days prior written notice of such termination.

8.2 Payment Upon Termination .

(b) Upon termination of Employee’s employment by the Company without cause, or upon termination of Employee’s employment with the Company resulting from either (i) a breach by the Company of any of the payment obligations owed to the Employee as set forth in this Agreement, or (ii) a breach any material non payment provision of this Agreement and under (i) or (ii) above, the Company fails to cure such breach upon written notice from Employee of such breach within a reasonable period of time of such notice, not to exceed fifteen (15) business days, then the Company shall continue to pay Employee’s Base Salary in accordance with normal payroll procedures for a period of 6 months from the date of termination. After any such termination, the Company shall not be obligated to further compensate Employee nor provide the benefits to Employee described in Article 3 hereof, except as may be required by law.

9. Miscellaneous .

9.3 Governing Law . This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Rhode Island.

9.9 Attorneys’ Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys’ fees, legal expenses and court costs incurred in litigating, arbitrating or otherwise attempting to enforce this Agreement or resolve such dispute. In construing this Agreement, no party hereto shall have any term or provision construed against such party solely by reason of such party having drafted or written such term or provision.

9.10 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.

9.12 Headings . The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.


If to the Company, to:		Summer Infant, Inc.
		582 Great Road
		PO Box 829
		Slatersville, Rhode Island 02876-0899
		Attention: Jason Macari, CEO

If to the Employee, to:		Joseph Driscoll

IN WITNESS WHEREOF , Company and Employee have executed this Agreement as of the date first above written.


In the presence of				Summer Infant, Inc.

				By:
				Jason Macari, President


				Joseph Driscoll

Summer/Driscoll employ agr.v1

EXHIBIT 10.8

ESCROW AGREEMENT

ESCROW AGREEMENT (“Agreement”) dated [Closing Date] by and among KBL HEALTHCARE ACQUISITION CORP. II , a Delaware corporation (“ Parent ”), , as the Target Stockholders’ Representative (the “ Representative ”), being the representative of the former stockholders of each of SUMMER INFANT, INC. , a Rhode Island corporation (“ SII ”), SUMMER INFANT EUROPE, LTD. , a United Kingdom limited company (“ SIE ”), and SUMMER INFANT ASIA, LTD. , a Hong Kong limited company (“ SIA ” and, collectively, with SII and SIE, the “ Targets ”), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY , as escrow agent (the “ Escrow Agent ”).

Parent, Parent’s wholly owned subsidiary, SII Acquisition Corp. (the “ Merger Sub ”), each of the Targets and the stockholders of each of the Targets are the parties to an Agreement and Plans of Reorganization dated as of September 1, 2006 (the “ Reorganization Agreement ”) pursuant to which SII has merged with and into the Merger Sub and all of the Stockholders of SIE and SIA have sold and transferred all of their capital stock of SIE and SIA to Parent. Pursuant to the Reorganization Agreement, Parent (i) is to be indemnified in certain respects and (ii) may be entitled to the return, for cancellation, of some or all of the Net Worth Shares in certain circumstances. The parties desire to establish escrow funds as collateral security for the indemnification obligations and to effectuate the return to Parent of Net Worth Shares under the Reorganization Agreement. The Representative has been designated pursuant to the Reorganization Agreement to represent all of the former stockholders of the Targets (the “Stockholders”) and each Permitted Transferee (as hereinafter defined) of the Stockholders (the Stockholders and all such Permitted Transferees are hereinafter referred to collectively as the “Owners”), and to act on their behalf for purposes of this Agreement. Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Reorganization Agreement.

The parties agree as follows:

1. (a) Concurrently with the execution hereof, the Stockholders, as a group, are delivering to the Escrow Agent, to be held in escrow pursuant to the terms of this Agreement, stock certificates issued in the name of the Stockholders representing an aggregate of (i) 1,000,000 Transaction Shares received by such Stockholders pursuant to the Reorganization Agreement, together with ten (10) assignments separate from certificate executed in blank by such Stockholder to be held in escrow pursuant to this Agreement and Section 1.10(a) of the Reorganization Agreement (the “ Indemnity Escrow Fund ”), and (ii) 391,667 Net Worth Shares received by such Stockholders pursuant to the Reorganization Agreement, together with ten (10) assignments separate from certificate, executed in blank by such Stockholder, to be held in escrow pursuant to the terms of this Agreement and Section 1.10(b) of the Reorganization Agreement (the “ Adjustment Escrow Fund ” and, together with the Indemnity Escrow Fund, each an “ Escrow Fund ” and, collectively, the “ Escrow Funds ”). The Escrow Agent shall maintain a separate account for each Stockholder’s, and, subsequent to any transfer permitted pursuant to Paragraph 1(e) hereof, each Owner’s, portion of each Escrow Fund.

(b) The Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the Escrow Funds pursuant to the terms and conditions hereof. It shall treat each Escrow Fund as a trust fund in accordance with the terms of this Agreement and not as the property of Parent. The Escrow Agent’s duties hereunder shall terminate upon its distribution of the entirety of both Escrow Funds in accordance with this Agreement.

(c) Except as herein provided, the Owners shall retain all of their rights as stockholders of Parent with respect to shares of Parent Common Stock constituting (i) the Indemnity Escrow Fund during the period ending on the later of (1) the date that is sixteen months after the Effective Time and (2) 30 days after Parent has filed with the SEC its annual report on Form 10-KSB for the year ending December 31, 2007 (such period, the “ Escrow Period ”), and for such further period as may be required pursuant to this Agreement (the “ Indemnity Escrow Period ”) and (ii) the Adjustment Escrow Fund during the period from the date hereof until they are returned to the Owners in accordance with Section 4 of this Agreement (“ Adjustment Escrow Period ” and, together with the Indemnity Escrow Period, the “ Escrow Period ”), including, in each case, without limitation, the right to vote their shares of Parent Common Stock included in the Escrow Funds.

(d) During each Escrow Period, all dividends payable in cash with respect to the shares of Parent Common Stock included in the respective Escrow Fund shall be paid to the Owners, but all dividends payable in stock or other non-cash property (“ Non-Cash Dividends ”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term “Escrow Fund” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

(e) During each Escrow Period, no sale, transfer or other disposition may be made of any or all of the shares of Parent Common Stock in the respective Escrow Fund except (i) to a “Permitted Transferee” (as hereinafter defined), (ii) by virtue of the laws of descent and distribution upon death of any Owner, or (iii) pursuant to a qualified domestic relations order; provided, however, that such permissive transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement. As used in this Agreement, the term “ Permitted Transferee ” shall include: (x) members of a Stockholder’s “Immediate Family” (as hereinafter defined); (y) an entity in which (A) a Stockholder and/or members of a Stockholder’s Immediate Family beneficially own 100% of such entity’s voting and non-voting equity securities, or (B) a Stockholder and/or a member of such Stockholder’s Immediate Family is a general partner and in which such Stockholder and/or members of such Stockholder’s Immediate Family beneficially own 100% of all capital accounts of such entity; and (z) a revocable trust established by a Stockholder during his lifetime for the benefit of such Stockholder or for the exclusive benefit of all or any of such Stockholder’s Immediate Family. As used in this Agreement, the term “ Immediate Family ” means, with respect to any Stockholder, a spouse, parents, lineal descendants, the spouse of any lineal descendant, and brothers and sisters (or a trust, all of whose current beneficiaries are members of an Immediate Family of the Stockholder). In connection with and as a condition to each permitted transfer, the Permitted Transferee shall deliver to the Escrow Agent an assignment separate from certificate executed by the transferring Stockholder, or where applicable, an order of a court of competent jurisdiction, evidencing the transfer of shares to the Permitted Transferee, together with ten (10) assignments separate from certificate executed in blank by the

Permitted Transferee, with respect to the shares transferred to the Permitted Transferee. Upon receipt of such documents, the Escrow Agent shall deliver to Parent the original stock certificate out of which the assigned shares are to be transferred, together with the executed assignment separate from certificate executed by the transferring Stockholder, or a copy of the applicable court order, and shall request that Parent issue new certificates representing (m) the number of shares, if any, that continue to be owned by the transferring Stockholder, and (n) the number of shares owned by the Permitted Transferee as the result of such transfer. Parent, the transferring Stockholder and the Permitted Transferee shall cooperate in all respects with the Escrow Agent in documenting each such transfer and in effectuating the result intended to be accomplished thereby. During each Escrow Period, no Owner shall pledge or grant a security interest in such Owner’s shares of Parent Common Stock included in the respective Escrow Fund or grant a security interest in such Owner’s rights under this Agreement.

2. (a) Parent, acting through the current or former member or members of Parent’s Board of Directors who has or have been appointed by Parent to take all necessary actions and make all decisions on behalf of Parent with respect to its and Targets’ rights to indemnification under Article VII of the Reorganization Agreement (the “ Committee ”), may make a claim for indemnification pursuant to the Reorganization Agreement (“ Indemnity Claim ”) against the Escrow Fund by giving notice (an “ Indemnity Notice ”) to the Representative (with a copy to the Escrow Agent) specifying (i) the covenant, representation, warranty, agreement, undertaking or obligation contained in the Reorganization Agreement which it asserts has been breached or otherwise entitles Parent or one or more of the Targets to indemnification, (ii) in reasonable detail, the nature and dollar amount of any Indemnity Claim, and (iii) whether the Indemnity Claim results from a Third Party Claim against Parent or one or more of the Targets. The Committee also shall deliver to the Escrow Agent (with a copy to the Representative), concurrently with its delivery to the Escrow Agent of the Indemnity Notice, a certification as to the date on which the Indemnity Notice was delivered to the Representative.

(b) If the Representative shall give a notice to the Committee (with a copy to the Escrow Agent) (a “ Counter Indemnity Notice ”), within 45 days following the date of receipt (as specified in the Committee’s certification) by the Representative of a copy of the Indemnity Notice, disputing whether the Indemnity Claim is indemnifiable under the Reorganization Agreement, the Committee and the Representative shall attempt to resolve such dispute by voluntary settlement as provided in Section 2(c) below. If no Counter Indemnity Notice with respect to an Indemnity Claim is received by the Escrow Agent from the Representative within such 45-day period, the Indemnity Claim shall be deemed to be an Established Claim (as hereinafter defined) for purposes of this Agreement.

(c) If the Representative delivers a Counter Indemnity Notice to the Escrow Agent, the Committee and the Representative shall, during the period of 60 days following the delivery of such Counter Indemnity Notice or such greater period of time as the parties may agree to in writing (with a copy to the Escrow Agent), attempt to resolve the dispute with respect to which the Counter Indemnity Notice was given. If the Committee and the Representative shall reach a settlement with respect to any such dispute, they shall jointly deliver written notice of such settlement to the Escrow Agent specifying the terms thereof. If the Committee and the Representative shall be unable to reach a settlement with respect to a dispute, such dispute shall be resolved by arbitration pursuant to Section 2(d) below.

(d) If the Committee and the Representative cannot resolve a dispute prior to expiration of the 60-day period referred to in Section 2(c) above (or such longer period as the parties may have agreed to in writing), then such dispute shall be submitted (and either party may submit such dispute) for arbitration before a single arbitrator in New York, New York, in accordance with the commercial arbitration rules of the American Arbitration Association then in effect and the provisions of Section 10.12 of the Reorganization Agreement to the extent that such provisions do not conflict with the provisions of this paragraph. The Committee and the Representative shall attempt to agree upon an arbitrator; if they shall be unable to agree upon an arbitrator within 10 days after the dispute is submitted for arbitration, then either the Committee or the Representative, upon written notice to the other, may apply for appointment of such arbitrator by the American Arbitration Association. Each party shall pay the fees and expenses of counsel used by it and 50% of the fees and expenses of the arbitrator and of other expenses of the arbitration. The arbitrator shall render his decision within 90 days after his appointment and may award costs to either the Committee or the Representative if, in his sole opinion reasonably exercised, the claims made by any other party had no reasonable basis and were arbitrary and capricious. Such decision and award shall be in writing and shall be final and conclusive on the parties, and counterpart copies thereof shall be delivered to each of the parties. Judgment may be obtained on the decision of the arbitrator so rendered in any New York state court sitting in New York County, or any federal court sitting in New York County, having jurisdiction, and may be enforced in accordance with the law of the State of New York. If the arbitrator shall fail to render his decision or award within such 90-day period, either the Committee or the Representative may apply to any New York state court sitting in New York County, or any federal court sitting in New York County, then having jurisdiction, by action, proceeding or otherwise, as may be proper to determine the matter in dispute consistently with the provisions of this Agreement. The parties consent to the exclusive jurisdiction of the New York state courts having jurisdiction and sitting in New York County, or any federal court sitting in New York County, for this purpose. The prevailing party (or either party, in the case of a decision or award rendered in part for each party) shall send a copy of the arbitration decision or of any judgment of the court to the Escrow Agent.

(e) As used in this Agreement, “ Established Claim ” means any (i) Indemnification Claim deemed established pursuant to the last sentence of Section 2(b) above, (ii) Indemnification Claim resolved in favor of Parent or Target by settlement pursuant to Section 2(c) above, resulting in a dollar award to Parent or any Target, (iii) Indemnification Claim established by the decision of an arbitrator pursuant to Section 2(d) above, resulting in a dollar award to Parent, (iv) Third Party Claim that has been sustained by a final determination (after exhaustion of any appeals) of a court of competent jurisdiction, or (v) Third Party Claim that the Committee and the Representative have jointly notified the Escrow Agent has been settled in accordance with the provisions of the Reorganization Agreement.

(f) (i) Promptly after an Indemnity Claim becomes an Established Claim, the Committee and the Representative shall jointly deliver a notice to the Escrow Agent (a “ Joint Indemnity Notice ”) directing the Escrow Agent to pay to Parent, and the Escrow Agent promptly shall pay to Parent, an amount equal to the aggregate dollar amount of the Established Claim (or, if at such time there remains in the Indemnity Escrow Fund less than the full amount so payable, the full amount remaining in the Indemnity Escrow Fund).

(ii) Payment of an Established Claim shall be made in shares of Parent Common Stock, pro rata from the account maintained on behalf of each Owner. For purposes of each payment, such shares shall be valued at the “Fair Market Value” (as defined below). However, in no event shall the Escrow Agent be required to calculate Fair Market Value or make a determination of the number of shares to be delivered to Parent in satisfaction of any Established Claim; rather, such calculation shall be included in and made part of the Joint Indemnity Notice. The Escrow Agent shall transfer to Parent out of the Indemnity Escrow Fund that number of shares of Parent Common Stock necessary to satisfy each Established Claim, as set out in the Joint Indemnity Notice. Any dispute between the Committee and the Representative concerning the calculation of Fair Market Value or the number of shares necessary to satisfy any Established Claim, or any other dispute regarding a Joint Indemnity Notice, shall be resolved between the Committee and the Representative in accordance with the procedures specified in Section 2(d) above, and shall not involve the Escrow Agent. Each transfer of shares in satisfaction of an Established Claim shall be made by the Escrow Agent delivering to Parent one or more stock certificates held in each Owner’s account evidencing not less than such Owner’s pro rata portion of the aggregate number of shares specified in the Joint Indemnity Notice, together with assignments separate from certificate executed in blank by such Owner and completed by the Escrow Agent in accordance with instructions included in the Joint Indemnity Notice. Upon receipt of the stock certificates and assignments, Parent shall deliver to the Escrow Agent new certificates representing the number of shares owned by each Owner after such payment. The parties hereto (other than the Escrow Agent) agree that the foregoing right to make payments of Established Claims in shares of Parent Common Stock may be made notwithstanding any other agreements restricting or limiting the ability of any Owner to sell any shares of Parent stock or otherwise. The Committee and the Representative shall be required to exercise utmost good faith in all matters relating to the preparation and delivery of each Joint Indemnity Notice. As used herein, “Fair Market Value” means the average reported closing price for the Parent Common Stock for the ten trading days ending on the last trading day prior to the day the Established Claim is paid.

(iii) Notwithstanding anything herein to the contrary, at such time as an Indemnification Claim has become an Established Claim, the Representative shall have the right to substitute for the Escrow Shares that otherwise would be paid in satisfaction of such claim (the “ Claim Shares ”), cash in an amount equal to the Fair Market Value of the Claim Shares (“ Substituted Cash ”). In such event (i) the Joint Indemnity Notice shall include a statement describing the substitution of Substituted Cash for the Claim Shares, and (ii) substantially contemporaneously with the delivery of such Joint Indemnity Notice, the Representative shall cause currently available funds to be delivered to the Escrow Agent in an amount equal to the Substituted Cash. Upon receipt of such Joint Indemnity Notice and Substituted Cash, the Escrow Agent shall (y) in payment of the Established Claim described in the Joint Indemnity Notice, deliver the Substituted Cash to Parent in lieu of the Claim Shares, and (z) cause the Claim Shares to be returned to the Representative.

3. On the first Business Day after the expiration of the Indemnity Escrow Period, upon receipt of a Joint Indemnity Notice, the Escrow Agent shall distribute and deliver to each Owner certificates representing the shares of Parent Common Stock then in such Owner’s account in the Indemnity Escrow Fund, unless at such time there are any Indemnity Claims with respect to which Indemnity Notices have been received but which have not been resolved

pursuant to Section 2 hereof or in respect of which the Escrow Agent has not been notified of, and received a copy of, a final determination (after exhaustion of any appeals) by a court of competent jurisdiction, as the case may be (in either case, “ Pending Claims ”), and which, if resolved or finally determined in favor of Parent, would result in a payment to Parent, in which case the Escrow Agent shall retain, and the total amount of such distributions to such Owner shall be reduced by, the “ Pending Claims Reserve ” (as hereafter defined). The Committee shall certify to the Escrow Agent the Fair Market Value to be used in calculating the Pending Claims Reserve and the number of shares of Parent Common Stock to be retained therefor. Thereafter, if any Pending Claim becomes an Established Claim, the Committee and the Representative shall deliver to the Escrow Agent a Joint Indemnity Notice directing the Escrow Agent to pay to Parent an amount in respect thereof determined in accordance with Section 2(f) above, and to deliver to each Owner shares of Parent Common Stock then in such owner’s account in the Escrow Fund having a Fair Market Value equal to the amount by which the remaining portion of his account in the Indemnity Escrow Fund exceeds the then Pending Claims Reserve (determined as set forth below), all as specified in a Joint Indemnity Notice. If any Pending Claim is resolved against Parent, the Committee and the Representative shall deliver to the Escrow Agent a Joint Indemnity Notice directing the Escrow Agent to pay to each Owner the amount by which the remaining portion of his account in the Indemnity Escrow Fund exceeds the then Pending Claims Reserve. Upon resolution of all Pending Claims, the Committee and the Representative shall deliver to the Escrow Agent a Joint Indemnity Notice directing the Escrow Agent shall pay to such Owner the remaining portion of his or her account in the Indemnity Escrow Fund.

As used herein, the “ Pending Claims Reserve ” shall mean, at the time any such determination is made, that number of shares of Parent Common Stock in the Indemnity Escrow Fund having a Fair Market Value equal to the sum of the aggregate dollar amounts claimed to be due with respect to all Pending Claims (as shown in the Indemnity Notices of such Claims).

4. (a) (i) If Summer’s Net Worth (as defined) at the Closing Date (“ Closing Date Net Worth ”) is less than Summer’s Net Worth at June 30, 2006 (“ June 30 Net Worth ”), as finally determined in accordance with the Reorganization Agreement and this Agreement, the Escrow Agent shall return to Parent, for cancellation, that number of Transaction Shares equal to the Transaction Share Reduction Number.

(ii) The term “ Transaction Share Reduction Number ” shall mean the quotient derived by dividing (i) the difference between the June 30 Net Worth and Closing Date Net Worth by (ii) $6.00 (rounded up to the nearest share); provided, however, that if Closing Date Net Worth is equal to or greater than June 30 Net Worth, the Transaction Share Reduction Number shall be zero.

(iii) Notwithstanding anything to the contrary in this Agreement, if the Transaction Share Reduction Number is greater than 391,667 shares (such greater number being the “ Shortfall ”), each of the Stockholders shall return to Parent on demand, for cancellation, that number of Transaction Shares received by him or it determined by multiplying the Shortfall by such Stockholder’s fraction, the numerator of which is the total number of shares issued to such Stockholder at Closing in the Transaction and the denominator of which is 3,916,667.

(iv) The term “ Net Worth ” shall mean, on the date in question, the assets of Summer (on a consolidated basis) at such date, less all liabilities of Summer (on a consolidated basis) at such date, adjusted to (A) give effect to the payment of dividend distributions by SII for the payment of taxes in such fiscal year or prior years, and (B) exclude direct costs and expenses through the applicable date related to the Transactions and related to litigation and settlement of the dispute with Springs Global US, Inc. (“Springs”) described on Schedule 2.10 of the Reorganization Agreement, including, without limitation, legal accounting, investment bankers, road show, expert witness and broker fees and expenses.

(v) As soon as practicable following the Closing Date, Goldstein Golub and Kessler LLP shall calculate and deliver to Parent a statement of Summer’s June 30 Net Worth (“ June 30 Net Worth Statement ”) and Summer’s Closing Date Net Worth (“ Closing Date Net Worth Statement ”), which shall be derived utilizing generally accepted accounting principles, and which Statements shall be certified by each of Summer’s Chief Executive Officer and Chief Financial Officer. At the same time, such PCOAB audit firm shall deliver a written calculation of the difference between Summer’s Closing Date Net Worth and June 30 Net Worth (“ Auditor’s Net Worth Difference Calculation ”), which shall be utilized to determine the Transaction Share Reduction Number and Shortfall, if any.

(b) Parent shall deliver a notice (“ Adjustment Notice ”) to the Representative, with a copy to the Escrow Agent, setting forth the Auditor’s Net Worth Difference Calculation and stating the number of shares in the Adjustment Escrow Fund to be returned to Parent for cancellation pursuant to Section 1.5(c)(ii) of the Reorganization Agreement. If requested by Representative in writing, Representative shall be provided access to all working papers utilized in the calculations at the premises of Parent during regular business hours.

(c) If the Representative shall give a notice to Parent (with a copy to the Escrow Agent) (a “ Counter Adjustment Notice ”), within 45 days following the date of receipt (as specified in the Committee’s certification) by the Representative of a copy of the Adjustment Notice, disputing Parent’s calculation of the Auditor’s Net Worth Difference Calculation, the Committee and Parent shall attempt to resolve such dispute by voluntary settlement in the manner provided in Section 2(c) or, if the dispute is not so resolved, by arbitration in the manner provided in Section 2(d). If no Counter Adjustment Notice is received by the Escrow Agent from the Representative within such 45-day period, the calculation of the Auditor’s Net Worth Difference Calculation shall be deemed to be established as set forth in the Adjustment Notice for all purposes of this Agreement.

(d) Promptly upon the Auditor’s Net Worth Difference Calculation becoming established either as set forth in the Adjustment Notice, by resolution of Parent and the Representative or by arbitration, as the case may be, upon receipt of notice from either Parent or the Representative (with a copy to the other), the Escrow Agent shall deliver to Parent, for cancellation, that number of shares from the Adjustment Escrow Fund required under Section 4(a)(i) as so established and shall distribute and deliver certificates representing the remaining shares in the Adjustment Escrow Fund, if any, to the Owners, in each case in proportion to each such Owner’s Allocation Factor.

5. The Escrow Agent, the Committee, Parent and the Representative shall cooperate in all respects with one another in the calculation of any amounts determined to be payable to Parent and the Owners in accordance with this Agreement and in implementing the procedures necessary to effect such payments.

6. (a) The Escrow Agent undertakes to perform only such duties as are expressly set forth herein. It is understood that the Escrow Agent is not a trustee or fiduciary and is acting hereunder merely in a ministerial capacity.

(b) The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

(c) The Escrow Agent’s sole responsibility upon receipt of any notice requiring any payment to Parent pursuant to the terms of this Agreement or, if such notice is disputed by the Committee or the Representative, the settlement with respect to any such dispute, whether by virtue of joint resolution, arbitration or determination of a court of competent jurisdiction, is to pay to Parent the amount specified in such notice, and the Escrow Agent shall have no duty to determine the validity, authenticity or enforceability of any specification or certification made in such notice.

(d) The Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement, and may consult with counsel of its own choice and shall have full and complete authorization and indemnification under Section 6(g), below, for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

(e) The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time that the Escrow Agent shall turn over the Escrow Funds to a successor escrow agent appointed jointly by the Committee and the Representative. If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Funds with any court it reasonably deems appropriate.

(f) In the event of a dispute between the parties as to the proper disposition of an Escrow Fund, the Escrow Agent shall be entitled (but not required) to deliver such Escrow Fund into the United States District Court for the Southern District of New York and, upon giving notice to the Committee and the Representative of such action, shall thereupon be relieved of all further responsibility and liability.

(g) The Escrow Agent shall be indemnified and held harmless by Parent from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Funds held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Fund in question or it may deposit such Escrow Fund with the clerk of any appropriate court and be relieved of any liability with respect thereto or it may retain the Escrow Fund pending receipt of a final, non appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Fund in question is to be disbursed and delivered.

(h) The Escrow Agent shall be entitled to reasonable compensation from Parent for all services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from Parent for all reasonable documented expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

(i) From time to time on and after the date hereof, the Committee and the Representative shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

(j) Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

7. This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the parties hereto except this Agreement and shall have no duty to inquire into the terms and conditions of any agreement made or entered into in connection with this Agreement, including, without limitation, the Reorganization Agreement.

8. This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal representatives, shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be performed therein except that issues relating to the rights and obligations of the Escrow Agent shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be performed therein. This Agreement cannot be changed or terminated except by a writing signed by the Committee, the Representative and the Escrow Agent.

9. The Committee, Parent and the Representative each hereby consents to the exclusive jurisdiction of the New York state courts sitting in New York County, New York, and federal courts sitting in New York County with respect to any claim or controversy arising out of this Agreement. Service of process in any action or proceeding brought against the Committee, Parent or the Representative in respect of any such claim or controversy may be made upon it by registered mail, postage prepaid, return receipt requested, at the address specified in Section 10, with a copy delivered by nationally recognized overnight carrier to Graubard Miller, The Chrysler Building, 405 Lexington Avenue, New York, N.Y. 10174-1901, Attention: David Alan Miller, Esq.

10. All notices and other communications under this Agreement shall be in writing and shall be deemed given if given by hand or delivered by nationally recognized overnight carrier, or if given by telecopier and confirmed by mail (registered or certified mail, postage prepaid, return receipt requested), to the respective parties as follows:

A. If to the Committee, to it at:

Telecopier No.:

with a copy to:

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174-1901

Attention: David Alan Miller, Esq.

Telecopier No.: 212-818-8881

B. If to the Representative, to him at:

Telecopier No.:

with a copy to:

Steven Rosenbaum, Esq.

Poore & Rosenbaum

The Commerce Center

30 Exchange Terrace

Providence, Rhode Island 02901-1117

Telephone: 401-831-2600

Facsimile: 401-831-2220

and

James Redding, Esq.

Greenberg Traurig

One International Place

Boston, MA 02110

Telephone: (617) 310-6000

Facsimile: (617) 310-6001

C. If to the Escrow Agent, to it at:

Continental Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, New York 10004

Attention: Steven G. Nelson

Telecopier No.: 212-509-5150

D. If to Parent, to it at the addresses listed above for the Committee and the Representative or to such other person or address as any of the parties hereto shall specify by notice in writing to all the other parties hereto.

11. (a) If this Agreement requires a party to deliver any notice or other document, and such party refuses to do so, the matter shall be submitted to arbitration pursuant to Section 2(d) of this Agreement.

(b) All notices delivered to the Escrow Agent shall refer to the provision of this Agreement under which such notice is being delivered and, if applicable, shall clearly specify the aggregate dollar amount due and payable to Parent and the number of shares of Parent Common Stock to be returned to Parent.

(c) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement.

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement on the date first above written.

[Signatures are on following page]

[Signature Page to Escrow Agreement dated Closing Date]


KBL HEALTHCARE ACQUISITION CORP. II

By:
Name:
Title:

THE REPRESENTATIVE


ESCROW AGENT

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

By:
Name:		Steven G. Nelson
Title:		Chairman

EXHIBIT 10.9

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the day of , 200 , by and among: KBL Healthcare Acquisition Corp. II, a Delaware corporation (the “Company”); and the undersigned parties listed under the caption “Investors” on the signature page hereto (each, an “Investor” and collectively, the “Investors”).

WHEREAS, the Investors, formerly stockholders of one or more of Summer Infant, Inc., a Rhode Island corporation (“SII”), Summer Infant Europe, Ltd., a United Kingdom limited company (“SIE”) and/or Summer Infant Asia, Ltd., a Hong Kong limited company (“SIA” and, collectively, with SII and SIE, the “Targets”), have received shares of common stock of the Company (“Common Stock”) in exchange for the shares of stock of the Targets formerly held by them in connection with a series of transactions under the terms of an Agreement and Plans of Reorganization, dated September 1, 2006;

WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the Investors with certain rights relating to the registration of shares of Common Stock held by them;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. DEFINITION S. The following capitalized terms used herein have the following meanings:

“ Agreement ” means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.

“ Commission ” means the Securities and Exchange Commission, or any other federal agency then administering the Securities Act or the Exchange Act.

“ Common Stock ” means the common stock, par value $0.0001 per share, of the Company.

“ Company ” is defined in the preamble to this Agreement.

“ Demand Registration ” is defined in Section 2.1.1.

“ Demanding Holder ” is defined in Section 2.1.1.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

“ Form S-3 ” is defined in Section 2.3.

“ Founding Investors ” shall mean those parties that are entitled to the rights and benefits under the terms of the registration rights agreement by and among the Company and the other signatories thereto, dated as of April 21, 2005.

“ Indemnified Party ” is defined in Section 4.3.

“ Indemnifying Party ” is defined in Section 4.3.

“ Investor ” is defined in the preamble to this Agreement.

“ Investor Indemnified Party ” is defined in Section 4.1.

“ Maximum Number of Shares ” is defined in Section 2.1.4.

“ Piggy-Back Registration ” is defined in Section 2.2.1.

“ Register ,” “ registered ” and “ registration ” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

“ Registrable Securities ” mean all of the shares of Common Stock issued to the Investors in the Mergers. Registrable Securities include any warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of such shares of Common Stock. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding, or (d) the Securities and Exchange Commission makes a definitive determination to the Company that the Registrable Securities are salable under Rule 144(k).

“ Registration Statement ” means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of Common Stock (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).

“ Release Date ” means April 22, 2008.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

“ Underwriter ” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.

2. REGISTRATION RIGHTS.

2.1 Demand Registration .

2.1.1. Request for Registration . At any time and from time to time on or after the Release Date, the holders of a majority-in-interest of the Registrable Securities held by the Investors or the transferees of the Investors, may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “ Demand Registration ”). Any demand for a Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “ Demanding Holder ”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be obligated to effect more than an aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of Registrable Securities.

2.1.2. Effective Registration . A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided , however , that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided , further , that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

2.1.3. Underwritten Offering . If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating the Demand Registration.

2.1.4. Reduction of Offering . Subject to the rights of the holders of securities issued or issuable upon exercise of those certain Unit Purchase Options issued to EarlyBirdCapital, Inc. or its designees in connection with the Company’s initial public offering in April 2005, if the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “ Maximum Number of Shares ”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders ( pro rata in accordance with the number of shares of Registrable Securities which such Demanding Holder has requested be included in such registration, regardless of the number of shares of Registrable Securities held by each Demanding Holder) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares; and (v) fourth, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other shareholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

2.1.5. Withdrawal . If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 2.1.1.

2.2 Piggy-Back Registration .

2.2.1. Piggy-Back Rights . If at any time on or after the Release Date the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or by the Company and by shareholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or

offering of securities solely to the Company’s existing shareholders, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a “ Piggy-Back Registration ”). The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.

2.2.2. Reduction of Offering . Subject to the rights of the holders of securities issued or issuable upon exercise of those certain Unit Purchase Options to be issued to EarlyBirdCapital, Inc. or its designees in connection with the Company’s initial public offering in April 2005, if the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of shares of Common Stock which the Company desires to sell, taken together with shares of Common Stock, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 2.2, and the shares of Common Stock, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:

(i) If the registration is undertaken for the Company’s account: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock, if any, including the Registrable Securities, as to which registration has been requested pursuant to written contractual piggy-back registration rights of security holders (pro rata in accordance with the number of shares of Common Stock which each such person has actually requested to be included in such registration, regardless of the number of shares of Common Stock with respect to which such persons have the right to request such inclusion) that can be sold without exceeding the Maximum Number of Shares; and

(ii) If the registration is a “demand” registration undertaken at the demand of persons other than the holders of Registrable Securities pursuant to written contractual arrangements with such persons, (A) first, the shares of Common Stock for the

account of the demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights of security holders (pro rata in accordance with the number of shares of Common Stock which each such person has actually requested to be included in such registration, regardless of the number of shares of Common Stock with respect to which such persons have the right to request such inclusion) that can be sold without exceeding the Maximum Number of Shares.

2.2.3. Withdrawal . Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company may also elect to withdraw a registration statement at any time prior to the effectiveness of the Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.

2.3 Registrations on Form S-3 . The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available at such time (“ Form S-3 ”); provided , however , that the Company shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other holder or holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided , however , that the Company shall not be obligated to effect any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.

3. REGISTRATION PROCEDURES.

3.1 Filings; Information . Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:

3.1.1. Filing Registration Statement . The Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its best efforts to cause such Registration Statement to become and remain effective for the period required by Section 3.1.3; provided , however , that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the holders a certificate signed by the Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its shareholders for such Registration Statement to be effected at such time; provided further , however , that the Company shall not have the right to exercise the right set forth in the immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.

3.1.2. Copies . The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the holders of Registrable Securities included in such registration, and such holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.

3.1.3. Amendments and Supplements . The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus any period during which any such disposition is interfered with by any stop order or injunction of the Commission or any governmental agency or court) or such securities have been withdrawn.

3.1.4. Notification . After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing in all events within two (2) business days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for

any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.

3.1.5. State Securities Laws Compliance . The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other Governmental Authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided , however , that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e) or subject itself to taxation in any such jurisdiction.

3.1.6. Agreements for Disposition . The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such registration statement. No holder of Registrable Securities included in such registration statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.

3.1.7. Cooperation . The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any

offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.

3.1.8. Records . The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.

3.1.9. Opinions and Comfort Letters . The Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public accountants delivered to any Underwriter. In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement, at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.

3.1.10. Earnings Statement . The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its shareholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

3.1.11. Listing . The Company shall use its best efforts to cause all Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities included in such registration.

3.2 Obligation to Suspend Distribution . Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered by such program to transact in the Company’s securities because of the existence of material non-public information, each holder of Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact in the Company’s

securities is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.

3.3 Registration Expenses . The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection with such registration and (ix) the fees and expenses of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such registration. The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders. Additionally, in an underwritten offering, all selling shareholders and the Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount of shares each is selling in such offering.

3.4 Information . The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s obligation to comply with federal and applicable state securities laws.

4. INDEMNIFICATION AND CONTRIBUTION.

4.1 Indemnification by the Company . The Company agrees to indemnify and hold harmless each Investor and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any, who controls an Investor and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “ Investor Indemnified Party ”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities

Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the Company shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided , however , that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein. The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.

4.2 Indemnification by Holders of Registrable Securities . Each selling holder of Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each underwriter (if any), and each other person, if any, who controls such selling holder or such underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each such controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. Each selling holder’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.

4.3 Conduct of Indemnification Proceedings . Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (the “ Indemnified Party ”) shall, if a claim in respect thereof is to be made against any other person for indemnification hereunder, notify such other person (the “ Indemnifying Party ”) in writing of the loss, claim, judgment, damage, liability or action; provided , however , that the failure by the Indemnified

Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided , however , that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.

4.4 Contribution .

4.4.1. If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

4.4.2. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section 4.4.1. The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other

expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

5. UNDERWRITING AND DISTRIBUTION.

5.1 Rule 144 . The Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar Rule or regulation hereafter adopted by the Commission.

6. MISCELLANEOUS.

6.1 Other Registration Rights . The Company represents and warrants that no person, other than a holder of the Registrable Securities, has any right to require the Company to register any shares of the Company’s capital stock for sale or to include shares of the Company’s capital stock in any registration filed by the Company for the sale of shares of capital stock for its own account or for the account of any other person.

6.2 Assignment; No Third Party Beneficiaries . This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and the permitted assigns of the Investor or holder of Registrable Securities or of any assignee of the Investor or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.2.

6.3 Notices . All notices, demands, requests, consents, approvals or other communications (collectively, “ Notices ”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided , that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day. Notice otherwise sent as

provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.

To the Company:

KBL Healthcare Acquisition Corp. II

757 Third Avenue

21 ^st Floor

New York, New York 10017

Attention: Marlene Krauss, M.D.

Telephone: 212-319-5555

Facsimile: 212-319-5591

with a copy to:

Graubard Miller

405 Lexington Avenue

New York, NY 10174

Attention: David Alan Miller, Esq.

Telephone: 212-818-8800

Facsimile: 212-818-8881

To an Investor, to:

Such Investor’s address as set forth on the Signature Page hereto:

with a copy to:

Steven Rosenbaum, Esq.

Poore & Rosenbaum

The Commerce Center

30 Exchange Terrace

Providence, Rhode Island 02901-1117

Telephone: 401-831-2600

Facsimile: 401-831-2220

and

James Redding, Esq.

Greenberg Traurig LLP

One International Place

Boston, MA 02110

Telephone: (617) 310-6000

Facsimile: (617) 310-6001

6.4 Severability . This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu

of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

6.5 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

6.6 Entire Agreement . This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.

6.7 Modifications and Amendments . No amendment, modification or termination of this Agreement shall be binding upon any party unless executed in writing by such party.

6.8 Titles and Headings . Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

6.9 Waivers and Extensions . Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

6.10 Remedies Cumulative . In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Investor or any other holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

6.11 Governing Law . This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within the State of Delaware, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction.

6.12 Waiver of Trial by Jury . Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions contemplated hereby, or the actions of the Investor in the negotiation, administration, performance or enforcement hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.


KBL HEALTHCARE ACQUISITION CORP. II

By:
		Marlene Krauss, M.D.
		Chief Executive Officer

INVESTORS:


Signature

Name:

Address:



Signature

Name:

Address:



Signature

Name:

Address:



Signature

Name:

Address:

Exhibit 99.1

For Immediate Release

Company Contact:

Dr. Marlene Krauss

Chief Executive Officer

KBL Healthcare Acquisition Corp. II

212-319-5555

KBL HEALTHCARE ACQUISITION CORP. II TO ACQUIRE

SUMMER INFANT, INC. AND AFFILIATE COMPANIES

New York, NY, September 5, 2006 – KBL Healthcare Acquisition Corp. II (OTCBB: KBLH, KBLHU, KBLHW) (“KBL”) announced today it has entered into a definitive agreement to acquire privately held Summer Infant, Inc. (“Summer Infant”), a rapidly-growing, profitable designer, marketer and distributor of branded durable infant health, safety and wellness products.

Summer Infant’s current management team will remain in place to run the business following consummation of the acquisition. In addition, upon consummation of the acquisition, Jason Macari, Summer Infant’s Chief Executive Officer, will become Chief Executive Officer of KBL and Dr. Marlene Krauss will become Chairman of the Board of KBL. It is intended that, upon consummation of the acquisition, KBL will change its name to “Summer Infant, Inc.”

Dr. Krauss stated, “We believe that Summer Infant, with its proprietary product line, exceptional customer base, and experienced management team, is well-positioned to continue its history of strong organic growth. This transaction will provide capital that can not only enhance this growth but also enable the company to take advantage of select acquisition opportunities.”

Mr. Macari added, “We are extremely excited about this transaction as it will allow us to continue to invest in product development, design, and manufacturing and to further develop our retail relationships. These have been the keys to our growth strategy to date. We believe consumers are becoming more aware of the “Summer Infant” brand as evidenced by our growing market share and strong sales growth. We are excited to have the opportunity to further develop the brand.”

About Summer Infant

Based in North Smithfield, Rhode Island, Summer Infant is a designer, marketer and distributor of branded durable juvenile health, safety and wellness products (for ages 0-3 years) which are sold principally to large U.S. retailers. Summer Infant currently has over sixty proprietary products, including nursery audio/video monitors, safety gates, durable bath products, bed rails, infant thermometers and related health and safety products, booster and potty seats, and bouncers.

In North America, the company’s largest customers are Babies R Us, Target, K-Mart, Buy Buy Baby, Meijer, Chelsea & Scott (One Step Ahead) and Baby Depot (Burlington Coat Factory). In the United Kingdom, the largest customers are Mothercare, Toys R Us, Argos, Mammas & Pappas, Sainsbury and Tesco. In 2005, North America accounted for approximately 90% of revenue and the United Kingdom accounted for approximately 10%.

Following the purchase of its predecessor company and its incorporation in 2001, Summer Infant has experienced rapid organic growth under the direction of Chief Executive Officer and principal owner, Jason P. Macari and his experienced senior management team. Net sales have grown from less than $1 million in 2001 to approximately $35.4 million in 2005, reflecting a compound annual growth rate of over 200%. Net sales for the first half 2006 were approximately $26.1 million, an increase of over 55% as compared to net sales of approximately $16.7 million for the first half 2005.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) has grown from approximately ($0.3) million in 2001 to approximately $2.1 million in 2005. EBITDA for the first half of 2006 was approximately $2.5 million, an increase of almost 150% as compared to EBITDA of $1.0 million for the first half of 2005. EBITDA as a percent of net sales increased from 5.9% for the first half of 2005 to 9.4% for the first half of 2006.

Infant Health, Safety and Wellness Market Background

According to the Juvenile Products Manufacturer’s Association, the juvenile products industry represents approximately $5.75 billion in annual U.S. retail sales. Summer Infant management estimates that this market exceeds $12 billion with the inclusion of Canada, Western Europe, Australia and similarly developed markets. In its March 2005 report, Mintel Consumer Intelligence estimated the U.S. market for baby durables (which encompasses Summer Infant’s current infant health, safety and wellness products) at $2.5 billion in 2004 and projects growth to $2.9 billion by 2009.

Summer Infant’s management believes that several market trends will continue to drive significant growth in its product categories. Specifically, consumers in this market are skewed towards first-time parents who are heavily influenced by “best for baby” perceptions, product innovation and quality, traits that are well-aligned with the company’s product/business strategy. Demographic trends, including couples having children later in life (with an attendant increase in disposable income) and increased public awareness of the importance of infant health, safety and wellness also contribute to consumers’ willingness to spend more on products perceived to deliver greater value to them and their children.

Summary of the Transaction

Under the terms of the acquisition agreement, KBL will purchase Summer Infant and its two affiliate companies, Summer Infant Europe, Limited, and Summer Infant Asia, Ltd., for an initial payment of $20.0 million in cash and 3,916,667 shares of KBL common stock, subject to certain closing adjustments based on net worth. KBL will also assume or repay Summer Infant’s outstanding debt (approximately $10.1 million as of 6/30/06) at closing.

The Summer Infant stockholders would also be entitled to receive up to an aggregate of $5.0 million in additional performance payments based on 50% of audited EBITDA in excess of $4.2 million, $10.0 million and $15.0 million for the years ended December 31, 2006, 2007 and 2008 respectively. In addition, they will be entitled to receive an additional 2.5 million shares of KBL common stock if the closing market price of KBL’s common stock exceeds $8.50 for 20 out of 30 trading days at any time prior to April 20, 2009.

Page 2 of 6

The closing of the acquisition is subject to customary closing conditions, including approval of the acquisition agreement by the stockholders of KBL. In addition, the closing is conditioned on holders of less than 20% of the shares of KBL common stock voting against the acquisition and electing to convert their KBL common stock into cash, as permitted by the KBL certificate of incorporation. All of the stockholders, officers and directors of Summer Infant have agreed not to sell any of the KBL shares they will receive until April 21, 2008, subject to certain exceptions.

Following the completion of the transaction, the board of directors of KBL will consist of seven members, with two members nominated by certain stockholders of KBL, two members nominated by Summer Infant’s former stockholders and three members jointly nominated.

About KBL Healthcare Acquisition Corp. II

KBL Healthcare Acquisition Corp. II was formed on December 9, 2004 to serve as a vehicle to effect a business combination with an operating business in the healthcare or a health-related industry. KBL’s registration statement for its initial public offering was declared effective on April 21, 2005 and the offering closed on April 27, 2005, generating gross proceeds of $55.2 million from the sale of 9.2 million units, including the full exercise of the underwriters’ over-allotment option. Each unit was comprised of one share of KBL common stock and two warrants, each with an exercise price of $5.00. As of June 30, 2006, KBL held approximately $51.2 million in a trust account maintained by an independent trustee, which will be released to KBL upon the consummation of the business combination.

Forward Looking Statements

This press release, and other statements that KBL may make, including statements about the benefits of the transaction with Summer Infant, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to KBL’s and Summer Infant’s future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

KBL cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and KBL assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in KBL’s filings with the Securities and Exchange Commission (SEC) and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: general economic and business conditions in the U.S. and abroad, changing interpretations of generally accepted accounting principles, changes in market acceptance of the company’s products, inquiries and investigations and related litigation, fluctuations in customer demand, management of rapid growth, intensity of competition as well as other relevant risks detailed in KBL’s filings with the Securities and Exchange Commission, including its report on Form 10-QSB for the period ended June 30, 2006. The information set forth herein should be read in light of such risks. Neither KBL nor Summer Infant assumes any obligation to update the information contained in this press release.

Page 3 of 6

KBL’s prospectus and subsequent filings with the SEC, accessible on the SEC’s website at http://www.sec.gov, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.

Additional Information

KBL intends to file with the SEC a proxy statement on Schedule 14A in connection with the proposed transaction. STOCKHOLDERS OF KBL AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, KBL’S DEFINITIVE PROXY STATEMENT IN CONNECTION WITH THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING BECAUSE THIS PROXY STATEMENT WILL CONTAIN IMPORTANT INFORMATION.

The definitive proxy statement will be mailed to stockholders as of a record date to be established for voting on the acquisition. Stockholders will also be able to obtain a copy of the definitive proxy statement, without charge, once available, at the SEC’s Internet site http://www.sec.gov or by directing a request to KBL Healthcare Acquisition Corp. II at 757 Third Avenue, New York, NY 10017. As a result of the review by the SEC of the proxy statement, KBL may be required to make changes to its description of the acquired business or other financial or statistical information contained in the proxy statement.

Such persons can also read KBL’s final prospectus, dated April 21, 2005, for a description of the security holdings of the KBL officers and directors and of EarlyBirdCapital, Inc. (“EBC”), the underwriters of KBL’s initial public offering consummated on April 27, 2005, and their respective interests in the successful consummation of this business combination.

Page 4 of 6

Summer Infant, Inc. and Affiliates

Consolidated Balance Sheets

(Unaudited)

(in thousands of US dollars)


	As of June 30, 2006		As of December 31, 2005
Cash and equivalents	$	90	$	1,115
Trade receivables		7,905		6,542
Inventory		9,711		7,860
Prepaid expenses		316		198

Total current assets		18,022		15,716
Property and equipment, net		3,013		2,342
Goodwill and intangibles		174		182

Total assets	$	21,210	$	18,240

Line of credit	$	8,991	$	7,087
Accounts payable		5,357		6,711
Accrued expenses		1,505		958
Notes payable – short term		280		280

Total current liabilities		16,134		15,027
Notes payable – long term		920		560

Total liabilities		17,054		15,587
Common stock & paid in capital		133		133
Retained earnings		2,103		1,306

Total stockholders equity		4,156		2,661
Total liabilities & stockholders equity	$	21,210	$	18,240

Consolidated balance sheets and statements of operations were prepared by Summer Infant as a private company, in accordance with U.S. generally accepted accounting principles and may not conform to SEC Regulation S-X. Accordingly, such historical information may be adjusted and presented differently in our proxy statement to solicit stockholder approval of the acquisition.

Page 5 of 6

Summer Infant, Inc. and Affiliates

Consolidated Statements of Operations

(Unaudited)

(in thousands of US dollars)


	Six Months Ended June 30					Fiscal Year Ended December 31, 2005
	2006			2005		Fiscal Year Ended December 31, 2005
Net sales	$	26,133		$	16,651	$	35,426
Cost of goods sold		16,254			11,212		23,317

Gross profit		9,879			5,439		12,109
Selling, general & administrative expenses		7,433			4,449		10,058
Depreciation & amortization		288			156		380

Income from operations		2,158			834		1,671
Interest expense		402			117		448
Other expense/(income)		(2	)		0		1

Net income	$	1,758		$	717	$	1,223

EBITDA	$	2,448		$	990	$	2,051

Page 6 of 6

EXHIBIT 99.2

Summer Infant, Inc. and Affiliates

Consolidated Balance Sheets

(Unaudited)

(in thousands of US dollars)


	As of June 30, 2006		As of December 31, 2005
Cash and equivalents	$	90	$	1,115
Trade receivables		7,905		6,542
Inventory		9,711		7,860
Prepaid expenses		316		198

Total current assets		18,022		15,716
Property and equipment, net		3,013		2,342
Goodwill and intangibles		174		182

Total assets	$	21,210	$	18,240

Line of credit	$	8,991	$	7,087
Accounts payable		5,357		6,711
Accrued expenses		1,505		958
Notes payable – short term		280		280

Total current liabilities		16,134		15,027
Notes payable – long term		920		560

Total liabilities		17,054		15,587
Common stock & paid in capital		133		133
Retained earnings		2,103		1,306

Total stockholders equity		4,156		2,661
Total liabilities & stockholders equity	$	21,210	$	18,240

Summer Infant, Inc. and Affiliates

Consolidated Statements of Operations

(Unaudited)

(in thousands of US dollars)


	Six Months Ended June 30					Fiscal Year Ended December 31, 2005
	2006			2005		Fiscal Year Ended December 31, 2005
Net sales	$	26,133		$	16,651	$	35,426
Cost of goods sold		16,254			11,212		23,317

Gross profit		9,879			5,439		12,109
Selling, general & administrative expenses		7,433			4,449		10,058
Depreciation & amortization		288			156		380

Income from operations		2,158			834		1,671
Interest expense		402			117		448
Other expense/(income)		(2	)		0		1

Net income	$	1,758		$	717	$	1,223

EBITDA	$	2,448		$	990	$	2,051

KBL Healthcare Acquisition Corp. II

to acquire

Summer Infant Inc.

Infant Health, Safety & Wellness

September 5, 2006

Exhibit 99.3

Road Show Presentation

The

attached

slide

show

was

filed

with

the

Securities

and

Exchange

Commission

part

the

Form

8–K

filed

KBL

Healthcare

Acquisition

Corp.

with

the

Securities

and

Exchange

Commission

September

2006

(“September

2006

8–K”).

KBL

holding

presentations

for

certain

its

stockholders,

well

other

persons

who

might

interested

purchasing

KBL’s

securities,

regarding

its

acquisition

with

Summer

Infant,

Inc.

and

affiliated

companies,

described

the

September

2006

8–K.

The

attached

slide

show,

well

the

September

2006

8–K,

are

being

distributed

attendees

these

presentations.

Earlybird

Capital,

Inc.

("EBC"),

the

managing

underwriter

KBL

Healthcare's

initial

public

offering

("IPO")

consummated

April

2005,

assisting

KBL

Healthcare

these

efforts

without

charge,

other

than

the

reimbursement

its

out–of–pocket

expenses,

although

EBC

will

paid

cash

fee

the

closing

the

acquisition

equal

one

percent

(1%)

the

consideration

paid

the

acquisition.

KBL

Healthcare

and

its

directors

and

executive

officers

and

EBC

may

deemed

participants

the

solicitation

proxies

for

the

special

meeting

KBL

Healthcare

stockholders

held

approve

the

acquisition.

Stockholders

KBL

Healthcare

and

other

interested

persons

are

advised

read,

when

available,

KBL

Healthcare's

preliminary

Proxy

Statement

and

definitive

Proxy

Statement

connection

with

KBL

Healthcare's

solicitation

proxies

for

the

special

meeting

because

these

proxy

statements

will

contain

important

information.

Such

persons

can

also

read

KBL

Healthcare's

final

Prospectus,

dated

April

21,

2005,

for

description

the

security

holdings

KBL

Healthcare’s

officers

and

directors

and

EBC

and

their

respective

interests

the

successful

consummation

this

business

combination.

The

definitive

Proxy

Statement

will

mailed

stockholders

record

date

established

for

voting

the

acquisition.

Stockholders

will

also

able

obtain

copy

the

definitive

Proxy

Statement,

without

charge,

directing

request

to:

KBL

Healthcare

Acquisition

Corporation

II,

757

3rd

Ave,

New

York,

10017.

The

preliminary

Proxy

Statement

and

definitive

Proxy

Statement,

once

available,

and

the

final

Prospectus

can

also

obtained,

without

charge,

the

Securities

and

Exchange

Commission's

internet

site

(Http://www.sec.gov).

Safe Harbor

This

presentation

may

contain

forward–looking

statements

within

the

meaning

the

Private

Securities

Litigation

Reform

Act

1995

about

KBL,

Summer

and

their

combined

business

after

completion

the

proposed

acquisition.

Forward–looking

statements

are

statements

that

are

not

historical

facts.

Such

forward–looking

statements,

based

upon

the

current

beliefs

and

expectations

KBL’s

and

Summer’s

management,

are

subject

risks

and

uncertainties

which

could

cause

actual

results

differ

from

the

forward-looking

statements.

The

following

factors,

among

others,

could

cause

actual

results

differ

from

those

set

forth

the

forward–looking

statements:

business

conditions;

changing

interpretations

generally

accepted

accounting

principles;

outcomes

government

reviews;

inquiries

and

investigations

and

litigation;

continued

compliance

with

government

regulations;

legislation

regulatory

environments;

requirements

changes

adversely

affecting

the

businesses

which

Summer

engaged;

fluctuations

customer

demand;

management

rapid

growth;

intensity

competition

from

other

providers

infant

health,

safety

and

wellness

products;

general

economic

conditions;

geopolitical

events

and

regulatory

changes;

well

other

relevant

risks

detailed

KBL’s

filing

with

the

Securities

and

Exchange

Commission,

including

its

reports

Form

10–QSB.

The

information

set

forth

herein

should

read

light

such

risks.

well,

Summer’s

financial

information

were

prepared

Summer

private

company,

accordance

with

U.S.

generally

accepted

accounting

principles,

and

may

not

conform

SEC

Regulation

S–X.

Accordingly,

such

historical

information

may

adjusted

and

presented

differently

KBL’s

proxy

statement

solicit

stockholder

approval

the

acquisition.

Neither

KBL

nor

Summer

assumes

any

obligation

update

the

information

contained

this

presentation.

Summer Infant is a leading designer of

innovative, branded infant health, safety and

wellness products that is well–positioned

deliver continued strong organic growth and

to implement a focused acquisition strategy

Summer Investment Highlights

•

Experienced, proven management team with demonstrated

expertise in product development/innovation

•

Emerging brand and strong relationships with major retailers

including: Babies “R”

Us, Target, K–Mart, Baby Depot, Buy

Buy Baby, Wal–Mart, MotherCare

•

Rapid Sales and EBITDA growth

–

2005 Net Sales: $35.4 million, up >65% from 2004

–

2005 EBITDA: $2.1 million, up ~50% from 2004

–

1H ‘06 Net Sales: $26.1 million, up >55% from 1H ‘05

–

1H ’06 EBITDA: $2.5 million, up ~150% from 1H ‘05

•

Well–positioned in a $12 billion, expanding global industry

that is ripe for acquisitions/consolidation

•

Attractive valuation

These

numbers

were

obtained

using

private

company

accounting,

are

unaudited

and

subject

change

The Transaction

•

KBLH/Summer Infant business combination pending

–

Acquisition agreement signed August 2006

–

Expected closing late 2006/early 2007

•

Terms of the transaction

–

$20.0 million cash

–

3,916,667 KBLH common shares (locked–up through April 2008)

•

Worth ~$21.0 million at KBLH closing stock price of $5.35/share on

August 30, 2006

–

Assumption or repayment of outstanding net debt at closing

•

Balance of ~$10.0 million at June 30, 2006

–

Future contingent payments

•

50% of EBITDA in excess of $4.2mm for 2006, $10.0 million for 2007 and

$15.0 million

for

2008

(payable

cash;

payments

capped

million

total)

•

2.5

million

KBLH

common

post–acquisition

stock

price

closes

above

$8.50 for 20 out of 30 days prior to April 2009

Post–Transaction Cap Table

100

15,116,667

Total

9,200,000

KBL Investors

Does not include contingent payments

Does not include warrants or underwriter purchase option and assumes

no KBL stockholder conversions

in the transaction

2,000,000

KBL Management

3,916,667

Summer Shareholders

Common Shares

Holder

Infant Health, Safety & Wellness

•

90% of products fall under healthcare classification (preventive

diagnostic)

defined

the

Department

Health

and

Human

Services*

•

Majority of children’s deaths occur in first year and >80% of

children’s deaths of those under 15 years old occur before age 5

–

According to the NIH, Accidents are, by far, the leading cause of death

among children and adolescents. (2003)

•

Summer’s baby care products are subject to rigorous certification

and testing ensuring high quality standards

–

Food and Drug Administration (FDA)

–

Consumer Product Safety Commission

–

Juvenile Products Manufacturers Association (JPMA)

–

American Society for Testing Materials (ASTM)

* http://www.cms.hhs.gov/apps/hipaa2decisionsupport/CoveredEntityF lowcharts.pdf

Summer Infant

“Delivering the best for you and your baby”

•

Designs and markets proprietary baby products under the Summer

brand

•

Innovation & new product development fueling market share gain

–

Significant number of products are patent–protected

•

Excellent customer relationships

•

Emerging brand gaining retailer & consumer momentum

•

Experienced management team with scalable infrastructure

•

$12 billion worldwide baby products industry

–

Durables

segment

–

billion

worldwide,

Summer

currently

competes

~25%

–

Stable

and

growing

–

tied

births,

new

parents

with

higher

disposable

incomes and desire to provide the best for their babies (regardless of cost)

Company History

2001 & 2002

Founded in autumn

Purchased name and

bouncer product

molds

Initial Sales

Babies “R”

New Products:

Thermometers,

grooming aids,

audio/video

monitors

Net Sales:

2002 –

$6M

2003

Added retailers

Baby Depot, Buy

Buy Baby, One Step

Ahead

New Products:

Bed

Rails, gates, bath

products

Started Summer

Europe

Net Sales:

$18M

2004

Added retailers

Target, JCPenny,

Toys “R”

US Canada,

The Right Start,

Meijer

New Products:

Booster seats, safely

aids, further

expansion within

existing categories

Net Sales:

$21M

2005

Added Retailers:

K-Mart, Sears, Sears

Canada, U.S.

Military PXs,

Mothercare, Tesco

New Products:

Handheld video

monitor, new gates,

new bed rails, new

baby baths, new

potty seat

Net

Sales :

$35M

2006

Added Retailers:

Wal-Mart.com, Argos

New Products:

Soft goods, further

expansion within

existing categories

Net

Sales :

’06

–

$26M

These

numbers

were

obtained

using

private

company

accounting,

are

unaudited

and

subject

change

Innovative Products

•

Focus on new product development

–

Experienced product development team

–

Plan to introduce 15–20 new products annually

•

First or early to market with:

–

Handheld video monitor

–

Double–sided bed rail

–

Audible alarmed gate

–

“Grow

with

me”

ear

thermometer

–

Baby bath spa & shower

•

40% market share in the high–growth video monitor segment

•

The

majority

products

have

FDA,

Consumer

Product

Safety

Commission and JPMA approval

•

Products sold through major retailers & infant specialty stores in

the US, Canada & the UK

•

industry

sales

concentrated

through

–

retailers

Diverse Product Mix

(as a % of 2005 Net Sales)

Gates

Monitors

Bath

Medical

Rails

Seats, Bouncers &

Other

28%

19%

27%

Sales and Marketing

•

Market directly to retail chain buyers

–

Management & sales force has long–standing

relationships with key

buyers

–

Significant recurring revenue

–

Every major customer increased purchases in 2006 over 2005

•

Early commitments from retailers lead to strong sales visibility

–

Buying decisions primarily made in the summer for next calendar year

purchases

–

Purchase commitments are for one year

•

Very little seasonality

Strong Customer Relationships

Argos

Sainsbury

Europe

North America

Operational Infrastructure

Scalable, low cost business model

Suburban London

European operations

HQ –

North Smithfield, RI

Electronics and QC –

Shunde

China

R&D

Approximately 70–80 worldwide

Employees

Leased facilities in Rhode Island, California,

Suburban London

Warehousing

North Smithfield, RI (new HQ in Woonsocket, RI

to be completed in Q1’07)

Headquarters

80% in Southern China

20% in Massachusetts

Manufacturing

Management

31 years experience; GE Healthcare,

Organogenesis

VP Operations

Paul DiCicco

20 years experience; Safety 1

(CFO), Staples,

KPMG Peat Marwick

Chief Financial

Officer

Joseph Driscoll *

Dorel, Dolly, Inc., and Gibson Greetings

VP of Sales

William Basset

10 years experience; The First Years

VP Quality &

Assurance

Anthony Paolo

Financial positions with Trammell Crow,

Action Automation and Controls

VP Finance & IT

Mark Gorton

20 years industry experience; Safety 1

VP Research &

Development

Brian Sundberg

20 years industry experience; Mothercare,

Dorel Juvenile Group Europe

VP European

Operations

Rachelle Harel

20 years experience; Little Kids, Inc., Safety

, Hasbro

SVP Product

Development

Steve Gibree

Founder; 20 years experience; Safety 1

, CR

Bard, & Hasbro

CEO, President,

Principal Owner

Jason Macari

Background

Title

Management

* Anticipated that he will join Summer in mid–September 2006.

Rapid Growth in Sales & EBITDA

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2002A

2003A

2004A

2005A

1H '05

1H '06

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Net Sales

(000)

EBITDA

(000)

2002-1Q’06 RR CAGR: Net Sales = 74% , EBITDA = 171%

$000; unaudited

These

numbers

were

obtained

using

private

company

accounting,

are

unaudited

and

subject

change

Net Sales CAGR = 82%

EBITDA CAGR = 158%

Net Sales increase = 57%

EBITDA increase = 147%

Multiple Growth Drivers

•

Summer positioned to continue to grow much faster than the

overall market

–

Organic growth

•

New products

•

Increased product penetration (more products at each customer)

•

Broadened mass merchant distribution (more stores)

•

Increased store penetration (more stores with existing customers)

•

Additional retail relationships, e.g. large food and drug chains, price clubs,

home centers, web–based

retailers

•

International expansion

•

Increased operating efficiencies

–

Opportunistic acquisitions that provide access to innovative products, new

product categories, new retailers, new geographies and/or new brands

Acquisition Opportunities

•

Opportunity for Summer to be consolidator

–

Strong balance sheet

–

Relationships with mass merchants

–

Experienced product and management team

•

Large

and

fragmented

market:

400

infant

product

companies

–

5–10

are

$250

million

–

billion

–

20–30

are

$50

million–

$250

million

–

30–50

are

$10

million

–

$50

million

–

300+

are

under

$10

million

•

Summer’s products currently address less than 10% of the $12 billion

market

•

Summer currently does not compete in the following large and growing

segments of the market:

–

Baby

mobility

–

strollers,

car

seats,

travel

systems

–

Baby

gear

–

play

yards,

high

chairs,

swings,

walkers,

etc.

–

Nursery

care

–

feeding

accessories,

nursery

needs

–

Soft

goods

–

bedding,

blankets,

bedding

sets,

etc.

Investment Conclusion

•

Simple, scalable business with rapidly growing sales & profits

with good visibility

•

Increasing market share due to:

–

Innovative designs

–

Superior product quality

–

Strong value proposition

–

New product introductions

–

Strong relationships with major retailers

•

Experienced, proven management team

•

Organic

and

acquisition–based

growth

opportunities

available

•

Enhanced financial position

Appendix

Recent Industry Transactions

•

Prentice

Capital

Management

acquires

Russ

Berrie

Co.

(NYSE:

RUS)

(announced

August 2006)

•

Group

plc

(LSE:

III)

acquires

Mayborn

Group

plc

(AIM:

MBY)

(announced

May

2006)

•

Royal

Philips

Electronics

(NYSE:PHG,

AEX:PHI)

acquires

AVENT

Holdings

Ltd.

(announced May 2006)

•

JAKKS

Pacific

(NASDAQ:

JAKK)

acquires

Creative

Design

International,

Ltd.

(completed February 2006)

•

Baby

Universe

(NASDAQ:

POSH)

acquires

PoshTots,

LLC

(completed

January

2006)

•

Baby

Universe

(NASDAQ:

POSH)

acquires

Huta

Duna,

Inc.

(completed

September

2005)

•

The

Carlyle

Group

acquires

Britax

Childcare

(completed

September

2005)

•

Russ

Berrie

and

Company,

Inc.

(NYSE:

RUS)

acquires

Kids

Line,

LLC

(completed

Dec 2004)

•

RC2

Corp.

(NASDAQ:

RCRC)

acquires

The

First

Years,

Inc.

(completed

June

2004)

Summer Products

02090 Day & Night Color Handheld

Video Monitor First to give moms and

dads handheld portability

02170 Secure Sounds™

2.4 GHz Digital

Monitor –

Secure and private audio

transmissions

02180 Baby’s Quiet Sounds™

Video

Monitor –

L eading video monitor on

the market

07160 Custom–Fit Gate –

First gate to

accommodate openings up to 12’

07030 Sure and Secure™

Top–of–Stairs

Gate with Alarm –

Audible alarmed

gate for added safety

08190 Soothing Spa and Shower Baby

Bath –

The first whirlpool tub for baby

Summer Products

08160 Mother’s Touch™

Large Comfort

Bather –

The perfect alternative to

bathing bigger babies

01350 Deluxe Soft Embrace™

Comfort

Bouncer–

The next best thing to being

cradled in mom’s arms

12020 Sure and Secure™

Double

Bedrail –

Double protection and fully

assembled

08040 Newborn–to–Toddler Bath

Center & Shower – The first baby bath

with a clean rinse shower

04520 Deluxe Baby Essentials Kit

Everything baby needs for a healthy

start

03200 “Grow with Me”

Ear

Thermometer –

fast & accurate

temperature readings with no fuss in

about 1 second

Competition

Fisher–Price, Safety 1

, The First Years, Kids II

Small Furniture

Safety 1

, The First Years, Braun, Vicks

Infant Health

Evenflo, KidCo, North States, Safety 1st

Gates

Fisher–Price, Kids II, Graco, Safety 1

Bouncers

Safety 1

, The First Years, Regalo, Dex Products

Bed Rails

The First Years, Fisher–Price, Safety 1

, Evenflo

Baby Bath

Safety 1

, Bebe

Sounds, Mobi

A/V Monitor

KBL Healthcare Acquisition Corp. II

•

A Specified Purpose Acquisition Company

(“SPAC”)

designed to provide a profitable investment in a

health–related company

•

Each KBLH unit, issued at $6.00, consists of one share of

common stock and two warrants

–

Cash per share in trust at 6/30/06 of approximately $5.57/share

($51.2 million in trust at 6/30/06); increases with additional

interest earned

•

Lockup of insider shares until April 2008

About KBL

•

KBL Founders Also Run KBL Healthcare Ventures

–

~$94mm venture capital fund

–

L.Ps include Novartis, Allianz, PA State Teachers Retirement

System, William Blair, Others

–

Representive

investments include

•

Lumenos: sold to Wellpoint for $185mm

•

Spinal Concepts: sold to Abbott for $180mm

•

KBL Healthcare Acquisition Corp. I (prior SPAC)

–

IPO in March 1993 raised $17.5 mm gross proceeds

–

Merger with Concord Health Group, a long–term care/assisted living

company in August 1994

–

Concord

sold

for

cash

Multicare

Companies

February

1996

–

Investors in KBL IPO realized 34.7 % IRR

The KBL Team

•

Zachary Berk

–

Chairman and President

–

Managing Director/founder of KBL Healthcare Ventures

•

Founder: Prolong Pharmaceuticals, Lumenos, Transgenic Sciences (now part of

Genzyme)

•

Chairman: Prolong Pharmaceutiocals

•

B.S. and Doctorate of Optometry from Pacific University

•

Marlene

Krauss,

M.D.

–

CEO,

Secretary

and

Director

•

Managing Director/founder of KBL Healthcare Ventures

•

Founder/seed

financed:

Lumenos

(sold

Wellpoint

for

$185mm),

Summit

Technology

(sold to Alcon for $900mm), Candela Laser (CLZR), Cambridge Heart (CAMH)

•

Board Member: Cardio Focus, PneumRx, Prolong Pharmaceuticals

•

B.S. Cornell University, M.B.A. Harvard University (Alumni Achievement Award), M.D.

Harvard

Medical

School

(vitreoretinal

surgeon)

•

Michael Kaswan

–

COO and Director

•

Managing Director of KBL Healthcare Ventures

•

Founder: Lumenos

•

Board Member: Scandius, Remon

•

BS University of Virginia, MBA Harvard Business School