AGREEMENT AND PLAN OF MERGER

EXHIBIT 10.1

AGREEMENT AND PLAN OF MERGER

Among

Exactech, Inc.,

Exactech Spine, Inc.,

Altiva Corporation and

Certain Stockholders of Altiva Corporation

Dated as of December 7, 2007

TABLE OF CONTENTS

(i)

(ii)

Schedules and Exhibits

(iii)

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of December 7, 2007 by and among Exactech, Inc, a Florida corporation (“ Parent ”), Exactech Spine, Inc., a Florida corporation and wholly-owned subsidiary of Parent (“ Sub ”), Altiva Corporation, a Delaware corporation (the “ Company ”), the Senior Management Stockholders identified on the signature pages hereto (the “ Senior Management Stockholders ”) and the holders (the “ Series A Preferred Stockholders ”) of the Company’s Series A Convertible Preferred Stock, $0.01 par value per share, of the Company (“ Series A Preferred ”) and holders (the “ Series B Preferred Stockholders ” and, together with the Series A Preferred Holders, the “ Preferred Stockholders ”) of the Company’s Series B Convertible Preferred Stock, $0.01 par value per share, of the Company (“ Series B Preferred ”). Parent, Sub, Company, the Senior Management Stockholders and the Preferred Stockholders are sometimes referred to herein collectively as the “ Parties ” and individually as a “ Party ”.

WHEREAS , the respective Boards of Directors of Parent and the Company have each determined that it is in the best interests of their respective companies and stockholders that Parent acquire the business of the Company pursuant to the terms and subject to the conditions set forth in this Agreement; and

WHEREAS , the Boards of Directors of Parent, Sub and the Company have each approved and adopted this Agreement and the consummation of the merger of the Company into Sub (the “ Merger ”), upon the terms and subject to the conditions set forth in this Agreement whereby, except for those shares of Company capital stock that are authorized but not outstanding, (i) each share of Series A Preferred outstanding immediately prior to the Effective Time, as defined below, will be converted into the right to receive shares of common stock, par value $.01 per share of (“ Parent Common Stock ”), (ii) each share of Series B Preferred outstanding immediately prior to the Effective Time will be converted into the right to receive cash, (iii) each share of Series C-1 Convertible Preferred Stock, $0.01 par value per share (“ Series C-1 Preferred ”), of the Company outstanding immediately prior to the Effective Time will be converted into the right to receive a combination of cash and Parent Common Stock, (iv) each share of Series C Convertible Preferred Stock, $0.01 par value per share, of the Company (“ Series C Preferred ”) and each share of common stock, par value $0.01 per share, of the Company (“ Company Common Stock ” and, together with the Series A Preferred, Series B Preferred, Series C-1 Preferred and Series C Preferred, “ Company Capital Stock ”) outstanding immediately prior to the Effective Time will be cancelled and (v) no consideration shall be delivered for any warrants to purchase Company Common Stock (the “ Warrants ”) outstanding immediately prior to the Effective Time; and

WHEREAS , the respective Boards of Directors of the Company, Parent and Sub have each determined that the Merger is fair to, and in the best interests of, their respective companies and stockholders, and have approved and adopted this Agreement and the consummation of the Merger; and

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

NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Senior Management Stockholders, the Preferred Stockholders, Parent, Sub and the Company hereby agree as follows:

ARTICLE I

The Merger

SECTION 1.01. The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Florida Business Corporations Act (the “ FBCA ”) and the Delaware General Corporation Law (the “ DGCL ”) the Sub shall be merged with and into the Company at the Effective Time (as defined in Section 1.03). Following the Effective Time, the separate corporate existence of the Sub shall cease and the Company shall continue as the surviving corporation (the “ Surviving Corporation ”) and shall succeed to and assume all the rights and obligations of the Company in accordance with the FBCA and the DGCL.

SECTION 1.02. Closing . The closing (the “ Closing ”) of the Merger will take place at 1:00 p.m. (Miami time) on January 2, 2008, with an effective date of January 1, 2008, provided that all conditions set forth in Article VIII shall have been satisfied or waived (the “ Closing Date ”), at the offices of Greenberg Traurig, P.A., counsel to Parent, located at 1221 Brickell Avenue, Miami, Florida, 33131, unless another date, time or place is agreed to in writing by the Parties hereto; provided , however , that the Closing may occur by facsimile, unless a location for the Closing is agreed to in writing by the Parties hereto.

SECTION 1.03. Effective Time and Effect of the Merger . Subject to the provisions of this Agreement, on the Closing Date, the Parties shall file with the Florida Secretary of State and the Delaware Secretary of State, as appropriate, a copy of this Agreement (or a certificate in lieu of the Agreement) together with the required certificates of officer or other appropriate documents (in any such case, the “ Certificate of Merger ”) executed in accordance with the relevant provisions of the FBCA and the DGCL and shall make all other filings or recordings required under the FBCA and the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Florida Secretary of State and the Delaware Secretary of State, or at such later time as Sub and the Company shall agree and as is specified in the Certificate of Merger (the time the Merger becomes effective being hereinafter referred to as the “ Effective Time ”). The Merger shall have the effects set forth in the applicable provisions of the FBCA and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of each of the Company and Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of the Sub and the Company shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation, all without further act or deed. Each Certificate (as defined in Section 2.02(a)) delivered by the Senior Management Stockholders and Preferred Stockholders at Closing shall be held in escrow by Parent pending the effectiveness of the Merger.

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SECTION 1.04. Certificate of Incorporation and Bylaws .

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

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

SECTION 1.05. Directors . The directors of Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of their resignation, removal or death or until their respective successors are duly elected and qualified, as the case may be.

SECTION 1.06. Officers . The officers of Sub immediately prior to the Effective Time or such other persons as Parent shall designate shall be the officers of the Surviving Corporation until the earlier of their resignation, removal or death or until their respective successors are duly elected and qualified, as the case may be.

SECTION 1.07. Supplementary Action . If at any time after the Effective Time, any further assignments or assurances are necessary or desirable to vest or to perfect or confirm of record in the Surviving Corporation the title to any property or rights of the Company or Sub, or otherwise to carry out the provisions of this Agreement, the officers and directors of the Surviving Corporation are hereby authorized and empowered in the name of and on behalf of the Company and the Sub to execute and deliver any and all things necessary or proper to vest or to perfect or confirm title to such property or rights in the Surviving Corporation, and otherwise to carry out the purposes and provisions of this Agreement.

ARTICLE II

Effect of the Merger on the Capital Stock of the Constituent Corporations; Exchange of Certificates

SECTION 2.01. Effect on Capital Stock . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Company Capital Stock or any shares of capital stock of Parent or Sub:

(a) Capital Stock of Sub . Each issued and outstanding share of capital stock of Sub shall be converted into and become eleven thousand (11,000) fully paid and nonassessable shares of common stock, par value $0.001 per share, of the Surviving Corporation.

(b) Cancellation of Company Common Stock . (i) Any shares of Company Common Stock that are issued but not outstanding shall be canceled and no consideration shall be delivered in exchange therefor, and (ii) all issued and outstanding shares of Company Common Stock shall be cancelled and no consideration shall be delivered in exchange therefor.

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The parties hereto agree and acknowledge that the allocation and distribution of the Merger Consideration (as defined below) are subject to the terms and conditions of Article (IV)(B)(2) of the Certificate of Incorporation (as defined in Section 3.02 below) and, as a result thereof no Merger Consideration shall be allocable or distributable to the holders of Company Common Stock.

(c) Treatment of Warrants . No consideration shall be delivered in exchange for the Warrants, which absence of consideration the Parties hereto acknowledge and agree represents the excess of the value exchanged for one share of Company Common Stock pursuant to the Merger over the exercise price of each Warrant.

(d) Aggregate Consideration . In consideration of their respective shares of Company Capital Stock, the Stockholders (other than the holders of shares of Company Common Stock) shall receive, according to the terms and conditions set forth in this Agreement, total consideration (the “ Purchase Price ”) of $15,420,503, which amount the Parties hereto acknowledge and agree includes an aggregate amount equal to (A) $8,404,174 in consideration of the cancellation of certain indebtedness extended by Parent to the Company and the shares of Series C Preferred held by Parent (which amount the Parties hereto acknowledge and agree includes such shares of Series C Preferred that were issued to Parent prior to Closing upon the funding (the “ Funding ”) of certain additional loan commitments by the Parent to the Company in an aggregate amount equal to $700,000, which Funding is hereby waived), which Series C Shares shall be cancelled at the Effective Time plus (B) $372,726, which amount represents the aggregate exercise price owed in connection with the exercise of options to acquire Series C-1 Preferred. The Parties agree that the remaining $6,643,603 shall be distributed as follows:

(i) Conversion of Series C-1 Preferred and Termination of Options . At the Effective Time, each share of Series C-1 Preferred and each issued Company Option (as defined below and with respect to each share of Series C-1 Preferred subject to such Company Option) shall be converted or terminated, as applicable, into the right to receive: (A) a certificate representing the number of shares of Parent Common Stock (the “ Parent Shares ”)(each Parent Share to be valued at the average closing price per share of Parent Common Stock as quoted on NASDAQ for the five (5) trading days immediately preceding the Closing Date) equal in value to the quotient determined by dividing (1) $1,304,273 by (2) the aggregate number of issued and outstanding shares of Series C-1 Preferred immediately prior to the Closing Date (including the number of shares of Series C-1 Preferred subject to those options (individually, a “ Company Option ”) and collectively, the “Company Options”) issued as of the date hereof pursuant to the Altiva Corporation 2001 Stock Incentive Plan, as amended); and (B) cash, via wire transfer or company check of immediately available funds, in an amount equal to the quotient determined by dividing (1) $558,974 by (2) the aggregate number of issued and outstanding shares of Series C-1 Preferred Stock immediately prior to the Closing Date (including the number of shares of Series C-1 Preferred subject to the Company Options) (the “ Series C-1 Cash Consideration ”).

For purposes of this Agreement, the consideration to be received by the Series C-1 Preferred holders and Company Option holders pursuant to this Section 2.01(d)(i) and by the Series A Preferred holders pursuant to Section 2.01(d)(ii) below shall collectively be referred to as the “Stock Consideration.”

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(ii) Conversion of Series A Preferred . At the Effective Time, each share of Series A Preferred shall be converted into the right to receive, and each holder of Series A Preferred shall receive, a certificate representing the number of Parent Shares (each Parent Share to be valued at the average closing price per share of Parent Common Stock as quoted on NASDAQ for the five (5) trading days immediately preceding the Closing Date) equal in value to the quotient determined by dividing (A) $281,197 by (B) the aggregate number of shares of Company Common Stock issuable upon the conversion of all issued and outstanding Series A Preferred shares immediately prior to the Closing Date.

(iii) Conversion of Series B Preferred . At the Effective Time, each share of Series B Preferred shall be converted into the right to receive cash, via wire transfer, and each of the holders of Series B Preferred shall receive, a ratable portion of $4,499,159 in proportion to the full preferential amount each such holder is otherwise entitled to receive under Section (IV)(B)(2)(b) and (d) of the Certificate of Incorporation (the “ Series B Cash Consideration ,” and together with the Series C-1 Cash Consideration, the “Cash Consideration”).

As used herein, the term “ Merger Consideration ” means the Cash Consideration together with the Stock Consideration (with each certificate representing Parent Shares having a dollar value determined in accordance with Section 2.01(d)(i) or 2.01(d)(iii), as applicable).

As of the Effective Time, all such shares of Series A Preferred, Series B Preferred and Series C-1 Preferred (together, the “ Cancelled Shares ”) shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any Cancelled Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration in accordance with Section 2.01(d)(i), (ii) and (iii) as applicable. If subsequent to the date of this Agreement but prior to the Effective Time, Parent should split or combine the Parent Shares or pay a stock dividend or other stock distribution in Parent Shares, then the number of Parent Shares issuable as Stock Consideration shall be appropriately adjusted to reflect such split, combination, dividend or other distribution.

SECTION 2.02. Closing Procedures .

(a) Exchange of Certificates . On the Closing Date, each Company stockholder holding a certificate or certificates, which prior to the Effective Time represented Company Capital Stock (other than Company Capital Stock to be cancelled in accordance with Section 2.01(b)) (the “ Certificates ”), shall deliver such Certificates, endorsed in blank together with duly executed stock powers transferring the shares represented by such Certificates to Parent. Upon surrender of such instruments to Parent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash and the number of Parent Shares into which the Company Capital Stock theretofore represented by such Certificate shall have been converted pursuant to Section 2.01, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Capital Stock that is not registered in the transfer records of the Company, payment may be made to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of the

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Surviving Corporation that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 2.02, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration, without interest. No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate. In the event any Certificate shall have been lost, stolen or destroyed, Parent may, in its reasonable discretion and as a condition precedent to the payment of the Merger Consideration in respect of the shares represented by such Certificate, 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 Parent or the Surviving Corporation.

(b) No Further Ownership Rights in Company Capital Stock . At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Capital Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or its transfer agent for any reason, they shall be canceled and exchanged as provided in this Article II.

(c) No Fractional Securities . No certificates or scrip representing fractional Parent Shares shall be issued in connection with the Merger, and such fractional interest shall not entitle the owner thereof to vote or to any rights of a Parent stockholder. Any such fractional interest shall be rounded down to the next nearest whole share.

SECTION 2.03. Dissenting Shares . Notwithstanding any provision of this Agreement to the contrary, shares of Company Capital Stock that are outstanding immediately prior to the Effective Time and which are held by stockholders who have exercised and perfected appraisal rights for such shares of Company Capital Stock in accordance with the DGCL (collectively, the “ Dissenting Shares ”) shall not be converted into or represent the right to receive the Merger Consideration. Such stockholders shall be entitled to receive payment, if any, of the appraised value of such shares of Company Capital Stock held by them in accordance with the DGCL, unless and until such stockholders fail to perfect or effectively withdraw or otherwise lose their appraisal rights under the DGCL. All Dissenting Shares held by stockholders who shall have failed to perfect or who effectively shall have withdrawn or lost their right to appraisal of such shares of Company Capital Stock under the DGCL shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration, if any, upon the surrender, in the manner provided in Section 2.02.

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ARTICLE III

Representations and Warranties of the Company and the Senior Management Stockholders

The Company and each Senior Management Stockholder represent and warrant to Parent and Sub as of the date hereof:

SECTION 3.01. Incorporation, Qualification and Corporate Power .

(a) The Company is a duly incorporated and validly existing corporation and in good standing under the laws of the State of Delaware and has all requisite corporate power and corporate authority for the ownership and operations of its properties and for the carrying on of its business as now conducted. The Company is duly qualified and is in good standing as a foreign corporation and authorized to do business in all jurisdictions wherein the character of the property owned or leased, or the nature of the activities conducted by it, makes such qualification or authorization necessary. The Company has all requisite corporate power and corporate authority to execute and deliver this Agreement and to perform all its obligations hereunder.

(b) As of the date hereof, the Company has no subsidiaries and does not own of record or beneficially, directly or indirectly, (i) any shares of capital stock or securities convertible into capital stock of any other corporation or (ii) any participating interest in any partnership, joint venture, limited liability company or other non-corporate business enterprise and does not control, directly or indirectly, any other entity.

SECTION 3.02. Authorization of Agreements, etc . The execution and delivery by the Company of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all requisite corporate action and will not (x) violate (i) any provision of any applicable law, or any order of any court or other agency of government applicable to the Company, (ii) the Third Amended and Restated Certificate of Incorporation of the Company (the “ Certificate of Incorporation ”), (iii) the Bylaws of the Company or (iv) any provision of any mortgage, lease, indenture, agreement or other instrument to which the Company is a party or by which the Company or any of its properties or assets is bound, except for those violations of law or agreements and instruments that do not, individually or in the aggregate, have a Material Adverse Effect (as defined in Section 11.02) or adversely affect the consummation of the transactions contemplated hereby, (y) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such mortgage, lease, indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company, except for those conflicts, breaches or defaults that do not, individually or in the aggregate, have a Material Adverse Effect or adversely affect consummation of the transactions contemplated hereby or (z) require any consent be obtained from any party to such mortgage, lease, indenture, agreement or other instrument except as otherwise set forth in Schedule 3.02.

SECTION 3.03. Validity . This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

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SECTION 3.04. Authorized Capital Stock .

(a) The authorized capital stock of the Company consists of (i) 70,000,000 shares of preferred stock, $.01 par value (the “ Preferred Stock ”), of which (A) 1,000,000 shares have been designated Series A Preferred, (B) 10,000,000 shares have been designated Series B Preferred, (C) 52,000,000 shares have been designated Series C Preferred and (D) 7,000,000 shares have been designated Series C-1 Preferred, and (ii) 100,000,000 shares of Company Common Stock. As of the date hereof, the number of issued and outstanding shares of each class of Company Capital Stock is set forth on Schedule 3.04(a). All of the issued and outstanding shares of Preferred Stock and Common Stock are owned of record and, to the best knowledge of the Company and the Senior Management Stockholders, beneficially as set forth on Schedule 3.04(a). The Company has provided to Parent a list which, to the best knowledge of the Company and the Senior Management Stockholders, sets forth the true and accurate address of each holder of the Company’s Capital Stock. All issued and outstanding shares of Company Common Stock and Preferred Stock are duly authorized and validly issued, and are fully paid and nonassessable.

(b) The designations, powers, preferences, rights, qualifications, limitations and restrictions in respect of each class and series of authorized capital stock of the Company are as set forth in the Certificate of Incorporation, and all such designations, powers, preferences, rights, qualifications, limitations and restrictions are in accordance with all applicable laws and are legal, valid and binding obligations of the Company. Except as set forth in Schedule 3.04(b), (i) no subscription, warrant, option, convertible security or other right (contingent or other) to purchase or otherwise acquire from the Company (or, to the best of the Company’s and the Senior Management Stockholders’ knowledge, from any other Person or entity) any equity securities of the Company is authorized or outstanding, and (ii) there are no additional commitments by the Company to issue shares, subscriptions, warrants, options, convertible securities or other such rights or to distribute to holders of any of its equity securities any evidence of indebtedness or assets. Except as provided for in the Certificate of Incorporation, the Company has no obligation to purchase, redeem or otherwise acquire any of its equity securities or any interest therein or to pay any dividend or make any other distribution in respect thereof.

(c) Except for that certain Stockholder’s Agreement, dated as of October 29, 2003, by and among the Company, Parent and certain Company stockholders, to the best of the Company’s and the Senior Management Stockholders’ knowledge, there are no voting trusts or agreements, stockholders’ agreements, pledge agreements, buy-sell agreements, rights of first refusal, preemptive rights (statutory or contractual) or proxies relating to any securities of the Company (whether or not the Company is a party thereto). There are no restrictions on the transfer of shares of capital stock of the Company, other than those imposed by relevant Federal and state securities laws.

SECTION 3.05. Financial Statements; Liabilities . Attached hereto as Schedule 3.05 are the audited balance sheets and the related statements of income, stockholders’ equity and cash flows (including the related notes and schedules thereto and reports of independent auditors) of the Company as of and for the periods ended December 31, 2006, December 31, 2005 and December 31, 2004, and the unaudited balance sheet and the related statement of income, stockholders’ equity and cash flows as of and for the nine month period ended September 30, 2007 (collectively, the “ Financial Statements ”). The Financial Statements of the Company present fairly the financial position of the Company as at the dates thereof and its results of operations for the periods covered thereby and

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have been prepared in all material respects in accordance with generally accepted accounting principles (“ GAAP ”) consistently applied. Except as expressly set forth in the Financial Statements or Schedule 3.05, (i) subsequent to September 30, 2007, the Company has no liabilities, commitments or obligations, of any nature, whether absolute, accrued, contingent or otherwise and whether or not of a type required to be set forth on a balance sheet prepared in accordance with GAAP other than (a) liabilities incurred in the ordinary course of business (it being understood the business of the Company is manufacturing, selling, developing or distributing spine or spine-related medical products or accessories and the NTR Dental Device and related accessories) (“ Ordinary Course of Business ”) and (b) obligations under contracts and commitments incurred in the Ordinary Course of Business and not required under GAAP to be reflected in the Financial Statements; (ii) since December 31, 2006, there has been no material adverse change in the assets, business, liabilities, properties, condition (financial or otherwise) or results of operations of the Company; (iii) since December 31, 2006, neither the business, condition or operations of the Company nor any of its properties or assets has been materially or adversely affected as a result of any legislative or regulatory change, any revocation or change in any franchise, license or right to do business, or any other event or occurrence, whether or not insured against; and (iv) since December 31, 2006, the Company has not entered into any transaction outside of the Ordinary Course of Business or, except as set forth in Schedule 3.05, made any distribution on its capital stock or other ownership interest.

SECTION 3.06. Litigation, Compliance with Law . Except as set forth in Schedule 3.06, there is no: (i) action, suit, claim, proceeding or investigation pending or, to the best of the Company’s and the Senior Management Stockholders’ knowledge, threatened against or affecting the Company, at law or in equity, or before or by any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign; (ii) arbitration proceeding relating to the Company pending under collective bargaining agreements or otherwise; or (iii) to the best of the Company’s and the Senior Management Stockholders’ knowledge, governmental inquiry pending or threatened against or affecting the Company (including, without limitation, any inquiry as to the qualification of the Company or a Subsidiary of the Company to hold or receive any license or permit). To the best of the Company’s and Senior Management Stockholders’ knowledge, the Company is not in default with respect to any governmental order, writ, judgment, injunction or decree known to or served upon the Company of any court or of any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign. Except as set forth in Schedule 3.06, there is no action or suit by the Company pending or threatened against others. The Company and all of its products have complied, and has not received any notices or other correspondence of the failure to have complied, in all respects with all laws, rules, regulations and orders applicable to its business, operations, properties, assets, products and services, including all applicable rules and regulations of the Food and Drug Administration of the U.S. Department of Health and Human Services or any committee thereof or from any other U.S. or foreign government or drug or medical device regulatory agency (collectively, the “ Regulatory Agencies ”) except where failure to so comply does not have a Material Adverse Effect, and the Company has all necessary permits, licenses and other authorizations required to conduct its business as conducted and as proposed to be conducted. There is no existing law, rule, regulation or order, and the Company is not aware of any proposed law, rule, regulation or order, whether Federal or state, which would prohibit or materially restrict the Company from, or otherwise materially adversely affect the Company in, conducting its business in any jurisdiction in which it is now conducting business.

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SECTION 3.07. Proprietary Information of Third Parties . Except as set forth in Schedule 3.07, to the best of the Company’s and the Senior Management Stockholders’ knowledge, no third party has claimed that any Person employed by or affiliated with the Company has (a) violated or may be violating to any extent any of the terms or conditions of such Person’s employment, non-competition or non-disclosure agreement with such third party, (b) disclosed or may be disclosing or utilized or may be utilizing any trade secret or proprietary information or documentation of such third party or (c) interfered or may be interfering in the employment relationship between such third party and any of its present or former employees.

SECTION 3.08. Title to Assets . Except as set forth in Schedule 3.08, the Company has valid and defensible title to all of its assets free of any liens, charges or encumbrances of any kind whatsoever. The Company does not own any real property. The Company is in compliance, in all material respects, under all leases for property and assets under which it is operating, and all said leases are valid and subsisting and are in full force and effect. The assets are in good condition and repair (subject to routine maintenance and repair for similar assets of like age and use) and are usable in the Ordinary Course of Business. Except as set forth on Schedule 3.08, all of the assets are located at the premises of the Company.

SECTION 3.09. Insurance . The Company is insured against such risks and in such amounts as are customary for companies of a similar size in a similar industry. All of the insurance policies, binders, or bonds maintained by the Company are in full force and effect, and the Company is not in default thereunder; and all claims thereunder have been filed in due and timely fashion. Set forth on Schedule 3.09 is a list of all insurance policies maintained by or for the benefit of the Company or any of its respective directors, officers, employees or agents, together with any claims made under such policies during the previous 12 months.

SECTION 3.10. Taxes . Except as set forth in Schedule 3.10, the Company has prepared and timely filed all Federal, state and other tax returns required by law to be filed by it, and all taxes (including all withholding taxes) shown to be due and all additional assessments have been paid or provisions made therefor. Such tax returns were true, complete and accurate in all material respects when filed. The Company and the Senior Management Stockholders’ do not know of any additional assessments or adjustments pending or threatened against the Company for any period, nor of any basis for any such assessment or adjustment. The Company has not elected pursuant to the Internal Revenue Code of 1986, as amended (the “ Code ”), to be treated as a Subchapter S corporation or a collapsible corporation pursuant to Section 1362(a) or Section 341(f) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have a Material Adverse Effect. As of the date hereof, the Company’s tax returns are not the subject of an audit or other examination by the Internal Revenue Service or the appropriate state, local or foreign taxing authority. There is no tax sharing, allocation, or indemnity agreement, or similar contract or arrangement (whether or not written) that will require any payment by the Company after the date of this Agreement. Since January 1, 2002, the federal and state income or franchise tax returns of the Company have not been audited by the Internal Revenue Service or relevant state tax authorities for any applicable taxable years.

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SECTION 3.11. Material Agreements . Except as set forth in Schedule 3.11, the Company is not a party to or otherwise bound by any written or oral contract or instrument or other restriction which individually or in the aggregate is material to the business, financial condition, operations or property of the Company, including, without limitation, any:

(a) contract or agreement which is not terminable on less than ninety (90) days notice without cost or other liability to the Company;

(b) contract which entitles any customer to a rebate or right of set-off, or which varies in any material respect from the standard form contracts of the Company;

(c) contract with any labor union (and, to the knowledge of the Company and the Senior Management Stockholders, no organizational effort is being made with respect to any of its employees);

(d) contract or other commitment with any supplier of goods or services containing any provision permitting any party other than the Company to renegotiate the price or other terms, or containing any pay-back or other similar provision, upon the occurrence of a failure by the Company to meet its obligations under the contract when due or the occurrence of any other event;

(e) contract for the future purchase of fixed assets or for the future purchase of materials, supplies or equipment in excess of $10,000 in the aggregate;

(f) contract for the employment of any officer, employee or other Person on a full-time or consulting basis which is not terminable on notice without cost or other liability to the Company;

(g) bonus, pension, profit-sharing, retirement, hospitalization, insurance, stock purchase, stock option or other plan, contract or understanding pursuant to which benefits are provided to any employee of the Company (other than group insurance plans applicable to employees generally);

(h) agreement or indenture relating to the borrowing of money or to the mortgaging or pledging of, or otherwise placing a lien or security interest on, any asset of the Company;

(i) guaranty of any obligation for borrowed money or otherwise;

(j) voting trust or agreement, stockholders’ agreement, pledge agreement, buy-sell agreement or first refusal or preemptive rights agreement relating to any securities of the Company;

(k) agreement, or group of related agreements with the same party or any group of affiliated parties, under which the Company has advanced or agreed to advance money or has agreed to lease any property as lessee or lessor;

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(l) agreement or obligation (contingent or otherwise) to issue, sell or otherwise distribute or to repurchase or otherwise acquire or retire any share of its capital stock or any of its other equity securities;

(m) assignment, license or other agreement with respect to any form of intangible property involving in the aggregate more than $10,000 in payments;

(n) agreement under which it has granted any Person any registration rights;

(o) agreement under which it has limited or restricted its right to compete with any Person;

(p) other contract or group of related contracts with the same party involving more than $10,000, which contract or group of contracts is not terminable by the Company without penalty upon notice of thirty (30) days or less;

(q) distribution agreement;

(r) leases for office facilities and office equipment; or

(s) any other material contract or agreement which was not negotiated by the Company at arm’s length, including, without limitation, any contract or agreement with any Affiliate (as hereafter defined).

The Company has performed in all material respects all the obligations required to be performed by it to date, has received no notice of default and is not in default (with due notice or lapse of time or both) under any lease, agreement or contract described in Schedule 3.11. The Company and the Senior Management Stockholders have no knowledge of any breach or anticipated breach by the other party to any lease, agreement or contract described in Schedule 3.11. The Company is in full compliance with all of the terms and provisions of the Certificate of Incorporation and Bylaws, each as amended.

SECTION 3.12. Intellectual Property Assets . Set forth in Schedule 3.12 is a list of all patents, patent rights, patent applications (collectively, the “ Patents ”), trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets and know-how and all applications for such which are in the process of being prepared, owned by or registered in the name of the Company, or of which the Company is a licensor or licensee or in which the Company has any right (collectively, the “ Intellectual Property ”). The assets comprising the Intellectual Property are all those necessary for the operation of the Company’s business as it is currently conducted. The Company is the owner or licensee of all right, title and interest in and to each item of the Intellectual Property, free and clear of all liens and encumbrances, and has the right to use such Intellectual Property without payment to a third party, other than in respect of licenses listed in Schedule 3.12 and without any conflict with or infringement of the rights of others. No claim is pending or, to the best of the Company’s and the Senior Management Stockholders’ knowledge, threatened to the effect that the operations of the Company infringe upon or conflict with the asserted rights of any other Person under any Intellectual Property, and, to the Company’s and the Senior Management Stockholders’ knowledge,

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there is no basis for any such claim (whether or not pending or threatened). Except as disclosed in Schedule 3.12, no claim is pending or, to the best of the Company’s and the Senior Management Stockholders’ knowledge, threatened to the effect that any such Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable by the Company, and, to the best of the Company’s and the Senior Management Stockholders’ knowledge, there is no basis for any such claim (whether or not pending or threatened). The Company has not granted or assigned to any other Person or entity any right to manufacture, have manufactured or assemble the products or proposed products or to provide the services or proposed services of the Company. Except as set forth in Schedule 3.12, the Company has no obligation to compensate any Person for the use of any Intellectual Property nor has the Company granted to any Person any license or other rights to use in any manner any Intellectual Property of the Company. All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing, examination and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety (90) days after the Closing Date. No Patent has been or is now involved in any interference, reissue, reexamination, or opposition proceeding. To the best of the Company’s and the Senior Management Stockholders’ knowledge, there is no potentially interfering patent or patent application of any third party. No Patent is infringed or, to the best of the Company’s and the Senior Management Stockholders’ knowledge, has been challenged or threatened in any materially adverse manner and, to the best of the Company’s and the Senior Management Stockholders knowledge, none of the products manufactured or sold, nor any process or know-how used, by the Company infringes or is alleged to infringe any Patent or other proprietary right of any other person. All products made, used or sold under the Patents have been marked with the proper patent notice.

SECTION 3.13. Investments in Other Persons . The Company has not made any loan or advance to any Person which is outstanding on the date of this Agreement, nor is the Company obligated or committed to make any such loan or advance, nor does the Company own any capital stock or assets comprising the business of, obligations of, or any interest in, any Person.

SECTION 3.14. Assumptions, Guaranties, etc. of Indebtedness of Other Persons . Except as set forth in Schedule 3.14, the Company has not assumed, guaranteed, endorsed or otherwise become directly or contingently liable for any indebtedness of any other Person (including, without limitation, liability by way of agreement, contingent or otherwise, to purchase, to provide funds for payment, to supply funds to or otherwise invest in the debtor, or otherwise to assure the creditor against loss), except for guaranties by endorsement of negotiable instruments for deposit or collection in the Ordinary Course of Business.

SECTION 3.15. Governmental Approvals . No authorization, consent, approval, license, filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, is or will be necessary for the valid execution, delivery and performance by the Company of this Agreement.

SECTION 3.16. No Brokers or Finders . No Person has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon the Company for any commission, fee or other compensation as a finder or broker arising out of the transactions contemplated by this Agreement.

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SECTION 3.17. Officers . The Company has delivered to the Parent a list of the names of the officers of the Company, together with the title or job classification of each such Person and the total base compensation anticipated to be paid to each such Person by the Company on an annual basis during the 12-month period immediately following the Closing, not including bonuses or benefits which the Company is not obligated to pay. Except as disclosed on Schedule 3.17, none of such Persons has an employment agreement or understanding, whether oral or written, with the Company which is not terminable without cost or other liability to the Company.

SECTION 3.18. Transactions with Affiliates . There are no loans, leases, royalty agreements or other agreements between the Company and (i) any of the officers or directors of the Company, (ii) any Person owning five percent (5%) or more of any class of capital stock of the Company or other entity controlled by any such Person or a member of any such Person’s family, (iii) any other Person otherwise controlling, controlled by or under common control with the Company or (iv) any founder of the Company (collectively the “ Affiliates ”).

SECTION 3.19. Employees . Each of the key employees now employed by the Company who has access to confidential information of the Company has executed an employment agreement, confidentiality agreement or other similar agreement, and such agreements are in full force and effect. As of the date hereof, no officer or key employee of the Company has advised the Company in writing that he or she intends to terminate employment with the Company. The Company has complied with all applicable laws in all material respects relating to the employment of labor, including provisions relating to wages, hours, equal opportunity, collective bargaining and the payment of Social Security and other taxes, and with the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”).

SECTION 3.20. Benefit Plans .

(a) Each “ employee pension benefit plan ” (as defined in Section 3(2) of ERISA) (a “ Pension Plan ”), “ employee welfare benefit plan ” (as defined in Section 3(1) of ERISA) (a “ Welfare Plan ”) and each other plan, arrangement or policy (written or oral) relating to stock options, stock purchases, compensation, deferred compensation, bonuses, severance, fringe benefits or other employee benefits, in each case maintained or contributed to, or required to be maintained or contributed to, by the Company for the benefit of any present or former employee, officer or director (each of the foregoing, including any Pension Plan or Welfare Plan, is a “ Benefit Plan ”) has been administered in all material respects in accordance with its terms and the requirements of ERISA. Schedule 3.20(a) sets forth all of the Company’s Benefit Plans. All contributions required to be made with respect to any Benefit Plan pursuant to the terms of the Benefit Plan or any collective bargaining agreement, have been made on or before their due dates.

(b) None of the Pension Plans is subject to Title IV of ERISA and none of the Company or any other person or entity that, together with the Company, is treated as a single employer under Section 414 Code or pursuant to Title IV of ERISA (each,

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including the Company, a “ Commonly Controlled Entity ”) has any liability under Title IV of ERISA (whether actual or contingent) with respect to a Pension Plan, or to any other employee pension benefit plan that is or was maintained, contributed to or required to be contributed to by a Commonly Controlled Entity (other than for contributions not yet due) or to the Pension Benefit Guaranty Corporation (other than for payment of premiums not yet due), which liability has not been fully paid.

(c) No Commonly Controlled Entity is required to contribute to any “ multiemployer plan ” (as defined in Section 4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such withdrawal has resulted or would result in any “ withdrawal liability ” (within the meaning of Section 4201 of ERISA) that has not been fully paid or as to which a Commonly Controlled Entity would have liability pursuant to Section 4212(c) of ERISA.

(d) With respect to each Benefit Plan, the Company has delivered or, not more than ten (10) days after the date hereof shall deliver, to Parent (i) current, accurate and complete copies of each such Benefit Plan (including all trust agreements, insurance or annuity contracts, descriptions, agreements and any other material documents or instruments relating thereto); (ii) copies of the most recent Internal Revenue Service determination letter, if any, (including copies of any outstanding requests for determination letters) with respect to each such Benefit Plan which is intended to qualify under Section 401(a) of the Code; and (iii) copies of the most recent Form 5500 annual report and accompanying schedules, the most recent actuarial report (to the extent applicable) and the most recent summary plan descriptions.

(e) With respect to the Benefit Plans, individually and in the aggregate, no event has occurred, and to the Knowledge of the Company and the Senior Management Stockholders, there exists no condition or set of circumstances (including without limitation the transactions contemplated by this Agreement) in connection with which the Company could be subject to any material liability (except liability for benefits claims and funding obligations payable in the ordinary course) under ERISA, the Code or any other applicable law.

SECTION 3.21. Labor Relations . To the best of the knowledge of the Company and t