EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

by and between

Vascular Solutions, Inc.

and

Escalon Vascular Access, Inc.

April 30, 2010

---



TABLE OF CONTENTS

|                                                         |                                                   |    |   
|-------------------------------------------------------- | ------------------------------------------------- | -- | --
|TABLE OF
 CONTENTS                                       |                                                   | I 
|                                                         |                                                   |   
|EXHIBIT LIST                                             |                                                   | IV
|                                                         |                                                   |   
|ARTICLE I
 PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES |                                                   | 1 
|1.01                                                     | Transfer of
 Assets                               |    | 1 
|1.02                                                     | Excluded
 Assets                                  |    | 3 
|1.03                                                     | Assumption
 of Liabilities                        |    | 3 
|1.04                                                     | Excluded
 Liabilities                             |    | 4 
|                                                         |                                                   |    |   
|ARTICLE II
 PURCHASE PRICE                               |                                                   | 4 
|2.01                                                     | Amount                                            |    | 4 
|2.02                                                     | Holdback
 Amount                                  |    | 4 
|2.03                                                     | Allocation
 of Purchase Price                     |    | 6 
|2.04                                                     | Earn-Out
 Amount                                  |    | 6 
|                                                         |                                                   |    |   
|ARTICLE III
 CLOSING                                     |                                                   | 8 
|3.01                                                     | Closing                                           |    | 8 
|3.02                                                     | General
 Procedure                                |    | 8 
|3.03                                                     | Economic
 Results; Risk of Loss                   |    | 9 
|                                                         |                                                   |    |   
|ARTICLE IV
 REPRESENTATIONS AND WARRANTIES OF SELLER     |                                                   | 9 
|4.01                                                     | Incorporation;
 Power and Authority               |    | 9 
|4.02                                                     | Execution,
 Delivery; Valid and Binding Agreement |    | 9 
|4.03                                                     | No Breach                                         |    | 10
|4.04                                                     | Governmental
 Authorities; Consents               |    | 10
|4.05                                                     | Financial
 Statements                             |    | 10
|4.06                                                     | Absence of
 Undisclosed Liabilities               |    | 10
|4.07                                                     | No Material
 Adverse Changes                      |    | 10
|4.08                                                     | Title to
 Assets                                  |    | 11
|4.09                                                     | Books and
 Records                                |    | 11
|4.10                                                     | Inventory                                         |    | 11
|4.11                                                     | Tax Matters                                       |    | 11
|4.12                                                     | Accounts
 Receivable                              |    | 12
|4.13                                                     | Contracts
 and Commitments                        |    | 12
|4.14                                                     | Intellectual
 Property Rights                     |    | 12
|4.15                                                     | Litigation                                        |    | 14
|4.16                                                     | Regulatory
 Compliance                            |    | 15
|4.17                                                     | Insurance                                         |    | 18
|4.18                                                     | Warranties                                        |    | 19
|4.19                                                     | Compliance
 with laws; Permits                    |    | 19
|4.20                                                     | Direct
 Customer List                             |    | 19
|4.21                                                     | Distributor
 Customer List                        |    | 19
|4.22                                                     | Brokerage                                         |    | 20
|4.23                                                     | Availability
 of Documents                        |    | 20

i

---



|                                                   |                                                                           |    |   
|-------------------------------------------------- | ------------------------------------------------------------------------- | -- | --
|4.24                                               | Solvency                                                                  |    | 20
|4.25                                               | Disclosure                                                                |    | 20
|                                                   |                                                                           |    |   
|ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF BUYER |                                                                           | 21
|5.01                                               | Incorporation
 and Power                                                  |    | 21
|5.02                                               | Execution,
 Delivery; Valid and Binding Agreement                         |    | 21
|5.03                                               | Authority,
 No Breach                                                     |    | 21
|5.04                                               | Governmental
 Authorities; Consents                                       |    | 21
|5.05                                               | Brokerage                                                                 |    | 21
|                                                   |                                                                           |    |   
|ARTICLE VI
 COVENANTS OF SELLER                    |                                                                           | 22
|6.01                                               | Conduct
 Relating to the Assets                                           |    | 22
|6.02                                               | Consents,
 Approvals, Filings                                             |    | 22
|6.03                                               | No
 Negotiations, etc.                                                    |    | 23
|6.04                                               | Updates of
 Seller Disclosure Schedule                                    |    | 23
|6.05                                               | Use of Name                                                               |    | 23
|6.06                                               | Conditions                                                                |    | 23
|6.07                                               | Tax Matters                                                               |    | 23
|6.08                                               | Protection
 of Trade Secrets, Know-How and Other Confidential Information |    | 23
|6.09                                               | Noncompetition                                                            |    | 24
|6.10                                               | Agreement
 Not to Solicit                                                 |    | 25
|6.11                                               | IMA
 Agreement                                                            |    | 25
|6.12                                               | Cooperation
 and Exchange of Information                                  |    | 25
|6.13                                               | Insurance
 Coverage                                                       |    | 26
|                                                   |                                                                           |    |   
|ARTICLE VII
 COVENANTS OF BUYER                    |                                                                           | 26
|7.01                                               | Regulatory
 Filings                                                       |    | 26
|7.02                                               | Conditions                                                                |    | 26
|                                                   |                                                                           |    |   
|ARTICLE VIII
 CONDITIONS TO CLOSING                |                                                                           | 26
|8.01                                               | Conditions
 to Buyers Obligations                                        |    | 26
|8.02                                               | Conditions
 to Sellers Obligations                                       |    | 30
|                                                   |                                                                           |    |   
|ARTICLE IX
 SURVIVAL; INDEMNIFICATION              |                                                                           | 31
|9.01                                               | Reliance and
 Survival of Representations and Warranties                  |    | 31
|9.02                                               | Indemnification
 by Seller                                                |    | 32
|9.03                                               | Indemnification
 by Buyer                                                 |    | 32
|9.04                                               | Method of
 Asserting Claims                                               |    | 33
|9.05                                               | Limitations
 on Indemnification                                           |    | 34
|9.06                                               | Materiality                                                               |    | 35
|                                                   |                                                                           |    |   
|ARTICLE X
 MISCELLANEOUS                           |                                                                           | 35
|10.01                                              | Press
 Releases and Announcements                                         |    | 35
|10.02                                              | Confidentiality
 Relating to Agreement                                    |    | 36
|10.03                                              | Expenses                                                                  |    | 36
|10.04                                              | Further
 Assurances                                                       |    | 36
|10.05                                              | Schedules                                                                 |    | 36

ii

---



|      |                             |  |   
|----- | --------------------------- |  | --
|10.06 | Amendment
 and Waiver       |  | 36
|10.07 | Notices                     |  | 36
|10.08 | Binding
 Effect; Assignment |  | 37
|10.09 | Severability                |  | 37
|10.10 | Complete
 Agreement         |  | 37
|10.11 | Counterparts                |  | 37
|10.12 | Governing
 law              |  | 38
|10.13 | Jurisdiction                |  | 38
|10.14 | Waiver of
 Jury Trial       |  | 38
|10.15 | Specific
 Performance       |  | 38

iii

---



EXHIBIT LIST

|          |                                     
|--------- | ------------------------------------
|Exhibit A | Bill of Sale                        
|          |                                     
|Exhibit B | Assignment
 and Assumption Agreement
|          |                                     
|Exhibit C | Certificate
 of Officer of Seller   
|          |                                     
|Exhibit D | Certificate
 of Officer of Buyer    
|          |                                     
|Exhibit E | Assignment
 of Intellectual Property
|          |                                     
|Exhibit F | Supply
 Agreement                   

iv

---



ASSET PURCHASE AGREEMENT

This
ASSET PURCHASE AGREEMENT (this Agreement),
dated as of April 30, 2010, is made and entered into by and among Vascular
Solutions, Inc., a Minnesota corporation (Buyer)
and Escalon Vascular Access, Inc., a Delaware corporation (Seller), a subsidiary of Escalon Medical
Corp., a Pennsylvania corporation (Parent).

WHEREAS,
Seller is engaged in the manufacture and marketing of a complete line of
ultrasound-guided assisted vascular access products (the Business).

WHEREAS,
Seller desires to sell and assign to Buyer, and Buyer desires to purchase and
assume from Seller, substantially all of the assets of the Business, on the
terms and subject to the conditions set forth in this Agreement.

NOW,
THEREFORE, in consideration of the mutual representations, warranties, and
agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

ARTICLE I

PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES

1.01    Transfer
of Assets. On the terms and conditions set forth in this Agreement, Seller
shall, at the applicable Closing (as defined in Section 3.01 hereof), sell,
transfer and assign to Buyer, free and clear of all liens and encumbrances, and
Buyer shall purchase and acquire from Seller, all of right, title and interest
in and to substantially all of the assets of the Business (the Assets),
including:

| |                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                
| | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 All intellectual property owned by Seller relating to the Business, including
 that which is listed and designated in Schedule 1.01(a), including:
| |                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                         | (i)          all
 related tangibles and intangibles relating to the Business and all rights to
 continue to use the Assets, and all rights Seller may have to institute or
 maintain any action to protect the same and recover damages for
 misappropriation or misuse thereof;                                                                                                                               
| |                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                         | (ii)         all
 internet domain names, uniform resource locators, and registrations and
 applications for registration thereof, relating to the Business, as listed on
 Schedule 1.01(a) and all rights Seller may have to institute or maintain any
 action to protect the same and recover damages for misappropriation or misuse
 thereof;                                                                
| |                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                         | (iii)        all
 trade secrets, know-how, and confidential information relating to the Business,
 computer programs and software (in source code and object code formats) and
 related data and documentation, copyrightable subject matter, or protectable
 designs, registered or unregistered, and registrations and applications for
 registration thereof, and all rights Seller may have to institute or

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | maintain any
 action to protect the same and recover damages for infringement,
 misappropriation or misuse thereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (iv)        all
 other intellectual and industrial property rights of every kind and nature
 and however designated, whether arising by operation of law, contract,
 license, or otherwise, relating to the Business, and all rights Seller may
 have to institute or maintain any action to protect the same and recover
 damages for infringement, misappropriation or misuse thereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (v)         all
 documents or other tangible materials embodying or relating to: (x) the
 intellectual property described in (i) through (vi) (including trade secrets,
 know-how, data, access rights, data links, concepts, specifications, user
 manuals, training materials, documentation, working notes, technical
 writings, reports, correspondence, photographs, pictorial reproductions,
 drawings and other graphic representations, labeling and packaging
 specifications and work-in-progress) and all copyright therein; and (y) the
 other Assets (including presentations, correspondence, regulatory and
 clinical trial information, data, and records, including patient case files,
 case report forms and case summaries with respect to patients who have
 utilized the products of the Business and other business records) and all
 copyright therein;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (vi)        supplier
 lists;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (vii)       a
 customer list, which such list includes a list of all direct customers of
 Seller and the customers of Sellers U.S. distributor, FS Group LLC d/b/a
 Independent Medical Associates (IMA),
 the current sales prices for all products sold to such customers and, to the
 extent available, the key contacts at each customer (the Customer List);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ((i) through
 (vii) collectively, the Intellectual
 Property)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (b)
 All of Sellers rights to data and records relating to the Business,
 including data and records relating to clinical trials, patient case files,
 case report forms, case summaries and government submissions and
 correspondence, including that which is summarily described and listed in
 Schedule 1.01(b);                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (c)
 the equipment and machinery relating to the Business (the Equipment), all of which are listed in
 Schedule 1.01(c);                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (d)
 the raw materials, work in process, supplies, parts, product labels and
 packaging materials inventory relating to the Business, wherever located,
 together with any express or implied warranty by the manufacturers or sellers
 of any item or component part thereof, rights of return, rebate rights,
 over-payment recovery rights and Sellers rights related to any of the
 foregoing (the Raw Materials Inventory),
 all of which are listed in Schedule 1.01(d);
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (e)
 all finished goods inventory relating to the Business, together with any
 express or implied warranty by the manufacturers or sellers of any item or
 component                                                                                                                                                                                                                                                                                                             

2

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | part
 thereof, rights of return, rebate rights, over-payment recovery rights and
 Sellers rights related to any of the foregoing, all of which are listed in
 Schedule 1.01(e) (the Finished Goods
 Inventory and referred to collectively with the Raw Materials
 Inventory, the Inventory);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f)
 the (x) Telemed Supply Agreement to which Seller is a party (the Assigned Contract), listed in Schedule
 1.01(f); (y) outstanding offers or solicitations made by or to Seller to
 enter into any such contract; and (z) rights of the Seller related to any of
 the foregoing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (g)
 All permits, licenses, certificates and governmental authorizations and
 approvals from any federal, state or local entity or authority exercising
 executive, legislative, judicial, regulatory, administrative or taxing functions
 of or pertaining to government (each, a Governmental
 Entity) relating to the Business, including all reports,
 documents, claims, permits and notices required to be filed with, maintained
 for or furnished to the FDA by the Business or any person that manufactures,
 develops, packages, processes, labels, tests or distributes Medical Devices
 pursuant to a development, distribution, commercialization, manufacturing,
 supply, testing or other arrangement with the Business (each, a Business Partner) (collectively, the Permits) held by Seller, and all pending
 applications for or renewals of the foregoing, all of which are listed in
 Schedule 1.01(g), to the extent that they are assignable;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (h)
 regulatory data, clinical data and other technical information, including,
 without limitation, any design history files and any data bases incorporating
 any such data and information, related to products of the Business, including
 the 510k applications and registrations listed on Schedule 1.01(h) (Regulatory Data);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (i)
 Sellers current 1-800 customer service phone numbers and fax numbers related
 to the Business; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (j)
 All of Sellers claims against third parties related to the Assets, whether
 choate or inchoate, known or unknown, contingent or noncontingent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

The
parties hereto expressly agree that Buyer is not assuming any of the
liabilities, obligations or undertakings relating to the foregoing Assets,
except for those liabilities and obligations specifically assumed by Buyer in
Section 1.03.

1.02    Excluded
Assets. Other than the Assets specified in Section 1.01, all other Seller
assets shall be retained by Seller and remain the property of Seller following
the Closing, and shall not be sold, transferred or assigned to Buyer in
connection with the purchase of the Assets (collectively, the Excluded Assets).

1.03    Assumption
of Liabilities.

(a)     Buyer shall assume, pay, perform in accordance with their
terms or otherwise satisfy, as of the Initial Closing Date and on the terms and
subject to the conditions set forth in this Agreement, only those liabilities
of Seller to the extent such liabilities arise out of or relate to the Business
or the Assets after the Initial Closing Date (the Assumed Liabilities), including liabilities of the Business
arising or to be performed after the Initial Closing Date under the Assigned
Contract.

3

---



1.04    Excluded
Liabilities. Other than the Assumed Liabilities, Seller shall retain, and Buyer
shall not assume, and nothing contained in this Agreement shall be construed as
an assumption by Buyer of, any Liabilities, employees or undertakings of Seller
of any nature whatsoever, including, without limitation, all accounts payable,
litigation, debt and Taxes (as defined in Section 4.11) relating to the Assets
that are attributable to periods prior to or on the Closing Date (the Excluded Liabilities). For purpose of this
Agreement, Liability means any
liability or obligation, whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due, whether known or unknown, and
regardless of when asserted.

ARTICLE IIPURCHASE PRICE

2.01    Amount.
The purchase price (the Purchase Price) for the Assets shall be equal to the
Holdback Amount, plus the Earn-Out Amount, plus the value of the Assumed
Liabilities to be assumed by Buyer pursuant to Section 1.03.

2.02    Holdback
Amount.

(a)
The Holdback Amount shall be
equal to $750,000 plus or minus the Final Inventory Adjustment.

(b)
Within 30 days after the Final Closing Date, Buyer will deliver to Seller: (i)
an inventory valuation statement based on a physical counting and
reconciliation (the Raw Materials Inventory
Valuation Statement) of the Finished Goods Inventory as of the
close of business on the Initial Closing Date and the Raw Materials Inventory
as of the close of business on the Final Closing Date, which shall include a
determination of (i) the dollar value of the Finished Goods Inventory
transferred to Buyer (the Finished Goods
Inventory Value) and (i) the dollar value of the Raw Materials
Inventory transferred to Buyer (the Raw
Materials Inventory Value). All Inventory shall be valued at
standard cost and physical counting shall take place at Sellers facility prior
to the packaging and shipping of the Inventory to Buyer.

(c)
Each of the Raw Materials Inventory Valuation Statement and the calculations of
the Finished Goods Inventory Value and the Raw Materials Inventory Value will
be subject to review by Seller and its representatives at Sellers expense.
Buyer will provide a copy of the workpapers and back-up materials used in
preparing the Raw Materials Inventory Valuation Statement to Seller and its
accountants and other representatives five (5) business days after the Final
Closing Date. Seller will be deemed to have accepted the Raw Materials
Inventory Valuation Statement and the calculations of the Finished Goods
Inventory Value and the Raw Materials Inventory Value unless, within 30 days
after the date of delivery of such Raw Materials Inventory Valuation Statement,
Seller gives written notice (the Objection
Notice) to Buyer of objection to any item thereon, which notice
shall specify in reasonable detail the basis for such objection. If Seller
gives an Objection Notice, Buyer and Seller shall attempt in good faith to
resolve the dispute as promptly as possible, subject to the terms of Section
2.02(d).

(d)
If Buyer and Seller do not reach a resolution of all objections raised in an
Objection Notice within 30 days after Buyer has received the Objection Notice,
BDO Seidman shall resolve any remaining objections. If BDO Seidman is not
willing to serve as an independent

4

---



arbitrator for
this purpose, then another independent accounting firm shall be selected to
serve as such by mutual agreement of Buyer and Seller. If Buyer and Seller are
unable to agree on the choice of an alternate accounting firm, they will select
an accounting firm by lot (after excluding the regular outside accounting firms
of Buyer and Seller). The accounting firm will resolve any objections set forth
in the Objection Notice and determine, but only to the extent any such amounts
are in dispute, the amounts to be included in the Raw Materials Inventory
Valuation Statement and the calculations of the Finished Goods Inventory Value
and the Raw Materials Inventory Value. The parties will provide the accounting
firm, within ten days of its selection, with a definitive statement of the
position of each party with respect to each unresolved objection and will
advise the accounting firm that the parties accept the accounting firm as the
appropriate person to interpret this Agreement for all purposes relevant to the
resolution of the unresolved objections. Buyer and Seller will provide the
accounting firm with access to books and records of the Business related to the
objections. The accounting firm will have 30 days to carry out a review of the
unresolved objections and prepare a written statement of its determination
regarding each unresolved objection. The determination of any accounting firm
so selected will be set forth in writing and will be conclusive and binding
upon the parties. Buyer will revise the Raw Materials Inventory Valuation
Statement and the calculations of the Finished Goods Inventory Value and the
Raw Materials Inventory Value as appropriate to reflect the resolution of any
objections to the Raw Materials Inventory Valuation Statement pursuant to this
Section 2.02(d).

(e)
If Buyer and Seller submit any unresolved objections to an accounting firm for
resolution as provided in Section 2.02(d), Buyer and Seller will each bear
their respective costs and expenses and will share equally in the fees and
expenses of the accounting firm.

(f)
Judgment upon the award rendered by the accounting firm may be entered in and
enforced by any court of competent jurisdiction.

(g)
After the calculations of the Finished Goods Inventory Value and the Raw
Materials Inventory Value are finally determined pursuant to this Section 2.02:

| |                                                                                                                                                           |                                                                                                                                                                                                                          | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | (i)       If
 the sum (the Final Inventory Value)
 of the calculations of the Finished Goods Inventory Value and the Raw
 Materials Inventory Value is:
| |                                                                                                                                                           |                                                                                                                                                                                                                          | 
| |                                                                                                                                                           | (A)     less
 than $500,000, then the Final Inventory Adjustment shall be equal to
 $500,000 minus the Final Inventory Value and the Holdback Amount shall
 be determined by subtracting this amount from $750,000; or
| |                                                                                                                                                           |                                                                                                                                                                                                                          | 
| |                                                                                                                                                           | (B)     more
 than $500,000, then the Final Inventory Adjustment shall be equal to the
 Final Inventory Value minus $500,000 and the Holdback Amount shall be
 determined by adding this amount to $750,000; or       
| |                                                                                                                                                           |                                                                                                                                                                                                                          | 
| |                                                                                                                                                           | (C)     equal
 to $500,000, then the Final Inventory Adjustment shall be equal to zero and
 the Holdback Amount shall be $750,000.                                                                                    

(h)
The Holdback Amount shall not be paid by Buyer to Seller until the
Manufacturing Transfer has occurred.Provided that the
Manufacturing Transfer has occurred, the Holdback Amount shall be paid by Buyer
to Seller by wire transfer of immediately available funds to the

5

---



account
designated by Seller no later than three business days after the date on which
the Final Inventory Adjustment is finally determined. If the Manufacturing
Transfer has not occurred prior to the date on which the Final Inventory
Adjustment is finally determined, then the Holdback Amount shall not be paid by
Buyer to Seller until the successful occurrence of the Manufacturing Transfer.
For purposes of this agreement, the Manufacturing
Transfer means the transfer of production of the Business from
Seller to Buyer, within 4 months of the Initial Closing Date, as measured by
Buyers ability to produce at least 20 boxes of product of the Business at
Buyers facility. Seller and Buyer have agreed on the plan and timeline related
to the Manufacturing Transfer attached hereto as Schedule 2.02(h).

2.03          Allocation
of Purchase Price. Prior to the Closing Date, Buyer and Seller shall
prepare and attempt in good faith to agree upon a preliminary allocation of the
Purchase Price and any Assumed Liabilities thereto as amounts recognized for
Tax purposes among the Assets. Within 90 days after the Closing Date, Buyer and
Seller shall finalize and agree upon such final allocation of the Purchase
Price (and all other capitalized costs) among the Assets in accordance with
Section 1060 of the Internal Revenue Code of 1986, as amended (the Code) and the Treasury regulations
thereunder (and any similar provision of state, local or foreign law, as
appropriate), which allocation shall be binding upon Buyer and Seller. Such
allocation will be set forth on Exhibit 2.03 hereto, which shall be
incorporated by reference in, and become a part of, this Agreement. Buyer and
Seller will timely and properly prepare, execute, file and deliver all such
documents, forms and other information as the other party may reasonably
request to prepare such allocation. After the Closing, the parties will make consistent
use of the allocation specified in Exhibit 2.03 for all Tax purposes and in all
filings, declarations and reports with the IRS or other Tax authorities in
respect thereof, including the reports required to be filed under Section 1060
of the Code unless otherwise required by law. In any proceeding related to the
determination of any Tax, neither Buyer nor Seller shall contest or represent
that such allocation was not a correct allocation. Any indemnification payment
pursuant to Article X shall be allocated in a manner consistent with Exhibit
2.03.

2.04          Earn-Out
Amount.

(a) Seller
acknowledges that Buyer will utilize the Business in its business in any way
that it deems appropriate and that it will operate its business utilizing the
Business in its sole discretion, and that Buyer owes no fiduciary duty or
express or implied duty to Seller.

(b)
For purposes of this section, Net Sales
shall mean:

| |                                                                                                                                             |  | 
| | ------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | (i)          Invoiced
End-User Sales of the VascuView products, including disposables, as listed on
Schedule 2.04(b) attached hereto, minus
|
| | (ii)         shipping
 costs and taxes, unless such shipping costs and taxes are paid by the
 applicable customer.                         

For
purposes of this Agreement, Invoiced
End-User Sales means sales upon invoice and shipment to a customer.

(c)
Buyer shall pay Seller an amount equal to 25% of the Net Sales by Buyer during
the period beginning July 1, 2010 and ending June 30, 2011 (the Earn-Out Amount).

6

---



(d)
The Earn-Out Amount shall be paid by Buyer to Seller in cash by wire transfer
of immediately available funds to Seller within 45 days of June 30, 2011.

(e)
The Earn-Out Amount shall represent only a contingent right to receive a cash
payment, and shall not possess any attributes of a security or entitle Seller
to any rights of any kind other than as specifically set forth herein.

(f)
The Earn-Out Amount is and shall remain nontransferable for any reason other
than by operation of law. Any attempted assignment, pledge, hypothecation,
transfer or other disposition of any portion of the Earn-Out Amount (other than
as set forth in the preceding sentence) shall be null and void.

(g)
Within 45 days after the June 30, 2011, Buyer will deliver to Seller a schedule
and accounting of the Earn-Out Amount (the Earn-Out
Statement).

(h)
The Earn-Out Statement will be subject to review by Seller and its
representatives at Sellers expense. Buyer will provide a copy of the materials
and invoices used in preparing the Earn-Out Statement to Seller and its
accountants and other representatives within five (5) business days of a
request from Seller. Seller will be deemed to have accepted the calculations of
the Earn-Out Amount unless, within 30 days after the date of delivery of such
Earn-Out Statement, Seller gives written notice (the Earn-Out Objection
Notice) to Buyer of objection to any item thereon, which notice
shall specify in reasonable detail the basis for such objection. If Seller
gives an Earn-Out Objection Notice, Buyer and Seller shall attempt in good
faith to resolve the dispute as promptly as possible, subject to the terms of
Section 2.04(i).

(i)
If Buyer and Seller do not reach a resolution of all objections raised in an
Earn-Out Objection Notice within 30 days after Buyer has received the Earn-Out
Objection Notice, BDO Seidman shall resolve any remaining objections. If BDO
Seidman is not willing to serve as an independent arbitrator for this purpose,
then another independent accounting firm shall be selected to serve as such by
mutual agreement of Buyer and Seller. If Buyer and Seller are unable to agree
on the choice of an alternate accounting firm, they will select an accounting
firm by lot (after excluding the regular outside accounting firms of Buyer and
Seller). The accounting firm will resolve any objections set forth in the
Earn-Out Objection Notice and determine, but only to the extent any such
amounts are in dispute, the amounts to be included in the Earn-Out Statement.
The parties will provide the accounting firm, within ten days of its selection,
with a definitive statement of the position of each party with respect to each
unresolved objection and will advise the accounting firm that the parties
accept the accounting firm as the appropriate person to interpret this
Agreement for all purposes relevant to the resolution of the unresolved objections.
Buyer and Seller will provide the accounting firm with access to books and
records of the Business related to the objections. The accounting firm will
have 30 days to carry out a review of the unresolved objections and prepare a
written statement of its determination regarding each unresolved objection. The
determination of any accounting firm so selected will be set forth in writing
and will be conclusive and binding upon the parties. Buyer will revise the
Earn-Out Statement and the calculation of the Earn-Out Amount as appropriate to
reflect the resolution of any objections to the Earn-Out Statement pursuant to
this Section 2.04(i).

7

---



(j)
If Buyer and Seller submit any unresolved objections to an accounting firm for
resolution as provided in Section 2.04(i), Buyer and Seller will each bear
their respective costs and expenses and will share equally in the fees and
expenses of the accounting firm.

(k)
Judgment upon the award rendered by the accounting firm may be entered in and
enforced by any court of competent jurisdiction.

(l)
After the calculations of the Earn-Out Amount are finally determined pursuant
to this Section 2.04, Buyer shall pay to Seller any underpayment by wire
transfer of immediately available funds to the account designated by Seller no
later than three business days after the date on which the Earn-Out Amount is
finally determined and Seller shall pay to Buyer any overpayment by wire
transfer of immediately available funds to the account designated by Buyer no
later than three business days after the date on which the Earn-Out Amount is
finally determined.

ARTICLE III

CLOSING

3.01    Closing

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Initial Closing. The initial closing of the transactions contemplated
 by this Agreement (the Initial Closing)
 will take place at such place as is mutually agreeable to Buyer and Seller,
 at 3:00 p.m. Central Daylight Time on April 30, 2010 or on such other date as
 is mutually agreeable to Buyer and Seller after all of the conditions to the
 parties obligations set forth in Article VIII hereof have been satisfied (or
 waived by the party entitled to the benefit of such conditions). The date on
 which the Initial Closing occurs is referred to herein as the Initial Closing Date, and the Initial
 Closing shall be deemed effective as of the close of business on the Initial
 Closing Date. At the Initial Closing, Seller shall sell, transfer and assign
 to Buyer, free and clear of all liens and encumbrances, and Buyer shall
 purchase and acquire from Seller, all right, title and interest in and to the
 Assets other than the Raw Materials Inventory.
|
| | (b)
 Final Closing. The Final Closing of the transactions contemplated by
 this Agreement (the Final Closing)
 will take place at such place as is mutually agreeable to Buyer and Seller,
 on the earlier of (i) 7 days notice by Buyer or (ii) the 4-month anniversary
 of the Initial Closing Date. The date on which the Final Closing occurs is
 referred to herein as the Final Closing
 Date, and the Final Closing shall be deemed effective as of the
 close of business on the Final Closing Date. The Initial Closing Date and
 Final Closing Date are each referred to as a Closing Date in this Agreement. At the Final Closing,
 Seller shall sell, transfer and assign to Buyer, free and clear of all liens
 and encumbrances, and Buyer shall purchase and acquire from Seller, all
 right, title and interest in and to the Raw Materials Inventory.                                                                                                                           

3.02    General
Procedure. At each Closing, each party shall deliver to the party entitled
to receipt thereof the documents required to be delivered pursuant to Article
VIII hereof and such other documents, instruments and materials (or complete
and accurate copies thereof,

8

---



where
appropriate) as may be reasonably required to effectuate the intent and
provisions of this Agreement, and all such documents, instruments and materials
shall be satisfactory in form and substance to counsel for the receiving party.
The conveyance, transfer, assignment and delivery of the Assets shall be
effected by Sellers execution and delivery to Buyer of a bill of sale
substantially in the form attached hereto as Exhibit A (the Bill of Sale) and such other instruments
of conveyance, transfer, assignment and delivery as Buyer shall reasonably
request to cause Seller to transfer, convey, assign and deliver the Assets to
Buyer. The assignment and assumption of the Assumed Liabilities to Buyer shall
be effected by Sellers and Buyers execution of an assignment and assumption
agreement substantially in the form attached hereto as Exhibit B (the Assignment and Assumption Agreement).

3.03    Economic
Results; Risk of Loss. All Interim Operating Losses related to the Raw
Materials Inventory that are not transferred until the Final Closing Date shall
be solely for Sellers account. All risk of loss or damage to the Raw Materials
Inventory that are not transferred until the Final Closing Date, whatever the
cause therefor, during the Interim Period shall be Sellers. For purposes of
this Agreement, Interim Operating Losses
means all income and loss related to the operation of the Business as it
relates to the Raw Materials Inventory during the Interim Period. For purposes
of this Agreement, Interim Period
means the period commencing on 12:01 a.m., Central Daylight Time, on the
Initial Closing Date, and ending on 12:59 p.m., Central Daylight Time, on the
Final Closing Date.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

For
purposes of this Article IV, references to Sellers Knowledge or similar qualifiers, shall mean the knowledge of
the officers of the Business, each having made diligent inquiry with respect to
the matter referenced. Seller hereby represents and warrants to Buyer that,
except as set forth in the Disclosure Schedule delivered by Seller to Buyer on
the date hereof (the Seller Disclosure
Schedule) (which Seller Disclosure Schedule sets forth the
exceptions to the representations and warranties contained in this Article IV
under captions referencing the Sections to which such exceptions apply):

4.01   Incorporation;
Power and Authority. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority and all authorizations, licenses, permits and
certifications necessary to carry on its business as now being conducted and to
own, lease and use the Assets. Seller has all necessary power and authority to
execute, deliver and perform this Agreement and each of the Related Agreements,
to consummate the transactions and perform its obligations contemplated by this
Agreement and each of the Related Agreements. Seller is duly qualified to do
business as a foreign corporation in each jurisdiction in which the nature of
its business or its ownership of property requires it to be so qualified.
Seller is in full compliance with its organizational documents.

4.02   Execution,
Delivery; Valid and Binding Agreement. The execution, delivery and
performance of this Agreement and the other documents and agreements
contemplated by this Agreement (collectively, the Related Agreements) by
Seller and the

9

---



consummation
of the transactions contemplated hereby have been duly and validly authorized
by all requisite corporate authority, and no other corporate authority is
necessary to authorize the execution, delivery and performance of this
Agreement and the Related Agreements. This Agreement and the Related Agreements
have been duly executed and delivered by Seller and, assuming that this
Agreement and the Related Agreements are the valid and binding agreements of
Buyer, constitute valid and binding obligations of Seller, enforceable in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies.

4.03   No
Breach. The execution, delivery and performance of this Agreement and the
Related Agreements by Seller and the consummation of the transactions
contemplated hereby and thereby do not conflict with or result in any breach of
any of the provisions of, or constitute a default under, result in a violation
of, result in the creation of a right of termination or acceleration or any
lien, security interest, charge, or encumbrance upon any of the Assets or
require any authorization, consent, approval, exemption or other action by or notice
to any court or other governmental body, under the provisions of the
organizational documents of Seller or any indenture, mortgage, lease, loan
agreement or other agreement or instrument by which Seller or the Assets are
bound or affected, or any law, statute, rule or regulation or order, judgment
or decree to which Seller or the Assets are subject.

4.04   Governmental
Authorities; Consents. Except as set forth on Schedule 4.04, Seller is not
required to submit any notice, report or other filing with any governmental
authority in connection with the execution or delivery by it of this Agreement
or the consummation of the transactions contemplated hereby. No consent,
approval or authorization of any governmental or regulatory authority is
required to be obtained by Seller in connection with its execution, delivery
and performance of this Agreement.

4.05   Financial
Statements. The unaudited balance sheet as of March 31, 2010 of the
Business (the Latest Balance Sheet)
and the unaudited statements of income and cash flows of the Business for the
9-month period then ended (such statements and the Latest Balance Sheet, the Latest Financial Statements) and the
unaudited balance sheet, as of June 30, 2009 (the Last Fiscal Year End) and for the each of the prior fiscal
year ends, of the Business and the unaudited statements of income and cash
flows of the Business for each of the 3 years ended on the Last Fiscal Year End
(collectively, the Annual Financial
Statements) are based upon the books and records of Seller, have
been prepared in accordance with GAAP consistently applied during the periods
indicated and present fairly the financial position, results of operations and
cash flows of the Business at the respective dates and for the respective
periods indicated.

4.06   Absence
of Undisclosed Liabilities. With respect to the Assets, Seller has no
Liabilities or contractual obligations (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due, and regardless of when
asserted) arising out of transactions or events heretofore entered into, or any
action or inaction, or any state of facts existing, with respect to or based
upon transactions or events heretofore occurring, except as disclosed in
Section 4.07 of the Seller Disclosure Schedule.

4.07   No
Material Adverse Changes. Since December 31, 2009, there has been no change
in the Assets that would have a Material Adverse Effect. For the purposes of
this

10

---



Agreement, Material Adverse Effect shall mean any one
or more events, conditions, circumstances or conditions which result in, or may
reasonably be expected to result in, individually or in the aggregate, a
material adverse effect on the operations, affairs, financial condition,
properties or prospects of the Assets or the Business.

4.08   Title
to Assets. Seller owns good and marketable title to the Assets, free and
clear of all liens and encumbrances. To the extent such documents exist, Seller
has delivered or made available to Buyer copies of the title, bills of sale, or
other instruments by which Seller acquired such Assets. Upon execution and
delivery by Seller of the instruments of conveyance including the Bill of Sale,
Buyer will become the true and lawful owner of, and will receive good and
marketable title to, the Assets, free and clear of all liens and encumbrances.

4.09   Books
and Records. The books of account of the Business are complete and correct
and have been maintained in accordance with sound business practices. Each
transaction of the Business is properly and accurately recorded on the books
and records of the Business, and each document upon which entries in the books
and records of the Business are based is complete and accurate in all respects.

4.10   Inventory.
Schedule 1.01(d) contains a description of all the Assets which constitute the
Inventory. The Inventory consists of items of a quality and quantity usable
and, with respect to finished goods only, salable at normal profit levels, in
each case, in the ordinary course of business. The Inventory of finished goods
is not slow-moving (as determined in accordance with past practices), obsolete,
damaged or defective, subject only to any reserve for inventory on the face of
the Latest Balance Sheet as adjusted in the books of account of the Business
for the passage of time through the applicable Closing Date in the ordinary
course of business and is merchantable and fit for its particular use. Seller
has on hand or has ordered and expects timely delivery of such quantities of
raw materials and supplies and has on hand such quantities of work in process
and finished goods as are reasonably required (and are not in excess) to fill
current orders on hand relating to the Business in a timely manner and to
maintain the manufacture and shipment of products up to the Initial Closing
Date, and thereafter in accordance with the Supply Agreement based upon agreed
levels of production.

4.11   Tax
Matters.

(a)
There are no liens for Taxes upon any of the Assets. No proceedings have been
commenced by any federal, state, local or foreign agency to create any liens
for Taxes upon any of the Assets. For purposes of this Agreement, Taxes means all taxes, charges, fees,
levies, or other assessments, including, without limitation, all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, social security,
unemployment, excise, estimated, severance, stamp, occupation, property, or
other taxes, customs duties, fees, assessments, or charges of any kind
whatsoever, including, without limitation, all interest and penalties thereon,
and additions to tax or additional amounts imposed by any taxing authority,
domestic or foreign, upon the Business. Seller has timely and properly paid (or
has had paid on its behalf) all Taxes with respect to the Business that were
due and payable on or before the date hereof.

11

---



| |                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b)
 No deficiency for any Taxes has been proposed, asserted or assessed against
 the Business that has not been resolved and paid in full. No waiver,
 extension or comparable consent given by the Business regarding the
 application of the statute of limitations with respect to any Taxes or any
 Tax return is outstanding, nor is any request for any such waiver or consent
 pending.
| |                                                                                                                                                                                                                                                                                                                                                                                                
| | (c)
 To the Sellers Knowledge, Seller does not expect or anticipate the
 assessment of any additional Taxes on the Assets and is not aware of any
 unresolved questions, claims or disputes concerning the Liability for Taxes
 of the Business. There is no written dispute or claim, and to Sellers
 Knowledge, any other dispute or claim, concerning any Tax Liability of the
 Business. 

4.12   Accounts
Receivable. All notes and accounts receivable of Seller relating to the
Assets are reflected properly on its books of account, are valid, have arisen
from bona fide transactions in the ordinary course of business. They are
subject to no setoff or counterclaim, and are current and collectible. Such
notes and accounts receivable will be collected in accordance with their terms
(none of which is beyond 60 days) at their recorded amounts, subject only to
the reserve for bad debts on the face of the Latest Balance Sheet as adjusted
in Sellers books of account for the passage of time through the Closing Date
in the ordinary course of business.

4.13    Contracts
and Commitments.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Schedule 1.01(f) lists the Assigned Contract. The Assigned Contract (i) is
 legal, valid, binding and enforceable and in full force and effect, (ii) will
 continue to be legal, binding and enforceable and in full force and effect
 immediately following the applicable Closing in accordance with the terms
 thereof as in effect prior to the applicable Closing, and (iii) is assignable
 to Buyer without the consent of any person or entity.                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (b)
 With respect to the Assigned Contract, Seller (i) has performed all
 obligations required to be performed by it in connection therewith and is not
 in breach or default, and no event has occurred which with notice or lapse of
 time would constitute a breach or default or permit termination, modification
 or acceleration under the Assigned Contract, (ii) is not in receipt of any
 claim of default, (iii) has no present expectation or intention of not fully
 performing any material obligation pursuant to the Assigned Contract, (iv)
 has no knowledge of any breach or expected breach by any other party to the
 Assigned Contract, and (v) has not received a written demand, or to Sellers
 knowledge oral demand, for renegotiation thereof or commenced the process of
 renegotiating and terms of such contract.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (c)
 Prior to the date of this Agreement, Seller has made available to Buyer a
 correct and complete copy of the Assigned Contract, together with all amendments,
 waivers or other changes thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

4.14    Intellectual
Property Rights.

(a)
Schedule 1.01(a) describes all of the Intellectual Property owned by, licensed
to or otherwise controlled by Seller in connection with the Assets, or used in,

12

---



developed for
use in, or necessary for, the Business, and identifies each license, agreement,
or other permission which Seller has granted to any third party with respect to
any of the Intellectual Property. Seller has delivered to Buyer correct and
complete copies of all service marks, trade names, trade dress and other
designators of origin, registrations and applications for internet domain names
and uniform resource locators, copyright registrations and applications,
licenses, sublicenses, agreements, and permissions (as amended to date)
relating to the Intellectual Property related to the Assets.

(b)
Seller owns or has the exclusive right to use pursuant to license, sublicense,
agreement or permission all of the Intellectual Property.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)          With
 respect to each item of the Intellectual Property which Seller owns, Seller
 solely possesses all right, title and interest in and to the item, free and
 clear of any lien or encumbrance. Seller is the official and sole owner of
 record of all registered Intellectual Property. No owned Intellectual
 Property has been infringed by any person or entity. Seller owns all of the
 Intellectual Property developed by its current and former employees and
 independent contractors during the period of their employment or within the
 scope of their contracting or consulting relationship, as the case may be,
 with Seller and no such person has any claim with respect to any of the
 Intellectual Property. All owned Intellectual Property is valid and
 enforceable, and no person or entity has asserted that any owned Intellectual
 Property is invalid or not enforceable.                                                                                    
|
| | (ii)          All
 registrations relating to the Intellectual Property are in full force and
 effect, and all actions required to keep such registrations pending or in
 effect or to provide full available protection of registered Intellectual
 Property or the Intellectual Property for which a registration is pending,
 including payment of filing, examination, annuity, and maintenance fess and
 filing of renewals, statements of use or working, affidavits of
 incontestability and other similar actions, have been taken, and no such
 Intellectual Property is the subject of any interference, opposition,
 cancellation, nullity, re-examination or other proceeding placing in question
 the validity or scope of such rights. All products covered by registered
 Intellectual Property and all usages of registered Intellectual Property have
 been marked with the appropriate patent, trademark, or other marking required
 or desirable to maximize available damage awards.
|
| | (iii)          Each
 item of the Intellectual Property owned immediately prior to the Closing
 hereunder will be owned by Buyer on the same terms and conditions immediately
 subsequent to the Closing. Seller has taken commercially reasonable actions
 to maintain and protect each item of the Intellectual Property that it owns
 or uses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

(c)
The documentation relating to all trade secrets listed in Schedule 1.01(a) is
current, accurate and sufficient in detail and content to identify and explain
such trade secrets and to allow their full and proper use without reliance on
the knowledge or memory of any individual. All reasonable precautions have been
taken to

13

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | protect the
 secrecy, confidentiality and value of the trade secrets and all other
 proprietary information used by Seller including the implementation and
 enforcement of policies requiring each employee or independent contractor who
 has access to trade secrets to execute proprietary information and
 confidentiality agreements substantially in a standard form, and each current
 and former employee and independent contractor of Seller has executed such an
 agreement. There has been no breach or other violation of such agreements.
 Seller has an unqualified right to use all trade secrets and other
 proprietary information currently used in its business, subject to any
 contract relating to licensed-in Intellectual Property. No such trade secret
 or other proprietary information is part of the public knowledge or
 literature, and no trade secret or other proprietary information has been
 used, divulged or appropriated either for the benefit of any person other
 than Seller or to the detriment of Seller.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d)
 Seller has not taken action, or failed to take an action, that might have the
 effect of estopping or otherwise limiting its right to enforce owned
 Intellectual Property against any person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e)
 With respect to the Assets or the Business or any component of any of the
 Assets or the Business, Seller has not infringed, misappropriated or
 otherwise violated any intellectual property right (including, but not
 limited to, patent, copyright, trademark, service mark, trade names, trade
 dress, trade secret, or know-how right) of any third-party, and Seller has
 not received any notice of any infringement, misappropriation or violation by
 Seller of any such intellectual property right of any third-party. No
 infringement, misappropriation or violation of any intellectual property
 right of a third-party has occurred or will occur with respect to the Assets
 or the Business or any component of any of the Assets or the Business.                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f)
 All software that is listed in Schedule 1.01(a) is owned by Seller or is
 subject to a current license agreement that covers all use of such software
 as the business relating to the Business is conducted. Seller has the right
 to use such software as it is being used in the business relating to the
 Business, without any conflict with the rights of others. Seller is not in
 breach of any license to, or license of, any such software. Seller does not
 use, rely on or contract with any person or entity to provide service bureau,
 outsourcing or other computer processing services to Seller, in lieu of or in
 addition to its use of such software. Following the Closing, Buyer will have
 sufficient rights to all necessary software to operate the business relating
 to the Business as it is conducted.                                                                                                                                                                                                                

4.15   Litigation.
No Litigation is pending, including product liability claims, or, to the
knowledge of Seller, threatened against the Business, at law or in equity, and
there is no reasonable basis known to Seller for any of the foregoing. The
Business is not subject to any outstanding governmental order. Seller has not
received any opinion or legal advice to the effect that Seller is exposed from
a legal standpoint to any Liability or disadvantage which may be material to
the Assets. For purposes of this Agreement, Litigation
means any suit, charge, complaint, claim, action, grievance, arbitration,
mediation, investigation, proceeding or litigation (whether civil, criminal,
administrative or investigative).

14

---



4.16   Regulatory
Compliance.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Seller has no Knowledge of any actual or threatened enforcement action or
 investigation by the Food and Drug Administration (the FDA) or any other Governmental Entity
 that has jurisdiction over the operations of the Business. Seller does not
 have any Knowledge or reason to believe that the FDA or any other
 Governmental Entity is considering such action. The operation of the Business
 of Seller, including the manufacture, import, export, testing, development,
 processing, packaging, labeling, storage, marketing, sales and distribution
 of the products of the Business is, and at all times has been, in material
 compliance with all applicable laws and Permits of the Business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b)
 All Permits required to be filed with, maintained for or furnished to the FDA
 and all material Permits required to be filed with, maintained for or
 furnished to any other Governmental Entity by the Business or, to Sellers
 Knowledge, any Business Partner, have been so filed, maintained or furnished
 by Seller, and the Business Partners, as applicable. All such reports,
 documents, claims and notices were complete and accurate in all material
 respects on the date filed or furnished (or were corrected in or supplemented
 by a subsequent filing), such that no liability exists with respect to such
 filing, and remain complete and accurate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c)
 Neither the Business nor, to Sellers Knowledge, any Business Partner, has,
 received any FDA Form 483, notice of adverse finding, Warning Letters,
 untitled letters or other correspondence or notice from the FDA, or other
 Governmental Entity (i) alleging or asserting noncompliance with any
 applicable laws or Permits and Seller has no Knowledge or reason to believe
 that the FDA or any other Governmental Entity is considering such action or
 (ii) contesting the investigational device exemption, pre-market clearance or
 approval of, the uses of or the labeling or promotion of any Medical Devices.
 The Business has not had any product or manufacturing site subject to a
 Governmental Entity (including the FDA) shutdown or import or export
 prohibition, nor received any FDA Form 483 or other Governmental Entity
 notice of inspectional observations, warning letters, untitled letters,
 or, requests or requirements to make changes to the Business products that,
 if not complied with, would reasonably be expected to result in a material
 liability to the Business, or similar correspondence or notice from the FDA
 or Governmental Entity in respect of the Business and alleging or asserting
 noncompliance with any applicable laws, Business Permits or such requests or
 requirements of a Governmental Entity and, to Sellers Knowledge, neither the
 FDA nor any Governmental Entity is considering such action.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d)
 No Permit issued to the Business or, to Sellers Knowledge, to any Business
 Partner, by the FDA or any other Governmental Entity has been limited,
 suspended, modified or revoked and Seller has no Knowledge or reason to
 believe that the FDA or any other Governmental Entity is considering such
 action.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e)
 To Sellers Knowledge, all preclinical animal testing and trials and all
 clinical trials and studies being funded or conducted by, or at the request,
 or on behalf of the Business or a Business Partner are listed on Section 4.16
 of the Seller Disclosure Schedule and true, complete, accurate and up-to-date
 documentation relating or pertaining to such clinical trials and studies,
 including but not limited to clinical trial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

15

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | agreements,
 consulting agreements, monitoring agreements and the like, have been provided
 to Buyer and all such clinical trials, studies and preclinical activities
 have been conducted in material compliance with experimental protocols,
 procedures and controls, accepted professional scientific standards and
 applicable law. To Sellers Knowledge, the descriptions of the studies, tests
 and preclinical and clinical trials listed on Section 4.16 of the Seller
 Disclosure Schedule including the related results and regulatory status are
 accurate and complete in all material respects. To the Sellers Knowledge,
 each such study conducted by or on behalf of the Business with respect to the
 Business products has been conducted or is being conducted such that the
 resulting data was or will be acceptable for use in the Business past or
 anticipated regulatory filings, and there is nothing included in such data
 currently in existence that would cause any such regulatory submission to be
 disallowed or delayed or that would indicate that the relevant product will
 not perform as intended. Seller has not received any written notices,
 correspondence or other communication from the FDA or any other Governmental
 Entity requiring the termination, suspension or material modification of any
 clinical trials conducted by, or on behalf of, the Business or in which the
 Business has participated and Seller has no Knowledge or reason to believe
 that the FDA or any other Governmental Entity is considering such action. To
 the Sellers Knowledge, the Regulatory Data is full and complete in all
 necessary respects and nothing in such Regulatory Data is false or misleading
 in any material respect. All Regulatory Data, including, but not limited to,
 all information about any product adverse effects, in the possession or
 control of Seller has been provided to Buyer. The Regulatory Data: (i) has
 been obtained and compiled in accordance with all material requirements and
 procedures of the FDA or other Governmental Entity; and (ii) does not contain
 any information that will render products as adulterated or misbranded
 under the Federal Food, Drug, and Cosmetic Act or similar law of any foreign
 Governmental Entity. To the Sellers Knowledge, there is nothing in the
 Regulatory Data that would cause any regulatory submission to be disallowed
 or delayed.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (f)
 Each product or product candidate subject to the Federal Food, Drug and
 Cosmetic Act (including the rules and regulations of the FDA promulgated
 thereunder, the FDCA) or, to
 Sellers Knowledge, comparable laws in any non-U.S. jurisdiction, that has
 been developed, manufactured, test distributed or marketed by or on behalf of
 the Business (each such product or product candidate, a Medical Device), is being or has been
 developed, manufactured, tested, distributed and marketed in compliance with
 all applicable requirements under the FDCA and, to Sellers Knowledge,
 comparable laws in any non-U.S. jurisdiction, including those relating to
 investigational use, pre-market clearance or approval, registration and
 listing, good manufacturing practices, good clinical practices, good
 laboratory practices, labeling, advertising, record keeping and filing of
 required reports. None of the Medical Devices are adulterated or
 misbranded under the FDCA or, to Sellers Knowledge, similar law of any
 foreign Governmental Entity. All Medical Devices have received a pre-market
 clearance and may be lawfully placed into commerce and sold as they are
 currently manufactured. In addition, the Business and, to Sellers Knowledge,
 the Business Partners, are in material compliance with all other applicable
 FDA requirements and all other applicable laws. Seller maintains complete
 documentation showing that components supplied to the Business are
 manufactured in accordance with the Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

16

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | specifications
 therefor. The processes used to produce the Business products are completely
 and accurately described in documents maintained by the Business, and such
 documents have been made available to the Buyer. Such processes are adequate
 to ensure that commercial quantities of the Business products will conform
 to the specifications established therefor and will be (i) of merchantable
 quality, (ii) salable in the ordinary course of business at prevailing market
 prices, (iii) free from defects in design, material and workmanship, and (iv)
 suitable for their intended purposes and efficacy levels.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (g)
 Seller and/or Parent is/are the sole and exclusive owner of all Permits,
 including without limitation all pre-market clearances, necessary to sell,
 market and distribute the Medical Devices. Seller has not previously sold or
 transferred in any manner, in whole or in part, directly or indirectly, any
 of the Permits necessary to sell the Medical Devices, including without
 limitation pre-market clearances for the Medical Devices. Seller will
 transfer all such Permits to Buyer at the Initial Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (h)
 Seller has not either voluntarily or involuntarily initiated, conducted or
 issued, or caused to be initiated, conducted or issued, any recall, field
 notifications, field corrections, market withdrawal or replacement, safety
 alert, warning, dear doctor letter, investigator notice, safety alert or
 other notice or action relating to an alleged lack of safety, efficacy or
 regulatory compliance of any Business product. Seller is not aware of any
 facts which are reasonably likely to cause (1) the recall, market withdrawal
 or replacement of any product sold or intended to be sold by the Business;
 (2) a change in the marketing classification or a material change in the
 labeling of any such products, or (3) a termination or suspension of the
 marketing of such products.                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (i)
 Seller has not received any written notice that the FDA or any other
 Governmental Entity has (i) commenced, or threatened to initiate, any action
 to withdraw its investigational device exemption, pre-market clearance or
 pre-market approval or request the recall of any Medical Device, (ii)
 commenced, or threatened to initiate, any action to enjoin manufacture or
 distribution of any Medical Device or (iii) commenced, or threatened to
 initiate, any action to enjoin the manufacture or distribution of any Medical
 Device produced at any facility where any Medical Device is manufactured,
 tested, processed, packaged or held for sale.                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (j)
 The Business is and at all times has been in compliance with federal or state
 criminal or civil laws (including the federal Anti-Kickback Statute (42
 U.S.C. §1320a-7(b)), Stark law (42 U.S.C. §1395nn), False Claims Act (42
 U.S.C. §1320a-7b(a)), Health Insurance Portability and Accountability Act of
 1996 (42 U.S.C. §1320d et seq., and any comparable state or local laws), any
 federal Civil Money Penalties Statute and, in each case, any similar or
 comparable state or local laws as well as the regulations promulgated
 pursuant to such laws, or which are cause for civil or criminal penalties or
 mandatory or permissive exclusion from Medicare (Title XVIII of the Social
 Security Act), Medicaid (Title XIX of the Social Security Act) or any other
 state or federal health care program (each, a Program). There is no Litigation threatened against Seller,
 that could reasonably be expected to result in its exclusion from
 participation in any Program or other third party payment programs in which
 the Business participates. Seller has not

17

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | been
 sanctioned within the meaning of Social Security Act Section 1128A or any
 amendments thereof or debarred, excluded or suspended from participation in
 any federal or state health care program. In addition, neither Seller nor any
 of its affiliates have been debarred or convicted of a crime for which a
 person or entity can be debarred under 21 U.S.C. § 335a, nor have they been
 threatened to be debarred or indicted for a crime or otherwise engaged in
 conduct for which a person or entity can be debarred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (k)
 Seller has made available to Buyer copies of any written complaints received
 from employees, independent contractors, vendors, physicians or any other
 person asserting that the Business has violated any applicable law. As of the
 date hereof, (i) Seller is not a party to a corporate integrity agreement
 with the United States Department of Health and Human Services Office of
 Inspector General that relate to the Business, (ii) the Business has no
 reporting obligations pursuant to any settlement agreement entered into with
 any Governmental Entity, (iii) the Business has not been subject to any
 government payor program investigation conducted by any Governmental Entity
 except with respect to individual claims for reimbursement in the ordinary
 course of business, (iv) Seller has not been a defendant in any qui tam or other litigation under the
 federal False Claims Act pertaining to the Business and (v) within the past
 six years, Seller has not been served with or received any written search
 warrant, subpoena, civil investigative demand or contact letter from any
 Governmental Entity pertaining to the Business.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (l)
 Seller has delivered to Buyer complete and accurate written documentation of
 the processes and procedures used or necessary to manufacture the Business
 products (the Manufacturing Documentation).
 The manufacture of the products of the Business by Seller is being conducted
 in compliance in all material respects with all applicable laws including the
 FDAs Quality Systems Regulation at 21 CFR Part 820 for products sold in the
 United States, and the respective counterparts thereof promulgated by
 Governmental Entities in countries outside the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (m)
 Seller is not the subject of any pending or, to Sellers Knowledge,
 threatened, investigation in respect of the Business or the Business
 products, by the FDA pursuant to its Fraud, Untrue Statements of Material
 Facts, Bribery, and Illegal Gratuities Final Policy set forth in 56 Fed.
 Reg. 46191 (September 10, 1991) and any amendments thereto. To Sellers
 Knowledge, neither Seller, nor any officer, employee or agent of Seller, nor
 any other person acting on their behalf, has directly or indirectly, given or
 agreed to give any gift or similar benefit to any customer, supplier,
 governmental employee or other person who is or may be in a position to help
 or hinder the Business (or assist the Business in connection with any actual
 or proposed transaction) in violation of any applicable law.                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 4.17    Insurance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

(a)
Seller has at all times maintained insurance relating to the Business and
covering all forms of insurance customarily obtained by businesses in the same
industry. Such insurance (i) is in full force and effect and (ii) provides
adequate

18

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | insurance
 coverage for the activities of the Business. Section 4.17 of the Seller
 Disclosure Schedule lists each policy of insurance in effect.                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b)
 Section 4.17 of the Seller Disclosure Schedule lists by year for the current
 policy year and each of the two preceding policy years a summary of the loss
 experience of the Business under each policy involving any claim in excess of
 $50,000, setting forth (i) the name of the claimant, (ii) a description of
 the policy by insurer, type of insurance and period of coverage and (iii) the
 amount and a brief description of the claim.

4.18    Warranties.
Section 4.18 of the Seller Disclosure Schedule summarizes all claims
outstanding, pending or, to the knowledge of Seller, threatened for breach of
any warranty relating to any products incorporating the Business sold by Seller
prior to the date hereof. The description of Sellers product warranties
related to the Business set forth under Section 4.18 of the Seller Disclosure
Schedule is correct and complete. None of the products incorporating the
Business has been the subject of any claim alleging that such products are
defective, or any product recall or return (whether voluntary or involuntary).

4.19    Compliance
with laws; Permits.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Seller and its officers, directors, shareholders, agents and employees have
 complied with all applicable laws, regulations, governmental orders, and
 other requirements relating to the Assets and the Assumed Liabilities, and to
 which Seller may be subject, including, but not limited to, federal, state,
 local and foreign laws, ordinances, rules, regulations and other requirements
 pertaining to product labeling and consumer products safety, and no claims
 have been filed against Seller alleging a violation of any such laws,
 regulations or other requirements and Seller has not received any notice
 asserting that it is not so in compliance. Seller is not relying on any
 exemption from or deferral of any law, regulation, governmental order, other
 requirement, or governmental authorization that would not be available to
 Buyer after the applicable Closing.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b)
 Seller and/or Parent has, in full force and effect, all Permits. A true,
 correct and complete list of all the Permits is set forth in Schedule
 1.01(g), with an indication as to whether each Permit is assignable to Buyer.
 Seller has conducted the business relating to the Business in compliance with
 the terms and conditions of the Permits. Seller will transfer all Permits to
 Buyer at the Initial Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

4.20    Direct
Customer List. Exhibit 4.20 sets forth the identity of each direct customer
of the Business, the name of the primary contact at each such customer, product
champions and other product users (in each case to the extent available), the
products sold to each such customer and the price at which such products were sold.
The list of customers on Exhibit 4.20 corresponds to the list of Business
customer numbers that is set forth on Exhibit 4.20.1.

4.21    Distributor
Customer List. Exhibit 4.21 sets forth the identity of each customer that
is a distributor for the Business, the products sold to each such customer for
the 27-month period prior to Closing and the price at which such products were
sold for the 27-

19

---



month period
prior to Closing. Such pricing of the products corresponds to the sales tracing
reports entitled Independent Medical Associates Sales Analysis Item Number
Report, a sample of which was provided to Buyer on April 23, 2010.

4.22    Brokerage.
Except for the commission payable by Seller to Gravitas Healthcare Partners,
LLC, no third party shall be entitled to receive any brokerage commissions,
finders fees, fees for financial advisory services or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Seller.

4.23    Availability
of Documents. Seller has delivered to Buyer correct and complete copies of
the items referred to in the Seller Disclosure Schedule or in this Agreement
(and in the case of any items not in written form, a written description
thereof).

4.24    Solvency.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Seller is not insolvent and will not be rendered insolvent by any of the
 transactions contemplated by this Agreement. As used in this Section 4.23,
 insolvent means that the sum of the debts and other probable liabilities of
 Seller exceeds the present fair saleable value of its assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (b)
 Immediately after giving effect to the consummation of the transactions
 contemplated by this Agreement, (i) Seller will be able to pay its
 liabilities as they become due in the usual course of its business; (ii)
 Seller will not have unreasonably small capital with which to conduct its
 present or proposed business; (iii) Seller will have assets (calculated at
 fair market value) that exceed its liabilities; (iv) taking into account all
 pending and threatened litigation, final judgments against Seller in actions
 for money damages are not reasonably anticipated to be rendered at a time
 when, or in amounts such that, Seller will be unable to satisfy any such
 judgments promptly in accordance with their terms (taking into account the
 maximum probable amount of such judgments in any such actions and the
 earliest reasonable time at which such judgments might be rendered) as well
 as all other obligations of Seller; and (v) the cash available to Seller,
 after taking into account all other anticipated uses of the cash, will be
 sufficient to pay all such debts and judgments promptly in accordance with
 their terms.

4.25    Disclosure.
Neither this Agreement, the Related Agreements, the Exhibits hereto, any of the
documents delivered by or on behalf of Seller pursuant to Article VIII hereof,
nor the Seller Disclosure Schedule (collectively, the Seller Documents), taken as a whole,
contain any untrue statement of a material fact regarding the Assets or the
Assumed Liabilities or any of the other matters dealt with in this Article IV
relating to Seller or the transactions contemplated by this Agreement. Seller
Documents, taken as a whole, do not omit any material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they were made, not misleading, and there is no fact relating to the
Assets or Assumed Liabilities which has not been disclosed to Buyer of which
any shareholder, officer or manager of Seller is aware which would have a
Material Adverse Effect.

20

---



ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer
hereby represents and warrants to Seller that:

5.01     Incorporation
and Power. Buyer is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Minnesota, with the requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.

5.02     Execution,
Delivery; Valid and Binding Agreement. The execution, delivery and
performance of this Agreement and the Related Agreements by Buyer and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all requisite corporate action, and no other
corporate proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement and the Related Agreements. This
Agreement and the Related Agreements have been duly executed and delivered by
Buyer and, assuming that this Agreement and the Related Agreements are the
valid and binding agreements of Seller, constitute the valid and binding
obligations of Buyer, enforceable in accordance with their terms, except as may
be limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the rights of creditors generally and the availability of
equitable remedies.

5.03     Authority,
No Breach. Buyer has the requisite corporate power and authority to execute
and deliver this Agreement and each of the Related Agreements and to perform
its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Related Agreements by Buyer and the
consummation by Buyer of the transactions contemplated hereby and thereby do not
conflict with or result in any breach of any of the provisions of, constitute a
default under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of Buyer, or require any authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Certificate of Incorporation or
Bylaws of Buyer or any indenture, mortgage, lease, loan agreement or other
agreement or instrument by which Buyer or its assets are bound or affected, or
any law, statute, rule or regulation or order, judgment or decree to which
Buyer or its assets is subject.

5.04     Governmental
Authorities; Consents. Buyer is not required to submit any notice, report
or other filing with any governmental authority in connection with the
execution or delivery by it of this Agreement or the consummation of the
transactions contemplated hereby. No consent, approval or authorization of any
governmental or regulatory authority or any other party, person, or entity is
required to be obtained by Buyer in connection with its execution, delivery and
performance of this Agreement or the transactions contemplated hereby.

5.05     Brokerage.
No third party shall be entitled to receive any brokerage commissions, finders
fees, fees for financial advisory services or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Buyer.

21

---



ARTICLE VI

COVENANTS OF SELLER

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.01    Conduct
 Relating to the Assets                                                                                                                                 
|
| | (a) In connection with the Raw Materials Inventory,
 Seller agrees that, from the date hereof until the Final Closing Date,
 without the prior written consent of Buyer:

| |                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)     Seller
 shall not take any action with respect to the Raw Materials Inventory except
 on an arms-length basis and in accordance with all applicable laws, rules
 and regulations and in accordance with the terms and conditions of the Supply
 Agreement;                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii)     Seller
 shall manage the Raw Materials Inventory levels in accordance with the terms
 and conditions of the Supply Agreement;                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iii)     Seller
 shall not, directly or indirectly, sell, pledge, dispose of or encumber any
 of the Raw Materials Inventory;                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iv)     Seller
 will not enter into any contract relating to the Raw Materials Inventory that
 would have been an Assigned Contract if such contract had been in effect on
 the date of this Agreement;                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                               
| | (v)     Seller
 shall not cancel or terminate its current insurance policies covering the Raw
 Materials Inventory, or cause any of the coverage thereunder to lapse, unless
 simultaneously with such termination, cancellation or lapse, replacement
 policies providing coverage equal to or greater than the coverage under the
 canceled, terminated or lapsed policies are in full force and effect; and

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) Seller
 shall: (A) use all reasonable efforts to preserve intact the Raw Materials
 Inventory until used in production and manufacturing; (B) not intentionally
 take any action which would render, or which reasonably may be expected to
 render, any representation or warranty made by it in this Agreement with
 respect to the Raw Materials Inventory untrue at the Final Closing; and (C)
 notify Buyer of any emergency or other change in the normal course of the
 business and of any governmental or third party complaints, investigations or
 hearings (or communications indicating that the same may be contemplated)
 relating to the Raw Materials Inventory.

6.02    Consents,
Approvals, Filings. As promptly as practicable after the execution of this
Agreement, Seller agrees that it shall diligently and in good faith assist
Buyer, using commercially reasonable efforts, in obtaining all consents,
approvals, filings and submissions required from any third parties, regulatory
or judicial bodies, or under any laws or regulations applicable to the Assets
for the consummation of the transactions contemplated hereby. Seller will
coordinate and cooperate with Buyer in exchanging such information, will not
make any such filing without providing to Buyer a final copy thereof for its
review and consent at least two full business days in advance of the proposed
filing and will provide such reasonable assistance as Buyer may request in
connection with all of the foregoing.

22

---



6.03     No
Negotiations, etc. From and after the date of this Agreement until the
Final Closing, Seller shall not, directly or indirectly, through any officer,
director, agent or otherwise, solicit, initiate or encourage submission of any
proposal or offer from any person or entity (including any of its or their
officers or employees) relating to any liquidation, license, acquisition or
purchase of any of the Raw Materials Inventory, any equity interest relating to
the business relating to the Business or Raw Materials Inventory or any sale of
the equity interests of Seller, or other similar transaction or business
combination involving the Assets or the business relating to the Business
(each, a Competing Transaction)
or participate in any negotiations or discussions regarding a Competing
Transaction, or furnish to any other person or entity any information, or
otherwise cooperate in any way, with respect to a possible Competing
Transaction or assist or participate in, facilitate or encourage, any effort or
attempt by any other person or entity to do or seek a possible Competing
Transaction. Seller shall promptly notify Buyer if any proposal or offer, or
any inquiry from or contact with any person or entity with respect to a
possible Competing Transaction is made and shall promptly provide Buyer with
such information regarding such proposal, offer, inquiry or contact as Buyer
may request.

6.04     Updates
of Seller Disclosure Schedule. From and after the date of the Initial
Closing Date until the Final Closing Date, Seller shall promptly notify Buyer
by written update to the Seller Disclosure Schedule (a) if any representation
or warranty made by Seller in this Agreement, as such representation or
warranty relates to the Raw Materials Inventory, was when made, or has
subsequently become, untrue in any material respect, (b) of the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which may
cause any condition to the obligations of any party hereto to effect the
transactions contemplated by this Agreement not to be satisfied or (c) of the
failure of Seller to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by Seller pursuant to this Agreement
which would be likely to result in any condition to the obligations of any
party hereto to effect the transactions contemplated hereby not to be
satisfied. The delivery of any notice pursuant to this Section 6.05 shall not
cure any breach of any representation or warranty requiring disclosure of such
matter prior to the date of this Agreement or otherwise limit or affect the
rights of, or the remedies available to, Buyer.

6.05     Use
of Name. Except as may be expressly permitted pursuant to the terms of the
Supply Agreement, Seller agrees not to use any mark transferred to Buyer under
Section 1.01(a)(ii) after the Initial Closing Date.

6.06     Conditions.
Seller take all commercially reasonable actions necessary or desirable to cause
the conditions set forth in Section 8.01 to be satisfied and to consummate the
transactions contemplated herein as soon as reasonably possible after the
satisfaction thereof and in any event prior to the applicable Closing Date.

6.07     Tax
Matters. All Taxes imposed in connection with the transfer and sale of the
Assets shall be borne by Seller, provided that Buyer shall be responsible for
any use taxes in connection with its use of the Assets after the applicable
Closing.

6.08     Protection
of Trade Secrets, Know-How and Other Confidential Information. Except as
permitted or directed by Buyer, Seller shall not, and shall use its best
efforts to cause Sellers employees and affiliates to not, divulge, furnish or
make accessible to

23

---



anyone or use
in any way any confidential or proprietary knowledge or information relating to
the Business or the Assets, whether developed by Seller or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, products or future products, plans, devices or material (whether or
not patented or patentable) directly or indirectly useful in any aspect for any
of the Assets, any customer or supplier lists relating to the Assets, any
confidential or secret development or research work relating to the Assets, any
clinical research, data, or information, or any other confidential information
or secret aspects of the Assets. Seller acknowledges that the above-described knowledge
or information constitutes a unique and valuable asset of the Assets, and that
any disclosure or other use of such knowledge or information by Seller would be
wrongful and would cause irreparable harm to Buyer. Seller will refrain from
any acts or omissions that would reduce the value of such knowledge or
information to Buyer.

6.09     Noncompetition.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 For three (3) years after the Initial Closing Date (the Restricted Period), Seller shall not and
 shall cause Sellers affiliates not to, directly or indirectly, engage in,
 and shall use its best efforts to ensure that none of its officers, employees
 (excluding Michael ODonnell) or directors directly or indirectly engage in,
 any Competitive Business (as defined below), whether in existence now or at
 any time in the future, in any manner or capacity (e.g., as an advisor,
 principal, agent, partner, officer, director, stockholder, consultant, member
 of any association or otherwise). A Competitive
 Business shall mean any business or venture that researches,
 designs, develops, creates, markets, distributes, or licenses or sells
 accessories, devices, systems, software, products, or services that compete,
 directly or indirectly, with the Business. The services provided by Seller to
 Buyer under the Supply Agreement shall not be considered a Competitive
 Business for purposes of this Section 6.09.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (b)
 Seller will not, directly or indirectly, assist or encourage any other person
 or entity in carrying out, directly or indirectly, any activity that would be
 prohibited by the above provisions of Sections 6.09 or 6.10 if such activity
 were carried out by Seller, either directly or indirectly. In particular,
 Seller agrees that it will not, directly or indirectly, induce any employee
 of Seller or Buyer to carry out, directly or indirectly, any such activity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (c)
 Seller agrees that the restrictions and agreements contained in Sections 6.09
 or 6.10 are reasonable and necessary to protect the legitimate interests of
 Buyer and that any violation of Sections 6.09 or 6.10 will cause substantial
 and irreparable harm to Buyer that would not be quantifiable and for which no
 adequate remedy would exist at law and accordingly injunctive relief shall be
 available for any violation of Sections 6.09 or 6.10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (d)
 If the duration or extent of business activities covered by Sections 6.09 or
 6.10 are in excess of what is valid and enforceable under applicable law, then
 such provisions shall be construed to cover only the greatest duration or
 activities that are valid and enforceable. Seller acknowledges the
 uncertainty of the law in this respect and expressly stipulates that this
 Agreement be given the construction which renders its                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

24

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | provisions
 valid and enforceable to the maximum extent (not exceeding its express terms)
 possible under applicable law. The parties intend these provisions to be
 deemed to be a series of separate covenants, one for each and every state of
 the United States of America, and each and every political subdivision of
 each and every country outside the United States of America where these
 provisions is intended to be in effect.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (e) Ownership,
 as a passive investment, in the aggregate of less than 1% of the outstanding
 shares of capital stock of any corporation listed on a national securities
 exchange or publicly traded on any nationally recognized over-the-counter
 market shall not constitute a breach of Section 6.09(a).                                                                                                                                 

6.10     Agreement
Not to Solicit. Excepting Roger Edens, during the Restricted Period, Seller
shall not (i) directly or indirectly attempt to hire away any then-current
employee of Buyer or any of its affiliates or to persuade any such employee to
leave employment with Buyer or any of its affiliates or (ii) directly or
indirectly solicit, divert, or take away, or attempt to solicit, divert or take
away, the business of any person with whom Buyer or the Business has established
or is actively seeking to establish a business or customer relationship.

6.11     IMA
Agreement. Seller will use its best efforts to reach an agreement with IMA
regarding the balance of the inventory of Seller held by IMA at the Initial
Closing. On or prior to May 4, 2010, Seller shall offer to purchase such
remaining inventory of Seller from IMA on the terms and conditions set forth on
Schedule 6.11 attached hereto. On or prior to May 7, 2010, Seller shall either
(i) sell to Buyer at the Supply Agreement pricing as reflected on Exhibit F
plus freight the inventory purchased from IMA pursuant to this Section 6.11 or
(ii) pay to Buyer a penalty equal to $350 per box of inventory of Seller that
is still in the possession of IMA at Closing. Seller will calculate for Buyer
the amount of Sellers inventory that is still in the possession of IMA at the
Initial Closing by reconciling the amount of Sellers inventory sold to IMA
with the sales tracing reports entitled Independent Medical Associates Sales
Analysis Item Number Reports that were provided to Seller from IMA.

6.12     Cooperation
and Exchange of Information.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 Buyer shall have the right for a period of seven years following the Initial
 Closing Date to have reasonable access to review such books, records and
 accounts, including financial and tax information, correspondence, production
 records, and other records of Seller relating to the Assets and Assumed
 Liabilities for the limited purposes of complying with its obligations under
 applicable laws and regulations, including financial reporting obligations,
 in all cases to the extent such books, records and accounts have not been
 destroyed in accordance with Sellers document retention policy. Except in
 accordance with Sellers document retention policy, Seller shall not destroy
 any such books, records or accounts retained by it without first providing
 Buyer with the opportunity to obtain or copy such books, records, or
 accounts. For a period of seven years following the Initial Closing Date,
 Seller shall provide Buyer with such cooperation and information as Buyer
 reasonably may request of Seller pursuant to this Section 6.12, including but
 not limited to making its employees available on a mutually

25

---



| |                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | convenient
 basis to provide explanation of any documents or information provided
 hereunder.                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                           
| | (b)
 Promptly upon request by Buyer made at any time during the seven-year period
 following the Initial Closing Date, Seller shall authorize the release to
 Buyer of all files pertaining to the Assets or Assumed Liabilities held by
 any federal, state, county or local authorities, agencies or
 instrumentalities.
| |                                                                                                                                                                                                                                                                                                                           
| | (c)
 Seller shall provide Buyer with such cooperation and information as Buyer
 reasonably may request of Seller in order for Buyer to prepare financial
 statements to comply with financial reporting obligations at any time at or
 after the Initial Closing.                                                         

6.13     Insurance
Coverage. From and after the Initial Closing Date and for five years
thereafter, Seller shall have and maintain in effect, at Sellers sole cost,
the following insurance relating to Sellers past operation of the Business:
Commercial General Liability Insurance and Products Liability Insurance for
each occurrence of bodily injury and property damage, in an amount of not less
than $5,000,000.00 for each such policy.

ARTICLE VII

COVENANTS OF BUYER

7.01     Regulatory
Filings. As promptly as practicable after the execution of this Agreement,
Buyer shall make or cause to be made all filings and submissions under any laws
or regulations applicable to Buyer for the consummation of the transactions
contemplated herein. Buyer will coordinate and cooperate with Seller in
exchanging such information, will not make any such filing without providing to
Seller a final copy thereof for its review and consent at least two full
business days in advance of the proposed filing and will provide such reasonable
assistance as Seller may request in connection with all of the foregoing.

7.02     Conditions.
Buyer shall take all commercially reasonable actions necessary or desirable to
cause the conditions set forth in Section 8.02 to be satisfied and to
consummate the transactions contemplated herein as soon as reasonably possible
after the satisfaction thereof and in any event prior to the applicable Closing
Date.

ARTICLE VIII

CONDITIONS TO CLOSING

8.01     Conditions
to Buyers Obligations.

| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 The obligation of Buyer to consummate the transactions contemplated by this
 Agreement is subject to the satisfaction of the following conditions on or
 before the Initial Closing Date:

26

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)       The
 representations and warranties set forth in Article IV hereof shall be true
 and correct at and as of the Initial Closing Date as though then made and as
 though the Initial Closing Date had been substituted for the date of this Agreement
 throughout such representations and warranties, except that any such
 representation or warranty made as of a specified date (other than the date
 hereof) shall only need to have been true and correct on and as of such date;                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii)      Seller
 shall have performed all of the covenants and agreements required to be
 performed and complied with by it in all material respects under this
 Agreement prior to the Initial Closing Date;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (iii)     The
 parties shall have obtained, or applied for, each consent and approval
 necessary as listed on Schedule 8.01(a)(iii), at no cost to Buyer, in order
 that the transactions contemplated herein not constitute a breach or
 violation of, or result in a right of termination or acceleration of, or
 creation of any encumbrance on any of the Assets pursuant to the provisions
 of, any Assigned Contract, agreement, arrangement or undertaking of or
 affecting Seller or any license, franchise or permit of or affecting Seller;                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (iv)     All
 governmental filings, authorizations and approvals as listed on Schedule
 8.01(a)(iii) will have been duly made, applied for or waived;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (v)      Buyer
 will have received evidence satisfactory to it that there is not threatened,
 instituted or pending any action or proceeding, before any court or
 governmental authority or agency, domestic or foreign, (i) challenging or
 seeking to make illegal, or to delay or otherwise directly or indirectly
 restrain or prohibit, the consummation of the transactions contemplated
 hereby or seeking to obtain material damages in connection with such
 transactions, (ii) seeking to invalidate or render unenforceable any material
 provision of this Agreement or the Related Agreements or (iii) otherwise
 relating to and materially adversely affecting the transactions contemplated
 hereby;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (vi)     There
 shall be no fact or circumstance existing as of the date of this Agreement
 which has not been disclosed to Buyer as of the Initial Closing Date
 regarding the Assets or the Assumed Liabilities, which is, individually or in
 the aggregate with other such facts and circumstances, materially adverse to
 the value of the Assets, as determined by Buyer in its reasonable discretion;                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (vii)    The
 transactions contemplated by this Agreement and the Related Agreements will
 have been approved by Buyers Board of Directors;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (viii)   Buyer
 shall be satisfied in its sole discretion with its operational, intellectual
 property, and legal due diligence with respect to the Assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ix)     Buyer
 shall have all releases as necessary to release all liens, claims,
 encumbrances and security interests in the Assets, except for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

27

---



| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | security
 interests and other liens relating to liabilities to be assumed by Buyer
 pursuant to Section 1.03;         
| |                                                                                                                       
| | (x)     Buyer
 shall have entered into the Supply Agreement with Seller in the form attached
 hereto as Exhibit F; and
| |                                                                                                                       
| | (xi)    Seller
 shall have delivered to Buyer all of the following with respect to the
 Initial Closing Assets:       

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (A) | the executed
 Bill of Sale and such other executed instruments of conveyance, transfer,
 assignment and delivery as Buyer shall have reasonably requested pursuant to
 Section 3.02 hereof;                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (B) | a copy of
 the Assignment and Assumption Agreement, including, but not limited to,
 assignment of the Assigned Contract and the Permits, executed by Seller;                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (C) | a
 certificate of an appropriate officer of Seller substantially in the form set
 forth in Exhibit D hereto, dated the Initial Closing Date, (i) stating that
 the conditions precedent set forth in subsections (a) and (b) above have been
 satisfied; (ii) setting forth and certifying the text of the resolutions
 adopted by the board of directors of Seller authorizing the execution,
 delivery, and performance of this Agreement and the Related Agreements; and
 (iii) setting forth and certifying the text of the resolutions adopted by the
 shareholders of Seller approving the sale of the Assets;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (D) | copies of
 the third party and governmental consents and approvals referred to in
 subsections (c) and (d) above;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (E) | assignment,
 in the form(s) set forth in Exhibit F, of the Assets that are Intellectual
 Property, duly executed by Seller, together with other agreements,
 instruments, certificates and other documents necessary or appropriate, in
 the opinion of Buyers counsel, to assign all of Sellers rights and
 interests in and to the Intellectual Property to Buyer;                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (F) | the Finished
Goods Inventory, all documents or other tangible materials described in
1.01(a)(viii), the Equipment, other than the Equipment that is necessary to
manufacture the products required by                                                                                                                                                                                                                                                                                                                                                                                                               

28

---



| |     |                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------
| |     | Seller under
 the Supply Agreement, copies of the Assigned Contract, and copies of the
 Permits;                                  
| |     |                                                                                                                                   
| | (G) | the Customer
 List;                                                                                                               
| |     |                                                                                                                                   
| | (H) | a guarantee,
 satisfactory to Buyer in its sole discretion, executed by Parent; and                                               
| |     |                                                                                                                                   
| | (I) | such other
 certificates, documents and instruments as Buyer reasonably requests related
 to the transactions contemplated hereby.

(b) The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Final Closing Date:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)     The
 representations and warranties set forth in Article IV as the same relate to
 the Final Closing Assets shall be true and correct at and as of the Final
 Closing Date as though then made and as though the Final Closing Date had
 been substituted for the date of this Agreement throughout such
 representations and warranties, except that any such representation or
 warranty made as of a specified date (other than the date hereof) shall only
 need to have been true and correct on and as of such date;                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)    Seller
 shall have performed all of the covenants and agreements required to be
 performed and complied with by it in all material respects under this
 Agreement prior to the Final Closing Date;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iii)   The
 Manufacturing Transfer shall have occurred in accordance with Section 2.02(h)
 and Schedule 2.20(h);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iv)    Buyer
 will have received evidence satisfactory to it that there is not threatened,
 instituted or pending any action or proceeding, before any court or
 governmental authority or agency, domestic or foreign, (i) challenging or
 seeking to make illegal, or to delay or otherwise directly or indirectly
 restrain or prohibit, the consummation of the transactions contemplated
 hereby or seeking to obtain material damages in connection with such
 transactions, (ii) seeking to invalidate or render unenforceable any material
 provision of this Agreement or the Related Agreements or (iii) otherwise
 relating to and materially adversely affecting the transactions contemplated
 hereby;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (v)     No
 person or entity will have asserted or threatened that such person or entity
 is the owner of, or has the right to acquire or to obtain ownership of, any
 of the Raw Materials Inventory or is entitle to all or any portion of the
 Purchase Price;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (vi)    No
 Material Adverse Effect with respect to the Raw Materials Inventory shall
 have occurred;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

29

---



| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | (vii)    Seller
 shall have delivered to Buyer all of the following with respect to the Raw
 Materials Inventory:

| |     |                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (A) | an executed
 Bill of Sale and such other executed instruments of conveyance, transfer,
 assignment and delivery as Buyer shall have reasonably requested pursuant to
 Section 3.02 hereof;                                                                
| |     |                                                                                                                                                                                                                                                           
| | (B) | a
 certificate of an appropriate officer of Seller substantially in the form set
 forth in Exhibit D hereto, dated the Final Closing Date, (i) stating that the
 conditions precedent set forth in subsections (a) and (b) above have been
 satisfied; and
| |     |                                                                                                                                                                                                                                                           
| | (C) | the Raw
 Materials Inventory.                                                                                                                                                                                                                             

8.02     Conditions
to Sellers Obligations.

(a) The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions on or
before the Initial Closing Date:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)     The
 representations and warranties set forth in Article V hereof shall be true
 and correct at and as of the Initial Closing as though then made and as
 though the Initial Closing Date had been substituted for the date of this
 Agreement throughout such representations and warranties, except that any
 such representation or warranty made as of a specified date (other than the
 date hereof) shall only need to have been true and correct on and as of such
 date;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii)    Buyer
 shall have performed all of the covenants and agreements required to be
 performed by it under this Agreement in all material respects prior to the
 Initial Closing;                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iii)    All
 governmental filings, authorizations and approvals that are required for the
 consummation of the transactions contemplated hereby shall have been duly
 made, applied for or waived;                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iv)    Buyer
shall have entered into the Supply Agreement with Seller in the form attached
hereto as Exhibit F; and                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (v)     Buyer
 shall have delivered to Seller all of the following:                                                                                                                                                                                                                                                                                                                                                                                                                     

| |     |                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | (A) | a copy of
 the Assignment and Assumption Agreement, executed by Buyer;                                                                                  
| |     |                                                                                                                                                         
| | (B) | a
 certificate of an appropriate officer of Buyer substantially in the form set
 forth as Exhibit E hereto, dated the Initial Closing Date, stating that

30

---



| |     |                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | the
 conditions precedent set forth in subsections (a) and (b) above have been
 satisfied and setting forth and certifying the text of the resolutions
 adopted by the board of directors of Buyer authorizing the execution,
 delivery, and performance of this Agreement; and
| |     |                                                                                                                                                                                                                                                                                
| | (C) | such other
 certificates, documents and instruments as Seller or its counsel may
 reasonably request related to the transactions contemplated hereby.                                                                                                                          

| |                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) The
 obligations of Seller to consummate the transactions contemplated by this
 Agreement are subject to the satisfaction of the following conditions on or
 before the Final Closing Date:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)     The
 representations and warranties set forth in Article V hereof shall be true
 and correct at and as of the Final Closing as though then made and as though
 the Final Closing Date had been substituted for the date of this Agreement
 throughout such representations and warranties, except that any such
 representation or warranty made as of a specified date (other than the date
 hereof) shall only need to have been true and correct on and as of such date;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (ii)    Buyer
 shall have performed all of the covenants and agreements required to be
 performed by it under this Agreement in all material respects prior to the
 Final Closing; and                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iii)   Buyer
 shall have delivered to Seller a certificate of an appropriate officer of
 Buyer substantially in the form set forth as Exhibit E hereto, dated the
 Final Closing Date, stating that the conditions precedent set forth in
 subsections (a) and (b) above have been satisfied.                                                                                                                                                                                     

ARTICLE IX

SURVIVAL; INDEMNIFICATION

9.01
Reliance and Survival of Representations and Warranties. Notwithstanding
any investigation made by or on behalf of the parties hereto or the results of
any such investigation, and notwithstanding the participation of the parties in
each Closing, each party shall be deemed to have relied on the representations,
warranties and covenants of the other parties, and the representations and
warranties contained in Article IV and Article V, and the indemnification
obligations of Buyer and Seller with respect thereto, shall survive each
Closing for a period of 12 months, except for (a) the representations and
warranties contained in Section 4.14 (Intellectual Property Rights) and 4.16
(Regulatory Compliance) which shall survive the Closing Date for a period of
five years after the Final Closing Date, (b) the representations and warranties
contained in Sections 4.01 (Incorporation; Power and Authority), 4.02
(Execution, Delivery; Valid and Binding Agreement), 4.08 (Title to Assets),
4.22 (Brokerage) and 5.05 (Brokerage) which shall survive indefinitely and (c)
the representations and warranties contained

31

---



in Section 4.17 (Insurance) which shall survive for a
period of 4 months after the Final Closing Date. Notwithstanding the foregoing,
any representation or warranty, and the indemnification obligations with
respect thereto, that would otherwise terminate in accordance with this Section
9.01 shall continue to survive, if notice of a claim shall have been timely
given under Section 9.04 on or prior to such termination date, until such claim
has been satisfied or otherwise resolved as provided in this Article IX.

9.02     Indemnification by Seller. Subject to the limitations of
Sections 9.01 and 9.05, Seller shall, jointly and severally, indemnify in
full, defend and hold harmless Buyer, its respective officers, directors,
employees, agents and shareholders (collectively, the Buyer Indemnified Parties) against any
loss, Liability, deficiency, damage, expense or cost (including reasonable
attorneys fees and expenses) (collectively, Losses),
whether or not involving a third-party Claim (as defined in Section 9.04(a))
prior to the expiration of the indemnification obligation of Seller hereunder,
which the Buyer Indemnified Parties may suffer, sustain or become subject to,
as a result of any of the following:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 any breach of or inaccuracy in any of the representations and warranties of
 Seller contained in the Seller Documents or in any certificate delivered by
 or on behalf of Seller pursuant to this Agreement (determined without giving
 effect to any update to the Seller Disclosure Schedule);                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (b)
 any breach of, or failure to perform, any agreement or covenant of Seller
 contained in any of the Seller Documents;                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (c)
 any Claim or threatened Claim against Buyer Indemnified Parties that arises
 in connection with the actions or inactions of Seller with respect to the
 Assets or Assumed Liabilities prior to the Closing Date;                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (d)
 any Claim or threatened Claim against the Buyer Indemnified Parties for
 infringement, misuse, misappropriation, or relating to the ownership of any
 intellectual property rights, including, but not limited to, patent,
 copyright, trademark, service mark, trade names, trade dress, trade secret,
 or know-how rights, relating to any of the Assets or the Business or any
 component of the Assets or the Business;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (e)
 any former or present employees, officers and/or managers of, consultants to,
 or independent contractors to, Seller holding any rights in or to the
 Intellectual Property;                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (f)
 any product liability Claims relating to the Assets and/or sales of and
 Business or component thereof prior to the Closing; or                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (g)
 any Excluded Liability.                                                                                                                                                                                                                                                                                                                                                                                                    

9.03     Indemnification by Buyer. Subject to the limitations of
Sections 9.01 and 9.05, Buyer agrees to indemnify in full, defend and hold
harmless Seller, its respective officers, managers, employees, agents and
shareholders (collectively, the Seller
Indemnified Parties) against any Losses, whether or not involving a
third-party Claim incurred prior to the expiration

32

---



of the indemnification obligations of Buyer hereunder,
which Seller may suffer, sustain or become subject to as a result of any of the
following:

| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 any breach of or inaccuracy in any of the representations and warranties of
 Buyer contained in the Buyer Documents or in any certificate delivered by or
 on behalf of Buyer pursuant to this Agreement;                                                                                             
| |                                                                                                                                                                                                                                                                                                            
| | (b)
 any breach of, or failure to perform, any agreement or covenant of Buyer
 contained in the Buyer Documents; or                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                            
| | (c)
 except to the extent that Seller agrees to indemnify Buyer under Section
 9.02, any Claim or threatened Claim against any Seller Indemnified Party that
 arises solely in connection with the actions or inactions of Buyer with
 respect to the Assets or Assumed Liabilities after the Closing Date.

9.04     Method of Asserting Claims. As used herein, an Indemnified Party shall refer to a Buyer
Indemnified Party or Seller Indemnified Party, as applicable, and the Indemnifying Party shall refer to the
party or parties hereto obligated to indemnify such Indemnified Party.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 In the event that any of the Indemnified Parties is made a defendant in or
 party to any action or proceeding, judicial or administrative, instituted by
 any third party for the Liability or the costs or expenses of which are
 Losses (any such third party action or proceeding being referred to as a Claim), then such Indemnified Party
 shall give the Indemnifying Party prompt notice thereof. The failure to give
 such notice shall not affect any Indemnified Partys ability to seek
 reimbursement unless such failure has materially and adversely affected the
 Indemnifying Partys ability to defend successfully a Claim. The Indemnifying
 Party shall be entitled to contest and defend such Claim; provided, that the
 Indemnifying Party (i) has a reasonable basis for concluding that such
 defense may be successful and (ii) diligently contests and defends such
 Claim. Notice of the intention so to contest and defend shall be given by the
 Indemnifying Party to the Indemnified Party within fifteen (15) business days
 after the Indemnified Partys notice of such Claim (but, in any event, at
 least five (5) business days prior to the date that an answer to such Claim
 is due to be filed). Such contest and defense shall be conducted by reputable
 attorneys employed by the Indemnifying Party. If the Indemnifying Party fails
 to give such notice or assume such defense, then the Indemnified Party shall
 be entitled to undertake such defense and its reasonable costs and expenses
 (including, without limitation, attorney fees and expenses) shall be included
 in the Loss to be indemnified by the Indemnifying Party. If the Indemnifying
 Party elects to contest and defend a Claim, the Indemnified Party shall be
 entitled at any time, at its own cost and expense (which expense shall not
 constitute a Loss unless the Indemnified Party reasonably determines that the
 Indemnifying Party is not adequately representing or, because of a conflict
 of interest, may not adequately represent, any interests of the Indemnified
 Parties, and only to the extent that such expenses are reasonable), to
 participate in such contest and defense and to be represented by attorneys of
 its or their own choosing. If the Indemnified Party elects to participate in
 such defense, the Indemnified Party will cooperate with the Indemnifying
 Party in the conduct of such defense. Neither the Indemnified Party nor the

33

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Indemnifying Party may concede, settle or compromise
 any Claim without the consent of the other party, which consents will not be
 unreasonably withheld or delayed. Notwithstanding the foregoing, if (i) a
 Claim seeks equitable relief or (ii) the subject matter of a Claim relates to
 the ongoing business of any of the Indemnified Parties, which Claim, if
 decided against any of the Indemnified Parties, would materially adversely
 affect the ongoing business or reputation of any of the Indemnified Parties,
 then, in each such case, the Indemnified Parties alone shall be entitled to
 contest, defend and settle such Claim in the first instance and, if the
 Indemnified Parties do not contest, defend or settle such Claim, the
 Indemnifying Party shall then have the right to contest and defend (but not
 settle) such Claim.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (b)
 In the event any Indemnified Party should have a claim for indemnification
 against any Indemnifying Party (whether such claim does not involve a Claim
 or involves a settled or resolved Claim which the Indemnifying Party has not
 defended for any reason, or a Claim from which an Indemnified Party has
 suffered Losses by reason of the Indemnifying Partys failure to adequately
 represent a Indemnified Partys interests or otherwise to indemnify the
 Indemnified Party), the Indemnified Party shall deliver a notice of such
 claim to the Indemnifying Party, setting forth in reasonable detail the
 identity, nature and estimated amount of Losses (if reasonably determinable)
 related to such claim or claims, with reasonable promptness and in all events
 prior to the expiration of the Indemnifying Partys indemnification
 obligation hereunder. If the Indemnifying Party notifies the Indemnified
 Party that it does not dispute the claim described in such notice or fails to
 notify the Indemnified Party within 20 days after delivery of such notice by
 the Indemnified Party whether the Indemnifying Party disputes the claim described
 in such notice, the Loss in the amount specified in the Indemnified Partys
 notice will be conclusively deemed a Liability of the Indemnifying Party and
 the Indemnifying Party shall pay the amount of such Loss to the Indemnified
 Party on demand. If the Indemnifying Party has timely disputed its Liability
 with respect to such claim, the Indemnifying Party and the Indemnified Party
 will proceed in good faith to negotiate a resolution of such dispute for a
 period of at least 30 days before submission of such claim to a court
 pursuant to Article XI.

9.05     Limitations on Indemnification.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 After the Initial Closing, the rights set forth in this Article IX shall be
 each partys sole and exclusive remedies against the other parties hereto for
 breaches of or inaccuracies in representations and warranties or breaches of
 covenants contained in this Agreement and the Related Documents.
 Notwithstanding the foregoing, nothing herein shall (i) prevent any
 Indemnified Party from bringing an action based upon allegations of fraud
 with respect to any party in connection with this Agreement and the Related
 Documents or (ii) prohibit any party from seeking specific performance or
 injunctive relief against any other party of any covenant hereunder. In the
 event an action based upon allegations of fraud with respect to any party in
 connection with this Agreement and the Related Documents is brought, the
 prevailing partys attorneys fees and costs shall be paid by the
 nonprevailing party.

34

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b)
 Any indemnification payable under this Article IX shall be, to the extent
 permitted by law, an adjustment to the Purchase Price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c)
 Seller will indemnify in full, defend and hold harmless Buyer Indemnified
 Parties against any Losses pursuant to Section 9.02(a) only if the
 aggregate amount of all Losses for which the Buyer Indemnified Parties would
 be entitled to indemnification under Section 9.02(a) exceeds $37,500 (the Basket),
 in which case Seller shall be liable to the Buyer Indemnified Parties hereby
 for the aggregate amount of all such Losses (and not just the Losses in
 excess of the Basket); provided,
 however, that the limitations
 set forth in this Section 9.05(c) shall not apply to (i) breaches of the
 representations and warranties contained in Sections 4.01 (Incorporation;
 Power and Authority), 4.02 (Execution, Delivery; Valid and Binding
 Agreement), 4.08 (Title to Assets) or (ii) Losses by reason of any claims
 brought on the basis of fraud or willful misconduct.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (d)
 Buyer will indemnify in full, defend and hold harmless Seller Indemnified
 Parties against any Losses pursuant to Section 9.03(a) only if the
 aggregate amount of all Losses for which the Seller Indemnified Parties would
 be entitled to indemnification under Section 9.03(a) exceeds the Basket, in
 which case Buyer shall be liable to the Seller Indemnified Parties hereby for
 the aggregate amount of all such Losses (and not just the Losses in excess of
 the Basket); provided, however, that the limitations set forth
 in this Section 9.05(d) shall not apply to Losses by reason of any claims
 brought on the basis of fraud or willful misconduct.                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (e)
 Notwithstanding anything to the contrary contained herein, no Indemnifying
 Party shall be liable to or otherwise responsible to any Indemnified Party
 for punitive damages that arise out of or relate to this Agreement or the
 performance or breach thereof or any Liability excluded or assumed hereunder;
 provided,
 however,
 that the exclusion of punitive damages shall not apply to the extent that
 such damages are found by a court of competent jurisdiction to be liabilities
 of such Indemnified Party pursuant to any Claim which results in a Loss to such
 Indemnified Party.                                                                                                                                                                                                                                                                                               

9.06     Materiality. Notwithstanding any provision in this Agreement to the
contrary, the Indemnifying Partys obligation to indemnify the Indemnified
Party in connection with a breach of any representation, warranty, covenant or
other agreement included in this Agreement or any of the Closing Agreements,
and the amount of Losses to be indemnified, shall be determined without regard
to any materiality (or correlative meanings) or Material Adverse Effect
qualifications, provisions or exceptions set forth in such representation,
warranty, covenant or other agreement, each of which shall be deemed to be
given for the purposes of this Article IX as though there were no such
qualifications, provisions or exceptions.

ARTICLE X

MISCELLANEOUS

10.01    Press Releases and Announcements. The parties agree that Buyer may issue
a press release or make any other public announcement related to this Agreement
or the

35

---



transactions contemplated hereby without prior written
approval of Seller. Buyer agrees to consult with Seller prior to making such
press release or announcement.

10.02    Confidentiality Relating to Agreement. Seller shall not disclose this
Agreement or the Related Agreements without the prior written consent of Buyer,
provided, however, that Seller may disclose this Agreement and the Related
Agreements to its legal, accounting and tax advisors or if required by Seller
pursuant to applicable laws.

10.03    Expenses. Except as otherwise expressly provided for herein, Seller and
Buyer will pay all of their own expenses (including attorneys and accountants
fees) incurred in connection with the negotiation of this Agreement and the
Related Agreements, the performance of their respective obligations hereunder
and thereunder, and the consummation of the transactions contemplated by this
Agreement and the Related Agreements (whether consummated or not).

10.04    Further Assurances. On and after the Closing Date, Seller will take all
appropriate action and execute any documents, instruments or conveyances of any
kind that may be reasonably requested by Buyer to carry out any of the
provisions of this Agreement.

10.05    Schedules. The Seller Disclosure Schedule contains a series of sections
corresponding to the sections contained in this Agreement. Nothing in the
Seller Disclosure Schedule is deemed adequate to disclose an exception to a
representation or warranty made in this Agreement unless the Seller Disclosure
Schedule identifies in the corresponding schedule the exception with
particularity and describes the relevant facts in detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a document
or other item is not deemed adequate to disclose an exception to a
representation or warranty unless the representation or warranty relates solely
to the existence of the document or other item itself. The schedules in the
Seller Disclosure Schedule relate only to the representations and warranties in
the section and subsection of this Agreement to which they correspond and not
to any other representation or warranty in this Agreement.

10.06    Amendment and Waiver. This Agreement may not be amended, a provision of
this Agreement or any default, misrepresentation or breach of warranty or
agreement under this Agreement may not be waived, and a consent may not be
rendered, except in a writing executed by the party against which such action
is sought to be enforced. Neither the failure nor any delay by any party in
exercising any right, power or privilege under this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. In addition, no course of dealing between or among any party will be
deemed effective to modify or amend any part of this Agreement or any rights or
obligations of any party under or by reason of this Agreement. The rights and
remedies of the parties to this Agreement are cumulative and not alternative.

10.07    Notices. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered (with
written confirmation of receipt),

36

---



when received if sent by a nationally recognized
overnight courier service (receipt requested), five (5) business days after
being mailed by first class U.S. mail, return receipt requested, or when
receipt is acknowledged by an affirmative act of the party receiving notice, if
sent by facsimile, telecopy or other electronic transmission device (provided
that such an acknowledgement does not include an acknowledgement generated
automatically by a facsimile or telecopy machine or other electronic
transmission device). Notices, demands and communications to Buyer and Seller
will, unless another address is specified in writing, be sent to the address
indicated below:

|                                   |                                  
|---------------------------------- | ---------------------------------
|Notices to Buyer:                  | with a copy to:                  
|                                   |                                  
|Vascular Solutions, Inc.           | Dorsey & Whitney LLP             
|6464 Sycamore Court                | 50 South Sixth Street, Suite 1500
|Minneapolis, Minnesota 55441       | Minneapolis, Minnesota 55402     
|Attention: Chief Executive Officer | Attention: Timothy S. Hearn, Esq.
|Facsimile No: (763) 656-4250       | Facsimile: (612) 340-2868        
|                                   |                                  
|Notices to Seller:                 | with a copy to:                  
|                                   |                                  
|Escalon Medical Corp.              | Duane Morris, LLP                
|435 Devon Park Drive,
 Bldg. 100   | 30 South 17th Street             
|Wayne, Pennsylvania 19087          | Philadelphia, PA 19103           
|Attention: Chief Executive Officer | Attention: Kathleen M. Shay, Esq.
|Facsimile No: (610) 688-3641       | Facsimile: 215 689-4382          

10.08    Binding Effect; Assignment. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by either party hereto, other than to an affiliate of Buyer, without
the prior written consent of the other parties hereto.

10.09    Severability. Subject to Section 6.09(d), whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

10.10    Complete Agreement. This Agreement, the Related Agreements, the Exhibits
and Schedules hereto and thereto, the Seller Disclosure Schedule and the other
documents referred to herein contain the complete agreement between the parties
and supersede any prior understandings, agreements or representations by or
between the parties, written or oral, which may have related to the subject
matter hereof in any way.

10.11    Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all

37

---



such counterparts taken together will constitute one
and the same instrument. A facsimile signature will be considered an original
signature.

10.12    Governing law. The internal law, without regard to conflicts of laws
principles, of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.

10.13    Jurisdiction. Each of the parties submits to the exclusive jurisdiction
of any state or federal court sitting in Wilmington, Delaware, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in
any such court. Each party also agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety or other security
that might be required of any other party with respect to any such action or
proceeding. The
parties agree that either or both of them may file a copy of this paragraph
with any court as written evidence of the knowing, voluntary and bargained
agreement between the parties irrevocably to waive any objections to venue or
to convenience of forum.

10.14    Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
(II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III)
IT MAKES SUCH WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN
THIS SECTION 11.14.

10.15    Specific Performance. Each of the parties acknowledges and agrees that
the subject matter of this Agreement, including the business, assets and
properties of Seller relating to the Business, is unique, that the other
parties would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached, and that the remedies at law would not be adequate to compensate
such other parties not in default or in breach. Accordingly, each of the
parties agrees that the other parties will be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions of this
Agreement in addition to any other remedy to which they may be entitled, at law
or in equity (without any requirement that Buyer provide any bond or other
security). The parties waive any defense that a remedy at law is adequate and
any requirement to post bond or

38

---



provide similar security in connection with actions
instituted for injunctive relief or specific performance of this Agreement.

[Remainder of
page intentionally left blank]

39

---



IN
WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.

| |                                          
| | -----------------------------------------
| | VASCULAR SOLUTIONS, INC.                 
| |                                          
| | /s/ James Hennen                         
| | By: James Hennen, Chief Financial Officer
| |                                          
| | ESCALON VASCULAR ACCESS, INC.            
| |                                          
| | /s/ Richard J. DePiano, Jr.              
| | By: Richard J. DePiano, Jr., Esquire     
| | Its: VP & General Counsel                

---