Unassociated Document


    Exhibit 10.1


     

    


     

    


     

    ASSET
PURCHASE AGREEMENT

     

    dated as
of February 19, 2009

     

    by and
among

     

    ALSIUS
CORPORATION,

     

    ALSIUS
MEDICAL CORPORATION

     

    and

     

    ZOLL
CIRCULATION, INC.

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE OF
CONTENTS

       


    

    
      
        	 	
                Page

                 

              
	
                ARTICLE
      I Definitions

              	 1
	 
      	
                1.1

              	
                Definitions

              	 1
	 
      	
                1.2

              	
                Construction

              	 7
	
                ARTICLE
      II Purchase and Sale

              	 8
	 
      	
                2.1

              	
                Agreements
      to Purchase and Sell

              	 8
	 
      	
                2.2

              	
                Excluded
      Assets

              	 9
	 
      	
                2.3

              	
                Assumed
      Liabilities

              	 10
	 
      	
                2.4

              	
                Excluded
      Liabilities

              	 11
	
                ARTICLE
      III Purchase Price; Consistent Treatment

              	 12
	 
      	
                3.1

              	
                Purchase
      Price

              	 12
	 
      	
                3.2

              	
                Purchase
      Price Allocation

              	 12
	
                ARTICLE
      IV Closing

              	 13
	 
      	
                4.1

              	
                Closing
      Date

              	 13
	 
      	
                4.2

              	
                Purchase
      Order

              	 13
	 
      	
                4.3

              	
                Transition
      Bonus Pool

              	 13
	 
      	
                4.4

              	
                Further
      Assurances

              	 13
	
                ARTICLE
      V Representations and Warranties of Seller

              	 14
	 
      	
                5.1

              	
                Organization

              	 14
	 
      	
                5.2

              	
                Authority;
      Binding Agreements

              	 14
	 
      	
                5.3

              	
                Conflicts

              	 15
	 
      	
                5.4

              	
                Information
      Statement

              	 15
	 
      	
                5.5

              	
                Commission
      Reports; Financial Statements

              	 15
	 
      	
                5.6

              	
                No
      Undisclosed Liabilities

              	 16
	 
      	
                5.7

              	
                Absence
      of Certain Changes

              	 16
	 
      	
                5.8

              	
                Title

              	 17
	 
      	
                5.9

              	
                Intellectual
      Property

              	 17
	 
      	
                5.10

              	
                Litigation

              	 19
	 
      	
                5.11

              	
                Contracts

              	 20
	 
      	
                5.12

              	
                Employment
      Matters

              	 20
	 
      	
                5.13

              	
                Regulatory
      Approvals

              	 20


      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

       

      
        	 
      	
                5.14

              	
                Compliance
      With Laws

              	 22
	 
      	
                5.15

              	
                Warranty
      Matters

              	 23
	 
      	
                5.16

              	
                Customers,
      Distributors and Suppliers

              	 23
	 
      	
                5.17

              	
                Taxes

              	 23
	 
      	
                5.18

              	
                Opinion
      of Financial Advisor

              	 23
	 
      	
                5.19

              	
                Brokers,
      Etc.

              	 23
	 
      	
                5.20

              	
                Required
      Consents for Transferred Contracts

              	 23
	
                ARTICLE
      VI Representations and Warranties of Buyer

              	 23
	 
      	
                6.1

              	
                Organization

              	 24
	 
      	
                6.2

              	
                Due
      Authorization

              	 24
	 
      	
                6.3

              	
                Conflicts

              	 24
	 
      	
                6.4

              	
                Litigation

              	 25
	 
      	
                6.5

              	
                Brokers,
      Etc.

              	 25
	 
      	
                6.6

              	
                Financial
      Ability

              	 25
	 
      	
                6.7

              	
                Compliance
      with Laws

              	 25
	
                ARTICLE
      VII Additional Agreements

              	 25
	 
      	
                7.1

              	
                Obligation
      to Consummate Transaction

              	 25
	 
      	
                7.2

              	
                Confidentiality

              	 25
	 
      	
                7.3

              	
                Access
      to Information

              	 25
	 
      	
                7.4

              	
                Transaction
      Written Consent; Preparation of Information Statement

              	 26
	 
      	
                7.5

              	
                Interim
      Operations

              	 27
	 
      	
                7.6

              	
                No
      Solicitation

              	 28
	 
      	
                7.7

              	
                Certain
      Tax Matters

              	 29
	 
      	
                7.8

              	
                Public
      Announcements

              	 29
	 
      	
                7.9

              	
                Notice
      of Certain Events

              	 30
	 
      	
                7.10

              	
                Insurance

              	 30
	 
      	
                7.11

              	
                Employment
      of Hired Employees by Buyer

              	 30
	 
      	
                7.12

              	
                Inspection
      of Tangible Assets

              	 31
	 
      	
                7.13

              	
                Use
      of Intellectual Property

              	 31
	 
      	
                7.14

              	
                Bulk
      Sales

              	 32
	
                ARTICLE
      VIII Conditions to Closing

              	 32
	 
      	
                8.1

              	
                Conditions
      to Obligations of Buyer and Seller

              	 32
	 
      	
                8.2

              	
                Conditions
      to Obligations of Buyer

              	 32


      

       

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      
        	 
      	
                8.3

              	
                Conditions
      to Obligations of Seller

              	 33
	 
      	
                8.4

              	
                Closing
      Deliverables

              	 34
	
                ARTICLE
      IX Termination

              	 35
	 
      	
                9.1

              	
                Termination

              	 35
	 
      	
                9.2

              	
                Procedure
      of Termination

              	 36
	 
      	
                9.3

              	
                Termination
      Fees

              	 36
	 
      	
                9.4

              	
                Other
      Consequences of Termination

              	 37
	
                ARTICLE
      X Indemnification and Survival

              	 37
	 
      	
                10.1

              	
                Indemnification
      by Seller

              	 37
	 
      	
                10.2

              	
                Indemnification
      by Buyer

              	 38
	 
      	
                10.3

              	
                Survival

              	 39
	 
      	
                10.4

              	
                Exclusive
      Remedy

              	 39
	 
      	
                10.5

              	
                Third Party Claim Indemnification
      Procedures

              	 39
	
                ARTICLE
      XI Miscellaneous

              	 40
	 
      	
                11.1

              	
                Assignment

              	 40
	 
      	
                11.2

              	
                Expenses

              	 40
	 
      	
                11.3

              	
                Severability

              	 41
	 
      	
                11.4

              	
                Entire
      Agreement

              	 41
	 
      	
                11.5

              	
                Waiver

              	 41
	 
      	
                11.6

              	
                Governing
      Law

              	 41
	 
      	
                11.7

              	
                Venue

              	 41
	 
      	
                11.8

              	
                Headings

              	 41
	 
      	
                11.9

              	
                Counterparts

              	 41
	 
      	
                11.10

              	
                Parties
      in Interest

              	 42
	 
      	
                11.11

              	
                Disclaimer
      of Warranties

              	 42
	 
      	
                11.12

              	
                Schedules

              	 42
	 
      	
                11.13

              	
                Notices

              	 42


      



     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    Exhibits and
Schedules

     

    Exhibits

     

    
      	
              Exhibit A

            	
              Assignment
      and Assumption Agreement

            
	
              Exhibit
      B

            	
              Assignment
      of Contracts

            
	
              Exhibit C

            	
              Bill
      of Sale

            
	
              Exhibit D

            	
              Patent
      Assignment

            
	
              Exhibit E

            	
              Trademark
      Assignment

            
	
              Exhibit
      F

            	
              Purchase
      Order

            


    

    


     

    Schedules

     

    
      	
              Schedule
      1.1(a)

            	
              Permitted
      Encumbrances

            
	
              Schedule
      1.1(b)

            	
              Products

            
	
              Schedule
      1.1(c)

            	
              Transferred
      Contracts

            
	
              Schedule
      2.1(a)

            	
              Tangible
      Assets

            
	
              Schedule
      2.1(d)

            	
              Inventory

            
	
              Schedule
      2.2(l)

            	
              Excluded
      Assets

            
	
              Schedule
      5.2

            	
              Authority;
      Binding Agreements

            
	
              Schedule
      5.3

            	
              Conflicts

            
	
              Schedule
      5.5(c)

            	
              Commission
      Reports; Financial Statements

            
	
              Schedule
      5.8(a) and (c)

            	
              Title

            
	
              Schedule
      5.9(a), (b), (c) and (d)

            	
              Intellectual
      Property

            
	
              Schedule
      5.10

            	
              Litigation

            
	
              Schedule
      5.12(a)

            	
              Employment
      Matters

            
	
              Schedule
      5.13(b)

            	
              Regulatory
      Approvals

            
	
              Schedule
      5.15

            	
              Warranty
      Matters

            
	
              Schedule
      5.16

            	
              Customers,
      Distributors and Suppliers

            
	
              Schedule
      5.19

            	
              Brokers,
      Etc.

            
	
              Schedule
      5.20

            	
              Required
      Consents for Transferred Contracts

            
	
              Schedule
      7.5

            	
              Interim
      Operations

            
	
              Schedule
      8.4(b)(i)

            	
              Wire
      Instructions

            


    

    


    Buyer
Schedules

     

    
      	
              Buyer
      Schedule 3.2

            	
              Purchase
      Price Allocation

            
	
              Buyer
      Schedule 4.3

            	
              Transition
      Bonus Pool

            
	
              Buyer
      Schedule 6.5

            	
              Brokers,
      Etc.

            


    

    
 

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

    ASSET
PURCHASE AGREEMENT

     

    THIS
ASSET PURCHASE AGREEMENT, dated as of February 19, 2009 (the “Execution Date”), is
entered into by and among Alsius Corporation, a Delaware corporation (“Alsius”), Alsius
Medical Corporation, a California corporation and a wholly-owned subsidiary of
Alsius (“Alsius
Medical,” and collectively with Alsius, “Seller”), and ZOLL
Circulation, Inc., a Delaware corporation (“Buyer”).  Seller
and Buyer are referred to in this Agreement (as defined hereinafter)
collectively as the “Parties” and
individually as a “Party.”

     

    
      	
              RECITALS

            


    

     

    WHEREAS,
Seller is engaged in the design, development, manufacture, sale and distribution
of intravascular temperature management devices (the “Business”);
and

     

    WHEREAS,
Buyer wishes to purchase from Seller, and Seller desires to sell to Buyer,
substantially all of the assets of Seller relating to the Business (other than
the Excluded Assets (as defined hereinafter)), and Buyer is willing to assume
the Assumed Liabilities (as defined hereinafter) with respect to the Business,
all for the consideration and upon the terms and conditions set forth in this
Agreement.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:

     

    ARTICLE
I

    Definitions

     

    1.1           Definitions.  In
addition to the terms defined above and other terms defined in other Sections of
this Agreement, the following initially capitalized terms have the following
meanings when used herein:

     

    “Acquired Assets” has
the meaning set forth in Section 2.1.

     

    “Acquisition
Transaction” has the meaning set forth in Section 7.6(a).

     

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

     

    “Agreement” means this
Asset Purchase Agreement, including all Schedules and Exhibits hereto, as it may
be amended from time to time in accordance with its terms.

     

    “Allocation Schedule”
has the meaning set forth in Section 3.2.

     

    “Assignment and Assumption
Agreement” means the Assignment and Assumption Agreement between Seller
and Buyer, the form of which is attached hereto as Exhibit A.

     

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    “Assignment of
Contracts” means the Assignment of Contracts between Seller and Buyer,
the form of which is attached hereto as Exhibit B.

     

    “Assumed Liabilities”
has the meaning set forth in Section 2.3.

     

    “Bill of Sale” means
the Bill of Sale between Seller and Buyer, the form of which is attached hereto
as Exhibit C.

     

    “Business Day” means
any day other than a day which is Saturday or Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required to remain
closed.

     

    “Buyer Indemnified
Party” has the meaning set forth in Section 10.1(a).

     

    “Buyer Parties” has
the meaning set forth in Section 9.3(c).

     

    “Buyer Schedules” has
the meaning set forth in the opening paragraph of Article VI.

     

    “Buyer Termination
Fee” has the meaning set forth in Section 9.3(b).

     

    “Cap” has the meaning
set forth in Section 10.1(b).

     

    “Cash” means cash and
cash equivalents (including marketable securities and short-term
investments).

     

    “Closing” means the
closing of the purchase and sale of the Acquired Assets and the assignment and
assumption of the Assumed Liabilities, each as contemplated by this
Agreement.

     

    “Closing Date” has the
meaning set forth in Section 4.1.

     

    “Commission” means the
United States Securities and Exchange Commission.

     

    “Consent” means any
consent, approval, authorization, consultation, waiver, permit, grant,
agreement, license, certificate, exemption, order, registration, declaration,
filing or notice of, with or to any Person, in each case required to permit the
consummation of any of the transactions contemplated hereby.

     

    “Contract” means any
written or binding oral contract, agreement, instrument, order, arrangement,
commitment or understanding of any nature, including sales orders, purchase
orders, leases, subleases, data processing agreements, maintenance agreements,
license agreements, sublicense agreements, distribution agreements, supply
agreements, loan agreements, promissory notes, security agreements, pledge
agreements, deeds, mortgages, guarantees, indemnities, warranties, employment
agreements, consulting agreements, sales representative agreements, joint
venture agreements, buy-sell agreements, options or warrants.

     

    “Corporate Names” has
the meaning set forth in Section
7.13(b).

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    “Customers and
Distributors” has the meaning set forth in Section 5.16.

     

    “Encumbrance” means
any lien, mortgage, security interest, pledge, conditional sale agreement, title
retention agreement or other charge or encumbrance of any nature whatsoever on
any property or property interest.

     

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

     

    “Excluded Assets” has
the meaning set forth in Section 2.2.

     

    “Excluded Liabilities”
has the meaning set forth in Section 2.4.

     

    “FDA” means the U.S.
Food and Drug Administration and similar federal, regional,
state, local or foreign Governmental Authorities.

     

    “Finished Inventory”
means any stock of finished Products maintained by Seller or any of its
Affiliates anywhere in the world.

     

    “GMP” has the meaning
set forth in Section 5.13(e).

     

    “Governmental
Authority” means any supra-national, federal, regional, state, local or
foreign government or other political subdivision thereof, and any entity,
department, commission, bureau, agency, authority, board, court, official or
officer, domestic or foreign, exercising executive, judicial, regulatory or
administrative governmental functions.

     

    “Hired Employees” has
the meaning set forth in Section 7.11.

     

    “Inbound Licenses” has
the meaning set forth in Section 5.9(b)(i).

     

    “Indemnified Party”
means any Person entitled to indemnification under Article X.

     

    “Indemnifying Party”
means any Person providing indemnification under Article X.

     

    “Information
Statement” has the meaning set forth in Section 5.2(c).

     

    “Inspection Period”
has the meaning set forth in Section 7.12.

     

    “Intellectual Property
Assets” means any and all of the following, as they exist throughout the
world: (a) patents, patent applications of any kind, patent rights,
inventions, discoveries and invention disclosures (whether or not patented)
(collectively, “Patents”);  (b) rights
in registered and unregistered trademarks, service marks, trade names, trade
dress, logos, packaging design, slogans and Internet domain names and
registrations and applications for registration of any of the foregoing
(collectively, “Marks”);
(c) registered and material unregistered copyrights in both published and
unpublished works, and all copyright registrations and applications, and all
derivatives, translations, adaptations and combinations of the above, including
copyrights in (i) all design history files, (ii) the Manufacturing
Instructions, and (iii) all documents primarily related to the Products and
controlled by Seller (collectively, “Copyrights”);
(d) know-how, trade secrets, confidential or proprietary information,
research in progress, algorithms, data, designs, processes, formulae, drawings,
schematics, blueprints, flow charts, models, strategies, prototypes, techniques,
customer lists and contact numbers/addresses, business strategies, forecasts,
testing procedures and testing results (collectively, “Trade Secrets”);
(e) any and all other intellectual property rights and/or proprietary
rights relating to any of the foregoing; (f) all licenses and other
Contracts under which Seller has sold, licensed, leased or otherwise transferred
or granted any interest or rights to any Marks, Patents, Copyrights or Trade
Secrets and (g) goodwill, franchises, permits, consents, approvals, and claims
of infringement and misappropriation against third parties.

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    “Inventory” shall mean
all inventory of the Products together with all inventory of raw materials,
work-in-progress related to the Products and finished goods inventory of the
Products, whether held at a location or facility of Seller (or of any other
Person on behalf of Seller) or in transit to or from Seller (or any such other
Person).

     

    “Knowledge” means the
actual knowledge after due inquiry of any of John Riolo, John Rogitz, Greg
Tibbitts, Andrew Wade, Suzanne Winter and William Worthen.

     

    “Law” means each
provision of any currently existing federal, state, local or foreign civil and
criminal law, statute, ordinance, order, code, rule, regulation or common law
promulgated or issued by any Governmental Authority, as well as any judgments,
decrees, injunctions or agreements issued or entered into by any Governmental
Authority.

     

    “Liability” means,
with respect to any Person, any liability or obligation of such Person, whether
known or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the
financial statements of such Person.

     

    “Losses” has the
meaning set forth in Section 10.1(a).

     

    “Manufacturing
Instructions” means those manufacturing, packaging and labeling
specifications for the Products used by Seller or Seller’s Affiliates in the
production and supply of the Products.

     

    “Material Adverse
Effect” means a material adverse effect on the business, assets,
financial condition, results of operations or prospects of the Business or the
Acquired Assets, taken as a whole; provided, however, that
Material Adverse Effect shall exclude any adverse changes or conditions as and
to the extent such changes or conditions are proximately caused by (a) public or
industry knowledge of the transactions contemplated by this Agreement
(including, without limitation, any action or inaction by the Business’
employees, customers and vendors) or (b) general economic conditions or other
conditions generally affecting the industry in which the Business
competes.  Seller may, however, at its option, include in the
Schedules of this Agreement or elsewhere items that would not have a Material
Adverse Effect within the meaning of the previous sentence in order to avoid any
misunderstanding, and such inclusion shall not be deemed to be an
acknowledgement by Seller that such items would have a Material Adverse Effect
or further define the meaning of such term for the purposes of this
Agreement.

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    “NASDAQ” means The
NASDAQ Capital Market.

     

    “Notice of
Termination” has the meaning set forth in Section 9.2.

     

    “Ordinary Course”
means ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).

     

    “Other Agreements”
means, collectively, the Assignment and Assumption Agreement, the Assignment of
Contracts, the Bill of Sale, the Patent Assignment, the Trademark Assignment and
other agreements entered into by Seller and Buyer in connection
herewith.

     

    “Outbound Licenses”
has the meaning set forth in Section 5.9(d).

     

    “Patent Assignment”
means the Patent Assignment between Buyer and Seller, the form of which is
attached hereto as Exhibit D.

     

    “Payoff Amount” shall
have the meaning set forth in Section 8.2(h).

     

    “Payoff Letter” shall
have the meaning set forth in Section 8.2(h).

     

    “Permitted
Encumbrances” means (a) Encumbrances for Taxes not delinquent or
past due; (b) pledges or deposits of money securing statutory obligations
under workers’ or unemployment compensation Laws (excluding Encumbrances under
ERISA); (c) mechanic’s, materialman’s, supplier’s, vendor’s or similar
liens arising in the Ordinary Course securing amounts that are not delinquent or
past due; (d) Encumbrances relating to purchase money security interests
arising in the Ordinary Course; (e) zoning ordinances, easements and other
restrictions of legal record affecting real property that would be revealed by a
survey and would not, individually or in the aggregate, materially interfere
with the value or usefulness of such real property to the Business; or (f)
Encumbrances set forth on Schedule
1.1(a).

     

    “Person” means any
individual, corporation, partnership, joint venture, limited liability company,
trust or unincorporated organization or government or any agency or political
subdivision thereof.

     

    “Product” or “Products” means those
products identified on Schedule 1.1(b)
(and for the avoidance of doubt does not mean specific units
thereof).

     

    “Purchase Order” has
the meaning set forth in Section 4.2.

     

    “Purchase Price” has
the meaning set forth in Section 3.1.

     

    “Regulatory Approval”
shall mean, with respect to a country, any and all approvals, substantial
equivalence determinations, licenses, permits, registrations or authorizations
of any Regulatory Authority necessary in order to commercially distribute, sell,
market or clinically investigate the Products in such country, including, where
applicable and as required, (a) pricing or reimbursement approval in such
country, (b) pre- and post-approval investigational and marketing
authorizations (including any prerequisite manufacturing approval or
authorization related thereto), (c) labeling approval and
(d) technical, medical and scientific licenses.

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    “Regulatory Authority”
shall mean any Governmental Authority regulating or otherwise exercising
authority with respect to the testing, manufacture, storage, distribution, use,
promotion, marketing, sale and importation of Products, including the
FDA.

     

    “Regulatory
Documentation” shall mean all applications, registrations, licenses,
authorization and approvals (including all Regulatory Approvals), all
correspondence submitted to or received from Regulatory Authorities (including
minutes and official contact reports relating to any communications with any
Regulatory Authority) and all supporting documents and all clinical studies and
tests, related to the Products, and all data contained in any of the foregoing,
including all 510(k)s, letters to file concerning device modifications, pre- and
post-approval marketing authorizations, investigational device exemptions,
product labeling, advertising and promotion documents, manufacturing data,
complaint files, adverse event files, correction and removal records and
reports, and all documents pertaining to recalls of the Products.

     

    “Representatives” has
the meaning set forth in Section 7.6(a).

     

    “Required Stockholder
Vote” has the meaning set forth in Section 5.2(b).

     

    “Schedules” has the
meaning set forth in the opening paragraph of Article V.

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “Seller Balance Sheet”
has the meaning set forth in Section 5.5(b).

     

    “Seller Commission
Filings” has the meaning set forth in Section 5.5(a).

     

    “Seller Indemnified
Party” has the meaning set forth in Section 10.2(a).

     

    “Seller In-Licensed
Intellectual Property Assets” has the meaning set forth in Section 5.9(b)(i).

     

    “Seller Marks” has the
meaning set forth in Section 5.9(a).

     

    “Seller Parties” has
the meaning set forth in Section 9.3(c).

     

    “Seller Patents” has
the meaning set forth in Section 5.9(a).

     

    “Seller Termination
Fee” has the meaning set forth in Section 9.3(a).

     

    “Seller Trade Secrets”
has the meaning set forth in Section 5.9(b)(viii).

     

    “Seller’s Financial
Advisor” means Leerink Swann LLC.

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    “Start Date” has the
meaning set forth in Section 7.11.

     

    “Subject Commission
Filings” has the meaning set forth in Section 5.5(a).

     

    “Superior Proposal”
has the meaning set forth in Section 7.6(c).

     

    “Suppliers” has the
meaning set forth in Section 5.16.

     

    “Tail Policy” has the
meaning set forth in Section 7.10.

     

    “Tangible Assets” has
the meaning set forth in Section 2.1(a).

     

    “Termination Date” has
the meaning set forth in Section 9.1(b).

     

    “Third Party Intellectual
Property Assets” has the meaning set forth in Section 5.9(b)(iv).

     

    “Taxes” means all
taxes, charges, fees, duties, levies or other assessments, including income,
gross receipts, net proceeds, ad valorem, turnover, real and personal property
(tangible and intangible), sales, use, franchise, excise, value added, license,
payroll, unemployment, environmental, customs duties, capital stock, disability,
stamp, leasing, lease, user, transfer, fuel, excess profits, occupational and
interest equalization, windfall profits, severance and employees’ income
withholding and Social Security taxes imposed by the United States or any
foreign country; by any state, municipality, subdivision or instrumentality
thereof or by any other tax authority and such term shall include any interest,
penalties or additions to tax attributable to such taxes.

     

    “Tax Return” means any
return, declaration, report, claim for refund or information return or statement
relating to Taxes, including any schedule or attachment thereto and any
amendment thereof.

     

    “Threshold Amount”
means Thirty Seven Thousand, Five Hundred Dollars ($37,500).

     

    “Trademark Assignment”
means the Trademark
Assignment between Seller and Buyer, the form of which is attached hereto as
Exhibit E.

     

    “Transaction Written
Consent” has the meaning set forth in Section 7.4(a).

     

    “Transfer Taxes” has
the meaning set forth in Section 7.7(a).

     

    “Transferred
Contracts” shall mean each Contract listed in Schedule 1.1(c).

     

    “Updated Schedule
2.1(d)” has the meaning set forth in Section 2.1(d).

     

    1.2           Construction.  The
language in all parts of this Agreement is to be construed in all cases
according to its fair meaning.  Seller and Buyer acknowledge that each
Party and its counsel have reviewed and revised this Agreement and that any rule
of construction to the effect that any ambiguities are to be resolved against
the drafting Party are not to be employed in the interpretation of this
Agreement. Whenever
used herein, the words “include,” “includes” and “including” mean “include,
without limitation,” “includes, without limitation” and “including, without
limitation,” respectively.  The masculine, feminine or neuter gender
and the singular or plural number are each deemed to include the other(s)
whenever the context so indicates.  “Days” means calendar days unless
otherwise specified.  Whenever used herein, the words “Seller” and
“Buyer” include their respective Affiliates whenever the context requires or to
the extent applicable.  The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement refer to this Agreement
as a whole (including any Exhibits and Schedules hereto) and not to any
particular provision of this Agreement, and all Article, Section, Schedule and
Exhibit references are to this Agreement unless otherwise
specified.  All references to “Dollar” or “$” refer to the lawful
money of the United States.

     

     

    
      
        
        

      

      
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    ARTICLE
II

    Purchase and
Sale

     

    2.1           Agreements to Purchase and
Sell.  Subject
to the terms and conditions of this Agreement, and except for the Excluded
Assets, at the Closing, Seller shall sell, transfer, convey, assign and deliver
to Buyer, and Buyer shall purchase and accept from Seller, free and clear from
any Encumbrances other than Permitted Encumbrances, all right, title and
interest of Seller in and to all of the assets, properties, interests and rights
comprising the Business, of every kind and description, existing as of the date
of this Agreement or acquired through the Closing, including all of the
following assets (collectively, the “Acquired
Assets”):

     

    (a)           subject
to Section 7.12,
the fixed and other tangible personal property and assets arising out of,
relating to or resulting from the Business, including tooling, fixtures,
equipment, computer systems and software, furniture, machinery, office
equipment, furnishings and instruments, set forth on Schedule 2.1(a),
whether owned by Seller or its Affiliates (the “Tangible
Assets”);

     

    (b)           all
goodwill directly arising from, related to or resulting from the
Business;

     

    (c)           all
Seller Intellectual Property Assets;

     

    (d)           all
Inventory (other than the Finished Inventory purchased pursuant to the Purchase
Order), including any Inventory on loan to or being used by any customers,
clinicians or others for evaluation, testing or in conjunction with any studies
or trials, including the Inventory set forth on Schedule 2.1(d),
which Schedule 2.1(d)
shall be updated prior to the Closing to (i) include any Inventory that is
acquired by Seller between the Execution Date and the Closing Date; and
(ii) exclude any Inventory that is disposed of by Sellers between the
Execution Date and the Closing Date (the “Updated
Schedule 2.1(d)”); provided, however, that Buyer
shall only be obligated to purchase Inventory that is identified by Buyer as
being necessary or useful after the Closing Date, which Inventory will be
identified by Buyer in accordance with Section
7.12;

     

    (e)           all
rights in, under and to the Transferred Contracts;

     

    (f)           all
Regulatory Documentation and Regulatory Approvals;

     

     

    
      
        
        

      

      
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    (g)           the
Manufacturing Instructions; and

     

    (h)           solely
to the extent related to an Assumed Liability, (i) all claims (including
claims for infringement or misappropriation of Intellectual Property Assets or
rights related thereto included in the Acquired Assets); and (ii) all
causes of action of Seller against any other Person, whether or not such claims
and causes of action have been asserted, and all rights of indemnity, warranty
rights, rights of contribution, rights to refunds, rights of reimbursement and
other rights of recovery of Seller (regardless of whether such rights are
currently exercisable) directly arising out of, relating to or resulting from
the Acquired Assets, the Assumed Liabilities or the Business; and

     

    (i)           all
other assets and properties directly arising out of, relating to or resulting
from the Business, of every nature whatsoever, tangible and intangible, and
wherever located, such as any business records; customer lists; customer records
and histories; customer invoices; lists of suppliers and vendors and all records
relating thereto; list of sales agents; price lists; engineering drawings;
clinical trial data and records; records with respect to production,
engineering, and product development costs; advertising matter; catalogues;
photographs; instruction manuals; sales literature and materials; purchasing
materials; media materials; manufacturing and quality control records and
procedures; research and development files; design history files; data and
laboratory books and media materials and plates; and copies of all files
relating to the Seller Intellectual Property Assets, including all applications,
registrations, assignments, correspondence to and from the United States Patent
and Trademark Office and any other foreign patent and trademark offices,
dockets, workbooks, legal opinions, prior art searches, notes, memoranda and
other related information.

     

    2.2           Excluded
Assets.  Notwithstanding
anything to the contrary in this Agreement, Seller shall not sell, transfer or
assign, and Buyer shall not purchase or otherwise acquire, any right, title or
interest of Seller in any of the following assets (collectively, the “Excluded
Assets”):

     

    (a)           rights
of Seller arising under this Agreement, the Other Agreements or the Purchase
Order or from the consummation of the transactions contemplated hereby or
thereby;

     

    (b)           all
accounts receivable and notes receivable and intercompany receivable balances
that exist as of the Closing Date, including any value added Taxes or similar
Taxes levied on such accounts receivable, any unpaid interest accrued on any
such accounts receivable and any security or collateral related thereto, and any
payments received with respect thereto before or after the Closing
Date;

     

    (c)           all
Cash and bank or other deposit accounts of Seller;

     

    (d)           the
capital stock of Seller or any of its Affiliates;

     

    (e)           all
books (including corporate minute books), documents, records (including stock
records), files and Tax Returns of Seller and Seller’s Affiliates as may exist
on the Closing Date (other than such books, records or files that are covered in
Section 2.1
above), which include, without limitation, those which: (i) were prepared in
connection with or relating to the transactions contemplated by this Agreement,
including bids received from other Persons and analyses relating to the Acquired
Assets, the Assumed Liabilities or the Products; or (ii) are maintained by
Seller, its Affiliates and/or their representatives, agents or licensees in
connection with their respective tax, legal, regulatory or reporting
requirements;

     

     

    
      
        
        

      

      
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    (f)           all
Contracts of Seller or its Affiliates other than the Transferred
Contracts;

     

    (g)           real
property, buildings, structures and improvements thereon, whether owned or
leased by Seller or Seller’s Affiliates, and all fixtures and fittings attached
thereto, but not including any of the Tangible Assets or Transferred
Contracts;

     

    (h)           any
and all claims of Seller for prepaid Taxes or refunds of Taxes or rights to use
tax attributes, all arising from or relating to any period (or a portion of any
period) ending on or before the Closing;

     

    (i)           insurance
policies and claims and refunds thereunder;

     

    (j)           all
employee benefit plans and arrangements and the assets related
thereto;

     

    (k)           all
claims and causes of action, whether or not asserted, to the extent not
exclusively or primarily related to an Assumed Liability or Acquired Asset;
and

     

    (l)           the
assets set forth on Schedule
2.2(l).

     

    In
addition, Seller may retain copies of any Transferred Contracts, documents or
records which:  (x) relate to properties or activities of Seller, and
(y) which are required to be retained pursuant to any legal requirement or are
subject to the attorney-client privilege, for financial reporting purposes, for
tax purposes, legal defense or prosecution purposes or otherwise; provided, however, that Seller
shall comply with the provisions of Section 7.2 with
respect to any such Contracts, documents or records.

     

    2.3           Assumed
Liabilities.  On
the Closing Date, Buyer shall assume only the Liabilities of Seller specifically
identified below in this Section 2.3 (the
“Assumed
Liabilities”), unless otherwise specifically excluded under Section 2.4:

     

    (a)           the
Liabilities and obligations of Seller under the Transferred Contracts as and to
the extent transferred to Buyer under Section 2.1(e),
but only to the extent either: (i) such obligations (A) are to be performed
after the Closing; (B) do not arise from or relate to any breach or default
by Seller or any of its Affiliates of any provision of any of the Transferred
Contracts or any event, circumstance or condition occurring or existing on or
prior to the Closing that, with notice or lapse of time, would constitute or
result in a breach or default thereof; and (C) do not arise from actions taken
(or omitted from being taken) by Seller or any of its Affiliates on or prior to
the Closing (or except to the extent that Buyer expressly agrees to assume from
or reimburse Seller for such Liabilities prior to the Closing Date); or (ii)
Buyer expressly agrees in writing to reimburse Seller for such
Liabilities;

     

     

    
      
        
        

      

      
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    (b)           to
the extent permitted by applicable Law, Liabilities arising after the Closing
Date directly relating to the repair or service of Products pursuant to valid
product warranty claims made in accordance with the Seller’s written product
warranties;

     

    (c)           Liabilities
relating to each of the Hired Employees, but only to the extent arising from or
related to their being an employee of Buyer or its Affiliates or designees after
their respective Start Dates;

     

    (d)           Liabilities
related to Regulatory Approvals, Regulatory Documentation and other regulatory
matters pertaining to the Business, including, without limitation, those
regulatory obligations owed to the FDA, the Japanese Ministry of Health and any
corresponding European Regulatory Authorities; and

     

    (e)           Liabilities
arising out of or directly relating to ownership or operation of the Acquired
Assets after the Closing.

     

    2.4           Excluded
Liabilities.  Buyer
shall not assume, nor shall Buyer become responsible for, any Liabilities of
Seller or Seller’s Affiliates other than the Assumed Liabilities (collectively,
the “Excluded
Liabilities”), which Excluded Liabilities shall include, without
limitation, the following Liabilities, all of which shall remain the Liabilities
of Seller or Seller’s Affiliates:

     

    (a)           all
Liabilities of Seller and Seller’s Affiliates arising under this Agreement, the
Other Agreements or the Purchase Order or from the consummation of the
transactions contemplated hereby or thereby;

     

    (b)           all
Liabilities of Seller and Seller’s Affiliates arising under or related to the
Transaction Written Consent or the Information Statement other than Liabilities
related to information provided by Buyer about itself or its
Affiliates;

     

    (c)           all
accounts payable, including all intercompany payable balances owing by Seller or
Seller’s Affiliates;

     

    (d)           any
Liabilities under Contracts of Seller or its Affiliates other than the
Liabilities relating to Transferred Contracts that are assumed under Section 2.3(a);

     

    (e)           any
Liability to any current or former employee or independent contractor (to the
extent not a party to a Transferred Contract) of Seller or any of its Affiliates
arising (i) in respect of Hired Employees, prior to their respective Start
Dates, including accrued vacation pay, holiday pay, sick pay, bonuses earned,
pensions or profit sharing or with respect to any discrimination and/or any
other claims that may arise or have arisen from the employment of such Hired
Employees with, or the termination of their employment by, Seller on or prior to
the Closing Date and (ii) in respect
of all other former and current employees or independent contractors (to the
extent not a party to a Transferred Contract) of Seller or any of its
Affiliates, at any time;

     

    (f)           any
Liability arising from or relating to any injury or damage to person or property
allegedly caused or resulting from use of any Product prior to the Closing
Date;

     

     

    
      
        
        

      

      
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    (g)           any
Liability relating to any Seller Commission Filing or Subject Commission
Filing;

     

    (h)           any
Liability with respect to Taxes of Seller for any period;

     

    (i)           any
Taxes attributable to the Acquired Assets and the Business arising from or
relating to any period (or portion of any period) ending on or before the
Closing;

     

    (j)           any
Liabilities under or in connection with any Excluded Assets;

     

    (k)           any
Liabilities arising out of or directly relating to ownership or operation of the
Acquired Assets prior to the Closing; and

     

    (l)           all
Liabilities of Seller or its Affiliates other than the Assumed
Liabilities.

     

    ARTICLE
III

    Purchase Price; Consistent
Treatment

     

    3.1           Purchase
Price.  In
consideration of the sale by Seller to Buyer of the Acquired Assets, and in
addition to the assumption of the Assumed Liabilities by Buyer, Buyer shall pay
to Seller an amount equal to Twelve Million Dollars ($12,000,000) in cash (the
“Purchase
Price”).  The Purchase Price shall be paid as
follows:

     

    (a)           at
the Closing, Buyer shall pay the Payoff Amount to GE Capital by wire transfer of
immediately available funds in full and complete satisfaction of all outstanding
amounts Seller and its Affiliates owe to GE Capital pursuant to the Payoff
Letter; and

     

    (b)           at
the Closing, Buyer shall pay the difference between the Purchase Price and the
Payoff Amount in cash to Seller by wire transfer of immediately available
funds.

     

    3.2           Purchase Price
Allocation.  At
least ten (10) days prior to the Closing Date, Buyer shall provide to Seller a
proposed allocation schedule that allocates the Purchase Price among the
Acquired Assets (the “Allocation
Schedule”).  Seller shall have five (5) days after delivery of
the Allocation Schedule to provide any comments to Buyer’s proposed Allocation
Schedule.  The Parties agree to negotiate in good faith to resolve any
differences between the Parties concerning such Allocation Schedule prior to the
Closing Date.  The agreed upon final Allocation Schedule shall be set
forth in Buyer
Schedule 3.2.  Seller and Buyer shall sign and submit all
necessary forms to report this transaction for federal, national, state, local
and foreign income tax purposes in accordance with the Allocation Schedule and
shall not take a position for Tax purposes inconsistent therewith, except
pursuant to a final “determination” (as defined in Section 1313(a) of the
Internal Revenue Code or corresponding provision of state, local or foreign
Law).  The Parties shall treat the transactions contemplated by this
Agreement in all filings with Governmental Authorities for all Tax purposes
(including consumption Taxes) consistently with the Allocation Schedule and this
Section 3.2.

     

     

    
      
        
        

      

      
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    ARTICLE
IV

    Closing

     

    4.1           Closing
Date.  On
the terms and subject to the conditions of this Agreement, the Closing shall
take place at the offices of Goodwin Procter LLP, Exchange Place, Boston,
Massachusetts, which Closing shall occur no later than the third (3rd)
Business Day after the last to be fulfilled or waived of the conditions set
forth in Article VIII
shall be fulfilled or waived in accordance with this Agreement or at such other
time, date or place as the Parties may mutually agree (the “Closing
Date”).

     

    4.2           Purchase
Order.  Upon
execution of this Agreement, Buyer or one of its Affiliates or designees shall
issue a purchase order to Seller in the form attached hereto as Exhibit F (the
“Purchase
Order”) for the purchase of Finished Inventory as set forth
therein.  Buyer or one of its Affiliates or designees shall pay Seller
for such Finished Inventory upon the following schedule: (a) fifty (50%) of
the Purchase Order sales price shall be paid within two (2) Business Days after
issuance of the Purchase Order; and (b) fifty (50%) of the Purchase Order
sales price shall be paid net thirty (30) days from the date of Seller’s
invoice, which invoice shall be issued by Seller to Buyer upon delivery of the
Finished Inventory to Buyer and Buyer’s acceptance thereof in accordance with
the terms of the Purchase Order.

     

    4.3           Transition Bonus
Pool.  As consideration to assist in the successful transition
of the Acquired Assets and Business to Buyer, the Parties shall establish and
implement a transition and bonus plan for the benefit of Seller’s employees
having the terms and conditions set forth in Buyer Schedule 4.3. 

     

    4.4           Further
Assurances.

     

    (a)           To
the extent that the consent or approval of any third party is required to
transfer or assign any Acquired Asset, including any Transferred Contract, to
Buyer as contemplated hereunder and, despite the commercially reasonable efforts
of Seller, such consent or approval is not obtained prior to the Closing, Seller
and Buyer shall mutually agree on a satisfactory arrangement intended to provide
Buyer following the Closing the benefits of and under each such Acquired Asset,
including any Transferred Contract.  Nothing herein shall be construed
as an attempt to transfer any Acquired Asset for which the consent or approval
of a third party is required unless and until such consent or approval shall be
obtained.

     

    (b)           Seller,
from time to time after the Closing, at the request of Buyer and without further
consideration, shall execute and deliver further instruments of transfer and
assignment and take such other action as a party may reasonably require, and
cause its Affiliates to do the same, to transfer more effectively and assign to,
and vest in, Buyer, the Acquired Assets and all rights thereto, and to implement
fully the provisions of this Agreement, the Other Agreements and the
transactions contemplated hereby and thereby.

     

    (c)           Promptly
after the Closing, Seller shall take all requisite steps to put Buyer in actual
possession and operating control of the Acquired Assets; provided that Buyer
shall pay the shipping costs thereof.

     

     

    
      
        
        

      

      
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    ARTICLE
V

    Representations and
Warranties of Seller

     

    As a
material inducement to Buyer to enter into this Agreement, subject to the
exceptions and limitations set forth in this Article V and
the matters set forth on the disclosure schedule delivered by Seller to Buyer
dated as of the Execution Date (the “Schedules”), Seller
hereby represents and warrants to Buyer as follows:

     

    5.1           Organization.  Seller
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified to transact
business as a corporation in such jurisdictions where the nature of the Business
makes such qualification necessary, except as to jurisdictions where the failure
to qualify would not reasonably be expected to have a Material Adverse
Effect.  Seller has all requisite corporate power and authority to
carry on its business (including the Business) as now being
conducted.

     

    5.2           Authority; Binding
Agreements.

     

    (a)           The
Board of Directors of Seller, at a meeting thereof duly called and held, has
duly adopted resolutions by the requisite majority vote approving this
Agreement, the Other Agreements and the transactions contemplated hereby and
thereby determining that the terms and conditions of this Agreement, the Other
Agreements and the transactions contemplated hereby and thereby are in the best
interests of Seller and its stockholders, and recommending that Seller’s
stockholders authorize the transactions contemplated by this Agreement and the
Other Agreements.  The foregoing resolutions of the Board of Directors
of Seller have not been modified, supplemented or rescinded and remain in full
force and effect as of the Execution Date.

     

    (b)           No
stockholder or other equityholder approval is required on behalf of Seller for
the execution, delivery or performance of this Agreement, the Other Agreements
or any of the transactions contemplated hereby or thereby, other than the
affirmative vote of the holders of a majority of the outstanding shares of
Seller’s common stock (the “Required Stockholder
Vote”).  Subject to obtaining the Required Stockholder Vote,
the execution and delivery by Seller of this Agreement and the Other Agreements
to which it is or will become a party and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action on the part of Seller.  Seller has all requisite
corporate power and authority to enter into this Agreement and the Other
Agreements to which it is or will become a party and, subject to obtaining the
Required Stockholder Vote, to consummate the transactions contemplated hereby
and thereby, and this Agreement and such Other Agreements have been, or upon
execution and delivery thereof will be, duly executed and delivered by
Seller.  This Agreement, the Other Agreements and the Purchase Order
to which Seller is or will become a party are, or upon execution and delivery by
Seller thereof will be, the valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except to the extent
that enforceability is limited by bankruptcy, insolvency or similar laws
affecting creditors’ rights and remedies by equitable principles.

     

    (c)           No
Consent in respect of, or filing with, any Governmental Authority is required to
be obtained or made by or with respect to Seller in connection with the
execution, delivery and performance of this Agreement, the Other Agreements or
the consummation of the transactions contemplated hereby and thereby, other than
(i) an information statement related to the Transaction Written Consent
(together with any amendments thereof or supplements thereto, the “Information
Statement”), (ii) compliance with the rules of NASDAQ, and
(iii) those that may be required solely by reason of Seller’s (as opposed
to any other third party’s) participation in the transactions contemplated by
this Agreement and the Other Agreements.

     

     

    
      
        
        

      

      
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    (d)           Except
as otherwise set forth in this Section 5.2 or
as set forth on Schedule 5.2, no
Consent of any Person is required for Seller or Seller’s Affiliates to
consummate the transactions contemplated by this Agreement or the Other
Agreements.

     

    5.3           Conflicts.  The
execution, delivery and performance by Seller of this Agreement and the Other
Agreements to which it is or will become a party and the consummation of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or result in a breach of the certificate of
incorporation, bylaws or other organizational documents of Seller;
(b) conflict with in any material respect, or result in any material
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a material default (or give rise to a right of termination,
cancellation, modification or acceleration of any material obligation or loss of
any material benefit) under, require a consent or waiver under or require the
payment of a penalty under, any material Contract or other instrument or
obligation to which Seller is a party, or by which Seller or any of the Acquired
Assets may be bound or affected, except as set forth on Schedule 5.3;
(c) assuming the Required Stockholder Vote is obtained and the filings
referred to in Section 7.4 are
made, conflict with or violate in any material respect any permit, concession,
franchise, license or applicable Law with respect to Seller, the Business or any
of the Acquired Assets; or (d) result in the creation or imposition of any
Encumbrance upon any Acquired Asset.

     

    5.4           Information
Statement.  None
of the information set forth in, by incorporation by reference or otherwise, the
Information Statement will contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The Information Statement and the
furnishing thereof by Alsius will comply in all material respects with the
requirements of applicable Law, including the Exchange Act and the General
Corporation Law of the State of Delaware.

     

    5.5           Commission Reports;
Financial Statements.

     

    (a)           Seller
has filed or will file with the Commission all reports, registration statements,
information statements and other documents required to be filed by it (including
exhibits and in each case together with all amendments thereto) (such reports,
registration statements, information statements and all other documents,
together with any amendments thereto, are collectively referred to as the “Seller Commission
Filings;” and all Seller Commission Filings made or required to be made
from January 1, 2006 through the Closing Date are hereinafter referred to as the
“Subject Commission
Filings”).  The Subject Commission Filings constitute all of
the documents (other than preliminary materials) that Seller was or will be
required to file with the Commission from January 1, 2006 to the Closing
Date.  As of their respective filing dates (or if amended or
superseded by a filing date, then on the filing date of such amending or
superseding filing), the Subject Commission Filings (i) were, and will be,
prepared in accordance, and complied, or will comply, in all material respects,
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the Commission thereunder applicable to
such Subject Commission Filings and (ii) did not, and will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

     

     

    
      
        
        

      

      
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    (b)           Each
of the consolidated financial statements (including, in each case, any related
notes and schedules) contained or to be contained in the Subject Commission
Filings at the time filed (i) complied or will comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto; (ii) were or
will be prepared in accordance with United States generally accepted accounting
principles as in effect from time to time applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited interim financial statements,
as permitted by the Commission on Form 10-Q or Form 8-K under the Exchange Act);
and (iii) fairly presented or will fairly present in all material respects
the consolidated financial position of Seller and its subsidiaries as of the
dates indicated and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments that
Seller does not expect to be material, individually or in the aggregate. The
consolidated, unaudited balance sheet of Seller as of September 30, 2008 is
referred to herein as the “Seller Balance
Sheet.”

     

    (c)           Seller
maintains disclosure controls and procedures required by Rule 13a-15 or
15d-15 under the Exchange Act. To the Knowledge of Seller, such disclosure
controls and procedures are effective to ensure that all material information
concerning Seller is made known on a timely basis to the individuals responsible
for the preparation of Seller’s filings with the Commission and other public
disclosure documents.  Except as set forth on Schedule 5.5(c),
Seller is in compliance in all material respects with the listing requirements
of NASDAQ and has not received any notice other than as already publicly
disclosed regarding the possible delisting of the Seller’s common stock from
NASDAQ.

     

    5.6           No Undisclosed
Liabilities.  Except
(a) as disclosed or reserved against in the financial statements, including
the notes thereto, included within the Subject Commission Filings filed prior to
the Execution Date; (b) for Liabilities incurred in the Ordinary Course
between the date of the Seller Balance Sheet and the Execution Date;
(c) Liabilities incurred in connection with this Agreement, the Other
Agreements or the Purchase Order or the transactions contemplated hereby and
thereby; (d) Liabilities that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (e) Liabilities
disclosed in or arising directly and reasonably foreseeably out of matters set
forth in the Schedules or that are the subject of representations or warranties
herein, Seller and its Affiliates do not have any material Liabilities of any
nature.

     

    5.7           Absence of Certain
Changes.  Except
as disclosed in the Subject Commission Filings filed prior to the Execution
Date, between the date of the Seller Balance Sheet and the Execution Date,
(a) Seller and its Affiliates have conducted their respective businesses
only in the Ordinary Course; and (b) there has not been (i) a Material
Adverse Effect or (ii) any other action or event that would have required
the consent of Buyer under Section 7.5 of
this Agreement had such action or event occurred after the Execution
Date.

     

     

    
      
        
        

      

      
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    5.8           Title.

     

    (a)           Seller
owns or licenses all of the Acquired Assets, and Seller has and will convey to
Buyer hereunder, good, valid and marketable title (subject to the Permitted
Encumbrances) to all of its personal property, tangible and intangible, included
in the Acquired Assets to be transferred to Buyer at the
Closing.  Except as set forth on Schedule 5.8(a),
no financing statement or security agreement under the Uniform Commercial Code
or any similar Law with respect to the Acquired Assets (including with respect
to the Seller Intellectual Property Assets) to be transferred to Buyer at the
Closing is active in any jurisdiction, and Seller has not signed any such active
financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement or security
agreement.

     

    (b)           Upon
delivery of the Other Agreements, Buyer will receive good, valid and marketable
title to all of the Acquired Assets to be transferred to Buyer at the Closing,
free and clear of all Encumbrances other than the Permitted
Encumbrances.

     

    (c)           The
Acquired Assets are in all material respects all of the assets used or held for
use in the Business as the same has been operated prior to the Execution Date
and except as set forth on Schedule 5.8(c),
the Acquired Assets constitute all of the assets necessary for Buyer to continue
to operate the Business.  Except as set forth on Schedule 5.8(c),
the Tangible Assets to be transferred to Buyer at the Closing (i) are in
good operating condition and repair (reasonable wear and tear excepted);
(ii) have been and shall through such date be maintained in accordance with
normal industry practice; and (iii) conform in all material respects with
all applicable Laws.

     

    (d)           The
Inventory consists of raw materials and supplies, manufactured and processed
parts, work in progress and finished goods, all of which is of a quality and
quantity saleable in the Ordinary Course, and none of which is obsolete or
unsalable, subject only to the reserve for inventory write-down set forth on the
financial statements presented in Subject Commission Filings, as adjusted for
operations and transactions through the Closing Date in accordance with the past
custom and practice of Seller.

     

    5.9           Intellectual
Property.

     

    (a)           Schedule 5.9(a)
contains a complete and accurate list of all issued patents and filed
applications therefor within the definition of Patents that are owned, purported
to be owned or licensed by Seller and used in the Business (“Seller Patents”), all
registered marks or filed applications therefor and all material unregistered
marks within the definition of Marks that are owned, purported to be owned or
licensed by Seller and used in the Business (“Seller Marks”), and
all registered copyrights and filed applications therefor and within the
definition of Copyrights that are owned, purported to be owned or licensed by
Seller and used in the Business, identifying (i) the owner of such
Intellectual Property Assets and (ii) in the event that the owner is not
Seller, identifying the agreement under which Seller is granted rights to the
applicable Intellectual Property Asset.

     

     

    
      
        
        

      

      
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    (b)           Except
as set forth on Schedule 5.9(b):

     

    (i)           Seller
exclusively owns or has license rights to all Seller Intellectual Property
Assets and/or Intellectual Property Assets that are the subject of a written
license or other agreement under which Seller is granted rights by a third party
with respect to the Business (such licenses or other agreements, the “Inbound Licenses” and
such Intellectual Property Assets, the “Seller In-Licensed
Intellectual Property Assets”), and all Seller Intellectual Property
Assets and Seller In-Licensed Intellectual Property Assets are free and clear of
all Encumbrances.

     

    (ii)           The
Seller Intellectual Property Assets owned or purported to be owned by Seller
have not been held by a court of competent jurisdiction to be invalid or
unenforceable.  All Patents, Marks, and Copyrights, in each case,
filed or registered (as applicable) or maintained by Seller and used in the
Business and which have been issued by, or are registered or the subject of an
application filed with, as applicable, the U.S. Patent and Trademark Office, the
U.S. Copyright Office or in any similar office or agency anywhere in the world
have been duly filed or registered (as applicable) and maintained, including
through the submission of all necessary filings and fees in accordance with the
legal and administrative requirements or the appropriate jurisdictions, and have
not lapsed, expired or been abandoned.

     

    (iii)           All
Seller Patents owned or purported to be owned by Seller have been prosecuted in
good faith.  No Seller Patent is subject to any maintenance fees,
taxes or filing deadlines falling due within ninety (90) days after the
Closing Date.  In each case where a Seller Patent is held by Seller by
assignment, the assignment has been duly recorded with the U.S. Patent and
Trademark Office and all other jurisdictions of registration.  No
Seller Patent owned by or exclusively licensed to Seller has been or is now
involved in any interference, reissue, re-examination or opposition
proceeding.  To the Knowledge of Seller, there is no published patent
application of any third party that is the subject of an interference with any
Seller Patent.

     

    (iv)           There
are no pending, or, to the Knowledge of Seller, threatened claims against Seller
or any of its employees alleging (A) that the operation of the Business
(including any activity by Seller in connection therewith) infringes on or
violates the rights of others in or to any Intellectual Property Assets (“Third Party Intellectual
Property Assets”) or constitutes a misappropriation of any Third Party
Intellectual Property Asset or (B) that any of the Seller Intellectual
Property Assets or Seller In-Licensed Intellectual Property Assets is invalid or
unenforceable.

     

    (v)           To
the Knowledge of Seller, neither the operation of the Business (including any
activity by Seller in connection therewith) nor the manufacture, use and/or sale
of any Product infringes on or violates any Third Party Intellectual Property
Asset, or constitutes a misappropriation of any Third Party Intellectual
Property Asset.

     

    (vi)           All
former and current employees, consultants and contractors of Seller performing
technical, scientific and/or creative activities relating to the Business have
executed written instruments with Seller that assign to Seller all rights, title
and interest in and to any and all (A) inventions, improvements,
discoveries, writings or other works of authorship, and information relating to
the Business and (B) Intellectual Property Assets relating
thereto.

     

     

    
      
        
        

      

      
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    (vii)           To
the Knowledge of Seller, (A) there is no infringement or violation by any
person or entity of any of the Seller Intellectual Property Assets or those
Seller In-Licensed Intellectual Property Assets over which Seller has primary
enforcement rights and (B) there is no misappropriation by any person or
entity of any of the Seller Intellectual Property Assets or such Seller
In-Licensed Intellectual Property Assets.

     

    (viii)          Seller
has taken reasonable and customary security measures to protect the secrecy,
confidentiality and value of all Trade Secrets owned, purported to be owned or
used by Seller in the Business (the “Seller Trade
Secrets”), including requiring each employee and consultant of Seller and
any other person with access to Seller Trade Secrets to execute a binding
confidentiality agreement, copies of which (or in substantially a form which)
have been made available to Buyer and, to the Knowledge of Seller, there has not
been any material breach by any party to any such confidentiality
agreement.

     

    (c)           All
Inbound Licenses are listed on Schedule 5.9(c),
other than licenses and agreements for commercial off-the-shelf computer
software, and other standard form non-exclusive licenses with respect to
Intellectual Property Assets available generally which licenses have a cost of
less than Fifty Thousand Dollars ($50,000) per year.  Except as set
forth on Schedule 5.9(c):
(i) all Inbound Licenses are in full force and effect;
(ii) (A) neither Seller and, (B) to the Knowledge of Seller, none
of the other parties to such Inbound Licenses is in material breach or default
under any such Inbound License; and (iii) all such Inbound Licenses are
assignable without the consent of the applicable licensor.  True and
complete copies of all such Inbound Licenses, and any amendments thereto, have
been made available to Buyer.  To the Knowledge of Seller, the
licensors under each Inbound License have all requisite power and authority to
grant the rights purported to be conferred thereby.

     

    (d)           All
licenses or other agreements under which Seller has granted rights to others in
Seller Intellectual Property Assets or Seller In-Licensed Intellectual Property
Assets (“Outbound
Licenses”) are listed on Schedule 5.9(d).  Except
as set forth thereon, (i) all Outbound Licenses are in full force and
effect; (ii) (A) neither Seller and, (B) to the Knowledge of
Seller, none of the other parties to such Outbound Licenses is in material
breach or default under any such Outbound License; and (iii) all such
Outbound Licenses are assignable without the consent of the applicable
licensee.  True and complete copies of all such Outbound Licenses, and
any amendments thereto, have been made available to Buyer.

     

    5.10           Litigation.  Except
as disclosed in the Subject Commission Filings filed prior to the Execution Date
or as set forth in Schedule 5.10,
there is no action, suit, proceeding, claim, arbitration or investigation
pending or, to the Knowledge of Seller, threatened against Seller or any of its
Affiliates (a) relating to the Business or the Acquired Assets or affecting
Seller’s or its Affiliates’ ability to sell or transfer the Acquired Assets or
(b) that, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect.  There are no material judgments, orders or
decrees outstanding against Seller or any of its Affiliates.

     

     

    
      
        
        

      

      
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    5.11           Contracts.  All
Transferred Contracts are valid and are in full force and effect and constitute
legal, valid and binding obligations of Seller and, to the Knowledge of Seller,
the other parties thereto, and are enforceable against the other parties thereto
in accordance with their respective terms.  Neither Seller nor
Seller’s Affiliates, nor to the Knowledge of Seller, any other party to any
Transferred Contract, is in material breach or default in complying with any
provisions thereof, and no condition or event or facts exists which, with
notice, lapse of time or both would constitute a material breach or default
thereunder on the part of Seller, Seller’s Affiliates or, to the Knowledge of
Seller, on the part of any other party thereto.

     

    5.12           Employment
Matters.

     

    (a)           Schedule 5.12(a)
contains a complete and accurate list of all of the Hired Employees describing
for each person: (i) his or her position or title, (ii) whether classified as
exempt or non-exempt for wage and hour purposes and, if exempt, the type of
exemption relied upon, (iii) annual base salary, if applicable, (iv) amounts
paid on a salary, hourly or commission and the actual rates of compensation, (v)
average scheduled hours per week (based on the last completed year), (vi)
maximum bonus potential, (vii) date of hire, (viii) business location, (ix)
whether on active or inactive status, and if inactive, the type of leave and
estimated duration, and (x) the total amount of bonus, severance and other
amounts to be paid to such employee at the Closing Date or otherwise in
connection with the transactions contemplated hereby.  To the
Knowledge of Seller, no Hired Employee has expressed any plans to terminate his
or her employment with Seller prior to the Closing Date.

     

    (b)           Buyer
shall never have any Liabilities, obligations or responsibilities for or with
respect to any employee benefit plans maintained or contributed by Sellers, and
Sellers are solely responsible for all such Liabilities, obligations or
responsibilities, including any related to any termination of any such
plans.

     

    (c)           None
of the Hired Employees are represented by any union or subject to any collective
bargaining agreement and, to the Knowledge of Seller, no such employees have
engaged in any such organizational activities.  None of the Hired
Employees has brought or asserted any claim of unfair labor practices involving
Seller.

     

    (d)           No
representative of Seller has made any representation, promise or guarantee,
express or implied, to any of its employees regarding (i) whether Buyer
intends to retain or offer to retain such individual, or (ii) the terms and
conditions on which Buyer may retain or offer to retain such
individual.

     

    (e)           Seller
has paid or will pay in full all expense reimbursement claims of all Hired
Employees for periods prior to the Closing Date.

     

    5.13           Regulatory
Approvals.

     

    (a)           Seller
is now and has heretofore been in compliance in all material respects with all
federal, state, local and foreign healthcare laws, rules, regulations and
orders, including:  (i) 42 U.S.C. § 1320a-7(b), commonly referred
to as the “Federal Anti-Kickback Statute;” (ii) 31 U.S.C. §§ 3729-33,
commonly referred to as the “False Claims Act” and (iii) all laws, rules
and regulations of the FDA.  All marketed products of Seller have to
the extent necessary been approved or cleared by the FDA or equivalent state or
foreign regulatory authorities and continue to materially comply with all laws,
rules, regulations and orders applicable to the Regulatory
Approvals.  Seller is now and has heretofore been in material
compliance with and each product in commercial distribution is designed,
manufactured, prepared, assembled, packaged, labeled, stored, serviced and
processed in material compliance with the applicable requirements of the Quality
System Regulation set forth in 21 CFR Part 820.  All required notices,
supplemental applications and annual or other reports, including adverse
experience reports, reports of removals and corrections and 510(k)s for device
modifications, required to be submitted by Seller or, to the Knowledge of
Seller, its agents, with respect to each product have been filed with the FDA or
equivalent state or foreign regulatory authorities, as
appropriate.  Seller is and has heretofore been in material compliance
with the written procedures, record-keeping and FDA reporting requirements for
Medical Device Reporting set forth in 21 CFR Part 803.

     

     

    
      
        
        

      

      
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    (b)           Except
as set forth in Schedule 5.13(b),
Seller has not received any regulatory or warning letter, or any written, or to
the Knowledge of Seller, any oral safety alert, request for or communication
regarding the mandatory or voluntary recall of any products, or notice or other
communication from the FDA or any other domestic or foreign regulatory authority
with jurisdiction over Seller and its products, regarding (i) the
commencement or threatened commencement of any action, suit, proceeding, claim,
arbitration or investigation to withdraw any Regulatory Approvals; (ii) the
commencement or threatened commencement of any action, suit, proceeding, claim,
arbitration or investigation to seize any products or enjoin production of the
products at any facility; or (iii) any failure or alleged failure by Seller
to materially comply with any applicable healthcare law, rule, regulation or
order.  Except as set forth in Schedule 5.13(b),
there are no written statements, citations, correspondence or decisions by any
Governmental Authority stating that any Product is defective or unsafe or fails
to meet any product warranty or any standards promulgated by any Government
Authority, or is misbranded or adulterated or otherwise not in compliance with
any applicable law, rule, regulation or order.  Except as set forth in
Schedule
5.13(b), there is no (x) duty to recall any Product or duty to warn
customers of a defect in any Product; or (y) latent or overt design,
manufacturing or other defect in any Product.  To the Knowledge of
Seller, there has not been any violation of law or regulation by Seller in its
product development efforts, product manufacturing and marketing submissions or
reports to any Regulatory Authority that could reasonably be expected to require
investigation, corrective action or enforcement action.  Seller is not
conducting a recall, removal or correction of any of the Products, and the FDA
has provided written notification to Seller that each recall of a Product
conducted at any time since January 1, 2004 has been terminated.  To
the Knowledge of Seller, no facts exist that provide a reasonable basis for any
new recall, removal or correction of any Product.  Seller has never
been and is not now subject to FDA’s Applications Integrity Policy.

     

    (c)           Seller
has not knowingly made any false statements on, or omissions from, any
applications, approvals, reports or other submissions to any applicable
Regulatory Authority, or in or from any other records and documentation prepared
or maintained to comply with the requirements of any Regulatory Authority
relating to Seller’s products.

     

    (d)           Seller
has not been excluded from participation in any federal health care program, as
defined under 42 U.S.C. §1320a-7b(f), for the provision of items or services for
which payment may be made under such federal health care programs, nor has
Seller, or, to the Knowledge of Seller, any of its employees, consultants or
contractors been debarred, suspended, proposed for debarment, declared
ineligible or voluntarily excluded by any federal department or
agency.  In addition, no final adverse action, as that term is defined
in 42 U.S.C. §1320a-7(e)(g), has occurred or is pending or, to the Knowledge of
Seller, threatened against Seller.

     

     

    
      
        
        

      

      
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    (e)           Seller
has made available, and prior to the Closing Date will deliver, to Buyer a true
and correct copy of each of the following with respect to the last
three (3) calendar years and year-to-date 2009:  (i) a list
of all products marketed by Seller or any predecessor thereto, and the numbers
of the 510(k)s, Pre-Market Approval or other Regulatory Approval for each such
product; (ii) all justifications by Seller or any predecessor thereto for
not filing a 510(k) for a change or modification to a marketed device;
(iii) all premarket notification submissions (510k) and all substantially
equivalent or not substantially equivalent letters received by Seller or any
predecessor thereto; (iv) all correspondence, meeting notes or minutes, or
related documents concerning material communications between the FDA and Seller
or any predecessor thereto as they relate to 510(k) submissions, including
requests for additional information and responses thereto, and compliance
matters; (v) all management review reports of Seller; (vi) all
documents in response to actual or proposed FDA regulatory action(s), including
all documents showing corrective actions undertaken by Seller or any predecessor
thereto in response to FDA regulatory action(s); (vii) all FDA reports of
inspection (Establishment Inspection Reports and Form FDA 483s) and FDA
inspection reports of Seller evaluating compliance with Good Manufacturing
Practices (“GMP”) or analogous
procedures from other Regulatory Authorities, including foreign regulatory
authorities; (viii) all MedWatch forms received by Seller or any
predecessor thereto for the Products; (ix) all written reports of GMP
audits of Seller or any predecessor thereto and their suppliers in Seller’s
possession or control; (x) all information and documents pertaining to the
Products required under FDA’s regulations pertaining to complaints, medical
device reports, and removals and corrections, including complaint files,
corrective and preventive actions, adverse event files, all Medical Device
Reports filed by Seller or any predecessor thereto, and correction and removal
records and reports; (xi) for the Products, design history files, including
design and development planning, design input and output, design review, design
verification and validation, including software validation and risk analysis
where appropriate, design transfer and design changes; and (xii) all
documents and communications in Seller’s possession (including written
correspondence, telephone notes, memoranda, meeting notes, or minutes reflecting
oral communications, between Seller or any predecessor thereto and the FDA or
any other Regulatory Authority), that pertain to any recall of any of the
Products, including health hazard evaluations, recall strategies, public
warnings, customer communications, effectiveness checks, status reports and
termination letters. Seller has made available, and prior to the Closing Date
will deliver, to Buyer a true and correct copy of all product labeling and
advertising currently in use, including that posted on Seller’s website and in
Seller’s user’s manuals.

     

    5.14           Compliance With
Laws.  Seller
and each of its Affiliates is in compliance with all applicable Laws with
respect to the conduct of its business (including the Business) as currently
conducted, and the ownership or operation of its properties or assets, except
where the failures to comply or violations, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.

     

     

    
      
        
        

      

      
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    5.15           Warranty
Matters.  Except
as disclosed on Schedule 5.15,
there are no material existing or, to the Knowledge of Seller, threatened
product liability, warranty, failure to adequately warn or any other similar
claims against Seller primarily relating to the Products that are inconsistent
with the amounts generally shown for warranty liability reserve in the Subject
Commission Filings.

     

    5.16           Customers, Distributors and
Suppliers.  Schedule 5.16
sets forth a true and complete list of all customers or distributors of Seller
who accounted for Fifty Thousand Dollars ($50,000) or more of the sales of the
Products in any one of the last three (3) years (collectively, the “Customers and
Distributors”).  Schedule 5.16
also sets forth a true and complete list of all third-party suppliers to Seller
primarily with respect to the Products to whom in any one of the last
three (3) years Seller made payments aggregating Fifty Thousand Dollars
($50,000) or more
(the “Suppliers”).  To
the Knowledge of Seller, except as set forth on Schedule 5.16,
no Customer and Distributor or Supplier has canceled or otherwise terminated, or
stated to Seller its intention to cancel or terminate, its relationship with
Seller.

     

    5.17           Taxes.

     

    (a)           Seller
has timely filed all Tax Returns required to be filed by it with any
Governmental Authority.

     

    (b)           Seller
has timely paid all Taxes (including all sales and use taxes) that are required
to be paid by it, including any Taxes the non-payment of which would result in
an Encumbrance on any Acquired Asset, would otherwise adversely affect the
Acquired Assets or would result in Buyer becoming liable or responsible
therefor.

     

    5.18           Opinion of Financial
Advisor. The
Board of Directors of Seller has received an opinion of Seller’s Financial
Advisor to the effect that, as of the date of such opinion, the Purchase Price
to be paid to Seller is fair, from a financial point of view, to
Seller.  The foregoing opinion has not been modified, supplemented or
rescinded prior to the Execution Date.

     

    5.19           Brokers,
Etc.  Except
as set forth on Schedule 5.19,
no broker, investment banker, agent, finder or other intermediary acting on
behalf of Seller or under the authority of Seller is or shall be entitled to any
broker’s or finder’s fee or any other commission or similar fee directly or
indirectly in connection with any of the transactions contemplated
hereby.

     

    5.20           Required Consents for
Transferred Contracts.  Schedule 5.20 sets
forth each Transferred Contract that requires a consent or other action by any
Person as a result of the execution, delivery and performance of this Agreement
or the Other Agreements or consummation of the transactions contemplated hereby
or thereby.  

     

    ARTICLE
VI

    Representations and
Warranties of Buyer

     

    As a
material inducement to Seller to enter into this Agreement, subject to the
exceptions and limitations set forth in this Article VI and
the matters set forth on the disclosure schedule delivered by Buyer to Seller
(the “Buyer
Schedules”), Buyer hereby represents and warrants to Seller as
follows:

     

     

    
      
        
        

      

      
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    6.1           Organization.  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified to transact
business as a corporation in such jurisdictions where the nature of its business
makes such qualification necessary, except as to jurisdictions where the failure
to qualify would not reasonably be expected to have a material adverse effect on
its business, assets, financial condition, results of operations or prospects of
its business.  Buyer has all requisite corporate power and authority
to carry on its business as now being conducted.

     

    6.2           Due
Authorization.

     

    (a)           The
Board of Directors of Buyer and its parent company duly adopted resolutions by
the requisite vote approving this Agreement, the Other Agreements and the
transactions contemplated hereby and thereby.  Buyer has all requisite
corporate power and authority to enter into this Agreement and the Other
Agreements to which it is or will become a party and to consummate the
transactions contemplated hereby and thereby, and this Agreement and such Other
Agreements have been, or upon execution and delivery thereof will be, duly
executed and delivered by Buyer.  This Agreement, the Other Agreements
and the Purchase Order to which Buyer is or will become a party are, or upon
execution and delivery by Buyer thereof will be, the valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, except to the extent that enforceability is limited by
bankruptcy, insolvency or similar laws affecting creditors’ rights and remedies
by equitable principles.

     

    (b)           No
Consent in respect of, or filing with, any Governmental Authority is required to
be obtained or made by or with respect to Buyer in connection with the
execution, delivery and performance of this Agreement, the Other Agreements or
the consummation of the transactions contemplated hereby or thereby, other than
(i) those that may be required solely by reason of Buyer’s (as opposed to
any other third party’s) participation in the transactions contemplated by this
Agreement and the Other Agreements or (ii) pursuant to applicable
securities Laws.

     

    (c)           No
vote of the holders of any class or series of Buyer’s capital stock or other
securities is necessary for the consummation by Buyer of the transactions
contemplated by this Agreement.

     

    (d)           Except
as otherwise set forth in this Section 6.2, no
Consent of any Person is required for Buyer or, if applicable, its Affiliates to
consummate the transactions contemplated hereby.

     

    6.3           Conflicts.  The
execution, delivery and performance by Buyer of this Agreement and the Other
Agreements to which it is or will become a party and the consummation of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or result in a breach of the certificate of
incorporation, bylaws or other constitutive or organizational documents of
Buyer; or (b) conflict with or violate in any material respect any permit,
concession, franchise, license or applicable Law with respect to Buyer or
Buyer’s properties or assets; which, in the case of (a) or (b) above,
would reasonably be expected to materially delay or prevent the consummation of
the transactions contemplated herein or in the Other Agreements.

     

     

    
      
        
        

      

      
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    6.4           Litigation.  There
is no action, suit, proceeding, claim, arbitration or investigation pending or,
to Buyer’s knowledge, threatened against Buyer or any of its Affiliates
(a) relating to or affecting Buyer’s or, if applicable, Buyer’s Affiliates’
ability to purchase the Acquired Assets or assume the Assumed Liabilities or
(b) that, individually or in the aggregate, is reasonably likely to have a
material adverse effect on Buyer and its Affiliates.

     

    6.5           Brokers,
Etc.  Except
as set forth on Buyer
Schedule 6.5, no broker, investment banker, agent, finder or other
intermediary acting on behalf of Buyer or Buyer’s Affiliates is or shall be
entitled to any broker’s or finder’s fee or any other commission or similar fee
directly or indirectly in connection with any of the transactions contemplated
hereby.

     

    6.6           Financial
Ability.  Buyer has, and will have on the Closing Date,
sufficient cash on hand from Buyer’s immediately available internal organization
funds or available under a currently established committed credit facility or
unutilized lines of credit with financial institutions to consummate the
transactions contemplated by this Agreement, the Other Agreements and the
Purchase Order and to perform its obligations hereunder and
thereunder.

     

    6.7           Compliance with
Laws.  Buyer
and each of its Affiliates is in compliance with all applicable Laws with
respect to the conduct of its business as currently conducted, and the ownership
or operation of its properties or assets, except where the failures to comply or
violations, individually or in the aggregate, would not reasonably be expected
to have a material adverse effect on Buyer and its Affiliates.

     

    ARTICLE
VII

    Additional
Agreements

     

    7.1           Obligation to Consummate
Transaction

    .  Each
of the Parties hereto agrees to use all commercially reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable to the extent permissible under applicable Law,
to consummate and make effective the transactions contemplated by this
Agreement, the Other Agreements and the Purchase Order as expeditiously as
practicable, to ensure that the conditions set forth in Article VIII are
satisfied and to hold the Closing on or before April 15, 2009, insofar as such
matters are within the control of such Party.

     

    7.2           Confidentiality.  The
Parties hereby agree that any information exchanged between the Parties hereto
pursuant to or in connection with this Agreement, the Other Agreements or the
transactions contemplated hereby or thereby shall be held subject to and in
accordance with the confidentiality, non-disclosure and non-use obligations set
forth in the Mutual Nondisclosure Agreement, dated as of October 13, 2008, by
and between Buyer and Alsius, as amended by that certain Addendum, dated as of
February 13, 2009.

     

    7.3           Access to
Information.

     

    (a)           From
the Execution Date to the Closing Date, Seller shall afford to Buyer and its
accountants, counsel and other authorized representatives reasonable access, at
Buyer’s sole expense, upon reasonable prior notice during normal business hours,
to the properties, books and records related to the Acquired Assets; provided, however, that such
access does not unreasonably disrupt the normal operations of
Seller.  Buyer and its representatives shall not speak to any of the
employees, customers, distributors and suppliers of Seller without the prior
consent of Seller, which consent shall not be unreasonably withheld, delayed or
conditioned, and any such permitted communications shall be made in the presence
of a designated representative of Seller.

     

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    (b)           After
the Closing Date, each Party shall grant to the other Party such access to
financial records and other information in its possession related to the
Acquired Assets with respect to the period before the Closing Date and shall
provide such cooperation and assistance as shall be reasonably required to
enable such Party to complete its legal, regulatory, stock exchange and
financial reporting requirements and for any other reasonable business purpose,
including in respect of litigation and insurance matters; provided, however, that such
access does not unreasonably disrupt the normal operations of the applicable
Party.

     

    7.4           Transaction Written Consent;
Preparation of Information Statement.

     

    (a)           As
soon as practicable following the Execution Date, Alsius shall, in accordance
with Alsius’s certificate of incorporation and bylaws and applicable Law, obtain
the Required Stockholder Vote by means of a binding written consent approving
this Agreement and the execution, delivery and consummation of the transactions
contemplated under this Agreement and the Other Agreements (the “Transaction Written
Consent”) signed by the holders of a majority of the outstanding shares
of Alsius’s common stock.

     

    (b)           As
soon as practicable after obtaining the Transaction Written Consent, Alsius
shall prepare and file with the Commission the Information Statement containing
the information required by the Exchange Act with respect to the Transaction
Written Consent and the transactions contemplated by this Agreement and the
Other Agreements.  Alsius and Buyer shall cooperate with each other in
the preparation of the Information Statement and without limiting the generality
of the foregoing, Alsius shall consult with Buyer prior to filing the
Information Statement (or any amendment or supplement thereto) with the
Commission and shall consider in good faith including any reasonable comments of
Buyer relating thereto, and Buyer shall, in a timely manner, furnish to Alsius
the information relating to Buyer required by the Exchange Act to be set forth
in the Information Statement.  The Information Statement shall
additionally include a copy of the opinion of Alsius’s Financial Advisor with
respect to the fairness to Alsius, from a financial point of view, of the
Purchase Price to be paid to Alsius.

     

    (c)           Alsius
shall use its commercially reasonable efforts to respond promptly to any
comments made by the Commission with respect to the Information
Statement.  Alsius shall use its commercially reasonable efforts to
cause the Information Statement to be mailed to its stockholders as promptly as
practicable following the filing thereof with the Commission and the resolution
of any comments thereon by the Commission.  Alsius shall advise Buyer
promptly after it receives notice of any request by the Commission for amendment
of the Information Statement or comments thereon and responses thereto or
requests by the Commission for additional information, and Alsius shall consult
with Buyer prior to responding to any of the foregoing and shall consider in
good faith including any reasonable comments of Buyer relating to any such
responses.  The Information Statement will, when filed, comply as to
form in all material respects with the applicable requirements of the Exchange
Act.  The information supplied by Buyer for inclusion in the
Information Statement or any amendment or supplement to the Information
Statement, will not, on the date it is first mailed to Alsius’s stockholders and
at the Closing, contain any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  If at any
time prior to the Closing Date any information relating to Alsius or Buyer, or
any of their respective Affiliates, officers or directors, is discovered by
Alsius or Buyer that should be set forth in an amendment or supplement to the
Information Statement, so that the Information Statement would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the Party that discovers such information shall promptly
notify the other Party and an appropriate amendment or supplement describing
such information shall be promptly filed with the Commission and, to the extent
required by applicable Law, disseminated to the stockholders of
Alsius.

     

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    7.5           Interim
Operations.  Seller
agrees that after the Execution Date and prior to the Closing Date (unless Buyer
shall otherwise approve in writing) and except as required by applicable Law,
Seller shall use its commercially reasonable efforts to (i) maintain in
effect all foreign, federal, state and local licenses, permits, consents,
franchises, approvals and authorizations; and (ii) continue to provide
customer support and service to its customers in the Ordinary
Course.  Without limiting the generality of the foregoing and in
furtherance thereof, from the Execution Date until the Closing, except
(A) as otherwise expressly contemplated by this Agreement; (B) as
Buyer may consent in writing (which consent shall not be unreasonably withheld
or delayed; provided that Buyer
shall be required to respond to Seller within two (2) Business Days after
receipt of written notice requesting approval from Seller with respect to any
such action, and if Buyer does not respond within such time period, such lack of
response shall be deemed to constitute written approval of Buyer with respect to
any such action); (C) as is required by applicable Law or Governmental
Authorities; or (D) as set forth in Schedule 7.5,
Seller will not:

     

    (a)           adopt
or propose any amendment or change in its certificate of incorporation or bylaws
or other applicable governing instruments;

     

    (b)           merge
or consolidate with any other Person, or restructure, reorganize or completely
or partially liquidate;

     

    (c)           sell,
lease or otherwise transfer, or create or incur any Encumbrance other than a
Permitted Encumbrance on, any Acquired Assets;

     

    (d)           modify
in any respect any of the Transferred Contracts or waive any failure to comply
with any provision thereunder by any of the other parties thereto;

     

    (e)           enter
into any agreement or arrangement that is material to the Acquired Assets, or
that materially increases Seller’s actual or contingent liabilities and
obligations beyond cash available to satisfy them;

     

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    (f)           fail
to maintain the Tangible Assets in the Ordinary Course;

     

    (g)           take
(or omit to take) any action that adversely affects, or could reasonably be
expected to adversely affect, any rights of Seller to the Seller Intellectual
Property Assets, or abandon or permit to lapse any rights of Seller to the
Seller Intellectual Property Assets;

     

    (h)           settle,
or offer or propose to settle (i) any litigation, investigation,
arbitration, proceeding or other claim involving or against Seller or
(ii) any litigation, arbitration, proceeding or dispute that relates to the
transactions contemplated hereby or by the Other Agreements, in either case with
any result which adversely affects the Business or Acquired Assets;

     

    (i)           sell
or offer to sell any Products on terms that are not consistent with Seller’s
Ordinary Course or at any price that is less than such Product’s list price,
subject to discounts consistent with the Ordinary Course;

     

    (j)           take
any action that would make any representation or warranty of Seller hereunder,
or omit to take any action necessary to prevent any representation or warranty
of Seller hereunder from being, inaccurate in any respect at, or as of any time
before, the Closing Date; or

     

    (k)           agree
or commit to do any of the foregoing.

     

    7.6           No
Solicitation.

     

    (a)           Other
than as expressly permitted herein, Seller will not, and will not permit any of
its subsidiaries or any of the directors, officers, employees, advisors,
representatives or agents of Seller or any of its subsidiaries (collectively,
the “Representatives”) to,
directly or indirectly, (i) discuss, negotiate, undertake, authorize,
recommend, propose or enter into, either as the proposed surviving, merged,
acquiring or acquired corporation, any transaction involving a merger,
consolidation, business combination, purchase or disposition of any amount of
the assets of Seller or any of its subsidiaries or any capital stock of Seller
or any of its subsidiaries other than the transactions contemplated by this
Agreement (an “Acquisition
Transaction”), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers in respect of an
Acquisition Transaction, (iii) furnish or cause to be furnished, to any
person or entity, any information concerning the business, operations,
properties or assets of Seller or its subsidiaries in connection with an
Acquisition Transaction or (iv) otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, any effort or attempt by any
other person or entity to do or seek any of the foregoing, provided, however, that, at any
time prior to receipt of the Required Stockholder Vote, if seller receives a
bona fide written Acquisition Transaction that was unsolicited and that did not
otherwise result from a breach of this Section 7.6,
Seller may furnish information with respect to Seller and its subsidiaries to
the person who made such Acquisition Transaction and may participate in
discussions regarding such Acquisition Transaction if (A) the Board of
Directors of Seller determines in good faith, after receiving advice from its
outside counsel, that failure to do so would violate its fiduciary duties to
Seller’s stockholders under applicable law, and (B) the Board of Directors
of Seller determines that such Acquisition Transaction is a Superior
Proposal.

     

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    (b)           Following
receipt of the Required Stockholder Vote, Seller shall, and shall cause its
subsidiaries’ and their Representatives to, immediately cease and cause to be
terminated any existing discussions or negotiations with any persons or entities
(other than Buyer) conducted heretofore with respect to any of the
foregoing.  Seller agrees not to (and to cause its Subsidiaries not
to) release any third party from the confidentiality provisions of any agreement
to which Seller or any of its subsidiaries is a party.

     

    (c)           For
the purposes of this Agreement, “Superior Proposal”
means any Acquisition Transaction which the Board of Directors of Seller
determines in its good faith judgment (after receiving advice from its financial
advisor and taking into account all the terms and conditions of such proposal
and the transactions contemplated by this Agreement, including any conditions to
consummation and the likelihood of such proposal and such transactions being
consummated) to be more favorable to the Seller’s stockholders from a financial
point of view than the transactions contemplated by this Agreement.

     

    7.7           Certain Tax
Matters.

     

    (a)           All
Taxes imposed or levied by reason of, in connection with or attributable to this
Agreement, the Other Agreements and the Purchase Order or the transactions
contemplated hereby and thereby (collectively, “Transfer Taxes”)
shall be borne equally by Buyer and Seller.  Upon payment of any such
Transfer Tax, the paying Party shall present a statement to the non-paying Party
setting forth the amount of reimbursement to which the paying Party is entitled
under this Section
7.7(a), together with such supporting evidence as is reasonably necessary
to calculate the amount to be reimbursed.  The non-paying Party shall
make such reimbursement promptly but in no event later than ten (10) days after
the presentation of such statement.

     

    (b)           Buyer
and Seller shall cooperate to avoid any Transfer Taxes that might be imposed to
the extent permitted by applicable Law (such as, for example and not by way of
limitation, Buyer providing Seller with a copy of Buyer’s resale certificate, or
such other instruments as will relieve Buyer or Seller from liability for any
Transfer Tax).

     

    (c)           Seller
and Buyer shall provide each other with such assistance as may reasonably be
requested by either Party in connection with the preparation of any Tax Return,
application for exemption or refund, audit or other examination by any
Governmental Authority or action, suit, proceeding, claim, arbitration or
investigation relating to Liability for Taxes in connection with the Acquired
Assets.

     

    7.8           Public
Announcements.  Promptly
following the execution of this Agreement, Buyer and Seller shall each (or shall
jointly) issue a press release in a form reasonably agreed to by the other with
respect to the transactions contemplated hereby.  Subject to the
foregoing and except for the Information Statement and any other filings
required to be made with the Commission, none of the Parties shall issue or
permit any of their respective Affiliates to issue any press release or other
public announcement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other Parties, such consent
not to be unreasonably withheld, delayed or conditioned, except as may be
required by applicable Laws (in which case the Party required to make the
release or statement shall allow the other Parties reasonable time to comment on
such release or statement in advance of such issuance to the extent permitted by
applicable Laws).

     

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    7.9           Notice of Certain
Events.  Each
Party shall promptly notify the other Party of:

     

    (a)           any
written notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement or any of the Other Agreements;

     

    (b)           any
written notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement or any of the
Other Agreements;

     

    (c)           any
actions, suits, claims, investigations or proceedings commenced or, to the
knowledge of either Party, threatened against, relating to or involving or
otherwise affecting such Party that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to Article V or
VI, or that
relate to the consummation of the transactions contemplated by this Agreement or
any of the Other Agreements;

     

    (d)           with
respect to Seller only, any material inaccuracy of any representation or
warranty contained in this Agreement at any time during the term hereof that
could reasonably be expected to cause the condition set forth in Section 8.2(b)
not to be satisfied; and

     

    (e)           any
failure of either Party to materially comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it
hereunder.

     

    The
delivery of any notice pursuant to this Section 7.9
shall not limit or otherwise affect the remedies otherwise available hereunder
to the Party receiving that notice.

     

    7.10           Insurance.  Prior
to Closing, Seller shall purchase from its existing liability insurer or another
reputable insurer or insurers reasonably satisfactory to Buyer extended
reporting or “tail” coverage with respect to its liability insurance policies in
effect for all periods prior to the Closing Date (the “Tail
Policy”).  The Tail Policy shall name Buyer as an additional
insured party and shall otherwise be reasonably satisfactory to
Buyer.  The cost of the foregoing Tail Policy shall be borne by
Seller.

     

    7.11           Employment of Hired
Employees by Buyer.  Each
employee of Seller who accepts, in a manner reasonably acceptable to Buyer, an
offer of employment from Buyer or its Affiliate or designee prior to the Closing
Date, as the case may be (each, a “Hired Employee”),
will become employed by Buyer or its Affiliate or designee as of his or her
designated start date with Buyer or its Affiliate or designee (each such
individual’s “Start
Date”).  Effective on his or her Start Date, each Hired
Employee will be under the exclusive supervision of Buyer or its Affiliate or
designee and, except as otherwise required by applicable Law, subject to Buyer’s
or such Affiliate’s or such designee’s policies and
procedures.  Seller shall reasonably cooperate with Buyer in any
effort by Buyer to secure the services of certain employees of Seller with whom
Buyer may have interest in employing or providing consulting services following
the Closing, and Seller shall not interfere knowingly, directly or indirectly,
with Buyer’s efforts to extend employment offers to the Hired
Employees.  The Buyer’s decision to hire any such employee will be
subject to his or her satisfactory completion of Buyer's customary hiring review
process, including background reviews and appropriate interviews.

     

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    7.12           Inspection of Tangible
Assets.  After
the Execution Date through a period of two (2) days prior to the Closing
Date (the “Inspection
Period”), Buyer shall have the right, in its sole discretion, to
(a) conduct, from time to time, an inspection of the Tangible Assets set
forth on Schedule 2.1(a)
and any related documents or other items relating to the Tangible Assets to
determine the acceptability of the Tangible Assets and (b) to reject and
not acquire any of the Tangible Assets.  Notwithstanding the
foregoing, such inspection shall occur only upon reasonable prior notice during
normal business hours and shall not unreasonably disrupt the normal operations
of Seller.  Seller shall maintain all Tangible Assets in the Ordinary
Course until the earlier of (x) the expiration of the Inspection Period or
(y) receipt of written notice by Buyer of the completion of its inspection
of the Tangible Assets pursuant to this Section 7.12.  In
the event that Buyer rejects any of the Tangible Assets, such Tangible Assets
shall become Excluded Assets and the sole property of Seller.  For the
avoidance of doubt, there shall be no adjustment to the Purchase Price in the
event that Buyer rejects any of the Tangible Assets in accordance with this
Section 7.12.

     

    7.13           Use of Intellectual
Property.

     

    (a)           Seller
acknowledges that from and after the Closing Date, the name “Alsius,” “Alsius
Medical” and all similar or related names, marks and logos (including the Seller
Marks) shall be owned by Buyer.  Promptly after the Closing Date,
except as provided in Section 7.13(b),
Seller shall (a) cease using the Seller Marks, including the name “Alsius,”
“Alsius Medical” or any other confusingly similar name; and (b) remove the
Seller Marks from all assets of the Seller (including all Excluded
Assets).  No later than the close of business on the first Business
Day after the Closing Date, Seller shall file with the Secretary of State of
Delaware and the Secretary of State of California a separate Certificate of
Amendment to remove the name(s) “Alsius” or “Alsius Medical” from its name(s),
which Certificate of Amendment shall be in form and substance reasonably
acceptable to Buyer.

     

    (b)           Notwithstanding
anything herein to the contrary, Buyer hereby grants a non-exclusive,
non-transferrable, non-sublicensable, royalty-free license to use the names
“Alsius” and “Alsius Medical” (the “Corporate Names”)
solely as an element of a corporate name for the purpose of winding down
Seller’s operations and its dissolution under applicable Law for the period
commencing on the Closing Date and terminating upon the filing of the
Certificate of Dissolution of Seller.  Seller shall comply with all
reasonable rules, practices and guidelines set forth from time to time by Buyer
and provided to Seller with respect to the use of the Corporate
Names.  Seller shall not use the Corporate Names in any way in a
manner likely to have a material adverse effect on the name, image, reputation,
goodwill or proprietary rights of Buyer or its Affiliates.  All use of
the Corporate Names by Seller shall inure solely to the benefit of
Buyer.  The Corporate Names are licensed to Seller on an “as is, where
is” basis without any representation or warranty of any kind.

     

    (c)           Except
in connection with the performance of Seller’s obligations under the Purchase
Order or as set forth in Section 7.13(b), from
and after the Closing Date, none of Seller or any of its Affiliates shall use
any of the Seller Intellectual Property Assets.

     

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    7.14           Bulk
Sales.  The
Parties hereby waive compliance with any Uniform Commercial Code bulk sales or
comparable statutory provisions of each applicable
jurisdiction.  Seller shall discharge and satisfy all Liabilities owed
to its trade creditors after the Closing.

     

    ARTICLE
VIII

    Conditions to
Closing

     

    8.1           Conditions to Obligations of
Buyer and Seller.  The
obligations of Buyer and Seller to complete the transactions contemplated by
this Agreement are subject to the satisfaction at or prior to the Closing of the
following conditions:

     

    (a)           The
Required Stockholder Vote shall have been obtained;

     

    (b)           No
applicable Law or order shall have been enacted, entered, promulgated or
enforced by any Governmental Authority that prohibits the consummation of all or
any part of the transactions contemplated by this Agreement or the Other
Agreements, and no action, suit, proceeding, claim, arbitration or investigation
shall be pending or threatened by any Governmental Authority or other Person
seeking any such order or decree or seeking to recover any damages or obtain
other relief as a result of the consummation of such transactions;

     

    (c)           All
required notifications and filings with any Governmental Authority shall have
been made and any waiting periods shall have expired or been waived or
terminated; and

     

    (d)           The
Information Statement shall have been disseminated to the stockholders of Alsius
in accordance with the Exchange Act and all applicable notice periods with
respect thereto shall have expired or been waived.

     

    8.2           Conditions to Obligations of
Buyer.  The
obligation of Buyer to complete the transactions contemplated by this Agreement
is subject to the satisfaction or waiver by Buyer at or prior to the Closing of
the following additional conditions:

     

    (a)           The
representations and warranties of Seller contained herein (disregarding any
materiality or Material Adverse Effect qualifications or dollar amount
thresholds contained therein) shall be true and correct in all respects as of
the Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct on and as of such earlier date), and
except, individually or in the aggregate, as any breach of any representation or
warranty has not had and would not reasonably be expected to have a Material
Adverse Effect.

     

    (b)           Seller
shall have performed and complied in all material respects with all covenants,
agreements and obligations required to be performed or complied with on or prior
to the Closing Date.  As of the Closing Date, there shall have not
occurred and be continuing any event, development or state of circumstances that
individually or in the aggregate has had or could reasonably be expected to
result in a Material Adverse Effect.

     

    (c)           Buyer
shall have received a certificate, dated as of the Closing Date, duly executed
by an authorized officer of Seller, certifying that: (i) all of the conditions
set forth in Sections
8.2(a) and (b) have been
satisfied and (i) Seller’s officers executing this Agreement, and each of the
other documents necessary for consummation of the transactions contemplated
herein, are authorized to execute the Agreement and such other documents and
their specimen signatures on such certificate are genuine
signatures.

     

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    (d)           Buyer
shall have received the documents and other agreements and instruments pursuant
to Section 8.4(a),
and such other documents, agreements and instruments as it may reasonably
request in connection with the consummation of the transactions contemplated
hereby.

     

    (e)           All
consents and approvals by Persons to the assignment of the Transferred Contracts
set forth on Schedule 5.20
shall have been received, all on terms and conditions materially not less
favorable to Seller than those in existence as of the Execution
Date.

     

    (f)           Buyer
shall have received an Updated
Schedule 2.1(d), which shall be in form and substance reasonably
satisfactory to Buyer.

     

    (g)           Buyer
shall have received a certificate of good standing in respect of Seller
certified by the Secretary of State of the State of Delaware or California, as
applicable, dated as of a reasonably recent date prior to the Closing
Date.

     

    (h)           Buyer
shall have received a letter from GE Capital setting forth the amount necessary
to be paid on the Closing Date to discharge all amounts due in full (the “Payoff Amount”) and
granting a release of its Encumbrances on the assets of Seller to Seller upon
payment thereof, which letter shall be in form and substance reasonably
satisfactory to Buyer (the “Payoff
Letter”).

     

    (i)           Seller
shall have supplied and delivered to Buyer, and Buyer shall have accepted, all
of the minimum order quantities for the Finished Inventory specified in the
Purchase Order in accordance with the terms thereof.

     

    (j)           The
Tail Policy shall have been issued and shall be in full force and effect and
Seller shall have paid the premiums therefor due and payable as of the Closing
Date.

     

    8.3           Conditions to Obligations of
Seller.  The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver by Seller at or prior to the
Closing of the following additional conditions:

     

    (a)           The
representations and warranties of Buyer contained herein that are qualified by
materiality or subject to thresholds shall be true and correct in all respects,
and the representations and warranties of Buyer contained herein that are not so
qualified shall be true and correct in all material respects, each as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such earlier date).

     

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    (b)           Buyer
shall have performed and complied in all material respects with all covenants,
agreements and obligations required to be performed or complied with on or prior
to the Closing Date.

     

    (c)           Seller
shall have received a certificate, dated as of the Closing Date, duly executed
by an authorized representative of Buyer, certifying that: (i) all of the
conditions set forth in Sections 8.3(a)
and (b) have
been satisfied and (ii) Buyer’s officers executing this Agreement, and each of
the other documents necessary for consummation of the transactions contemplated
herein, are authorized to execute the Agreement and such other documents and
their specimen signatures on such certificate are genuine
signatures.

     

    (d)           Seller
shall have received a certificate of good standing in respect of Buyer certified
by the Secretary of State of the State of Delaware, dated as of a reasonably
recent date to the Closing Date.

     

    (e)           Seller
shall have received the documents and other agreements and instruments pursuant
to Section 8.4(b),
and such other documents, agreements and instruments as it may reasonably
request in connection with the consummation of the transactions contemplated
hereby.

     

    8.4           Closing
Deliverables.

     

    (a)           Seller Closing
Deliverables.  At the Closing, Seller shall have delivered or
caused to be delivered to Buyer:

     

    
      	
            	
              (i) 

            	
              a
      duly executed counterpart of the Assignment and Assumption
      Agreement;

            


    

    
       

      
        	
              	
                (ii) 

              	
                a
      duly executed counterpart of the Assignment of
  Contracts;

              


      

      
        
           

          
            	
                  	
                    (iii)

                  	a duly executed counterpart of the Bill of
      Sale;


          

          
            
               

              
                	
                      	
                        (iv)   

                      	a duly executed counterpart of the Patent
      Assignment;


              

              
                
                   

                  
                    	
                          	
                            (v)

                          	
                            a
      duly executed counterpart of the Trademark
  Assignment;

                          


                  

                  
                    
                       

                      
                        	
                              	
                                (vi) 

                              	
                                an
      opinion from Sheppard Mullin Richter & Hampton, LLP, counsel for
      Seller, in a form reasonably acceptable to Buyer;
  and

                              


                      

                      
                        
                           

                          
                            	
                                  	
                                    (vii)

                                  	
                                    a
      duly executed Transaction Written Consent evidencing the Required
      Stockholder Vote.

                                  


                          

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

    (b)           Buyer Closing
Deliverables.  Buyer shall have delivered or caused to be
delivered to Seller:

     

    
      
        
          	
                	
                  (i)

                	payment of the Purchase Price by wire transfer
      of immediately available funds directly to the account set forth on Schedule 8.4(b)(i);


        

         

      

    

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            	
                  	
                    (ii)   

                  	evidence of the payment of the Payoff Amount
      to GE Capital;


          

          
            
               

              
                
                  
                    	
                          	
                            (iii)

                          	 a duly executed counterpart of the
      Assignment and Assumption Agreement;


                  

                  
                    
                       

                      
                        
                          
                            	
                                  	
                                    (iv)

                                  	a duly executed counterpart of the Assignment
      of Contracts;


                          

                          
                            
                               

                              
                                
                                  
                                    	
                                          	
                                            (v) 

                                          	
                                            a
      duly executed counterpart of the Bill of
Sale;

                                          


                                  

                                  
                                    
                                       

                                      
                                        
                                          
                                            	
                                                  	
                                                    (vi) 

                                                  	
                                                    a
      duly executed counterpart of the Patent
  Assignment;

                                                  


                                          

                                          
                                            
                                               

                                              
                                                
                                                  
                                                    	
                                                          	
                                                            (vii) 

                                                          	
                                                            a
      duly executed counterpart of the Trademark Assignment;
  and

                                                          


                                                  

                                                  
                                                    
                                                       

                                                      
                                                        
                                                          
                                                            	
                                                                  	
                                                                    (viii) 

                                                                  	an opinion from Goodwin Procter LLP, counsel
      for Buyer, in a form reasonably acceptable to
Seller.


                                                          

                                                           

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    ARTICLE
IX

    Termination

     

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

     

    (a)           by
mutual written agreement of Buyer and Seller;

     

    (b)           by
Notice of Termination delivered by either Party to the other Party, if
(i) the Closing shall not have occurred prior to June 30, 2009 (the “Termination Date”)
(other than due to a breach of any representation or warranty hereunder of the
Party seeking to terminate this Agreement or as a result of the failure on the
part of such Party to comply with or perform any of its covenants, agreements or
obligations under this Agreement) or (ii) there shall be in effect any
applicable Law that prohibits the Closing or if the Closing would violate any
non-appealable order;

     

    (c)           by
Notice of Termination delivered by Buyer to Seller, if any of the conditions set
forth in Section 8.1 or
Section 8.2
shall have become incapable of fulfillment on or prior to the Termination Date
and such condition or conditions shall not have been waived by
Buyer;

     

    (d)           by
Notice of Termination delivered by Seller to Buyer, if any of the conditions set
forth in Section 8.1 or
Section 8.3
shall have become incapable of fulfillment on or prior to the Termination Date
and such condition or conditions shall not have been waived by
Seller;

     

    (e)           by
Notice of Termination delivered by Buyer to Seller, if the Required Stockholder
Vote shall not have been obtained within two (2) Business Days following
execution by the Parties of this Agreement;

     

    (f)           by
Notice of Termination delivered by Seller to Buyer, if Seller is not then in
material breach of any term of this Agreement, upon a material breach of any
representation, warranty or covenant of Buyer contained in this Agreement; provided that such
breach is not capable of
being cured or has not been cured within thirty (30) days after the giving
of written notice thereof by Seller to Buyer; or

     

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    (g)           by
Notice of Termination delivered by Buyer to Seller, if Buyer is not then in
material breach of any term of this Agreement, upon a material breach of any
representation, warranty or covenant of Seller contained in this Agreement;
provided that
such breach is not capable of being cured or has not been cured within
thirty (30) days after the giving of written notice thereof by Buyer to
Seller.

     

    9.2           Procedure of
Termination.  Termination
of this Agreement by either Party shall be by delivery of a written notice to
the other Party (a “Notice of
Termination”).  A Notice of Termination shall state the
termination provision in this Agreement that such terminating Party is claiming
provides a basis for termination of this Agreement.  Termination of
this Agreement pursuant to the provisions of Section 9.1
shall be effective upon and as of the date of delivery of a Notice of
Termination as determined pursuant to Section 11.13.

     

    9.3           Termination
Fees.

     

    (a)           Notwithstanding
any provision in this Agreement to the contrary, if this Agreement is terminated
by Buyer pursuant to and in accordance with Section 9.1(e) or
Section 9.1(g),
then Seller shall pay to Buyer a fee of One Million Dollars ($1,000,000) in cash
(the “Seller
Termination Fee”) as promptly as reasonably practicable (and, in any
event, within two (2) Business Days following such termination), payable by
wire transfer of immediately available funds.

     

    (b)           Notwithstanding
anything to the contrary in this Agreement, if this Agreement is terminated by
Seller pursuant to and in accordance with Section 9.1(f),
then Buyer shall pay to a fee of One Million Dollars ($1,000,000) in cash (the
“Buyer Termination
Fee”) as promptly as reasonably practicable (and, in any event, within
two (2) Business Days following such termination), payable by wire transfer
of immediately available funds.

     

    (c)           The
Parties agree and understand that in no event shall Seller or Buyer, as the case
may be, be required to pay the Seller Termination Fee or Buyer Termination Fee
(as applicable) on more than one occasion.  Notwithstanding anything
to the contrary in this Agreement, the Parties hereby acknowledge and agree that
in the event the Seller Termination Fee becomes payable and is paid by Seller
pursuant to this Section 9.3,
then the Seller Termination Fee shall be Buyer’s sole and exclusive remedy
against Seller and its former, current and future direct or indirect equity
holders, controlling Persons, stockholders, directors, officers, employees,
agents, Affiliates, members, managers, general or limited partners or assignees
(collectively, the “Seller Parties”) for
any breach, loss or damage, including any loss or damages suffered as a result
of the failure of the transactions to be consummated, under any theory or for
any reason; and upon Seller’s payment of the Seller Termination Fee to Buyer,
the Seller Parties shall have no further liability or obligation under this
Agreement and no Person shall have any rights or claims against any of the
Seller Parties under this Agreement, whether at law or equity, in contract, in
tort or otherwise, and none of the Seller Parties shall have any further
liability or obligation relating to or arising out of this Agreement or the
transactions contemplated by this Agreement.  Notwithstanding anything
to the contrary in this Agreement, the Parties hereby acknowledge and agree that
Seller’s right to receive payment of the Buyer Termination Fee from Buyer
pursuant to this Section 9.3
shall be Seller’s sole and exclusive remedy against Buyer and its former,
current and future direct or indirect equity holders, controlling Persons,
stockholders, directors, officers, employees, agents, Affiliates, members,
managers, general or limited partners or assignees (collectively, the “Buyer Parties”) with
respect to this Agreement and the transactions contemplated hereby, including
for any breach, loss or damages hereunder, including any loss or damages
suffered as a result of the failure of the transactions to be consummated, under
any theory or for any reason; and upon Buyer’s payment of the Buyer Termination
Fee to Seller, the Buyer Parties shall have no further liability or obligation
under this Agreement and no Person shall have any rights or claims against any
of the Buyer Parties under this Agreement, whether at law or equity, in
contract, in tort or otherwise, and none of the Buyer Parties shall have any
further liability or obligation relating to or arising out of this Agreement or
the transactions contemplated by this Agreement.

     

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    (d)           Any
payment made pursuant to this Article IX shall
be net of any amounts as may be required to be deducted or withheld therefrom
under the Code or under any provision of state, local or foreign tax
Law.

     

    (e)           The
Parties acknowledge and agree that the agreements contained in this Section 9.3 are
an integral part of the transactions contemplated by this Agreement and are
included herein in order to induce the Parties to enter into this Agreement;
accordingly, if Seller or Buyer, as the case may be, fails to timely pay any
amount due pursuant to this Section 9.3,
and, in order to obtain the payment, Buyer or Seller, as the case may be,
commences a suit which results in a judgment against the other Party for the
payment set forth in this Section 9.3,
such paying Party shall pay the other Party its reasonable and documented costs
and expenses (including reasonable and documented attorneys’ fees) in connection
with such suit.

     

    9.4           Other Consequences of
Termination.  In
the event that this Agreement is terminated for any reason pursuant to Section 9.1,
(a) the Purchase Order shall be deemed to be cancelled upon such
termination; (b) Seller shall promptly refund to Buyer all amounts paid by
Buyer to Seller pursuant to the Purchase Order; and (c) Buyer shall
promptly return to Seller any Finished Inventory that has been delivered by
Seller to Buyer pursuant to the Purchase Order.

     

    ARTICLE
X

    Indemnification and
Survival

     

    10.1           Indemnification by
Seller.

     

    (a)           Seller’s
Indemnity.  Subject to the limitations and procedures set forth
in this Article X,
Seller agrees to indemnify and hold harmless Buyer and its Affiliates and their
respective officers, directors and employees (each, a “Buyer Indemnified
Party”) at all times against and in respect of all losses, damages,
Liabilities, costs and expenses (including reasonable attorneys’ fees)
(collectively, “Losses”) which any
Buyer Indemnified Party may suffer or incur to the extent arising out of,
related to or resulting from (i) any breach of any of the representations,
warranties, covenants and agreements of Seller set forth in this Agreement;
(ii) any Excluded Liability; (iii) any Permitted Encumbrance; or (iv) the
manufacture, marketing or sale of Products, or other operation of the Business
by Seller prior the Closing Date.

     

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

     

    (b)           Limitations on Seller’s
Indemnity.  Except in cases of fraud or willful misconduct,
Seller shall not be obligated to indemnify any Buyer Indemnified Party for any
Loss described in Section 10.1(a)(i)
with respect to breaches of representations and warranties until the aggregate
of all such Losses for which Seller is liable are in excess of the Threshold
Amount, and then only in respect of such excess.  Except in cases of
fraud or willful misconduct, Seller’s aggregate liability for Losses described
in Section 10.1(a)(i)
with respect to breaches of representations and warranties, together with
Seller’s aggregate liability for its indemnification, defense and settlement
obligations under the Purchase Order, shall not exceed One Million Dollars
($1,000,000) (the “Cap”).  Notwithstanding
anything contained in this Agreement to the contrary, the Threshold Amount shall
not apply with respect to any Loss arising from or related to a breach of (a)
any covenants of Seller; (b) the representations and warranties set forth in
Section 5.1 (Organization), Section 5.2(a) and (b) (Authority; Binding
Agreements), Section 5.8(a) and (b) (Title) and Section 5.9(a) and (b)(i) and
(ii) (Intellectual Property); or (c) any of the Permitted
Encumbrances.

     

    10.2           Indemnification by
Buyer.

     

    (a)           Buyer’s
Indemnity.  Subject to the limitations and procedures set forth
in this Article X, Buyer
agrees to indemnify and hold harmless Seller and Seller’s Affiliates and their
respective officers, directors and employees (each, a “Seller Indemnified
Party”) at all times against and in respect of all Losses which any
Seller Indemnified Party may suffer or incur to the extent arising out of,
related to or resulting from (i) any breach of any of the representations,
warranties, covenants and agreements of Buyer set forth in this Agreement;
(ii) any Assumed Liability; or (iii) the manufacture, marketing or
sale of Products, or other operation of the Business by Buyer from and after the
Closing Date.

     

    (b)           Limitations on Buyer’s
Indemnity.  Except in cases of fraud or willful misconduct,
Buyer shall not be obligated to indemnify any Seller Indemnified Party for any
Loss described in Section 10.2(a)(i)
with respect to breaches of representations and warranties until the aggregate
of all such Losses for which Seller is liable are in excess of the Threshold
Amount, and then only in respect of such excess.  Except in cases of
fraud or willful misconduct, Buyer’s aggregate liability for Losses described in
Section 10.2(a)(i)
with respect to breaches of representations and warranties shall not exceed the
Cap. Notwithstanding anything
contained in this Agreement to the contrary, the Threshold Amount shall not
apply with respect to any Loss arising from or related to a breach of any
covenants of Buyer or  the representations and warranties set forth in
Sections 6.1
(Organization) and 6.2(a) and (c) (Due
Authorization).

     

    (c)           Additional
Limitations.  The amount of any Loss for which indemnification
is provided under this Article X shall be net of the difference between (i) any
amounts actually recovered by the Indemnified Party under insurance policies in
effect and applicable to such Loss, and (ii) the amount (calculated on a present
value basis with a discount rate equal to the rate of interest then paid by
Buyer on its senior line of credit) of all future premium increases reasonably
likely to be charged as a result of the Indemnified Party making the insurance
claim resulting in such recovery.  No party hereto shall have any
liability for any incidental, special, exemplary, multiple, punitive or
consequential damages (including loss of profit or revenue), or any equitable
equivalent thereof or substitute therefor, suffered or incurred by any
Indemnified Party.

     

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

     

    10.3           Survival.  The
representations and warranties of the Parties contained herein shall survive
until twelve (12) months following the Closing Date at which time they
shall expire except with respect to claims previously made in writing with
respect to breaches of such representations and warranties.  Except in
cases of fraud or willful misconduct, no claim may be made against Seller under
Section 10.1,
whether for indemnification in respect thereof or otherwise, unless written
notice of such claim, in reasonable detail as to the basis for and facts
supporting such claim, is given to Seller prior to twelve (12) months
following the Closing Date.  Except in cases of fraud or willful
misconduct, no claim may be made against Buyer under Section 10.2, whether
for indemnification in respect thereof or otherwise, unless written notice of
such claim, in reasonable detail as to the basis for and facts supporting such
claim, is given to Seller prior to twelve (12) months following the Closing
Date.  The covenants of the Parties set forth herein shall survive in
perpetuity except to the extent otherwise stated herein.

     

    10.4           Exclusive
Remedy.  Except
in cases of fraud, willful misconduct or intentional misrepresentations, the
rights and remedies set forth in this Article X and
claims for specific performance of covenants shall constitute the sole and
exclusive rights and remedies of the Buyer Indemnified Parties and the Seller
Indemnified Parties with respect to this Agreement and the transactions
contemplated hereby and the Parties shall not be entitled to bring, and hereby
irrevocably waive, any other claims, rights or causes of action against the
other Party hereto, whether in equity or in Law with respect
thereto.  The rights of indemnification provided in this Article X are
solely for the benefit of the Indemnified Parties referred to therein, and such
rights may not be extended, directly or indirectly, to any other
Person.  

     

    10.5           Third Party Claim
Indemnification Procedures.

     

    (a)           Any
Indemnified Party shall give written notice as promptly as is reasonably
practicable to the Indemnifying Party of the assertion of any claim, or the
commencement of any action, suit, proceeding, claim, arbitration or
investigation, by any Person not a party hereto in respect of which indemnity
intends to be sought under this Agreement; provided that the
failure of the Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations under this Section 10.5
except to the extent (if any) that the Indemnifying Party shall have been
actually prejudiced thereby.  Following receipt of such written notice
from the Indemnified Party pursuant to this Section 10.5,
the Indemnified Party shall permit the Indemnifying Party, at the Indemnifying
Party’s election, to assume, at its own expense, the defense of any such action,
suit, proceeding, claim, arbitration or investigation with counsel selected by
the Indemnifying Party (and not reasonably objected to by the Indemnified Party)
if, but only if, the Indemnifying Party acknowledges in writing to the
Indemnified Parties that it is obligated under this Agreement to indemnify them
against all Losses they incur or have incurred in connection with such third
party claim.  The Indemnified Party shall not settle, compromise or
consent to any judgment in respect of any such action, suit, proceeding, claim,
arbitration or investigation without the prior written consent of the
Indemnifying Party (which consent shall not be unreasonably withheld, delayed or
conditioned).

     

    (b)           Following
the Indemnifying Party’s election to assume the defense of any action, suit,
proceeding, claim, arbitration or investigation pursuant to Section 10.5(a),
(i) the Indemnified Party shall deliver to the Indemnifying Party in a
timely fashion, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to such action, suit, proceeding,
claim, arbitration or investigation and (ii) the Indemnified Party shall
use its commercially reasonable efforts at the Indemnifying Party’s expense to
cooperate in the defense or prosecution thereof as reasonably requested by the
Indemnifying Party in the context of the relevant action, suit, proceeding,
claim, arbitration or investigation (including the amount and nature of damages
sought thereunder).  Such cooperation shall include the retention and
(upon the Indemnifying Party’s request) the provision to the Indemnifying Party
of records and information that are reasonably relevant to such action, suit,
proceeding, claim, arbitration or investigation, and making a reasonable number
of employees reasonably available on a mutually convenient basis, to provide
additional information and explanation of any material provided hereunder; provided, however, that the
foregoing shall be at the Indemnifying Party’s expense and shall be organized in
a manner as shall not unreasonably disrupt the normal operations of the
Indemnified Party’s business having regard to the context in which such
cooperation is requested and of the relevant action, suit, proceeding, claim,
arbitration or investigation (including the amount and nature of the damages
sought thereunder).

     

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

     

    (c)           The
Indemnifying Party shall be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which the
Indemnifying Party has not assumed the defense of a action, suit, proceeding,
claim, arbitration or investigation for which the Indemnified Party is entitled
to indemnification hereunder, except to the extent (if any) that the
Indemnifying Party shall have been actually prejudiced by the Indemnified
Party’s failure to give timely notice of such action, suit, proceeding, claim,
arbitration or investigation as required by Section 10.5(a).

     

    (d)           If
the Indemnifying Party assumes the defense of any action, suit, proceeding,
claim, arbitration or investigation pursuant to Section 10.5(a),
the Indemnified Party shall have the right (but not the duty) to participate in
such defense and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party.

     

    (e)           If
the Indemnifying Party does not elect to assume defense of any action, suit,
proceeding, claim, arbitration or investigation pursuant to Section 10.5(a),
the Indemnifying Party may nevertheless participate (but not control) and employ
its own counsel (not reasonably objected to by the Indemnified Party), at its
expense, in the defense of such action, suit, proceeding, claim, arbitration or
investigation.

     

    ARTICLE
XI

    Miscellaneous

     

    11.1           Assignment.  This
Agreement may not be assigned or otherwise transferred by either Party without
the written consent of the other Party which shall not be unreasonably withheld
or delayed.  Any purported assignment in violation of the preceding
sentence shall be void.  Notwithstanding the foregoing, Buyer may
assign this Agreement and its rights and benefits hereunder and may delegate its
duties hereunder to an Affiliate or to any Person which acquires all or
substantially all of the business of Buyer; provided, however, that Buyer
shall remain primarily liable for its obligations hereunder.

     

    11.2           Expenses.  Whether
or not the transactions contemplated hereby are consummated, and except as
otherwise specified herein, each Party shall bear its own costs and expenses in
connection with this Agreement and with respect to the transactions contemplated
by this Agreement.

     

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

     

    11.3           Severability.  Each
of the provisions contained in this Agreement shall be severable, and the
unenforceability of one shall not affect the enforceability of any others or of
the remainder of this Agreement.

     

    11.4           Entire
Agreement.  This
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by all of the Parties hereto.  This
Agreement and the Other Agreements contain the entire agreement of the Parties
hereto with respect to the transactions covered hereby, superseding all
negotiations, prior discussions and preliminary agreements made prior to the
Execution Date.

     

    11.5           Waiver.  The
failure of any Party to enforce any condition or part of this Agreement at any
time shall not be construed as a waiver of that condition or part, nor shall it
forfeit any rights to future enforcement thereof.

     

    11.6           Governing
Law.  All
question concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to its conflicts of laws
principles.

     

    11.7           Venue.  The
Parties hereby irrevocably and unconditionally consent to the exclusive
jurisdiction of the courts of (a) Boston, Massachusetts for any action,
suit, proceeding, claim, arbitration or investigation (other than appeals
therefrom) instituted by Seller and (b) Orange County, California for any
action, suit, proceeding, claim, arbitration or investigation (other than
appeals therefrom) instituted by Buyer, in each case arising out of or relating
to this Agreement or the Other Agreements or otherwise in connection with the
transactions contemplated hereby and thereby, and agree not to commence any
action, suit, proceeding, claim, arbitration or investigation (other than
appeals therefrom) related thereto except in such courts.  The Parties
further hereby irrevocably and unconditionally waive any objection to the laying
of venue of any action, suit, proceeding, claim, arbitration or investigation
(other than appeals therefrom) arising out of or relating to this Agreement or
the Other Agreements or otherwise in connection with the transactions
contemplated hereby and thereby in such courts, and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such court that
any such action, suit, proceeding, claim, arbitration or investigation brought
in any such court has been brought in an inconvenient forum.  Each
Party hereto further agrees that service of any process, summons, notice or
document by U.S. registered mail to its address set forth below shall be
effective service of process for any action, suit, proceeding, claim,
arbitration or investigation brought against it under this Agreement or the
Other Agreements in any such court.

     

    11.8           Headings.  The
headings of the sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part
hereof.

     

    11.9           Counterparts.  The
Parties may execute this Agreement in one or more counterparts, and each fully
executed counterpart shall be deemed an original.

     

    
      11.9           Parties in Interest.  Nothing
in this Agreement, express or implied, is intended to confer on any Person other
than the Parties and their respective successors and assigns any rights or
remedies under or by virtue of this Agreement.

    

     

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

     

    
      11.11         Disclaimer
of Warranties.  EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT AND THE OTHER AGREEMENTS,
SELLER IS SELLING THE ACQUIRED
ASSETS AND THE BUSINESS AND ASSIGNING THE ASSUMED LIABILITIES ON AN “AS IS,
WHERE IS” BASIS, AND EACH PARTY DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS
AND GUARANTIES, WHETHER EXPRESS OR IMPLIED.  NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER.

    

     

    11.12         Schedules.  The
Schedules and Buyer Schedules referred to herein shall be construed with and as
an integral part of this Agreement to the same extent as if they were set forth
verbatim herein.  Disclosure of any fact or item in any Schedule or
Buyer Schedule hereto referenced by a particular Section in this Agreement shall
be deemed to have been disclosed with respect to every other Section in this
Agreement; provided that it is
reasonably apparent that such fact or item relates to such other
Section.

     

    11.13         Notices.  All
communications, notices and consents provided for herein shall be in writing and
be given in person or by means of telex, facsimile or other means of wire
transmission (with request for assurance of receipt in a manner typical with
respect to communications of that type), by overnight courier or by mail, and
shall become effective: (a) on delivery if given in person; (b) on the
date of transmission if sent by telex, facsimile or other means of wire
transmission; (c) one (1) Business Day after delivery to the overnight
service; or (d) four (4) Business Days after being deposited in the
United States mails, with proper postage and documentation, for first-class
registered or certified mail, prepaid.

     

    Notices
shall be addressed as follows:

     

    
      	
              If
      to Buyer, to:

            
	
               

            	
              ZOLL
      Circulation, Inc.

              249
      Humboldt Court

              Sunnyvale,
      CA 94089

              Attention:
      General Manager

            


    

    
 

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

     

    
      	
              with
      copies (which shall not constitute notice) to:

            
	 
      	
              ZOLL
      Medical Corporation

              269
      Mill Road

              Chelmsford,
      MA, 01824

              Attention:  General
      Counsel

               

              and

               

              Goodwin
      Procter LLP

              Exchange
      Place

              53
      State Street

              Boston,
      MA  02109

              Facsimile:  (617)
      523-1231

              Attention:
      Raymond C. Zemlin, Esq.

            


    

    


    
      	
              If
      to Seller, to:

            
	 
      	
              Alsius
      Corporation

              15770
      Laguna Canyon Road, Suite 150

              Irvine,
      CA 92618

              Attention:
      Chief Executive Officer and Chief Financial Officer

               

              and

               

              Alsius
      Medical Corporation

              15770
      Laguna Canyon Road, Suite 150

              Irvine,
      CA 92618

              Attention:
      Chief Executive Officer and Chief Financial
  Officer

            


    

    


    
      	
              with
      copies (which shall not constitute notice) to:

            
	 
      	
              Sheppard
      Mullin Richter & Hampton, LLP

              650
      Town Center Drive, Fourth Floor

              Costa
      Mesa, CA 92626

              Facsimile:
      (714) 428-5984

              Attention:
      Ethan D. Feffer, Esq.

            


    

    


    provided, however, that if
either Party shall have designated a different address by notice to the other
Party, then to the last address so designated.

     

    [Signature
Page Follows]

     

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their respective duly authorized officers as of the date first above
written.

     

    
      	 
      	
              “BUYER”

               

              ZOLL
      CIRCULATION, INC.

               

               

              By:  /s/ James
      Palazzolo

              Name:
      James
      Palazzolo

              Title:
      General
      Manager

            
	 
      	 
      
	 
      	
              “SELLER”

               

              ALSIUS
      CORPORATION

               

               

              By:  /s/ William
      Worthen

              Name:
      William
      Worthen

              Title:
      Chief Executive
      Officer

            
	 
      	 
      
	 
      	
              ALSIUS
      MEDICAL CORPORATION

               

               

              By:  /s/ William
      Worthen

              Name:
      William
      Worthen

              Title:
      Chief Executive
      Officer

            


    

    


     

     

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