Document:

EXHIBIT
        10.65

      Redacted
        Version

    

     

    STOCK
      PURCHASE AGREEMENT

     

    This
      Stock Purchase Agreement (this “Agreement”),
      dated
      December 31, 2007, is by and among (i) ArthroCare
      Corporation, a Delaware corporation (“Buyer”),
      (ii)
      DiscoCare, Inc., a Delaware corporation (the
      “Company”),
      and
      (iii) Jonathan Cutler, D.P.M., the sole stockholder of the Company (the
“Seller”
and,
      together with the Company, the “Seller
      Parties”
and,
      together with Buyer, the “Parties”).

     

    RECITALS

     

    A. Seller
      owns all
      of the Company’s outstanding Common Stock, no par value per share (the
“Shares”).

     

    B. Buyer
      desires to purchase from Seller all of the Shares, and Seller desires to sell
      to
      Buyer all of the Shares, in accordance with this Agreement’s terms and
      conditions.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the premises, the respective representations,
      warranties, covenants and agreements contained in this Agreement, and other
      good
      and valuable consideration the receipt and sufficiency of which are hereby
      acknowledged, and intending to be legally bound, the Parties agree as
      follows:

     

    ARTICLE
      1

    PURCHASE
      AND SALE OF SHARES

     

    1.1 Purchase
      and Sale of Shares.
      On and
      subject to the terms and conditions of this Agreement, Buyer hereby purchases
      from Seller, and Seller hereby sells to Buyer, all of the Shares for the
      consideration specified in Section
      1.2.

     

    1.2 Purchase
      Price.
      The
      aggregate purchase price for the Shares (the “Purchase
      Price”)
      is
      $25,000,000. Buyer shall pay to the Seller the Purchase Price in cash, less
      the
      Escrow Amount (defined below), upon the execution and delivery of this Agreement
      by all Parties (the “Closing”).
      The
      date of the Closing shall hereinafter be referred to as the “Closing
      Date.”
      

     

    1.3 Deliveries.
      On the
      Closing Date,

     

    (a) Seller
      shall deliver, or caused to be delivered, to Buyer: (i) certificates
      representing the Shares, duly endorsed (or accompanied by duly executed stock
      powers), (ii) an officer’s certificate and a secretary’s certificate for the
      Company, each duly executed by the appropriate person, (iii) the resignation,
      effective as of the Closing, of each of the Company’s directors and officers,
      (iv) the
      consents set forth on Schedule
      3.3,
      (v) the
      **** Agreement in the form attached hereto as Schedule
      1.3(a);
      (vi)
      the Escrow Agreement (defined below), duly executed by Seller, (vii) an
      assignment of all of the Company’s Receivables which arose prior to ****
      (“Seller’s
      Receivables”),
      a
      list of which is attached as Schedule
      4.5,
      to
      Seller
      and (viii) other
      documents as mutually agreed to by the Parties.

     

    (b) Buyer
      shall
      deliver,
      or
      cause
      to be
      delivered, to the Seller: (i) the Purchase Price
      in
      cash,
      less
      the Escrow Amount
      payable
      by wire transfer of immediately available funds,
      (ii) an
      officer’s certificate and assistant secretary’s certificate for Buyer, each duly
      executed by the appropriate person,
      (iii)
      the Escrow Agreement, duly executed by Buyer, (iv)
      the
      Release Agreement in the form attached hereto as Schedule
      1.3(a);
      and
      (v)
other
      documents as mutually
      agreed to by the Parties.

     

    (c) Buyer
      shall pay the Escrow Amount (as defined in Section
      5.6)
      to the
      Escrow Agent in cash payable by wire transfer of immediately available
      funds.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        1

        
          

        

      

      
         

      

    

     

    ARTICLE
      2

    REPRESENTATIONS
      AND WARRANTIES CONCERNING THE TRANSACTION

     

    2.1 Representations
      and Warranties of Seller.
      Seller
      represents and warrants to Buyer that the statements contained in this
Section
      2.1
      are
      correct and complete on the Closing Date.

     

    (a) Power
      and Authority; Enforceability.
      Seller
      has the requisite competence and authority to execute and deliver this
      Agreement, each writing executed or delivered in connection with this Agreement
      and each amendment or supplement to any of the foregoing (including this
      Agreement, the “Transaction
      Documents”)
      to
      which Seller or any of Seller’s Affiliates (as defined below) is a party, and to
      perform and to consummate the transactions contemplated hereby and thereby
      (the
“Transactions”).
      Each
      Transaction Document to which a Seller Party is a party has been duly executed
      and delivered by such Seller Party, and is enforceable against such Seller
      Party
      in accordance with its terms except as such enforceability may be subject to
      the
      effects of bankruptcy, insolvency, moratorium or other Laws relating to or
      affecting the rights of creditors and remedies and general principles of equity,
      including principles of commercial reasonableness, good faith and fair dealing
      (the “Enforceability
      Exception”).
      An
“Affiliate”
of
      a
      specified person shall mean a person that directly, or indirectly through one
      or
      more intermediaries, controls or is controlled by, or is under common control
      with, the person specified. 

     

    (b) No
      Violation; Necessary Approvals. Except
      as
      listed on Schedule
      2.1,
      the
      execution and the delivery by Seller of this Agreement and the other Transaction
      Documents to which Seller is a party, the performance by Seller of Seller’s
      obligations hereunder and thereunder, and the consummation of the Transactions
      by Seller will not (i) with or without notice or lapse of time, constitute,
      create or result in a breach or violation of, default under, loss of any
      material benefit or right under or acceleration of performance of any obligation
      required under any (A) law (statutory, common or otherwise), constitution,
      ordinance, rule, regulation, executive order or other similar authority
      (“Law”)
      applicable to the Seller Parties enacted, adopted, promulgated or applied by
      any
      legislature, agency, bureau, branch, department, division, commission, court,
      tribunal or other similar recognized organization or body of any federal, state,
      county, municipal, local or foreign government or other similar recognized
      organization or body exercising similar powers or authority (a “Governmental
      Body”),
      (B)
      order, ruling, decision, award, judgment, injunction or other similar
      determination or finding by, before or under the supervision of any Governmental
      Body or arbitrator (an “Order”),
      (C)
      contract, agreement, arrangement, commitment, instrument, document or similar
      understanding (whether written or oral), including a lease, sublease and rights
      thereunder (“Contract”)
      or
      permit, license, certificate, waiver, notice and similar authorization
      (“Permit”)
      to
      which, in the case of (A), (B) or (C), any Seller Party is a party or by which
      it is bound or any of its assets are subject, or (D) any provision of the
      organizational documents of Company as in effect on the Closing Date; (ii)
      result in the imposition of any lien, claim or encumbrance (an “Encumbrance”)
      upon
      any assets (including the Shares) owned by Seller; (iii) require any consent
      under any Contract or organizational document to which any Seller Party is
      a
      party or by which it is bound or any of its assets are subject; (iv) require
      any
      Permit under any Law or Order other than notifications or other filings with
      state or federal regulatory agencies after the Closing that are necessary or
      convenient and do not require approval of the agency as a condition to the
      validity of the Transactions; or (v) trigger any rights of first refusal,
      preferential purchase or similar rights with respect to any of the
      Shares.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        2

        
          

        

      

      
         

      

    

    (c) Brokers’
      Fees.
      Seller
      has no liability or obligation to pay any compensation to any broker, finder
      or
      agent with respect to the Transactions for which Buyer or the Company could
      become directly or indirectly liable.

     

    (d) Shares;
      Seller Information.
      Seller
      holds of record and owns beneficially all of the capital stock of the Company,
      free and clear of any Encumbrances (other than any restrictions on transfer
      under the Securities Act of 1933 (the “Securities
      Act”)
      and
      state securities Laws). The
      signature page to this Agreement sets
      forth the address and state of residence of Seller as of the date hereof. Seller
      is not a party to any Contract (other than this Agreement) that could require
      Seller to sell, transfer, or otherwise dispose of any capital stock of the
      Company. Seller is not a party to any other Contract with respect to any capital
      stock of the Company.

     

    2.2 Representations
      and Warranties of Buyer.
      Buyer
      represents and warrants to the Seller Parties that the statements contained
      in
      this Section
      2.2
      are
      correct and complete on the Closing Date.

     

    (a) Organization
      of Buyer.
      Buyer is
      an entity duly organized, validly existing and in good standing under the Laws
      of the State of Delaware. Buyer has the relevant entity power and authority
      necessary to own or lease its properties and to carry on its businesses as
      currently conducted. There is no pending or (to Buyer’s knowledge) threatened
      action, appeal, petition, plea, charge, complaint, claim, suit, demand,
      litigation, arbitration, mediation, hearing, inquiry, investigation or similar
      event, occurrence, or proceeding (an “Action”)
      for
      the dissolution, liquidation, insolvency or rehabilitation of
      Buyer.

     

    (b) Power
      and Authority; Enforceability.
      Buyer
      has the relevant entity power and authority necessary to execute and deliver
      each Transaction Document to which it is a party and to perform and consummate
      the Transactions. Buyer has taken all action necessary to authorize its
      execution and delivery of each Transaction Document to which Buyer is a party,
      the performance of its obligations thereunder and its consummation of the
      Transactions. Each Transaction Document to which Buyer is a party has been
      duly
      authorized, executed and delivered by Buyer and is enforceable against Buyer
      in
      accordance with its terms, subject to the Enforceability Exception.

     

    (c) No
      Violation; Necessary Approvals.
      The
      execution and the delivery by Buyer of this Agreement and the other Transaction
      Documents to which Buyer is a party, the performance by Buyer of its obligations
      hereunder and thereunder and the consummation of the Transactions by Buyer
      will
      not (i) with or without notice or lapse of time, constitute, create or result
      in
      a breach or violation of, default under, loss of benefit or right under or
      acceleration of performance of any obligation required under any Law, Order,
      Contract or Permit to which Buyer is a party or by which it is bound or any
      of
      its assets are subject, or any provision of Buyer’s organizational documents as
      in effect on the Closing Date, (ii) require any consent under any Contract
      or organizational document to which Buyer is a party or by which it is bound;
      or
      (iii) require any Permit under any Law or Order other than (A) required filings,
      if any, with the Securities and Exchange Commission and (B) notifications or
      other filings with state or federal regulatory agencies after the Closing that
      are necessary or convenient and do not require approval of the agency as a
      condition to the validity of the Transactions

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        3

        
          

        

      

      
         

      

    

    (d) Brokers’
      Fees.
      Buyer
      has no liability or obligation to pay any compensation to any broker, finder
      or
      agent with respect to the Transactions. 

     

    (e) Litigation.
      There
      are no legal or similar proceedings pending, or, to the knowledge of Buyer,
      threatened against Buyer or to which Buyer is a party relating to this Agreement
      or the Transactions.

     

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES CONCERNING THE COMPANY

     

    Each
      Seller Party, jointly and severally, represents and warrants to Buyer that
      the
      statements contained in this ARTICLE
      3
      are
      correct and complete on the Closing Date, except as set forth in the schedules
      the Seller Parties delivered to Buyer on the Closing Date.

     

    3.1 Organization
      of Company.
      The
      Company (a) is a corporation duly organized, validly existing and in good
      standing under the Laws of the State of Delaware, (b) is duly qualified to
      do
      business as a foreign corporation and is in good standing under the Laws of
      each
      jurisdiction in which either the ownership or use of the properties owned or
      used by it, or the nature of the activities conducted by it, requires such
      qualification, (c) has the relevant entity power and authority necessary to
      own
      or lease its properties and to carry on its businesses as currently conducted
      and (d) is not in breach or violation of, or default under, any provision of
      its
      organizational documents. The Company has never approved or taken any action,
      nor is there any pending or (to any Seller Party’s knowledge) threatened Action,
      seeking or otherwise contemplating the Company’s dissolution, liquidation,
      insolvency or rehabilitation. The Company owns no interest in any subsidiary,
      consolidated or otherwise. 

     

    3.2 Power
      and Authority; Enforceability.
      The
      Company has the requisite power and authority necessary to execute and deliver
      each Transaction Document to which it is a party and to perform and consummate
      the Transactions. The Company has taken all action necessary to authorize the
      execution and delivery by it of each Transaction Document to which it is a
      party, the performance of its obligations thereunder, and the consummation
      by
      the Company of the Transactions. Each Transaction Document to which the Company
      is a party has been duly authorized, executed and delivered by the Company
      and
      is enforceable against the Company in accordance with its terms, subject to
      the
      Enforceability Exception.

     

    3.3 No
      Violation; Necessary Approvals.
      Except
      as listed on Schedule
      3.3,
      the
      execution and the delivery by Company of this Agreement and the other
      Transaction Documents to which the Company is a party, the performance by the
      Company of its obligations hereunder and thereunder and the consummation of
      the
      Transactions by the Company will not (a) with or without notice or lapse of
      time, constitute, create or result in a breach or violation of, default under,
      loss of benefit or right under or acceleration of performance of any obligation
      required under any Law, Order, Contract or Permit to which the Company is a
      party or by which it is bound or any of its assets are subject, or under any
      provision of the Company’s organizational documents as in effect on the Closing
      Date, (b) require any consent under any Contract or organizational document
      to
      which the Company is a party or by which it is bound or any of its assets are
      subject, (c) require any Permit under any Law or Order other than (i) required
      filings, if any, with the SEC and (ii) notifications or other filings with
      state
      or federal regulatory agencies after the Closing that are necessary or
      convenient and do not require approval of the agency as a condition to the
      validity of the Transactions, (d) trigger any rights of first refusal,
      preferential purchase or similar rights or (e) subject the Company or its assets
      to any Tax (as defined in Section 3.10).

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        4

        
          

        

      

      
         

      

    

    3.4 Capitalization.
      The
      Company’s authorized capital stock consists of One Thousand Five Hundred (1,500)
      shares of Common Stock, no par value per share, of which One Hundred (100)
      shares are issued and outstanding and no shares are held in treasury. All of
      the
      issued and outstanding Shares: (a) have been duly authorized and are validly
      issued, fully paid, and nonassessable, (b) were issued in compliance with all
      applicable state and federal securities Laws, (c) were not issued in breach
      or
      violation of, or did not cause as a result of the issuance thereof a default
      under, any Contract with or right granted to any other person and (d) are held
      of record and
      owned
      beneficially
      by the
      Seller. The Company has no outstanding options, warrants, exchangeable or
      convertible securities, subscription rights, exchange rights, statutory
      pre-emptive rights, preemptive rights granted under the Company’s organizational
      documents, stock appreciation rights, phantom stock, profit participation or
      similar rights, or any other right or instrument pursuant to which any person
      may be entitled to purchase any security of the Company, and has no obligation
      to issue any rights or instruments. There are no Contracts with respect to
      the
      voting or transfer of any of the Company’s capital stock. The Company is not
      obligated to redeem or otherwise acquire any of its outstanding capital
      stock.

     

    3.5 Records.
      The
      copies of the Company’s organizational documents that were provided to Buyer are
      accurate and complete and reflect all amendments made through the date hereof.
      The Company’s minute books and other records made available to Buyer for review
      were correct and complete as of the date of such review, no further entries
      have
      been made through the date of this Agreement, such minute books and records
      contain the true signatures of the persons purporting to have signed
      them.

     

    3.6 Financial
      Information. Set
      forth
      on Schedule
      3.6
      is the
financial
      information of
      the
      Company that was provided to the Buyer on December 19, 2007 (the
      “Financial
      Information”).
      The
      Financial Information presents fairly on a cash basis the Company’s receipts and
      disbursements for such periods and are consistent with the Company’s books and
      records.

     

    3.7 Subsequent
      Events.
      Except
      as set forth in Schedule
      3.7,
      since
      December 1, 2007, the Company has operated in the ordinary course of business
      consistent with past custom and practice (including with respect to quantity,
      quality and frequency) (“Ordinary
      Course of Business”),
      and
      there have been no events, series of events, or the lack of occurrence thereof
      that, singularly or in the aggregate, could reasonably be expected to have
      a
      material adverse effect, either individually or in the aggregate, on the
      Company’s business, operations, condition (financial or otherwise), properties,
      assets, liabilities, rights, obligations or prospects.

     

    3.8 No
      Undisclosed Liabilities.
      The
      Company does not have any liability or obligation (and, to each Seller Party’s
      knowledge, there is no basis for any present or future Action or Order against
      the Company giving rise to any material liability or obligation), except for
      (a)
      liabilities due
      to
      Buyer with respect to the purchase of inventory from Buyer and its Affiliates,
      (b) liabilities reflected
      or reserved against in the Financial Information and not paid or discharged
      prior to Closing and (c)
      liabilities not reflected or reserved against in the Financial Information
      which
      do not (i) result from or relate to any tort, infringement, breach, violation
      of
      or default under any Law, Order, Permit or Contract; (ii) arise out of any
      Action or Order or (iii) exceed $25,000 individually or in the aggregate. The
      Company has no liability or obligation to pay any compensation to any broker,
      finder or agent with respect to the Transactions for which Buyer could become
      directly or indirectly responsible.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        5

        
          

        

      

      
         

      

    

     

    3.9 Legal
      Compliance. 

     

    (a) The
      Company and each of its predecessors and Affiliates has complied with all
applicable
      Laws and Orders, and no Action is pending or, to each Seller Party’s knowledge,
      threatened against any of them alleging any failure to so comply. No material
      expenditures are, or based on any Law, Order or Permit will be, required of
      the
      Company or Buyer for the Company and its business and operations to remain
      in
      compliance with all Laws, Orders and Permits immediately following the Closing.
      “Affiliate”
with
      respect to a specified person means any other person who, directly or
      indirectly, through one or more intermediaries, controls or is controlled by,
      or
      is under common control with, the specified person.

     

    (b) None
      of
      the Seller Parties has ordered, referred, or requested, directly or indirectly,
      any items or services from the Company that are subject or entitled to
      reimbursement in whole or in part by, nor have any of the Seller Parties
      submitted any claims for reimbursement to, Medicare, Medicaid or any other
      state
      or federal healthcare reimbursement program. 

     

    (c) Without
      limiting the generality of the foregoing, the Company is in material compliance
      with all conditions and standards for participation in the Medicare, Medicaid
      and TriCare programs. The Company is not operating any aspect of its business
      under or subject to a plan of correction or corporate integrity agreement with
      a
      governmental agency or entity. Neither the Seller nor the Company, nor any
      employees of the Company, are excluded, suspended, debarred or otherwise
      ineligible from participation in Federal healthcare programs. Each Seller Party
      is in compliance, to the extent applicable, with all federal and state laws
      governing commercial or private third-party payor payments for healthcare
      services. 

     

    (d) The
      Company operates solely as a sales agent of U.S. medical devices manufactured
      by
      Buyer and its Affiliates. The Company has been and is in compliance with all
      applicable statutes, regulations and policies, if any, of the FDA, the Center
      for Medicare and Medicaid Services, state regulatory agencies and the TriCare
      program.

     

    (e) Without
      limiting the generality of the foregoing, no Seller Party has given or received
      in violation of any Law any payments or any other remuneration, either directly
      or indirectly, overtly or covertly, in cash or in kind, in return for receiving
      or making referrals for the furnishing or arranging for the furnishing of any
      item or service, or in return for purchasing, leasing, ordering, or arranging
      for or recommending purchasing, leasing, or ordering any good, facility, service
      or item in violation of 42 U.S.C. §1320a 7a and 1320a 7b, commonly known as the
“Anti Kickback Statute.” In addition, the Company has not accepted any referral
      for the provision of any designated health service, or submitted a claim for
      payment to Medicare or Medicaid for the provision of such services, in violation
      of 42 U.S.C. §1395nn, commonly known as the “Stark Act” or “Stark II.” No Seller
      Party has engaged in practices violating the Federal False Claims Act (31 U.S.C.
      §§3729-3730), HIPAA (defined below) fraud and abuse provisions (18 U.S.C.
§1347), and the Civil Monetary Penalties Act (42 U.S.C. §1320a-7a(a), including
      but not limited to, fraudulent coding practices and the presentation of
      otherwise fraudulent claims. There have been no compliance concerns found to
      be
      substantiated. 

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        6

        
          

        

      

      
         

      

    

    (f) Without
      limiting the generality of the foregoing, to the extent applicable to the
      Company, the Company, in its ordinary business operation, has complied and
      is
      currently in compliance with the requirements of the Health Insurance
      Portability and Accountability Act of 1996 (“HIPAA”)
      and
      its implementing regulations and with the requirements of all applicable state
      regulations implementing Title V of the Gramm-Leach-Bliley Act (“GLB”)
      that
      are applicable to the Company’s relationship with any Business Associate (as
      such term is defined in HIPAA and/or GLB). To the extent that the Company has
      access to Protected Health Information (as such term is defined in HIPAA and/or
      GLB, “PHI”),
      and
      except as necessary to complete the transactions contemplated by this Agreement
      or for internal management and compliance purposes, the Company has not and
      shall not use or further disclose PHI other than as permitted or required by
      HIPAA or as required by Law. 

     

    3.10 Taxes.
      The
      Company has no unpaid liability or obligation for any federal, state, local,
      or
      foreign income, gross receipts, license, payroll, employment, excise,
      occupation, customs, ad valorem, duties, franchise, withholding, social
      security, unemployment, real property, personal property, sales, use, transfer,
      registration, estimated or other tax of any kind whatsoever, including any
      interest, penalty or addition thereto, whether disputed or not (“Taxes”)
      as of
      the Closing Date. Except as set forth in Schedule
      3.10-1,
      the
      Company has filed when due all required Tax reports and returns in connection
      with and in respect of its business, assets and employees, and has timely paid
      and discharged all amounts shown as due thereon. Except as set forth in
Schedule
      3.10-2,
      all
      such Tax returns are true and complete in all material respects. The Seller
      Parties have made available to Buyer accurate and complete copies of all of
      the
      Company’s Tax reports and returns for all periods, except those periods for
      which returns are not yet due. To each Seller Party’s knowledge, there are no,
      and there is no basis for any, pending or threatened claims, assessments,
      notices, deficiencies or audits with respect to any Taxes owed or allegedly
      owed
      by the Company. The Company has not received any notice of any Tax deficiency
      outstanding, proposed or assessed against or allocable to it, and has not
      executed any waiver of any statute of limitations on the assessment or
      collection of any Tax or executed or filed with any Governmental Body any
      Contract now in effect extending the period for assessment or collection of
      any
      Taxes against it. Except for Permitted Encumbrances (as defined in Section
      3.11),
      there
      are no Encumbrances for Taxes upon, or pending or threatened against, the
      Company. The Company is not subject to any Tax allocation or sharing Contract.
      The Company (i) has not been a member of an “affiliated group” filing a
      consolidated federal income Tax return and (ii) has no liability or obligation
      for the Taxes of any other person under the Code or any regulations promulgated
      thereunder, as a transferee or successor, by Contract, or
      otherwise.

     

    3.11 Title
      to, Sufficiency and Condition of Assets. Set forth
      on
Schedule
      3.11 (a)
      are
      the
      assets and properties of
      the
      Company
      (the
“Company
      Assets”)
      which
      constitute and include all the assets necessary for the conduct of the Company’s
      business as currently conducted, (b) there are no material assets used in or
      relied upon for the conduct of the Company’s business other than the Company
      Assets, (c) the Company has (and subject to Buyer’s own actions after the
      Closing, Buyer will have) good, marketable and indefeasible title to, or a
      valid
      leasehold interest in, all of the Company Assets, in each case free and clear
      of
      any Encumbrances other than (i) statutory, mechanics’ or other liens that were
      incurred in Company’s Ordinary Course of Business, (ii) Encumbrances that
      are being contested in good faith and which have been disclosed to Buyer, (iii)
      liens for Taxes incurred but not yet due and (iv) Encumbrances set forth on
      Schedule
      3.11
      (collectively, “Permitted
      Encumbrances”)
      and
      (d) all tangible assets included as part of the Company Assets, whether owned
      or
      leased, are free from material defects (patent and latent), have been maintained
      in accordance with normal industry practice, are in good operating condition
      (subject to normal wear and tear) and are suitable for the purposes for which
      they are currently used and currently proposed to be used.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        7

        
          

        

      

      
         

      

    

    3.12 Real
      Property.
      Except
      as set forth on Schedule
      3.12,
      the
      Company does not own or lease any real property.

     

    3.13 Intellectual
      Property.
      As used
      in this Agreement, “Intellectual
      Property”
means
      any rights, licenses, charges, Encumbrances, equities and other claims that
      any
      person may have to claim ownership, authorship or invention of, to use, to
      object to or prevent the modification of or to withdraw from circulation or
      control the publication or distribution of, any: (a) copyrights in both
      published works and unpublished works, (b) fictitious business names, trading
      names, corporate names, registered and unregistered trademarks, service marks
      and applications, (c) any (i) patents and patent applications and (ii) business
      methods, inventions and discoveries that may be patentable, (d) computer
      software or middleware and (e) know-how, trade secrets, confidential
      information, customer lists, software (source code and object code), technical
      information, data, process technology, plans, drawings and blue prints. Except
      as set forth in Schedule
      3.13,
      the
      Company owns, or possesses legally enforceable rights to use, all Intellectual
      Property used in its business as currently, or as currently proposed to be,
      conducted by the Company. The Company’s use of the Intellectual Property in its
      business as currently conducted (and the operation of its business) does not,
      and the use of such Intellectual Property by the Company and its Affiliates
      after Closing (subject to Buyer’s own actions after the Closing) will not,
      infringe, violate or constitute misappropriation of any rights any other person
      owns or holds.

     

    3.14 Inventory.
      The
      Company’s sole inventory consists of finished goods purchased from Buyer
      pursuant to the terms of that certain Consulting, Services and Purchasing
      Agreement by and between Buyer and the Company dated November 1, 2006, as
      amended (the “CSP
      Agreement”).

     

    3.15 Contracts. Schedule
      3.15
      lists
      each Contract to which the Company is a party. The Company has delivered to
      Buyer a correct and complete copy of each written Contract (as amended to date)
      listed in Schedule
      3.15
      and a
      written summary setting forth the terms and conditions of each oral Contract
      referred to in Schedule
      3.15.
      Except
      as
      set forth on Schedule
      3.15,
      each
      such
      Contract is legal, valid and enforceable and will continue to be legal, valid
      and enforceable on identical terms following the consummation of the
      Transactions. Except
      as
      set forth in Schedule
      3.15,
      neither
      the
      Company nor, to each Seller Party’s knowledge, any of the counter-parties to any
      such Contract is or has been in (and no event has occurred that, with or without
      notice or lapse of time, would create or constitute a) breach or violation
      of,
      or default under, any of such Contract’s provisions, no event has occurred or
      likely to occur that, with or without notice or lapse of time, would give the
      Company or any other party to any Contract the right to either (i) declare
      a
      default or exercise any remedy under such Contract, (ii) accelerate the
      performance of, or payment under, such Contract or (iii) cancel, terminate
      or
      modify any such Contract. To each Seller Party’s knowledge, no party to any
      Contract has repudiated any provision of the Contract. Schedule
      3.15
      also
      denotes each such Contract to which Seller or any of its Affiliates is a
      party.

     

    3.16 Receivables.
      All of
      the Company’s receivables, including all Contracts in transit, manufacturers
      warranty receivables, notes receivable, accounts receivable, trade account
      receivables, and insurance proceeds receivable (“Receivables”)
      with
      respect to sales of Spine Products (****)
      as of
      December 26, 2007 are set forth on Schedule
      3.16.
      All of
      the Receivables as of the Closing Date are valid and enforceable, represent
      bona
      fide transactions, arose in the Company’s Ordinary Course of Business and are
      reflected on the Company’s books and records. Except as set forth on
Schedule
      3.16,
      all of
      the Receivables as of the Closing Date are good and collectible receivables,
      are
      current and will be collected in accordance with past practice without any
      set
      off, valid defense or counterclaims. No customer or supplier of the Company
      is
      entitled to any payment terms.

     

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      3.17 Litigation. Schedule
        3.17
        sets
        forth each instance in which the Company (a) is subject to any outstanding
        Order
        or (b) is a party to, the subject of or, to any Seller Party’s knowledge,
        threatened to be made a party to or the subject of, any action, appeal,
        petition, plea, charge, complaint, claim, suit, demand, litigation, arbitration,
        mediation, hearing, inquiry, investigation or similar event, occurrence,
        or
        proceeding. No Order or Action required to be set forth in Schedule
        3.17
        questions the validity or enforceability of any Transaction Document or any
        Transaction, or could result in any material adverse effect on the Company,
        and
        no Seller Party has any basis to believe that any such Action may be brought
        or
        threatened against the Company.

    

     

    3.18 Insurance. Schedule
      3.18
      contains
      accurate and complete (i) lists of all insurance policies currently carried
      by
      the Company, (ii) lists of all insurance loss runs or workers’ compensation
      claims received for the past three policy years, and (iii) copies of all
      insurance policies currently in effect. Such insurance policies evidence all
      of
      the insurance that the Company is required to carry pursuant to its Contracts
      and Law. Such insurance policies are currently in full force and effect and
      will
      remain in full force and effect through their current terms. No insurance that
      the Company has ever carried has been canceled nor has any such cancellation
      been, to any Seller Party’s knowledge, threatened. The Company has never been
      denied coverage nor has any such denial been, to any Seller Party’s knowledge,
      threatened.

     

    3.19 Intentionally
      Omitted.

     

    3.20 Employee
      Benefits. The
      Company does not maintain any non-qualified
      deferred compensation plan, qualified defined contribution retirement plan,
      qualified defined benefit retirement plan or other material fringe benefit
      plan
      or program or to which the Company contributes. 

     

    3.21 Intentionally
      Omitted.

     

    3.22 Permits. Except
      as
      set forth on Schedule
      3.22,
      the
      Company
      possesses all Permits required to be obtained for its businesses and operations.
      Schedule
      3.22
      sets
      forth a list of all such Permits. Except as set forth in Schedule
      3.22,
      with
      respect to each such Permit: (a) it is valid, subsisting and in full force
      and
      effect; (b) there are no violations of such Permit that would result in a
      termination of such Permit; (c) the Company has not received notice that such
      Permit will not be renewed; and (d) the Transactions will not adversely affect
      the validity of such Permit or cause a cancellation of or otherwise adversely
      affect such Permit. 

     

    3.23 Customers;
      Suppliers.
      There
      have been no customers, resellers, licensees and distributors of the Company
      that ordered goods and services from the Company with an aggregate value for
      each such customer of $50,000 or more during the twelve-month period ended
      November 30, 2007. The Company has not engaged in any “channel stuffing” or
      similar practices that could have the effect of accelerating revenue from a
      customer into a current period which will cause a significant reduction of
      revenue in a future period.  

     

    3.24 Accuracy
      of Information Furnished.
      No
      representation, statement or information contained in this Agreement, any of
      the
      Transaction Documents or any Contract or other document made available or
      furnished to Buyer or its representatives by any Seller Party is known to
      contain any untrue statement of a material fact or to omit any material fact
      necessary to make the information contained therein not misleading.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        9

        
          

        

      

      
         

      

    

     

    ARTICLE
      4

    COVENANTS

     

    4.1 General.
      If any
      time after the Closing any further action is necessary or desirable to
      effectuate the Transactions as contemplated by this Agreement, each Party will
      take such further action (including executing and delivering any further
      instruments and documents, obtaining any Permits and consents and providing
      any
      reasonably requested information) as any other Party may reasonably request,
      all
      at the requesting Party’s sole cost and expense (unless the requesting Party is
      entitled to indemnification therefor under ARTICLE
      5).
      

     

    4.2 Confidentiality.
      For a
      period of five years following the Closing Date (except with respect to the
      trade secrets of Company, for which the term of the covenant contained in this
      Section
      4.2
      shall be
      perpetual), Seller will, and will cause each of its respective Affiliates,
      directors, officers, employees, agents, representatives and similarly situated
      persons to (a) treat and hold as confidential, and not use or disclose, all
      of
      the information possessed by such person concerning the Company, its business,
      the negotiation or existence and terms of this Agreement and the business
      affairs of Buyer (“Confidential
      Information”),
      except for (i) disclosures to the person’s professional advisors, the actions
      for which the disclosing person will be responsible, (ii) disclosures required
      for such person to perform obligations it may have under this Agreement
or
      in
      enforcing its rights under this Agreement,
      and
      (iii) disclosures
      required by applicable law or order and information that is available to the
      public on the Closing Date or thereafter becomes available to the public other
      than as a result of a breach of this Section
      4.2,
      and
      (b)
      deliver promptly to Buyer or destroy, at Buyer’s request and option, all
      tangible embodiments (and all copies) of the Confidential Information which
      are
      in such person’s possession. If any person subject to these confidentiality
      provisions is ever requested or required (by oral or written question or request
      for information or documents in any Action) to disclose any Confidential
      Information, Seller will notify Buyer promptly of the request or requirement
      so
      that Buyer may seek an appropriate protective Order or waive compliance with
      this Section
      4.2.

     

    4.3 Restrictive
      Covenants.
      To
      assure that Buyer will realize the benefits of the Transactions, Seller agrees
      that it will not, and will ensure that each of its Affiliates does
      not:

     

    (a) From
      the
      Closing Date until five years after the Closing Date (the “Non-Compete
      Termination Date”),
      directly or indirectly, alone or as a partner, joint venturer, officer,
      director, member, employee, consultant, agent or independent contractor of,
      or
      lender to, any person or business, engage in activities similar to or
      competitive with the activities conducted by the Company anywhere
      in the United States;
      provided,
      however,
      that
      the passive ownership of less than one
      percent
      of the
      ownership interests of an entity having a class of securities that is traded
      on
      a national securities exchange or in the over-the-counter market is not a
      violation of this Section
      4.3(a).

     

    (b) From
      the
      Closing Date until the Non-Compete Termination Date, directly or indirectly
      (i)
      solicit any customers of Buyer or any of its Affiliates for the benefit of
      any
      business directly or indirectly in competition with the business of Buyer or
      any
      of its Affiliates or (ii) request, advise or induce any person who is a
      customer, employee, contractor, vendor or lessor of Buyer or any of its
      Affiliates to withdraw, curtail or cancel the relationship such person has
      with
      Buyer or its Affiliate.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        10

        
          

        

      

      
         

      

    

    (c) From
      the
      Closing Date until the Non-Compete Termination Date, directly or indirectly,
      for
      itself or on behalf of another, solicit for employment or engagement as an
      independent contractor, or for any other similar purpose, any person who was
      in
      the six-month period preceding the solicitation, or is at the time of the
      solicitation, an employee or independent contractor of Buyer or any of Buyer’s
      Affiliates,
      other
      than such person (i) whose employment or independent contractor relationship
      was
      terminated by Buyer or its Affiliate or (ii) who independently responded to
      a
      general solicitation for employment by such Seller or Seller
      Affiliate.

     

    Seller
      acknowledges that the restrictions in this Section
      4.3
      are
      reasonable in scope and duration and are necessary to protect Buyer after the
      Closing. Seller acknowledge that Seller’s breach of this Section
      4.3
      will
      cause irreparable damage to Buyer, and upon breach of any provision of this
      Section
      4.3,
      Buyer
      will be entitled to injunctive relief, specific performance or other equitable
      relief without bond or other security; provided,
      however,
      that
      the foregoing remedies will in no way limit any other remedies Buyer may
      have.

     

    4.4 Litigation
      Support.
      So long
      as any Party actively is contesting or defending against any Action in
      connection with (a) the Transactions or (b) 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
      the Company, each other Party will cooperate with such Party and such Party’s
      counsel in the contest or defense, make available their personnel, and provide
      such testimony and access to their books and records as will be necessary in
      connection with the contest or defense, at the sole cost and expense of the
      contesting or defending Party (unless the contesting or defending Party or
      one
      of its Affiliates is entitled to indemnification therefor under ARTICLE
      5).

     

    4.5 Post-Closing
      Cooperation. 

     

    (a)After
      the
      Closing, upon reasonable notice, Buyer shall furnish or cause to be furnished
      to
      Seller and his counsel, auditors and representatives, during normal business
      hours, such information and assistance relating to the Company’s business (to
      the extent within the control of Buyer) as is reasonably necessary
      for
      (i)
      financial reporting and accounting matters;
      (ii)
      filing of all Tax returns
      (including amended Tax Returns),
      and
      making any election related to Taxes, the preparation for, response to and
      defense of any audit by any taxing authority; (iii)
      the
      prosecution or defense of any proceeding; and (iv)
      the
      conduct of any audit or other proceeding involving the Company’s business on or
      prior to the Closing Date.

     

    (b)Seller
      shall prepare or cause to be prepared and file or cause to be filed all income
      tax returns of Company that are filed after the Closing Date with respect to
      all
      taxable periods ending on or before the Closing Date.

     

    (c) Buyer
      shall provide such financial information that is necessary and appropriate
      to
      enable Seller Parties to prepare and file their local, state and federal income
      Tax returns for the Tax year that includes the Closing Date.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        11

        
          

        

      

      
         

      

    

    (d) Buyer
      shall retain all records, schedules, work papers and all other documents
      relating to the Company’s business
      in a
      manner consistent with Buyer’s document retention policy.

     

    (e) Buyer
      shall pay to Seller the service fee
      earned
      by Company from December 1, 2007 through the Closing Date under the CSP
      Agreement,
      which
      service fee shall be payable by Buyer to Seller on or before January 31,
      2008.
      

     

    (f) Following
      the Closing Date, Buyer shall cause the Company to remit to Seller any payments
      received by Company with respect to Seller’s Receivables within 10 business days
      of the Company’s receipt thereof

     

    (g) Following
      the Closing Date, Seller shall use his reasonable best efforts to assist the
      Company in obtaining the written consent of the Landlord (defined below) to
      the
      sale of the Shares by Seller to Buyer, as required by that
      certain **** lease agreement dated June 8, 2007 (the “Lease”)
      by and
      between the Company and **** (the “Landlord”).
      

     

    ARTICLE
      5

    INDEMNIFICATION

     

    5.1 Survival
      of Representations, Warranties and Covenants.
      Each
      representation and warranty of the Parties contained herein and any certificate
      related to such representations and warranties will survive the Closing and
      continue in full force and effect until the applicable statute of limitations
      expires, except the representations and warranties set forth in Sections
      2.1,
      2.2(a),
      2.2(b),
      2.2(c),
      3.1,
      3.2
      and
3.4,
      which
      will survive the Closing and will continue in full force and effect forever.
      Each covenant and obligation in this Agreement, and any certificate or document
      delivered pursuant to this Agreement, will survive the Closing forever. Unless
      expressly waived pursuant to this Agreement, no representation, warranty,
      covenant, right or remedy available to any person in connection with the
      Transactions will be deemed waived by any action or inaction of that person
      (including consummation of the Transactions, any inspection or investigation,
      or
      the awareness of any fact or matter) at any time, whether before, on or after
      the Closing.

     

    5.2 Indemnification
      Provisions for Buyer’s Benefit.“Damages”
means
      all losses (including diminution in value), damages and other costs and expenses
      of any kind or nature whatsoever, whether known or unknown, contingent or
      vested, matured or unmatured, and whether or not resulting from third-party
      claims, including costs (including reasonable fees and expenses of attorneys,
      other professional advisors and expert witnesses and the allocable portion
      of
      the relevant person’s internal costs) of investigation, preparation and
      litigation in connection with any Action or threatened Action. The Seller
      Parties, jointly and severally, will indemnify and hold Buyer and its
      Affiliates, and their respective officers, directors, managers, employees,
      agents, representatives, controlling persons, stockholders and similarly
      situated persons (the “Buyer
      Indemnified Parties”),
      harmless from and pay any and all Damages directly or indirectly based upon,
      resulting from, relating to, arising out of or attributable to any of the
      following: (a) any breach of any representation or warranty any Seller Party
      has
      made in this Agreement; and (b) any breach, violation or default by any Seller
      Party of any covenant, agreement or obligation of a Seller Party in this
      Agreement. 

     

    5.3 Indemnification
      Provisions for Seller Parties’ Benefit.
      Buyer
      will indemnify and hold each Seller Party and its Affiliates, and their
      respective officers, directors, managers, employees, agents, representatives,
      controlling persons, stockholders and similarly situated persons (the
“Seller
      Indemnified Parties”
and
      together with the Buyer Indemnified Parties, the “Indemnified
      Parties”),
      harmless from and pay any and all Damages directly or indirectly, based upon,
      resulting from, relating to, arising out of or attributable to any of the
      following: (a) any breach of any representation or warranty Buyer has made
      in
      this Agreement; and (b) any breach, violation or default by Buyer of any
      covenant, agreement or obligation of Buyer in this Agreement.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        12

        
          

        

      

      
         

      

    

    5.4 Indemnification
      Claim Procedures.

     

    (a) If
      any
      Action
      is
      commenced or
      threatened
      that may
      give rise to a claim for indemnification (an “Indemnification
      Claim”)
      by a
      Seller Indemnified Party, then such Seller Indemnified Party will promptly
      give
      notice to Buyer. Failure to notify Buyer will not relieve Buyer of any liability
      that it may have to the Seller Indemnified Party, except to the extent the
      defense of such Action
      is
      materially and irrevocably prejudiced by the Seller Indemnified Party’s failure
      to give such notice. Buyer may elect, its
      sole
      cost and expense,
      to
      assume and thereafter conduct the defense of the Indemnification Claim with
      counsel of Buyer’s choice reasonably satisfactory to the Seller Indemnified
      Party; provided,
      however,
      that
      Buyer shall
      have acknowledged in writing Buyer’s unqualified obligation to indemnify the
      Seller Indemnified Parties as provided hereunder; and
      provided, further
      than
      Buyer will
      not
      approve of the entry of any judgment or enter into any settlement or
      other
      resolution with
      respect to the Indemnification Claim without the Seller Indemnified Parties’ prior
      written approval (which may
      not be
      withheld unreasonably). Until Buyer assumes the defense of the Indemnification
      Claim, the Seller Indemnified Party may defend,
      negotiate, settle or otherwise deal with
      the
      Indemnification Claim in any manner the Seller Indemnified Party
      reasonably deems appropriate.
      If the
      Buyer shall assume the defense of any Indemnification Claim, a Seller
      Indemnified Party may participate, at his or its own expense, in the defense
      of
      such Indemnification Claim; provided, however, that such Seller Indemnified
      Party shall be entitled to participate in any such defense with separate counsel
      at the expense of the Buyer if (i) so requested by the Buyer to participate
      or
      (ii) in the reasonable opinion of counsel to the Buyer, a conflict or potential
      conflict exists between the Seller Indemnified Party and the Buyer that would
      make such separate representation advisable; and
      provided, further,
      that
      the Buyer shall not be required to pay for more than one such counsel (plus
      any
      appropriate local counsel) for all Seller Indemnified Parties in connection
      with
      any such Indemnification Claim. The Parties hereto agree to provide reasonable
      access to the other to such documents and information as may be reasonably
      requested in connection with the defense, negotiation or settlement of any
      such
      Indemnification Claim. Notwithstanding anything contained in this Section 5.4
      to
      the contrary, the Buyer shall not without the written consent of the Seller
      Indemnified Party, settle or compromise any Indemnification Claim or permit
      a
      default or consent to entry of any judgment unless the claimant or claimants
      and
      Buyer provide to the Seller Indemnified Party an unqualified release from all
      liability in respect of such Indemnification Claim. After any final decision,
      judgment or award shall have been rendered by the applicable Governmental Body
      of competent jurisdiction and the expiration of the time in which to appeal
      therefrom, or a settlement shall have been consummated, or the Seller
      Indemnified Party and Buyer shall have reached an agreement, in each case with
      respect to an Indemnification Claim hereunder, the Seller Indemnified Party
      shall forward to the Buyer notice of any sums due and owing by the Buyer
      pursuant to this Section
      5.4
      with
      respect to such matter and Buyer shall pay all of such sums so due and owing
      to
      the Seller Indemnified Party in accordance with Section
      5.4(a)
      by wire
      transfer of immediately available funds within five (5) business days after
      the
      date of such notice.
      If the
      Seller Indemnified Party gives Buyer notice of an Indemnification Claim and
      Buyer does not, within ten (10) days after such notice is given, give notice
      to
      the Seller Indemnified Party of its election to assume the defense of such
      Indemnification Claim and thereafter promptly assume such defense, then Buyer
      will be bound by any judicial determination made with respect to such
      Indemnification Claim or any compromise or settlement of such Indemnification
      Claim effected by the Seller Indemnified Party.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        13

        
          

        

      

      
         

      

    

     

    (b) If
      any
      Action
      is
      commenced or
      threatened
      that may
      give rise to an Indemnification
      Claim
      by a
      Buyer Indemnified Party, then such Buyer Indemnified Party will promptly give
      notice to
      Seller
      Parties. Failure to notify
      Seller
      Parties will not relieve Seller
      Parties of any liability that it may have to the Buyer
      Indemnified Party, except to the extent the defense of such Action
      is
      materially and irrevocably prejudiced by the
      Buyer
      Indemnified Party’s
      failure to give such notice. Seller may elect,
      at
his
      sole
      cost and expense, to assume and thereafter conduct
      the
      defense of the Indemnification Claim with counsel of Seller’s choice reasonably
      satisfactory to the Buyer Indemnified Party;
      provided,
      however,
      that
      Seller shall have acknowledged in writing Seller’s unqualified obligation to
      indemnify the Buyer Indemnified Parties as provided hereunder; and
      provided, further
      than
      Seller will not approve of the entry of any judgment or enter into any
      settlement or other resolution with respect to the Indemnification Claim without
      the Buyer Indemnified Parties’ prior written approval (which must not be
      withheld unreasonably). Until Seller assumes the defense of the Indemnification
      Claim, the
      Buyer
      Indemnified Party may defend,
      negotiate, settle or otherwise deal with
      the
      Indemnification Claim in any manner the
      Buyer
      Indemnified Party reasonably deems
      appropriate. If the Seller shall assume the defense of any Indemnification
      Claim, a Buyer Indemnified Party may participate, at his or its own expense,
      in
      the defense of such Indemnification Claim; provided, however, that such Buyer
      Indemnified Party shall be entitled to participate in any such defense with
      separate counsel at the expense of the Seller if (i) so requested by the Seller
      to participate or (ii) in the reasonable opinion of counsel to the Seller,
      a
      conflict or potential conflict exists between the Buyer Indemnified Party and
      the Seller that would make such separate representation advisable; and
      provided, further,
      that
      the Seller shall not be required to pay for more than one such counsel (plus
      any
      appropriate local counsel) for all Buyer Indemnified Parties in connection
      with
      any such Indemnification Claim. The Parties hereto agree to provide reasonable
      access to the other to such documents and information as may be reasonably
      requested in connection with the defense, negotiation or settlement of any
      such
      Indemnification Claim. Notwithstanding anything contained in this Section
      5.4
      to the
      contrary, the Seller shall not without the written consent of the Buyer
      Indemnified Party, settle or compromise any Indemnification Claim or permit
      a
      default or consent to entry of any judgment unless the claimant or claimants
      and
      Seller provide to the Buyer Indemnified Party an unqualified release from all
      liability in respect of such Indemnification Claim. After any final decision,
      judgment or award shall have been rendered by the applicable Governmental Body
      of competent jurisdiction and the expiration of the time in which to appeal
      therefrom, or a settlement shall have been consummated, or the Buyer Indemnified
      Party and Seller shall have reached an agreement, in each case with respect
      to
      an Indemnification Claim hereunder, the Buyer Indemnified Party shall forward
      to
      the Seller notice of any sums due and owing by the Seller pursuant to this
      Section 5.4 with respect to such matter and Seller shall pay all of such sums
      so
      due and owing to the Buyer Indemnified Party in accordance with Section
      5.4(b)
      by wire
      transfer of immediately available funds within five (5) business days after
      the
      date of such notice. If the Buyer Indemnified Party gives Seller notice of
      an
      Indemnification Claim and Seller does not, within ten (10) days after such
      notice is given, give notice to the Buyer Indemnified Party of its election
      to
      assume the defense of such Indemnification Claim and thereafter promptly assume
      such defense, then Seller will
      be
      bound by any judicial determination made with respect to such Indemnification
      Claim or any compromise or settlement of such Indemnification Claim effected
      by
      the Buyer Indemnified Party.

     

    (c) A
      claim
      for any matter not involving a third party may be asserted by notice to the
      Party from whom indemnification is sought.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        14

        
          

        

      

      
         

      

    

     

    5.5 Limitations
      on Indemnification Liability.
      Any
      claims an Indemnified Party makes under this ARTICLE
      5
      will be
      limited as follows: Buyer, on the one hand, and the Seller Parties on the other,
      will have no liability for money Damages related to breaches of the
      representations and warranties in Section
      2.2
      (with
      respect to Buyer) or Section
      2.1
      and
ARTICLE
      3
      (with
      respect to the Seller Parties), unless and until the aggregate Damages related
      thereto exceed $****;
      provided,
      however,
      that,
once
      aggregate Damages exceed such amount, the applicable Indemnified Parties will
      be
      entitled to recover all amounts to which they are entitled in excess of the
      amount set forth above in this Section 5.5.
      Notwithstanding
      anything contained in this Agreement to the contrary, including, without
      limitation this ARTICLE
      5,
      any
      payment that Seller is obligated to make to a Buyer Indemnified Party pursuant
      to the provisions of this ARTICLE
      5
      or
      otherwise and any personal liability of Seller (in each case except to the
      extent arising from breaches
      of Sections
      2.1,
      3.1,
      3.2,
      3.4,
      4.1,
      4.2,
      and
4.4
      or
      instances of fraud by any Seller Party)
      shall be
      paid and satisfied solely out of the Escrow Fund (as defined in Section
      5.6)
      or
      offset by Buyer against any payments that might be due to Seller under
Section
      6.1.
      

     

    5.6 Escrow.
      Immediately
      after Closing, $**** (the “Escrow
      Amount”)
      will
      be placed in an escrow fund (the “Escrow
      Fund”)
      for a
      term of twenty-four (24) months pursuant to an escrow agreement (the
“Escrow
      Agreement”)
      by and
      among Buyer, Seller and Well Fargo Bank, N.A. (the
      “Escrow
      Agent”)
      dated
      as of the date of this Agreement and entered into in connection herewith. The
      Escrow Fund will be available to compensate the Buyer Indemnified Parties for
      Damages. The Escrow Fund will be paid out in accordance with the terms of the
      Escrow Agreement. An Indemnified Buyer Party may not receive any assets from
      the
      Escrow Fund unless and until an Officer’s Certificates (as defined in the Escrow
      Agreement) identifying the relevant Damages have been delivered to the Escrow
      Agent as provided in the Escrow Agreement. Neither the exercise of nor failure
      to exercise its rights under this Section
      5.6
      will
      constitute an election of remedies or limit Buyer in any matter in the
      enforcement of any other remedies available to it.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        15

        
          

        

      

      
         

      

    

     

    ARTICLE
      6

    EARN
      OUT

     

    6.1 Earn
      Out Payments.

     

    (a) Subject
      to the terms of this ‎ARTICLE
      6,
      Buyer
      will pay to Seller, as additional consideration for the Shares, the amounts
      set
      forth in this Section
      6.1.
      All
      payments to be made pursuant to this Section
      6.1
      will be
      paid in
      cash
      by wire
      transfer of immediately available funds. All calculations required by this
      Section
      6.1
      will be
      made by Company and delivered to Seller. At the time of each such payment,
      Buyer
      shall provide a computation of the amounts payable under this Article
      6,
      and
      Seller will have the right to communicate with, and to review the work papers,
      schedules, memoranda, and other documents Buyer prepared or reviewed in
      determining any of the amounts payable under this Section
      6.1.
      

     

    (b) In
      the
      event that, within one year of the Closing Date, any **** of the private health
      care insurers listed on Exhibit
      A
      attached
      hereto agree in writing to make routine payments to Company or its Affiliates
      for any surgical procedures involving the use of any Spine Products (as defined
      below) in the United States, except with respect to Medicare and Medicaid and
      with respect to No Carve Out Cases (as defined in the CSP Agreement) and,
      pursuant to such written agreement, the amount to be reimbursed for such
      Coblation device exceeds in each case at least $****, then, on the first
      anniversary of the Closing Date, Buyer shall pay to Seller an amount equal
      to
      $****. Buyer shall promptly notify Seller if any health care insurers listed
      on
      Exhibit A agree to make such payments.

     

    (c) In
      the
      event that no Seller Party has breached its obligations under Section
      4.3
      of this
      Agreement prior to then Non-Compete Termination Date, then, on the Non-Compete
      Termination Date, Buyer shall pay to Seller an amount equal to
      $****.

     

    (d) On
      the
      second anniversary of the Closing Date, Buyer shall pay to Seller an amount
      equal to the sum of: (i) ****% of the total dollar amount of the Public Health
      Insurance Receivables of the Company on the Closing Date that are collected
      by
      Buyer during the one-year period following the Closing Date, and (ii) ****%
      of
      the total dollar amount of the Public Health Insurance Receivables arising
      in
      the United States after the Closing Date and collected by Company or its
      Affiliates during the two-year period following the Closing Date under the
      “DiscoCare” tradename. For the purposes of this Agreement, “Public
      Health Insurance Receivables”
means
      all Spine Product Receivables from sales in the United States from all payors,
      excluding ****, and “Spine
      Product(s)”
means
      those products of the Company listed on Exhibit
      B
      attached
      hereto, including any further replacements for such products.

     

    (e) In
      the
      event that Public Health Insurance Net Revenue in the United States of the
      Company associated with the Spine Products (the “Revenue
      Subset”)
      exceeds $**** million (the “Threshold”)
      in any
      fiscal year of Company ending prior to January 1, 2012 (the “Initial
      Threshold Year”),
      then,
      within 45 days after the end of the Initial Threshold Year, Company shall pay
      to
      Seller an amount equal to (i) ****% times the amount that the Revenue Subset
      for
      the Initial Threshold Year exceeds the Threshold, up to a maximum of ****%
      of
      the Threshold, plus (ii) ****% times the amount that the Revenue Subset exceeds
      ****% of the Threshold. For the purposes of this Agreement, “Public
      Health Insurance”
means
      all payors, excluding ****, and “Net
      Revenue”
means
      such amount determined in accordance with GAAP as invoiced amount minus charges
      for handling, freight, taxes, C.O.D. charges, insurance, tariffs and duties,
      cash and trade discounts, rebates, amounts allowed or credited for returns,
      uncollected or uncollectable amounts, services, and the like.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        16

        
          

        

      

      
         

      

    

     

    (f) In
      the
      event that during Company’s fiscal year immediately following the Initial
      Threshold Year (the “Second
      Threshold Year”),
      if
      any, Buyer will pay to Seller, within 45 days of the end of the Second Threshold
      Year, an amount equal to: (i) ****% times the amount that the Revenue Subset
      for
      the Second Threshold Year exceeds the lesser of $**** million or the Revenue
      Subset during the Initial Threshold Year (the “Second
      Threshold”),
      up to
      a maximum of ****% of the Second Threshold, plus (ii) ****% times the amount
      that the Revenue Subset for the Section Threshold Year exceeds ****% of the
      Second Threshold. 

     

    (g) In
      the
      event that during Company’s fiscal year immediately following the Second
      Threshold Year (the “Third
      Threshold Year”),
      if
      any, Company will pay to Seller, within 45 days of the end of the Third
      Threshold Year, an amount equal to: (i) ****% times the amount that the Revenue
      Subset for the Third Threshold Year exceeds the lesser of $**** million or
      the
      Revenue Subset during the Second Threshold Year (the “Third
      Threshold”),
      up to
      a maximum of ****% of the Third Threshold, plus (ii) ****% times the amount
      that
      the Revenue Subset for the Third Threshold Year exceeds ****% of the Third
      Threshold.

     

    6.2 Resolution
      of Conflicts. If
      Buyer
      and Seller are unable to agree on an amount to be paid pursuant to this
Article
      6,
      then
      (A) for twenty (20) days after the date Buyer receives a letter from Seller
      detailing its objections to Company’s calculations of such amount, Seller and
      Buyer will use their reasonable good-faith efforts to agree on such calculation,
      and (b) lacking such agreement, the matter will be referred to a mutually
      acceptable independent accounting firm, which will determine the correct amount
      within sixty (60) days of such referral, which determination will be final
      and
      binding on the Parties for all purposes

     

    6.3 Offset. Buyer,
      acting in good faith, will have the option of setting off all or any part of
      any
      Damages a Buyer Indemnified Party suffers by notifying Seller that Buyer is
      reducing the amount of any payment due to Seller under Section
      6.1
      by the
      amount of such Damages. 

     

    ARTICLE
      7

    MISCELLANEOUS

     

    7.1 Entire
      Agreement.
      This
      Agreement, together with the other Transaction Documents and all schedules,
      exhibits, annexes or other attachments hereto or thereto, and the certificates,
      documents, instruments and writings that are delivered pursuant hereto or
      thereto, constitutes the entire agreement and understanding of the Parties
      in
      respect of the subject matter hereof and supersedes all prior understandings,
      agreements or representations by or among the Parties, written or oral, to
      the
      extent they relate in any way to the subject matter hereof. Except as provided
      in ARTICLE
      5,
      there
      are no third party beneficiaries having rights under or with respect to this
      Agreement.

     

    7.2 Assignment;
      Binding Effect.
      No Party
      other than Buyer may assign either this Agreement or any of its rights,
      interests or obligations hereunder without the prior written approval of the
      other Parties, and any such assignment by a Party without prior written approval
      of the other Parties will be deemed invalid and not binding on such other
      Parties. All of the terms, agreements, covenants, representations, warranties
      and conditions of this Agreement are binding upon, inure to the benefit of
      and
      are enforceable by, the Parties and their respective successors and permitted
      assigns.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        17

        
          

        

      

      
         

      

    

    7.3 Notices.
      All
      notices, requests and other communications provided for or permitted to be
      given
      under this Agreement must be in writing and must be given by personal delivery,
      by certified or registered United States mail (postage prepaid, return receipt
      requested), by a nationally recognized overnight delivery service for next
      day
      delivery, or by facsimile transmission, to the intended recipient at the address
      set forth for the recipient on the signature page (or to such other address
      as
      any Party may give in a notice given in accordance with the provisions hereof).
      All notices, requests or other communications will be effective and deemed
      given
      only as follows: (i) if given by personal delivery, upon such personal delivery,
      (ii) if sent by certified or registered mail, on the fifth business day after
      being deposited in the United States mail, (iii) if sent for next day delivery
      by overnight delivery service, on the date of delivery as confirmed by written
      confirmation of delivery or (iv) if sent by facsimile, upon the transmitter’s
      confirmation of receipt of such facsimile transmission, except that if such
      confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a
      business day, or is received on a day that is not a business day, then such
      notice, request or communication will not be deemed effective or given until
      the
      next succeeding business day. Notices, requests and other communications sent
      in
      any other manner, including by electronic mail, will not be
      effective.

     

    7.4 Specific
      Performance; Remedies.
      Each
      Party acknowledges and agrees that the other Parties would be damaged
      irreparably if any provision of this Agreement were not performed in accordance
      with its specific terms or were otherwise breached. Accordingly, the Parties
      will be entitled to an injunction or injunctions to prevent breaches of the
      provisions of this Agreement and to enforce specifically this Agreement and
      its
      provisions in any action or proceeding instituted in any
      state
      or federal court sitting in Travis County, Texas having
      jurisdiction over the Parties and the matter, in addition to any other remedy
      to
      which they may be entitled, at law or in equity. Except as expressly provided
      herein, the rights, obligations and remedies created by this Agreement are
      cumulative and in addition to any other rights, obligations or remedies
      otherwise available at law or in equity. Nothing herein will be considered
      an
      election of remedies.

     

    7.5 Headings.
      The
      article and section headings contained in this Agreement are inserted for
      convenience only and will not affect in any way the meaning or interpretation
      of
      this Agreement.

     

    7.6 Governing
      Law.
      This
      Agreement will be governed by and construed in accordance with the laws of
      the
      State of Texas, without giving effect to
      any
      choice of law principles.

     

    7.7 Resolution
      of Conflicts and Arbitration.

     

    (a)Except
      as
      otherwise provided herein, all disputes arising under this Agreement
      (“Arbitration
      Disputes”)
      will
      be resolved as follows: first, senior management of Buyer and Seller will meet
      to attempt to resolve such Arbitration Dispute. If the Arbitration Dispute
      cannot be resolved by agreement of the Parties, any Party may at anytime make
      a
      written demand for binding arbitration of the Arbitration Dispute in accordance
      with this Section
      7.7;
      provided that the foregoing will not preclude equitable or other judicial relief
      to enforce the provisions hereof or to preserve the status quo pending
      resolution of Arbitration Disputes; and provided further and subject to
Section
      7.7
      that
      resolution of Arbitration Disputes with respect to claims by third Persons
      will
      be deferred until any judicial proceedings with respect thereto are concluded.
      All Arbitration Disputes shall be settled by arbitration conducted by one
      arbitrator. Buyer and Seller shall agree on the arbitrator, provided that if
      Buyer and Seller cannot agree on such arbitrator, either Buyer or Seller can
      request that Judicial Arbitration and Mediation Services (“JAMS”)
      select
      the arbitrator. The arbitrator shall set a limited time period and establish
      procedures designed to reduce the cost and time for discovery while allowing
      the
      parties an opportunity, adequate in the sole judgment of the arbitrator, to
      discover relevant information from the opposing parties about the subject matter
      of the dispute. The arbitrator shall rule upon motions to compel or limit
      discovery and shall have the authority to impose sanctions, including attorneys’
fees and costs, to the same extent as a court of competent law or equity, should
      the arbitrator determine that discovery was sought without substantial
      justification or that discovery was refused or objected to without substantial
      justification. The decision of the arbitrator shall be written, shall be in
      accordance with applicable law and with this Agreement, and shall be supported
      by written findings of fact and conclusion of law which shall set forth the
      basis for the decision of the arbitrator. The decision of the arbitrator as
      to
      the validity and amount of any Damages shall be binding and conclusive upon
      the
      parties to this Agreement, and the Escrow Agent and the parties shall be
      entitled to act in accordance with such decision and the Escrow Agent shall
      be
      entitled to make or withhold payments out of the Escrow Fund in accordance
      therewith.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        18

        
          

        

      

      
         

      

    

     

    (b)Judgment
      upon any award rendered by the arbitrator may be entered in any court having
      jurisdiction. Any such arbitration shall be held in Travis County, Texas under
      the commercial rules then in effect of JAMS. The non-prevailing party to an
      arbitration shall pay its own expenses, the fees of the arbitrator, any
      administrative fee of JAMS, and the expenses, including attorneys’ fees and
      costs, reasonably incurred by the other party to the arbitration. For purposes
      of this Section
      7.7,
      the
      party seeking indemnification shall be deemed to be the non-prevailing party
      unless the arbitrator awards the party seeking indemnification more than 50%
      of
      the amount in dispute, plus any amounts not in dispute; otherwise, the person
      against whom indemnification is sought shall be deemed to be the non-prevailing
      party.

     

    7.8 Amendment;
      Extensions; Waivers.
      No
      amendment, modification, waiver, replacement, termination or cancellation of
      any
      provision of this Agreement will be valid, unless the same is in writing and
      signed by all of the Parties. Each waiver of a right hereunder does not extend
      beyond the specific event or circumstance giving rise to the right. No waiver
      by
      any Party of any default, misrepresentation or breach of warranty or covenant
      hereunder, whether intentional or not, may 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 because of any prior or
      subsequent such occurrence. Neither the failure nor any delay on the part of
      any
      Party to exercise any right or remedy under this Agreement will operate as
      a
      waiver thereof, nor does any single or partial exercise of any right or remedy
      preclude any other or further exercise of the same or of any other right or
      remedy.

     

    7.9 Severability.
      The
      provisions of this Agreement will be deemed severable and the invalidity or
      unenforceability of any provision will not affect the validity or enforceability
      of the other provisions hereof; provided,
      however,
      that if
      any provision of this Agreement, as applied to any Party or to any circumstance,
      is judicially determined not to be enforceable in accordance with its terms,
      the
      Parties agree that the court judicially making such determination may modify
      the
      provision in a manner consistent with its objectives such that it is
      enforceable, and/or to delete specific words or phrases, and in its modified
      form, such provision will then be enforceable and will be enforced.

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        19

        
          

        

      

      
         

      

    

     

    7.10 Expenses.
      Except
      as otherwise expressly provided in this Agreement, each Party will bear its
      own
      costs and expenses incurred in connection with the preparation, execution and
      performance of this Agreement and the Transactions, including all fees and
      expenses of agents, representatives, financial advisors, legal counsel and
      accountants.

     

    7.11 Counterparts;
      Effectiveness.
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed an original but all of which together will constitute one and the same
      instrument. This Agreement will become effective when one or more counterparts
      have been signed by each Party and delivered to the other Parties. For all
      purposes of this Agreement, a facsimile signature shall be deemed an original
      signature.

     

    7.12 Construction.
      This
      Agreement has been freely and fairly negotiated among the Parties. If an
      ambiguity or question of intent or interpretation arises, this Agreement will
      be
      construed as if drafted jointly by the Parties and no presumption or burden
      of
      proof will arise favoring or disfavoring any Party because of the authorship
      of
      any provision of this Agreement. Any reference to any law will be deemed to
      refer to such law as
      amended
      and all
      rules and regulations promulgated thereunder, unless the context requires
      otherwise. The words “include,” “includes,” and “including” will be deemed to be
      followed by “without limitation.” The word “person” includes individuals,
      entities and Governmental Bodies. Pronouns in masculine, feminine and neuter
      genders will be construed to include any other gender, and words in the singular
      form will be construed to include the plural and vice versa, unless the context
      otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,”
“hereunder,” and words of similar import refer to this Agreement as a whole and
      not to any particular subdivision unless expressly so limited. The Parties
      intend that each representation, warranty and covenant contained herein will
      have independent significance. If any 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) which the Party has not
      breached will not detract from or mitigate the fact that the Party is in breach
      of the first representation, warranty or covenant.

     

    7.13 Schedules.
      The
      disclosures in the schedules to this Agreement (the “Schedules”),
      and
      those in any supplement thereto, relate only to the representations and
      warranties in the section or paragraph of the Agreement to which they expressly
      relate and not to any other representation or warranty in this Agreement. If
      there is any inconsistency between the statements in the body of this Agreement
      and those in the Schedules (other than an exception expressly set forth in
      the
      Schedules with respect to a specifically identified representation or warranty),
      the statements in the body of this Agreement will control. Nothing in the
      Schedules will be deemed adequate to disclose an exception to a representation
      or warranty made herein, unless the Schedules identify the exception with
      reasonable particularity and describe the relevant facts in reasonable detail.
      The mere listing (or inclusion of a copy) of a document or other item in a
      Schedule will not be deemed adequate to disclose an exception to a
      representation or warranty made in this Agreement (unless the representation
      or
      warranty pertains to the existence of the document or other item
      itself).

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
        20

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE

    TO

    STOCK
      PURCHASE AGREEMENT

     

    IN
      WITNESS WHEREOF,
      the
      Parties have caused this Agreement to be executed as of the date stated in
      the
      introductory paragraph of this Agreement.

     

    

      
        	 	
                BUYER:

              	 
	 	 	 
	 	
                ARTHROCARE
                  CORPORATION

              	 
	 	 	 
	 	
                By:
                  /s/
                  John T. Raffle

              	 
	 	Name: John
                T.
                Raffle	 
	 	
                Title:
                  Senior
                  Vice President, Strategic Business Units

              	 
	 	 	 
	 	
                Address:   Building
                  Two

              	
                 

              
	 	       7500
                Rialto
                Boulevard, Suite 100	
                 

              
	 	       Austin
                TX
                78735	
                 

              
	 	 	 
	 	 	 
	 	 	 
	 	
                COMPANY:

              	 
	 	 	 
	 	
                DISCOCARE,
                  INC.

              	 
	 	 	 
	 	
                By:
                  /s/
                  Jonathan Cutler

              	 
	 	
                Name:
                  Jonathan Cutler, D.P.M.

              	 
	 	
                Title:
                  President

              	 
	 	 	 
	 	
                Address:   1145
                  Banks
                  Road

              	
                 

              
	 	
                        Margate,
                  FL
                  33063

              	
                 

              

      

    

     

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.

        

         

      

      
         

        
          

        

      

      
         

      

    

    SIGNATURE
      PAGE

     

    TO

     

    STOCK
      PURCHASE AGREEMENT

     

    IN
      WITNESS WHEREOF,
      the
      Parties have caused this Agreement to be executed as of the date stated in
      the
      introductory paragraph of this Agreement.

     

    

      
        	 	
                SELLER:

              
	 	 
	 	
                /s/
                  Jonathan Cutler

              
	 	
                
                  
Jonathan
                  Cutler, D.P.M.

              
	 	 
	 	 
	
                 

              	
                
                  Address:  11412
                    Okeechobee Boulevard, 

                

              
	 	
                       Suite
                  A

              
	 	
                       Royal
                  Palm
                  Beach, FL 33411

              
	 	 

      

    

     

     

    
      
        ****
          Certain
          information in this document has been omitted and filed separately with
          the
          Securities and Exchange Commission pursuant
          to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and
          the
          Commission’s rules and regulations promulgated under the Freedom of Information
          Act, pursuant to a request for confidential treatment.
          Confidential treatment has been requested with respect to the omitted
          portions.February
      18, 2008

    

    Mr.
      Armando Cardenas-Nolazco

    

    Dear
      Armando:

    

    This
      letter confirms that you have elected to resign from The Knot, Inc. (the
“Company”) effective February 29, 2008 (the “Resignation Date”). You have agreed
      to provide consulting services on an as-needed basis for the six months
      following that. This letter outlines our agreement (“Agreement”) concerning your
      resignation and consulting services.

     

    
      	1.            	
              In
                exchange for your signing this Agreement and complying with its terms,
                the
                Company agrees to provide you with severance/consulting payments
                for six
                months (March 1, 2008 - August 31, 2008). These payments will be
                paid to
                you regardless of the amount of consulting services provided, if
                any, and
                will be paid in an aggregate gross amount equal to one-half (1⁄2) your
                annual base salary (that is, in the gross amount of $110,250), paid
                out in
                semi-monthly installments commencing on the Company’s first regular
                payroll date after the Resignation Date and continuing on each of
                the
                Company’s regular payroll dates through and ending on August 31, 2008.
                These installments will be subject to all applicable withholdings
                and
                taxes. You agree and acknowledge that the Company is not obligated
                to
                provide the severance/consulting payments as described in this paragraph,
                and is doing so only in consideration for your promises and undertakings
                in this Agreement.

            

    

     

    
      	2.         
                	
              Regardless
                of whether you sign this Agreement, commencing March 1, 2008, you
                will be
                eligible to continue your medical coverage under the Company’s group
                medical plan pursuant to federal law (COBRA), at your own cost, and
                may
                exercise any other rights you have to convert other insurance coverage.
                Information about your rights in this regard will be sent to you
                in the
                mail. All other benefits and insurance coverage will cease as of
                your
                Resignation Date. You agree and acknowledge that your resignation
                shall
                constitute a cessation of service to the Company for purposes of
                the
                Company’s stock incentive plans, no further vesting of awards thereunder
                shall occur and all applicable post-service provisions of those plans
                shall apply after the Resignation
                Date.

            

    

     

    
      
        
          	3.	     
                  (a)	
                  By
                    signing this Agreement, and in exchange for the valuable consideration
                    provided for in paragraph 1 and other valuable consideration,
                    you, for
                    yourself and for your heirs, executors, administrators, successors
                    and
                    assigns, except as provided in paragraph 3(b), forever release
                    and
                    discharge the Company and any and all of its parent companies,
                    partners,
                    subsidiaries, affiliates, and related entities, and any and all
                    of its and
                    their past and present officers, directors, shareholders, partners,
                    principals, agents, employees, and employee benefit plans and
                    their
                    fiduciaries and administrators, in their official and individual
                    capacities, and all of their successors and assigns (referred
                    to
                    collectively as the “Company Releasees”), from all claims, demands, causes
                    of action, fees and liabilities of any kind whatsoever, whether
                    known or
                    unknown, which you ever had, now have or may have against any
                    and all of
                    the Company Releasees as of the date you sign this Agreement
                    arising out
                    of your employment with the Company, the terms and conditions
                    of such
                    employment and/or your separation from such employment, including,
                    without
                    limitation, all claims of discrimination and harassment in employment
                    based on race, national origin, ancestry, color, creed, religion,
                    sex,
                    sexual orientation, age, marital status, disability, veteran
                    status, and
                    any other protected characteristic arising under federal, state
                    and local
                    laws, including, without limitations, the Age Discrimination
                    in Employment
                    Act, the Employee Retirement Income Security Act of 1974 (ERISA),
                    Title
                    VII of the Civil Rights Act of 1964, the Americans with Disabilities
                    Act,
                    the National Labor Relations Act, and the Texas Human Rights
                    Act, the
                    Texas Labor Code, the Texas Employment Discrimination Law, and
                    the Texas
                    Disability Discrimination Law, all as amended; all claims based
                    on
                    contract, tort or any other legal theory; and all claims for
                    monetary
                    damages of any kind, equitable reinstatement, attorneys’ fees and
                    costs. 

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Mr.
            Armando Cardenas-Nolazco

          February
            18, 2008

          Page
            2

        

      

    

     

     

    
      	(b) 
                 	
              By
                signing this Agreement, and in exchange for the mutual covenants
                contained
                herein, and for other valuable consideration, the Company, and its
                successors and assigns, forever release and discharge you, your heirs,
                executors, administrators, successors and assigns (referred to
                collectively as the “Individual Releasees”), from all known claims,
                demands, causes of action, fees and liabilities of any kind whatsoever,
                which the Company ever had, now has or may have against any and all
                of the
                Individual Releasees as of the date of this Agreement arising out
                of your
                employment with, or conduct while employed by, the Company. You represent
                that you have not engaged in any conduct that would give rise to
                a claim
                against you.

            

    

     

    
      	(c)  
                	
              By
                signing this Agreement, you are not waiving claims arising after
                the date
                you sign this Agreement; claims or rights that may not be waived
                by law;
                claims for enforcement of this Agreement; claims for accrued, vested
                benefits under any employee benefit plan of the Company (or of its
                parents, subsidiaries or affiliates) in accordance with the terms
                of such
                plans and applicable law. By signing this Agreement, you also are
                not
                waiving your right to file a charge with or participate in any
                investigation or proceeding conducted by the U.S. Equal Employment
                Opportunity Commission or other government agency, except that even
                if you
                file a charge or participate in such an investigation or proceeding,
                you
                will not be able to recover damages or equitable relief of any kind
                from
                the Company Releasees in connection with the claims waived in paragraph
                3(a). By signing this Agreement, the Company and Company Releasees
                are not
                waiving any claims arising after the date the Company enters into
                this
                Agreement, claims and rights that may not be waived by law, or claims
                for
                enforcement of this Agreement, including, without limitation, claims
                for
                breach or threatened breach of your obligations of confidentiality
                and
                cooperation that continue after your Separation
                Date.

            

    

     

    
      	4.          
               	
              In
                exchange for the payments and benefits provided for in paragraph
                1, you
                agree to provide consulting services to the Company for six months
                following your Resignation Date (March 1, 2008 - August 31, 2008)
                but not
                to exceed 5 hours per week or 20 hours in a calendar month, such
                consulting services to include working with the Chief Executive Officer
                in
                an advisory role. It is understood and agreed that you will not be
                required to travel in connection with your consulting services. You
                also
                agree to cooperate, on a reasonable basis, and as part of the consulting
                services, with the Company and its counsel in connection with matters
                about which you have knowledge and/or that relate to the responsibilities
                you performed while employed with the Company. All such services
                and
                cooperation will be reasonably provided at such reasonable times
                as agreed
                upon by the parties.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Mr.
            Armando Cardenas-Nolazco

          February
            18, 2008

          Page
            3

        

      

    

     

     

    
      	5.             
                      	
              (a)You
                continue to have a fiduciary duty to the Company with respect to
                its
                confidential information and you agree to comply with your obligations
                and
                not to reveal to any person or entity, or use or attempt to use,
                any
                confidential information after your resignation. Confidential information
                includes, but is not limited to, any and all trade secrets or confidential
                and/or proprietary information of the Company, marketing, financial,
                business development and/or operations plans, passwords, proposals,
                strategies and/or information; diskettes; intangible information
                stored on
                diskettes; reports; projections; software programs and data compiled
                with
                the use of those programs; show how and know how; pricing and costing
                policies; systems; processes; software programs; works of authorship;
                inventions; projects; as well as any other information as may be
                designated or treated by the Company and its parent companies,
                subsidiaries and affiliates as confidential, proprietary and/or trade
                secrets. Confidential information does not include any information
                that is
                or subsequently becomes, through no fault of yours, publicly available.
                Immediately upon the effective date of this Agreement you shall deliver
                all confidential information in your possession, and all copies thereof,
                to the Company.

            

    

     

    
      	(b)   
               	
              The
                terms and conditions of this Agreement also shall be confidential
                and
                shall not be disclosed to third parties, except as required by law
                or to a
                government agency in connection with any claim or investigation being
                conducted, and except that you may disclose them to your spouse,
                attorneys
                and financial and tax advisors provided you first inform them and
                they
                agree to maintain the confidentiality of the terms and conditions
                of this
                Agreement.

            

    

     

    
      	(c)  
                	
              You
                agree not to publicly disparage any of the Company
                Releasees.

            

    

     

    
      	(d)     
              	
              Nothing
                in this Agreement prohibits you from providing truthful information
                about
                the Company or your employment with the Company to any government
                agency
                or as may be required by law.

            

    

     

    
      	(e)  
                	
              The
                Company agrees, in response to requests for references, to respond
                that
                you resigned from employment on an amicable basis and that you were
                employed by the Company from December 1, 2004 to February 29, 2008
                in the
                role of Chief Technology Officer. The Company agrees to direct its
                executive officers not to publicly disparage
                you.

            

    

     

    
      	 6.            	
              Any
                breach by you of your obligations under paragraphs 4 or 5, after
                notice
                and reasonable opportunity to cure, shall be a material breach of
                this
                Agreement, which will result in discontinuance of the payments referenced
                in paragraph 1.

            

    

     

    
      	7.          
               	
              This
                Agreement shall be governed by and construed in accordance with the
                laws
                of the State of New York and you consent to the jurisdiction of the
                courts
                of the State of New York in connection with any matter related to
                or
                arising out of this Agreement or any breach
                thereof.

            

    

     

    
      	8.         
                	
              You
                have 21 days to consider this Agreement before signing it. We encourage
                you to speak with an attorney before signing it. If you decide to
                sign it,
                you have 7 days after signing it to revoke your decision. Provided
                you do
                not revoke it, this Agreement will become effective on the 8th day
                after
                you sign it (the “effective date”).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Mr.
            Armando Cardenas-Nolazco

          February
            18, 2008

          Page
            4

        

      

    

     

     

    
      	9.          
               	
              By
                signing below, you acknowledge that you have carefully read this
                Agreement
                in its entirety; have had an opportunity to consider the terms of
                this
                Agreement for at least twenty-one (21) days and to consult with an
                attorney of your choice before signing it; understand the terms of
                this
                Agreement; and are signing this Agreement voluntarily and of your
                own free
                will.

            

    

     

    

    Sincerely,

    

    /s/
      DAVID
      LIU

    

    David
      Liu

    Chief
      Executive Officer

    

    

    

    AGREED
      AND ACCEPTED BY:

    

    

    /s/
      ARMANDO CARDENAS-NOLAZCO      2/26/08

    Armando
      Cardenas-Nolazco               
Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]