Document:

exv10w35

 

EXHIBIT
10.35

AGREEMENT

     This Agreement is made as of this 8th day of January 2006 by and among W. Whitlow
Wyatt (“Wyatt”), Phoenix Footwear Group, Inc. (“Phoenix”) and Altama Delta
Corporation (“Altama”).

     WHEREAS, Wyatt, Phoenix and Altama are parties to a Stock Purchase Agreement dated June 15,
2004 (the “Stock Purchase Agreement”) pursuant to which on at a closing on July 19, 2004
Wyatt sold to Phoenix and Phoenix purchased from Wyatt all of the issued and outstanding shares of
Altama capital stock; and

     WHEREAS, pursuant to the Stock Purchase Agreement, at such closing (i) Phoenix issued in the
name of Manufacturers and Traders Trust Company, as escrow agent (the “Escrow Agent”)
196,967 shares of Phoenix common stock (the “Escrow Shares”) in accordance with the terms
of an Escrow Agreement among Wyatt, Phoenix and the Escrow Agent; (ii) Phoenix and Wyatt executed
and delivered a Registration Rights Agreement (the “Registration Rights Agreement”);(ii)
Wyatt, Phoenix and Altama executed and delivered a Non-Competition and Confidentiality Agreement
(the “Non-Competition Agreement”); and (iii) Wyatt and Altama executed and delivered a
Consulting Agreement (“Consulting Agreement”); and

     WHEREAS, an action commenced August 31, 2005 against Wyatt, Phoenix and Altama by Caribbean
Co-op in the United States District Court for the District of Puerto Rico, captioned Caribbean
Co-op v. Altama Delta Corporation d/b/a Altama Footwear, Phoenix Footwear Group, Inc. and W.
Whitlow Wyatt, C.A. 05-1923(CC) for damages (such action, as amended or otherwise re-filed by
Caribbean Co-op or its successor in interest for damages arising out of the same transactions or
occurrences, the “Carribean Co-op Action”); and

     WHEREAS, a dispute has arisen among Wyatt, Phoenix and Altama regarding the terms of the Stock
Purchase Agreement and the parties desire to resolve their dispute on the terms and conditions
herein;

     NOW THEREFORE, the parties hereby agree as follows:

     1. Waiver of Payment Rights and Future Obligations. Wyatt hereby irrevocably waives
the right to receive any payments due or past due from Phoenix or Altama of any kind, including but
not limited to (i) payments provided for in Sections 2(c), 6(d) and 6(h) of the Stock Purchase
Agreement, (ii) payments under the Non-Competition Agreement and (iii) payments under the
Consulting Agreement. Phoenix and Altama make no claim to any previous funds paid to or by Wyatt,
including the purchase price and post-closing adjustments for Altama stock and any payments made
under the Stock Purchase Agreement, the Non-Competition Agreement and the Consulting Agreement.
Neither Phoenix, nor Altama nor Wyatt shall have any future obligations under the Stock Purchase
Agreement, the Non-Competition Agreement or the Consulting Agreement. Wyatt represents and
warrants that he has not assigned, transferred, pledged, conveyed, granted a security interest or
lien with respect to his rights under the Stock Purchase Agreement or with respect to the foregoing
payment obligations and that he has full right, title and interest to take the actions provided in
this Section 1 and that no third party consent is necessary or required for him to do so, the
failure to obtain which would be a breach of an obligation to a third party or result in a lien or
security interest with respect to his rights under the Stock Purchase Agreement.

     2. Escrow Release. Wyatt hereby agrees to direct the Escrow Agent to transfer and
release the Escrow Shares and anything else constituting the Escrow Amount (as defined in the
Escrow Agreement) in such manner and at such time as Phoenix may direct. Wyatt hereby waives any
right, title or interest in or to the Escrow Amount (including the Escrow Shares and the proceeds
thereof) and authorizes the Escrow Agent to vote the Escrow Shares at all times in such manner as
the Escrow Agent may determine in its sole and absolute discretion. Wyatt represents and warrants
that he has not assigned, transferred, pledged, conveyed, granted a security interest or lien with
respect to his rights under the Escrow Agreement or with respect to the Escrow Amount (including
the Escrow Shares and the

 

 

proceeds thereof) and that he has full right, title and interest to take
the actions provided in this Section 2 and that no third party consent is necessary or required for
him to do so, the failure to obtain which would be a breach of an obligation to a third party or
result in a lien or security interest with respect to his rights under the Escrow Agreement or the
Escrow Amount. Phoenix and Wyatt shall have no further obligations to one another under the
Registration Rights Agreement.

     3. Caribbean Co-op Claims.

     (a) Wyatt shall indemnify, defend and hold harmless Phoenix and Altama and its officers,
directors and agents (“Phoenix Indemnitees”) for the entirety (other than the Defense Fund,
as defined below) of all out of pocket costs, losses, liabilities, obligations, damages,
deficiencies, claims, demands, and expenses, including interest, penalties, attorneys’ fees which
any of the Phoenix Indemnitees may suffer resulting from, arising out of, relating to any claim
made by Caribbean Co-op in the Carribean Co-op Action.

     (b) On or before January 26, 2006, Phoenix shall deposit with the law firm of O’Neil & Borges
$50,000 (“Defense Fund”) to pay the costs of defending the Caribbean Co-op claims and any
settlement or judgment with Caribbean Co-op in the Carribean Co-op Action. Wyatt shall be entitled
to retain the balance, if any, remaining of the Defense Fund after the full satisfaction of any
judgment by Caribbean Co-op against any of the Phoenix Indemnitees or a settlement which is fully
paid and provides for a full and complete release by Caribbean Co-op
against the Phoenix Indemnitees for all claims arising from the Caribbean Co-op Action. For
purposes of defending the Caribbean Co-op claims, Phoenix and Altama shall, at the sole cost and
expense of Wyatt, cooperate in providing to Wyatt Altama’s records relating to Caribbean Co-op’s
claims, subject to, upon request by Phoenix, a confidentiality undertaking in substance and form
satisfactory to it. Phoenix and Altama, shall exercise reasonable efforts to make their employees
with relevant and/or discoverable information available to Wyatt as witnesses after reasonable
advance notice, and shall otherwise cooperate with reasonably request in the defense of the
Caribbean Co-op Action. Wyatt shall keep Phoenix and Altama fully informed as to the status of the
Caribbean Co-op Action and, upon request, provide them with copies of all pleadings, motion papers,
discovery requests and responses or other materials identified by Phoenix.

     4. Releases.

     (a) Except for and subject only to the other provisions of this Agreement, for and in
consideration of the mutual covenants set forth herein, Phoenix and Altama shall, and each hereby
does on behalf of itself and its officers, directors, affiliates, subsidiaries, employees, agents,
successors and assigns release and discharge Wyatt from any and all claims, complaints, contracts,
liabilities, obligations, demands, debts, damages, losses, costs, expenses, attorneys fees, rights
of action and causes of actions of any kind or character whatsoever, at law or in equity, whether
known or unknown, direct or indirect, fixed or contingent, suspected or unsuspected that they may
have against Wyatt.

     (b) Except for and subject only to the other provisions of this Agreement, for and in
consideration of the mutual covenants set forth herein, Wyatt hereby does on behalf of himself and
his agents, successors and assigns release and discharge Phoenix and Altama and its officers,
directors, affiliates, subsidiaries, employees, agents, successors and assigns from any and all
claims, complaints, contracts, liabilities, obligations, demands, debts, damages, losses, costs,
expenses, attorneys fees, rights of action and causes of actions of any kind or character
whatsoever, at law or in equity, whether known or unknown, direct or indirect, fixed or contingent,
suspected or unsuspected that Wyatt may have against Phoenix or Altama.

     (c) Wyatt on the one hand, and Phoenix and Altama, on the other hand, hereby represent and
warrant to one another that they are sole owner of the claims being released by it or him hereby
and such party has not assigned or otherwise transferred, voluntarily or involuntarily, any such
released claims.

     5. Confidentiality. The parties hereby agree to abide by the terms of a separate
confidentiality letter agreement of even date herewith among them.

 

 

     6. Miscellaneous. This agreement and the confidentiality letter agreement referred to
above constitute the entire agreement among the parties with respect to the subject matter hereof
and may not be amended or modified except pursuant to a written instrument executed by all parties
hereto. Phoenix and Altama and the undersigned representative for each hereby represent and warrant
that the undersigned representative of each has the authority to fully bind Phoenix and Altama to
this agreement. This agreement shall be governed by the internal laws of the State of Delaware
without reference to conflict principles. Any dispute regarding this Agreement may be adjudicated
by the parties only in a court located in the State of Delaware. The parties hereto irrevocably
consent to the jurisdiction and venue of the courts located in the State of Delaware.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first set forth above.

	 	 	 	 	 
	 

	 	/s/ W. Whitlow Wyatt
	 	 
	 

	 	 	 	 
	 

	 	W. Whitlow Wyatt	 	 
	 
	 	 	 	 
	 

	 	Phoenix Footwear Group, Inc.	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Steve DePerrior
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Steve DePerrior	 	 
	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 
	 	 	Altama Delta Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Steve DePerrior	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Steve DePerrior	 	 
	 	 	Title: Authorized PersonDATED 23 February 2006

                              SETTLEMENT AGREEMENT

                                WITHOUT PREJUDICE

        INTAVENT ORTHOFIX LIMITED                               (1)

        GALVIN MOULD                                            (2)

                                 Hogan & Hartson
                                   Juxon House
                             100 St Pauls Churchyard
                                 London EC4M 8BU
                               Tel: 020 7367 0200
                               Fax: 020 7267 0220
                               Ref: NW/AP/24469-6

<PAGE>

THIS AGREEMENT is made the 23rd day of  February 2006

B E T W E E N :

(1)       INTAVENT ORTHOFIX LIMITED (No. 02853159) whose registered office is at
          5 Burnley Court, Cordwallis Park, Maidenhead, Berkshire, SL6 7BZ ("the
          Company");

(2)       GALVIN MOULD of Lambourne House, College Way, East Garston, Berkshire,
          RG17 7EP ("Mr Mould").

IT IS AGREED as follows:

1.        TERMINATION

1.1       Mr Mould's employment and all other offices held by Mr Mould with the
          Company will terminate on 23 February 2006 ("the Departure Date").

1.2       The Company will pay Mr Mould's salary and pay in lieu of holiday not
          taken, accrued up to the Departure Date and Mr Mould's bonus
          entitlement of US$ 25,344 under the Company's 2005 Incentive
          Compensation Plan. Income tax and employee's national insurance
          contributions and employee's contributions to the Company's pension
          scheme ("the Pension Scheme") and any other deductions required by law
          will be deducted through the payroll in the normal way.

1.3       Mr Mould's Form P45 will be issued as soon as reasonably practicable
          after the Departure Date and any sums paid after the issue of the P45
          will be paid less basic rate tax only. Mr Mould will be personally
          liable for any additional taxes due in respect of such payments.

2.        EXPENSES

2.1       Mr Mould should submit his final expenses claim in the normal manner
          within five (5) working days of the Departure Date. The Company will
          then reimburse Mr Mould for reasonable business expenses wholly,
          exclusively and necessarily incurred in the performance of his duties
          up to the Departure Date subject to Mr Mould's compliance with the
          Company's expenses procedures and production of satisfactory receipts.

3.        COMPENSATION

3.1       By way of compensation for termination of employment, the Company
          shall pay Mr Mould, without any admission of liability, the sum of
          (pound)214,250 ("the Settlement Sum") in accordance with Clause 3.2,
          (less any tax or employee's national insurance or any other sum that
          the Company is required by law (or entitled under the terms of this
          Agreement) to deduct ("the

<PAGE>

          Deductions")). The Company believes that up to (pound)30,000 can be
          paid gross on the basis that it is taxable only under Chapter 3 Part 6
          of the Income Tax (Earnings and Pensions) Act 2003, and will make the
          payment on that basis, in reliance on Mr Mould's undertaking to be
          responsible for any further tax that may be due and his indemnifying
          the Company in accordance with Clause 5.3.

3.2       Subject to receipt by the Company of a copy of this Agreement duly
          signed by Mr Mould, a copy of the letter from the Legal Adviser
          pursuant to Clause 7.8, and provided that at that date Mr Mould has
          not instituted any legal proceedings as warranted by Clause 7.5 the
          Settlement Sum shall be paid by cheque or bank transfer on 10 April
          2006.

4.        CONTINUATION OF BENEFITS

4.1       The Company shall by way of further compensation for termination of
          employment and without any admission of liability whatsoever procure
          that Mr Mould shall remain covered under his current BUPA medical
          insurance scheme until 22 February 2007.

5.        INDEMNITY

5.1       Mr Mould agrees that he is liable for the full amount of any tax
          (including without limitation, income tax and employee's national
          insurance contributions) which may become payable arising from his
          employment and the Settlement Sum and/or the payments and the
          arrangements set out in this Agreement or arising out of the
          termination of his employment with the Company and any interest or
          penalties imposed in connection therewith, as well as any costs,
          claims, damages or other expenses which the Company may incur as a
          result of challenging such demand for tax.

5.2       The Company shall make reasonable efforts to notify Mr Mould promptly
          following receipt by it of any demand or claim for tax. No challenge
          (including an appeal against such demand) shall be initiated by the
          Company unless Mr Mould gives the Company reasonable notice in writing
          addressed to the Company Secretary that he wishes to make such a
          challenge and Mr Mould has given sufficient information or
          instructions to the Company to enable it to make the challenge. The
          Company will give Mr Mould reasonable co-operation in making such a
          challenge (provided that any such co-operation shall not involve the
          Company in any costs or expenses). In the absence of such a notice
          from Mr Mould requesting that the Company challenge the demand, the
          Company shall comply with the tax demand.

5.3       Mr Mould agrees to indemnify the Company on a continuing basis against
          any demand for tax or any other sums as set out in Clause 5.1 and Mr
          Mould shall be liable under this indemnity or in relation to any such
          demand and shall pay the Company any sums so due within 7 days of
          receipt of a written notification from the Company. This indemnity
          shall not apply to any tax or employee's national insurance
          contributions that have already been deducted from any sums paid to Mr
          Mould by the Company.

5.4       For the avoidance of doubt, the indemnity given under Clause 5.3 shall
          extend to any income tax, employee's national insurance contributions,
          interest, penalties, costs, claims, damages or other expenses arising
          in respect of the first (pound)30,000 of the Settlement Sum if the
          Inland

                                      -2-
<PAGE>

          Revenue and/or the Contributions Agency do not accept the parties'
          agreed treatment of the Settlement Sum as taxable only under Sections
          403 and 404 of the Income Tax (Earnings and Pensions) Act 2003.

6.        COMPANY PROPERTY

6.1       Mr Mould agrees to return to the Company on or before the Departure
          Date in good condition (fair wear and tear excepted) and without
          modification all property (including but not limited to documents,
          mobile phone, laptop computer, credit or charge cards, keys, security
          passes) belonging to the Company or relating to the business of the
          Company or any of their respective officers, employees, customers,
          suppliers, bankers, agents or professional advisers which are in Mr
          Mould's possession or under his control. Mr Mould further agrees to
          return the Company car to Ms V. Clarke at the Maidenhead office by 4pm
          Tuesday, 28 February 2006 and in the meantime to ensure that the
          Company car is kept in good condition and to comply with all
          requirements of the insurance policy and the Company's car policy.

6.2       The obligation in Clause 6.1 applies to all documents and records
          including, but not limited to: books, correspondence, files, manuals,
          customer documentation, statistics, papers, materials, reports,
          minutes, plans, records, surveys, diagrams and computer printouts and
          to computer disks, CD Roms, audio tapes and any other medium for
          storing information and all copies, drafts, reproductions, notes,
          extracts or summaries in whatever form.

6.3       Mr Mould shall immediately inform the Company of the passwords used by
          him on computers which are the property of the Company and deliver up
          all computer disks and CD Roms in accordance with Clause 6.1 and shall
          delete from the hard disk of any computer which is his personal
          property, all records and information belonging to or prepared for or
          obtained from the Company or any of their clients or customers.

6.4       If Mr Mould wishes to transfer the telephone number of the Company
          mobile phone which he had been using up to the Departure Date to his
          own personal telephone, the Company will provide reasonable
          co-operation provided that he arranges such transfer within 14 days of
          the Departure Date and he undertakes full responsibility for any and
          all costs, including but not limited to line rental and call costs,
          associated with that mobile telephone number from the Departure Date
          and indemnifies the Company for any claims for such costs. Mr Mould
          agrees to return the mobile phone within 14 days of the Departure
          Date.

7.        SETTLEMENT AND WAIVER

7.1       Mr Mould asserts that he may have statutory claims and could bring
          proceedings in an Employment Tribunal against the Company and/or any
          of its Group Companies for:

          (a)  unfair dismissal;

          (b)  redundancy;

          (c)  breach of contract;

          (d)  unauthorised deduction of wages;

                                      -3-
<PAGE>

          (e)  sex discrimination;

          (f)  race discrimination;

          (g)  disability discrimination;

          (h)  claims relating to a protected disclosure.

7.2       While the Company and any of its Group Companies disputes the
          assertion, Mr Mould agrees to accept the Settlement Sum and the
          arrangements contained in this Agreement in full and final settlement
          of:

7.2.1     his entitlement to bring the claims in Clause 7.1 above; and

7.2.2     any and all present and future claims, rights of action, remedies,
          costs and expenses whatsoever and howsoever arising which he has or
          may have in any jurisdiction against the Company or any of its Group
          Companies or any of their directors or officers, employees,
          professional advisers, agents or shareholders arising from or in
          connection with his employment with the Company or any of its Group
          Companies and/or the termination of such employment or loss of any
          office, or any rights he has or may have under any existing or
          proposed bonus or incentive scheme or arrangement, or any pension
          provision relating to the Pension Scheme, including any common law or
          statutory claims, whether under English law, European law, or any
          other applicable law such as (but not limited to) compensation for
          breach of contract, wrongful dismissal, tort, and any and all of the
          Statutory Claims. The parties expressly agree that this waiver shall
          apply to future claims by Mr Mould against the Company and its Group
          Companies arising out of or relating to his employment or its
          termination or any act or omission by such company after the
          termination of his employment regardless of the fact that those may be
          unknown to either Mr Mould, to the Company or to a Group Company of
          the Company or the factual basis for such a claim may not be known or
          may not yet have arisen.

7.3       The Statutory Claims referred to in Clause 7.2 of this Agreement are
          claims against the Company and its Group Companies and/or their
          officers, employees and agents for breaches of the Equal Pay Act 1970,
          the Sex Discrimination Act 1975, the Race Relations Act 1976, the
          Trade Union and Labour Relations (Consolidation) Act 1992, the
          Disability Discrimination Act 1995, the Employment Tribunals Act 1996,
          the Employment Rights Act 1996, the Working Time Regulations 1998, the
          National Minimum Wage Act 1998, the Employment Relations Act 1999, the
          Trans-national Information and Consultation of Employees Regulations
          1999, the Maternity and Parental Leave, etc Regulations 1999, the
          Part-time Workers (Prevention of Less Favourable Treatment)
          Regulations 2000, the Fixed-term Employees (Prevention of Less
          Favourable Treatment) Regulations 2002, the Flexible Working
          (Procedural Requirements) Regulations 2002, the Flexible Working
          (Eligibility, Complaints and Remedies) Regulations 2002, the
          Employment Act 2002; the Employment Equality (Religion or Belief)
          Regulations 2003, and the Employment Equality (Sexual Orientation)
          Regulations 2003, including (but not limited to) claims of unfair
          dismissal, automatic unfair dismissal, a redundancy payment,
          discrimination on grounds of race, religion or belief, ethnic or
          national origin, sex, sexual orientation and disability
          discrimination, unlawful deductions from wages, for detriment or
          dismissal or selection for redundancy on the grounds related to having
          made a protected disclosure, detrimental

                                      -4-
<PAGE>

          treatment and breaches of Mr Mould's rights and/or the obligations of
          the Company's and its Group Companies under the provisions of the
          legislation mentioned above, (which the Company and its Group
          Companies and their officers, employees and agents dispute).

7.4       The waiver in clause 7.2 shall not affect any claim in relation to Mr
          Mould's accrued pension entitlement or any industrial injury, personal
          injury or any breach of the terms of this Agreement although no
          admission of liability is made by the Company in relation to any such
          claims (and Mr Mould confirms that he is not aware of any such claims
          as at the date of this Agreement).

7.5       Mr Mould warrants that he has not and undertakes that he will not
          institute any legal proceedings to or before any Employment Tribunal
          or court in relation to any claim referred to in Clause 7.1 and agrees
          that if any such proceedings of the nature referred to in Clauses 7.1,
          7.2, 7.3 are or have been instituted by him in breach of this Clause,
          the Settlement Sum will be accepted by him as being made on account of
          and applied towards any basic, compensatory or any other award or
          damages or costs award which may be made in his favour and the Company
          shall have the option to demand the immediate repayment of the
          Settlement Sum paid to Mr Mould, whereupon Mr Mould will immediately
          repay such sum.

7.6       Mr Mould warrants and agrees that he has received independent legal
          advice as to the terms and effect of this Agreement and in particular
          as to its effect on his ability to pursue his claims (including in
          particular the Statutory Claims) before an Employment Tribunal from
          Kate Ward of Penningtons Solicitors, Newbury House, 20 Kings Road
          West, Newbury, Berkshire, RG14 5XR ("the Legal Adviser") who is a
          relevant independent adviser as defined by S.203(3A) of the Employment
          Rights Act 1996 and who holds appropriate insurance (as defined by
          S.203(3)(d) of the Employment Rights Act 1996).

7.7       Mr Mould agrees and warrants that, having taken legal advice from the
          Legal Adviser, the claims listed at Clause 7.1 are all the statutory
          claims which Mr Mould has or may have against the Company and its
          Group Companies and he confirms that he has raised all relevant facts
          and matters pertaining to his engagement, his term of employment and
          the termination of his employment and his directorship and its
          termination with the Legal Adviser and the Company and he acknowledges
          that the Company enters into this Agreement in reliance on the
          warranty given by him in this Clause.

7.8       Mr Mould will procure that the Legal Adviser will send a letter within
          two days of the execution of this Agreement to the Company's
          solicitors, Hogan & Hartson, in the form set out in Schedule 1.

7.9       The conditions regulating compromise agreements under the Sex
          Discrimination Act 1975, the Race Relations Act 1976, the Trade Union
          and Labour Relations (Consolidation) Act 1992, the Disability
          Discrimination Act 1995, the Employment Rights Act 1996, the Working
          Time Regulations 1998, the National Minimum Wage Act 1998, the
          Trans-national Information and Consultation of Employees Regulations
          1999, the Employment Equality (Religion or Belief) Regulations 2003,
          and the Employment Equality (Sexual Orientation) Regulations 2003, the
          Part-time Workers (Prevention of Less Favourable Treatment)
          Regulations 2000 and the Fixed Term Employees (Prevention of Less
          Favourable Treatment) Regulation 2002 are satisfied.

                                      -5-
<PAGE>

8.        ONGOING OBLIGATIONS

8.1       Mr Mould will comply and continue to comply fully with his common law
          and contractual obligation of confidentiality and his obligations
          under Clause 8.2 of this Agreement.

8.2       The Company will pay Mr Mould an additional sum of (pound)34,973 (less
          statutory deductions) (the "Additional Sum"), which sum will be paid
          on the same date as the Settlement Sum in consideration for Mr Mould
          hereby agreeing and undertaking that except as required by law he will
          not at any time in the future without the prior written consent of the
          board of the Company:

8.2.1     disclose directly or indirectly to any person the contents of this
          Agreement or the terms of settlement with the Company except to his
          professional advisers, the Inland Revenue and his spouse provided that
          disclosure to professional advisers and spouse shall be on the
          condition that they agree to honour this obligation; or

8.2.2     make or publish any public announcement, statement or comment whether
          in writing or otherwise concerning the Company or any of its Group
          Companies or any of their officers or employees relating to his
          employment and/or termination of employment or his holding or
          resignation from any directorships or other offices with the Company
          and its Group Companies;

8.2.3     make any derogatory or critical statements or comments concerning the
          Company or any of its current or former directors, or officers or
          employees or shareholders or investors;

8.2.4     for a period of 6 months from the Departure Date, without the prior
          written consent of the Company which shall not be unreasonably
          withheld, within the UK carry on or be concerned or engaged or
          interested, directly or indirectly, (whether as principal,
          shareholder, partner, employee, officer, agent or otherwise) in any
          part of trade or business which directly or indirectly competes with
          the business or businesses of the Company in which he was materially
          involved at any time in the year prior to the Departure Date;

8.2.5     for a period of 6 months from the Departure Date either on his own
          behalf or on behalf of any person, firm or company in relation to the
          business of the Company in which he was materially involved at any
          time in the year prior to the Departure Date, directly or indirectly,
          approach, solicit, endeavour to entice away any person who is or was a
          Key Employee with whom he had dealings at any time in the year prior
          to the Departure Date whether or not such person would commit any
          breach of his contract of employment by reason of so leaving the
          service of the Company or otherwise;

8.2.6     for a period of 6 months from the Departure Date either on his own
          behalf or on behalf of any person, firm or company in relation to the
          business of the Company in which he was materially involved at any
          time in the year prior to the Departure Date, directly or indirectly,
          employ, engage, offer employment to or offer to engage, or procure the
          employment or engagement of any person who is or was a Key Employee
          with whom he had dealings at any time in the year prior to the
          Departure Date whether or not such person would commit any breach of
          his contract of employment by reason of so leaving the Company or
          otherwise;

                                      -6-
<PAGE>

8.2.7     for a period of 6 months from the Departure Date either on his own
          behalf or on behalf of any person, firm or company in relation to the
          business of the Company in which he was materially involved at any
          time in the year prior to the Departure Date, directly or indirectly,
          solicit, approach or offer goods or services to or endeavour to entice
          away from the Company, any person, firm or company who was a client or
          customer of the Company at any time in the year prior to the Departure
          Date, and in each case with whom he was materially involved by virtue
          of his duties under his employment contract at any time in the year
          prior to the Departure Date; and

8.2.8     for a period of 6 months from the Departure Date either on his own
          behalf or on behalf of any person, firm or company in relation to the
          business of the Company in which he was materially involved at any
          time in the year prior to the Departure Date, directly or indirectly,
          deal with or accept custom from any person, firm or company who was a
          client or customer of the Company at any time in the year prior to the
          Departure Date, and in each case with whom he was materially involved
          by virtue of his duties under his employment contract at any time in
          the year prior to the Departure Date.

8.3       For the purposes of the restrictions set out in clause 8.2 above "Key
          Employee" shall mean any person who is and was (in the period of 12
          months prior to the Departure Date) employed or engaged by the Company
          in a management position and who by reason of such position possesses
          or is likely to possess information which may be imparted in
          confidence or be of a confidential nature relating to the business or
          prospective business or internal affairs of the Company. If Mr Mould
          applies for consent pursuant to clause 8.2.4 above he should write to
          Alan Milinazzo providing him with full details of the proposed
          activities and the Company will consider each request on its own
          merits.

8.4       Mr Mould may describe the nature of his work for the Company and
          explain the termination of his employment with the Company in private
          discussions with any prospective employer and any recruitment
          consultants to whom he should apply or who approach him provided that
          such description and explanation accords with the reference at
          Schedule 2 and announcement at Schedule 3 hereto.

8.5       Mr Mould agrees that if the Company becomes aware that he has breached
          any of his obligations under Clause 8 of this Agreement, on or after
          the Additional Sum and Settlement Sum has been paid to him, then he
          will immediately repay all of such sum to the Company. The Company's
          right to repayment of this sum shall be without prejudice to its right
          to seek an injunction against and/or claim further damages from Mr
          Mould.

9.        RESIGNATION

9.1       Mr Mould will immediately provide the Company with his written
          resignation from the offices which he holds in the Group to take
          effect from the Departure Date, such resignation to be in the form set
          out in Schedule 2 and will also resign forthwith from all other
          directorships, appointments, trusteeships and positions which he holds
          within the Group or as a nominee or representative of any Group
          Company and agrees to execute such documents and to do such things as
          are necessary to give effect to such resignations.

                                      -7-
<PAGE>

10.       WARRANTIES

10.1      Mr Mould represents and warrants to the Company that as at the date of
          this Agreement he has not received (either orally or in writing), nor
          agreed to accept (either orally or in writing) any offer, conditional
          or unconditional, of a contract of service or for services or any
          association with a partnership or to hold any office or of any form of
          deferred remuneration (save in respect of pension payments) to take
          effect at any time after the Departure Date.

11.       LEGAL FEES

11.1      The Company will pay direct to Mr Mould's Legal Adviser's firm, within
          twenty eight (28) days of receipt of a satisfactory copy of their
          invoice to Mr Mould marked as payable by the Company, their fees and
          disbursements properly, reasonably and exclusively incurred in
          advising Mr Mould in relation to the termination of his employment
          (including, without limitation, the negotiation and preparation of
          this Agreement) up to a maximum of (pound)1000 plus VAT.

12.       REFERENCE

12.1      All requests for a reference from the Company or the Group should be
          directed to Alan Milinazzo who, subject to the Company and the Group's
          duties to any recipients, will provide the Employee with a reference
          in the form of Schedule 3 and Alan Milinazzo will respond to any
          verbal enquiries which he may receive relating to a reference for the
          Employee in terms which comply with the tenor of the reference at
          Schedule 3.

13.       ANNOUNCEMENT

13.1      The Company agrees that any written announcement to employees
          regarding Mr Mould's termination of employment shall be in the form of
          Schedule 4.

14.       PREVIOUS TERMINATION ARRANGEMENTS

14.1      This Agreement contains all of the terms of settlement agreed between
          Mr Mould and the Company and is in substitution for all previous
          termination agreements or arrangements between Mr Mould and the
          Company whether written or oral or implied or express which shall
          terminate with effect from execution of this Agreement.

15.       LITIGATION

15.1      Mr Mould agrees to provide the Company with such reasonable assistance
          as it may require in the conduct of any legal proceedings anywhere in
          the world in which the Company or any Group Company is or may become
          involved, subject to the payment by the Company of Mr Mould's
          reasonable expenses incurred in providing such co-operation and to the
          extent permissible under the relevant legal jurisdiction the Company
          shall also compensate Mr Mould at the rate of $500 per day for such
          assistance PROVIDED THAT Mr Mould will not

                                      -8-
<PAGE>

          be required to provide assistance to the Company if this conflicts
          with any obligations owed to his employer.

16.       INTERPRETATION

16.1      "Group Company" shall mean any subsidiary or holding company of the
          Company or a subsidiary of such holding company (as defined by the
          Companies Acts 1985 (as amended by the Companies Act 1989)) and all
          such companies together shall be referred to as "the Group" or "Group
          Companies".

16.2      The Company enters into this Agreement on its own behalf and on behalf
          of its respective Group Companies and the Contract (Rights of Third
          Parties) Act 1999, s.1 (1)(a) and s.1(6) shall apply to this Agreement
          to the extent that the Company's officers and employees and each of
          its Group Companies and their respective officers and employees are
          expressly provided with the right to enforce the waiver given by Mr
          Mould pursuant to clause 7.2 together with the right to enforce the
          benefit of all other clauses in this Agreement conferring rights on
          third parties, but no more. The consent of a third party shall not be
          required for the variation or termination of this Agreement, even if
          that variation or termination affects the benefits conferred in this
          Agreement on that third party.

17.       GOVERNING LAW AND JURISDICTION

17.1      The terms of this Agreement shall be governed by and construed in all
          respects in accordance with English law and the parties agree to
          submit to the exclusive jurisdiction of the English Courts as regards
          any claim or matter arising in respect of this Agreement.

18.       GENERAL

18.1      This Agreement, although marked "without prejudice" will, upon
          signature by both parties, be treated as an open document evidencing
          an agreement binding on the parties.

19.       COUNTERPARTS

19.1      This Agreement may be executed in two counterparts each of which when
          executed and delivered is an original but all the counterparts
          together constitute the same document.

                                      -9-
<PAGE>

                                   SCHEDULE 1

                                    [Omitted]

                                   SCHEDULE 2

                                    [Omitted]

                                   SCHEDULE 3

                                    [Omitted]

                                   SCHEDULE 4

                                    [Omitted]

Signed:         /s/
                ---
                For and on behalf of  INTAVENT ORTHOFIX LIMITED

Dated:          23 February 2006
                ----------------

Signed:         /s/ Galvin Mould
                ------------------
                GALVIN MOULD

Dated:          23 February 2006
                ----------------

                                      -10-

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