Exhibit 10.3
Deferred Prosecution Agreement
     1. Wright Medical Technology, Inc. (the “Company”), by its undersigned
attorneys, pursuant to authority granted by its Board of Directors, and the
United States Attorney’s Office for the District of New Jersey (the “Office”),
enter into this Deferred Prosecution Agreement (the “DPA”). Except as
specifically provided below, the DPA shall be in effect for a period of twelve
(12) months from the date on which it is fully executed (the “Effective Date”).
     2. The Office has informed the Company that it will file, on or shortly
after the Effective Date of this DPA, a criminal complaint in the United States
District Court for the District of New Jersey charging the Company with
conspiracy to commit violations of the Federal Anti-Kickback Statute, contrary
to Title 42, United States Code, Section 1320a - 7b(b), in violation of Title
18, United States Code, Section 371, during the years 2002 through 2007 (the
“Criminal Complaint”). This Office acknowledges that neither this DPA nor the
Criminal Complaint alleges the Company’s conduct adversely affected patient
health or patient care.
     3. The Company and the Office agree that, upon filing of the Criminal
Complaint in accordance with the preceding paragraph, this DPA shall be publicly
filed in the United States District Court for the District of New Jersey, and
the Company agrees to post the DPA prominently on the Company website for the
duration of the DPA.
     4. In light of the Company’s remedial actions to date and its willingness
to (a) undertake additional remediation as necessary; (b) acknowledge
responsibility for its behavior; (c) continue its cooperation with the Office
and other government agencies; and (d) demonstrate its good faith and commitment
to full compliance with federal health care laws, the Office shall recommend to
the Court that prosecution of the Company on the Criminal Complaint be deferred
for a period of twelve (12) months from the filing date of such Criminal
Complaint. If the Court declines to defer prosecution for any reason, this DPA
shall be null and void, and the parties will revert to their pre-DPA positions.
     5. In 2004, the Company incorporated the provisions of the newly
promulgated AdvaMed Code of Ethics on Interactions with Health Care
Professionals (“AdvaMed Code”) into its Code of Business Conduct, which the
Company first issued in 1994. More recently, the Company has undertaken a
Compliance Initiative designed to strengthen its compliance processes,
procedures and controls, with a particular focus on those concerning consulting
arrangements with customers or potential customers of the Company’s hip and knee
reconstruction and replacement products. In that respect, the Company has
separated the roles of General Counsel and Chief Compliance Officer, appointed a
new Chief Compliance Officer, expanded the obligations of its Nominating,
Compliance and Governance Committee, undertaken a review of its existing
consulting agreements with respect to hip and knee reconstruction and
replacement products, and developed a comprehensive needs assessment process for
such consulting services. The Company also has developed additional policies and
standard operating procedures regarding, among other things, educational grants
and charitable donations, product development consultants, research consultants,
training and education consultants, and employee and distributor compliance
training programs.

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General Commitment to Compliance and Remedial Actions
     6. The Company commits itself to exemplary corporate citizenship, the best
practices of effective corporate governance, the highest principles of honesty
and professionalism, the integrity of the operation of federal health care
programs including Medicare and Medicaid, the sanctity of the doctor-patient
relationship, and a culture of openness, accountability, and compliance
throughout the Company. The Company also commits not to attempt to influence
medical practitioners and institutions to use the Company’s products through the
use of unlawful inducements. To advance and underscore this commitment, the
Company agrees to take, or has acknowledged that it has taken, the remedial and
compliance measures set forth herein.
     7. In matters relating to federal health care laws, the Company will
cooperate fully with all federal law enforcement and regulatory agencies,
including but not limited to: the Criminal and Civil Divisions of the Office;
the United States Department of Justice, Criminal and Civil Divisions; the
United States Department of Health and Human Services, Office of Inspector
General (“HHS-OIG”); the Federal Bureau of Investigation (“FBI”); and the United
States Postal Inspection Service (“USPIS”); provided, however, that such
cooperation shall not require the Company’s waiver of attorney-client and work
product protections or any other applicable legal privileges. Nothing in this
DPA shall be construed as a waiver of any applicable attorney-client or work
product privileges (hereafter “privilege”).
     8. The Company shall communicate to its employees and distributors that
Company personnel and agents are required to report to the Company any suspected
violations of any federal laws, regulations, federal health care program
requirements, or internal policies and procedures.
     9. The Company shall implement or continue its operation of an effective
corporate compliance program and function to ensure that internal controls are
in place to prevent recurrence of the activities that resulted in this DPA. The
Company shall also develop and implement policies, procedures, and practices
designed to ensure compliance with federal health care program requirements,
including the Anti-Kickback Statute, with respect to all its dealings with
Consultants, as defined herein, and others who cause the purchase of Company hip
and knee reconstruction and replacement products in the United States.
     10. The Company shall adhere to the Revised and Restated AdvaMed Code of
Ethics on Interactions with Health Care Professionals. The Revised and Restated
AdvaMed Code, which became effective on July 1, 2009, can be found at
www.advamed.org. The principles set forth in the AdvaMed Code are expressly
incorporated as compliance requirements under this DPA.
     11. The Company agrees that its President and Chief Executive Officer, Vice
President, General Counsel and Secretary, Vice President, Chief Compliance
Officer (“Compliance Officer”), and appropriate Company executives will meet
quarterly with representatives of the Office and with the Monitor, in
conjunction with the Monitor’s quarterly reports described in paragraph 19(c)
herein.

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Definitions
     12. “Consultant” is defined as any United States-based orthopaedic surgeon,
PhD, health care professional, non-physician practitioner, medical fellow,
resident or student, hospital, medical institution, or any employee or agent of
any educational or health care organization the Company retains for any personal
or professional services or compensates or remunerates in any way, directly or
indirectly, for or in anticipation of personal or professional services relating
to hip and knee reconstruction and replacement in the United States. The term
“Consultant” shall not include accountants, auditors, attorneys, fair market
value specialists, CME providers, reimbursement specialists, any non-physician
engineering or marketing consultants, or any other types of non-physician
professionals or entities excluded from this definition by the Monitor upon
recommendation by the Company.
     13. “Consulting Agreement” includes all contracts with Consultants for
services to be performed on behalf of the Company relating to hip and knee
reconstruction and replacement in the United States. This includes, but is not
limited to, agreements for compensation, payments, remuneration, honoraria,
fellowships, professional meetings, speaking engagements, teaching,
publications, clinical studies, fee-for-service consulting, product development
and license agreements, research, and professional services agreements. The term
“Consulting Agreement” also includes agreements to provide grants, donations,
sponsorships and other forms of payment to medical educational organizations,
medical societies and training institutions.
     14. “Consulting Services” or “Services” include any and all professional
services provided by a Consultant to or on behalf of the Company relating to hip
and knee reconstruction and replacement in the United States.
     15. “Payment” shall include any and all compensation or remuneration paid
to or for the benefit of Consultants, including but not limited to payments and
reimbursements for personal or professional services, any type of securities,
registered or unregistered, meals, entertainment, travel, gifts, grants,
honoraria, charitable contributions, donations, sponsorships, research grants,
clinical studies, professional meetings, product training, medical education,
research funding, product development services, in-kind services (e.g., use of
aircraft), advertising, promotion, and marketing expenses or support, and
royalties or other payments for transfer of documented intellectual property.
Unless otherwise approved by the Monitor, the Company shall only compensate or
remunerate Consultants through direct Payments made pursuant to a Consulting
Agreement. The Company shall not knowingly make any Payments to Consultants
indirectly, such as through distributors. Subject to Monitor approval, payments
may be made to Consultants through consulting entities provided that (1) the
Consultant is named in the corresponding Consulting Agreement, and (2) the
Consultant is named on any and all payment documents.
Retention and Obligations of a Monitor
     16. The Company agrees that until the expiration of this DPA, it will
retain an outside, independent individual (the “Monitor”) selected by the Office
consistent with United

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States Department of Justice guidelines and after consultation with the Company,
to evaluate and monitor the Company’s compliance with this DPA. The Monitor is
an independent third party, and not an employee or agent of the Company, and no
attorney-client relationship shall be formed between the Monitor and the
Company. The Company agrees that it will not employ or be affiliated with any
selected Monitor for a period of not less than one year from the date the
monitorship is terminated.
     17. The Monitor shall have access to all non-privileged Company documents
and information the Monitor determines are reasonably necessary to assist in the
execution of his or her duties. The Monitor shall have the authority to meet
with any officer, employee, or agent of the Company. The Company shall use its
best efforts to have its independent distributors for hip and knee
reconstruction and replacement products in the United States and their employees
and agents fully cooperate and meet with the Monitor as requested. For all
distributor agreements for hip and knee reconstruction and replacement products
and renewals in the United States executed after the Effective Date, the Company
shall require provisions allowing the Monitor access to non-privileged relevant
documents and information relating to Consulting Agreements and Services, and
compliance with all applicable provisions of the DPA.
     18. The Monitor shall conduct a review and evaluation of all Company
policies, practices, and procedures relating to compliance with the DPA and the
following subjects, and shall report and make written recommendations as
necessary (“Recommendations”) to the Company and the Office concerning:

  a.   The corporate structure and governance of the Company relative to
selecting, engaging, and paying Consultants;     b.   The effectiveness of the
procedures and practices at the Company to select, engage, and pay Consultants
in exchange for the provision of Services to the Company, as well as the related
legal, compliance, research and development, marketing, sales, internal
controls, and finance functions;     c.   The effectiveness of the training and
education programs in the following areas: federal health care laws concerning
relationships between the Company and Consultants; Medicare, Medicaid and other
health care benefit programs; ethics; and compliance and corporate governance
issues relating to federal health care laws;     d.   The structure and content
of agreements memorializing arrangements to engage and pay Consultants in
exchange for the provision of Services to the Company and the Company’s payments
to Consultants made thereunder. The Monitor shall have access to and may review
all previously entered agreements to the extent he or she reasonably deems
necessary; and

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  e.   The influence, actual or potential, over Consultants’ selection of
Company products as a result of the financial relationships between the Company
and those Consultants.

     19. The Monitor shall, inter alia:

  a.   Monitor and review the Company’s compliance with this DPA and all
applicable federal health care laws, statutes, regulations, and programs,
including the Anti-Kickback Statute and regulations promulgated thereunder in
connection with the sale and marketing by the Company of the Company’s hip and
knee reconstruction and replacement products in the United States;     b.   As
requested by the Office, cooperate with the Criminal and Civil Divisions of the
Office, the United States Department of Justice, Criminal and Civil Divisions,
HHS-OIG, the FBI and the USPIS, and, as requested by the Office, provide
information about the Company’s compliance with the terms of this DPA;     c.  
Provide written reports to the Office, on at least a quarterly basis, concerning
the Company’s compliance with this DPA. In these reports or at other times the
Monitor deems appropriate, the Monitor shall make Recommendations to the Company
to take any steps he or she reasonably believes are necessary for the Company to
comply with the terms of this DPA and enhance future compliance with federal
health care laws in connection with the sale and marketing by the Company of the
Company’s hip and knee reconstruction and replacement products in the United
States, and, as agreed by the Company or mandated by the Office pursuant to
paragraph 46, require the Company to take such steps when it is agreed that such
steps are reasonable and necessary for compliance with the DPA. The first report
to the Office shall be due three (3) months after the Effective Date, and
subsequent reports shall be made quarterly thereafter;     d.   After
consultation with the Company and the Office, and allowing reasonable time for
the Company or the Office to object, the Monitor may retain, at the Company’s
expense, consultants, accountants or other professionals the Monitor reasonably
deems necessary to assist the Monitor in the execution of the Monitor’s duties.
Before retention, these consultants, accountants or other professionals shall
provide to the Monitor and the Company a proposed budget. If the Company
believes the costs to be unreasonable, the Company may bring the matter to the
Office’s attention for dispute resolution by the Office;     e.   Monitor the
preparation of and approve the Needs Assessment and any Modifications thereto
described in paragraphs 27-30 herein;

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  f.   Review and approve all new or renewed Consulting Agreements executed
between the Effective Date and the date the Needs Assessment is approved;     g.
  Review in his or her discretion any requests for Consulting Services made
between the Effective Date and the date the Needs Assessment is approved;     h.
  Review in his or her discretion any Payments made to Consultants between the
Effective Date and the date the Needs Assessment is approved;     i.   Review
and approve in his or her discretion all Consulting Agreements with new
Consultants executed after the Needs Assessment is approved;     j.   Review in
his or her discretion any Consulting Agreement renewals executed after the Needs
Assessment is approved;     k.   Review in his or her discretion any requests
for Consulting Services made after the Needs Assessment is approved;     l.  
Review in his or her discretion any Payments made to Consultants after the Needs
Assessment is approved;     m.   Review in his or her discretion any payments
made to CME providers, reimbursement specialists, any non-physician engineering
or marketing consultants, or other excluded consultants as described in
paragraph 12, for personal or professional services relating to hip and knee
reconstruction and replacement in the United States;     n.   Review in his or
her discretion any payments made to Consultants as honoraria, fellowships,
gifts, donations, charitable contributions and other non-Service payments as
described in paragraph 27;     o.   Review and approve any new or substitute
Consultants as described in paragraphs 33 and 34 herein;     p.   Approve any
changes to the Hourly Rate or any Payments made at a rate other than the Hourly
Rate, as described in paragraphs 36-37 herein;     q.   Monitor the Company’s
compliance with its Consultant disclosure obligations as described in paragraphs
40-41 herein; and     r.   Monitor the information received by the confidential
hotline and e-mail address as described in paragraph 43 herein.

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     In the event the Monitor opposes any Consulting Agreement, request for
Consulting Services, or request for Payment, the Monitor will promptly meet with
the Company to discuss his or her concerns. The Consulting Agreement shall not
be executed, the Consulting Services shall not be rendered, or the Payment shall
not be made unless and until the Monitor’s objections are remedied. All actions
of the Monitor in this regard shall be subject to review by the Office and shall
not require the Company to breach any existing contractual requirements so long
as those requirements comply with all applicable laws. The Office will act
promptly to resolve any issues on a good faith and reasonable basis.
     20. The Company shall promptly notify the Monitor and the Office in writing
of any credible evidence of criminal corporate conduct as well as of any known
criminal investigations of any type of the corporation or any of its officers or
directors that becomes known to the Company after the Effective Date. In
addition, the Company shall promptly notify the Monitor and the Office in
writing of any credible evidence of criminal conduct or serious wrongdoing
relating to federal health care laws by the Company, its officers, employees and
agents. The Company shall provide the Monitor and the Office with all relevant
non-privileged documents and information concerning such allegations, including
but not limited to internal audit reports, letters threatening litigation,
“whistleblower” complaints, civil complaints, and documents produced in civil
litigation. In addition, the Company shall report to the Monitor and the Office
concerning its planned investigative measures and any resulting remedial
measures, internal and external. The Monitor in his or her discretion may
conduct an investigation into any such matters, and nothing in this paragraph
shall be construed as limiting the ability of the Monitor to investigate and
report to the Company and the Office concerning such matters.
Remedial Measures
     Responsibilities of Compliance Officer
     21. The Compliance Officer shall be responsible for monitoring the
day-to-day compliance activities of the Company. The Compliance Officer shall be
a member of senior management of the Company who reports directly to the
Nominating, Compliance and Governance Committee of the Board of Directors and
indirectly to the President and Chief Executive Officer, and shall not be a
subordinate to the General Counsel, the Chief Financial Officer, or any sales or
marketing officers. The Compliance Officer shall make periodic (at least
quarterly) reports regarding compliance matters to the Company Board of
Directors and is authorized to report on such matters directly to the Company
Board of Directors at any time.
     22. The Compliance Officer shall have the authority to meet with, and
require reports and certifications on any subject from, any officer or employee
of the Company and any distributor and its employees.
     23. The Compliance Officer shall be responsible for oversight, evaluation,
and approval of the Company’s Needs Assessments (described more fully at
paragraphs 27-30), and shall evaluate and approve requests for Consulting
Agreements, Services, and Payments, subject to review and approval by the
Monitor as set forth in paragraph 19.

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     24. The Compliance Officer shall be responsible for approving the
Consulting Services budget. All requests for Consulting Services and Payments
must be made to and approved by the Compliance Officer. Any Payments to or for
the benefit of a Consultant must be approved by the Compliance Officer, subject
to review of the Monitor as set forth in paragraph 19.
     25. Consulting Agreements shall be managed by Company employees who have no
sales responsibilities and who report to the Compliance Officer on issues
relating to Consulting Services. These employees shall interface directly with
the Consultants on the terms of their Consulting Agreements and on issues
relating to Payments.
     26. From the Effective Date until the Needs Assessment is approved, all
requests for Consulting Services and Payments shall be pre-approved by the
Compliance Officer. In considering these requests, the Compliance Officer and
any other Company personnel with knowledge of the request shall evaluate the
bona fides of the activity for which the Services or Payments are requested,
subject to review of the Monitor. No Consulting Services may be approved unless
the Compliance Officer verifies that the Company has a bona fide commercial need
for such services. No Payments may be made without appropriate documentation and
verification of services rendered on a standard form to be developed by the
Compliance Officer and approved by the Monitor.
Needs Assessment
     27. The Company shall complete a Needs Assessment no later than
December 31, 2010, and annually thereafter. The Needs Assessment may be modified
if bona fide, commercially reasonable, unexpected business needs arise
(“Modification”). The Needs Assessment must reflect the Company’s expected,
commercially reasonable needs for all Consulting Services to fulfill its
medical, clinical, training, educational, and research and development needs for
its hip and knee reconstruction and replacement products in the United States.
The Needs Assessment shall also contain a budget for the total amount of
honoraria, fellowships, gifts, donations, charitable contributions, and any
other payments contemplated to be made to Consultants for which no Consulting
Services are provided. The Needs Assessment and any Modifications shall be
prepared in consultation with those areas of the Company that have bona fide
needs for the services to be performed. The Needs Assessment and any
Modifications must be approved by the Compliance Officer and the Monitor before
they are finalized. As of January 1, 2011, the Needs Assessment and any
Modifications shall be used as a basis for Consultant selection and all
Consulting Agreements, Services and Payments. The Compliance Officer shall
attest to the best of his or her knowledge, after conducting reasonable due
diligence, that the Needs Assessment and any Modifications reflect the bona
fide, commercially reasonable consulting needs of the Company.
     28. The Needs Assessment shall establish or incorporate by reference
detailed protocols or procedures that must be followed before a Consulting
Agreement will be authorized. The Needs Assessment must identify and quantify
the services needed within each discrete service category (e.g., operating room
training, speaking engagements, clinical studies, product development groups),
and provide written support for the needs. The Needs Assessment must set

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forth the nature of the services needed, the range of hours or other
quantitative measure needed to complete the services, the number of Consultants
needed, and the maximum fair market value compensation to be paid for each
consulting service. The Needs Assessment shall also identify the qualifications
and expertise required to perform the services. The Needs Assessment shall
ensure that Services are distributed appropriately to all regions of the
country.
     29. The Needs Assessment and any approved Modifications shall be used to
define and limit all Consulting Services performed for the Company for the
ensuing year. All Consulting Agreements entered into by the Company shall be for
services specified and enumerated by the Needs Assessment and any approved
Modifications. No Consulting Agreement shall be entered into with any Consultant
for services outside those specified in the Needs Assessment and any approved
Modifications, or for services exceeding the number of services specified in the
Needs Assessment and any approved Modifications. For example, if the Needs
Assessment specifies that the Company will require Consultants to conduct 50
speaking engagements on a particular topic, once the total number of
contracted-for speaking engagements reaches 50, the Company may not engage any
additional Consultants for such speaking engagements unless it obtains an
approved Modification.
     30. The Company shall maintain a record of all Consulting Services provided
under the Needs Assessment and any Modifications. Monthly reports will be issued
by the Compliance Officer to the Monitor and to senior executives in the areas
in which services are provided summarizing the Consulting Services provided or
submitted for Payment, by Consultant, by region, and by total, with a list of
services left to be provided during the calendar year in fulfillment of the
Needs Assessment.
     Consulting Agreements
     31. All Consulting Agreements shall be in writing and executed by the
Compliance Officer, the President and Chief Executive Officer, and the Vice
President, General Counsel and Secretary. For product development and research
agreements, the Senior Vice President, Research and Development also shall sign.
For research and clinical services agreements (such as clinical trials, clinical
studies, and follow-up visits), the Vice President, Clinical and Regulatory
Affairs also shall sign. On an annual basis, the Compliance Officer, the Senior
Vice President, Research and Development, for product development and research
agreements, the Vice President, Clinical and Regulatory Affairs, for clinical
services agreements, shall attest and certify in writing that, based on their
reasonable inquiry and knowledge, all Consulting Agreements and all Consulting
Services performed thereunder were bona fide, commercially reasonable, and
compliant with all federal health care programs. The Company shall not enter
into Consulting Agreements with Consultants through any third parties, including
distributors. Subject to Monitor approval, payments may be made to Consultants
through consulting entities provided that (1) the Consultant is named in the
corresponding Consulting Agreement, and (2) the Consultant is named on any and
all payment documents.
     32. All Consulting Agreements for Consulting Services to be rendered in
2011 and thereafter shall be for a term of the calendar year, with the exception
of product development agreements that could result in the payment of royalties,
clinical agreements, external research

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agreements, or other agreements which may be for a length appropriate to the
type of Service being rendered, upon approval of the Monitor. All Consulting
Agreements shall identify the specific Services to be provided as defined by the
Needs Assessment and any Modification thereto, and specify the rate to be paid
for each Service. The Company may not enter into Consulting Agreements for
Services exceeding the total number of Services set forth in the Needs
Assessment and any Modification thereto. Consultants shall be paid only for the
actual time expended in providing Consulting Services, in hourly billing
increments or other reasonable quantitative measure as identified in the Needs
Assessment, without regard to the total amount of consulting services
permissible under their Consulting Agreements.
     New and Substitute Consultants
     33. The Compliance Officer, in consultation with the Monitor and
appropriate Company employees, shall conduct an evaluation of each new
Consultant to be considered for a Consulting Agreement. This evaluation shall
ensure that the proposed Consultant’s qualifications and experience are
commensurate with those required by the Needs Assessment and any Modification
thereto, and that any new relationship meets an unfilled bona fide commercial
need of the Company.
     34. In the event a Consultant is unable to provide services to the Company
under a Consulting Agreement in any given year, the Company may substitute
another Consultant or retain a new Consultant to perform the specified yet
unfulfilled Consulting Services of the Consulting Agreement. The substitute
Consultant must be authorized by the Compliance Officer and approved by the
Monitor after conducting a substantive review of the Consultant’s qualifications
and expertise.
     Payments to Consultants
     35. A Company employee or representative must be present for every
Consulting Service, except that the Monitor, upon application by the Compliance
Officer, may exempt certain Services from this requirement (such as collection
of clinical study data, travel or preparation time). Upon completion of the
Consulting Service, both the Company employee (or representative) in attendance
and the Consultant must independently verify in writing that the Service took
place, identify the participants present and length of service, and summarize
the Service provided. These verifications must be certified, made under penalty
of perjury, and submitted to the Compliance Officer within ninety (90) calendar
days of the date of the Service and as a condition precedent to any Payments
being issued under a Consulting Agreement.
     36. For all Consulting Agreements entered into after the Effective Date of
this DPA, the Company agrees to make Payments to Consultants at a fair market
value hourly rate (“Hourly Rate”) of no more than $500 per hour for time
actually expended by a Consultant performing Consulting Services. In the event
the Company wishes to make Payments to a Consultant at a higher Hourly Rate or
at a different rate because of the Consultant’s special expertise or the nature
of the service (such as a per patient rate for clinical studies), the Company
must obtain or have obtained a fair market value analysis conducted by an
independent organization with

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expertise in valuation as approved or accepted by the Monitor. Any changes to
the Hourly Rate or Payments at other than the Hourly Rate must be approved by
the Monitor.
     37. With respect to product development agreements and renewals entered
into after the Effective Date and for all Services to be rendered after
January 1, 2011, the Company shall pay a Consultant on a product development
team for the actual time spent providing Services to the Company, at no more
than the Hourly Rate. In addition to the Hourly Rate payments, the Company may
pay each member of a product development team royalties on any product the team
may develop. The number of Consultants serving on a product development team
must not exceed the number reasonably necessary to achieve the identified design
and development needs of the project. The aggregate royalties paid per project
to all Consultants shall not exceed fair market value expressed as a certain
percentage of all domestic and international product sales of the product or
products that are the subject of the product development agreement as proposed
by the Company and approved by the Monitor. These royalty payments and Hourly
Rate payments shall be the only compensation a Consultant may receive for
participation on a product design team; that is, the Company shall not make any
flat rate payments or minimum guaranteed payments in lieu of or in addition to
Hourly Rate payments and royalty payments. The Company may offset royalty
payments to a Consultant with Hourly Rate payments for Services the Consultant
appropriately performed. The Company may pay royalties to a Consultant only for
Intellectual Property received by the Company for products that have actually
been sold. (Products may be considered to have been sold when the products are
transferred to an unrelated third-party or to a Company affiliate located
outside the United States.) If the Intellectual Property has been patented in
the United States, royalty payments may not extend beyond the life of the U.S.
patent. If the Intellectual Property has not been patented, royalties may not
extend beyond a reasonable period (in light of factors such as the life cycle
and commercial advantages of the products and Intellectual Property and the
burden of administering the royalty arrangement). As used herein, “Intellectual
Property” includes patents, trade secrets and knowhow received by the Company
from the Consultant or product development team under a product development
agreement. The Company shall establish processes for reviewing individual
Consultant contributions to determine whether Intellectual Property has been
provided to the Company, and such processes shall be approved by the Monitor.
The persons responsible for deciding whether Intellectual Property has been
provided shall not be involved in sales functions, and their decision is subject
to Monitor approval. The identity of royalty-bearing products must be reasonable
(in light of factors such as the scope of Intellectual Property transferred, the
relationship of the Intellectual Property to the products and the burden of
administering the royalty arrangement) and is subject to Monitor approval.
Royalties must not be paid in advance or in anticipation of product development
that might result in a royalty. No royalty may be paid to a Consultant that is
earned by virtue of the use of the product in question by the Consultant or by
any hospital or medical institution with which the Consultant is affiliated. In
lieu of royalties, a fixed amount may be paid for Intellectual Property provided
to the Company, provided the amount is commercially reasonable; such fixed
amounts are subject to Monitor approval. For patents and patent applications
that are not assigned or licensed to the Company under a product development
agreement, royalties, patent fees, patent costs, and/or a fixed amount may be
paid for the acquisition or licensing of such patents and patent applications,
subject to Monitor approval.

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     38. All Consultants on product design teams shall submit invoices, at least
quarterly, and supporting documentation for services rendered to the Company’s
design team project manager for approval, prior to any Payments being made. A
Company employee shall be present at all meetings of product development teams.
That employee shall report the date, the participants, and a summary of the
meeting to the project manager. The project manager must certify in writing that
the invoices reflect bona fide services provided by the Consultant. These
invoices, supporting documentation, and certification must be submitted to the
Compliance Officer for Payment.
     39. In addition, the following practices have been or shall be implemented
no later than sixty (60) calendar days after the Effective Date:

  a.   The Company may not make Payments to Consultants for collection of
clinical data unless there is a written agreement defining the required
procedures and protocol and the amount of clinical data to be collected by the
Consultant, pre-approved by the Vice President, Clinical and Regulatory Affairs.
    b.   The Company may not make Payments to Consultants for research unless
there is a written agreement defining the required procedures and protocol,
pre-approved by the Senior Vice President, Research and Development. The Company
may not provide unrestricted grants to Consultants.     c.   The Company may not
fund any fellowships for fellows who work with any Consultant, with the
exception of fellowship funding to legitimate medical education foundations or
institutions so long as that funding is approved in advance by the Compliance
Officer and the Monitor.     d.   The Company may not make charitable
contributions to 501(c)(3) organizations that are, to the best of the Company’s
knowledge after reasonable due diligence is conducted, controlled by a
Consultant or an immediate family member of a Consultant, or at which an
immediate family member of a Consultant is employed. All charitable
contributions must be approved in advance by the Compliance Officer in
consultation with the Monitor, and the Monitor has the discretion to make
exceptions to the above standard.     e.   Other than Consulting Agreements, the
sale of products and associated equipment and instruments and the purchase of
Intellectual Property, the Company may have no commercial dealings with any
Consultant or any entity or organization that the Company has reason to believe,
after reasonable due diligence is conducted, is controlled by the Consultant or
an immediate family member of the Consultant. The Monitor has the discretion to
make exceptions to the above standard.

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  f.   The Company shall not hire or engage as an agent or distributor anyone in
order to induce a specific Consultant to use or purchase Company products.    
g.   The Compliance Officer shall notify the Monitor of any employees or
independent distributors who are known to bear an immediate family relationship
to any Consultant. In such cases, the Monitor may recommend changes in
assignment or case coverage to avoid actual or perceived conflicts of interest.

Disclosure
     40. All new Consulting Agreements and renewals shall require Consultants to
disclose their financial engagement with the Company to their patients, as well
as to their affiliated hospitals.
     41. Within thirty (30) calendar days of the Effective Date of this DPA, the
Company shall prominently feature on its web site the name, city, and state of
residence for each of the Company’s Consultants who were retained at any time in
2010, who provided Consulting Services to the Company at any time in 2010, or
who received any Payments from the Company in 2010. The Company shall also there
disclose the Payments made to each Consultant to date in 2010 within $25,000
increments, and all other Payments made in other than dollar form. Within ten
(10) calendar days after a new Consulting Agreement or renewal is executed, the
Company shall post the name of the Consultant on its web site. If the Company
has or does enter into a Consulting Agreement with an entity rather than an
individual, the Company shall post both the name of the entity and the
individual providing Services to the Company under the Consulting Agreement.
Payment information shall be updated quarterly during the term of this DPA to
reflect the total Payments made to each Consultant within $25,000 increments,
and all other Payments made in other than dollar form. The Company must also
disclose this information to the Consultant’s affiliated hospitals.
Compliance, Training, Hotline
     42. The Company agrees to enhance, support, and maintain its existing
training and education programs, including any programs recommended by the
Monitor pursuant to paragraph 18, above. The programs, which shall be reviewed
and approved by the Company President and Chief Executive Officer, Board of
Directors, Vice President, General Counsel and Secretary, Compliance Officer,
and the Monitor, shall be designed to advance and underscore the Company’s
commitment to exemplary corporate citizenship, to best practices of effective
corporate governance and the highest principles of integrity and
professionalism, and to fostering a culture of openness, accountability and
compliance with federal health care laws throughout the Company. Completion of
such training shall be mandatory for all Company officers, executives, and
employees who are involved in Sales, Marketing, Legal, Compliance, and other
senior executives at the Company as proposed by the Compliance Officer and
approved by the Monitor (collectively the “Mandatory Participants”). Such
training and education shall cover, at a minimum, all relevant federal health
care laws and regulations, internal controls in place concerning Consultants and
their Consulting Agreements with the Company, and the obligations

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assumed by, and responses expected of, the Mandatory Participants upon learning
of improper, illegal, or potentially illegal acts relating to the Company’s
sales and marketing practices. The Company Chief Executive Officer and Board of
Directors shall communicate to the Mandatory Participants, in writing or by
video, their review and endorsement of the training and education programs. The
Company shall commence providing this training within ninety (90) calendar days
after the Effective Date of this DPA.
     43. The Company agrees to maintain its confidential hotline and e-mail
address, of which Company employees, agents, and customers are informed and
which they can use to notify the Company of any concerns about unlawful conduct,
other wrongdoing, or evidence that Company practices do not conform to the
requirements of this Agreement. Subject to Monitor approval, the Company may
retain a vendor to assist in the maintenance of the Company’s confidential
hotline and e-mail address. This hotline and e-mail address shall be reviewed by
the Monitor. The Company shall post information about this hotline on its
website and shall inform all those who avail themselves of the hotline of the
Company’s commitment to non-retaliation and to maintain confidentiality and
anonymity with respect to such reports.
Disclosure of Monitor Reports
     44. The Company agrees that the Monitor may disclose his or her written
reports, as directed by the Office, to any other federal law enforcement or
regulatory agency in furtherance of an investigation of any other matters
discovered by, or brought to the attention of, the Office in connection with the
Office’s investigation of the Company or the implementation of this DPA. The
Company may identify any trade secret or proprietary information contained in
any report, and request that the Monitor redact such information prior to
disclosure.
Replacement of Monitor
     45. The Company agrees that if the Monitor resigns or is unable to serve
the balance of his or her term, a successor shall be selected by the Office
consistent with United States Department of Justice guidelines and after
consultation with the Company, within forty-five (45) calendar days. The Company
agrees that all provisions in this DPA that apply to the Monitor shall apply to
any successor Monitor.
Adopting Recommendations of Monitor
     46. The Company shall adopt all Recommendations contained in each report
submitted by the Monitor to the Office, unless the Company objects to the
Recommendation and the Office agrees that adoption of the Recommendation shall
not be required. The Monitor’s reports to the Office shall not be received or
reviewed by the Company prior to submission to the Office; such reports will be
preliminary until the Company is given the opportunity, within fifteen
(15) calendar days after the submission of the report to the Office, to comment
to the Monitor and the Office in writing upon such reports, and the Monitor has
reviewed and provided to the Office responses to such comments, upon which such
reports shall be considered final. In the event the Company disagrees with any
Recommendation of the Monitor, the Company and the Monitor may present the issue
to the United States Attorney for his consideration and final decision, which is
non-appealable.

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Meeting with the U.S. Attorney
     47. Within thirty (30) calendar days of the Effective Date of this DPA, the
Company agrees to call a meeting, on a date mutually agreed upon by the Company
and the Office, of Company senior compliance, sales, and marketing executives,
and any other Company employees whom the Company desires to attend, such meeting
to be attended by the United States Attorney, his designee, and/or other
representatives of the Office for the purpose of communicating the goals and
expected effect of this DPA.
Cooperation
     48. The Company agrees that its continuing cooperation during the term of
this DPA shall include, but shall not be limited to, the following:

  a.   Not engaging in or attempting to engage in any criminal conduct;     b.  
Completely, truthfully and promptly disclosing all non-privileged information
concerning all matters about which the Office and other government agencies
designated by the Office may inquire with respect to the Company’s compliance
with health care laws, and continuing to provide the Office, upon request, all
non-privileged documents and other materials relating to such inquiries;     c.
  Consenting to any order sought by the Office permitting disclosure to the
Civil Division of the United States Department of Justice of any materials
relating to compliance with federal health care laws that constitute “matters
occurring before the grand jury” within the meaning of Rule 6(e) of the Federal
Rules of Criminal Procedure. If the Company asserts that any such any material
contains trade secrets or other proprietary information, the Company shall
propose redactions to the Office prior to disclosure to any other governmental
entity, or the material shall be accompanied by a prominent warning notifying
the agency of the protected status of the material;     d.   Making available
current Company officers and employees and using its best efforts to make
available former Company officers and employees to provide information and/or
testimony at all reasonable times as requested by the Office, including sworn
testimony before a federal grand jury or in federal trials, as well as
interviews with federal law enforcement authorities as may relate to matters
involving compliance with health care laws. The Company is not required to
request of its current or former officers and employees that they forego seeking
the advice of an attorney nor that they act contrary to that advice. Cooperation
under this paragraph shall include, upon request, identification of witnesses
who, to the Company’s knowledge, may have material non-privileged information
regarding the matters under investigation;     e.   Providing testimony,
certifications, and other non-privileged information deemed necessary by the
Office or a court to identify or establish the original location, authenticity,
or other evidentiary foundation necessary to admit into evidence

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      documents in any criminal or other proceeding relating to compliance with
health care laws as requested by the Office;

  f.   The Company acknowledges and understands that its future cooperation is
an important factor in the decision of the Office to enter into this DPA, and
the Company agrees to continue to cooperate fully with the Office, and with any
other government agency designated by the Office, regarding any issue about
which the Company has knowledge or information with respect to compliance with
health care laws;     g.   This agreement to cooperate does not apply to any
information provided by the Company to legal counsel in connection with the
provision of legal advice and the legal advice itself, or to information or
documents prepared in anticipation of litigation, and nothing in this DPA shall
be construed to require the Company to provide any such information or advice to
the Office or any other government agency; and     h.   The cooperation
provisions in this paragraph shall not apply in the event that the Office
pursues a criminal prosecution against the Company.

Breach of Agreement
     49. Should the Office determine, in good faith and in its sole discretion,
during the term of this DPA that the Company has committed any criminal conduct
relating to compliance with health care laws subsequent to the Effective Date of
this DPA, the Company shall, in the discretion of the Office, thereafter be
subject to prosecution for any federal crimes of which the Office has knowledge.
     50. Should the Office determine in good faith and in its sole discretion
that the Company has knowingly and willfully breached any material provision of
this DPA, the Office shall provide written notice to the Company of the alleged
breach and provide the Company with a three-week period from receipt of such
notice in which to make a presentation to the Office to demonstrate that no
breach occurred, or, to the extent applicable, that the breach was not material
or knowingly and willfully committed or has been cured. The parties understand
and agree that should the Company fail to make a presentation to the Office
within the three-week period after receiving written notice of an alleged
breach, it shall be conclusively presumed that the Company is in breach of this
DPA. In the event the Office determines, in good faith and in its sole
discretion, that a second material breach has occurred, or that the first
material breach has not been adequately cured, the Office shall provide written
notice to the Company of the breach, and the breach may result, in the sole
discretion of the Office, in the prosecution of the Company relating to the
allegations set forth in the criminal complaint described in paragraph 2 above.
In the event of any breach of this DPA that results in a prosecution of the
Company, such prosecution may be premised upon any information provided by or on
behalf of the Company to the Office at any time, unless otherwise agreed at the
time the information was provided. The parties further understand and agree that
the determination whether the Company has breached this DPA rests solely in the
discretion of the Office, and the exercise of discretion by the Office

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under this paragraph is not subject to review in any court or tribunal outside
the United States Department of Justice.
     51. In the event of breach of this DPA as defined in paragraph 49 or 50
above, the Company may be subject to exclusion by HHS-OIG from participation in
all federal health care programs. Such exclusion shall have national effect and
shall also apply to all other federal procurement and non-procurement programs.
Federal health care programs shall not pay anyone for services or items
manufactured, furnished, or distributed by the Company in any capacity while the
Company is excluded. This payment prohibition applies to the Company and all
other individuals and entities (including, for example, anyone who employs or
contracts with the Company, and any hospital or other provider where the Company
provides services). The exclusion applies regardless of who submits the claim or
other request for payment. The Company shall not submit or cause to be submitted
to any federal health care program any claim or request for payment for services
or items manufactured, furnished, or distributed by the Company during the
exclusion. Violation of the conditions of the exclusion may result in criminal
prosecution, the imposition of civil monetary penalties and assessments, and an
additional period of exclusion. The Company further agrees to hold the federal
health care programs, and all federal beneficiaries and/or sponsors, harmless
from any financial responsibility for services or items manufactured, furnished
or distributed to such providers, beneficiaries or sponsors after the effective
date of the exclusion. The Company waives any further notice of the exclusion
under 42 U.S.C. § 1320a-7(b)(7), and agrees not to contest such exclusion either
administratively or in any state or federal court. Reinstatement to program
participation is not automatic. If at the end of the period of exclusion the
Company wishes to apply for reinstatement, the Company must submit a written
request for reinstatement to the OIG in accordance with the provisions of 42
C.F.R. §§ 1001.3001-.3005. The Company will not be reinstated unless and until
the OIG approves such request for reinstatement.
     52. In the event of breach of this DPA as defined in paragraph 49 and 50
above, the Office shall have discretion to extend the term of the Monitor by a
period of up to 6 months, with a total term not to exceed 18 months, in lieu of
prosecuting or subjecting the Company to exclusion.
     53. In the event that the Company can demonstrate to the Office that there
exists a change in circumstances sufficient to eliminate the need for a Monitor,
the Office may exercise its discretion, consistent with United States Department
of Justice policy, to terminate the monitorship.
Waivers and Limitations
     54. The Company shall expressly waive all rights to a speedy trial pursuant
to the Sixth Amendment of the United States Constitution, Title 18, United
States Code, Section 3161, Federal Rule of Criminal Procedure 48(b), and any
applicable Local Rules of the United States District Court for the District of
New Jersey, for the period that this DPA is in effect for any prosecution of the
Company relating to the allegations set forth in the criminal complaint
described in paragraph 2 above.

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     55. In case of a knowing and willful material breach of this DPA, any
prosecution of the Company relating to the allegations set forth in the criminal
complaint described in paragraph 2 above that is not time-barred by the
applicable statute of limitations as of the Effective Date of this DPA may be
commenced against the Company notwithstanding the expiration of any applicable
statute of limitations during the term of the DPA. The Company agrees to waive
any claims of improper venue with respect to any prosecution of the Company
relating to the allegations set forth in the criminal complaint described in
paragraph 2 above. This waiver is knowing and voluntary and in express reliance
on the advice of counsel. Any such waiver shall terminate upon final expiration
of this DPA.
     56. Absent the express written consent of the Office to conduct itself
otherwise, and consistent with United States Department of Justice policy, the
Company agrees that if, after the Effective Date of this Agreement, the Company
sells all or substantially all of its business operations as they exist as of
the Effective Date of this Agreement to a single purchaser or group of
affiliated purchasers during the term of this Agreement, or merges with a third
party in a transaction in which the Company is not the surviving entity, the
Company shall include in any contract for such sale or merger a provision
binding the purchaser, successor, or surviving entity to continue to comply with
the Company’s obligations as contained in this DPA.
     57. The Company is simultaneously entering into an agreement with the
Office’s Civil Division (the “Civil Settlement Agreement’) regarding the payment
of money to settle certain civil claims. The Company is also simultaneously
entering into a Corporate Integrity Agreement (“CIA”) with HHS-OIG to implement
certain specified compliance measures. Failure by the Company to comply fully
with those material terms of the Civil Settlement Agreement scheduled to occur
during the Effective Period of this DPA may constitute a breach of this DPA;
provided, however, that a breach of the CIA referenced in the Civil Settlement
Agreement does not constitute a breach of this DPA. Any disputes arising under
the CIA shall be resolved exclusively through the dispute resolution provisions
of the CIA.
     58. Nothing in this DPA restricts in any way the ability of the Office to
investigate and prosecute any current or former Company officer, employee, agent
or attorney.
     59. It is understood that this DPA is limited to the Company and the
Office, and it cannot bind other federal, state or local authorities. However,
the Office will bring this DPA, the United States Department of Justice Petite
Policy and the cooperation of the Company and its compliance with its other
obligations under this DPA to the attention of other prosecuting offices, if
requested to do so.
Dismissal of Complaint
     60. The Office agrees that if the Company is in full compliance with all of
its obligations under this DPA, the Office, within ten (10) calendar days of the
expiration of the term of this DPA, will seek dismissal with prejudice of the
criminal complaint described in paragraph 2 above. Except as otherwise provided
herein, during and upon the conclusion of the term of this DPA, the Office
agrees that it will not prosecute the Company further for the matters

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that have been the subject of the Office’s investigation relating to this DPA,
including but not limited to Payments that the Company made to Consultants
between 2002 and 2007.
The Full Agreement
     61. This DPA constitutes the full and complete agreement between the
Company and the Office and supersedes any previous agreement between them. No
additional promises, agreements, or conditions have been entered into other than
those set forth in this DPA, and none will be entered into unless in writing and
signed by the Office, Company counsel, and a duly authorized representative of
the Company. It is understood that the Office may permit exceptions to or excuse
particular requirements set forth in this DPA at the written request of the
Company or the Monitor, but any such permission shall be in writing.
     62. This DPA may be executed in counterparts, each of which shall be deemed
an original but all of which taken together shall constitute one and the same
agreement. The exchange of copies of this DPA and of signature pages by
facsimile or electronic transmission shall constitute effective execution and
delivery of this DPA as to the parties and may be used in lieu of the original
DPA for all purposes. Signatures of the parties transmitted by facsimile or
electronic transmission shall be deemed to be their original signatures for all
purposes.
AGREED TO:

     
/s/: Gary D. Henley
  /s/: J. Gilmore Childers      
Gary D. Henley
  J. Gilmore Childers
President and Chief Executive Officer
  Attorney for the United States, Acting Under
Wright Medical Technology, Inc.
  Authority Conferred by 28 U.S.C. § 515
 
         
9/22/10
Date
  9/29/10

Date

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DIRECTOR’S CERTIFICATE
     I have read this agreement and carefully reviewed every part of it with
counsel for Wright Medical Technology, Inc. (the “Company”). I understand the
terms of this Deferred Prosecution Agreement and voluntarily agree, on behalf of
the Company, to each of the terms. Before signing this Deferred Prosecution
Agreement, I consulted with the attorney for the Company. The attorney fully
advised me of the Company’s rights, of possible defenses, of the Sentencing
Guidelines’ provisions, and of the consequences of entering into this Deferred
Prosecution Agreement. No promises or inducements have been made other than
those contained in this Deferred Prosecution Agreement. Furthermore, no one has
threatened or forced me, or to my knowledge any person authorizing this Deferred
Prosecution Agreement on behalf of the Company, in any way to enter into this
Deferred Prosecution Agreement. I am also satisfied with the attorney’s
representation in this matter. I certify that I am a director of the Company,
and that I have been duly authorized by the Board of Directors of the Company to
execute this certificate on behalf of the Company.

     
/s/: Gary D. Henley
  9/22/10      
Wright Medical Technology, Inc.
  Date
 
   
By: Gary D. Henley
   

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CERTIFICATE OF COUNSEL
     I am counsel for Wright Medical Technology, Inc. (the “Company”). In
connection with such representation, I have examined relevant Company documents,
and have discussed this Deferred Prosecution Agreement with the authorized
representative of the Company. Based on my review of the foregoing materials and
discussions, I am of the opinion that:
     1. Gary D. Henley, President, Chief Executive Officer and a Director of the
Company, is duly authorized to enter into this Deferred Prosecution Agreement on
behalf of the Company; and
     2. This Deferred Prosecution Agreement has been duly and validly
authorized, executed and delivered on behalf of the Company, and is a valid and
binding obligation of the Company.
     Further, I have carefully reviewed every part of this Deferred Prosecution
Agreement with directors of the Company. I have fully advised these directors of
the Company’s rights, of possible defenses, of the Sentencing Guidelines’
provisions, and of the consequences of entering into this Agreement. To my
knowledge, the Company’s decision to enter into this Agreement is an informed
and voluntary one.

     
/s/: Karen F. Green, Esq.
  9/23/10      
Karen F. Green, Esq.
  Date
Wilmer Cutler Pickering Hale and Dorr LLP
   

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CERTIFIED COPY OF RESOLUTION
     Upon motion duly made, seconded, and unanimously carried by the affirmative
vote of all the Directors present, the following resolutions were adopted:
     WHEREAS, Wright Medical Technology, Inc. (the “Company”) has been engaged
in discussions with the United States Attorney’s Office for the District of New
Jersey (the “Office”) in connection with an investigation being conducted by
that Office;
     WHEREAS, the Board of the Company consents to resolution of these
discussions by entering into a deferred prosecution agreement that the Company
Board of Directors has reviewed with outside counsel representing the Company,
relating to a criminal complaint to be filed in the U.S. District Court for the
District of New Jersey charging the Company with conspiracy to commit violations
of the federal anti-kickback statute;
     NOW THEREFORE, BE IT RESOLVED that Gary D. Henley, the Company’s President,
Chief Executive Officer and a Director, be, and hereby is authorized to execute
the Deferred Prosecution Agreement on behalf of the Company substantially in the
same form as reviewed by the Company Board of Directors at this meeting and as
attached hereto as Exhibit A, and is authorized to execute the Director’s
Certificate attached thereto.

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SECRETARY’S CERTIFICATION
     I, Raymond C. Kolls, the duly elected Secretary of Wright Medical
Technology, Inc. (the “Company”) a corporation duly organized under the laws of
the State of Delaware, hereby certify that the following is a true and exact
copy of a resolution approved by the Board of Directors of the Company at its
telephonic meeting held on the 21st day of September, 2010;
     WHEREAS, Wright Medical Technology, Inc. has been engaged in discussions
with the United States Attorney’s Office for the District of New Jersey (the
“Office”) in connection with an investigation being conducted by the Office into
activities of the Company relating to certain payments to Consultants who have
selected orthopaedic hip and knee replacement products manufactured by the
Company in surgeries performed by them;
     WHEREAS, the Board of Directors of the Company consents to resolution of
these discussions on behalf of the Company by entering into a deferred
prosecution agreement that the Board of Directors has reviewed with outside
counsel representing the Company, relating to a criminal complaint to be filed
in the U.S. District Court for the District of New Jersey charging the Company
with conspiracy to commit violations of the federal anti-kickback statute;
     NOW THEREFORE, BE IT RESOLVED that Gary D. Henley, the Company’s President,
Chief Executive Officer and a Director be, and hereby is authorized to execute
the Deferred Prosecution Agreement on behalf of the Company substantially in the
same form as reviewed by the Board of Directors at this meeting and as attached
hereto as Exhibit A, and is authorized to execute the Director’s Certificate
attached thereto.
     IN WITNESS WHEREOF, I have hereunto signed my name as Secretary and affixed
the Seal of said Corporation this 21st day of September, 2010.

     
 
  /s/: Raymond C. Kolls      
 
  Raymond C. Kolls, Secretary

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