8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 8, 2006 (August 2, 2006)

THERAGENICS CORPORATION^®

(Exact name of Registrant as specified in its charter)

Delaware	000-15443	58-1528626
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5203 Bristol Industrial Way

Buford, Georgia 30518

(Address of principal executive offices / Zip Code)

(770) 271-0233

(Company’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act.

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

o    Pre-commencement communications pursuant to Rule 14d—2(b) under the Exchange Act.

o    Pre-commencement communications pursuant to Rule 13e—4(c) under the Exchange Act.

ITEM 1.01.ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On August 2, 2006, Theragenics Corporation^®, a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with James R. Eddings (“Eddings”), as Sellers’ Representative, Galt Medical Corp., a Texas corporation (“Galt”), the shareholders of Galt, the holders of Company Stock Derivatives (as defined in the Stock Purchase Agreement), and acquired one hundred percent (100%) of the issued and outstanding capital stock of Galt, for a total purchase price of $34,000,000. The purchase price was comprised of 978,065 shares of common stock of the Company and $30,400,000 in cash (the “Acquisition”). At the closing, the 978,065 shares of the Company’s common stock issued and $214,440 in cash were placed in escrow for the purpose of compensating the Company in the event the Sellers must indemnify the Company pursuant to the terms of the Stock Purchase Agreement. The Company financed $7.5 million of the purchase price with borrowings on its existing $40.0 million Credit Facility. The Stock Purchase Agreement contained customary representations and warranties from the Company, the Sellers, and Galt. A copy of the Stock Purchase Agreement is filed as Exhibit 2.1 to this Report and is incorporated by reference. The Stock Purchase Agreement and the acquisition was approved by the board of directors of both the Company and Galt. As a result of the Acquisition, Galt became a wholly-owned subsidiary of the Company.

Galt, located in Garland, Texas is a manufacturer, distributor and supplier of disposable medical devices utilized for vascular access, primarily serving the interventional radiology and interventional cardiology markets.

Agreements Entered into in Connection with the Galt Acquisition

Employment Agreement

In connection with the Acquisition, Galt entered into an employment agreement (the “Employment Agreement”) with Eddings. Eddings may be deemed to be an executive officer of the Company by virtue of his role as President of Galt. The execution of the Employment Agreement was contingent upon consummation of the acquisition of Galt by the Company pursuant to the Stock Purchase Agreement.

The Employment Agreement contains a two year term with automatic extensions for successive additional one-year terms unless either party gives prior notice of termination ninety (90) days before the anniversary of the execution date. Eddings’ base salary is set at $195,000 per year, and Eddings became eligible to participate in the Company’s short-term and long-term incentive compensation programs. The Employment Agreement also contained provisions for transition and consultancy services, as well as customary non-competition, non-solicitation and confidentiality provisions.

The Employment Agreement may be immediately terminated upon the occurrence of any of the following events (capitalized terms as defined in the Employment Agreement):

·   Galt and Eddings reach a mutual agreement in writing as to termination;

·   by Eddings with Good Reason;

·   by Eddings without Good Reason upon prior written notice to Galt;

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·   by Galt with or without Cause; and

·   by Galt or Eddings due to the Disability of the Employee.

If Eddings is terminated for Cause, Eddings will not be entitled to any compensation or other benefits of employment from and after the effective date of the termination. If termination is by Galt without Cause or by Eddings for Good Reason, he will be entitled to salary continuation for two (2) years; provided, however, if such termination is within ninety (90) days preceding or within one year following a Change in Control (as defined in the Employment Agreement), Eddings will be entitled to salary continuation for two (2) years (or if less, the maximum amount that can be paid without causing a parachute payment under the Internal Revenue Code).

Registration Rights Agreement

Pursuant to the terms of the Stock Purchase Agreement, the Company also entered into a registration rights agreement dated as of August 2, 2006 (the “Registration Rights Agreement”) with Eddings as Sellers’ Representative for the purpose of registering the shares of the Company’s common stock issued to the Sellers. Pursuant to the terms of the Registration Rights Agreement, the Company has agreed to file a Registration Statement on Form S-3, or other form as the Company determines appropriate, with the Securities and Exchange Commission no later than August 2, 2007, registering the resale of the shares issued to the Sellers, and to keep such Registration Statement effective for a period equal to (i) one year from the initial date that the Securities and Exchange Commission declares such Registration Statement effective, or (ii) such shorter period which shall terminate when all of the registrable securities have been sold or are eligible for resale without restriction under Rule 144 of the Securities Act of 1933, as amended. The Company has agreed to pay all expenses associated with the registration of the Company’s common stock owned by the Sellers, except for the filing fees which are the responsibility of the Sellers. Sales of substantial additional amounts of the Company’s common stock in the public market, or the perception that such sales may occur, could adversely affect the prevailing market of the Company’s common stock.

The foregoing summaries are being provided for information purposes only, do not purport to be complete, and are qualified in their entirety by reference to the full text of the Stock Purchase Agreement, the Employment Agreement or the Registration Rights Agreement (collectively, “Material Agreements”), attached hereto as Exhibits 2.1, 10.1 and 10.2, respectively. The representations, warranties and covenants made by the parties in the Material Agreements may be qualified by information in disclosure schedules (or otherwise) that the parties exchanged in connection with the execution of the Material Agreements, or by materiality standards. Statements made in the Material Agreements or any appended agreement could be alleged to be or be determined to be false or may become incorrect or the underlying facts may have changed after the time the statements were initially made. Such statements are for the purpose of confirming certain due diligence matters as between the parties and may represent an allocation of risk as between the parties as part of a negotiated transaction. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Galt.

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ITEM 2.01.COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On August 2, 2006, the Company purchased all of the issued and outstanding shares of capital stock of Galt as described in Item 1.01 above.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION.

In connection with the Acquisition referred to in Item 1.01, the Company borrowed $7.5 million under its revolving credit facility (the “Credit Facility”). The Credit Facility expires October 31, 2009 and provides for revolving borrowings of up to $40.0 million, including a $5.0 million sub-limit for letters of credit. Interest on outstanding borrowings is payable at the rate of interest periodically designated by the financial institution as its base rate, or, at the option of the Company, interest may accrue at a LIBOR based rate plus 1%. Interest on base rate loans is payable monthly, while interest on LIBOR loans is payable on the last day of the applicable one, two or three month interest period.

The Credit Agreement is unsecured, but provides for a “springing lien” to be established on substantially all of the assets of the Company (subject to certain exceptions) in the event certain events of default occur under the Credit Agreement. The Credit Agreement contains representations and warranties, as well as affirmative, reporting and negative covenants, customary for financings of this type. Among other things, certain provisions of the Credit Agreement limit the incurrence of additional debt and require the maintenance of certain financial ratios.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

As partial consideration for the Acquisition, on August 2, 2006, the Company issued 978,065 shares of the Company’s common stock, valued at $3.26 per share. The issuance of the Company’s common stock to the Sellers was made in reliance upon the exemption afforded by the provision of Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D thereunder. Certificates representing such securities contain restrictive legends preventing sale, transfer or other disposition, unless registered under the Securities Act of 1933, as amended.

ITEM 5.02 APPOINTMENT OF PRINCIPAL OFFICER.

As a result of the Acquisition described in Item 1.01 above, Eddings will continue to serve as the President of Galt. The summary of Eddings’ employment agreement is described in Item 1.01 above and is incorporated herein by reference.

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ITEM 9.01. Financial Statements and Exhibits.

(a) Financial statements of business acquired.

As permitted by Item 9.01(a)(4) of Form 8-K, the Company will, if required, file the financial statements required by Item 9.01(a)(1) of Form 8-K pursuant to an amendment to this Current Report not later than seventy-one (71) calendar days after the date this Current Report must be filed.

(b) Pro forma financial information.

As permitted by Item 9.01(b)(2) of Form 8-K, the Registrant will, if required, file the pro forma financial information required by Item 9.01(b)(1) of Form 8-K pursuant to an amendment to this Current Report not later than seventy-one (71) calendar days after the date this Current Report must be filed.

(c) Exhibits

Exhibit No.	Document
2.1	Stock Purchase Agreement by and among Theragenics Corporation,James R. Eddings, as Sellers’ Representative, those shareholders and holders of Company Stock Derivatives of Galt Medical Corp. listed on Schedule 1 thereto, dated as of August 2, 2006.
10.1	Employment Agreement between Galt Medical Corp. and James R. Eddings, dated as of August 2, 2006.
10.2	Registration Rights Agreement between Theragenics Corporation and James R. Eddings, as Sellers’ Representative, dated as of August 2, 2006.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THERAGENICS CORPORATION
	(Registrant)
Dated: August 8, 2006	By: /s/ M. Christine Jacobs
	M. Christine Jacobs
	Chief Executive Officer

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EX-2.1

Exhibit 2.1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

dated as of August 2, 2006

with respect to

GALT MEDICAL CORP.

by and among

THERAGENICS CORPORATION

as Purchaser,

JAMES R. EDDINGS

as Sellers’ Representative,

and

THE SHAREHOLDERS OF GALT MEDICAL CORP.

AND HOLDERS OF COMPANY STOCK DERIVATIVES

LISTED ON SCHEDULE 1 TO THIS AGREEMENT

as Sellers.

TABLE OF CONTENTS

This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience only.

		Page
ARTICLE I DEFINITIONS		1
Section 1.01	Definitions and Construction.	1
ARTICLE II SALE AND TRANSFER OF SHARES; CLOSING		11
Section 2.01	Purchase and Sale of Company Shares and Company Stock Derivatives.	11
Section 2.02	Executed Stock Powers.	11
Section 2.03	Purchase Price.	12
Section 2.04	Payment of Purchase Price.	12
Section 2.05	Closing.	13
Section 2.06	Closing Deliverables.	13
Section 2.07	Exemption from Registration.	13
Section 2.08	Stock Registration Rights.	13
Section 2.09	Further Assurances; Post-Closing Cooperation.	13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF EACH SELLER AND THE COMPANY		13
Section 3.01	Organization, Standing and Power.	14
Section 3.02	Authority.	14
Section 3.03	No Conflicts.	14
Section 3.04	No Consents.	15
Section 3.05	Title to Assets and Properties, Company Shares and Company Stock Derivatives; Absence of Encumbrances.	16
Section 3.06	Financial Statements and Schedules.	16
Section 3.07	Ordinary Course.	17
Section 3.08	Absence of Undisclosed Liabilities.	18
Section 3.09	Litigation; Regulatory Compliance.	19
Section 3.10	Product Liability Claims.	20
Section 3.11	Restrictions on Business Activities.	20
Section 3.12	Governmental Authorization.	20
Section 3.13	Intellectual Property.	20
Section 3.14	Environmental Matters.	24
Section 3.15	Taxes.	26
Section 3.16	Employee Benefit Plans.	26
Section 3.17	Capitalization and Equity Ownership.	28
Section 3.18	Certain Agreements Affected by the Acquisition.	29
Section 3.19	Employee Matters.	29
Section 3.20	Interested Party Transactions.	30

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Section 3.21	Insurance.	31
Section 3.22	Books and Records.	31
Section 3.23	Brokers’ and Finders’ Fees; Third Party Expenses.	32
Section 3.24	Customers, Suppliers and Sales Representatives.	32
Section 3.25	Contracts and Licenses.	33
Section 3.26	No Breach of Business Contracts or Business Licenses.	34
Section 3.27	Third Party Consents.	34
Section 3.28	Solvency.	35
Section 3.29	Securities Law Matters.	35
Section 3.30	Absence of Certain Business Practices.	37
Section 3.31	Disclosure of Certain Financial Relationships.	37
Section 3.32	Real Property.	37
Section 3.33	Representations Complete.	37
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER		38
Section 4.01	Organization, Standing and Power.	38
Section 4.02	Authority.	38
Section 4.03	No Conflict.	38
Section 4.04	Financial Resources.	39
Section 4.05	SEC Filings; Financial Statements.	39
Section 4.06	Absence of Certain Changes or Events.	39
Section 4.07	Valid Issuance.	39
Section 4.08	Litigation; Regulatory Compliance.	40
Section 4.09	Due Diligence.	40
Section 4.10	Solvency.	40
Section 4.11	Required Registration.	40
Section 4.12	No Further Representations.	41
ARTICLE V COVENANTS AND AGREEMENTS		41
Section 5.01	Public Announcements.	41
Section 5.02	Assistance and Cooperation.	41
Section 5.03	Consent of Auditors.	42
Section 5.04	Employee Benefit Plans.	42
Section 5.05	Sellers’ Representative.	42
Section 5.06	Approval of Payments.	43
Section 5.07	Approval of Schedule 1.	43
ARTICLE VI CLOSING DELIVERABLES		43
Section 6.01	Deliveries of the Purchaser.	43
Section 6.02	Deliveries of the Sellers and the Company.	44
ARTICLE VII SURVIVAL, INDEMNIFICATION AND ESCROW		45
Section 7.01	Survival.	45
Section 7.02	Escrow Fund.	46

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Section 7.03	Indemnification.	46
Section 7.04	Procedure for Indemnification.	47
Section 7.05	Assignment by Purchaser.	49
ARTICLE VIII GENERAL PROVISIONS		49
Section 8.01	Notices.	49
Section 8.02	Rights and Remedies Cumulative.	50
Section 8.03	Severability.	50
Section 8.04	Assignment; Binding Effect; No Third Party Beneficiary.	50
Section 8.05	Governing Law.	51
Section 8.06	Waiver of Jury Trial.	51
Section 8.07	Headings; Interpretation.	51
Section 8.08	Counterparts.	51
Section 8.09	Mediation.	52
Section 8.10	Entire Agreement.	52

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EXHIBITS/SCHEDULES

Schedule 1	List of Shareholders and holders of Company Stock Derivatives
Exhibit A	Escrow Agreement
Exhibit B	Registration Rights Agreement
Exhibit C	Opinion of Counsel to Purchaser
Exhibit D	Opinion of Counsel to the Company
Exhibit E	Intellectual Property Assignment Agreement
Exhibit F-1	Eddings Employment and Non-Competition Agreement
Exhibit F-2	Angela Walters Employment and Non-Competition Agreement
Exhibit F-3	David Catlin Employment and Non-Competition Agreement
Exhibit F-4	David Ozinga Employment and Non-Competition Agreement
Exhibit F-5	Lauren Hart Employment and Non-Competition Agreement
Exhibit F-6	Frank Gerome Employment and Non-Competition Agreement
Exhibit G	Landlord Consent
Exhibit H	Company Stock Derivatives Agreement
Exhibit I	Litigation Trust Agreement

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT is made and entered into as of August 2, 2006, by and among Theragenics Corporation, a Delaware corporation (“Purchaser”), James R. Eddings, a resident of the State of Texas (“Eddings”) and those shareholders of Galt Medical Corp., a Texas corporation (the “Company”) listed on Schedule 1 hereto (together with Eddings, “Shareholders”) and holders of Company Stock Derivatives (as defined in Section 1.01) listed on Schedule 1 hereto (together with Shareholders, “Sellers”), and Eddings as Sellers’ Representative pursuant to Section 5.05 hereof. Capitalized terms not otherwise defined herein have the meanings set forth in Article I.

RECITALS

As of the date hereof, the Sellers are the beneficial owners of one hundred percent (100%) of the issued and outstanding capital stock of the Company and Company Stock Derivatives.

Pursuant to this Agreement, Sellers shall sell, transfer, assign, and deliver to Purchaser, and Purchaser shall purchase and accept from Sellers, for the consideration and on the terms set forth in this Agreement, (i) the shares of common stock of the Company, $0.10 par value (the “Company Shares”) set forth opposite the name of each Seller on Schedule 1 hereto, which Company Shares represent one hundred percent (100%) of the issued and outstanding capital stock of the Company, and (ii) Company Stock Derivatives set forth opposite the name of each Seller on Schedule 1 hereto, which Company Stock Derivatives represent one hundred percent (100%) of the aggregate outstanding Company Stock Derivatives.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01Definitions and Construction.

(a)Certain Defined Terms. For purposes of this Agreement, the following terms shall have the respective meanings set forth below. All other capitalized terms, when used in this Agreement, shall have the respective meanings assigned to them where they first appear and are defined in this Agreement.

“Action or Proceeding” means any action, suit, litigation, proceeding, mediation, arbitration or Governmental Entity investigation or audit.

“Affiliate”, with respect to any Person, means any other Person that controls, is controlled by or is under common control with the first Person.

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“Agreement” means this Stock Purchase Agreement, together with all Schedules and Exhibits attached hereto and referenced herein.

“Ancillary Agreements”means, collectively, the Eddings Employment and Non-Competition Agreement, the Angela Walters Employment and Non-Competition Agreement, the David Catlin Employment and Non-Competition Agreement, the David Ozinga Employment and Non-Competition Agreement, the Lauren Hart Employment and Non-Competition Agreement, the Frank Gerome Employment and Non-Competition Agreement, the Escrow Agreement, the Registration Rights Agreement, the Form of Intellectual Property Assignment Agreement, the Landlord Consent and all other support agreements and other agreements to be entered into in connection with the transactions contemplated by this Agreement.

“Assets and Properties” of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned, leased or licensed by such Person, including Investment Assets, accounts and notes receivable, chattel paper, documents, instruments, licenses, Contracts, general intangibles, real estate, equipment, inventory, goods and Intellectual Property.

“Associate”, with respect to any Person, means any corporation or other business organization of which such Person is an officer or partner or is the beneficial owner, directly or indirectly, of ten percent (10%) or more of any class of equity securities, any trust or estate in which such Person has a substantial beneficial interest or as to which such Person serves as a trustee or in a similar capacity, the spouse of such Person, or any relative of such Person or spouse, who shares the same primary residence as such Person.

“Audited Financial Statements” has the meaning ascribed to it in Section 3.06.

“Benefit Plan” means any written and any unwritten bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, savings, stock purchase, stock option, restricted stock, stock grant, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day care, dependent care, legal services, cafeteria, life insurance, health, accident, disability, worker’s compensation or other insurance, severance, separation, welfare or other employee benefit plan, practice, policy, agreement or arrangement of any kind, whether written or oral, including any “employee benefit plan” within the meaning of Section 3(3) of ERISA.

“Books and Records” of any Person means all files, documents, instruments, papers, books and records relating to the business, operations, condition (financial or other), results of operations and Assets and Properties of such Person, including financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, sales and promotional literature, sales and purchase correspondence, ledgers, journals, deeds, title policies, personnel and employment records, Contracts, Licenses, customer and supplier lists, telephone and facsimile numbers, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans.

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“Business” means the business of manufacturing, selling and distributing medical products and devices of the Company and any other activities performed by the Company on the date hereof.

“Business Contracts” means all Contracts (other than the Real Property Leases and the Personal Property Leases) to which the Company is a party and which are used or held for use by the Company primarily in, or are necessary for, the conduct of the Business as a going concern, including purchase orders and Contracts related to customers, suppliers, sales representatives, distributors, marketing, manufacturing and testing.

“Business Day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized by Law or executive order to close in the State of Georgia.

“Business Licenses” means all Licenses (including applications therefor), to the extent transferable, which are used or held for use by the Company primarily in, or are necessary for, the conduct of the Business as a going concern.

“CERCLA” has the meaning ascribed to it in Section 1.01(a), under “Environmental Law.”

“Certificates” has the meaning ascribed to it in Section 2.02.

“Claim” has the meaning ascribed to it in Section 7.04(a).

“Closing” has the meaning ascribed to it in Section 2.05.

“Closing Date” has the meaning ascribed to it in Section 2.05.

“COBRA” has the meaning ascribed to it in Section 3.16(j).

“Company” means Galt Medical Corp., a Texas corporation.

“Company Authorizations” has the meaning ascribed to it in Section 3.12.

“Company Intellectual Property” means all the Intellectual Property that is used or useful in, or is necessary for, the conduct of the Business as a going concern (including the Company’s goodwill therein) as conducted within the twelve (12) month period prior to the date hereof.

“Company Stock Derivatives” means all equity interests in the Company other than Company Shares, all rights to receive equity interests in the Company, all rights to receive payments that are derivative of the value of equity interests in the Company, and all promises to issue any of the foregoing, whether written or unwritten, including without limitation, phantom stock, options, warrants, other derivatives and promises to issue any of the foregoing.

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“Company Shares” means the issued and outstanding common stock of the Company.

“Company’s Plans” has the meaning ascribed to it in Section 3.16(d).

“Confidentiality Agreement” means that certain Confidentiality Agreement dated January 17, 2006between Purchaser and the Company.

“Contract” means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract or arrangement (whether written or oral) setting forth a legal obligation or right of a party thereto with respect to the subject matter thereof (including all amendments, supplements thereto, restatements thereof and consents, waivers and notices thereunder which affect the rights and/or obligations of any of the parties thereto).

“Disclosure Schedule” has the meaning ascribed to it in the introductory paragraph of Article III.

“Dispute” has the meaning ascribed to it in Section 8.09.

“$” or “Dollars” means United States dollars.

“Employees” means all employees of the Company employed in connection with the Business as of the date of this Agreement.

“Encumbrance” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge, right of first refusal or other encumbrance, right or restriction of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing.

“Environmental Claim” means any action, suit, complaint, notice of violation, demand, penalty, written or oral notice, request for information or other communication, claim, investigation, order or proceeding relating to: (i) the actual or alleged violation of any Environmental Law, including, without limitation, any alleged failure to possess or comply with any environmental approvals, permits, licenses, clearances and consents required under any Environmental Law; (ii) any treatment, storage, recycling, transportation, disposal, handling, placement, Release or threatened Release, or the presence of any Hazardous Material at any location, whether or not owned by the Person against whom such liability is alleged or asserted; or (iii) the actual or alleged exposure of any Person to any Hazardous Material.

“Environmental Law” means any Law or rule of common law (including, without limitation, nuisance and trespass claims) of any Governmental Entity, relating to human health, safety, any Hazardous Material, natural resources or the environment (including, without limitation, ground, air, water or noise pollution or contamination, and underground or above-ground storage tanks), and shall include, without limitation, the Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq. (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”); the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., and their state equivalents or analogs, and any other state or federal environmental statutes, and all rules, regulations, orders and decrees now or hereafter promulgated under any of the foregoing, as any of the foregoing now exist or may be changed or amended or come into effect in the future.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” has the meaning ascribed to it in Section 3.16(g).

“Escrow Agent” has the meaning ascribed to it in Section 7.02.

“Escrow Agreement” has the meaning ascribed to it in Section 2.04.

“Escrow Amount” has the meaning ascribed to it in Section 2.04.

“Escrow Fund” has the meaning ascribed to it in Section 7.02.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder, as in effect from time to time.

“Expenses” means, with respect to any party hereto, all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants) reasonably incurred by or on behalf of such party in connection with or related to the negotiation, authorization, preparation, execution and performance of its obligations pursuant to this Agreement, the Ancillary Agreements and the consummation of the transactions contemplated hereby, and all other matters and proceedings related to this Agreement, the Ancillary Agreements, the transactions contemplated hereby and thereby and the closing of such transactions.

“GAAP” means accounting principles generally accepted in the United States of America, consistently applied throughout the specified period and in the immediately preceding comparable period.

“Governmental Entity” means any United States federal, state or local and any foreign governmental, regulatory or administrative authority, agency, commission, court, tribunal or arbitral body.

“Gross Shares” means a number of shares of Purchaser Common Stock with an aggregate dollar value valued at the Purchaser Average Stock Price equal to Three Million One Hundred Eighty Five Thousand Five Hundred Fifty Seven and 21/100 Dollars ($3,185,557.21) and issued on the Closing Date to those Sellers who qualify as an “accredited investor” within the meaning of Rule 501 of the Securities Act, in the amount set forth opposite the name of each such Seller on Schedule 1 hereto.

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“Hazardous Material” means any material or substance, whether solid, liquid or gaseous: (i) which is listed, regulated or defined as a “hazardous substance,” “hazardous waste,” “hazardous material,” “regulated substance,” “toxic substance,” “contaminant,” “pollutant” or “solid waste,” or otherwise classified or regulated as hazardous or toxic, in or pursuant to any Environmental Law, or for which a Person may be subject to liability under any Environmental Law; (ii) which is or contains asbestos, lead-based paint, radon, any polychlorinated biphenyl, polybrominated diphenyl ether, urea formaldehyde foam insulation, explosive or radioactive material, motor fuel, or petroleum (including, without limitation, petroleum products, by-products, constituents or other petroleum hydrocarbons), fungi, bacterial or viral matter which reproduces through the release of spores or the splitting of cells or other means, (including without limitation, mold, toxic or mycotoxin spores); or (iii) which causes a contamination or nuisance on, in, at, under, around or affecting any property or a hazard, or threat of the same, to public health, human health or the environment.

“Indebtedness” of any Person means all obligations of such Person (i) for borrowed money, whether or not evidenced by notes, bonds, debentures or similar instruments; (ii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business); (iii) under capital leases; and (iv) in the nature of guarantees of the obligations described in clauses (i) through (iii) above of any other Person.

“Indemnified Parties” has the meaning ascribed to it in Section 7.03(a).

“Indemnitee” has the meaning ascribed to it in Section 7.04(a).

“Indemnitor” has the meaning ascribed to it in Section 7.04(a).

“Intangible Personal Property” means all Intellectual Property of the Company, including the items listed in Section 3.13(h) of the Disclosure Schedule, and all Intellectual Property of the Company related to Product-Specific Machinery and Equipment.

“Intellectual Property” means any or all of the following, and all rights in, to, under, arising out of, or associated with any or all of the following: (i) all United States, foreign and international patents and patent rights (including all patents, patent applications, and any and all divisions, continuations, continuations-in-part, reissues, re-examinations and extensions thereof, and all invention registrations and invention disclosures); (ii) all trademarks and trademark rights, service marks and service mark rights, trade names and trade name rights, service names and service name rights (including all goodwill, common law rights and governmental or other registrations or applications for registration pertaining thereto), designs, trade dress, brand names, business and product names, Internet domain names, logos and slogans; (iii) all copyrightable works and copyright rights therein (including all common law rights and governmental or other registrations or applications for registration pertaining thereto, and renewal rights therefor); (iv) all sui generis database rights, ideas, inventions, (whether patentable or not), invention disclosures, improvements, technology, know-how, show-how, formulas, systems, processes, designs, methodologies, industrial models, works of authorship, technical drawings, statistical models, algorithms, modules, computer programs, technical documentation, business methods, work product, intellectual and industrial property licenses, proprietary information, and customer lists; (v) all mask works, mask work registrations and applications therefor; (vi) all industrial designs and any registrations and applications therefor throughout the world; (vii) all computer software including all source code, object code, firmware, development tools, files, records and data, and all media on which any of the foregoing is recorded; (viii) all shop rights and moral rights, (ix) all trade secrets, trade secret rights, and other proprietary rights in information, including contractual or other rights to confidential information of third parties or to have information treated as confidential by third parties; (x) all similar, corresponding or equivalent rights to, and to the benefits pertaining to, any of the foregoing, including (without limitation), the right to institute, prosecute, defend, and/or prosecute all suits and proceedings and retain all damage and other awards and to take all actions necessary or proper to collect, assert, or enforce any interest, claim, right, or title of any kind in and to any and all of the foregoing, or the Assets and Properties; and (xi) all documentation related to any of the foregoing; provided, however, that the term “Intellectual Property” does not include any of the foregoing to the extent that the rights thereto are in the public domain and not subject to ownership or proprietary rights on the part of any party.

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

“Inventory” means all inventory of goods and supplies used or maintained in connection with the Business, including medical supplies and office supplies, whether as finished product, raw material or work in progress, and whether held at, or in transit from or to, the locations at which the Business is conducted.

“Investment Assets” means all debentures, notes and other evidences of Indebtedness, stocks, securities (including rights to purchase and securities convertible into or exchangeable for other securities), interests in joint ventures and general and limited partnerships, mortgage loans and other investment or portfolio assets owned of record or beneficially by the Company (other than trade receivables generated in the ordinary course of business of the Company).

“IRS” means the United States Internal Revenue Service.

“Law” means any U.S. federal, state, or local, and any foreign, statute, law, ordinance, regulation, rule, code, order, judgment, decree, or other requirement or rule of law, as in effect from time to time, including the Foreign Corrupt Practices Act.

“Legal Expenses” of Indemnified Parties means any and all reasonable out-of-pocket fees, costs and expenses of any kind incurred by such Indemnified Parties and its counsel in investigating, preparing for, defending against, providing evidence, producing documents or responding to subpoenas in connection with, or taking other action with respect to any threatened or asserted claim or investigation of a third party or Governmental Entity, including expenses of investigation, court costs, and fees and expenses of attorneys, accountants and experts.

“Liability” and “Liabilities” means any Indebtedness, obligation or other liability of a Person (whether absolute, accrued, contingent, fixed or otherwise, matured or unmatured, determined or undetermined, or whether due or to become due).

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“License” means any license, permit, certificate of authority, authorization, approval, registration, franchise and similar consent granted or issued by any Governmental Entity.

“Loss” has the meaning ascribed to it in Section 7.03(a).

“Material Adverse Effect” with respect to the specified Person means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate with all other such changes, effects, events, occurrences, states of fact and developments, is, or would reasonably be expected to be, materially adverse to the business, assets, Liabilities, financial condition, operations, or results of operations of the specified Person; provided, however, that none of the following shall be deemed in itself to constitute a Material Adverse Effect: changes, effects, events, occurrences, states of facts or developments (A) occurring as a result of general economic or financial conditions, or (B) which, in the case of the Business, are not unique to the Business, but also affect other Persons who participate or are engaged in the businesses comparable to the Business, and, in the case of Purchaser, are not unique to Purchaser, but also affect other Persons who participate or are engaged in the businesses conducted by Purchaser, to the extent, in each case, that such changes, events, occurrences, states of fact or developments do not have a materially disproportionate effect on the Business (in the case of provisions relating to the Business) or on Purchaser (in the case of provisions relating to Purchaser).

“Notice” has the meaning ascribed to it in Section 7.04(a).

“Order” means any writ, judgment, decree, notice, ruling, opinion, stipulation, determination, injunction or similar order or award of any arbitrator, mediator or Governmental Entity (in each such case whether preliminary or final).

“Payment Programs” means any payment program, including without limitation Medicare, TRICARE, Medicaid, worker’s compensation, Blue Cross/Blue Shield programs, managed care plans, health maintenance organizations, preferred provider organizations, health benefit plans, health insurance plans, employee benefit plans, government sponsored programs, alternative care plans, and other third party reimbursement and payment programs.

“Permitted Encumbrance” means (i) any Encumbrance for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; or (ii) any statutory Encumbrance arising in the ordinary course of business by operation of Law with respect to a Liability that is not yet due and payable and does not materially impair the value of the property subject to such Encumbrance or the use of such property in the conduct of the Business.

“Person” means an individual, corporation, partnership, limited partnership, limited liability company, limited liability partnership, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association, entity or Governmental Entity.

“Personal Property Leases” means (i) the leases or subleases of Tangible Personal Property described in Section 3.25(a) of the Disclosure Schedule as to which the Company is the lessor or sublessor, and (ii) the leases of Tangible Personal Property described in Section 3.25(a) of the Disclosure Schedule as to which the Company is the lessee or sublessee, together with any options to purchase the underlying property.

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“Pricing Period” means the forty (40) trading days ending on two trading days immediately prior to (and not including) the execution date of this Agreement.

“Product-Specific Machinery and Equipment” has the meaning ascribed to it in the definition for “Tangible Personal Property”.

“Purchase Price” has the meaning ascribed to it in Section 2.03.

“Purchaser” means Theragenics Corporation, a Delaware corporation.

“PurchaserAverage Stock Price” means the arithmetic average of the closing price for a share of Purchaser Common Stock as quoted on the New York Stock Exchange for each trading day during the Pricing Period.

“Purchaser Common Stock”means the common stock, par value $.01 per share, of Purchaser.

“Purchaser SEC Reports”has the meaning ascribed to it in Section 4.05(a).

“Rate” has the meaning ascribed to it in Section 7.03(a).

“Real Property Leases”means (i) the leases and subleases of real property with respect to the Company’s facilities which are described in Section 3.25(a) of Disclosure Schedule as to which the Company is the lessor or sublessor, and (ii) the leases and subleases of real property described in Section 3.25(a) of the Disclosure Schedule as to which the Company is the lessee or sublessee, together with any options to purchase the underlying property and leasehold improvements thereon, and in each case all other rights, subleases, licenses, permits and profits appurtenant to or related to such leases and subleases.

“Registrable Securities” has the meaning ascribed to it in Section 2.08.

“Registration Rights Agreement” has the meaning ascribed to it in Section 2.08.

“Release” means any past or present release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, depositing, escaping, injecting, leaching, dispersing, seeping, migrating, filtering, dumping, disposing, injecting or other releasing into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater, and surface or subsurface strata) or into or out of any property, whether intentional or unintentional, including, without limitation, the movement of Hazardous Material on, in, under, above, about, through or into the air, soil, surface water, or groundwater.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder, as in effect from time to time.

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“Sellers” has the meaning ascribed to it in the introductory paragraph of this Agreement.

“Sellers’ Representative” has the meaning ascribed to it in Section 5.05.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited partnership, limited liability company, limited liability partnership, joint venture or other legal entity, a majority of the stock or other equity interests or voting power of which is owned, directly or indirectly, by such Person (either alone or through or together with any other subsidiary of such Person).

“Tangible Personal Property” means all furniture, fixtures, vehicles, machinery, equipment, tools (including machinery and equipment designed exclusively for products of the Business) (“Product-Specific Machinery and Equipment”) computers (including computer hardware and software) and other tangible personal property and all replacement parts therefor which are used or held for use by the Company primarily in, or are necessary for, the conduct of the Business as a going concern, and including any of the foregoing purchased subject to any conditional sales or title retention agreement in favor of any other Person and including Product-Specific Machinery and Equipment owned or leased by the Company and located at locations where products of the Business are manufactured or tested.

“Tax” means (i) any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Taxing Authority, including, without limitation, taxes or other charges on or with respect to income, built-in gains, excessive net passive income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth, taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes, license, registration and documentation fees, and customs’ duties, tariffs and similar charges; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being a member of an affiliated, combined, consolidated or unitary group for any taxable period; and (iii) any liability for the payment of amounts of the type described in clause (i) or clause (ii) as a result of being a transferee of, or a successor in interest to, any Person or as a result of an express or implied obligation to indemnify any Person.

“Tax Return” means any return, statement, report or form (including any estimated tax reports and returns, withholding tax reports and returns and information reports and returns) required to be filed with respect to any Tax.

“Taxing Authority” means any Governmental Entity or taxing authority responsible for the assessment, collection or administration of any Tax.

“Unaudited Financial Statements” has the meaning ascribed to it in Section 3.06.

(b)Construction. Unless the context of this Agreement otherwise clearly requires: (i) words of any gender include each other gender and the neuter; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement as a whole and not to any particular Article, Section or other subdivision; (iv) the terms “Article” or “Section” or other subdivision refer to the specified Article, Section or other subdivision of the body of this Agreement; (v) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation” except when preceded by a negative predicate; and (vi) when a reference is made in this Agreement to a Schedule or Exhibit, such reference shall be to a Schedule or Exhibit to this Agreement unless otherwise indicated. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. The term “party” or “parties” (but not the term “third party”) when used herein refers to Purchaser, on the one hand, and the Sellers and the Company, on the other hand. When used herein, the phrase “to the knowledge of” any Person, “to the best knowledge of” any Person, “known to” any Person or any similar phrase, means, in the case of Purchaser, the actual knowledge of Christine Jacobs, Bruce Smith, and Frank Tarallo, in the case of the Company, the actual knowledge of Eddings, David Catlin, David Ozinga, Lauren Hartand Angela Walters, in the case of each Seller, the actual knowledge of such Seller, and in each case, the knowledge that such Person or Persons would have obtained of the matter represented after reasonable due and diligent inquiry of those employees and agents of such Person whom such Person reasonably believes would have actual knowledge of the matters represented. In this Agreement, any reference to a party conducting its business or other affairs or taking any action in the “ordinary course of business” and “ordinary course of business consistent with past practice” refers to the business and practice of the specified business as heretofore conducted to the extent: (a) such action is consistent with such party’s past practices and is taken in the ordinary course of such party’s normal day-to-day operations; and (b) such action is not required to be authorized by such party’s shareholders or members, as applicable, such party’s board of directors or managers, as applicable, or any committee thereof and does not require any other separate or special authorization of any nature from a third party.

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ARTICLE II

SALE AND TRANSFER OF SHARES; CLOSING

Section 2.01Purchase and Sale of Company Shares and Company Stock Derivatives.

On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser hereby purchases, acquires and accepts from Sellers, and Sellers hereby sell, assign, convey and deliver to Purchaser, all of their respective right, title and interest in and to the Company Shares and Company Stock Derivatives, free and clear of any Encumbrances.

Section 2.02Executed Stock Powers.

At the Closing, and simultaneously with the execution and delivery of this Agreement, each Seller shall deliver executed stock powers, in a form reasonably satisfactory to Purchaser, together with those original certificates that immediately prior to the Closing represented the Company Shares held by such Seller, or a duly executed affidavit of lost certificate and indemnity for any certificate for Company Shares which has been lost, stolen, seized or destroyed (the “Certificates”), to Purchaser. Also at the Closing, and simultaneously with the execution and delivery of this Agreement, all Company Stock Derivatives shall cease to be outstanding, shall be cancelled, retired and shall cease to exist, and each holder of Company Stock Derivatives shall cease to have any rights with respect to such Company Stock Derivatives, except the right to receive the consideration described in Section 2.04 (iii).

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Section 2.03Purchase Price.

The aggregate purchase price for the Company Shares and Company Stock Derivatives is Thirty Four Million Dollars ($34,000,000) (the “Purchase Price”). The Purchase Price is payable in cash and Gross Shares at the Closing in the manner provided in Section 2.04.

Section 2.04Payment of Purchase Price.

The Purchase Price which is payable at Closing shall be paid as follows:

(i)       that amount, if any, of the Purchase Price necessary to be paid to the applicable lenders and other creditors of the Company or Sellers to release and satisfy in full any Indebtedness and Encumbrances with respect to the Company, or otherwise obtain clear title to the Company’s Assets and Properties, shall be paid to such lenders and other creditors in accordance with the payoff letters or other documentation provided by such creditors;

(ii)      Purchaser shall deliver to the Escrow Agent (a) those certain certificates, registered in the name of each Seller who is receiving ten percent (10%) of his allocable portion of the Purchase Price in Purchaser Common Stock, representing the Gross Shares and (b) cash in the amount of Two Hundred Fourteen Thousand Four Hundred Forty Two and 79/100 Dollars ($214,442.79), representing the sum of those Sellers’ ten percent (10%) of their allocable portion of the Purchase Price who are receiving their said allocable portion of the Purchase Price solely in cash, for a total deposit valued at Three Million Four Hundred Thousand Dollars ($3,400,000) (the “Escrow Amount”), in accordance with Article VII and the escrow agreement entered into on the Closing Date among Purchaser, Sellers’ Representative and the Escrow Agent in substantially the form of Exhibit A hereto (the “Escrow Agreement”). Each Seller’s respective interest in the Escrow Amount is set forth opposite each Seller’s name on Schedule 1;

(iii)   each Seller’s portion of the Purchase Price allocable to the Company Stock Derivatives held by such Seller shall be paid to such Seller in shares of Purchaser Common Stock, cash or a combination thereof, in the manner and amount set forth opposite each Seller’s name on Schedule 1 hereto, such amount being determined in the case of any derivative or option to purchase Company Shares by subtracting the aggregate applicable exercise price from the portion of the Purchase Price allocable to the number of Company Shares subject to the option, and in the case of current or former employees, the amount shown of Schedule 1 shall be reduced by any required tax withholding; and

(iv)     each Seller’s allocable portion of the balance of the Purchase Price shall be paid to such Seller in cash.

The cash portion of the Purchase Price payable to each Seller shall be transmitted by wire transfer or other immediately available funds to a bank or other account designated by such Seller in the amount set forth opposite each Seller’s name on Schedule 1.

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Section 2.05Closing.

The closing of the purchase and sale of the Company Shares and Company Stock Derivatives shall take place effective as of 5:00 pm Eastern Daylight Savings Time on the date of this Agreement (the “Closing Date”) or such other date as the parties hereto agree (the “Closing”). The Closing shall take place at the Dallas office of Powell Goldstein LLP, JP Morgan Chase Tower, Suite 3200, 2200 Ross Avenue, Dallas, TX 75201.

Section 2.06Closing Deliverables.

Sellers and the Company shall deliver to Purchaser and Purchaser shall deliver to Sellers and the Company fully executed originals of the opinions, certificates, contracts, documents and instruments required by Article VI.

Section 2.07Exemption from Registration.

The Gross Shares to be issued in connection with the transactions contemplated by this Agreement will be issued in a transaction exempt from registration under the Securities Act by reason of Section 4(2) thereof and/or Regulation D and may not be re-offered or resold other than in conformity with the registration requirements of the Securities Act and such other Laws as may be applicable thereto or pursuant to an exemption therefrom. The certificates representing the Gross Shares shall be legended to the effect described above and shall include such additional legends as necessary to comply with applicable U.S. federal and state securities Laws and other applicable restrictions.

Section 2.08Stock Registration Rights.

The Purchaser shall on or before the first anniversary of the date of this Agreement, file with the SEC a Registration Statement on Form S-3 covering the resale of all of the Gross Shares issued on the Closing Date (the “Registrable Securities”).To evidence the Purchaser’s obligations under this Section 2.08, the Purchaser shall execute and deliver to the Sellers a Registration Rights Agreement substantially in the form of Exhibit B hereto (the “Registration Rights Agreement”).

Section 2.09Further Assurances; Post-Closing Cooperation.

At any time or from time to time after the Closing, at Purchaser’s request and sole cost and without further consideration, Sellers shall execute and deliver to Purchaser such other instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and information and take such other actions as Purchaser may reasonably deem necessary or desirable in order more effectively to transfer, convey and assign to Purchaser, and to confirm Purchaser’s title to, the Company Shares and Company Stock Derivatives, and, to the full extent permitted by Law, to put Purchaser in actual possession and operating control of the Company and to assist Purchaser in exercising all rights with respect thereto.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF EACH SELLER AND THE COMPANY

As inducements to Purchaser to enter into this Agreement and to consummate the transactions contemplated herein, each Seller (with respect to himself, herself or itself only, and with respect only to the representations and warranties contained in Sections 3.02, 3.03, 3.04, 3.05(c), 3.20(c), 3.23, 3.29 and 3.33), and the Company represent and warrant to Purchaser that, subject to the exceptions specifically disclosed in writing in a schedule delivered to Purchaser prior to (or contemporaneously with) the signing of this Agreement (“Disclosure Schedule”), the statements set forth in this Article III are true and correct. The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered sections and lettered subsections of this Agreement, and all exceptions shall reference a specific representation set forth in this Article III and shall apply only to such numbered section and lettered subsection unless expressly cross-referenced in another numbered section and lettered subsection.

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Section 3.01Organization, Standing and Power.

(a)The Company is a corporation duly organized, validly existing and in good standing under the Laws of the state of its incorporation. Except as set forth in Section 3.01 of the Disclosure Schedule, the Company has the corporate power and authority to own, use, license, lease and operate its Business and to carry on its Business as it is now being conducted and as currently proposed to be conducted and is duly qualified, licensed or admitted to do business and is in good standing in each jurisdiction in which the ownership, use, licensing, leasing or operation of its Business, or the conduct or nature of its Business, makes such qualification, licensing or admission necessary.

(b)The Company does not own any wholly or partially-owned Subsidiaries.

Section 3.02Authority.

Sellers and the Company have the requisite capacity to enter into, execute and deliver this Agreement and the Ancillary Agreements to which it is a party, to consummate the transactions contemplated hereby and thereby, and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Ancillary Agreements to which the Sellers, the Company or any of their Affiliates are each a party, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate, shareholder and other action on the part of the Sellers and the Company. This Agreement has been, and the Ancillary Agreements to which the Sellers and the Company are a party will be, duly executed and delivered by such parties. This Agreement constitutes, and the Ancillary Agreements to which the Sellers and the Company are a party, when executed and delivered as contemplated by this Agreement, will constitute, assuming due authorization, execution and delivery by each of the other parties hereto and thereto, legal, valid and binding obligations of such parties, enforceable against such parties in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy and insolvency laws, the rights of creditors generally, and general principles of equity.

Section 3.03No Conflicts.

The execution and delivery by the Sellers and the Company of this Agreement and the Ancillary Agreements to which they are parties do not, and the consummation by the Sellers and the Company of the transactions contemplated hereby and thereby do not and will not:

(a)conflict with, or result in any violation or breach of, or default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under (i) any provision of the Articles of Incorporation, Bylaws or other charter or organizational documents of the Company, as presently in effect, or (ii) any of the Real Property Leases, Business Contracts, Personal Property Leases, or Business Licenses, or any other material mortgage, indenture, lease, Contract, or other instrument, permit, concession, franchise, or license applicable to the Company, its Business or any of the Assets and Properties applicable to it;

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(b)conflict with or result in a violation or breach of, or default under, any Law or Order applicable to the Company, its Business or any of the Assets and Properties of the Company that has had, or would reasonably be expected to have, a Material Adverse Effect on the Business or any Assets and Properties of the Company;

(c)except as listed in Section 3.27 of the Disclosure Schedule, (i) conflict with or result in a violation or breach of, (ii) constitute a default (or an event that, with or without notice or lapse of time or both, would constitute a default) under, (iii) require the Sellers or the Company to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (iv) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (v) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments or performance under, or (vi) result in the loss of any material benefit under any of the terms, conditions or provisions of, any Business Contract, Business License, Real Property Lease or Personal Property Lease to which the Company is a party; or

(d)result in the creation or imposition of (or the obligation to create or impose) any Encumbrance upon the Business or any of the Assets and Properties of the Company.

Section 3.04No Consents.

No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to the Sellers, the Company, its Business or any of the Assets and Properties applicable to the Company in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, except for (i) such consents, authorizations, filings, approvals and registrations which would not prevent or alter or delay any of the transactions contemplated by this Agreement or any of the Ancillary Agreements, (ii) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state or federal securities Laws; and (iii) as set forth on Section 3.04 of the Disclosure Schedule, such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable Food and Drug Administration, Drug Enforcement Administration, Medicare/Medicaid, CE Mark, ISO Certification, Patent and Trademark Office and Environmental Law authorities.

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Section 3.05Title to Assets and Properties, Company Shares and Company Stock Derivatives; Absence of Encumbrances.

(a)The Company has good and valid title to all of the Assets and Properties of the Company (excluding any assets that are subject to a lease) free and clear of any Encumbrances except for Permitted Encumbrances. The Assets and Properties of the Company are not subject to any preemptive right, right of first refusal or other right or restriction, are in good operating condition and repair, reasonable wear and tear excepted, are suitable and adequate for use in the ordinary course of business, and conform in all material respects to all applicable Laws. Except for the Assets and Properties currently owned or leased by the Company, there are no other Assets or Properties that are required or will be required by the Company after the Closing in order to conduct the Business consistent in all material respects with the manner in which the Company conducts its Business on and as of the date of this Agreement.

(b)Except as set forth in Section 3.05 of the Disclosure Schedule, all of the Real Property Leases and Personal Property Leases are valid, binding and enforceable on the Company in accordance with their terms, and, to the knowledge of the Company, are enforceable against the other party or parties thereto in accordance with their terms. The Company is not in default under any such lease applicable to it and there has not occurred any event that, either alone or with the giving of notice or lapse of time or both, would constitute a default by the Company under such lease. To the knowledge the Company, there is no current default by any other party to any such lease and no event has occurred that, either alone or with the giving of notice or lapse of time or both, would constitute a default by such party under any such lease.

(c)Each Seller has good and marketable title to his or her Company Shares or Company Stock Derivatives, free and clear of all Encumbrances (other than restrictions on transfer under applicable state and federal securities Laws). To the extent that any Seller’s Company Shares or Company Stock Derivatives constitute community property with such Seller’s spouse, such spouse has the requisite capacity to execute the spousal consent form incorporated in the signature pages to this Agreement, and such spouse’s execution of such spousal consent form shall be a legal, valid and binding obligation of such spouse.

Section 3.06Financial Statements and Schedules.

As set forth in Section 3.06 of the Disclosure Schedule, the Company has delivered to Purchaser the Company’s audited balance sheet and income statements as of and for the twelve (12) month period ended December 31, 2005, respectively (the “Audited Financial Statements”), as well as the Company’s unaudited balance sheet and income statement as of and for the six (6) months ended June 30, 2006, respectively( the “Unaudited Financial Statements”). The Audited Financial Statements and Unaudited Financial Statements delivered to Purchaser with respect to the Company are correct and complete in all material respects and were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated and with each other. The Audited Financial Statements and Unaudited Financial Statements present fairly and accurately the financial position and operating results of the Company for the periods indicated therein, subject to normal year-end audit adjustments, which adjustments are of a normal and recurring nature and are not material in amount. The Company maintains and, through the Closing Date, will continue to maintain a system of internal accounting controls that is reasonably and in good faith believed by the Company to be adequate for their intended purpose.

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Section 3.07Ordinary Course.

Since December 31, 2005, the Company has conducted its Business in the ordinary course consistent with past practice and there has not occurred any change, event or condition (whether or not covered by insurance) that has had, or would reasonably be expected to have, a Material Adverse Effect on the Company or its Business. In addition, without limiting the generality of the foregoing, since December 31, 2005:

(a)The Company has not entered into any strategic alliance, joint development or joint marketing Contract relating to or involving the Business;

(b)Except as set forth in Section 3.07 of the Disclosure Schedule, there has not been any amendment or other modification (or agreement to do so) or violation of the terms of, any of the Business Contracts, Business Licenses or Personal Property Leases;

(c)Except as set forth in Section 3.07 of the Disclosure Schedule, the Company has not entered into any transaction with any Seller, officer, director, partner, member or Employee engaged in the conduct of the Business;

(d)The Company has not entered into any Contract pursuant to which any other Person is granted manufacturing, marketing, distribution, licensing or similar rights of any type or scope with respect to any product of the Business;

(e)The Sellers and the Company have not authorized, declared or paid any distributions or dividends to any Person;

(f)Except as set forth in Section 3.07 of the Disclosure Schedule, no Action or Proceeding has been commenced or, to the knowledge of the Company, threatened by or against the Company relating to the Business or any of the Assets and Properties of the Company, and the Company has not received any request for indemnification with respect to any product of the Company or any Company Intellectual Property;

(g)There has not been any transfer, waiver or release (by way of a License, assignment or otherwise) to or Encumbrance by any Person of rights to any Company Intellectual Property;

(h)The Company has not made or agreed to make any waiver of rights to, or license, lease or other disposition of, any of the Assets and Properties of the Company;

(i)Except as reflected in either the Audited Financial Statements or the Unaudited Financial Statements, the Company has not made or agreed or determined to make any write-off, write-down or revaluation of any of the Assets and Properties of the Company or any change in any reserves or Liabilities associated therewith;

(j)The Company has not granted any severance or termination pay, and has not paid or agreed or made any commitment to pay any discretionary or stay bonus, to any Employee or independent contractor of or consultant to the Company;

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(k)Except as set forth in Section 3.07 of the Disclosure Schedule, the Company has not made, granted or approved any (A) grant of options, restricted stock or phantom stock or any change in the vesting schedule applicable thereto, or (B) increase in salary, rate of commissions, rate of consulting fees, rate or amount of distribution to equity holders or other compensation of any current Employee, independent contractor or consultant engaged in the conduct of the Business, and the Company has not paid or approved the payment of any other consideration of any nature whatsoever (other than salary, commissions or consulting fees and customary benefits paid to any current or former Employee or independent contractor of or consultant to the Business) to any current or former Employee or independent contractor of or consultant to the Business;

(l)The Company has not made or changed any election in respect of any Tax, adopted or changed any accounting method in respect of any Tax, entered into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settlement or compromise of any claim or assessment in respect of any Tax, or consented to any extension or waiver of the limitation period applicable to any claim or assessment in respect of any Tax;

(m)Except as reflected in either the Audited Financial Statements or the Unaudited Financial Statements, the Company has not made any change in accounting policies, principles, methods, practices or procedures (including for bad debts,contingent liabilities or otherwise, respecting capitalization or expense of research and development expenditures, depreciation or amortization rates or timing of recognition of revenue and expense) used in connection with the Business;

(n)To the knowledge of the Company, the Company has observed all Laws and Orders applicable to the Business;

(o)The Company has taken all action required to procure, maintain, renew, extend or enforce the Company Intellectual Property used or held for use in the Business, including submission of required documents or fees during the prosecution of patent, trademark, copyright or other applications for the Company Intellectual Property rights;

(p)There has been no physical damage, destruction or other loss (whether or not covered by insurance) that has had, or would reasonably be expected to have, a Material Adverse Effect on the Business or any Assets and Properties of the Company;

(q)No default by the Company under or violation by the Company of any Contract of the Company has occurred, and to the knowledge of the Company, no event has occurred which, with notice or lapse of time or both, would constitute such a default or violation; and

(r)The Company is not obligated to any Person to maintain, modify, improve or upgrade the Business or any of the Assets and Properties of the Company.

Section 3.08Absence of Undisclosed Liabilities.

The Company has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Unaudited Financial Statements and current liabilities incurred in the ordinary course of business since the respective dates thereof.

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Section 3.09Litigation; Regulatory Compliance.

(a)Except as set forth in Section 3.09(a) of the Disclosure Schedule, there is no private or governmental Action or Proceeding pending, or, to the knowledge of the Company, threatened by or against the Company relating to the Assets and Properties of the Company or the operation of the Business, and no judgment, decree or Order applicable to the Company or any of the Assets and Properties of the Company, that could reasonably be expected to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement or the Ancillary Agreements or to have a Material Adverse Effect on the Business.

(b)Except as set forth in Section 3.09(b) of the Disclosure Schedule, the Company does not currently, nor has it ever in the past, participated in any Payment Programs.

(c)Neither the Company, nor any director or officer, nor to the knowledge of the Company, any Employee or agent thereof, with respect to actions taken on behalf of the Company, (A) has been assessed a civil money penalty under Section 1128A of the Social Security Act or any regulations promulgated thereunder, (B) has been excluded from participation in any federal health care program or state health care program (as such terms are defined by the Social Security Act), (C) has been convicted of any criminal offense relating to the delivery of any item or service under a federal health care program relating to the unlawful manufacture, distribution, dispensing or administration of medical supplies, products or devices, or (D) has been a party to or subject to any Action or Proceeding concerning any of the matters described above in clauses (A) through (C).

(d)The Company (A) is in compliance in all material respects with all Laws relating to the operation of the Business, (B) is in compliance in all material respects with all Laws relating to the manufacturing, labeling, packaging, relabeling, repackaging, distribution, marketing, advertising, use/distribution, or sale of medical supplies, products and devices, and (C) is not subject to any sanction, Order or other adverse action by any Governmental Entity for the matters described above in clauses (A) and (B). This includes the laws, rules and regulations implemented, enforced or promulgated by the Food and Drug Administration, the Federal Trade Commission, the Centers for Medicare and Medicaid Services, the Office of Inspector General, OSHA or comparable laws, rules and regulations implemented, enforced or promulgated by any Governmental Entity where the Company’s medical supplies, products and devices are manufactured, labeled, packaged, relabeled, repackaged, distributed, marketed, advertised, used, distributed or sold. The Company has responded to and implemented all corrective measures in connection with any investigations conducted by the Food and Drug Administration. The Company is not and has not been in violation of any outstanding Order that has had, or would reasonably be expected to have, a Material Adverse Effect on the Company or its Business. Except in the ordinary course of the Business, consistent with past practice, the Company is not required to make, and has no reasonable expectation that it will be required to make, any expenditures to achieve or maintain compliance with any Law.

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(e)There is no third-party litigation related to the Company or its Business where the Company or, to the knowledge of the Company, an Employee of the Company, has been served a subpoena to testify.

Section 3.10Product Liability Claims.

Except as described in Section 3.10 of the Disclosure Schedule, there: (a) have been no product or service warranty claims made by customers of the Company which were not reimbursed or assumed by the Company’s suppliers; (b) have been no product recalls by the Company, and to the knowledge of the Company, there is no reasonable basis for any product recalls; and (c) are no product and/or service warranties outstanding or currently being offered by the Company to its customers (other than those of third parties for which the Company has no obligation or responsibility). Furthermore, the Company and any of its predecessors in interest have not been subject to any product liability claim relating to any of the products of the Company or operation of the Business and, to the knowledge of the Company, no such claim is threatened and no circumstance or condition exists that would reasonably be expected to give rise to such a claim.

Section 3.11Restrictions on Business Activities.

There is no agreement, judgment, injunction, Order or decree binding upon the Company which has, or would reasonably be expected to have, the effect of prohibiting or impairing any current business practice of the Company or the conduct of the Business as currently conducted by the Company.

Section 3.12Governmental Authorization.

The Company has obtained each Governmental Entity consent, license, permit, grant, and other authorization (i) pursuant to which the Company currently operates, manufacturers, labels, packages, relabels, repackages, distributes, markets, advertises, or distributes medical supplies and products or holds any interest in any of the Assets and Properties of the Company or (ii) that is required for the operation of the Business or the holding of any such interest ((i) and (ii) herein collectively called the “Company Authorizations”), and all of the Company Authorizations are in full force and effect, except where the failure to obtain or have any of the Company Authorizations would not reasonably be expected to have a Material Adverse Effect on the Business. Section 3.12 of the Disclosure Schedule sets forth all Company Authorizations currently in force and, except as set forth in Section 3.12 of the Disclosure Schedule, no consent or approval of any Governmental Entity or other third party is necessary in order to consummate the transactions contemplated hereby.

Section 3.13Intellectual Property.

(a)The Company owns all rights, title and interest in and to, or is licensed or otherwise possesses a valid and enforceable right to use, all the Company Intellectual Property. No Action or Proceeding or claim to the contrary or any challenge by any other Person to the rights, title or interests of the Company with respect to the foregoing is pending or, to the knowledge of the Company, threatened. The Company has not entered into any exclusive agreements related to the Company Intellectual Property.

(b)The Company owns all rights, title and interest in and to all of the Company’s Intellectual Property, free and clear of any Encumbrances.

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(c)Except as set forth in Section 3.13(c) of the Disclosure Schedule, the Company Intellectual Property constitutes all the Intellectual Property used or useful in, or necessary for, the conduct of the Business as it was conducted in the twelve (12) months preceding the date hereof, as a going concern, and as it currently is conducted, including the design, development, distribution, marketing, manufacture, use, import, license, obtaining regulatory approval for, and sale of the products, technology and services of the Company (including products, technology, methods or services of the Company currently under development).

(d)No Action or Proceeding or claim relating to the Company Intellectual Property, including (without limitation) any interference, reissue, reexamination, protest, or opposition proceeding before an administrative agency or office, is pending or, to the knowledge of the Company, threatened against the Company or any of its officers, directors, customers, licensees, licensors or Affiliates.

(e)Except as set forth in Section 3.13(e) of the Disclosure Schedule, to the knowledge of the Company, none of the Company’s Intellectual Property infringes or has been alleged to infringe any Intellectual Property, proprietary or contractual right of any other Person or has been challenged or threatened in any way.

(f)Each material license agreement relating to the Business is in effect, and the Company has not taken or failed to take any action and, to the knowledge of the Company, no other event has occurred that could subject any such license agreement to termination or otherwise cause any such license agreement not to be in effect in the foreseeable future. The Company has the right to use the Intellectual Property not owned by it without payment or obligation to a third party, in perpetuity, and, in those instances where a payment is required, the Company has paid all royalties due and performed all obligations under all such license agreements. The Company is not presently in default and has received no notice of default under any such license agreement.

(g)Except as set forth in Section 3.13(g) of the Disclosure Schedule, the Company has received no request for indemnification or contribution, or to defend or hold harmless, from any third party in respect of any claim that relates to the Business.

(h)Section 3.13(h) of the Disclosure Schedule lists (i) all patents and patent applications and all registered and unregistered trademarks, trade names and service marks, registered copyrights, registered domain names, and registered mask works, contained in the Company Intellectual Property, the jurisdictions in which each such Company Intellectual Property right has been issued or registered or in which any application for such issuance and registration has been filed, and the nature and extent of the ownership interest or other right held in each such Company Intellectual Property right; (ii) all licenses, sublicenses and other agreements as to which the Company is a party and pursuant to which any Person is authorized to use any Company Intellectual Property; (iii) all licenses, sublicenses and other agreements with respect to Intellectual Property of a third party which are incorporated in, are, or form a part ofany product of the Business; (iv) a description of all Assets and Properties that the Company considers trade secrets; (v) Intellectual Property not covered by any of the foregoing; and (vi) the unpatented ideas, improvements and trade secrets of the Company. Each such item of Company Intellectual Property listed (or required to be listed) in Section 3.13(h) of the Disclosure Schedule is owned exclusively by the Company (excluding Intellectual Property licensed to the Company under any License) and is free and clear of any Encumbrances. The Company (i) owns exclusively all trademarks, service marks, trade dress and trade names constituting Company Intellectual Property, and (ii) owns exclusively, and has good title to, each copyrightable work that is a product of the Company and each other work of authorship related to the Business.

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(i)Except as set forth in Section 3.13(i) of the Disclosure Schedule, to the knowledge of the Company, there is no unauthorized use, disclosure, infringement or misappropriation of any Company Intellectual Property, or any third-party Intellectual Property, by the Company or any third party, including (without limitation) any Employee or former Employee, consultant, or contractor of the Company. The Company has not entered into any agreement to defend, indemnify or hold harmless any other Person against any charge or claim of infringement or misappropriation of any Company Intellectual Property or third party Intellectual Property.

(j)All patents, registered trademarks, service marks, copyrights, URLs and domain names owned by the Company are valid and subsisting, and all necessary registration, maintenance, renewal fees, annuity fees and taxes in connection with such Company’s Intellectual Property have been paid. All necessary documents, affidavits and certificates in connection with such Company Intellectual Property have been filed with all relevant patent, copyright, trademark or other authorities in all applicable jurisdictions, for the purpose of maintaining such Company Intellectual Property. The Company (i) has not received notice that the Company has been named as a party in any opposition or in any Action or Proceeding which involves a claim of infringement of any Company Intellectual Property, or violation of any trade secret or other proprietary right, of any third party; (ii) has no knowledge that the manufacturing, marketing, licensing, sale or offer of licensing or sale of products of the Company infringes or misappropriates any patent, trademark, service mark, copyright, trade secret, mask work or other proprietary right of any third party; and (iii) has not brought any Action or Proceeding for infringement of any of the Company Intellectual Property or breach of any license or agreement involving any of the Company Intellectual Property against any third party.

(k)To the knowledge of the Company, the Company has not and does not, in connection with the operation of the Business (i) own any product, technology, service or publication, (ii) publish or distribute any material or (iii) engage in any conduct or speech (oral or written) that would constitute a defamatory or libelous statement or material that is false advertising or otherwise violate in any material respect any Law.

(l)The Company has secured valid and enforceable written agreements with all consultants, independent contractors, Employees, joint inventors, joint authors and other Persons who developed, created, or contributed to the development or creation of Company Intellectual Property and has either (i) obtained ownership of, and is the exclusive owner of, all such Company Intellectual Property by operation of Law or by valid assignment or (ii) obtained a valid and enforceable license under or to such Company Intellectual Property that the Company does not already own by operation of Law.

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(m)The Company has taken all commercially reasonable steps to protect and preserve the confidentiality and trade secret status of all information used in the Business which derives any value from being not generally known or readily ascertainable by others through legitimate means and is not otherwise protected by issued patents, trademarks or copyrights of the Company (“Confidential Information”), and have not permitted the Company’s rights in such Confidential Information to lapse or enter the public domain. To the knowledge of the Company, the Company has secured valid and enforceable written assignments from all consultants, Employees and other contributors who contributed to the creation or development of Confidential Information. All use, disclosure or appropriation by a third party of Confidential Information owned by the Company or, to the Company’s knowledge, has been pursuant to the terms of a written agreement between the Company and such third party protecting the confidentiality of and limiting the use of Confidential Information. All use, disclosure or appropriation by the Company of confidential and proprietary information known by the Company to be owned by third parties has been pursuant to the terms of a written agreement permitting such use, disclosure or appropriation between the Company, as the case may be, and the owner of such confidential and proprietary information, or is otherwise lawful. There are no actions that must be taken by the Company within one hundred and eighty (180) days following the date of this Agreement that, if not taken, would result in the loss of any Company Intellectual Property, including the payment of any registration, maintenance or renewal fees, annuity fees and Taxes or the filing of any responses, documents, applications, affidavits or certificates for the purposes of obtaining, maintaining, perfecting or preserving or renewing any such Company Intellectual Property. In each case in which the Company has acquired from any Person ownership of any Company Intellectual Property, the Company has obtained a valid and enforceable assignment sufficient to transfer all right, title and interest in, to and under such Company Intellectual Property (including the right to seek past and future damages with respect to such Company Intellectual Property) to the Company and, to the extent provided for by and reasonably required to protect the Company’s ownership rights in and to such Company Intellectual Property in accordance with applicable Laws, the Company has recorded each such assignment of Company Intellectual Property with the relevant Governmental Entity, including the U.S. Patent and Trademark Office, the U.S. Copyright Office, or comparable authorities in any relevant foreign jurisdiction, as the case may be.

(n)Neither the execution and delivery of this Agreement and the Ancillary Agreements nor the consummation of the transactions contemplated hereby and thereby will result in the Company granting any rights or licenses with respect to theCompany Intellectual Property to any Person.

(o)The Company has not, waived or released any rights, either actively or otherwise, that have had, or would reasonably be expected to have, a Material Adverse Effect relating to the Company Intellectual Property.

(p)The Company has not sent notices to third parties of potential infringement of the Company Intellectual Property.

(q)All patents and patent applications relating to products of the Company have properly identified all inventors, inventorship being determined according to conventional law regarding inventorship qualifications.

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(r)The Company has reviewed all issued patents and pending applications with its patent counsel and all inventors on such patents and pending applications are properly named, and any individuals who should not have been named have been removed by filing appropriate petitions with the U.S. Patent and Trademark Office.

Section 3.14Environmental Matters.

Except as disclosed in Section 3.14 of the Disclosure Schedule:

(a)Neither the Company nor, to the knowledge of the Company, any Person: (i) has used, generated, stored, treated, disposed, handled or placed any Hazardous Material on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases), except in compliance with all Environmental Laws; (ii) has transported or arranged for the transportation of any Hazardous Material currently or formerly on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied, or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases) to any location which to the knowledge of the Company is or may become the subject of any action, suit or proceeding relating to Hazardous Material or any Environmental Law; or (iii) has disposed of, transported, sold, distributed, or manufactured any product, substance or material of the Company which is or contains any Hazardous Material, except in compliance with all Environmental Laws;

(b)There has been no Release or threatened Release of Hazardous Material by the Company on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases), or, to the knowledge of the Company on adjacent parcels of real estate;

(c)There are no actual, or to the knowledge of the Company, potential conditions or circumstances, including, without limitation, actual or potential conditions or circumstances relating to Hazardous Material or Environmental Laws, on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases), which pose an unreasonable risk or threat to the environment, the health or safety of persons, or the market value of such properties;

(d)To the knowledge of the Company, there are: (i) no underground storage tanks, whether in use, active, closed or abandoned, that are on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases), and the Company has provided a detailed description of all above ground or underground storage tanks removed by or on behalf of the Company, in Section 3.14 of the Disclosure Schedule; and (ii) no Hazardous Materials which are present on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases) except those Hazardous Materials held in compliance with all applicable Environmental Laws and the presence of which would not trigger any reporting, clean-up or remedial obligation pursuant to any Environmental Laws;

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(e)The Company and all properties currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases) are and have been in compliance with all Environmental Laws, except where the failure to be in such compliance has not had and would not reasonably be expected to have a Material Adverse Effect;

(f)The Company currently holds any and all environmental approvals, permits, licenses, clearances and consents necessary for the conduct of the Business as such activities and business are currently being conducted;

(g)There are no Environmental Claims pending against the Company or, to the knowledge of the Company and the Sellers, threatened or potentially threatened against the Company, by any Person (including, without limitation, any Governmental Entity), relating to: (i) the Business, (ii) any of the Assets and Properties of the Company, (iii) any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases), or (iv) any current or former product of the Company that has been manufactured, sold, distributed, transported or disposed of. The Sellers have no knowledge of any fact or circumstance which is reasonably likely to involve the Company in any Environmental Claims or to impose upon the Company any Liability arising from or related to any Environmental Law;

(h)To the knowledge of the Company and the Sellers, there are no Encumbrances threatened or attached to any real estate property constituting Assets and Properties of the Company, which arise under or pursuant to any applicable Environmental Law, and no action of any Governmental Entity has been taken or, to the knowledge of the Company and the Sellers, is threatened, which could subject any such real estate property to such Encumbrances;

(i)The Company and the Sellers have not entered into any agreement to provide indemnification to any Person in a manner relating to Hazardous Material or any Environmental Laws, except for indemnity agreements in favor of lenders or ground lessors entered into in connection with any loan or credit agreements or ground leases, for property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases);

(j)The Company and the Sellers have provided to Purchaser prior to the execution of this Agreement, true and complete copies and results of any reports, studies, analyses, tests, investigation, monitoring or similar documentation within the knowledge, possession or control of the Sellers and the Company, which pertain to the presence or potential presence of Hazardous Materials on, in, at, under, around or affecting any property currently or formerly owned, operated, occupied or leased by the Company (including, without limitation, property owned or leased pursuant to the Real Property Leases); and

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(k)The Company is not subject to any material capital expenditures or material obligations (contractual or otherwise) arising under or relating to Environmental Laws.

Section 3.15Taxes.

(a)Except as set forth on Section 3.15(a) of the Disclosure Schedule, the Company has properly completed and timely filed all Tax Returns required to be filed by it and has paid all Taxes with respect to the Assets and Properties and the Business which are due through the date of this Agreement and will properly complete and timely file all Tax Returns and pay all Taxes with respect to the Assets and Properties and the Business for periods through the Closing Date. Except for Permitted Encumbrances, there is and at Closing there will be (i) no claim for any Tax that is an Encumbrance against any of the Assets and Properties of the Company or that is being asserted against the Company with respect to any of the Assets and Properties or the Business, (ii) no audit of any Tax Return relating to the Company or any of the Assets and Properties or the Business being conducted by any Taxing Authority, and (iii) no extension of any statute of limitations on the assessment of any Tax with respect to the Company or any of the Assets and Properties or the Business.

(b)Except as disclosed in Section 3.15(b) of the Disclosure Schedule, the Company has withheld all amounts required to be withheld by Law from payment made to any Person, whether that Person is regarded as an employee, independent contractor, or otherwise, in the conduct of the Business. The Company has timely paid to the appropriate Taxing Authority all amounts so withheld or otherwise due in connection with all such payments, and has timely filed all requisite returns with the Taxing Authorities with respect to such Taxes. The Company is not a party to any Tax proceeding with respect to the withholding of Taxes from any payments made in the conduct of the Business. To the knowledge of the Company, no investigation is being conducted against the Company by any Taxing Authority with respect to any of the above withholding, payment, filing or any other obligations in connection with the above.

Section 3.16Employee Benefit Plans.

(a)Section 3.19(d) of the Disclosure Schedule lists all Employees employed by the Company on the date hereof and, with respect to each such listed Employee, his/her position, salary, incentive compensation, and all major employment benefits estimated to be paid for the 2006 calendar year. No salary, incentive compensation, pension or other major employment benefits have been granted to any such Persons on terms and conditions which are more favorable than those indicated in Section 3.19(d) of the Disclosure Schedule.

(b)Except for compensation paid by the Company to Eddings, each payment made or authorized by the Company to its Employees, consultants or independent contractors who are engaged in the conduct of the Business was made in an arm’s length transaction. The Company has not entered into any Contract, undertaking or commitment with any such Employee, consultant or independent contractor which was not made in the ordinary course of business of the Company.

(c)There are no outstanding, pending or, to the knowledge of the Company, threatened: (i) claims, disputes or other controversies between the Company and any of its respective Employees; (ii) unfair labor practice charges or other complaints or grievances against the Company in connection with its operation of the Business; (iii) labor strikes, slowdowns, picketings, work stoppages or other labor disputes against the Company affecting the operation of the Business; or (iv) inspection or prosecution orders against the Business under any labor, employment or occupational health and safety legislation and there is no basis for any such action.

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(d)Section 3.16(d) of the Disclosure Schedule contains a true and complete list of each (i) Benefit Plan, and (ii) any employment, indemnification, consulting or severance agreement, under which any Employee or former Employee has any present or future right to benefits or under which the Company has any present or future liability with respect to Employees or former Employees (collectively, the “Company’s Plans”).

(e)The Company has made available to Purchaser a complete and current copy of the Company’s Plans documents or a written description of any unwritten plan; any trust agreement or insurance contract related to a plan; the most recent employee handbooks, policies and statements of practices and, for each plan subject to ERISA, the most recent summary plan description, the most recent IRS determination letter for each plan intended to be tax-qualified; and the three (3) most recent (i) Forms 5500 and attached schedules, and (ii) audited financial statements.

(f)The Company has no liability with respect to the Company’s Plans and no Encumbrance has arisen under ERISA or the Internal Revenue Code on the Assets and Properties or Business, and no condition or event has occurred or exists with respect to the Company’s Plans which could result in an Encumbrance on the Assets and Properties or Business.

(g)Neither the Company nor any entity that is a member of a controlled group with, under common control with, or otherwise required to be aggregated with, the Company pursuant to Sections 414(b), (c), (m) or (o) of the Code (an “ERISA Affiliate”) has communicated to present or former Employees of the Company, or formally adopted or authorized for present or former Employees of the Company, any plan not disclosed pursuant to Section 3.16(d) or any change in any existing plan.

(h)None of the Company’s Plans is subject to Section 412 of the Code or Title IV of ERISA, and neither the Company nor any ERISA Affiliate has any outstanding liability with respect to any such plan (contingent or otherwise).

(i)None of the Company’s Plans are a “multi-employer plan” within the meaning of Section 3(37)(A) of ERISA, and the Company does not have any outstanding liability with respect to any such plan (contingent or otherwise).

(j)The Company is in material compliance with Sections 601 through 608 of ERISA (“COBRA”).

(k)Except as set forth in Section 3.16(k) of the Disclosure Schedule, neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement will (either by themselves or in conjunction with any other event within the Company’s control): (i) entitle any Employee or other service provider of the Company currently or formerly engaged in the conduct of the Business to severance benefits or any other payment (except Purchase Price as a holder of Company Shares or Company Stock Derivatives) or(ii) accelerate the time of payment or vesting, or increase the amount, of compensation due any such Employee or service provider.

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(l)No person is, or will as a result of the transactions contemplated by this Agreement become, entitled to any payment or benefit from or with respect to the Company which constitutes a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986 as amended (the “Code”).

(m)The Company does not maintain a “nonqualified deferred compensation plan” within the meaning of Code Section 409A under which any amount is or may become subject to Code Section 409A(1).

Section 3.17Capitalization and Equity Ownership.

The authorized equity securities of the Company consist of 10,000,000 shares of common stock, par value $0.10 per share, of which 3,293,393 shares of common stock are issued and outstanding, constitute the Company Shares and are held by the Sellers in amounts listed in Schedule 1. Schedule 1 sets forth each holder of any equity interest in the Company, including Company Stock Derivatives and such holder’s corresponding ownership amount or right to receive such ownership amount or other payment and any material terms or conditions relating thereto. The Shareholders are the record and beneficial owners and holders of the Company Shares, free and clear of all Encumbrances, other than restrictions on transfer under applicable state and federal securities Laws and the denial of cumulative voting and preemptive rights to acquire Company Shares. The holders of the Company Stock Derivatives are the record and beneficial owners and holders of the Company Stock Derivatives, free and clear of all Encumbrances, other than restrictions on transfer under applicable state and federal securities Laws. No legend or other reference to any purported Encumbrance appears upon any certificate representing Company Shares, other than restrictions on transfer under applicable state and federal securities Laws and the denial of cumulative voting and preemptive rights to acquire Company Shares. No legend or other reference to any purported Encumbrance appears upon any document representing Company Stock Derivatives, other than restrictions on transfer under applicable state and federal securities Laws. All of the outstanding Company Shares and Company Stock Derivatives have been duly authorized and validly issued, and in the case of Company Shares are fully paid and non-assessable. Other than this Agreement and the Ancillary Agreements, there are no Contracts relating to the issuance, sale, or transfer of any Company Shares or Company Stock Derivatives. None of the outstanding Company Shares or Company Stock Derivatives were issued in violation of the Securities Act or any other Law or any preemptive right whether such right was granted by statute or contract. The Company does not own or have a Contract to acquire any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business. True and complete copies of all agreements relating to the ownership interest of the shareholders of the Company and relating to the interests of holders of Company Stock Derivatives have been provided to Purchaser, and such agreements have not been amended, modified or supplemented, and there are no agreements to amend, modify or supplement such agreements in any case from the form provided to Purchaser.

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Section 3.18Certain Agreements Affected by the Acquisition.

Neither the execution and delivery of this Agreement and the Ancillary Agreements nor the consummation of the transactions contemplated hereby or thereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any Employee, consultant or independent contractor of the Company engaged in the conduct of the Business, (ii) increase any benefits otherwise payable by the Company to any Employee, consultant or independent contractor engaged in the conduct of the Business, or (iii) result in the acceleration of the time of payment or vesting of any such benefits of any Employee, consultant or independent contractor engaged in the Business, except as provided in the Ancillary Agreements.

Section 3.19Employee Matters.

(a)Since January 1, 2001, (i) there has been no federal or state claim, including court claims, complaints or charges before a federal or state administration agency, based on sex, sexual or other harassment, age, disability, race, national origin, religion or other discrimination, other statutory claim, complaint or charge relating to employment, whether under federal, state or local law or ordinance, or any common law claim, including claims of wrongful termination, and/or tort claims involving Employees, by any Employee against the Company and there is no fact or circumstance known to the Company that could reasonably be expected to give rise to such a complaint, claim or charge or to result in any Action or Proceeding; and (ii) the Company has not received any notice of any claim that it has not complied in any respect with any Law relating to the employment of any of the Employees, including any provisions thereof relating to wages, hours, collective bargaining, the payment of social security and similar taxes, equal employment opportunity, employment discrimination, reasonable accommodations, family or medical leave, immigration, including IRCA, the WARN Act, employee safety, or that it is liable for any arrearage of wages or any Tax or penalty for failure to comply with any of the foregoing.

(b)The Company has paid all amounts due to be paid to each Employee other than with respect to any equity interest in the Company. The Company has not made any deductions from employees’ wages except as may be permitted by applicable law.

(c)There is no pending claim against the Company by any Employee under any workers’ compensation plan or policy or for long term disability under any long-term disability plan. There is no controversy pending or threatened between the Company and any Employee which has or could reasonably be expected to result in an Action or Proceeding. The Company is not a party to any collective bargaining agreement or other labor union contract nor does the Company know of any activities or proceedings of any labor union or any other Person(s) to organize any Employees. There has been no work stoppage, strike or other concerted action by any Employees.

(d)Each Employee engaged in the conduct of the Business is employed at will. To the knowledge of the Company, no Employee is in violation of any term of any employment contract, patent disclosure agreement, non-competition agreement, or any restrictive covenant to a former employer relating to the right of any such Employee to be employed by the Company, as the case may be, because of the nature of the Business conducted by the Company or to the use of trade secrets or proprietary information of others. No Employee has given notice to the Company, and to the Company’s knowledge, no Employee intends to terminate his or her employment with the Company. Section 3.19(d) of the Disclosure Schedule lists each Employee under the heading “Employees,” each consultant and independent contractor to the Company engaged in the conduct of the Business under the heading “Consultants and Independent Contractors,” and each temporary worker engaged in the conduct of the Business identified as “Temporary”, and each such Person’s applicable position, and annual compensation (including any bonus or other incentive compensation) as of the date hereof. As of the Closing Date, the Company will have a sufficient number of appropriately trained employees of the Company to continue to conduct the Business as presently conducted.

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(e)To the Company’s knowledge, no Employee, no consultant or independent contractor of the Company or temporary worker who is engaged in the conduct of the Business is obligated under any Contract or subject to any Order or Law that would interfere with the conduct of the Business as currently conducted. To the Company’s knowledge, neither the execution nor delivery of this Agreement, nor the carrying on of the Business as presently conducted nor any activity of such Employees or consultants in connection with the carrying on of the Business as presently conducted, will conflict with or result in a breach of the terms, conditions or provisions of, constitute a default under, or trigger a condition precedent to any rights under any Contract under which any of such Employees, consultants or independent contractors are now bound.

(f)The Company has completed I-9 forms for all Employees pursuant to the Immigration Reform and Control Act thereby confirming the work eligibility and identity of each Employee. All filings and documents required under the immigration laws with regard to any Employees have been filed, maintained and retained. Neither the Company, nor any Person acting on its behalf has misrepresented a material fact to gain an immigration benefit by, for or on behalf of an Employee.

(g)The Company has informed all Employees of their rights under the Family and Medical Leave Act (“FMLA”) or Laws relating to family and medical leave. The Company has provided all eligible Employees with FMLA leave and has returned all Employees taking FMLA leave to the same or a substantially similar job following any FMLA leave.

(h)Except as disclosed in Section 3.19(h) of the Disclosure Schedule, all Employees of the Company are employed at-will, such that either the Company or the Employee may terminate the employment relationship at any time for any reason.

Section 3.20Interested Party Transactions.

(a)Except as disclosed in Section 3.20(a) of the Disclosure Schedule, there are no Contracts, arrangements, understandings, transfers of assets or liabilities or other commitments or transactions, whether or not entered into in the ordinary course of business consistent with past practice, to or by which both the Company and any Affiliate of the Company are parties and that are currently pending or in effect and relate to or affect the Business or any of the Assets and Properties of the Company or affect any Liabilities of the Company.

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(b)Each Contract, arrangement, understanding, transfer of assets or liabilities or other commitments or transactions set forth or required to be set forth in Section 3.20(a) of the Disclosure Schedule was entered into, or incurred, as the case may be, on terms and conditions as favorable to the Company as would have been obtainable by the Company in a comparable arm’s-length transaction with a Person other than an Affiliate of the Company.

(c)No Seller, officer, director, partner, member or Employee of the Company (i) owns, directly or indirectly, on an individual or joint basis, any interest in (A) any Assets and Properties of the Company or (B) to the Company’s knowledge, any Person that is a supplier, customer or competitor of the Company in connection with the Business (other than through the ownership of one percent (1%) or less of any class of securities registered under the Exchange Act); (ii) to the Company’s knowledge, serves as an officer, director or employee of any Person that is a supplier, customer or competitor of the Business; or (iii) has received any loan from or is otherwise a debtor of, or made any loan to or is otherwise a creditor of, the Company.

Section 3.21Insurance.

Section 3.21 of the Disclosure Schedule contains a complete and correct list of all insurance policies and bonds maintained by the Company related to any of the Assets and Properties of the Company, the Liabilities of the Company or the Business. There is no claim pending under any such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds other than customary reservation of rights provisions. Each policy listed in Section 3.21 of the Disclosure Schedule is valid and binding and in full force and effect, all premiums due and payable under all such policies and bonds have been paid and the Company is otherwise in compliance with the terms of such policies and bonds. Neither the Company nor the Person to whom such policy has been issued has received any written notice of cancellation or termination of, or premium increase with respect to, any such policies.

Section 3.22Books and Records.

The Books and Records of the Company have been made available to Purchaser or its representatives, and such books and records are complete and correct in all material respects and have been maintained in accordance with sound business practices. Except as set forth in Section 3.22 of the Disclosure Schedule,the Company’s minute books contain a complete and accurate summary of all meetings of directors, shareholders and members, as applicable, or actions by written consent that relate to the Business or the Assets and Properties of the Company, through the date of this Agreement, and reflect all transactions involving the Business or Assets and Properties of the Company referred to in such minutes accurately in all material respects. Prior to the execution of this Agreement, the Company has delivered to Purchaser true copies of its Articles of Incorporation and Bylaws, both as amended through the date of this Agreement, and true copies of all actions by written consent that relate to the Business or the Assets and Properties through the date of this Agreement.

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Section 3.23Brokers’ and Finders’ Fees; Third Party Expenses.

Neither the Company nor any Seller has incurred, nor will incur, directly or indirectly, any liability for brokerage, finders’, or financial advisor’s fees or agents’ commissions or investment bankers’ fees or any similar charges, fees or commissions in connection with this Agreement or any transaction contemplated hereby.

Section 3.24Customers, Suppliers and Sales Representatives.

(a)Section 3.24(a)(i) of the Disclosure Schedule lists each customer of the Business that individually accounts for more than One Hundred Thousand Dollars ($100,000) of the consolidated gross revenues of the Business during the twelve (12) month period ended on December 31, 2005, and for more than Fifty Thousand Dollars ($50,000) of the consolidated gross revenues of the Business for the five months ended May 31, 2006, on the basis of revenues collected. Section 3.24(a)(ii) of the Disclosure Schedule lists the ten (10) largest suppliers of the Business on the basis of cost of goods or services purchased during the twelve (12) month period ended on December 31, 2005 and for the five months ended May 31, 2006. Section 3.24(a)(iii) of the Disclosure Schedule lists all sales representatives of the Company. To the Company’s knowledge, no such customer, supplier or sales representative is threatened with bankruptcy or insolvency.

(b)No (i) customer required to be disclosed in Section 3.24(a)(i) of the Disclosure Schedule, (ii) supplier required to be disclosed in Section 3.24(a)(ii) of the Disclosure Schedule or (iii) sales representative required to be disclosed in Section 3.24(a)(iii) of the Disclosure Schedule, has ceased or materially reduced, canceled or otherwise terminated, or made any written threat to the Company to cancel or otherwise terminate its relationship with the Company relating to the Business, or materially decreased its services or supplies to the Company, in the case of any such supplier or sales representative, or its usage of any service or purchase of any product of the Business, in the case of such customer or sales representative (as applicable), and, to the Company’s knowledge, no supplier, sales representative, or customer intends to cancel or otherwise terminate its relationship with the Company or to materially decrease its services or supplies to the Company or its usage of the services or products of the Company or to seek a reduction in the price (or a modification of any other material term) on which it purchases services or products of the Business or, in the case of sales representatives, sells products of the Company. Furthermore, no other contracts, agreements, or letters of understanding detailing a relationship or an arrangement exist between the Company and any customer, supplier or sales representative other than as disclosed in Section 3.24(a) of the Disclosure Schedule.

(c)Each (i) customer required to be disclosed in Section 3.24(a)(i) of the Disclosure Schedule, (ii) supplier required to be disclosed in Section 3.24(a)(ii) of the Disclosure Schedule or (iii) sales representative required to be disclosed in Section 3.24(a)(iii) of the Disclosure Schedule has transacted business with the Company and otherwise has acted substantially in accordance with the terms of its Business Contract consistent with the established course of conduct or, to the extent there is no Business Contract, its course of performance with the Company over the last twelve (12) months. Each such customer, supplier or sales representative has not sought in writing, or indicated in writing any intention to seek, a material reduction in the prices it currently pays for products and services of the Company or material increase in the price it currently charges the Company for supplier products and services or sales representatives services, as the case may be, or any other material modification of any payment term or other material term applicable to its purchases of products and services of the Company or sales to the Company or sales to the Company’s customers, as applicable.

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Section 3.25Contracts and Licenses.

(a)Section 3.25(a) of the Disclosure Schedule contains a true and complete list of each of the Business Contracts, Business Licenses, Real Property Leases and Personal Property Leases (true and complete copies or, if none, reasonably complete and accurate written descriptions) of which, together with all amendments andsupplements thereto and all waivers of any terms thereof, have been delivered to Purchaser prior to the execution of this Agreement (other than employee offer letters).

(b)Except for the Contracts and Licenses described in Section 3.25(b) of the Disclosure Schedule, the Company is not a party to or bound by any material Contract or License, including:

(i)any distributor, agency, advertising agency, marketing, manufacturer’s or representative sales Contract related to the Business;

(ii)any continuing Contract for the purchase of materials, supplies, equipment or services for use in connection with the Business which is not subject to cancellation by the Company, or which is subject to cancellation by the other party thereto on sixty (60) or fewer days’ notice;

(iii)any Business Contract or any Contract otherwise binding upon any of the Assets and Properties of the Company or relating to any of the Liabilities of the Company that had or would reasonably be expected to have, either individually or in the aggregate with any other similar Contracts, a Material Adverse Effect on the Business;

(iv)any Contract related to the conduct of the Business that expires or may be renewed at the option of any Person other than the Company so as to expire more than one year after the date of this Agreement;

(v)any Contract related to the conduct of the Business that (a) automatically terminates or provides for termination by any Person other than the Company upon consummation of the transactions contemplated by this Agreement or (b) contains any covenant or other provision which limits the Company’s ability to compete with any Person in any line of business comprising the Business or in any market, area, jurisdiction or territory;

(vi)any trust indenture, mortgage, promissory note, loan agreement or other Contract for the borrowing of money, any currency exchange, commodities or other hedging arrangement or any leasing transaction related to the conduct of the Business or binding on the Assets and Properties of the Company of the type required to be capitalized in accordance with GAAP;

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(vii)any Contract for capital expenditures related to the conduct of the Business in excess of Twenty Thousand Dollars ($20,000); or

(viii)any Contract of guarantee, support, indemnification, assumption or endorsement of, or any similar commitment with respect to, the obligations, or Liabilities of the Company secured by any of the Assets and Properties of the Company.

(c)All Contracts and Licenses set forth in Section 3.25(b) of the Disclosure Schedule, and all transactions in which the Company has engaged with a customer, supplier or sales representative of the Company, have utilized U.S. Dollars as the underlying currency.

Section 3.26No Breach of Business Contracts or Business Licenses.

All of the Business Contracts, Business Licenses, Real Property Leases and Personal Property Leases are in written form. The Company has performed in all material respects all of the obligations required to be performed by it and is entitled to all benefits under, and is not in default, and is not alleged in writing to be in default, in respect of any Business Contract, Business License, Real Property Lease and Personal Property Lease. Each of the Business Contracts, Business Licenses, Real Property Leases and Personal Property Leases is in full force and effect, and there exists no default or event of default or event, occurrence, condition or act, with respect to the Company or, to the Company’s knowledge, with respect to the other contracting party, which, with the giving of notice, the lapse of time or the happening of any other event or conditions, would become a default or event of default under any Business Contract, Business License, Real Property Lease or Personal Property Lease.

Section 3.27Third Party Consents.

Section 3.27 of the Disclosure Schedule lists (a) all Business Contracts, Business Licenses, Real Property Leases and Personal Property Leases that require a novation or consent in connection with the transactions contemplated hereby, prior to the Closing Date and (b) every Business Contract, Business License, Real Property Lease and Personal Property Lease which, if no novation occurs or if no consent is obtained, would adversely affect the Company’s ability to operate the Business in the same manner as the Business was operated prior to the Closing Date.

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Section 3.28Solvency.

The Company is, and at the time of the consummation of the transactions contemplated herein will be, solvent. For purposes of this Agreement, “solvent” shall mean that, on the date specified (a) the fair value of the Assets and Properties of the Company shall be greater than the total amount of its Liabilities, including those arising under any Law, Order, Contract, arrangement, commitment or undertaking; (b) the present fair salable value of the Company’s Assets and Properties is not less than the amount that will be required to pay the probable debts and liabilities of the Company on its debts as they become absolute and matured in accordance with their stated terms; (c) the Company does not intend to, and does not believe that the Company will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature; and (d) the Company is not engaged in, and is not about to be engaged in, a business or a transaction for which its property would constitute unreasonably small capital.

Section 3.29Securities Law Matters.

Each Seller receiving any portion of the Purchase Price consideration in Gross Shares:

(a)acknowledges that the certificates representing the Gross Shares delivered pursuant to this Agreement shall include the following legend, substantially in the form set forth below:

THE SHARES REPRESENTED BY THIS CERTIFICATE (THE “SHARES”) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THE SHARES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS. BY THE ACQUISITION HEREOF, THE HOLDER AGREES THAT SUCH HOLDER WILL GIVE EACH PERSON TO WHOM THE SHARES ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN THE CASE OF ANY TRANSFER OR OTHER DISPOSITION MADE OTHERWISE THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, THE HOLDER HEREOF SHALL BE REQUIRED TO PROVIDE TO THERAGENICS CORPORATION, PRIOR TO SUCH TRANSFER, AN OPINION OF COUNSEL SATISFACTORY TO THERAGENICS CORPORATION THAT SUCH TRANSFER IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE ACT AND IN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS.

(b)understands that the Gross Shares are being issued in reliance on an exemption from the registration requirements of the Securities Act for an offer and sale of securities that does not involve a public offering and has not been registered under the Securities Act or with any securities regulatory authority of any state of the United States or other jurisdiction and, therefore, that such Gross Shares (and all securities issued in exchange therefor or in substitution thereof) cannot be resold in the absence of such registration except pursuant to an exemption from, or in a transaction not subject to, such registration requirements. Each Seller agrees that he or she shall not transfer any of the Gross Shares except in a transaction registered under the Securities Act or unless the Seller shall have provided Purchaser prior written notice of the proposed transfer and delivered to Purchaser an opinion of counsel, which counsel and opinion shall be reasonably satisfactory to Purchaser, that such transfer is being effected in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

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(c)acknowledges that he or she is (i) an “accredited investor” within the meaning of Rule 501 of the Securities Act, (ii) able to evaluate the merits and risks of an investment in Purchaser, and (iii) able to bear the economic risks of such investment for an indefinite period of time. The information set forth in the Accredited Investor Questionnaire previously provided to Purchaser by each Seller acquiring a portion of the Gross Shares remains true and correct as of the date hereof.

(d)will acquire his or her portion of the Gross Shares for his or her own account and not with a view to any distribution (within the meaning of the Securities Act) thereof or with any present intention of offering or selling any of such shares in a transaction that would violate the Securities Act or the securities Laws of any state of the United States or any other applicable jurisdiction.

(e)is not in the business of buying and selling securities.

(f)acknowledges and agrees that any purported or attempted resale or other transfer of any portion of the Gross Shares which is made other than in compliance with the restrictions stated herein shall not be recognized by Purchaser, and that Purchaser may deliver a corresponding stop-transfer order to Purchaser’s transfer agent to that effect.

(g)has been furnished and has read the (i) Purchaser’s Form10-K for the year ended December 31, 2005, (ii) Purchaser’s Form 10-Q for the quarter ended March 31, 2006, (iii) the proxy statement for the annual meeting of Purchaser’s stockholders held May 9, 2006, and (iv) each other report or document filed by Purchaser under Sections 13(a), 14(a), 14(c) and 15(d) of the Securities Exchange Act of 1934, as amended, since the filing of Purchaser’s most recent Form 10-Q. Each such Seller has been furnished access to such information and documents as such Seller has requested, and has been afforded an opportunity to ask questions of and receive answers from officers of Purchaser concerning the terms and conditions of this Agreement and the business of the Purchaser.

(h)has been advised by Purchaser to consult his or her own financial, legal and tax advisors with respect to the economic, legal and tax consequences of this Agreement and an investment in the Gross Shares, and has not relied on Purchaser or any of its officers, directors, legal counsel, or financial or other professional advisors for advice or guidance with respect to such consequences. Without limiting the generality of the foregoing, each such Seller has relied solely on the information received from Purchaser and other publicly available information and has not relied on information provided by any other party, including without limitation Genesis Capital, l.l.c. and Powell Goldstein, LLP, for the accuracy or due diligence of any of the information provided by the Purchaser. Nothing contained in this Section 3.29(h) shall be construed to absolve Purchaser from any liability for fraud or intentional misrepresentation and no knowledge or information obtained by any Seller as a result of such due diligence shall be deemed to modify or in any way qualify any of the representations and warranties of Purchaser in this Agreement.

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Section 3.30Absence of Certain Business Practices.

None of the Company, and to the knowledge of the Company, any member of the governing board of the Company, officer, Employee, agent, or representative of the Company, or any other Person acting on behalf of the Company, acting alone or together, has (i) received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any vendor, governmental employee or other Person with whom the Company has done business directly or indirectly, or (ii) directly or indirectly, offered, given or agreed to offer or give any gift or similar benefit to any vendor, governmental employee or other Person who is or may be in a position to help or hinder the Business (or assist the Company in connection with any actual or proposed transaction) which, in the case of either clause (i) or clause (ii) above, would reasonably be expected to subject the Company to damage or penalty in any civil, criminal or governmental Action or Proceeding.

Section 3.31Disclosure of Certain Financial Relationships.

The Company has disclosed to Purchaser any and all financial relationships (whether or not memorialized in a writing) that the Company has had with a physician or an immediate family member of a physician. For purposes of this Section 3.31, the term “financial relationship” has the meaning set forth in 42 U.S.C. § 1395nn.

Section 3.32Real Property.

The Company does not own any real property and does not lease any real property other than pursuant to the Real Property Leases.

Section 3.33     Representations Complete.

None of the representations or warranties made by the Sellers or the Company herein, and none of the statements, representations or warranties contained in the Disclosure Schedule or in any certificate, list or other writing furnished to Purchaser by the Company and the Sellers pursuant to this Agreement or any of the Ancillary Agreements, when all such documents are read together in their entirety, contain any untrue statement of a material fact, or omit to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading. It is the explicit intent of each party hereto that the Sellers and the Company are making no representations or warranties except as set forth in this Agreement, the Ancillary Agreements, the Disclosure Schedule, and the certificates, documents and instruments delivered in connection herewith or therewith, and except further that nothing in this sentence shall be construed to absolve the Sellers or the Company from liability for fraud or intentional misrepresentation.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

As an inducement to the Sellers and the Company to enter into this Agreement and consummate the transactions contemplated herein, Purchaser hereby represents and warrants to the Sellers and the Company that the statements set forth in this Article IV are true and correct.

Section 4.01Organization, Standing and Power.

Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the state of its incorporation. Purchaser has the corporate power and authority to own, use, license, lease and operate its respective properties and to carry on its respective business as it is now being conducted and as currently proposed to be conducted and is duly qualified, licensed or admitted to do business and is in good standing in each jurisdiction in which the ownership, use, licensing, leasing or operation of its properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary.

Section 4.02Authority.

Purchaser has all requisite corporate power and authority to enter into, execute and deliver this Agreement and the other Ancillary Agreements to which it is a party, to consummate the transactions contemplated hereby and thereby, and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been, and the Ancillary Agreements to which Purchaser is a party will be, duly executed and delivered by Purchaser. This Agreement constitutes, and the other Ancillary Agreements to which Purchaser is a party, when executed and delivered as contemplated by this Agreement, will constitute, assuming the due authorization, execution and delivery by each of the other parties hereto and thereto, legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy and insolvency Laws, the rights of creditors generally, and general principles of equity.

Section 4.03No Conflict.

The execution and delivery by Purchaser of this Agreement and the Ancillary Agreements to which Purchaser is a party do not, and the consummation by Purchaser of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Certificate of Incorporation or Bylaws of Purchaser, (ii) conflict with or violate in any material respect any Law applicable to Purchaser or by which any of its Assets and Properties is bound, or (iii) result in any breach of or constitute a default (or an event which with the giving of notice or lapse of time or both could reasonably be expected to become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, any material note, bond, mortgage, indenture, Contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Purchaser is a party or by which any of its Assets and Properties is bound so as to impair the ability of Purchaser to carry out its obligations under, or to prevent or delay the completion of the transactions contemplated by, this Agreement.

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Section 4.04Financial Resources.

Purchaser has sufficient cash on hand to pay, and borrowing capacity under committed lines of credit to finance, the cash portion of the Purchase Price.

Section 4.05SEC Filings; Financial Statements.

(a)Purchaser has filed all reports required to be filed by it with the SEC under Section 13(a) of the Exchange Act since June 30, 2005 (collectively, together with any such reports Purchaser may file subsequent to the date hereof until the Closing Date, the “Purchaser SEC Reports”). Each Purchaser SEC Report (i) complied as to form in all material respects with the requirements of the Exchange Act as of its filing date, and (ii) did not at the time it was filed (or, if amended, supplemented or superseded, then as of the date of the last such amendment, supplement or superseding filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

(b)Except as is provided in the Purchaser SEC Reports, each of the consolidated financial statements (including, in each case, any notes thereto) contained in the Purchaser SEC Reports complied as to form in all material respects with applicable accounting requirements, was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and each presented fairly the consolidated financial position of Purchaser and the consolidated Subsidiaries of Purchaser as of the respective dates thereof and the consolidated results of operations and cash flows of Purchaser and the consolidated Subsidiaries of Purchaser for the respective periods indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements, to normal year-end adjustments).

Section 4.06Absence of Certain Changes or Events.

Except as disclosed in the Purchaser SEC Reports, since December 31, 2005, there has not occurred (i) any amendment or change to the Certificate of Incorporation or Bylaws of Purchaser, (ii) any damage to, or destruction or loss of any Assets or Properties of Purchaser that resulted in a Material Adverse Effect on Purchaser, or (iii) any other change, event or condition that has had a Material Adverse Effect on Purchaser.

Section 4.07Valid Issuance.

The Gross Shares to be issued pursuant to Article II, when issued in accordance with this Agreement, will be duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights or similar contractual rights granted by Purchaser. Upon receipt of his allocable portion of the Gross Shares, each Seller will acquire good and valid title to such shares of common stock, free and clear of any and all liens, claims, security interests, encumbrances, restrictions on voting or alienation or otherwise, or adverse interests, except as may be created by such Seller, or by applicable securities Laws.

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Section 4.08Litigation; Regulatory Compliance.

There is no private or governmental Action or Proceeding pending, or, to the knowledge of Purchaser, threatened by or against Purchaser, in which Purchaser is named as a party or is otherwise directly involved, relating to the Assets and Properties of Purchaser or the operation of the business of Purchaser, and no judgment, decree or Order applicable to Purchaser or any of the Assets and Properties of Purchaser, that could reasonably be expected to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement or the Ancillary Agreements or to have a Material Adverse Effect on the business of Purchaser.

Section 4.09Due Diligence.

Purchaser was provided the opportunity to conduct full and complete due diligence on the Company and the Business, including an opportunity for the Purchaser to make specified telephone calls, interview or meet with the key customers of the Company set forth on Purchaser Schedule 4.09, and as of the date hereof, Purchaser has performed such due diligence. To the knowledge of Purchaser, Purchaser has received all responsive information requested from the Company with respect to the Company and the Business. Nothing contained in this Section 4.09 shall be construed to absolve the Sellers’ and the Company’s liability for fraud or intentional misrepresentation and no knowledge or information obtained by Purchaser as a result of such due diligence shall be deemed to modify or in any way qualify any of the representations and warranties of Sellers and the Company in this Agreement.

Section 4.10Solvency.

The Purchaser is, and at the time of the consummation of the transactions contemplated herein after giving effect thereto, will be, solvent. For purposes of this Agreement, “solvent” shall mean that, on the date specified (a) the fair value of the Assets and Properties of the Purchaser shall be greater than the total amount of its Liabilities, including those arising under any Law, Order, Contract, arrangement, commitment or undertaking; (b) the present fair salable value of the Purchaser’s Assets and Properties is not less than the amount that will be required to pay the probable debts and liabilities of the Purchaser on its debts as they become absolute and matured in accordance with their stated terms; (c) the Purchaser does not intend to, and does not believe that the Purchaser will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature; and (d) the Purchaser is not engaged in, and is not about to be engaged in, a business or a transaction for which its property would constitute unreasonably small capital.

Section 4.11Required Registration.

Purchaser is eligible to register Registrable Securities on Form S-3 under the Securities Act.

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Section 4.12No Further Representations.

Notwithstanding anything to the contrary contained in this Agreement, it is the explicit intent of each party hereto that Purchaser is making no representation or warranty whatsoever, express or implied, except as set forth in this Article IV, the Ancillary Agreements, and the certificates, documents and instruments delivered in connection herewith or therewith, and except further that nothing in this sentence shall be construed to absolve Purchaser from liability for fraud or intentional misrepresentation.

ARTICLE V

COVENANTS AND AGREEMENTS

Section 5.01Public Announcements.

Purchaser, on the one hand and Eddings on the other hand, shall consult with each other before issuing any press release or otherwise making any public statements with respect to the Agreement or the transactions contemplated hereby and, until the first anniversary of the date hereof, will not issue any such press release or make any such public statement that is not approved by the other party, except as may be required by Law or applicable stock exchange rules, in which case the parties shall make reasonable efforts to consult with each other prior to the making of such public statement.

Section 5.02Assistance and Cooperation.

After the Closing Date, Purchaser shall become primarily responsible for (i) filing the Company’s audited financial statements for the year ended December 31, 2005 with the SEC; and (ii) preparing and filing all Tax Returns of the Company due after the Closing Date; provided, however, that Purchaser, the Sellers and the Company shall (and shall cause their respective Affiliates and Representatives to): (a) assist the other party in assembling financial information for the year ended December 31, 2005 and preparing any Tax Returns which such other party is responsible for preparing and filing related to the Company; (b) cooperate fully in preparing for any audits of, or disputes with any Taxing Authority regarding, any Tax Returns of the Company; (c) make available to the other and to any Taxing Authority as reasonably requested all information, records, and documents relating to financial information for the year ended December 31, 2005 and Taxes of the Company; (d) provide timely notice to the other in writing of any pending or threatened Tax audit or assessments of the Company for taxable periods for which the other may have liability under this Agreement; and (e) furnish the other with copies of all correspondence received from any Taxing Authority in connection with any Tax audit with respect to any taxable period for which the other may have liability under this Agreement. In the event of any Tax audit with respect to the Company, the Sellers and the Company shall not negotiate and settle with the applicable Taxing Authority without the written consent of Purchaser.

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Section 5.03Consent of Auditors.

The Sellers and the Company acknowledge that Purchaser will require the written consent of Hartman Leito & Bolt, LLP for inclusion in Form 8-K containing the Company’s December 31, 2005 audited financial statements, and may require the written consent of Hartman Leito & Bolt, LLP to the inclusion of the Company’s audited financial statements in any registration statements that Purchaser may file under the Securities Act, through the date of filing of Purchaser’s Annual Report on Form 10-K for the year ending December 31, 2007. Eddings and Angela Walters agree to use their reasonable efforts in assisting Purchaser in obtaining any required written consents from Hartman Leito & Bolt, LLP.

Section 5.04Employee Benefit Plans.

The Parties acknowledge and agree that the Purchaser may desire for the termination of certain of the Company’s employee benefit plans set forth on Section 3.16(d) of the Disclosure Schedule. In the event Purchaser desires to terminate any of such employee benefit plans (which indication shall be in writing), the Company and Eddings hereby agree to use all commercially reasonable efforts to effect such termination, provided that Purchaser pays all termination fees incurred as a result thereof.

Section 5.05Sellers’ Representative.

The Sellers, by their execution of this Agreement, hereby designate Eddings as their representative (the “Sellers’ Representative”). In case of Eddings’ death or disability, the Sellers shall designate an alternate Sellers’ Representative within 10 days of such event. The Sellers shall be bound by any and all actions taken by the Sellers’ Representative with respect to all matters arising under this Agreement, the Escrow Agreement and the Registration Rights Agreement, as well as in resolving all disputes or other issues between Purchaser and the Sellers arising hereunder or thereunder at or following Closing. The Sellers authorize the Sellers’ Representative to reimburse himself from distributions received by him from the Escrow Fund for all costs, expenses and payments incurred by him in his capacity as Sellers' Representative. The Sellers’ Representative shall be indemnified from and against any and all claims, demands, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees), arising from or related to any acts undertaken (and any omissions to act) in his capacity as Sellers’ Representative, except to the extent attributable to Sellers’ Representative’s gross negligence or willful misconduct. The Sellers, by their approval of the transactions contemplated in this Agreement, agree to bear the costs of such expense reimbursement and indemnification on a pro-rata basis in accordance with their pro rata fully-diluted equity interest in the Company immediately prior to the Closing. Purchaser shall be entitled to rely upon any communication or writings given or executed by the Sellers’ Representative. All notices to be sent to Sellers pursuant to this Agreement may be addressed to the Sellers’ Representative and any notice so sent in accordance with Section 8.01 shall be deemed notice to all of the Sellers.

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Section 5.06Approval of Payments.

Each Shareholder hereby approves the payment of a portion of the Purchase Price to the holders of the Company Stock Derivatives, each of whom is an Employee, in the amount for each such holder set forth on Schedule 1.

Section 5.07Approval of Schedule 1.

Each Seller hereby acknowledges and approves the accuracy of Schedule 1, as it pertains to each such Seller.

ARTICLE VI

CLOSING DELIVERABLES

Section 6.01Deliveries of the Purchaser.

As of the Closing Date, the Company and the Sellers shall have received from Purchaser the following documents:

(a)a certificate of existence and good standing from the state of incorporation as to the corporate status of Purchaser dated not earlier than ten (10) days prior to the Closing Date;

(b)a certificate executed by the Secretary or Assistant Secretary of the Purchaser as to a true and complete copy of the resolutions, adopted by the Board of Directors of Purchaser, authorizing the execution, delivery and performance of this Agreement and the Ancillary Agreements to which Purchaser is a party and all transactions contemplated hereby and thereby;

(c)a certificate from the Secretary or Assistant Secretary of Purchaser as to the incumbency and signatures of the officers who will execute documents at the Closing or who have executed this Agreement;

(d)a certified copy of the Certificate of Incorporation of Purchaser issued by Purchaser’s state of incorporation;

(e)a certificate from the Secretary or Assistant Secretary of Purchaser that such Certificate of Incorporation has not been amended since the date of issuance of such certified copy;

(f)a copy of an executed Escrow Agreement, which shall be in full force and effect;

(g)evidence of all corporate approvals of Purchaser required for the lawful consummation of the transactions contemplated by this Agreement and the Ancillary Agreements to which Purchaser is a party, which shall be in full force and effect;

(h)a legal opinion from Powell Goldstein LLP, outside legal counsel to Purchaser, in substantially the form of Exhibit C hereto; and

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(i)such other documents and instruments (if any) as the Company and Sellers may reasonably request in order to effectuate the transactions contemplated by this Agreement.

Section 6.02Deliveries of the Sellers and the Company.

As of the Closing Date, the Purchaser shall have received from the Sellers and the Company the following documents:

(a)a legal opinion from Hallett & Perrin, P.C., outside legal counsel to the Company, substantially in the form of Exhibit D hereto;

(b)evidence that all consents and waivers of third parties and novations and amendments to Contracts set forth in Section 3.27 of the Disclosure Schedule shall have been obtained;

(c)Certificates, duly endorsed (or accompanied by duly executed stock powers);

(d)Intellectual Property Assignment Agreements executed by the following Employees of the Company: Michael Vaughn, Samuel Austin, Eddings and David Catlin; substantially in the form of Exhibit E;

(e)the Eddings Employment and Non-Competition Agreement, the Angela Walters Employment and Non-Competition Agreement, the David Catlin Employment and Non-Competition Agreement, the David OzingaEmployment and Non-Competition Agreement, and the Lauren HartEmployment and Non-Competition Agreement, the Frank Gerome Employment and Non-Competition Agreement, signed and executed by each of Eddings, Angela Walters, David Catlin, David Ozinga, Lauren Hart and Frank Gerome, respectively, substantially in the form of ExhibitsF-1, F-2, F-3, F-4, F-5, and F-6 hereto, and each of the foregoing agreements in such form shall be in full force and effect;

(f)evidence of landlord consent to this transaction for the property located at 2220 Merritt Drive, Garland, Texas 75041 in substantially the form of Exhibit G hereto;

(g)a copy of the Escrow Agreement executed by the Sellers’ Representative on behalf of the Sellers, which agreement shall be in full force and effect;

(h)a certificate of existence and good standing from the state of incorporation as to the corporate status of the Company;

(i)a true and complete copy of the Articles of Incorporation of the Company and all amendments thereto certified by the Secretary thereof;

(j)a true and complete copy of the Bylaws of the Company certified by the Secretary thereof;

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(k)a copy of the financial statements previously issued by Hartman Leito & Bolt, LLP which have been prepared as of and for the year ended December 31, 2005 in accordance with Regulation S-X of the Securities Exchange Act of 1934. The Purchaser will be responsible for Hartman Leito & Bolt, LLP’s costs incurred by the Company and directly related to any required modifications related to the year ended December 31, 2005. Notwithstanding the foregoing, the Sellers will be responsible and hold the Purchaser harmless for any costs or expenses of Hartman Leito & Bolt, LLP related to the correction of any errors or omissions discovered in such financial statements which are identified in writing by Hartman Leito & Bolt, LLP;

(l)Evidence that the Company has paid all Indebtedness and satisfied all obligations owed to its creditors necessary to release all Encumbrances, and otherwise permit the Purchaser to obtain clear title to the Assets and Properties, or the Company shall have obtained payoff letters and releases from such creditors, in form and substance reasonably satisfactory to the Purchaser, which contain payoff and release information with respect to the satisfaction of such obligations and the release of all such Encumbrances, and provided such payoff letters to the Purchaser;

(m)copies or originals of all of the Real Property Leases, the Personal Property Leases, the Business Contracts and the Business Licenses, and the Company shall make available to Purchaser at the locations at which the Business is conducted, all of the other Books and Records of the Company, and deliver or make available to Purchaser at the locations at which the Business is conducted all other Assets and Properties of the Company;

(n)an executed agreement of each holder of Company Stock Derivatives relating to the cancellation, retirement and cessation of existence of all of the holder’s Company Stock Derivatives as contemplated by Section 2.02 hereto and releasing all claims, in the form of Exhibit H hereto;

(o)a copy of an executed Litigation Trust Agreement, in substantially the form of Exhibit I hereto; and

(p)such other documents and instruments (if any) as Purchaser may reasonably request in order to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

ARTICLE VII

SURVIVAL, INDEMNIFICATION AND ESCROW

Section 7.01Survival.

The covenants, obligations, representations and warranties of Purchaser, Sellers, and the Company contained in this Agreement, or in any document delivered pursuant to this Agreement, shall be deemed to be material and to have been relied upon by the parties hereto notwithstanding any investigation prior to the Closing and shall survive the date of Closing until the termination of the Escrow Agreement; and shall not be merged into any documents delivered in connection with the Closing; provided, however, that the covenants, obligations, representations and warranties of Purchaser, Sellers, and the Company regarding (a) power and authority to enter into this Agreement and the Ancillary Agreements (Sections 3.01, 3.02, 4.01 and 4.02), (b) title to assets and Company Shares (Section 3.05), (c) compliance with Laws (Section 3.09), (d) Taxes (Section 3.15), (e) Intellectual Property (Section 3.13), and (f) capitalization (Section 3.17), shall survive the date of Closing indefinitely.

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Section 7.02Escrow Fund.

(a)On or as soon as reasonably practicable after the Closing Date, in accordance with Section 2.04, the Escrow Amount shall be deposited with U.S. Bank National Association (or its successor in interest or other institution selected by Purchaser with the consent of the other parties to the Escrow Agreement, which consent shall not be unreasonably withheld), as escrow agent (the “Escrow Agent”). The Escrow Amount so deposited, together with interest and other income thereon, if any, shall constitute the “Escrow Fund” and shall be governed by the terms set forth in this Agreement and in the Escrow Agreement. The Escrow Fund shall be the sole source of funds available to compensate Purchaser pursuant to the indemnification obligations of the other parties hereto, including any indemnification claim made by Purchaser under this Article VII; provided, however,that the limitations contained this Section 7.02 shall not apply to recovery for inaccuracy in or breach of a representation, warranty or obligation contained in Sections 3.01, 3.02, 3.05(c), and 3.17 or a claim based on willful misconduct or fraud. Any claim for indemnification paid from the Escrow Fund for breach by a Seller of the representations and warranties contained in Sections 3.02, 3.03, 3.04, 3.05(c), 3.20(c), 3.23, 3.29, and 3.33 shall be charged first to the amounts contributed to the Escrow Fund on behalf of the breaching Seller, and thereafter to the remaining Escrow Fund. The Escrow Agreement shall have a term of two (2) years and shall provide for the release of one half (1/2) of the Escrow Fundon the first anniversary thereof, net of the estimated value of any asserted claims, which estimated value shall be withheld from the amount released, and the remaining one half (1/2) on the second anniversary thereof, also net of the estimated value of asserted claims, which estimated value shall be withheld from the amount released.

Section 7.03Indemnification.

(a)Indemnification by the Sellers from the Escrow Fund. From and after the Closing Date, subject to the limitations set forth in this Article VII and solely from the Escrow Fund, the Sellers promptly shall indemnify, defend and hold harmless (and upon demand shall reimburse) Purchaser and the directors, officers, shareholders, employees, Affiliates and agents of Purchaser, respectively (the “Indemnified Parties”), against any and all claims, actions, demands, suits, proceedings, assessments, judgments, losses, costs, and expenses (including Legal Expenses) and other damages (individually and collectively a “Loss”) resulting from (i) any breach by the Sellers or the Company of any of its covenants, obligations, representations or warranties or breach or untruth of any covenant, obligation, representation, warranty, fact or conclusion contained in this Agreement, any Ancillary Agreement or any document delivered pursuant to which it is a party, (ii) any action, claim or investigation relating to or arising out of the ownership, licensing, operation, action, inaction or conduct of the Business, or any of the Assets or Properties related to the Business, relating to all periods of time prior to Closing, and (iii) any and all Taxes imposed on or against the Company as a result of any failure to either (1) properly withhold any such Taxes on any payments made by the Company to any Person prior to the Closing Date or (2) report properly on any such payments on a Tax Return, including the reporting of such payments on an incorrect Tax Return. Any indemnification payment pursuant to the foregoing shall include interest at a rate equal to eight percent (8%) (the “Rate”) from the date the loss, costs, expenses or damages were incurred until the date of payment; provided, however, the Rate shall not be payable with respect to attorneys’ fees incurred until such date as the underlying claim is determined to be payable. Notwithstanding the foregoing, (i) if all individual Losses do not exceed One Hundred Twenty Five Thousand Dollars ($125,000) in the aggregate, they shall not be deemed to be Losses for which indemnification is required under this Section 7.03(a) and (ii) in no event shall the Sellers be responsible for any Losses in excess of, in the aggregate, the amount of the Escrow Fund at any given time, and Purchaser shall look solely to the Escrow Fund for reimbursement of Losses, the Sellers having no additional personal liability therefor; provided, however, that once the One Hundred Twenty Five Thousand Dollar ($125,000) threshold is exceeded, Losses shall include the first dollar of Loss. The limitations contained this Section 7.03(a) shall not apply to recovery for inaccuracy in or breach of a representation, warranty or obligation contained in Sections 3.01, 3.02, 3.05(c), and 3.17 or a claim based on willful misconduct or fraud.

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(b)Indemnification by Purchaser.

 (i)        Purchaser shall promptly indemnify, defend, and hold harmless (and upon demand shall reimburse) the Sellers against any Loss resulting from (i) any breach by Purchaser of any of its covenants, obligations, representations or warranties or breach or untruth of any covenant, obligation, representation, warranty, fact or conclusion contained in this Agreement or any certificate or document of Purchaser delivered pursuant to this Agreement, and (ii) any claim arising out of the conduct of the Business after Closing, except for failure to obtain consents, if any, for the assignment of the Contracts and except those directly or indirectly resulting solely from a breach by the Company or the Sellers of any representations or covenants of this Agreement. Any indemnification payment pursuant to the foregoing shall include interest at the Rate from the date the loss, costs, expenses or damages were incurred until the date of payment; provided, however, the Rate shall not be payable with respect to attorneys’ fees incurred until such date as the underlying claim is determined to be payable.

 (ii)       Notwithstanding anything in this Agreement to the contrary, the Company and each Seller agree that (i) to the extent the Company, any Seller or any of their respective Affiliates have incurred any losses or damages in connection with this Agreement, (A) the maximum aggregate liability of Purchaser and its respective Representatives and Affiliates for such losses or damages, if liable therefor, will be limited to an amount equal to Five Hundred Thousand Dollars ($500,000) in the aggregate, except liability for fraud or intentional misconduct and (B) in no event will the Company, any Seller or any of their respective Affiliates seek to recover any money damages in excess of such amount from Purchaser, or its respective Representatives and Affiliates in connection therewith. The limitation contained in this Section 7.03(b) shall not apply to recovery for inaccuracy in or breach of a representation or warranty contained in Section 4.07.

Section 7.04Procedure for Indemnification.

(a)Notice. Within thirty (30) days (or, if sooner, at least five (5) Business Days before an answer or response is due) after receipt of written or actual notice of any action or claim (the “Claim”) as to which it asserts a right to indemnification, the party seeking indemnification hereunder (the “Indemnitee”) shall give written notice thereof (the “Notice”) to the Person from whom indemnification is sought (the “Indemnitor”), provided that the failure of the Indemnitee to give the Indemnitor notice within the specified number of days shall not relieve the Indemnitor of any of its obligations hereunder, but may create a cause of action for breach for damages directly attributable to such delay. Indemnitor shall be liable to Indemnitee with respect to Losses only so long as Indemnitee gives Indemnitor written notice thereof prior to the expiration of the survival periods set forth in Section 7.01.

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(b)Third Party Claims.

(i)If any claim for indemnification by Indemnitee arises out of a Claim by a Person other than Indemnitee, the Indemnitor shall be entitled to assume the defense thereof, by written notice to the Indemnitee within fifteen (15) days after receipt of the Notice. Indemnitor shall thereupon take all steps or commence proceedings to defeat or compromise any such Claim, including retaining counsel reasonably satisfactory to the Indemnitee. Except as otherwise provided herein, all costs, fees and expenses with respect to any such Claim shall be borne by Indemnitor. If the Indemnitor assumes the defense of a Claim, it shall not settle such Claim unless such settlement includes as an unconditional term thereof a release by the claimant of the Indemnitee, reasonably satisfactory to the Indemnitee except that Indemnitor shall not, without the prior written consent of Indemnitee, directly or indirectly require Indemnitee to take or refrain from taking any action, or make any public statement, or consent to any settlement, which it reasonably considers to be against its interest. Indemnitee shall have the right to participate at its own expense, in such proceedings, but control of such proceedings shall remain exclusively with Indemnitor.

(ii)If the Indemnitor shall fail to notify the Indemnitee of its desire to assume the defense of any such claim or action within the prescribed period of time, then the Indemnitee may assume such defense in such manner as it may deem appropriate, and the Indemnitor shall be bound by any determination made or any settlement thereof effected by the Indemnitee. The Indemnitor shall be permitted, at its own expense, to join in such defense and to employ its own counsel but control of such proceedings shall remain exclusively with Indemnitee.

(iii)Indemnitor and Indemnitee agree to make available to each other, their counsel and other representatives, all information and documents reasonably available to them reasonably requested by the other which relate to any such claim or action, and to render to each other such reasonable assistance as may be reasonably requested in order to insure the proper and adequate defense of such claim or action, but any costs or expenses related thereto shall be borne by Indemnitor; and provided that any failure (after written notice with specificity and an opportunity to cure) shall not relieve the Indemnitor of any of its obligations hereunder but may create a cause of action for breach for damages directly attributable to such failure.

(c)Other Claims. In the event of any Claim other than those provided for in subsection (b) hereof, Indemnitee shall be entitled to indemnification as provided herein.

(d)Payment of Claims. Amounts payable by the Indemnitor to the Indemnitee under this Section 7.04 shall be payable by the Indemnitor (or the Escrow Agent under the Escrow Agreement) as incurred by the Indemnitee. In the event Indemnitor (or the Escrow Agent under the Escrow Agreement) fails to pay, timely and fully, any such amounts, Indemnitee may pay such Claim. In such event, the Indemnitee may recover from the Indemnitor, in addition to the amount so paid, (i) interest on the amount claimed at the Rate, and (ii) reasonable attorneys’ fees in connection with the enforcement of payment under this Section 7.04; provided, however, that in the event the Escrow Agent fails to pay any amounts, the Sellers shall not be liable for any of the foregoing interest or fees or for reimbursing Purchaser if it pays such Claim.

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(e)No Set-Off. The Indemnitee’s right to indemnification under this Section 7.04 shall not be subject to set-off for any claim by the Indemnitor against the Indemnitee.

Section 7.05Assignment by Purchaser.

No consent by any party hereto shall be required for any assignment or reassignment of the rights of Purchaser under this Article VII.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.01Notices.

All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon confirmation of delivery) by delivery in person, by telecopy or facsimile, by registered or certified mail (postage prepaid, return receipt requested) or by a nationally recognized courier service to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.01):

(a)	if to the Sellers generally, c/o Eddings: James R. Eddings 6416 Dykes Way Dallas, Texas 75230
	with a copy to:
	Hallett & Perrin, P.C. 2001 Bryan Street Dallas, Texas 75201 Attention: Randall Roberts Fax: (214) 922-4170

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(b)	if to Purchaser: Theragenics Corporation 5203 Bristol Industrial Way Buford, Georgia 30518 Attention: Frank Tarallo Fax: (770) 831-5295
	with a copy to:
	Powell Goldstein LLP Fourteenth Floor 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309-3488 Attention: Rick Miller Fax: (404) 572-6999
(c)	if to any individual Seller for a matter not germane to any other Seller, to such Seller at the address set forth below such Seller’s name on Schedule 1.

Section 8.02Rights and Remedies Cumulative.

The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies that either party may otherwise have at law or in equity.

Section 8.03Severability.

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner to the fullest extent permitted by applicable Law in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.

Section 8.04Assignment; Binding Effect; No Third Party Beneficiary.

Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties hereto. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Notwithstanding anything contained in this Agreement to the contrary, other than Article VII, nothing in this Agreement, expressed or implied, is intended or shall be construed to confer on any person other than the parties hereto or their respective successors and permitted assigns any rights or remedies under or by reason of this Agreement.

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Section 8.05Governing Law.

This Agreement shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of Georgia applicable to contracts made and to be performed entirely within that state, and no effect shall be given to any conflict-of-laws principles thereof directing the application of any Law other than the laws of the State of Georgia. Except as otherwise expressly set forth in this Agreement or the Ancillary Agreements, the United States District Court for the Northern District of Georgia and the state courts of the State of Georgia situated within the County of Fulton in the State of Georgia shall have exclusive jurisdiction over all disputes between the parties hereto arising out of or relating to this Agreement and the agreements, instruments and documents contemplated hereby. The parties hereby consent to and agree to submit to the exclusive jurisdiction of such courts. Each of the parties hereto waives, and agrees not to assert in any such dispute, to the fullest extent permitted by applicable Law, any claim that (i) such party is not personally subject to the jurisdiction of such courts, (ii) such party and such party’s property is immune from any legal process issued by such courts, or (iii) any litigation commenced in such courts is brought in an inconvenient forum.

Section 8.06Waiver of Jury Trial.

Each party hereto hereby irrevocably waives all right to trial by jury in any proceeding (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any transaction or agreement contemplated hereby or the actions of any party hereto in the negotiation, administration, performance or enforcement hereof.

Section 8.07Headings; Interpretation.

The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

Section 8.08Counterparts.

This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

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Section 8.09Mediation.

In the event of any dispute or claim arising out of or relating to the interpretation of this Agreement, or breach hereof (a “Dispute”), each of the parties hereto subject to the Dispute shall in good faith first negotiate a written resolution of the Dispute within a period not to exceed fifteen (15) days from the date of written notice of the Dispute. The negotiations shall be conducted by representatives of the subject parties who have authorization to resolve the Dispute. In the event that the subject parties cannot negotiate a written resolution to the Dispute during this 15-day negotiation period, and still prior to filing any claims in a court of law, the subject parties shall then submit the Dispute to non-binding mediation. The mediation may be initiated by the written request of any party subject to the Dispute, and shall commence within fifteen (15) days of the receipt of such notice and shall be conducted in Atlanta, Georgia, in accordance with the mediation procedures established by the mediator, unless otherwise agreed to by the subject parties. The subject parties will attempt to each agree upon the selection of a mediator. The mediation shall not exceed a period of thirty (30) days. Each of the subject parties shall bear his or her own expenses in connection with such mediation, and the fees and expenses of the mediator shall be shared equally between the subject parties. In the event that the subject parties do not resolve the Dispute as a result of such mediation or in the event that the Dispute is not resolved within sixty (60) days of the commencement of the Dispute, any party subject to the Dispute may seek to resolve the Dispute in a court of competent jurisdiction or seek other legal or equitable resolution in compliance with Sections 8.05 and 8.06. Notwithstanding the foregoing, any party hereto may at any time apply to any court of competent jurisdiction for injunctive relief in the event of an alleged breach of this Agreement or otherwise to prevent irreparable harm, provided the party complies with Sections 8.05 and 8.06.

Section 8.10Entire Agreement.

This Agreement, together with the Ancillary Agreements and the Confidentiality Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto. No addition or modification of any provision of this Agreement shall be binding upon any party hereto unless made in writing and signed by all parties hereto.

[Remainder of Page Intentionally Left Blank]

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

PURCHASER: THERAGENICS CORPORATION
By:	/s/ M. Christine Jacobs
	M. Christine Jacobs Chief Executive Officer

SELLERS’ REPRESENTATIVE:

/s/ James R. Eddings

James R. Eddings

THE COMPANY (for purposes of the representations and warranties contained in Article III, V, VI, VIII): GALT MEDICAL CORP.
By:	/s/ James R. Eddings
	James R. Eddings President

SELLERS:

[Signature Pages Following]

Form of Seller Signature Page
 

Address:

Attention: 

Fax: (___)

SPOUSAL CONSENT

CONSENT TO BE BOUND BY THE ABOVE AND FOREGOING AGREEMENT

The undersigned spouse of ___________________________, a party to the foregoing Agreement, acknowledges on his or her own behalf that:

I have read the foregoing Stock Purchase Agreement and I know its contents. I am aware that by its provisions my husband or wife, ___________________________, sells to Purchaser all of his or her right, title and interest in the Company Shares, including my community interest (if any) in it (the “Property”). I hereby consent to the sale, approve of the provisions of the Stock Purchase Agreement, and agree that such Property and my interest in it (if any) are subject to the provisions of the Stock Purchase Agreement and that I will take no action at any time to hinder operation of the Stock Purchase Agreement or such Property or my interest in it (if any).

Thus done and signed on the ____ day of _____________, 2006.

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of August 2, 2006 between Galt Medical Corp., a Texas corporation (the “Company”) and James Eddings (the “Employee”).

INTRODUCTION

The Company and the Employee desire to enter into an employment agreement embodying the terms and conditions of the Employee’s employment, effective as of, and contingent upon, the closing of the purchase and sale transaction contemplated by the Stock Purchase Agreement dated as of August 2, 2006 with respect to the Company by and among Theragenics Corporation and the shareholders of the Company and the other persons listed on Schedule 1 thereto (the “Closing”).

NOW, THEREFORE, the parties agree as follows, effective as of, and contingent upon, the Closing:

1. Definitions

(a)“Affiliate” means any person, firm, corporation, partnership, association or entity that, directly or indirectly or through one or more intermediaries, controls, is controlled by or is under common control with the Company. For these purposes, “control” shall mean the direct or indirect ownership of equity securities of the applicable entity possessing the right to more than fifty percent (50%) of the combined ordinary voting power of the outstanding voting equity securities of such entity.

(b)“Applicable Period” means the period of the Employee’s employment hereunder and for two (2)years after termination of employment.

(c)“Area” means the United States.

(d)“Board of Directors” means the Board of Directors of Theragenics Corporation.

(e)“Business of the Company” means any business that involves the manufacture, production, sale, marketing, promotion, exploitation, development and distribution of wound closure medical devices (including but not limited to sutures, cassettes, and glues), cardiac pacing cables, brachytherapy needles, brachytherapy seed spacers, brachytherapy sleeves, palladium-103, temporary or permanently implantable devices for use in the treatment of cancer, restenosis or macular degeneration, the manufacture, sale, and distribution of vascular access devices, or other medical products manufactured or sold by the Company or any of its Affiliates, but only to the extent that such devices and products are the same as or similar to a product manufactured, produced, sold, marketed, promoted, exploited, developed or distributed by the Company or any of its Affiliates at any time during the period of the Employee’s employment under this Agreement, or is in an active state of development by the Company or any of its Affiliates as evidenced by establishment of a design history file at any time during the period of the Employee’s employment under this Agreement.

(f)“Cause” means the occurrence of any of the following events: (i) willful and continued failure (other than such failure resulting from the Employee’s incapacity during physical or mental illness) by the Employee to substantially perform the Employee’s duties with the Company or an Affiliate; (ii) conduct by the Employee that amounts to willful misconduct or gross negligence; (iii) any act by the Employee of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or an Affiliate; (iv) commission by the Employee of a felony or any other crime involving dishonesty; (v) illegal use by the Employee of alcohol or drugs; or (vi) a material breach of the Agreement by the Employee.

(g)“Change in Control”means

(1)the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of Theragenics Corporation where such acquisition causes such person to own thirty-five percent (35%) or more of the combined voting power of the then outstanding voting securities of Theragenics Corporation entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); provided, however, that for purposes of this Subsection (1), the following acquisitions shall not be deemed to result in a Change of Control: (i) any acquisition directly from Theragenics Corporation, (ii) any acquisition by Theragenics Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Theragenics Corporation or any corporation controlled by Theragenics Corporation or (iv) any acquisition by any corporation pursuant to a transaction that complies with clauses (i), (ii) and (iii) of Subsection (3) below; and provided, further, that if any Person’s beneficial ownership of the Outstanding Voting Securities reaches or exceeds thirty-five percent (35%) as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of Theragenics Corporation, such subsequent acquisition shall be treated as an acquisition that causes such Person to own thirty-five percent (35%) or more of the Outstanding Voting Securities; or

(2)individuals who as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the shareholders of Theragenics Corporation, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or

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(3)the approval by the shareholders of Theragenics Corporation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Theragenics Corporation (“Business Combination”) or, if consummation of such Business Combination is subject, at the time of such approval by shareholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns Theragenics Corporation or all or substantially all of Theragenics Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (ii) no Person (excluding any employee benefit plan (or related trust) of Theragenics Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, thirty-five percent (35%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(4)approval by the shareholders of Theragenics Corporation of a complete liquidation or dissolution of Theragenics Corporation.

Notwithstanding the foregoing, no Change of Control shall be deemed to have occurred for purposes of this Agreement by reason of any actions or events in which the Employee participates in a capacity other than in the Employee’s capacity as an employee.

(h)“Closing” shall have the meaning set forth in the Introduction to this Agreement.

(i)“Company Invention” means any Invention which is conceived by the Employee alone or in a joint effort with others during the period of the Employee’s employment hereunder or prior thereto while an employee of or consultant to the Company or an Affiliate which (i) may be reasonably expected to be used in a product of the Company or an Affiliate, or a product similar to a product of the Company or an Affiliate, (ii) results from work that the Employee has been assigned as part of the Employee’s duties as an employee of or consultant to the Company or an Affiliate, (iii) is in an area of technology which is the same or substantially related to the areas of technology with which the Employee is involved in the performance of the Employee’s duties as an employee of the Company or an Affiliate, or (iv) is useful, or which the Employee reasonably expects may be useful, in any manufacturing or product design process of the Company or an Affiliate.

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(j)“Competing Business” means any person, firm, corporation, joint venture or other business entity which is engaged in the Business of the Company (or any aspect thereof) within the Area.

(k)“Confidential Information” means data and information relating to the business of the Company or an Affiliate which is or has been disclosed to the Employee or of which the Employee became aware as a consequence of or through the Employee’s relationship to the Company or an Affiliate and which has value to the Company or an Affiliate and is not generally known to its competitors. Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Company or an Affiliate (except where such public disclosure has been made by the Employee without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

(l)“Disability” means the inability of the Employee to perform any of the Employee’s duties hereunder due to a physical, mental, or emotional impairment, as determined by an independent qualified physician (who may be engaged by the Company), for a ninety (90) consecutive day period or for an aggregate of one hundred eighty (180) days during any three hundred sixty-five (365) day period.

(m)“Good Reason” means the occurrence of any of the following events which is not corrected by the Company within thirty (30) days after the Employee’s written notice to the Company of the same: (i) the nature of the Employee’s duties or the scope of the Employee’s responsibilities are materially modified, without the Employee’s consent, to duties or responsibilities that are consistent with a lower level position in the Company, (ii) the Employee is required to report, without the Employee’s consent, to a supervisor in a different and lower level position than is set forth in Section 2(a) in the Company, (iii) the Company changes the location of the Employee’s place of employment, without the Employee’s consent, to more than fifty (50) miles from its present location, (iv) a material breach of this Agreement by the Company; provided that with respect to any of the foregoing events, the Employee gives the Company notice of the event within thirty (30) days of the date of the event and provided the Employee resigns effective upon not less than fourteen (14) days, and not more than thirty (30) days notice to the Company after the expiration of the Company’s thirty (30) day cure period.

(n)“Invention” means any discovery, whether or not patentable, including, but not limited to, any useful process, method, formula, technique, machine, manufacture, composition of matter, algorithm or computer program, as well as improvements thereto, which is new or which the Employee has a reasonable basis to believe may be new.

(o)“Stock Purchase Agreement” means the stock purchase agreement referred to in the Introduction to this Agreement.

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(p)“Termination Date” means the date which corresponds to the first to occur of (i) the death or Disability of the Employee, (ii) the last day of the Term as provided in Section 4(a) below or (iii) the date set forth in a notice given pursuant to Section 4(b) below.

(q)“Trade Secrets” means information including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(r)“Work” means a copyrightable work of authorship, including without limitation, any technical descriptions for products, user’s guides, illustrations, advertising materials, computer programs (including the contents of read only memories) and any contribution to such materials.

2. Terms and Conditions of Employment.

(a)Employment. The Company hereby employs the Employee as its President and the Employee accepts such employment with the Company in such capacity and agrees to serve as President as long as the Employee is appointed to such position, subject to the terms and conditions hereof. The Employee shall report to the Chief Executive Officer of the Company and shall have such authority and responsibilities not inconsistent with the Employee’s position as shall reasonably be assigned to the Employee from time to time.

(b)Exclusivity. Throughout the Employee’s employment hereunder, the Employee shall devote substantially all the Employee’s time, energy and skill during regular business hours to the performance of the duties of the Employee’s employment (vacations and reasonable absences due to illness excepted), shall faithfully and industriously perform such duties, and shall diligently follow and implement all management policies and decisions of the Company.

(c)Adjustment and Consultancy.

(i)During the term of the Employee’s employment, Employee will meet once per calendar quarter with the Chief Executive Officer of the Theragenics Corporation (“CEO”) (or upon such other schedule as the Employee and the CEO may separately agree) to review and discuss the transition of the Employee’s day-to-day operational responsibilities from the Employee to other members of management of the Company (the “Transition”), using any quantitative or qualitative evidence they choose. Based on this review and discussion, the Employee and CEO agree to negotiate in good faith in determining the timing and extent to which the Employee can reduce his day to day operational responsibilities and reduce the number of hours per week devoted to his job responsibilities at the Company. If the Employee’s regularly-scheduled working hours are reduced below forty (40) hours per week, Employee and the Company agree that there shall be a proportional downward adjustment in the Employee’s base salary under Section 3(a), notwithstanding anything to the contrary contained therein. Not withstanding the foregoing, the Employee’s base salary cannot be reduced to less than 50% of his base salary at the time his regularly scheduled working hours are reduced below 40 hours per week.

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(ii)The parties specifically contemplate that, at some future date, the Transition will result in the Employee ceasing to be an employee of the Company by virtue of his diminishing day-to-day operational responsibilities. At such time as the Employee and the Company agree, they shall execute an independent contractor agreement in substantially the form attached as Exhibit A hereto, at which point the Employee shall cease to be an employee of the Company and shall become a consultant to the Company. The Company’s obligation to enter into the consulting agreement described in this Section 2(c)(ii) will be contingent upon the Employee executing and providing to the Company (and not revoking within the revocation period, if any, provided pursuant to the applicable release agreement) the form of release agreement attached hereto as Exhibit B, Exhibit C, or Exhibit D, whichever is determined by the Company to be appropriate. The Employee shall execute the release within such period as is provided for in the applicable release agreement, following the Company’s provision of such release agreement to the Employee in connection with the Employee’s termination of employment. Notwithstanding anything herein to the contrary, the termination of the Employee’s employment under this Section 2(c)(ii) and the execution of the agreement described in this Section 2(c)(ii) shall be deemed to be a termination of employment under Section 4(b)(i).

3. Compensation.

(a)Base Salary. In consideration for the Employee’s services hereunder, the Company shall pay to the Employee an annual base salary in the amount of $195,000. The Employee’s annual base salary shall be reviewed at least annually by the Company and the Company may approve an increase in (but may not decrease) the Employee’s annual base salary from time to time. The Company shall pay annual base salary in accordance with the normal payroll payment practices of the Company and subject to such deductions and withholdings as law or policies of the Company, from time to time in effect, require.

(b)Short-Term Incentive Plan. The Employee shall be entitled to participate in short-term incentive plans or programs applicable generally to similarly situated management employees of the Company, subject to the terms of the plan or program and the conditions established by the Company or Theragenics Corporation, and subject to the Company’s or Theragenics Corporation’s right to amend or terminate the plan or program at any time.

(c)Stock Based Compensation. Stock options or other stock-based compensation will be awarded to the Employee at the discretion of the Compensation Committee or the Board of Directors, and pursuant to the stock incentive plan, of the Company or Theragenics Corporation.

(d)Vacation. The Employee shall be entitled to vacation in accordance with Company policy, but in no event will the Employee be entitled to more than four (4) weeks of vacation per year. Vacation shall be taken at times mutually convenient to the Company and the Employee.

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(e)Memberships. The Company will reimburse the Employee for one professional membership which has a business related purpose and is approved by the Company.

(f)Licenses. The Company will reimburse the Employee for the costs associated with keeping in full force the professional licenses the Employee possessed prior to the date of this Agreement, provided that the licenses have a business-related purpose. This benefit shall include reimbursement for costs associated with up to two (2) trips per year to attend professional meetings necessary for maintaining the licenses and credentials.

(g)Financial, Tax and Estate Planning. The Company will reimburse the Employee for the cost of personal financial, tax, and estate planning and services in an amount not to exceed $1,000 per year.

(h)Annual Physical. The Company will pay the expenses associated with an annual physical examination for the Employee for each year during the Term.

(i)Life Insurance. During the term of this Agreement, the Company will provide the Employee with term life insurance coverage in accordance with its group term life insurance program. Subject to the availability of supplemental coverage under the terms of the Company’s program, the Company will reimburse the Employee for the Employee’s cost of premiums under its group term life insurance program for additional optional coverage up to the lesser of an additional $200,000 death benefit or an aggregate death benefit up to $450,000.

(j)Expenses. The Employee shall be entitled to be reimbursed in accordance with the policies of the Company, as adopted and amended from time to time, for all reasonable and necessary expenses incurred by the Employee in connection with the performance of the Employee’s duties of employment hereunder; provided, however, the Employee shall, as a condition of such reimbursement, submit verification of the nature and amount of such expenses in accordance with the reimbursement policies from time to time adopted by the Company.

(k)Benefits. In addition to the benefits payable to the Employee specifically described herein, the Employee shall be entitled to such benefits as generally may be made available to similarly situated management employees of the Company from time to time; provided, however, that nothing contained herein shall require the establishment or continuation of any particular plan or program.

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(a)Term. The term of this Agreement (the “Term”) shall commence as of the date of the Closing (the “Commencement Date”) and shall expire on the second (2^nd) anniversary of the Commencement Date, with automatic extensions for successive additional one-year terms, as provided herein. Ninety (90) days before the second (2^nd) anniversary of the Commencement Date and ninety (90) days before each subsequent anniversary of the Commencement Date, the Agreement is extended for an additional one year period unless either party gives prior notice of termination. In the event prior notice of termination is given, this Agreement shall terminate at the end of the remaining Term then in effect.

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(b)Termination. The Employee’s employment by the Company hereunder may only be terminated before expiration of the Term (i) by mutual agreement of the Employee and the Company; (ii) by the Employee with Good Reason; (iii) by the Employee without Good Reason upon not less than thirty (30) days written prior notice to the Company; (iv) by the Company without Cause; (v) by the Company for Cause; or (vi) by the Company or the Employee due to the Disability of the Employee. This Agreement shall also terminate immediately upon the death of the Employee. Notice of termination by either the Company or the Employee shall be given in writing and shall specify the basis for termination and the effective date of termination.

(c)Effect of Termination. Upon termination of the Employee’s employment hereunder, the Company and its Affiliates shall have no further obligation to the Employee or the Employee’s estate with respect to this Agreement, except for payment of salary and bonus amounts, if any, accrued pursuant to Section 3(a) or 3(b) hereof and unpaid at the Termination Date previously incurred and unreimbursed expenses in accordance with Sections 3(e), 3(f), 3(g) and 3(j) hereof, and termination payments, if any, set forth in Section 4(e) or 4(f) hereof, as applicable, subject to the provisions of Section 11 hereof. Neither Section 4(e) nor 4(f) applies to a Termination due to the Employee’s Disability or death. Nothing contained herein shall limit or impinge any other rights or remedies of the Company, its Affiliates or the Employee under any other agreement or plan to which the Employee is a party or of which the Employee is a beneficiary.

(d)Survival. The covenants of the Employee in Sections 5, 6, 7, 8 and 9 hereof shall survive the termination of the Employee’s employment hereunder and shall not be extinguished thereby.

(e)Certain Terminations not in Connection with a Change in Control. If either the Company terminates the Employee’s employment without Cause or the Employee terminates the Employee’s employment for Good Reason, and in either event a Change in Control has not occurred within the one year preceding the termination of employment and does not occur within ninety (90) days after the termination of employment, the Company shall be obligated to continue to pay the Employee the Employee’s annual base salary at the time of termination of employment for two (2) yearsafter termination of employment. Payments made under this Section 4(e) shall be paid as a salary continuation on the same schedule that applied while the Employee was employed, provided, however, that no payment hereunder shall be paid until sixty (60) days after the Employee’s termination of employment, at which time the Employee shall be paid a lump sum equal to the payments accumulated to such date, and thereafter payment of the unpaid balance shall continue on what would have otherwise been the original payment schedule for such unpaid balance. Notwithstanding the foregoing, if the payment of severance hereunder would fail to meet the requirements of Section 409A(a)(1) of the Internal Revenue Code because the Employee is a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code), no payment hereunder shall be made until six months after the Employee’s termination of employment, at which time the Employee shall be paid a lump sum equal to what would otherwise have been the first six months’ of such payments, and thereafter payment of the unpaid balance shall continue on what would otherwise have been the original payment schedule for such unpaid balance.

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(f)Certain Terminations in Connection with a Change in Control. If, within ninety (90) days preceding or within one year following a Change in Control, either the Company terminates the Employee’s employment without Cause or the Employee terminates the Employee’s employment for Good Reason, the Company shall be obligated to pay the Employee an amount equal to whichever of the following results in the Employee receiving a larger after-tax amount: (i) two (2) times the Employee’s annual base salary at the time of termination of employment or (ii) if less than two (2) times the Employee’s annual base salary at the time of termination of employment, then the largest amount that could be paid to the Employee, which will not result in a nondeductible “parachute payment” under Section 280G of the Internal Revenue Code. Payments made under this Section 4(f) shall be paid as a salary continuation on the same schedule that applied while the Employee was employed, provided, however, that no payment hereunder shall be paid until sixty (60) days after the Employee’s termination of employment, at which time the Employee shall be paid a lump sum equal to the payments accumulated to such date, and thereafter payment of the unpaid balance shall continue on what would have otherwise been the original payment schedule for such unpaid balance. Notwithstanding the foregoing, if the payment of severance hereunder would fail to meet the requirements of Section 409A(a)(1) of the Internal Revenue Code because the Employee is a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code), no payment hereunder shall be made until six months after the Employee’s termination of employment, at which time the Employee shall be paid a lump sum equal to what would otherwise have been the first six months’ of such payments, and thereafter payment of the unpaid balance shall continue on what would otherwise have been the original payment schedule for such unpaid balance.

(g)Notwithstanding any other provision hereof, the Company’s obligation to pay the severance benefit set forth in Section 4(e) or 4(f), if applicable, will be contingent upon the Employee executing and providing to the Company (and not revoking within the revocation period, if any, provided pursuant to the applicable release agreement) the form of release agreement attached hereto as Exhibit B, Exhibit C, or Exhibit D, whichever is determined by the Company to be appropriate. The Employee shall execute the release within such period as is provided for in the applicable release agreement, following the Company’s provision of such release agreement to the Employee in connection with the Employee’s termination of employment.

5. Agreement Not to Compete and Not to Solicit Customers.

(a)Agreement Not to Compete. The Employee agrees that commencing on the Commencement Date and continuing through the Applicable Period, the Employee will not (except on behalf of or with the prior written consent of the Company, which consent may be withheld in Company’s sole discretion), within the Area, either directly or indirectly, on the Employee’s own behalf, or in the service of or on behalf of others, provide services of a similar type or nature as the Employee performs for the Company to any Competing Business. For purposes of this Section 5, the Employee acknowledges and agrees that the Business of the Company is conducted in the Area.

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(b)Agreement Not to Solicit Customers. The Employee further agrees that beginning on the Commencement Date and throughout the Applicable Period within the Area, the Employee will not, directly or indirectly, on the Employee’s own behalf, or on behalf of any third party, entity or business, divert, solicit, or attempt to divert or solicit to a Competing Business for the purpose of providing products or services in competition with the Business of the Company to any individual or entity (a) who is a Customer at any time during the last twelve (12)-month period of the Employee’s employment with the Company, or who was within such period a Prospective Customer, and (b) in either case, with whom the Employee had material contact on the Company’s or an Affiliate’s behalf. For purposes of this Agreement, “material contact” exists between the Employee and each Customer or actively sought Prospective Customer (i) with whom the Employee dealt on behalf of Company or an Affiliate; (ii) whose dealings with Company or an Affiliate were coordinated or supervised by the Employee; or (iii) about whom the Employee obtained Confidential Information in the course of the Employee’s providing services to Company or an Affiliate. For purposes of this Agreement, “Customer” means any individual or entity from whom the Company or an Affiliate has solicited sales or provided targeted marketing or other services, and a “Prospective Customer” means any individual or entity the Company or an Affiliate has identified as a potential Customer as part of any long-term or strategic plan.

6. Agreement Not to Solicit Employees.

The Employee agrees that commencing on the Commencement Date and continuing through the Applicable Period, the Employee will not, either directly or indirectly, on the Employee’s own behalf or in the service of or on behalf of others, solicit, divert or hire, or attempt to solicit, divert or hire, to any Competing Business in the Area any person employed by the Company or an Affiliate with whom the Employee has had material contact during the Employee’s employment, whether or not such employee is a full-time employee or a temporary employee of the Company or an Affiliate and whether or not such employment is pursuant to written agreement and whether or not such employment is for a determined period or is at will.

7. Ownership and Protection of Proprietary Information.

(a)Confidentiality. All Confidential Information and Trade Secrets and all physical embodiments thereof received or developed by the Employee while employed by the Company are confidential to and are and will remain the sole and exclusive property of the Company. Except to the extent necessary to perform the duties assigned to the Employee by the Company, the Employee will hold such Confidential Information and Trade Secrets in trust and strictest confidence, and will not use, reproduce, distribute, disclose or otherwise disseminate the Confidential Information and Trade Secrets or any physical embodiments thereof and may in no event take any action causing or fail to take the action necessary in order to prevent, any Confidential Information and Trade Secrets disclosed to or developed by the Employee to lose its character or cease to qualify as Confidential Information or Trade Secrets.

(b)Return of Company Property. Upon request by the Company, and in any event upon termination of the employment of the Employee with the Company for any reason, as a prior condition to receiving any final compensation hereunder (including payments pursuant to Section 4(e) or 4(f) hereof), the Employee will promptly deliver to the Company all property belonging to the Company, including, without limitation, all Confidential Information and Trade Secrets (and all embodiments thereof) then in the Employee’s custody, control or possession.

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(c)Survival. The covenants of confidentiality set forth herein will apply on and after the date hereof to any Confidential Information and Trade Secrets disclosed by the Company or developed by the Employee prior to or after the date hereof. The covenants restricting the use of Confidential Information will continue and be maintained by the Employee for a period of two (2) years following the termination of this Agreement. The covenants restricting the use of Trade Secrets will continue and be maintained by the Employee following termination of this Agreement for so long as permitted by the Georgia Trade Secrets Act of 1990, O.C.G.A. § 10-1-760, et seq. and as amended hereafter.

8. Inventions.

(a)Company Inventions. The Employee agrees that all Company Inventions conceived or first reduced to practice by the Employee during the Term or prior to the Term while an employee of or consultant of the Company, and all patent rights and copyrights to such Company Inventions shall become and remain the property of the Company, and the Employee hereby irrevocably and unconditionally sells, transfers, conveys, assigns and delivers to Company (a) Employee’s entire worldwide right, title and interest in and to the Company Inventions, any continuations, continuations-in-part, divisionals, reissues, re-exams, or extensions thereof, together with the right to sue for and recover and retain damages with respect to past infringements of the Company Inventions by third parties, both foreign and domestic, the same to be held and enjoyed by Company for the Company’s own use and enjoyment, and for the use and enjoyment of its successors, assigns or other legal representatives as fully and entirely as the same would have been held and enjoyed by Employee if this assignment had not been made, (b) all applications for industrial property protection, including, without limitation, all applications for patents, utility models and designs which may heretofore have been filed or may hereafter be filed for said inventions in any country, together with the right to file such applications and the right to claim the same priority rights derived from said patent applications under the patent laws of the United States, the International Convention for the Protection of Industrial Property, or any international agreement or the domestic laws of the country in which any such application is filed, as may be applicable, and (c) all forms of industrial property protection, including, without limitation, patents, utility models and designs which may heretofore have been granted or may hereafter be granted for said inventions in any country and all extensions, renewals and reissues thereof If the Employee conceives an Invention during the Term of this Agreement for which there is a reasonable basis to believe that the conceived Invention is a Company Invention, the Employee shall promptly provide a written description of the conceived Invention to the Company adequate to allow evaluation thereof for a determination by the Company as to whether the Invention is a Company Invention. Notwithstanding the foregoing, the provisions of this Section 8(a) shall not apply to any Invention that the Employee may develop without using the Company’s equipment, supplies, facilities, or trade secret information, except for any Inventions that either (i) relate at the time of conception or reduction to practice of the Invention to the Business of the Company, or to actual or demonstrably anticipated research or development of the Company; or (ii) result from any work performed by the Employee for the Company. 

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(b)Prior Inventions. If prior to the Commencement Date the Employee conceived any Invention or acquired any ownership interest in any Invention which (i) is the property of the Employee, or of which the Employee is a joint owner with another person or entity, (ii) is not described in any issued patent as of the Commencement Date, and (iii) would be a Company Invention if such Invention were made during the Term of this Agreement, then (A) with respect to any such Invention described in Exhibit E attached hereto, the Employee hereby agrees that such written description (but no rights to the Invention) is and shall remain the property of the Company and (B) with respect to any such Invention not described in Exhibit E attached hereto, the Employee hereby grants to the Company a nonexclusive, paid up, royalty-free license to use and practice such Invention, including a license under all patents to issue in any country which pertain to such Invention. 

(c)Prior Patents. The Employee represents to the Company that the Employee owns or has rights to no patents or copyrights, individually or jointly with others, except those described in Exhibit E attached hereto.

(d)Patent Applications. The Employee agrees that should the Company elect to file an application for patent protection, either in the United States or in any foreign country, on a Company Invention of which the Employee was an inventor, the Employee for the Employee and the Employee’s successors, heirs and assigns, but at Company’s expense, shall execute all applications, amended specifications, deeds or other instruments, and to do all acts necessary or proper to secure the grant of Letters Patent in the United States and in all other countries to the Company, with specifications and claims in such form as shall be approved by the counsel of the Company and to vest and confirm in Company its successors and assigns, the legal title to all such patents. The Employee further agrees to cooperate with any attorneys or other persons designated by the Company by explaining the nature of any Company Invention for which the Company elects to file an application for patent protection, reviewing applications and other papers and providing any other cooperation reasonably required for orderly prosecution of such patent applications; provided, however, that if the Employee is required to provide such assistance after the Employee has left employment with the Company, the Company shall pay the Employee an hourly rate for the Employee’s assistance, which shall be determined by converting the Employee’s annual salary as in effect upon termination of the Employee’s employment with the Company into an hourly rate of pay. The Company shall be responsible for all expenses incurred for the preparation and prosecution of all patent applications on Company Inventions filed by the Company.  Employee agrees, and Employee further authorizes and grants a limited power of attorney to the Company or its designee, to execute on Employee’s behalf any documents necessary to evidence the assignments granted herein for the United States or any other country without further notice to Employee.

9. Copyrights.

(a)Ownership and Assignment. The Employee acknowledges and agrees that any Works created by the Employee in the course of the Employee’s employment during the Term or prior to the Term while an employee of or consultant to the Company, are subject to the “Work for Hire” provisions contained in Sections 101 and 201 of the United States Copyright Law, Title 17 of the United States Code, and that all right, title and interest to copyrights in all Works which have been or will be prepared by the Employee within the scope of the Employee’s employment hereunder shall be the property of the Company.  The Employee further acknowledges and agrees that, to the extent the provisions of Title 17 of the United States Code do not vest in the Company the copyrights to any Works, the Employee hereby assigns to the Company all right, title and interest to copyrights which the Employee may have in such Works, including the right to sue for and recover and retain damages with respect to past infringement.

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(b)Registration. The Employee agrees to disclose to the Company all Works referred to in the immediately preceding paragraph and execute and deliver all applications for registration, registrations, and other documents relating to the copyrights to the Works and provide such additional assistance, as the Company may deem necessary and desirable to secure the Company’s title to the copyrights in the Works.  The Company shall be responsible for all expenses incurred in connection with the registration of all such copyrights.

(c)Prior Works. The Employee claims no ownership rights in any Works, except as described in Exhibit E attached hereto.

10. Contracts or Other Agreements with Former Employer or Business.

The Employee hereby represents and warrants that the Employee is not subject to any employment agreement or similar document, except as previously disclosed and delivered to the Company, with a former employer or any business with which the Employee has been associated, which on its face prohibits the Employee during a period of time which extends through the Commencement Date from any of the following: (i) competing with, or in any way participating in a business which competes with the Employee’s former employer or business; (ii) soliciting personnel of such former employer or business to leave such former employer’s employment or to leave such business; or (iii) soliciting customers of such former employer or business on behalf of another business. The Employee hereby further represents and warrants that the Employee has not executed any agreement with any other party which, on its face, purports to require the Employee to assign any Work or any Invention created, conceived or first reduced to practice by the Employee during a period of time which extends through the Commencement Date except as previously disclosed in writing to the Company.

11. Remedies.

(a)The Employee agrees that the covenants and agreements contained in Sections 5, 6, 7, 8 and 9 hereof are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the interests and properties of the Company and the Business of the Company; that the Company is engaged in and throughout the Area in the Business of the Company; that the Employee has access to and knowledge of the Company’s business and financial plans; that irreparable loss and damage will be suffered by the Company should the Employee breach any of such covenants and agreements; that each of such covenants and agreements is separate, distinct and severable not only from the other of such covenants and agreements but also from the other and remaining provisions of this Agreement; that the unenforceability of any such covenant or agreement shall not affect the validity or enforceability of any other such covenant or agreements or any other provision or provisions of this Agreement; and that, in addition to other remedies available to it, the Company shall be entitled to specific performance of this Agreement and to both temporary and permanent injunctions to prevent a breach or contemplated breach by the Employee of any of such covenants or agreements.

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(b)In addition to any other rights the Company may have pursuant to this Agreement, if the Employee engages in or provides managerial, supervisory, sales, marketing, financial, management information, administrative or consulting services or assistance (collectively “Prohibited Services”) to, or owns (other than ownership of less than five percent (5%) of the outstanding voting securities of an entity whose voting securities are traded on a national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation System) a beneficial or legal interest in, any Competing Business within the Area during the Applicable Period, the Employee will forfeit any amounts owed to the Employee under Section 4(e) or 4(f), as applicable, which have not been paid to the Employee by the Company and the Employee shall immediately repay to the Company all amounts previously paid to the Employee pursuant to Section 4(e) or 4(f), as applicable.

12. No Set-Off.

The existence of any claim, demand, action or cause of action by the Employee against the Company, or any Affiliate, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of its rights hereunder. The existence of any claim, demand, action or cause of action by the Company or any Affiliate against the Employee, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employee of any of the Employee’s rights hereunder.

13. Notice.

All notices, requests, demands and other communications required hereunder shall be in writing and shall be deemed to have been duly given if delivered or if mailed, by United States certified or registered mail, prepaid to the party to which the same is directed at the following addresses (or at such other addresses as shall be given in writing by the parties to one another):

If to the Company:	Theragenics Corporation 5203 Bristol Industrial Way Buford, Georgia 30518 Attn:Chief Financial Officer
If to the Employee:	The most recent address that the Company has on file for the Employee.

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Notices delivered in person shall be effective on the date of delivery.  Notices delivered by mail as aforesaid shall be effective upon the third calendar day subsequent to the postmark date thereof.

14. Miscellaneous.

(a)Assignment.  Neither this Agreement nor any right of the parties hereunder may be assigned or delegated by any party hereto without the prior written consent of the other party.

(b)Waiver.  The waiver by the Company of any breach of this Agreement by the Employee shall not be effective unless in writing, and no such waiver shall constitute the waiver of the same or another breach on a subsequent occasion.

(c)Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be adjudicated through binding arbitration before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) in Atlanta, Georgia, with the Company bearing responsibility for the filing costs charged by the AAA for such arbitration. However the provisions of this Section will not prevent the Company from instituting an action in a court of law under this Agreement for specific performance of this Agreement or temporary or permanent injunctive relief as provided in Section 11 hereof. The parties hereto agree that the exclusive venue for any such lawsuit will be Gwinnett County, Georgia and the Employee consents to the exercise of personal jurisdiction by the Superior Court of Gwinnett County for the purposes of such lawsuit.

Any party who desires to submit a claim to arbitration in accordance with this Section shall file its demand for arbitration with AAA within thirty (30) days of the event or incident giving rise to the claim. A copy of said demand shall be served on the other party in accordance with the notice provisions in Section 13 of this Agreement. The parties agree that they shall attempt in good faith to select an arbitrator by mutual agreement within twenty (20) days after the responding party’s receipt of the demand for arbitration. If the parties do not agree on the selection of an arbitrator within that timeframe, the selection shall be made pursuant to the rules from the panels of arbitrators maintained by the AAA. If the Employee prevails in the dispute, the Company will pay and be financially responsible for all costs, expenses, reasonable attorneys’ fees and reasonable expenses of the arbitrator incurred by the Employee (or the Employee’s estate in the event of the Employee’s death) in connection with the dispute. Any award rendered by the arbitrator shall be accompanied by a written opinion providing the reasons for the award.

By initialing below, the Company and the Employee indicate their agreement to this Section 14(c).

By the Company: /s/MCJ (initials of Company representative)

By Employee: /s/JE (initials of Employee)

The arbitrator’s award shall be final and non-appealable. Nothing in this Subsection shall prevent the parties from settling any dispute or controversy by mutual agreement at any time.

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(d)Applicable Law. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Georgia.

(e)Entire Agreement.  This Agreement embodies the entire agreement of the parties hereto relating to the subject matter hereof and supersedes all oral agreements, and to the extent inconsistent with the terms hereof, all other written agreements.

(f)Amendment.  This Agreement may not be modified, amended, supplemented or terminated except by a written instrument executed by the parties hereto.

(g)Severability.  Each of the covenants and agreements hereinabove contained shall be deemed separate, severable and independent covenants, and in the event that any covenant shall be declared invalid by any court of competent jurisdiction, such invalidity shall not in any manner affect or impair the validity or enforceability of any other part or provision of such covenant or of any other covenant contained herein.

(h)Captions and Section Headings.  Except as set forth in Section 1 hereof, captions and section headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it.

IN WITNESS WHEREOF, the Company and the Employee have each executed and delivered this Agreement as of the date first shown above.

THE COMPANY: GALT MEDICAL CORP.
By:	/s/ M. Christine Jacobs
Title:	Chairman

ATTEST:
/s/ Francis J. Tarallo
Title:	Assistant Secretary [CORPORATE SEAL]

THE EMPLOYEE:

 

/s/ James Eddings

James Eddings

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EXHIBIT A

CONSULTING AGREEMENT

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INDEPENDENT CONTRACTOR CONSULTING AGREEMENT

THIS AGREEMENT (the “Agreement”) is made effective as of the _____ day of ____________________, 200_ (the “Effective Date”), between GALT MEDICAL CORPORATION, a Texas corporation (“the Company”), and JAMES EDDINGS (the “Contractor”).

INTRODUCTION

Pursuant to Section 2(c) of that certain employment agreement dated _________ between the Contractor and the Company, the Company and the Contractor now desire to enter into an agreement pursuant to which the Contractor will provide services to the Company from and after the Effective Date, upon the terms set forth below.

NOW, THEREFORE, the parties agree as follows:

1. Terms and Conditions of Engagement.

(a)Engagement. The Contractor shall perform such consulting and advisory services to the Company as the Company may require from time to time. Consultant shall report to the Board of Directors of the Company or to such person(s) as the Company shall designate.

(b)Contractor Relationship. The Contractor is an independent contractor to the Company, not an employee of the Company. The Contractor is not an agent of the Company and shall have no right to bind the Company. The Company will report all payments to be made hereunder on Forms 1099 as payments to the Contractor for independent contracting services, and will not report any payments on Form W-2 to the Contractor. The Contractor shall not be treated for any purposes as an employee of the Company and shall not be entitled to participate in any employee benefits plans or programs of the Company. This is a personal services contract for the services of the Contractor. The Contractor cannot satisfy the terms and conditions of this Agreement by making anyone else available to perform his services. The Contractor shall devote sufficient business time and efforts to the performance of services for the Company to complete the services within the time frames for completion established by the Company. The Contractor shall use his best efforts in such endeavors. The Contractor shall also perform his services with a level of care, skill, and diligence that a prudent professional acting in a like capacity and familiar with such matters would use.

2. Compensation.

(a)Fees.

(i)The Company shall pay to the Contractor a total of $100,000 for his services hereunder for each twelve (12)-month period of the Term, which shall be paid in substantially equal twice monthly installments in arrears. Notwithstanding the foregoing, if this Agreement is terminated by the Company without Cause, it shall pay the Contractor the remainder of the fee even though the Contractor’s services have not been fully performed.

(ii)Notwithstanding any other provision hereof, the Company’s obligation to pay the severance benefit set forth in Section 2(a)(i), if applicable, will be contingent upon the Contractor executing and providing to the Company (and not revoking within the revocation period, if any, provided pursuant to the applicable release agreement) the form of release agreement attached hereto as Exhibit 1, Exhibit 2, or Exhibit 3, whichever is determined by the Company to be appropriate. The Contractor shall execute the release within such period as is provided for in the applicable release agreement, following the Company’s provision of such release agreement to the Contractor in connection with the termination of the Contractor’s engagement.

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(b)Expenses. The Contractor shall be entitled to be reimbursed in accordance with the policies of the Company, as adopted and amended from time to time, for all reasonable and necessary expenses and business travel incurred by the Contractor in connection with the performance of services hereunder; provided, however, the Contractor shall, as a condition of such reimbursement, submit verification of the nature and amount of such expenses in accordance with the reimbursement policies from time to time adopted by the Company.

3. Term, Termination and Termination Payments.

(a)Term. The Term of this Agreement shall commence as of the Effective Date and will run until the day before the first anniversary of the Effective Date (the “Initial Term”). At the end of the Initial Term and at the end of any Renewal Term (as hereinafter defined), this Agreement shall automatically be extended for a successive twelve-month period (the “Renewal Term”) unless either party gives written notice to the other of its intent not to extend this Agreement with such written notice to be given not less than ninety (90) days prior to the end of the Initial Term or Renewal Term, as applicable. In the event such notice of non-extension is properly given, this Agreement shall terminate at the end of the remaining Term then in effect. Throughout this Agreement, “Term” shall refer to the Initial Term or any Renewal Term, as applicable.

(b)Termination. This Agreement and the engagement of the Contractor by the Company hereunder shall only be terminated: (i) by expiration of the Term set forth in Section 3(a) hereof; (ii) by mutual agreement of the parties; (iii) by the Company without Cause; (iv) by the Company for Cause; or (v) during any Renewal Term, but not the Initial Term, by the Contractor for any reason upon not less than thirty (30) days written prior notice to the Company. Notice of termination by any party shall be given prior to termination in writing and shall specify the basis for termination and the effective date of termination. Except as provided in Section 2(a) hereof, the Contractor shall not be entitled to any payments after termination of this Agreement.

(c)Survival. The covenants of the Contractor in Sections 4, 5, 6, 7, 8 and 10 hereof shall survive the termination of this Agreement and shall not be extinguished thereby.

4. Agreement Not to Compete and Not to Solicit Customers.

(a)Agreement Not to Compete. The Contractor agrees that commencing on the Effective Date and continuing through the twelve (12)-month period following the expiration of the Term (collectively, the “Non-Competition Term”), the Contractor will not (except on behalf of or with the prior written consent of the Company, which consent may be withheld in Company’s sole discretion), within the Area, either directly or indirectly, on the Contractor’s own behalf, or in the service of or on behalf of others, provide services of a similar type or nature as the Contractor performs for the Company to any Competing Business. For purposes of this Section 4, the Contractor acknowledges and agrees that the Business of the Company is conducted in the Area.

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(b)Agreement Not to Solicit Customers. The Contractor further agrees that during the Non-Competition Term within the Area, the Contractor will not, directly or indirectly, on the Contractor’s own behalf, or on behalf of any third party, entity or business, divert, solicit, or attempt to divert or solicit to a Competing Business for the purpose of providing products or services in competition with the Business of the Company to any individual or entity (a) who is a Customer at any time during the last twelve (12)-month period of the Contractor’s engagement with the Company, or who was within such period a Prospective Customer, and (b) in either case, with whom the Contractor had material contact on the Company’s or an Affiliate’s behalf. For purposes of this Agreement, “material contact” exists between the Contractor and each Customer or actively sought Prospective Customer (i) with whom the Contractor dealt on behalf of Company or an Affiliate; (ii) whose dealings with Company or an Affiliate were coordinated or supervised by the Contractor; or (iii) about whom the Contractor obtained Confidential Information in the course of the Contractor’s providing services to Company or an Affiliate. For purposes of this Agreement, “Customer” means any individual or entity from whom the Company or an Affiliate has solicited sales or provided targeted marketing or other services, and a “Prospective Customer” means any individual or entity the Company or an Affiliate has identified as a potential Customer as part of any long-term or strategic plan.

5. Agreement Not to Solicit Employees.

The Contractor agrees that during the Non-Competition Term, the Contractor will not, either directly or indirectly, on the Contractor’s own behalf or in the service of or on behalf of others, solicit, divert or hire, or attempt to solicit, divert or hire, to any Competing Business in the Area any person employed by the Company or an Affiliate with whom the Contractor has had material contact during the Contractor’s engagement, whether or not such employee is a full-time employee or a temporary employee of the Company or an Affiliate and whether or not such employment is pursuant to written agreement and whether or not such employment is for a determined period or is at will.

6. Ownership and Protection of Proprietary Information.

(a)Confidentiality. All Confidential Information and Trade Secrets and all physical embodiments thereof received or developed by the Contractor during the Term or prior to the Term while an employee of or consultant to the Company are confidential to and are and will remain the sole and exclusive property of the Company. Except to the extent necessary to perform the duties assigned to the Contractor by the Company, the Contractor will hold such Confidential Information and Trade Secrets in trust and strictest confidence, and will not use, reproduce, distribute, disclose or otherwise disseminate the Confidential Information and Trade Secrets or any physical embodiments thereof and may in no event take any action causing or fail to take the action necessary in order to prevent, any Confidential Information and Trade Secrets disclosed to or developed by the Contractor to lose its character or cease to qualify as Confidential Information or Trade Secrets.

(b)Return of Company Property. Upon request by the Company, and in any event upon termination of the engagement of the Contractor with the Company for any reason, as a prior condition to receiving any final compensation hereunder, the Contractor will promptly deliver to the Company all property belonging to the Company, including, without limitation, all Confidential Information and Trade Secrets (and all embodiments thereof) then in the Contractor’s custody, control or possession.

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(c)Survival. The covenants of confidentiality set forth herein will apply on and after the date hereof to any Confidential Information and Trade Secrets disclosed by the Company or developed by the Contractor prior to or after the date hereof. The covenants restricting the use of Confidential Information will continue and be maintained by the Contractor for a period of two (2) years following the termination of this Agreement. The covenants restricting the use of Trade Secrets will continue and be maintained by the Contractor following termination of this Agreement for so long as permitted by the Georgia Trade Secrets Act of 1990, O.C.G.A. § 10-1-760, et seq. and as amended hereafter.

7. Inventions.

(a)Company Inventions. The Contractor agrees that all Company Inventions conceived or first reduced to practice by the Contractor during the Term or prior to the Term while an employee of or consultant to the Company, and all patent rights and copyrights to such Company Inventions shall become and remain the property of the Company, and the Contractor hereby irrevocably and unconditionally sells, transfers, conveys, assigns and delivers to Company (i) Contractor’s entire worldwide right, title and interest in and to the Company Inventions, any continuations, continuations-in-part, divisionals, reissues, re-exams, or extensions thereof, together with the right to sue for and recover and retain damages with respect to past infringements of the Company Inventions by third parties, both foreign and domestic, the same to be held and enjoyed by Company for the Company’s own use and enjoyment, and for the use and enjoyment of its successors, assigns or other legal representatives as fully and entirely as the same would have been held and enjoyed by Contractor if this assignment had not been made, (ii) all applications for industrial property protection, including, without limitation, all applications for patents, utility models and designs which may heretofore have been filed or may hereafter be filed for said inventions in any country, together with the right to file such applications and the right to claim the same priority rights derived from said patent applications under the patent laws of the United States, the International Convention for the Protection of Industrial Property, or any international agreement or the domestic laws of the country in which any such application is filed, as may be applicable, and (iii) all forms of industrial property protection, including, without limitation, patents, utility models and designs which may heretofore have been granted or may hereafter be granted for said inventions in any country and all extensions, renewals and reissues thereof. If the Contractor conceives an Invention during the Term of this Agreement for which there is a reasonable basis to believe that the conceived Invention is a Company Invention, the Contractor shall promptly provide a written description of the conceived Invention to the Company adequate to allow evaluation thereof for a determination by the Company as to whether the Invention is a Company Invention. Notwithstanding the foregoing, the provisions of this Section 7(a) shall not apply to any Invention that the Contractor may develop without using the Company’s equipment, supplies, facilities, or trade secret information, except for any Inventions that either (x) relate at the time of conception or reduction to practice of the Invention to the Business of the Company, or to actual or demonstrably anticipated research or development of the Company; or (xi) result from any work performed by the Contractor for the Company.

(b)Prior Inventions. If prior to the Effective Date the Contractor conceived any Invention or acquired any ownership interest in any Invention which (i) is the property of the Contractor, or of which the Contractor is a joint owner with another person or entity, (ii) is not described in any issued patent as of the Effective Date, and (iii) would be a Company Invention if such Invention were made during the Term of this Agreement, then (A) with respect to any such Invention described in Exhibit 4 attached hereto, the Contractor hereby agrees that such written description (but no rights to the Invention) is and shall remain the property of the Company and (B) with respect to any such Invention not described in Exhibit 4 attached hereto, the Contractor hereby grants to the Company a nonexclusive, paid up, royalty-free license to use and practice such Invention, including a license under all patents to issue in any country which pertain to such Invention.

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(c)Prior Patents. The Contractor represents to the Company that the Contractor owns or has rights to no patents or copyrights, individually or jointly with others, except those described in Exhibit 4 attached hereto.

(d)Patent Applications. The Contractor agrees that should the Company elect to file an application for patent protection, either in the United States or in any foreign country, on a Company Invention of which the Contractor was an inventor, the Contractor for the Contractor and the Contractor’s successors, heirs and assigns, but at Company’s expense, shall execute all applications, amended specifications, deeds or other instruments, and to do all acts necessary or proper to secure the grant of Letters Patent in the United States and in all other countries to the Company, with specifications and claims in such form as shall be approved by the counsel of the Company and to vest and confirm in Company its successors and assigns, the legal title to all such patents. The Contractor further agrees to cooperate with any attorneys or other persons designated by the Company by explaining the nature of any Company Invention for which the Company elects to file an application for patent protection, reviewing applications and other papers and providing any other cooperation reasonably required for orderly prosecution of such patent applications; provided, however, that if the Contractor is required to provide such assistance after the Contractor’s engagement with the Company has ended for any reason whatsoever, the Company shall pay the Contractor an hourly rate for the Contractor’s assistance, which shall be determined by converting the Contractor’s annual fees as in effect upon termination of the Contractor’s engagement with the Company into an hourly rate of pay. The Company shall be responsible for all expenses incurred for the preparation and prosecution of all patent applications on Company Inventions filed by the Company. Contractor agrees, and Contractor further authorizes and grants a limited power of attorney to the Company or its designee, to execute on Contractor’s behalf any documents necessary to evidence the assignments granted herein for the United States or any other country without further notice to Contractor.

8. Copyrights.

(a)Ownership and Assignment. The Contractor acknowledges and agrees that any Works created by the Contractor in the course of the Contractor’s engagement during the Term or prior to the Term while an employee of or consultant to the Company, are subject to the “Work for Hire” provisions contained in Sections 101 and 201 of the United States Copyright Law, Title 17 of the United States Code, and that all right, title and interest to copyrights in all Works which have been or will be prepared by the Contractor within the scope of the Contractor’s engagement hereunder shall be the property of the Company. The Contractor further acknowledges and agrees that, to the extent the provisions of Title 17 of the United States Code do not vest in the Company the copyrights to any Works, the Contractor hereby assigns to the Company all right, title and interest to copyrights which the Contractor may have in such Works, including the right to sue for and recover and retain damages with respect to past infringement.

(b)Registration. The Contractor agrees to disclose to the Company all Works referred to in the immediately preceding paragraph and execute and deliver all applications for registration, registrations, and other documents relating to the copyrights to the Works and provide such additional assistance, as the Company may deem necessary and desirable to secure the Company’s title to the copyrights in the Works. The Company shall be responsible for all expenses incurred in connection with the registration of all such copyrights.

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(c)Prior Works. The Contractor claims no ownership rights in any Works, except as described in Exhibit 4 attached hereto.

9. Contracts or Other Agreements with Former Employer or Business.

The Contractor hereby represents and warrants that he is not subject to any employment or consulting agreement or similar document with a former employer or with any business as to which the Contractor’s engagement by the Company and provision of services hereunder would be a breach. For that reason, the Contractor hereby represents and warrants that he is not subject to any agreement which prohibits the Contractor during a period of time which extends through the Term from any of the following: (a) providing services for the Company hereunder by this Agreement; (b) competing with, or in any way participating in a business which includes the Company’s business; (c) soliciting personnel of such former employer or other business to leave such former employer’s employment or to leave such other business; or (d) soliciting customers of such former employer or other business on behalf of another business.

10. Remedies and Enforceability.

(a)The Contractor agrees that the covenants and agreements contained in Sections 4, 5, 6, 7, and 8 hereof are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the interests and properties of the Company and the Business of the Company; that the Company is engaged in and throughout the Area in the Business of the Company; that the Contractor has access to and knowledge of the Company’s business and financial plans; that irreparable loss and damage will be suffered by the Company should the Contractor breach any of such covenants and agreements; that each of such covenants and agreements is separate, distinct and severable not only from the other of such covenants and agreements but also from the other and remaining provisions of this Agreement; that the unenforceability of any such covenant or agreement shall not affect the validity or enforceability of any other such covenant or agreements or any other provision or provisions of this Agreement; and that, in addition to other remedies available to it, the Company shall be entitled to specific performance of this Agreement and to both temporary and permanent injunctions to prevent a breach or contemplated breach by the Contractor of any of such covenants or agreements.

(b)In addition to any other rights the Company may have pursuant to this Agreement, if the Contractor engages in or provides managerial, supervisory, sales, marketing, financial, management information, administrative or consulting services or assistance (collectively “Prohibited Services”) to, or owns (other than ownership of less than five percent (5%) of the outstanding voting securities of an entity whose voting securities are traded on a national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation System) a beneficial or legal interest in, any Competing Business within the Area during the Non-Competition Term, the Contractor will forfeit any amounts owed to the Contractor under this Agreement, which have not been paid to the Contractor by the Company and the Contractor shall immediately repay to the Company all amounts previously paid to the Contractor pursuant to Section 2(a)(ii).

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11. No Set Off.

The existence of any claim, demand, action or cause of action by the Contractor against the Company, or any Affiliate, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of its rights hereunder. The existence of any claim, demand, action or cause of action by the Company or any Affiliate against the Contractor, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Contractor of any of the Contractor’s rights hereunder.

12. Notice.

All notices, requests, demands and other communications required hereunder shall be in writing and shall be deemed to have been duly given if delivered or if mailed, by United States certified or registered mail, prepaid to the party to which the same is directed at the following addresses (or at such other addresses as shall be given in writing by the parties to one another):

If to the Company:	Theragenics Corporation 5203 Bristol Industrial Way Buford, Georgia 30518 Attn:Chief Financial Officer
If to the Contractor:	The most recent address that the Company has on file for the Contractor.

Notices delivered in person shall be effective on the date of delivery. Notices delivered by mail as aforesaid shall be effective upon the third calendar day subsequent to the postmark date thereof. 

13. Definitions

(a)“Affiliate” means any person, firm, corporation, partnership, association or entity that, directly or indirectly or through one or more intermediaries, controls, is controlled by or is under common control with the Company. For these purposes “control” shall mean the direct or indirect ownership of equity securities of the applicable entity possessing the right to more than fifty percent (50%) of the combined ordinary voting power of the outstanding voting equity securities of such entity.

(b)“Area” means the United States.

(c)“Business of the Company” means any business that involves the manufacture, production, sale, marketing, promotion, exploitation, development and distribution of wound closure medical devices (including but not limited to sutures, cassettes, and glues), cardiac pacing cables, brachytherapy needles, brachytherapy seed spacers, brachytherapy sleeves, palladium-103, temporary or permanently implantable devices for use in the treatment of cancer, restenosis or macular degeneration, the manufacture, sale, and distribution of vascular access devices, or other medical products manufactured or sold by the Company or any of its Affiliates, but only to the extent that such devices and products are the same as or similar to a product manufactured, produced, sold, marketed, promoted, exploited, developed or distributed by the Company or any of its Affiliates at any time during the period of the Contractor’s engagement under this Agreement, or is in an active state of development by the Company or any of its Affiliates as evidenced by establishment of a design history file at any time during the period of the Contractor’s engagement under this Agreement.

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(d)“Cause”means the occurrence of any of the following events: (i) willful and continued failure (other than such failure resulting from the Contractor’s incapacity during physical or mental illness) by the Contractor to substantially perform the Contractor’s duties with the Company or an Affiliate; (ii) conduct by the Contractor that amounts to willful misconduct or gross negligence; (iii) any act by the Contractor of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or an Affiliate; (iv) commission by the Contractor of a felony or any other crime involving dishonesty; (v) illegal use by the Contractor of alcohol or drugs; or (vi) a material breach of the Agreement by the Contractor.

(e)“Company Invention” means any Invention which is conceived by the Contractor alone or in a joint effort with others during the period of the Contractor’s engagement hereunder or prior thereto while an employee of or consultant to the Company or an Affiliate which (i) may be reasonably expected to be used in a product of the Company or an Affiliate, or a product similar to a product of the Company or an Affiliate, (ii) results from work that the Contractor has been assigned as part of the Contractor’s duties as a consultant to the Company or an Affiliate, (iii) is in an area of technology which is the same or substantially related to the areas of technology with which the Contractor is involved in the performance of the Contractor’s duties as a consultant to the Company or an Affiliate, or (iv) is useful, or which the Contractor reasonably expects may be useful, in any manufacturing or product design process of the Company or an Affiliate.

(f)“Competing Business” means any person, firm, corporation, joint venture or other business entity which is engaged in the Business of the Company (or any aspect thereof) within the Area.

(g)“Confidential Information” means data and information relating to the business of the Company or an Affiliate (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Contractor or of which the Contractor became aware as a consequence of or through his relationship to the Company or an Affiliate and which has value to the Company or an Affiliate and is not generally known to its competitors. Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Company or an Affiliate (except where such public disclosure has been made by the Contractor without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

(h)“Invention” means any discovery, whether or not patentable, including, but not limited to, any useful process, method, formula, technique, machine, manufacture, composition of matter, algorithm or computer program, as well as improvements thereto, which is new or which the Contractor has a reasonable basis to believe may be new.

(i)“Trade Secrets” means information including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

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(j)“Work” means a copyrightable work of authorship, including without limitation, any technical descriptions for products, user’s guides, illustrations, advertising materials, computer programs (including the contents of read only memories) and any contribution to such materials.

14. Miscellaneous.

(a)Assignment. The rights and obligations of the Company under this Agreement shall inure to the benefit of the Company’s successors and assigns. This Agreement may be assigned by the Company to an Affiliate, to any legal successor to all or a portion of the business of the Company or an Affiliate, or to an entity which purchases assets from the Company or an Affiliate. In the event the Company assigns this Agreement as permitted by this Agreement and the Contractor remains engaged by the assignee, “the Company” as defined herein will refer to the assignee. The Contractor may not assign this Agreement.

(b)Waiver.  The waiver by the Company of any breach of this Agreement by any party shall not be effective unless in writing, and no such waiver shall constitute the waiver of the same or another breach on a subsequent occasion.

(c)Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be adjudicated through binding arbitration before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) in Atlanta, Georgia, with the Company bearing responsibility for the filing costs charged by the AAA for such arbitration. However the provisions of this Section will not prevent the Company from instituting an action in a court of law under this Agreement for specific performance of this Agreement or temporary or permanent injunctive relief as provided in Section 10 hereof. The parties hereto agree that the exclusive venue for any such lawsuit will be Gwinnett County, Georgia and the Contractor consents to the exercise of personal jurisdiction by the Superior Court of Gwinnett County for the purposes of such lawsuit.

Any party who desires to submit a claim to arbitration in accordance with this Section shall file its demand for arbitration with AAA within thirty (30) days of the event or incident giving rise to the claim. A copy of said demand shall be served on the other party in accordance with the notice provisions in Section 12 of this Agreement. The parties agree that they shall attempt in good faith to select an arbitrator by mutual agreement within twenty (20) days after the responding party’s receipt of the demand for arbitration. If the parties do not agree on the selection of an arbitrator within that timeframe, the selection shall be made pursuant to the rules from the panels of arbitrators maintained by the AAA. If the Contractor prevails in the dispute, the Company will pay and be financially responsible for all costs, expenses, reasonable attorneys’ fees and reasonable expenses of the arbitrator incurred by the Contractor (or the Contractor’s estate in the event of the Contractor’s death) in connection with the dispute. Any award rendered by the arbitrator shall be accompanied by a written opinion providing the reasons for the award.

By initialing below, the Company and the Contractor indicate their agreement to this Section 14(c).

By the Company:	(initials of Company representative)
By Contractor:	(initials of Contractor)

26

The arbitrator’s award shall be final and non-appealable. Nothing in this Subsection shall prevent the parties from settling any dispute or controversy by mutual agreement at any time.

(d)Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia.

(e)Entire Agreement.  This Agreement embodies the entire agreement of the parties hereto relating to the subject matter hereof and supersedes all oral agreements, and to the extent inconsistent with the terms hereof, all other written agreements.

(f)Amendment.  This Agreement may not be modified, amended, supplemented or terminated except by a written instrument executed by the parties hereto.

(g)Severability.  Each of the covenants and agreements hereinabove contained shall be deemed separate, severable and independent covenants, and in the event that any covenant shall be declared invalid by any court of competent jurisdiction, such invalidity shall not in any manner affect or impair the validity or enforceability of any other part or provision of such covenant or of any other covenant contained herein.

(h)Captions and Section Headings.  Except as set forth in Section 13 hereof, captions and section headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it.

IN WITNESS WHEREOF, the Company and the Contractor have each executed and delivered this Agreement as of the date first shown above.

GALT MEDICAL CORP.

By:  

Title: 

JAMES EDDINGS:

By:  

27

Contractor

Under 40

EXHIBIT 1

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this _____ day of __________, by Galt Medical Corp. (the “Company”) and ________________________ (the “Contractor”).

Introduction

Contractor and the Company entered into an Independent Contractor Consulting Agreement dated ______________ (the “Severance Agreement”) which provides certain severance benefits.

The Severance Agreement requires that as a condition to the payment of severance benefits under the Severance Agreement (the “Severance Benefits”), the Contractor must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

1. The effective date of this Agreement shall be the date on which Contractor signs this Agreement (“the Effective Date”), at which time this Agreement shall be fully effective and enforceable. Contractor has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. Contractor understands that the Contractor may sign this Agreement at any time before the expiration of the twenty-one (21) day review. To the degree Contractor chooses not to wait twenty-one (21) days to execute this Agreement, it is because Contractor freely and unilaterally chooses to execute this Agreement before that time.

2. In exchange for Contractor’s execution of this Agreement and in full and complete settlement of any and all claims, the Company will provide Contractor with the Severance Benefits.

3. The release given by Contractor in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Contractor was entitled to receive prior to entering into this Agreement.

Contractor has been advised to consult an attorney prior to entering into this Agreement.

By entering into this Agreement, Contractor does not waive rights or claims that may arise after the date this Agreement is executed.

4. This Agreement shall in no way be construed as an admission by the Company that it has acted wrongfully with respect to Contractor or any other person or that Contractor has any rights whatsoever against the Company. The Company specifically disclaims any liability to or wrongful acts against Contractor or any other person on the part of itself, its employees or its agents.

5. As a material inducement to the Company to enter into this Agreement, Contractor hereby irrevocably releases the Company and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of the Company, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Company’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Equal Pay Act; (6) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (7) Executive Order 11141 (age discrimination); (8) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (9) negligence; (10) negligent hiring and/or negligent retention; (11) intentional or negligent infliction of emotional distress or outrage; (12) defamation; (13) interference with employment; (14) wrongful discharge; (15) invasion of privacy; or (16) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Contractor now has, or claims to have, or which Contractor at any time heretofore had, or claimed to have, or which Contractor at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Contractor covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting any action against any of the Releasees with respect to any Claim released herein.

Notwithstanding the foregoing, this Agreement shall not release any claims the Contractor has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Contractor’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Company to Contractor, or (iii) under the Stock Purchase Agreement dated as of August 2, 2006, with respect to the Company by and among Theragenics Corporation and the shareholders of the Company and the other persons listed on Schedule 1 thereto.

6. The Company and Contractor agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

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7. This Agreement sets forth the entire agreement between the Company and Contractor and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Company and Contractor pertaining to the subject matter of this Agreement.

8. Contractor is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

IN WITNESS WHEREOF, Contractor and Company have executed this Agreement effective as of the date first written above.

CONTRACTOR

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

Title:

3

Contractor

40 and over

EXHIBIT 2

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this _____ day of ______________, by Galt Medical Corp. (the “Company”) and _____________________ the “Contractor”).

Introduction

Contractor and the Company entered into an Independent Contractor Consulting Agreement dated ___________________________ (the “Severance Agreement”) which provides certain severance benefits.

The Severance Agreement requires that as a condition to the payment of severance benefits under the Severance Agreement (the “Severance Benefits”), the Contractor must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

1. Contractor has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Contractor signs this Agreement (“the Effective Date”). For a period of seven (7) days following Contractor’s execution of this Agreement, Contractor may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven (7) day period has expired. Contractor must communicate the desire to revoke this Agreement in writing. Contractor understands that the Contractor may sign the Agreement at any time before the expiration of the twenty-one (21) day review period. To the degree Contractor chooses not to wait twenty-one (21) days to execute this Agreement, it is because Contractor freely and unilaterally chooses to execute this Agreement before that time. Contractor’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.

2. In exchange for Contractor’s execution of this Agreement and in full and complete settlement of any and all claims, the Company will provide Contractor with the Severance Benefits.

3. Contractor acknowledges and agrees that this Agreement is in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth in this Agreement shall be applicable, without limitation, to any claims brought under these Acts.

The release given by Contractor in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Contractor was entitled to receive prior to entering into this Agreement.

Contractor has been advised to consult an attorney prior to entering into this Agreement, and this provision of the Agreement satisfies the requirement of the Older Workers Benefit Protection Act that Contractor be so advised in writing.

By entering into this Agreement, Contractor does not waive rights or claims that may arise after the date this Agreement is executed.

4. This Agreement shall in no way be construed as an admission by the Company that it has acted wrongfully with respect to Contractor or any other person or that Contractor has any rights whatsoever against the Company. The Company specifically disclaims any liability to or wrongful acts against Contractor or any other person on the part of itself, its employees or its agents.

5. As a material inducement to the Company to enter into this Agreement, Contractor hereby irrevocably releases the Company and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of the Company, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Company’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Age Discrimination in Employment Act; (6) the Older Workers Benefit Protection Act; (7) the Equal Pay Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (9) Executive Order 11141 (age discrimination); (10) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (11) negligence; (12) negligent hiring and/or negligent retention; (13) intentional or negligent infliction of emotional distress or outrage; (14) defamation; (15) interference with employment; (16) wrongful discharge; (17) invasion of privacy; or (18) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Contractor now has, or claims to have, or which Contractor at any time heretofore had, or claimed to have, or which Contractor at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Contractor covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting, any action against any of the Releasees with respect to any Claim released herein.

Notwithstanding the foregoing, this Agreement shall not release any claims the Contractor has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Contractor’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Company to Contractor, or (iii) under the Stock Purchase Agreement dated as of August 2, 2006, with respect to the Company by and among Theragenics Corporation and the shareholders of the Company and the other persons listed on Schedule 1 thereto.

2

6. The Company and Contractor agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

7. This Agreement sets forth the entire agreement between the Company and Contractor and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Company and Contractor pertaining to the subject matter of this Agreement.

8. Contractor is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. You may take up to twenty-one (21) days to decide whether you want to accept and sign this Agreement. Also, if you sign this Agreement, you will then have an additional seven (7) days in which to revoke your acceptance of this Agreement after you have signed it. This Agreement will not be effective or enforceable, nor will any consideration be paid, until after the seven (7) day revocation period has expired. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

3

IN WITNESS WHEREOF, Contractor and Company have executed this Agreement effective as of the date first written above.

CONTRACTOR

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

 

Title:

4

Contractor

40 and over -

Group of terminations

EXHIBIT 3

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this ____ day of _______________, by Galt Medical Corp. (the “Company”) and _________________________ (the “Contractor”).

Introduction

Contractor and the Company entered into an Independent Contractor Consulting Agreement dated ______________ (the “Severance Agreement”) which provides certain severance benefits.

The Severance Agreement requires that as a condition to the payment of severance benefits under the Severance Agreement (the “Severance Benefits”), the Contractor must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

1. Contractor has been offered forty-five (45) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Contractor signs this Agreement (“the Effective Date”). For a period of seven (7) days following Contractor’s execution of this Agreement, Contractor may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven (7) day period has expired. Contractor must communicate the desire to revoke this Agreement in writing. Contractor understands that the Contractor may sign the Agreement at any time before the expiration of the forty-five (45) day review period. To the degree Contractor chooses not to wait forty-five (45) days to execute this Agreement, it is because Contractor freely and unilaterally chooses to execute this Agreement before that time. Contractor’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.

2. In exchange for Contractor’s execution of this Agreement and in full and complete settlement of any and all claims, the Company will provide Contractor with the Severance Benefits.

3. Contractor acknowledges and agrees that this Agreement is in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth in this Agreement shall be applicable, without limitation, to any claims brought under these Acts.

The release given by Contractor in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Contractor was entitled to receive prior to entering into this Agreement.

Contractor has been advised to consult an attorney prior to entering into this Agreement, and this provision of the Agreement satisfies the requirement of the Older Workers Benefit Protection Act that Contractor be so advised in writing.

By entering into this Agreement, Contractor does not waive rights or claims that may arise after the date this Agreement is executed.

4. The Company has                                                                                                                                                         [Company to describe class, unit, or group of individuals covered by termination program, any eligibility factors, and time limits applicable] and such individuals comprise the “Decisional Unit.” Attached as “Attachment I” to this Agreement is a list of ages and titles of persons in the Decisional Unit who were and who were not selected for termination and the offer of consideration for signing the Agreement.

5. This Agreement shall in no way be construed as an admission by the Company that it has acted wrongfully with respect to Contractor or any other person or that Contractor has any rights whatsoever against the Company. The Company specifically disclaims any liability to or wrongful acts against Contractor or any other person on the part of itself, its employees or its agents.

6. As a material inducement to the Company to enter into this Agreement, Contractor hereby irrevocably releases the Company and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and. attorneys of such affiliates) of the Company, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Company’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Age Discrimination in Employment Act; (6) the Older Workers Benefit Protection Act; (7) the Equal Pay Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (9) Executive Order 11141 (age discrimination); (10) Section 503 of the Rehabilitation Act. of 1973 (disability discrimination); (11) negligence; (12) negligent hiring and/or negligent retention; (13) intentional or negligent infliction of emotional distress or outrage; (14) defamation; (15) interference with employment; (16) wrongful discharge; (17) invasion of privacy; or (18) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Contractor now has, or claims to have, or which Contractor at any time heretofore had, or claimed to have, or which Contractor at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Contractor covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting, any action against any of the Releasees with respect to any Claim released herein.

2

Notwithstanding the foregoing, this Agreement shall not release any claims the Contractor has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Contractor’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Company to Contractor, or (iii) under the Stock Purchase Agreement dated as of August 2, 2006, with respect to the Company by and among Theragenics Corporation and the shareholders of the Company and the other persons listed on Schedule 1 thereto.

7. The Company and Contractor agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

8. This Agreement sets forth the entire agreement between the Company and Contractor and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Company and Contractor pertaining to the subject matter of this Agreement.

9. Contractor is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. You may take up to forty-five (45) days to decide whether you want to accept and sign this Agreement. Also, if you sign this Agreement, you will then have an additional seven (7) days in which to revoke your acceptance of this Agreement after you have signed it. This Agreement will not be effective or enforceable, nor will any consideration be paid, until after the seven (7) day revocation period has expired. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

3

IN WITNESS WHEREOF, Contractor and Company have executed this Agreement effective as of the date first written above.

CONTRACTOR

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

Title:

4

ATTACHMENT I

Individuals Comprising the “Decisional Unit”

Title: Age: Participating: Not Participating:

EXHIBIT 4

Inventions, Patents and Copyrights

1. Previously Conceived Inventions

[DESCRIBE ANY INVENTIONS WHICH THE CONTRACTOR DEVELOPED OR HAS AN OWNERSHIP INTEREST IN. IF NONE, INSERT “NONE”. Note: With respect to any such Inventions not described herein, the Company shall have a nonexclusive, paid up, royalty-free license to use and practice such Invention, including a license under all patents to issue in any country which pertain to such Invention.]

2. Patents

[LIST OR DESCRIBE ALL PATENTS WHICH THE CONTRACTOR OWNS INDIVIDUALLY, WITH OTHERS, OR FOR WHICH APPLICATIONS ARE PENDING. IF NONE, INSERT “NONE”.]

3. Copyrights

[DESCRIBE ANY WORKS FOR WHICH THE CONTRACTOR CLAIMS THE COPYRIGHT EITHER INDIVIDUALLY OR WITH OTHERS. IF NONE, INSERT “NONE”.]

Employee

Under 40

EXHIBIT B

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this _____ day of _________, by Galt Medical Corp. (the “Employer”) and _________________________ (the “Employee”).

Introduction

Employee and the Employer entered into an Employment Agreement dated ______________ (the “Employment Agreement”) which provides certain benefits in the event of certain terminations of the Employee’s employment.

The Employment Agreement requires that as a condition to the payment of severance benefits under the Employment Agreement or the Employer entering into a consulting agreement with the Employee as provided in the Employment Agreement (the “Separation Benefits”), the Employee must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

9. The effective date of this Agreement shall be the date on which Employee signs this Agreement (“the Effective Date”), at which time this Agreement shall be fully effective and enforceable. Employee has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. Employee understands that the Employee may sign this Agreement at any time before the expiration of the twenty-one (21) day review. To the degree Employee chooses not to wait twenty-one (21) days to execute this Agreement, it is because Employee freely and unilaterally chooses to execute this Agreement before that time.

10. In exchange for Employee’s execution of this Agreement and in full and complete settlement of any and all claims, the Employer will provide Employee with the Separation Benefits.

11. The release given by Employee in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Employee was entitled to receive prior to entering into this Agreement.

Employee has been advised to consult an attorney prior to entering into this Agreement.

By entering into this Agreement, Employee does not waive rights or claims that may arise after the date this Agreement is executed.

12. This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Employee or any other person or that Employee has any rights whatsoever against the Employer. The Employer specifically disclaims any liability to or wrongful acts against Employee or any other person on the part of itself, its employees or its agents.

13. As a material inducement to the Employer to enter into this Agreement, Employee hereby irrevocably releases the Employer and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of the Employer, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Employer’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Equal Pay Act; (6) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (7) Executive Order 11141 (age discrimination); (8) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (9) negligence; (10) negligent hiring and/or negligent retention; (11) intentional or negligent infliction of emotional distress or outrage; (12) defamation; (13) interference with employment; (14) wrongful discharge; (15) invasion of privacy; or (16) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Employee now has, or claims to have, or which Employee at any time heretofore had, or claimed to have, or which Employee at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Employee covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting any action against any of the Releasees with respect to any Claim released herein.

Notwithstanding the foregoing, this Agreement shall not release any claims the Employee has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Employee’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Employer to Employee, or (iii) under the Stock Purchase Agreements (and its exhibits) identified in the introduction to the Employment Agreement.

14. The Employer and Employee agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

2

15. This Agreement sets forth the entire agreement between the Employer and Employee and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Employee pertaining to the subject matter of this Agreement.

16. Employee is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

IN WITNESS WHEREOF, Employee and Employer have executed this Agreement effective as of the date first written above.

EMPLOYEE

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

Title:

3

Employee

40 and over

EXHIBIT C

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this _____ day of ______________, by Galt Medical Corp. (the “Employer”) and ______________________the “Employee”).

Introduction

Employee and the Employer entered into an Employment Agreement dated ______________ (the “Employment Agreement”) which provides certain benefits in the event of certain terminations of the Employee’s employment.

The Employment Agreement requires that as a condition to the payment of severance benefits under the Employment Agreement or the Employer entering into a consulting agreement with the Employee as provided in the Employment Agreement (the “Separation Benefits”), the Employee must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

9. Employee has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Employee signs this Agreement (“the Effective Date”). For a period of seven (7) days following Employee’s execution of this Agreement, Employee may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven. (7) day period has expired. Employee must communicate the desire to revoke this Agreement in writing. Employee understands that the Employee may sign the Agreement at any time before the expiration of the twenty-one (21) day review period. To the degree Employee chooses not to wait twenty-one (21) days to execute this Agreement, it is because Employee freely and unilaterally chooses to execute this Agreement before that time. Employee’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.

10. In exchange for Employee’s execution of this Agreement and in full and complete settlement of any and all claims, the Employer will provide Employee with the Separation Benefits.

11. Employee acknowledges and agrees that this Agreement is in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth in this Agreement shall be applicable, without limitation, to any claims brought under these Acts.

The release given by Employee in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Employee was entitled to receive prior to entering into this Agreement.

Employee has been advised to consult an attorney prior to entering into this Agreement, and this provision of the Agreement satisfies the requirement of the Older Workers Benefit Protection Act that Employee be so advised in writing.

By entering into this Agreement, Employee does not waive rights or claims that may arise after the date this Agreement is executed.

12. This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Employee or any other person or that Employee has any rights whatsoever against the Employer. The Employer specifically disclaims any liability to or wrongful acts against Employee or any other person on the part of itself, its employees or its agents.

13. As a material inducement to the Employer to enter into this Agreement, Employee hereby irrevocably releases the Employer and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of the Employer, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Employer’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Age Discrimination in Employment Act; (6) the Older Workers Benefit Protection Act; (7) the Equal Pay Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (9) Executive Order 11141 (age discrimination); (10) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (11) negligence; (12) negligent hiring and/or negligent retention; (13) intentional or negligent infliction of emotional distress or outrage; (14) defamation; (15) interference with employment; (16) wrongful discharge; (17) invasion of privacy; or (18) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Employee now has, or claims to have, or which Employee at any time heretofore had, or claimed to have, or which Employee at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Employee covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting, any action against any of the Releasees with respect to any Claim released herein.

Notwithstanding the foregoing, this Agreement shall not release any claims the Employee has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Employee’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Employer to Employee, or (iii) under the Stock Purchase Agreements (and its exhibits) identified in the introduction to the Employment Agreement.

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14. The Employer and Employee agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

15. This Agreement sets forth the entire agreement between the Employer and Employee and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Employee pertaining to the subject matter of this Agreement.

16. Employee is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. You may take up to twenty-one (21) days to decide whether you want to accept and sign this Agreement. Also, if you sign this Agreement, you will then have an additional seven (7) days in which to revoke your acceptance of this Agreement after you have signed it. This Agreement will not be effective or enforceable, nor will any consideration be paid, until after the seven (7) day revocation period has expired. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

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IN WITNESS WHEREOF, Employee and Employer have executed this Agreement effective as of the date first written above.

EMPLOYEE

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

Title:

4

Employee

40 and over -

Group of terminations

EXHIBIT D

RELEASE AGREEMENT

This Release Agreement (this “Agreement”) is made this ____ day of _______________, by Galt Medical Corp. (the “Employer”) and _________________________ (the “Employee”).

Introduction

Employee and the Employer entered into an Employment Agreement dated ______________ (the “Employment Agreement”) which provides certain benefits in the event of certain terminations of the Employee’s employment.

The Employment Agreement requires that as a condition to the payment of severance benefits under the Employment Agreement or the Employer entering into a consulting agreement with the Employee as provided in the Employment Agreement (the “Separation Benefits”), the Employee must provide a release and agree to certain other conditions.

NOW, THEREFORE, the parties agree as follows:

10. Employee has been offered forty-five (45) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Employee signs this Agreement (“the Effective Date”). For a period of seven (7) days following Employee’s execution of this Agreement, Employee may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven (7) day period has expired. Employee must communicate the desire to revoke this Agreement in writing. Employee understands that the Employee may sign the Agreement at any time before the expiration of the forty-five (45) day review period. To the degree Employee chooses not to wait forty-five (45) days to execute this Agreement, it is because Employee freely and unilaterally chooses to execute this Agreement before that time. Employee’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.

11. In exchange for Employee’s execution of this Agreement and in full and complete settlement of any and all claims, the Employer will provide Employee with the Separation Benefits.

12. Employee acknowledges and agrees that this Agreement is in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth in this Agreement shall be applicable, without limitation, to any claims brought under these Acts.

The release given by Employee in this Agreement is given solely in exchange for the consideration set forth in this Agreement and such consideration is in addition to anything of value that Employee was entitled to receive prior to entering into this Agreement.

Employee has been advised to consult an attorney prior to entering into this Agreement, and this provision of the Agreement satisfies the requirement of the Older Workers Benefit Protection Act that Employee be so advised in writing.

By entering into this Agreement, Employee does not waive rights or claims that may arise after the date this Agreement is executed.

13. The Employer has[Employer to describe class, unit, or group of individuals covered by termination program, any eligibility factors, and time limits applicable] and such employees comprise the “Decisional Unit.” Attached as “Attachment 1” to this Agreement is a list of ages and job titles of persons in the Decisional Unit who were and who were not selected for termination and the offer of consideration for signing the Agreement.

14. This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Employee or any other person or that Employee has any rights whatsoever against the Employer. The Employer specifically disclaims any liability to or wrongful acts against Employee or any other person on the part of itself, its employees or its agents.

15. As a material inducement to the Employer to enter into this Agreement, Employee hereby irrevocably releases the Employer and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, and affiliates (and agents, directors, officers, employees, representatives and. attorneys of such affiliates) of the Employer, and all persons acting by, through, under or in concert with them (collectively “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Employer’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Age Discrimination in Employment Act; (6) the Older Workers Benefit Protection Act; (7) the Equal Pay Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (9) Executive Order 11141 (age discrimination); (10) Section 503 of the Rehabilitation Act. of 1973 (disability discrimination); (11) negligence; (12) negligent hiring and/or negligent retention; (13) intentional or negligent infliction of emotional distress or outrage; (14) defamation; (15) interference with employment; (16) wrongful discharge; (17) invasion of privacy; or (18) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Employee now has, or claims to have, or which Employee at any time heretofore had, or claimed to have, or which Employee at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date. Employee covenants and agrees not to institute, or participate in any way in anyone else’s actions involved in instituting, any action against any of the Releasees with respect to any Claim released herein.

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Notwithstanding the foregoing, this Agreement shall not release any claims the Employee has (i) to any unpaid benefits under any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) to Employee’s right to exercise vested stock options, if any, pursuant to any stock option agreements provided by the Employer to Employee, or (iii) under the Stock Purchase Agreements (and its exhibits) identified in the introduction to the Employment Agreement.

16. The Employer and Employee agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

17. This Agreement sets forth the entire agreement between the Employer and Employee and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Employee pertaining to the subject matter of this Agreement.

18. Employee is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement.

Your signature below indicates your understanding and agreement with all of the terms in this Agreement.

Please take this Agreement home and carefully consider all of its provisions before signing it. You may take up to forty-five (45) days to decide whether you want to accept and sign this Agreement. Also, if you sign this Agreement, you will then have an additional seven (7) days in which to revoke your acceptance of this Agreement after you have signed it. This Agreement will not be effective or enforceable, nor will any consideration be paid, until after the seven (7) day revocation period has expired. Again, you are free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of your choosing.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS DOCUMENT.

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IN WITNESS WHEREOF, Employee and Employer have executed this Agreement effective as of the date first written above.

EMPLOYEE

Print Name

Signature

Date Signed

GALT MEDICAL CORP.

By:  

Title:

4

ATTACHMENT I

Employees Comprising the “Decisional Unit”

Job Title: Age: Participating: Not Participating:

EXHIBIT E

Inventions, Patents and Copyrights

1. Previously Conceived Inventions

[DESCRIBE ANY INVENTIONS WHICH THE EMPLOYEE DEVELOPED OR HAS AN OWNERSHIP INTEREST IN. IF NONE, INSERT “NONE”. Note: With respect to any such Inventions not described herein, the Company shall have a nonexclusive, paid up, royalty-free license to use and practice such Invention, including a license under all patents to issue in any country which pertain to such Invention.]

2. Patents

[LIST OR DESCRIBE ALL PATENTS WHICH THE EMPLOYEE OWNS INDIVIDUALLY, WITH OTHERS, OR FOR WHICH APPLICATIONS ARE PENDING. IF NONE, INSERT “NONE”.]

3. Copyrights

[DESCRIBE ANY WORKS FOR WHICH THE EMPLOYEE CLAIMS THE COPYRIGHT EITHER INDIVIDUALLY OR WITH OTHERS. IF NONE, INSERT “NONE”.]

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 2, 2006, is made and entered into by and amongTheragenics Corporation, a Delaware corporation (the “Purchaser”), James R. Eddings, a resident of the State of Texas, on behalf of the Accredited Sellers (as defined below) in connection with that certain Stock Purchase Agreement (as defined below)(“Sellers’ Representative”). The Company and the Sellers’ Representative are sometimes herein individually referred to as a “Party” and, collectively, as the “Parties.”

WITNESSET
60;H:

WHEREAS, in connection with the sale of one hundred percent (100%) of the issued and outstanding capital stock of Galt Medical Corp., a Texas corporation (the “Company”), and one hundred percent (100%) of the aggregate outstanding Company Stock Derivatives (as defined in the Stock Purchase Agreement defined below) (the “Transaction”), pursuant to the terms and conditions of that certain Stock Purchase Agreement, dated as of the date hereof (the “Stock Purchase Agreement”), by and among the Purchaser, the Sellers’ Representative, and the holders of capital stock of the Company and the holders of Company Stock Derivatives (collectively, the “Sellers”), the Purchaser will issue shares of its common stock, par value $.01 per share (the “Common Stock”) to each Seller who qualifies as an “accredited investor” within the meaning of Rule 501 of the Securities Act (collectively, the “Accredited Sellers”);

WHEREAS, as a condition to the consummation of the Transaction, the Purchaser is obligated to provide the Accredited Sellers with certain registration rights with respect to the Common Stock; and

WHEREAS, the Purchaser and the Sellers’ Representative desire to enter into this Agreement pursuant to which the Purchaser shall register with the SEC the offer and sale by the Accredited Sellers of the shares of Common Stock received by the Accredited Sellers in connection with the Transaction, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the premises and the mutual covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Section 1.        Definitions.

As used in this Agreement, the capitalized terms shall have the meanings set forth below.

(a)“Agent” shall mean any Person authorized to act and who acts on behalf of a Party with respect to the transactions contemplated by this Agreement.

(b)“Business Day” shall mean any day on which commercial banks are not authorized or required by law to close in the State of Georgia.

(c)“Effectiveness Period” shall have the meaning set forth in Section 3 of this Agreement.

(d)“Indemnified Party” shall have the meaning set forth in Section 6(c) of this Agreement.

(e)“Indemnifying Party” shall have the meaning set forth in Section 6(c) of this Agreement.

(f)“Person” shall mean an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

(g)“Prospectus” shall mean the prospectus included in the Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments and all material incorporated by reference in such Prospectus.

(h)“Required Registration Filing Date” shall mean August 2, 2007.

(i)“Registration Statement” shall have the meaning set forth in Section 3 of this Agreement.

(j)“Registrable Securities” shall mean shares of Common Stock issued or issuable by the Purchaser to Accredited Sellers pursuant to the Stock Purchase Agreement.

(k)“Restricted Securities” shall mean the Registrable Securities upon original issuance thereof, subject to the provisions of Section 2(a) of this Agreement.

(l)“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

(m)“SEC” shall mean the Securities and Exchange Commission.

(n)“Withdrawn Registration Statement” shall have the meaning set forth in Section 5(a) of this Agreement.

Section 2.       Securities Subject to this Agreement.

(a)      Registrable Securities. The securities entitled to the benefits of Sections 3 and 4 of this Agreement are the Registrable Securities; however, with respect to any particular Registrable Security, only so long as such security continues to be a Restricted Security. A Registrable Security ceases to be a Restricted Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement, (ii) as to any Holder, when the Registrable Security held by such Holder could be sold without restriction pursuant to Rule 144(k) or Rule 145 (or any similar provisions then in force) under the Securities Act, (iii) it has otherwise been transferred in a private transaction in which the transferor’s rights under this Agreement are not assigned, or (iv) it ceases to be outstanding.

(b)    Holders of Registrable Securities. Any reference herein to a “Holder” or “Holders” of Registrable Securities shall mean any Accredited Seller and its heirs and personal representatives.

Section 3.        Required Registration.

The Purchaser shall prepare and file with the SEC, no later than the Required Registration Filing Date, a Registration Statement on Form S-3 pursuant to Rule 415 of the Securities Act(the “Registration Statement”) with respect to all ofthe Registrable Securities, and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable thereafter. After the Registration Statement filed pursuant to this Section 3 has become effective, the Purchaser shall use its commercially reasonable efforts to keep such Registration Statement (on Form S-3 or such other form as may then be available to the Purchaser) effective for a period (the “Effectiveness Period”) equal to (i) one year from the initial date that the SEC declares such Registration Statement effective (subject to any extension pursuant to Sections 5(a) and 5(b) hereof, or, if such Registration Statement is not effective during any period within such one-year period, such one-year period shall be extended by the number of days that the Registration Statement is not effective), or (ii) such shorter period which shall terminate when all of the Registrable Securities have been sold, or are eligible to be sold within a single three-month period pursuant to Rule 144(k) or any successor thereto. The Purchaser represents and warrants that it is eligible to register the Registrable Securities on Form S-3 under the Securities Act. To the extent that the Purchaser is ineligible to register the Registrable Securities on Form S-3, the Purchaser shall satisfy its obligations under this Agreement to register Registrable Securities on Form S-1.

Section 4.        Registration Procedures.

With respect to the registration of the Registrable Securities pursuant to this Agreement, the Purchaser will as promptly as reasonably practicable:

(a)    before filing the Registration Statement, the Prospectus or any amendments or supplements thereto (excluding documents to be incorporated by reference therein filed after the effectiveness of the Registration Statement), the Purchaser will, no later than five (5) Business Days prior to filing, furnish to the Holders copies of all such documents in substantially the form proposed to be filed (including documents incorporated therein by reference other than documents previously filed with the SEC), to enable the Holders to review such documents prior to the filing thereof, and the Purchaser shall make such reasonable changes thereto (including changes to documents incorporated by reference other than documents previously filed with the SEC) as may be reasonably requested by the Holders;

(b)    prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement continuously effective for the Effectiveness Period; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed with the SEC pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with this paragraph (b) and the intended methods of disposition by the Holders thereof set forth in such Registration Statement or supplement to the Prospectus;

(c)     notify the Holders promptly, and confirm such notice in writing, (1) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (2) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (3) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (4) of the receipt by the Purchaser of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (5) of the happening of any event (but not the details of such event) which makes any statement made in the Registration Statement, the Prospectus or any document incorporated therein by reference untrue or which requires the making of any changes in the Registration Statement, the Prospectus or any document incorporated therein by reference in order to make the statements therein not misleading, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (6) of the Purchaser’s good faith determination that it is appropriate to amend the Registration Statement or supplement the Prospectus before sales of the Registrable Securities continue.

(d)   use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible time;

(e)    furnish to the Holders, without charge, a reasonable number of conformed copies of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

(f)      deliver to the Holders as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons may reasonably request; the Purchaser hereby consents to the use of the Prospectus or any amendment or supplement thereto by the Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto;

(g)     use its commercially reasonable efforts to register or qualify such Registrable Securities for offer and sale prior to the date on which the Registration Statement is declared effective, under the securities or blue sky laws of such jurisdictions as any Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, that the Purchaser will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;

(h)    cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the Holders may request at least two (2) Business Days prior to any such sale of Registrable Securities;

(i)     upon the occurrence of any event contemplated by paragraph (c)(5) above, promptly prepare a supplement or post-effective amendment to the Registration Statement or the Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

(j)      provide a transfer agent and registrar for all Registrable Securities.

The Purchaser may require the Holders to furnish to the Purchaser such information and documents regarding the distribution of the Registrable Securities by the Holders as the Purchaser may from time to time reasonably request in writing, and the Purchaser’s obligations with respect to registration are subject to such information being provided on a timely basis.

Each of the Holders hereby agrees by acquisition of the Registrable Securities that, upon receipt of any notice from the Purchaser of the happening of any event of the kind described in Section 4(c)(5) hereof, such Holder will forthwith discontinue disposition of Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(i) hereof, or until it is advised in writing by the Purchaser that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the Prospectus, and, if so directed by the Purchaser, each Holder will deliver to the Purchaser (at the Purchaser’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

Section 5.        Effect of Withdrawal and Suspension.

(a)Withdrawal. If the Purchaser shall withdraw the Registration Statement prior to the expiration of the Effectiveness Period (a “Withdrawn Registration Statement”), the Holders that continue to hold the Registrable Securities, which shares were covered by the Withdrawn Registration Statement, shall be entitled to an additional Registration Statement, and the Purchaser shall use its commercially reasonable efforts to (i) prepare and file with the SEC, as soon as practicable following the date of withdrawal of the Withdrawn Registration Statement, an additional Registration Statement on Form S-3, and (ii) keep such additional Registration Statement effective for the remainder of the Effectiveness Period of the Withdrawn Registration Statement. The Purchaser shall reimburse the Holders for all reasonable legal and other advisory fees incurred by the Holders in connection with the Withdrawn Registration Statement.

(b)Suspended Sales. If the Purchaser shall give any notice to suspend the disposition of Registrable Securities pursuant to Section 4(c)(5) hereof, the Purchaser shall extend the period of time during which the Purchaser is required to maintain the effectiveness of the Registration Statement pursuant to Section 3 of this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date the Holders either are advised by the Purchaser that the use of the Prospectus may be resumed or receive copies of the supplemented or amended Prospectus contemplated by Section 4(i).

Section 6.        Indemnification.

(a)     Indemnification by Purchaser. The Purchaser will indemnify and hold harmless, to the full extent permitted by law, each Holder and its Agents and each Person who controls such Holder or any of its Agents (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses to which any such Person may be subject, under the Securities Act or otherwise, and reimburse all such Persons for any legal or other expenses incurred with investigating or defending against any such losses, claims, damages or liabilities, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in a Registration Statement, Prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation by the Purchaser of the Securities Act, the Securities Exchange Act of 1934, as amended, or applicable “blue sky” laws, except insofar as the same arise out of or are based upon an untrue statement of a material fact or omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, which statement or omission is made therein in reliance upon and in conformity with information furnished in writing to the Purchaser by such Holder, expressly for use therein.

(b)     Indemnification by Holders. Each Holder will, severally but not jointly, indemnify and hold harmless, to the full extent permitted by law, the Purchaser, its directors and officers and each Person who controls the Purchaser (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses to which any such Person may be subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement or Prospectus or preliminary prospectus or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only if and to the extent, that such untrue or alleged untrue statement or omission or alleged omission is made therein in reliance upon and in conformity with the information furnished in writing by such Holder or any Agent of a Holder specifically for inclusion therein.

(c)    Conduct of Indemnification Proceedings. Any Person entitled to indemnification (the “Indemnified Party”) hereunder will (i) give prompt notice to the indemnifying party (the “Indemnifying Party”) of any claim with respect to which it seeks indemnification, and (ii) unless, in such Indemnified Party’s reasonable judgment, a conflict of interest may exist between such Indemnified Party and Indemnifying Party with respect to such claim, permit such Indemnifying Party to assume at its own expense the defense of such claim with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall have the right to participate in the conduct of such defense by the Indemnifying Party provided that it will pay for the fees of its own counsel. Whether or not such defense is assumed by the Indemnifying Party, the Indemnifying Party will not be subject to any liability for any settlement made without its consent. No Indemnifying Party will consent to entry into any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. An Indemnifying Party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such Indemnifying Party with respect to such claim, unless in the reasonable judgment of any Indemnified Party and any other of such Indemnified Parties with respect to such claim, such Indemnified Parties reasonably believe that due to conflict of interests, one counsel will not be in a position to adequately represent all Indemnified Parties, in which event the Indemnifying Party shall be obligated to pay the fees and expenses of such additional counsel or counsels. Failure to give prompt written notice shall not release the Indemnifying Party from its obligations hereunder, except to the extent that the Indemnifying Party demonstrates that the defense of such claim has been materially prejudiced by the Indemnified Party’s failure to give such notice.

(d)    Continued Effect. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party or any officer, director, Agent or person who controls such Indemnified Party and shall survive the transfer of the Registrable Securities.

(e)     Contribution. If the indemnification provided for in Section 6(a) or 6(b) is due in accordance with the terms hereof, but is held by a court of competent jurisdiction to be unavailable or unenforceable with respect to any losses, claims, damages, liabilities or expenses referred to herein, then each Indemnifying Party in lieu of indemnifying such Indemnified Party shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, liabilities, claims or damages referred to in Section 6(a) or 6(b) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and any Indemnified Party on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims or damages. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information initially supplied or developed by the Indemnifying Party or such Indemnified Party and such parties’ relative intent, knowledge, access to information and opportunity to correct such untrue statement or omission. The amount paid by an Indemnified Party as a result of the losses, liabilities, claims or damages referred to in the first sentence of this Section 6(e) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any action or claim which is the subject of this Section 6(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

Section 7.        Miscellaneous.

(a)     Termination. This Agreement shall terminate upon termination of the Effectiveness Period, and shall thereupon be of no further force and effect; provided that Section 6 shall survive the termination of this Agreement.

(b)    No Inconsistent Agreements. The Purchaser will not on or after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders or otherwise conflicts with the provisions hereof.

(c)     Notices. All notices, requests, demands and other communications required or permitted to be given hereunder shall be given in accordance with Section 8.01 of the Stock Purchase Agreement.

(d)    Entire Agreement. This Agreement contains the entire agreement among the Parties with respect to the subject matter hereof, and supersedes all prior agreements, written or oral, with respect thereto.

(e)    Waivers and Amendments. This Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

(f)     Remedies Cumulative. No remedy made available by any of the provisions of this Agreement is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity; provided, however, that in no event shall any party be entitled to recover more than once in respect of any claim.

(g)    Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors. This Agreement is not assignable by the Holders (other than to the heirs and personal representatives of a deceased Holder) without the prior written consent of the Purchaser and any other purported assignment shall be null and void.

(h)    Counterparts. This Agreement may be executed by the Parties hereto in multiple counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

(i)       Interpretive Provisions.

(i)       The words “hereof,” “herein,” “hereunder” and “hereto” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Except as expressly set forth herein, the term “including” when used with or without the term “without limitation” shall be deemed to be inclusive, and not to the exclusion of any other item except when used with a negative predicate.

(ii)      All references herein to Sections, subsections, and clauses shall be deemed references to such parts of this Agreement, unless the context shall otherwise require.

(j)      Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

(k)     Severability of Provisions. If any provision or any portion of any provision of this Agreement or the application of such provision or any portion thereof to any Person or circumstance, shall be held invalid or unenforceable, the remaining portion of such provision and the remaining provisions of this Agreement, or the application of such provision or portion of such provision as is held invalid or unenforceable to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby.

(l)     Choice of Law.This Agreement shall be governed and construed in accordance with the laws of the State of Georgia without regard to the conflicts of laws principles thereof. Each Party hereby irrevocably submits to the exclusive jurisdiction of Fulton County, State of Georgia, in any action or proceeding arising out of or relating to this Agreement and hereby irrevocably agrees, on behalf of itself and on behalf of such Party’s successors, that all claims in respect of such action or proceeding may be heard and determined in any such court and irrevocably waives any objection such Party may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum.

(m)    Waiver of Jury Trial. The Parties hereby waive trial by jury in any judicial proceeding involving, directly or indirectly, any matter (whether in tort, contract or otherwise) in any way arising out of, related to, or connected with this Agreement.

(n)    Expenses. The Purchaser shall pay all expenses associated with the preparation and filing of each Registration Statement and the maintaining of its effectiveness. However, the Holders shall be responsible for the filing fees.

(o)     Third Party Beneficiaries. The Holders are third party beneficiaries of each and every provision of this Agreement purporting to provide rights to any Holder.

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

PURCHASER: THERAGENICS CORPORATION
By:	/s/ M. Christine Jacobs
	M. Christine Jacobs Chief Executive Officer

SELLERS’ REPRESENTATIVE:
	/s/ James.R. Eddings
	James R. Eddings