ASSET PURCHASE AGREEMENT
     THIS ASSET PURCHASE AGREEMENT (the “Agreement”) dated March 15, 2007 (the
“Effective Date”), is by and among Uroplasty, Inc., a Minnesota corporation
(“Uroplasty”), and CystoMedix, Inc., a Minnesota corporation (“CystoMedix”).
R E C I T A L S :
     WHEREAS, Uroplasty is a medical device company that develops, manufactures
and markets innovative, proprietary products for the treatment of voiding
dysfunctions;
     WHEREAS, CystoMedix is a medical device company that developed products for
patients in the urogynecology and gynecology markets, including neurostimulation
devices marketed under the brand names and trademarks (collectively, the
“Trademarks”) URGENT(R), “URGENT-PC™” and “URGENT-SQ™” (collectively as now
existing or hereafter improved, modified or enhanced, and with any other
CystoMedix products, being referred to hereafter as the “Products”);
     WHEREAS, pursuant to an Exclusive Manufacturing and Distribution Agreement
dated April 18, 2005 (the “License Agreement”), Uroplasty has been acting as the
exclusive manufacturer and distributor of the Products in particular territories
named therein; and
     WHEREAS, although Uroplasty has an option pursuant to the License Agreement
to acquire all of CystoMedix’s assets, Uroplasty desires to acquire only select
intellectual property assets of CystoMedix on the terms and conditions contained
in this Agreement;
     NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
     SECTION 1. DEFINITIONS
     Unless otherwise defined elsewhere in this Agreement, as used in this
Agreement and any exhibits or schedules hereto, the following words and phrases
shall have the meanings set forth below:
     “Act” shall mean the Securities Act of 1933, as amended.
     “Authorization” and “Authorizations” shall have the meanings ascribed to
them in Section 5.13 below.
     “Business Day” means any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions located in Minneapolis, Minnesota are
permitted or required by law, executive order or governmental decree to remain
closed.

 

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     “Closing” shall mean the consummation of the transactions contemplated
herein as described in Section 4.1 below.
     “Closing Date” shall be the date of the Closing as described in Section 4.1
below.
     “Code” shall mean the Internal Revenue Code of 1986, as amended and
interpreted by treasury regulations.
     “Uroplasty Common Stock” shall mean the Common Stock of Uroplasty, par
value $.01 per share.
     “Environmental Law” shall mean any environmental or health and
safety-related law, regulation, rule, ordinance, or by-law at the federal,
foreign, state, or local level, whether existing as of the date hereof,
previously enforced or subsequently enacted.
     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
     “Fraud” shall require a showing of an intent to deceive and, with respect
to a claim of misrepresentation, that the party to be charged had Knowledge of
the falsity of the representation (or acted recklessly in making the
representation); and with respect to an omission, that the party to be charged
Knowingly failed to disclose (or acted recklessly in failing to disclose).
     “Hazardous Materials” shall mean and include any hazardous waste, hazardous
material, hazardous substance, petroleum product, oil toxic substance or
pollutant as defined in or pursuant to the Resource Conservation and Recovery
Act, as amended, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Hazardous Materials Transportation Act or any
other foreign, federal, state or local law, regulation, ordinance, rule or
by-law, whether existing as of the date hereof, previously enforced or
subsequently enacted pertaining to environmental or health and safety matters.
     “Intellectual Property” shall have the meaning ascribed to it in
Section 5.4(a) below.
     “Knowledge” shall mean actual knowledge after reasonable investigation by
the individual or the entity referred to.
     “Person” shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency or political
subdivision thereof).
     “Purchase Consideration” shall have the meaning ascribed to it in
Section 3.1 below.
     “SEC” shall mean the U.S. Securities and Exchange Commission.

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     “Taxes” shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value-added, alternative or add-on minimum, estimated or other tax
of any kind whatsoever, including any interest, penalty or addition thereto,
whether disputed or not.
     “Tax Return” shall mean any return, declaration, report, claim for refund
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
     SECTION 2. SALE OF ASSETS
     2.1 Sale of Intellectual Property Assets by CystoMedix. Subject to the
terms and conditions set forth in this Agreement, at the Closing, CystoMedix
will sell, convey, transfer, assign and deliver to Uroplasty (or to a subsidiary
of Uroplasty, if so designated by Uroplasty, referred to hereafter as the
“Acquisition Subsidiary”), and Uroplasty (or its Acquisition Subsidiary) will
purchase from CystoMedix, the exclusive right, title and interest, free and
clear of all liens, security interests and encumbrances, in and to the following
intellectual property assets of CystoMedix (collectively, the “IP Assets”):
     (a) Patents and Patent Rights. All patents applied for, issued to or owned
in whole or in part by CystoMedix, or under which CystoMedix is licensed, which
relate to the Products, all inventions and discoveries described or contained
therein, all licenses relating to any of the foregoing and all income and
royalties with respect to any licenses, all rights to sue for past, present or
future infringement thereof, all rights arising therefrom and pertaining thereto
and all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof. Without limitation, the IP Assets include U.S.
Patent Nos. 6,493,588 and 5,711,314, U.S. Patent Application Serial Nos.
10/195,197, 10/492,578 and 10/905,501 (and any patents that may issue with
respect thereto) and any other U.S. or foreign patent or patent applications
owned or controlled by CystoMedix (all together, the “Patent Rights”).
     (b) Trademarks and Tradenames. All state (including common law), federal
and foreign trademarks, service marks and trade names, URLs and domain names,
and applications for registration of such trademarks, service marks and trade
names, URLs and domain names, which related to the Products, all licenses
relating to any of the foregoing and all income and royalties with respect to
any licenses, whether registered or unregistered and wherever registered, all
rights to sue for past, present or future infringement or unconsented use
thereof, all rights arising therefrom and pertaining thereto and all reissues,
extensions and renewals thereof. Without limitation, the IP Assets include the
Trademarks, the tradename “CystoMedix” and the domain name “cystomedix.com” (all
together, the “Trademark Rights”).

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     (c) Copyrights. All state, federal and foreign copyrights, copyright
registrations, and applications for copyright registrations, including, without
limitation, derivative works, which relate to the Products, all licenses
relating to any of the foregoing, all income and royalties with respect to any
licenses, all rights to sue for past, present or future infringement or
unconsented use thereof, and all extensions and renewals thereof and all
documents, writings, logos, artwork, tapes, disks, storage media, computer
programs, computer databases, computer program flow diagrams, source codes,
object codes and all tangible property embodying or incorporating the Copyrights
(all together, the “Copyrights”).
     (d) Regulatory Assets. CystoMedix’s FDA 510(k) and foreign marketing
clearances or registrations for the Products (and the related rights, if any,
that CystoMedix could claim to own in any amended, modified or enhanced Products
as developed and marketed by Uroplasty since entering into the License
Agreement), including, without limitation, all technical and design files
related to preclinical testing, design, clinical, manufacturing, marketing,
distribution, labeling, advertising, clinical adverse event experience
(including investigational notes) and other regulatory matters, and any and all
worldwide regulatory agency/Notified Body/consultant correspondence.
     (e) Product Design and Manufacturing Specifications. All product design and
manufacturing specifications, as amended, modified or enhanced from time to
time, for the manufacture of the Products (the “Products Design and
Manufacturing Specifications”).
     2.2 The Retained Assets. All other assets of CystoMedix which are not
specifically listed as an IP Asset shall remain an asset of and owned by
CystoMedix including but not limited to the following (all together, the
“Retained Assets”):
     (a) Cash and Accounts Receivable. Any and all cash and bank accounts and
all investments, investment accounts or other similar holdings, all accounts
receivable and all credit balances, reimbursements or rebates and any payments
made or to be made by Uroplasty to CystoMedix pursuant to the License Agreement
through the Closing Date hereunder.
     (b) Tangible Assets. All of CystoMedix’s physical assets utilized by or
useful to it including, but not limited to, furniture, fixtures, equipment,
machinery, hardware, office equipment, tools, supplies, inventories and any
other tangible personal property or assets owned by CystoMedix.
     (c) Contracts and Agreements. All contracts and agreements of CystoMedix
except license agreements related to the IP Assets pursuant to Section 2.1(a)
above.
     (d) Intangible Assets other than the IP Assets. All business plans, rights,
governmental permits, approvals or authorizations, CystoMedix’s telephone
numbers and other intangible property rights and interests applied for, issued
to or owned in whole or in part by CystoMedix, or under which CystoMedix is
licensed, which is not an IP Asset.
     (e) Goodwill. CystoMedix as a going concern and all of its goodwill, if
any.

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     (f) Customers. Any and all of CystoMedix’s past and present customer lists,
prospect and prospect lists and relationships with customers and suppliers.
     (g) Business Records. All files, logs, records, books of account, financial
records, supplier files and lists, including telephone numbers, payroll and
personnel records, marketing data and reports, marketing information, brochures,
photographs, advertising materials, consultants’ reports, and other similar or
related materials; provided the foregoing do not contain a Trademark or
Copyright or otherwise comprise the IP Assets.
     2.3 Assumption of Liabilities. Uroplasty (and its Acquisition Subsidiary,
if applicable) shall not assume and Uroplasty (and its Acquisition Subsidiary,
if applicable) shall not be liable for any of the obligations or liabilities of
CystoMedix or for obligations related to the IP Assets of any kind or nature
other than obligations or liabilities arising under or related to any of the IP
Assets after the Closing Date which Uroplasty agrees to specifically assume at
Closing. All other obligations or liabilities of CystoMedix shall be the
responsibility of CystoMedix specifically including that certain loan in excess
of $1,400,000 payable to Mr. J. Stephen Schmidt, Chairman of CystoMedix or his
affiliates (“Schmidt”), incurred by CystoMedix prior to the date of the License
Agreement (the “Bridge Loan”).
     2.4 Right of Inspection. From the date hereof and until Closing, CystoMedix
will make available at reasonable times CystoMedix’s books, records and other
information as are requested by Uroplasty for examination, and for the
examination by its advisors and such other information relating to the IP Assets
as Uroplasty may reasonably request.
     2.5 Termination of License Agreement. Effective as of the Closing, all
rights and obligations of CystoMedix and Uroplasty under the License Agreement
shall terminate in all respects. As of the Closing Date, Uroplasty shall no
longer be required to pay CystoMedix royalties on sales of Products by Uroplasty
as of and after the Closing Date and CystoMedix shall have no rights to
manufacture, sell, license or otherwise exploit the Products in any territory.
Accordingly, effective as of the Closing, CystoMedix and Uroplasty each release
the other and its respective officers, directors, stockholders, employees and
agents from any claim, cause of action, liability, damages or expenses,
including attorneys’ fees, arising out of or with respect to the License
Agreement, whether known or unknown, matured or unmatured or fixed or contingent
(it being intended that this is a complete release as to the License Agreement
by each of CystoMedix and Uroplasty).
SECTION 3. PURCHASE CONSIDERATION
     3.1 Purchase Consideration; Manner of Payment.
     (a) As full payment for the transfer of the IP Assets under Section 2.1 by
CystoMedix to Uroplasty, Uroplasty agrees to pay CystoMedix the sum $4,900,000
plus 20,000 shares of Uroplasty Common Stock (all together, the “Purchase
Consideration”).

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     (b) The $4,900,000 of Purchase Consideration shall also be payable in
shares of Uroplasty Common Stock. On the Closing Date, Uroplasty will issue to
CystoMedix that number of shares of Uroplasty’s Common Stock equal to $4,900,000
divided by the Share Price. The term “Share Price” means the greater of (i)
$3.00 per share or (ii) 15% in excess of the average of the closing price of
Uroplasty’s Common Stock, as quoted on the American Stock Exchange during the 20
trading days prior to the Closing Date. For example, if the average 20 day
trading closing price is $3.50, the Share Price would be $3.50 x 1.15 or $4.025;
and, if the average 20 day trading closing price is $2.50, the Share Price would
be $3.00 because $2.50 x 1.15 is $2.875, which is less than the $3.00 per share
minimum. All share computations shall be rounded to the nearest whole share.
     (c) Sales and Use Taxes. CystoMedix shall pay any sales, use or other
similar taxes payable on account of the sale of the IP Assets to Uroplasty
hereunder.
     3.2 Allocation of Purchase Consideration. The Purchase Consideration (also
referred to in this Agreement as the “Shares”) shall be allocated among the IP
Assets in such manner as Uroplasty shall reasonably specify in writing at
Closing.
SECTION 4. CLOSING
     4.1 Closing. The closing (the “Closing”) of the transactions contemplated
by this Agreement shall take place at the offices of Messerli & Kramer P.A. at
10:00 a.m., local time, on March 27, 2007 or at such other time and place and on
such other date as Uroplasty and CystoMedix shall agree (the “Closing Date”).
     4.2 Deliverables at Closing. The parties shall deliver the following
instruments, documents and property at the Closing to one another:
     (a) By Uroplasty. Uroplasty shall deliver an instruction letter to its
stock transfer agent, authorizing the issuances of the Shares and, no later than
five Business Days after Closing, Uroplasty shall deliver the stock certificate
representing the Shares.
     (b) By CystoMedix and Schmidt. CystoMedix and Schmidt shall deliver the
following instruments, documents and property to Uroplasty at the Closing:

  (i)   a Bill of Sale substantially in a form acceptable to Uroplasty as
executed by CystoMedix;     (ii)   any and all assignments and other appropriate
documents and instruments in form necessary and reasonably acceptable to
Uroplasty to transfer and assign to Uroplasty the IP Assets specifically
including a Trademark Assignment and Patent Assignment in forms acceptable to
Uroplasty to be executed by CystoMedix or inventors of the IP Assets;

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  (iii)   consents of third parties necessary to transfer the IP Assets to
Uroplasty unless waived in writing by Uroplasty;     (iv)   all physical files,
documents, papers, notes, and certificates whether in electronic form or hard
copy form representing the IP Assets;     (v)   UCC-3 Termination Statements
terminating liens, if any, on the IP Assets;     (vi)   a one-year
noncompetition agreement by CystoMedix and Schmidt in form acceptable to
Uroplasty precluding them from competing worldwide with Uroplasty;     (vii)   a
certificate of the President of CystoMedix certifying the truth and accuracy of
CystoMedix’s representations and warranties and compliance with all of its
covenants and agreements on and as of the Closing Date; and     (viii)  
resolutions of the Board of Directors and stockholders of CystoMedix authorizing
the transactions contemplated hereby.

     (c) Additional Matters. Each party agrees to execute and deliver such
additional instruments, documents and property, and to take such additional
action, as may reasonably be requested by another party hereto, or his, her or
its counsel, in order to effectuate the transactions contemplated by this
Agreement. CystoMedix further agrees that it will cooperate with and assist
Uroplasty in acquiring the signatures of Jeffrey Williams and Hans van den
Biggelaar, prior to and after Closing, on any and all documents or instruments
to effect the assignment of the IP Assets.
     4.3 Conditions to Closing. The obligations of the parties to close
hereunder are subject to the satisfaction of the following conditions on or
before the Closing Date (each of which the applicable party agrees to timely
perform and satisfy):
     (a) CystoMedix’s Obligation. The obligation of CystoMedix to consummate the
transactions contemplated by this Agreement is subject to satisfaction of the
following contingencies on or before the Closing Date:

  (i)   Uroplasty shall have performed, satisfied and complied with all of its
agreements, obligations and conditions required under this Agreement to be
performed or complied with by it prior to the Closing including delivering of
the instruction letter as specified in Section 4.2(a).     (ii)   The warranties
and representations of Uroplasty made in this Agreement are true as of the
Closing Date as though made at that time and Uroplasty shall deliver a
certificate as described above to that effect.

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     (b) Uroplasty’s Obligation. The obligation of Uroplasty to consummate the
transactions contemplated by this Agreement is subject to satisfaction of the
following contingencies on or before the Closing Date:

  (i)   CystoMedix and Schmidt shall have performed, satisfied and complied with
all of their respective agreements, obligations and conditions required under
this Agreement to be performed or complied with by them prior to or at the
Closing including delivering all of the items specified in Section 4.2(b).    
(ii)   The warranties and representations of CystoMedix made in this Agreement
are true and correct as of the Closing Date as though made at that time and
CystoMedix shall deliver a certificate as described above to that effect.    
(iii)   Jeffrey Williams, Hans van den Biggelaar and any other inventors of any
IP Assets shall have executed and delivered to CystoMedix all assignments and
other appropriate documents and instruments, including any non-provisional
patent applications and international patent applications, in the form necessary
and reasonably accepted to Uroplasty, to transfer, assign and fully vest
Uroplasty in the IP Assets.     (iv)   Uroplasty is satisfied that the IP Assets
will be validly transferred to and vested in Uroplasty upon delivery of the
appropriate assignment and other documents by CystoMedix at Closing.     (v)  
The American Stock Exchange shall have approved Uroplasty’s application for the
listing of the Shares.     (vi)   The number of Shares required to be issued to
CystoMedix on the Closing Date shall not exceed twenty percent (20%) of
Uroplasty’s total issued and outstanding shares on the Business Day immediately
prior to the Closing Date.     (vii)   CystoMedix’s stockholders shall have
approved this Agreement and the transactions contemplated hereby.     (ix)  
Uroplasty (in its sole discretion) shall have determined that, since the
Effective Date, there has been no material or adverse change in the IP Assets or
any purchase, sale, license or other disposition, or any agreement or other
arrangement for the purchase, sale, license or other disposition, of any part of
the IP Assets (including any patents, trademarks and copyrights) except as
provided in the Schedule of Changes (Schedule 5.8 hereto).

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  (x)   Uroplasty shall have received certification from a certified public
accountant in a form satisfactory to it that the total amount due and owing J.
Stephen Schmidt on the Bridge Loan as of the Closing Date is at least
$1,400,000.

     4.4 No Shop. Until Closing or termination of this Agreement as provided
below, CystoMedix and Schmidt agree not to solicit, negotiate with or provide
any information to any person, firm or entity other than Uroplasty and its
employees, accountants, attorneys and representatives regarding any acquisition
of the IP Assets whether by merger, stock sale or other business combination.
     4.5 Termination Date. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate and be of no effect (and each party
hereto shall bear its own expenses of any kind) if the Closing does not take
place on or before April 20, 2007. Despite the foregoing, if the Closing does
not take place because a party hereto (the “Defaulting Party”) has not delivered
a required item under Section 4.2 to the other party (the “Non-Defaulting
Party”) for the Closing or satisfied a contingency to Closing under Section 4.3
(which is not waived in writing by the Non-Defaulting Party), then, at the
election in writing of the Non-Defaulting Party, the Closing shall be postponed
(but not beyond July 20, 2007) so that the Defaulting Party may remedy its
default. The Defaulting Party agrees that the Non-Defaulting Party may obtain an
order directing the Defaulting Party to comply with its obligations and to
proceed with a Closing as contemplated hereby.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER
     As a material inducement to Uroplasty to enter into this Agreement and to
consummate the transactions contemplated hereby, CystoMedix hereby makes to
Uroplasty each of the representations and warranties set forth in this
Section 5.
     5.1 Organization and Qualification; No Operations. CystoMedix is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota and has full power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or as such business is currently conducted.
Except as described on the Schedule of Other Activities (Schedule 5.1),
CystoMedix is not and has not been since the date of the License Agreement
engaged in the manufacture, sale or distribution of the Products other than
collecting royalties from Uroplasty under the License Agreement. As of the
Closing Date, CystoMedix’s business activities will consist solely of holding
the Shares and the Retained Assets.

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     5.2 Authority. CystoMedix has full right, power and authority to enter into
this Agreement and each agreement, document and instrument to be executed and
delivered by CystoMedix pursuant to this Agreement and to carry out the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and each such other agreement, document and
instrument by CystoMedix has been duly and validly authorized and approved by
all necessary action on the part of CystoMedix and no other action on the part
of CystoMedix or its stockholders is required in connection therewith. This
Agreement and each agreement, document and instrument to be executed and
delivered by CystoMedix and Schmidt pursuant to this Agreement constitutes, or
when executed and delivered will constitute, the legal, valid and binding
obligation of CystoMedix and Schmidt, each enforceable in accordance with their
respective terms, except to the extent that enforcement is limited by
bankruptcy, insolvency, moratorium, conservatorship, receivership or similar
laws of general application affecting creditors’ rights or by the application by
a court of equity principles. The execution, delivery and performance by
CystoMedix of this Agreement and each such agreement, document and instrument:
     (a) does not and will not violate any foreign, federal, state, local or
other laws, regulations or ordinances applicable to CystoMedix;
     (b) does not or will not violate any term or provision of the Articles or
Bylaws of CystoMedix; and
     (c) does not and will not result in a breach of, constitute or result in a
default under, accelerate any obligation under or give rise to a right of
termination of, any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which CystoMedix is a party or by which the IP Assets are bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien, security
interest or other charge or encumbrance on any of the IP Assets.
     Except as obtained by CystoMedix prior to the Closing, no consent or waiver
by, approval of, or designation, declaration or filing with, any Person is
required in connection with the execution, delivery and performance by
CystoMedix of this Agreement and each agreement, document and instrument to be
executed and delivered by CystoMedix pursuant to this Agreement.
     5.3 Title to IP Assets; Liens. CystoMedix has good and marketable title to
the IP Assets and none of the IP Assets is subject to any mortgage, pledge,
lien, conditional sales agreement, security interest, encumbrance or other
charge except as specifically reflected in the Schedule of Liens (Schedule 5.3).
The IP Assets are the only assets used in or otherwise necessary to the
manufacture, sale, and distribution of the Products as currently manufactured
and distributed by Uroplasty under the License Agreement.
     5.4 Intellectual Property.

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     (a) All Patent Rights, Trademarks and Copyrights (collectively, the
“Intellectual Property”) are listed in the Schedule of Intellectual Property
(Schedule 5.4) attached hereto, which Schedule indicates, with respect to each,
the nature of CystoMedix’s interest therein and the expiration date thereof or
the date on which CystoMedix’s interest therein terminates. Except as set forth
on the Schedule of Intellectual Property, the Intellectual Property have been
duly registered in, filed in or issued by, as the case may be, the United States
Patent and Trademark Office, the United States Register of Copyrights or the
corresponding offices of other countries identified on said Schedule, and have
been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States and each
such country.
     (b) Except as set forth on the Schedule of Intellectual Property, the
Intellectual Property is owned exclusively by CystoMedix, free and clear of any
attachments, liens, encumbrances or adverse claims.
     (c) Except as set forth on the Schedule of Intellectual Property, there are
no claims or demands of any other person pertaining to the Intellectual Property
and no proceedings have been instituted, are pending or, to the Knowledge of
CystoMedix, are threatened which challenge the rights of CystoMedix in respect
thereof and CystoMedix has no Knowledge of any facts which could be the basis of
any such claims. To the Knowledge of CystoMedix, there is no infringement of any
of the Intellectual Property by others nor is any of the Intellectual Property
subject to any outstanding order, decree, judgment, stipulation, settlement,
lien, charge, encumbrance or attachment. No claim or demand has been made and no
proceeding has been filed or, to the Knowledge of CystoMedix, is threatened to
be filed charging CystoMedix with infringement of any patent, trade name,
trademark, service mark or copyright and CystoMedix does not know of any facts
which could be the basis of any such claims. To the Knowledge of CystoMedix,
there are no royalties, honoraria, fees or other payments payable by or on
behalf of CystoMedix to any person with respect to any of the Intellectual
Property.
     5.5 Trade Secrets. CystoMedix owns or has the right to use, free and clear
of any claims or rights of others, all trade secrets, inventions, developments,
manufacturing and secret processes, and other information and know-how (if any)
comprising the IP Assets. There are no payments which are required to be made by
or on behalf of CystoMedix for the use of such trade secrets, inventions,
developments, manufacturing and secret processes and know-how. To the Knowledge
of CystoMedix, none of the IP Assets contain, comprise or use any confidential
information, copyrighted materials, know-how or trade secrets of any third
party.
     5.6 Litigation. Except as set forth on the Schedule of Litigation (Schedule
5.6 hereto), there are no suits, actions or administrative, arbitration or other
proceedings or governmental investigations pending or threatened against or
relating to CystoMedix or the IP Assets. Except as set forth on the Schedule of
Litigation, CystoMedix is not otherwise engaged as a party in any suit, action
or administrative, arbitration or other proceeding. CystoMedix has not entered
into or been subject to any consent decree, compliance order or administrative

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order with respect to any of the IP Assets. CystoMedix has not received any
request for information, notice, demand letter, administrative inquiry or formal
or informal complaint or claim with respect to the IP Assets. Except as set
forth on the Schedule of Litigation, there are no existing or, to the Knowledge
of CystoMedix, threatened product liability, warranty or other similar claims,
or any facts upon which a claim of such nature could be based, against
CystoMedix for services or products which are defective or fail to meet any
service or product warranties.
     5.7 Taxes. CystoMedix has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects. Except as
set forth on the Schedule of Tax Matters (Schedule 5.7 hereto), all Taxes owed
by CystoMedix (whether or not shown on any Tax Return) have been paid. There are
no actual, pending or threatened liens, encumbrances or charges against any of
the IP Assets arising in connection with any failure (or alleged failure) to pay
any Tax.
     5.8 Absence of Certain Changes. Except as provided in the Schedule of
Changes (Schedule 5.8 hereto), since the date of the License Agreement, there
has not been any change in the IP Assets or any purchase, sale, license or other
disposition, or any agreement or other arrangement for the purchase, sale,
license or other disposition, of any part of the IP Assets (including any
patents, trademarks and copyrights).
     5.9 Compliance with Laws. CystoMedix is not in material violation of any
laws, rules or regulations which apply to the conduct of CystoMedix’s business
or properties which violation has had or may be expected to have a material
adverse effect on the IP Assets. There has never been any citation, fine or
penalty imposed, asserted or threatened against CystoMedix under any foreign,
federal, state, local or other law or regulation relating to medical device,
employment, immigration, occupational safety, zoning or environmental matters
and CystoMedix is not aware of any circumstances, occurrences or conditions
likely to result in the imposition or assertion of such a citation, fine or
penalty, nor has CystoMedix received any notice to the effect that CystoMedix is
in violation of any such laws or regulations.
     5.10 Product Warranty. To the Knowledge of CystoMedix, each product
manufactured, sold, leased or delivered by it has been in conformity with all
applicable contractual commitments and all express and implied warranties.
     5.11 Product Liability. To the Knowledge of CystoMedix, CystoMedix has no
liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
it giving rise to any liability) arising out of any injury to individuals or
property as a result of the ownership, possession or use of any product
manufactured, sold, leased or delivered or services rendered by it.
     5.12 Finders’ Fees. CystoMedix has not incurred and will not incur or
become liable for any broker’s commission or finder’s fee relating to or in
connection with the transactions contemplated by this Agreement.

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     5.13 Authorizations. CystoMedix has obtained and is in material compliance
with all federal, foreign, state, provincial, municipal, local or other
governmental consents, certifications, licenses, permits, registrations, grants
and other authorizations, including U.S. Food and Drug Administration and
foreign medical device directives (collectively the “Authorizations” and
individually an “Authorization”) which are necessary to permit it to conduct its
business as presently conducted and for which the failure to comply with has had
or may be expected to have a material adverse effect on the IP Assets. No
proceeding is pending or, to the Knowledge of CystoMedix, is threatened in which
any Person or governmental authority is seeking to revoke or deny the renewal of
any Authorization.
     5.14 Hazardous Materials; Environmental Compliance; Disclosure of
Environmental Information. CystoMedix has never generated, used, stored or
handled any Hazardous Materials nor has it treated, stored, disposed of, spilled
or released any Hazardous Materials at any site presently or formerly owned,
leased, operated or used by CystoMedix or shipped any Hazardous Materials for
treatment, storage or disposal at any other site or facilities. To the Knowledge
of CystoMedix, no other person has ever generated, used, handled, stored or
disposed of any Hazardous Materials at any site presently or formerly owned,
leased, operated or used by CystoMedix, nor has there been or is there
threatened any release of any Hazardous Materials on or at any such site. To the
Knowledge of CystoMedix, CystoMedix does not presently own or lease, nor has it
previously owned or leased, any site on which underground storage tanks are or
were located. No lien has been imposed by any governmental agency on any
property, facility, machinery, or equipment owned, operated, leased or used by
CystoMedix in connection with the presence of any Hazardous Materials.
     To the Knowledge of CystoMedix, CystoMedix has no liability under nor has
it ever violated any Environmental Law with respect to any property owned,
operated, leased, or used by CystoMedix and any facilities and operations
thereon. In addition, any property owned, operated, leased, or used by
CystoMedix, and any facilities and operations thereon are presently in material
compliance with all applicable Environmental Laws. CystoMedix has not entered
into or been subject to any consent decree, compliance order or administrative
order with respect to any environmental or health and safety matter or received
any request for information, notice, demand letter, administrative inquiry, or
formal or informal complaint or claim with respect to any environmental or
health and safety matter or any enforcement of any Environmental Law; and
neither CystoMedix nor Schmidt have any Knowledge that any of the above will be
forthcoming.
     5.15 Completeness. The representations, warranties and statements contained
in this Agreement and in the certificates, exhibits and schedules delivered by
CystoMedix to Uroplasty pursuant to this Agreement, when taken together, do not
and shall not contain any untrue statement of a material fact, and do not and
shall not omit to state a material fact required to be stated therein or
necessary in order to make such representations, warranties or statements not
misleading in light of the circumstances in which they were made.

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     5.16 Certain Securities Law Matters. Through its officers and directors,
CystoMedix has such knowledge and experience in financial business matters that
its is capable of evaluating the merits and risks of an investment in Uroplasty
Common Stock to be received pursuant to this Agreement. CystoMedix acknowledges
its access to Uroplasty’s annual, quarterly and periodic reports filed with the
U.S. Securities and Exchange Commission (the “SEC Reports”), and being offered
the opportunity to ask questions of, and receive answers from, Uroplasty’s
officers with respect to Uroplasty’s business and financial affairs. To the
extent that CystoMedix has, in the course of its investment or other discussions
with Uroplasty, learned any confidential, proprietary or trade secret
information of Uroplasty, CystoMedix agrees to keep such information
confidential and to not use, or disclose to third parties (except to
CystoMedix’s counsel and other advisors, who are bound by this promise of
confidentiality), any such information unless and until Uroplasty publicly
discloses such information. CystoMedix hereby acknowledges and agrees that the
Uroplasty Common Stock to be acquired pursuant to this Agreement is being
acquired for its own account and not for any other person, or with a view to
distribution or sale thereof, and that such securities have not been registered
under the Act or applicable state securities or “Blue Sky” laws, and therefore
cannot be resold unless so registered or exempted therefrom. CystoMedix
understands that certificates representing the Uroplasty Common Stock will bear
the following legend reflecting the foregoing restrictions on transfer and the
resale restriction described in Section 8.5 below:
“The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the “Act”) or under any applicable
state securities laws (the “Laws”). The shares may not be sold, transferred,
assigned, pledged or otherwise disposed of at any time unless they are
registered under such Act and laws or unless in the opinion of legal counsel for
the Company such disposition will not result in a violation of such Act or any
such Laws. In addition, the resale of the shares is restricted by the terms of
an Asset Purchase Agreement dated March 15, 2007, by and between Uroplasty, Inc.
and CystoMedix, Inc.”
SECTION 6. REPRESENTATIONS AND WARRANTIES OF UROPLASTY
     Uroplasty hereby makes to CystoMedix each of the representations and
warranties set forth in this Section 6 as follows:
     6.1 Organization and Good Standing. Uroplasty is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota with full corporate power to conduct its business as now being
conducted.
     6.2 Authority. Uroplasty has full right, power and authority to enter into
this Agreement and each agreement, document and instrument to be executed and
delivered by it pursuant to this Agreement and to carry out the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and each such other agreement, document and instrument by it has been
duly and validly

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authorized and approved by all necessary action on its part and no other action
on its part is required in connection therewith. This Agreement and each
agreement, document and instrument to be executed and delivered by Uroplasty
pursuant to this Agreement constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of Uroplasty, enforceable in
accordance with its respective terms, except to the extent that enforcement is
limited by bankruptcy, insolvency, moratorium, conservatorship, receivership or
similar laws of general application affecting creditors’ rights or by the
application by a court of equity principles. The execution, delivery and
performance by Uroplasty of this Agreement and each such agreement, document and
instrument:
     (a) does not and will not violate any foreign, federal, state, local or
other laws, regulations or ordinances applicable to Uroplasty;
     (b) does not or will not violate any term or provision of the Articles of
Incorporation or Bylaws of Uroplasty; or
     (c) does not and will not result in a breach of, constitute or result in a
default under, accelerate any obligation under or give rise to a right of
termination of, any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which Uroplasty is a party or by which the property of Uroplasty is bound or
affected, or result in the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any of Uroplasty’s assets.
     No consent or waiver by, approval of, or designation, declaration or filing
with, any Person or authority (governmental or otherwise) is required in
connection with the execution, delivery and performance by Uroplasty of this
Agreement and each agreement, document and instrument to be executed and
delivered by Uroplasty pursuant to this Agreement.
     6.3 Uroplasty Common Stock. The Uroplasty Common Stock being issued
hereunder will be (i) duly authorized, validly issued and outstanding,
(ii) fully paid, non-assessable and free of preemptive rights and (iii) except
as otherwise provided by this Agreement, free and clear of any and all pledges,
claims, restrictions, charges, liens, security interests, encumbrances or other
interests of third parties of any nature whatsoever.
     6.3 SEC Reports; Financial Statements. Except as described on Schedule 6.3,
the Company has filed all SEC Reports required to be filed by it under the Act
and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the twelve months preceding the date hereof (or such shorter period as the
Company was required by law to file such reports, forms or other information).
Unless corrected prior to the date of this Agreement in a subsequent SEC Report,
as of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC

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Reports, when filed (if applicable, as corrected prior to the date of this
Agreement), contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
     6.4 Completeness. The representations, warranties and statements contained
in this Agreement and in the certificates, exhibits and schedules delivered by
Uroplasty to CystoMedix pursuant to this Agreement, when taken together, do not
and shall not contain any untrue statement of a material fact, and do not and
shall not omit to state a material fact required to be stated therein or
necessary in order to make such representations, warranties or statements not
misleading in light of the circumstances in which they were made.
SECTION 7. INDEMNIFICATION
     7.1 Materiality; Survival. All representations, warranties, agreements,
covenants and obligations herein or in any schedule, certificate or financial
statement delivered by any party incident to the transactions contemplated
hereby are material, shall be deemed to have been relied upon by the parties and
shall survive the Closing hereof.
     7.2 Indemnification.
     (a) CystoMedix agrees to defend, indemnify and hold Uroplasty and its
respective subsidiaries and affiliates and the persons serving as officers,
directors, partners, employees or agents thereof harmless from and against any
claims, damages, liabilities, losses, fines, penalties, costs, and expenses
(including, without limitation, reasonable counsel fees and expenses as the same
are incurred; together referred to as “Losses”) of any kind or nature whatsoever
which may be sustained or suffered by any of them arising out of, based upon or
in connection with any of the following matters:

  (i)   a breach of any representation, warranty, agreement, covenant or
obligation made by CystoMedix in this Agreement or in any Schedule, Exhibit, or
certificate delivered hereunder or in connection herewith or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting a breach of such representations, warranties or covenants;  
  (ii)   Fraud in connection with the making by CystoMedix of any
representation, warranty, covenant or obligation or an intentional
misrepresentation by CystoMedix of any representation, warranty, covenant or
obligation; and     (iii)   any return, rebate or other expense (including
warranty, installation, configuration or other service work) associated with
products shipped and/or installed, or services rendered, by CystoMedix prior to
Closing.

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     (b) Uroplasty shall give prompt written notice to CystoMedix of any claim,
liability or expense to which the indemnification obligations hereunder would
apply. Such notice shall state the information then available regarding the
amount of such claim, liability or expense and shall specify the provision or
provisions of this Agreement under which the claim, liability or expense is
asserted. The failure to promptly notify CystoMedix as provided above shall not
relieve CystoMedix of any liability hereunder except to the extent that the
rights of CystoMedix have been materially and adversely prejudiced as a result
of the failure to give, or the delay in giving, such notice.
     (c) If such indemnification claim, liability or expense is the subject of
litigation, CystoMedix shall have the right to participate at its own expense in
the defense of any such litigation, or Uroplasty may authorize CystoMedix, if it
so desires, to take over the defense of such litigation so long as such defense
is expeditious and is undertaken by counsel reasonably acceptable to Uroplasty.
Otherwise, Uroplasty will control the defense of such claim.
     (d) Upon resolution of the indemnification claim, whether by final judicial
decision after all periods for appeal have lapsed, settlement, arbitration
decision or otherwise, Uroplasty shall give CystoMedix written notice of the
Losses incurred by Uroplasty with respect to the claim (the “Uroplasty Final
Notice”). Thereafter, CystoMedix shall have 30 days to give Uroplasty written
notice that it intends to dispute the amount of Uroplasty’s claimed Losses.
Within 30 days after receipt of said written notice, Uroplasty shall attempt to
settle the dispute with CystoMedix. If CystoMedix and Uroplasty do not reach
settlement of Uroplasty’s claim within such 30 days, the dispute may at any time
thereafter be submitted by either party to arbitration in Minneapolis,
Minnesota, before three arbitrators, one of which is selected by CystoMedix, one
of which is selected by Uroplasty and the third of which is selected by the
first two arbitrators. The arbitration shall be conducted by the American
Arbitration Association in accordance with the rules and procedures of the
American Arbitration Association then in effect. CystoMedix and Uroplasty agree
that the arbitrators’ award (which shall be agreed to unanimously by the
arbitrators) shall be final and binding upon them with respect to the dispute
and may be entered in any court having jurisdiction thereof. All costs of the
arbitration (including the reasonable legal expenses of all parties thereto)
shall be borne by CystoMedix and/or Uroplasty in the amounts determined by the
arbitrators, which shall base such determination upon the relative merits of the
respective positions of the parties in the dispute. The judgment upon the award
may be entered in any court having jurisdiction thereof. There shall be added to
the amount of any arbitration award interest at the rate of 10% per annum on the
amount required to be paid pursuant to such award. This interest will be
computed from the date payment would have been paid if not disputed by
CystoMedix to the date paid and the arbitrators shall include provisions
therefor in any award rendered.
     Any claims as determined above in favor of Uroplasty first shall be
resolved by cancellation of Shares then held by CystoMedix. If the Uroplasty
Final Notice is given and is not disputed by CystoMedix, or if an arbitrators’
award on Uroplasty’s claim is granted, then the

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shares to be canceled shall be valued at the average of the closing price per
share for the Uroplasty Common Stock as reported by the American Stock Exchange
for the ten (10) trading days ending on the trading day immediately prior to the
date of the Uroplasty Final Notice (if not disputed by CystoMedix) or
arbitrators’ award (if disputed by CystoMedix), as the case may be. If
Uroplasty’s claim cannot be resolved with the number of shares of Uroplasty
Common Stock then held by CystoMedix, then CystoMedix shall within ten
(10) business days after written demand, pay the remaining claim amount to
Uroplasty in cash.
     Despite the above provisions of this subsection (d), CystoMedix may resolve
any claim by paying cash to Uroplasty.
     (e) Notwithstanding anything else in this Section 7 to the contrary, no
claim by Uroplasty under Section 7 may be enforced against CystoMedix unless
Uroplasty gives CystoMedix written notice of such claim under Section 7.2(b)
above within one (1) year from the Closing Date.
     (f) Notwithstanding anything to contrary in this Agreement, and except for
the Shares referred to in Section 8.5 below, CystoMedix shall not sell,
distribute or otherwise dispose of or transfer any Shares held by it until the
later of (i) one (1) year after the Closing Date or (ii) resolution of all
Indemnifiable claims for which CystoMedix has received timely notice pursuant to
this Section 7.2.
SECTION 8. POST-CLOSING OBLIGATIONS.
     8.1 Registration Rights.
     (a) Request for Registration. If after the later of (i) one year following
the Closing or (ii) the date of final resolution of any Losses, CystoMedix gives
Uroplasty written notice that its board and stockholders have authorized a
dissolution of CystoMedix, and if Uroplasty is then eligible to use Form S-3 (or
its then equivalent) as a registration statement with the SEC, Uroplasty will
use its commercially reasonable efforts to promptly file and obtain
effectiveness of a registration statement on Form S-3 (or its then equivalent)
under the Act covering the resale of the Shares to be distributed upon
dissolution to CystoMedix’s stockholders. If Uroplasty is not then eligible to
use Form S-3 (or its then equivalent), and if within six (6) months thereafter,
Uroplasty determines to file a registration statement for its own account on
Form S-1 or SB-2 (or their then equivalents), Uroplasty will use its
commercially reasonable efforts to include the Shares for resale in such
registration statement (the “Company Registration Statement”). To the extent
that the managing underwriter for the offering covered by the Company
Registration Statement determines in its judgment that it is impractical for
marketing purposes to include some or all of the Shares on the Company
Registration Statement, Uroplasty will so reduce the number of Shares included
on the Company Registration Statement. In no event will Uroplasty have any
liability to CystoMedix or any of its stockholders if Uroplasty is unable to
obtain or maintain the effectiveness of any registration statement.

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     (b) Expenses of Registration. With respect to each inclusion of Shares in a
registration statement pursuant to this Section 8.1, Uroplasty shall bear the
following fees, costs and expenses: all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants for
Uroplasty and all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified. Fees and
disbursements of counsel and accountants for CystoMedix and its stockholders,
underwriting discounts and commissions and transfer taxes for CystoMedix and its
stockholders and any other expenses incurred by CystoMedix or its stockholders
not expressly included above shall be borne by CystoMedix and its stockholders.
     (c) Registration Procedures. In the case of each registration effected by
Uroplasty pursuant to this Agreement, Uroplasty will keep CystoMedix advised in
writing as to the initiation of such registration and as to the completion
thereof. Uroplasty will:
     (i) Prepare and file with the Commission a registration statement and such
amendments and supplements as may be necessary and use commercially reasonable
efforts to cause such registration statement to become and remain effective
until the distribution described in the registration statement has been
completed or for two years, whichever first occurs; and
     (ii) Furnish to CystoMedix such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to facilitate the
public offering of such securities.
     8.2 Registration Indemnification.
     (a) By Uroplasty. Uroplasty will indemnify CystoMedix, and CystoMedix’s
officers and directors, and each person controlling such CystoMedix within the
meaning of Section 15 of the Act, and each selling stockholder with respect to
which registration has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration, or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by
Uroplasty of the Act, the Exchange Act, state securities laws or any rule or
regulation promulgated under such laws applicable to Uroplasty in connection
with any such registration, and Uroplasty will reimburse each said persons for
any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, provided that Uroplasty will not be liable in any such case (i) to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on

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any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Uroplasty
by or on behalf of any such persons and stated to be specifically for use
therein or (ii) insofar as the claim, loss, damage, liability or expense relates
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary prospectus but eliminated or remedied in the prospectus.
     (b) By CystoMedix and the Selling Stockholders. CystoMedix and the selling
stockholders will indemnify Uroplasty, each of its directors and officers, other
holders of Uroplasty’s securities covered by such registration statement, their
officers and directors and each person controlling such other holder within the
meaning of Section 15 of the Act, each person who controls Uroplasty within the
meaning of Section 15 of the Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, 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 by CystoMedix or a selling stockholder, and each
person controlling it or them within the meaning of Section 15 of the Act, the
Exchange Act, state securities laws or any rule or regulation promulgated under
such laws applicable to it, and will reimburse Uroplasty, such other holders,
such directors, officers, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such claim, loss, damage,
liability or action, but in the case of Uroplasty or the other holders or their
officers, directors or controlling persons, only to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with information furnished to
Uroplasty by or on behalf of CystoMedix or a selling stockholder.
     (c) Notice and Defense. Each party entitled to indemnification under this
Section 8.2 (the “Indemnified Party”) shall give notice to the party required to
provide indemnification (the “Indemnifying Party”) promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party’s expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party’s ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
there are separate and different defenses. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to
entry of 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

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Party of a release from all liability in respect to such claim or litigation.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
     8.3 Information by CystoMedix and Selling Stockholders. CystoMedix and each
selling stockholder shall furnish to Uroplasty such information regarding
CystoMedix, the Shares held by it or them and the distribution proposed by
CystoMedix as Uroplasty may request in writing and as shall be required in
connection with any registration referred to in this Agreement.
     8.4 Termination of Registration Rights. Despite anything else to the
contrary, the rights granted pursuant to Section 8 shall terminate upon the date
CystoMedix or its stockholders are able to immediately sell all Shares held by
it or them under Rule 144 during any 90-day period.
     8.5 Private Resale Restriction. During the one year period commencing on
the Closing Date, CystoMedix (and its collective stockholders, to the extent
that any Shares are distributed to them) may privately resell no more than
150,000 Shares (limited to 15,000 Shares in the aggregate for any particular
calendar month); provided, that any resale of Shares must comply with the Act.
The balance of the Shares is subject to the restriction on resale or other
transfer pursuant to Section 7.2(f) above.
     8.6 Regulatory Bodies. Promptly after Closing, CystoMedix will notify the
FDA and any other worldwide regulatory bodies of its discontinuance of holding
regulatory submissions or establishment registrations.
SECTION 9. MISCELLANEOUS
     9.1 Fees and Expenses. Except as otherwise provided herein, each of the
parties to this Agreement will bear its own expenses in connection with the
negotiation and consummation of the transactions contemplated by this Agreement
(it being understood that CystoMedix’s expenses associated herewith will not be
assumed by Uroplasty). All sales and transfer taxes, fees and duties under
applicable law (including all stock transfer taxes, fees and duties, if any)
incurred in connection with this Agreement or the transactions contemplated
thereby will be borne and paid by CystoMedix.
     9.2 Confidentiality. CystoMedix acknowledges that Uroplasty is a publicly
traded company and agree that it will treat the existence and terms of this
Agreement and the transactions contemplated hereby as strictly confidential and
will not disclose them to any Person without the prior written consent of
Uroplasty or unless Uroplasty publicly discloses such information.

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     9.3 Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota without reference to the
choice of law provisions thereof. The parties hereby irrevocably and
unconditionally consent to the exclusive jurisdiction of the courts of the State
of Minnesota and of the United States of America located in the State of
Minnesota in connection with any suit, action or proceeding relating to this
Agreement and the transactions contemplated hereby (without, however, derogating
from the exclusivity of the arbitration procedures set forth in subparagraph
7.2(d) hereof) and agree not to commence any action, suit or proceeding relating
thereto except in such courts.
     9.4 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given on the date delivered if
delivered by hand, three days after being sent by certified or registered mail
(postage prepaid and with return receipt requested), on the date delivered if by
overnight courier service, on the date delivered if by telecopy or other written
form of electronic confirmation:

     
To:     UROPLASTY:
  David B. Kaysen, President and Chief Executive Officer
 
  5420 Feltl Road
 
  Minnetonka, Minnesota 55343
(952) 426-6199 (telefax)
 
   
With a copy to:
  Jeffrey C. Robbins, Esq.
 
  Messerli & Kramer P.A.
 
  150 South Fifth Street, Suite 1800
 
  Minneapolis, Minnesota 55402
 
  (612) 672-3777 (telefax)
 
   
To:      CYSTOMEDIX:
  in care of Frank I. Harvey, Esq.
 
  Larkin Hoffman Daly & Lindgren Ltd.
 
  7900 Xerxes Avenue South, Suite 1500
 
  Bloomington, Minnesota 55435
 
  (952) 896-3333 (telefax)

or to such other address of which any party may notify the other parties as
provided above. Notices are effective upon receipt or, if mailed, five
(5) business days after the placing thereof in the United States mail in the
manner provided above.
     9.5 Entire Agreement. This Agreement, including the Schedules and Exhibits
referred to herein, constitutes the entire agreement between the parties with
respect to its subject matters and supersedes all previous written or oral
negotiations, commitments and writings; no promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Schedules and Exhibits or in such
other writings; and all inducements to the making of this Agreement relied upon
by all the parties hereto have been expressed herein or in said Schedules or
Exhibits or in such other writings.

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     9.6 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties named herein and their
respective successors and assigns.
     9.7 Waivers; Severability. The failure of any of the parties to this
Agreement to require the performance of a term or obligation under this
Agreement or the waiver by any of the parties to this Agreement of any breach
hereunder shall not prevent subsequent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach hereunder. If any one or more of the
provisions of this Agreement are held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining provisions of this
Agreement will not be affected thereby, and the parties will use all reasonable
efforts to substitute for such invalid, illegal or unenforceable provisions one
or more valid, legal and enforceable provisions which, insofar as practicable,
implement the purposes and intents hereof. To the extent permitted by applicable
law, each party waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
     9.8 Specific Performance. Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matters covered by this Agreement (subject to the provisions set
forth in Section 7.2), in addition to any other remedy to which they may be
entitled, at law or in equity.
     9.9 Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same agreement.
     9.10 Amendments. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.

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[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT DATED MARCH 15, 2007]
IN WITNESS WHEREOF, the undersigned have hereto affixed their signatures.

                      Uroplasty, Inc.       CystoMedix, Inc.    
 
                   
By
          By        
 
 
 
David B. Kaysen, President and          
 
Jeffrey M. Williams, President and    
 
  Chief Executive Officer           Chief Executive Officer    

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Schedule 5.1
Other Activities

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Schedule 5.3
Liens

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Schedule 5.4
Intellectual Property

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Schedule 5.6
Litigation

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Schedule 5.7
Tax Matters

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Schedule 5.8
Changes

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CystoMedix, Inc.
1887 Station Parkway N.W., Building #7
Andover, Minnesota 55304
March ____, 2006
 
 
 
Dear                     :
     As you are aware, in April 2005, we entered into a five-year Exclusive
Manufacturing and Distribution Agreement with Uroplasty, Inc. At the time, we
also granted Uroplasty an option and a right of first refusal to acquire our
assets.
     Based upon our recent negotiations, Uroplasty has agreed to purchase our
intellectual property assets now, but not our business or goodwill, solely in
exchange for Uroplasty Common Stock. As a condition of this revised purchase
agreement (a copy of which we are providing to you subject to your obligation of
confidentiality below), Uroplasty requires that the holders of a majority of our
outstanding Common Stock consent to the agreement. By your signature below, you
hereby grant this consent. You also hereby appoint J. Stephen Schmidt as your
attorney-in-fact (with full power of substitution) to vote all of your shares at
any meeting of CystoMedix stockholders held at any time in favor of approving
the purchase agreement and the transactions contemplated by it, or to execute
written consents on your behalf in lieu of any such meeting. Because of the
benefit that CystoMedix, and therefore you as a stockholder, will receive in
connection with the Uroplasty purchase agreement, this proxy and power of
attorney is coupled with an interest and is irrevocable. If for any reason your
proxy and power of attorney is not effective, your signature constitutes your
separate agreement with Mr. Schmidt to vote all of your shares at any meeting of
CystoMedix stockholders held at any time in favor of approving the purchase
agreement and the transactions contemplated by it.
     Until Uroplasty makes a publicly discloses the purchase agreement, you also
agree to keep confidential its existence and terms. You further agree that you
will not, directly or indirectly, purchase or sell (whether in a short sale
transaction or otherwise) any of Uroplasty’s Common Stock (or options, warrants
or other rights to purchase or acquire Uroplasty Common Stock) until the day
following the date Uroplasty issues a press release announcing the terms and
conditions of the purchase agreement.
     If this letter is acceptable, please so indicate by your signature below.

                  Very truly yours,       Agreed to and accepted:
 
                CystoMedix, Inc.            
 
               
By
               
 
               
 
               
Its