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                                                                    Exhibit 10.2

                           LIMITED COMMERCIAL GUARANTY

BORROWER:                  SANDHILL GROUP, L.L.C.
                           (TIN: 26-0042775)

BANK:                      REGIONS BANK (TIN: 63-037-1391)

GUARANTOR:                 GENESIS CRUDE OIL, L.P.
                           (TIN: 76-0516202)

                                    RECITALS

         WHEREAS, Bank previously has issued the Letter of Credit and advanced
the Indebtedness (each as defined herein) to Sandhill Group, L.L.C.
("Borrower"), pursuant to the terms of the Credit Agreement (as defined herein)
and the Letter of Credit;

         WHEREAS, Borrower has requested that Bank release the guaranties of the
individual guarantors of the Indebtedness and limit the guaranty of the
corporate guarantor (50%) in exchange for the guaranty of Guarantor as provided
herein;

         WHEREAS, it is a condition to Bank's releasing and limiting the
guaranties as provided in the foregoing paragraph that Guarantor execute this
Commercial Guaranty (this "Agreement") on behalf of Borrower and in favor of
Bank as contemplated by the terms hereof;

         WHEREAS, Guarantor hereby represents and acknowledges that (i) it will
derive substantial benefit from Bank's continuing to advance the Indebtedness to
Borrower; (ii) it has received valuable consideration for entering into this
Agreement on behalf of Borrower; and (iii) Borrower has requested Guarantor to
execute and deliver this Agreement in favor of Bank.

         NOW, THEREFORE, Guarantor hereby enters into this Agreement in favor of
Bank as follows:

1.       DEFINITIONS. The following terms shall have the meanings ascribed to
         them when used in this Agreement:

         1.1      AGREEMENT. The word "Agreement" means this Commercial Guaranty
                  as may be amended or modified from time to time.

         1.2      BANK. The word "Bank" means REGIONS BANK, THROUGH ITS
                  NORTHEAST LOUISIANA BANKING DIVISION (MONROE, LOUISIANA MAIN
                  OFFICE) (TIN: 63-037-1391), its successors and assigns, and
                  any subsequent holder or holders of the Indebtedness.

         1.3      BORROWER. The word "Borrower" means SANDHILL GROUP, L.L.C., a
                  Mississippi limited liability company.

         1.4      CREDIT AGREEMENT. The words "Credit Agreement" mean that
                  certain Credit and Reimbursement Agreement dated as of
                  December 18, 2003, between Bank and Borrower.

         1.5      FINANCING DOCUMENTS. The words "Financing Documents" shall
                  have the meaning set forth in the Credit Agreement.

         1.6      GUARANTOR. The word "Guarantor" means GENESIS CRUDE OIL, L.P.,
                  a Delaware limited partnership.

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         1.7      INDEBTEDNESS. The word "Indebtedness" means and includes
                  individually, collectively, interchangeably and without
                  limitation, the face amount of the Letter of Credit and any
                  and all present and future loans, extensions of credit,
                  liabilities and/or obligations of every nature and kind
                  whatsoever that Borrower may now and in the future owe to or
                  incur in favor of Bank and its successors or assigns, whether
                  such loans, extensions of credit, liabilities and/or
                  obligations are direct or indirect, or by way of assignment,
                  and whether related or unrelated, or whether committed or
                  purely discretionary, and whether absolute or contingent,
                  voluntary or involuntary, determined or undetermined,
                  liquidated or unliquidated, due or to become due, together
                  with interest, costs, expenses, attorneys' fees and other fees
                  and charges, whether or not such Indebtedness may be barred
                  under any statute of limitations or may be otherwise
                  unenforceable or voidable for any reason.

         1.8      LETTER OF CREDIT. The words "Letter of Credit" shall have the
                  meaning set forth in the Credit Agreement.

         1.9      LIMITED AMOUNT. The words "Limited Amount" shall mean fifty
                  percent (50%) of the Indebtedness.

         1.10     MORGAN KEEGAN. The word "Morgan Keegan" means Morgan Keegan &
                  Company, Inc., an affiliate of Bank.

2.       GUARANTEE OF THE INDEBTEDNESS. For valuable consideration, Guarantor
         hereby absolutely and unconditionally agrees to, and by these presents
         does hereby, guarantee the prompt and punctual payment, performance and
         satisfaction of any and all of Borrower's present and future
         Indebtedness in favor of Bank up to the Limited Amount.

3.       AMOUNT OF GUARANTY. The amount of this Guaranty is limited to the
         Limited Amount.

4.       CONTINUING GUARANTY. THIS IS A CONTINUING GUARANTY AGREEMENT UNDER
         WHICH GUARANTOR AGREES TO GUARANTEE PAYMENT OF BORROWER'S PRESENT AND
         FUTURE INDEBTEDNESS IN FAVOR OF BANK ON A CONTINUING BASIS. Guarantor's
         obligations and liability under this Agreement shall be open and
         continuous in effect. Guarantor intends to and does hereby guarantee at
         all times the prompt and punctual payment, performance and satisfaction
         of the Indebtedness up to the Limited Amount. Accordingly, any payments
         made towards the Indebtedness will not discharge or diminish the
         obligations and liability of Guarantor under this Agreement for any
         remaining and succeeding Indebtedness of Borrower in favor of Bank. To
         the extent that Guarantor is or may become a Member of Borrower,
         Guarantor agrees that, notwithstanding the provisions of La. R.S.
         12:1320, or similar provisions of Mississippi law, Guarantor shall be
         liable under this Agreement for the Limited Amount in favor of Bank.

5.       [RESERVED]

6.       DURATION OF GUARANTY. This Agreement and Guarantor's obligations and
         liability hereunder shall remain in full force and effect until such
         time as this Agreement may be canceled or otherwise terminated by Bank
         under a written cancellation instrument in favor of Guarantor (subject
         to the automatic reinstatement provisions hereinbelow). It is
         anticipated that fluctuations may occur in the aggregate amount of the
         Indebtedness guaranteed under this Agreement and it is specifically
         acknowledged and agreed to by Guarantor that reductions in the amount
         of the Indebtedness, even to zero ($0.00) dollars, prior to Bank's
         written cancellation of this Agreement, shall not constitute or give
         rise to a termination of this Agreement.

7.       CANCELLATION OF AGREEMENT; EFFECT. Unless otherwise indicated under
         such a written cancellation instrument, Bank's agreement to terminate
         or otherwise cancel this Agreement shall affect only, and shall be
         expressly limited to, Guarantor's continuing obligations and liability
         to guarantee the Indebtedness incurred, originated and/or extended
         (without prior commitment) after the date of such a written
         cancellation instrument; with Guarantor remaining fully obligated and
         liable

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         under this Agreement for any and all of the Indebtedness incurred,
         originated, extended, or committed to prior to the date of such a
         written cancellation instrument. Nothing under this Agreement or under
         any other agreement or understanding by and between Guarantor and Bank,
         shall in any way obligate, or be construed to obligate, Bank to agree
         to the subsequent termination or cancellation of Guarantor's
         obligations and liability hereunder; it being fully understood and
         agreed to by Guarantor that Bank has and intends to continue to rely on
         Guarantor's assets, income and financial resources in extending credit
         and other Indebtedness to and in favor of Borrower, and that to release
         Guarantor from Guarantor's continuing obligations and liabilities under
         this Agreement would so prejudice Bank that Bank may, within its sole
         and uncontrolled discretion and judgment, refuse to release Guarantor
         from any of its continuing obligations and liability under this
         Agreement for any reason whatsoever as long as any of the Indebtedness
         remains unpaid and outstanding.

8.       DEFAULT. Should any event of default occur or exist under the Credit
         Agreement, the Notes or the Financing Documents in favor of Bank,
         Guarantor unconditionally and absolutely agrees to pay Bank the then
         unpaid amount of the Indebtedness up to the Limited Amount, in
         principal, interest, costs, expenses, attorneys' fees and other fees
         and charges. Such payment or payments shall be made at Bank's offices
         indicated below, immediately following demand by Bank.

9.       GUARANTOR'S WAIVERS. Guarantor hereby waives:

         (a) Notice of Bank's acceptance of this Agreement.

         (b) Presentment for payment of all or any portion of the Indebtedness,
         notice of dishonor and of nonpayment, notice of intention to
         accelerate, notice of acceleration, protest and notice of protest,
         collection or institution of any suit or other action by Bank in
         collection thereof, including any notice of default in payment thereof,
         or other notice to, or demand for payment thereof, on any party.

         (c) Any right to require Bank to notify Guarantor of any nonpayment
         relating to any collateral directly or indirectly securing the
         Indebtedness, or notice of any action or nonaction on the part of
         Borrower, Bank, or any other Guarantor, surety or endorser of the
         Indebtedness, or notice of the creation of any new or additional
         Indebtedness subject to this Agreement.

         (d) Any rights to demand or require collateral security from the
         Borrower or any other person as provided under applicable Louisiana law
         or otherwise.

         (e) Any right to require Bank to notify Guarantor of the terms, time
         and place of any public or private sale of any collateral directly or
         indirectly securing the Indebtedness.

         (f) Any "one action" or "anti-deficiency" law or any other law which
         may prevent Bank from bringing any action, including a claim for
         deficiency, against Guarantor, before or after Bank's commencement or
         completion of any foreclosure action, or any action in lieu of
         foreclosure.

         (g) Any election of remedies by Bank that may destroy or impair
         Guarantor's subrogation rights or Guarantor's right to proceed for
         reimbursement against Borrower or any other Guarantor, surety or
         endorser of the Indebtedness, including without limitation, any loss of
         rights Guarantor may suffer by reason of any law limiting, qualifying,
         or discharging the Indebtedness.

         (h) Any disability or other defense of Borrower, or any other
         Guarantor, surety or endorser, or any other person, or by reason of the
         cessation from any cause of whatsoever, other than payment in full of
         the Indebtedness or to the extent it offsets all or a portion of the
         Indebtedness or affects the validity or enforceability of the
         Indebtedness.

         Guarantor warrants and agrees that each of the waivers set forth above
         is made with Guarantor's full knowledge of its significance and
         consequences, and that, under the circumstances, such waivers are
         reasonable and not contrary to public policy or law. If any such waiver
         is determined to be contrary to any applicable law or public policy,
         such waiver shall be effective only to the extent permitted by law.

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10.      GUARANTOR'S SUBORDINATION OF RIGHTS. In the event that Guarantor should
         for any reason (a) advance or lend any other monies to Borrower,
         whether or not such funds are used by Borrower to make payment(s) under
         the Indebtedness, and/or (b) make any payment(s) to Bank or others for
         and on behalf of Borrower under the Indebtedness, and/or (c) make any
         payment to Bank in total or partial satisfaction of Guarantor's
         obligations and liabilities under this Agreement, and/or (d) if any of
         Guarantor's property is used to pay or satisfy any of the Indebtedness,
         Guarantor hereby agrees that any and all rights that Guarantor may have
         or acquire to collect from or to be reimbursed by Borrower (or from or
         by any other Guarantor, endorser or surety of the Indebtedness),
         whether Guarantor's rights of collection or reimbursement arise by way
         of subrogation to the rights of Bank or otherwise, shall in all
         respects, whether or not Borrower is presently or subsequently becomes
         insolvent, be subordinate, inferior and junior to the rights of Bank to
         collect and enforce payment, performance and satisfaction of Borrower's
         then remaining Indebtedness, until such time as the Indebtedness is
         fully paid and satisfied. In the event of Borrower's insolvency or
         consequent liquidation of Borrower's assets, through bankruptcy, by an
         assignment for the benefit of creditors, by voluntary liquidation, or
         otherwise, the assets of Borrower applicable to the payment of claims
         of both Bank and Guarantor shall be paid to Bank and shall be first
         applied by Bank to Borrower's then remaining Indebtedness. Guarantor
         hereby assigns to Bank all claims which it may have or acquire against
         Borrower or any assignee or trustee of Borrower in bankruptcy; provided
         that, such assignment shall be effective only for the purpose of
         assuring to Bank full payment of the Indebtedness guaranteed under this
         Agreement.

         If now or hereafter (a) Borrower shall be or become insolvent, and (b)
         the Indebtedness shall not at all times until paid be fully secured by
         collateral pledged by Borrower, Guarantor hereby forever agrees that
         any claim or right to payment Guarantor may now have or hereafter have
         or acquire against Borrower, by subrogation or otherwise, shall be
         inferior and subordinate to the rights and claims of Bank.

11.      GUARANTOR'S RECEIPT OF PAYMENTS. Guarantor further agrees to refrain
         from attempting to collect and/or enforce any of Guarantor's collection
         and/or reimbursement rights against Borrower (or against any other
         Guarantor, surety or endorser of the Indebtedness), arising by way of
         subrogation or otherwise, until such time as all of Borrower's then
         remaining Indebtedness in favor of Bank is fully paid and satisfied, or
         under the "insider" circumstances described above, until the thirteen
         (13) month anniversary date following the full and final payment and
         satisfaction of the Indebtedness. In the event that Guarantor should
         for any reason whatsoever receive any payment(s) from Borrower (or any
         other Guarantor, surety or endorser of the Indebtedness) that Borrower
         (or such a third party) may owe to Guarantor for any of the reasons
         stated above, Guarantor agrees to accept such payment(s) in trust for
         and on behalf of Bank, advising Borrower (or the third party payee) of
         such fact. Guarantor further unconditionally agrees to immediately
         deliver such funds to Bank, with such funds being held by Guarantor
         over any interim period, in trust for Bank. In the event that Guarantor
         should for any reason whatsoever receive any such funds from Borrower
         (or any third party), and Guarantor should deposit such funds in one or
         more of Guarantor's deposit accounts, no matter where located, Bank
         shall have the right to attach any and all of Guarantor's deposit
         accounts in which such funds were deposited, whether or not such funds
         were commingled with other monies of Guarantor, and whether or not such
         fund then remain on deposit in such an account or accounts.

12.      [RESERVED]

13.      SECURITY INTEREST. As collateral security for repayment of Guarantor's
         obligations hereunder and under any additional guaranties previously
         granted or to be granted by Guarantor in the future, and additionally
         as collateral security for any present and future indebtedness of
         Guarantor in favor of Bank (with the exception of any indebtedness
         under a consumer credit card account), Guarantor is granting Bank a
         continuing security interest in any and all funds that Guarantor may
         now and in the future have on deposit with Bank and/or Morgan Keegan or
         in certificates of deposit, other deposit accounts or investment
         accounts as to which Guarantor is an account holder against the unpaid
         balance of any and all other present and future obligations and
         indebtedness of Guarantor to Bank, in

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         principal, interest, fees, costs, expenses, and attorneys' fees. The
         security interests and related rights herein granted to Bank are in
         addition to the pledge granted to Bank under La. R.S. 6:316 and any
         other rights in favor of Bank granted by applicable statute.

14.      ADDITIONAL COVENANTS. Guarantor agrees that Bank may, at its sole
         option, at any time, and from time to time, without the consent of or
         notice to Guarantor, or any of them, or to any other party, and without
         incurring any responsibility to Guarantor or to any other party, and
         without impairing or releasing any of Guarantor's obligations or
         liabilities under this Agreement:

         (a) Make additional secured and/or unsecured loans to Borrower.

         (b) Discharge, release or agree not to sue any party (including, but
         not limited to, Borrower or any other Guarantor, surety, or endorser of
         the Indebtedness), who is or may be liable to Bank for any of the
         Indebtedness.

         (c) Sell, exchange, release, surrender, realize upon, or otherwise deal
         with, in any manner and in any order, any collateral directly or
         indirectly securing repayment of any of the Indebtedness.

         (d) Alter, renew, extend, accelerate, or otherwise change the manner,
         place, terms and/or times of payment or other terms of the
         Indebtedness, or any part thereof, including any increase or decrease
         in the rate or rates of interest on any of the Indebtedness.

         (e)  Settle or compromise any of the Indebtedness.

         (f) Subordinate and/or agree to subordinate the payment of all or any
         part of the Indebtedness, or Bank's security rights in any collateral
         directly or indirectly securing any such Indebtedness, to the payment
         and/or security rights of any other present and/or future creditors of
         Borrower.

         (g) Apply any payments and/or proceeds to any of the Indebtedness in
         such priority or with such preferences as Bank may determine in its
         sole discretion, regardless of which of the Indebtedness then remains
         unpaid.

         (h) Take or accept any other collateral security or guaranty for any or
         all of the Indebtedness.

         (i) Enter into, deliver, modify, amend, or waive compliance with, any
         instrument or arrangement evidencing, securing or otherwise affecting,
         all or any part of the Indebtedness.

15.      NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. No course of dealing between
         Bank and Borrower (or any other Guarantor, surety or endorser of the
         Indebtedness), nor any failure or delay on the part of Bank to exercise
         any of Bank's rights and remedies under this Agreement or any other
         agreement or agreements by and between Bank and Borrower (or any other
         Guarantor, surety or endorser), shall have the effect of impairing or
         releasing Guarantor's obligations and liabilities to Bank, or of
         waiving any of Bank's rights and remedies under this Agreement or
         otherwise. Any partial exercise of any rights and remedies granted to
         Bank shall furthermore not constitute a waiver of any of Bank's other
         rights and remedies; it being Guarantor's intent and agreement that
         Bank's rights and remedies shall be cumulative in nature. Guarantor
         further agrees that, should Borrower default under any of its
         Indebtedness, any wavier or forbearance on the part of Bank to pursue
         Bank's available rights and remedies shall be binding upon Bank only to
         the extent that Bank specifically agrees to such waiver or forbearance
         in writing. A waiver or forbearance on the part of Bank as to one event
         of default shall not constitute a waiver or forbearance as to any other
         default.

16.      NO RELEASE OF GUARANTOR. Guarantor's obligations and liabilities under
         this Agreement shall not be released, impaired, reduced, or otherwise
         affected by, and shall continue in full force and effect
         notwithstanding the occurrence of any event, including without
         limitation any one or more of the following events:

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         (a) The death, insolvency, bankruptcy, arrangement, adjustment,
         composition, liquidation, disability, dissolution, or lack of authority
         (whether corporate, partnership or trust) of Borrower (or any person
         acting on Borrower's behalf), or of any other Guarantor, surety or
         endorser of the Indebtedness.

         (b) Any payment by Borrower, or any other party, to Bank that is held
         to constitute a preferential transfer or a fraudulent conveyance under
         any applicable law, or any such amounts or payment which, for any
         reason, Bank is required to refund or repay to Borrower or to any other
         person.

         (c) Any dissolution by Borrower, or any sale, lease or transfer of all
         or any part of Borrower's assets.

         (d) Any failure of Bank to notify Guarantor of the making of additional
         loans or other extensions of credit in reliance on this Agreement.

17.      AUTOMATIC REINSTATEMENT. This Agreement and Guarantor's obligations and
         liabilities hereunder shall continue to be effective, and/or shall
         automatically and retroactively be reinstated, if a release or
         discharge has occurred, or if at any time, any payment or part thereof
         to Bank with respect to any of the Indebtedness, is rescinded or must
         otherwise be restored by Bank pursuant to any insolvency, bankruptcy,
         reorganization, receivership, or any other debt relief granted to
         Borrower or to any other party to the Indebtedness or any such security
         therefor. In the event that Bank must rescind or restore any payment
         received in total or partial satisfaction of the Indebtedness, any
         prior release or discharge from the terms of this Agreement given to
         Guarantor shall be without effect, and this Agreement and Guarantor's
         obligations and liabilities hereunder shall automatically and
         retroactively renewed and/or reinstated and shall remain in full force
         and effect to the same degree and extent as if such a release or
         discharge had never been granted. It is the intention of Bank and
         Guarantor that Guarantor's obligations and liabilities hereunder shall
         not be discharged except by Guarantor's full and complete performance
         and satisfaction of such obligations and liabilities; and then only to
         the extent of such performance.

18.      ORGANIZATION. Guarantor is a limited partnership which is, and at all
         times shall be, duly organized, validly existing, and in good standing
         under and by virtue of the laws of the State of Mississippi. Guarantor
         is duly authorized to transact business in all other states in which
         Guarantor is doing business, having obtained all necessary filings,
         governmental licenses and approvals for each state in which Guarantor
         is doing business. Specifically, Guarantor is, and at all times shall
         be, duly qualified as a foreign limited liability company in all states
         in which the failure to so qualify would have a material adverse effect
         on its business or financial condition. Guarantor's guaranty of the
         Indebtedness does not violate Guarantor's Partnership Agreement.
         Guarantor has taken all actions necessary to authorize the execution,
         rights and privileges, and shall comply with all regulations, rules,
         ordinances, statutes, orders and decrees of any governmental or
         quasi-governmental authority or court applicable to Guarantor and
         Guarantor's business activities.

19.      REPRESENTATIONS AND WARRANTIES BY GUARANTOR. Guarantor represents and
         warrants that:

         (a) Guarantor has the lawful power to own its properties and to engage
         in its business as presently conducted.

         (b) Guarantor's guaranty of the Indebtedness and Guarantor's execution,
         delivery and performance of this Agreement are not in violation of any
         laws and will not result in a default under any contract, agreement, or
         instrument to which Guarantor is a party, or by which Guarantor or its
         property may be bound.

         (c) Guarantor has reviewed the terms of the Indebtedness, including,
         without limitation, the Credit Agreement.

         (d) Guarantor has agreed and consented to execute this Agreement and to
         guarantee the Indebtedness in favor of Bank, at Borrower's request and
         not at the request of Bank.

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         (e) Guarantor will receive and/or has received a direct or indirect
         material benefit from the transactions contemplated herein and/or
         arising out of the Indebtedness.

         (f) This Agreement, when executed and deliver to Bank, will constitute
         a valid, legal and binding obligation of Guarantor, enforceable in
         accordance with its terms.

         (g) Guarantor has established adequate means of obtaining information
         from Borrower on a continuing basis regarding Borrower's financial
         condition.

         (h) Bank has made no representations to Guarantor as to the
         creditworthiness of Borrower.

20.      ADDITIONAL OBLIGATIONS OF GUARANTOR. So long as this Agreement remains
         in effect, Guarantor has not and will not, without Bank's prior written
         consent, sell, lease, assign, pledge, hypothecate, encumber, transfer,
         or otherwise dispose of all or substantially all of Guarantor's assets.
         Guarantor agrees to keep adequately informed of any facts, events or
         circumstances which might in any way affect Guarantor's risks under
         this Agreement. Guarantor further agrees that Bank shall have no
         obligation to Guarantor any information or material relating to
         Borrower or the Indebtedness.

21.      ADDITIONAL DOCUMENTS; FINANCIAL STATEMENTS. Upon the reasonable request
         of Bank, Guarantor will, at any time, and from time to time, execute
         and deliver to Bank any and all such financial instruments and
         documents, and supply such additional information, as may be necessary
         or advisable in the opinion of Bank to obtain the full benefits of this
         Agreement.

         Guarantor further agrees to provide Bank with the following financial
         statements of Guarantor within the required time frame during the term
         of this Agreement:

                  (i) Within ninety (90) days after the end of Guarantor's
         fiscal year audited financial statements of Guarantor as of the end of
         such year including the balance sheet and related statements of income
         and cash flows of Guarantor for such fiscal year, together with
         supporting schedules, all on a comparative basis with the prior fiscal
         year, in reasonable detail prepared in accordance with generally
         accepted accounting principles consistently applied throughout the
         periods involved, showing the financial condition, assets, liabilities
         and member equity of Guarantor at the close of such year and the
         results of the operations of Guarantor during such year. The financial
         statements required to be provided under this Section must be
         accompanied by a certificate of an independent certified public
         accountant that such financial statements have been audited by said
         certified public accountant and present fairly and in accordance with
         generally accepted accounting principles the financial position and the
         results of operations of the Borrower for the periods presented. Said
         certified public accountant is to be selected by Guarantor; however,
         such certified public accountant must be of recognized standing and
         satisfactory to the Bank.

                  (ii) Annual federal income tax return of Guarantor as filed
         with the Internal Revenue Service within fifteen (15) days of filing
         each year during the term of this Agreement. Guarantor shall notify
         Bank of any extension of time requested for such filing.

22.      TRANSFER OF INDEBTEDNESS. This Agreement is for the benefit of Bank and
         for such other person or persons as may from time to time become or be
         the holders of all or any part of the Indebtedness. This Agreement
         shall be transferrable and negotiable with the same force and effect
         and to the same extent as the Indebtedness may be transferrable; it
         being understood and agreed to by Guarantor that, upon any transfer or
         assignment of all or any part of the Indebtedness, the holder of such
         Indebtedness shall have all of the rights and remedies granted to Bank
         under this Agreement. Guarantor further agrees that, upon any transfer
         of all or any portion of the Indebtedness, Bank may transfer and
         deliver any and all collateral securing repayment of such Indebtedness
         (including, but not limited to, any collateral provided by Guarantor)
         to the transferee of such Indebtedness, and such collateral shall
         secure any and all of the Indebtedness in favor of such a transferee.
         Guarantor additionally agrees that, after any such transfer or
         assignment has taken place, Bank shall be fully

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         discharged from any and all liability and responsibility to Borrower
         and Guarantor with respect to such collateral, and the transferee
         thereafter shall be vested with all the powers and rights with respect
         to such collateral.

23.      CONSENT TO PARTICIPATION. Guarantor recognizes and agrees that Bank
         may, from time to time, one or more times, transfer all or any part of
         the Indebtedness through sales of participation interests in such
         Indebtedness to one or more third party Banks. Guarantor specifically
         agrees and consents to all such transfers and assignments, and
         Guarantor further waives any subsequent notice of such transfers and
         assignments as may be provided under Louisiana law. Guarantor
         additionally agrees that the purchaser of a participation interest in
         the Indebtedness will be considered as the absolute owner of a
         percentage interest of such Indebtedness and that such a purchaser will
         have all of the rights granted under any participation agreement
         governing the sale of such a participation interest. Guarantor waives
         any rights of offset that Guarantor may have against Bank and/or any
         purchaser of such a participation interest, and Guarantor
         unconditionally agrees that either Bank or such a purchaser may enforce
         Guarantor's obligations and liabilities under this Agreement,
         irrespective of the failure or insolvency of Bank or any such
         purchaser.

24.      NOTICES. Any notice provided in this Agreement must be in writing and
         will be considered as given on the day it is delivered by hand or
         deposited in the U.S. mail, postage prepaid, addressed to the person to
         whom the notice is to be given at the address shown above or at such
         other addresses as any party may designate to the other in writing.

25.      ADDITIONAL GUARANTIES. Guarantor recognizes and agrees that Guarantor
         may have previously granted, and may in the future grant, one or more
         additional guaranties of the Indebtedness in favor of Bank. Should this
         occur, the execution of this Agreement and any additional guaranties on
         the part of Guarantor will not be construed as a cancellation of this
         Agreement or any of Guarantor's additional guaranties; it being
         Guarantor's full intent and agreement that all such guaranties of the
         Indebtedness in favor of Bank shall remain in full force and effect and
         shall be cumulative in nature and effect.

26.      MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
         part of this Guaranty:

         26.1     AMENDMENT. No amendment, modification, consent or waiver of
                  any provision of this Agreement, and no consent to any
                  departure by Guarantor therefrom, shall be effective unless
                  the same shall be in writing signed by a duly authorized
                  officer of Bank, and then shall be effective only as to the
                  specific instance and for the specific purpose for which
                  given.

         26.2     CAPTION HEADINGS. Caption headings of the sections of this
                  Agreement are for convenience purposes only and are not to be
                  used to interpret or the define their provisions. In this
                  Agreement, whenever the context so requires, the singular
                  includes the plural and the plural also includes the singular.

         26.3     SEVERABILITY. If any provision of this Agreement is held to be
                  illegal, invalid or unenforceable under present or future laws
                  effective during the term hereof, such provision shall be
                  fully severable. This Agreement shall be construed and
                  enforceable as if the illegal, invalid or unenforceable
                  provision had never comprised a part of it, and the remaining
                  provisions of this Agreement shall remain in full force and
                  effect and shall not be affected by the illegal, invalid or
                  unenforceable provision or by its severance herefrom.
                  Furthermore, in lieu of such illegal, invalid or unenforceable
                  provision, there shall be added automatically as a part of
                  this Agreement, a provision as similar in terms to such
                  illegal, invalid or unenforceable provision as may be possible
                  and legal, valid and enforceable.

                                       8
<PAGE>

         26.4     SUCCESSORS AND ASSIGNS BOUND. Guarantor's obligations and
                  liabilities under this Agreement shall be binding upon
                  Guarantor's successors, heirs, legatees, devisees,
                  administrators, executors and assigns.

         26.5     WAIVE JURY. Guarantor and Bank hereby waive the right to any
                  jury trial in any action, proceeding, or counterclaim brought
                  by either against the other.

                     [SIGNATURES APPEAR ON FOLLOWING PAGES]

                                       9
<PAGE>

THE UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, THE GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO BANK AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED. NO FORMAL
ACCEPTANCE BY BANK IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED AS OF APRIL 4, 2006.

GUARANTOR:

GENESIS CRUDE OIL, L.P.

BY:  /s/ MARK J. GORMAN
   ------------------------------------
         MARK GORMAN, PRESIDENT

                [INDIVIDUAL ACKNOWLEDGMENT FOLLOWS ON NEXT PAGE]

                                       10
<PAGE>

                            INDIVIDUAL ACKNOWLEDGMENT

STATE OF TEXAS

COUNTY OF HARRIS
          ------

BE IT KNOWN, that on this 4th day of April, 2006;

BEFORE ME, a Notary Public,

PERSONALLY CAME AND APPEARED:

GENESIS CRUDE OIL, L.P., through its duly authorized officer, who, being duly
sworn, did say and acknowledge that he, in his representative capacity, executed
the foregoing Guaranty on behalf of Genesis Crude Oil, L.P. as its free act and
deed.

GUARANTOR:

GENESIS CRUDE OIL, L.P.

BY:  /s/ MARK J. GORMAN
   -------------------------------------
         MARK GORMAN, PRESIDENT

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
at my office in said County and State the date and year last above written.

SWORN TO AND SUBSCRIBED BEFORE ME THIS 4TH DAY OF APRIL, 2006.

                                    JAN WHITE
                      ------------------------------------
                                  NOTARY PUBLIC
                      MY COMMISSION EXPIRES: JUNE 29, 2009
                                             -------------

                                       11exv10w1

 

EXHIBIT 10.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

AMERICAN MEDICAL SYSTEMS, INC.

XENON MERGER CORP.

SOLARANT MEDICAL, INC.

AND

THE OTHER PARTIES HERETO

DATED AS OF MAY 8, 2006

 

 

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of May 8, 2006, is
entered into by and among American Medical Systems, Inc., a Delaware corporation
(“Parent”), Xenon Merger Corp., a Delaware corporation and a wholly owned subsidiary of
Parent (“Merger Subsidiary”), Solarant Medical, Inc., a Delaware corporation
(“Company”), and Warburg Pincus Equity Partners, L.P. as Stockholders’ Representative
(“Stockholders’ Representative”).

     WHEREAS, the Board of Directors of each of the Company, Parent and Merger Subsidiary have (i)
determined that the Merger (as defined below) is fair and in the best interests of their respective
stockholders and (ii) approved the Merger of Merger Subsidiary with and into the Company, with the
Company surviving, in accordance with the terms and conditions of this Agreement.

     WHEREAS, the parties hereto desire to make certain representations, warranties and agreements
in connection with the Merger and also to prescribe various conditions to the Merger.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound hereby, the Company,
Parent, Merger Subsidiary, and the Stockholders’ Representative hereby agree as follows:

ARTICLE 1

THE MERGER; CONVERSION OF SHARES

	1.1	 	The Merger. At the Effective Time (as defined below) and upon the terms and subject
to the conditions of this Agreement and in accordance with the Delaware General Corporation
Law (the “DGCL”), Merger Subsidiary shall be merged with and into the Company, and,
following the merger, the Company shall continue as the surviving corporation (the
“Surviving Corporation”), the separate corporate existence of Merger Subsidiary shall
cease and the Surviving Corporation shall continue to be governed by the laws of the State of
Delaware (the “Merger”).
	 
	1.2	 	Effective Time. Subject to the terms and conditions set forth in this Agreement, on
the Closing Date (as defined below) the Company and Merger Subsidiary will file, or cause to
be filed, with the Secretary of State of the State of Delaware a Certificate of Merger, in the
form as required by, and executed and acknowledged in accordance with, the applicable
provisions of the DGCL, and substantially in the form attached hereto as Exhibit A
(the “Certificate of Merger”). The Merger shall become effective at 3:00 p.m. Central
Standard Time on the date the Certificate of Merger is filed or, if agreed to by the Parent
and the Company, such later date or time set forth in the Certificate of Merger (the
“Effective Time”).

 

 

	1.3	 	Closing of the Merger.

	 	(a)	 	The closing of the Merger (the “Closing”) will take place on the date
hereof (the “Closing Date”), at 10:00 a.m., local time, at the offices of
Oppenheimer, Wolff & Donnelly LLP, 45 South Seventh Street, Suite 3300, Minneapolis,
Minnesota 55402, unless another time, date, place or manner (e.g., by facsimile
exchange of signature pages with originals to follow by overnight delivery) is agreed
to in writing by the parties hereto.
	 
	 	(b)	 	At the Closing:

	 	(i)	 	Parent shall deliver the Net Initial Merger Consideration, if
any, to the Paying Agent and the Escrow Funds to the Escrow Agent.
	 
	 	(ii)	 	The Company shall deliver to Parent copies of the Amended and
Restated Certificate of Incorporation of the Company certified by the Secretary
of State of the State of Delaware; and Certificates of Good Standing (or their
equivalent) from the Secretary of State of each other state in which the
Company is required to be qualified to do business.
	 
	 	(iii)	 	Parent, the Company, the Stockholders’ Representative and
Escrow Agent shall execute and deliver the Escrow Agreement, in substantially
the form attached hereto as Exhibit B (the “Escrow Agreement”).
	 
	 	(iv)	 	Parent, the Stockholders’ Representative and Payment Agent
shall execute and deliver the Payment Agreement, in substantially the form
attached hereto as Exhibit C (the “Payment Agreement”).
	 
	 	(v)	 	The Company shall deliver to Parent an opinion from Cooley
Godward LLP, counsel to the Company, dated the Closing Date, in substantially
the form attached hereto as Exhibit D.
	 
	 	(vi)	 	The Company shall deliver to Parent an opinion from Willkie
Farr & Gallagher LLP, counsel to Warburg Pincus Equity Partners, L.P., dated
the Closing Date, in substantially the form attached hereto as Exhibit
E.
	 
	 	(vii)	 	Parent shall deliver to the Company an opinion from
Oppenheimer Wolff & Donnelly LLP, counsel to Parent, dated the Closing Date, in
substantially the form of Exhibit F.
	 
	 	(viii)	 	The Company shall deliver to Parent the resolutions of the Company’s Board of
Directors and the Stockholders authorizing the execution, delivery and
performance of this Agreement and the Company Documents, and the transactions
contemplated hereby and thereby, certified by an officer of the Company and
dated as of the Closing Date.
	 
	 	(ix)	 	The Company shall deliver copies of all approvals, consents,
waivers of third parties, or any notices thereto, set forth on Schedule
1.3(b).

2

 

	 	(x)	 	Parent and Merger Subsidiary shall deliver to the Company the
resolutions of their respective Boards of Directors and the resolutions of
Parent, as the sole stockholder of Merger Subsidiary, authorizing the
execution, delivery and performance by them of this Agreement and the Parent
Documents, and the transactions contemplated hereby and thereby, each certified
by an officer of Parent and Merger Subsidiary, respectively, and dated as of
the Closing Date.
	 
	 	(xi)	 	Each officer and director of the Company shall deliver to
Parent Letters of Resignation and Release of Claims, in substantially the form
attached hereto as Exhibit G, dated effective as of the Effective Time.
	 
	 	(xii)	 	Each of Ed Luttich, Oren Mosher, Abdul Tayeb and Bee
Pongbandith shall have accepted Parent’s offers of employment and executed
Parent’s standard agreement for at-will employees regarding confidentiality,
assignment of inventions and non-competition.
	 
	 	(xiii)	 	Mike Gandy shall execute and deliver to Parent a consulting agreement with
the Company, in substantially the form attached hereto as Exhibit H.
	 
	 	(xiv)	 	Each of Terry Spraker, Cheryl Shimek and Mike Gandy
(collectively, the “Terminated Employees”), shall execute and deliver
documentation reasonably satisfactory to Parent terminating their respective
employment with the Company, effective as of the Closing Date.

	1.4	 	Effects of the Merger. The Merger shall have the effects set forth in the DGCL.
Without limiting the generality of the foregoing and subject thereto, at the Effective Time
all the properties, rights, privileges, powers and franchises of the Company and Merger
Subsidiary shall vest in the Surviving Corporation and all debts, liabilities and duties of
the Company and Merger Subsidiary shall become the debts, liabilities and duties of the
Surviving Corporation.
	 
	1.5	 	Certificate of Incorporation of the Surviving Corporation. The form of Certificate
of Incorporation of Merger Subsidiary, as amended, attached hereto as Exhibit I, shall
be the Certificate of Incorporation of the Surviving Corporation until thereafter further
amended in accordance with Applicable Law, except that the name of the Surviving Corporation
shall be Solarant Medical, Inc.
	 
	1.6	 	Bylaws of the Surviving Corporation. The Bylaws of Merger Subsidiary as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until
thereafter amended in accordance with Applicable Law, except that the name of the Surviving
Corporation shall be Solarant Medical, Inc.
	 
	1.7	 	Directors and Officers of the Surviving Corporation. The directors and officers of
Merger Subsidiary immediately prior to the Effective Time shall be the directors and officers
respectively, of the Surviving Corporation until their respective successors shall be duly
elected and qualified.

3

 

	1.8	 	Initial Merger Consideration. Subject to Section 1.11 (Dissenting Shares) and
Section 5.6 (Right of Set-Off), Parent shall pay as consideration for the Merger the amounts
set forth in this Section 1.8 and Section 1.9.

	 	(a)	 	At Closing, Parent shall pay One Million Dollars ($1,000,000) (the “Initial
Payment”) minus (i) the amount of all Liabilities of the Company (exclusive,
however, of the Lease Liabilities and any liabilities set forth on Schedule
1.8(a)) outstanding as of the Closing (including, without limitation, any and all
Transaction Expenses) (the “Company Liabilities”), and (ii) the amount of
consideration that would have been payable to Dissenting Stockholders who would be
entitled to receive a portion of the Initial Payment if they have perfected their
rights as Dissenting Stockholders as of the Closing Date (the Initial Payment as so
adjusted, the “Initial Merger Consideration”), which shall be paid by Parent to
the Persons and in the amounts as follows: (x) One Hundred Thousand Dollars ($100,000)
(the “Escrow Funds”) to the Escrow Agent to be held in escrow to secure any
indemnification obligation of the Stockholders under Section 5.2; and (y) the balance
of the Initial Merger Consideration to the Payment Agent for distribution in accordance
with Schedule 1.8(b) and the terms of the Payment Agreement (any portion of the
Initial Merger Consideration in excess of the Escrow Funds payable to the Stockholders
is sometimes referred to herein as the “Net Initial Merger Consideration”).
Prior to the Closing, the Company shall prepare and deliver to Parent a balance sheet
of the Company dated as of the Closing Date which discloses all the Company Liabilities
(the “Closing Date Balance Sheet”), a copy of which is attached hereto as
Schedule 1.8(c). The Closing Date Balance Sheet shall be prepared in
accordance with GAAP (subject to the absence of footnote disclosures and changes
resulting from normal year-end adjustments, but including supporting account detail for
all balance sheet accounts) and consistent with and using the same methods, procedures,
assumptions and adjustments employed on the Latest Balance Sheet.
	 
	 	(b)	 	The Escrow Funds shall not be distributed until six (6) months after the
Effective Time and shall only be distributed in accordance with the terms and
conditions of the Escrow Agreement. In the event that Parent shall have timely given a
notice of a claim for indemnification pursuant to Article 5, prior to the expiration of
such six-month period, the Stockholders’ Representative and the Parent shall endeavor
in good faith to determine a reasonable estimate of the maximum amount of such claim
and shall instruct the Escrow Agent to deliver any excess amount of Escrow Funds to the
Payment Agent for distribution in accordance with the Escrow Agreement.

	1.9	 	Contingent Merger Consideration. As additional consideration for the Merger and
subject to the conditions set forth in this Section 1.9, Section 1.11 (Dissenting Shares) and
Section 5.6 (Right of Set-Off), Parent shall make the following additional payments
(collectively, the “Contingent Merger Consideration” and, together with the Initial
Merger Consideration, the “Merger Consideration”) to the Payment Agent for
distribution in accordance with Schedule 1.8(b):

4

 

	 	(a)	 	Milestone Payments.

	 	(i)	 	If Parent achieves the Hospital CPT Code Milestone, Parent
shall pay, in accordance with Schedule 1.8(b), an additional Two
Million Dollars ($2,000,000) within 45 days after the achievement of the
Hospital CPT Code Milestone (the “Hospital CPT Code Milestone
Payment”).
	 
	 	(ii)	 	If Parent achieves the Office CPT Code Milestone, Parent shall
pay, in accordance with Schedule 1.8(b), an additional Four Million
Dollars ($4,000,000) within 45 days after the achievement of the Office CPT
Code Milestone (the “Office CPT Code Milestone Payment”).
	 
	 	(iii)	 	Parent shall pay, in accordance with Schedule 1.8(b),
an amount equal to the difference between Six Million Dollars ($6,000,000),
minus the amount of any Hospital CPT Code Milestone Payment or Office CPT Code
Milestone Payment already paid if: (A) the Product has been approved for
marketing or sale in the United States by the FDA; and (B) an Office CPT code
that covers the Product has been issued; and (C) Parent has elected to
commercialize the Product (the “Commercialization Milestone Payment”
and together with the Hospital CPT Code Milestone Payment and the Office CPT
Code Milestone Payment, the “Milestone Payments”).
	 
	 	(iv)	 	In no event shall the aggregate amount payable by Parent in
accordance with Section 1.9(a)(i), Section 1.9(a)(ii) and Section 1.9(a)(iii)
exceed six million dollars ($6,000,000).

	 	(b)	 	Revenue Payments.

	 	(i)	 	Upon the earlier to occur of: (A) the achievement of either:
(1) the Commercialization Milestone Payment; or (2) the Hospital CPT Code
Milestone Payment and the Office CPT Code Milestone Payment, or (B) the date of
written notice from the Stockholders’ Representative that it would like the
revenue payments to commence (the “Revenue Payment Commencement Date”),
Parent shall make the following additional payments:

(1) An amount equal to the excess, if any, of Net Sales during the
first calendar year following the calendar year in which the Revenue
Payment Commencement Date occurs (“Year One”) over Net Sales
during the calendar year in which the Revenue Payment Commencement
Date occurs (“Year Zero”) (the “First Revenue
Payment”);

(2) An amount equal to one-half (1/2) times the excess, if any, of Net
Sales during the calendar year following Year One (“Year

5

 

Two”) over Net Sales in Year One (the “Second Revenue
Payment”); and

(3) An amount equal to one-half (1/2) times the excess, if any, of Net
Sales during the calendar year following Year Two (“Year
Three”) over Net Sales in Year Two (the “Third Revenue
Payment” and, together with the First Revenue Payment and the
Second Revenue Payment, the “Revenue Payments”).

	 	(ii)	 	Parent shall deliver to the Stockholders’ Representative, no
later than sixty (60) days following the last day of each of Year Zero, Year
One, Year Two and Year Three a statement, with reasonable detail and
accompanied by detailed schedules and work papers providing reasonable support
for such determination, reflecting Parent’s calculation of Net Sales during
such applicable twelve-month period (each a “Revenue Calculation”).
The Stockholders’ Representative shall not distribute these statements to any
Person. Each Revenue Calculation will be deemed to be accepted by the
Stockholders’ Representative and shall be conclusive for purposes of
determining the applicable Revenue Calculation, unless the Stockholders’
Representative shall have delivered to Parent within fifteen (15) days
following delivery of a Revenue Calculation a written statement objecting to
any of the information contained in the applicable Revenue Calculation,
specifying in reasonable detail the amount in dispute and accompanied by
detailed schedules and work papers providing reasonable support for such
determination.
	 
	 	(iii)	 	The Stockholders’ Representative may cause an audit to be made
of those books and records of Parent that are necessary to review and audit the
statements delivered pursuant to Section 1.9(b)(ii) and created in connection
with each applicable Revenue Calculation. Any such audit shall be conducted
only by an independent certified accountant selected by the Stockholders’
Representative and reasonably acceptable to Parent, after prior written notice
to Parent, and shall be conducted during regular business hours at Parent’s
offices and in such a manner so as not to interfere with Parent’s normal
business activities. Parent agrees to permit such accountant, during normal
business hours, to have reasonable access to, and to examine and make copies
of, those books and records of Parent that such accountant, in his or her sole
discretion, deems necessary to review and audit the applicable Revenue
Calculation. Neither the Stockholders’ Representative nor such accountant will
have the right to review or audit any other books and records of Parent. In no
event shall more than one audit be conducted, nor shall the records supporting
any statements be audited more than once for the same purpose. In the event
any such audit reveals any discrepancy less than five percent

6

 

	 	 	 	(5%) of the Net
Sales for the period audited, the Stockholders shall pay for the reasonable
third party costs and expenses of such audit. In the event any such audit
reveals any discrepancy greater than or equal to five percent (5%) of the Net
Sales for the period audited, Parent shall pay for the reasonable third party
costs and expenses of such audit.
	 
	 	(iv)	 	Subject to Section 5.6 (Right of Set-Off), within fifteen (15)
days following final determination of the applicable Revenue Calculation
pursuant to Section 1.9(b)(iii), Parent shall pay the applicable Revenue
Payment, if any, owed hereunder to the Payment Agent for distribution in
accordance with Schedule 1.8(b).
	 
	 	(v)	 	Not more than two (2) times per any twelve month period prior
to the Revenue Commencement Date, Stockholders’ Representative may deliver
written notice to Parent requesting documentation regarding the status of
Parent’s then current efforts, if any, to commercialize the Product.

	 	(c)	 	Development Period Contingency Payment. In the event that (i) Parent
achieves the Office CPT Code Milestone, and (ii) the Parent and its Affiliates incur
Product Development Expenses during the Development Period (as defined below) less than
Fourteen Million Dollars ($14,000,000), then Parent shall pay an amount equal to fifty
percent (50%) of the difference between Sixteen Million Dollars ($16,000,000) and the
aggregate amount of Product Development Expenses paid by the Parent and its Affiliates
during the Development Period (the “Development Period Contingency Payment”),
in accordance with Schedule 1.8(b). For the avoidance of doubt, no Development
Period Contingency Payment shall be made if (i) Parent does not achieve the Office CPT
Code Milestone or (ii) Parent and its Affiliates spend more than Fourteen Million
Dollars ($14,000,000) on Product Development Expenses during the Development Period.
For purposes hereunder, “Development Period” shall mean the period from Closing
Date through the end of the calendar year in which the Parent achieves the Office CPT
Code Milestone.
	 
	 	(d)	 	Contingent Payments Not Certain. Each of Parent, the Company, the
Principal Stockholders, and the Stockholders’ Representative hereby acknowledges that
(i) the achievement of either or both of the Milestones and the amount of Net Sales, if
any, that Parent and its Affiliates may generate is uncertain, (ii) Parent and its
Affiliates may elect not to pursue either or both of the Milestones, may not achieve
either or both of the Milestones and may not generate any Net Sales, and (iii) it is
therefore not assured that Parent will be required to make any Milestone Payments or
Revenue Payments for any particular year, or at all. Each of Parent, the Company, the
Principal Stockholders, and the Stockholders’ Representative further acknowledges that
Parent will not be required to make any Milestone Payments if Parent elects not to
pursue the Milestones and the AMA subsequently issues a Hospital CPT Code or an Office
CPT Code as a result of the efforts of third parties that could be used to seek
reimbursement for procedures using the Products. Parent shall notify the Stockholders’
Representative in writing if Parent elects not to pursue the Milestones.
	 
	 	(e)	 	Sale of Product. If during the period from the Effective Time and
ending on the earlier of (i) five (5) years following the Effective Time or (ii) the
payment of the

7

 

	 	 	 	first Milestone Payment, Parent shall sell all or substantially all of
the rights related to the Product (including the Intellectual Property related to the
Product) to a Person other than an Affiliate of Parent, then Parent shall pay the
Stockholders in accordance with Schedule 1.8(b) an amount equal to fifty
percent (50%) of (x) the amount of all cash proceeds received by Parent from the
sale of such rights minus (y) all fees and expenses incurred by or on behalf
of Parent in connection with the negotiation and consummation of such sale that are
payable to a third party (including, without limitation, all legal, accounting,
financial advisory, investment banking, consulting and all other fees and expenses
of third parties); provided, however, the foregoing shall not apply in case of a
Change in Control of American Medical Systems Holdings, Inc., a Delaware corporation
and the parent corporation of Parent (“AMS Holdings”), or the sale of a
product line of Parent or an Affiliate of Parent that includes the rights to the
Product, such that the acquiring entity assumes all of the Parent’s obligations
under this Section 1.9 of the Agreement.

	1.10	 	Cancellation and Conversion of Company Securities at the Effective Time. As of the
Effective Time, by virtue of the Merger and without any action on the part of any holder of
any share of capital stock of the Company or Merger Subsidiary:

	 	(a)	 	Subject to the terms and conditions hereof, each share of Company Common Stock,
Series A-1 Stock, Series A-2 Stock, Series A-3 Stock, Series B Stock, Series C Stock,
Series D Stock, Company Stock Options and Company Warrants (collectively, the
“Junior Company Securities”), issued and outstanding immediately prior to the
Effective Time (other than (i) Junior Company Securities held in the Company’s
treasury, (ii) Junior Company Securities held by Parent, Merger Subsidiary or any other
Subsidiary of Parent, and (iii) Dissenting Shares) shall receive $0.00 for each such
share of Junior Company Securities and shall be cancelled without consideration
therefore.
	 
	 	(b)	 	Subject to the terms and conditions hereof, each share of Series E-1 Preferred
Stock, Series F-1 Preferred Stock and Series G-1 Preferred Stock (collectively, the
“Senior Stock”), issued and outstanding immediately prior to the Effective Time
(other than (i) Senior Stock held in the Company’s treasury, (ii) Senior Stock held by
Parent, Merger Subsidiary or any other Subsidiary of Parent, and (iii) Dissenting
Shares) shall automatically be converted into the right to receive the amounts set
forth on Schedule 1.8(b).
	 
	 	(c)	 	Each share of the common stock, par value $.01 per share, of Merger Subsidiary
(“Merger Subsidiary Common Stock”), issued and outstanding at the Effective
Time of the Merger shall be converted into one (1) share of common stock, par value
$.01 per share, of the Surviving Corporation (“Surviving Corporation Common
Stock”).
	 
	 	(d)	 	Each share of Junior Company Securities and Senior Stock held in the treasury
of the Company and each share of Junior Company Securities and Senior Stock held by
Parent, Merger Subsidiary or any Subsidiary of Parent, Merger Subsidiary or

8

 

	 	 	 	the Company
immediately prior to the Effective Time will, by virtue of the Merger and without any
action on the part of Merger Subsidiary, the Company or
the holder thereof, be canceled, retired and cease to exist without payment of any
consideration therefore and without any conversion thereof.

	1.11	 	Dissenting Shares.

	 	(a)	 	Notwithstanding any provision of this Agreement to the contrary, any shares of
Company Capital Stock issued and outstanding immediately prior to the Effective Time
that are held by any holder of shares of Company Capital Stock that has not voted in
favor of the Merger (if entitled to vote) and has properly exercised and perfected
appraisal rights in accordance with either Section 262 et. Seq. of DGCL or Section 1300
et. Seq. of the California Corporations Code (the “CCC”) (such holders are
referred to as “Dissenting Stockholders” and such shares are referred to as
“Dissenting Shares”) will not be converted into the right to receive the Merger
Consideration, but will become entitled to the right to receive such consideration as
may be determined to be due to the holders of such Dissenting Shares pursuant to the
DGCL or CCC; provided, however, that any holder of Dissenting Shares
who will have failed to perfect or who effectively will have withdrawn or lost such
rights of appraisal under the DGCL or CCC will forfeit the right to
appraisal of such shares of Company Capital Stock, and such shares of Company Capital Stock will no
longer be Dissenting Shares and, as of the later of the Effective Time or the loss of
such status, will be deemed to have been converted into the right to receive the Merger
Consideration.
	 
	 	(b)	 	The Company will give Parent and Merger Subsidiary prompt notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other related
instruments received by the Company and Parent will have the right to participate in
all negotiations and proceedings with respect to such demands. Prior to the Effective
Time, the Company will not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands other than by
operation of law or pursuant to a final order of a court of competent jurisdiction.
Notwithstanding anything to the contrary in this Section 1.11 if (i) the Merger is
terminated, rescinded or abandoned or (ii) if the Stockholders revoke the authority to
effect the Merger, then the right of any Stockholder to be paid the fair value of such
Stockholder’s shares of Company Capital Stock will cease. The Surviving Corporation
will comply with all obligations of the DGCL or CCC with respect to Dissenting
Stockholders.

	1.12	 	Escrow Procedure; Exchange of Certificates.

	 	(a)	 	The Company, the Stockholders’ Representative, Parent and the Payment Agent
shall enter into the Payment Agreement, and Parent, Stockholders’ Representative and
the Escrow Agent shall enter into the Escrow Agreement, for the benefit of the holders
of Senior Stock for the purpose of paying the Merger Consideration upon surrender of
certificates which immediately prior to the Effective Time

9

 

	 	 	 	represented Senior Stock (in
either case, the “Certificates”) and for the purpose of securing any
indemnification obligation of the Stockholders under Section 5.2.
	 
	 	(b)	 	At the Closing, Parent shall deposit, or shall cause to be deposited, with the
Payment Agent pursuant to the Payment Agreement, for the benefit of the Stockholders,
cash in U.S. dollars in an amount equal to the Net Initial Merger Consideration.
	 
	 	(c)	 	To the extent that sums are released by the Payment Agent or the Escrow Agent
to the Stockholders or the Parent in accordance with this Agreement, the Escrow
Agreement or the Payment Agreement, any accumulated interest shall be distributed in
accordance with the Payment Agreement or the Escrow Agreement, as the case may be.
	 
	 	(d)	 	As soon as reasonably practicable after the Effective Time, the Payment Agent
shall mail to each holder of record of Certificates: (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Payment Agent
and shall be in such form and have such other provisions as Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for a cash payment of the proper Merger Consideration when and
if it becomes payable under this Agreement, the Payment Agreement or the Escrow
Agreement. Upon surrender of a Certificate for cancellation to the Payment Agent or to
such other agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to receive
in exchange therfor by check or wire transfer, as the case may be, an amount equal to
the proper Merger Consideration when and if it becomes payable under this Agreement,
the Payment Agreement or the Escrow Agreement, and the Certificate so surrendered shall
forthwith be canceled. No interest shall be paid or accrued on any Merger
Consideration upon the surrender of any Certificates. In the event of a transfer of
ownership of Senior Stock which is not registered in the transfer records of the
Company, payment of the proper Merger Consideration when and if it becomes payable
under this Agreement may be paid to a transferee if the Certificate representing such
Senior Stock, as applicable, is presented to the Payment Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such shares have been paid. Until
surrendered and exchanged as contemplated by this Section 1.12, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to receive
upon such surrender an amount equal to the proper Merger Consideration when and if it
becomes payable under this Agreement, the Payment Agreement or the Escrow Agreement.
	 
	 	(e)	 	In the event that any Certificate shall have been lost, stolen or destroyed,
the Payment Agent will, upon the making of an affidavit of that fact by the holder
claiming such Certificate to have been lost, stolen or destroyed, pay the proper

10

 

	 	 	 	Merger
Consideration as would be required pursuant to this Agreement but for the failure to
deliver such Certificate to the Payment Agent; provided, however, that
the Surviving Corporation may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
Certificate to deliver a bond in such sum as it may reasonably direct as indemnity
against any claim that may be made against the Surviving Corporation with respect to
the Certificate alleged to have been lost, stolen or destroyed.
	 
	 	(f)	 	The Merger Consideration paid upon the surrender of Certificates for exchange
of Senior Stock in accordance with the terms hereof shall be deemed to have been paid
in full satisfaction of all rights pertaining to such Senior Stock. After the
Effective Time, there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the Company Common Stock or Company
Preferred Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article 1, except
as otherwise provided by Applicable Law.
	 
	 	(g)	 	Notwithstanding Section 1.12(d), neither the Surviving Corporation nor Parent
shall be liable to any holder of Senior Stock for any Merger Consideration delivered to
a public official pursuant to any applicable abandoned property, escheat or similar
law.
	 
	 	(h)	 	To the extent permitted by Applicable Law, any amounts of Merger Consideration,
including any Escrow Funds and any set-off amounts pursuant to Section 5.6, remaining
unclaimed by any holder of Senior Stock at the time the Escrow Agreement and Payment
Agreement are terminated in accordance with their respective terms (or such earlier
date immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall be delivered to Parent and shall
become the property of the Parent, subject to the rights of any such Stockholder to
claim such amounts from Parent.

11

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     As a material inducement to Parent and Merger Subsidiary to enter into this Agreement, with
the understanding that Parent and Merger Subsidiary will be relying thereon in consummating the
transactions contemplated hereunder, the Company hereby represents and warrants to Parent and
Merger Subsidiary that, except as set forth in the Disclosure Schedule delivered by the Company to
Parent and Merger Subsidiary on the date hereof (the “Disclosure Schedule”), the statements
contained in this Article 2 are true and correct. The Disclosure Schedule is arranged in sections
corresponding to the sections and subsections of this Article 2, and disclosure in one section of
the Disclosure Schedule shall constitute disclosure for all sections of the Disclosure Schedule as
though fully set forth in such other sections (whether or not specific cross-references are made)
only to the extent to which the applicability of such disclosure is reasonably apparent.

	2.1	 	Corporate Organization and Power. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and
has all requisite corporate power and authority, and all governmental licenses,
governmental authorizations, governmental consents and governmental approvals, required to
carry on its business as now conducted and to own, lease and operate the assets and
properties of the Company as now owned, leased and operated. The Company is duly qualified
or licensed to do business as a foreign corporation and is in good standing in every
jurisdiction in which the character or location of its properties and assets owned, leased
or operated by the Company or the nature of the business conducted by the Company requires
such qualification or licensing, except where the failure to be so qualified, licensed or in
good standing in such other jurisdiction would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company has heretofore delivered to Parent
complete and accurate copies of its Certificate of Incorporation and Bylaws, as currently in
effect. The Disclosure Schedule contains a list of all jurisdictions in which the Company
is qualified or licensed to do business.
	 
	2.2	 	Subsidiaries. The Company does not have and has never had any Subsidiaries. The
Company does not, directly or indirectly, own or control, or have any capital, equity,
partnership, participation or other ownership interest in, any corporation, partnership, joint
venture or other business association or entity.
	 
	2.3	 	Authorization. The Company has the full corporate power and authority to enter into
this Agreement and each other agreement, document, instrument or certificate contemplated by
this Agreement or to be executed by the Company in connection with the consummation of the
transactions contemplated by this Agreement (the “Company Documents”), and subject to
obtaining the necessary approval of its stockholders with respect to the Merger, to carry out
the transactions contemplated herein. The Board of Directors and Stockholders of the Company
have taken all action required by law, the Company’s Amended and Restated Certificate of
Incorporation and Bylaws and otherwise to duly and validly authorize and approve the
execution, delivery and performance by the Company of this Agreement and the Company Documents
and the consummation by the Company of the transactions contemplated herein and therein and

12

 

	 	 	no
other corporate proceedings on the part of the Company are, or will be, necessary to authorize
this Agreement or the Company Documents or to consummate the transactions contemplated hereby
or thereby. The affirmative vote of holders of at least: (i) a
majority of the outstanding shares of Company Capital Stock, voting together as a class; (ii) a majority of the
outstanding shares of Series D Stock, voting separately as a class, (iii) a majority of the
outstanding shares of Series E-1 Stock, voting separately as a class, (iv) a majority of the
outstanding shares of Series F-1 Stock, voting separately as a class, (v) a majority of the
outstanding shares of Series G-1 Stock, voting separately as a class, and (vi) a majority of
the outstanding shares of Company Common Stock, voting separately as a class, are the only
votes of the holders of any class or series of the Company’s Capital Stock necessary to
approve and adopt this Agreement and the Company Documents and to consummate the Merger. This
Agreement and each of the Company Documents has been, duly and validly executed and delivered
by the Company and constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms, subject to laws of general
application relating to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and rules of law governing specific performance,
injunctive relief or other equitable remedies.
	 
	2.4	 	Capitalization of the Company. The Company has authorized 110,000,000 shares of
capital stock, which consists of (a) 75,000,000 shares of Company Common Stock, 3,648,448
shares of which are issued and outstanding; and (b) 35,000,000 shares of Company Preferred
Stock, which is designated as follows: (i) 3,000,000 shares of Series A-1 Stock, 2,537,500
shares of which are issued and outstanding, (ii) 2,500,000 shares of Series A-2 Stock,
2,196,666 shares of which are issued and outstanding, (iii) 1,500,000 shares of Series A-3
Stock, 1,042,778 shares of which are issued and outstanding, (iv) 5,500,000 shares of Series B
Stock, 4,911,294 shares of which are issued and outstanding, (v) 2,500,000 shares of Series C
Stock, 2,046,979 shares of which are issued and outstanding, (vi) 11,000,000 shares of Series
D Stock, 10,416,666 shares of which are issued and outstanding, (vii) 115,000 shares of Series
E-1 Stock, 121,587.7367 shares of which are issued and outstanding, (viii) 70,000 shares of
Series F-1 Stock, 68,250.8509 shares of which are issued and outstanding, (ix) 40,000 shares
of Series G-1 Stock, 33,598.8781 shares of which are issued and outstanding and (x) 8,775,000
shares of which are undesignated and not outstanding. All of the issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid, nonassessable
and free of preemptive rights. All issued and outstanding shares of Company Capital Stock are
owned (of record) solely by the Stockholders in the exact amounts as set forth in the
Disclosure Schedule. There are 1,498,731 shares of Company Common Stock reserved for future
issuance pursuant to (y) Company Stock Option Plans, 2,772,646 shares subject to outstanding
Company Stock Options and 0 shares subject to Company Restricted Stock and (z) 8,264,390
shares of Company Common Stock subject to outstanding Company Warrants and 377,952 shares of
Series B Stock subject to outstanding Company Warrants. There are no other outstanding
Company Securities. There are no outstanding obligations of the Company to repurchase, redeem
or otherwise acquire any Company Securities. There are no stockholder agreements, voting
trusts or other agreements or understandings to which the Company is a party or by which it is
bound relating to the voting or registration of any shares of capital stock of the Company.

13

 

	2.5	 	Non-Contravention. None of the execution, delivery and performance by the Company of
this Agreement or the Company Documents or the consummation of the transactions contemplated
herein or therein will (i) contravene or conflict with the Amended and Restated Certificate of
Incorporation or Bylaws of the Company, (ii) contravene or conflict with or constitute a
violation of any provision of any Applicable Law binding upon or applicable to the Company or
any of the Company’s assets, (iii) result in the creation or imposition of any Lien on any of
the Company’s assets, other than Permitted Liens, (iv) be in conflict with, constitute (with
or without due notice or lapse of time or both) a default under, result in the loss of any
material benefit under, or give rise to any right of termination, cancellation, increased
payments or acceleration under any terms, conditions or provisions of any note, bond, lease,
mortgage, indenture, license, contract (including, without limitation, the Coopers Agreement),
franchise, permit, instrument or other agreement or obligation to which the Company is a
party, or by which any of their respective properties or assets may be bound, or (v) conflict
with, or result in any violation of, any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award of any Governmental Authority applicable to the Company or by
which any of the properties or assets of the Company are bound, other than, in the case of
clauses (ii), (iii), (iv) or (v), where such conflicts or other occurrences could not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
	 
	2.6	 	Consents and Approvals. No consent, approval, order or authorization of or from, or
registration, notification, declaration or filing with (hereinafter sometimes separately
referred to as a “Consent” and sometimes collectively as “Consents”), any
Person, including without limitation any Governmental Authority, is required in connection
with the execution, delivery or performance of this Agreement or the Company Documents by the
Company or the consummation by the Company of the transactions contemplated herein, other than
the requirements of the DGCL for filing of appropriate documents to effect the Merger. The
Company is the “acquired person” within the meaning of Rule 801.2(b) promulgated pursuant to
the HSR Act and does not within the meaning of Rule 801.1 of the HSR Act directly or
indirectly control (as defined in Rule 801.1(b)) any entities, trusts, partnerships or other
business organizations. The Company had total assets as of the date of its last regularly
prepared balance sheet (as determined in accordance with Rule 801.11 of the HSR Act) of less
than Eleven Million Three Hundred Thousand Dollars ($11,300,000) and annual net sales for its
most recent fiscal year (as determined in accordance with Rule 801.11 of the HSR Act) of less
than Eleven Million Three Hundred Thousand Dollars ($11,300,000). There are no facts relating
to the identity or circumstances of the Company that would prevent or materially delay
obtaining any of the Consents.
	 
	2.7	 	Financial Statements; Undisclosed Liabilities.

	 	(a)	 	The Company has delivered to Parent copies of (i) the unaudited consolidated
balance sheet, as of March 31, 2006 of the Company (the “Latest Balance Sheet”)
and the unaudited consolidated statements of income and cash flows of the Company for
the three-month period ended March 31, 2006 (such statements of income and cash flows
and the Latest Balance Sheet being herein referred to as

14

 

	 	 	 	the “Latest Financial
Statements”), (ii) the audited consolidated balance sheet, as of December 31, 2003,
of the Company and the audited consolidated statements of income and cash flows of the
Company for each of the year ended December 31, 2003 (collectively, the “Audited
Annual Financial Statements”), and (iii) the unaudited consolidated balance sheet
as of December 31, 2004 and 2005 of the Company and the unaudited consolidated
statements of income and cash flows of the Company for the years ended December 31,
2004 and 2005 (collectively, the “Unaudited Annual Financial Statements” and
together with the Audited Annual Financial Statements, the “Annual Financial
Statements”). The Latest Financial Statements and the Annual Financial Statements
are based upon the information contained in the books and records of the Company and
fairly present the financial condition of the Company as of the dates thereof and
results of operations for the periods referred to therein. The Annual Financial
Statements have been prepared in accordance with GAAP, consistently applied. The
Latest Financial Statements have been prepared in accordance with GAAP applicable to
unaudited interim financial statements (and thus may not contain all notes and may not
contain prior period comparative data which are required for compliance with GAAP),
consistently with the Annual Financial Statements, and reflect all
adjustments necessary to a fair statement of the financial condition and results of
operations for the interim periods presented. The Company’s internal controls and
procedures are sufficient to ensure, and have in fact ensured, that the Latest
Financial Statements, the Annual Financial Statements and the Closing Balance Sheet
are accurate in all material respects.
	 
	 	(b)	 	All accounts, books and ledgers related to the business of the Company are
properly kept, are complete in all material respects, and there are no material
inaccuracies or discrepancies contained or reflected therein. The Company does not
have any of its records, systems, controls, data, or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not under the
exclusive ownership (excluding licensed software programs) and direct control of the
Company.
	 
	 	(c)	 	Except as and to the extent reflected in the Closing Balance Sheet, the Company
does not have any Liabilities of any nature (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due, whether known or unknown, and
regardless of when asserted) arising out of transactions or events heretofore entered
into, or any action or inaction, or any state of facts existing, with respect to or
based upon transactions or events heretofore occurring, including, without limitation,
any Liabilities arising out of or related to the Coopers Agreement.

	2.8	 	Absence of Certain Changes. Except as otherwise authorized by this Agreement, since
December 31, 2005, the Company has owned and operated its assets, properties and businesses in
the Ordinary Course of Business and there has not been:

15

 

	 	(a)	 	any change, effect, event, occurrence, state of facts or development that
individually or in the aggregate, has had or would reasonably be expected to have a
Material Adverse Effect;
	 
	 	(b)	 	failure to pay or perform, or delay in payment or performance of, any material
obligation by the Company (other than an obligation being contested or which the
Company intends to contest in good faith by appropriate proceedings, in either event,
for which the Company has established adequate reserves which are reflected in the
Latest Financial Statements);
	 
	 	(c)	 	any declaration, setting aside or payment of any dividend or other distribution
with respect to any shares of capital stock of the Company, or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of capital
stock or other equity or debt securities of, or other ownership interests in, the
Company;
	 
	 	(d)	 	any split, combination or reclassification of any of its capital stock;
	 
	 	(e)	 	any amendment of any provision of the Amended and Restated Certificate of
Incorporation, Bylaws or other governing documents of, or of any material term of any
outstanding security issued by, the Company;
	 
	 	(f)	 	any incurrence, assumption or guarantee by the Company of any indebtedness for
borrowed money;
	 
	 	(g)	 	any change in any method of accounting or accounting practice by the Company,
except for any such change required by reason of a change in GAAP and concurred with by
the Company’s independent public accountants;
	 
	 	(h)	 	issuance of any equity or debt securities of the Company other than pursuant to
the Company Stock Option Plans, Company Stock Options or Company Warrants in the
Ordinary Course of Business;
	 
	 	(i)	 	acquisition or disposition of assets material to the Company, taken as a whole,
except for sales of inventory in the Ordinary Course of Business, any acquisition or
disposition of capital stock of any third party, or any merger or consolidation with
any third party, by the Company;
	 
	 	(j)	 	any creation or assumption by the Company of any Lien;
	 
	 	(k)	 	any individual capital expenditure (or series of related capital expenditures)
either involving more than Ten Thousand Dollars ($10,000) or outside the Ordinary
Course of Business;
	 
	 	(l)	 	any material damage, destruction or loss (whether or not covered by insurance)
from fire or other casualty to its tangible property;

16

 

	 	(m)	 	any material increase in the base salary of any officer or employee of the
Company;
	 
	 	(n)	 	adoption, amendment, modification, or termination any bonus, profit-sharing,
incentive, severance, retirement or other similar plan for the benefit of any of its
directors, officers or employees;
	 
	 	(o)	 	making or revocation of any material Tax election or any settlement or
compromise of any material Tax liability or application for any change in a material
Tax accounting method;
	 
	 	(p)	 	entry by the Company into any joint venture, partnership or similar agreement
with any Person; or
	 
	 	(q)	 	any authorization of, or commitment or agreement to take any of, the foregoing
actions except as otherwise permitted by this Agreement.

	2.9	 	Assets and Properties. The Company does not own, and has never owned, any real
property. The Company has good and valid right, title and interest in
and to or, in the case of leased properties or properties held under license, good and valid leasehold or
license interests in, all of its assets and properties, including, but not limited to, all
of the machinery, equipment, terminals, computers, vehicles, and all other assets and
properties (real, personal or mixed, tangible or intangible) reflected in the Latest Balance
Sheet and all of the assets purchased or otherwise acquired since the date of the Latest
Balance Sheet, except those assets and properties disposed of in the Ordinary Course of
Business after the date of the Latest Balance Sheet. The Company holds title to each such
property and asset free and clear of all Liens, except Permitted Liens.
	 
	2.10	 	Manufacturing and Marketing Matters. Prior to the effectiveness of the Coopers
Agreement, all products previously manufactured and sold by the Company were designed,
manufactured, labeled, packaged and sold in accordance with all Applicable Laws pertaining to
medical devices including, but not limited to, in the case of products falling under the
jurisdiction of the FDA, the U.S. Food, Drug and Cosmetic Act (the “FDC Act”) and the
regulations promulgated thereunder, and the Good Manufacturing Practices/Quality System
Regulations (“GMP/QSR Regulations”) promulgated under the FDC Act. All of the
manufacturing facilities of the Company are in compliance with all GMP/QSR Regulations and ISO
9001, 9002, EN 29001, 46001 requirements. The Company has not granted rights to manufacture,
produce, assemble, license, market, or sell the Product to any other Person and is not bound
by any agreement that affects the Company’s exclusive right to develop, manufacture, assemble,
distribute, market or sell the Product.
	 
	2.11	 	FDA and Regulatory Matters.

	 	(a)	 	The Company has obtained all necessary and applicable approvals, clearances,
authorizations, licenses and registrations required by United States or foreign
governments or government agencies, to permit the design, development, pre-clinical and
clinical testing, manufacture, labeling, sale, distribution and

17

 

	 	 	 	promotion of its
products in jurisdictions where it currently conducts such activities with respect to
each product (collectively, the “Company Licenses”). The Company is in
compliance in all material respects with the terms and conditions of each Company
License. The Company is in compliance in all material respects with all Applicable
Laws regarding registration, license, certification for each site at which a product is
manufactured, labeled, sold, or distributed. To the extent any product has been
exported from the United States, the Company has exported such product in compliance in
all material respects with Applicable Laws. All manufacturing operations performed by
or on behalf of the Company have been and are being conducted in all material respects
in compliance with the Quality Systems regulations of the FDA. All non-clinical
laboratory studies of products sponsored by the Company and intended to be used to
support regulatory clearance or approval, have been and are being conducted in
compliance in all material respects with the FDA’s good laboratory practice for
non-clinical studies regulations (21 CFR Part 58) in the United States and, to the
extent applicable to the Company, counterpart regulations in the European Union and all
other countries. The Company is in compliance in all material respects with all
applicable reporting requirements for all Company Licenses or plant
registrations including, but not limited to, applicable adverse event reporting
requirements in the United States and outside of the United States under Applicable
Law. The Disclosure Schedule sets forth a list of all Company Licenses.
	 
	 	(b)	 	The Company is in compliance in all material respects with all FDA and
non-United States equivalent agencies and other Applicable Laws relating to the
maintenance, compilation and filing of reports, including medical device reports, with
regard to the Company’s Products. The Disclosure Schedule sets forth a list of all
applicable adverse event reports related to the Products, including any Medical Device
Reports (as defined in 21 CFR 803). The Disclosure Schedule sets forth a list of all
complaint review and analysis reports of the Company, including information regarding
complaints by product and root cause analysis of closed complaints, which reports are
correct in all material respects.
	 
	 	(c)	 	The Company has not received any written notice or other written communication
from the FDA or any other Governmental Authority (i) contesting the pre-market
clearance or approval of, the uses of or the labeling and promotion of the Products or
(ii) otherwise alleging any violation of Applicable Law by the Company in connection
with development or marketing of the Product.
	 
	 	(d)	 	There have been no recalls, field notifications or seizures ordered or adverse
regulatory actions taken or, to the Company’s Knowledge, threatened by the FDA or any
other Governmental Authority with respect to the Product, including any facilities
where the Product is produced, processed, packaged or stored, and the Company has not,
within the last three years, either voluntarily or at the request of any Governmental
Authority, initiated or participated in a recall of the Product or provided post-sale
warnings regarding the Product.

18

 

	 	(e)	 	The Company has conducted all of its clinical trials with reasonable care and
in all material respects in accordance with all Applicable Laws and the stated
protocols for such clinical trials.
	 
	 	(f)	 	All filings with and submissions to the FDA and any corollary entity in any
other jurisdiction made by the Company with regard to the Company’s products, whether
oral, written or electronically delivered, were true, accurate and complete in all
material respects as of the date made, and, to the extent required to be updated, as so
updated remain true, accurate and complete in all material respects as of the date
hereof, and do not materially misstate any of the statements or information included
therein, or omit to state a material fact necessary to make the statements therein not
misleading.

	2.12	 	Compliance with Applicable Laws. The Company has not violated or infringed, nor is
it in violation or infringement of, any Applicable Law or any order, writ, injunction or
decree of any Governmental Authority in connection with its activities. The Company, and each
of its officers, directors, agents and employees, has complied with all Applicable Laws. No
claims have been filed against the Company alleging a violation of
any Applicable Law. The Company is not a “covered entity” or a “business associate” within
the meaning of the HIPAA Privacy, Security and other Administrative Simplification
Regulations.
	 
	2.13	 	Compliance Program. The Company has made available to Parent a copy of the Company’s
current compliance program materials, including all program descriptions, compliance officer
and committee descriptions, ethics and risk area policy materials, training and education
materials, auditing and monitoring protocols, reporting mechanisms, and disciplinary policies.
The Company (i) is not a party to a Corporate Integrity Agreement with the Office of the
Inspector General of the Department of Health and Human Services, (ii) has no reporting
obligations pursuant to any settlement agreement entered into with any Governmental Authority,
(iii) to its Knowledge, has not been the subject of any investigation conducted by any
Governmental Authority, (iv) has not been a defendant in any qui tam/False Claims Act
litigation (other than by reason of an unsealed complaint of which the Company has no
Knowledge), and (v) has not been served with or received any search warrant, subpoena, civil
investigation demand, contact letter, or to the Company’s Knowledge, telephone or personal
contact by or from any Governmental Authority. For purposes of this Agreement the term
“compliance program” refers to programs of the type described in the compliance guidance
published by the Office of the Inspector General of the Department of Health and Human
Services.
	 
	2.14	 	Permits. The Disclosure Schedule sets forth all approvals, authorizations,
certificates, consents, licenses, orders and permits and other similar authorizations of all
Governmental Authorities (and all other Persons) necessary for the Company to conduct its
business and own and operate its properties (collectively, the “Permits”). Each
Permit is valid and in full force and effect and none of the Permits has been terminated,
revoked, modified or become terminable or impaired in any respect for any reason, except as
would not have a Material Adverse Effect. The Company has conducted its business in

19

 

	 	 	compliance with all material terms and conditions of the Permits. The term Permits shall not
include any Company License as defined in Section 2.11.
	 
	2.15	 	Litigation. There are no (a) actions, suits, claims, hearings, arbitrations,
proceedings (public or private) or governmental investigations that have been brought by or
against any Governmental Authority or any other Person (collectively, “Proceedings”),
nor any investigations or reviews by any Governmental Authority against the Company, pending
or, to the Company’s Knowledge, threatened, against or by the Company or any of its assets or
which seek to enjoin or rescind the transactions contemplated by this Agreement or the Company
Documents; and (b) existing orders, judgments or decrees of any Governmental Authority naming
the Company as an affected party or otherwise affecting any of the assets or the business of
the Company.
	 
	2.16	 	Contracts.

	 	(a)	 	The Disclosure Schedule lists the following Contracts of the Company
(collectively, the “Scheduled Contracts”):

	 	(i)	 	Each Contract providing for the lease of real property by the
Company or which is used by Company in connection with the operation of its
business.
	 
	 	(ii)	 	Each Contract relating to all machinery, tools, equipment,
motor vehicles, rolling stock and other tangible personal property (other than
inventory and supplies) owned, leased or used by the Company, except for
Contracts that have a value of less than $10,000 which do not, in the
aggregate, have a total value of more than $25,000 or have a remaining term of
longer than six (6) months or that are not cancelable by the Company in its
discretion and without penalty upon notice of sixty (60) days or less.
	 
	 	(iii)	 	Each Contract to which the Company is a party that would
reasonably be expected to involve payments by or to the Company in excess of
$25,000, or would have a Material Adverse Effect.
	 
	 	(iv)	 	All Contracts relating to, or evidences of, or guarantees of,
or providing security for, indebtedness or the deferred purchase price of
property (whether incurred, assumed, guaranteed or secured by any asset).
	 
	 	(v)	 	Each independent sales representative or distribution
agreement, supply agreement or similar Contracts relating to or providing for
the marketing or manufacturing of the Company’s products.
	 
	 	(vi)	 	Each consulting, development, joint development, research and
development or similar Contracts relating to development of the Company’s
products or Intellectual Property and each Contract under which the Company has
granted or obtained a license to Intellectual Property, other than commercial
software licenses.

20

 

	 	(vii)	 	All acquisition, partnership, joint venture, teaming
arrangements or other similar Contracts.
	 
	 	(viii)	 	Any Contract under which the Company has agreed not to compete or has granted
to a third party an exclusive right that restricts or otherwise adversely
affects the ability of the Company to conduct its business.
	 
	 	(ix)	 	All Benefit Plans.
	 
	 	(x)	 	All Contracts with any “disqualified individual” (as defined in
Section 280GI of the Code) which contains any severance or termination pay
liabilities which would result in a disallowance of the deduction for any
“excess parachute payment” (as defined in Section 280G(b)(l) of the Code) under
Section 280G of the Code.
	 
	 	(xi)	 	Every Contract between the Company and any of the Company’s
officers, directors or more than 5% stockholders, or any entity in which any of
the
Company’s officers, directors or more than 5% stockholders has a greater
than 2% equity interest.
	 
	 	(xii)	 	All Contracts giving any party the right to renegotiate or
require a reduction in price or refund of payments previously made in
connection with the business of the Company.
	 
	 	(xiii)	 	Contracts with any labor union or association representing any employee of
the Company.
	 
	 	(xiv)	 	Any voting trust agreements, investor rights agreement or
stockholder agreements to which the Company is a party.
	 
	 	(xv)	 	All Contracts for clinical or marketing trials relating to the
Company’s products and all Contracts with physicians, hospitals or other
healthcare providers, or other scientific or medical advisors.
	 
	 	(xvi)	 	All Contracts not identified in clause (xv) which relate to
the Company’s compliance with or obligation to comply with the requirements of
the HIPAA Privacy Regulations, including without limitation all business
associate agreements, subcontractor agreements, confidentiality agreements and
similar contracts.

	 	(b)	 	The Company has delivered to Parent true and correct copies (or summaries, in
the case of any oral Contracts) of all such Scheduled Contracts. No notice of default
or indemnification arising under any Scheduled Contract has been delivered to or by the
Company. Each Scheduled Contract is a legal, valid and binding obligation of the
Company, and each other party thereto, enforceable against each such party thereto in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights
generally and subject to general principles

21

 

of equity, and neither the Company nor the
other party thereto is in breach, violation or default thereunder.

	2.17	 	Benefit Plans.

	 	(a)	 	Neither the Company nor any other ERISA Affiliate sponsors, maintains,
contributes to, is required to contribute to or has or could have any liability of any
nature, whether known or unknown, direct or indirect, fixed or contingent, with respect
to, any Pension Plan, including, without limitation, any such plan that is excluded
from coverage by Section 4 of ERISA or is a “Multiemployer Plan” within the meaning of
Section 3(37) or 4001(a)(3) of ERISA. Each such Pension Plan that is a Multiemployer
Plan has been operated in all material respects in accordance with its terms and is in
compliance in all material respects with the applicable provisions of ERISA, the Code
and other Applicable Law. Each such other Pension Plan has been operated in all
material respects in accordance with its terms and in compliance in all material
respects with the applicable provisions of ERISA, the Code and all other Applicable
Law. All Pension Plans which the
Company operates as plans that are qualified under the provisions of Section 401(a)
of the Code satisfy in form and operation all applicable qualification requirements
and has not received in the preceding seven (7) years or committed to receive a
transfer of assets and/or liabilities or spin-off from another plan, except
transfers, which qualify as transfers from eligible rollover distributions within
the meaning of Code Section 402(c)(4). Neither the Company nor any other ERISA
Affiliate has sponsored, maintained or contributed to any Pension Plan which, during
the preceding seven (7) years, has been terminated, including by way of merger with
or into another Pension Plan.
	 
	 	(b)	 	No Pension Plan is now nor has ever been “top-heavy” pursuant to Section 416 of
the Code.
	 
	 	(c)	 	The Disclosure Schedule sets forth the name of each ERISA Affiliate.
	 
	 	(d)	 	Neither the Company nor any other ERISA Affiliate has or could have any
liability of any nature, whether known or unknown, direct or indirect, fixed or
contingent, to any Pension Plan, the Pension Benefit Guaranty Corporation or any other
Person, arising directly or indirectly under Title IV of ERISA other than liability
pursuant to Section 4007 for premiums which are not yet due (without regard to any
waiver). No “reportable event,” within the meaning of Section 4043 of ERISA, has
occurred with respect to any Pension Plan subject to Title IV of ERISA. Neither the
Company nor any other ERISA Affiliate has ceased operations at any facility or
withdrawn from any Company Pension Plan in a manner which could subject the Company or
any other ERISA Affiliate to liability under Section 4062(e), 4063 or 4064 of ERISA.
Neither the Company nor any other ERISA Affiliate maintains, contributes to or has
participated in or agreed to participate in any Pension Plan that is a Multiemployer
Plan. Neither the Company nor any other ERISA Affiliate has been a party to a sale of
assets to which Section 4204 of ERISA applied with respect to which it could incur any

22

 

	 	 	 	withdrawal liability (including any contingent or secondary withdrawal liability) to
any Multiemployer Plan. Neither the Company nor any other ERISA Affiliate has
incurred, or has experienced an event that will, within the ensuing 12 months, result
in, a “complete withdrawal” or “partial withdrawal,” as such terms are defined
respectively in Sections 4203 and 4205 of ERISA, with respect to a Pension Plan which
is a Multiemployer Plan, and nothing has occurred that could result in such a complete
or partial withdrawal. Neither the Company nor any other ERISA Affiliate has incurred
a decline in contributions to any Multiemployer Plan such that, if the current rate of
contributions continues, a 70 percent decline in contributions (as defined in Section
4205 of ERISA) will occur within the next three plan years.
	 
	 	(e)	 	Neither the Company nor any other ERISA Affiliate sponsors, maintains,
contributes to, is required to contribute to, or has or could have any liability of any
nature, whether known or unknown, direct or indirect, fixed or contingent, with respect
to any Welfare Plan, whether insured or otherwise, including, without limitation, any
such plan that is a Multiemployer Plan within the meaning
of Section 3(37) of ERISA. Each such Welfare Plan that is a Multiemployer Plan has
been operated in all material respects in accordance with its terms and in
compliance in all material respects with applicable provisions of ERISA, the Code,
and other Applicable Law. Each such other Welfare Plan has been operated in all
material respects in accordance with its terms and in compliance in all material
respects with the applicable provisions of ERISA, the Code, HIPAA and corresponding
regulations, including the HIPAA Portability Regulations and the HIPAA Privacy,
Security and other Administrative Simplification Regulations and all other
Applicable Law. Benefits under each Welfare Plan are fully insured by an insurance
company unrelated to the Company or any other ERISA Affiliate. No insurance policy
or contract requires or permits retroactive increase in premiums or payments due
thereunder. Neither the Company nor any other ERISA Affiliate has established or
contributed to, is required to contribute to or has or could have any liability of
any nature, whether known or unknown, direct or indirect, fixed or contingent, with
respect to any “voluntary employees’ beneficiary association” within the meaning of
Section 501I(9) of the Code, “welfare benefit fund” within the meaning of Section
419 of the Code, “qualified asset account” within the meaning of Section 419A of the
Code or “multiple employer welfare arrangement” within the meaning of Section 3(40)
of ERISA. No Welfare Plan that is a Multiemployer Plan imposes any post-withdrawal
liability or contribution obligations upon the Company or any ERISA Affiliate.
Neither the Company nor any other ERISA Affiliate maintains, contributes to or has
or could have any liability of any nature, whether known or unknown, direct or
indirect, fixed or contingent, with respect to retiree medical coverage or other
medical, health, life or other welfare benefits for present or future terminated
employees or their spouses or dependents other than as required by Part 6 of
Subtitle B of Title I of ERISA or any comparable state law.
	 
	 	(f)	 	Neither the Company nor any other ERISA Affiliate is a party to, maintains,
contributes to, is required to contribute to or has or could have any liability of any

23

 

	 	 	 	nature, whether known or unknown, direct or indirect, fixed or contingent, with respect
to any Compensation Plan. Each Compensation Plan has been operated in all material
respects in accordance with its terms and in compliance with Applicable Law.
	 
	 	(g)	 	There are no facts or circumstances which could, directly or indirectly,
subject the Company or any other ERISA Affiliate to any (i) excise tax or other
liability under Chapters 43, 46 or 47 of Subtitle D of the Code, (ii) penalty tax or
other liability under Chapter 68 of Subtitle F of the Code or (iii) civil penalty,
damages or other liabilities arising under Section 502 of ERISA.
	 
	 	(h)	 	Full payment has been made of all amounts which the Company or any other ERISA
Affiliate is required, under Applicable Law, the terms of any Benefit Plan, or any
agreement relating to any Benefit Plan, to have paid as a contribution, premium or
other remittance thereto or benefit thereunder. Each Pension Plan that is subject to
the minimum funding standards of Section 412 of the Code and/or Section 302 of ERISA
meets those standards and has not incurred any
accumulated funding deficiency within the meaning of Section 412 or 418B of the Code
or Section 302 of ERISA and no waiver of any minimum funding requirements has been
applied for or obtained with respect to any Pension Plan. The Company and each
other ERISA Affiliate has made adequate provisions for reserves or accruals in
accordance with GAAP to meet contribution, benefit or funding obligations arising
under Applicable Law or the terms of any Benefit Plan or related agreement.
	 
	 	(i)	 	The Company and each other ERISA Affiliate has timely complied in all material
respects with all reporting and disclosure obligations with respect to the Benefit
Plans imposed by the Code, ERISA or other Applicable Law.
	 
	 	(j)	 	There are no pending or, to the Company’s Knowledge, threatened audits,
investigations, claims, suits, grievances or other proceedings, and there are no facts
that could give rise thereto, involving, directly or indirectly, any Benefit Plan, or
any rights or benefits thereunder, other than the ordinary and usual claims for
benefits by participants, dependents or beneficiaries.
	 
	 	(k)	 	The transactions contemplated herein do not result in any payment (whether of
severance pay or otherwise), forgiveness of debt, distribution, increase in benefits,
obligation to fund, or the acceleration of accrual, vesting, funding or payment of any
contribution or benefit under any Benefit Plan. Except to the extent specifically
disclosed on the Disclosure Schedule, no amount that could be received (whether in cash
or property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer, or director of the Company or
any ERISA Affiliate who is a “disqualified individual” (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any Benefit Plan currently in
effect would be an “excess parachute payment” (as such term is defined in Section
280G(b)(1) of the Code).

24

 

	 	(l)	 	No employer other than the Company and/or an ERISA Affiliate is permitted to
participate or participates in the Benefit Plans. No leased employees (as defined in
Section 414(n) of the Code) or independent contractors are eligible for, or participate
in, any Benefit Plans.
	 
	 	(m)	 	No action or omission of the Company or any other ERISA Affiliate or any
director, officer, employee, or agent thereof in any way restricts, impairs or
prohibits the Parent, the Company, any other ERISA Affiliate or any successor from
amending, merging, or terminating any Benefit Plan in accordance with the express terms
of any such plan and Applicable Law.
	 
	 	(n)	 	The Disclosure Schedule lists the name of each Benefit Plan. The Company has
delivered to the Parent true and complete copies of all Benefit Plan documents and
related trust agreements or other agreements or contracts evidencing any funding
vehicle with respect thereto, including all amendments. The Company has delivered to
the Parent true and complete copies of: (i) the three most recent annual reports on
Treasury Form 5500, including all schedules and attachments
thereto, with respect to any Benefit Plan for which such a report is required; (ii)
the three most recent actuarial reports with respect to any Pension Plan that is a
“defined benefit plan” within the meaning of Section 414(j) of the Code; (iii) the
form of summary plan description, including any summary of material modifications
thereto or other modifications communicated to participants, currently in effect
with respect to each Benefit Plan; (iv) ) true and correct copies of the Welfare
Plan documents establishing compliance with HIPAA requirements, including required
plan document and summary plan description language, certificates of creditable
coverage, appointment of privacy and security officials, notice of privacy
practices, privacy and security policies and procedures, business associate
agreements and amendments, security risk analysis evaluation documents, the privacy
and security group health plan document amendment and the privacy certification of
amendment; (v) the most recent determination letter with respect to each Pension
Plan intended to qualify under Section 401(a) of the Code and the full and complete
application therefore submitted to the Internal Revenue Service; and (vi) all
professional opinions, material internal memoranda, material correspondence with
regulatory authorities and administrative policies, manuals, interpretations and the
like with respect to each Benefit Plan.
	 
	 	(o)	 	The Disclosure Schedule lists each Benefit Plan that is or may be, in whole or
in part, subject to Section 409A of the Code (each such plan or part thereof, a
“Section 409A Benefit Plan”). Except as set forth in the Disclosure Schedule,
(i) each Section 409A Benefit Plan complies in form with Section 409A of the Code, and
(ii) no service provider under any Section 409A Benefit Plan is subject to the
additional income tax under Section 409A of the Code.
	 
	 	(p)	 	The Disclosure Schedule lists and the Company has delivered to the Parent true
and correct copies of the Welfare Plan documents establishing compliance with the HIPAA
Privacy Regulations, including appointment of a privacy official, its

25

 

	 	 	 	Notice of HIPAA
Privacy Practices, privacy policies and procedures, and the plan administrator’s group
health plan document amendment certification.
	 
	 	(q)	 	The Company has properly determined and timely collected and reported all
Federal Insurance Contribution Act (“FICA”) taxes imposed under Sections 3101
and 3111 of the Code on remuneration for employment that constitutes “wages” within the
meaning of Section 3121(a) of the Code, including amounts deferred under nonqualified
deferred compensation plans, agreements or arrangements.
	 
	 	(r)	 	As of the date hereof the Company has ceased contributions to and/or taken the
necessary actions in order to terminate certain of the Company Benefit Plans, each such
plan separately listed on the Disclosure Schedule as “Terminated Company Benefit
Plans.” In connection with the termination of the Company 401(k) Plan, the Company has
provided copies to the Parent of (a) resolutions adopted by the Company’s Board to
terminate such Company 401(k) Plan and to fully (100%) vest all participants under said
Company 401(k) Plan, such termination and vesting effective as of April 14, 2006, (b) a
signed plan
amendment and (c) notice of the Company 401(k) Plan termination to participants and
any trustees and custodians of the Company 401(k) Plan and/or its assets. With
respect to any other Terminated Company Benefit Plan, the Company has provided
copies to the Parent of (a) resolutions adopted by the Company’s Board to terminate
such Company Benefit Plan, (b) signed plan amendments and (c) notices of the
termination of such Company Benefit Plans to participants, insurance companies,
third-party administrators and other vendors.

	2.18	 	Labor and Employment Matters.

	 	(a)	 	The Disclosure Schedule sets forth a list showing the name, title, hire date,
employment status (such as active or on leave of absence, full-time, part-time or
temporary), salary or wage, commission percentage, cash incentives (such as bonus) and
vacation or paid-time-off balance of each individual who is employed by the Company
(each an “Employee”). All employees of the Company are employed on an
“at-will” basis.

	 	(i)	 	Information Regarding Employees on Leave of Absence.
With respect to any Employee who is on a leave of absence, the Disclosure
Schedule contains a true and complete list showing the name of each individual
and a description of the leave of absence (such as the type of leave of
absence, the date the leave commenced, the expected date the leave of absence
will end, the type of benefit (if any) such Employee is receiving (such as
short-term disability, long-term disability or workers compensation benefits)).
	 
	 	(ii)	 	List of Independent Contractors, Consultants and Leased
Employees. The Disclosure Schedule contains a true and complete list
showing the name and identifying the contract, agreement or other arrangement
between the Company and any independent contractor, consultant, leased employee
or other individual (other than an Employee) in effect as of the date hereof.

26

 

	 	 	 	The Seller has provided copies of each such contract or agreement to Parent.

	 	(b)	 	The Company is and has been in compliance in all material respects with all
Applicable Laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, any such Applicable Laws
respecting employment discrimination and occupational safety and health requirements,
and has not and is not engaged in any unfair labor practice. There is no unfair labor
practice complaint against the Company pending or, to the Company’s Knowledge,
threatened before the National Labor Relations Board or any other comparable
Governmental Authority. There is no labor strike, dispute, slowdown or stoppage
actually pending or, to the Company’s Knowledge, threatened against or directly
affecting the Company. No labor representation question exists respecting the
employees of the Company and there is not pending or, to the Company’s Knowledge,
threatened any activity intended or likely to result in a labor representation vote
respecting the employees of the Company. No grievance or any arbitration
proceeding arising out of or under collective bargaining agreements is pending and
no claims therefore exist or, to the Company’s Knowledge, have been threatened. No
collective bargaining agreement is binding and in force against the Company or
currently being negotiated by the Company. The Company has not experienced any
significant work stoppage or other significant labor difficulty. The Company is not
delinquent in payments to any Persons for any wages, salaries, commissions, bonuses
or other direct or indirect compensation for any services performed by them or
amounts required to be reimbursed to such Persons, including without limitation any
amounts due under any Benefit Plan. Upon termination of the employment of any
Person, neither the Company, Parent nor any subsidiary of Parent will, by reason of
any agreement or understanding to which the Company is a party, be liable to any of
such Persons for so-called “severance pay” or any other payments. Within the
twelve-month period prior to the date hereof there has not been any expression of
intention to the Company by any officer or key employee to terminate such
employment.
	 
	 	(c)	 	All individuals who are performing or have performed services for the Company
or any of its Affiliates and who are or were classified by the Company or any of its
Affiliates as “independent contractors” qualify for such classification under Section
530 of the Revenue Act of 1978 or Section 1706 of the Tax Reform Act of 1986, as
applicable, and such individuals are not entitled to any benefits under the Benefit
Plans maintained by the Company.

	2.19	 	Intellectual Property.

	 	(a)	 	The Disclosure Schedule lists all Intellectual Property that is registered
with, has been applied for, or has been issued by the U.S. Patent and Trademark Office
or a corresponding foreign governmental or public authority and all Intellectual
Property that: (i) is owned by, licensed to or otherwise controlled by the Company;
(ii) is used in, developed for use in, or necessary to the conduct of its

27

 

	 	 	 	business as
now conducted or presently planned to be conducted; or (iii) has been licensed to or
from third parties (other than subcontractors retained by Company in the Ordinary
Course of Business), including a description of each license agreement, the name and
address of the licensee or licensor, as the case may be, and the date and term of the
agreement. The Company has delivered or made available to Parent complete and accurate
copies of correspondence, litigation documents, agreements, file histories and office
actions relating to the patents and patent applications listed in the Disclosure
Schedule. Each item of Intellectual Property owned or used by the Company immediately
prior to the Effective Time hereunder will be owned or available for use by Parent or
any subsidiary of Parent on identical terms and conditions immediately after the
Effective Time.
	 
	 	(b)	 	The Company owns, free and clear of any Lien, and possesses all right, title
and interest, or holds a valid license, in and to all Intellectual Property subject to
the license agreements referenced in Section 2.19(a)(iii) above that grant licenses to
third parties and any restrictions set forth therein. All patents included in the
Intellectual Property are valid and enforceable. The Intellectual Property owned
or licensed by the Company constitutes all the intellectual property necessary to
the conduct of the business of the Company as it is currently conducted. There are
no royalties, fees, honoraria or other payments payable by the Company to any Person
by reason of the ownership, development, modification, use, license, sublicense,
sale, distribution or other disposition of the Intellectual Property other than
salaries and sales commissions paid to employees and sales agents in the Ordinary
Course of Business and other than as set forth in the license agreements referenced
in Section 2.19(a)(iii). The Company has taken all reasonable security measures to
protect the value and the secrecy and confidentiality of trade secrets in the
Intellectual Property.
	 
	 	(c)	 	The Disclosure Schedule lists the trademarks and Internet domain names included
in the Intellectual Property. The Company is the registrant and sole legal and
beneficial owner of the trademarks and Internet domain names included in the
Intellectual Property, free and clear of all Liens. The Company is the registered
owner of the trademarks underlying each of the domain names included in the
Intellectual Property. The Company is not aware of any pending or threatened actions,
suits, claims, litigation or proceedings relating to the trademarks or domain names
included in the Intellectual Property. The Company has operated the websites
identified in the Disclosure Schedule.
	 
	 	(d)	 	All personnel, including employees, agents, consultants and contractors, who
have contributed to or participated in the conception or development, or both, of the
Intellectual Property on behalf of the Company and all officers and technical employees
of the Company either (i) have been a party to “work-for-hire” arrangements or
agreements with the Company in accordance with applicable federal and state law that
has accorded the Company full, effective, sole, exclusive and original ownership of all
tangible and intangible property thereby arising, or (ii) have executed appropriate
instruments of assignment in favor of the Company as assignee that have conveyed to the
Company effective, sole and

28

 

	 	 	 	exclusive ownership of all tangible and intangible property
arising thereby, to the extent permissible under Applicable Law.
	 
	 	(e)	 	The conduct of the Company’s business has not infringed, misappropriated or
conflicted with and does not infringe, misappropriate or conflict with any intellectual
property right of any other Person, nor has the Company received any notice from any
third party of any infringement, misappropriation or violation by the Company of any
intellectual property right of any third party and no notice has been received by any
third party challenging the Company’s ownership to any of the Intellectual Property.
No claim by any third party contesting the validity of any Intellectual Property has
been made, is currently outstanding or, to the Knowledge of the Company, is threatened
or reasonably expected to arise. To the Knowledge of the Company, no third party is
infringing any Intellectual Property right of the Company.

	2.20	 	Environmental Compliance.

	 	(a)	 	The Company has not engaged in or permitted, direct or indirect, operations or
activities upon, or any use or occupancy of the Properties, or any portion thereof, for
the purpose of or in any way involving the handling, manufacture, treatment, storage,
use, generation, emission, release, discharge, refining, dumping or disposal of any
Environmentally Regulated Materials (whether legal or illegal, accidental or
intentional, direct or indirect) on, under, in or about the Properties, or transported
any Environmentally Regulated Materials to, from or across the Properties, nor are any
Environmentally Regulated Materials presently constructed, deposited, stored, placed or
otherwise located on, under, in or about the Properties, nor have any Environmentally
Regulated Materials migrated from the Properties upon or beneath other properties, nor
have any Environmentally Regulated Materials migrated or threatened to migrate from
other properties upon, about or beneath the Properties. The Properties do not contain
any: (i) underground or aboveground storage tanks; (ii) asbestos; (iii) equipment
containing polychlorinated biphenyls (“PCBs”); (iv) underground injection
wells; or (v) septic tanks in which process waste water or any Environmentally
Regulated Materials have been disposed.
	 
	 	(b)	 	The Company is in material compliance with applicable Environmental, Safety and
Health Laws and has obtained all Permits required under applicable Environmental,
Safety and Health Laws.
	 
	 	(c)	 	No enforcement, investigation, cleanup, removal, remediation or response or
other governmental or regulatory actions have been asserted or, to the Company’s
Knowledge, threatened with respect to operations conducted on the Properties by the
Company or against the Company with respect to or regarding the Properties pursuant to
any Environmental, Safety and Health Laws.
	 
	 	(d)	 	To the Company’s Knowledge, there are no past or present events, conditions,
circumstances, incidents, actions or omissions relating to or affecting the

29

 

	 	 	 	Company or
its business or assets that violate, or would reasonably be expected to violate after
the Closing, any Environmental, Safety and Health Laws, or that would reasonably be
expected to give rise to any Environmental Liability.
	 
	 	(e)	 	The Company is not aware of any past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans with respect to or of
the Company which may reasonably be expected to interfere with or prevent compliance or
continued compliance with Environmental, Safety and Health Laws.
	 
	 	(f)	 	All machinery, tools, devices and equipment operated by the Company on the
Properties have been operated in compliance with all Environmental, Safety and Health
Laws, and all such equipment currently is operational and in good condition.
	 
	 	(g)	 	The Company has delivered to Parent all environmental documents, studies and
reports in its possession or under its control relating to: (i) any facilities or real
property ever owned, operated or leased by the Company; or (ii) any actual
Environmental Liability of the Company.

	2.21	 	Insurance. The Disclosure Schedule contains an accurate and complete list of all
insurance policies owned or held by the Company, including, but not limited to, fire and other
casualty, general liability, theft, life, workers’ compensation, health, directors and
officers, business interruption and other forms of insurance owned or held by the Company,
specifying the insurer, the policy number, and the term of the coverage. All present policies
are in full force and effect and all premiums with respect thereto have been paid. The
Company has not been denied any form of insurance and no policy of insurance has been revoked
or rescinded during the past five (5) years.

	2.22	 	Tax Matters.

	 	(a)	 	The Company and any combined or unitary group of which the Company is or was a
member, has prepared and filed or will timely prepare and file all material Tax Returns
which any of them is required to file (taking into account any extensions) on or prior
to the Closing Date. As of the time of filing, such Tax Returns were or will be
accurate and correct in all material respects and did not or will not contain a
disclosure statement under Section 6662 of the Code (or any predecessor provision or
comparable provision of state, local or foreign law). The Company has made or will
make all such Tax Returns available to Parent, with copies of such Tax Returns filed
after the effective date of this Agreement provided to Parent at least three (3)
Business Days prior to filing such Tax Return.
	 
	 	(b)	 	The Company has paid or adequately provided for (on its Latest Financial
Statements in accordance with GAAP (exclusive of any reserves for deferred taxes
established to reflect timing differences between book and taxable income pursuant to
Statement of Financial Accounting Standards No. 109) all Taxes

30

 

	 	 	 	(whether or not shown on
any Tax Return) that are due and owing with respect to all taxable periods (or portions
thereof) ending on or before the Closing Date.
	 
	 	(c)	 	No claim for assessment or collection of Taxes is presently being asserted
against the Company, and the Company is not a party to any pending action, proceeding,
or investigation by any Governmental Authority, nor has any such action, proceeding or
investigation been threatened in a writing delivered to the Company. No claim has been
made in any jurisdiction where the Company does not file Tax Returns that the Company
may be subject to Tax by that jurisdiction.
	 
	 	(d)	 	The Company is not a party to any agreement, contract, arrangement or plan that
(i) has resulted or would result, separately or in the aggregate, in connection with
this Agreement or any change of control of the Company, in the payment of any “excess
parachute payments” within the meaning of Section 280G of the Code; or (ii) would
obligate the Company to provide “gross-up” benefits with respect to any excise tax due
on any “excess parachute payments” within the meaning of Section 280G of the Code.
	 
	 	(e)	 	All deficiencies and assessments of Taxes of the Company resulting from an
examination of any Tax Returns by any Governmental Authority on or before the Closing
Date have been or will be paid and there are no pending examinations currently being
made by any Governmental Authority nor has there been any written or oral notification
to the Company of any intention to make an examination of any Tax Returns by any
Governmental Authority. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any Tax Return for any period.
	 
	 	(f)	 	For purposes of computing Taxes and the filing of Tax Returns, the Company has
not failed to treat as “employees” any individual providing services to the Company who
reasonably would be expected to be classified as an “employee” under the applicable
rules or regulations of any Governmental Authority with respect to such classification.
	 
	 	(g)	 	The Company has complied with all Applicable Laws relating to the withholding
of Taxes and the payment thereof (including, without limitation, withholding of Taxes
under Sections 1441 and 1442 of the Code, or similar provisions under any foreign
laws), and timely and properly withheld from individual employee wages and paid over to
the proper Governmental Authority all amounts required to be so withheld and paid over
under all Applicable Laws.
	 
	 	(h)	 	The Company is not involved in, subject to, or a party to any joint venture,
partnership, contract or other arrangement that is treated as a “partnership” for
federal, state, local or foreign income Tax purposes. The Company does not own any
interest in an entity that is classified as an entity that is “disregarded as an entity
separate from its owner” under Treasury Regulations Section 301.7701-3(b).

31

 

	 	(i)	 	The Company has not requested any extension of time within which to file any
Tax Return, which Tax Return has not since been filed.
	 
	 	(j)	 	The Company is not required to include in income any adjustment under Section
481(a) of the Code by reason of a voluntary change in accounting method initiated by
the Company.
	 
	 	(k)	 	The Company has not made an election under Section 341(f) of the Code for any
taxable years not yet closed for statute of limitation purposes.
	 
	 	(l)	 	The Company is, and at all times has been, a corporation or association taxable
as a corporation for U.S. income tax purposes.
	 
	 	(m)	 	The Company is not, nor has it been at any time, a U.S. real property holding
corporation within the meaning of Section 897I(2) of the Code.
	 
	 	(n)	 	The Company is not a party to or bound by any obligations under any Tax
sharing, Tax allocation, Tax indemnity or similar agreement or arrangement.
	 
	 	(o)	 	The Company has not, within three (3) years preceding the date hereof, been
either a “distributing” or “controlled” corporation (as such terms are defined in
Section 355(a)(1) of the Code) in a transaction structured to qualify as a tax-free
distribution under Section 355 of the Code.
	 
	 	(p)	 	The Company has not received any written ruling related to Taxes, entered into
any agreement with a taxing authority relating to Taxes or authorized any Person to
represent them before a taxing authority pursuant to a power of attorney or otherwise.
	 
	 	(q)	 	There are no liens for Taxes upon any of the assets or properties of the
Company other than liens for Taxes not yet due and payable. There is no outstanding
closing agreement, ruling request, request to consent to change a method of accounting,
subpoena or request for information with or by a Governmental Authority with respect to
the Company, its income, assets, properties, payroll, operation or business.
	 
	 	(r)	 	The Company is not, and has not been, a party to any transaction where a
deferred intercompany gain was generated under Section 1502 of the Code and the
Treasury Regulations promulgated thereunder.
	 
	 	(s)	 	Prior to the transaction contemplated by this Agreement, the Company has not
been subject to an “ownership change” with the meaning of Section 382(g) of the Code
and no “Section 382 limitation” within the meaning of Section 382 of the Code applies
to limit the Company’s ability to utilize its net operating losses or other Tax
attributes.

	2.23	 	Bank Accounts; Powers of Attorney. The Disclosure Schedule sets forth: (i) the names
of all financial institutions, investment banking and brokerage houses, and other similar

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	 	 	institutions at which the Company maintains accounts, deposits, safe deposit boxes of any
nature, and the names of all persons authorized to draw thereon or make withdrawals therefrom
and a description of such accounts; and (ii) the names of all Persons holding general or
special powers of attorney from the Company and copies thereof.
	 
	2.24	 	Orders, Commitments and Returns. All accepted and unfulfilled orders for the sale of
products and the performance of services entered into by the Company and all outstanding
contracts or commitments for the purchase of supplies, materials and services by or from the
Company were made in bona fide transactions in the Ordinary Course of Business. There are no
material claims against the Company to return products by reason of alleged over-shipments,
defective products or otherwise, or of products in the hands of customers, retailers or
distributors under an understanding that such products would be returnable.
	 
	2.25	 	Product Liability Claims. The Company has never received a claim, or incurred any
uninsured or insured liability, for or based upon failure to warn, California Proposition 65,
breach of product warranty (other than warranty service and repair claims incurred in the
Ordinary Course of Business and expensed as warranty expense on the Latest
Financial Statements for the period in which incurred), strict liability in tort, general
negligence, negligent manufacture of product, negligent provision of services or any other
allegation of liability, including or resulting in, but not limited to, product recalls,
arising from the materials, design, testing, manufacture, packaging, labeling (including
instructions for use) or sale of its products or from the provision of services
(“Product Liability Claim”). The Company has disclosed to Parent each Product
Liability Claim received by the Company.
	 
	2.26	 	Warranties. The Product has never been used except in connection with clinical
trials sponsored by the Company. The Company has never sold or received any consideration for
providing the Product to clinical sites or health care providers in connection with clinical
trials sponsored by the Company. The Company has never extended any warranties in connection
with the Product.
	 
	2.27	 	Prior Divestitures of the Company. The Company does not have any actual or potential
Liabilities or obligations to make payments, contingent or otherwise, arising out of any prior
divestiture of its business or assets (a “Prior Divestiture”). No Person has (i) made
any claim or, to the Knowledge of the Company, has any basis to make a claim against the
Company as a result of any Prior Divestiture, or (ii) received any indemnification payment
from the Company as a result of any damages or losses incurred or sustained as a result of any
Prior Divestiture.
	 
	2.28	 	Relations with Suppliers and Customers. No material current supplier of the Company
has canceled any contract or order for provision of, and there has been no threat by any such
supplier not to provide, raw materials, products, supplies or services to the business of the
Company either prior to or following the Effective Time. The Disclosure Schedule lists each
supplier to the Company that is the source of a particular raw material, product, supply or
service with respect to which locating and qualifying a replacement source would involve
significant cost or delay.

33

 

	2.29	 	Reimbursement/Billing. The Company has not sold any Products, has not sought
reimbursement for any Product and has not made any billing applicable to the Product.
	 
	2.30	 	Indemnification Obligations. Except as set forth on the Disclosure Schedule, the
Company is not a party to any Contract that contains any provisions requiring the Company to
indemnify any Person (excluding indemnities contained in the Company’s standard terms and
conditions of sale, copies of which have been provided to Parent), including, without
limitation, the Coopers Agreement. There is no event, circumstance or other basis that would
reasonably be expected to give rise to any indemnification obligation of the Company to its
officers and directors under their Amended and Restated Certificate of Incorporation, Bylaws,
similar governing documents or any Contract between the Company and any of its officers or
directors or to any other Person under any Contract.
	 
	2.31	 	Absence of Certain Business Practices. Neither the Company nor any director,
officer, employee or agent of the Company, nor any other Person acting on behalf of the
Company, has, directly or indirectly, given or agreed to give any gift or similar benefit or
agreed to make or made any payment to any customer, supplier, governmental employee or other
Person who is or may be in a position to help or hinder the business of the Company, taken
as a whole (or assist it in connection with any actual or proposed transaction) which (i)
would reasonably be expected to subject the Company, Parent or Merger Subsidiary to any
damage or penalty in any civil, criminal or governmental litigation proceeding, or (ii)
violated or violates any Applicable Law.
	 
	2.32	 	Brokers. Neither the Company nor any of its directors, officers or employees, has
employed any broker, finder, or financial advisor or incurred any liability for any brokerage
fee or commission, finder’s fee or financial advisory fee, in connection with the transactions
contemplated hereby.
	 
	2.33	 	Minute Books. The minute books of the Company, as previously made available to
Parent and its representatives, contain, in all material respects, complete and accurate
records of all meetings of and corporate actions or written consents by the stockholders,
Boards of Directors, and committees of the Boards of Directors of the Company.
	 
	2.34	 	State Takeover Statutes. No “fair price,” “moratorium,” “control share acquisition,”
“business combination,” or other state takeover statute or similar statute or regulation
applies or purports to apply to the Merger, the Company, the Merger Subsidiary or Parent or to
this Agreement.
	 
	2.35	 	Disclosure. No representation or warranty by Company in this Agreement and no
statement contained or to be contained in any document, certificate or other writing furnished
or to be furnished by the Company to the Parent or Merger Subsidiary, contains or will contain
any untrue statement of a material fact or omits or will omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. There is no fact that has not been disclosed to Parent
of which any officer or director of the Company is aware which has or could reasonably be
expected to have a Material Adverse Effect.

34

 

	2.36	 	Investigation by Parent. Notwithstanding anything to the contrary in this Agreement,
(i) no investigation by Parent shall affect the representations and warranties of the Company
under this Agreement or contained in any other writing to be furnished to Parent in connection
with the transactions contemplated hereunder and (ii) such representations and warranties
shall not be affected or deemed waived by reason of the fact that Parent knew or should have
known that any of the same is or might be inaccurate in any respect.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF

PARENT AND MERGER SUBSIDIARY

          As a material inducement to the Company to enter into this Agreement, with the understanding
that the Company will be relying thereon in consummating the transactions contemplated hereunder,
Parent and Merger Subsidiary hereby, jointly and severally, represent and warrant to the Company
that the statements contained in this Article 3 are true and correct.

	3.1	 	Corporate Existence and Power. Parent and Merger Subsidiary are corporations duly
organized, validly existing and in good standing under the laws of their respective states of
incorporation and each has all requisite corporate power and authority required to own,
operate and lease their respective assets and properties as now owned, leased and operated and
to carry on their respective businesses as now being conducted. Parent and Merger Subsidiary
are each duly qualified or licensed to do business as a foreign corporation and are in good
standing in every jurisdiction in which the character or location of their properties and
assets owned, leased or operated by them or the nature of their business require such
licensing or qualification, except where the failure to be so qualified, licensed or in good
standing in such other jurisdiction would not, individually or in the aggregate, have a
Material Adverse Effect on Parent or Merger Subsidiary. Merger Subsidiary is a recently
formed Delaware corporation that has not conducted, and prior to the Effective Time will not
conduct, any activities other than those incident to its formation and in connection with the
consummation of the Merger.
	 
	3.2	 	Authorization. Parent and Merger Subsidiary have the requisite corporate power and
authority to enter into this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the Parent and Merger
Subsidiary in connection with the consummation of the transactions contemplated by this
Agreement (the “Parent Documents”) and to carry out the transactions contemplated
hereunder and thereunder. The Boards of Directors of Parent and Merger Subsidiary and Parent,
as the sole stockholder of Merger Subsidiary, have taken all action required by law, their
respective Certificates of Incorporation and Bylaws and otherwise to duly and validly
authorize and approve the execution, delivery and performance by Parent and Merger Subsidiary
of this Agreement and the Parent Documents and the consummation by Parent and Merger
Subsidiary of the transactions contemplated herein and therein and no other corporate
proceedings on the part of Parent or Merger Subsidiary are, or will be, necessary to authorize
this Agreement or the Parent Documents or to consummate the transactions contemplated hereby
or thereby. This Agreement and each of the Parent Documents has been duly and validly
executed and delivered by each of them and,

35

 

	 	 	assuming the due authorization, execution and
delivery by the Company of this Agreement and the Parent Documents, constitutes the legal,
valid and binding obligations of Parent and Merger Subsidiary enforceable against each of them
in accordance with its terms, subject to laws of general application relating to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights
generally and rules of law governing specific performance, injunctive relief or other
equitable remedies.
	 
	3.3	 	Consents and Approvals. No Consent by any Person, including, without limitation, any
Governmental Authority, is required in connection with the execution, delivery or performance
of this Agreement or the Parent Documents by Parent and Merger Subsidiary or the consummation
by Parent and Merger Subsidiary of the transactions contemplated herein or therein, other than
(i) requirements of the DGCL for filing of appropriate documents to effect the Merger, or (ii)
where the failure to make any such filing, or to obtain such permit, authorization, Consent or
approval, would not prevent or delay consummation of the Merger or would not otherwise prevent
Parent or Merger Subsidiary from performing their respective obligations under this Agreement
or the Parent Documents.
	 
	3.4	 	Disclosure. No representation or warranty by Parent or Merger Subsidiary in this
Agreement and no statement contained or to be contained in any document, certificate or other
writing furnished or to be furnished by either Parent or Merger Subsidiary to the Company in
connection with the transactions contemplated by this Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
	 
	3.5	 	Non-Contravention. None of the execution, delivery and performance by Parent or
Merger Subsidiary of this Agreement or the Parent Documents or the consummation of the
transactions contemplated herein or therein will (i) contravene or conflict with the
respective Certificate of Incorporation or Bylaws of Parent and Merger Subsidiary, (ii)
contravene or conflict with or constitute a violation of any provision of any Applicable Law
binding upon or applicable to Parent or Merger Subsidiary or any of the Parent’s or Merger
Subsidiary’s assets, (iii) result in the creation or imposition of any Lien on any of Parent’s
or Merger Subsidiary’s assets, other than Permitted Liens or (iv) be in conflict with,
constitute (with or without due notice or lapse of time or both) a default under, result in
the loss of any material benefit under, or give rise to any right of termination,
cancellation, increased payments or acceleration under any terms, conditions or provisions of
any note, bond, lease, mortgage, indenture, license, contract, franchise, permit, instrument
or other agreement or obligation to which Parent or Merger Subsidiary is a party, or by which
any of their respective properties or assets may be bound, except in the cases of clause (ii)
where such conflicts or other occurrences would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
	 
	3.6	 	Brokers. Neither Parent nor Merger Subsidiary, nor any of their respective
directors, officers or employees has employed any broker, finder, or financial advisor or
incurred any liability for any brokerage fee or commission, finder’s fee or financial advisory
fee, in connection with the transactions contemplated hereby.

36

 

ARTICLE 4

COVENANTS

	4.1	 	Confidentiality. Each of the parties hereto agrees that it will not use, or permit
the use of, any of the information relating to any other party hereto furnished or made
available to it in connection with the transactions contemplated herein
(“Information”) for any purpose
or in any manner other than solely in connection with its evaluation or consummation of the
transactions contemplated by this Agreement in a manner that the disclosing party has
approved and shall in no event use or permit the use of any of such Information in a manner
or for a purpose detrimental to such other party, and that they will not disclose, divulge,
provide or make accessible (collectively, “Disclose” or “Disclosure”), or
permit the Disclosure of, any of the Information to any Person, other than solely to their
respective directors, officers, employees, investment advisors, accountants, counsel and
other authorized representatives and agents (collectively, the “Representatives”)
who have a “need to know” to carry out the purposes of this Agreement, except as may be
required by judicial or administrative process or, in the opinion of such party’s regular
counsel, by other requirements of Applicable Law; provided, however, that
prior to any Disclosure of any Information permitted hereunder, the disclosing party shall
first obtain the recipients’ undertaking to comply with the provisions of this subsection
with respect to such Information. Each party shall instruct its Representatives to observe
the terms of this Agreement and shall be responsible for any breach of this Agreement by any
of its Representatives. The term “Information” as used herein shall not include any
information relating to a party which the party receiving such information can show to: (i)
have been rightfully in its possession prior to its receipt from another party hereto; (ii)
be now or to later become generally available to the public through no fault of the
receiving party; (iii) have been received separately by the receiving party in an
unrestricted manner from a Person entitled to disclose such information; or (iv) have been
developed independently by the receiving party without regard to any Information received in
connection with this transaction. Each party hereto also agrees to promptly return to the
party from whom it originally received all original and duplicate copies of materials
containing Information and to destroy any summaries, analyses or extracts thereof or based
thereon (whether in hard copy form or intangible media) should the transactions contemplated
herein not occur. A party hereto shall be deemed to have satisfied its obligations to hold
the Information confidential if it exercises the same care as it takes with respect to its
own similar information, which shall in no event be less than reasonable care. The
provisions of this Section 4.1 shall survive indefinitely any termination of this Agreement.
	 
	4.2	 	Further Assurances; Notification. Each party hereto shall after Closing, execute and
deliver such instruments and take such other actions as the other party or parties, as the
case may be, may reasonably require in order to carry out the intent of this Agreement.
	 
	4.3	 	Public Announcements. None of the parties hereto shall make any public announcement
with respect to the transactions contemplated herein without the prior written consent of the
other parties, which consent shall not be unreasonably withheld or delayed. The parties shall
maintain this Agreement and the terms hereof in strict confidence, and neither party shall
disclose this Agreement or any of its terms to any third party unless

37

 

	 	 	specifically ordered to
do so by a court of competent jurisdiction after consulting with the other party or unless
required by Applicable Law or regulation including, but not limited to, the rules and
regulation of the Securities and Exchange Commission and the NASDAQ Stock Market.
Notwithstanding the foregoing, the parties may, on a confidential basis, advise and release
information regarding the existence and content of this Agreement or the transactions
contemplated hereby to their respective Affiliates or
any of their agents, accountants, attorneys and prospective lenders or investors in
connection with or related to the transactions contemplated by this Agreement.
	 
	4.4	 	Cancellation and Forgiveness of Certain Indebtedness of the Company. Immediately
prior to the Closing, Parent shall assume the following indebtedness of the Company
(collectively, the “Company Indebtedness”): (i) any and all indebtedness owed by the
Company pursuant to that certain Loan Agreement, dated December 7, 2005, by and between Parent
and the Company (the “Loan Agreement”), and (ii) the Two Hundred Thousand Dollars
($200,000) loaned to the Company by the Parent pursuant to the Letter of Intent.
	 
	4.5	 	Conduct of Business after Closing Date. Parent shall, and to the extent applicable,
shall cause its Affiliates to, use commercially reasonable efforts to complete a feasibility
study to evaluate the use of local anesthesia for treatment with the Product in physician
offices. Parent shall have sole discretion over all matters relating to the Products after
the Closing Date, including, but not limited to, whether or not to pursue the Milestones and
any development, manufacturing, clinical, regulatory, reimbursement, marketing, and sales
decisions relating to the Products.

ARTICLE 5

SURVIVAL AND INDEMNIFICATION

	5.1	 	Survival. The representations and warranties of each party contained in this
Agreement, and the indemnification obligations of the Stockholders with respect thereto, shall
survive the Closing and shall expire twelve (12) months after the Closing Date.
Notwithstanding the preceding sentence, (i) the representations and warranties contained in
Sections 2.17 (Benefit Plans) and 2.22 (Tax Matters), and the indemnification obligations of
the Company and the Stockholders with respect thereto, shall survive the Closing for a period
of six (6) months after all applicable statutes of limitations with respect to any claims
governing the respective matters set froth therein have expired, and (ii) the representations
and warranties contained in Section 2.19 (the “Intellectual Property Representations”)
and the indemnification obligations of the Company and the Stockholders with respect thereto,
shall survive the Closing for a period of six (6) months following Year Three.
Notwithstanding the foregoing, any representation or warranty that would otherwise terminate
in accordance with this Section 5.1 shall continue to survive, if a notice of a claim pursuant
to this Article 5 shall have been timely given under Section 5.4 on or prior to such
respective termination date, until the related claim has been satisfied or otherwise resolved
as provided herein. The covenants set forth in this Agreement shall survive the Closing
indefinitely. The right to indemnification or any other remedy based on representations,
warranties, covenants and obligations in this Agreement will not be affected by any
investigation conducted with respect to, or any

38

 

	 	 	knowledge acquired (or capable of being
acquired) at any time, whether before or after the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty, covenant or
obligation. The waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or obligation, will not
affect the right to indemnification or any other remedy based on such representations,
warranties, covenants and obligations.
	 
	5.2	 	Indemnification by Stockholders. Subject to Section 5.5, the Stockholders agree to
indemnify, defend and hold harmless Parent and Merger Subsidiary, and their respective
directors, officers, employees, agents and Affiliates, from and against any and all Damages
asserted against, relating to, imposed upon, suffered or incurred by Parent, Merger
Subsidiary, or their respective officers, directors, employees, agents and Affiliates, in
connection with enforcing their indemnification rights pursuant to this Section 5.2 by reason
of or resulting from (i) any untrue representation of, or breach of warranty by, the Company
in any part of this Agreement, and (ii) any non-fulfillment of any covenant, agreement or
undertaking of the Company in any part of this Agreement, (iii) any Product Liability Claim or
other third party claim relating to the Company, whether presently in existence or arising
hereafter from acts, events, conditions or circumstances existing or occurring on or before
the Effective Time, regardless of whether such Product Liability Claim or third party claim
arises out of or constitutes a breach of any representation, warranty or covenant in this
Agreement, (iv) any Liabilities for Taxes of the Company or any respective predecessor in
interest with respect to any Tax period or portion thereof ending on or before the Effective
Time, regardless of whether such Liabilities for Taxes arise out of or constitute a breach of
any representation, warranty or covenant in this Agreement, (v) any incremental compensation
Liabilities that are owed to employees, consultants or other representatives and agents of the
Company that arise out of or are related to any of the Contingent Merger Consideration, (vi)
any Liabilities directly or indirectly arising out of, resulting from or in connection with
the Company’s Severance Benefit Plan and Retention Plan, (vii) any payments made to Dissenting
Stockholders pursuant to the DGCL or CCC in excess of the Merger Consideration per share of
Senior Stock held by Dissenting Stockholders, and (viii) any tax, fee, or other like
obligation in excess of USD $2,500.00 imposed by the hospital located in Guadalajara, Mexico
that was used in the Company’s clinical trials as such is further described in Section 2.7.c
of the Disclosure Schedules to this Agreement.
	 
	5.3	 	Indemnification by Parent. Subject to Section 5.5, Parent agrees to indemnify,
defend and hold harmless each of the Stockholders from and against any and all Damages
asserted against, relating to, imposed upon, suffered or incurred by the Stockholders in
connection with enforcing their indemnification rights pursuant to this Section 5.3 by reason
of or resulting from (i) any untrue representation of, or breach of warranty by, Parent or
Merger Subsidiary in any part of this Agreement, (ii) any non-fulfillment of any covenant,
agreement or undertaking of Parent or Merger Subsidiary in any part of this Agreement, (iii)
any liability of the Company arising out of the operation of the Company or its business after
the Effective Time, (iv) any Liabilities for Taxes of the Company or its predecessor in
interest with respect to any Tax period or part thereof beginning after the Effective Time,
and (v) any Product Liability Claim or other third party claim relating

39

 

	 	 	to the Company,
arising from acts, events, conditions or circumstances existing or occurring after the
Effective Time.
	 
	5.4	 	Claims for Indemnification.

	 	(a)	 	Subject to Section 5.1, whenever any claim arises for indemnification hereunder
the party seeking indemnification (the “Indemnified Party”), will promptly
notify
the party from whom indemnification is sought (the “Indemnifying Party”) of
the claim and, when known, the facts constituting the basis for such claim. In the
event that the Stockholders are seeking indemnification as the Indemnified Party
hereunder, or indemnification is sought against the Stockholders as an Indemnifying
Party hereunder, then in either such case, the Stockholders’ Representative shall be
entitled to act on behalf of, and receive notice on behalf of, the Stockholders for
any and all purposes stated therein. In the case of any such claim for
indemnification hereunder resulting from or in connection with any claim or legal
proceedings of a third party (a “Third Party Claim”), the notice to the
Indemnifying Party will specify with reasonable specificity, if known, the basis
under which the right to indemnification is being asserted and the amount or an
estimate of the amount of the liability arising therefrom. The Indemnifying Party
shall have the right to dispute and defend all Third Party Claims and thereafter so
defend and pay any adverse final judgment or award or settlement amount in regard
thereto. Such defense shall be controlled by the Indemnifying Party, and the cost
of such defense shall be borne by the Indemnifying Party, except that the
Indemnified Party shall have the right to participate in such defense at its own
expense; provided, however, that the Indemnifying Party must first
acknowledge that the claim is a bona fide indemnification claim under this
Agreement. The Indemnified Party shall cooperate in all reasonable respects in the
investigation, trial and defense of any such claim, including making personnel,
books, and records relevant to the claim available to the Indemnifying Party,
without charge, except for reasonable out-of-pocket expenses. If the Indemnifying
Party fails to take action within thirty (30) days as set forth above, then the
Indemnified Party shall have the right to pay, compromise or defend any Third Party
Claim and to assert the amount of any payment on the Third Party Claim plus the
reasonable expenses of defense or settlement of the claim. The Indemnified Party
shall also have the right and upon delivery of advance written notice to such effect
to the Indemnifying Party, exercisable in good faith, to take such action as may be
reasonably necessary to avoid a default prior to the assumption of the defense of
the Third Party Claim by the Indemnifying Party, and any reasonable expenses
incurred by Indemnified Party so acting shall be paid by the Indemnifying Party.
Except as otherwise provided herein, the Indemnified Party will not, except at its
own cost and expense, settle or compromise any Third Party Claim for which it is
entitled to indemnification hereunder without the prior written consent of the
Indemnifying Party, which will not be unreasonably withheld. The parties intend
that all indemnification claims be made as promptly as practicable.

40

 

	 	(b)	 	If the Indemnifying Party is of the opinion that the Indemnified Party is not
entitled to indemnification, or is not entitled to indemnification in the amount
claimed in such notice, the Indemnifying Party will deliver, within ten (10) Business
Days after the receipt of such notice, a written objection to such claim and written
specifications in reasonable detail of the aspects or details objected to, and the
grounds for such objection. If the Indemnifying Party filed timely written notice of
objection to any claim for indemnification, the validity and amount of such claim will
be determined by arbitration pursuant to Article 6. If timely
notice of objection is not delivered or if a claim by an Indemnified Party is
admitted in writing by an Indemnifying Party or if an arbitration award is made in
favor of an Indemnified Party, the Indemnified Party, as a non-exclusive remedy,
will have the right to set-off the amount of such claim or award against any amount
yet owed, whether due or to become due, by the Indemnified Party or any subsidiary
thereof to any Indemnifying Party by reason of this Agreement or any agreement or
arrangement or contract to be entered into at the Closing.

	5.5	 	Indemnification Limits.

	 	(a)	 	Except for claims based on fraud or breach of the Intellectual Property
Representations, the maximum aggregate liability of each Stockholder under this
Agreement shall be limited to an amount equal to ten percent (10%) of the Merger
Consideration actually paid to such Stockholder. Except for claims based on fraud, the
maximum aggregate liability for each Stockholder for breaches of the Intellectual
Property Representations shall be limited to an amount equal to thirty percent (30%) of
the Merger Consideration actually paid to such Stockholder. Except for claims based on
fraud or related to Parent’s failure to make any payment due under Sections 1.8 or 1.9,
the maximum aggregate liability of Parent and the Surviving Corporation under this
Agreement shall be limited to an amount equal to ten percent (10%) of the Merger
Consideration actually paid to the Stockholders.
	 
	 	(b)	 	Except as expressly provided otherwise herein, and subject to the provisions of
Section 5.4, neither the Stockholders nor the Parent, as the case may be, will be
entitled to indemnification for any Damages under this Agreement (unless the aggregate
of all Damages is more than Ten Thousand Dollars ($10,000) (the “Basket
Amount”), provided that when the Basket Amount is exceeded, the Parent will be
entitled to full indemnification of all claims, including the Ten Thousand Dollars
($10,000) that amounted to the Basket Amount. The parties hereto agree that the Basket
Amount is not a deductible amount and that the Basket Amount will not be deemed to be a
definition of “material” for any purpose in this Agreement.

	5.6	 	Right of Set-Off.

	 	(a)	 	Parent shall be entitled to set-off any amounts to which Parent is entitled
based on a claim for indemnification by Parent under this Article 5 (except for a claim
for indemnification by Parent for a breach of any of the Intellectual Property

41

 

	 	 	 	Representations, which is provided in subsection (b) below) against any amounts
otherwise payable by Parent to the Stockholders under this Agreement (including,
without limitation, the Contingent Merger Consideration); provided,
however, that (i) Parent deposits any such set-off amounts in an escrow account
to be held by the Escrow Agent pending resolution of any such claim, and (ii) Parent
may not exercise its right of set-off under this Section 5.6(a) unless the Escrow Funds
at the time of exercise that is not subject to outstanding good faith claims is equal
to $0. Neither the exercise of, nor the failure to exercise, such right of set-off
will
constitute an election of remedies or limit Parent in any manner in the enforcement
of any other remedies that may be available to it.
	 
	 	(b)	 	Parent shall be entitled to set-off any amounts to which Parent is entitled
based a claim for indemnification by Parent for breach of any of the Intellectual
Property Representations against any Milestone Payments that may become payable by
Parent to the Stockholders; provided, however, that (i) Parent deposits
any such set-off amounts in an escrow account to be held by the Escrow Agent pending
resolution of such claim (the “IP Escrow Fund”); and (ii) Parent may not
exercise its right of set-off under this Section 5.6(b) unless the IP Escrow Fund, if
any, at the time of exercise that is not subject to outstanding good faith claims is
equal to $0. Neither the exercise of, nor the failure to exercise, such right of
set-off will constitute an election of remedies or limit Parent in any manner in the
enforcement of any other remedies that may be available to it.

	5.7	 	Escrow Funds. The Escrow Funds will be held in an interest-bearing escrow account as
established pursuant to the Escrow Agreement for the purpose of satisfying claims by an
Indemnified Party for indemnification under this Article 5 and will be released to an
Indemnified Party only in accordance with the terms of the Escrow Agreement. Subject to, and
in accordance with, the terms and conditions set forth in the Escrow Agreement, the Escrow
Agent shall deliver or cause to be delivered to the Stockholders the balance, if any, of the
Escrow Funds.
	 
	5.8	 	Expenses of Stockholders’ Representative. The reasonable out-of-pocket costs and
expenses of the Stockholders’ Representative incurred on the Stockholders’ behalf in
connection with this Agreement or the Escrow Agreement (including legal and other fees
incurred in connection with the defense of claims under Article 5) shall be paid out of the
Escrow Funds; provided, however, that in the event the Escrow Funds are
insufficient or have been released pursuant to the terms of the Escrow Agreement, such costs
and expenses shall be paid out of the Contingent Merger Consideration, if any.
	 
	5.9	 	Exclusive Remedy; Exceptions. From and after the Closing Date, the provisions of
this Article 5 shall be the sole and exclusive remedy for monetary damages arising out of or
resulting from the breach of any representations, warranties or covenants made pursuant to
this Agreement, except for intentional breach, intentional misrepresentation or fraud by the
Company or the Stockholders against Parent or Merger Subsidiary in connection with this
Agreement and the Merger. In the event of intentional breach, intentional misrepresentation
or fraud by the Company or Stockholders against Parent or Merger

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	 	 	Subsidiary in connection with
this Agreement and the Merger, none of the limitations set forth in this Article 5 shall
apply.

ARTICLE 6

ARBITRATION

	6.1	 	Dispute. Except for any controversy, claim or dispute arising out of the failure by
any party to this Agreement to consummate the Merger and the transactions contemplated by this
Agreement and subject to the last sentence of this Section 6.1, any controversy, claim
or dispute of whatever nature arising between the parties under this Agreement, the Payment
Agreement or the Escrow Agreement, or in connection with the transactions contemplated
hereunder or thereunder, including those arising out of or relating to the breach,
termination, enforceability, scope or validity hereof or thereof, whether such claim existed
prior to or arises on or after the Effective Time (a “Dispute”), shall be resolved
by binding arbitration. The agreement to arbitrate contained in this Article 6 shall
continue in full force and effect despite the expiration, rescission or termination of this
Agreement. Notwithstanding the foregoing, prior to Closing either party may seek injunctive
relief with respect to any controversy or claim arising out of or relating to any provision
of this Agreement in any court of competent jurisdiction.
	 
	6.2	 	Mediation. No party shall commence an arbitration proceeding pursuant to the
provisions set forth below unless such party shall first give a written notice (a “Dispute
Notice”) to the other parties setting forth the nature of the Dispute. The parties shall
attempt in good faith to resolve the Dispute by mediation under the CPR Institute for Dispute
Resolution (“CPR”) Model Mediation Procedure for Business Disputes (the “CPR
Procedure”) in effect at the time of the Dispute. If the parties cannot agree on the
selection of a mediator within twenty (20) days after receipt of the Dispute Notice, the
mediator will be selected in accordance with the CPR Procedure.
	 
	6.3	 	Arbitration.

	 	(a)	 	If the Dispute has not been resolved by mediation within sixty (60) days after
receipt of the Dispute Notice or such greater period as the parties may agree upon in
writing, then the Dispute shall be determined by binding arbitration in Minneapolis,
Minnesota. The arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) in effect on
the date on which the Dispute Notice is sent, subject to any modifications contained in
this Agreement. The Dispute shall be determined by one (1) arbitrator, except that if
the Dispute involves an amount in excess of One Million Dollars ($1,000,000), exclusive
of interest and costs, three (3) arbitrators shall be appointed as follows: one
arbitrator shall be selected by Parent, one arbitrator shall be selected by the
Stockholders’ Representative and one arbitrator shall be selected by the first two
arbitrators. Persons eligible to serve as arbitrators shall be members of the AAA
Large, Complex Case Panel or a CPR Panel of Distinguished Neutrals, or persons who have
professional credentials similar to those persons listed on such AAA or CPR panels.
The award shall be

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	 	 	 	in writing and include the findings of fact and conclusions of law
upon which it is based.
	 
	 	(b)	 	The arbitration shall be governed by the substantive laws of the State of
Minnesota, without regard to conflicts-of-law rules, and by the arbitration law of the
Federal Arbitration Act (Title 9, U.S. Code). Judgment upon the award rendered may be
entered in any court having jurisdiction.
	 
	 	(c)	 	Except as otherwise required by law, the parties and the arbitrator(s) agree to
keep confidential and not disclose to third parties any information or documents
obtained in connection with the arbitration process, including the resolution of the
Dispute. If a party fails to proceed with arbitration as provided in this
Agreement, or unsuccessfully seeks to stay the arbitration, or fails to comply with
the arbitration award, or is unsuccessful in vacating or modifying the award
pursuant to a petition or application for judicial review, the other party or
parties, as applicable, shall be entitled to be awarded costs, including reasonable
attorneys’ fees, paid or incurred in successfully compelling such arbitration or
defending against the attempt to stay, vacate or modify such arbitration award
and/or successfully defending or enforcing the award.

ARTICLE 7

DEFINITIONS

	7.1	 	Definitions. The following terms, as used herein, have the following meanings:

	 	(a)	 	“AAA” shall have the meaning set forth in Section 6.3(a).
	 
	 	(b)	 	“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under direct or indirect common control with
such other Person, through the ownership of all or part of any Person, or (ii) any
Person who may be deemed to be an “affiliate” under Rule 145 of the Securities Act.
	 
	 	(c)	 	“Agreement” shall have the meaning set forth in the first paragraph.
	 
	 	(d)	 	“AMS Holdings” shall have the meaning set forth in Section 1.9(e).
	 
	 	(e)	 	“Applicable Law” means, with respect to any Person, any domestic or foreign,
federal, state or local common law or duty, case law or ruling, statute, law,
ordinance, policy, guidance, rule, administrative interpretation, regulation, code,
order, writ, injunction, directive, judgment, decree or other requirement of any
Governmental Authority (including any Environmental, Safety and Health Laws) applicable
to such Person or any of its Affiliates or Plan Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents (in
connection with such officer’s, director’s, employee’s, consultant’s or agent’s
activities on behalf of such Person or any of its Affiliates or Plan Affiliates).
	 
	 	(f)	 	“Annual Financial Statements” shall have the meaning set forth in Section
2.7(a).

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	 	(g)	 	“Audited Annual Financial Statements” shall have the meaning set forth in
Section 2.7(a).
	 
	 	(h)	 	“Basket Amount” shall have the meaning set forth in Section 5.5(b).
	 
	 	(i)	 	“Benefit Plan” means all Pension Plans, Welfare Plans and Compensation Plans.
	 
	 	(j)	 	“Bundled Product” means the Product and other products that are not the Product
sold in a bundle of products that are priced together.
	 
	 	(k)	 	“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Minneapolis, Minnesota are authorized or required by law to close.
	 
	 	(l)	 	“CCC” shall have the meaning set forth in Section 1.11(a).
	 
	 	(m)	 	“Certificate of Merger” shall have the meaning set forth in Section 1.2.
	 
	 	(n)	 	“Certificates” shall have the meaning set forth in Section 1.12(a).
	 
	 	(o)	 	A “Change in Control” shall be deemed to have occurred if:

(i) any one Person, or more than one Person acting as a group, acquires
ownership of stock of AMS Holdings constituting more than fifty percent
(50%) of the total voting power of AMS Holdings;

(ii) a merger or consolidation where the holders of the voting stock of AMS
Holdings immediately prior to the effective date of such merger or
consolidation own less than fifty percent (50%) of the voting stock of
either entity surviving such merger or consolidation; or

(iii) any one Person or more than one Person acting as a group, acquires
assets from AMS Holdings that have a total fair market value greater than
fifty percent (50%) of the total fair market value of all of AMS Holdings’
assets respectively immediately before the acquisition or acquisitions;
provided, however, that transfers of assets which otherwise would satisfy
the requirements of this subsection (iii) will not be treated as an
acquisition of such assets if the assets are transferred to:

(A) any Person, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly by AMS
Holdings; or

(B) any Person, or more than one Person acting as a group, that owns,
directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all of the outstanding stock of AMS
Holdings.

45

 

     Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred solely as a result of any transaction or reorganization undertaken for the
primary purpose of implementing a change in jurisdiction or charter of AMS Holdings.

	 	(p)	 	“Closing” shall have the meaning set forth in Section 1.3.
	 
	 	(q)	 	“Closing Date” shall have the meaning set forth in Section 1.3.
	 
	 	(r)	 	“Closing Date Balance Sheet” shall have the meaning set forth in Section
1.8(a).
	 
	 	(s)	 	“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
or other binding pronouncements promulgated thereunder.
	 
	 	(t)	 	“Commercialization Milestone Payment” shall have the meaning set forth in
Section 1.9(a)(iii).
	 
	 	(u)	 	“Company” shall have the meaning set forth in the first paragraph.
	 
	 	(v)	 	“Company 401(k) Plan” means each Company Pension Plan qualified under Code
Section 401(k).
	 
	 	(w)	 	“Company Capital Stock” means Company Common Stock and Company Preferred Stock.
	 
	 	(x)	 	“Company Common Stock” means the common stock, $.001 par value, of the Company.
	 
	 	(y)	 	“Company Documents” shall have the meaning set forth in Section 2.3.
	 
	 	(z)	 	"Company Indebtedness” shall have the meaning set forth in Section 4.4.
	 
	 	(aa)	 	“Company Liabilities” shall have the meaning set forth in Section 1.8(a).
	 
	 	(bb)	 	“Company Licenses” shall have the meaning set forth in Section 2.11(a).
	 
	 	(cc)	 	“Company Preferred Stock” means, collectively, the Series A-1 Stock, the Series
A-2 Stock, the Series A-3 Stock, the Series B Stock, the Series C Stock, the Series D
Stock, the Series E-1 Stock, the Series F-1 Stock, the Series G-1 Stock of the Company.
	 
	 	(dd)	 	“Company Securities” means any and all (i) Company Common Stock, (ii) Company
Preferred Stock, (iii) Company Stock Options, (iv) Company Warrants, (v) shares of
capital stock or other voting securities of the Company, (vi) securities of the Company
convertible into or exchangeable for shares of capital stock or voting securities of
the Company, (vii) options, warrants, conversion privileges, contracts, understandings,
agreements or other rights to purchase or acquire from the Company, or obligations of
the Company to issue,

46

 

	 	 	 	any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the Company, and (viii)
equity equivalent interests in the ownership or earnings of the Company or other
similar rights.
	 
	 	(ee)	 	“Company Stock Option” means an option to purchase a share of the Company’s
Common Stock granted pursuant to the Company Stock Option Plans.
	 
	 	(ff)	 	“Company Stock Option Plans” means the Company’s 1996 Stock Option Plan.
	 
	 	(gg)	 	“Company Warrants” means warrants issued by the Company and outstanding from
time to time to purchase either Company Common Stock or Company Preferred Stock.
	 
	 	(hh)	 	“Compensation Plan” means any material benefit or arrangement that is not
either a Pension Plan or a Welfare Plan, including, without limitation, (i) each
employment or consulting agreement, (ii) each arrangement providing for insurance
coverage or workers’ compensation benefits, (iii) each bonus, incentive
bonus or deferred bonus arrangement, (iv) each arrangement providing termination
allowance, severance or similar benefits, (v) each equity compensation plan, (vi)
each current or deferred compensation agreement, arrangement or policy, (vii) each
compensation policy and practice maintained by the Company or any ERISA Affiliate of
the Company covering the employees, former employees, directors and former directors
of the Company and the beneficiaries of any of them, and (viii) each agreement,
arrangement or plan that provides for the payment of compensation to any person who
provides services to the Company and who is not an employee, former employee,
director or former director of the Company.
	 
	 	(ii)	 	“Contingent Merger Consideration” shall have the meaning set forth in Section
1.9.
	 
	 	(jj)	 	“Consent” or “Consents” shall have the meaning set forth in Section 2.6.
	 
	 	(kk)	 	“Contracts” means all contracts, agreements, options, leases, licenses, sales
and accepted purchase orders, commitments and other instruments of any kind, whether
written or oral, to which the Company is a party on the Closing Date, including the
Scheduled Contracts.
	 
	 	(ll)	 	"Coopers Agreement” means the Asset Purchase Agreement, dated November 26,
2003, between CooperSurgical Acquisition Corp. and SURx, Inc (now known as Solarant
Medical, Inc.).
	 
	 	(mm)	 	“CPR” shall have the meaning set forth in Section 6.2.
	 
	 	(nn)	 	“CPR Procedure” shall have the meaning set forth in Section 6.2.
	 
	 	(oo)	 	“Damages” means all losses, damages, costs, expenses, liabilities, judgments,
awards, fines, sanctions, penalties, charges and amounts paid in settlement,

47

 

	 	 	 	without
giving effect to any qualifications as to materiality of Material Adverse Effect
contained in any representation or warranty contained herein, including, but not
limited to, (i) interest on cash disbursements in respect of any of the foregoing at
the “prime rate” as published in the Wall Street Journal, from time to time from the
date each such cash disbursement is made until the Person incurring the same shall have
been indemnified in respect thereof, and (ii) reasonable costs, fees and expenses of
attorneys, accountants, bankers and other agents of the Person incurring such expenses.
	 
	 	(pp)	 	“Development Period” shall have the meaning set forth in Section 1.9(c).
	 
	 	(qq)	 	“Development Period Contingency Payment” shall have the meaning set forth in
Section 1.9(c).
	 
	 	(rr)	 	“DGCL” shall have the meaning set forth in Section 1.1.
	 
	 	(ss)	 	“Disclose” or “Disclosure” shall have the meaning set forth in Section 4.1
	 
	 	(tt)	 	“Disclosure Schedule” shall have the meaning set forth in Article 2.
	 
	 	(uu)	 	“Dispute” shall have the meaning set forth in Section 6.1.
	 
	 	(vv)	 	“Dispute Notice” shall have the meaning set forth in Section 6.2.
	 
	 	(ww)	 	“Dissenting Shares” shall have the meaning set forth in Section 1.11(a).
	 
	 	(xx)	 	“Dissenting Stockholders” shall have the meaning set forth in Section 1.11(a).
	 
	 	(yy)	 	“Effective Time” shall have the meaning set forth in Section 1.2.
	 
	 	(zz)	 	“Employee” shall have the meaning set forth in Section 2.18(a).
	 
	 	(aaa)	 	“Environmental, Safety and Health Laws” means all Applicable Laws in any way
relating to Environmentally Regulated Materials, toxic torts, occupational health and
safety, or the environment, including, without limitation, the Safe Drinking Water and
Toxic Enforcement Act (“Proposition 65”), the Federal Resource Conservation and
Recovery Act, the Federal Comprehensive Environmental Response Compensation and
Liability Act, the Federal Clean Air Act, the Federal Water Pollution Control Act, the
Federal Safe Drinking Water Act, the Federal Toxic Substances Control Act, the Federal
National Environmental Policy Act, the Federal Insecticide Fungicide and Rodenticide
Act, the Federal Emergency Planning and Community Right to Know Act, the Federal Hazard
Communication Act, the Federal Occupational Safety and Health Act, any requirements
promulgated pursuant to these Applicable Laws, amendments, or restatements thereof or
similar enactments thereof, as is now in effect, or any analogous foreign, state or
local Applicable Laws.

48

 

	 	(bbb)	 	“Environmental Liabilities” means all Liabilities of a Person (whether such
Liabilities are owed by such Person to Governmental Authorities, third parties, or
otherwise) currently in existence which arise under or relate to any Environmental Law.
	 
	 	(ccc)	 	“Environmentally Regulated Material” means any element, compound, waste,
pollutant, contaminant, substance, material or any mixture thereof: (i) the presence of
which requires investigation or remediation under any Applicable Law; (ii) that is
defined as a “hazardous waste” or “hazardous substance,” or chemicals known to cause
cancer or reproductive toxicity under any Applicable Law; (iii) that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic or mutagenic or
otherwise hazardous and is regulated by any Governmental Authority having or asserting
jurisdiction over the Company; (iv) the presence of which causes a nuisance, trespass
or other tortious condition; (v) the presence of which poses a hazard to the health or
safety of Persons; (vi) without limitation, that contains gasoline, diesel fuel or
other petroleum hydrocarbons, polychlorinated biphenyls (PCBs), or asbestos, (vii) that
gives rise to any exposure prohibition or warning requirement under any Environmental
Law; or (viii) that is otherwise regulated in any way under any Environmental Law.
	 
	 	(ddd)	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	 	(eee)	 	“ERISA Affiliate” means any “person,” within the meaning of Section 7701(a)(1)
of the Code, that together with the Company is considered a single employer pursuant to
Section 414(b), (c), (m) or (o) of the Code or Section 3(5) or 4001(b)(1) of ERISA.
	 
	 	(fff)	 	“Escrow Agent” means U.S. Bank National Association, or such other bank as the
parties may agree upon.
	 
	 	(ggg)	 	“Escrow Agreement” shall have the meaning set forth in Section 1.3(b)(iii).
	 
	 	(hhh)	 	“Escrow Funds” shall have the meaning set forth in Section 1.8(a).
	 
	 	(iii)	 	“FDA” means the U.S. Food and Drug Administration.
	 
	 	(jjj)	 	“FDC Act” shall have the meaning set forth in Section 2.10.
	 
	 	(kkk)	 	“FICA” shall have the meaning set forth in Section 2.17(q).
	 
	 	(lll)	 	“First Revenue Payment” shall have the meaning set forth in Section
1.9(b)(i)(1).
	 
	 	(mmm)	 	“GAAP” means generally accepted accounting principles in the United States.
	 
	 	(nnn)	 	“GMP/QSR Regulations” shall have the meaning set forth in Section 2.10.

49

 

	 	(ooo)	 	“Government Programs” shall have the meaning set forth in Section 2.12(a).
	 
	 	(ppp)	 	“Governmental Authority” means any foreign, domestic, federal, territorial,
state or local governmental or regulatory authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization, commission,
tribunal or organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.
	 
	 	(qqq)	 	“Group Health Plan” means any group health plan, as defined in Section
5000(b)(1) of the Code.
	 
	 	(rrr)	 	“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
Public Law 104-191 as codified in the Code and ERISA.
	 
	 	(sss)	 	“HIPAA Portability Regulations” means the regulations issued by the Department
of Treasury (Title 26, Part 54, of the Code of Federal Regulations) and the Department
of Labor (Title 29, Part 2590, of the Code of Federal Regulations) pursuant to HIPAA,
including the regulations governing pre-existing condition
exclusions, special enrollment rights and non-discrimination on the basis of health
status.”
	 
	 	(ttt)	 	“HIPAA Privacy, Security and“other Administrative Simplification Regulations”
means the regulations (Title 45, Parts 160 through 164, of the Code of Federal
Regulations) issued by the U.S. Department of Health and Human Services pursuant to
HIPAA.
	 
	 	(uuu)	 	"Hospital CPT Code” means a current procedural terminology code with physician
work values established via the AMA RBRVS (Resource Based Relative Value Scale) update
committee process.
	 
	 	(vvv)	 	“Hospital CPT Code Milestone” shall mean (i) the AMA’s issuance of the
Hospital CPT Code for the Product and (ii) Parent’s receipt of FDA approval and
clearance to market the Product.
	 
	 	(www)	 	“Hospital CPT Code Milestone Payment” shall have the meaning set forth in
Section 1.9(a)(i).
	 
	 	(xxx)	 	“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
	 
	 	(yyy)	 	“Indemnified Party” shall have the meaning set forth in Section 5.4(a).
	 
	 	(zzz)	 	“Indemnifying Party” shall have the meaning set forth in Section 5.4(a).
	 
	 	(aaaa)	 	“Information” shall have the meaning set forth in Section 4.1.
	 
	 	(bbbb)	 	“Initial Merger Consideration” shall have the meaning set forth in Section 1.8(a).

50

 

	 	(cccc)	 	“Initial Payment” shall have the meaning set forth in Section 1.8(a).
	 
	 	(dddd)	 	“Intellectual Property” shall mean all rights in patents, patent applications,
trademarks (whether registered or not), trademark applications, service mark
registrations and service mark applications, trade names, trade dress, logos, slogans,
tag lines, uniform resource locators, Internet domain names, Internet domain name
applications, corporate names, copyright applications, registered copyrighted works,
technology, software, trade secrets, know-how, technical documentation, specifications,
data and designs, other than off-the-shelf computer programs, used in or necessary to
the conduct of the business of the Company.
	 
	 	(eeee)	 	"Intellectual Property Representations” shall have the meaning set forth in Section
5.1.
	 
	 	(ffff)	 	“IP Escrow Fund” shall have the meaning set forth in Section 5.6(b).
	 
	 	(gggg)	 	“Junior Company Securities” shall have the meaning set forth in Section 1.10(a).
	 
	 	(hhhh)	 	“Knowledge of the Company” or “Company’s Knowledge” means the knowledge actually
possessed, or which, upon the exercise of reasonable due diligence could be possessed
by Mike Gandy, Ed Luttich, Cheryl Shimek and Terry Spraker.
	 
	 	(iiii)	 	“Latest Balance Sheet” shall have the meaning set forth in Section 2.7(a).
	 
	 	(jjjj)	 	“Latest Financial Statements” shall have the meaning set forth in Section 2.7(a).
	 
	 	(kkkk)	 	“Letter of Intent” means the Preliminary Summary of Terms and Conditions, dated March
13, 2006, signed by the Company and Parent.
	 
	 	(llll)	 	“Liability” or “Liabilities” means any liabilities, obligations or claims of any kind
whatsoever whether absolute, accrued or un-accrued, fixed or contingent, matured or
un-matured, asserted or unasserted, known or unknown, direct or indirect, contingent or
otherwise and whether due or to become due, including without limitation any foreign or
domestic tax liabilities or deferred tax liabilities incurred in respect of or measured
by the Company’s income, or any other debts, liabilities or obligations relating to or
arising out of any act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition which occurred or existed on or before the date
hereof, whether or not known, due or payable, whether or not the same is required to be
accrued on the financial statements or is disclosed on the Disclosure Schedule.
	 
	 	(mmmm)	 	“Lien” means, with respect to any asset, any mortgage, title defect or objection,
lien, pledge, charge, security interest, hypothecation, restriction, encumbrance,
adverse claim or charge of any kind in respect of such asset.
	 
	 	(nnnn)	 	"Loan Agreement” shall have the meaning set forth in Section 4.4.

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	 	(oooo)	 	“Material Adverse Effect” means, with respect to the Company or Parent, in either
case as applicable, an individual or cumulative adverse change in or effect on the
business, operations, working capital condition (financial or otherwise), assets,
properties or liabilities of such party which (i) is reasonably expected to be
materially adverse to the business, operations, properties, working capital condition
(financial or otherwise), assets or liabilities of such party or its Subsidiaries taken
as a whole; or (ii) would prevent such party from consummating the transactions
contemplated hereby: provided, however, that none of the following
shall be deemed, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or will be,
a Material Adverse Effect: any adverse effect arising from or attributable or relating
to (1) the announcement of any of the transactions contemplated by this Agreement, (2)
the taking of any action required by this Agreement, or (3) the taking of any action by
any party approved or consented to in writing by each of the other parties to this
Agreement.
	 
	 	(pppp)	 	“Merger” shall have the meaning set forth in Section 1.1.
	 
	 	(qqqq)	 	“Merger Consideration” shall have the meaning set forth in Section 1.9.
	 
	 	(rrrr)	 	“Merger Subsidiary” shall have the meaning set forth in the first paragraph.
	 
	 	(ssss)	 	“Merger Subsidiary Common Stock” shall have the meaning set forth in Section 1.10(c).
	 
	 	(tttt)	 	“Milestone Payments” shall have the meaning set forth in Section 1.9(a)(iii).
	 
	 	(uuuu)	 	“Milestones” shall mean the Hospital CPT Code Milestone and the Office CPT Code
Milestone.
	 
	 	(vvvv)	 	“Net Initial Merger Consideration” shall have the meaning set forth in Section
1.8(a).
	 
	 	(wwww)	 	“Net Sales” means Parent’s properly recognized consolidated aggregate net sales of
the Products, calculated in accordance with GAAP consistently applied by Parent in
accordance with its audited revenue recognition policies. Whenever a Product is sold
as part of a Bundled Product, the “Net Sales” for the Product resulting from such sale
of such Bundled Product shall be the product of (X) the net revenues reported by Parent
or its Affiliate, whichever is applicable, for such Bundled Product multiplied by (Y) a
fraction, the numerator of which is the per unit average selling price of such Product
and the denominator of which is the sum of the aggregate per unit average selling
prices of all products, including the Product, included in such Bundled Product.
	 
	 	(xxxx)	 	"Office CPT Code” means a current procedural terminology code that recognizes the
site of service differential with appropriate payment for the office setting.
Appropriate payment is defined as greater than or equal to $1,600.

52

 

	 	(yyyy)	 	“Office CPT Code Milestone” shall mean (i) the AMA’s issuance of the Office CPT
Code for the Product and (ii) Parent’s receipt of FDA approval and clearance to market
the Product.
	 
	 	(zzzz)	 	“Office CPT Code Milestone Payment” shall have the meaning set forth in Section
1.9(a)(ii).
	 
	 	(aaaaa)	 	“Ordinary Course of Business” means any action taken by a Person that is (i)
consistent with the past practices of such Person and is taken in the ordinary course
of the normal day-to-day operations of such Person and (ii) not required to be
specifically authorized by the Board of Directors of such Person (or by any Person or
group of Persons exercising similar authority).
	 
	 	(bbbbb)	 	“Parent” shall have the meaning set forth in the first paragraph.
	 
	 	(ccccc)	 	“Parent Documents” shall have the meaning set forth in Section 3.2.
	 
	 	(ddddd)	 	“Payment Agent” means U.S. Bank National Association, or such other bank as the
parties may agree upon.
	 
	 	(eeeee)	 	“Payment Agreement” shall have the meaning set forth in Section 1.3(b)(iv).
	 
	 	(fffff)	 	“PCBs” shall have the meaning set forth in Section 2.20(a).
	 
	 	(ggggg)	 	“Pension Plan” means an “employee pension benefit plan” as such term is defined in
Section 3(2) of ERISA.
	 
	 	(hhhhh)	 	“Permits” shall have the meaning set forth in Section 2.14.
	 
	 	(iiiii)	 	“Permitted Liens” means (i) Liens for Taxes or governmental assessments, charges or
claims the payment of which is not yet due, or for Taxes the validity of which are
being contested in good faith by appropriate proceedings (and which contested Taxes are
described on the Disclosure Schedule); (ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other similar Persons and other
Liens imposed by Applicable Law incurred in the Ordinary Course of Business for sums
not yet delinquent or being contested in good faith; (iii) Liens relating to deposits
made in the Ordinary Course of Business in connection with workers’ compensation,
unemployment insurance and other types of social security or to secure the performance
of leases, trade contracts or other similar agreements; (iv) Liens and Encumbrances
specifically identified in the Latest Balance Sheet; (v) Liens securing executory
obligations under any lease that constitutes an “operating lease” under GAAP; and (vi)
other Liens set forth on the Disclosure Schedule; provided, however,
that, with respect to each of clauses (i) through (v), to the extent that any such Lien
on any of the Company’s assets arose prior to the date of the Latest Balance Sheet and
relates to, or secures the payment of, a Liability that is required to be accrued for
under GAAP, such Lien shall not be a Permitted Lien unless all such Liabilities have
been fully accrued or otherwise reflected on the Latest Balance Sheet.

53

 

	 	 	 	Notwithstanding
the foregoing, no Lien arising under the Code or ERISA with respect to the operation,
termination, restoration or funding of any Benefit Plan sponsored by, maintained by or
contributed to by the Company or any of its ERISA Affiliates or arising in connection
with any excise tax or penalty tax with respect to such Benefit Plan shall be a
Permitted Lien.
	 
	 	(jjjjj)	 	“Person” means an individual, corporation, partnership, limited liability company,
association, trust, estate or other entity or organization, including a Governmental
Authority.
	 
	 	(kkkkk)	 	“Plan Affiliate” means, with respect to any Person, any Benefit Plan sponsored by,
maintained by or contributed to by such Person, and with respect to any Benefit Plan,
any Person sponsoring, maintaining or contributing to such plan or arrangement.
	 
	 	(lllll)	 	“Prior Divestiture” shall have the meaning set forth in Section 2.27.
	 
	 	(mmmmm)	 	“Proceedings” shall have the meaning set forth in Section 2.15.
	 
	 	(nnnnn)	 	“Product” or “Products” means the Solarant 2 System, which consists of: (i) a
hand-held applicator used to apply RF energy and cooling to the tissue from inside the
vagina; (ii) a console that generates RF energy, provides liquid coolant and cooling
power, controls the Solarant 2 System through software and provides a user interface
screen; and (iii) a urethral measurement assembly which is inserted into the urethra,
to help correctly position the applicator relative to the individual patient’s anatomy.
	 
	 	(ooooo)	 	"Product Development Expenses” means all internal and external expenses incurred by
Parent and its Affiliates related to research and development, clinical, regulatory,
marketing and operation activities for the Product.
	 
	 	(ppppp)	 	“Product Liability Claim” shall have the meaning set forth in Section 2.25.
	 
	 	(qqqqq)	 	“Properties” means any real property owned or leased by or to the Company.
	 
	 	(rrrrr)	 	“Representatives” shall have the meaning set forth in Section 4.1.
	 
	 	(sssss)	 	“Revenue Calculation” shall have the meaning set forth in Section 1.9(b)(ii).
	 
	 	(ttttt)	 	“Revenue Payment Commencement Date” shall have the meaning set forth in Section
1.9(b).
	 
	 	(uuuuu)	 	“Revenue Payments” shall have the meaning set forth in Section 1.9(b)(i)(3).
	 
	 	(vvvvv)	 	“Scheduled Contracts” shall have the meaning set forth in Section 2.16(a).

54

 

	 	(wwwww)	 	“Second Revenue Payment” shall have the meaning set forth in Section 1.9(b)(i)(2).
	 
	 	(xxxxx)	 	“Section 409A Benefit Plan” shall have the meaning set forth in Section 2.17(o).
	 
	 	(yyyyy)	 	“Securities Act” means the Securities Act of 1933, as amended.
	 
	 	(zzzzz)	 	“Senior Stock” shall have the meaning set forth in Section 1.10(b).
	 
	 	(aaaaaa)	 	“Series A-1 Stock” means the Series A-1 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(bbbbbb)	 	“Series A-2 Stock” means the Series A-2 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(cccccc)	 	“Series A-3 Stock” means the Series A-3 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(dddddd)	 	“Series B Stock” means the Series B Preferred Stock, $.001 par value, of the
Company.
	 
	 	(eeeeee)	 	“Series C Stock” means the Series C Preferred Stock, $.001 par value, of the
Company.
	 
	 	(ffffff)	 	“Series D Stock” means the Series D Preferred Stock, $.001 par value, of the
Company.
	 
	 	(gggggg)	 	“Series E-1 Stock” means the Series E-1 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(hhhhhh)	 	“Series F-1 Stock” means the Series F-1 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(iiiiii)	 	“Series G-1 Stock” means the Series A-1 Preferred Stock, $.001 par value, of the
Company.
	 
	 	(jjjjjj)	 	“Stockholder Expenses” mean expenses to be borne by the Stockholders pursuant to
Section 8.3 or otherwise as authorized and approved by the Stockholders’
Representatives.
	 
	 	(kkkkkk)	 	“Stockholders” mean the Persons who hold of record immediately prior to the
Effective Time shares of Company Common Stock or Company Preferred Stock.
	 
	 	(llllll)	 	“Stockholders’ Representative” shall have the meaning set forth in the first
paragraph.
	 
	 	(mmmmmm)	 	“Subsidiary” or “Subsidiaries” mean each corporation or other legal entity as to
which more than 50% of the outstanding equity securities having

55

 

ordinary voting rights
or power at the time of determination is being made is owned or controlled, directly or
indirectly, by the Company.

	 	(nnnnnn)	 	“Surviving Corporation” shall have the meaning set forth in Section 1.1.
	 
	 	(oooooo)	 	“Surviving Corporation Common Stock” shall have the meaning set forth in Section
1.10(c).
	 
	 	(pppppp)	 	“Tax” or “Taxes” means all taxes imposed of any nature including federal, state,
local or foreign net income tax, alternative or add-on minimum tax, profits or excess
profits tax, franchise tax, gross income, adjusted gross income or gross receipts tax,
employment related tax (including employee withholding or employer payroll tax, FICA or
FUTA), real or personal property tax or ad valorem tax, sales or use tax, excise tax,
stamp tax or duty, any withholding or back up withholding tax, value added tax,
severance tax, prohibited transaction tax, premiums tax, environmental tax, intangibles
tax or occupation tax, together with any interest or any penalty, addition to tax or
additional amount imposed by any Governmental Authority (domestic or foreign)
responsible for the imposition
of any such tax. The term Tax shall also include any Liability of the Company for
the Taxes of any other Person under U.S. Treasury Regulations Section 1.1502-6 (or
similar provisions of state, local or foreign law), as a transferee or successor by
contract or otherwise.
	 
	 	(qqqqqq)	 	“Tax Return” means all returns, declarations, reports, estimates, forms,
information returns and statements or other information required to be filed with
respect to any Tax.
	 
	 	(rrrrrr)	 	“Terminated Employees” shall have the meaning set forth in Section 1.3(b)(xiii).
	 
	 	(ssssss)	 	“Third Party Claim” shall have the meaning set forth in Section 5.4(a).
	 
	 	(tttttt)	 	"Third Revenue Payment” shall have the meaning set forth in Section 1.9(b)(i)(3).
	 
	 	(uuuuuu)	 	“Transaction Expenses” means all fees and expenses incurred by or on behalf of the
Company payable to a third party (including, without limitation, all legal, accounting,
financial advisory, investment banking, consulting and all other fees and expenses of
third parties) incurred in connection with the negotiation and preparation of this
Agreement and the transactions contemplated hereby.
	 
	 	(vvvvvv)	 	“Unaudited Annual Financial Statements” shall have the meaning set forth in Section
2.7(a).
	 
	 	(wwwwww)	 	“Welfare Plan” means an “employee welfare benefit plan” as such term is defined in
Section 3(1) of ERISA (including without limitation a plan excluded from coverage by
Section 4 of ERISA).
	 
	 	(xxxxxx)	 	“Year One” shall have the meaning set forth in Section 1.9(b)(i)(1).

56

 

	 	(yyyyyy)	 	“Year Three” shall have the meaning set forth in Section 1.9(b)(i)(3).
	 
	 	(zzzzzz)	 	“Year Two” shall have the meaning set forth in Section 1.9(b)(i)(2).
	 
	 	(aaaaaaa)	 	“Year Zero” shall have the meaning set forth in Section 1.9(b)(i)(1).

ARTICLE 8

MISCELLANEOUS

	8.1	 	Notices. All notices, requests, demands, claims and other communications hereunder
shall be in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given (a) if personally delivered, when so delivered, (b) if mailed, two
(2) Business Days after having been sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth below, (c) if
given by facsimile, once such notice or other communication is transmitted to the facsimile
number specified below and electronic confirmation is received; provided,
however, that such notice or other communication is promptly
thereafter mailed in accordance with the provisions of clause (b) above, or (d) if
sent through an overnight delivery service in circumstances to which such service
guarantees next day delivery, the day following being so sent:
	 
	 	 	If to the Company after Closing or to the Parent or Merger Subsidiary:

	 	 	 	 	 	 	 
	 

	 	To:
	 	American Medical Systems, Inc.
	 	 
	 

	 	 	 	10700 Bren Road West	 	 
	 

	 	 	 	Minnetonka, Minnesota 55343	 	 
	 

	 	 	 	Attn: Chief Executive Officer	 	 
	 

	 	 	 	Fax: (612) 930-6695	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Oppenheimer Wolff & Donnelly LLP	 	 
	 

	 	 	 	3300 Plaza VII	 	 
	 

	 	 	 	45 South Seventh Street	 	 
	 

	 	 	 	Minneapolis, Minnesota 55402	 	 
	 

	 	 	 	Attn: Thomas A. Letscher, Esq.	 	 
	 

	 	 	 	Fax: (612) 607-7100	 	 
	 

	 	 	 	E-mail: TLetscher@Oppenheimer.com	 	 
	 
	 	 	 	 	 	 
	If to the Stockholders’ Representative:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Warburg Pincus Equity Partners, L.P.	 	 
	 

	 	 	 	466 Lexington Ave	 	 
	 

	 	 	 	11th Floor	 	 
	 

	 	 	 	New York, NY 10017	 	 
	 

	 	 	 	Attn: Timothy Curt	 	 

57

 

	 	 	 	 	 	 	 
	 

	 	 	 	Fax (212) 878-9361	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Cooley Godward LLP	 	 
	 

	 	 	 	3175 Hanover Street	 	 
	 

	 	 	 	Palo Alto, CA 94304-1130	 	 
	 

	 	 	 	Attn: James F. Fulton, Jr., Esq.	 	 
	 

	 	 	 	Fax: 650-849-7400	 	 
	 

	 	 	 	E-mail: fultonjf@cooley.com	 	 

          Any party may give any notice, request, demand, claim or other communication hereunder using
any other means (including ordinary mail or electronic mail), but no such notice, request, demand,
claim or other communication shall be deemed to have been duly given unless and until it actually
is received by the individual for whom it is intended. Any party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be delivered by giving
the other parties notice in the manner herein set forth.

	8.2	 	Amendments; No Waivers.

	 	(a)	 	Subject to Applicable Law, any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by all parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective.
	 
	 	(b)	 	No waiver by a party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent occurrence.
No failure or delay by a party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.

	8.3	 	Expenses. All costs, fees and expenses incurred in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and in closing and carrying
out the transactions contemplated hereby shall be paid by the party incurring such cost or
expense (which in the case of the Company, shall be deducted from the Merger Consideration).
This Section 8.3 shall survive the termination of this Agreement.
	 
	8.4	 	Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns. No party
hereto may assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval of each other party.

58

 

	8.5	 	Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the internal laws of the State of Delaware (regardless of the laws that might
otherwise govern under applicable principles of conflicts of law).
	 
	8.6	 	Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts and the signatures delivered by facsimile, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received a counterpart
hereof signed by the other parties hereto.
	 
	8.7	 	Entire Agreement. This Agreement (including the Disclosure Schedule, all Exhibits
and Schedules and all other agreements referred to herein or therein which are hereby
incorporated by reference and the other agreements executed simultaneously herewith)
constitutes the entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of this Agreement, including, without
limitation, the Letter of Intent. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
	 
	8.8	 	Captions. The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof. All references to an Article
or Section include all subparts thereof.
	 
	8.9	 	Severability. If any provision of this Agreement, or the application thereof to any
Person, place or circumstance, shall be held by a court of competent jurisdiction to be
invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied
to other Persons, places and circumstances shall remain in full force and effect only if,
after excluding the portion deemed to be unenforceable, the remaining terms shall provide for
the consummation of the transactions contemplated hereby in substantially the same manner as
originally set forth at the later of the date this Agreement was executed or last amended.
	 
	8.10	 	Construction. The parties hereto intend that each representation, warranty and
covenant contained herein shall 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) that the party has not breached shall not
detract from or mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
	 
	8.11	 	Cumulative Remedies. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
	 
	8.12	 	Third Party Beneficiaries. No provision of this Agreement shall create any third
party beneficiary rights in any Person, including any employee of Parent or Merger Subsidiary

59

 

or employee or former employee of the Company or any Affiliate thereof (including any
beneficiary or dependent thereof).

	8.13	 	Appointment of Stockholders’ Representative; Enforcement of Rights, Benefits and
Remedies.

	 	(a)	 	By adopting this Agreement, the Stockholders hereby irrevocably constitute and
appoint Kathleen Regan as the Stockholders’ Representative, effective as of the
Effective Time, for the purpose of performing and consummating the transactions
contemplated by this Agreement, the Escrow Agreement and the Payment Agreement. The
appointment of such Stockholders’ Representative is coupled with an interest and all
authority hereby conferred shall be irrevocable and such Stockholders’ Representative
is hereby authorized and directed to perform and consummate all of the transactions
contemplated by this Agreement. Not by way of limiting the authority of the
Stockholders’ Representative, each and all of the Stockholders, by their adoption of
this Agreement, for themselves and their
respective heirs, executors, administrators, successors and assigns hereby authorize
the Stockholders’ Representative to:

	 	(i)	 	effect any amendment to this Agreement, the Payment Agreement
or the Escrow Agreement which the Stockholders’ Representative deems necessary
or desirable,
	 
	 	(ii)	 	execute and deliver on their behalf all documents and
instruments which may be executed and delivered pursuant to this Agreement, the
Payment Agreement or the Escrow Agreement, except that all stock powers and
letters of transmittal with respect to the transfer of the Company Common Stock
or Company Preferred Stock shall be personally executed by the Stockholders,
	 
	 	(iii)	 	make and receive notices and other communications pursuant to
this Agreement, the Payment Agreement or the Escrow Agreement and service of
process in any legal action or other proceeding arising out of or related to
this Agreement, the Payment Agreement or the Escrow Agreement or any of the
transactions hereunder or thereunder,
	 
	 	(iv)	 	settle any dispute, claim, action, suit or proceeding arising
out of or related to this Agreement, the Payment Agreement or the Escrow
Agreement or any of the transactions hereunder or thereunder, including,
without limitation, the calculation of the Merger Consideration or the defense,
settlement or compromise of any claim, action or proceeding for which Parent or
Merger Subsidiary may be entitled to indemnification,
	 
	 	(v)	 	receive and distribute the Initial Merger Consideration,
Contingent Merger Consideration and any Escrow Funds,
	 
	 	(vi)	 	appoint or provide for successor agents, and

60

 

	 	(vii)	 	pay expenses incurred or which may be incurred by or on behalf
of the Stockholders (and to be reimbursed by the Stockholders for their pro
rata share of such expenses out of the sums held by the Escrow Agent pursuant
to the Escrow Agreement) in connection with this Agreement, the Payment
Agreement and the Escrow Agreement.

In the event of the death or disability of the Stockholders’ Representative, a
majority of the remaining Stockholders shall promptly appoint a replacement. No
person serving as the Stockholders’ Representative under this Agreement shall have
any personal liability to any Stockholder or its permitted assigns with respect to
any action taken, suffered or omitted by him hereunder as a Stockholders’
Representative while acting in good faith and in the absence of gross negligence or
willful misconduct, and any act done, suffered or omitted pursuant to the advice of
counsel shall be deemed hereunder to have been done in good faith, except to the
extent that such person may have liability as a Stockholder hereunder. The
Stockholders shall severally and not jointly indemnify the
Stockholders’ Representative and hold him harmless against any loss, liability or
expense incurred without bad faith or gross negligence on the part of the
Stockholders’ Representative and arising out of or in connection with the acceptance
or administration of their duties hereunder.

	 	(b)	 	Any claim, action, suit, or other proceeding, whether in law or equity, to
enforce any right, benefit or remedy granted to Stockholders under this Agreement, the
Payment Agreement or the Escrow Agreement shall be asserted, brought, prosecuted or
maintained only by the Stockholders’ Representative. With respect to any matter
contemplated by this Section 11.13, the Stockholders shall be bound by any
determination in favor of or against the Stockholders’ Representative or the terms of
any settlement or release to which the Stockholders’ Representative shall become a
party.
	 
	 	(c)	 	Any notice given the Stockholders’ Representative will constitute notice to
each and all of the Stockholders at the time the notice is given to the Stockholders’
Representative. Any action taken by, or instruction received from, the Stockholders’
Representative will be deemed to be action be, or notice or instruction from, each and
all of the Stockholders. Parent may, and the Escrow Agent will, disregard any notice
or instruction received directly from any of the Stockholders other than the
Stockholders’ Representative.
	 
	 	(d)	 	At any time during the term of the Escrow Agreement, holders of a majority in
interest of the Escrow Funds can remove and replace the Stockholders’ Representative by
sending notice and a copy of the written consent appointing such new individual or
individuals signed by holders of a majority in interest of the Escrow Funds to Parent
and the Escrow Agent.

[Remainder of Page Intentionally Left Blank]

61

 

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

	 	 	 	 	 
	PARENT:	 	AMERICAN MEDICAL SYSTEMS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	MERGER SUBSIDIARY:	 	XENON MERGER CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	COMPANY:	 	SOLARANT MEDICAL, INC.
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	STOCKHOLDERS’
	 	 	 	 
	REPRESENTATIVE:
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

SIGNATURE PAGE

AGREEMENT AND PLAN OF MERGER

 

 

EXHIBIT INDEX

	 	 	 
	EXHIBIT A

	 	Form of Certificate of Merger
	 
	 	 
	EXHIBIT B

	 	Form of Escrow Agreement
	 
	 	 
	EXHIBIT C

	 	Form of Payment Agreement
	 
	 	 
	EXHIBIT D

	 	Form of Opinion of Cooley Godward LLP
	 
	 	 
	EXHIBIT E

	 	Form of Opinion of Willkie Farr & Gallagher LLP
	 
	 	 
	EXHIBIT F

	 	Form of Opinion of Oppenheimer Wolff & Donnelly LLP
	 
	 	 
	EXHIBIT G

	 	Form of Letters of Resignation and Release of Claims
	 
	 	 
	EXHIBIT H

	 	Form of Consulting Agreement
	 
	 	 
	EXHIBIT I

	 	Form of Certificate of Incorporation of Merger Subsidiary
	 
	 	 
	SCHEDULE 1.3(b)

	 	Approvals, Consents, and Waivers of Third Parties
	 
	 	 
	SCHEDULE 1.8(a)

	 	Liabilities Excluded From Company Liabilities
	 
	 	 
	SCHEDULE 1.8(b)

	 	Distribution of Merger Consideration
	 
	 	 
	SCHEDULE 1.8(c)

	 	Closing Date Balance Sheet

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE 1 THE MERGER; CONVERSION OF SHARES	 	 	1	 
	 

	 	 	1.1	 	 	The Merger
	 	 	1	 
	 

	 	 	1.2	 	 	Effective Time
	 	 	1	 
	 

	 	 	1.3	 	 	Closing of the Merger
	 	 	2	 
	 

	 	 	1.4	 	 	Effects of the Merger
	 	 	3	 
	 

	 	 	1.5	 	 	Certificate of Incorporation of the Surviving Corporation
	 	 	3	 
	 

	 	 	1.6	 	 	Bylaws of the Surviving Corporation
	 	 	3	 
	 

	 	 	1.7	 	 	Directors and Officers of the Surviving Corporation
	 	 	3	 
	 

	 	 	1.8	 	 	Initial Merger Consideration
	 	 	4	 
	 

	 	 	1.9	 	 	Contingent Merger Consideration
	 	 	4	 
	 

	 	 	1.10	 	 	Cancellation and Conversion of Company Securities at the Effective Time
	 	 	7	 
	 

	 	 	1.11	 	 	Dissenting Shares
	 	 	9	 
	 

	 	 	1.12	 	 	Escrow Procedure; Exchange of Certificates
	 	 	9	 
	ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	12	 
	 

	 	 	2.1	 	 	Corporate Organization and Power
	 	 	12	 
	 

	 	 	2.2	 	 	Subsidiaries
	 	 	12	 
	 

	 	 	2.3	 	 	Authorization
	 	 	12	 
	 

	 	 	2.4	 	 	Capitalization of the Company
	 	 	13	 
	 

	 	 	2.5	 	 	Non-Contravention
	 	 	14	 
	 

	 	 	2.6	 	 	Consents and Approvals
	 	 	14	 
	 

	 	 	2.7	 	 	Financial Statements; Undisclosed Liabilities
	 	 	14	 
	 

	 	 	2.8	 	 	Absence of Certain Changes
	 	 	15	 
	 

	 	 	2.9	 	 	Assets and Properties
	 	 	17	 
	 

	 	 	2.10	 	 	Manufacturing and Marketing Matters
	 	 	17	 
	 

	 	 	2.11	 	 	FDA and Regulatory Matters
	 	 	17	 
	 

	 	 	2.12	 	 	Compliance with Applicable Laws
	 	 	19	 
	 

	 	 	2.13	 	 	Compliance Program
	 	 	19	 
	 

	 	 	2.14	 	 	Permits
	 	 	19	 
	 

	 	 	2.15	 	 	Litigation
	 	 	20	 
	 

	 	 	2.16	 	 	Contracts
	 	 	20	 

 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 

	 	 	2.17	 	 	Benefit Plans
	 	 	22	 
	 

	 	 	2.18	 	 	Labor and Employment Matters
	 	 	26	 
	 

	 	 	2.19	 	 	Intellectual Property
	 	 	27	 
	 

	 	 	2.20	 	 	Environmental Compliance
	 	 	29	 
	 

	 	 	2.21	 	 	Insurance
	 	 	30	 
	 

	 	 	2.22	 	 	Tax Matters
	 	 	30	 
	 

	 	 	2.23	 	 	Bank Accounts; Powers of Attorney
	 	 	32	 
	 

	 	 	2.24	 	 	Orders, Commitments and Returns
	 	 	33	 
	 

	 	 	2.25	 	 	Product Liability Claims
	 	 	33	 
	 

	 	 	2.26	 	 	Warranties
	 	 	33	 
	 

	 	 	2.27	 	 	Prior Divestitures of the Company
	 	 	33	 
	 

	 	 	2.28	 	 	Relations with Suppliers and Customers
	 	 	33	 
	 

	 	 	2.29	 	 	Reimbursement/Billing
	 	 	34	 
	 

	 	 	2.30	 	 	Indemnification Obligations
	 	 	34	 
	 

	 	 	2.31	 	 	Absence of Certain Business Practices
	 	 	34	 
	 

	 	 	2.32	 	 	Brokers
	 	 	34	 
	 

	 	 	2.33	 	 	Minute Books
	 	 	34	 
	 

	 	 	2.34	 	 	State Takeover Statutes
	 	 	34	 
	 

	 	 	2.35	 	 	Disclosure
	 	 	34	 
	 

	 	 	2.36	 	 	Investigation by Parent
	 	 	35	 
	ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY	 	 	35	 
	 

	 	 	3.1	 	 	Corporate Existence and Power
	 	 	35	 
	 

	 	 	3.2	 	 	Authorization
	 	 	35	 
	 

	 	 	3.3	 	 	Consents and Approvals
	 	 	36	 
	 

	 	 	3.4	 	 	Disclosure
	 	 	36	 
	 

	 	 	3.5	 	 	Non-Contravention
	 	 	36	 
	 

	 	 	3.6	 	 	Brokers
	 	 	36	 
	ARTICLE 4 COVENANTS	 	 	37	 
	 

	 	 	4.1	 	 	Confidentiality
	 	 	37	 

 

 

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	 	 	4.2	 	 	Further Assurances; Notification
	 	 	37	 
	 

	 	 	4.3	 	 	Public Announcements
	 	 	37	 
	 

	 	 	4.4	 	 	Cancellation and Forgiveness of Certain Indebtedness of the Company
	 	 	38	 
	 

	 	 	4.5	 	 	Conduct of Business after Closing Date
	 	 	38	 
	ARTICLE 5 SURVIVAL AND INDEMNIFICATION	 	 	38	 
	 

	 	 	5.1	 	 	Survival
	 	 	38	 
	 

	 	 	5.2	 	 	Indemnification by Stockholders
	 	 	39	 
	 

	 	 	5.3	 	 	Indemnification by Parent
	 	 	39	 
	 

	 	 	5.4	 	 	Claims for Indemnification
	 	 	40	 
	 

	 	 	5.5	 	 	Indemnification Limits
	 	 	41	 
	 

	 	 	5.6	 	 	Right of Set-Off
	 	 	41	 
	 

	 	 	5.7	 	 	Escrow Funds
	 	 	42	 
	 

	 	 	5.8	 	 	Expenses of Stockholders’ Representative
	 	 	42	 
	ARTICLE 6 ARBITRATION	 	 	43	 
	 

	 	 	6.1	 	 	Dispute
	 	 	43	 
	 

	 	 	6.2	 	 	Mediation
	 	 	43	 
	 

	 	 	6.3	 	 	Arbitration
	 	 	43	 
	ARTICLE 7 DEFINITION	 	 	44	 
	 

	 	 	7.1	 	 	Definitions
	 	 	44	 
	ARTICLE 8 MISCELLANEOUS	 	 	57	 
	 

	 	 	8.1	 	 	Notices
	 	 	57	 
	 

	 	 	8.2	 	 	Amendments; No Waivers
	 	 	58	 
	 

	 	 	8.3	 	 	Expenses
	 	 	58	 
	 

	 	 	8.4	 	 	Successors and Assigns
	 	 	58	 
	 

	 	 	8.5	 	 	Governing Law
	 	 	59	 
	 

	 	 	8.6	 	 	Counterparts; Effectiveness
	 	 	59	 
	 

	 	 	8.7	 	 	Entire Agreement
	 	 	59	 
	 

	 	 	8.8	 	 	Captions
	 	 	59	 
	 

	 	 	8.9	 	 	Severability
	 	 	59	 
	 

	 	 	8.10	 	 	Construction
	 	 	59	 

 

 

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	 	 	8.11	 	 	Cumulative Remedies
	 	 	59	 
	 

	 	 	8.12	 	 	Third Party Beneficiaries
	 	 	59	 
	 

	 	 	8.13	 	 	Appointment of Stockholders’ Representative; Enforcement of Rights,
Benefits and Remedies
	 	 	60

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]