Exhibit
10.1


 


SECURITIES PURCHASE AND LOCK-UP
AGREEMENT


 


This
SECURITIES PURCHASE AND LOCK-UP AGREEMENT (this “Agreement”) is entered
into as of October 18, 2010, by and between Hanger Orthopedic Group, Inc.,
a Delaware corporation (“Seller”), and John B. Beach, an individual
residing at 10490 Chadwell Drive, Reno, Nevada 89521 (“Buyer”).  Buyer and Seller are referred to collectively
herein as the “Parties.”


 


R E C I T A L S:


 


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, Seller is
executing and delivering an Agreement and Plan of Merger (the “Merger
Agreement”) by and among Seller, Speed Acquisition Vehicle, Inc. (“Merger
Sub”), Accelerated Care Plus Corp. (“ACP”), ComVest ACPC Holdings,
LLC, and John B. Beach, pursuant to which Merger Sub will merge with and into
ACP with ACP as the surviving corporation and a wholly owned subsidiary of
Seller;


 


WHEREAS,
in connection with, and as a condition to the closing of the transactions
contemplated in the Merger Agreement, certain of ACP’s key executives,
including Buyer, have agreed to execute and deliver this Agreement to purchase
shares of Common Stock, par value $0.01 per share, of Seller (“Common Stock”);


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement, Seller desires
to sell to Buyer, and Buyer desires to purchase from Seller, 356,676  shares of Seller’s Common Stock (the “Shares”); and


 


WHEREAS,
Seller and Buyer are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by Section 4(2) of
the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the Securities Act.


 


NOW,
THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:


 


1.             Definitions.  The following terms shall
have the meanings given to them below when used herein:


 


“Accredited
Investor Questionnaire” has the meaning set forth in Section 3(b)(vi).


 


“ACP”
has the meaning set forth in the Recitals.


 


“Adverse
Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, 


 

















 


liens,
losses, expenses, and fees, including court costs and reasonable attorneys’
fees and expenses.


 


“Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Exchange Act.


 


“Agreement”
has the meaning set forth in the Preamble.


 


“Buyer”
has the meaning set forth in the Preamble.


 


“Closing”
has the meaning set forth in Section 2(c).


 


“Closing
Date” has the meaning set forth in Section 2(c).


 


“Common
Stock” has the meaning set forth in the Recitals.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


“Governmental
Entity” means any supranational, national, state, provincial, municipal,
local or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, judicial,
administrative, taxing, importing or other governmental or quasi-governmental
authority.


 


“Laws”
has the meaning set forth in Section 3(a)(iii).


 


“Merger
Agreement” has the meaning set forth in the Recitals.


 


“Merger
Sub” has the meaning set forth in the Recitals.


 


“Non-Voting
Common Stock” has the meaning set forth in Section 3(a)(iv).


 


“Parties”
has the meaning set forth in the Preamble.


 


“Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, a Governmental Entity (or any department, agency,
or political subdivision thereof) or any other entity.


 


“Preferred
Stock” has the meaning set forth in Section 3(a)(iv).


 


“Purchase
Price” has the meaning set forth in Section 2(b).


 


“Regulation
D” has the meaning set forth in the Recitals.


 


“Relevant
Seller SEC Reports” has the meaning set forth in Section 3(a)(v)(A).


 


“Rule 144”
has the meaning set forth in Section 3(b)(x).


 


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“SEC”
has the meaning set forth in the Recitals.


 


“Securities
Act” has the meaning set forth in the Recitals.


 


“Seller”
has the meaning set forth in the Preamble.


 


“Seller
Material Adverse Effect” has the meaning set forth in Section 3(a)(iii).


 


“Seller
SEC Reports” has the meaning set forth in Section 3(a)(v)(A).


 


“Shares”
has the meaning set forth in the Recitals.


 


2.             Sale
and Purchase of the Shares.


 


(a)           Sale
and Purchase of the Shares.  Subject to the terms and conditions and based
upon the representations and warranties contained herein, on the Closing Date,
Seller agrees to sell the Shares to Buyer and Buyer agrees to purchase the
Shares from Seller for the purchase price provided in Section 2(b).


 


(b)           Purchase
Price.  The aggregate
purchase price to be paid by Buyer at Closing for the Shares shall be Five
Million Three Hundred Seventy-Five Thousand One Hundred Seven and 32/100
Dollars ($5,375,107.32) (the “Purchase Price”), payable by wire transfer
or delivery of other immediately available funds by Buyer to Seller.


 


(c)           The
Closing.   Upon the terms and subject to the satisfaction
or waiver of the conditions set forth herein (other than those conditions that,
by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions), the closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place remotely
through the exchange of documents and signatures on or immediately following
the date of the closing of the transactions contemplated by the Merger
Agreement, or at such location and on such other date as Buyer and Seller may
mutually agree in writing (such date, the “Closing Date”); provided, however, that each of the Parties hereto agrees
that the Closing shall take place immediately following the closing of the
transactions contemplated by the Merger Agreement.


 


(d)           Deliveries
at the Closing.  At the
Closing, (i) Buyer shall deliver to Seller the Purchase Price specified in
Section 2(b), (ii) Seller shall deliver to Buyer evidence indicating
that the Shares have been registered in Buyer’s name by book entry, and (iii) the
Parties shall deliver the certificates, instruments, and other documents
referred to in Section 5.


 


3.             Representations
and Warranties of the Parties.


 


(a)           Representations
and Warranties of Seller.  Seller hereby represents and warrants to
Buyer as follows as of the date of this Agreement and as of the Closing Date:


 


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(i)            Organization
of Seller.  Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.


 


(ii)           Authorization
of Transaction.  Seller has
all requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.  This Agreement has been duly executed and
delivered by Seller and, assuming the due authorization, execution and delivery
of this Agreement by Buyer, constitutes the legal, valid and binding obligation
of Seller, enforceable in accordance with its terms.  The execution and delivery of this Agreement
by Seller does not, and the performance of this Agreement by Seller will not, require
Seller to obtain any consent, approval, authorization or permit of, or to make
any filing with or notification to, any Governmental Entities, other than (A) any
filings required by applicable state securities laws, (B) the filing of a Form D
with the SEC under Regulation D of the Securities Act, and (C) any other
filings required by the Securities Act or the Exchange Act, if any.  The Shares are duly authorized and, upon
issuance in accordance with this Agreement, will be validly issued, fully paid,
nonassessable and free of preemptive rights.


 


(iii)         Noncontravention.  The execution and delivery of this Agreement
by Seller do not, and the performance of this Agreement by Seller will not (A) conflict
with or violate the Certificate of Incorporation or Bylaws of Seller, (B) conflict
with or violate any federal, state, foreign or local law, statute, ordinance,
rule, regulation, order, injunction, ruling, judgment or decree (collectively, “Laws”)
in effect as of the date of this Agreement applicable to Seller or by which
Seller’s property is bound, or (C) 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 give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation of a lien or encumbrance on any of the properties or assets of Seller
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Seller is
a party or by which Seller or any of its property is bound or subject, except
for breaches, defaults, events, rights of termination, amendment, acceleration
or cancellation, payment obligations or liens or encumbrances that would not
have a material adverse effect on Seller’s business, properties, assets,
condition (financial or otherwise), liabilities, operations or prospects (“Seller
Material Adverse Effect”).


 


(iv)          Capitalization.  As of the date of this
Agreement, the authorized capital stock of Seller consists of (A) 70,000,000
shares of common stock, consisting of (1) 60,000,000 shares of Common
Stock, of which 35,559,031 shares are issued and outstanding as of the date of
this Agreement, and (2) 10,000,000 shares of Non-Voting Common Stock, par
value $0.01 per share (the “Non-Voting Common Stock”), none of which are
issued and outstanding as of the date of this Agreement, and (B) 10,000,000
shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
none of which are issued and outstanding as of the date of this Agreement.  141,154 shares of Seller’s Common Stock are
held 


 


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in treasury; 0 shares of
Seller’s Non-Voting Common Stock are held in treasury; and 0 shares of Seller’s
Preferred Stock are held in treasury. 
All of such issued and outstanding shares have been validly issued and
are fully paid and nonassessable.  Schedule
3(a)(iv) attached hereto lists all outstanding securities issued by
Seller, as of September 30, 2010, that give the holders of such securities
the right to acquire any shares of capital stock of Seller (whether by
purchase, exchange, conversion or exercise of options or warrants).


 


(v)           Reports;
Financial Statements.


 


(A)          Seller is current in all
forms, reports, statements and other documents required to be filed with the
SEC (collectively, the “Seller SEC Reports”), except where the failure
to be current would not have a Seller Material Adverse Effect.  The Seller SEC Reports, including all Seller
SEC Reports filed prior to the Closing Date (the “Relevant Seller SEC
Reports”), were or will be prepared in all material respects in accordance
with the requirements of applicable Law (including, the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Seller SEC Reports).  As of their respective dates, the Relevant
Seller SEC Reports did 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 made therein, in the light of the circumstances under which
they were made, not misleading.


 


(B)          Each of the financial
statements (including, in each case, any related notes thereto) contained in
the Relevant Seller SEC Reports (i) have been or will be prepared in
accordance with, and complied or will comply as to form with, the published rules and
regulations of the SEC and GAAP applied on a consistent basis throughout the periods
involved (except as otherwise noted therein) and (ii) fairly present or
will fairly present, in all material respects, the financial position of Seller
as of the respective dates thereof and the results of its operations and cash
flows for the periods indicated, except that any unaudited interim financial
statements were or will be subject to normal and recurring year-end
adjustments.


 


(vi)          Absence of Certain Changes or
Events.  Except as
and to the extent disclosed in the Seller SEC Reports filed prior to the date
of this Agreement or as contemplated in this Agreement, since the end of the
calendar period for which Seller filed its most recent Seller SEC Report, there
has not been (a) a Seller Material Adverse Effect or (b) any
significant change by Seller in its accounting methods, principles or
practices.


 


(vii)        Brokers’ Fees.  Seller has no liability or
obligation to pay any fees or commissions to any investment banker, broker,
finder, or agent with respect to 


 


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the transactions
contemplated by this Agreement for which Buyer could become liable or
obligated.


 


(viii)       No Other Representations and
Warranties.  Except for the
representations and warranties of Buyer contained in Section 3(b) of
this Agreement, Seller acknowledges that Buyer is not making any
representations or warranties, and Buyer hereby disclaims any other
representations or warranties with respect to the negotiation, execution and
delivery of this Agreement or the transactions contemplated hereby,
notwithstanding the delivery or disclosure, in writing or orally, to Seller or
any of its officers, directors, employees, agents, Affiliates or other
representatives of any documentation or other information.


 


(b)           Representations
and Warranties of Buyer.  Buyer hereby represents, warrants and
covenants to Seller as follows as of the date of this Agreement and as of the
Closing Date:


 


(i)            Organization
of Buyer.  Buyer is a
natural person over 21 years of age who is domiciled in the State of Nevada.


 


(ii)           Authorization
of Transaction.  Buyer has
full capacity and authority to execute and deliver this Agreement and to
perform its obligations hereunder.  This
Agreement constitutes the valid and legally binding obligation of Buyer,
enforceable in accordance with its terms and conditions.  Buyer is not required to give any notice to,
make any filing with, or obtain any authorization, consent or approval of any
Governmental Entity in order to consummate the transactions contemplated by
this Agreement.


 


(iii)         Noncontravention.  The execution and delivery of this Agreement
by Buyer does not, and the performance of this Agreement by Buyer will not (A) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge or other restriction of any government, Governmental
Entity, or court to which Buyer is subject or (B) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify or cancel, or require
any notice under any agreement, contract, lease, license, instrument or other
arrangement to which Buyer is a party, by which Buyer is bound or to which any
assets of Buyer are subject.


 


(iv)          Brokers’ Fees.  Buyer has no liability or obligation to pay
any fees or commissions to any investment banker, broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Seller
could become liable or obligated.


 


(v)           Investment.  Buyer is acquiring the Shares
for investment for Buyer’s own account, not as a nominee or agent, and not with
a view to the direct or indirect sale or distribution of any part thereof, and
Buyer has no present intention of selling, granting any participation in, or
otherwise distributing the 


 


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Shares.  Buyer has no contract, undertaking, agreement
or arrangement with any person to sell, transfer, or grant participation to
such person or to any third person, with respect to any of the Shares.


 


(vi)          Accredited Investor Status.  Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation
D.  The representations and warranties to
be made by Buyer in his or her completed Accredited Investor Questionnaire, in
substantially the form attached hereto as Exhibit A (the “Accredited
Investor Questionnaire”), regarding his or her status as an “accredited
investor” will be true and correct as of the date Buyer completes, executes and
delivers such Accredited Investor Questionnaire to Seller and as of the Closing
Date.


 


(vii)        Reliance on Exemptions.  Buyer understands that the
Shares are being offered and sold to him or her in reliance on specific
exemptions from the registration requirements of United States federal securities
laws and that Seller is relying upon the truth and accuracy of, and Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Buyer set forth herein and in the completed Accredited
Investor Questionnaire, in substantially the form attached hereto as Exhibit A,
to be delivered to Seller in order to determine the availability of such
exemptions and the eligibility of Buyer to acquire the Shares.


 


(viii)       Information.  Buyer and his or her advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of Seller and materials relating to the offer and sale of the Shares
which have been requested by Buyer. 
Buyer and his or her advisors, if any, have been afforded the
opportunity to ask questions of Seller. 
Neither such inquiries nor any other due diligence investigations
conducted by Buyer or his or her advisors or representatives, nor any other
statement in this Section 3(b), shall modify, amend or affect Seller’s representations
and warranties contained herein or Buyer’s right to rely thereon.  Buyer understands that his or her investment
in the Shares involves a high degree of risk. 
Buyer has sought such accounting, legal and tax advice as he or she has
considered necessary to make an informed investment decision with respect to
his or her acquisition of the Shares.


 


(ix)          No Governmental Review.  Buyer understands that no United States
federal or state agency or any other government or governmental agency has passed
on or made any recommendation or endorsement of the Shares or the fairness or
suitability of the investment in the Shares nor have such authorities passed
upon or endorsed the merits of the offering of the Shares.


 


(x)           Transfer
or Resale.  Buyer
understands that, subject to Section 4(b):


 


(A)          the Shares have not been and
are not being registered under the Securities Act, and may not be offered for
sale, sold, assigned or 


 


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transferred unless (1) subsequently
registered thereunder, (2) Buyer shall have delivered to Seller an opinion
of counsel, in a generally acceptable form, to the effect that such Shares to
be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (3) Buyer provides Seller with
reasonable assurance that such Shares can be sold, assigned or transferred
pursuant to Rule 144 promulgated under the Securities Act (or a successor rule thereto)
(“Rule 144”);


 


(B)          any sale of the Shares made
in reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and, further, if Rule 144 is not applicable, any resale of the Shares
under circumstances in which the seller (or the Person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the SEC thereunder; and


 


(C)          neither Seller nor any other
Person is under any obligation to register the Shares under the Securities Act
or to comply with the terms and conditions of any exemption thereunder.


 


Subject to the restrictions set forth in Section 4(b),
the Shares may be pledged in connection with a bona fide margin account or
other loan or financing arrangement secured by the Shares and such pledge of
Shares shall not be deemed to be a transfer, sale or assignment of the Shares
hereunder, and Buyer shall not be required to provide Seller with any notice
thereof or otherwise make any delivery to Seller pursuant to this Agreement,
including, without limitation, this Section 3(b)(x), in connection with
such a pledge.


 


Buyer has not, in anticipation of this Agreement and
Buyer’s acquisition of and investment in the Shares, and in any case during
forty-five (45) days prior to the date hereof, effected any “short” sales with
respect to Seller’s Common Stock or entered into any swap or any other
agreement, transaction or series of transactions that hedges or transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such transaction, swap or series of
transactions is to be settled by delivery of securities, in cash or otherwise.


 


(xi)          Legends.  Buyer understands that,
until such time as provided in Section 4(c), any stock certificates
representing the Shares shall bear restrictive legends in substantially the
form set forth in Section 4(c) (and a stop-transfer order may be
placed against transfer of such stock certificates) in accordance with the
terms and conditions of Section 4(c).


 


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(xii)                         No
Ownership of Common Stock.  Buyer does not beneficially own any shares of
Seller’s Common Stock as of the date of this Agreement.


 


(xiii)                     Knowledge
and Experience.  Buyer has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of Buyer’s investment in the Shares.


 


(xiv)                      No
Need for Liquidity.  Buyer
has no need for liquidity with respect to Buyer’s investment in the Shares to
satisfy any existing or contemplated need, undertaking or indebtedness.  Buyer is able to bear the economic risk of
Buyer’s investment in the Shares for an indefinite period, including the risk
of losing all of Buyer’s investment.


 


(xv)                          No
General Solicitation.  The
Shares were not offered to Buyer by means of: (A) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar medium, or broadcast over television or radio, (B) any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising, or (C) any other form of general solicitation or
advertising contemplated by Regulation D.


 


(xvi)                      No
Other Representations and Warranties.  Except for the representations and warranties
of Seller contained in Section 3(a) of this Agreement, Buyer
acknowledges that Seller is not making any representations or warranties, and
Seller hereby disclaims any other representations or warranties with respect to
the negotiation, execution and delivery of this Agreement or the transactions
contemplated hereby, notwithstanding the delivery or disclosure, in writing or
orally, to Buyer or any of its officers, directors, employees, agents,
Affiliates or other representatives of any documentation or other information.


 


4.                                      Covenants.


 


(a)                                 General.  In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the
requesting Party.


 


(b)                                 Lock-Up
Agreement.


 


(i)                                    Buyer hereby
agrees that during the three (3) year period beginning on the Closing
Date, Buyer will not offer, sell, contract to sell, pledge, transfer, or
otherwise dispose of, directly or indirectly, any of the Shares, enter into a
transaction that would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of the Shares, without, in each case, the prior written consent of
Seller.  The restrictions set forth in
this Section 4(b) shall lapse and be of no further effect in
accordance with the following schedule:  (A) with
respect to fifty percent (50%) of the aggregate number of Shares purchased by
Buyer, on or after 


 


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the first anniversary of the
Closing Date, the restrictions set forth in this Section 4(b) shall
lapse and be of no further effect; (B) with respect to twenty-five percent
(25%) of the aggregate number of Shares purchased by Buyer, on or after the
second anniversary of the Closing Date, the restrictions set forth in this Section 4(b) shall
lapse and be of no further effect; and (C) with respect to the remaining
twenty-five percent (25%) of the aggregate number of Shares purchased by Buyer,
on or after the third anniversary of the Closing Date, the restrictions set
forth in this Section 4(b) shall lapse and be of no further effect.


 


(ii)                                The
restrictions in Section 4(b)(i) shall not apply to (A) transactions
relating to any securities of Seller acquired by Buyer or any of his or her
Affiliates (1) prior to the execution of this Agreement or (2) in the
open market after the date of this Agreement, or (B) with respect to
transfers to immediate family members, Affiliates, partners, or former partners
of Buyer in private transactions in which the transferee agrees in writing with
Seller to be bound by the provisions of this Agreement as if such transferee
were Buyer.


 


(iii)                            In the event
that Buyer’s employment is terminated by Seller without Cause (as such term is
defined in Buyer’s employment agreement with Seller) or by Buyer for Good
Reason (as such term is defined in Buyer’s employment agreement with Seller)
following the Closing, the restrictions in this Section 4(b) shall
terminate in their entirety automatically upon the effective date of
termination of Buyer’s employment by Seller.


 


(c)                                  Legends.


 


(i)                                    Buyer agrees
that any certificates representing the Shares, except as set forth below, shall
bear a restrictive legend in substantially the following form:


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. 
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144
UNDER THE SECURITIES ACT.


 


The legend set forth above shall be removed and
Seller shall issue a certificate without such legend to the holder of the
applicable Shares upon which it is stamped if (A) such Shares are
registered for resale under the 


 


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Securities
Act, (B) in connection with a sale, assignment or other transfer, such
holder provides Seller with an opinion of counsel, in a generally acceptable
form, to the effect that such sale, assignment or transfer of the Shares may be
made without registration under the applicable requirements of the Securities
Act, or (C) such holder provides Seller with reasonable assurance that the
Shares may be sold, assigned or transferred pursuant to Rule 144(b)(1)(i).


 


(ii)                                Buyer further
agrees that any certificates representing the Shares, except as set forth
below, shall bear a second restrictive legend in substantially the following
form:


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A SECURITIES PURCHASE AND LOCK-UP AGREEMENT
BETWEEN THE CORPORATION AND THE STOCKHOLDER, DATED AS OF OCTOBER 18, 2010.  THE FOREGOING AGREEMENT SHALL BE BINDING ON
ALL HEIRS, ADMINISTRATORS, EXECUTORS AND ASSIGNEES OR SUCCESSORS IN INTEREST TO
EITHER THE CORPORATION OR THE STOCKHOLDER IN ACCORDANCE WITH ITS TERMS. THE
SECURITIES PURCHASE AND LOCK-UP AGREEMENT MAY BE INSPECTED AT THE
PRINCIPAL OFFICE OF THE CORPORATION DURING NORMAL BUSINESS HOURS.


 


The legend set forth above shall be removed and
Seller shall issue a certificate without such legend to the holder of the
applicable Shares upon which it is stamped, (A) when, in accordance with Section 4(b)(i),
the restrictions set forth in Section 4(b)(i) have lapsed and are of
no further effect, or (B) if the restrictions set forth in Section 4(b)(i) have
terminated in accordance with Section 4(b)(iii).


 


(d)                                 Transfer
Taxes.  Any stock
transfer, stamp, registration or other similar taxes or fees payable as a
direct result of the sale and transfer of the Shares to Buyer hereunder shall
be paid by Seller.  The Party required by
applicable Law to file tax returns required in connection with such taxes and
fees shall file such tax returns.  Each
Party hereto shall use commercially reasonable efforts to cooperate in the
preparation, execution and filing of all tax returns and other documents
required in connection with such taxes and fees.


 


(e)                                  No
Short Sales in Violation of the Securities Act.  Except in compliance with the Securities Act
and any applicable interpretations of the SEC promulgated thereunder, Buyer
will not effect any “short” sales with respect to the Shares or enter into any
swap or any other agreement, transaction or series of transactions that hedges
or transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Shares, whether any such transaction, swap or
series of transactions is to be settled by delivery of securities, in cash or
otherwise.


 


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5.                                      Conditions
to Obligation to Close.


 


(a)                                 Conditions
to Obligation of Buyer.   The obligation of Buyer to purchase the Shares
at the Closing and to otherwise consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions, each of which may be waived, in whole or in part, to the extent
permitted by applicable Law, by Buyer in writing:


 


(i)                                    the
representations and warranties set forth in Section 3(a) shall be
true and correct in all material respects at and as of the Closing Date;


 


(ii)                                Seller shall
have performed and complied with all of its covenants hereunder in all material
respects through the Closing;


 


(iii)                            there shall not
be any injunction, judgment, order, decree, ruling or charge in effect
preventing consummation of any of the transactions contemplated by this
Agreement; and


 


(iv)                             the closing of
the transactions contemplated by the Merger Agreement shall have occurred.


 


(b)                                 Conditions
to Obligation of Seller.   The obligation of Seller to issue and sell the
Shares to Buyer at the Closing and to otherwise consummate the transactions to
be performed by it in connection with the Closing is subject to satisfaction of
the following conditions, each of which may be waived, in whole or in part, to
the extent permitted by applicable Law, by Seller in writing:


 


(i)                                    the
representations and warranties set forth in Section 3(b) shall be
true and correct in all material respects at and as of the Closing Date;


 


(ii)                                Buyer shall
have performed and complied with all of its covenants hereunder in all material
respects through the Closing;


 


(iii)                            there shall not
be any injunction, judgment, order, decree, ruling or charge in effect
preventing consummation of any of the transactions contemplated by this
Agreement;


 


(iv)                             the closing of
the transactions contemplated by the Merger Agreement shall have occurred; and


 


(v)                                 Buyer shall
have delivered to Seller a completed Accredited Investor Questionnaire in
substantially the form attached hereto as Exhibit A.


 


6.                                      Survival
of Representations, Warranties and Covenants.  All of the representations and warranties of
Seller and Buyer contained in Section 3(a) and Section 3(b),
respectively, shall survive the Closing and continue in full force and effect
until the eighteen (18) month anniversary of the Closing Date (subject to any
applicable statutes of limitations), and all 


 


12

















 


of the covenants of Seller and Buyer contained
herein shall survive the Closing and continue in full force and effect until
the eighteen (18) month anniversary of the Closing Date.


 


7.                                      Termination.


 


(a)                                 Termination
of Agreement.  Certain of
the Parties may terminate this Agreement as provided below:


 


(i)                                    Buyer and
Seller may terminate this Agreement by mutual written consent at any time prior
to the Closing; and


 


(ii)                                This Agreement
shall terminate automatically in the event that the Merger Agreement is
terminated or in the event that the transactions contemplated by the Merger
Agreement fail to close.


 


(b)                                 Effect
of Termination.  If any Party
terminates this Agreement pursuant to Section 7(a) above, all rights
and obligations of the Parties hereunder shall terminate without any liability
of any Party to any other Party (except for any liability of any Party then in
breach).


 


8.                                      Miscellaneous.


 


(a)                                 Press
Releases and Public Announcements.  From the date hereof through the Effective
Time of the Merger (as defined in the Merger Agreement), the Parties hereto
agree not to make public any of the terms of this Agreement, the Merger
Agreement, the Merger, all other transactions contemplated hereunder and
thereunder, and all Exhibits executed in connection herewith and therewith,
unless otherwise required by law, regulation, rule, judicial order or a
directive from the SEC or the New York Stock Exchange or unless in connection with
an alleged or actual violation of the terms of Section 5 or Section 6
of the Employment Agreements (as defined in the Merger Agreement) and/or the
terms of the Non-Competition Agreements (as defined in the Merger
Agreement).  Notwithstanding the foregoing,
the Parties hereto agree that (i) Seller shall publicly announce its entry
into the Merger Agreement through a press release issued after the close of the
trading markets on the date of the Merger Agreement and a Form 8-K filed
with the SEC; (ii) a draft of the press release and the Form 8-K
shall be provided for ACP’s review prior to the issuance and filing thereof; (iii) after
the issuance of the press release, ACP shall be permitted to communicate with
its customers, employees and suppliers concerning the existence of the Merger
Agreement; and (iv) except as otherwise mutually agreed by the Parties,
prior to the issuance of the press release, only Seller may make any public
announcement of the existence of this Agreement, the Merger Agreement, and/or
the transactions contemplated hereby or thereby, including but not limited to
the Merger.


 


(b)                                 Fees,
Expenses, and Other Payments.  Each Party shall bear its own costs and
expenses incurred in connection with the preparation, negotiation and
performance of this Agreement (including the certificates, schedules and
Exhibits executed or drafted in connection with this Agreement and any prior
memorandum of understanding or letter of intent relating hereto) and the
transactions contemplated 


 


13

















 


hereby, including all due
diligence expenses and fees and expenses of agents, representatives, counsel
and accountants.


 


(c)                                  Notices.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested), or delivered by
overnight delivery service (e.g., FedEx), to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like
changes of address) or sent by electronic transmission to the fax number
specified below:


 


If
to Seller:


 


Hanger Orthopedic Group, Inc.


10910 Domain Drive, Suite 300


Austin, Texas 78758


Attention: 
President


Attention: 
Chief Financial Officer


Attention: 
General Counsel


Phone No.: (512) 777-3800


Fax No.: (512) 777-3779


 


with
a copy to:


 


Foley & Lardner LLP


3000 K Street, N.W., Suite 600


Washington, D.C. 
20007


Attention: 
Jay W. Freedman, Esq.


Phone No.: (202) 672-5300


Fax No.: (202) 672-5399


 


If
to Buyer:


 


Mr. John B. Beach


10490 Chadwell Drive


Reno, Nevada 89521


Phone No.: (310) 569-9412

Fax No.: 310-265-0798


 


14

















 


with
a copy to:


 


Stinson Morrison Hecker LLP


1201 Walnut, Suite 2900


Kansas
City, Missouri 64106-2150

Attention:  John A. Granda, Esq.


Phone
No.: (816) 691-3188

Fax No.: (816) 412-1159


 


(d)                                 Construction.  The Parties have
participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.


 


(e)                                  Headings;
Construction.  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.  All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.  Unless otherwise expressly provided, the word
“including” does not limit the preceding words or terms.


 


(f)                                   Severability.  If any term or other provision of this
Agreement is determined to be 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 hereto as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.


 


(g)                                 Entire
Agreement and Modification.  This Agreement (together with the Exhibits
and schedules) constitutes the entire agreement of the Parties and supersedes
all prior agreements and undertakings, both written and oral, between the
Parties hereto with respect to the subject matter hereof.  This Agreement may not be amended except by a
written agreement executed by the Party to be charged with the amendment.


 


(h)                                 Assignment.  This Agreement shall not be assigned by
operation of law or otherwise.


 


(i)                                    Parties
in Interest.  This
Agreement shall be binding upon and inure solely to the benefit of each Party
hereto, and nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.


 


15
















 


(j)            Waiver; Remedies Cumulative.  No failure or delay on the part of any Party
hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.  To the maximum extent
permitted by applicable law, (i) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (ii) no waiver that may
be given by a Party will be applicable except in the specific instance for
which it is given; and (iii) no notice to or demand on one Party will be
deemed to be a waiver of any obligation of such Party or of the right of the
Party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.  All rights and remedies
existing under this Agreement are in addition to, and not exclusive of, any
rights or remedies otherwise available.


 


(k)           Further Assurances.  The Parties hereto agree (i) to furnish
upon request to each other such further information, (ii) to execute and
deliver to each other such other documents, and (iii) to do such other
acts and things, all as another Party hereto may reasonably request for the
purpose of carrying out the intent of this Agreement and the documents referred
to in this Agreement.


 


(l)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW.


 


(m)          Jurisdiction; Service of Process.  ANY ACTION OR PROCEEDING SEEKING TO ENFORCE
ANY PROVISION OF, OR BASED ON ANY RIGHT ARISING OUT OF, THIS AGREEMENT MAY BE
BROUGHT AGAINST ANY OF THE PARTIES HERETO IN THE COURTS OF THE STATE OF NEVADA,
COUNTY OF WASHOE, OR, IF IT HAS OR CAN ACQUIRE JURISDICTION, IN THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA, AND EACH OF THE
PARTIES HERETO CONSENTS TO THE JURISDICTION OF SUCH COURTS (AND OF THE
APPROPRIATE APPELLATE COURTS) IN ANY SUCH ACTION OR PROCEEDING AND WAIVES ANY
OBJECTION TO VENUE LAID THEREIN.  PROCESS
IN ANY ACTION OR PROCEEDING REFERRED TO IN THE PRECEDING SENTENCE MAY BE
SERVED ON ANY PARTY HERETO ANYWHERE IN THE WORLD.


 


(n)           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.  The Parties further agree that facsimile
signatures or signatures scanned into .pdf (or similar) format and sent by
e-mail shall be deemed original signatures.


 


16

















 


(o)           Damages.  The Parties agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement; therefore, in the event of a breach by either party of any of the
provisions of this Agreement, the other party or its successors or assigns may,
in addition to other rights and remedies existing in its favor, apply to any
court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof.


 


[The next page is the
signature page.]


 


17

















 


IN WITNESS WHEREOF, the Parties hereto have
executed or caused this Securities Purchase and Lock-Up Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized:


 


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  HANGER
  ORTHOPEDIC GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Hartman

  
	
   

  	
   

  	
  Thomas
  E. Hartman

  
	
   

  	
   

  	
  Vice
  President and General Counsel

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  JOHN
  B. BEACH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John B. Beach

  
	
   

  	
  John
  B. Beach, Individually

  



 


18

















 


EXHIBIT A


 


ACCREDITED INVESTOR QUESTIONNAIRE


 






 


HANGER ORTHOPEDIC GROUP, INC.


 






 


The
undersigned investor (“Buyer”) hereby delivers this questionnaire in connection
with his or her investment in Hanger Orthopedic Group, Inc. (“Seller”)
and pursuant to the Securities Purchase and Lock-Up Agreement, dated as of October 18,
2010, by and between Seller and Buyer to which this questionnaire is
attached.  The name, address and social
security number of Buyer are provided below. 
Buyer represents and warrants that he or she is correctly and in all
respects described by the category or categories set forth below directly under
which Buyer has signed his or her name.


 


I. GENERAL INFORMATION


 


	
  Name:

   

  
	
   

  
	
  Address:

   

  
	
   

   

  
	
   

   

  
	
   

  
	
  Social
  Security (Tax I.D.) Number:

   

  



 


II. ACCREDITED INVESTOR STATUS


 


[SIGN BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBE YOU]


 


1.             Buyer is a natural person whose net
worth, either individually or jointly with Buyer’s spouse, at the time of
his/her purchase, exceeds $1,000,000, excluding the value of Buyer’s primary
residence.


 


	
   

  	
   

  



 


2.             Buyer is a natural person who had
individual income in excess of $200,000, or joint income with Buyer’s spouse in
excess of $300,000, in the previous two calendar years and reasonably expects
to reach the same income level in the current calendar year.


 


	
   

  	
   

  



 

















 


3.             Buyer is a corporation,
partnership, organization described in Section 501(c)(3) of the
Internal Revenue Code, or Massachusetts or similar business trust, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.


 


	
   

  	
   

  



 


4.             Buyer is an entity which falls
within one of the following categories of accredited investors set forth in Rule 501(a) of
Regulation D (“Regulation D”) under the Securities Act of 1933, as
amended (the “Securities Act”):


 


(a)           A bank as defined in Section 3(a)(2) of
the Securities Act, or any savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the Securities Act whether acting in
its individual or a fiduciary capacity.


 


	
   

  	
   

  



 


(b)           A broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.


 


	
   

  	
   

  



 


(c)           An insurance company as defined in Section 2(13)
of the Securities Act.


 


	
   

  	
   

  



 


(d)           An investment company registered
under the Investment Company Act of 1940 or as a business development company
as defined in Section 2(a)(48) of that Act.


 


	
   

  	
   

  



 


(e)           A Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.


 


	
   

  	
   

  



 


(f)            Any plan established and maintained
by a state, its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000.


 


	
   

  	
   

  



 


(g)           Any private business development
company as defined in Section 202(22) of the Investment Advisors Act of
1940.


 


	
   

  	
   

  



 


(h)           Any employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, if
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of such Act, which is either a bank, savings and loan association, 


 

















 


insurance
company or registered investment adviser or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors.


 


	
   

  	
   

  



 


(i)            A trust, with total assets in excess
of $5,000,000 not formed for the specific purpose of acquiring the securities
offered, whose purpose is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D.


 


	
   

  	
   

  



 


5.             Buyer is an entity in which all of
the equity owners are accredited investors and described in one or more of the
categories set forth in paragraphs 1 through 4 above.


 


	
   

  	
   

  



 


6.             Buyer is any director or executive
officer or general partner of Seller.


 


	
   

  	
   

  



 


***


 

















 


 


SCHEDULE OF SUBSTANTIALLY IDENTICAL SECURITIES
PURCHASE AND LOCK UP AGREEMENTS OMITTED PURSUANT TO INSTRUCTION 2 TO ITEM 601 OF REGULATION S-K


 


Material details in which omitted Securities Purchase and
Lock Up Agreements differ from the Securities Purchase and Lock Up Agreement,
dated as of October 18, 2010, by and between Hanger Orthopedic
Group, Inc. and John B. Beach, included as Exhibit 10.1


 


	
  Title of the Agreement

  	
   

  	
  Buyer

  	
   

  	
  Seller

  	
   

  	
  Number of

  Shares

  Purchased

  	
   

  	
  Purchase

  Price of

  Shares

  	
   

  
	
  Securities and Lock Up Purchase Agreement,
  dated as of October 18, 2010, by and between Hanger Orthopedic
  Group, Inc. and John C. Castel

  	
   

  	
  John C. Castel

  	
   

  	
  Hanger Orthopedic Group

  	
   

  	
  97,776

  	
   

  	
  $

  	
  1,473,484.32

  	
   

  
	
  Securities and Lock Up Purchase Agreement,
  dated as of October 18, 2010, by and between Hanger Orthopedic
  Group, Inc. and Antony Ricketts

  	
   

  	
  Antony Ricketts

  	
   

  	
  Hanger Orthopedic Group

  	
   

  	
  19,956

  	
   

  	
  $

  	
  300,736.92

  	
   

  
	
  Securities and Lock Up Purchase Agreement,
  dated as of October 18, 2010, by and between Hanger Orthopedic
  Group, Inc. and Debbie Koepsel

  	
   

  	
  Debbie Koepsel

  	
   

  	
  Hanger Orthopedic Group

  	
   

  	
  13,704

  	
   

  	
  $

  	
  206,519.28