Document:

Exhibit
10.14

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

TORNIER US HOLDINGS, INC.,

 

AXYA ACQUISITION II, INC.

 

and

 

AXYA HOLDINGS, INC.

 

 

Dated as of February 27, 2007

 

 

This
AGREEMENT AND PLAN OF MERGER, dated as of February 27, 2007 (this “Agreement”), is among Tornier US
Holdings, Inc., a Delaware corporation (the “Parent”),
Axya Acquisition II, Inc., a Delaware corporation and a wholly-owned subsidiary
of Parent (“Merger Sub”)  and
Axya Holdings, Inc., a Delaware corporation (the “Company”).  Certain terms used in this Agreement are used
as defined in Section 6.10.

 

RECITALS:

 

WHEREAS,
the respective Boards of Directors of the Company and Merger Sub have adopted,
approved and declared advisable, and the Board of Directors of Parent, the sole
shareholder of the Company and Parent as the sole shareholder of Merger Sub,
have approved, this Agreement and the merger of Merger Sub with and into the
Company (the “Merger”), on the terms and
subject to the conditions provided for in this Agreement; and

 

WHEREAS,
Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.

 

NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as follows:

 

ARTICLE I.

 

THE MERGER

 

Section 1.1             The Merger.  Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the “DGCL”),
at the Effective Time, the Company shall be merged with and into the Merger
Sub, and the separate corporate existence of the Merger Sub shall thereupon
cease, and the Company shall be the surviving corporation in the Merger (the “Surviving Corporation”).

 

Section 1.2             Closing.  The
closing of the Merger (the “Closing”)
shall be deemed to take place at 10:00 a.m. (New York, New York Time) on a
date hereof (the “Closing Date”).
The Closing will be held at the offices of Willkie Farr & Gallagher LLP,
787 Seventh Avenue, New York, NY 10019, unless another place is agreed to in
writing by the parties hereto.

 

Section 1.3             Effective Time.  Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date the parties shall file a
certificate of merger with the Secretary of State of the State of Delaware (the
form of which is attached hereto as Exhibit A), executed in accordance
with the relevant provisions of the DGCL (the “Certificate
of Merger”). The Merger shall become effective upon the filing of
the Certificate of Merger or at such later time as is agreed to by the parties
hereto and specified in the Certificate of Merger (the time at which the Merger
becomes effective is herein referred to as the “Effective
Time”).

 

Section 1.4             Effects of the Merger.  The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the rights, privileges, immunities,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger
Sub shall become the debts, liabilities and duties of the Surviving
Corporation.

 

 

Section
1.5             Certificate
of Incorporation and Bylaws of the Surviving Corporation.

 

(a)   The certificate of incorporation of the
Company, as in effect immediately prior to the Effective Time, shall amended to
be in the form attached as Exhibit A to the Certificate of Merger and,
as so amended, such certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.

 

(b)   The bylaws of the Merger Sub, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation until thereafter amended as provided therein or by applicable law.

 

Section 1.6             Directors of the Surviving Corporation.  Parent and the Company shall take
all necessary actions to cause (a) all of the directors of the Company to
resign as of the Effective Date and (b) the directors of Merger Sub immediately
prior to the Effective Time to be the directors of the Surviving Corporation
immediately following the Effective Time, until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.

 

Section 1.7             Officers of the Surviving Corporation.  The officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until their respective successors are duly appointed and qualified
or their earlier death, resignation or removal in accordance with the
certificate of incorporation and bylaws of the Surviving Corporation.

 

ARTICLE II.

 

EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS

 

Section 2.1             Effect on Capital Stock.  At the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of common stock,
$0.001 par value per share, of the Company (“Company
Common Stock”) or any shares of capital stock of Merger Sub:

 

(a)   Capital
Stock of Merger Sub. Each issued and outstanding share of capital
stock of Merger Sub shall be converted into and become one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.

 

(b)   Cancellation
of Treasury Stock and Parent-Owned Stock. 
Any shares of Company Common Stock that are owned by the
Company as treasury stock, and any shares of Company Common Stock owned by
Parent or Merger Sub, shall be automatically canceled and shall cease to exist
and no consideration shall be delivered in exchange therefor.

 

(c)   Conversion of Company Common Stock.
Each issued and outstanding share of Company Common Stock (other than
Dissenting Shares, and shares to be canceled in accordance with
Section 2.1(b)) shall be converted into the right to receive the Per Share
Common Stock Merger Consideration, without interest.  As of the Effective Time, all such shares of
Company Common Stock shall no longer be outstanding and shall automatically be
canceled and shall cease to exist, and each holder of shares of Company Common
Stock shall cease to have any rights with respect thereto, except the right to
receive the Per Share Common Stock Merger Consideration to be paid in
consideration therefor without interest.

 

(d)   Transfer
Books; No Further Ownership Rights in Company Stock.  All consideration paid upon the
surrender of the shares of Company Common Stock in accordance with the terms of
this Agreement shall be deemed to have been paid in full satisfaction of all
rights pertaining to such shares of 

 

2

 

Company Common Stock.  At the close of business on the day on which
the Effective Time occurs, the stock transfer books of the Company shall be
closed and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Company Common
Stock that were outstanding immediately prior to the Effective Time.

 

(e)   No
Liability. Notwithstanding any provision of this Agreement to the
contrary, neither Parent nor the Surviving Corporation shall be liable to any
Person for any amount properly paid or delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.

 

(f)    Dissenting
Shares. Notwithstanding anything in Section 2.1 to the contrary, any
shares of Company Common Stock outstanding immediately prior to the Effective
Time and held by a Person who has not voted in favor of the Merger or consented
thereto in writing and who has properly complied with all of the relevant
provisions of Section 262 of the DGCL (the “Dissenting
Shares”) shall not be converted into the right to receive the Per
Share Common Stock Merger Consideration unless such holder fails to perfect or
withdraws or otherwise loses its rights to appraisal or it is determined that
such holder does not have appraisal rights in accordance with the DGCL.  If, after the Effective Time, such holder
fails to perfect or withdraws or loses its right to appraisal, or if it is
determined that such holder does not have appraisal rights, such shares shall
be treated as if they had been converted as of the Effective Time into the
right to receive the Per Share Common Stock Merger Consideration.  Notwithstanding anything to the contrary
contained in this Section 2.1, if the Merger is rescinded or abandoned, then
the right of any stockholder to be paid the fair value of such stockholder’s
Dissenting Shares pursuant to Section 262 of the DGCL will cease.  The Company shall give Parent prompt notice
of any demands received by the Company for appraisal of shares, and Parent
shall have the right to participate in all negotiations and proceedings with
respect to such demands except as required by applicable law. The Company shall
not, except with the prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, any such demands, unless and to the
extent required to do so under applicable law.

 

Section
2.2             Company Options.  At the Closing, each holder of a
Company Option (an “Optionholder”)
shall be entitled to receive, in accordance with the terms and conditions of
this Agreement, in exchange for the cancellation of each Company Option held by
such Optionholder (whether or not then exercisable) an amount (without interest
and net of applicable taxes required to be withheld pursuant to any applicable
laws) (the “Option Consideration”) equal to the
excess, if any, of (i) the difference obtained by subtracting the exercise
price per each share of Company Common Stock subject to such Company Option
from (ii) the Per Share Common Stock Merger Consideration.  In the event that the exercise price of any
Company Option is equal to or greater than the Per Share Common Stock Merger
Consideration for such Company Option, such Company Option shall be cancelled
and have no further force or effect, in which case the Option Consideration
with respect to such Company Option shall be deemed to equal zero.  Prior to the Effective Time, the Company
shall take such action as shall be required:

 

(i)            to effectuate the cancellation, as
of the Closing, of the Company Stock Plan and of all Company Options
outstanding immediately prior to the Closing (without regard to the exercise
price of such Company Options); and

 

(ii)           to cause each outstanding Company
Option to represent as of the Closing solely the right to receive, in
accordance with this Section 2.2, a lump sum cash payment in the amount of the
Option Consideration, if any, with respect to such Company Option and to no
longer represent the right to purchase shares of Company Common Stock or any
other equity security of the Company or any other Person or any other
consideration.

 

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Section 2.3             Withholding Taxes.  Parent and the Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable to a
holder of shares of Company Common Stock pursuant to this Agreement such
amounts as may be required to be deducted or withheld with respect to the
making of such payment under the Code, or under any provision of state, local
or foreign tax law.  To the extent that
amounts are so deducted and withheld, such amounts shall be treated for all
purposes under this Agreement as having been paid to the Person in respect of
which such deduction and withholding was made.

 

ARTICLE III.

 

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

 

The
Company represents and warrants to Parent that, except as set forth in the
Disclosure Schedule delivered to Parent in the date hereof (which Disclosure
Schedule makes explicit reference to the particular representation or warranty
as to which exception is taken, which in each case shall constitute the sole
representation and warranty as to which such exception shall apply) (the “Disclosure Schedule”):

 

Section
3.1             Organization, Qualification and Corporate Power.

 

(a)   The Company is a corporation duly incorporated, validly existing
and in good corporate standing under the laws of the State of Delaware and is
duly licensed or qualified to transact business as a foreign corporation and is
in good corporate standing in each jurisdiction in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires such licensing or qualification except where the failure to be so
qualified or licensed would not have a material adverse effect on the Company.

 

(b)   Except for Axya Medical, Inc., the Company has no subsidiaries,
and the Company does not:  (i) own of
record or beneficially, directly or indirectly: 
(1) any shares of capital stock or securities convertible into capital
stock of any other corporation; or (2) any participating interest in any
partnership, joint venture, limited liability company or other non-corporate
business enterprise; or (ii) control, directly or indirectly, any other entity.

 

Section 3.2             Authorization of Agreements, No Conflicts Etc.  The execution and delivery by the Company of
this Agreement and the performance by the Company of its obligations hereunder
have been duly authorized by all requisite corporate action and by the shareholders
of the Company and do not:  (i) violate
any provision of any law, any order of any court or other agency of government,
the Certificate of Incorporation of the Company (the “Charter”), or the By-laws of the Company,
as amended (the “By-laws”), or any
provision of any indenture, mortgage, agreement, note or other evidence of
indebtedness, or other instrument, arrangement, or understanding to which the
Company or any of its properties or assets is bound (collectively, the “Key Agreements and Instruments”); (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such Key Agreements and Instruments; (iii)
result in the creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever upon any of the properties or assets of
the Company; (iv) give any third party the right to modify, terminate or
accelerate any provision of any Key Agreements and Instruments; or (v) require
any permit, authorization, consent, approval, exemption or other action by, or
notice or declaration to, or filing with, any court or administrative or
governmental body or agency, pursuant to the Charter or By-laws of the Company
or any law, statute, rule or regulation to which the Company is subject, or any
agreement, instrument, order, judgment or decree to which the Company is
subject.

 

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Section 3.3             Validity.  This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.

 

Section 3.4             Governmental Approvals.  Except for the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the
DGCL, no consents or approvals of, or filings, declarations or registrations
with, any Governmental Authority are necessary for the execution and delivery
of this Agreement by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, other than such other consents, approvals,
filings, declarations or registrations that, if not obtained, made or given,
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Company.

 

Section 3.5             Authorized
Capital Stock.  The authorized
capital stock of the Company consists of: 
(a) 50,000,000 shares of Company Common Stock and 20,000,000 shares of
Preferred Stock, par value $0.001 per share. 
On the date hereof the stockholders of record and holders of
subscriptions, warrants, options, including Company Options, convertible
securities, and other rights (contingent or other) to purchase or otherwise
acquire equity securities of the Company, and the number of shares of stock and
the number of such subscriptions, warrants, options, including Company Options,
convertible securities, and other such rights held by each, are as set forth on
Section 3.5 of the Disclosure Schedule. 
Except as set forth on Section 3.5 of the Disclosure Schedule:  (i) no person owns of record or is known to
the Company to own beneficially any share of capital stock of the Company; (ii)
no subscription, warrant, option, convertible security, or other right
(contingent or other) to purchase or otherwise acquire equity securities of the
Company is authorized or outstanding; and (iii) there is no commitment by the
Company to issue shares, subscriptions, warrants, options, convertible
securities, or other such rights or to distribute to holders of any of its
equity securities any evidence of indebtedness or any asset.  Except as set forth on Section 3.5 of the
Disclosure Schedule, the Company has no obligation (contingent or other) to
purchase, redeem or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.

 

ARTICLE IV.

 

REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB

 

Parent
and Merger Sub jointly and severally represent and warrant to the Company:

 

Section 4.1             Organization, Standing and Corporate Power.  Each of Parent and Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated.

 

Section
4.2             Authority;
Noncontravention.

 

(a)   Each of Parent and Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform their respective obligations hereunder and to consummate the
transactions contemplated by this Agreement. 
The execution, delivery and performance by Parent and Merger Sub of this
Agreement, and the consummation by Parent and Merger Sub of the transactions
contemplated by this Agreement, have been duly authorized and approved by their
respective Boards of Directors and Parent as the sole shareholder of Merger Sub
and no other corporate action on the part of Parent and Merger Sub is necessary
to authorize the execution, delivery and performance by Parent and Merger Sub
of this Agreement and the consummation by them of the transactions contemplated
by this Agreement.  This Agreement has
been duly executed and delivered by Parent and Merger Sub and, assuming due
authorization, execution and delivery hereof by the Company, constitutes

 

5

 

a legal, valid and binding
obligation of each of Parent and Merger Sub, enforceable against each of them
in accordance with its terms.

 

(b)   Neither the execution and delivery of this
Agreement by Parent and Merger Sub, nor the consummation by Parent or Merger
Sub of the transactions contemplated by this Agreement, nor compliance by
Parent or Merger Sub with any of the terms or provisions hereof, will
(i) conflict with or violate any provision of the certificate of
incorporation or bylaws of Parent or the certificate of incorporation or bylaws
of Merger Sub or (ii)  violate any law, judgment, writ or injunction of
any Governmental Authority applicable to Parent or any of its subsidiaries or
any of their respective properties or assets, or (iii) violate, conflict
with, result in the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
lien upon any of the respective properties or assets of, Parent or Merger Sub
or any of their respective subsidiaries under, any of the terms, conditions or
provisions of any contract or other agreement to which Parent, Merger Sub or
any of their respective subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected for such
violations, conflicts, losses, defaults, terminations, cancellations,
accelerations or liens as, individually or in the aggregate, would not
reasonably be expected to prevent or materially impair the ability of Parent or
Merger Sub to consummate the transactions contemplated by this Agreement (a “Parent Material Adverse Effect”).

 

Section 4.3             Governmental Approvals.  Except for the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the
DGCL, no consents or approvals of, or filings, declarations or registrations
with, any Governmental Authority are necessary for the execution and delivery
of this Agreement by Parent and Merger Sub or the consummation by Parent and
Merger Sub of the transactions contemplated by this Agreement, other than such
other consents, approvals, filings, declarations or registrations that, if not
obtained, made or given, would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.

 

Section 4.4             Ownership and Operations of Merger Sub.  Parent owns beneficially and indirectly of
record all of the outstanding capital stock of Merger Sub. Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement, has engaged in no other business activities and has conducted
its operations only as contemplated hereby.

 

ARTICLE V.

 

COVENANTS AND AGREEMENTS

 

Section 5.1             Further Action; Reasonable Best Efforts.
Upon the terms and subject to the conditions set forth in this Agreement, each
of the parties hereto shall, and shall cause their respective Affiliates to,
use reasonable best efforts to take, or cause to be taken, all actions
necessary, proper and advisable under applicable laws to consummate the
transactions contemplated by this Agreement.

 

Section 5.2             Indemnification and Insurance.

 

(a)   From and after the Effective Time, the
Surviving Corporation shall indemnify the individuals who at or prior to the
Effective Time were directors or officers of the Company (collectively, the “Indemnitees”) with respect to all acts or
omissions by them in their capacities as such at any time prior to the
Effective Time, to the fullest extent permitted by (A) the Charter and
Bylaws as in effect on the date of this Agreement and (B) applicable law; provided, however, that the Surviving
Corporation shall not be required to indemnify any Indemnitee for such
Indemnitee’s criminal conduct or fraud.

 

6

 

(b)   In the event that Parent or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any
other Person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers or conveys all or a
majority of its properties and assets to any Person, then, and in each such
case, proper provision shall be made so that the successors and assigns of
Parent or the Surviving Corporation shall succeed to the obligations set forth
in this Section 5.2.

 

ARTICLE VI.

 

MISCELLANEOUS

 

Section 6.1             Survival of Representations and Warranties.  The representations, warranties and
agreements in this Agreement shall survive the Closing.

 

Section 6.2             Assignment.  This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns.

 

Section 6.3             Counterparts; Facsimile; Electronic Transmission.  This Agreement may be executed in
counterparts (each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties. The exchange of copies of this Agreement
and of signature pages by facsimile or electronic transmission shall constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
parties transmitted by facsimile or electronic transmission shall be deemed to be
their original signatures for all purposes.

 

Section 6.4             Entire Agreement; No Third-Party Beneficiaries.  This Agreement and the Disclosure Schedule
(a) constitute the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and thereof and
(b) except for the provisions of Section 5.2, are not intended to and
shall not confer upon any Person other than the parties hereto any rights or
remedies hereunder.

 

Section
6.5             Governing
Law; Waiver of Jury Trial.

 

(a)   This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, applicable to
contracts executed in and to be performed entirely within that State, except to
the extent the DGCL is applicable hereto.

 

(b)   Each of the parties hereto hereby irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or related to this Agreement or the transactions contemplated by this
Agreement.

 

Section 6.6             Consent to Jurisdiction.  All actions and proceedings arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement shall be heard and determined in the Delaware Court of Chancery or,
if subject matter jurisdiction in the such court is not available, in the
United States District Court for the District of Delaware, and the parties
hereto hereby irrevocably submit to the exclusive jurisdiction of such courts
(and, in the case of appeals, appropriate appellate courts therefrom) in any
such action or proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding. The consent to
jurisdiction set forth in this 

 

7

 

paragraph
shall not constitute general consent to service of process in the State of
Delaware and shall have no effect for any purpose except as provided in this
paragraph and shall not be deemed to confer rights on any Person other than the
parties hereto. The parties hereto agree that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
applicable law.

 

Section 6.7             Notices.  All notices, requests and other
communications to any party hereunder shall be in writing and shall be deemed
given if delivered personally, facsimiled (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses:

 

If
to the Company:

 

Axya
Holdings, Inc.

100
Cummings Center, Suite 444C

Beverly,
MA 01915

Attention:  Paul V. Fenton

Facsimile:  (978) 232-9998

 

with
a copy to:

 

Choate,
Hall & Stewart LLP

Two
International Place

100-150
Oliver Street

Boston,
MA 02110

Attention:  Lawrence H. Gennari

Facsimile:  (617) 248-4000

 

c/o
Warburg Pincus LLC

466
Lexington Avenue

New
York, NY 10017

Attention:
Sean D. Carney

Facsimile:  (212) 716-5040

 

If
to Parent or Merger Sub:

 

Tornier
US Holdings, Inc.

7716
Golden Triangle Drive

Eden Prairie, MN 55344

Attn: Douglas Kohrs

Facsimile:
(952) 995-7446

 

with
a copy to:

 

c/o
Warburg Pincus LLC

466
Lexington Avenue

New
York, NY 10017

Attention:
Sean D. Carney

Facsimile:  (212) 716-5040

 

Willkie
Farr & Gallagher LLP

 

8

 

787
Seventh Avenue

New
York, NY 10019

Attention: Steven J. Gartner, Esq.

Facsimile:  (212) 728-9222

 

or
such other address or facsimile number as such party may hereafter specify by
like notice to the other parties hereto. All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 P.M. in the place of receipt and such
day is a business day in the place of receipt. 
Otherwise, any such notice, request or communication shall be deemed not
to have been received until the next succeeding business day in the place of
receipt.

 

Section 6.8             Severability.  If any term or other provision of this
Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms, provisions and conditions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated by this Agreement are fulfilled to the extent
possible.

 

Section
6.9             Remedies.  Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement will be cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity.  The exercise by a party to this Agreement of
any one remedy will not preclude the exercise by it of any other remedy.

 

Section
6.10           Definitions.

 

(a)   As used in this Agreement, the following
terms have the meanings ascribed thereto below:

 

 “Business day” shall mean a
day except a Saturday, a Sunday or other day on which the SEC or banks in the
City of New York are authorized or required by law to be closed.

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

“Common Stock Merger Consideration” means
an amount equal to $27,000,000 plus the aggregate of the exercise prices
of in-the-money Company Options issued and outstanding immediately prior to the
Closing, assuming the acceleration of all otherwise unvested Company Options at
such time.

 

“Company Options” shall
mean any Option issued under a Company Stock Plan.

 

“Company Stock Plan” shall
mean the Axya Holdings, Inc. Stock Incentive Plan.

 

“Fully Diluted Shares” shall mean the total number of shares of Company Common Stock
outstanding immediately prior to the Closing on a fully diluted basis
(excluding any out-of-the-money Company Options).

 

9

 

“Options” shall mean options,
warrants and other rights to acquire shares of Company Common Stock.

 

“Person” shall mean an individual, a
corporation, a limited liability company, a partnership, an association, a
trust or any other entity, including a Governmental Authority.

 

“Per Share Common Stock Merger Consideration” means an amount in cash equal to the quotient obtained by dividing the
Common Stock Merger Consideration by the Fully Diluted Shares.

 

Section 6.11           Waiver of Jury Trial.  Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues and, therefore, each such party irrevocably
and unconditionally waives any right it may have to a trial by jury in respect
of any legal action, suit or proceeding arising out of or relating to this
Agreement or the transactions
contemplated by this Agreement. 
Each party to this Agreement certifies and acknowledges that (a) no
representative of any other party has represented, expressly or otherwise, that
such other party would not seek to enforce the foregoing waiver in the event of
a proceeding, (b) such party has considered the implications of this waiver,
(c) such party makes this waiver voluntarily, and (d) such party has been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 6.11.

 

Section 6.12           Interpretation.

 

(a)   When a reference is made in this Agreement to
an Article, a Section or Exhibit, such reference shall be to an Article of, a
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words “include”, “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words “without
limitation”. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns.

 

(b)   The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and, in the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Agreement.

 

10

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.

 

 

	
   

  	
  TORNIER
  US HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Douglas W. Kohrs

  
	
   

  	
   

  	
  Name:

  	
  Douglas
  W. Kohrs

  
	
   

  	
   

  	
  Title:

  	
  President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AXYA
  ACQUISITION II, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Douglas W. Kohrs

  
	
   

  	
   

  	
  Name:

  	
  Douglas
  W. Kohrs

  
	
   

  	
   

  	
  Title:

  	
  President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AXYA
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul
  V. Fenton, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Paul
  V. Fenton, Jr.

  
	
   

  	
   

  	
  Title:

  	
  President/CEOExhibit
10.15

 

CONTRIBUTION
AGREEMENT

 

BY
AND BETWEEN

 

TORNIER
B.V.,

 

VERTICAL
FUND I, L.P., 

VERTICAL FUND II, L.P.,

TMG HOLDINGS COÖPERATIEF U.A.,

STICHTING ADMINISTRATIEKANTOOR TORNIER,

FRED B. DINGER III 

AND 

DOUGLAS W. KOHRS

 

DATED
AS OF MARCH 26, 2010

 

1

 

Table
of Contents

 

	
  Section 1.

  	
   

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Contribution

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Representations and
  Warranties

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Contributors’
  Representations and Warranties Concerning the Company

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Pre-Closing Covenants

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Post-Closing Covenants

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Conditions to Obligation
  to Close and Deliveries at Closing

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Remedies for Breaches of
  This Agreement

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Tax Matters

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Termination

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Miscellaneous

  	
   

  	
  24

  

 

Schedules

 

Schedule 2(a)                        Contributors Information, C2M
Shares Owned by Contributors and Tornier Shares to Be Acquired by Contributors

Schedule 3(a)                        Disclosures Regarding Contributors’
Representations and Warranties

Schedule 3(b)                       Disclosures Regarding Tornier’s
Representations and Warranties

Schedule 4                                      Disclosures Regarding Contributors’
Representations and Warranties Concerning the Company

 

2

 

CONTRIBUTION
AGREEMENT

 

This
Contribution Agreement (this “Agreement”) is
entered into this 26th day of March, 2010 (the “Effective
Date”), by and between Tornier B.V., (“Tornier”),
Stichting Administratiekantoor Tornier (“STAK”),
Vertical Fund I, L.P. (“Vertical I”),
Vertical Fund II, L.P. (“Vertical II”),
TMG Holdings Coöperatief U.A. (“TMG”), Fred B.
Dinger, III (“Dinger”) and
Douglas W. Kohrs (“Kohrs”; and
Vertical I, Vertical II, TMG, Dinger and Kohrs are each referred to as a “Contributor” and collectively as “Contributors”).

 

RECITALS:

 

A.            Each of
Vertical I, Vertical II, TMG and Kohrs currently own certain ordinary shares
with a par value of EUR 0.01 each, in Tornier.

 

B.            Tornier and
Contributors have agreed that each of Vertical I, Vertical II, TMG and Kohrs
will acquire the number of additional ordinary shares, and Dinger will acquire
the number of depositary receipts of ordinary shares, with a par value of EUR
0.01 each, in Tornier, as more specifically set forth below.

 

C.            Contributors
own all the issued and outstanding shares of Series A Convertible
Preferred Stock, par value $0.0001 in C2M Medical, Inc., a Delaware
corporation (the “Company”), and
desire to use such shares to pay up the additional ordinary shares in Tornier.

 

D.            Tornier desires
to accept the shares of Series A Convertible Preferred Stock, par value
$0.0001 in C2M as contribution for its shares according to the terms and
conditions set forth below.

 

AGREEMENTS:

 

NOW, THEREFORE,
in consideration of the premises and the mutual promises herein made, Tornier
and Contributors agree as follows:

 

Section 1.               Definitions.

 

“Adverse Consequences” means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, penalties, fines, costs, amounts
paid in settlements, Liabilities, obligations, Taxes, liens, losses, expenses
and fees, including court costs and reasonable attorneys’ fees and expenses.

 

“Affiliate” means a person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the person specified.

 

“C2M Shares” means all of the issued and outstanding shares
of the Company’s Series A Convertible Preferred Stock, par value $0.0001
per share, which shares are listed in the attached Schedule 2(a).

 

“Claiming Party” has the meaning set forth in Section 8(d) below.

 

3

 

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

 

“Closing Date” has the meaning set forth in Section 2(b) below

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” has the meaning set forth in the recitals above.

 

“Confidential Information” means any information concerning
the businesses and affairs of the Company that is not already generally
available to the public.

 

“Contributor Material Adverse Change” means any change that
would be materially adverse to the business, assets, financial condition,
operating results or operations of Company, or that would affect the ability of
Contributors to timely consummate the transactions contemplated hereby.

 

“Contributors” has the meaning set forth in the preface
above.

 

“Deadline” means June 15, 2010.

 

“Dinger” has the meaning set forth in the preface above.

 

“Effective Date” has the meaning set forth in the preface
above.

 

“Environmental, Health and Safety Requirements” shall mean,
as amended and as now and hereafter in effect, all federal, state, local, and
non-U.S. statutes, regulations, ordinances, and other provisions having the
force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations, and all common law concerning
public health and safety, worker health and safety, pollution, or protection of
the environment, including all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances, or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise, or radiation.

 

“Expense Payment”
has the meaning set forth in Section 11(k) below.

 

“Financial Statements” has the meaning set forth in Section 4(g) below.

 

“Indemnification Threshold” has the meaning set forth in Section 8(f)(ii).

 

“Indemnifying Party” has the meaning set forth in Section 8(d) below.

 

“Intellectual Property” means all of the following in any
jurisdiction throughout the world: (a) all ideas, concepts, inventions
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, divisional, revisions, extensions, counterparts, and
reexaminations thereof, (b) all trademarks, service 

 

4

 

marks, trade
dress, logos, slogans, trade names, corporate names, Internet domain names, and
rights in telephone numbers, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all
mask works and all applications, registrations, and renewals in connection
therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all
computer software (including source code, executable code, data, databases, and
related documentation) and computer/engineering models, (g) all
advertising and promotional materials, (h) all other proprietary rights,
and (i) all copies and tangible embodiments thereof (in whatever form or
medium).

 

“Kohrs” has the meaning set forth in the preface above.

 

“Liability” means any liability or obligation of whatever
kind or nature (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any
liability for Taxes.

 

“Lien” means any mortgage, pledge, lien, encumbrance, charge,
or other security interest.

 

“Most Recent Balance Sheet” means the balance sheet contained
within the Most Recent Financial Statements.

 

“Most Recent Financial Statements” has the meaning set forth
in Section 4(g) below.

 

“Most Recent Fiscal Month End” means February 28, 2010.

 

“Most Recent Fiscal Year End” has the meaning set forth in Section 4(g) below.

 

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

 

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

 

“STAK” has the meaning set forth in the preface above.

 

“Tax” or “Taxes” means
any federal, state, local, or non-U.S. income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, shares, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind 

 

5

 

whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not
and including any obligations to indemnify, defend or hold harmless, or
otherwise assume or succeed to the Tax liability of any other Person.

 

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

 

“Third-Party Claim” has the meaning set forth in Section 8(d) below.

 

“TMG” has the meaning set forth in the preface above.

 

“Tornier” has the meaning set forth in the preface above.

 

“Tornier, Inc.” means Tornier, Inc., a Delaware
corporation.  Tornier, Inc. is a
wholly owned indirect subsidiary of Tornier.

 

“Tornier IP License” means that certain Intellectual Property
License Agreement dated June 17, 2008, between the Company and Tornier, Inc.

 

“Tornier Material Adverse Change” means any change that would
be materially adverse to the business, assets, financial condition, operating
results or operations of Tornier, or to the ability of Tornier to consummate
timely the transactions contemplated hereby.

 

“Tornier Shares” has the meaning set forth in Section 2(a).

 

“Vertical I” has the meaning set forth in the preface above.

 

“Vertical II” has the meaning set forth in the preface above.

 

Section 2.               Contribution.

 

(a)               Basic Transaction.  Subject
to the terms and conditions of this Agreement:

 

(i)        Tornier agrees to issue to each
Contributor at Closing, the number of ordinary shares with a par value of EUR
0.01 each, as indicated in the attached Schedule 2(a) (collectively,
the “Tornier Shares”), provided however,
that Dinger directs Tornier to issue the number of shares issuable to him, as
indicated next to his name in Schedule 2(a) to STAK in exchange for
allotment of depositary receipts of those shares to Dinger.  In order to meet their respective obligations
to pay-up the Tornier Shares, Contributors will transfer to Tornier at Closing,
the C2M Shares having a value of no less than the nominal value of Tornier
Shares (the “Contribution”), as more
specifically set forth in Tornier’s Management Board’s description of the
Contribution.  Tornier will have no
obligation to pay back any part of the Contribution; and

 

(ii)       STAK agrees to allot depositary receipts
of the Tornier Shares it acquires pursuant to this Agreement to Dinger upon
receipt of such shares, which depositary receipts have the same nomination and
nominal value as the Tornier Shares it acquires and which 

 

6

 

allotment
(i) is governed by STAK’s prevailing trust conditions and (ii) occurs
without Tornier’s cooperation.

 

(b)              Closing.  The
closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on March 26, 2010, or at
such other date as Tornier and Contributor may mutually agree (the “Closing Date”), at a time and place as Tornier and
Contributor may mutually agree.

 

Section 3.               Representations and Warranties.

 

(a)               Contributors’ Representations and Warranties. 
Each Contributor, severally and not jointly, represents and warrants to
Tornier for the benefit of Tornier, Inc. that, except as specifically set
forth in Schedule 3(a) attached hereto, the statements contained in
this Section 3(a) are true, correct and complete as of the Effective
Date and shall continue to be true, correct and complete as of the Closing
Date.

 

(i)            Authorization of Transaction. 
Each Contributor has full power and authority to execute and deliver
this Agreement and to perform all of its/his obligations hereunder.  This Agreement constitutes the valid and
legally binding obligation of Contributors, enforceable in accordance with its
terms and conditions.  Contributors need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.

 

(ii)           Non-contravention. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Contributors individually or
collectively, are subject, (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any person
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Contributors individually or collectively are a party or by which
Contributors individually or collectively are bound or to which any of
Contributors’ assets are subject, or (C) result in the imposition or
creation of a Lien upon or with respect to the C2M Shares.

 

(iii)          Brokers’ Fees. 
Contributors have no Liability to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement.

 

(iv)          C2M Shares. 
Contributors hold of record and own beneficially the number of C2M
Shares set forth in Schedule 2(a) attached hereto, which represent
such percentage of the issued and outstanding C2M Shares as stated on Schedule
2(a), and all of which collectively represent all the issued and
outstanding shares of the Company, free and clear of any restrictions on
transfer, Taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. 
Contributors individually or collectively are not a party to any option,
warrant, purchase right, or other contract or commitment (other than this
Agreement) that could require Contributors to sell, transfer, or otherwise
dispose of any shares of 

 

7

 

Company.  Contributors individually or collectively are
not a party to any voting trust, proxy, or other agreement or understanding
with respect to the voting of any shares of Company.

 

(v)           Litigation.  There
is no action, suit, proceeding, claim, arbitration or litigation pending or
threatened in writing against Contributors which (a) challenges or seeks
to enjoin, alter, or materially delay the consummation of the transactions
contemplated by this Agreement, or (b) would constitute a Contributor
Material Adverse Change.

 

(b)           Tornier’s
Representations and Warranties.  Tornier represents and warrants to
Contributors that except as set forth in Schedule 3(b) attached
hereto, the statements contained in this Section 3(b) are
correct and complete as of the Effective Date and shall continue to be true,
correct and complete as of the Closing Date.

 

(i)            Organization of Tornier. 
Tornier is duly organized, validly existing, and in good standing under
the laws of the Netherlands.

 

(ii)           Authorization of Transaction. 
Tornier has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and
legally binding obligation of Tornier, enforceable in accordance with its terms
and conditions.  Tornier needs not give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement. 
The execution, delivery, and performance of this Agreement and all other
agreements contemplated hereby have been duly authorized by Tornier.

 

(iii)          Tornier Capitalization. 
As of the Effective Date, Tornier’s current issued and outstanding share
capital consists of 74,210,912 ordinary shares with a par value of EUR 0.01
each, and its authorized share capital consists of 300,000,000 ordinary shares
with a par value of EUR 0.01 each.

 

(iv)          Tornier Financial Statements. 
Tornier has delivered to Contributors unaudited balance sheets, and cash
flow as of and for the fiscal year that ended December 31, 2009, which are
subject to normal year-end adjustments.

 

(v)           Non-contravention.  Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which Tornier is subject or any provision of its charter,
bylaws, or other governing documents, (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Tornier is a party or by which it is bound or to which any
of its assets are subject, or (C) result in the imposition or creation of
a Lien upon or with respect to Tornier Shares.

 

(vi)          Brokers’
Fees.  Tornier has no Liability to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Contributor could
become liable or obligated.

 

8

 

(vii)                           Litigation.  There
is no action, suit, proceeding, claim, arbitration or litigation pending or
threatened in writing against Tornier which (a) challenges or seeks to
enjoin, alter or materially delay the consummation of the transactions
contemplated by this Agreement or (b) would constitute a Tornier Material
Adverse Change.

 

Section
4.                                            Contributors’ Representations and
Warranties Concerning the Company.  Each of
the Contributors, severally and not jointly, represent and warrant to Tornier
for the benefit of Tornier, Inc. that, except as set forth in Schedule 4
attached hereto, each statement contained in this Section 4 is true,
correct and complete as of the Effective Date and shall continue to be true,
correct and complete as of the Closing Date.

 

(a)                                  Organization, Qualification and Corporate
Power.  Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Delaware.  Company is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where qualification is required, except where the failure to be so qualified
would not result in a Contributor Material Adverse Change.  Company has full corporate power and
authority all licenses, permits, and authorizations necessary to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it, except where the failure to obtain such license, permit or
authorization would not result in a Contributor Material Adverse Change.  Company is not in default under or in
violation of any provision of its certificate of incorporation, bylaws, or any
other corporate document to which it is a party, except where such default
would not result in a Contributor Material Adverse Change.

 

(b)                                 Capitalization.  The entire authorized capital stock of
Company consists of 50,000,000 shares of common stock, US $0.00001 par value
per share of which no shares have been issued, and 40,000,000 shares of Series A
Convertible Preferred Stock, par value US $0.0001, of which 23,200,000 are
issued and outstanding.  No shares of
capital stock of the Company are held in the Company’s treasury.  All of the C2M Shares have been duly
authorized, are validly issued, fully paid, and non-assessable.  No equity interest in the Company was issued
in violation of the certificate of incorporation or bylaws of the Company or
any pre-emptive (or other similar right) of any Person.  There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights or other contracts or 
commitments that could require the Company to issue, sell or otherwise
cause to become outstanding any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation or
similar rights with respect to the Company. There are no voting trusts, proxies
or other agreements or understandings with respect to the voting of the capital
stock of the Company.

 

(c)                                  Non-contravention.  Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Company is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Company is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Lien upon any of
its assets).  Company does not need 

 

9

 

to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the transactions
contemplated by this Agreement to be consummated.

 

(d)                                 Brokers’ Fees.  Company has no Liability to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.

 

(e)                                  Title to Assets.  Company has good and marketable title to, or
a valid leasehold interest in, the properties and assets used by it, located on
its premises, shown on the Most Recent Balance Sheet or acquired after the date
thereof, free and clear of all Liens.

 

(f)                                    No Subsidiaries.  Company has no subsidiaries and does not own
or have any right to acquire, directly or indirectly, any outstanding shares
of, or other equity interests in, any Person.

 

(g)                                 Statements.  Attached as Section (g) of Schedule
4 are the following financial statements (collectively, the “Financial Statements”): 
(i) unaudited balance sheets, and cash flow as of and for the
fiscal year that ended December 31, 2009 (the “Most Recent
Fiscal Year End”)  for the
Company; and (ii) unaudited balance sheets, and cash flow as of and for
the months that ended February 28, 2010 (collectively, the “Most Recent Financial Statements”) for the Company.  Subject to normal year-end adjustments and
the absence of notes, the Financial Statements present fairly in all material
respects the financial condition of Company as of the date thereof.

 

(h)                                 Events
Subsequent to Most Recent Fiscal Month End.  Since the Most Recent Fiscal Month End, there
has not been any Contributor Material Adverse Change.

 

(i)                                     No Actions. Except for
the bonus payments described in Section (i) of Schedule 4
attached hereto, since the Most Recent Fiscal Month End:

 

(i)                                     Company has not sold, leased,
transferred, or assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business;

 

(ii)                                  Company has not entered into any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $10,000;

 

(iii)                               no party (including Company) has
accelerated, terminated, modified, or cancelled any agreement, contract, lease,
or license (or series of related agreements, contracts, leases, and licenses)
involving more than $10,000 to which Company is a party or by which it is
bound;

 

(iv)                              no Liens have been imposed on any of
Company’s tangible or intangible assets;

 

(v)                                 Company has not made any capital
expenditure (or series of related capital expenditures) either involving more
than $10,000;

 

10

 

(vi)                              Company has not made any capital
investment in, any loan to, or any acquisition of the securities or assets of,
any other Person (or series of related capital investments, loans, and
acquisitions);

 

(vii)                           Company has not issued any note, bond, or
other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation;

 

(viii)                        Company has not delayed or postponed the
payment of accounts payable and other Liabilities outside the Ordinary Course
of Business;

 

(ix)                                Company has not cancelled, compromised,
waived, or released any right or claim (or series of related rights and claims)
either involving more than $10,000 or outside the Ordinary Course of Business;

 

(x)                                   Company has not transferred, assigned, or
granted any license or sublicense of any rights under or with respect to any
Intellectual Property;

 

(xi)                                there has been no change made or
authorized in the certificate of incorporation or bylaws of Company;

 

(xii)                             Company has not issued, sold, or
otherwise disposed of any of its shares, or granted any options, warrants, or
other rights to purchase or obtain (including upon conversion, exchange, or
exercise) any of its shares;

 

(xiii)                          Company has not declared, set aside, or
paid any dividend or made any distribution with respect to its shares (whether
in cash or in kind) or redeemed, purchased, or otherwise acquired any of its
shares;

 

(xiv)                         Company has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its property;

 

(xv)                            Company has not entered into any
transaction with any of its directors or officers outside the Ordinary Course
of Business;

 

(xvi)                         Company has not entered into or
terminated any employment contract or collective bargaining agreement, written
or oral;

 

(xvii)                      Company has not granted any increase in
the base compensation of any of its directors or officers;

 

(xviii)                   Company has not adopted, amended, modified, or
terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors or officers;

 

(xix)                           Company has not made or pledged to make
any charitable or other capital contribution;

 

11

 

(xx)                              there has not been any other occurrence,
event, incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving Company;

 

(xxi)                           Company has not discharged a material
Liability or Lien;

 

(xxii)                        Company has not made any loans or
advances of money;

 

(xxiii)                     Company has not, except as required or necessary
in the Ordinary Course of Business, disclosed any Confidential Information; and

 

(xxiv)                    Company has not committed to do any of the
foregoing.

 

(j)                                     Undisclosed Liabilities. 
Except as disclosed in the Most Recent Financial Statements, Company has
no Liabilities, and Contributors have no knowledge of any basis for any present
or future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against it giving rise to any Liability.

 

(k)                                  Legal Compliance and Licenses. 
Company has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and non-U.S. governments (and
all agencies thereof).  No action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against the Company alleging any failure to so
comply. Section (k) of Schedule 4 contains a complete list of
all governmental licenses possessed by the Company, permits, franchises, rights
and privileges, if any, necessary for or material to the present conduct of the
Company (collectively, the “Licenses”).  All Licenses are in full force and
effect.  There are no pending or, to the
actual knowledge of Contributors, threatened claims or proceedings challenging
the validity of or seeking to revoke or discontinue, any of the Licenses.

 

(l)                                     Tax Matters.

 

(i)                                     Company has timely filed (or obtained an
extension for filing) all Tax Returns that it was required to file under
applicable laws and regulations.  All Tax
Returns were correct and complete in all respects and were prepared and filed
in substantial compliance with all applicable laws and regulations.  All Taxes due and owing by Company (whether
or not shown on any Tax Return) have been paid. 
Company is not currently the beneficiary of, or has an application
pending for, any extension of time within which to file any Tax Return.  No claim has ever been made by an authority
in a jurisdiction where Company does not file Tax Returns that Company is or
may be subject to taxation by that jurisdiction.  There are no Liens for Taxes upon any of the
assets of Company.

 

(ii)                                  Company has withheld and paid all Taxes
required to have been withheld and paid in connection with any amounts paid or
owing to any employee, independent contractor, creditor, shareholder, or other
third party.

 

(iii)                               No federal, state, local or non-U.S. tax
audits or administrative or judicial Tax proceedings are pending or being
conducted with respect to Company. 
Company has not received from any federal, state, local or non-U.S.
taxing authority any (A) notice indicating an intent to open an audit or
other review, (B) request for information related to Tax 

 

12

 

matters, or (C) notice
of deficiency or proposed adjustment for any amount of Tax proposed, asserted,
or assessed by any taxing authority against Company.

 

(iv)                              Company has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.

 

(v)                                 The C2M Shares do not constitute “United
States real property interests” within the meaning of section 897(c)(1) of
the Code.

 

(m)                               Real Property. 
Company does not own or lease any real property.

 

(n)                                 Intellectual Property.

 

(i)                                     Company owns and possesses or has the
right to use pursuant to a transferable, valid and enforceable written license,
sublicense, agreement or permission all know-how and trade secrets used in the
operation of its business.  Each item of
know-how and trade secret owned or used by Company will be owned or available
for use by Tornier on identical terms and conditions immediately subsequent to
the Closing.

 

(ii)                                  Section (n) of Schedule 4
identifies each patent and trademark registration that has been, or before the
Closing will have been, assigned to Company with respect to any of its
Intellectual Property, identifies each pending patent application and trademark
application that has been, or before the Closing will have been, assigned to
Company, and identifies each material license, sublicense, agreement, or other
permission that Company has granted to any third party with respect to any of
its Intellectual Property (together with any exceptions).  Section (n) of Schedule 4
also identifies each material unregistered trademark, service mark, trade name,
corporate name or Internet domain name, computer software item (other than
commercially available off-the-shelf software purchased or licensed for less
than a total cost of $1,000 in the aggregate) and material unregistered
copyright used by Company in connection with its business.  With respect to each item of Intellectual
Property owned by the Company required to be identified in Section (n) of
Schedule 4:

 

(A)                              as of the Closing Date, Company owns and
possesses all right, title, and interest in and to the item, free and clear of
any Lien, license (other than the Tornier IP License), or other restriction or
limitation regarding use or disclosure;

 

(B)                                the item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;

 

(C)                                other than proceedings in respect to the
prosecution of patent applications, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or threatened
that challenges the legality, validity, enforceability, use, or ownership of
the item; and

 

(D)                               Company has not agreed to indemnify,
defend or hold harmless any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.

 

13

 

(iii)                               Company has received no notice alleging
that, and Contributors have no knowledge that, any of the items of Intellectual
Property set forth on Section (n) of Schedule 4 or any
products or methods of making them disclosed in such Intellectual Property
interferes with, infringes upon or misappropriates, or otherwise is in conflict
with any Intellectual Property rights of third parties or that any third party
has interfered with, infringed upon, misappropriated or otherwise come into
conflict with any of the items of Intellectual Property set forth on Section (n) of
Schedule 4 or any of Company’s products or methods of making them.

 

(o)                                 Tangible Assets. 
Company does not have any tangible assets.

 

(p)                                 Contracts.  Section (p) of
Schedule 4 lists all material contracts and other agreements and
arrangements to which Company is a party, and each of such contract,
agreement  or arrangement:  (A) is legal, valid, binding,
enforceable, and in full force and effect; (B) will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (C) the
Company and, to the knowledge of Contributors, the other parties thereto are
not in breach or default, and no event has occurred that with notice or lapse
of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement, except where any such
breach or default would not result in a Contributor Material Adverse Change;
and (D) no party has repudiated any provision of the agreement.

 

(q)                                 Notes and Accounts Receivable. 
All notes and accounts receivable of Company are reflected properly on
its books and records.

 

(r)                                    Powers of Attorney. 
There are no outstanding powers of attorney executed on behalf of
Company.

 

(s)                                  Insurance.  Section (s) of
Schedule 4 sets forth a complete list of all policies of insurance
of any kind or nature covering the Company or any of its properties or assets,
including fire, theft, and other casualty and liability insurance.  All such policies are in full force and
effect, and the Company is not in default of any material provision
thereof.  To Contributors’ actual
knowledge, no insurance policy limits, aggregates or maximums have been reached
or exceeded.

 

(t)                                    Litigation.  The
Company is not (i) subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (ii) a party, or to its knowledge or the
knowledge of Contributors, threatened to be made a party, to any action, suit,
proceeding, hearing, or investigation of, in, or before (or that could come
before) any court or quasi-judicial or administrative agency of any federal,
state, local, or non-U.S. jurisdiction or before (or that could come before)
any arbitrator.

 

(u)                                 Products.  Company
has not sold, leased, distributed, or given away any products.

 

(v)                                 Employees.  As of
the Closing Date, the Company does not have any employees.  There is no employment-related charge,
complaint, grievance, investigation, inquiry or obligation of any kind, pending
or threatened in any forum, relating to an alleged violation or breach by
Company of any law, regulation or contract. 
There are no written or unwritten employment contracts or severance
agreements with any employees of Company. 
Company has not implemented any plant closing or layoff of employees
that could implicate the Worker Adjustment and Retraining 

 

14

 

Notification
Act of 1988, as amended, or any similar non-U.S., state, or local law,
regulation, or ordinance.

 

(w)                               Guaranties.  Company
is not a guarantor or otherwise is liable for any Liability of any other Person.

 

(x)                                   Environmental, Health, and Safety Matters. 
Company has at all times complied and is in compliance with all
Environmental, Health, and Safety Requirements, except where any failure to so
comply would not result in a Contributor Material Adverse Change.

 

(y)                                 Customers and Suppliers.

 

(i)                                     Company has no customers.

 

(ii)                                  Since the date of the Most Recent Balance
Sheet, no supplier of Company has indicated in writing that it shall stop, or
decrease the rate of, supplying materials, products or services to Company.

 

(z)                                   Disclosure.  No
representation, warranty or other statement of Contributors contained in this
Agreement or the Schedules contains an untrue statement of material fact or, to
the actual knowledge of Contributors, omits to state a material fact necessary
in order to make such representation, warranty or other statement, in light of
the circumstances under which it was made, not misleading.  To the actual knowledge of Contributors, they
have not withheld from Tornier any documents or other information in their
possession that, taken as a whole with all other documents and information in
Contributors’ possession, would lead a reasonable person in Tornier’s position
to conclude that any such representation, warranty or other statement is untrue
in any material respect.

 

Section 5.                                            Pre-Closing Covenants.  
The Parties covenant as follows:

 

(a)                                  General. Each of the Parties will use reasonable
efforts to take all actions and to do all things necessary, proper or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction of the Closing conditions set forth in Section 7
below).

 

(b)                                 Notices and Consents. 
Contributors will cause Company to give all notices to third parties,
and will cause Company to obtain all third-party consents, authorizations, and
approvals as necessary or required in connection with the transactions
contemplated under this Agreement.  All
such notices, consents, authorizations and approvals are listed in Section (b) of
the attached Schedule 4.

 

(c)                                  Operation of Business. 
Contributors will not cause or permit Company to engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business.  Without limiting the
generality of the foregoing, Contributors will not cause or permit Company to (i) declare,
set aside, or pay any dividend or make any distribution with respect to its
shares or redeem, purchase, or otherwise acquire any of its shares, or (ii) otherwise
engage in any practice, take any action, or enter into any transaction of the
sort described in Section 4(h) above.

 

15

 

(d)                                 Preservation of Business. 
Contributors will cause Company to keep its business and properties
substantially intact, including its present operations, working conditions,
insurance policies, and relationships with lessors, licensors, suppliers.

 

(e)                                  Notice of Developments. 
Each of Contributor and Tornier will give prompt written notice to the
other of any material adverse development causing a breach of any of its
representations and warranties in this Agreement.  No disclosure by any party to this Agreement
pursuant to this Section 5(e), however, shall be deemed to amend or
supplement the Schedules or to prevent or cure any misrepresentation, breach of
warranty or breach of covenant.

 

(f)                                    Tax Matters. 
Without the prior written consent of Tornier, Company will not, and
Contributors shall not permit the Company to, make or change any election,
change an annual accounting period, adopt or change any accounting method, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
or assessment relating to Company, surrender any right to claim a refund of
Taxes, consent to any extension or waiver of the limitation period applicable
to any Tax claim or assessment relating to Company, or take any other similar
action relating to the filing of any Tax Return or the payment of any Tax, if
such election, adoption, change, amendment, agreement, settlement, surrender,
consent or other action would have the effect of increasing the Tax liability
of Company for any period ending after the Closing Date or decreasing any Tax
attribute of Company existing on the Closing Date.

 

Section
6.                                            Post-Closing Covenants. 
The Parties covenant as follows with respect to the period following the
Closing:

 

(a)                                  General.

 

(i)                                     If at any time after the Closing any
further actions are necessary or desirable to carry out the purposes of this
Agreement, each of the parties to this Agreement will take such further actions
(including the execution and delivery of such further instruments and
documents) as any other party to this Agreement may reasonably request, all at
the sole cost and expense of the requesting party (unless the requesting party
is entitled to indemnification therefore under Section 8 below).

 

(ii)                                  From and after the Closing, Tornier will
be entitled to possession of all documents, books, records (including Tax
records), agreements, and financial data of any sort relating to Company.

 

(b)                                 Litigation Support. 
If, and for so long as, any party to this Agreement actively is
contesting or defending against any third party, any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving Company, each of the other Parties will cooperate with it in the
contest or defense, make available his, her, or its personnel, and provide such
testimony and access to his, her, or its books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending party (unless the contesting or
defending party is entitled to indemnification therefore under Section 8
below).

 

16

 

(c)                                  Transition. 
Contributors will not take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, supplier, or other
business associate of Company from maintaining the same business relationships
with Company after the Closing as it maintained with Company prior to the
Closing.  Contributors will refer all
customer inquiries relating to the business of Company to Tornier from and
after the Closing.  At Tornier’s sole
cost and expense, Contributors will cooperate and use their reasonable efforts
to change any identifying or contact information on record with any supplier,
government agency, business associate, or other third party promptly upon
Tornier’s request.

 

(d)                                 Confidentiality. 
Contributors will refrain from using any of the Confidential Information
except in connection with this Agreement and deliver promptly to Tornier or
destroy all tangible embodiments (and all copies) of the Confidential
Information that are in its, his or her possession.  If any Contributor is requested or required
pursuant to written or oral question or request for information or documents in
any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process to disclose any Confidential Information, such Contributor will
notify Tornier promptly of the request or requirement so that Tornier may seek
an appropriate protective order.  If, in
the absence of a protective order or the receipt of a waiver hereunder, any
Contributor is, on the advice of counsel, compelled to disclose any
Confidential Information, such Contributor may disclose the Confidential
Information.  The foregoing provisions
shall not apply to any Confidential Information that is (a) generally
available to the public immediately prior to the time of disclosure unless that
Confidential Information is so available due to the actions of Contributors; (b) properly
and legally was or becomes available to Contributors on a non-confidential
basis independently and without restriction by third parties who have no
obligation of confidentiality with respect to such information; or (c) independently
developed by Contributors without reference to Confidential Information.

 

Section
7.                                            Conditions to Obligation to Close and
Deliveries at Closing.

 

(a)                                  Conditions to
Tornier’s Obligation. Tornier’s obligation to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions, at or prior to, the Closing, unless
Tornier waives any such condition in writing prior to the Closing:

 

(i)                                     the
representations and warranties of Contributors set forth in Section3(a) and
Section 4 above shall be true and correct in all material respects at and
as of the Closing Date;

 

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

 

(iii)                               Contributors
shall have procured all of the third-party consents specified in Section 5(b) above;

 

(iv)                              no action,
suit, or proceeding shall be pending or threatened before (or that could come
before) any court or quasi-judicial or administrative agency of any federal,
state, local, or non-U.S. jurisdiction or before (or that could come before)
any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent 

 

17

 

consummation of any of the transactions contemplated
by this Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) adversely affect the
right of Tornier to own the C2M Shares and to control Company, or (D) adversely
affect the right of Company to own its assets and to operate its business (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect); and

 

(v)                                 all actions to
be taken by Contributors in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby shall be
reasonably satisfactory in form and substance to Tornier and Tornier shall have
received all the documents, instruments and certificates set forth in Section 7(c).

 

(b)                                 Conditions to
Contributors’ Obligations.  The
obligations of Contributors to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the following
conditions at, or prior to, the Closing, unless Contributors waive in writing
prior to the Closing any such condition:

 

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

 

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

 

(iii)                               no action,
suit, or proceeding shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or
non-U.S. jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement or (B) cause
any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect); and

 

(vi)                              all actions to
be taken by Tornier in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Contributors and Contributors
shall have received all the documents, instruments and certificates set forth
in Section 7(d).

 

(c)                                  Contributors’
Deliveries  Contributors
shall deliver to Tornier at the Closing:

 

(i)                                     Original stock
certificates representing all of the C2M Shares, accompanied by duly executed
stock powers transferring the C2M Shares to Tornier;

 

(ii)                                  the resignations,
effective as of the Closing, of each director and officer of Company;

 

(iii)                               original
certificate of incorporation of Company;

 

18

 

(iv)          copies of the certificate of good
standing of Company issued on or within thirty days before the Closing Date by
the Secretary of State (or comparable officer) of the jurisdiction of
organization;

 

(v)           the original minute books (containing the
records of meetings of the shareholders, the board of directors, and any
committees of the board of the directors), the bylaws, the stock certificate
books, and the stock record books for Company;

 

(vi)          a certificate of the secretary of the
Company, dated as of the Closing Date, in form and substance reasonably
satisfactory to Tornier certifying that (A) there are no amendments to the
certificate of incorporation of the Company, or the bylaws (or other governing
documents) of the Company other than as evidenced in the original minute book
provided to Tornier; (B) the minute book, the stock certificates, and the
stock record books for Company provided to Tornier are correct and complete; (C) the
copies of all Licenses delivered to Tornier are true and correct; and (D) each
of the conditions specified above in Section 7(a) are satisfied in
all respects.

 

(d)           Tornier’s Deliveries. 
Tornier shall deliver to Contributors at the Closing:

 

(i)            Deed of Issue of the Tornier Shares to
Vertical I, Vertical II, TMG and Kohrs pursuant to Schedule 2(a) attached
hereto; and

 

(ii)           Deed of Issue of the Tornier Shares to
STAK against allotment of depositary receipts of shares to Dinger pursuant to Schedule
2(a) attached hereto.

 

Section
8.               Remedies for Breaches of This Agreement.

 

(a)           Survival of Representations and
Warranties.  The representations and warranties of the
Parties hereto contained in this Agreement and any certificate or other
document provided hereunder or thereunder shall survive in full force and
effect until the first anniversary of the Closing Date and shall thereupon
terminate; provided, however, that the representations and
warranties of the Parties hereto contained Sections 3(a)(ii) [Non-contravention],
3(a)(iv) [C2M Shares], 4(b) [Capitalization], 4(c) [Non-contravention]
and 4(l) [Tax Matters] shall survive in full force and effect until the
end of the applicable statute of limitations, and shall thereupon
terminate.  The covenants and agreements
which by their terms do not contemplate performance after the Closing shall
terminate as of, and not survive, the Closing. 
The covenants and agreements which by their terms contemplate
performance after the Closing and expire upon a date certain shall survive
until such date certain, and those which do not expire upon a date certain
shall survive the Closing in accordance with their terms until the expiration
of the applicable statute of limitations.

 

(b)           Indemnification Provisions for Tornier’s
Benefit.  Subject to the limitations set forth herein,
following the Closing, Contributors shall severally (in proportion to the
number of C2M Shares being contributed by each Contributor), and not jointly,
indemnify and defend Tornier, Inc. against, and shall hold Tornier, Inc.
harmless from, any Adverse Consequences resulting from, arising out of, or
incurred by Tornier, Tornier, Inc., or any other Tornier Affiliate in
connection with:

 

19

 

(i)            Any breach of any representation or
warranty made by any Contributor herein (including any inaccuracy in any
related Schedule);

 

(ii)           Any breach or nonperformance of any
covenant or agreement of any Contributor pursuant hereto; or

 

(iii)          fraud, intentional misrepresentation or
willful breach by any Contributor.

 

(c)           Indemnification Provisions for
Contributors’ Benefit.  Subject to the limitations set forth herein,
following the Closing, Tornier shall indemnify and defend Contributors against,
and shall hold Contributors harmless from, any Adverse Consequences resulting
from, arising out of, or incurred by Contributors in connection with:

 

(i)            any breach of any representation or
warranty by Tornier set forth in this Agreement;

 

(ii)           any covenant of Tornier contained in this
Agreement; or

 

(iii)          any fraud, intentional misrepresentation
or willful breach by Tornier.

 

(d)           Matters Involving Third Parties.

 

(i)            A party entitled to indemnification
hereunder (the “Claiming Party”) will give the
party obligated to provide such indemnification (the “Indemnifying
Party”) prompt notice of any claim of a third party (a “Third-Party Claim”) as to which the Claiming Party has the
right to demand indemnification hereunder (the “Initial
Claim Notice”).  The failure
to promptly give such Initial Claim Notice to the Indemnifying Party will not
relieve the Indemnifying Party of any liability hereunder, unless the
Indemnifying Party was prejudiced thereby.

 

(ii)           Promptly after receiving such Initial
Claim Notice, the Indemnifying Party will assume the defense of such
Third-Party Claim at its own expense and may settle such Third-Party Claim, but
will not, without the written consent of the Claiming Party, agree to (i) any
injunctive relief affecting the Claiming Party or any of its Affiliates or (ii) any
settlement that would adversely affect the business or operations of the
Claiming Party or any of its Affiliates.

 

(iii)          The Claiming Party will have the right to
engage their/its own legal counsel (and other professional advisers) in
connection with the defense of such Third-Party Claim, at the Claiming Party’s
expense.  The Indemnifying Party will
keep the Claiming Party fully informed of all matters material to such defense
and Third-Party Claim at all stages thereof, whether or not the Claiming Party
is represented by separate legal counsel.

 

(iv)          If the Indemnifying Party does not
commence a defense within 30 days following receipt of such Initial Claim
Notice (or such shorter period, if any, during which a 

 

20

 

defense must be
commenced for the preservation of rights), the Claiming Party may, at its
option, settle or defend such Third-Party Claim at the expense of the
Indemnifying Party.

 

(v)           If a judgment or order in favor of such
third party is rendered against the Claiming Party or such Third-Party Claim is
settled resulting in losses on the part of the Claiming Party, then the amount
of such losses incurred by the Claiming Party will be paid by the Indemnifying
Party.

 

(vi)          Each of the Contributors, STAK and
Tornier will, and will cause its Affiliates to, promptly make available to the
other party (and its legal counsel and other professional advisers with a
reasonable need to know) all books and records of such party relating to such
defense of such Third-Party Claim, subject to reasonable confidentiality requirements.  Each of Contributor, STAK and Tornier will
render to the other parties such assistance as such other parties may
reasonably request to ensure the proper and adequate defense of such
Third-Party Claim.

 

(vii)         In conducting any defense or dealing with
any Third-Party Claim hereunder, each party will use commercially reasonable
efforts to protect and preserve the reputation and goodwill associated with
each other party.

 

(e)           Additional Notices.  In addition to, and not in limitation of Section 8(d),
a Claiming Party will give prompt notice to an Indemnifying Party of each claim
for indemnification hereunder for which such Claiming Party proposes to demand
indemnification (whether or not involving a third party), specifying the amount
and nature of such claim (to the extent known). 
The failure to promptly give such notice to the Indemnifying Party will
not relieve the Indemnifying Party of any liability hereunder, unless the
Indemnifying Party was prejudiced thereby.

 

(f)            Limitations on
Indemnification.

 

(i)            The cumulative indemnification
obligations of either Contributors (collectively) or Tornier under this Section 8
shall not exceed U.S. $5 million. 
For the avoidance of doubt, this limitation shall not apply to
indemnification for Taxes governed by Section 9 of this Agreement or to
indemnification for breach of Tax warranties.

 

(ii)           Notwithstanding anything to the contrary
in this Section 8, neither Contributors (collectively) nor Tornier will
have any indemnification obligations under this Section 8 unless and until
the aggregate losses of, respectively, Tornier or Contributors (collectively)
exceeds $20,000 (the “Indemnification Threshold”);
provided, however, that if such losses exceeds the
Indemnification Threshold, then Contributors (collectively) or Tornier,
respectively, will be obligated to indemnify respectively, Tornier or
Contributors (collectively) for all such losses, including those losses equal
to or less than the Indemnification Threshold.

 

(iii)          Any amounts payable
under this Section 8 by the Indemnifying Party shall be reduced (A) by
any amounts recoverable by the Claiming Party under insurance policies or from
any other Person and (B) by any Tax
benefit of the Claiming Party  arising
from the incurrence or payment of any such indemnified amount.

 

21

 

(iv)          No party hereto shall be obligated to
indemnify, defend or hold harmless, any other Person with respect to (A) any
item disclosed in the Schedules or (B) any covenant or condition waived by
the other party on, or prior to, the Closing. 
Each party hereto agrees that, for so long as such party has any right
of indemnification under Section 8, it shall not, and shall use its
reasonable efforts to ensure that their Affiliates do not, voluntarily or by
discretionary action (including conducting any invasive sampling or testing),
accelerate the timing, or increase the cost of any obligation of any other
party under this Section 8, except to the extent that such action is taken
(x) for a reasonable legitimate purpose or (y) in response to a
discovery by such party.

 

(v)           No party hereto shall be obligated to
indemnify, defend or hold harmless, any other Person with respect to any
covenant or condition waived by the other party on or prior to the Closing.

 

Section
9.               Tax Matters.  The
following provisions shall govern the allocation of responsibility as between
Tornier and Contributors for certain tax matters following the Closing Date:

 

(a)           Tax Indemnification. 
Contributors shall severally (in proportion to the number of C2M Shares
being contributed by each Contributor), and not jointly, indemnify Company,
Tornier and each Tornier Affiliate and hold them harmless from and against, any
loss, claim, liability, expense, or other damage attributable to (i) all
Taxes (or the non-payment thereof) of Company due or accrued during all taxable
periods ending on or before the Closing Date and the portion through the end of
the Closing Date for any taxable period that includes (but does not end on) the
Closing Date; (ii) all Taxes of any member of an affiliated, consolidated,
combined or unitary group of which Company is or was a member immediately prior
to the Closing Date; and (iii) any and all Taxes of any person (other than
Company) imposed on Company as a transferee or successor, by contract or
pursuant to any law, rule, or regulation, which Taxes relate to an event or
transaction occurring before the Closing.

 

(b)           Responsibility for Filing Tax Returns. 
Tornier shall prepare or cause to be prepared and file or cause to be
filed all Tax Returns for Company starting with the taxable year 2010.  Contributors shall prepare or cause to be
prepared and file or cause to be filed all Tax Returns for the Company for the
taxable year 2009 and all other prior years.

 

(c)           Cooperation on Tax Matters.

 

(i)            Tornier, Company and Contributors shall
cooperate fully, as and to the extent reasonably requested by the other party
or parties, in connection with the filing of Tax Returns pursuant to this Section 9
and any audit, litigation or other proceeding with respect to Taxes.
Cooperation shall include the retention and (upon the other party’s request)
the provision of records and information that are reasonably relevant to any
such audit, litigation or other proceeding. 
Company and Contributors shall retain all books and records with respect
to Tax matters pertinent to Company relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations
(and, to the extent notified by Tornier or Contributors, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority.

 

22

 

(ii)           Upon request, Tornier and Contributors
will use their reasonable efforts to
obtain any certificate or other document from any governmental authority or any
other Person as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including with respect to the transactions contemplated
hereby).

 

(d)           Certain Taxes and Fees. 
All transfer, documentary, sales, use, stamp, registration and other
such Taxes, and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred in connection with
consummation of the transactions contemplated by this Agreement shall be paid
by Tornier when due, and Tornier will, at its own expense, file all necessary
Tax Returns and other documentation with respect to all Taxes, fees and charges,
and, if required by applicable law, Contributors will join in the execution of
any Tax Returns and other documentation.

 

(e)           Limitations on
Indemnification.  The
cumulative indemnification obligations of Contributors under this Section 9,
which are separate from and in addition to the indemnification obligations of
Contributors under Section 8 of this Agreement, shall not exceed U.S.
$5 million.  For the avoidance of
doubt, this limitation shall apply only to indemnification for Taxes governed
by Section 9 and to indemnification for breach of Tax warranties.

 

Section 10.             Termination.

 

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

 

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

 

(ii)           Tornier may terminate this Agreement by
giving written notice to Contributors at any time prior to the Closing (A) if
Contributors have breached any representation, warranty, or covenant contained
in this Agreement in any material respect, Tornier has notified Contributors of
the breach, and the breach has continued without cure for a period of ten days
after the notice of breach, or (B) if the Closing shall not have occurred
on or before the Deadline, because of the failure of any condition precedent
under Section 7(a) hereof; and

 

(iii)          Contributors may terminate this Agreement
by giving written notice to Tornier at any time prior to the Closing, (A) if
Tornier has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, Contributors have notified Tornier of
the breach, and the breach has continued without cure for a period of ten days
after the notice of breach or (B) if the Closing shall not have occurred
on or before the Deadline by reason of the failure of any condition precedent
under Section 7(b) hereof (unless the failure results primarily from
any Contributor breaching any representation, warranty, or covenant contained
in this Agreement).

 

(b)           Effect of Termination. 
If any of the Contributors, Tornier, or STAK terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the
parties to this Agreement shall terminate without any Liability of any of the
parties to this 

 

23

 

Agreement to
any of the other parties (except for any Liability of any party for breach) of
the obligations of each party with respect to Confidential Information.

 

Section
11.             Miscellaneous.

 

(a)           Public Announcements. 
Tornier may make any public announcements relating to the transactions
contemplated by this Agreement at any time at its sole discretion.  Company and Contributors will not make any
public announcements concerning any of the matters set forth in this Agreement
without the prior written consent of Tornier, which consent may be withheld at
Tornier’s sole discretion.

 

(b)           No Third-Party Beneficiaries. 
This Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.

 

(c)           Entire Agreement. 
This Agreement (including the documents referred to herein) constitutes
the entire agreement among the Parties and supersedes any prior understandings,
agreements and representations by or among the Parties, written or oral, to the
extent they relate in any way to the subject matter hereof.

 

(d)           Succession and Assignment. 
This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted
assigns.  No party to this Agreement may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other party.

 

(e)           Counterparts. 
This Agreement may be executed in one or more counterparts and may be
delivered by facsimile or any other electronic means of communication, each of
which shall be deemed an original and all of which together shall constitute
one and the same instrument.

 

(f)            Headings.  The Section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.

 

(g)           Notices.  All
notices, requests, demands, claims, and other communications hereunder shall be
in writing, and shall only be deemed duly given (i) when delivered
personally to the recipient, (ii) one business day after being sent to the
recipient by reputable overnight courier service (charges prepaid), (iii) one
business day after being sent to the recipient by facsimile transmission, or (iv) four
business days after being mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid, and addressed to the
intended recipient as set forth below:

 

	
   

  	
  If
  to Contributors:

  	
   

  	
  To
  the respective addresses set forth in Schedule 2(b).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If
  to Tornier:

  	
   

  	
  Tornier, Inc.

  
	
   

  	
   

  	
   

  	
  Attn:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
  7701
  France Avenue South, Suite 600

  
	
   

  	
   

  	
   

  	
  Edina, MN 55435

  

 

24

 

	
   

  	
  Copy
  to (not constituting notice):

  	
  Faegre &
  Benson LLP

  
	
   

  	
   

  	
  Attn:  Steven C. Kennedy

  
	
   

  	
   

  	
  2200 Wells Fargo Center

  
	
   

  	
   

  	
  90
  South 7th Street

  
	
   

  	
   

  	
  Minneapolis,
  MN  55402

  
	
   

  	
   

  	
  (612)
  766-1600 (facsimile)

  

 

Any party may
change the address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.

 

(h)           Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, U.S.A., without giving effect to any choice or
conflict of law provision or rule that would cause the application of the
laws of any jurisdiction other than the State of Delaware.  Each party to this Agreement hereby
irrevocably submits to the exclusive jurisdiction and venue of the federal and
state courts located in Delaware, which shall have exclusive jurisdiction to
hear and settle any and all matters involving the Parties.

 

(i)            Amendments and Waivers. 
No amendment of any provision of this Agreement shall be valid unless it
is in writing and signed by both Parties. No waiver by a party of any provision
of this Agreement or any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be valid unless the same
shall be in writing and signed by the party making the waiver nor shall such
waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such default,
misrepresentation, or breach of warranty or covenant.

 

(j)            Severability. 
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by such provision
or its severance herefrom and (d) in lieu of such provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such provision as may be possible.

 

(k)           Expenses.  Tornier
and Contributors shall each bear their own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. 
Notwithstanding the foregoing, in the event that Contributors breach the
restrictions of Section 5(f) above, in addition to all other remedies
available to Tornier, Contributors shall pay all fees and expenses incurred by
Tornier relating to this Agreement and the transaction contemplated by this
Agreement, including but not limited to reasonable fees and expenses of
counsel, financial advisors and accountants (the “Expenses
Payment”).  Contributors
acknowledge and agree that payment of the Expenses Payment under the
circumstances is fair and reasonable.

 

25

 

(l)            Construction. 
The Parties have participated jointly in the negotiation and drafting of
this Agreement.  If an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.  Any
reference to any federal, state, local, or non-U.S. statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. 
The word “including” shall mean including without limitation.  The Parties intend that each representation,
warranty, and covenant contained herein shall have independent
significance.  If a party has breached
any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant relating
to the same subject matter (regardless of the relative levels of specificity)
that the party has not breached shall not detract from or mitigate the fact
that the party is in breach of the first representation, warranty, or covenant.

 

(m)          Incorporation of Exhibits, Annexes and
Schedules.  The Exhibits, Annexes and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

 

(n)           Common Interest. 
Both Parties acknowledge that TMG Holdings Coöperatief U.A., Vertical
Fund I, L.P., Vertical Fund II, L.P., and Douglas W. Kohrs are
shareholders of both the Company and Tornier.

 

[SIGNATURE
PAGE FOLLOWS]

 

26

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first above written.

 

	
   

  	
  TORNIER:

  
	
   

  	
   

  
	
   

  	
  TORNIER B.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Eric Liu

  
	
   

  	
  By:

  	
  Eric Liu

  
	
   

  	
  Title:

  	
  Managing Director A

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas W. Kohrs

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STAK:

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Guido Nieuwenhuizen

  
	
   

  	
  By:

  	
  G.F.X.M. Nieuwenhuizen

  
	
   

  	
  Title:

  	
  Director A

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STICHTING ADMINISTRATIEKANTOOR
  TORNIER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Carney

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas W. Kohrs

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Curt

  
	
   

  	
  Title:

  	
  Tim Curt, Director

  

 

[continued]

 

[Signature
Page to Contribution Agreement]

 

 

	
   

  	
  CONTRIBUTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTICAL
  FUND I, L.P.

  
	
   

  	
  By:

  	
  THE
  VERTICAL GROUP, L.P.

  
	
   

  	
   

  	
  General
  Partner

  
	
   

  	
  By:

  	
  THE
  VERTICAL GROUP GPHC, LLC

  
	
   

  	
   

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John E. Runnells III

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John
  E. Runnells III

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTICAL
  FUND II, L.P.

  
	
   

  	
  By:

  	
  THE
  VERTICAL GROUP, L.P.

  
	
   

  	
   

  	
  General
  Partner

  
	
   

  	
  By:

  	
  THE
  VERTICAL GROUP GPHC, LLC

  
	
   

  	
   

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John E. Runnells III

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John
  E. Runnells III

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  TMG HOLDINGS COÖPERATIEF U.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ T. Curt

  
	
   

  	
  Title:

  	
  Manager A  T. Curt

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Guido Nieuwenhuizen

  
	
   

  	
  Title:

  	
  Manager A  Guido Nieuwenhuizen

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Douglas W. Kohrs

  
	
   

  	
  DOUGLAS W. KOHRS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Fred B.
  Dinger, III

  
	
   

  	
  FRED B. DINGER, III

  

 

[Signature
Page to Contribution Agreement]

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