**EXHIBIT 2.3**

| **TABLE OF CONTENTS**                                                  |
|------------------------------------------------------------------------|
| ** **                                                             |  |  |
|                                                                        |  | **Page** |
| Article 1  DEFINITIONS                                            | 1 |
| Article 2  PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES | 17 |
| 2.1                                                                    | Transferred  Assets; Transferred IPR | 17 |
| 2.2                                                                    | Assumed  Liabilities | 17 |
| 2.3                                                                    | Conveyances | 17 |
| 2.4                                                                    | Net  Working Capital Adjustment | 18 |
| 2.5                                                                    | No  Withholding | 18 |
| Article 3  CLOSING                                                |  | 19 |
| 3.1                                                                    | The  Closing | 19 |
| 3.2                                                                    | Deliveries  by Seller | 19 |
| 3.3                                                                    | Deliveries  by Buyer | 20 |
| Article 4  INTELLECTUAL PROPERTY LICENSES                         | 20 |
| 4.1                                                                    | Licensed  IPR | 20 |
| 4.2                                                                    | License‐Back  Patents | 21 |
| 4.3                                                                    | Limitations | 21 |
| 4.4                                                                    | License-Back  Other IPR | 21 |
| 4.5                                                                    | Reservation  of Rights | 21 |
| 4.6                                                                    | Trade  Secret Protection and Use | 21 |
| 4.7                                                                    | Transfer | 21 |
| 4.8                                                                    | Products  Outside of Licensed Field and License-Back Field | 22 |
| 4.9                                                                    | Bulking  Agent and/or Toxin | 22 |
| 4.1                                                                    | Exclusive  Patent | 22 |
| 4.11                                                                   | License  to Transition Marks | 22 |
| Article 5  REPRESENTATIONS AND WARRANTIES OF SELLER               | 23 |
| 5.1                                                                    | Organization  and Authority | 23 |
| 5.2                                                                    | Transferred  Subsidiaries; Capitalization | 23 |
| 5.3                                                                    | No  Violation | 24 |
| 5.4                                                                    | Compliance  with Laws; Business Permits | 24 |
| 5.5                                                                    | No  Broker | 24 |
| 5.6                                                                    | Absence  of Changes | 24 |
| 5.7                                                                    | Contracts | 26 |
| 5.8                                                                    | Taxes | 26 |
| 5.9                                                                    | Transferred  Tangible Assets | 27 |
| 5.1                                                                    | Transferred  Contracts; Subsidiary Contracts | 27 |
| 5.11                                                                   | Intellectual  Property | 27 |
| 5.12                                                                   | Financial  Statements and Reports | 28 |
| 5.13                                                                   | Benefit  Plan Compliance | 29 |
| 5.14                                                                   | Labor  Matters | 30 |
| 5.15                                                                   | Properties | 31 |
| 5.16                                                                   | Environmental  Matters | 31 |
| 5.17                                                                   | Transferred  Inventory | 32 |
| 5.18                                                                   | Accounts  Receivable | 32 |
| 5.19                                                                   | Litigation | 32 |
| 5.2                                                                    | Products  Liability | 32 |
| 5.21                                                                   | Customers  and Suppliers | 33 |

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**TABLE OF CONTENTS**

**(Continued)**
**Page**
5.22
Compliance  With Health Care Laws33
5.23
FDA  and Global Regulation Compliance33
5.24
Restrictions  on Business Activities35
5.25
Sufficiency35
5.26
Exclusive  Warranties35
5.27
Insurance35
5.28
Compliance  with Conduct of Business Covenant35Article 6  REPRESENTATIONS AND WARRANTIES OF BUYER35
6.1
Organization  of Buyer35
6.2
Authorization36
6.3
No  Violation36
6.4
Government  Consents36
6.5
Purchase  for Investment; Accredited Investor36
6.6
No  Broker36
6.7
Financing37
6.8
Litigation37Article 7  EMPLOYEE TRANSFERS AND BENEFITS37
7.1
Voluntary  Transfer Employees37
7.2
Automatic  Transfer38
7.3
Compensation  and Benefits39
7.4
Information  and Consultation39
7.5
Severance39
7.6
Employment‐Related  Assumed Liabilities40
7.7
Employment-Related  Excluded Liabilities40
7.8
Timing  of Claims Incurred40
7.9
Retention  Payment40Article 8  ADDITIONAL COVENANTS41
8.1
Contracts41
8.2
Conduct  of the Business41
8.3
Access  to Information43
8.4
Books  and Records43
8.5
Necessary  Efforts; HSR Filings43
8.6
Taxes  and Costs Relating to the Porges Asset Sale44
8.7
Tax  Matters45
8.8
Allocation  of Purchase Price46
8.9
Return  of Excluded Assets46
8.1
Brokers47
8.11
Further  Assurances47
8.12
Mail  Handling47
8.13
Non‐Solicitation47
8.14
Pre-Closing  Integration Planning48
8.15
Confidentiality48
8.16
Non-Competition49
8.17
Real  Estate Matters49
8.18
Licensed  Patent Schedule51
8.19
Name  Change51 
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**TABLE OF CONTENTS**

**(Continued)**
**Page**
8.2
Business  Permits52
8.21
Environmental  Insurance52
8.22
Transition  Services Agreement52
8.23
Product  Liability52
8.24
Supply  of SMEC Products52
8.25
Escrow  Agreement54
8.26
Porges  Asset Sale54
8.27
ABISS54
8.28
Intercompany  Contracts and Balances54Article 9  CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE55
9.1
Seller  Closing Deliverables55
9.2
Performance55
9.3
Regulatory  Approvals55
9.4
No  Injunction or Restraints; Illegality55
9.5
Officer's  Certificate55
9.6
Representations  and Warranties55
9.7
No  Seller Material Adverse Effect56
9.8
Transition  Services Agreement56Article 10  CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS TO CLOSE56
10.1
Buyer  Closing Deliverables56
10.2
Performance56
10.3
Regulatory  Approvals56
10.4
No  Injunction or Restraints; Illegality57
10.5
Officer's  Certificate57
10.6
Representations  and Warranties57
10.7
Sufficient  Funds57
10.8
No  Buyer Material Adverse Effect57
10.9
UK OFT Undertakings57Article 11  INDEMNITY58
11.1
Survival58
11.2
Buyer  Indemnification58
11.3
Seller  Indemnification61
11.4
Procedures62
11.5
Limitation  on Recovery62
11.6
Duty  to Mitigate62
11.7
Escrow  Fund63
11.8
Indemnity  is the Exclusive Remedy63
11.9
Assignment  of Claims63
11.1
No  Set‐Off63Article 12  TERMINATION63
12.1
Term63
12.2
Termination63
12.3
Notice  of Termination64
12.4
Effect  of Termination64
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**TABLE OF CONTENTS**

**(Continued)**
**Page**Article 13  GENERAL PROVISIONS65
13.1
Notices65
13.2
Currency66
13.3
Sections  and Headings66
13.4
Rules  of Construction66
13.5
Construction67
13.6
Entire  Agreement67
13.7
Governing  Law; Jurisdiction and Venue; Arbitration of Indemnification Disputes;  Injunctive Relief67
13.8
Waiver  of Jury Trial68
13.9
Public  Announcement68
13.1
Expenses68
13.11
Exclusion  of Certain Damages68
13.12
Severability68
13.13
Successors  and Assigns69
13.14
Amendment  and Waivers69
13.15
Counterparts69
 

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**INDEX OF EXHIBITS**

 

 

**Exhibit**

**Description**

A

Form of Assignment and Assumption Agreement

B

Form of Bill of Sale

C

Transition Services Agreement

D

Balance Sheet and Net Working Capital  Spreadsheet

E-1

Form of Patent Assignment

E-2

Form of Trademark Assignment

F

Preliminary Purchase Price Allocation

**INDEX OF SCHEDULES**

 

 

**Schedule**
**Description**
Schedule 1.6

Assumed Liabilities

Schedule 1.59

Excluded Assets

Schedule 1.60

Excluded Liabilities

Schedule 1.79

Infrastructure Assets

Schedule 1.84(a)

Individuals (Knowledge)

Schedule 1.84(b)

Individuals (Knowledge)

Schedule 1.94

Licensed Patents

Schedule 1.104

Net Working Capital

Schedule 1.115

Permitted Encumbrances - U.S. Real Property

Schedule 1.125(a)

Products (Existing)

Schedule 1.125(b)

Products (Under Development)

Schedule 1.161

Subsidiary Real Property

Schedule 1.166

Third Party Licenses

Schedule 1.173

Transferred Contracts

Schedule 1.174

Transferred Copyrights

Schedule 1.178

Transferred Internet Properties

Schedule 1.181(a)

Transferred Marks

Schedule 1.181(b)

Non-Transferred Marks

Schedule 1.182

Transferred Patents

Schedule 1.183

Transferred Real Property

Schedule 1.184

Transferred Subsidiaries

Schedule 1.186

Transferred Tangible Assets

Schedule 3.2(g)

Foreign Conveyance Jurisdictions

Schedule 3.2(m)

Released Encumbrances

Schedule 7.1(a)

Employees

Schedule 8.2(a)

Exceptions to Conducting Business in Ordinary  Course

Schedule 8.2(b)

Exceptions to Taking of Prohibited Actions

Schedule 8.17(b)

Summary of Space-Sharing Terms -301 Mentor Drive

Schedule 8.21

Environmental Insurance

Schedule 9.3

Regulatory Approvals

Schedule 11.3(a)

Seller Indemnification Matters

 

-v-
THIS PURCHASE AGREEMENT (this"**Agreement**"), is entered into and made as of May 17, 2006, by andbetween Mentor Corporation, a Minnesota corporation ("**Seller**"), andColoplast A/S, a Danish corporation ("**Buyer**") (Buyer and Seller mayhereinafter be referred to individually as a "**Party**" and collectively asthe "**Parties**").

WITNESSETH:

WHEREAS, Seller is engaged, directly and throughSubsidiaries, in the Business (as defined below); and

WHEREAS, upon and subject tothe terms and conditions set forth herein, Seller desires to sell to Buyer andBuyer desires to purchase from Seller, certain of the assets of Seller,including the Equity Interests (as defined below) of the TransferredSubsidiaries (as defined below), related to the Business (as defined below),and Seller desires to transfer to Buyer and Buyer desires to assume from Sellerand the Transferred Subsidiaries, certain of the liabilities related to theBusiness; 

WHEREAS, it is the intention and desire of Seller, bythis Agreement, to divest itself of, and transfer to Buyer, or otherwiseprovide Buyer the benefit of, the Business and all rights thereof; and

WHEREAS, accordingly, Sellerwill, by the terms of this Agreement transfer, license or provide by means ofservices agreements, to Buyer Seller's tangible and intangible assets andrights used by Seller in the conduct of the Business and necessary for Buyer toconduct the Business following the Closing (as defined below); and

WHEREAS, concurrently withthe execution hereof, Seller and Buyer are entering into a Transition ServicesAgreement (as defined below) that provides for integration planning andtransition services with respect to the conveyance of the Business from Sellerto Buyer as contemplated by the terms hereof. 

NOW, THEREFORE, inconsideration of the foregoing premises and the mutual promises herein made,and in consideration of the covenants, representations, warranties, conditionsand agreements herein contained, Buyer and Seller hereby agree as follows:

**Article 1DEFINITIONS**

(i)            As used inthis Agreement, the following terms shall have the meanings specified orreferred to in this Article 1. 

1.1               "**AAA**" has the meaning setforth in Section 13.7(b).

1.2               "**Acquired Entity**" has themeaning set forth in Section 8.16.

1.3               "**Affiliate**" means anyentity which controls, is controlled by, or is under common control with,Seller or Buyer, as the case may be.  An entity shall be deemed to be in controlof another entity only if, and for so long as, it owns or controls more than50% of the voting power in the election of directors (or, in the case of anentity that is not a corporation, for the election of the correspondingmanaging authority) of such other entity.

1.4               "**Agreement**" has the meaningset forth in the first paragraph of this Agreement together with all schedulesand exhibits attached hereto.

1.5               "**Assigned Leases**" has themeaning set forth in Section 5.15(a).

1.6               "**Assumed Liabilities**" meansthe Liabilities of Seller and its Subsidiaries identified on Schedule 1.6.

1.7               "**Assumption Agreement**"means an Assignment and Assumption Agreement in substantially the form set forthin Exhibit A (subject to substitution in certain cases by theConveyance Documents pursuant to Section 2.3). 

1

1.8               "**Automatic Transfer Employees**"means those Employees of Transferred Subsidiaries whose Contracts of employmentautomatically transfer to Buyer (or a Subsidiary thereof) in accordance withapplicable Laws in connection with the transactions contemplated by thisAgreement.

1.9               "**Bills of Sale**" means Billsof Sale in substantially the form set forth in Exhibit B (subjectto substitution in certain cases by the Conveyance Documents pursuant to Section 2.3).

1.10           "**Business**" means thesurgical urology and consumer and clinical healthcare operating segments ofSeller, whether conducted by Seller or its Subsidiaries, and consisting of thefollowing diversified product portfolio of surgical and non-surgical products,that provide solutions for a broad range of urological problems:

(a)           thecatheter products and operations, selling the following products for themanagement of bladder control and urinary retention: (i) the Self-Cath®brand line of intermittent catheters both with and without the Self-CathHydroGelTM, (ii) the Freedom® brand line of latex and latex free maleexternal catheters, and (iii) catheter accessories, including leg bags,deodorizers and moisturizers;

(b)           thedisposable urology products and operations, selling the following products forboth hospital and outpatient settings for the management of urinary tractobstruction, urinary incontinence, or urinary retention: (i) urethralstents and catheters, dilators and guidewires, (ii) stone extractors,(iii) prostatic catheters and prostatic stents, (iv) urethral stents,(v) bladder drainage catheters, (vi) Foley catheters,(vii) bladder injection needles (currently under development), and(viii) general surgical devices including Elephants/Easivac;

(c)           clinicalor consumer ostomy care products;

(d)           thewomen's health products and operations, selling the following surgicallyimplantable products for the treatment of incontinence and pelvic organprolapse: (i) synthetic slings for the surgical treatment of stressurinary incontinence under the brand ArisTM, (ii) tissue-based slings andgrafts for the surgical treatment of pelvic organ prolapse under the brandsAxisTM and Suspend®, (iii) pelvic floor synthetic mesh systems for thetreatment of cystocele and rectocele pelvic organ prolapse, (iv) minimallyinvasive office-based endometrial ablation product called Selene® for thetreatment of excessive menstrual bleeding, and (v) the soon to be releasedNovaSilkTM synthetic mesh for treatment of pelvic organ prolapse;

(e)           themen's health products and operations, selling the following surgicallyimplanted penile implants for the treatment of erectile dysfunction:(i) the Titan® three-piece inflatable penile implant, (ii) theGenesisTM one-piece malleable penile implant, (iii) One-Touch Pump developmentproject to enhance the Titan, (iv) Excel® two-piece implant product,development efforts and operations, and (v) testicular implants; and

(f)            thebrachytherapy products and operations, consisting of the following radioisotopeproducts and loading products, supplies and systems  for the treatment ofprostate cancer: (i) the Iodine-I-125 radio isotope brachytherapy seed,(ii) the Palladium-PD-103 radio isotope brachytherapy seed,(iii) Isoloader® all-in-one workstation automated needle loading, seedassay and reporting, and (iv) IsoStrand® automated stranding device. 

1.11           "**Business Competitor**" meansthat part of any Person engaged, directly or indirectly, in a CompetingBusiness.

1.12           "**Business Day**" means a day,other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.

1.13           "**Business Permits**" has themeaning set forth in Section 5.4.

1.14           "**Buyer**" has the meaning setforth in the first paragraph of this Agreement.

1.15           "**Buyer Benefits Plans**"means the Employee Benefits Plans of Buyer (or a Subsidiary thereof), asamended from time to time, under which some or all of the Employees will beeligible to participate following the Closing. 

2

1.16           "**Buyer Indemnified Parties**"has the meaning set forth in Section 11.3(a). 

1.17           "**Buyer Employment Liabilities**"has the meaning set forth in Section 7.6.

1.18           "**Buyer Material Adverse Effect**"means any change that is materially adverse to the net assets or financialcondition of Buyer and its Subsidiaries taken as a whole or to the ability ofBuyer to consummate the transactions contemplated hereby or any agreementsdelivered or entered into in connection herewith.  For the avoidance of doubt,"Buyer Material Adverse Effect" does not include any requirement by Buyer todivest, license, hold separate (through the establishment of a trust orotherwise) or otherwise dispose, or agree to dispose, of assets as, or if, requiredto avoid or overcome the objections of the UK Competition Authorities to thetransactions contemplated by this Agreement or to comply with the UK OFTUndertakings.

1.19           "**Buyer Subsidiaries**" hasthe meaning set forth in Section 2.3.

1.20           "**Cause**" means (a) aTransferred Employee's breach of any trade secret or any confidentialinformation agreement with Buyer (or a Subsidiary thereof), or written policyof Buyer or a Subsidiary thereof, (b) willful misconduct by a TransferredEmployee, which is determined in good faith by Buyer to be injurious to thebusiness of Buyer, (c) the conviction of, or entry of a guilty plea by, aTransferred Employee for the commitment of, a crime of moral turpitude(d) substance abuse including alcohol, (e) repeated and documentedneglect of duty, (f) taking an action for the purpose of harming the Buyeror its business, (g) noncompliance with applicable Law in a manner that isinjurious to the business of Buyer, (h) fraud or intentional misrepresentation,(i) continual, significant absenteeism, or (j) in any pertinentjurisdiction outside the United States, any action giving grounds for dismissalunder applicable Laws, as applied to any Employee of a Transferred Subsidiary. 

1.21           "**Change of Control**" means,with respect to a Party, a transaction or series of related transactions thatwould directly or indirectly: (a) result in or have the effect of a thirdPerson obtaining legal or beneficial ownership of more than 50% of the votingshares (or other voting interests) of such Party (even if such Party is thesurviving entity, such as in the case of a reverse triangular merger); or(b) result in the sale, transfer, assignment, exclusive license or otherdisposition of all or substantially all of the Party's assets; other than, inthe case of (a), a transaction pursuant to which the shareholders of such Partyimmediately prior to the relevant transaction continue to beneficially own atleast 50% of the voting shares (or other voting interests) of such Party or itsdirect or indirect parent entity immediately following such transaction.

1.22           "**Closing**" has the meaningset forth in Section 3.1.

1.23           "**Closing Date**" has themeaning set forth in Section 3.1.

1.24           "**Closing Date Balance Sheet**"has the meaning set forth in Section 2.4(a).

1.25           "**Closing Date Net WorkingCapital Statement**" has the meaning set forth in Section 2.4(a).

1.26           "**Closing Statements**" hasthe meaning set forth in Section 2.4(a).

1.27           "**Code**" means the InternalRevenue Code of 1986, as amended.

1.28           "**Competing Business**" means(1) the developing, manufacturing, marketing, selling, importing ordistributing any or all of the following products: (a) surgicallyimplantable substances, prostheses or other devices for the treatment of maleimpotence or erectile dysfunction; (b) substances, prostheses or otherdevices to replace or simulate the testicle; (c) clinical or consumerhealthcare products for the management of urinary retention or incontinence,including external or internal catheters and adult incontinence diapers (butnot baby diapers); (d) clinical or consumer ostomy care products;(e) surgically implantable (i) substances, (ii) prostheses or(iii) other devices, for the treatment of kidney or ureter stones, kidneyor urethral obstructions, urinary retention or incontinence, or pelvic organprolapse; (f) devices or methods to instill substances or devices in theuterus for the purpose of treating excessive endometrial bleeding; and(g) brachytherapy products, devices or substances for use or applicationin the Licensed Field, and/or (2) the wholesale or retail service ofproviding any or all of the above products to consumers or healthcareproviders.  Notwithstanding the foregoing, however, a "Competing Business"shall not include: (1) thedeveloping, manufacturing, marketing, selling, importing or distributing of(A) any oral pharmaceuticals or (B) any product or treatmentsinvolving dermal fillers or other bulking agents or toxins, including botulinumtoxins, for any indication or application, including any urologic indication orapplication; or (2) any business(es) acquired (and thereafter operated) bySeller or its Affiliates for so long as such business(es) generate(s) lessthan $5,000,000 in aggregate annual revenues from any Competing Business.

3

1.29           "**Confidentiality Agreement**"means that certain agreement between Citigroup Global Markets Inc., on behalfof Seller, and Buyer dated October 27, 2005.  

1.30           "**Consensual Transfers**" hasthe meaning set forth in Section 5.10(a). 

1.31           "**Consent**" has the meaningset forth in Section 8.5(a).

1.32           "**Constructive Termination**"shall mean only a resignation of an Employee's employment within forty-five(45) days after the occurrence of any of the following events: (i) a materialreduction in the Employee's responsibilities, provided that a change of titleshall not constitute such a material reduction; (ii) a reduction in theEmployee's base salary, other than a one-time reduction that applies tosubstantially all other employees of Buyer; or (iii) a relocation of theEmployee's principal office to a location more than fifty (50) miles from thelocation of the Employee's principal office prior to such relocation in anycase when the terms of employment made to the Employee by Buyer did notindicate that the Eligible Employee would be relocated to a principal officeoutside such fifty (50) mile radius; and provided in all the above cases theBuyer has failed to cure the facts and circumstances giving rise to theConstructive Termination within fifteen (15) days after receipt of notice ofsuch resignation.

1.33           "**Contracts**" means allcontracts, binding agreements, options, leases, licenses, sales, bindingcommitments and other similar instruments, whether oral or written.

1.34           "**Conveyance Documents**" hasthe meaning set forth in Section 2.3.

1.35           "**Copyrights**" has themeaning set forth in Section 1.81.

1.36           "**Covenant Breach**" meanswith respect to a Party, a breach of, nonfulfillment or failure to comply witha covenant or agreement made or to be performed pursuant to this Agreement orany other Operative Agreement by such Party or a Subsidiary thereof.

1.37           "**CPA Firm**" has the meaningset forth in Section 2.4(c).

1.38           "**Disclosure Letter**" has themeaning set forth in the introduction to Article 5.

1.39           "**DOJ**" has the meaning setforth in Section 8.5(c).

1.40           "**Downward Adjustment Amount**"has the meaning set forth in Section 2.4(d).

1.41           "**Effect**" has the meaningset forth in Section 1.151.

1.42           "**Eligible Employee**" has themeaning set forth in Section 7.9.

1.43           "**Employee Benefits Plan**"means, and whether written or oral: (a) any plan, fund, agreement orprogram which provides health, medical, surgical, hospital, vision or dentalcare or other welfare benefits, or benefits in the event of sickness, accidentor disability, or death benefits, apprenticeship or other training programs, orday care centers, scholarship funds, or prepaid legal services; (b) anyplan, fund, agreement or program which provides retirement income to Employeesor results in a deferral of income by Employees for periods extending to thetermination of covered employment or beyond; (c) any plan, fund,agreement, practice or program which provides severance, unemployment, vacationor fringe benefits (including dependent and health care accounts); (d) anyincentive compensation plan, deferred compensation plan, stock option or stock‐basedincentive or compensation plan, or stock purchase plan; (e) any other"employee pension benefit plan" (as defined in Section 3(2) of ERISA), anyother "employee welfare benefit plan" (as defined in Section 3(1) ofERISA); and (f) any other written or oral plan, agreement or arrangementinvolving direct or indirect compensation including insurance coverage, severancebenefits, disability benefits, fringe benefits, pension or retirement plans,profit sharing, deferred compensation, bonuses (including any sale bonuses),stock options, stock purchase, phantom stock, stock appreciation or other formsof incentive compensation or post‐retirement compensation, as well as anychange in control agreements, managing director agreements and other retentionarrangements.

4

1.44           "**Employees**" means thoseindividuals who are employed by (a) a Transferred Subsidiary, or(b) Seller or a Subsidiary thereof and who are primarily engaged in ordedicated to the Business and, in both cases (a) and (b) to be listed on Schedule 7.1(a)(as may be updated by Seller as of or prior to the Closing, subject to theconsent of Buyer (such consent not to be unreasonably withheld, delayed orconditioned), to reflect as of the Closing Date those Employees who areprimarily engaged in or dedicated to the Business).

1.45           "**Encumbrance**" means anylien, claim, charge, license, security interest, mortgage, pledge, easement,conditional sale or other title retention agreement, defect in title, covenantor other restrictions of any kind, other than a Permitted Encumbrance.

1.46           "**End Date**" means July 31,2006 (or such later date as may be mutually agreed to by the Parties); *provided,**however*, that if on or prior to July 31, 2006 (or such later date),Buyer has notified Seller that a Covenant Breach and/or a Warranty Breach hasoccurred with respect to Seller, then the End Date shall be automaticallyextended for such number of days as is necessary to provide Seller the full60-day period to cure such breach from the date of notice pursuant to Section 12.2(c).

1.47           "**Enforceability Exceptions**"has the meaning contained in Section 5.1(c).

1.48           "**Environmental Claim**" meansany actual or threatened complaint, judgment, demand, legal action,administrative proceeding, lien, order, directive, claim, citation orassessment made, presented, sought or alleged by any Person and that(i) arises out of events, acts or conditions existing on or prior to theClosing, (ii) relates to the Business or the Transferred Assets or theuse, ownership or operation thereof, and (iii) arises under anyEnvironmental Law.  Environmental Claims include any and all(x) enforcement, clean-up, Response Actions or other governmentalregulatory actions initiated, completed, pending or threatened, (y) claimsmade, threatened or prosecuted by any third party, and (z) proceedings forthe recovery of any damages, indemnification, contribution, cost recovery,compensation, Losses or injury, including personal injury.

1.49           "**Environmental Condition**"means any Hazardous Substance that is present on or prior to the Closing in,under, on or about any real property used for the Business or otherwisecomprising any of the Transferred Real Property and that (i) requires anyResponse Action pursuant to any Environmental Law, or (ii) constitutes anendangerment of health, safety, property or the environment pursuant to anyEnvironmental Law, including the presence or Release, or threatened Release, ofany Hazardous Substances into, on or under the air, soil, surface water,groundwater or other media.

1.50           "**Environmental Laws**" meansany and all Laws anywhere in the world relating to worker health, safety,exposure of any individual to a Hazardous Substance or pollution or protectionof the environment, including those relating to emissions, discharges, spillsor other releases or threatened releases into or impacting the environment ornatural resources (including ambient air, surface water, groundwater or land),or otherwise relating to the manufacture, processing, distribution, use,treatment, recycling, storage, disposal, transport, sale, offer for sale,distribution or handling of Hazardous Substances, including the ComprehensiveEnvironmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 etseq. ("**CERCLA**"), the Resource Conservation and Recovery Act, 42 U.S.C.§§ 6901 et seq., and the Occupational Safety and Health Act, 29 U.S.C. §§ 651et seq., any amendments or successor statutes to any of the foregoing, and therules, regulation, permits orders and decrees implementing the same and allanalogous state and local laws, rules regulations, permits, orders anddecrees.  

1.51           "**Environmental Permits**"means those Business Permits required to be held pursuant to EnvironmentalLaws.

1.52           "**Equity Interest**" meanscapital stock, membership interests, options, warrants, stock appreciation rights,or rights to subscribe for, calls or other instruments exercisable for, orconvertible into, the capital stock, membership interests or similar equityinterests of any Person.

1.53           "**ERISA**" means the EmployeeRetirement Income Security Act of 1974, as amended, and the regulationsthereunder.

1.54           "**ERISA Affiliate**" means anyemployer that is, or at any time for which any relevant statute of limitationsremains open, was, together with Seller, treated as a "single employer" undersection 414(b), section 414(c) or section 414(m) of the Code.

5

1.55           "**Escrow Agent**" means NordeaBank Finland plc.

1.56           "**Escrow Agreement**" has themeaning set forth in Section 8.25.

1.57           **"Escrow Amount"** means an amount equal to $10,000,000.

1.58           **"Escrow Fund**" has the meaning set forth in Section 11.7.

1.59           "**Excluded Assets**" means theassets of Seller and its Subsidiaries and Affiliates that are not TransferredAssets, including those assets identified on Schedule 1.59.

1.60           "**ExcludedLiabilities**" means any and all Liabilities of Seller and its Subsidiariesand Affiliates other than the Assumed Liabilities, including those Liabilitiesidentified on Schedule 1.60.

1.61           "**ExclusivityAgreement**" means that certain letter agreement between Seller and Buyerdated March 27, 2006, relating to the transactions contemplated hereby.

1.62           "**ExistingSupply Agreement**" means that certain Agreement between Seller, SSL InternationalPlc and Buyer dated September 29, 2001, (novation to Distribution Agreementbetween Seller and SSL International Plc dated September 1, 2001).

1.63           "**Expenses**" means any andall reasonable expenses actually incurred in connection with investigating, defendingor asserting any claim, action, suit or proceeding incident to any matterexpressly indemnified against hereunder (including court filing fees, courtcosts, arbitration fees or costs, witness fees, and statutory or otherreasonable and actual fees and disbursements of legal counsel, investigators,expert witnesses, consultants, accountants and other professionals).

1.64           "**FDA**" has the meaning setforth in Section 5.23(a).

1.65           "**Final Balance Sheet**" hasthe meaning set forth in Section 2.4(c).

1.66           "**Final Net Working CapitalStatement**" has the meaning set forth in Section 2.4(c).

1.67           "**Financial Statements**" hasthe meaning set forth in Section 5.12.

1.68           "**Foreign Benefit Plans**" hasthe meaning set forth in Section 5.13(b)(i).

1.69           "**FTC**" has the meaning setforth in Section 8.5(c).

1.70           "**GAAP**" means GenerallyAccepted Accounting Principles as established and understood under accountingstandards in the United States of America.

1.71           "**Governmental Actions**"means any authorizations, consents, approvals, waivers, exceptions, variances,franchises, permissions, permits, and licenses of, and filings, notificationsor  declarations with, any Governmental Authority worldwide, including theUnited States, the European Union, Canada, Australia and Japan.

1.72           "**Governmental Authority**"means any national, supranational, local or foreign court, governmental oradministrative agency or commission or other governmental agency, authority,instrumentality, notified body, competent authority, third party governmentaldesignate or regulatory body having appropriate jurisdiction worldwide.

1.73           "**Hazardous Substances**"means any material, substance, chemical or emission designated by anyGovernmental Authority as "toxic", "hazardous", "extremely hazardous", a"pollutant" or "contaminant" or words of similar import pursuant toEnvironmental Laws, including petroleum, waste or asbestos.

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1.71           "**Governmental Actions**"means any authorizations, consents, approvals, waivers, exceptions, variances,franchises, permissions, permits, and licenses of, and filings, notificationsor  declarations with, any Governmental Authority worldwide, including theUnited States, the European Union, Canada, Australia and Japan.

1.72           "**Governmental Authority**"means any national, supranational, local or foreign court, governmental oradministrative agency or commission or other governmental agency, authority,instrumentality, notified body, competent authority, third party governmentaldesignate or regulatory body having appropriate jurisdiction worldwide.

1.73           "**Hazardous Substances**"means any material, substance, chemical or emission designated by anyGovernmental Authority as "toxic", "hazardous", "extremely hazardous", a"pollutant" or "contaminant" or words of similar import pursuant toEnvironmental Laws, including petroleum, waste or asbestos.

1.74           "**Health Care Laws**" has themeaning set forth in Section 5.22(c).

1.75           "**HSR**" means the Hart ScottRodino Antitrust Improvements Act of 1976, as amended.

1.76           "**Indemnified Party**" has themeaning set forth in Section 11.4.

1.77           "**Indemnifying Party**" hasthe meaning set forth in Section 11.4.

1.78           "**Industry‐Wide Plan**"means any scheme, plan, fund or arrangement, which provides Retirement Benefitsto or in respect of Automatic Transfer Employees in which employers mayparticipate even if they are not within the same corporate group as the otherparticipating employers.

1.79           "**Infrastructure Assets**"means all assets and Technology that are used in, or are a part of, the generaloperation of Seller's (including its Subsidiaries) business and not exclusivelyrelated to the Business, including network or telecommunications software andequipment, accounting software, IT systems, desktop computer software, databasesoftware, and general software development or control systems, tools orenvironments and including those assets identified on Schedule 1.79. Notwithstanding the foregoing, "Infrastructure Assets" exclude those items thatare specifically listed in Schedule 1.186 as a Transferred TangibleAsset.

1.80           "**Intellectual Property**" or"**IP**" means Technology and Intellectual Property Rights in and toTechnology.

1.81           "**Intellectual Property Rights**"or "**IPR**" means all rights associated with any of the following:(a) United States and foreign patents and applications  therefor, andincluding any patent or application that is a provisional application, reissue,re-examination, renewal, extension or continuation of a patent or patentapplication ("**Patents**"); (b) know-how, trade secret rights and allother rights in or to confidential business or technical information ("**TradeSecrets**"); (c) copyrights, copyright registrations and applicationstherefor and all other rights corresponding thereto throughout the world ("**Copyrights**");(d) trademarks, service marks, logos, trade dress rights and similardesignation of origin and rights therein, registrations and applications forregistration therefor ("**Marks**"); (e) industrial design rights andany registrations and applications therefor; (f) URLs, WWW address, anddomain names ("**Internet Properties**") (g) databases and data collections(including knowledge databases, customer lists and customer databases); and(h) any similar, corresponding or equivalent rights to any of theforegoing anywhere in the world.  Intellectual Property Rights specificallyexcludes contractual rights, including license grants, and the tangibleembodiment of any of the foregoing.

1.82           "**Interim Financials**" hasthe meaning set forth in Section 5.12.

1.83           "**IPR Assignment**" has themeaning set forth in Section 3.2(c).

1.84           "**Knowledge**" means:(a) the knowledge of any of the individuals listed on Schedule 1.84(a); or (b) the knowledge of any of the individuals on Schedule 1.84(b),*provided* that prior to the Offer Date the particular individual listedon Schedule 1.84(b) communicated the subject matter of such knowledge inwriting to one or more superiors of such individual.

1.85           "**Landlord**" means alandlord, sublandlord, licensor or other party granting the right to use oroccupy real property. 

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1.86           "**Laws**" means any applicablelaws, statutes, ordinances, regulations, rules, interpretations, or orders ofany Governmental Authority anywhere in the world.

1.87           "**Lease**" means a lease,sublease, license or other agreement permitting the use or occupancy of realproperty.

1.88           "**Liabilities**" means any andall debts, liabilities, obligations and duties (whether known or unknown,whether asserted or unasserted, whether absolute or contingent, whether accruedor unaccrued, whether liquidated or unliquidated, whether latent or patent,whether determined or undetermined, and whether due or to become due).

1.89           "**License-Back Field**" means:(a) the field (other than the Licensed Field) covering the types ofproducts (other than the Products) sold by Seller and/or its Subsidiaries as ofthe date hereof; and (b) the field of aesthetics medicine including breastaugmentation and reconstruction, body contouring and facial rejuvenation, withproducts including, breast implants, mammary prostheses, breast expanders,extremity tissue expanders, liposuction and body contouring products, dermalfillers and other bulking agents, toxins, including botulinum toxins, andderivatives and improvements of the foregoing products together with theTechnology related thereto, irrespective of whether such products were sold bySeller and/or its Subsidiaries as the date hereof.

1.90           "**License-Back Other IPR**"means the Transferred IPR (other than Transferred Patents, the TransferredMarks, the Transferred Internet Properties and those Transferred Copyrightslisted on Schedule 1.174), to the extent used as of or prior to theClosing Date in Seller's business (other than exclusively in the Business) orembodied in a product of Seller (other than exclusively in the Products).

1.91           "**License-Back Patents**"means any Transferred Patents and any Patent filed by Buyer following theClosing that claims  priority from any Transferred Patents.

1.92           "**Licensed Field**" means the diagnosis, treatment or management ofmedical or surgical conditions, disorders or diseases relating to (a) theurinary tract or any part thereof (being from kidney to distal urethra),(b) prostate, (c) anorectal canal, rectum and distal colon,(d) pelvic floor, and (e) male or female reproductive organs and theuterus; *provided*, *however*, that the License Field shall notinclude the Licensed-Back Field or any treatment or use involving a toxin,including botulinum toxins, a dermal filler, or bulking agent.  

1.93           "**Licensed Other IPR**" meansall Intellectual Property Rights (other than Transferred IPR, Patents andMarks) owned or licensable (without the consent of or material payment of anyconsideration to any third Person) by Seller or its Subsidiaries as of theClosing, that are used in, or reasonably necessary to the operation of, theBusiness in the Licensed Field as of the Closing.  

1.94           "**Licensed Patents**" meansany Patent owned by Seller as of the Closing Date, which is either (i) aPatent issued as of the Closing Date or (ii) which issues following theClosing Date from a Patent application of Seller filed before the Closing Date,and which Patent would, absent the license granted in Section 4.1(a)hereof, be infringed as of the Closing by the operation of the Business or theProducts in the Licensed Field, including the Patents identified on Schedule 1.94;*provided,* that the Licensed Patents shall not include anyPatent directed to a toxin, including botulinum toxins, a dermal filler, abulking agent or use thereof.

1.95           "**Licensor Party**" and "**LicenseeParty**" have the respective meanings set forth in Section 4.3(a).

1.96           "**Losses**" means any and alllosses, costs, obligations, Liabilities, settlement payments, awards,judgments, fines, penalties, damages, Expenses, deficiencies or other charges.

1.97           "**Manages**" (or "**Management**,"as the context requires) means uses, possesses, generates, treats,manufactures, processes, handles, stores, recycles, transports, or disposes ofHazardous Substances.

1.98           "**Marks**" has the meaning setforth in Section 1.81.

1.99           "**Minneapolis Claim**"has the meaning set forth in Section 11.3(d)(i)(1).

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1.100        "**Minneapolis Environmental Losses**" has the meaning set forth in Section 11.3(d)(i).

1.101        "**Minneapolis Property**"has the meaning set forth in Section 11.3(d)(i).

1.102        "**MML**" shall mean MentorMedical Limited.

1.103        "**Most Recent Balance Sheet**"has the meaning set forth in Section 5.12.

1.104        "**Net Working Capital**" hasthe meaning set forth in Schedule 1.104.

1.105        "**Net Working Capital Target**"means the Net Working Capital derived from the 2006 Year-End Balance Sheet (asdefined in Section 5.12(a) of the Disclosure Letter) to be delivered bySeller to Buyer in accordance with Section 5.12(a) of the DisclosureLetter.  The Net Working CapitalTarget will be calculated on a consistent basis with, and in accordance withthe principles set forth on, the illustrative Closing Date Net Working CapitalStatement (assuming the Closing Date had occurred on December 31, 2005)attached hereto as Exhibit D.  

1.106        "**Objection**" has the meaningset forth in Section 2.4(b).

1.107        "**Offer Date**" means March 27,2006.

1.108        "**Offer Letter**" means thatcertain binding offer letter dated March 27, 2006 from Buyer to Seller relatingto the transactions contemplated hereby. 

1.109        "**Offered Employee**" has themeaning set forth in Section 7.1(a).

1.110        "**Operative Agreements**"means this Agreement, the Assumption Agreement, the Bills of Sale, the EscrowAgreement, any Conveyance Documents, the IPR Assignment, the TransitionServices Agreement and the Real Property Agreements and any other document oragreement to be executed and delivered by either of the Parties at the Closing.

1.111        "**Other Business PropertyEnvironmental Claim**" has the meaning set forth in Section 11.3(d)(ii)(1).

1.112        "**Other Business Property**"has the meaning set forth in Section 11.3(d)(ii).

1.113        "**Other Business PropertyEnvironmental Losses**" has the meaning set forth in Section 11.3(d)(ii).

1.114        "**Patents**" has the meaningset forth in Section 1.81.1.115        "**PermittedEncumbrances**" means any or all of the following (a) liens for taxesand other similar governmental charges and assessments which are not yetdelinquent or liens for taxes being contested in good faith by any appropriateproceedings for which adequate reserves have been established, (b) liensof landlords and liens of carriers, warehousemen, mechanics and materialmen andother like liens arising in the ordinary course of business for sums not yetdue and payable, (c) undetermined or inchoate liens, charges andprivileges existing as of the Closing Date and any statutory liens, licenses,charges, adverse claims, security interests or encumbrances of any naturewhatsoever existing as of the Closing Date and claimed or held by anyGovernmental Authority that have not at the time been filed or registeredagainst title to the Transferred Assets or that are related to obligations thatare not due or delinquent, (d) licenses or other non‐exclusiverights to any Transferred IPR granted prior to the date of this Agreement bySeller or any Affiliate thereof to any third Person, (e) restrictions onresale of securities imposed by applicable federal, state and foreignsecurities Laws, (f) security given in the ordinary course of business asof the Closing Date to any public utility, Governmental Authority or other statutoryor public authority in connection with the Transferred Assets,(g) Encumbrances imposed on the underlying fee interest in the leasedproperty, (h) with respect to U.S. properties, those PermittedEncumbrances listed on Schedule 1.115, and with respect to all RealProperty all other Encumbrances of record that affect such Real Property andsuch encroachments or other state of facts which an inspection or survey of anyReal Property would disclose and (i) other Encumbrances that do not materiallyimpair the use of the Real Property by Seller in respect of the Business.

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1.116        "**Person**" means anyindividual, corporation, partnership, limited liability company, trust,unincorporated organization, association, firm, joint venture, joint stockcompany, Governmental Authority or other entity.

1.117        "**Poor Performance**" meansthe failure of a Transferred Employee to substantially perform his or herduties to Buyer, or a Subsidiary of Buyer, after having been provided writtennotice of such failure and 30 days to cure such failure.

1.118        "**Porges**" shall mean PorgesS.A.S.

1.119        "**Porges Asset Sale**" shallmean the sale of all IPR (which, for purposes of this Section 1.119, shall beread to exclude clause (g) of the definition of IPR) owned by Porges to Buyerto be effected one day prior to the Closing Date pursuant to Section 8.26hereof.

1.120        "**Potential Contributor**" hasthe meaning set forth in Section 11.9.

1.121        "**Pre-Closing Taxes**" has themeaning set forth in Section 8.7(a)(i).

1.122        "**Pre‐Closing Tax Period**"has the meaning set forth in Section 8.7(a)(i).

1.123        "**Preliminary Purchase Price**"means $456,137,500.

1.124        "**Product Liability Claim**"shall mean any civil action or claim for money damages brought by an individualrecipient and user of product, or any derivative action or claim for moneydamages including loss of consortium and survival actions and claims, wheresuch action or claim arises out of an alleged defect in design, manufacture,materials, testing, workmanship, or performance of such product, or any allegedfailure to warn, or from any alleged breach of warranty, express or implied, orany alleged noncompliance with any applicable Laws, or any alleged negligence,with respect to such product.  A Product Liability Claim will be deemed to be "**Made**"on the first date a written notice is received by Seller or Buyer, as the casemay be, asserting a Product Liability Claim that includes a claim for moneydamages other than a claim for reimbursement under an express written warrantyfor such product.   

1.125        "**Products**" means any andall products of the Business in the Licensed Field: (a) which arecurrently manufactured and/or sold or licensed by Seller and/or any of itsSubsidiaries, including those identified on Schedule 1.125(a);(b) which are under development by Seller and/or its Subsidiaries,including those identified on Schedule 1.125(b); and (c) whichwere developed, manufactured, distributed, licensed and/or sold, as applicable,at any time before the Closing Date by or on behalf of Seller and/or itsSubsidiaries.  

1.126        "**Programs**"****has themeaning set forth in Section 5.22(a).

1.127        "**Purchase Price**" means thePreliminary Purchase Price, as adjusted pursuant to Section 2.4(d).

1.128        "**Purchase Price Allocation**"has the meaning set forth in Section 8.8.

1.129        "**Real Property**" has themeaning set forth in Section 5.15(a).

1.130        "**Real Property Agreements**"means the Real Property Lease Assignments.  Notwithstanding the foregoing, ifthe relevant Landlord consent to the assignment of an Assigned Lease has notbeen received prior to the Closing Date as set forth in Section 8.17(a)below, the Real Property Lease Assignment as to such premises shall not beconsidered Real Property Agreements for purposes of Section 3.2 andSection 3.3.

1.131        "**Real Property LeaseAssignments**" has the meaning set forth in Section 8.17(a)(i).

1.132        "**Recall**" has the meaningset forth in Section 5.20(b).

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1.133        "**Released**" (or "**Release**,"as the context requires) means released, spilled, leaked, discharged, disposedof, pumped, poured, emitted, emptied, injected, leached, or dumped HazardousSubstances.

1.134        "**Remedial Action**" has themeaning set forth in Section 8.5(b).

1.135        "**Remediation**" has themeaning set forth in Section 5.16(a).

1.136        "**Response Action**" means anyaction or activities of "response" as that term is defined in 42 U.S.C. §9601(25), without regard to any limitation of that term (or terms includedtherein by reference) to "hazardous substances" as defined under CERCLA.

1.137        "**Retirement Benefits**" meansany pension, lump sum, installment, annuity or similar benefit provided or tobe provided on or after retirement (including early retirement), death ordisability in respect of an Employee's employment, but excluding benefitsprovided under an arrangement, the sole purpose of which is to provide benefitson the accidental injury or death of a Transferred Employee.

1.138        "**Returns**" has the meaningset forth in Section 5.8(a).

1.139        "**Rules**" has the meaning setforth in Section 13.7(b).

1.140        "**Schedules**" means the schedulesto this Agreement as of the Offer Date, except that Schedule 1.94(Licensed Patents), Schedule 1.186 (Transferred Tangible Assets)and Schedule 7.1(a) (Employees) may be updated by the Seller prior tothe Closing, subject to the consent of Buyer (such consent not to beunreasonably withheld, delayed or conditioned) to the extent contemplated by orotherwise provided for under this Agreement.

1.141        "**SEC**" means the Securitiesand Exchange Commission.

1.142        "**Securities Act**" has themeaning set forth in Section 5.2(c).

1.143        "**Seller**" has the meaningspecified in the first paragraph of this Agreement.

1.144        "**Seller Benefits Plans**"means the Employee Benefits Plans of Seller (or a Subsidiary thereof) underwhich some or all of the Transferred Employees are eligible to participateimmediately prior to the date of this Agreement.

1.145        "**Seller Caused EnvironmentalClaim**" has the meaning set forth in Section 11.3(d)(iii)(1).

1.146        "**Seller Caused EnvironmentalLosses**" has the meaning set forth in Section 11.3(d)(iii).

1.147        "**Seller Domestic Benefit Plan**"has the meaning set forth in Section 5.13(a)(i).

1.148        "**Seller Employment Liabilities**"has the meaning set forth in Section 7.7.

1.149        "**Seller's Environmental IndemnificationObligations**" means (i) Seller's obligation to indemnify the BuyerIndemnified Parties for any breach of the representations contained in Section 5.16hereof to the extent required in (and subject to the other terms and conditionsof) Article 11hereof; and (ii) Seller's obligation to indemnify the Buyer IndemnifiedParties for the Seller's Special Environmental Indemnity in Section 11.3(d)hereof to the extent required in (and subject to the other terms and conditionsof) Article 11 hereof.

1.150        "**Seller Indemnified Parties**"has the meaning set forth in Section 11.2.

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1.151        "**Seller Material Adverse Effect**"means any change, event, state of facts, or effect (each an "**Effect**")that is materially adverse to the Business; *provided, however*, that noneof the following shall be deemed, either alone or in combination, to constitutea Seller Material Adverse Effect: any Effect resulting from or arising out of(a) the announcement of this Agreement or the pendency of the transactionscontemplated hereby, including actions taken in connection with the separationof the Business in furtherance of the transactions contemplated hereby,(b) the performance by a Party of its obligations under this Agreement oras required by applicable Laws or accounting requirements, (c) generaleconomic conditions in any country where the Business is conducted that do notdisproportionately and adversely affect the Business in any material respect,(d) general conditions in any industry in which the Business is conductedthat do not disproportionately and adversely affect the Business in anymaterial respect, (e) any natural disaster or any acts of terrorism,sabotage, military action or war (whether or not declared) or any escalation orworsening thereof, (f) any Environmental Condition existing on or beforethe Closing in the soil and/or groundwater on, or migrating on or before theClosing from, all properties owned, leased or occupied at any time by Seller orany of Seller's Subsidiaries in connection with the Business or (g) anyEffect for which an adjustment to the Preliminary Purchase Price is required tobe made pursuant to Section 2.4.

1.152        "**Seller Representatives**"means the directors, officers, employees, agents, investment bankers,attorneys, accountants and other advisors to, or representatives of, Sellerand/or its Subsidiaries.

1.153        "**Seller Retirement Plan**"means each scheme, plan, fund or arrangement of Seller, whether written ororal, which provides Retirement Benefits to or, in respect of AutomaticTransfer Employees (not including any mandatory state or social security planor Industry‐Wide Plan in which any member of Seller participates for thebenefit or, in respect of Automatic Transfer Employees).

1.154        "**Seller's Special EnvironmentalIndemnity**" means the indemnity provided by Seller to the Buyer IndemnifiedParties set forth in Section 11.3(d) hereof to the extent requiredin (and subject to the other terms and conditions of) Article 11hereof.

1.155        "**Shared Benefit Employees**"means those Offered Employees (i) who do not accept an offer of employment madeby Buyer pursuant to Section 7.1(a), which offer of employmentcontemplates a relocation of the Offered Employee's principal office to alocation of more than fifty (50) miles from the location of the OfferedEmployee's principal office prior to such relocation and (ii) whose employmentis terminated for any reason, other than for Cause or Poor Performance, whichtermination occurs on or after the date of the offer and on or before theninetieth (90th) day after the Closing Date.

1.156        "**Straddle Period**" has themeaning set forth in Section 8.7(a)(i). 

1.157        "**Subsidiary**" means withrespect to a Party, any other corporation, limited liability company, generalor limited partnership, unincorporated association or other business entity ofwhich (a) if a corporation, a majority of the total voting power of sharesof stock entitled (without regard to the occurrence of any contingency) to votein the election of directors, managers or trustees thereof is at the time ownedor controlled, directly or indirectly, by such Party, or one or more of theother Subsidiaries of such Party or a combination thereof, or (b) if alimited liability company, partnership, association or other business entity, amajority of the partnership or other similar ownership interest thereof is atthe time owned or controlled, directly or indirectly, by such Party, or one ormore Subsidiaries of such Party or a combination thereof.

1.158        "**Subsidiary Consents**" hasthe meaning set forth in Section 5.10(b).

1.159        "**Subsidiary Contract**" hasthe meaning set forth in Section 5.10(b).

1.160        "**Subsidiary Leases**" has themeaning set forth in Section 5.15(a).

1.161        "**Subsidiary Real Property**"means the real property described on Schedule 1.161 hereof.

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1.162         "**Tax(es)**" means any tax ofany kind including United States or other national, state, provincial,regional, local or foreign income, net income, alternative or add on minimum,gross income, gross receipts, profits, windfall profits, property, ad valorem,franchise, sales, value‐added, use, capital, transfer, gains, license,excise, employment, payroll, premium, services, environmental transfer,withholding or minimum tax, or any other tax custom, duty, governmental fee orother like assessment or charge of any kind whatsoever, together with anyinterest and any penalty, addition to tax or additional amount imposed by anyGovernmental Authority.

1.163        "**Tax Return**" means anyreturn, declaration, report, statement or information return or other documentrequired to be filed with respect to any Taxes (including any attachedschedules, statements or other documents), including any information return,claim for refund, amended return and declaration of estimated Tax.

1.164        "**Technology**" meansinventions, works of authorship, mask works, models, know-how, and otherinformation, including all designs, design and manufacturing documentation(such as bills of materials, build instructions and test reports), schematics,algorithms, routines, patterns, compilations, programs, methods, techniques,unpatented inventions, manufacturing and production processes and techniques,software, databases, lab notebooks, development and lab equipment, process,prototypes, published and unpublished research regarding products,clinical or otherwise, customer and supplier lists, formulas, pricing and costinformation and devices.  Technology shall not include Intellectual PropertyRights, including any Intellectual Property Rights in any of the foregoing.

1.165        "**Territory**" meansworldwide.

1.166        "**Third Party Licenses**"means the Contracts identified on Schedule 1.166.

1.167        "**Trade Secrets**" has themeaning set forth in Section 1.81.

1.168        "**Transfer**" means the saleand transfer of the Transferred Assets from Seller (including the Subsidiariesof Seller) to Buyer (including the Buyer Subsidiaries).

1.169        "**Transfer Taxes**" means alltransfer, documentary, sales, registration, value‐added, use and otherTaxes, excluding income Taxes, arising in connection with the consummation ofthe transactions contemplated hereby.

1.170        "**Transferred AccountsReceivables**" means the accounts receivable of Seller included on the FinalNet Working Capital Statement.

1.171        "**Transferred Assets**" meansall right, title and interest of Seller and its Subsidiaries (excluding IPR) inand to the Transferred Equity Interests, the Transferred Inventory, theTransferred Tangible Assets, the Transferred Contracts, the TransferredAccounts Receivables, the Assigned Leases, the Subsidiary Leases, theTransferred Employee Records and the Transferred Real Property.

1.172        "**Transferred Business**"means such portion of the Business that constitutes the Transferred Assets,Transferred IPR and the Assumed Liabilities under this Agreement and thetransactions contemplated hereby.

1.173        "**Transferred Contracts**"means the Contracts listed on Schedule 1.173 and any SubsidiaryContracts.

1.174        "**TransferredCopyrights**" means (a) the registered Copyrights listed on Schedule 1.174 and (b) the Copyrights owned by Seller in worksof authorship that are used exclusively in the Business in the Licensed Fieldas of the Closing.  Notwithstanding,Buyer shall have full, unlimited ownership of the Transferred Copyrights as ofthe date of Closing, and shall have no limitation on the use of the TransferredCopyrights whether in the Licensed Field or otherwise.

1.175        "**Transferred Employee**"means each Employee that either (a) becomes an employee of Buyer (or aSubsidiary thereof) upon the Closing or (b) is an Automatic TransferEmployee; *provided*, *however*, the parties acknowledge that if anEmployee of Seller does not accept an employment offer from Buyer, suchEmployee would never become a Transferred Employee for any purposes.

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1.176        "**Transferred Employee Records**"means (with such Transferred Employee's consent where legally required) theemployment data, which discloses the terms and conditions under which anEmployee is employed immediately prior to the Closing, and copies of allpersonnel files related thereto.

1.177        "**Transferred Equity Interests**"means the Equity Interests owned of record or beneficially by Seller and itsSubsidiaries in the Transferred Subsidiaries.  

1.178        "**Transferred InternetProperties**" means the Internet Properties that are exclusively used in theBusiness as identified on Schedule 1.178.

1.179        "**Transferred Inventory**"means the raw materials, work in process, and finished goods used or held foruse in the Business as of the Closing Date (including any on consignment or intransit, and wherever located).

1.180        "**Transferred IPR**" means(a) the Transferred Marks, (b) the Transferred Internet Properties, (c) the Transferred Trade Secrets, (d) theTransferred Copyrights, and (e) the TransferredPatents.

1.181        "**Transferred Marks**" means the Marks that are listed on Schedule 1.181(a)and all of the goodwill of the Business associated with or appurtenant to suchMarks as of the Closing; *provided*, *however*, that in no event willsuch Marks include the term "Mentor", those terms identified on Schedule 1.181(b)or any variations thereof, or any trade marks or trade names incorporating suchname or the "Mentor" logo, or any trade marks, logos or designs confusingtherewith.

1.182         "**TransferredPatents**" means (i) the Patents (including applications) identified on Schedule 1.182(ii) any Patent filed by Seller prior to the Closing that claims priorityfrom a Patent identified on Schedule 1.182 as of the Offer Date (in which case such Schedule shall be amended to add such Patent), and(iii) any Patent filed by Buyer following the Closing which claimspriority from a Patent identified on Schedule 1.182 and whichinvention is in the Licensed Field and a Transferred Trade Secret.

1.183        "**Transferred Real Property**"means for non-U.S. Real Property, the Real Property identified on Schedule 1.183(a),and for U.S. Transferred Real Property, the Real Property identified on Schedule 1.183(b).

1.184        "**Transferred Subsidiaries**"means those direct and indirect Subsidiaries of Seller identified on Schedule 1.184.

1.185        "**Transferred SubsidiaryEmployee**" has the meaning set forth in Section 7.1(a).

1.186         "**Transferred Tangible Assets**"means the fixed and other tangibleassets (other than real property and buildings and inventory) owned by Selleror any Seller Subsidiaries, other than Transferred Subsidiaries, listed in Schedule 1.186,including (a) the Transferred Technology, (b) thetangible embodiments of the Transferred Trade Secrets, (c) allpersonal productivity assets owned by Seller or any Seller Subsidiaries associatedwith Transferred Employees such as personal data assistants, cellular phonesand personal computers, and (d) all notes, correspondence, document files,records, marketing materials, pamphlets and literature exclusively relating tothe Business or the Products, in each case of clauses (a), (b), (c) and(d), as the same may be depleted or augmented prior to the Closing Date in theordinary course of business; *provided*, *however*, that in no eventwill such assets include any Excluded Assets.

1.187        "**Transferred Technology**"means the Technology (other than Excluded Assets) owned by Seller or any SellerSubsidiaries that is used exclusively in the Business in the Licensed Field asof the Closing and the tangible embodiments of the Transferred Trade Secretsand the Transferred Copyrights.  Notwithstanding, Buyer shall have full, unlimitedownership of the Transferred Copyrights as of the date of Closing, and shallhave no limitation on the use of the Transferred Copyrights whether in theLicensed Field or otherwise.

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1.188        "**Transferred Trade Secrets**"means the Trade Secrets (other than the Excluded Assets) owned by Seller or anySeller Subsidiaries that are exclusively used in the Business in the LicensedField as of the Closing Date.  Notwithstanding, Buyer shall have full,unlimited ownership of the Transferred Trade Secrets as of the date of Closing,and shall have no limitation on the use of the Transferred Trade Secretswhether in the Licensed Field or otherwise.

1.189        "**Transition Services Agreement**"means the Transition Services Agreement of even date herewith in the formattached hereto as Exhibit C.

1.190        "**Upward Adjustment Amount**"has the meaning set forth in Section 2.4(d).

1.191        "**UK**" means the United Kingdom.

1.192        "**UK Competition Authorities**"means the UK OFT, the UK Competition Commission and any other GovernmentalAuthority in the United Kingdom responsible for the enforcement of antitrust ormerger control Laws.

1.193        "**UK OFT**" means theUK Office of Fair Trading.

1.194        "**UK OFT Undertakings**" meansthe undertakings given to the UK Secretary of State for Trade and Industryunder Section 88(2) of the Fair Trading Act 1973 by Coloplast A/S, ColoplastLimited and 4C Health Limited following the report of the UK CompetitionCommission entitled "Coloplast A/S and SSL International plc: A report on themerger situation" (Cm 5811, May 2003) and announced in a Department of Tradeand Industry Press Notice dated 22 July 2003 (P/2003/420), or any variations oramended versions thereof.

1.195        "**U.S. Employee**" hasthe meaning set forth in Section 7.1(a).

1.196        "**Voluntary Transfer Employee**"means each Offered Employee who becomes a Transferred Employee pursuant to theterms of this Agreement.

1.197        "**Voting Debt**" means bonds,debentures, notes or other indebtedness having the right to vote on any matterson which holders of other Equity Interests may vote.  

1.198        "**Warranty Breach**" meanswith respect to a Party, an inaccuracy or breach of a representation orwarranty expressly made by such Party in an Operative Agreement.

1.199        "**Year‐End Financials**"has the meaning set forth in Section 5.12.

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1.200        "**Years of Service**" means,with respect to any Transferred Employee's prior service as an employee ofeither Seller or a Subsidiary of Seller, fully completed calendar years plusthe pro rated time described in the following sentence.  Not fully completedcalendar years shall be counted towards Years of Service at the rate of 1/12thfor each full calendar month of service.

(ii) ***        ***  For all purposes of and under this agreement, thefollowing capitalized terms shall have the respective meanings ascribed theretoin the section of this Agreement set forth opposite each such capitalized termbelow:

Capitalized Term

Section

ABISS

8.27

ABISS Agreement

8.27

Anoka  Facility

8.24(b)(ii)

Anoka Sale  

8.24(a)

Assigned Lease Premises

8.17(a)(ii)

Assumed Taxes

8.7(a)(i)

CERCLA

1.50

Changes

8.7(b)

CP UK

8.24(a)

Environmental Insurance

8.21

Evaluation Material

8.15(a)

FIFO

4.11(d)

Foreign Benefit Plan

5.13(b)(i)

FTC Amount

8.6(b)

Insurance Payment

11.6(a)

Internet Properties

1.81

Licensed MEC Mark

8.24(b)(viii)

Made

1.124

MEC

8.24(b)(i)

MENTOR CLEAR  ADVANTAGE Mark

8.24(c)

Minneapolis  Environmental Losses

11.3(d)(i)

Mitigation Payment

11.6(a)

MML Sale

8.24(a)

Offered Employees

7.1(a)

Other Business Property

11.3(d)(ii)

Party

Preamble

Patent Covenant

4.8

Preliminary Purchase Price Allocation

8.8

Qualifying Loss

11.3(b)

Residuals

4.4

Retained MEC Marks

8.24(b)(viii)

Retained Subsidiaries

8.28

Retention Payment

7.9

RMC 

8.24(a)

RM UK

8.24(a)

Sarlat Property

11.3(d)(ii)(2)

SMEC

8.24(b)(ii)

Structural Representations

11.1

Termination

8.24(a)

Third Party Payment

11.6(a)

Threshold

11.3(b)

Transferred Names

8.19(a)

Transition Marks

4.11(e)

Transition Products

4.11(e)

UK MEC Marks

8.24(b)(viii)

UK MEC Products

8.24(b)(iii)

Year‐End Financials

5.12(a)

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**Article 2PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES**

2.1               Transferred Assets; Transferred IPR

(a)                Upon the terms and subject to theconditions set forth herein, including Section 2.3, Article 9and Article 10, as of the Closing Date, Seller shall, and/or shallcause its Subsidiaries to, sell, transfer, convey, assign and deliver to Buyer,or if so requested by Buyer, to a Subsidiary of Buyer, free and clear of allEncumbrances, and Buyer shall purchase and accept from Seller and itsSubsidiaries, the Transferred Assets.

(b)                Upon the terms and subject to theconditions set forth herein, including Section 2.3, Article 9and Article 10, as of the Closing Date Seller shall, and/or shallcause its Subsidiaries to, sell, transfer, convey, assign and deliver to Buyer,or if so requested by Buyer, to a Subsidiary of Buyer, free and clear of allEncumbrances, all right, title and interest of Seller and its Subsidiaries inand to the Transferred IPR, including the right to pursue past damages based onthird‐party infringement of the Transferred IPR, and also including thegoodwill of the Business appurtenant to the Transferred Marks included in theTransferred IPR. 

(c)                Buyer hereby waives compliancewith the provisions of any applicable Laws which relate to the sale of propertyin bulk in connection with the transfer of the Transferred Assets to the Buyer.

2.2               Assumed Liabilities

Upon the terms andsubject to the conditions hereof, as of the Closing Date, Seller shall, orshall cause its Subsidiaries to, assign and transfer to Buyer, and Buyer shall,or shall cause the Buyer Subsidiaries to, assume and fully perform anddischarge, on a timely basis and in accordance with their respective terms, theAssumed Liabilities.  Notwithstanding the foregoing, other than the AssumedLiabilities specifically listed on Schedule 1.6, Buyer assumes noLiabilities of Seller, its Subsidiaries or any of its Affiliates. Notwithstanding anything to the contrary, nothing shall include or be deemed toinclude among or within the Transferred Business, Transferred Assets,Transferred IPR, Transferred Internet Properties, any assets, Liabilities, IP,IPR or other property rights, or any Liabilities whatsoever with respect to, the ObTape® brand products,including any components thereof, any instruments or other accessories sold inconjunction with and for use strictly with ObTape®, and Marks, advertising andmarketing materials used strictly with ObTape®.

2.3               Conveyances

Promptly followingthe execution and delivery of this Agreement, each of Buyer and Seller willcooperate in good faith to prepare and execute appropriate Contracts to conveyor transfer the Transferred Assets, Transferred IPR and Assumed Liabilitiesheld by Seller or its Subsidiaries to Buyer in connection with the Closing, orif so requested by Buyer, Subsidiaries of Buyer (the "**Buyer Subsidiaries**"). Each of the Parties will use commercially reasonable efforts to cause suchtransfers to be effected on the most efficient basis, including minimizingTransfer Taxes.  Such transfers shall be on terms (including conditions toClosing, representations and warranties, covenants and indemnificationobligations) consistent with this Agreement, including the Purchase PriceAllocation, except and only to the extent of modifications required to providefor the intent of this Agreement under applicable Laws (and in such case theminimal modifications required to do so) as may be required by applicableLaws.  Where appropriate, each of Buyer and Seller will cause its Subsidiariesto comply with any applicable Laws prior to entering into the ConveyanceDocuments.  With respect to any Transferred Assets, Transferred IPR or AssumedLiabilities, one or more bills of sale, assignment and assumption agreement, orsimilar conveyance documents as may be required under the Laws of theapplicable jurisdiction to validly convey, assign and transfer such TransferredAssets, Transferred IPR or Assumed Liabilities (the "**Conveyance Documents**")may be used by Buyer or Seller in place of the Bills of Sale or the AssumptionAgreement, as applicable.  The Parties agree that the Conveyance Documents arenot intended to expand or limit the rights and obligations of Seller and Buyerbeyond those provided for in this Agreement, and that the Conveyance Documentsshall not provide for any additional rights or obligations of the Parties ortheir respective Subsidiaries that are not provided for in this Agreement orthe other Operative Agreements (it being understood that for purposes of thissentence only, Operative Agreements shall not include the ConveyanceDocuments).  In the event of any conflict between the terms of the ConveyanceDocuments and this Agreement, the Parties agree and acknowledge that the termsof this Agreement shall control and that, if necessary, the Parties shalldeliver such additional instruments as may be necessary to accomplish theforegoing.

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2.4               Net Working Capital Adjustment

(a)                Within 60 days after the ClosingDate, Buyer will prepare (i) a balance sheet as of the Closing Date, (the "**ClosingDate Balance Sheet**"), which Closing Date Balance Sheet shall be prepared inaccordance with GAAP on a consistent basis with the Year-End Financials, and(ii) a statement of Net Working Capital as of the Closing Date (the "**ClosingDate Net Working Capital Statement**", and together with the Closing DateBalance Sheet, the "**Closing Statements**"), which Closing Date Net WorkingCapital Statement shall be derived from the Closing Date Balance Sheet.  Sellerwill assist and cooperate with Buyer in the preparation of the ClosingStatements, including by providing Buyer with reasonable access to any relevantpersonnel, books and records related to the Transferred Assets, the TransferredIPR and the Assumed Liabilities and historical financial data that are inSeller's possession.  A spreadsheetillustrating the Closing Date Balance Sheet and the Closing Date Net WorkingCapital Statement (assuming in each case that the Closing Date had occurred onDecember 31, 2005) is attached as Exhibit D hereto for illustrativepurposes. 

(b)                Following the delivery by Buyer toSeller of the Closing Statements, Seller shall have a period of 30 days inwhich to review the Closing Statements.  Seller and its accountants shall beprovided with reasonable access to the Transferred Assets and the TransferredIPR, the work papers of Buyer and its accountants and to the books and recordsrelating to the Transferred Assets, the Transferred IPR and the AssumedLiabilities in connection with such review.  In the event that Seller determinesthat the Closing Statements have not been prepared on a basis consistent withthe requirements of Section 2.4(a), Seller shall, on or before thelast day of such 30‐day period, inform Buyer in writing of such determination(the "**Objection**"), setting forth in reasonable detail a specificdescription of the basis of the Objection, the adjustments to the ClosingStatements which Seller believes should be made, and Seller shall be deemed tohave accepted any items not specifically disputed in the Objection.  Failure toso notify Buyer shall constitute acceptance and approval of Buyer's preparationof the Closing Statements.

(c)                Buyer shall then have 30 daysfollowing the date it receives the Objection to review and respond to theObjection, during which period Buyer and Seller shall negotiate in good faithto resolve the Objection.  If Buyer and Seller are unable to resolve all oftheir disagreements with respect to the determination of the foregoing items bythe 30th day following the date on which Buyer receives the Objection, afterhaving used their good faith efforts to reach a resolution, they shall refertheir remaining differences to KPMG LLP (or, if KPMG refuses to act in suchcapacity, such other nationally recognized accounting firm as the Parties shallreasonably agree) (the "**CPA Firm**"), who shall, acting as experts inaccounting and not as arbitrators, determine on a basis consistent with therequirements of Section 2.4(a), whether and to what extent, if any,the Closing Statements require adjustment.  Buyer and Seller shall request theCPA Firm to use all reasonable efforts to render its determination within 45days following submission of such matters to the CPA Firm.  The CPA Firm'sdetermination shall be final, conclusive and binding upon Buyer and Seller, andnonappealable to any Person, court or forum absent manifest error or manifestbias.  Buyer and Seller shall promptly make reasonably available to the CPA Firmaccess to the Transferred Assets, all relevant books and records, any workpapers (including those of the Parties' respective accountants, to the extentapplicable) and supporting documentation relating to the Closing Statements andall other items reasonably requested by the CPA Firm.  The "**Final BalanceSheet**" and the "**Final Net Working Capital Statement**" shall mean,respectively, the Closing Date Balance Sheet and the Closing Date Net WorkingCapital Statement, as the case may be, (i) as submitted by Buyer pursuantto Section 2.4(a), in the event that (1) no Objection isdelivered to Buyer during the initial 30‐day period specified above or(2) Buyer and Seller so agree, (ii) as adjusted in accordance withthe Objection, in the event that (A) Buyer does not respond to theObjection during the 30‐day period specified above following receipt byBuyer of the Objection or (B) Buyer and Seller so agree, (iii) asadjusted in accordance with the agreement of Buyer and Seller, if the Partiesso agree during the 30‐day period following receipt by Buyer of theObjection, or (iv) as adjusted by the CPA Firm, if it has been submittedto the CPA Firm for review, together with any other modifications to theClosing Statements agreed upon by the Parties.  All fees and expenses of theCPA Firm shall be shared equally by Buyer and Seller.

(d)                If the Net Working CapitalTarget is greater than the Net Working Capital as reflected on the Final NetWorking Capital Statement (the amount of such excess, the "**DownwardAdjustment Amount**"), then Seller shall pay within ten (10) days to Buyercash equal to the amount of the Downward Adjustment Amount.  If the Net Working Capitalas reflected on the Final Net Working Capital Statement is greater thanthe Net Working Capital Target (the amount of such excess, the "**UpwardAdjustment Amount**"), then Buyershall pay within ten (10) days to Seller cash equal to the amount of the UpwardAdjustment Amount.  Any payment pursuantto this Section 2.4(d) will be treated by the Parties as anadjustment to the Purchase Price.

2.5               No Withholding

Buyer shall make allpayments required to be made to Seller hereunder free and clear of and withoutreduction for any withholding taxes which shall be the sole responsibility ofBuyer.

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**Article 3CLOSING**

3.1               The Closing

The transactionscontemplated by this Agreement shall be consummated (the "**Closing**") atthe offices of Wilson Sonsini Goodrich & Rosati, ProfessionalCorporation, at 650 Page Mill Road, Palo Alto, California, no later thantwo Business Days after all of the conditions set forth in Article 9and Article 10 shall have been satisfied or waived (other thanthose conditions that by their terms are not capable of being satisfied orwaived until the Closing), or such other place, time and date as the Partiesshall agree in writing.  The time and date on which the Closing is actuallyheld is sometimes referred to herein as the "**Closing Date**."

3.2               Deliveries by Seller

At the Closing,Seller will deliver or cause to be delivered to Buyer (unless previouslydelivered) the following:

(a)                duly executed share certificatesor evidence of membership interests (as applicable), stock powers in blank ormembership interest powers in blank (as applicable) in respect of each of theTransferred Equity Interests; 

(b)                duly executed counterparts to theBills of Sale;

(c)                duly executed counterparts of theassignments of the Transferred IPR in substantially the forms as set forth in Exhibit E-1and Exhibit E-2 (collectively, the "**IPR Assignment**");

(d)                limited or special warranty deedstransferring the Transferred Real Property to Buyer or its Subsidiaries,subject to any and all Permitted Encumbrances;

(e)                duly executed counterparts of theReal Property Agreements;

(f)                 the certificate referred to in Section 9.5;

(g)                the applicable ConveyanceDocuments with respect to each of the jurisdictions set forth in Schedule 3.2(g);

(h)                certificates satisfying therequirements of Treasury Regulation § 1.1445-2 that exempt Buyer and theBuyer Subsidiaries from any requirement to withhold Taxes under Code§ 1445; 

(i)                  a duly executed counterpart of theEscrow Agreement;

(j)                 all Schedules and other documents,instruments, declarations, affidavits and writings as may be necessary toassign, convey, transfer and deliver to Buyer good and valid title to theTransferred Assets and Transferred IPR, free of Encumbrances, or as required tobe delivered by Seller (or a Subsidiary thereof) at or prior to the Closingpursuant to the Operative Agreements; *provided, however*, that Buyer andSeller shall each file or record or cause to be filed and recorded suchdocuments, instruments, declarations, affidavits or other writings as may benecessary in accordance with applicable Laws; *provided, further*, thatthe responsibility for the payment of all fees for applicable recordation andfilings of documents, instruments, declarations, deeds, affidavits or otherwritings necessary to effect any applicable assignments or transfers under thisAgreement and for recording any such assignments, including assignments withrespect to the Transferred Real Property and the Transferred IPR, shall besplit equally between Buyer and Seller;

(k)                all documents and instrumentsnecessary to effect filings with any Governmental Authority which are requiredto properly register the Products and relevant establishments in the Buyer'sname effective as of the Closing Date (for example, FDA and its overseascounterparts' products and establishment licenses and environmental permits,etc.);

(l)                  the advice of the Workers' Councilof Porges; 

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(m)              evidence of release of theEncumbrances against the Transferred Assets identified on Schedule 3.2(m);

(n)                all other documents, instrumentsand writings required to be delivered by Seller (or a Subsidiary thereof), ator prior to the Closing pursuant to the Operative Agreements.

3.3               Deliveries by Buyer

(a)                At the Closing, Buyer will deliveror cause to be delivered to Seller (unless previously delivered) the following:

(i)           an amount equal to  thePreliminary Purchase Price less the Escrow Amount, which shall be paid by wiretransfer of immediately available funds to an account designated by Seller; *provided,however*, that, if applicable, an appropriate portion of the PreliminaryPurchase Price shall be paid in accordance with the terms of the ConveyanceDocuments (as determined by Seller in its reasonable judgment), with theremainder paid to Seller;

(ii)           a duly executed counterpart of theAssumption Agreement;

(iii)           a duly executed counterpart of theEscrow Agreement;

(iv)           duly executed counterparts to theapplicable Conveyance Documents with respect to each of the jurisdictions setforth in Schedule 3.2(g);

(v)           the certificates referred to in Section 10.5;

(vi)           duly executed counterparts of theReal Property Agreements; and

(vii)           all other documents, instrumentsand writings required to be delivered by Buyer (or a Subsidiary thereof) at orprior to the Closing pursuant to the Operative Agreements.

(b)                At the Closing, Buyer will deliveror cause to be delivered to the Escrow Agent the Escrow Amount in accordancewith the terms of the Escrow Agreement.

**Article 4INTELLECTUAL PROPERTY LICENSES**

4.1               Licensed IPR

Subject to the terms andconditions of this Agreement, effective as of the Closing, Seller hereby doesgrant, and shall  grant and cause its Subsidiaries to grant, to Buyer and itsSubsidiaries, a worldwide, perpetual, irrevocable, non‐terminable, fullypaid‐up, non‐exclusive, right and license:

(a)                under all of Seller's rights inthe Licensed Patents, to make, have made, use, sell, offer for sale, export and import products in theLicensed Field, and to practice any claimed method within such Licensed Patentsin the Licensed Field. The Licensed Patents shall not be sublicensable by Buyerexcept in the ordinary course of business and only in connection with generallicense of all or substantially all of the Patents owned by Buyer in the Licensed Field to a thirdPerson; and

(b)                under all of Seller's rights in the Licensed Other IPR, tocopy, use, perform, display,distribute, otherwise transfer products and services, and otherwise fully exploit (including by the granting of sublicenses) theLicensed Other IPR and conduct the business of Buyerfollowing the Closing, subject to any restrictions on Buyer with respect to theTrade Secrets of Seller set forth in Section 4.6.

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4.2               License‐Back Patents

Subjectto the terms and conditions of this Agreement, effective as of the Closing,Buyer and its Subsidiaries shall and do hereby grant to Seller and itsSubsidiaries, and Seller and its Subsidiaries retain, a worldwide, perpetual,irrevocable, non‐terminable, fully paid‐up, non‐exclusive,right and license under all of Buyer's rights in the License‐BackPatents, to make, have made, use, sell, offer for sale, and import any product,and to practice any claimed method within the License‐Back Patents in theLicense-Back Field.  The License-Back Patents shall not be sublicensable bySeller except in the ordinary course of business and only in connection withgeneral license of all or substantially all of the Patents in the License-BackField owned by Seller to a third Person.

4.3               Limitations

(a)                Existing Licenses.  All licenses granted by a Party ("**Licensor Party**")to the other Party or its Subsidiaries, as applicable ("**Licensee Party**")under this Article 4 are subject to any and all Contracts betweenthe Licensor Party and any third Person entered into prior to the date hereof.

(b)                Maintenance of Patents.  Where a Licensor Party no longer wishes toprosecute or maintain a Licensed Patent or License-Back Patent in force thatcould be so reasonably prosecuted or maintained in force, it shall offerassignment of the said application or Patent to the Licensee Party at no cost butshall retain a perpetual, irrevocable, non-terminable, royalty free,sublicensable, license to such transferred Patent.

4.4               License-Back Other IPR

Subject to Section 8.16,Buyer and its Subsidiaries shall and do hereby grant to Seller and itsSubsidiaries under all rights in the License-Back Other IPR transferred toBuyer hereunder, and Seller and its Subsidiaries retain thereunder, anon-exclusive, worldwide, non-terminable, irrevocable, perpetual, assignable, sublicensablelicense to use, copy, distribute, otherwise transfer, create derivative worksfrom, display, and perform the Licensed-Back Other IPR (and associatedTechnology) in all fields; *provided*, that (i) Seller agrees that itwill not knowingly and specifically assign or sublicense such Licensed-BackOther IPR to a third party on a stand-alone basis in the Licensed Field andthat the foregoing licenses shall be subject to Section 4.6 withrespect to any Trade Secrets included in the License-Back Other IPR;(ii) the forgoing license to the Transferred Trade Secrets included in theLicensed Back Other IPR is limited in the Licensed Field to a license toResiduals only; and (iii) the foregoing license to the TransferredCopyrights included in the Licensed Back Other IPR excludes the use of thetangible embodiments of any such Copyrights in the Licensed Field.  "**Residuals**"means Trade Secret information retained in the unaided memory of employees thathave been exposed to such Trade Secret information.

4.5               Reservation ofRights

Each of the Licensor Parties hereby reserves allrights not expressly granted hereunder.  No implied licenses are granted bySeller with respect to any of the Transferred Assets or pursuant to any term ofthis Agreement.

4.6               Trade Secret Protection and Use

Notwithstanding theretention of ownership of any Trade Secrets by Seller (and the license grantedthereto to Buyer), or transfer of ownership of Trade Secrets to Buyer (with alicense retained thereto by Seller) hereunder, each Party agrees(i) nothing set forth herein shall limit either Party's rights to enforceits rights with respect to the any misappropriation following the Closing bythird parties of such Trade Secrets or to protect the confidentiality of suchTrade Secrets regardless of whether such Trade Secrets are licensed to, orowned by such Party, and (ii) each Party shall treat the Trade Secrets ofthe other with at least the same degree of care, as its does its own like TradeSecrets, but in no event with less than reasonable care; *provided* thateach Party may use and disclose the Trade Secrets of the other within the scopeof the licensed granted hereunder.

4.7               Transfer

The Licensee Partymay transfer or assign, in whole or in part, the licenses granted to ithereunder in connection with a Change of Control of the Licensee Party or thesale of substantially all of the assets of a business of the Licensee Party towhich the license to be transferred or assigned relates.

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4.8               Products Outside of Licensed Fieldand License-Back Field

In the event that Seller and/or its Subsidiaries shallmake, have made, use, sell, offer for sale, or import a product outside of theLicense-Back Field that, absent a license, infringes or would infringe any ofthe Transferred Patents, Seller shall so notify Buyer, and thereafter, Buyershall license to Seller such Transferred Patents for use in such field of use(but in no event within the Licensed Field) upon commercially reasonable terms,which such terms shall be negotiated in good faith by Buyer and Seller (theforegoing, the "**Patent Covenant**").  If Seller infringes any TransferredPatents outside the License-Back Field and does not seek a license to suchPatents in accordance with the foregoing Patent Covenant, Buyer's sole andexclusive remedy shall be to bring an action seeking a reasonable royalty for alicense to such Patents and for past royalty payments that would have been due;*provided*, *however*, Buyer (or any successor to the TransferredPatents) shall not have the right to seek or obtain an injunction againstSeller's infringement of such Patents and if Buyer is the prevailing party insuch action, Buyer shall be entitled to payment of Buyer's legal fees andexpenses by Seller.  Buyer agrees that in the event of an assignment ortransfer of any of the Transferred Patents, Buyer (and any subsequenttransferee) shall obtain the agreement of the transferee or successor to suchTransferred Patents, for the benefit of Buyer and its successors, to the PatentCovenant.  In the event that Buyer (or any subsequent transferee of theTransferred Patents) fails to obtain agreement to such Patent Covenant, theSeller shall be deemed to have, effective as of the date hereof, anon-exclusive, royalty free, perpetual worldwide license to such Patents in allfields other than the Licensed Field.

4.9               Bulking Agent and/or Toxin

In the event thatSeller shall seek to first commercialize a dermal filler or other bulking agentor toxin (including a botulinum toxin), as the case may be, in the LicensedField after the Closing Date, then Seller shall provide Buyer the reasonableopportunity to discuss in good faith a mutually beneficial arrangement for thecommercialization of such dermal filler or other bulking agent or toxin, as thecase may be, in the Licensed Field; in no event such opportunity to be laterthan thirty (30) days prior to Seller entering into an agreement, if any, forsuch first commercialization with a third party.  Seller's obligations underthis Section 4.9 shall terminate on the tenth (10th)anniversary of the Closing Date.

4.10           Exclusive Patent

If Schedule 1.182omits any Patents owned by Seller as of the Closing Date that as of the ClosingDate claim an invention that is exclusive to the Licensed Field, Buyer shall,as its sole and exclusive remedy for such omission, be granted and shall haveeffective as of the Closing Date, a perpetual, worldwide, royalty free, paid-uplicense in the Licensed Field to such Patent with the right to bring an actionfor the infringement of such Patent or Patents in the Licensed Field.  Suchlicense shall be exclusive in the Licensed Field as of the date thedetermination is made that such Patent was omitted from Schedule 1.182.

4.11           License to Transition Marks

(a)                Seller hereby grants to Buyer,effective as of the Closing Date, a worldwide, non-exclusive, non-transferablelicense under the Transition Marks (as defined below) to use such TransitionMarks in connection with the marketing, packaging, sale and promotion ofTransition Products (as defined below) in substantially the same manner thatsuch Transition Marks were used by Seller prior to the Closing.  All goodwillassociated with the use of such Transition Marks shall inure to the benefit ofSeller.

(b)                Buyer shall maintain the qualityof the goods with which such Transition Marks are used at least at the samelevel maintained by Seller prior to the Closing.  Without limiting theforegoing, Buyer shall not (i) use the Transition Marks in a manner thatdetracts from the goodwill associated with such Transition Marks or in a mannercontrary to the reasonable instructions of Seller, (ii) co-brand the Productswith any other Marks without the prior written consent of Seller, or (iii) sellany Transition Product beyond its shelf life or in any other improper manner. Buyer shall not make any warranty, express or implied, to any third party onbehalf of Seller with respect to the Transition Products and except as may beotherwise provided under this Agreement shall be solely responsible for allTransition Products sold by it.

(c)                Notwithstanding the license setforth in Section 4.1(a), Buyer will use reasonable commercial efforts,subject to regulatory requirements, to cease using the Transition Marks aspromptly as practicable following the Closing, and replace such Marks with newMarks owned by Buyer.  Without limiting the generality of the foregoing, in noevent may Buyer market, package, sell or promote any product under or bearing aTransition Mark that shall have been manufactured by or for Buyer whichmanufacture shall have occurred after the last day of the 18th month followingthe Closing Date.

(d)                Buyer will sell TransitionProducts in inventory on a first-in-first-out (FIFO) basis.  Buyer will notincrease inventory levels of Transition Products beyond levels consistent withhistoric inventory levels of such Transition Products.

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(e)                For the purposes of this Section4.11, (A) "**Transition Products**" means (i) all Products in Seller'sinventory as of the Closing Date and (ii) all such Products manufactured by orfor Buyer in accordance herewith and sold by Buyer under a Transition Mark; and(B) "**Transition Marks**" means all Marks used by Seller prior to theClosing Date in connection with the marketing, sale, promotion and packaging ofthe Transition Products.

**Article 5****REPRESENTATIONSAND WARRANTIES OF SELLER**

Subjectto the Schedules and the disclosures and exceptions set forth in the DisclosureLetter delivered by Seller to Buyer on the date hereof (the "**DisclosureLetter**") (which disclosures and exceptions will reference the appropriatesection of this Article 5 to which they relate and each of whichdisclosures and exceptions shall be deemed to be incorporated by reference intothe representations and warranties; *provided*, that any informationdisclosed in the Disclosure Letter shall be deemed disclosed and incorporatedin any other section, subsection, clause and paragraph hereof where it isreasonably apparent that such disclosure is applicable to such other section,subsection, clause or paragraph) Seller hereby makes the followingrepresentations and warranties to Buyer as of the Offer Date:

5.1               Organization and Authority

(a)                Seller is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofMinnesota.  Seller has the requisite corporate power andauthority to execute and deliver this Agreement and each of the OperativeAgreements to which it is a party and to perform its obligations hereunder andthereunder.  Seller is duly qualified to do business as a foreign corporationand is in good standing in each jurisdiction where such qualification isnecessary, except for those jurisdictions where failure to be so qualifiedwould not, individually or in the aggregate, have a material adverse effect onSeller or prevent the performance by Seller of its obligations under thisAgreement or the other Operative Agreements to which it is a party.

(b)                Each of the TransferredSubsidiaries is duly organized, validly existing and in good standing (to theextent such jurisdiction recognizes the concept or similar concept) under thelaws of the jurisdiction in which it was formed.  Each of the TransferredSubsidiaries has the requisite corporate power and authority to execute anddeliver each of the Operative Agreements (if applicable) to which it is a partyand to perform its obligations thereunder.  Each of the TransferredSubsidiaries is duly qualified to do business in and is in good standing ineach jurisdiction where such qualification is necessary, except for those jurisdictionswhere failure to be so qualified or in good standing would not, individually orin the aggregate, be reasonably likely to have a material adverse effect onSeller or prevent the performance by Seller of its obligations under thisAgreement or the other Operative Agreements to which it is a party.

(c)                This Agreement is as of the datehereof, and each of the other Operative Agreements to which Seller or aSubsidiary is a party will be, upon their execution and delivery, duly andvalidly authorized, executed and delivered by Seller or the applicableSubsidiary and this Agreement constitutes, and each of the other OperativeAgreements to which Seller or a Subsidiary is a party will constitute, thevalid and binding agreement of Seller or the applicable Subsidiary, enforceableagainst Seller or the applicable Subsidiary in accordance with its respectiveterms, subject to bankruptcy and debtor creditor laws of general application,rules of equity and rules concerning specific performance (collectively, the "**EnforceabilityExceptions**").  No other actions or proceedings on the part of Seller arenecessary to authorize Seller's execution or performance of this Agreement orany of the other Operative Agreements to which it is a party or thetransactions contemplated hereby or thereby.

5.2               Transferred Subsidiaries;Capitalization

(a)                Except for the Transferred EquityInterests, Seller does not own or hold, directly or indirectly, any EquityInterest of any kind in any Person that owns assets or properties or conductsoperations used or held for use in the Business.  All of the Transferred EquityInterests have been duly authorized and validly issued and are fully paid andnon-assessable, to the extent such terms are applicable to such TransferredEquity Interests, with no personal liability attaching to ownership thereof,and such Transferred Equity Interests are owned by Seller, in each case freeand clear of any Encumbrances.  Upon consummation of the transactionscontemplated hereby, Buyer and/or a Subsidiary of Buyer will acquire good andvalid title to the Transferred Equity Interests free and clear of allEncumbrances, other than Encumbrances placed upon such Transferred EquityInterests by Buyer or its Subsidiaries or generally applicable to the assets ofBuyer and/or its Subsidiaries. Except for this Agreement, the TransferredEquity Interests and as described in Section 5.2(a) of theDisclosure Letter, there are no outstanding Equity Interests in the TransferredSubsidiaries.  There are no Contracts or other arrangements by which theTransferred Subsidiaries are, may be or become bound to issue additional EquityInterests in the Transferred Subsidiaries.

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(b)                Neither Seller nor any of itsSubsidiaries is subject to any obligation or requirement to provide funds to ormake any investment (whether in the form of a loan, capital contribution orotherwise) in any of the Transferred Subsidiaries.

(c)                The jurisdiction of organizationand authorized Equity Interests of each Transferred Subsidiary is set forth in Section 5.2(c)of the Disclosure Letter.  There are no outstanding obligations of theTransferred Subsidiaries to repurchase, redeem or otherwise acquire any sharesof capital stock or membership interests of the Transferred Subsidiaries orpursuant to which any Transferred Subsidiary is required to register any EquityInterests under the Securities Act of 1933, as amended (the "**Securities Act**")or under any other Laws.  None of theTransferred Subsidiaries has any outstanding Voting Debt.

5.3               No Violation

The execution anddelivery by Seller of this Agreement, and by Seller and its Subsidiaries undereach of the other Operative Agreements to which any of them is a party, doesnot, and the performance by Seller of its obligations hereunder, and by Sellerand its Subsidiaries under each of the other Operative Agreements to which anyof them is a party, will not: (a) conflict with, or result in a breach of,any of the provisions of any of their respective charter documents, bylaws orsimilar organizational documents; (b) materially breach, violate orcontravene any applicable Laws; (c) create any right of termination oracceleration or Encumbrance that would prevent Seller or any of its Subsidiariesfrom performing its obligations under this Agreement or any other OperativeAgreement to which any of them is a party; (d) assuming that theConsensual Transfers identified in Section 5.10(a) of the DisclosureLetter are obtained, conflict with, or result in a breach of or default under,any Transferred Contract in any material respect; or (e) conflict with, orresult in a breach of or default under, any material Subsidiary Contract in anymaterial respect. 

5.4               Compliance with Laws; Business Permits

No GovernmentalActions on the part of Seller or any of its Affiliates or Subsidiaries arerequired in connection with the execution or delivery by Seller of thisAgreement or by Seller or any of its Subsidiaries under any of the OperativeAgreements to which it is a party or the consummation by Seller of thetransactions contemplated hereby or the consummation by Seller or any of itsSubsidiaries of the transactions contemplated thereby, other than pursuant to HSR and such other Governmental Actions identified on Section 5.4of the Disclosure Letter.  For the avoidance of doubt, neither Seller nor anyof its Subsidiaries hereby make any representations or warranties to Buyer asto the compliance with the UK OFT Undertakings of Buyer, any of itsSubsidiaries or other parties to the UK OFT Undertakings.  Seller and theTransferred Subsidiaries, as the case may be, hold, to the extent legallyrequired, all material permits, licenses, variances, clearances, consents,commissions, foreclosures, exemptions, orders, authorizations and approvalsfrom Governmental Authorities that are required for them to conduct theBusiness in accordance with all applicable Laws (the "**Business Permits**"). Seller and the Transferred Subsidiaries have conducted and operated, and areconducting and operating, the Business in accordance with the terms of theBusiness Permits and in compliance with all Laws applicable to the Business,its properties and affairs, including employment and immigration Laws, in allmaterial respects. 

5.5               No Broker

None of Seller or anySubsidiary of Seller, has engaged any Person, other than Citigroup GlobalMarkets Inc. (the fees of which shall be paid by Seller), which is entitled toany fee or commission as a finder or a broker in connection with this Agreementor the transactions contemplated hereby. 

5.6               Absence of Changes

Since the date of theMost Recent Balance Sheet and through the Offer Date there has not been:

(a)                any event, occurrence, developmentor state of circumstances or facts which, individually or in the aggregate, hashad or could reasonably be expected to have a Seller Material Adverse Effect;

(b)                any creation or other incurrenceof any Encumbrance on any Transferred Asset other than Encumbrances created orincurred in the ordinary course of business;

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(c)                any Contract entered into bySeller primarily relating to the Business or any Transferred Assets (includingthe acquisition or disposition of any assets) material to the Business or tothe Transferred Assets and Transferred IPR, taken as a whole or exceeding$100,000 per annum, other than Contracts entered into in the ordinary course ofbusiness and those contemplated by this Agreement and the other OperativeAgreements; or any Contract entered into by Seller resulting in an Encumbranceother than a Permitted Encumbrance with respect to Real Property;

(d)                any receipt of written notice bySeller of any termination by any customer, supplier or other third Person inconnection with, and material to, the Business;

(e)                any material damage, destructionor loss to the assets of the Business; 

(f)                 any (i) employment, deferredcompensation, severance, retirement or other similar Contract entered into withany Transferred Employee (or any amendment to any such existing Contract) otherthan as required by Law or in the ordinary course of business, (ii) grantof any right to severance or termination pay to any Transferred Employee, otherthan in the ordinary course of business, (iii) change in compensation orother benefits payable to any Transferred Employee pursuant to any severance orretirement plans or policies thereof, other than in the ordinary course ofbusiness, or (iv) other change in the compensation or benefits structureapplicable to the Transferred Employees in a manner that adversely affects in amaterial respect the cost structure of the Business; 

(g)                any payment, discharge orsatisfaction of any claim, Encumbrance, obligation or Liability of theBusiness, other than (i) Permitted Encumbrances, (ii) the payment,discharge or satisfaction of claims, Encumbrances, obligations or liabilitiesreflected or reserved against in the Most Recent Balance Sheet or (iii) inthe ordinary course of business; 

(h)                any write down or write up in thevalue of any Transferred Inventory, or any determination as collectible of anyTransferred Accounts Receivable or any part thereof which were previouslyconsidered uncollectible, or any write off as uncollectible of any TransferredAccounts Receivable or any part thereof, except in each case for write downs,write ups, and write offs in the ordinary course of business consistent withpast practice;

(i)                  except in the ordinary course ofbusiness, any disposition of or permission to lapse of any right to the use ofany of the Transferred IPR, or application therefor or any disposition of, orto Seller's Knowledge any disclosure of anyTransferred Trade Secrets or other confidential information constitutingTransferred IPR to Persons not bound by confidentiality obligations;

(j)                 except in the ordinary course ofbusiness and except for the capital expenditure commitments described on Section 5.6(j)of the Disclosure Letter, making by the Business of any capital expenditure orcommitment in excess of $500,000 for additions to property, plant, equipment,intangible or capital assets or for any other purpose, other than for emergencyrepairs or replacements;

(k)                any entry related to the Business,into any collective bargaining or labor Contract, or any experience of anyorganized slowdown, work interruption, strike or work stoppage;

(l)                  sale, transfer or otherdisposition of any of the Transferred Assets except in the ordinary course ofbusiness; 

(m)              any grant or incurrence of anyobligation for any increase in the compensation of any Transferred Employee(including same pursuant to any bonus, pension, profit sharing, retirement orother plan or commitment) except for raises to Transferred Employees in theordinary course of business consistent with past practices;

(n)                any change in any method ofaccounting or accounting principles, practices or policies of Seller withrespect to the Financial Statements except as required by a concurrent changein GAAP or the rules and regulations of the Securities and Exchange Commission;

(o)                any Contract, whether in writingor otherwise, to take any of the actions set forth in this Section 5.6except as otherwise specifically permitted or contemplated by this Agreement orany other Operative Agreement.

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5.7               Contracts

As of the Offer Date,neither Seller nor any of the Transferred Subsidiaries is a party to or boundby, nor has Seller or any Transferred Subsidiary made any commitment withrespect to any of the following with respect to the Business:

(a)                any Contract relating to thepending acquisition or disposition of any business or product line (whether bymerger, sale of stock, sale of assets or otherwise);

(b)                any Contract which creates anyEncumbrance on any Transferred Asset or Transferred IPR;

(c)                any Contract concerning theestablishment or operation by the Business of a partnership, joint venture orlimited liability company;

(d)                any Contract relating to theBusiness concerning or containing restrictions on business activities,including noncompetition or nonsolicitation (other than noncompetition ornonsolicitation agreements entered into with Employees in the ordinary courseof business);

(e)                any employment Contract (otherthan "at will" employment Contracts and Contracts arising as a matter ofapplicable Law) with any Transferred Employee or consulting Contract with anyPerson (other than consulting Contracts terminable by Seller or itsSubsidiaries without cause or penalty and with no more than 30 days advancenotice) providing for fixed annual cash compensation in excess of $50,000 orany employee retention, stay or bonus Contracts;

(f)                 any collective bargaining,workers' council or similar Contract relating to the Business entered into withany trade union, workers' council or other group of employee representatives;

(g)                any Contract (excluding AssignedLeases and Subsidiary Leases) under which the consequences of a default ortermination would reasonably be expected to have a Seller Material AdverseEffect; or

(h)                any Contract (excluding AssignedLeases and Subsidiary Leases) which contains any provisions requiring Seller orany Transferred Subsidiary to indemnify any other party (other than(i) indemnities against breach of the obligations contained in Contractswhich were entered into in the ordinary course of business, including ordinarycourse, generic director, officer and employee indemnification agreements notrelating to specific or particular subjects and (ii) indemnities againstIPR infringement contained in non-exclusive licenses entered into in theordinary course).

5.8               Taxes

(a)                To the extent that failure to doso would materially adversely impact the Transferred Assets or the Buyer'sownership of the Transferred Assets or operation of the Business, Seller andthe Transferred Subsidiaries (a) have timely paid all Taxes they arerequired to pay or have provided adequate accruals on its Financial Statementsfor all Taxes it is required to pay and (b) have timely filed all requiredfederal, state, local and foreign returns, estimates, information statementsand reports (collectively, "**Returns**") relating to any and all Taxesconcerning or attributable to the Transferred Assets or the Business and suchReturns are true, correct and complete, prepared in accordance with applicableLaws and have timely filed all other material Tax returns required to be filedby them.

(b)                Seller and the TransferredSubsidiaries have timely paid or withheld with respect to their Employees andother third parties (and timely paid over any withheld amounts to theappropriate Taxing authority) all federal and state income taxes, FederalInsurance Contribution Act, Federal Unemployment Tax Act and other Taxesrequired to be withheld or paid.

(c)                There are no Encumbranceswith respect to any Taxes upon any of the Transferred Assets, other than withrespect to Taxes not yet due and payable.

(d)                Seller does not know of any basisfor the assertion of any claim for any liabilities for unpaid Taxes of Selleror the Transferred Subsidiaries for which Buyer would become liable as a resultof the transactions contemplated by this Agreement or that would result in anyEncumbrance on any of the TransferredAssets.

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(e)                To the extent applicable to theTransferred Assets or the Buyer's ownership of the Transferred Assets oroperation of the Business, Seller has not been delinquent in the payment of anymaterial Tax, nor is there any Tax deficiency outstanding, assessed or proposedagainst Seller, nor has Seller executed any outstanding waiver of any statuteof limitations on or extension of the period for the assessment or collectionof any Tax.

(f)                 To the extent applicable to theTransferred Assets or the Buyer's ownership of the Transferred Assets oroperation of the Business, (i) no audit or other examination of any Returnof Seller is presently in progress, nor has Seller been notified of any requestfor such an audit or other examination; (ii) no adjustment relating to anyReturn filed by Seller has been proposed formally or, to the Knowledge ofSeller, informally by any tax authority to Seller or any representativethereof; and (iii) no claim has ever been made by an authority in ajurisdiction where Seller does not file Returns that it is or may be subject totaxation by that jurisdiction.  

5.9               Transferred Tangible Assets

Seller or itsSubsidiaries have good and marketable title to the Transferred Tangible Assets,free and clear of any Encumbrances.  To the Knowledge of Seller, suchTransferred Tangible Assets are in good operating condition, free of anymaterial defects (except those resulting from normal wear and operation).  TheTransferred Tangible Assets will constitute at the Closing, all of the materialtangible assets (other than Infrastructure Assets) held by Seller or any of itsSubsidiaries and primarily used or held for use in the Business.

5.10           Transferred Contracts; SubsidiaryContracts

(a)                Each Transferred Contract is avalid and binding agreement of Seller or a Subsidiary of Seller, is in fullforce and effect and, to the Knowledge of Seller, is enforceable according toits terms, subject to the Enforceability Exceptions.  Each of Seller and itsSubsidiaries has performed or is performing all material obligations requiredto be performed by it under the Transferred Contracts and is not in breach ordefault in any material respect thereunder and, to the Knowledge of Seller, noother party to any Transferred Contract is in breach or default in any materialrespect thereunder.  True and complete copies of each Transferred Contract havebeen made available to Buyer.  Section 5.10(a) of the DisclosureLetter sets forth a list of all consents to transfers, assignments andnovations required as of the Closing in connection with the assignment of theTransferred Contracts as contemplated by this Agreement (the "**Consensual Transfers**"). Notwithstanding the foregoing, Seller makes no representation or warranty withrespect to the Transferred Contracts regarding infringement or misappropriationof Intellectual Property Rights except those expressly made pursuant to Section 5.11.

(b)                Each Contract (excludingSubsidiary Leases) to which a Transferred Subsidiary is a party (each suchContract, a "**Subsidiary Contract**"), is a valid and binding agreement ofsuch Transferred Subsidiary and is in full force and effect and, to theKnowledge of Seller, is enforceable according to its terms, subject to theEnforceability Exceptions.  Each Transferred Subsidiary has performed or isperforming all material obligations required to be performed by it under theSubsidiary Contracts and is not in breach or default in any material respectthereunder and, to the Knowledge of Seller, no other party to any SubsidiaryContract is in breach or default in any material respect thereunder.  True andcomplete copies of each material Subsidiary Contract have been made availableto Buyer.  Section 5.10(b) of the Disclosure Letter sets forth alist of all consents to transfers and assignments required in respect of theSubsidiary Contracts as of the Closing in connection with the transactionscontemplated by this Agreement (the "**SubsidiaryConsents**").

(c)                As of the Offer Date, the ThirdParty Licenses listed on Schedule 1.166 areall of the licenses between Seller (or a Subsidiary thereof) and a third Personpursuant to which such third Person has licensed software or other IPR (exceptfor Marks) to Seller or a Transferred Subsidiary that is material to, and usedby Seller or any of its Subsidiaries in the Business (other than InfrastructureAssets and software licensed under industry typical object code licenses andgenerally available in the marketplace).  Schedule 1.166 indicateswhich of such Third Party Licenses that Seller or its Subsidiaries maytransfer to Buyer or a Buyer Subsidiary in accordance with the terms of suchlicense and without Seller, or the applicable Transferred Subsidiary, incurringany material Liability to such third Person. 

5.11           Intellectual Property

(a)                To the Knowledge of Seller, as ofthe Offer Date, neither Seller nor any Subsidiary has received written noticewithin the four-year period preceding theOffer Date of any material claim that the conduct of the Business by Seller orits Subsidiaries infringes, misappropriates or otherwise violates theIntellectual Property Rights of any third Person.

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(b)                To the Knowledge of Seller, as ofthe Offer Date, the conduct of the Business by Seller and its Subsidiaries doesnot infringe any Patent held by any third Person.

(c)                To the Knowledge of Seller, as ofthe Offer Date, the conduct of the Business by Seller and its Subsidiaries hasnot and does not infringe or misappropriate any Copyright, Trade Secret or Markheld by any third Person.

(d)                The issued Patents identified on Schedule 1.94(as such schedule may be supplemented prior to the Closing Date) together withthe Transferred Patents are the only issued Patents owned or licensable bySeller and its Subsidiaries that, absent a license, would be infringed byBuyer's and its Subsidiaries' conduct of the Business immediately after theClosing Date (assuming the conduct of the Business by Buyer and itsSubsidiaries immediately after the Closing is the same as the conduct of theBusiness by Seller and its Subsidiaries immediately prior to the Closing).

(e)                As of the Offer Date, there havebeen no written claims within the four-year period preceding the Offer Dateagainst Seller or its Subsidiaries asserting the invalidity, misuse orunenforceability of any Transferred IPR.

(f)                 Seller owns all right, title andinterest in and to all of the Transferred IPR and/or has the right andauthority to transfer such Transferred IPR to Buyer in accordance with theterms hereof free and clear of any and all Encumbrances but subject to anyprior non-exclusive licenses granted by Seller or its Subsidiaries prior to theClosing pursuant to Section 8.2.

(g)                Seller and its Subsidiaries havetaken reasonable steps to protect Seller's and its Subsidiaries' rights inTrade Secrets relating to the Business that it wishes to protect, and withoutlimiting the foregoing, Seller and each Transferred Subsidiary have a policyrequiring each Employee and contractor materially involved in proprietaryaspects of the Business to execute nondisclosure of proprietary information andconfidentiality agreements and Seller and each Transferred Subsidiary haveimplemented such policy.

(h)                There are no Contracts (other thanTransferred Contracts), which provide for any future cash payments to Seller ora Subsidiary thereof for the use of the Transferred IPR.

(i)                  Section 5.11(i) of the Disclosure Letter lists (i) all items of TransferredIPR that are subject to a formal registration with the United Stated Patent andTrademark Office, Copyright Office or similar authority anywhere in the worldthat, to the Knowledge of Seller, will expire or otherwise require action tocontinue, renew or maintain same within the six (6) month period after theOffer Date and (ii) such information as Seller's intellectual propertycounsel is able to reasonably provide from a review of standard docket reportsas of the Offer Date.

(j)                 There is no currently pending, orto Seller's Knowledge threatened, adverse decisions or claims in which Selleris a named party with respect to any opposition, cancellation, injunction orother claim or restriction concerning the Transferred IPR.

(k)                To Seller's Knowledge, theTransferred IPR is valid and enforceable.

5.12           Financial Statements and Reports

(a)             Section 5.12(a) of the Disclosure Letter sets forth the followingwith respect to the Business: (i) (A) the audited balance sheet as ofMarch 31, 2005 and the related audited statements of income and cash flows forthe 12‐month period ended March 31, 2005 and the related notes of Sellerand its Subsidiaries related to the Business and (B) the unaudited balancesheet as of March 31, 2004 and the related unaudited income statement for the12‐month period ended March 31, 2004 of Seller and its Subsidiariesrelated to the Business ((A) and (B) together, the "**Year‐EndFinancials**"), and (ii) unaudited balance sheet as of December 31, 2005(the "**Most Recent Balance Sheet**"), and the related unaudited incomestatement for the 9‐month period ended December 31, 2005 of Seller andits Subsidiaries related to the Business (together with the Most Recent BalanceSheet, the "**Interim Financials**").  The Year‐End Financials and theInterim Financials (collectively, the "**Financial Statements**") have beenprepared in accordance with GAAP, applied in a consistent manner, except thatthe Interim Financials do not contain the notes required by GAAP.  The FinancialStatements present fairly the financial condition, operating results and cashflows of the Business as of the dates and for the periods indicated therein.

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(b)                Neither Seller nor any TransferredSubsidiary has any Liability with respect to the Business, except for(i) Liabilities reflected in the Financial Statements,(ii) Liabilities which have arisen since the date of the Most RecentBalance Sheet in the ordinary course of business, (iii) contractual andother Liabilities incurred but which are not required by GAAP to be reflectedon a balance sheet and (iv) the Excluded Liabilities.

(c)                Seller and each TransferredSubsidiary maintain accurate books and records reflecting their respectiveassets and liabilities and maintain proper and adequate internal accountingcontrols which are designed to provide reasonable assurance that(i) transactions related to the Business are executed with management'sauthorization, (ii) transactions are recorded as necessary to permitpreparation of the financial statements of Seller and its Subsidiaries and tomaintain accountability for the assets of the Business, (iii) access toassets of the Business is permitted only in accordance with Seller'smanagement's authorization, (iv) the reporting of assets of the Business iscompared with existing assets at regular intervals, and (v) accounts,notes and other receivables and inventory related to the Business were recordedaccurately, and proper and adequate procedures are implemented to effect in allmaterial respects the collection thereof on a current and timely basis. 

5.13          Benefit Plan Compliance

(a)                Domestic Plans.

(i)           The Employee Benefits Planscurrently maintained by, or contributed to by Seller or any ERISA Affiliate forthe benefit of Employees on Seller's United States payroll (each a "**SellerDomestic Benefit Plan**") that are subject to the Laws of the United Statesare those listed in Section 5.13(a)(i) of the Disclosure Letter,and a copy or summary of each has been furnished or made available to Buyer.

(ii)           Each Seller Domestic Benefit Planintended to be qualified under Section 401(a) of the Code, has obtained afavorable determination, notification, advisory and/or opinion letter, asapplicable, as to its qualified status from the Internal Revenue Service. Seller and each ERISA Affiliate and, to the Knowledge of Seller, each of the SellerDomestic Benefit Plans, are in compliance with the provisions of the applicableLaws (if any) under which the Seller Domestic Benefit Plans are maintained, andwith the terms of such Seller Domestic Benefit Plans.

(iii)           Except as may be set forth in Section 5.13(a)(iii)of the Disclosure Letter, all contributions to the Seller Domestic Benefit Planswhich may have been required to be made in accordance with the terms of anysuch plan, and, when applicable, the Law of the jurisdiction in which such planis maintained, have been made.

(iv)           Except as set forth in Section 5.13(a)(iv)of the Disclosure Letter, all reports and returns, including Forms 5500, withrespect to any Seller Domestic Benefit Plan required to be filed by Seller withany Governmental Authority or distributed to any Seller Domestic Benefit Planparticipant by Seller have been duly filed or distributed.

(v)           Except as set forth in Section 5.13(a)(v) ofthe Disclosure Letter, there are no pending investigations by any GovernmentalAuthority involving the Seller Domestic Benefit Plans, and there are no claimspending or, to the Knowledge of Seller, threatened against Seller (except forclaims for benefits payable in the normal operation of the Seller DomesticBenefit Plans) nor, are there any facts that could give rise to any Liabilityin the event of such investigation, claim, suit or proceeding.

(vi)           Neither Seller nor any ERISAAffiliate has incurred any Liability under Title IV of ERISA, includingany Liability under Sections 4062, 4063 or 4064 of ERISA, or anywithdrawal liability, within the meaning of Section 4201 of ERISA orpotential withdrawal liability arising from a transaction described inSection 4204 of ERISA.

(vii)           Seller and each ERISA Affiliatehave complied with the notice and continuation coverage requirements ofSection 4980B of the Code and the regulations thereunder with respect toeach Seller Domestic Benefit Plan that is, or was during any taxable year ofSeller or any ERISA Affiliate for which the statute of limitations on theassessment of federal income Taxes remains open, by consent or otherwise, agroup health plan within the meaning of Section 5000(b)(1) of the Codeexcept for such noncompliance as would not reasonably be expected to subjectBuyer, or any of the Transferred Assets, to any material liability.

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(b)           Foreign Plans.

(i)           The only Employee Benefits Plansmaintained by, or contributed to by Seller, any Transferred Subsidiary or anyERISA Affiliate for the benefit of Employees or former Employees that aresubject to the Laws of jurisdictions other than the United States, and that itis anticipated by Seller that Buyer will be required to assume or continueeither by operation of Law or by the terms of this Agreement, are those listedin Section 5.13(b)(i) of the Disclosure Letter (each a "**ForeignBenefit Plan**").  A copy or summary of each Foreign Benefit Plan, and, whereapplicable, a copy of the most recent actuarial report has been furnished ormade available to Buyer.

(ii)           Seller, each TransferredSubsidiary and each ERISA Affiliate and, to the Knowledge of Seller, each ofthe Foreign Benefit Plans, are in compliance with the provisions of theapplicable Laws of each jurisdiction in which any of the Foreign Benefit Plansare maintained, to the extent such Laws are applicable to the Foreign BenefitPlans and with the terms of such Foreign Benefit Plans.

(iii)           Except as may be set forth in Section 5.13(b)(iii)of the Disclosure Letter, all contributions to or accruals for the ForeignBenefit Plans which may have been required to be made in accordance with theterms of any such plan, and, when applicable, the Law of the jurisdiction inwhich such plan is maintained, have been made.

(iv)           Except as set forth in Section 5.13(b)(iv)of the Disclosure Letter, all reports and returns with respect to any ForeignBenefit Plan required to be filed by Seller with any Governmental Authority ordistributed to any Foreign Benefit Plan participant by Seller have been duly filedor distributed.

(v)           Except as set forth in Section 5.13(b)(v)of the Disclosure Letter, there are no pending investigations by anyGovernmental Authority involving the Foreign Benefit Plans, and there are no claimspending or, to the Knowledge of Seller, threatened against Seller (except forclaims for benefits payable in the normal operation of the Foreign BenefitPlans), nor, are there any facts that could give rise to any Liability in theevent of such investigation claim, suit or proceeding.

5.14         Labor Matters

(a)            Section 5.14(a) of the Disclosure Letter contains a list of anycollective bargaining, workers' council or similar agreement to which Seller orany Transferred Subsidiary is a party, or to which Seller or any TransferredSubsidiary is subject as a matter of applicable Law, with respect to orrelating to the Business.  Neither Seller nor any Transferred Subsidiary is(a) subject to a legal duty to bargain (exclusive of any notification andconsultation obligations) with any trade union or workers' council on behalf ofthe Employees or (b) to the Knowledge of Seller, the object of any attemptto organize the Employees for collective bargaining purposes or presentlyoperating under an expired collective bargaining agreement.  As of the OfferDate and within the four year period preceding the Offer Date, neither Sellernor any Transferred Subsidiary in respect of the Transferred Business is or hasbeen a party to or subject to any pending strike, work stoppage, organizingattempt, picketing, boycott or similar activity.  

(b)             Section 5.14(b) of the Disclosure Letter contains a list (with namesomitted where required by applicable local law) of all Employees or independentcontractors employed or engaged by Seller and the Transferred Subsidiaries inthe Transferred Business and whose base annual salary exceeds $100,000 per yearor who are employed pursuant to any employment Contract (other than "at will"employment Contracts and Contracts arising as a matter of applicable Law),along with the position and the annual rate of compensation of each suchperson.  Each current or past Employee has entered into Seller's or the TransferredSubsidiaries' standard confidential information and invention assignmentagreement with Seller or a Transferred Subsidiary, as the case may be.  Section 5.14(b)of the Disclosure Letter contains a list of all Employees employed in the United States who are not citizens of the United States.

(c)              On or before the date of thisAgreement, (i) the formalities of information and consultation of the Workers'Council of Porgès have been duly fulfilled, and (ii) Seller has providedBuyer with a copy of the minutes of all the meetings of the Workers' Council ofPorges held in this respect that were made available to Seller.

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5.15           Properties

(a)             Section 5.15(a) of the Disclosure Letter contains a list of allLeases to be assigned to Buyer in accordance with Article 2 (the "**AssignedLeases**") and all Leases held by the Transferred Subsidiaries (the "**SubsidiaryLeases**", which, together with the Assigned Leases, the Transferred RealProperty and the Subsidiary Real Property shall hereinafter be referred to asthe "**Real Property**").  To the Knowledge of Seller, all facilities leasedor subleased under any Assigned Lease or Subsidiary Lease are supplied withutilities and other services adequate for  the conduct of the Business at suchfacility as it is currently being conducted and all such facilities areprovided legal access to public roads. 

(b)               Neither Seller nor any of itsSubsidiaries has received written notice that it is in default in any materialrespect under any Assigned Lease or Subsidiary Lease which notice has not beenremedied or withdrawn, and, to the Knowledge of Seller, no other party to anyAssigned Lease or Subsidiary Lease is default thereof in any material respect. Each Assigned Lease and Subsidiary Lease is a valid and binding agreement ofSeller or a Subsidiary of Seller, is in full force and effect and, to theKnowledge of Seller, is enforceable according to its terms, subject to theEnforceability Exceptions.

(c)                Seller or its Subsidiaries hasgood and valid title to the Transferred Real Property and the Subsidiary RealProperty, subject to Permitted Encumbrances.  There are no pending or, to theKnowledge of Seller, threatened condemnation proceedings relating to theTransferred Real Property or the Subsidiary Real Property.  All facilitieslocated on the Transferred Real Property and the Subsidiary Real Property aresupplied with utilities and other services adequate for  the conduct of theBusiness at such facility as it is currently being conducted and all suchfacilities are provided legal access to public roads.  The improvementsconstructed on the Transferred Real Property and the Subsidiary Real Propertyare suitable for the conduct of the Business as it is currently beingconducted.  

5.16             Environmental Matters

(a)                No Environmental Condition existswith respect to the Transferred Business or the Transferred Assets that wouldconstitute a violation in any material respect of any Environmental Laws orotherwise give rise to any material liability under any Environmental Laws. Neither Seller nor any of its Subsidiaries has received any written notice,citation, summons, order or complaint, and no penalty has been assessed withinthe two-year period preceding the Offer Date or is pending or, to the Knowledgeof Seller, threatened, by any third Person (including any GovernmentalAuthority) with respect to the Management or Release of, or exposure to anyHazardous Substance by or on behalf of Seller (with respect to the Business) orany of its predecessors or in relation to its past or present conduct of theBusiness for which either the Seller or any of its Subsidiaries has anyremaining material Liability.  Neither Seller nor any of its Subsidiaries hasreceived and, to the Knowledge of Seller, no one else has received, any requestfor information, notice of claims, demand or other notification that it (or anyof its predecessors with respect to the Business) is or may be potentiallyresponsible with respect to any investigation, cleanup remedial action or otherresponse action ("**Remediation**") of Hazardous Substances (whether on-siteor off-site) in connection with the Business for which either the Seller or anyof its Subsidiaries has any remaining material Liability.

(b)                No Hazardous Substances have beenReleased by Seller or any Transferred Subsidiary or, to the Knowledge ofSeller, by any other Person at any property now formerly owned, operated orleased by Seller or a Transferred Subsidiary in connection with the Business insuch manner as would reasonably be expected to result in a material Liabilityto Seller or any of it Subsidiaries or require any Response Action.

(c)                Section 5.16(c) of the Disclosure Letter contains a list of theEnvironmental Permits held by Seller and its Subsidiaries.

(d)                No representations in this Article 5other than this Section 5.16 shall apply to Liabilities and othermatters respecting Environmental Claims, Environmental Conditions,Environmental Permits and the violation of Environmental Laws.

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5.17           Transferred Inventory

The TransferredInventory has been maintained in the ordinary course of business, is of goodand merchantable quality; and is in a condition that in Seller's reasonablejudgment consistent with past practice is useable, leaseable or saleable in theordinary course of business taking into account the remaining shelf life and expecteddemand, subject to the inventory reserve determined consistent with pastpractice for slow-moving, excess non-saleable or obsolete inventory as recordedon the Financial Statements in good faith in accordance with GAAP.  AllTransferred Inventory, whether reflected on the Financial Statements orsubsequently acquired, (a) is located on the Real Property described on Section 5.17of the Disclosure Letter or is in consignment stock in the possession of Seller'scustomers or distributors in the ordinary course of business consistent withpast practice and (b) has been acquired, developed or manufactured bySeller only in bona fide transactions entered into in the ordinary course ofbusiness.  Except as described in Section 5.17 of the DisclosureLetter, Seller has valid legal title to the Transferred Inventory free andclear of any consignments, Encumbrances, claims or charges other than PermittedEncumbrances.  

5.18           Accounts Receivable

Except as describedon Section 5.18 of the Disclosure Letter, the accounts receivablebalances shown on the Financial Statements represent actual amounts due andowing from bona fide sales and services transactions completed in accordancewith the terms and provisions contained in the documents, if any, relatingthereto.  The reserves for uncollectible accounts receivable reflected on theFinancial Statements were established in accordance with GAAP in light of allthe facts then known to Seller and Seller's historical methods and practices inestablishing such reserves.  

5.19           Litigation

There is no action,suit, claim or proceeding of any nature with respect to the Business pending,or to the Knowledge of Seller, threatened, against Seller or any of itsSubsidiaries, their respective assets, properties, rights (tangible orintangible) or any of their respective officers or directors.  There is noinvestigation or other proceeding with respect to the Business (excluding anyroutine inspections) pending or, to the Knowledge of Seller, threatened,against Seller or any of its Subsidiaries, any of their respective properties(tangible or intangible) or any of their officers or directors by or before anyGovernmental Authority.  No Governmental Authority has at any time challengedthe legal right of Seller or any of its Subsidiaries to conduct the Businesswithout restriction as presently or previously conducted.  

5.20           Products Liability

(a)                Neither Seller nor any of itsSubsidiaries has received any written notice with respect to any materialpending claim involving any Product sold by or on behalf of Seller or any ofits Subsidiaries resulting from an alleged defect in design, manufacture,materials, testing or workmanship, performance, or any alleged failure to warn,or from any alleged breach of warranty, express or implied, or any allegednoncompliance with any applicable Laws.

(b)                Except as set forth in Section 5.20(b)of the Disclosure Letter, during the five (5) yearperiod ending on the Offer Date there has been no recall or rework inthe field or in the internal business or manufacturing processes, or post-salewarning or similar action (collectively, a "**Recall**") conducted by Selleror any of its Subsidiaries with respect to any Product sold by or on behalf ofSeller or its Subsidiaries, and there are no facts or circumstances which arereasonably expected to lead to a Recall.

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5.21           Customers and Suppliers

(a)                Section 5.21(a) of the Disclosure Letter sets forth the thirty (30)largest customers of Seller and its Subsidiaries relating to the Business byrevenue for the fiscal year ended March 31, 2005.  As of the Offer Date,neither Seller nor any Transferred Subsidiary has received notification thatany such customer of the Business intends to terminate or adversely change itsrelationship with Seller or any Transferred Subsidiary, as applicable, withrespect to the Business.

(b)                Section 5.21(b) of the Disclosure Letter sets forth (i) thetwenty (20) largest suppliers to Seller and its Subsidiaries related to theBusiness for the fiscal year ended March 31, 2005, measured by the amount ofpayments made to such Persons in connection with the Business, (ii) allcontract manufacturers used by Seller or its Subsidiaries in connection withthe Business and (iii) any sole source suppliers of the Business.  As ofthe Offer Date, neither Seller nor any or any Transferred Subsidiary, asapplicable, has received notification that any such supplier intends toterminate or adversely change its relationship with Seller or any TransferredSubsidiary, as applicable, with respect to the Business.

5.22           Compliance With Health Care Laws

(a)                Neither Seller nor any of itsAffiliates or Subsidiaries participate in the United States healthcare programsof Medicare, Medicaid, or their counterparts worldwide, or any other healthcare programs of a Governmental Authority, or third party payment programs inany jurisdiction (collectively, "**Programs**") and nor are they a party toparticipation agreements for payments by such Programs.

(b)                Neither Seller nor any of itsAffiliates or Subsidiaries has been the subject of any investigation by aGovernmental Authority, whether in the United States or overseas, as a resultof or in connection with Seller's or any of its Affiliates' or Subsidiary'spricing, production, distribution, marketing or sales activities related to theProducts or related services. To Seller's Knowledge, Seller and each of itsAffiliates and Subsidiaries have complied in all material respects with allapplicable Laws regarding distribution, marketing and sales of Products andservices.

(c)                Seller andeach of its Affiliates and Subsidiaries is, and at all times has been,in compliance with all relevant federal and other health care Laws applicableto the Business, including the federal Anti-kickback and Fraud and AbuseProhibition Statutes (42 U.S.C. § 1320a‐7b) and to Seller's Knowledge allother Laws prohibiting false statements and improper remuneration forpurchasing services or products, the civil False Claims Act (31 U.S.C. §§ 3729 *etseq*.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), theHealth Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1301 *etseq*. and implementing regulations), the exclusion laws, SSA § 1128 (42U.S.C. 1320a-7) and the regulations promulgated pursuant to such laws andregulations, relating to the regulation of the Business (collectively, "**HealthCare Laws**"), except for failures of compliance that, individually or in theaggregate, have not or would not reasonably be expected to have a SellerMaterial Adverse Effect, and no change in the current conduct of the Business,or its internal procedures or processes, is required in order to so comply.

5.23           FDA and Global RegulationCompliance

(a)                Seller and each of the TransferredSubsidiaries has obtained each federal, state, county, local or non-U.S.Business Permit (including all those that may be required by the Federal Foodand Drug Administration (the "**FDA**") or any other Governmental Authorityengaged in the regulation of the Products, the Business or the Business'smanufacturing and other quality systems) that is required for or has beenapplied for in operating the Business in any location in which it is currentlyoperated and all of such Business Permits are in full force and effect.  Section 5.23(a)of the Disclosure Letter lists all annual manufacturing registration and devicelisting, annual reports and similar regulatory filing requirements that arerequired to be filed within six months after the Offer Date in order tomaintain Business Permits and manufacturing facility licenses and where failureto timely file would result in a Seller Material Adverse Effect.  NeitherSeller nor any of the Transferred Subsidiaries has received any notice orwritten communication with respect to the Business from any GovernmentalAuthority regarding, and, there are no facts or circumstances that are likelyto give rise to, (i) any violation of applicable Law or material adversechange in any Business Permit, or any failure to materially comply with anyapplicable Law or any term or requirement of any Business Permit or(ii) any revocation, withdrawal, suspension, cancellation, limitation,termination or modification of any Business Permit.  No such Business Permitwill be terminated or impaired, or will become terminable, in whole or in part,as a result of the consummation of the transactions contemplated by thisAgreement.

 

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(b)                The operation of the Business,including the manufacture, import, export, testing, development, processing,packaging, labeling, storage, marketing, and distribution of all Products, isand at all times has been in material compliance with all applicable Laws,Business Permits, Governmental Authorities and orders including thoseadministered by the FDA for products sold in the United States.  There is noactual or, to the Knowledge of Seller, threatened material action orinvestigation in respect of the Business by the FDA or any other GovernmentalAuthority which has jurisdiction over the operations, properties, products orprocesses of the Business or the Transferred Subsidiaries, or, to the Knowledgeof Seller, by any third parties acting on their behalf.  Seller has noKnowledge that any Governmental Authority is considering such action or of anyfacts or circumstances that are likely to give rise to any such action orinvestigation.(c)                Except as set forth in Section 5.23(c)of the Disclosure Letter, during the three (3) year period ending on the OfferDate, neither Seller nor any Transferred Subsidiary has had any product ormanufacturing site subject to a Governmental Authority (including FDA) shutdownor import or export prohibition, nor received any FDA Form 483 or otherGovernmental Authority notice of inspectional observations, "warning letters,""untitled letters" or, to the Knowledge of Seller, requests or requirements tomake changes to the operations of the Business or Products that if not compliedwith would reasonably be expected to result in a Seller Material AdverseEffect, or similar correspondence or written notice from the FDA or otherGovernmental Authority in respect of the Business and alleging or assertingnoncompliance with any applicable Laws, Business Permits or such requests orrequirements of a Governmental Authority, and, to the Knowledge of Seller,neither the FDA nor any Governmental Authority is considering such action.  Except as set forth in Section 5.23(c) of theDisclosure Letter, no vigilance report or medical device report with respect tothe Business or the Products has been reported to Seller during the 90 dayperiod ending on the Offer Date, and to the Knowledge of Seller, as of theOffer Date no vigilance report or medical device report is under investigationby any Governmental Authority with respect to the Products or the Business.

(d)                All studies, tests and preclinicaland clinical trials in respect of the Business being conducted by or on behalfof Seller or any Transferred Subsidiary that have been or will be submitted toany Governmental Authority, including the FDA and its counterparts worldwide,including in the European Union, in connection with any Business Permit, arebeing or have been conducted in compliance in all material respects with therequired experimental protocols, procedures and controls pursuant to acceptedprofessional scientific standards and applicable local, state, federal andforeign Laws, rules and regulations, including the applicable requirements ofGood Laboratory Practices, Good Clinical Practices, Good ManufacturingPractices and the U.S. Food, Drug and Cosmetic Act of 1938 and its implementingregulations, including 21 CFR Parts 50, 54, 56, 58, and 812.  NeitherSeller nor any Transferred Subsidiary has received any notices, correspondenceor other communication in respect of the Business from the FDA or any otherGovernmental Authority requiring the termination or suspension of any clinicaltrials conducted by, or on behalf of, Seller or in which Seller hasparticipated, and to the Knowledge of Seller neither the FDA nor any otherGovernmental Authority is considering such action.  During the six month periodending on the Offer Date, neither Seller nor any Transferred Subsidiary hasreceived specific written notification from a Governmental Authority of the rejectionof data obtained from any clinical trials conducted by, or on behalf of, Selleror in which Seller has participated with respect to the Business or Products,which data was submitted to the Governmental Authority and which was necessaryto obtain regulatory approval of a particular Product.

(e)                The manufacture of Products by, oron behalf of, Seller or any Transferred Subsidiary is being conducted incompliance in all material respects with all applicable Laws including theFDA's Quality Systems Regulation at 21 CFR Part 820 for products sold inthe United States, and the respective counterparts thereof promulgated byGovernmental Authorities in countries outside the United States.  Seller andeach of the Transferred Subsidiaries, and, to the Knowledge of Seller, anythird party assembler, sterilizer or manufacturer of Products, components oraccessories, are in material compliance with all applicable Laws andcertifications currently held by Seller governing quality systems,manufacturing processes and all other quality standards, registration andlisting requirements governing those third parties' activities, including setforth in 21 CFR Part 807 and 21 CFR Part 820 for products sold in theUnited States and all other similar applicable Laws.

(f)                 Neither Seller nor any of theTransferred Subsidiaries is the subject of any pending or, to the Knowledge ofSeller, threatened investigation in respect of the Business by the FDA pursuantto its "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities"Final Policy set forth in 56 Fed. Reg. 46191 (September 10, 1991) and anyamendments thereto.  Neither Seller nor any of its Transferred Subsidiaries hascommitted any act, made any statement, or failed to make any statement, in eachcase in respect of the Business and that would provide a basis for the FDA toinvoke its policy with respect to "Fraud, Untrue Statements of Material Facts,Bribery and Illegal Gratuities" and any amendments thereto.  Neither Seller norany of the Transferred Subsidiaries or any of their respective officers,Employees or agents has been convicted of any crime or engaged in any conductthat could result in a material debarment or exclusion (i) under 21 U.S.C.Section 335a, or (ii) any similar applicable state Law.  To the Knowledgeof Seller, no debarment or exclusionary claims, actions, proceedings orinvestigations in respect of the Business are pending or threatened againstSeller, any of the Transferred Subsidiaries or any of their respectiveofficers, employees or agents, except for such debarments, claims, actions,proceedings or investigations that, individually or in the aggregate, have notor would not reasonably be expected to have a Seller Material Adverse Effect.

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5.24           Restrictions on BusinessActivities

There is no Contractor commitment to which Seller or any Transferred Subsidiary is a party or bywhich they are bound limiting or restricting in any material respect the rightof Seller or any Transferred Subsidiary to engage in any line of businessrelating to the Business or to compete without restriction with any Person, ineach case which would or could be reasonably expected to apply to theactivities of Buyer after the Closing with respect to the Business. 

5.25           Sufficiency

The TransferredAssets and the Transferred IPR, and the assets of the Transferred Subsidiaries(other than Excluded Assets) acquired by Buyer as a matter of law as a resultof Buyer's acquisition of the TransferredEquity Interests and any rights or licenses granted or services providedpursuant to any other commitment or Contract entered into pursuant to thisAgreement (subject to the limitations therein and in the related exhibitsthereto), constitute all the assets, properties, interests in properties, andrights owned or licensable by Seller or its Subsidiaries and used or necessaryto conduct the Business after the Closing as currently conducted.  

5.26           Exclusive Warranties

Except for theexpress representations and warranties set forth in this Agreement, neitherSeller nor any of its Subsidiaries makes any representation or warranty,express or implied, with respect to the Transferred Assets, the Transferred IPRand the Assumed Liabilities, which are being sold "AS IS" in all respects withall faults and without any other warranties of any kind.  EXCEPT ASSPECIFICALLY CONTAINED HEREIN, SELLER EXPRESSLY DISCLAIMS ANY WARRANTY OFMERCHANTABILITY, NON‐INFRINGEMENT, VALIDITY, ENFORCEABILITY, ORSUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF BUYER'S, WHETHER OR NOTSELLER HAS BEEN MADE AWARE OF ANY SUCH PURPOSE.

5.27           Insurance

Section 5.27 of theDisclosure Letter lists all insurance policies reasonably related to theTransferred Business.  All premiums due and payable under all such policieshave been paid, and Seller is otherwise in material compliance with the termsof such policies (or other policies providing substantially similar insurancecoverage). Seller does not have Knowledge of the threatened termination of, ora material increase in premium with respect to, any of such policies.

5.28           Compliance with Conduct ofBusiness Covenant

During the periodfrom the Offer Date until the date of this Agreement, Seller has conducted, andhas caused each of its Subsidiaries to conduct, the Business in a manner thatdoes not violate the covenants set forth in Section 8.2 hereof.

**Article 6REPRESENTATIONS ANDWARRANTIES OF BUYER**

Buyerhereby makes the following representations and warranties to Seller as of theOffer Date:

6.1               Organization of Buyer

Buyer is a dulyincorporated and validly existing corporation in good standing under the Lawsof Denmark, with all requisite power and authority to own its properties andconduct its business, including the discharge of its obligations with respectto the Assumed Liabilities, and is duly qualified in each jurisdiction in whichits ownership of property, including the Transferred Assets, and its conduct ofbusiness, including the performance of the Assumed Liabilities, requires such qualification,except where the failure to so qualify would not, individually, or in theaggregate, be reasonably likely to have a material adverse effect on Buyer.

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6.2               Authorization

Buyer has therequisite power and authority to execute and deliver this Agreement and each ofthe other Operative Agreements to which it is a party, and to perform itsobligations hereunder and thereunder.  This Agreement has been, and each of theother Operative Agreements to which it or a Buyer Subsidiary is a party willbe, upon their execution and delivery, duly and validly authorized, executedand delivered by Buyer and/or any Buyer Subsidiary, and this Agreementconstitutes, and each of the other Operative Agreements to which it and/or anyBuyer Subsidiary is a party will constitute, the valid and binding agreement ofBuyer and/or such Buyer Subsidiary enforceable against Buyer and/or such BuyerSubsidiary in accordance with its respective terms, subject to theEnforceability Exceptions.  No other actions or proceedings on the part ofBuyer are necessary to authorize Buyer's execution or performance of thisAgreement or any of the Operative Agreements to which it is a party or thetransactions contemplated hereby or thereby.

6.3               No Violation

The execution anddelivery by Buyer of this Agreement and each of the other Operative Agreementsto which it is a party does not, and the performance by Buyer of its respectiveobligations hereunder and thereunder will not: (a) conflict with, orresult in a breach of, any of the provisions of its charter documents orbylaws; (b) materially breach, violate or contravene any applicable Laws;(c) be prevented or delayed as a result of a breach of the UK OFTUndertakings; or (d) conflict in any material respect with, or result in amaterial breach of or default under, any material Contract to which Buyer is aparty or by which Buyer or any of its properties may be affected or bound.

6.4               Government Consents

No materialGovernmental Actions on the part of Buyer are required in connection with theexecution or delivery by Buyer of this Agreement or any of the other OperativeAgreements or the consummation by Buyer of the transactions contemplated herebyor thereby, other than pursuant to HSR and such Governmental Actions set forthon Schedule 9.3.

6.5               Purchase for Investment;Accredited Investor

Buyer is aware thatthe Transferred Equity Interests were not registered under the Securities Act,or any other applicable securities Laws, and were issued pursuant to exemptions therefrom.  Buyer is purchasing the Transferred Equity Interests solely forinvestment, with no present intention to distribute any Transferred EquityInterests to any Person, and Buyer will not sell or otherwise dispose of anyTransferred Equity Interests except in compliance with the registrationrequirements or exemption provisions under the Securities Act and the rules andregulations promulgated thereunder, or any other applicable securities Laws.  Buyerhas substantial experience in evaluating and investing in securities incompanies similar to the Transferred Subsidiaries and acknowledges that it canprotect its own interests.  Buyer has such knowledge and experience infinancial and business matters so that it is capable of evaluating the meritsand risks of its acquisition of the Transferred Equity Interests.  Buyer is an"accredited investor" within the meaning of Rule 501(a) of Regulation D,promulgated by the Securities and Exchange Commission under the Securities Act.

6.6               No Broker

None of Buyer or anySubsidiary of Buyer, has engaged any Person, other than J.P. Morgan Chase &Co. (the fees of which shall be paid by Buyer), which is entitled to any fee orcommission as a finder or a broker in connection with this Agreement or the transactionscontemplated hereby.

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6.7               Financing

Buyer has available,and will have available on the Closing Date, sufficient funds to enable it toconsummate the transactions contemplated hereby and by the other OperativeAgreements.

6.8               Litigation

There is no action,suit, claim or proceeding of any nature pending, or to the Knowledge of Buyer,threatened against Buyer or any of its Subsidiaries, their respective assets,properties, rights (tangible or intangible) or any of their respective officersor directors that, individually or in the aggregate, has had or is reasonablylikely to have a Buyer Material Adverse Effect, nor to the Knowledge of Buyeris there any reasonable basis therefor.  Buyer is not subject to any order,judgment, consent decree, settlement agreement or other Contract that wouldreasonably be expected to result in a Buyer Material Adverse Effect. 

**Article 7EMPLOYEETRANSFERS AND BENEFITS**

7.1               Voluntary Transfer Employees

(a)                Offers of Employment.  On a date or dates to be mutually agreed upon byPurchaser and Seller, which shall be no later than the tenth (10th) BusinessDay after Seller delivers Schedule 7.1(a) toBuyer, Buyer will extend an offer of employment to (i) each Employee onSeller's U.S. payroll and listed on Schedule 7.1(a) (each, a "**U.S.Employee**") and (ii) each Employee who is not on Seller's U.S. payroll oremployed by a Transferred Subsidiary and who is listed on Schedule 7.1(a)((i) and (ii) collectively, the "**Offered Employees**").  The employment of each Employee who is employed by aTransferred Subsidiary (each a "**Transferred Subsidiary Employee**") willcontinue uninterrupted at Closing without the Buyer extending an offer ofemployment. Each such offer shall provide for employment by Buyer effectiveonly as of and after the Closing Date and at a job responsibility level andtitle that is substantially similar to or higher than such Offered Employee'semployment with Seller for the year prior to the date of the offer.  Effectiveonly as of the Closing and after the Closing Date, Buyer will hire each OfferedEmployee who accepts the offer of employment extended to such individual byBuyer.  Notwithstanding the foregoing, any U.S. Employee who is, at the time anoffer of employment is required under this Section 7.1(a), on a Seller(or a Subsidiary thereof) approved leave of absence from work, shall not becomean employee of Buyer (and shall not be considered a TransferredEmployee) unless and until such employee becomes eligible to return toactive employment within one year after the Closing Date in accordance withSeller's human resource policies and applicable Laws and is accepted foremployment by Buyer in its discretion and actually commences employment withBuyer.

(b)                Service Credit; Waivers;Credits.  As soon as reasonablypracticable following the Closing, Seller shall provide Buyer with acertificate of creditable coverage under HIPAA for all U.S. Transferred Employees. Buyer shall provide each Transferred Employee with credit for purposes ofeligibility, vesting and benefit accrual (other than under a defined benefitplan intended to benefit Employees located in the U.S.) under the BuyerBenefits Plans for Years of Service on and prior to the Closing Date withSeller and its Subsidiaries credited under the comparable Seller BenefitsPlans, including recognition of such service for purposes of determining TransferredEmployees' amount of paid time off or vacation and severance benefits; *provided,however*, that in no event shall Buyer be required to provide any servicecredit to any Transferred Employee to the extent the provision of such creditwould result in any duplication of benefits.  To the extent permitted byapplicable Law, Buyer shall cause any pre‐existing conditions orlimitations and eligibility waiting periods (to the extent that such waitingperiods would be inapplicable under Seller Benefits Plans) under any BuyerBenefits Plans to be waived with respect to Transferred Employees and their eligible dependents.  Tothe extent permitted by applicable Law, Buyer shall provide the Transferred Employeesand their eligible dependents with credit for any deductibles and annual out‐of‐pocketlimits for medical, dental and vision expenses paid during the applicableperiod under any Seller Benefits Plans in satisfying any deductibles and annualout‐of‐pocket limits for medical, dental and vision expenses forthe corresponding period under the Buyer Benefits Plans.

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(c)                401(k) Plan.  To the extent permitted under Section 401(k)of the Code and regulations issued thereunder, Voluntary Transfer Employees whoparticipate in Seller's 401(k) plan shall be eligible to receive, at theirelection, a distribution of their account balance from Seller's401(k) plan after the Closing Date.  Buyer shall use reasonable efforts tocause its 401(k) plan to accept eligible rollovers of such distributions, *provided*that Buyer determines that receipt of any such rollover will not result in adisqualification of Buyer's 401(k) plan.  Rollovers relating to any VoluntaryTransfer Employee may include participant loans.

(d)                FSA.  Promptly after the Closing Date, Seller shalltransfer and Buyer shall accept the flexible spending account elections,liabilities and accounts (maintained pursuant to Code Sections 105 and129) of the Voluntary Transfer Employees under Seller's Section 125 planflexible spending arrangement.  Promptly after the Closing Date, Seller shallcause to be transferred to Buyer the aggregate net cash amount (determinedimmediately prior to the Closing) for contributions paid (but not yetreimbursed) by or on behalf of the Voluntary Transfer Employees under Seller'sSection 125 plan flexible spending arrangement.

(e)                Vacation.  Seller shall allow Transferred Employees totransfer any accrued but unused vacation time (which vacation time was accruedin accordance with Seller's policies consistent with past practice) toBuyer.   With respect to Voluntary Transfer Employees, only those VoluntaryTransfer Employees who submit a vacation consent form, prior to the ClosingDate, are eligible to transfer vacation time to Buyer.  To the extentpermitted by Law, Buyer shall assume such accrued but unused vacation time ofthe Transferred Employees and allow each Transferred Employee to use suchaccrued vacation time after the Closing Date.  The transfer of vacationtime shall not affect each Transferred Employee's accrual of vacation underBuyer's vacation policies.  Seller shall be liable for and pay in cash anamount equal to any accrued but unused vacation time to any (i) VoluntaryTransfer Employee who has not executed a vacation consent form or (ii) anyOffered Employee who declines to accept Buyer's offer of employment made inaccordance with Section 7.1(a) and whose employment terminates prior tothe Closing Date.

7.2               Automatic Transfer

(a)                Transfer of Obligations.  Immediately upon the Closing Date, all rights,powers and Liabilities of Seller and its Subsidiaries to, or in respect of, theAutomatic Transfer Employees (including the rights, powers and Liabilitiesunder, in connection with or arising from a Contract of employment oremployment relationship between an Automatic Transfer Employee and Seller or aSubsidiary of Seller) in force immediately prior to the Closing Date shall betransferred to Buyer upon Closing in accordance with applicable Laws.  Buyerand Seller agree to fully and timely comply with all applicable provisions ofthe European Union Acquired Rights Directive and other similar country‐specificlegal standards or applicable Laws.

(b)                Retirement Benefits.  With respectto Automatic Transfer Employees only and subject to the requirements ofapplicable Laws, Buyer and Seller agree as follows:

(i)           Except to the extent thatapplicable local Law requires more favorable benefits to be provided, Buyershall provide Retirement Benefits in respect of service with Buyer followingthe Closing, which are substantially similar to the benefits provided for or inrespect of Automatic Transfer Employees under Seller Retirement Plansimmediately prior to the Closing; 

(ii)           Subject only to the requirementsof local Law in the relevant jurisdiction, Buyer shall not assume any accruedRetirement Benefits liabilities relating to the Automatic Transfer Employees inrespect of their Years of Service prior to the Closing.  If Buyer is requiredby local Law or the terms of any existing Seller Retirement Plan to assume anyaccrued Retirement Benefits liabilities relating to the Automatic TransferEmployees in respect of their Years of Service prior to the Closing, and *provided*the assets associated with such liabilities are retained by Seller (or aSubsidiary thereof) at the Closing, Seller will treat all such Retirement Benefitsliabilities as Excluded Liabilities and, to the extent required by the terms ofthe applicable Seller Retirement Plan and applicable Law, shall pay all suchbenefits as and when they become payable; and

(iii)           Years of Service in respect of theAutomatic Transfer Employees under any Seller Retirement Plan shall count asYears of Service under any relevant retirement benefit arrangement operated ornominated by Buyer for the purpose of vesting, eligibility for benefits, earlyretirement or termination subsidies, levels of contribution and, subject to Section 7.1(b)(relating to non‐duplication of benefits) and Section 7.2(b)(i),benefit accrual.

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7.3               Compensation and Benefits

Buyer will compensateeach Transferred Employee (so long as any such Transferred Employee remainsemployed by Buyer or an Affiliate thereof, and subject to Buyer's terminationrights and resulting severance obligations under Section 7.5) forat least one year after the Closing as follows:

(a)                at a rate of total cashcompensation, including base salary rate and target bonus opportunity, whichshall be at least substantially similar in the aggregate to the total cashcompensation opportunity provided to the Transferred Employee by Sellerimmediately prior to the date of this Agreement; and

(b)                with Employee Benefits Plans(excluding stock-based incentive plans and employee stock purchase or stockoption plans) that are at least substantially similar in the aggregate to thebenefits provided under those Seller Benefits Plans in effect immediately priorto the Closing Date.

(c)                Notwithstanding anything to thecontrary, any and all "stay", "retention", or incentive bonus(es) offered bySeller to its Employees, and regardless of when payable, shall be the sole andexclusive responsibility of Seller, and Buyer shall have no responsibility orliability therefor.

7.4               Information and Consultation

Buyer and Sellershall provide one another with such information, which information will bematerially accurate and complete, and assistance at such times as either Partymay reasonably request or as may be necessary for such Party or itsSubsidiaries to comply with any requirement to consult with the Employees, arelevant trade union, or any other Employee representatives.

7.5               Severance

(a)                Buyer shall provide anyTransferred Employee whose employment is terminated by Buyer (other thanemployees terminated (a) for Cause or (b) by reason of such employee'sPoor Performance) or who resigns as a result of a Constructive Termination, ineach case within the 12‐month period immediately following the ClosingDate, with severance payments and benefits, which are no less favorable thanthe severance pay and benefits such employee would have received had he or sheterminated employment with Seller on the Closing Date.  

(b)                Buyer and Seller agree to shareequally the cost of the severance obligations owed to Shared Benefit Employees.

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7.6               Employment‐Related AssumedLiabilities

Buyer, to theexclusion of Seller, assumes, accepts and shall be fully responsible for anyand all Losses, Liabilities or claims to the extent arising out of or relatingto: (a) any Transferred Subsidiary Employee; (b) any Voluntary Transfer Employeeemployed by Mentor Benelux B.V.; (c) Buyer's alleged failure to make offers ofemployment to Offered Employees in keeping with its obligations under Section7.1(a); (d) Buyer's employment of, or the termination of employment of anyTransferred Employee, in each case only on or after the Closing Date; (e) anyBuyer Benefits Plans; and (f) workers' compensation claims of any VoluntaryTransfer Employee arising out of conditions with a date of injury (or, in thecase of a claim relating to occupational illness or disease, the lastsignificant exposure) that begins prior to but continues after the Closing Date(collectively referred to herein as "**Buyer Employment Liabilities**"). Notwithstanding the preceding sentence, Buyer shall retain responsibility forand continue to pay all medical, life insurance, disability and other welfareplan expenses and benefits for each Transferred Employee with respect to claimsincurred by such Transferred Employees or their covered dependents on or afterthe Closing Date.  Buyer shall reimburse, indemnify and hold harmless each ofthe Seller Indemnified Parties and their respective Employee Benefits Plansfrom and against any and all Losses incurred by any of them in connection withany Buyer Employment Liabilities.  All Buyer Employment Liabilities shall beAssumed Liabilities for all purposes of this Agreement.

7.7               Employment-Related ExcludedLiabilities

Seller, to the exclusion ofBuyer, assumes, accepts and shall be fully responsible for any and all Losses,Liabilities or claims to the extent arising out of or relating to: (a) theemployer-employee relationship, or Seller's employment or termination ofemployment, of any Transferred Employee, former Employee, any consultant or independentcontractor, in each case, on or before the Closing Date; (b) any SellerBenefits Plans other than Foreign Benefit Plans; and (c) workers compensationclaims of Voluntary Transfer Employees arising out of conditions with a date ofinjury, (or in the case of a claim relating to occupational illness or disease,the last significant exposure) that begins and ends on or before the ClosingDate (collectively referred to herein as "**Seller Employment Liabilities**"). Notwithstanding the preceding sentence, Seller shall retain responsibility forand continue to pay all medical, life insurance, disability and other welfareplan expenses and benefits for each Transferred Employee with respect to claimsincurred by such Transferred Employees or their covered dependents prior to theClosing Date.  Seller shall reimburse, indemnify and hold harmless each of theBuyer Indemnified Parties and their respective Employee Benefits Plans from andagainst any and all Losses whenever asserted or incurred by any of them in connectionwith any Seller Employment Liabilities.  All Seller Employment Liabilitiesshall be Excluded Liabilities for all purposes of this Agreement.

7.8               Timing of Claims Incurred

For purposes of Section 7.6 and Section 7.7,a claim is deemed incurred when all facts and circumstances giving rise to theclaim have occurred and specifically: in the case of medical or dentalbenefits, when the services that are the subject of the claim are performed; inthe case of life insurance, when the death occurs; in the case of long termdisability benefits, when the disability occurs; in the case of workerscompensation benefits, as described in Section 7.6 and Section 7.7above; and otherwise, at the time the Transferred Employee or covereddependent becomes entitled to payment of a benefit (assuming that allprocedural requirements are satisfied and claims applications properly andtimely completed and submitted).

7.9               Retention Payment

Within thirty (30)days after the Closing Date, Seller agrees to pay to each Transferred Employeewho holds options exercisable for shares of Seller's common stock as of theClosing Date (the "**Eligible Employees**") one-half (1/2) of the RetentionPayment for such Eligible Employee, less any applicable required withholdings. Upon the first (1st) anniversary of the Closing Date, Buyer shall pay to eachEligible Employee then employed by Buyer or any of Buyer's Subsidiaries orAffiliates one-half (1/2) of the Retention Payment, less any applicablerequired withholdings.  If after the Closing Date and prior to the first (1st)anniversary of the Closing Date, the employment of any Eligible Employee isterminated (a) by the Buyer other than for Cause or Poor Performance or (b) asa result of a Constructive Termination, death or disability, Buyer shall pay tosuch terminated Eligible Employee one-half (1/2) of the Retention Paymentwithin thirty (30) days after the date of such termination, less any applicablerequired withholdings.  No Eligible Employee shall otherwise be entitled to anyRetention Payment if such Eligible Employee resigns or terminates his or heremployment for any reason other than those set forth in the foregoingsentence.  "**Retention Payment**" means, for each Eligible Employee, anamount of cash equal to the difference between (A) the product of (x) theaverage closing price of Seller's common stock on the five (5) trading dayspreceding (but not including) the Closing Date multiplied by (y) the number ofunvested stock options issued by Seller and held by an Eligible Employee as ofthe Closing Date, less (B) the total aggregate exercise price of all such stockoptions referred to in clause (y) above.  

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**Article 8ADDITIONAL COVENANTS**

8.1               Contracts

Beginningon the date hereof and ending 90 days following the Closing Date, each Partyshall, and shall cause its respective Subsidiaries to, use commerciallyreasonable efforts to obtain, as soon as practicable, all Consensual Transfersand the Subsidiary Consents.  Anything in this Agreement to the contrarynotwithstanding, nothing in this Agreement shall constitute an agreement toassign any Transferred Contract or any claim, right or benefit arisingthereunder or resulting therefrom if the failure to obtain any ConsensualTransfer with respect thereto would (i) constitute a breach of or othercontravention thereof, (ii) be ineffective with respect to any partythereto, or (iii) in any way adversely affect the rights of Buyer orSeller, or their respective Subsidiaries, thereunder.  Pending receipt of suchConsensual Transfers and for a period not to exceed three (3) years after theClosing Date, the Parties shall cooperate with each other to the extentpracticable in establishing mutually agreeable, reasonable and lawfularrangements designed to provide to Buyer the benefits of use of such asset andto provide to Seller or a Subsidiary of Seller, as the case may be, the benefitsthat they would have obtained had the asset been conveyed to Buyer at theClosing.  To the extent that Buyer is provided the benefits pursuant to this Section 8.1of any Contract, Buyer shall perform for the benefit of the other partiesthereto the obligations of Seller or a Subsidiary of Seller, as the case maybe, thereunder and pay, discharge and satisfy any related Liabilities that, butfor the lack of a Consensual Transfer, would be Assumed Liabilities.  If, withrespect to any Consensual Transfers, there is any financial cost to obtainingsuch consent, waiver, confirmation, novation or approval, then Seller shallbear such financial costs and any payment thereof.  In addition, Buyer shallreimburse, indemnify and hold harmless each of the Seller Indemnified Partiesfrom and against any and all Losses incurred by it in connection with the goodfaith performance by Seller or any of it Subsidiaries of the obligations under(including any payment or incurrence of Liabilities by Seller or any of itsSubsidiaries) those Contracts for which Buyer is provided the benefits pursuantto this Section 8.1.  If and to the extent that a ConsensualTransfer is obtained after the Closing Date, the Contract for which suchConsensual Transfer was obtained shall thereafter constitute a TransferredAsset and an Assumed Liability for all purposes under this Agreement. Notwithstanding the foregoing, to the extent that any consents, novations ortransfers applicable to the Transferred Assets, the Transferred IPR or theAssumed Liabilities are expressly addressed in the other Operative Agreements,such other provision shall be controlling and this Section 8.1shall be deemed to apply only to the extent consistent with the intent of suchother provision.

8.2               Conduct of the Business

(a)                Except as set forth in Schedule 8.2(a),during the period from the date hereof and continuing until the earlier of thetermination of this Agreement pursuant to its terms or the Closing, Sellershall, and shall cause each of its Subsidiaries to, except to the extent thatBuyer shall otherwise consent in writing (such consent to not be unreasonablywithheld, delayed or conditioned), use its commercially reasonable efforts tocarry on the Business in all material respects in the ordinary course, and incompliance in all material respects with all applicable Laws, and to pay orperform the obligations of the Business when due.

(b)                Without limiting the generality ofSection 8.2(a), except as permitted or required by the terms of anyother Operative Agreement or as provided in Schedule 8.2(b),without the prior written consent of Buyer (such consent to not be unreasonablywithheld, delayed or conditioned), during the period from the date hereof andcontinuing until the earlier of the termination of this Agreement pursuant toits terms or the Closing, Seller shall not do any of the following, and shallcause its Subsidiaries not to do any of the following:

(i)           except as required by applicableLaws or pursuant to written agreements in effect or written policies existingon the date hereof, (A) grant any material severance or termination pay toany Transferred Employee, (B) change the compensation payable to anyTransferred Employee other than in the ordinary course, or (C) make any material change in any EmployeeBenefits Plan that by reason of this Agreement or applicable Law wouldreasonably be expected to increase, in any material respect, the liabilities ofBuyer, except for such changes that are intended to apply to a population ofemployees of Seller and/or its Subsidiaries that is not limited to TransferredEmployees;

(ii)           (A) hire any new employee at anannual base salary of over $100,000, which employee would become a TransferredEmployee at Closing, (B) terminate the employment of any employee whose annualbase salary as of the date hereof is over $100,000, if such employee wouldotherwise become a Transferred Employee at Closing;

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(iii)           enter into any collectivebargaining or labor Contract;

(iv)           enter into any Contract orassignment which has the effect of transferring or licensing to any Person orotherwise extending, amending or modifying in any material respect anyTransferred IPR, unless incidentalto ordinary course commercial transactions and, in the case of distributionagreements, which are terminable within a reasonable period of time;

(v)           except as required by GAAP or theSEC, revalue any of the Transferred Assets in any material respect or make anychange in accounting methods, principles or practices in any material respectapplicable to the Transferred Assets;

(vi)           write down or write up the valueof any Transferred Inventory, or determine as collectible any TransferredAccounts Receivable or any part thereof which were previously considereduncollectible, or write off as uncollectible any Transferred AccountsReceivable or any part thereof, except in each case for write downs, write ups,and write offs in the ordinary course of business consistent with pastpractice;

(vii)           pay, discharge or satisfy anyclaim, Encumbrance, obligation or Liability of the Business, other than (A)Permitted Encumbrances, (B) the payment, discharge or satisfaction of claims,Encumbrances, obligations or liabilities reflected or reserved against in theMost Recent Balance Sheet or (C) in the ordinary course of business;

(viii)           other than in the ordinary courseof the Business or sale of inventory in the ordinary course, dispose of anyTransferred Assets;

(ix)           create any Encumbrance on(a) any of the Transferred Assets other than a Permitted Encumbrance or(b) any of the Transferred IPR unless in or incidental to ordinary coursecommercial transactions;

(x)           enter into any Contract withrespect to the Business that would either: (a) by its terms expresslyrequire a non-cancellable payment by Seller or any of its Subsidiaries of morethan $250,000 per year; or (b) be reasonably likely to cause a SellerMaterial Adverse Effect; 

(xi)           fail to maintain or prosecute any IPR that would be Transferred IPR but for the failure to maintain or prosecutesuch IPR, other than in the ordinary course of Business;

(xii)           disclose any Transferred TradeSecrets or other confidential information constituting Transferred IPR toPersons not bound by confidentiality obligations;

(xiii)           voluntarily terminate ormaterially modify any Transferred Contract or Subsidiary Contract; or

(xiv)           agree in writing or otherwise totake any of the actions described in Sections 8.2(b)(i) through 8.2(b)(xiii)above.

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8.3               Access to Information

Except as may benecessary or appropriate to ensure compliance with respect to any applicableLaws and subject to any confidentiality obligations or applicable privileges(including privacy obligations under relevant employment law andattorney-client privilege), from the date of this Agreement until the ClosingDate, Seller will (a) give Buyer and its authorized representatives accessto financial and operating data and other information relating to theTransferred Business during normal business hours and upon reasonable priornotice, (b) give Buyer and its authorized representatives reasonable access tokey employees of the Business, the identities of whom and the procedures andscope of which access to be mutually agreed upon by the Parties,(c) furnish to Buyer and its authorized representatives such financial andoperating data and other information relating to the Transferred Business asBuyer may reasonably request, and (c) will instruct the SellerRepresentatives to cooperate with Buyer in its investigation of the TransferredBusiness, all for the purpose of enabling Buyer and its authorizedrepresentatives to conduct, at their own expense, legal, business and financialreviews, investigations and studies of the Transferred Business in connectionwith this Agreement and the transactions contemplated hereby; *provided,however*, that notwithstanding the foregoing, Seller shall not be requiredto provide any financial, operating data or other information that is notcurrently available through Seller's existing business processes or thecreation of which would be unduly burdensome on Seller.  Notwithstanding theforegoing or any other provision of any other Operative Agreement, Buyer shallnot have access to such price and other competitive information as may invokeantitrust or similar legal restrictions, as determined by Seller in itsreasonable judgment.  Any access to Seller's Real Property shall be subject toSeller's reasonable security measures and insurance requirements and shall notinclude the right to perform any "invasive" testing.

8.4               Books and Records

For a period of six(6) years from the Closing Date, or for such longer period as is required byapplicable Laws, Buyer will permit Seller or its authorized representativesreasonable access, at Seller's expense, to information relating to theTransferred Business to the extent required by Seller to permit it to determineany matter relating to its rights and obligations under the OperativeAgreements and its compliance with applicable Tax and financial reportingrequirements, and any claim asserted in connection with an Assumed Liability.

8.5               Necessary Efforts; HSR Filings

(a)                Seller and its Subsidiaries andBuyer and its Subsidiaries agree to take, or cause to be taken, all actions andto do, or cause to be done, all things necessary, proper or advisable toconsummate and make effective the transactions contemplated by the OperativeAgreements and to cause the conditions to each party's obligation to close thetransactions contemplated hereby to be satisfied, including all actionsnecessary to obtain all licenses, certificates, permits, approvals, clearances,expirations or terminations of applicable waiting periods, authorizations,qualifications and orders, and including, for the avoidance of doubt, anyactions necessary to ensure compliance with the UK OFT Undertakings (each a "**Consent**")of any Governmental Authority required for the satisfaction of the conditionsset forth in Section 9.3 or Section 10.3, and necessaryin connection with the consummation of the transactions contemplated by the OperativeAgreements.  Each of Seller and its Subsidiaries and Buyer and its Subsidiariesagree that (i) no contact will be initiated with, or Consent sought from,any Governmental Authority prior to the Closing Date without the writtenconsent of the other Party (such consent not to be unreasonably withheld,delayed or conditioned) other than with respect to antitrust or merger controlmatters, and (ii) each Party will be given prior notice of and areasonable opportunity to consult with the other Party regarding contacts withGovernmental Authorities regarding antitrust or merger control matters.  TheParties hereto shall cooperate fully with each other to the extent necessary inconnection with the foregoing.

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(b)                Buyer and Seller shall timely andpromptly make all filings or submissions which may be required for thesatisfaction of the condition set forth in Section 9.3 or Section10.3 by each of them in connection with the consummation of thetransactions contemplated hereby.  In furtherance and not in limitation of theforegoing, each of Seller and Buyer shall file notification and report formsunder HSR or any other similar antitrust or merger control filings under applicableLaws as promptly as practicable following the date of this Agreement and in anyevent no later than (i) 10 Business Days following the date of this Agreement,in the case of notification and report forms under HSR, and (ii) the timeprescribed by applicable Law in the case of requirements under other applicableantitrust or merger control Laws.  In addition, Buyer and Seller agree, andshall cause each of its Subsidiaries, as applicable, to cooperate and to useall necessary efforts and take all actions necessary to: obtain any Consentsrequired for the Closing, including through compliance with HSR and any otherapplicable Laws, to respond to any requests for information from anyGovernmental Authority, and notwithstanding Section 8.5(c) below, toavoid and/or overcome any action, including any legislative, administrative orjudicial action, and to have vacated, lifted, reversed or overturned anyjudgment, injunction or other order (whether temporary, preliminary orpermanent) that restricts, prevents or prohibits, or could restrict, prevent orprohibit, the consummation of the transactions contemplated by this Agreement. Without limiting the foregoing, Buyer and its Subsidiaries shall agree todivest, license, hold separate (through the establishment of a trust orotherwise) or otherwise dispose, or agree to dispose of assets as, or if,required to avoid or overcome the objections of any Governmental Authority(each, a "**Remedial Action**"); provided, however, that notwithstanding theforegoing, and, for the avoidance of doubt, with the exception of RemedialAction in respect of the UK OFT Undertakings (which is dealt with separately inSection 8.5(d) below), nothing contained in this Agreement shall bedeemed to require Buyer or any of its Subsidiaries to take or agree to take anysuch action if such action would be reasonably likely to have a Buyer MaterialAdverse Effect on a combined basis with the Transferred Subsidiaries after theClosing.  Each party shall furnish to the other such necessary information andassistance as the other party may reasonably request in connection with thepreparation of any necessary filings or submissions by it to any GovernmentalAuthority.  Except as prohibited or restricted by Law, each party or itsattorneys shall provide the other party or its attorneys the opportunity tomake copies of all correspondence, filings or communications (or memorandasetting forth the substance thereof) between such party or its representatives,on the one hand, and any Governmental Authority, on the other hand, withrespect to this Agreement, the other Operative Agreements or the transactionscontemplated hereby or thereby.  Without in any way limiting the foregoing, theParties will consult and cooperate with one another, and consider in good faiththe views of one another, in connection with any analyses, appearances,presentations, memoranda, briefs, arguments, opinions and proposals made orsubmitted by or on behalf of any party hereto in connection with proceedingsunder or relating to HSR or other antitrust or merger control Laws.

(c)                Each of Buyer and Seller shallnotify and keep the other advised as to (i) any material communicationfrom the Federal Trade Commission (the "**FTC**"), the Antitrust Division ofthe United States Department of Justice (the "**DOJ**") or any otherGovernmental Authority regarding any of the transactions contemplated hereby,including, for the avoidance of doubt, any communications with the UKCompetition Authorities in relation to the UK OFT Undertakings, (ii) anylitigation or administrative proceeding pending and known to such party, or toits knowledge threatened, which challenges, or would challenge, thetransactions contemplated hereby and (iii) any event or circumstancewhich, to its knowledge, would constitute a Warranty Breach; *provided*, *however*,that the failure of Seller or Buyer to comply with this Section 8.5(c)shall not subject Seller or Buyer to any Liability hereunder in respect of anyclaim asserted after the relevant expiration date for the relevantrepresentation or warranty; and *provided**further*, that neitherBuyer nor Seller may separately recover pursuant to Article 11 orotherwise for both a breach of this Section 8.5(c) and any WarrantyBreach.  Subject to the provisions of Article 11, Seller and Buyershall not take any action inconsistent with their obligations under this Agreementor, without prejudice to Buyer's rights under this Agreement, which wouldmaterially hinder or delay the consummation of the transactions contemplated bythis Agreement.

(d)                Buyer shall timely and promptlytake all action necessary to ensure that the UK OFT Undertakings do not preventor delay the consummation of the transactions contemplated by this Agreement,including taking all and any Remedial Actions or other steps required by the UKCompetition Authorities.

8.6               Taxes and Costs Relating to thePorges Asset Sale

(a)                Notwithstanding any otherprovision of this Agreement, Buyer shall indemnify Seller and hold Sellerharmless from and against any Liability for Taxes (including, withoutlimitation, withholding and Transfer Taxes) and all costs (including third-partycosts) incurred by Porges in connection with the Porges Asset Sale.

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(b)                Buyer shall also pay to Seller thefollowing additional amounts: (i) 90% of the amount of foreign tax creditsattributable to the Porges Asset Sale (such foreign tax credits, for purposesof this Agreement, shall be $7,875,000) (the "**FTC Amount**") that aredetermined to be unavailable to Seller following an audit of Seller or thepromulgation of Treasury Regulations with final effect disallowing such foreigntax credits; (ii) 90% of the amount by which the FTC Amount is reduced byoperating losses of Porges following the Closing; and (iii) 100% of the amountby which the foreign tax credits of Porges that would have been attributable tothe operating income of Porges for the Pre-Closing Tax Period (determined underthe principles of Section 8.7(a)) are reduced by the operatinglosses of Porges following the Closing.  For purposes of this subsection (b),operating losses shall be used first to reduce the operating income of Porges,and then to reduce the gain from the Porges Asset Sale.

(c)                Seller and Buyer shall provideeach other with access to all information reasonably necessary to determine theaccuracy of the amounts required to be determined by this Section 8.6.

8.7               Tax Matters

(a)                Returns; Indemnification;Liability for Taxes.  

                                                                              (i)           Seller shall prepare and file (orcause to be prepared and filed) on a timely basis all Tax Returns with respectto Seller and its Subsidiaries for all taxable periods ending on or before theClosing Date and shall pay, and shall indemnify and hold Buyer harmless againstand from (A) all Taxes of Seller and its Subsidiaries for all taxableyears or periods that end on or before the Closing Date; (B) all Taxes forwhich Seller or any of its Subsidiaries may be liable under Treasury RegulationSection 1.1502‐6 (or any similar provision of state, local orforeign law); and (C) with respect to any taxable period commencing beforethe Closing Date and ending after the Closing Date (a "**Straddle Period**")all Taxes of Seller and its Subsidiaries attributable to the Tax period priorto and including the Closing Date (the "**Pre-Closing Tax Period**") (theTaxes referred to in items (A), (B), and (C) of this sentence are referredto herein as "**Pre-Closing Taxes**"); *provided*, *however*, thatto the extent that any such Taxes (i) are reflected as a Liability in thecalculation of Net Working Capital as reflected on the Final Net WorkingCapital Statement, or (ii) are described in Section 8.6(a) ((i) and(ii), collectively, the "**Assumed Taxes**"), such Assumed Taxes shall notbe considered "Pre-Closing Taxes" hereunder, and Seller shall have no obligationto indemnify Buyer for any such Assumed Taxes.  For purposes of this Agreement,the portion of any Tax that is attributable to a Pre-Closing Tax Period shallbe (A) in the case of a Tax that is not based on net income, gross income,premiums or gross receipts, the total amount of such Tax for the period inquestion multiplied by a fraction, the numerator of which is the number of daysin the Pre-Closing Tax Period, and the denominator of which is the total numberof days in such Straddle Period, and (B) in the case of a Tax that isbased on any of net income, gross income, premiums or gross receipts, the Taxthat would be due with respect to the Pre-Closing Tax Period if suchPre-Closing Tax Period were a separate taxable period, except that exemptions, allowances,deductions or credits that are calculated on an annual basis (such as thededuction for depreciation or capital allowances) shall be apportioned on a perdiem basis.  

                                                                            (ii)           Buyer shall prepare and file (orcause to be prepared and filed) on a timely basis all Tax Returns relating tothe Transferred Assets or the operation of the Business (including all TaxReturns of the Transferred Subsidiaries) for periods ending after the ClosingDate and shall pay and shall indemnify and hold Seller harmless against andfrom (A) all Taxes of Buyer and its Subsidiaries (including theTransferred Subsidiaries) for any taxable year or period commencing after theClosing Date; (B) all Taxes of Buyer and its Subsidiaries (including theTransferred Subsidiaries) for any Straddle Period other than Pre‐ClosingTaxes; (C) all withholding Taxes incurred in connection with thetransactions contemplated hereby; and (D) all Assumed Taxes.

                                                                           (iii)           If, in order to properly prepareits Tax Returns or other documents required to be filed with the GovernmentalAuthorities, it is necessary that a Party be furnished with additionalinformation, documents or records relating to the Transferred Assets, bothSeller and Buyer agree to use commercially reasonable efforts to furnish ormake available such nonprivileged information at the other's request, cost andexpense; *provided, however*, that neither Party shall be entitled toreview or examine the Tax Returns of the other Party (other than the TaxReturns related to MML, Porges and the Porges Asset Sale).

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(b)                Refunds and Credits.  Any refunds and credits attributable to Pre‐ClosingTaxes to the extent not taken into account in the calculation of Net WorkingCapital as reflected in the Final Net Working Capital Statement shall be forthe account of Seller if properly reportable by Seller on any of itspre-Closing Tax Returns or with respect to any Pre-Closing Tax Period and anyother refunds and credits shall be for the account of Buyer.  To the extentpermitted by applicable Law, Buyer shall (or shall cause or permit itsSubsidiaries to) elect to relinquish any carryback of a Tax attribute to anyPre-Closing Tax Period.  In cases where Buyer cannot elect to relinquish suchcarrybacks, Seller agrees to pay to Buyer the net Tax benefit received bySeller or any of its Subsidiaries from the use in any Pre-Closing Tax Period ofa carryback of any Tax arising in a Post-Closing Tax Period.  If an audit orother examination of any Tax Return of Seller or its Subsidiaries for anytaxable period ending on or before the Closing Date, or of Buyer or itsSubsidiaries for any taxable period ending after the Closing Date, shall result(by settlement or otherwise) in any adjustment, the effect of which is toincrease deductions, losses or tax credits or decrease income, gains, premiums,revenues or recapture of tax credits ("**Changes**") of the other party, theaudited party will notify such other party and provide it with all necessaryinformation so that it can reflect on its Tax Returns any such Changes.  If asa result of such Changes, the other party enjoys a net Tax benefit, such partyshall pay to the audited party the amount of such net Tax benefit.

(c)                Transfer Taxes.  Notwithstanding any other provision of thisAgreement, (i) all Transfer Taxes arising in connection with the Porges Asset Sale shall be borne by Buyer as set forth in Section 8.6of this Agreement; and (ii) all other Transfer Taxes and related feesincurred in connection with the Operative Agreements, and the transactionscontemplated hereby, shall be borne equally by Buyer and Seller.  To the extentreasonable and legally able to do so, Buyer and Seller shall cooperate witheach other to minimize such Taxes.  The Party required by law to file a TaxReturn with respect to such Transfer Taxes shall do so within the time periodprescribed by law, and the other Party shall promptly reimburse the payingParty for such other Party's portion of the  Transfer Taxes so paid uponreceipt of notice that such Transfer Taxes have been paid.

(d)                Post-Closing Actions by Buyer.  Following the Closing, Buyer shall not make anyelection under U.S. or foreign Tax law, cause any Transferred Subsidiary to paya dividend, elect to carryback any loss or otherwise take any action that couldadversely affect Seller without the prior written consent of Seller; provided,however, that, if requested by Seller, Buyer shall make a timely election underSection 338 of the Code, in form and substance satisfactory to Seller, withrespect to the purchase of the Equity Interests of Porges and/or MML.

(e)                Tax Audit Support.  In the event and for so long as any Party activelyis contesting or defending against any Tax audit or other investigation, claimor proceeding relating to a taxable period ending on or prior to the ClosingDate involving Seller or its Subsidiaries, each Party shall cooperate with theother Party and its counsel in the contest or defense, make available theirpersonnel, and provide such testimony and access to their books and records asshall be necessary in connection with the contest or defense, all at the solecost and expense of the indemnifying Party.

8.8               Allocation of Purchase Price

The PreliminaryPurchase Price shall be provisionally allocated by Seller and Buyer mutuallynot later than ten Business Days prior to the Closing Date and shall be setforth in the form substantially similar to Exhibit F attached hereto (the "**PreliminaryPurchase Price Allocation**").  Not later than 30 days following thepreparation of the Final Net Working Capital Statement, the PreliminaryPurchase Price Allocation shall be adjusted by mutual agreement of the Parties(or if the parties cannot agree within such 30 days, by the CPA Firm within thefollowing 30 days) to take into account the final determined amount of thePurchase Price and the final determined values of all Transferred Assets, itbeing understood that any such adjustment shall not adjust the total cashconsideration set  forth in any of the Conveyance Documents (such adjustedallocation, the "**Purchase Price Allocation**"). Upon its completion, the Purchase Price Allocation shall become part of theAgreement.  Each of the Parties, when reporting the transactions consummatedhereunder in its own Tax Returns, shall allocate the Purchase Price paid orreceived, as the case may be, in a manner that is consistent with the PurchasePrice Allocation.  Additionally, each of the Parties will comply with, andfurnish the information required by, Section 1060 of the Code, and anyregulations thereunder.

8.9               Return of Excluded Assets

Promptly followingthe Closing, and in any event within thirty (30) days after the Closing Date,Buyer will remit to Seller an amount of cash equal to the amount of cash on thegeneral ledger of each Transferred Subsidiary as of the Closing.  Theremittance will be treated as a return of Excluded Assets and not as anadjustment to the Purchase Price.  If at any time within 12 months followingthe Closing Date, Buyer becomes aware of any other Excluded Assets that weredelivered to Buyer in connection with the Operative Agreements, Buyer shallpromptly notify Seller of the Excluded Assets in its possession, and shallreturn (or at Seller's discretion, destroy) such Excluded Assets, including allcopies thereof.  In any case, Buyer agrees to keep and treat all ExcludedAssets as "Evaluation Material" in accordance with the terms of theConfidentiality Agreement.  

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8.10           Brokers

Seller shall beresponsible for, and shall reimburse, indemnify and hold harmless Buyer for,all Losses arising from a claim by a finder or broker that it acted on behalfof Seller (or a Subsidiary thereof) in connection with the transactionscontemplated hereby.  Buyer shall be responsible for, and shall reimburse,indemnify and hold harmless Seller for, all Losses arising from a claim by afinder or broker that it acted on behalf of Buyer (or a Subsidiary thereof) inconnection with the transactions contemplated hereby.

8.11           Further Assurances

From and after theClosing Date, Seller shall cooperate with Buyer and its representatives andshall execute and deliver such documents and take such other actions as Buyermay reasonably request, for the purposes of evidencing the transactionscontemplated by this Agreement and putting Buyer in possession and control ofall of the Transferred Assets and Transferred IPR, especially to the extentlocated overseas; *provided*, *however*, that notwithstandinganything herein to the contrary, nothing herein shall require Seller or itsAffiliates to assist or cooperate with Buyer or any of its Affiliates inconnection with any actual or threatened litigation, arbitration, mediation orother alternative dispute resolution procedure regarding the TransferredBusiness, except to the extent required by applicable Law or Article 11(Indemnity), and to the extent that Seller or its Affiliates are required to doso by applicable Law (as distinguished from Article 11(Indemnity)), Buyer shall promptly reimburse Seller for all out-of-pocketExpenses that it incurs in connection therewith.  From and after the ClosingDate, the parties shall cooperate with each other and each party'sRepresentatives and shall execute and deliver such documents and take suchother actions as the other party may reasonably request, for the purpose ofevidencing the transactions contemplated by this Agreement and as otherwise setforth herein.  In addition, Buyer will make Transferred Employees reasonablyavailable to Seller for the purpose of obtaining, maintaining, securing anddefending the Intellectual Property Rights of Seller, at Seller's expense.

8.12           Mail Handling

Effective as of theClosing Date, Buyer and/or its Affiliates shall have the right to open all mailand packages delivered to it that are addressed to Seller or any of theTransferred Subsidiaries relating to the Transferred Business, the TransferredAssets, the Transferred IPR or the Assumed Liabilities.  To the extent thatBuyer and/or any of its Subsidiaries receives any mail or packages addressed toSeller or any of its Subsidiaries and delivered to Buyer and/or any of itsAffiliates not relating to the Transferred Business, the Transferred Assets,the Transferred IPR or the Assumed Liabilities, Buyer shall promptly deliversuch mail or packages to Seller.  After the Closing Date, Buyer may deliver toSeller any checks or drafts made payable to Seller or any of its Subsidiariesthat constitute a Transferred Asset, and Seller shall promptly deposit suchchecks or drafts, and, upon receipt of funds, reimburse Buyer within fiveBusiness Days for the amounts of all such checks or drafts, or, if so requestedby Buyer, endorse such checks or drafts to Buyer for collection.  To the extentSeller or any of its Subsidiaries receives any mail or packages addressed anddelivered to Seller but relating to the Transferred Business, the TransferredAssets, the Transferred IPR or the Assumed Liabilities, Seller shall, or shallcause such Subsidiaries to, promptly deliver such mail or packages to Buyer. After the Closing Date, to the extent that Buyer or any of its Affiliatesreceives cash or checks or drafts made payable to Buyer that constitute anExcluded Asset, Buyer shall promptly use such cash to, or deposit such checksor drafts and upon receipt of funds from such checks or drafts, reimburseSeller within five Business days for such amount received, or, if so requestedby Seller, endorse such checks or drafts to Seller for collection.

8.13           Non‐Solicitation

(a)                Seller agrees that for a period offour (4) years from and after the Closing Date it shall not, and it shall causeand each of its Subsidiaries not to, without the prior written consent ofBuyer, directly or indirectly, solicit to hire (or cause or seek to cause toleave the employ of Buyer or any of its Subsidiaries) (i) any TransferredEmployee in the Territory, or (ii) any Person employed by Buyer or any ofits Subsidiaries in the Territory who became known to or was identified toSeller or any of its Subsidiaries in connection with the transactionscontemplated by this Agreement, unless, in the case of clause (i) or (ii)above, such Person ceased to be an employee of Buyer and/or its Subsidiaries atleast six (6) months prior to such action by Seller or any of it Subsidiaries.

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(b)                Except with respect to TransferredEmployees, Buyer agrees that for a period of four (4) years from and after theClosing Date it shall not, and it shall cause each of its Subsidiaries not to,without the prior written consent of Seller, directly or indirectly, solicit tohire (or cause or seek to cause to leave the employ of Seller or any of itsSubsidiaries) (i) any Person employed by Seller or any Subsidiary ofSeller in the Territory immediately following the Closing or (ii) anyPerson employed by Seller or any Subsidiary of Seller in the Territory whobecame known to or was identified to Buyer or any of its Subsidiaries inconnection with the transactions contemplated by this Agreement, unless, in thecase of clause (i) or (ii) above, such Person ceased to be an employee ofSeller and/or its Subsidiaries at least six (6) months prior to such action byBuyer or any of its Subsidiaries.

(c)                Notwithstanding the foregoing, therestrictions set forth in Section 8.13(a) and Section 8.13(b)shall not prohibit the placement of bona fide public advertisements foremployment by any party and not specifically targeted at, in the case ofSeller, any Transferred Employee or any Person employed by Buyer or aSubsidiary of Buyer or, in the case of Buyer, any person employed by Seller.  Section 8.13(a)shall not apply to any Person employed outside of the United States who ishired by Seller or any Subsidiary of Seller (i) pursuant to any existingagreement with employee representatives by which Seller or any Subsidiary ofSeller are bound or (ii) as a result of actions required to be taken bySeller or any Subsidiary of Seller in order to comply with local employmentLaws.

8.14           Pre-Closing Integration Planning

During the periodbeginning on the date hereof and continuing until the Closing, the Partiesshall reasonably cooperate and communicate with one another concerningpre-Closing communications and integration planning communications on acountry-by-country basis.  

8.15           Confidentiality

(a)                Confidentiality Agreement.  The Confidentiality Agreement shall continue infull force and effect and survive the execution of this Agreement, the Closing,the consummation of the transactions contemplated hereby and/or the terminationof this Agreement for seven (7) years.  The Parties hereby agree that the term"Evaluation Material," as used in the Confidentiality Agreement shall be deemedto include (i) all exhibits, schedules, certificates and other documentsexecuted or delivered in connection with this Agreement, the other OperativeAgreements and the consummation of the transactions contemplated hereby andthereby, (ii) all proprietary and confidential information concerningSeller and its Subsidiaries, which includes all information with respect to theBusiness, and (iii) all documents and materials contained in Seller's dataroom, or otherwise furnished or made available (directly or indirectly) toBuyer or its Subsidiaries; *provided, however*, that after the Closing,with respect to Buyer, the foregoing shall not apply to such information that(1) is solely related to the Transferred Subsidiaries, Transferred Assets,Transferred IPR or Assumed Liabilities and (2) is not also related to anybusiness or assets of Seller (or a Subsidiary thereof) not transferred to Buyerunder this Agreement.  In addition,notwithstanding any other provision of the Confidentiality Agreement, and thisAgreement, Buyer and its Affiliates and Seller and its Affiliates may includethis Agreement and the other Operative Agreements in or as an exhibit to anyreport, form or registration statement filed with or furnished to the SEC.  Seller agrees to treat and hold confidential anyinformation concerning the Business and the affairs of the Business that is not(other than by virtue of Seller's violation of this Section 8.15(a))generally available to the public; *provided*, *however*, thatnothing in this Section 8.15(a) shall prohibit Seller or any of itsSubsidiaries from complying with applicable Laws or the rules and regulationsof any stock exchange or over the counter trading market on or through whichSeller's securities are traded.

(b)                Release of CertainConfidentiality Obligations. Effective as of the Closing, Seller shall, or shall cause its applicableSubsidiary to, release the Transferred Employees from any confidentialityobligations they may have to Seller (or a Subsidiary thereof) with respect totrade secret, confidential and other information that relates to the Business,but only to the extent such information does not also relate to any business orassets of Seller (or a Subsidiary thereof) not transferred to Buyer (or aSubsidiary thereof) under this Agreement.

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8.16           Non-Competition

(a)                Seller agrees that for a periodcommencing on the Closing Date and terminating on the seventh (7th)anniversary of the Closing Date, Seller will not, and will cause itsSubsidiaries and Affiliates not to, engage, directly or indirectly, in aCompeting Business anywhere in the Territory.  The foregoing restrictions willterminate in the event of a Change of Control of Seller.  The foregoingrestrictions are reasonable and appropriate, do not exceed the protectionnecessary to secure the goodwill purchased, and do not place undue hardship onSeller.  

(b)                The remedy at law for any breachof the foregoing will be inadequate and Buyer, in addition to any other reliefavailable to it, shall be entitled to temporary and permanent injunctive reliefwithout the necessity of proving actual damages.  If any provisions of anyrestrictive covenant contained herein, should be deemed to exceed thelimitations allowed by applicable Law, then such provision shall be reformed toprovide the maximum limitations permitted.  

(c)                Notwithstanding the foregoing, theprovisions of this Section 8.16 shall not restrict Seller or anySubsidiaries of Seller from acquiring and thereafter operating any BusinessCompetitor (an "**Acquired Entity**") so long as (a) Seller or suchSubsidiary, within three (3) months after such acquisition, offer to enter intogood faith discussions for forty-five (45) days with Buyer for the purpose ofproviding Buyer the opportunity to (i) purchase the Competing Businessfrom Seller or its Subsidiaries, or (ii) enter into a joint venture,distribution agreement or similar agreement with Seller or its Subsidiarieswith respect to the Competing Business, with closing of a purchase (in (i)) orexecution of an agreement (in (ii)) to occur within eighteen (18) monthsfollowing the acquisition by Seller or its Subsidiaries of the Acquired Entityand (b) if Seller or such Subsidiary and Buyer fail to (i) consummatea transaction resulting in a purchase of the Competing Business by Buyer, or(ii) enter into a joint venture, distribution agreement or similaragreement with respect to the Competing Business after offering to enter intogood faith discussions with Buyer for that purpose as contemplated byclause (a) above, Seller or such Subsidiary shall offer to enter into goodfaith discussions for forty-five (45) days with Buyer for the purpose ofproviding Buyer the opportunity to purchase the Competing Business from Selleror its Subsidiaries, or enter into a joint venture, distribution agreement orsimilar agreement with Buyer with respect to the Competing Business, if theterms offered are more favorable to those terms previously offered to the Buyerpursuant to clause (a) above, prior to entering into a similar arrangementwith a third party.

8.17          Real Estate Matters

(a)            Real Property Lease Assignments.

 (i)           Promptly following execution ofthis Agreement, Seller shall contact the Landlords under the Assigned Leasesand seek each Landlord's consent to the assignment of the applicable AssignedLease to Buyer and a release of Seller from further liability under theapplicable Assigned Lease.  If Seller obtains prior to the Closing Date suchconsent, Seller shall assign to Buyer and Buyer shall accept from Seller anassignment of such Assigned Lease in accordance with Section 3.2hereof (the "**Real Property Lease Assignments**").  Any such Real PropertyLease Assignment shall be effective on the Closing Date and shall be on theterms of the lease assignment form reasonably acceptable to Buyer and Seller.

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(ii)           Seller shall use commerciallyreasonable efforts to obtain the consents and releases set forth inclause (i) above, but shall not be required to commence judicialproceedings for a declaration that a consent has been unreasonably withheld,delayed or conditioned.  Seller shall have the right, in its sole and absolutediscretion, but shall not be required, to pay any additional consideration orprovide any additional security or guarantees to the Landlords.  Buyer shallcooperate with Seller in attempting to obtain the consents and releases setforth above, including (i) providing financial statements, references and additionalsecurity and/or guarantees as may be requested by the relevant Landlords,(ii) entering into any amendments to the Leases as may be requested by therelevant Landlords or (iii) entering into direct Leases of the applicablepremises leased under an Assigned Lease (the "**Assigned Lease Premises**")with the relevant Landlords, if requested by such Landlords.  Notwithstandinganything to the contrary in this Agreement, if the Landlord under any AssignedLease conditions its grant of a consent (including by threatening to exercise a"recapture" or other termination right) upon, or otherwise requires in responseto a notice or consent request regarding this Agreement or any OperativeAgreement, the payment of a consent fee, "profit sharing" payment or other consideration(including increased rent payments), or the provision of additional security(including a guaranty), Buyer shall be solely responsible for making all suchpayments or providing all such additional security.  Notwithstanding anythingto the contrary in this Agreement, in the event that Seller makes any suchpayments, Buyer shall promptly reimburse Seller for such amounts.  Buyer shallnot, however, communicate directly with any of Seller's Landlords without theprior written consent of Seller.

(iii)           If, despite the efforts of theparties as set forth in clauses (ii) and (iii) above, a Landlord of anAssigned Lease Premises fails to consent to the assignment of the applicableAssigned Lease of such Assigned Lease Premises prior to the Closing Date, subjectto Section 8.17(a)(iv) below:

(1)                Buyer shall be entitled to occupythe relevant Assigned Lease Premises as a licensee upon the terms andconditions contained in Seller's Assigned Lease of such Assigned Lease Premises. Such license shall not be revocable due to the relevant Landlord's failure toconsent, unless (A) the relevant Landlord formally, unconditionallyrefuses to consent or (B) an enforcement action or forfeiture by therelevant Landlord due to Buyer's occupation of such Assigned Lease Premisescannot, in the reasonable opinion of Seller, be avoided other than by requiringBuyer to immediately vacate the relevant Assigned Lease Premises.  In eithersuch event, Seller may terminate the license by delivering written notice toBuyer, and Buyer shall vacate the relevant Assigned Lease Premises immediatelyor by such other date as may be specified in a notice served by Seller.  Buyershall be solely responsible for, and shall indemnify, defend, protect and hold harmlessSeller from, all losses, costs, damages, claims and liabilities incurred bySeller or Buyer as a consequence of Buyer's occupation of such Assigned LeasePremises, including as a result of any enforcement action taken by the relevantLandlord with respect to any breach by Seller of the relevant Assigned Lease inpermitting Buyer to so occupy the relevant Assigned Lease Premises withoutobtaining the required consent.  Buyer shall not be entitled to make any claimor demand against, or obtain reimbursement from, Seller with respect to anycosts, losses, claims, liabilities or damages incurred by Buyer as aconsequence of being obliged to vacate an Assigned Lease Premises or inobtaining alternative premises, including any enforcement action which a Landlordmay take against Buyer.

(2)                whether or not Buyer occupies suchAssigned Lease Premises as licensee as provided above, Buyer shall, effectiveas of the Closing Date, (A) pay Seller all rents, service charges,insurance premiums and other sums payable by Seller under the relevant AssignedLease of the Assigned Lease Premises, (B) observe and perform all ofSeller's covenants, obligations and conditions contained in the relevantAssigned Lease of the Assigned Lease Premises and (C) indemnify, defend,protect and hold harmless Seller from and against all losses, costs, claims,damages and liabilities arising on account of any breach thereof by Buyer. Immediately upon receipt of the relevant Landlord's consent to the assignmentof an Assigned Lease Premises, as set forth above, Buyer and Seller shall enterinto a Real Property Lease Assignment with respect to such Assigned LeasePremises. 

(iv)           If, despite the efforts of theparties as set forth above, a Landlord of an Assigned Lease Premises formally,unconditionally refuses to consent to the assignment of the applicable AssignedLease:

(1)                Without limiting Seller's rightsas set forth in subparagraphs (2) and (3) below, Seller may by written noticeto Buyer elect to apply to the relevant Landlord for consent to sublease all ofthe relevant premises to Buyer for the remainder of the relevant Assigned Leaseterm at a rent equal to the rent from time to time under the relevant AssignedLease, but otherwise on substantially the same terms and conditions as therelevant Assigned Lease and pursuant to the terms of a reasonable sublease formprepared by Seller.  If Seller makes such an election after the Closing Date(or before the Closing Date, if the Landlord consent is not received before theClosing Date), the provisions of Section 8.17(a)(iii) will apply,except, on the grant of the consent required to sublease the Assigned LeasePremises in question, Seller shall sublease to Buyer the relevant AssignedLease Premises as set forth herein.  If Seller makes such an election beforethe Closing Date and the relevant Assigned Lease consent is obtained before theClosing Date, Seller shall sublease to Buyer the relevant Assigned LeasePremises on the Closing Date as set forth above. 

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(2)                If the Landlord formally,unconditionally refuses such consent prior to the Closing Date, Seller mayelect by written notice to Buyer to delete the relevant Assigned Lease from theterm "Assigned Leases" hereunder.  In such case, on the Closing Date, Sellershall not assign or sublease such premises to Buyer, and Buyer shall vacate therelevant premises.  Buyer shall not be entitled to make any claim or demandagainst or obtain reimbursement from Seller with respect to any costs, losses,claims, liabilities or damages incurred by Buyer as a consequence of beingobliged to vacate the applicable premises or obtaining alternative premises.

(b)                Space-Sharing Arrangements.  Buyer and Seller agree to negotiate in good faiththe space-sharing arrangements at those facilities to be shared by Buyer andSeller or their respective Subsidiaries following the Closing, whicharrangements will be on commercial terms equivalent to those that could beobtained in reasonable arms length market transactions, and with respect to thesublease of the properties located at 301 Mentor Drive, Santa Barbara,California 93111, arrangements substantially on the terms set forth on Schedule 8.17(b).

(c)                Casualty.  Buyer and Seller shall grant and accept the leases,assignments, subleases or licenses of the premises as described in this Section 8.17,regardless of any casualty damage or other change in the condition of theapplicable premises.  In addition, in the event that any Assigned Lease isterminated prior to the Closing Date, notwithstanding anything to the contraryin this Agreement, including Section 3.2, (a) Seller or itsapplicable Subsidiary shall not be required to assign such premises,(b) Buyer or its applicable Subsidiary shall not be required to accept anassignment of such premises and (c) neither party shall have any furtherliability with respect to such premises hereunder.

8.18           Licensed Patent Schedule

Without limiting thedefinition of Licensed Patents set forth in Section 1.94, if priorto the fifth (5th) anniversary of the Closing Date there is aninaccuracy with respect to Schedule 1.94 such that therepresentation set forth in Section 5.11 with respect to LicensedIPR was not true and correct as of the Closing Date, then, notwithstandinganything to the contrary set forth herein, as Buyer's sole and exclusive remedywith respect to the breach of the representation set forth in Section 5.11(d),on Buyer's written request, Seller shall add to such Patents as may be owned andlicensable by Seller to Schedule 1.94 (and such Patents shall bedeemed for all purposes as if such added Patents were on such Schedule as ofthe Closing Date).

8.19           Name Change

(a)                On or promptly after the ClosingDate, Seller shall use its commercially reasonable efforts to cause a change ofthe following corporate names with the applicable Secretary of State in such away as to allow Buyer to qualify and register to form a corporation under thefollowing names: Mills Biopharmaceuticals and Selene (together, the "**TransferredNames**"), and shall execute and deliver all documents, certificates or otherevidence required by the applicable Secretary of State to allow Buyer toreserve such name and establish entities with the applicable Secretary of Statebearing such names.  On or promptly after the Closing Date, Seller shall useits commercially reasonable efforts to change the Transferred Names by filingswith the applicable Secretary of State as reasonably requested by Buyer to giveBuyer the same rights as Seller had to the Transferred Names immediately priorto the Closing.

(b)                On or promptly after the ClosingDate, Buyer shall use its commercially reasonable efforts to cause a change ofthe corporate name of each Transferred Subsidiary that has "Mentor" as part ofits corporate name with the applicable Governmental Authority in such a way sothat "Mentor" is no longer part of the corporate name.

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8.20           Business Permits

Beginning on the datehereof and ending 180 days following the Closing Date, Seller agrees that itshall (or, as applicable, cause its relevant Subsidiary to) use itscommercially reasonable efforts to assist Buyer to effect the assignment,transfer or renewal of, or where applicable, re‐application for, the BusinessPermits.  Such assistance shall include cooperating with the gathering ofinformation to be provided to the applicable Governmental Authority andresponding to such other reasonable requests as are made by Buyer; *provided*,*however*, that Seller and its Subsidiaries shall not be required to incurany more than a nominal cost in providing such assistance and shall not beresponsible for the payment of any Business Permit fees or related costs.

8.21           Environmental Insurance

Buyer and Selleragree to cooperate in good faith to obtain, effective as of the Closing, theenvironmental insurance policies described on Schedule 8.21 namingBuyer and its relevant Subsidiaries as the named insureds and Seller and itsrelevant Subsidiaries as additional named insureds ("**Environmental Insurance**"). Buyer and Seller agree and acknowledge that Buyer and Seller shall equally bearthe cost of the Environmental Insurance policy premium up to a total amount of$300,000, and Seller shall pay the full cost of any excess.  Buyer and Sellerrespectively shall complete any application and such other documents as arenecessary to obtain the Environmental Insurance.  Buyer and Seller shall provide such additional information as may be requiredby the insurer following the date hereof.

8.22           Transition Services Agreement

From the date hereofuntil the Closing, Buyer and Seller agree to negotiate in good faithenhancements to the Transition Services Agreement that are mutually beneficialto both Parties.

8.23           Product Liability

Buyer hereby agreesto pay Seller $300,000 per year for a period of seven years, to be paid inequal amounts on a semi-annual basis with the first payment to occur on the sixmonth anniversary of the Closing Date, in connection with Product LiabilityClaims that constitute Excluded Liabilities.  Buyer shall cooperate with Sellerin Seller's defense of any Product Liability Claim that constitutes an ExcludedLiability, and Seller shall have reasonable access to the books, records andpersonnel which are pertinent to the defense and which are in the possession orcontrol of Buyer.  Seller shall cover the reasonable expenses of Buyer for suchcooperation consistent with Seller's past practice.

8.24           Supply of SMEC Products; UK Marks

(a)                On the date hereof, (i) Buyerentered into that certain Agreement with Coloplast Limited ("**CP UK**"),MML, Rochester Medical Corporation ("**RMC**") and Rochester Medical Limited("**RM UK**"), pursuant to which Buyer, CP UK and MML have agreed totransfer certain assets to RMC or RM UK immediately following the Closing (the"**MML Sale**"), (ii) Seller and RMC entered into that certain AssetPurchase Agreement (the "**Anoka Agreement**"), pursuant to which Sellerwill transfer certain assets to RMC (the "**Anoka Sale**"), and (iii) Buyerand Seller entered into that certain Termination Agreement pursuant to whichthe Existing Supply Agreement will terminate (the "**Termination**").

(b)                If as of immediately following theClosing either (1) the MML Sale has not been consummated, (2) the Anoka Salehas not been consummated or (3) the Termination has not occurred, the Partiesagree that, notwithstanding anything to the contrary contained herein(including in the Schedules):

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(i)           the existing Male ExternalCatheter ("**MEC**") supply arrangements to the extent pertaining to thesupply of Transfix products from Seller to MML with respect to the UK willautomatically terminate as of and subject to the Closing;

(ii)           Buyer and Seller will enter into anew agreement for the supply by Seller and purchase by Buyer of Silicone MaleExternal Catheters ("**SMEC**") products, currently manufactured by Sellerin its manufacturing facility in Anoka, Minnesota (the "**Anoka Facility**"),for sale by Buyer worldwide other than in the UK, for five (5) years from theClosing Date;

(iii)           Buyer and Seller willcontinue the Existing Supply Agreement for distribution and sale of siliconeand latex Male External Catheter products in the UK ("**UK MEC Products**") until its expiration;

(iv)           with respect to the new supplyagreement referred to in clause (ii) above, (A) the terms of the supplyagreement will be on commercially reasonable terms that are substantiallysimilar (other than with respect to territory, price and product volumes) asthat contained in the Existing Supply Agreement, (B) pricing under such supplyagreement will be intended to cover only Seller's total fully burdened costs ofsupporting the manufacture and supply of such products to Buyer withoutrealizing a profit therefrom and, accordingly, the price for such productscharged by Seller to Buyer for such products will be all costs and expenses tosupport the manufacture and supply of such products, and (C) Buyer shallprovide Seller with certain manufacturing support functions and services;

(v)           the Existing Supply Agreementshall be assignable to a third party in connection with Buyer's sale of Buyer'sUK MEC Business (excluding MECs developed independently by Buyer);

(vi)           during the term of the new supplyagreement described in clause (ii) above, Seller will not transfer themanufacturing capacity (other than as a part of a Change of Control of Seller)of the Anoka Facility without the consent of Buyer, which shall not beunreasonably withheld, delayed or conditioned (it being understood that it willbe unreasonable to withhold consent if the transferee is capable of continuingthe supply agreements referred to in clauses (ii) and (iii) above and agrees tohonor such agreements); 

(vii)           Seller's obligations in Section8.16 (Non-competition) will be deemed hereby to be amended to provide thatthe developing, manufacturing, marketing, selling or distributing of SMECs (only)manufactured in the Anoka Facility shall not be considered a "CompetingBusiness" or otherwise violate the covenants contained therein; 

(viii)           Seller shall (A) retain ownershipof all rights in the UK in the CLEAR ADVANTAGE Mark, the URO-FLOW Mark, theFREEDOM PLUS Mark, the TRANSFIX Mark and the UK registration of the TRANSFIXMark (UK Reg. No. 2,201,911), the URO-FLO XTEND Mark and the UK registration ofthe URO-FLO XTEND Mark (UK Reg. No. 1,384,039), the URO-FLO UNIQUE Mark and theUK registration of the URO-FLO UNIQUE Mark (UK Reg. No. 1,429,535) and theUROFLO SILKIE Mark and the UK registration of the UROFLO SILKIE Mark (UK Reg.No. 2,049,250) (and the associated goodwill of each such Mark) (collectively,the "**Retained MEC Marks**") and (B) receive from Buyer, and Buyer shallgrant to Seller, after the expiration or other termination of the ExistingSupply Agreement, a paid up, royalty free, perpetual, transferable,irrevocable, exclusive (including as to Buyer) trademark license to use theFREEDOM Mark (including with respectto any registration thereof) in the UK (the "**Licensed MEC Mark**" and,collectively with the Retained MEC Marks, the "**UK MEC Marks**") inconnection with all UK MEC Products.  Buyer shall continue to maintain theexclusive sales, marketing and distribution rights to the UK MEC Marks for usewith the UK MEC Products pursuant to the Existing Supply Agreement for theremaining term of the Existing Supply Agreement.  At the expiration or othertermination of the Existing Supply Agreement for any reason, Buyer's rights inand to the UK MEC Marks for use with UK MEC Products shall cease. The sale,distribution or other use of the UK MEC Marks in connection with UK MECProducts shall not be considered a "Competing Business" or otherwise violatethe covenants contained in Section 8.16. If Seller retains ownership ofthe Retained MEC Marks pursuant to this paragraph, the Parties agree to amendthe Schedules as appropriate to reflect Seller's retention thereof.  

(ix)           For the avoidance of doubt, thereshall be no restrictions on Seller's right to use the UK MEC Marks retained byor licensed to Seller pursuant to Section 8.24(b)(viii) in connectionwith the UK MEC business. Buyer acknowledges and agrees that Seller intends tosell the UK MEC business to a third party and that accordingly any rights inthe UK MEC Marks retained by or licensed to Seller will be transferred to suchpurchaser of the UK MEC Business.  

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(x)           Any allocation of rights in, anduse of, the UK MEC Marks will be subject to all requirements of UK Law,including those Laws that pertain to the use of trademarks.

(c)                Notwithstanding anything to thecontrary contained herein (including in the Schedules), Seller shall in anyevent retain all rights in the UK in the MENTOR CLEAR ADVANTAGE Mark and the UKregistration of the MENTOR CLEAR ADVANTAGE Mark (UK Reg. No. 1,494,286) (andthe associated goodwill) (collectively, the "**MENTOR CLEAR ADVANTAGE Mark**")and the MENTOR CLEAR ADVANTAGE Mark shall be deemed an Excluded Asset. Following the Closing, Seller shall, and shall cause its Subsidiaries to,suspend the use of the MENTOR CLEAR ADVANTAGE Mark immediately following theClosing and in Seller's discretion either terminate the UK registration of theMENTOR CLEAR ADVANTAGE Mark or allow such registration to lapse when it comesup for renewal.  Notwithstanding the foregoing, if at the Closing Buyer doesnot purchase from Seller all products in inventory (if any) that bear theMENTOR CLEAR ADVANTAGE Mark, then following the Closing Seller shall beentitled to sell, transfer or otherwise dispose of those products that itretains.  

8.25           Escrow Agreement

The Parties agree tonegotiate in good faith the terms of an escrow agreement (the "**EscrowAgreement**") that, together with this Agreement, will govern the EscrowFund.

8.26           Porges Asset Sale

The Parties will effectthe Porges Asset Sale in accordance with the terms of this Agreement, providedthat the closing of the Porges Asset Sale will take place one day prior to theClosing Date.

8.27           ABISS

As promptly as practicablefollowing the execution hereof, Seller agrees to work in good faith to obtainthe consent of Analytical Biosurgical Solutions ("**ABISS**") to theassignment to Buyer of that certain Exclusive Supply Agreement dated as ofJanuary 31, 2005, between Seller, Porges and ABISS (the "**ABISS Agreement**"),to the extent such consent is required to effect the assignment thereof.  Inthe event such consent to assignment is required and Seller is unable to eitherobtain the consent of ABISS or provide the benefits of the ABISS Agreement toBuyer as contemplated by Section 8.1, Seller will: (i) use itscommercially reasonable efforts to find a substitute manufacturer that agrees,and is ready, willing and able, to deliver substantially similar services toBuyer as are provided by ABISS to Seller as of the Closing Date pursuant to theterms of the ABISS Agreement, and (ii) indemnify and hold harmless Buyer in accordancewith the provisions of Article 11 hereof (including Section 11.6,but without regard to the limitation on recovery for consequential damagesprovided for in Section 11.5 and Section 13.11, which shall notapply in such event) for any Losses arising out of Seller's failure to obtainsuch consent or provide such benefits that are incurred by Buyer during theperiod from the Closing Date through the earliest of (A) the date Seller isable to obtain such consent, (B) the date Seller is able to provide suchbenefits and (C) the date Buyer or Seller finds a substitute manufacturerpursuant to clause (i) above.

8.28           Intercompany Contracts andBalances

At or before the Closing,Seller will, and will cause each of its Subsidiaries to, terminate all intercompany Contracts, receivables and payables between (i) Seller and itsRetained Subsidiaries (as defined below), or any of them, on the one hand, and(ii) the Transferred Subsidiaries (other than Mentor Development LimitedPartnership), or any of them, on the other hand, except in each case foramounts payable to or receivable from (x) the Retained Subsidiaries, or any ofthem, on the one hand and (y) the Transferred Subsidiaries (other than MentorDevelopment Limited Partnership), or any of them, on the other hand.  "**RetainedSubsidiaries**" means all Subsidiaries of Seller other than the TransferredSubsidiaries.  

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**Article 9CONDITIONSPRECEDENT TO BUYER'S OBLIGATION TO CLOSE**

Allobligations of Buyer to effect the Closing hereunder are subject to thesatisfaction at or prior to the Closing of the conditions precedent thatfollow, any one or more of which may be waived in writing, in whole or in part,exclusively by Buyer in its sole discretion:

9.1               Seller Closing Deliverables

Seller shall havemade all the deliveries required to be made by Seller pursuant to Section 3.2.

9.2               Performance

Seller and/or itsSubsidiaries shall have performed and complied in all material respects witheach of the agreements, covenants and conditions contained in this Agreementthat are required to be performed or complied with by Seller and/or itsSubsidiaries at or prior to the Closing.

9.3               Regulatory Approvals

All GovernmentalActions pursuant to HSR and those set forth on Schedule 9.3, shallhave been obtained and shall remain in full force and effect and all statutorywaiting periods in respect thereof shall have expired.

9.4               No Injunction or Restraints;Illegality

No provision of anyapplicable Law (other than the UK OFT Undertakings) shall have been enacted,entered, promulgated or enforced by any Governmental Authority that prohibits,restrains, enjoins, or restricts the consummation of the transactionscontemplated hereby in any material respect and no litigation or proceedingshall be pending by any Governmental Authority seeking to prohibit, restrain,enjoin or restrict the consummation of the transactions contemplated hereby inany material respect which would reasonably be expected to succeed.

9.5               Officer's Certificate

(a)                Buyer shall have receivedat the Closing, with respect to Seller, a certificate, dated as of the ClosingDate, of an appropriate officer of Seller certifying that the conditions setforth in Sections 9.2, 9.6 and 9.7 have beensatisfied.

9.6               Representations and Warranties

The representationsand warranties set forth in Article 5 shall be true and correct(without giving effect to any qualification as to materiality or SellerMaterial Adverse Effect contained in any specific representation or warranty)on the Offer Date and as of the Closing Date as though such representations andwarranties were made on and as of the Closing Date (*provided* that thoserepresentations and warranties which address matters only as of a particulardate shall have been true and correct only on such date), except as would not,individually, or in the aggregate, constitute or be reasonably likely toconstitute a Seller Material Adverse Effect.

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9.7               No Seller Material Adverse Effect

There shall not haveoccurred and be continuing a Seller Material Adverse Effect.

9.8               Transition Services Agreement

The Parties shallhave executed and delivered the Transition Services Agreement.

**Article 10CONDITIONSPRECEDENT TO SELLER'S OBLIGATIONS TO CLOSE**

Allobligations of Seller to effect the Closing hereunder are subject to thesatisfaction at or prior to the Closing of the conditions precedent thatfollow, any one or more of which may be waived in writing, in whole or in part,exclusively by Seller:

10.1           Buyer Closing Deliverables

Buyer shall have madeall the deliveries required to be made by Buyer pursuant to Section 3.3.

10.2           Performance

Buyer and/or itsSubsidiaries shall have performed and complied in all material respects witheach of the agreements, covenants and conditions contained in this Agreementthat are required to be performed or complied with by Buyer and/or itsSubsidiaries at or prior to the Closing.

10.3           Regulatory Approvals

All GovernmentalActions pursuant to HSR and those set forth on Schedule 9.3,including those in jurisdictions outside the United States, shall have beenobtained and shall remain in full force and effect and all statutory waitingperiods in respect thereof shall have expired.

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10.4           No Injunction or Restraints;Illegality

No provision of anyapplicable Law shall have been enacted, entered, promulgated or enforced by anyGovernmental Authority that prohibits, restrains, enjoins, or restricts theconsummation of the Transfer in any material respect and no litigation orproceeding shall be pending by any Governmental Authority seeking to prohibit,restrain, enjoin or restrict the consummation of the Transfer in any materialrespect which would reasonably be expected to succeed.

10.5           Officer's Certificate

Seller shall havereceived at the Closing, with respect to Buyer, a certificate signed by anappropriate officer of Buyer dated the Closing Date certifying that theconditions set forth in Sections 10.2, 10.6 and 10.8have been satisfied.

10.6           Representations and Warranties

The representationsand warranties set forth in Article 6 shall be true and correct(without giving effect to any qualification as to materiality or Buyer MaterialAdverse Effect contained in any specific representation or warranty) on theOffer Date and as of the Closing Date as though such representations andwarranties were made on and as of the Closing Date (*provided* that thoserepresentations and warranties which address matters only as of a particulardate shall have been true and correct only on such date), except as does not,individually, or in the aggregate, constitute or would reasonably be likely toconstitute a Buyer Material Adverse Effect.

10.7           Sufficient Funds

Buyer shall havesufficient funds to pay the Purchase Price.

10.8           No Buyer Material Adverse Effect

There shall not haveoccurred and be continuing a Buyer Material Adverse Effect.

10.9           UK OFT Undertakings

The UK OFT shall nothave decided that the UK OFT Undertakings prevent or delay the consummation ofthe transactions contemplated by this Agreement.

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**Article 11INDEMNITY**

11.1           Survival

The representations and warranties of the Parties set forth in this Agreementor in any instrument delivered pursuant hereto shall survive for 18 months after the Closing Date; *provided,however*, that (i) the representations and warranties of Seller setforth in Section 5.20 (Products Liability) shall survive for 12months after the Closing Date, and (ii) the representations and warrantiesof Seller set forth in Section 5.1 (Organization and Authority(other than the last sentence of Section 5.1(a) and the lastsentence of Section 5.1(b) concerning qualification of as a foreigncorporation), Section 5.2 (Transferred Subsidiaries,Capitalization), Section 5.5 (No Broker), the first sentence of Section 5.15(c)(Title to Real Property) and Section 5.25 (Sufficiency) (suchrepresentations and warranties in this clause (ii), collectively, the "**StructuralRepresentations**") and the representations and warranties of Buyer set forthin Section 6.1 (Organization of Buyer), Section 6.2(Authorization) and Section 6.6 (No Broker) shall survive until thetenth (10th) anniversary of the Closing Date; *provided further*that the foregoing time limitation shall not apply to any claim for which agood faith written notice meeting the requirements set forth in Section 11.4(a)has been delivered prior to such date.  All covenants that by their terms areto be performed after the Closing shall survive the Closing.

11.2           Buyer Indemnification

Subject to thelimitations set forth in this Article 11, and as otherwiseexpressly set forth herein, Buyer hereby agrees to indemnify Seller, Seller'sAffiliates and the Seller Representatives (the "**Seller Indemnified Parties**"),against and agrees to hold the Seller Indemnified Parties harmless from anyLoss incurred or suffered by the Seller Indemnified Parties arising out of orrelated to (a) a Warranty Breach by Buyer (*provided* that, in theevent of any such breach or inaccuracy, for purposes of determining the amountof any Loss no effect will be given to any qualification as to "material,""materiality," "material adverse effect" or a "Buyer Material Adverse Effect"contained therein), (b) a Covenant Breach by Buyer, (c) the AssumedLiabilities, or (d) any (formal or informal) investigation or inquiry bythe UK Competition Authorities in relation to the UK OFT Undertakings to theextent that any such investigation or inquiry prevents or delays theconsummation of the transactions contemplated by this Agreement.

11.3           Seller Indemnification

(a)                Subject to the limitations setforth in this Article 11, and as otherwise expressly set forthherein, Seller hereby agrees to indemnify Buyer and Buyer's Subsidiaries, andtheir respective Affiliates, officers, directors, agents, representatives,successors, assigns, partners and employees (the "**Buyer Indemnified Parties**")against and agrees to hold the Buyer Indemnified Parties harmless from any Lossincurred or suffered by the Buyer Indemnified Parties arising out of or relatedto (i) a Warranty Breach by Seller (*provided* that, in the event ofany such breach or inaccuracy, for purposes of determining the amount of anyLoss no effect will be given to any qualification as to "material,""materiality," "material adverse effect" or a "Seller Material Adverse Effect"contained therein); (ii) a Covenant Breach by Seller; (iii) the ExcludedLiabilities; (iv) any failure to comply with Laws relating to bulktransfers that are applicable to the sale of the Transferred Assets; (v)Seller's Special Environmental Indemnity pursuant to Section 11.3(d); or(vi) the matters identified on Schedule 11.3(a).

(b)                Notwithstanding anything herein tothe contrary, Seller shall have noLiability with respect to indemnification under this Agreement due to aWarranty Breach until the aggregate amount of Qualifying Losses (as definedbelow) incurred by the Buyer Indemnified Parties exceeds $1,000,000 (the "**Threshold**"),in which case the Buyer Indemnified Parties shall be entitled to seek compensation for all such Qualifying Losses.  A Lossshall not be a "Qualifying Loss" eligible to be counted toward the Thresholdunless such Loss, standing alone or in the aggregate with other Losses forsubstantially similar matters (over any time period during the survival periodof the relevant representations and warranties), equals or exceeds $100,000, inwhich case it shall be counted from the first dollar.  Notwithstanding theforegoing, any claims for a Warranty Breach with respect to StructuralRepresentations shall not be subject to the foregoing Threshold and QualifyingLoss limitations.

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(c)                Notwithstanding anything herein tothe contrary, in no event shall Seller be liable for indemnification under thisAgreement (i) for any Losses due to Warranty Breaches (other than withrespect to Structural Representations), pursuant to this Article 11or otherwise, for any amounts, individually or in the aggregate, in excess of 15%of the Purchase Price or (ii) for any Losses due to Warranty Breachesrelating to Structural Representations, pursuant to this Article 11or otherwise, for any amounts, individually or in the aggregate, which, whentaken together with amounts paid for Losses with respect to Warranty Breachespursuant to clause (i), exceed the Purchase Price.

(d)                Seller shall indemnify the BuyerIndemnified Parties for Seller's Special Environmental Indemnity.  The term "**Seller'sSpecial Environmental Indemnity**" shall mean the following:

(i)           Minneapolis, Minnesota. Seller shall indemnify the Buyer Indemnified Parties for Losses incurred withrespect to Environmental Claims arising out of Environmental Conditionsexisting as of the Closing in the soil and/or groundwater on, or migrating onor before the Closing from, the Transferred Real Property or the real propertythat is leased pursuant to the Assigned Leases located in Minneapolis,Minnesota including those described in that certain Phase I Environmental SiteAssessment - Mentor Corporation, 1401, 1499, 1525, 1601 and 1615 West RiverRoad North, Minneapolis, Minnesota ("**Minneapolis Property**"), prepared byGaiaTech and dated February 2006 ("**Minneapolis Environmental Losses**"),on the following terms and conditions:

(1)            The Minneapolis EnvironmentalLosses must originate from a third Person claim including any claim of aGovernmental Authority (i.e. other than a direct claim brought by any BuyerIndemnified Party) ("**Minneapolis Claim**").

(2)             Buyer andits Subsidiaries agree not to voluntarily perform or permit to be performed anysoil or groundwater testing of any kind or nature on the Minneapolis Propertyunless required by a Governmental Authority pursuant to Environmental Laws.  Ifsuch voluntary testing is performed except as permitted in the previoussentence, the indemnity obligations of Seller in this Section 11.3(d)(i)shall be null and void and of no further force and effect.

(3)            Seller shall only be required toindemnify for any Minneapolis Environmental Losses suffered by any of the BuyerIndemnified Parties to the extent such Losses are incurred as a result of arequirement of a Governmental Authority pursuant to Environmental Laws or, inthe event of a claim by any other third Person, to the extent it is reasonableand necessary to incur such Losses pursuant to Environmental Laws.

(4)             Losses covered under this Section 11.3(d)(i) shall not includediminution in property value of the Minneapolis Property.

(5)           Notwithstanding anything to thecontrary in this Agreement, the Minneapolis Environmental Losses shall onlyinclude those Losses arising under a Minneapolis Claim that has been made on orbefore that date which is five (5) years following the Closing Date.

(ii)           Other Business Properties.  Seller shall indemnify the Buyer IndemnifiedParties for one half of all Losses (other than Seller Caused EnvironmentalLosses, which are addressed in Section 11.3(d)(iii) below) incurred withrespect to Environmental Claims arising out of Environmental Conditionsexisting as of the Closing in the soil and/or groundwater on, or migrating onor before the Closing from or to, all properties owned, leased or occupied asof the date hereof by Seller or any of Seller's Subsidiaries in connection withthe Business, excluding the Minneapolis Property covered in Section 11.3(d)(i) above ("**OtherBusiness Property**" with the Losses in this Section 11.3(d)(ii)referred to as "**Other Business Property Environmental Losses**"),on the following terms and conditions:

(1)                The Other Business PropertyEnvironmental Losses must originate from a third Person claim including anyclaim of a Governmental Authority (i.e. other than a direct claim brought byany Buyer Indemnified Party) ("**Other Business Property Environmental Claim**").

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(2)                Buyer and its Subsidiaries agreenot to voluntarily perform or permit to be performed any soil or groundwatertesting of any kind or nature on the Other Business Property, except: (i) asrequired by a Governmental Authority pursuant to Environmental Laws; or(ii) with respect to the Real Property located at Avenue Edmond Rostand,Lieu-Dit Le Pontet, Sarlat-La-Caneda, France as further described in thatcertain Phase I Environmental Site Assessment prepared by GaiaTech datedFebruary 2006 (the "**Sarlat Property**"), which testing occurs after thefirst anniversary of the Closing Date and then only at the request of apotential buyer in connection with a bona fide proposed sale of the SarlatProperty.  If such voluntary testing is performed, except as permitted in theprevious sentence, the indemnity obligations of Seller in this Section 11.3(d)(ii)shall be null and void and of no further force and effect as to each particularlegal parcel of Real Property upon which such testing was performed. 

(3)                Seller shall only be required toindemnify for any Other Business Property Environmental Losses suffered by anyof the Buyer Indemnified Parties to the extent such Losses are incurred as aresult of a requirement of a Governmental Authority pursuant to EnvironmentalLaws or, in the event of a claim by any other third Person, to the extent it isreasonable and necessary to incur such Losses pursuant to Environmental Laws.

(4)                Losses covered under this Section 11.3(d)(ii) shall notinclude diminution in property value of the relevant Other Business Property.

(5)                Notwithstanding anything to thecontrary in this Agreement, the Other Business Property Environmental Lossesshall only include those Losses arising under an Other Business PropertyEnvironmental Claim that has been made on or before that date which is four (4)years following the Closing Date.

    (iii)           Except as set forth in Sections11.3(d)(i) and 11.3(d)(ii) above, Seller shall indemnify the BuyerIndemnified Parties for all Losses incurred with respect to EnvironmentalClaims arising out of Environmental Conditions existing as of the Closing inthe soil and/or groundwater on, or migrating on or before the Closing from, allproperties owned, leased or occupied at any time by Seller or any of Seller'sSubsidiaries in connection with the Business to the extent caused by Seller orany Subsidiary of Seller ("**Seller Caused Environmental Losses**"), on thefollowing terms and conditions:

(1)                The Seller Caused EnvironmentalLosses must originate from a third Person claim including any claim of aGovernmental Authority (i.e. other than a direct claim brought by any BuyerIndemnified Party) ("**Seller Caused Environmental Claim**").

(2)                The Seller Caused EnvironmentalLosses can not arise as a result of soil or groundwater testing of any kind ornature that has been performed or permitted to be performed by Buyer or anySubsidiary of Buyer except as required by a Governmental Authority pursuant toEnvironmental Laws.  If such voluntary testing is performed, except aspermitted in the previous sentence, the indemnity obligations of Seller in thisSection 11.3(d)(iii) shall be null and void and of no further forceand effect as to each particular legal parcel of Real Property upon which suchtesting was performed.

(3)                Seller shall only be required toindemnify for any Seller Caused Environmental Losses suffered by any of theBuyer Indemnified Parties to the extent such Losses are incurred as a result ofa requirement of a Governmental Authority pursuant to Environmental Laws or, inthe event of a claim by any other third Person, to the extent it is reasonableand necessary to incur such Losses pursuant to Environmental Laws.

(4)                Losses covered under this Section 11.3(d)(iii)shall not include diminution in property value of the Real Property.

(5)                The Buyer shall bear the burden ofproof that the relevant Environmental Condition constitutes Seller CausedEnvironmental Losses.

(6)                Notwithstanding anything to thecontrary in this Agreement, the Seller Caused Environmental Losses shall onlyinclude those Losses arising under a Seller Caused Environmental Claim that hasbeen made on or before that date which is four (4) years following the ClosingDate.

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       (iv)           Buyer hereby confirms that it hasno present intention to perform any voluntary soil or groundwater testing ofany kind or nature at any of the properties to be covered by the EnvironmentalInsurance.

11.4           Procedures

EachParty agrees to give prompt written notice (such Party with the obligation togive notice, the "**Indemnified Party**") to the other Party (the "**IndemnifyingParty**") of the assertion of any claim, or the commencement of any suit,action or proceeding in respect of which indemnity may be sought under thisAgreement, including the estimated amount and other details of such claim; *provided,however*, that the failure of the Indemnified Party to so notify theIndemnifying Party shall not relieve the Indemnifying Party of itsindemnification obligations hereunder, except to the extent that theIndemnifying Party shall have been materially prejudiced by such lack of timelyand adequate notice.  The Indemnifying Party shall have the right, at itselection, to take over the defense or settlement of any third Person claim atits own Expense by giving prompt notice to that effect to the IndemnifiedParty; *provided, however,* that the Indemnifying Party shall keep theIndemnified Party reasonably informed of the progress of such third Personclaim.  If the Indemnifying Party shall have so assumed the defense of anyclaim, the Indemnifying Party shall be authorized to consent to a settlementof, or the entry of any judgment arising from, any such claim, in its solediscretion without the prior consent of the Indemnified Party; *provided,however*, that a condition to any such settlement shall be a completerelease of the Indemnified Party with respect to such claim.  The IndemnifyingParty agrees to consult with the Indemnified Party prior to entering into anysettlement contemplated by the immediately preceding sentence, it beingexpressly understood that such duty to consult does not in any way limit theIndemnifying Party's right to consent to a settlement or the entry of judgmentin its sole discretion without obtaining the prior consent of the IndemnifiedParty.  The Indemnified Party shall at all times have the right, at its optionand Expense, to participate fully in, but not to control, any such defense.  Ifthe Indemnifying Party, within 20 days after receipt of the Indemnified Party'snotice of claim, does not (i) give such notice to take over the defense ofsuch claim and proceed diligently to defend the claim or (ii) object tosuch claim in writing to the Indemnified Party, then the Indemnified Partyshall have the right, but not the obligation, to undertake the defense of suchclaim for the account of and at the risk of the Indemnifying Party.  TheParties shall cooperate in defending any third Person claim, and the defendingparty shall have reasonable access to the books, records and personnel whichare pertinent to the defense and which are in the possession or control of theother party.  The Parties agree that any Indemnified Party, at its own expense,may join an Indemnifying Party in any action, claim or proceeding brought by athird Person, as to which any right of indemnity created by this Agreementwould or might apply, for the purpose of enforcing any right of indemnitygranted to such Indemnified Party pursuant to this Agreement.

(a)                Any claim for indemnification madedirectly by a Party and which does not result from a third Person claim oraction, shall be asserted by written notice.  The Indemnifying Party shall havea period of 45 days within which to respond thereto.  If the Indemnifying Partydoes not respond within such 45‐day period, such Party shall be deemed tohave accepted responsibility to make payment and shall have no further right tocontest the validity of such claim.  

(b)                Notwithstanding anything to thecontrary, (i) no investigation by or knowledge of Buyer shall affect orlimit Buyer's rights to indemnity contained in this Article 11, and(ii) Buyer's inability to recover for Losses under Section 11.3(a)(i)(whether due to the scope of a particular representation or warranty orotherwise) shall not preclude Buyer from recovering under any other subsectionof Section 11.3(a), each such subsection being an independent basisfor indemnification.

(c)                The Parties acknowledge that theprovisions of Section 13.7 and that the same applies to allindemnity claims hereunder 

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11.5           Limitation on Recovery

With respect to anyLosses for which indemnification is sought pursuant to Section 11.3,the Seller shall not be liable, except in the case of fraud, for any Lossesrelating to any matter to the extent that a specific liability or reserverelating to the matter was taken into account in the calculation of Net WorkingCapital as reflected in the Final Net Working Capital Statement. With respectto any Losses for which indemnification is sought pursuant to Section 11.2or Section 11.3, the Indemnifying Party shall not be liable, exceptin the case of fraud, for any special, consequential or punitive damages,including loss of profits or goodwill, except (i) to the extent a GovernmentalAuthority has required, or a third party settlement has provided (to the extentthe Indemnifying Party has consented to the settlement and the amounts payablethereof, which consent shall not be unreasonably withheld), such amounts to bepaid to a third Person or (ii) with respect to consequential damages, asprovided in Section 8.27. 

11.6           Duty to Mitigate

(a)                Each Indemnified Party shall useits commercially reasonable efforts to mitigate Losses for whichindemnification may be sought pursuant to Section 11.2 or Section 11.3,including (i) using its commercially reasonable efforts to secure paymentfrom insurance policies available and in existence (including the EnvironmentalInsurance) that provide coverage with respect to such Losses (an "**InsurancePayment**") and (ii) using its commercially reasonable efforts to securereimbursement, indemnity or other payment from any third Person obligated byContract or otherwise to reimburse, indemnify or pay the Indemnified Party withrespect to such Loss (a "**Third****Party Payment**" and, together withan Insurance Payment, a "**Mitigation Payment**"), it being understood andagreed that the Indemnified Party shall not be required to exhaust or concludeits remedies with respect to such Mitigation Payments prior to seekingindemnification from the Indemnifying Party under Section 11.2 or Section11.3, as the case may be.  Notwithstanding anything to the contrarycontained herein, the recovery by an Indemnified Party from any IndemnifyingParty pursuant to Section 11.2 or Section 11.3, as thecase may be, shall not relieve the Indemnified Party of its obligation tomitigate Losses pursuant to this Section 11.6(a).

(b)                Any amounts payable by anIndemnifying Party with respect to a particular Loss pursuant to Section 11.2or Section 11.3, as the case may be, shall be reduced by the amountof Mitigation Payment, if any, received by the Indemnified Party with respectto such Loss prior to payment therefor by the Indemnifying Party.  In the eventan Indemnifying Party makes a payment with respect to a particular Losspursuant to Section 11.2 or Section 11.3, as the casemay be, and thereafter the Indemnified Party receives a Mitigation Payment withrespect to such Loss, the Indemnified Party shall reimburse the IndemnifyingParty an amount equal to the lesser of (i) the Mitigation Payment and(ii) the amount so paid by the Indemnifying Party. 

(c)                The Parties agree to treat indemnificationpayments as an adjustment to the Purchase Price.

(d)                The Parties acknowledge and agreethat a Party's reporting to a Governmental Authority under a good faith beliefof a duty to report under applicable Law does not violate the Party's duty tomitigate.

11.7           Escrow Fund

At the Closing, theEscrow Amount shall be deposited by Buyer with the Escrow Agent, such depositto constitute an escrow fund (the "**Escrow Fund**") and to be governed bythe terms set forth herein and in the Escrow Agreement.  The Escrow Fund shallbe available as security for the indemnification obligations of Seller for anyWarranty Breach pursuant to Section 11.3(a)(i).  Buyer shall payall fees and expenses of the Escrow Agent in connection with the administrationof the Escrow Fund.

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11.8           Indemnity is the Exclusive Remedy

Each Partyacknowledges and agrees that after the Closing Date, absent fraud, its sole andexclusive remedy with respect to any and all claims relating to or arising outof any representation, warranty, covenant or agreement made by the other Party(or its Subsidiaries) in the Operative Agreements shall be pursuant to theindemnification provisions of this Article 11; provided, however, that in the event of any Warranty Breacharising under Section 5.25 (Sufficiency), Seller may, in its solediscretion and in lieu of payment of money damages, cure such breach bydelivering or otherwise conveying sufficient rights to the asset or assets inquestion giving rise to such Warranty Breach; provided further that to theextent any provision in this Agreement (other than this Article 11)or any other Operative Agreement expressly creates an indemnity obligation inone of the Parties, the provisions of this Article 11 will apply tosuch provision to the extent not inconsistent therewith.  However, nothing setforth in this Agreement shall be deemed to prohibit or limit either Party'sright at any time before, on or after the Closing Date, to seek injunctive orother equitable relief for the failure of the other Party to perform anycovenant or agreement contained in any Operative Agreement, and the pursuit ofinjunctive relief shall not affect, modify or diminish in any way a Party'sright to monetary relief in arbitration pursuant to Section 13.7(b).

11.9           Assignment of Claims

If an IndemnifiedParty receives any payment from an Indemnifying Party in respect of any Losspursuant to Section 11.2 or Section 11.3 and theIndemnified Party could reasonably have recovered all or a part of such Lossfrom a third Person (a "**Potential Contributor**") based on the underlyingclaim asserted against the Indemnifying Party, the Indemnified Party shallassign such of its rights to proceed against the Potential Contributor but onlyto the extent necessary to permit the Indemnifying Party to recover from thePotential Contributor the amount of such payment.

11.10        No Set‐Off

Neither Party may set‐offLosses against other payments to be made by the respective Party pursuant tothis Agreement or any other Operative Agreement without the written consent ofthe other Party.

**Article 12TERMINATION**

12.1           Term

Unless terminatedpursuant to Section 12.2 or as otherwise expressly set forthherein, this Agreement shall continue in full force and effect until full andfinal performance of all of the terms herein.

12.2           Termination

Anything contained inthis Agreement to the contrary notwithstanding, this Agreement may beterminated at any time prior to the Closing Date:

(a)                by the mutual signed writtenconsent of Buyer and Seller;

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(b)                by either Party if: 

(i)           a Law is in effect having theeffect of permanently restraining, enjoining or otherwise prohibiting, in amaterial respect, the consummation of the transactions contemplated by thisAgreement, which Law is final and nonappealable (and for the avoidance ofdoubt, the Buyer shall have no right to terminate this Agreement pursuant tothis Section 12.2(b)(i) by reason of the fact that it is in breachof the UK OFT Undertakings); or

(ii)           the Closing shall not haveoccurred on or before the End Date; *provided, however*, that the failureof the Closing to occur is not due to a material breach hereof by the Partyseeking termination;

(c)                by Buyer: 

(i)           in the event of a Warranty Breachor Covenant Breach by Seller such that the conditions set forth in Section 9.6or Section 9.2, as applicable, would not be satisfied; *provided,however*, that Seller is given notice to cure such breach and does not curesuch breach within 60 days after receipt of notice from Buyer requesting suchbreach be cured; or

(ii)           if a Seller Material AdverseEffect shall have occurred since the date hereof; or

(d)                by Seller: 

(i)           if a Buyer Material Adverse Effectshall have occurred since the date hereof; or

(ii)           in the event of a Warranty Breachor Covenant Breach by Buyer such that the conditions set forth in Section 10.6or Section 10.2, as applicable, would not be satisfied; *provided,however*, that Buyer is given notice to cure such breach and does not curesuch breach within 60 days after receipt of notice from Seller requestingsuch breach be cured.

12.3           Notice of Termination

Any Party desiring toterminate this Agreement pursuant to Section 12.2 shall givewritten notice of such termination to the other Party.

12.4           Effect of Termination

In the event thatthis Agreement shall be validly terminated pursuant to this Article 12,this Agreement shall forthwith terminate and be of no further force and effect;*provided, however*, that (a) any agreements contained herein thatexpressly provide for survival after termination of this Agreement and Section 8.15and Article 13 shall survive the termination hereof, and(b) nothing herein shall relieve any Party from liability for any willfulbreach of this Agreement or fraud arising prior to such valid termination. Termination of this Agreement shall not limit the Liability of any Party exceptas otherwise expressly provided in this Agreement.

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**Article 13GENERAL PROVISIONS**

13.1           Notices

(a)                Any notice or other communicationrequired or permitted to be given hereunder shall be in writing and shall bedelivered in person, transmitted by facsimile (with acknowledgment of completetransmission together with notice by telephone (either to a person or by voicemail message) to the confirmatory telephone numbers below, provided that suchconfirmatory telephone numbers shall allow for voice mail messages to be left24 hours per day, seven days per week) or sent by registered or certified mail,or recognized overnight courier, charges prepaid, addressed as follows:

(i)           if to Seller:

Mentor Corporation201 Mentor DriveSanta Barbara, California 94311Attention: Chief Executive Officer, with a copy to theGeneral CounselFacsimile No.:      (805) 879-6008Phone: (805) 879-6000 (for confirmation purposes only)

with a copy to (which shall notconstitute notice):

Wilson Sonsini Goodrich & RosatiProfessional Corporation 650 Page Mill RoadPalo Alto, CA 94304Attention:              Bradley Finkelstein,Esq.                                Martin Korman,Esq.Facsimile No.:      (650) 493-6811Phone: (650) 493-9300 (for confirmation purposes only)

(ii)           if to Buyer:

Coloplast A/SHoltedam 13050 HumlebaekDenmarkAttn: Peter VolkersFacsimile No.:      011-45(country code) -49-11-24-10Phone: 011-45 (country code)-49-11-16-13 (for confirmation purposes only)

with a copy to (which shall notconstitute notice):

Welch Spell, PCSuite 17501170 Peachtree Street, N.E.Atlanta, GA  30309Attention: Laurance D. Pless, Esq.                        Robert Sauro, Esq.Facsimile No.:       (404) 875-0798Phone: (404) 885-5229 (for confirmation purposes only)

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(b)                Any such notice or othercommunication shall be deemed to have been given and received on the day onwhich it was personally delivered or transmitted by facsimile, receipt ofcomplete transmission confirmed (or, if such day is not a Business Day, on thenext following Business Day) or, if mailed, by registered or certified mail, onthe third Business Day following the date of mailing or, if courieredovernight, on the next following Business Day; *provided, however*, thatif at the time of mailing or within three Business Days thereafter, there is oroccurs a labor dispute or other event that might reasonably be expected todisrupt the delivery of documents by mail, any notice or other communicationhereunder shall be delivered or transmitted by means of overnight courier asset forth above.

(c)                Either Party may change itsaddress for service and/or notice at any time by giving notice to the otherParty in accordance with this Section 13.1.

13.2           Currency

Unless otherwiseindicated, all dollar amounts referred to in this Agreement are expressed in United States dollars.

13.3           Sections and Headings

Unless otherwisespecified herein, any reference in this Agreement to an Article, Section,paragraph, Schedule or Exhibit refers to the specified Article, Section orparagraph of, or Schedule or Exhibit to, this Agreement.  In this Agreement,the terms "this Agreement", "hereof", "herein", "hereunder" and similarexpressions refer to this Agreement and not to any particular part, Article,Section, paragraph or other provision hereof.

13.4           Rules of Construction

Unless the contextotherwise requires, in this Agreement:

(a)                words importing the singularnumber only shall include the plural and *vice versa* and words importingthe masculine gender shall include the feminine and neuter genders and *viceversa*;

(b)                the word "or" may be conjunctiveor disjunctive, as the context may require;

(c)                the words "include", "includes","including" and "particularly" means "include", "includes" or "including", ineach case, "without limitation";

(d)                reference to any agreement orother instrument referred to herein shall mean such agreement or otherinstrument as amended, modified, replaced or supplemented from time to time tothe extent permitted by applicable provisions thereof and by this Agreement;

(e)                reference to any statute shall bedeemed to be a reference to such statute as amended, re enacted or replacedfrom time to time; 

(f)                 if there is any conflict orinconsistency between the provisions contained in the body of this Agreementand those of any Schedule or Exhibit hereto, the provisions contained in thebody of this Agreement shall prevail;

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(g)                time periods within which apayment is to be made or any other action is to be taken hereunder shall becalculated excluding the day on which the period commences and including theday on which the period ends; and

(h)                whenever any payment to be made oraction to be taken hereunder is required to be made or taken on a day otherthan a Business Day, such payment shall be made or action taken on the nextfollowing Business Day.

13.5           Construction

The Partiesacknowledge that their respective legal counsel have reviewed and participatedin settling the terms of this Agreement and that any rule of construction tothe effect that any ambiguity is to be resolved against the drafting party,shall not be applicable in the interpretation of this Agreement.

13.6           Entire Agreement

This Agreement,together with the agreements specifically contemplated herein or entered intoor delivered in connection herewith, constitutes the entire agreement betweenthe Parties with respect to the subject matter hereof and supersedes all prioragreements and understandings, written and oral, with respect to the subjectmatter hereof (including the Offer Letter and the Exclusivity Agreement butexcluding the Confidentiality Agreement).  There are no conditions, covenants,agreements, representations, warranties or other provisions, express orimplied, collateral, statutory or otherwise, relating to the subject matterhereof except as herein provided or as provided in other documents executed anddelivered by the Parties in connection herewith.

13.7           Governing Law; Jurisdiction andVenue; Arbitration of Indemnification Disputes; Injunctive Relief

(a)                This Agreement shall be governedby, and construed in accordance with, the Laws of the State of Minnesota, without regard to any conflicts of law principles.  The parties heretoirrevocably submit to the exclusive jurisdiction of the United States DistrictCourt located in Minneapolis, Minnesota for the purposes of any suit, action orother proceeding arising out of this Agreement or any transaction contemplatedhereby (except for claims, disputes or controversies arising out of or relatingto Article 11 (including all its subsections), which shall begoverned by subsection (b) below).  Each of the parties hereto, furtheragrees that service of any process, summons, notice or document by U.S.registered mail to such party's respective address set forth in Section 13.1shall be effective service of process for any action, suit or proceeding in Minneapolis,Minnesota with respect to any matters to which it has submitted to jurisdictionas set forth above in the immediately preceding sentence.  Each of the partieshereto irrevocably and unconditionally waives any objection to the laying ofvenue of any action, suit or proceeding set forth above arising out of thisAgreement or the transactions contemplated hereby, and hereby furtherirrevocably and unconditionally waives and agrees not to plead or claim in anysuch court that any such action, suit or proceeding brought in any such courthas been brought in an inconvenient forum. 

(b)                Any claims, disputes orcontroversies arising out of or relating to Article 11 (includingall its subsections), including any dispute concerning arbitrability or thescope of this arbitration clause, shall be exclusively settled by bindingarbitration pursuant to the Commercial Rules ("**Rules**") of the AmericanArbitration Association ("**AAA**") (it being expressly understood andagreed that any such claims, disputes and remedies shall be subject to theprovisions of Article 11, including but not limited to Section 11.8thereof).  Notwithstanding anything to the contrary, arbitration may becommenced at any time following the expiration of the last counternotice periodprovided in subsection (b) above by any Party hereto in Minneapolis,Minnesota, by giving written notice to AAA in such place, and to each otherParty, that such claim or dispute has been referred to arbitration under this Section 13.7(b). The arbitration proceedings shall be conducted, using Minnesota law, andapplicable federal law, before a single neutral arbitrator (or, in the case ofa claim exceeding One Million Five Hundred Thousand Dollars ($1,500,000),before a panel of three (3) neutral arbitrators), each of whom shall haveexperience with mergers and acquisitions.  Any award rendered by thearbitrator(s) shall be conclusive, final and binding upon the Parties hereto,and nonappealable to any court or forum; *provided*, *however*, thatany such award shall be accompanied by a concise written opinion giving thereasons for the award.  Judgment upon such award may be entered in any court ofcompetent jurisdiction.  Each Party shall pay its own expenses of arbitration. 

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13.8           Waiver of Jury Trial

Each Party herebywaives, to the fullest extent permitted by applicable Laws, any right it mayhave to a trial by jury with respect to any litigation directly or indirectlyarising out of, under or in connection with this Agreement, the other OperativeAgreements or the transactions contemplated hereby or thereby.  Each Party hereby(a) certifies that no representative, agent or counsel of the other Partyhas represented, expressly or otherwise, that the other Party would not, in theevent of litigation, seek to enforce the foregoing waiver, and(b) acknowledges that it and the other Party have been induced to enterinto the Operative Agreements by, among other things, the mutual waivers andcertifications contained in this Section 13.8.

13.9           Public Announcement

The Parties shallconsult with each other before issuing any press release or making any otherpublic announcement with respect to this Agreement or the transactionscontemplated hereby and, except as required by any applicable Laws, regulatoryrequirement or the rules of any national or foreign stock exchange upon whichtheir respective securities are listed for trading, neither of them shall issueany such press release or make any such public announcement without the priorwritten consent of the other, which consent shall not be unreasonably withheld,delayed or conditioned. 

13.10        Expenses

Except as otherwiseprovided herein, each Party shall be responsible for all expenses incurred byit and its Subsidiaries (it being understood that effective upon the Closing,the Transferred Subsidiaries shall become Subsidiaries of Buyer), respectively,in connection with the negotiation and settlement of this Agreement and theOperative Agreements and the completion of the transactions contemplated herebyand thereby.

13.11        Exclusion of Certain Damages

EXCEPT ASSPECIFICALLY SET FORTH IN SECTION 11.5 OR IN THE CASE OF FRAUD,NEITHER BUYER (INCLUDING BUYER'S SUBSIDIARIES) NOR SELLER (INCLUDING SELLER'SSUBSIDIARIES) SHALL BE RESPONSIBLE FOR ANY SPECIAL, PUNITIVE OR CONSEQUENTIALDAMAGES WHATSOEVER, INCLUDING LOSS OF PROFITS OR GOODWILL, IN CONNECTION WITHANY ASPECT OF THIS AGREEMENT OR THE OTHER OPERATIVE AGREEMENTS.

13.12        Severability

If any provision ofthis Agreement is determined by a court of competent jurisdiction to beinvalid, illegal or unenforceable in any respect, such determination shall notimpair or affect the validity, legality or enforceability of the remainingprovisions hereof, and each provision is hereby declared to be separate,severable and distinct.  To the extent that any such provision is found to beinvalid, illegal or unenforceable, the Parties shall act in good faith tosubstitute for such provision, to the extent possible and as necessary, a newprovision with content and purpose as close as possible to the provision sodetermined to be invalid, illegal or unenforceable.

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13.13        Successors and Assigns

This Agreement shallinure to the benefit of and shall be binding on and enforceable by the Partiesand their respective successors and permitted assigns.  Neither Party mayassign any of its rights or obligations hereunder, by operation of law orotherwise, without the prior written consent of the other Party, which consentshall not be unreasonably withheld, delayed or conditioned; *provided,however,* that Buyer may assign or delegate its rights, obligations orliabilities under this Agreement in whole or in part to one or moreSubsidiaries of Buyer without the consent of Seller if and so long as Buyershall remain fully liable for the fulfillment of all such obligations; *provided,further*, that Seller may assign any of its rights or obligations under thisAgreement in connection with a transfer or sale of all or substantially all ofSeller's assets *provided* that the assignee agrees to be bound by theterms and provisions of this Agreement.  Buyer and Buyer Subsidiaries shallhave the right without consent of Seller to assign their rights under thisAgreement and the other Operative Agreements as collateral to their respectivelenders after reasonable prior notice to the other Party.  Any purportedassignment in violation of this Section 13.13 shall be void and noassignment by Buyer or Seller to a Subsidiary thereof will relieve Buyer or Sellerfrom any of their respective obligations hereunder.  Nothing herein expressedor implied is intended or should be construed to confer upon or give to anyPerson other than the parties hereto and their representatives, successors andassigns any rights or remedies under or by reason of this Agreement.

13.14        Amendment and Waivers

No amendment,modification or waiver of, or supplement to, any provision of this Agreementshall be binding on any Party unless consented to in writing by such Party.  Nowaiver of any provision of this Agreement shall constitute a waiver of anyother provision, and no waiver shall constitute a continuing waiver unlessotherwise provided.

13.15        Counterparts

This Agreement may beexecuted in counterparts, each of which shall constitute an original and all ofwhich taken together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, each ofBuyer and Seller has caused this Agreement to be executed by its dulyauthorized representative as of the date and year first written above.****
**MENTOR		CORPORATION** **COLOPLAST A/S**     By:/s/JOSHUA H.		LEVINE                      		 By:/s/STEN SCHEIBYE                   Joshua H. Levine  Sten Scheibye Chief Executive		Officer  Chief Executive		Officer
 

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**PURCHASE AGREEMENT**

**by and between**

**MENTOR CORPORATION**

**and**

**COLOPLAST A/S**

**dated May 17, 2006**